If you have contributed to a tax-deferred IRA over your working life, there are several tax benefits related to donating this money to a 501c3 nonprofit organization like the National Quilt Museum.
If you withdraw from these accounts at any time you will be required to pay income tax on the withdrawal. At 70 ½ years, in most cases, you will be required to make annual withdrawals from your account. Failure to do so can result in significant penalties. If you are fortunate enough to not need your distribution for living expenses, you can avoid the income tax bill by donating your withdrawal to The National Quilt Museum or other nonprofit organizations.
What you need to know:
- You must be at least 70 ½ years of age.
- You may transfer up to $100,000 a year to The National Quilt Museum or other qualified nonprofits without paying income tax on the transaction.
- Couples can exclude up to $200,000 in taxes in some cases depending on how they file.
- In some cases, you can roll a 401k over into an IRA and take advantage of these benefits.
- You do not have to donate the entire withdrawal; you may take some of the money and donate the rest.
- You don’t need to itemize your taxes to take advantage of this benefit.
- Funds must be directly transferred from your IRA trustee to the 501c3 nonprofit organization to take advantage of the tax benefits.
The tax benefits of donating funds from your IRA to The National Quilt Museum can be significant. If you are interested in potentially making a donation to The National Quilt Museum in order to take advantage of these tax breaks, please contact Museum CEO Frank Bennett at 270-442-8856. Please consult a financial professional before making any decisions.
The National Quilt Museum is a 501c3 nonprofit organization with federal tax ID number 61-1193387.
This article does not serve as financial advice. Every situation is unique. Please get advice from a financial services professional or attorney before making any decisions.