Pat Holmes and Margie Barber
Sometimes life just works out in a way that lets you help others while also helping yourself!
Do you have a Required Minimum Distribution (RMD) coming up before the 2024 tax year ends? It will be taxable income and may well shoot you up into a higher tax bracket. Rather than taking the distribution and incurring the taxes, consider donating to a cause that The Women of Quail Creek (TWOQC) supports: Scholarships or Community Outreach.
Normally, distributions from a traditional individual retirement arrangement (IRA) are taxable when received. However, the mechanism for bypassing such taxes when using the funds for a charitable deduction is called a Qualified Charitable Distribution (QCD), which is paid directly out of your RMD. So, such a distribution becomes tax-free as long as it is paid directly from the IRA to a qualified charity.
Since TWOQC is a 501(c)(3) not-for-profit charitable organization, any donation made to them, whether to the Scholarship Fund or to Community Outreach, is fully tax-deductible. So, this time of year, one of the best ways to donate to either of these worthy causes is by means of a QCD.
Each year, an IRA owner age 70-1/2 or over can exclude from gross income up to $105,000 by making a QCD. For a married couple, if both spouses are age 70-1/2 or over and both have IRAs, each spouse can exclude up to $105,000, for a total of up to $210,000 per year. And for those who are at least 73 years old, QCDs count toward the IRA owner’s required minimum distribution for the year. QCDs can be made electronically, directly to the charity, or by check payable to the charity. And the QCD option is available whether you itemize deductions or not. This is a great way to avoid additional taxes while, at the same time, helping the community!
For information about donating to Community Outreach, contact Roxanne Housley, director of Community Outreach, at [email protected]. For information about donating to Scholarships, contact Deb Melton, director of Scholarships, at [email protected]. But either way, if you wish to donate to one of these great TWOQC causes for 2024, it’s important to contact your IRA trustee and/or financial advisor as soon as possible so that the transaction can be completed before the end of the year.