Using an IRA required minimum distribution (RMD) to make a charitable gift
At age 73, IRA owners are required to take an annual distribution from their retirement account. The required minimum distribution (RMD) is taxed at ordinary income rates, however it is possible to make a qualified charitable donations (QCDs) directly from an Individual Retirement Account (IRA) to a qualified charity. QCDs can be counted toward satisfying required minimum distributions (RMDs) for the year. The IRA assets go directly to the charity, so donors don’t report QCDs as taxable income and don’t owe any taxes on the QCD, even if they do not itemize deductions. A QCD allows for a transfer up to $105,000 per individual or $210,000 per couple to satisfy your RMD. Some donors may also find that QCDs provide greater tax savings than cash donations for which charitable tax deductions are claimed. Your accountant can provide thorough advice on how to make this transaction and achieve the most tax savings benefits. It is good to start the process now so that it is completed before the end of the 2024 tax year. You can also find information about this on the Archdiocese of Chicago website https://myimpact.archchicago.org/qcd/