For the 2018 tax year filing under the new tax law, standard deductions will double. This means that many taxpayers who now itemize deductions will find it no longer beneficial to do so. They will find that the deductions they normally take, including for charitable giving, do not add up to as much as the new standard deduction amount ($12,000 for single and $24,000 for married couples filing jointly)
Individuals age 70 ½, who are doing required minimum distributions (RMD) from their IRAs, may wish to consider making a direct transfer of charitable contribution (pledge) to the Read Aloud program from their RMD and lower their taxable adjusted gross income.
How this works:
To qualify for the tax break, funds must be transferred directly from the IRA to an eligible charity by the IRA trustee. Those who meet the age requirement can transfer up to $100,000 per year directly to an eligible charity without paying income tax on the transaction. If you file a joint tax return, your spouse can also make a charitable contribution of up to $100,000, meaning couples can exclude up to $200,000 of their retirement savings from income tax if they donate it to charity.
If you withdraw the money from your IRA and later donate it, it won’t qualify as a tax-free qualified charitable distribution.
Interested individuals should check with their tax preparer and/or legal counsel.
Other planned giving options to consider that may provide tax benefits and supporting the Read Aloud program:
Outright gifts of stock or securities
Gifts under a Will
Gifts of life insurance, trusts and retirement plans
Please consult your financial adviser or counsel, or you may contact our giving team at email@example.com