Qualified Charitable Distributions (QCDs)

Utilizing a QCD is a tax-savvy strategy that allows you to transfer up to $100,000 per year from your IRA directly to a qualified charity*. It is only available to IRAs and individuals who have reached the required minimum distributions (RMDs) age of 70.5. Any amount processed as a QCD counts towards your RMD requirement and reduces the taxable amount of your IRA distribution. This lowers both your adjusted gross income and taxable income, resulting in a lower overall tax liability.

 

*PLEASE NOTE: Donor Advised Funds limit their giving to 501c(3) Charitable Organizations. When recommending a grant to support Marines’ Memorial, please use the Foundation’s EIN number: 45-5261064

 

Example: A 70+ year-old couple who has an annual RMD between the two of them of $24,000, can instead direct $10,000 of it to charity as a QCD. This reduces their taxable income by $10,000 and are still able claim the same $26,550 standard deduction. In this example, if the couple is in the new 24% tax bracket, they will have saved $2,400 in federal taxes.

 

The above example demonstrates the benefits to perform a QCD when planning to take the standard deduction in 2018.**

 

A tax advisor can help you determine if both your IRA and charity qualify for QCDs.

 

** For a QCD to count towards your current year’s RMD, the funds must come out of your IRA by your RMD deadline, generally December 31.

Please contact Chelsea Leonard, Director of Development for additional information at (415) 673-6672 x248.