- If you have other sources of income and don’t really need the RMD from your IRA, you can also donate the funds directly to a charity.
- There are various ways to structure gifting. You can set up trusts, gift annually, gift through businesses, etc.; you’re allowed to gift up to $14,000 a year.
Hello everyone! It’s Shauna, the Tax Goddess. And yes, I have been dying to wear these glasses since I found them about two weeks ago for our Q&A today! So today, since love is in the air, I wanted to talk to you guys about using your required minimum distributions (RMD); this is if you have an IRA and you are over the age of 70-1/2. Last year, the Path Act made this a permanent requirement, which was awesome.
So for many people, if you’ve done well and you know you’re being forced to take these RMDs, required minimum distributions, out of your IRA accounts every year, you know that’s income and you have to pay tax on it. Well, there’s an awesome piece to the tax code where if you have one of these RMDs you can now donate all of it to a charity. It has to be a qualified charity, but you can donate your entire RMD as a charitable deduction and you get a 100% charity deduction for that money.
If you don’t need that money from your IRA, if you have other sources of income, and if you’re just trying to find a way to do something beneficial for the world, spread a little bit of love and have those RMDs directly donated to a charity!
Now, there are some special rules on that, so if you are interested, definitely reach out to your CPA. If you have any questions, don’t hesitate to call us at Tax Goddess. Keep in mind that there are various ways to structure gifting. You can set up trusts, gift annually, gift through businesses, etc.; you’re allowed to gift up to $14,000 a year from one person to another. So there’s a lot of specialty rules with the IRS that specifically relate to gifting and what’s allowed and what is not allowed. We are more than happy to answer those questions!
I hope you guys are having an amazing Valentine’s Day and I hope everyone’s lives are full with as much love and happiness as they can possibly have. Thanks so much, and happy Valentine’s Day.