If you are looking to make a non-deductible donation to charity, you may want to consider a Qualified Charitable Distribution (QCD).
The year you turn 70.5, Traditional IRA holders must withdraw a Required Minimum Distribution (RMD). You can, however, satisfy your RMD requirement by making a QCD gift to United Way--it’s a gift that’s tax-free, even if you don’t itemize deductions on your tax return.
By directing a portion of that minimum distribution DIRECTLY to charity, you can avoid being taxed on that part of your distribution. Amounts gifted in this way also help to lessen the possibility that your Social Security benefits will be taxed.
To qualify for this type of preferential tax treatment, the gift must move directly from your IRA to the charity. Pay outs made to you and then donated by you to charity are ineligible. Maximum gifts made under this provision are $100,000 annually. Even if you do not itemize, this powerful option can reduce your taxes!
To set up a QCD gift to United Way, please talk with your IRA Administrator or tax advisor.