Individual Retirement Account (IRA)
Are you 70 ½, or older? Do you have an Individual Retirement Account (IRA)? When considering your Required Minimum Distribution (RMD), make it a win-win with a Qualified Chartiable Distribution!
Charitable distributions from an Individual Retirement Account (IRA) are one of the most tax efficient ways available to make charitable gifts. It means you can make a nontaxable distribution directly from your IRA to a qualified public charity for up to $100,000 each year.
The gift itself can satisfy all or part of your required distribution and create tax benefits, even if you do not itemize your deductions. Keeping your taxable income lower may also help reduce the impact to certain tax credits and deductions, including Social Security and Medicare.
This is a Win-Win for all concerned!
- You can make charitable gifts directly from your IRA with pre-tax dollars.
- The gift amount is excluded from your taxable income.
- The gift amount can be applied towards your annual Required Minimum Distributions (RMD).
In order to for the charitable distribution to be “qualified”, it must meet the following requirements:
- You must be at least 70½ years of age at the time of the distribution.
- The distribution must be from your Roth or Traditional IRA.
- The distribution must be made directly from the IRA custodian to a qualifying charity, such as the Catholic Foundation.
- Qualified Charitable Distributions (QCD) are limited to $100,000.00 per individual each year. Your spouse who qualifies may also make a QCD from his or her IRA.
- For a QCD to count towards your current year's RMD, the funds must come out of your IRA by your RMD deadline, generally December 31.
Please consult with your tax professionals to determine how you can provide a Gift of Faith while achieving the greatest tax benefit.