What is a Qualified Charitable Distribution (QCD)?
Thank you for considering a charitable gift to Friends of Pleasanton Senior Center. Under federal tax law, a taxpayer age 70 ½ or older may make a charitable distribution directly from his IRA to Friends of Pleasanton Senior Center without incurring taxable income. The gift must come directly from the taxpayer’s IRA administrator and can satisfy all or some portion of the required minimum distribution (RMD)for the year.
How it works
The provision allows retirees age 70 ½ and older to donate up to $100,000 tax free from their IRA each year. Generally, when you take a distribution from your IRA, it is treated as taxable income. Under this provision, those assets are excluded from income if the distribution is made directly to a non-profit charity.
Contact your IRA administrator to make a gift from your IRA to Friends of Pleasanton Senior Center. Your IRA funds will be directly transferred to help us continue our mission. Your gift will fulfill some or all of your RMD without increasing your taxable income.
Turn your required distributions into charitable donations
IRS rules mandate that individuals age 70 ½ and older take RMDs from their IRA each year, regardless of whether the income is needed. These annual withdrawals are subject to ordinary income taxes. By making a charitable contribution directly from your IRA, you can satisfy your RMD without reporting additional income.
This provision may be especially attractive for retirees who don’t need all the income from their IRA. By donating the money to a charity, you can enjoy the satisfaction of knowing that you are contributing to a worthy cause while effectively lowering your tax bill.
How to Lower Taxes by Taking a Qualified Charitable Distribution (QCD)
If you are taking required minimum distributions (RMD) from your traditional IRA, there’s a smart strategy that will still allow you to obtain a financial benefit from your charitable donations, even if you’re still claiming the standard deduction.
Any amount processed as a QCD counts toward your RMD requirement and reduces the taxable amount of your IRA distribution which lowers both your adjusted gross income and taxable income, resulting in a lower overall tax liability.
Is a QCD right for you?
Donating IRA assets can be a financially rewarding strategy for both you and the charity. As always, you should talk with your financial advisor before making a decision. This information is not intended to be a substitute for specific individualized tax advice. You should discuss your specific tax issues with a qualified tax advisor to see if this strategy makes sense for your unique situation.
Friends of Pleasanton Senior Center is a 501 c 3 non-profit public charity tax id # #46-1532711.
Give charitable + Save on Taxes by Taking a Qualified Charitable Distribution (QCD)
Thank you for considering a charitable gift to Friends of Pleasanton Senior Center. Under federal tax law, a taxpayer age 70 ½ or older may make a charitable distribution directly from his IRA to Friends of Pleasanton Senior Center without incurring taxable income. The gift must come directly from the taxpayer’s IRA administrator and can satisfy all or some portion of the required minimum distribution (RMD)for the year.
How it works
The provision allows retirees age 70 ½ and older to donate up to $100,000 tax free from their IRA each year. Generally, when you take a distribution from your IRA, it is treated as taxable income. Under this provision, those assets are excluded from income if the distribution is made directly to a non-profit charity.
Contact your IRA administrator to make a gift from your IRA to Friends of Pleasanton Senior Center. Your IRA funds will be directly transferred to help us continue our mission. Your gift will fulfill some or all of your RMD without increasing your taxable income.
Turn your required distributions into charitable donations
IRS rules mandate that individuals age 70 ½ and older take RMDs from their IRA each year, regardless of whether the income is needed. These annual withdrawals are subject to ordinary income taxes. By making a charitable contribution directly from your IRA, you can satisfy your RMD without reporting additional income.
This provision may be especially attractive for retirees who don’t need all the income from their IRA. By donating the money to a charity, you can enjoy the satisfaction of knowing that you are contributing to a worthy cause while effectively lowering your tax bill.
How to Lower Taxes by Taking a Qualified Charitable Distribution (QCD)
If you are taking required minimum distributions (RMD) from your traditional IRA, there’s a smart strategy that will still allow you to obtain a financial benefit from your charitable donations, even if you’re still claiming the standard deduction.
Any amount processed as a QCD counts toward your RMD requirement and reduces the taxable amount of your IRA distribution which lowers both your adjusted gross income and taxable income, resulting in a lower overall tax liability.
Is a QCD right for you?
Donating IRA assets can be a financially rewarding strategy for both you and the charity. As always, you should talk with your financial advisor before making a decision. This information is not intended to be a substitute for specific individualized tax advice. You should discuss your specific tax issues with a qualified tax advisor to see if this strategy makes sense for your unique situation.
Friends of Pleasanton Senior Center is a 501 c 3 non-profit public charity tax id # #46-1532711.
Give charitable + Save on Taxes by Taking a Qualified Charitable Distribution (QCD)