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The Right PATH to Charitable Giving

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.”)

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