New Tax Law Offers Added Incentive to Make Tax-Free Transfer of RMDs From Your IRA to Charity

Basic rules for charitable deductions stay the same under the new tax law, but a near doubling of the standard deduction may change people's giving.

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Question: I heard that the new tax law changed some of the rules pertaining to charitable giving. Can I still make a tax-free transfer from my IRA to charity and have it count as my required minimum distribution? I'm 75 and I've been doing that for the past few years.

Answer: Yes. The new tax law doesn't change the rules for qualified charitable distributions, or QCDs, which let people older than 70½ transfer up to $100,000 from their IRAs to charity each year and have it count as their RMD without being added to their adjusted gross income. In fact, the new law is likely to make QCDs attractive to more retirees.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.