Many people over 70 1/2 years old find that they do not need their IRA funds to support themselves, so they might find themselves taking one, lump-sum Required Minimum Distribution (RMD) each year (usually in the 4th quarter). Instead, they could make a Qualified Charitable Distribution (QCD) to avoid paying tax on the RMD (since it will increase their adjusted gross income). Then the QCD transferred directly to charity will likely also reduce their taxable income.
Giving Directly from an IRA
Did you know?
While the new tax law brought many changes to households across the nation, one thing that remains the same and is now permanent is the Charitable IRA Rollover Act. This allows donors age 70 ½ or older to donate up to $100,000 from their IRA without having to recognize the distribution as income.
We advise that before taking any actions you should consult with a qualified tax advisor, but if you’re receiving taxable income from retirement plan assets there are a number of tax-advantaged ways to make these assets work for you and qualified nonprofits like SAHC.
Something to remember is the transfer is not deductible, the amount you are giving does not count as taxable income and this can often reduce your taxable income
Here’s an example: If your Required Minimum Distribution (RMD) is $20,000 and you give a $5,000 Qualified Charitable Distribution (QCD) to SAHC only $15,000 of the IRA distribution will be reported as part of your income.
If this is applicable to you – it’s easy to do. To take advantage of the IRA charitable distribution, the distribution must be sent directly from your IRA manager to SAHC. Contact your IRA manager and ask them to make a transfer directly to SAHC, 372 Merrimon Ave. Asheville, NC 28801.
SAHC’s non-profit tax ID# is: 62-1098890.
Questions? Contact Pauline, Director of Philanthropy at 828.253.0095 ext. 216 or pauline@appalachian.org.
Why donors like Rollover IRAs
