Taxation: Donate your RMD Directly to your church

Charitable Deduction without

Schedule A 


This is so good, it seems like cheating - but it is not.

Did you know that you can donate your required minimum distribution form yourn Individual Retiurement Account up to $100,000 to the charity of your choice? - and NOT SHOW THE INCOME on your tax return? Most people don’t know this. Of course there are rules – and it has to come from an IRA.

Many of the older generation are more generous to charities than we younger folk. We get to deduct charitable contributions on Schedule A to reduce our income. It goes something like this:

Report income from IRA on page 1, including it in gross income.

Deduct Charitable contributions on Schedule A to reduce taxable income.

Now that the standard deduction is much higher, fewer people will itemize their deductions on Schedule A, and this change makes this strategy even more attractive.

Assume you are receiving minimum distributions from an IRA, meaning you are over 70 ½ years old. Your standard deduction for 2018 is $26,600.Lets assume further that you donate $20,000 to your church and have another $5,000 in other deductions. You would naturally elect to take the standard deduction because it is a better deduction. It tax lingo, more reductions to income is better. $26,600 is greater than $25,000, so you deduct $26,600 from your income.

This makes your charitable contribution worthless as far as tax benefit is calculated.

Lucky you know me.




There are a lot of people that could benefit from this simple strategy. With the changing of the tax laws, it is even more attractive now.

You can’t do this with a 401(k) – only IRA. Why not you ask? It is just another tax mystery.

Direct the custodian of your IRA (bank, mutual fund, brokerage company, insurance company, etc) to send the $20,000 directly to the church of your choice rather than you sending monthly or weekly donations. This results in $20,000 directly deducted from your gross income BEFORE you complete your Schedule A (Itemized deductions) and you still get the additional $26,600 standard deduction.

Instead of $26,600 deducted from your income, $46,600 is deducted. Cool.

If your tax bracket is 25%, you just saved $5,000 without spending an additional dime.


If it kind of seems unfair to have someone as smart as me on your team, you can send half your tax savings to me at the address in the contact page.