Could You Still Be Eligible to Deduct Your Charitable Giving?

April 23, 2018

By: Joan Catherine Braun

Among the many milestones we marked on April 17, 2018—the end of the 2017 tax filing season, the unprecedented breakdown of IRS computers, Daffy Duck turning eighty-one years old—was this one: It was the last time that as many as twenty-one million Americans may have been able to deduct charitable donations on their federal tax returns.   

If you are one of these citizens and you will be 70½ years old or older in 2018, you may still be able to reap the tax benefit of your charitable giving when you file your tax return next April—whether you itemize or not!   

If you have an IRA (Individual Retirement Account), you are required to take a Required Minimum Distribution (RMD) each year, beginning in the year you turn 70½ years old—no ifs, ands, or buts. Normally, that distribution is included in your taxable income and you pay income tax on it. However, by directing a portion of your RMD to be paid DIRECTLY from your IRA to the charity or charities of your choice, the amount you donate is completely excluded from your taxable income. Result: You pay no tax at all on the amount donated.  

As loyal supporters Kathy and Mike said when they dropped off the Qualified Charitable Distribution (QCD) check their broker had written from their IRA to United Way Bay Area, “Some of us don’t have as many ways to reduce our tax bill, especially if our homes are paid off. This is a good way. Plus, you can feel comfortable about giving more.”

To learn about how you can make a QCD both part of your tax reduction strategy and part of your philanthropic impact strategy, please see the resources and stories on our QCD web pages here: https://uwba.org/ira-charitable-distribution/. Alternatively, please call us. Development Officer Lisa Simons would be happy to walk you through the process. She can be reached at: lsimons@uwba.org or (408) 345-4314.  

We always look forward to helping you to do well by doing good. But we are especially eager to assist you now because experts estimate that the recent tax law changes could reduce charitable giving by as much as 6.5% or nineteen and half billion dollars this year.  

Like you, we know that the needs of our community are growing, not shrinking. For that reason, we are committed to doing all we can to assist you in helping Bay Area families to build better lives for themselves and their children.

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