Tax Facts

Information to help individuals and small business navigate our complex Tax Laws. Not to be construed as tax advice. Contact your hired tax advisor for your specific tax situation and advice.

Charitable Donations in 2019 and your IRA RMD

If you are over 70 1/2 and are required to start or continue taking money as income from your IRA, it is known as an RMD or Required Minimum Distribution. This is the tax law that requires you to start taking at least a minimum amount of money out of your retirement account and start paying taxes on it.

If you are tithing or giving money to charity each year, you may not get a tax deduction for that charitable donation if you no longer exceed the new standard deduction, which has essentially doubled.

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Taking Your RMD from an IRA

Did you take an RMD from your IRA? It may seem like alphabet soup, but it is an important check you should make each year if you are over 70. Once you reach 70 and a half, you are required to start taking distributions from your IRA. This is called an RMD or Required Minimum Distribution. And it is just that - an amount of money you are required to take out of the IRA in the calendar year. If you don't take the distribution by December 31 (last day of the calendar year) you will incur a penalty on your tax return for not doing so. That penalty is steep: 50% of your RMD! Call your tax advisor and your financial advisor to determine your IRA status and make sure you don't end up giving half of it to the IRS!

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