Charitable IRA rollover: QCDs
If you are 70½ or older, you can make qualified charitable distributions (QCDs) directly from your IRA to eligible charitable organizations. These distributions can be helpful for retirees who want to support charitable causes while minimizing their tax liability. QCDs fulfill required minimum distributions (RMDs) without being included in adjusted gross income (AGI).
- QCDs are not subject to tax.
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You can benefit from a QCD even if you claim the standard deduction. (However, a QCD is not deductible as a charitable contribution.)
- There are other rules to follow and a limit: For 2024, the IRA QCD limit is $105,000. For the 2023 tax year (if you haven’t yet filed), the limit is $100,000. For married couples, each spouse can exclude up to the limit for a total, for the 2023 tax year, of up to $200,000 and for 2024, up to $210,000.
A note on RMDs: Due to changes brought about by the SECURE 2.0 Act, 73 is the age at which you must start taking distributions from retirement savings accounts (other than Roth IRAs). You have until April 1 of the following year to take your first required minimum distribution. Different RMD rules may apply to inherited IRAs.
Property tax relief
Some states offer property tax breaks or exemptions for older adults, usually 65 or older, but some states may offer property tax relief to those under 65. These tax breaks, which vary from state by state based on factors like age, income, or disability status, can relieve property tax burdens, enabling older homeowners to maintain financial stability and remain in their homes during retirement.
To find information about potential property tax relief, visit your state’s government website or contact your state Department of Revenue for guidance on tax credits available for housing, real estate, and property taxes.
Extra standard deduction: 65 and older
Once you turn 65, you become eligible for an additional standard deduction on top of the regular standard deduction. This extra deduction reduces taxable income, potentially lowering overall tax liabilities and allowing retirees to keep more of their hard-earned money. IRS Standard Deduction Link.
For 2023, the additional standard deduction is $1,850 if you are single or file as head of household. If you're married, filing jointly or separately, the extra standard deduction amount is $1,500 per qualifying individual.
The just-released additional standard deduction for over 65 amount for 2024 (returns usually filed in early 2025) is $1,550 for married, filing jointly or separately and is $1,950 if single or file as head of household. Additional deductions if you're over 65 and blind, see chart below.
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