The IRA-to-charity break becomes an even more valuable planning tool. Individuals age 70½ and older can transfer as much as $100,000 annually from their traditional IRAs directly to charity. If married, you and your spouse can give up to $100,000 each from your separate IRAs. The charitable transfers count as all or part of your required minimum distribution. But unlike other payouts,
you are not taxed on them and they are not added to your adjusted gross income. Not only did the new tax law keep this tax-saver, but its usefulness increased. Beginning with 2018 returns, many more people will take the larger standard deduction in lieu of itemizing, leading to fewer filers claiming charitable write-offs on Schedule A. The IRA-to-charity strategy will be a good way to get tax savings from charitable gifts. Be sure to correctly report IRA distributions to charity on your tax return. When filling out your 1040, you should include the total amount of distributions shown on Form 1099-R on line 15a of the 1040. Then subtract the amount that was transferred directly to charity and report the remainder…even if it is $0… on line 15b. Write “QCD” next to line 15b so IRS knows why the numbers don’t match. People using Form 1040A should follow the same procedures on lines 11a and 11b. Don’t double-dip. You can’t take a charitable write-off for the IRA donation.