You can avoid a tax bill on required IRA withdrawals if you use the money to make charitable contributions. By Kimberly Lankford, Contributing Editor October 7, 2011 I turned 70½ this year, so this will be the first time that I have to take a required minimum distribution from my IRA. I don’t need the money, and I’m not looking forward to the tax bill that comes with it. Can I transfer money from my IRA to a charity tax-free, or did that rule expire last year?IRA owners who are 70½ and older can direct up to $100,000 of their IRA distributions to charity in 2011. The money given to the charity will count toward your required minimum distribution, but it won’t increase your adjusted gross income or generate a tax bill. Making this tax-free transfer to charity can help retirees like you who are required to take minimum distributions from traditional IRAs each year, but who don’t need the money to live on. It also helps retirees who want to support a charity but who don’t itemize their deductions and, as a result, can’t deduct their charitable contributions. But even if you do itemize, you can’t double up on tax breaks by transferring the IRA distribution tax-free to a charity and deducting the contribution on your tax return. However, making the tax-free transfer could lower your taxes in other ways because it excludes the contribution from your adjusted gross income, which could help you qualify for other tax breaks. For example, having a lower AGI can reduce the threshold for deducting medical expenses (in excess of 7.5% of your AGI); could reduce taxes on your Social Security benefits; and could help you avoid a high-income surcharge for your Medicare Part B and Part D premiums (which kicks in if your AGI is more than $85,000 if single or $170,000 if married filing jointly). Advertisement IRA owners have been permitted to make tax-free transfers from their IRAs to charity since 2006, but Congress usually approves the provision one year at a time and often waits until the last minute to do it. In the past, that has left retirees scrambling to make the transfers just a week or two before the December 31 deadline. But older IRA owners get some breathing room this year: The tax law signed on December 17, 2010, extended the provision for both 2010 and 2011, so you can make the tax-free transfer anytime before the end of this year. To make the transfer, contact the charity to get its tax identification number and address, then ask your IRA administrator to transfer the money directly to the charity. If the check is made out to you, it won’t qualify as a tax-free transfer. Got a question? Ask Kim at firstname.lastname@example.org.