If you are at 70 1/2 years old and would like to provide Seneca White Deer a source of on-going support, pretax money saved in an IRA can be an ideal charitable donation. Rather than passing these assets to a beneficiary – who will likely pay taxes when the inherited IRA is distributed – you can give them to Seneca White Deer, Inc. by taking a qualified charitable distribution.
A qualified charitable distribution will count toward satisfying your required minimum distribution, and neither you nor the charity will have to pay income taxes.
For some people, a qualified charitable distribution has distinct advantages over a regular charitable contribution:
• A qualified charitable distribution counts toward satisfying your required minimum distribution.
• You can take a qualified charitable distribution whether or not you itemize deductions on your tax return. If you use the standard deduction, you would generally receive no tax benefit from a regular charitable contribution. This is especially important given the increase in the standard deduction beginning in 2018.
• A qualified charitable distribution is not included in your adjusted gross income (AGI). This could benefit you because AGI (or a modification of AGI) is used to calculate certain other taxes and benefits.
• The regular charitable contribution deduction is typically limited to no more than 50% of AGI. This AGI limit does not apply to a qualified charitable distribution.
Talk to your personal financial advisor and your tax advisor to learn more about qualified charitable distributions to SWD.
--Courtesy of Council Rock Wealth Advisory Group
A private wealth advisory practice of Ameriprise Financial Services, Inc.