Give via IRA Qualified Charitable Distribution
Did you know that you can “avoid” paying taxes on your annual IRA required minimum distribution (RMD) with a qualified charitable distribution (QCD)?
If you are 70½ or older, and required to take an annual distribution from your IRA, you can use those funds to make a gift to St. Michael’s (or any other qualified charity) to satisfy that obligation, and not pay income tax on the transfer. You can give any amount up to $100,000, but it must come directly from your IRA to St. Michael’s. The QCD can satisfy your required minimum distribution for the year. The funds must come out of your account by the December 31st RMD deadline.
This is a great option for anyone who does not itemize charitable deductions and/or anyone who does not want to incur that additional RMD income. Since the gift doesn’t count as income, it can actually reduce your annual income level, which in turn may help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax.
Be sure to consult with your financial, tax and/or legal advisors before taking any action to ensure you’re making the right decision for you.