While new tax cuts went into effect last year, many provisions relating to charitable giving remain intact. Most prominently, qualifying donors can still make direct transfers to charities from individual retirement accounts (IRAs) without first having to recognize the distribution as income.
People over 70 1/2 years old are required to make minimum yearly distributions from their retirement accounts – distributions that are taxed by the government. But qualifying donors are still allowed to give up to $100,000 per year from these accounts to charity, which counts toward the minimum disbursement, without being taxed. You may make tax-free transfers from your IRA or Roth IRA if:
- You are 70 1/2 years or older
- Your cumulative tax-free transfers to charity do not exceed $100,000 per tax year (married couples can donate up to $200,000 per year).
- Your tax-free transfers are made directly from your IRA or Roth IRA to a qualified public charity, like Open Door Mission, and NOT to donor-advised funds, supporting organizations or private foundations.
Transfers completed by December 31, 2019 will be free of federal income tax this year, and such gifts qualify for the 2019 required minimum distribution from donors’ IRAs. Please act now to support Open Door Mission – and to fulfill your own charitable goals – by taking advantage of the planning options available to you.
If you would like us to coordinate with your fund custodian a direct transfer of funds from your IRA or Roth IRA to Open Door Mission, please contact our Chief Financial Officer, Mike Johnson, at email@example.com.
Thank you for considering this excellent charitable-giving opportunity!