It’s a win/win with a Qualified Charitable Distribution!
By: Elizabeth A. McLaughlin, CFRE, Executive Director, Tri-Cities Cancer Center Foundation
Did you know that you can take advantage of a significant tax benefit if you are 70 ½ years old and facing a required minimum distribution from your IRA? Because of a tax break made permanent by Congress and President Obama in 2015, you can use money from your traditional IRA to make a Qualified Charitable Distribution (QCDs) to your favorite non-profit and lower your tax bill.
What is a Qualified Charitable Distribution (QCD)?
A qualified charitable distribution (QCD) is a distribution from an IRA made directly to an eligible charity, bypassing the owner of the account. Owners of individual retirement accounts who are at least age 70 ½ can contribute some or all of their IRAs to charity.
Can I make a QCD?
- Many IRAs are eligible to make a QCD – however there are some requirements:
- You must be 70½ or older to be eligible to make a QCD.
- QCDs are limited to the amount that would otherwise be taxed as ordinary income. This excludes non-deductible contributions.
- The maximum annual amount that can qualify for a QCD is $100,000. This applies to the sum of QCDs made to one or more charities in a calendar year. (Additional limits may apply if you are filing jointly with a spouse.)
- For a QCD to count towards your current year’s required minimum distribution (RMD), the funds must come out of your IRA by your RMD deadline, which is generally at year end.
Funds distributed directly to you and which you then give to charity do not qualify as a QCD.
Itemization is not required to make a QCD.
A QCD is not subject to withholding. State tax rules may vary, so for guidance, consult a tax advisor.
When making a QCD, you must receive the same type of acknowledgement of the donation that you would need to claim a deduction for a charitable contribution.
A tax advisor can help you determine if both your IRA and charity qualify for QCDs.
Why should I choose the TCCC Foundation as a beneficiary?
In the past 25 years, our Foundation, thanks to generous investors like you, has committed nearly 20 million dollars to supporting world-class cancer care.
These generous investments built this regional resource in 1994, and since then has been a critical element in ensuring that our community has everything we need and deserve to fight cancer.
Your investments in the Tri-Cities Cancer Center Foundation will allow us to do more, to serve more, and to continue the legacy of the finest community cancer center on the west coast. Facing cancer and fighting cancer, every day.
Source: Fidelity Investments.