Margie Barber
Helping others while helping yourself? Now that’s a win-win! Here’s one way to do it:
Do you need to take a Required Minimum Distribution (RMD) before the 2025 tax year ends? If so, the amount you receive will be taxable income and may even put you in a higher tax bracket. Fortunately, Congress provided a tax-free option by allowing you to donate your RMDs to worthy causes, such as The Women of Quail Creek’s (TWOQC) Scholarship Fund or their Community Outreach Fund.
All distributions from a traditional individual retirement arrangement (IRA) are taxable when received unless the funds are used for a Qualified Charitable Distribution (QCD) that has been paid directly out of your RMD. Thus, all distributions less than $105,000 each year become tax-free, but only as long as the distributions are paid directly from the IRA by your IRA trustee 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. And so, this time of year, one of the best ways to donate to either of these worthy causes is by means of a Qualified Charitable Distribution.
Each year, an individual 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. In addition, once the owner of the IRA reaches 73 years of age, QCDs also count toward the IRA owner’s annual Required Minimum Distribution. Qualified Charitable Distributions must be sent directly by your IRA trustee, either electronically or by check, to the charity of your choice. And the QCD option has another advantage—even if you don’t itemize your deductions, you’re still able to avoid additional taxes while at the same time helping women to receive an education and/or providing other support for the community!
For information about donating to scholarships, contact Deb Melton, Director of Scholarships, at scholarships@womenqc.com. For information about donating to Community Outreach, contact Roxanne Housley, Director of Community Outreach, at Roxanne.housley@gmail.com.
But either way, if you wish to donate to one of these great TWOQC causes for 2025, 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.