A: The rule is that if you are over 70½ years old, you can do all of your giving through your IRA account. The gifts count as your Minimum Required Distribution, so you will not have to pay tax on that money.
It is a wonderful habit to acquire. Whatever your MRD is, you can give that amount to charity and not pay tax on it. Imagine being able to give a gift to your church or other favorite ministry that amounts to what you would normally give in a year.
But there is one important regulation that you must follow: you cannot write a personal check for that gift. The check has to come directly from the firm that is managing your IRA to the ministries that you tell them to send it to.
If you meet the age qualification, I strongly encourage you to take advantage of this giving strategy. It’s the only way you can get money out of your IRA tax free.
____________________ Dan Celia has been in financial management for more than 30 years. He works closely with AFA Foundation and can be heard six days a week on AFR Talk (afr.net).
