When you turn 70 1/2, you must begin taking the required minimum distribution from your traditional IRA accounts. The amount is based on how much money you have in the account and how long you are expected to live. Typically, you have to pay taxes on these distributions and if you have accumulated a sizable amount in the IRA, it could create a heavy tax burden. As of the time of publication, you can avoid taxes by giving up to $100,000 to charity.
1. Contact the charity to see if they are eligible to receive charitable contributions from an IRA. Some charities may not be.
2. Ask the charity for its tax identification number and the address of the location that handles donations.
3. Submit a special payee form to your IRA custodian. Each custodian has a different specific process for this request. Typically, though, you need to make the request in writing, using either a signed letter in which you've typed the request or through a special application form. Contact your IRA custodian if you are not sure of the procedure.
4. Give the check to the charity, if applicable. The IRA custodian will write the check out to the charity, but will send the check to you if you prefer to make the donation yourself.
- You must make it clear to the IRA custodian that you are doing a charitable donation and that the check should be in the name of the charity. If the check comes in your name, you'll be responsible for the taxes.