A Qualified Charitable Distribution (QCD) is a direct transfer of funds from your IRA custodian, payable to a qualified charity. QCDs can be counted toward satisfying your required minimum distributions (RMDs) for the year, as long as certain rules are met. As any member over the age of 70½ knows, you are required to take an annual distribution from your IRA or face a stiff penalty. Since you have to take a distribution anyway, you can do it in the most tax advantaged way possible. For those who are not using their required IRA distributions for living expenses, you might consider making a QCD directly to the church.
In addition to the benefits of giving to charity, a QCD excludes the amount donated from taxable income, which is unlike regular withdrawals from an IRA. Keeping your taxable income lower may reduce the impact to certain tax credits and deductions, including Social Security and Medicare.
To make a contribution, instruct your IRA trustee or custodian to make a transfer from the IRA directly to Sewickley United Methodist Church. Many trustees and custodians already have forms and procedures in place to make this transfer.
If you have any questions about this legislation and how it can benefit both you and SUMC, please reach out to your financial planner, your IRA trustee/custodian, or me.
Blessings,
Pam Honeychurch
SUMC Treasurer
Photo by Mike Cohen