Qualified Charitable Distributions (QCDs)
A Qualified Charitable Distribution (QCD) is
a direct transfer of funds from your IRA, payable to a qualified charity. QCDs
can be counted toward satisfying your Required Minimum Distributions (RMDs) for
the year if certain rules are met.
In addition to the benefits of giving to
charity, a QCD excludes the amount donated from your taxable income. Keeping
your taxable income lower may reduce the impact to certain tax credits and
deductions, including Social Security and Medicare. Funds distributed directly
to you in which you direct to the charity do not qualify as a QCD.
must be 70 ½ or older to make a QCD.
maximum annual amount that can qualify for a QCD is $100,000.
must be distributed from your IRA by your RMD deadline (usually Dec. 31.)
to an IRA may reduce the QCD amount you can deduct.
charities may not qualify for QCDs. Consult with your tax advisor or the
charity for its qualification status.
From the Thornhill Times
Deduction of Charitable Contributions
The deduction of charitable contributions by
nonitemizers has expired along with the enhanced deduction of itemized
charitable contributions. However, considering charitable contributions for the
year remains a viable tax strategy for itemizers, including bunching strategies
in which charitable contributions are bunched into every other year in order to
exceed the standard deduction in the year that charitable deductions are
claimed. Donor-advised funds can assist in the strategy by making it easier to spread
out the actual contribution to a particular charity. Donating appreciated stock
continues to be a viable strategy for avoiding tax on the appreciated amount.
Qualified charitable distributions from IRAs
are available for taxpayers age 70 ½ or older up to $100,000 per year. This
removes the distribution from adjusted gross income. A new law change also
permits a one-time distribution of up to $50,000 of the qualified charitable
distribution to a dual beneficiary trust, such as a charitable remainder trust.