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Gene G. Stern

Gene G. Stern

If You are Over 70½ , This is Important Information

The recent Tax Overhaul legislation and Congress' passage of the Charitable IRA contribution three years ago has provided tax incentives in making charitable contributions to The Free Clinic.

IRA owners over the age of 70½ are mandated by law to take a Required Minimum Distribution (RMD). The IRS has published factors to determine each year's amount, and for year one, it is about 3.6% of the IRA value on 12/31 of the previous year. A $500,000 IRA would have an $18,000 RMD and this is reportable and taxable on the 1040. This income will increase the adjusted gross income (AGI) of the IRA owner and potentially place the owner into a higher tax bracket and also impact the income used to determine the Part B of Medicare paid from Social Security.

If you notify your IRA custodian that you would like all or a part of the RMD to be directed to The Free Clinic, you are satisfying the RMD, but NOT increasing the AGI. This could potentially keep you in a lower income tax bracket and possibly a lower fee for Medicare part B while making a gift to the Free Clinic.

An added benefit is that the New Tax Overhaul, recently passed, has increased the Standard Deduction and will potentially have everyone file a Short Form 1040, which will eliminate itemizing deductions. The standard deduction has been raised to $24,000 so it's unlikely that you itemize deductions but you can reduce your AGI. For those of us needing to take an RMD, we now have real tax incentives to continue making our annual contributions to The Free Clinic.

I personally choose this method of giving to the Free Clinic because it allows me to feel good that I am helping the neediest in our community and meets my RMD requirement. Since this is not reported as income, it reduces my AGI, which is way better than having a deduction. Doing the charitable RMD benefits me and the Free Clinic!

Gene G. Stern

If you have any questions about how to make a charitable RMD, please contact Debbie Sokolov, CFRE, MNA at 727-821-1200, ext. 110.


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