Are you over 70.5 years old? Do you have retirement assets? Reduce your retirement tax bill by taking a qualified charitable distribution from your IRA to support World Ocean School!
Did you know that people that are over 70 ½ with retirement assets, are required by the IRS to withdraw a portion of their funds and pay taxes on it? The IRS allows you to take up to $100,000 from your RMD for charitable donations. If you use your RMD for a qualified charitable donation, then you do not have to pay taxes on that withdrawal.
For example, in 2019—
If a client had $1M Individual Retirement Account and turned 71 years old, the IRS would require that the client take out roughly $37,735 during the course of the year.
Normally, if a client takes that distribution for themselves, then they would pay full taxes on that withdrawal.
Those in the highest tax brackets, could pay as much as 42% (37% Federal taxes, 5% MA State taxes) which comes out to: $15,850.
Instead, if a client distributed the Required Minimum Distribution directly to a Qualified Charitable Organization(s), they do not pay any taxes – thereby saving $15,580 in taxes.
Each client would need to consult their tax advisor to ensure this is the most advantageous way to make charitable donations.