Many donors have been using their required IRA distributions to benefit the Jewish Community Board of Akron and reduce their tax burden. It’s a win-win situation for the donor and for JCBA. Lately, this method of giving has become even more attractive for donors.
In the last several years, Congress has allowed individuals who are 70 ½ years old or older to make a charitable contribution, up to $100,000 from the individual’s Required Minimum Distribution (RMD). Given the new tax law, IRAs are a more attractive way to donate annually and through an estate than in the past.
The new standard deduction levels ($12,000 for an individual and $24,000 for a couple), will reduce the ability to make itemized deductions and therefore make the RMD on an IRA one of the most attractive, tax-deductible ways to give charitable dollars. Any dollars coming to a charity from your IRA need to be sent directly to the organization from your IRA to qualify.
If you want to leave a gift through your estate, an IRA is the most tax-friendly way to give. Because the maximum for taxing an estate (formerly called the Death Tax) is $11.2 million for an individual or $22.4 million for a couple, very few estates will be taxed. However, any money disbursed after death from an IRA to heirs will be taxed. When a charity is the beneficiary designee, there is no tax consequence for that money.
IRA distributions can be used today and in the future to your advantage and those of your heirs if you plan ahead and use distributions wisely. Check with your financial advisor for more information about your specific circumstance.
Contact Julie Katz at 330-835-0005 if you would like to discuss leaving a legacy gift to JCBA through your IRA.
This information should not be considered as financial advice. Please seek the opinion of a financial advisor to determine what may be best for your individual needs.