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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121261  
Subject: Re: offsetting income with charity Date: 4/14/2008 6:56 PM
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irasmilo:

<<<<I am trying to determine what my tax burden would be if I withdrew money from an IRA for donation to charity. The amount would be about $20,000, and our gross income (married, filing jointly) is $50k. My back of the envelope calculation is as follows:

- standard deduction: -$10k
- income withdrawn from IRA: $20k

so net effect would be an additional $10k. However, since the entire $20k would be donated to a 501(c)(3) (religious), wouldn't my overall tax burden remain the same?>>>>

"There's not enough information to provide an answer."

I will defer to Ira on the specifics, but I have a nit to pick.

You get your standard deduction whether you withdraw from your IRA (or not).

If you use the standard deduction "offset" (in your mind) a portion of the IRA withdrawal, that will expose 10k of your other usual income to to taxes, and which would not have been so exposed without the IRA withdrawal --- it is an opportunity cost issue.

Regards, JAFO
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