The “giving season” of the year is coming – the months leading to the end of the year are when most people make their charitable contributions – and for donors who are older than 70 and one-half, one of the most efficient, effective, and beneficial ways of making charitable contributions comes from a process that is required – taking distributions from your retirement account. “Required distributions” are taxable, unless you have them sent directly to your charity of choice instead of coming to you. The percentage of your retirement savings that must be taken out increases annually, providing you with more opportunities to contribute instead of paying taxes.
I am not a tax advisor, and nonprofit personnel are not in the business of giving tax advice. Every donor’s situation is different, but I am happy to share ways that you can experience the joy of philanthropy while minimizing the pain of taxes.
The IRS has a nice FAQ page to answer many basic questions about required distributions, and the NCSML has a useful guide for terms and verbiage related to planned gifts that may involve assets like real property, retirement accounts, and more.