Lucy and Bill regularly give to charity and have benefitted from tax deductions on their donations in the past. Now, with the new tax changes, can they still claim a charitable deduction if they don’t itemize on their tax return?
Yes, they can if they make what’s known as a qualified charitable distribution. Both Lucy and Bill can do this if they are at least age 70½ and they make the donation directly from the IRA to the charity. Because individuals with a traditional IRA must begin qualified minimum distributions at age 70½, those not needing the distributions for living expenses may opt to elect this type of distribution to meet minimum requirements while gaining a deduction from taxable income of up to $100,000 of the gift.
They are eligible to make a qualified charitable distribution without itemizing other deductions if their deductions, including the charitable donation, don’t exceed the standard deduction of $24,000 for joint filers, $18,000 for heads of household and $12,000 for singles. Lucy and Bill should consult their tax and financial professionals to learn more.
Client Profile is based on a hypothetical situation. The solutions discussed here may or may not be appropriate for you.
|Next Article||November 2018 Newsletter||Previous Article|