Donating IRA distributions.

If you're age 70½ or older, you are expected to take a required minimum distribution, or RMD, from your traditional Individual Retirement Account each year. (No distributions are required from Roth IRAs.) The taxable sum involved is included on your tax return.

But if you are charitably inclined, there's an alternative: You can have the money sent directly to a charity. In 2011, those 70½ or older can transfer up to $100,000 to charity. The contribution must be made directly to a public charity and not through a foundation or donor-advised fund.

Say you want to donate $5,000. If you donate directly from your IRA to a charity, you can give the full $5,000 and count the money toward that year's RMD. True, you won't get a tax deduction--but you also won't have to include the distribution as part of your taxable income. Meanwhile, if you took the $5,000 as cash and then donated it, you might have just $3,600 after taxes to give to the charity--and, unless you itemize your deductions, you still won't get a tax deduction.

While direct donations from an IRA can be made in 2011, it isn't clear whether Congress will allow such transfers in future years. Also, you can only use distributions from an IRA. Distributions from employer-sponsored plans like 401(k), 403(b) and 457 plans don't qualify.

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