Attention Over 65 donors

If you are 70 ½ older and have an IRA, you have to make Required Minimum Deduction each year, based on the balance as of January 1 of the tax year. You have to count this as income and pay taxes on the amount withdrawn.

But Congress did give a tax break to those who want to make a contribution to any 501c3 charity. In fact you can make more than the Required Minimum Deduction, up to $100,000.

The amount given as a Qualified Charitable Deduction directly from your IRA to your choice or choices of recipients does not count as income, thus avoiding all income taxes (on the amount donated) at the Federal level. And this will count toward your Required Minimum Deduction.

To make this happen for 2015, the funds must be withdrawn and donated by December 31. For tax year 2016, these funds may be given any time before December 31, 2016.

You should consult with your tax advisor or use a tax preparation program for how to show this on your 1040.