taxes

Minimum Age for Tax-Free IRA Gifts to Charity

You can donate money directly from a traditional IRA to a charity without triggering taxes – but only if you meet a strict age requirement.

Question:

I’m 69 years old, and I’m trying to determine if I can transfer money from my IRA to charity now without having it taxed as income. Or do I have to wait until age 70½?

Answer:

You can only transfer money tax-free from your IRA to charity (called a “qualified charitable distribution”) after you turn 70½. The transfer must be made after you reach that exact age–no earlier than six months after your 70th birthday.

This timing is different from the rules for required minimum distributions, which can be taken anytime during the year you turn age 70½ (or up to April 1 of the year after that, for your first RMD). After you turn 70½, you can transfer up to $100,000 each year from your IRA to charity, which can count as your mandatory distribution but isn’t included in your adjusted gross income.

You can always withdraw money from your IRA before turning 70½ and give it to charity, but it will be reported as income on your tax return. If you itemize, you can then deduct the gift as a charitable contribution. However, fewer people will be itemizing this year, now that the standard deduction has more than doubled under the federal tax law passed late last year. For taxpayers age 65 and older, the standard deduction for 2018 is $13,600 for singles and $26,600 for married joint filers.

For more information, see New Tax Law Offers Added Incentive to Make Tax-Free Transfer of RMDs From Your IRA to Charity. Also see Charitable Giving Under the New Tax Law.

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