Turn your IRA Distributions into Tax Free Charitable Donations

 

Individuals who are age 70½ and older can donate up to $100,000 per year tax free from their IRA to the church or other charity.  IRA distributions are generally taxable income, but with a QCD (Qualified Charitable Distribution) it is not included in your income so you avoid the potential negative tax consequences that regular IRA withdrawals can create. 

Charitable contribution deductions are usually limited or eliminated altogether for taxpayers who do not itemize deductions, but making the donation via a QCD ensures that you receive the full tax benefit of the donation even if you do not itemize.  QCDs can satisfy all or part the amount of your required minimum distribution from your IRA for those age 72 or older.  The QCD must be made payable directly to the charitable entity. 

Be sure to work closely with your financial and tax advisors to determine whether this provision is right for you.