Leave a Legacy: Qualified Charitable Distributions
In this section, we share often overlooked giving options that can reflect your charitable goals and make a meaningful difference.
What is a QCD?
Qualified Charitable Distributions (QCDs) are a planned giving option that allow you to transfer assets directly from your Individual Retirement Account (IRA) to charitable entities of your choosing, excluding Donor Advised Funds (DAFs) and private foundations. QCDs are sometimes called the “IRA charitable rollover.” You must be 70 ½ or older to be eligible to make a QCD and you may make up to $100,000 in total QCDs each year.
Why a QCD?
QCDs present a tax-planning opportunity for charitably inclined taxpayers who itemize or take the standard deduction.
At age 72 ½, you are required to begin taking distributions, called Required Minimum Distributions (RMDs), from traditional IRAs. Because RMDs are included in your taxable income, you may find yourself in a higher tax bracket when you begin taking them. But you may wish to keep your taxable income below a certain threshold, including to avoid any adverse impacts on Social Security incomes or Medicare benefits.
QCDs count towards your RMD and are excluded from your taxable income, allowing you to save on taxes while supporting your favorite organizations.
—> Contact your financial advisor or IRA custodian to find out more and decide if a QCD is right for you. ILAP also welcomes the opportunity to talk with you about your charitable goals. For more information about giving options and how you can support ILAP, contact Development Director Marjorie Hankla at mhankla@ilapmaine.org or 207-699-4407 at any time.
