Using an IRA to make a charitable donation can lower your tax bill and help a worthy cause. Distributions must be made payable directly to the charity — not to the owner or beneficiary.
The qualified charitable distribution (QCD) rule allows traditional IRA owners to deduct their required minimum distributions on their tax returns if they give the money to a charity. By lowering your adjusted gross income, the QCD rule can effectively reduce your income taxes.
The SECURE Act became law on December 20, 2019. The SECURE Act pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs), from 70 ½ to 72, and allows traditional IRA owners to keep making contributions indefinitely.
You can maximize your charitable impact and make a tax-smart gift!
HOW IT WORKS:
1. If you are at least 70 ½ years old, you are eligible to make a qualified charitable distribution (QCD) from your IRA and receive tax benefits in return.
2. At your direction, your plan administrator can transfer as much as $100,000 a year from your IRA directly to Trinity-Pawling. This qualified charitable distribution (QCD) is considered nontaxable.
3. Required minimum distributions (RMD) are not required this year, due to the CARES Act. However, you can still take advantage of tax benefits when you support Trinity-Pawling through your IRA.
NEXT STEPS: Contact your tax advisor or your IRA plan administrator to learn if this gift is right for you.
QUESTIONS? If you have questions or would like a sample letter to request a qualified charitable distribution from your IRA administrator, please contact Colleen Dealy: cdealy@trinitypawling.org or 845-855-4831.
Thank you for considering a tax-smart gift to Trinity-Pawling School.