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Your IRA Can Help you Achieve Your Charity Goals

September 13th, 2019 Back to Browse Stories

Laura Brownfield, General Counsel, Community Foundation for Southeast Michigan

Consider using your individual retirement account (IRA) to achieve your charitable giving goals in 2019.

Address your IRA planning now to maximize tax savings. As you plan for yourself, your family, and your charitable causes, keep in mind that while tax rules constantly change, a cash donation to the Community Foundation out of your IRA may be an appropriate tool to utilize in accomplishing your charitable planning objectives.

You may make cash gifts from your IRA to a charity without having to include the IRA distribution in your taxable income. An IRA charitable rollover allows you to direct all or part of your required distribution directly to charitable organizations, including the Community Foundation.

Keep in mind the following when using a distribution from your IRA:

  • You are eligible if you are age 70½ or older;
  • An individual is allowed to roll over up to $100,000 each year from his or her IRA ($200,000 for married couples) to a qualified charity;
  • The amount distributed is excluded from your taxable income;
  • You do not have to itemize your deductions in order to make a distribution; you may take the standard deduction and make a distribution in 2019;
  • The amount of the charitable distribution may exceed your required minimum distribution;
  • You can make a distribution to support the
    Community Foundation’s flexible endowment or a field of interest fund in an area of interest to you (e.g. arts, early childhood education, youth sports);
  • Under the law, IRA distributions to donor-advised funds do not qualify;
  • The window closes on December 31, 2019, as the distribution must be taken in the calendar year in which the taxpayer plans on reporting it; and
  • The distribution must be made directly from the IRA to the Community Foundation and can never pass through your bank account.

The Community Foundation can help you plan to make your charitable giving as tax-efficient and as impactful as possible, to maximize tax savings and carry out your philanthropic objectives.

In the coming months, we would be pleased to help you avoid the year-end rush and discuss making a qualified charitable distribution to the Community Foundation. For assistance, call the Community Foundation at 313.961.6675 or use the form below.