How to Use Your RMD to Your Best Advantage
To those of us who are 70½ or older and have required minimum distribution (RMD) IRA funds to draw down.
Are you utilizing tax advantages based on how your RMD is directed?
Stewardship Option #1:
When you have your RMD go directly to yourself (via check or deposit into your bank account), it counts toward your adjusted gross income pay which you pay taxes on.
Most donations to BASICS come from dollars that are already counted toward your adjusted gross income.
Stewardship Option #2:
Have your RMD IRA amount or some portion of it go directly to approved charities like BASICS in Milwaukee Inc.
Then the amount directed to the charity is not counted in your adjusted gross income and is truly tax-free.
Keeping the money out of your adjusted gross income could also help you avoid the Medicare income tax on the larger portion of your Social Security benefits.
By transferring this directly to BASICS you don’t need to itemize your deductions to get a tax benefit from the gift.
Other Notes of Interest:
Are you utilizing tax advantages based on how your RMD is directed?
Stewardship Option #1:
When you have your RMD go directly to yourself (via check or deposit into your bank account), it counts toward your adjusted gross income pay which you pay taxes on.
Most donations to BASICS come from dollars that are already counted toward your adjusted gross income.
Stewardship Option #2:
Have your RMD IRA amount or some portion of it go directly to approved charities like BASICS in Milwaukee Inc.
Then the amount directed to the charity is not counted in your adjusted gross income and is truly tax-free.
Keeping the money out of your adjusted gross income could also help you avoid the Medicare income tax on the larger portion of your Social Security benefits.
By transferring this directly to BASICS you don’t need to itemize your deductions to get a tax benefit from the gift.
Other Notes of Interest:
- Ask your IRA administrator about making a direct transfer to BASICS in Milwaukee Inc, or call our office 414.372.7200 if you have any questions.
- You can transfer up to $100,000 to charity tax-free each year -- even if that’s more than your RMD.
- You can transfer your RMD money anytime during the year.
- 401(k) plans do not qualify for the tax-free transfer.