Not everyone wants to take the required minimum distributions from their retirement accounts right away. If you don't want your distribution, one option is to donate it to charity and get a tax deduction.
You are required to begin taking distributions from your tax-deferred IRA when you reach age 72 (70 ½ if you turned 70 ½ in 2019 or before) even if you don't need the money. The distributions are added to your income and taxed at the same rate, which could put you into a higher tax bracket, especially if you are still working.
If you don't want the distribution, you may want to consider donating the distribution directly to charity through a qualified charitable donation. By donating your required minimum distribution, the distribution won't be included in your gross income, which means lower taxes overall.
A qualified charitable donation can also be a good way to get a tax deduction after the 2017 tax law doubled the standard deduction, making it harder to get a deduction for a direct charitable contribution. If your charitable contributions along with any other itemized deductions are less than $12,950 a year (in 2022), the standard deduction will lower your tax bill more than itemizing your deductions, which can be a disincentive to donate to charity. A qualified charitable donation is a way to make a donation and receive a tax benefit from it.
In order for the donation to count as a required minimum distribution, the donation must be made directly from the IRA to the charity. Funds distributed directly to you do not count. The charity must be approved by the IRS, and different IRAs have different rules about how to make the distributions. If you make a qualified charitable donation, you cannot also itemize the deduction. The maximum amount you can donate is $100,000. If you donate less than your required minimum distribution, you will need to take the remainder as a distribution.
For more information from the IRS about distributions, click here.