July 2018 – Q: What about the new tax bill’s impact on my IRA? Are there changes I need to know of?
A: New tax laws won’t impact your IRA in any major way. You may still add current amounts, and, if over 70½, you are still required to take a Minimum Required Distribution (MRD).
As far as I can tell, rules on the MRD haven’t changed – you may still direct your MRD directly to ministries without it being taxed income. Have your fiduciary send a portion (or all) of the MRD directly to your church or other charity.
For instance, if you give $2,000 a year to your church, have your MRD sent directly to your church, then use your increased cash flow for other needs. It’s important to note that you will not get a charitable deduction for that $2,000, but you won’t have to pay income tax on it as long as it is sent directly from the account to your church or charity. Everyone should be taking advantage of this if you are required to take a Minimum Required Distribution.
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).
Financial Issues website
AFA Foundation: 800-326-4543, ext 345