If you are 70 ½ and older and are considering a year-end gift to BGCOR, consider this gifting strategy to unlock tax-wise benefits: Qualified Charitable Distributions (QCD), also known as a Charitable IRA Rollover.
Most of us spend our lives caring for family, our community, and favorite charities, while also saving for retirement. While you are employed, most of your charitable giving is funded using after-tax dollars such as a writing a check, using a credit card, or simply giving cash.
However, once you retire, in most cases, your income is reduced as you’ve stopped earning an income. Now your savings, pension, investments, and social security provide for your daily needs. With this in mind how can you keep giving to your favorite charity(s) during retirement in a tax-wise way?
This is where the Qualified Charitable Distribution (QCD) strategy comes in. QCDs are direct gifts from your IRA to charity. To be eligible you must be 70½ or older. If eligible, you may donate up to $100,000 per year from your IRA, and not pay any tax on the distribution! For a married couple where each spouse has their own IRA, each spouse can contribute up to $100,000 so long as they are both older than 70½ for a combined total of $200,000.00.
Another strategy if you are aged 72 is that you can use a QCD to satisfy your Require Minimum Distribution (RMD). The facts are many retirees do not like being forced to withdraw money from their IRA and paying taxes. By using a QCD gift to satisfy an RMD helps to avoid income taxes and at the same time support the charity you love! Please keep in mind, a QCD gift must directly come from your IRA to the charity, and it must clear by December 31st.
The bottom line, using your IRA to make a charitable donation (QCD) can help lower your tax bill and help kids in your community who are being served at a BGCOR Unit near you!
Jay is the founder and CEO of Launch Legacy Consulting, LLC. He has over twenty-six years’ professional experience, sixteen in the financial services industry as a financial/insurance advisor for individuals, families, businesses, nonprofits and school systems.
Disclaimer: This communication does not constitute legal, tax, or financial advice, which we do not provide. Please consult professional advisors concerning the legal, tax, or financial consequences related to your charitable planning.
A legacy gift is a way for you to develop a long-lasting positive impact on Ocoee Region youth. Often called planned giving, your legacy gift helps ensure future generations of youth will have the programs, resources and guidance to help them achieve academic success, grow in character and citizenship, make healthy life choices, and foster the creativity and skills they need to reach their full potential. To learn more about Legacy Giving options, explore our Great Futures Legacy Giving Society or call 423-559-8299 today!
