Healthy Women Healthy Liberia

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Qualified Charitable Distributions

Did you find that with the higher IRS standard deduction, you were unable to itemize your charitable giving on your 2018 tax return? 

Did you know the gift of a Qualified Charitable Distribution (QCD), also referred to as Charitable IRA Rollover Gifts, benefits donors aged 70½ and up? 

The Qualified Charitable Distribution is an excellent way to show your support for Healthy Women, Healthy Liberia and receive tax benefits in return.  As you plan your required minimum distributions (RMD) for this year, consider using your IRA account to make the most of your charitable giving.  You receive a tax benefit even if you take the standard deduction!

The following is what the African University Development Office (Planned Giving) recommends:

“It’s important to consider your tax situation before deciding whether to make a charitable contribution from your IRA.  Be sure to share this gift plan with your financial advisor before proceeding.”1

To qualify

  1. You must be 70½ or older at the time of gift.
  2. Distributions must be made directly from a traditional IRA account by your IRA administrator to Healthy Women, Healthy Liberia. 3
  3. Gifts must be outright, meaning they go directly to Healthy Women, Healthy Liberia.

Tax Benefits

  1. IRA Qualified Charitable Distributions are excluded as gross income for federal income tax purposes on your IRS Form 1040.
  2. The gift counts toward your required minimum distribution for the year in which you made the gift.
  3. You could avoid a higher tax bracket that might otherwise result from adding an RMD to your income.1

Example

Mary is 71 years old and wants to make a gift to Healthy Women, Healthy Liberia.  She has $500,000 in her IRA and wants to donate $20,000.  She can authorize the administrator of her IRA to distribute $20,000 to Healthy Women, Health Liberia.  Because the IRA Qualified Charitable Distribution is excluded from income, Mary will not be eligible for a charitable income tax deduction — but she still receives tax savings.  The $20,000 distributed to Healthy Women, Healthy Liberia will be counted toward her annual minimum required distribution and she will not pay income tax on the portion given to HWHL.

About HWHL

Healthy Women, Healthy Liberia is a 501(c)(3) charity; EIN 27-4540631

Send Distributions to: Healthy Women, Healthy Liberia, PO Box 816, Waxahachie, TX 75168

Contributed by DIck McCreight, HWHL Board Director, Secretary

Image from: HeatherPaque_Pixabay

Reference:

1 African University Development Office (Planned Giving); Retrieved April 19, 2019:  http://www.africau.plannedgiving.org/africau/articles/254.html

Additional QCD information:  

Fidelity. Qualified Charitable Distributions (QCDs).  https://www.fidelity.com/building-savings/learn-about-iras/required-minimum-distributions/qcds

Kiplinger. Follow QCD Rules to Make Your IRA Qualified Charitable Distributions Counthttps://www.kiplinger.com/article/retirement/T054-C000-S004-ira-qcd-rules-qualified-charitable-distributions.html