Here’s a helpful, often over-looked tax tip for your estate planning if you want to make a charitable gift. If you have an IRA, it may be best to make that gift directly from the IRA to help save taxes.
Normally, when you withdraw funds from an IRA, you (or your beneficiaries) must pay income tax on those distributions. However, a charity doesn’t pay income taxes.
This means if you designate a charitable organization to receive funds directly from your IRA, the entire amount goes to the charity tax-free.
This approach allows you to make a more meaningful gift while reducing the tax burden on your estate. In effect, it stretches your dollars further and ensures your money is used the way you intended rather than lost to taxes.
At Pyke & Associates, we regularly help clients explore strategies like this to maximize the value of their estate plans. Every family’s situation is different, so always consult with a qualified tax professional before making changes to your retirement or estate plan.
Contact us to discuss how we can help you with strategies like this.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.
