With the passing of the Protecting Americans from Tax Hikes (PATH) Act, qualified charitable distributions (QCDs) from the IRAs of taxpayers over the age of 70 ½ has now become permanent. While we see our wealthier clients take advantage of this strategy, we think everyone eligible should consider it.
As an example, a widow who normally gives $2,000 to her church each year could have $2,000 paid directly from her IRA to her church as a QCD. This would lower her AGI by $2,000, potentially reducing the amount of her taxable social security. It is extra beneficial if she normally takes the standard deduction.
-John Haffey, CPA
(P.S. If giving from your IRA is not an option, or you aren’t over 70 ½, you can still save on taxes through gifting of stock. See our blog “Charitable Giving, Or Two Birds With One Stone.”)