If you are at least 70 1/2, own a tax deferred retirement account and donate to charity, making a Qualified Charitable Distribution (QCD) may be especially beneficial for you.
For illustrative purposes, a traditional IRA is referenced: Unlike regular distributions from your IRA, any portion of your Required Minimum Distribution donated as a QCD will not be taxable income. And, if you are turning 72 and have a Required Minimum Distribution (RMD), the amount of the QCD will not only count toward fulfilling that RMD, but that amount will also be deducted from your IRA’s taxable income. Thus, a QCD may reduce the impact of your RMD on future income taxes, social security benefits subject to taxes and exposure to the Medicare surtax. This can be a significant advantage for some higher-income earners as they consider their annual charitable gifting.
Please consult your tax deferred retirement plan administrator to take advantage of this provision, while noting the following requirements as you support charities that are important to you.
- The charity must be registered as 501c3.
(Donor advised funds, private foundations, etc. are not allowed)
- The funds must be transferred directly from your IRA custodian to the qualified charity. Request your custodian to issue the check from your IRA payable to the charity.
(The check may NOT be written by you, even if your IRA account has a check writing feature)
- Because a QCD is reported by your IRA custodian as a normal distribution, you MUST notify your tax preparer and keep the charity’s acknowledgement of this donation for your tax records.
(The QCD amount is subtracted from the total reported IRA distributions on your tax return)
- A QCD is an option for your charitable giving, even if you claim the standard deduction that year.
In summary, taxpayers over 70 ½ years of age are allowed an exclusion from their gross income for IRA distributions made directly to a qualified charitable organization. A QCD counts toward satisfying a taxpayers required minimum distribution (RMD) and, currently, is only limited by the donors RMD or $100,000 ($100,000 for each spouse on a joint return) whichever is less.
Thank you for considering the Urological Research Foundation for your charitable giving. Their ongoing research and communication will benefit men and their families for generations to come.
Your support is greatly appreciated.
Urological Research Foundation is a registered 501c3 qualified charity. Donations can be mailed to:
Urological Research Foundation
% Financial Support Services
P.O. Box 50348
St Louis, MO 63105-5348