Steve Criser
Your gift to The Active Age, a 501(c)(3) not-for-profit organization, is normally tax deductible as an itemized deduction on your tax return.
With the higher federal standard deduction, it may be difficult to achieve the desired tax benefit from your charitable donation. For older taxpayers, consider:
If you are 70 ½, plan to make the Qualified Charitable Deduction gift from your traditional Individual Retirement Account (IRA) in 2024 or 2025.
Federal law allows people age 70½ or older to make direct transfers up to $100,000 per year per person to charitable organizations from their Individual Retirement Account (IRA), without the withdrawal being treated as taxable income. The payment from your Traditional IRA must be made directly by the IRA Trustee. You cannot personally touch the money.
The withdrawal can also be counted toward your Required Minimum Distribution.
The advantages are that many of us cannot take advantage of charitable deductions. This is because of the high standard deduction ($33,100 for seniors filing jointly). Paying the donation directly out of your IRA lets you take advantage of this tax deduction by instead reducing your adjusted gross income by the amount donated. Reducing Adjusted Gross Income has other potential tax benefits as well.
Please visit with your tax accountant to see if this would help you.
Steve Criser is a member of The Active Age board of directors. He can be reached at steve@cgp.llc.
