The How & Why I Give - Don Dudziak
I have been asked to write the first of a series of articles on why and how I give to charities. The first part - why - is easy. Most non-profit organizations always have a need for funds to continue, and often to expand, the good they do for the community. I have decided to focus on just a few local ones where I can see the benefits of contributions, and verify that only a small portion of the donation goes to administration or fundraising expenses.
As to how, I make donations by direct transfer from my IRA. Because I do not itemize on my income tax Form 1040, cash contributions have no tax benefits as a deduction. With transfer from an IRA, my taxed income is reduced by the entire amount of the contribution. The advantages of contributing directly from your IRA can be even greater; here are some details:
If you are 72 years old or older, you are required to withdraw a minimum distribution from your traditional IRA each year, and the withdrawn money is taxed as income. An exception is that the IRS lets you contribute up to $100k yearly to charities directly from your IRA, with the money you contribute being income-tax free. The money must go directly from the IRA custodian to the charity; i.e., you cannot withdraw the money from the IRA yourself and give it to the charity.
Another advantage to giving money this way from an IRA is that it decreases your modified gross income on your IRS1040 tax return by the amount you contribute. If your gross income is above certain thresholds your direct contribution to charity can possibly decrease it below those thresholds and save considerable money on your premiums for Medicare Part B and Part D. See ssa.gov for more details. Examples are given below for a single person in 2024; similar increases occur for Part D (prescription drug) premiums:
Gross Income Medicare Monthly Part B Premium
<$103k -$174.40
$103k-129k -$244.60
$129-161k -$349.40
$161k-$103 -$454.20
$183k-$500k -$559.00
For gifts to the Friends of the Senior Center of Los Alamos, the custodian should be instructed to send the check to:
Los Alamos Friends of the Senior Center
1101 Bathtub Row Los Alamos, NM 87544
Attn: Cathy Walters, Treasurer
For LARSO, the checks should be sent to:
Los Alamos Retired and Senior Organization
1101 Bathtub Row Los Alamos, NM 87544
Attn: Jacci Gruninger, Director