If you’re over 73, you have a special opportunity to turn a tax obligation into a lasting gift. If you are in this age range and have a traditional IRA or 401(k) you probably already know that you have to withdraw a Required Minimum Distribution (RMD) each year and pay taxes on it. But did you know RMDs can be an opportunity to make a significant charitable impact? By donating your minimum distribution directly to charity, you can reduce your taxable income, lower your tax burden, and support causes that matter to you.
Even more people are eligible to make a Qualified Charitable Distribution (QCD) from their retirement accounts. These function similarly to RMD’s, but you can start making them at age 70 ½ ! The 2025 annual limit for a QCD is $108,000. This is greater than the RMD for many people. Gifting more than you are required to can be helpful by reducing the total amount of your IRA and thus reducing your required distribution in the coming years.
Donating directly from a retirement account has real benefits. Most donations can only be deducted if you itemize, a Qualified Charitable Distribution (QCD) from your retirement account provides a more direct benefit by excluding the donation from your income altogether. This can also help reduce Medicare premiums and minimize the taxable portion of your Social Security benefits. Your donation can immediately support essential projects, like clean water, renewable energy, and community development. It’s a win-win: you satisfy your RMD requirement, lower your taxes, and make a lasting impact on causes that matter to you.
To make a gift to Green Empowerment using your IRA, 401(k), or other qualifying retirement account:
– Contact your retirement account administrator
– Provide instructions in writing to transfer the amount you wish directly to Green Empowerment, PO Box 8802, Portland, OR 97207
– Indicate that Green Empowerment is a qualified 501[c]3 nonprofit organization and include our federal tax ID number: EIN# 93-1230409
More questions? Contact us at [email protected], (503) 284 5774.
CAUTION – This is not intended as tax or legal advice. Please consult with your IRA administrator to determine to what extent these ideas might apply to you.
https://www.irs.gov/newsroom/irs-reminds-those-aged-73-and-older-to-make-required-withdrawals-from-iras-and-retirement-plans-by-dec-31-notes-changes-in-the-law-for-2023
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
https://plannedgiving.waterforpeople.org/give-from-your-ira