9 Valuable Tax Breaks Retirees Should Know About

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Give Money to Charity

If you reached the age of 70½, there’s a tax-friendly way to give money to charity without itemizing. It’s called QCD, a.k.a. qualified charitable distribution. If you opt for this type of distribution, you can actually transfer up to $100,000 annually from your traditional IRA account directly to charity.

Your spouse can transfer the same amount of money to charity, too. Plus, the best part is that the amount of money that goes to charity is excluded from taxable income, and it actually counts toward RMDs.

Also of interest: 12 Legal Ways to Reduce Your Tax Burden

There’s also a deduction of up to $300 for cash donations that go to charity for 2020 and 2021.

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