Maximize your contribution while minimizing your taxes.
If you are age 70 1/2 or older, you can transfer up to $100,000 per year directly to a qualified non-profit organization like Vascular Cures from an IRA without having to report it as income for federal tax purposes. The transferred amount would be excluded from your taxable income and can count toward your minimum required IRA distribution for the year. This provision applies only to traditional and Roth IRAs – not other retirement plans, such as 401(K), 403(b), annuities, and SEPs.
Here’s how it works: If Bob Jones, a donor in the 35% tax bracket, withdraws $100,000 from an IRA, he will only get to keep $65,000; the remaining $35,000 goes to pay federal tax. However, if Bob instead transferred the same $100,000 to Vascular Cures, Vascular Cures gets the entire amount and Bob pays no taxes on the transfer. In essence, Bob makes a $100,000 charitable donation for only $65,000!
Because the transfer donation is income tax-free to you, the donor, you cannot also claim it as a charitable contribution. Your IRA administrator or your accountant can provide you with further information about the benefits of an IRA donation.