‘Tis the Season to Give AND Reduce Taxes!

A great way to make a financial gift to your church or another charitable organization is through a Qualified Charitable Distribution from your Traditional IRA account. IF you are over the age of 70 ½ and subject to required minimum distributions, you can request that the IRA custodian issue a check for part or all of your required minimum distribution made payable to your charity of choice. The amount that goes to charity is not included in your ordinary income. For example: Let’s say your required minimum distribution for your traditional IRA account is $10,000, if you instruct your advisor or mutual fund company to send your church $3,000 directly, and send the remaining $7,000 to you, the $3,000 you gave to the church is not included in your income for the year. The taxable distribution to you would be $7,000. This can only be accomplished from an IRA account. If you have a 401(k) or other employer retirement plan, you can roll a portion of the 401(k) into an IRA, then take the distribution as outlined above.