Year-End Charitable Giving via a Qualified Charitable Distribution (QCD)

Did you know that you may be able to give to Divine Mercy Catholic Church and save money at the same time?

If you are looking to lower your taxable income, you may want to consider a Qualified Charitable Distribution (QCD). If IRS rules require you to take required minimum distributions (RMDs) from your tax-deferred retirement accounts, please consider the following. Distributions from an IRA generate additional taxable income which may push you into a higher tax bracket and may also reduce your eligibility for certain tax credits and deductions. To eliminate or reduce the impact of RMD income, charitably inclined investors may want to consider making a qualified charitable distribution (QCD) to Divine Mercy Catholic Church. Lowering your taxable annual income level could also result in lower Medicare premiums and the amount of Social Security subject to taxes.

A QCD is a direct transfer of funds from an IRA custodian, payable to a qualified charity, as described in the QCD provision in the Internal Revenue Code. Amounts distributed as a QCD can be counted toward satisfying your RMD for the year, up to $100,000, and can also be excluded from your taxable income. This is not the case with a regular withdrawal from an IRA, even if you use the money to make a charitable contribution later on. In this scenario, the funds would be counted as taxable income even if you later offset that income with the charitable contribution deduction.

Please consult a tax advisor to learn more. If you must make a required minimum distribution, own an IRA, and donate to Divine Mercy Catholic Church, QCDs may make sense for you; consult a tax advisor regarding your specific situation.