Now's the Time to Cue Up the QCD

Now is the Time to Cue Up the QCD

Tax Law Changes Provide Win-Win

Continuing your legacy of love and compassion at St. Vincent de Paul just got easer thanks to tax law changes that are proving a win-win for older adults who like to donate to charities, but don’t like to pay taxes. 

Now, Individual Retirement Account (IRA) holders who are age 70 ½ or older can use their required minimum distribution (RMD) to support a charity such as SVdP through a qualified charitable distribution (QCD). 

“Accountants will tell you that using the QCD is a tax-savvy strategy, allowing you to transfer any amount up to $100,000 per year from your IRA directly to a qualified charity like St. Vincent de Paul,” explained Mike and Rita Hutt, Servant Leaders Society members who took advantage of the provision to the new tax law to support SVdP in 2017. This year, they are doing the same.  

“It’s a win-win,” added Mike, “since the transfer counts as the required minimum distribution without being added to your adjusted gross income.”  

Also, keeping your QCD donation out of your adjusted gross income may also reduce Medicare Part B premiums, according to Mike, as these surcharges are based on a sliding income scale.   

With fall underway and the holiday season beckoning, now is the time to think about year-end tax planning—particularly, year-end contributions to your favorite charities. According to a Sept. 23 Wall Street Journal article, “What’s a QCD—and Why Taxpayers Need to Know the Answer Now,” financial planners are advising clients to get familiar with and act on QCDs now, not to wait until late December. 

To that end, the Hutts offer three easy steps to get the ball rolling now and make a qualified chartable distribution, before the ball drops:     

  • Contact your IRA custodian about their process, which is often as simple as completing an online form. 
  • Advise that you wish to make a qualified charitable distribution to St. Vincent de Paul for a specified amount of your RMD. 
  • Request the check be sent in care of you to your home address, then forward it to SVdP. Or better yet, deliver it to SVdP and take a tour! 

Remember, your QCD gift of $1,000 or more automatically makes you a member of the Servant Leaders Society!    

Please note: It is wise to consult with your tax professional if you are contemplating a charitable gift under the extended law. Please feel free to contact Donna Rodgers at 602.261.6884 or with any questions.