The use of Qualified Charitable Distributions (QCDs) & Required Minimum Distributions (RMDs) to fund the Lord’s work can be a win-win situation.
Qualified Charitable Distribution (QCD) provides you with an opportunity to make tax-free contributions to any qualified public charity from your IRA.
Current tax law allows someone age 70 ½ or over to make a gift directly from a traditional IRA to a charity, such as your local church, school, or the Wisconsin Conference of Seventh-day Adventists, by means of a QCD. * Warning: The contribution must go directly from your IRA custodian to the charity and not come to you first.
This QCD option may be of special interest to those who must take a Required Minimum Distribution (RMD) annually from a traditional IRA. The gift counts toward your annual RMD; however, it does not count as taxable income to you. Hence, this is a win-win situation.
You, the taxpayer, win in three ways:
1) You essentially lower your taxable income, and thus your taxes.
2) If you have a Required Minimum Distribution (RMD), the QCD contribution counts toward satisfying it. By the way, up to a maximum of $100,000 of your RMD can be donated to a qualified charity…this would include returning tithe.
3) You get to support the church’s mission and ministry. This might include your local Seventh-day Adventist Church, School, or the Wisconsin Conference. Keep in mind, a QCD option applies to all qualified charitable organizations.
NOTE: Always consult your financial advisor, IRA plan administrator, tax preparer, IRS Publication 590-B, or the IRS website www.irs.gov.
* This article is based on information from the following site: www.sneucc.org/blogdetail/17384323
Bill Ochs, Planned Giving & Trust Services Director