The 2017 tax-cut plan eliminated or restricted many itemized deductions from 2018 through 2025, and raised the standard-deduction thresholds.
This means that for many taxpayers, including retirees, it won’t be worthwhile to itemize deductions. That’s particularly true for those who’ve paid off their mortgages and won’t be able to include interest in their itemized deductions. However, there is a way for some seniors to benefit from their charitable contributions even if they don’t itemize, says Andrew Brenner, a senior tax manager at Brinker, Simpson & Co., an accounting firm in Springfield, Pa. Those 70½ or older can donate up to $100,000 from their individual retirement account directly to a charitable organization, and that donation won’t be counted as taxable income, he says. Holders of traditional IRAs must take required minimum distributions each year once they turn 70½ or face a penalty from the IRS, so for those who don’t need the money, this is a good way to take the distribution without adding to their tax burden. The charitable contribution has to come directly from the custodian on the taxpayer’s behalf, Brenner cautions. Read more here.