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How to Give to Charity and Pay Less in Taxes

October 13, 2016

What could be better than having more retirement money than you need? How about being able to give it to charity tax-free?

For the lucky investor who has amassed excess funds for old age, this option became permanent under a law signed by President Barack Obama in 2015. Previously, Congress approved this strategy year by year, often leaving investors scrambling.

After turning 70.5, owners of traditional IRAs are required to take annual required minimum distributions, or RMDs. The amount is a percentage of the investor’s IRA values as of the previous Dec. 31, based on life expectancy on government tables – 4 percent for a person expected to live another 25 years, 10 percent if just 10 years, for instance.

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