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Stop the Cycle of Paying Taxes on Your RMD (Required Minimum Distribution)
Many people are required to receive a minimum distribution from their Individual Retirement Account (IRA) although they do not need the income. If this is your situation, rather than incurring a large penalty for not withdrawing your RMD, you can choose to receive your RMD and donate 100% of it. The charitable deduction will offset any federal income taxes required for the distribution and you will have the satisfaction of helping the VFW National Home for Children.
Example:
Beverly has a required minimum distribution from her IRA of $15,000. Beverly also has other sources of income such as social security and a pension, which adequately cover her living expenses. Consider the options below, assuming Beverly is taxed at a rate of 28%.
Because Beverly’s lifestyle does not require the use of this distribution, rather than paying penalties of $7,500 or paying taxes of $4,200 or more, she simply gives the distribution to the National Home.
If Beverly did need some of the income, she could use a portion of the distribution and donate the remainder.
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