IRA Charitable Rollover

IRA Charitable Rollover

Did you know…you can satisfy your Required Minimum Distribution (RMD) while saving taxes and supporting local charitable causes? This is an excellent opportunity to make a gift during your lifetime from an asset that could be subject to multiple levels of taxation if it remains in your taxable estate.

The RMD is the smallest amount account holders must withdraw from their plans each year once they reach retirement. If you fail to meet your RMD, the amount not withdrawn could be taxed at 50%.

If you have an RMD on your own account or an inherited account, donating to charity is a great option. Your required withdrawal will be included in your taxable income and cannot be rolled into other tax-deferred accounts. However, donating your RMD to a charitable organization like the Community Foundation is a Qualified Charitable Distribution (QCD) and will not be taxed up to $100,000 per person. Tax benefits aside, earmarking this income for charity is a great way to begin or expand your giving portfolio to support the causes you care about.

Are you 70 ½ or older? Do you have an RMD? Have you thought about how much your distribution will be this year from your account and how it will be affecting your income? Consult your financial advisor to see if this charitable option is right for you. And then contact your custodian to request a Qualified Charitable Distribution.

A few things to note:

• If you are 70 ½ or older, you can give up to $100,000 directly from your plan. A husband and wife can each give up to $100,000 from their own accounts.
• Your gift must come directly from your account. You cannot transfer the cash to yourself prior to the gift.
• Your administrator can either cut a check payable to the Community Foundation or wire your cash to us. Please contact us for cash wiring instructions.
• You can rollover cash tax-free from another qualified retirement account to an IRA then make a rollover gift to the Community Foundation if you wish and if time permits for the year.
• The charitable rollover generates neither taxable income nor a tax deduction, so you still benefit even if you do not itemize your tax deductions.• If you have not taken your RMD for the year, a charitable rollover can satisfy all or part of the requirement.
• Be sure to inform us of your gift so that we will know the donation is from you!

Many of our donors choose to take advantage of this Qualified Charitable Distribution. Call us with any questions. And please let us know if you do decide to donate your Required Minimum Distribution to the Community Foundation so that we can ensure your wishes are met. We are committed to helping you meet your charitable goals.

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