Qualified Charitable Distribution
Biblical Stewardship Ministry
April 14, 2021
If you are over 70½, you are eligible to make an IRA charitable rollover to public charities. And the good news is that your IRA distribution to charity will not be included in your federal taxable income. “Qualified Charitable Distribution”, or QCD, is a direct-distribution from your IRA to a charity that has terrific benefits!
Consider these benefits:
- Convenience – It is a simple process. You will contact your IRA custodian to initiate a QCD distribution to charity.
- Standard Deduction Benefit – You don’t need to itemize to benefit. With an IRA charitable rollover, you may take the standard deduction and still receive benefits for your gift. Your QCD distribution is reported as part of your Required Minimum Distribution, but you do NOT include it in taxable income, thus avoiding income taxes.
- Lower AGI may reduce taxes on other income and reduce Medicare costs – Since you do not include the QCD in your gross income, lower tax rates on items like social security in taxable income, Medicare rates, or higher income tax rates are avoided.
- Not included in itemized deductions – Because you don’t report income, the QCD is not included in other itemized charity deductions. For itemizers, this means you CAN deduct your other gifts up to the full limits
- Your IRA charitable QCD rollovers this year could be $500, $1,000, $5,000, $50,000, or any amount up to $100,000 – If you need any questions, you may email Biblical Stewardship Ministry firstname.lastname@example.org. We recommend that you discuss the benefits of an IRA rollover with your CPA or tax advisor.
One final giving idea! The CARES Act offered one-time charitable giving options for the tax year of 2020. It has been extended for the tax year of 2021. To encourage charitable giving, Congress approved gifts to public charities of up to 100% of your Adjusted Gross Income! There are a few details to navigate, but if you are able to be really generous this year, you may completely wipe out federal income taxes! We’ll help you with more information. If this is an option in your gift, tax, and financial plans, email us at email@example.com .