Benefits of an IRA Charitable Rollovers

For many donors 70½ or older, a rollover gift from a qualified IRA is far more advantageous. We encourage our retired congregants and donors to talk to their professional advisors about tithing to Unity of the Midlands via qualified charitable distributions from their IRA rather than cash. 

In late 2015, Congress made the IRA charitable rollover provision of the Taxpayer Relief Act of 2012 permanent. With the passage of the Tax Cuts and Jobs Act of 2017, many more donors over the age of 70½ will likely benefit from giving via a qualified charitable distribution from their IRA. Donors are allowed to transfer up to $100,000 annually from their IRA directly to their favorite charity. 

When the transfer is made directly from the custodian of the IRA to a qualified charity, the distribution is excluded from the donor’s adjusted gross income (AGI) but still counts toward their required minimum distribution (RMD). For retired donors who do not need the required minimum distribution from their IRA, or at least a portion of it, this is an efficient and easy way to support Unity of the Midlands and reduce taxable income. The IRA charitable rollover is particularly appealing to: donors who do not benefit from charitable deductions because they do not itemize deductions; those who have already reached their annual limitation on charitable deductions; and, those impacted by the percentage of adjusted gross income limitation on charitable contributions. 

The tax code makes charitable giving and tithing less financially advantageous for many Americans, so this is where the IRA rollover can benefit more of our congregants. Because the tax code nearly doubles the standard deduction and limits the itemized deduction for state and local taxes at $10,000 annually, many retired donors who typically itemized deductions in the past will now be taking the standard deduction. This means that charitable gifts and Unity of the Midlands tithes will no longer be advantageous to you at tax time. However, a qualified charitable distribution from an IRA, even if you take the standard deduction, will still allow you to make your gifts with pretax dollars.  For many older congregants, tithing via your IRA will now benefit you more than giving cash. 

Making a qualified charitable distribution from an IRA is simple. Typically, you need only contact the custodian of your IRA and specifically request to make a qualified charitable distribution—most administrators will simply provide a form and issue a check made out to the donor’s charity of choice.

You can have the donation sent to Unity of the Midlands, 1801 Legrand Rd, Columbia, SC  29223.