Qualified Charitable Distributions
Making Good Happen with Tax Strategies that Make Good Sense
If you hold an Individual Retirement Account (IRA) you are likely aware of the required minimum distributions (RMDs) that become mandatory once you reach age 73. Whether you need the money or not, the funds must be disbursed, and taxes paid. Sometimes those RMDs even push taxpayers into a higher tax bracket.
For the charitably minded, RMDs that are not essential to meeting current living expenses could be put to work for the benefit of our broader community, while potentially providing some tax benefits. Consider using a portion or all of your RMD to make a qualified charitable distribution (QCD). QCDs allow individuals 70 ½ years or older to donate up to $100,000 per year to one or more charities directly from a taxable IRA, without tax consequences.
Furthermore, we can help you set up a Designated Fund to support your favorite nonprofits in perpetuity or over a set number of years. You select your nonprofit beneficiaries upfront, putting your charitable donations on autopilot. Beneficiaries cannot change once the Designated Fund is established; however, we can help you achieve your philanthropic goals with thoughtful consideration in advance. Scholarship Funds, Field of Interest Funds, and the Community Foundation’s general operating funds are also eligible to receive QCDs.
Contact us to learn more about this giving strategy to determine if it will be a good fit for your circumstances.
Please note, Donor Advised Funds and private foundations are not eligible to receive QCDs.