Talk to your tax advisor. Those who are already required to take distributions should know the exact amount the distribution is for. Those under the age of 70 1/2 should review existing IRS regulations.
Determine whether itemizing deductions, taking a standard deduction or rolling IRA assets over to a charity is the best option. Individuals over 65 have higher standard deductions and may be better off without itemization. Note that the laws allowing a $100,000 non-taxable rollover from an IRA into a charity expired in 2009. Whether Congress will re-enact this legislation is unknown as of May 2010. Your tax advisor will have the most updated information.
Choose a charity to donate to. The charity must be IRS approved. Confirm with the IRS through IRS.gov, "Search for Charities" or call 877-829-5500 to find out if the charity of your choice is approved for donation.
File forms with your IRA custodian to either take the distribution or rollover the assets to the charity directly. Request that no withholding be applied to any money sent to you. If there is mandatory withholding, keep accurate records to regain those funds when you file your taxes. Rollovers will have zero withholding and are ideal if you have the option to do this.
Make the donation. Get a receipt for the rollover or a direct donation.
File your taxes in the following year. File Form 8283 for all donations over $500 along with your Form 1040 or 1040A. Apply the deductions as needed to regain your taxes.
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