Years ago, Congress generally waited until December every year to extend the law that allows people to make a tax-free donation from their IRA. But now, anyone 70 1/2 or older can transfer up to $100,000 of their Required Minimum Distribution (RMD) to a charity like GraceWorks Ministries any time during the year.
The benefits to doing this is that your RMD won’t increase your adjusted gross income, which is particularly helpful if you don’t itemize and can’t deduct charitable deductions. It also helps to avoid the Medicare high-income surcharge and may make less of your Social Security benefits taxable.
To make it tax-free, the RMD needs to be transferred directly from the IRA to GraceWorks. If it’s withdrawn first, it can still be donated and deducted but becomes a charitable contribution and added in your adjusted gross income.
To donate your RMD to GraceWorks, ask your IRA administrator about the procedures and time frame for making a transfer. In some cases, stock or mutual funds within your IRA can be sold in order to have enough cash in your account to cover the RMD.
A check written to GraceWorks can be mailed to you in which you can then make a copy for your records before forwarding onto GraceWorks. Your IRA administrator can also send the check directly to GraceWorks but make sure the money is deducted from your IRA before the December 31 deadline.
Our address is: GraceWorks Ministries, 104 Southeast Parkway, Franklin, TN 37064
Also, GraceWorks can accept stock transfers if that is preferred. To find out more, contact Shelley Johnson by email or call 615.794.9055 x139.
We thank everyone who helps us achieve our mission to provide immediate and long-term resources to neighbors in need in Williamson County through their generous donations.