1925

Smart Philanthropy – Your RMDs

Smart philanthropists are embracing an option available to people that take Required Minimum Distributions from their IRAs.  The strategy involves two dynamics:

• Required Minimum Distributions
• Increased Standard Deduction levels

Beginning in 2023, people must start withdrawing from their IRAs after turning 73.  These taxable withdrawals are mandatory, with a penalty for any shortfall.  While many people utilize these funds, others wish they could avoid these taxable distributions. 

Most retirees claim the Standard Deduction for income tax purposes each year.  People who no longer itemize their deductions have no opportunity to claim a ‘write-off’ for their donations. 

Here’s the strategy:  Use your RMD to make your charitable donations.

A Qualified Charitable Distribution from your IRA can satisfy your RMD, and also provide support for Trinidad State.  Although these gifts are not tax deductible, if you’re no longer itemizing deductions it really doesn’t matter.  You still receive the Standard Deduction.  Perhaps most importantly, there is no income tax due from an unwanted RMD.

This strategy makes sense for people who:

• Want to support Trinidad State
• Have sufficient retirement income from non-IRA sources
• No longer itemize income tax deductions
• Want to preserve available cash on hand
• Have reached age 73 and must take RMDs

To learn more about this option, please contact Toni DeAngelis at toni.deangelis@trinidadstate.edu or 719-846-5520.  There is no expectation or obligation to complete a gift.