News

If you have a tax-deferred retirement account and are age 72 or older, the IRS requires you to take required minimum distributions (RMDs) each year. Those RMDs count as taxable income.

But there is good news! If you donate to a qualified charity, such as JCCF, with a qualified charitable distribution (QCD) from your IRA, the distribution is excluded from your taxable income.

Fidelity.com defines a QCD as follows:

“A QCD is a direct transfer of funds from your IRA, payable directly 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.”

More good news is that the Protecting Americans from Tax Hikes (PATH) Act of 2015, made the QCD provision a permanent part of the Internal Revenue Code. This means that you can take advantage of this charitable planning tool every year.

Here are the QCD rules:

• The QCD must come from a Traditional or Inherited IRA.
• IRA beneficiary must be at least 70½.
• The distribution must go directly to a qualified charity.
• You must receive a confirmation letter from the charity that states no goods or services were received in exchange for the contribution.

So, if you are of age, own an IRA, and donate to charity, QCDs may make sense for you. Contact Kim Kasting at 317-738-2213 or kimm@jccf.org to direct your QCD to JCCF.

Consult a tax advisor about your specific situation.