Is there a tax benefit to making a donation directly from my IRA?

May 07, 2014 by Dave Du Val, EA
church

Hey Dave,

Is there a tax benefit to making a charitable contribution to my church directly from my IRA rather than writing a check and then deducting the contribution from my 2014 tax return?

Pete

 

Hi Pete,

The Qualified Charitable Distribution (QCD) was a beneficial tax provision that unfortunately ended in 2013. It allowed taxpayers who were 70 ½ or older to pay directly from their IRAs to a qualified charity. You were able exclude from gross income up to $100,000 of a QCD made for a year, and that QCD could be used to satisfy any IRA required minimum distributions (RMDs) for the year. The amount of a QCD excluded from gross income was not taken into account in determining any deduction for charitable contributions.

This was a popular tax provision that could be extended by Congress this year, so keep your eyes on any new tax legislation that gets passed to find out if it comes back.

 

Deductibly Yours,

Dave
 

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David E. Du Val, EA
Chief Compliance Officer for TRI Holdco

 

Dave Du Val, EA, is Chief Compliance Officer for TRI Holdco. Inc., the parent company of TaxAudit, and Centenal Tax Group. A nationally recognized speaker and educator, Dave is well known for his high energy and dynamic presentation style. He is a frequent and popular guest speaker for the California Society of Tax Consultants, the California Society of Enrolled Agents and the National Association of Tax Professionals. Dave frequently contributes tax tips and information to news publications, including US News and World Report, USA Today, and CPA Practice Advisor. Dave is an Enrolled Agent who has prepared thousands of returns during his career and has trained and mentored hundreds of tax professionals. He is a member of the National Association of Tax Professionals, the National Association of Enrolled Agents and the California Society of Enrolled Agents. Dave also holds a Master of Arts in Education and has been educating people since 1972. 


 

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