This blog is one where I am seeking answers to tax questions. Under the new tax law it is my understanding that each individual will receive an automatic charitable contribution deduction of $12,000 or $24,000 per couple. Seniors will receive an additional dollar about of around $2,600. The first question is: Are these figures correct?
If the amounts are this high, many tax filers will take the standard deduction and not itemize. This leads to my second question. If one does not exceed the standard deduction, is it possible to reduce taxes by designating charitable organizations to receive monies from Required Minimum Distributions (RMD)?
When one reaches the age of 70.5, mandatory withdrawals are required from tax deferred accounts. A percentage of the withdrawal goes to pay federal taxes and another portion is allocated to cover state taxes. Anything left over can be directed into a taxable account or taken as cash.
When making the RMD for the 2018, is it possible to reduce the federal and state tax burden by designating charitable contributions be paid out of the RMD sum? Or are contributions made from the RMD amount counted against the standard deduction?
Perhaps we have a U.S. tax lawyer among the readers who might either answer my questions or be able to articulate the problem in clearer fashion than I have.