Letter to the Editor: Donating Your Required Minimum Distribution

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As 2018 comes to an end and we get ready for the start of 2019, the United Way of Kent County would like to remind you to be sure you have taken your Required Minimum Distribution (RMD) from your IRA or 401K. If you are over 70.5 years of age, these withdrawals must be taken by the end of the year. And once January arrives, you can take your new withdrawal for calendar year 2019.

We would also like to remind you that there are significant tax advantages of donating part of your RMD directly from your custodian to the United Way of Kent County—or to any other qualified charity.

The RMD is taxed as regular income and may increase not only your income taxes, but may also your Part B and D Medicare premiums. Moreover, the extra income can result in higher taxes on your Social Security. By donating the RMD, or part of it, you reduce your income and subsequent income taxes, while helping to support your favorite charities in Kent County.

The Qualified Charitable Distribution provision for donating pre-tax money from the RMD is now a permanent provision of the tax code, and any IRA holder over the age of 70.5 can donate up to $100,000 of their RMD. And with the 2018 new tax law making itemizing a rarity, it makes even more sense to source your charitable donations from your RMD.

A few simple requirements: The money is limited to the RMD and is capped at $100,000. The money must come direct from the IRA custodian to the charity. It cannot go to the owner first. Plus, the money contributed reduces income, but cannot then be claimed as a charitable donation (if you itemize)—since that would result in a double deduction.

For more information on how to donate your IRA RMD to the United Way of Kent County and the benefits that brings to Kent County, please contact Executive Director Beth Everett at 410-778-3195 or email her at beth@unitedwayofkentcounty.org.

Glenn L. Wilson, President
United Way of Kent County

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