Doing Good While Saving Taxes 

You may find yourself among most taxpayers these days who no longer itemize their income tax deductions and cannot enjoy the tax advantages of the charitable contribution deduction. However, there is good news for donors age 70½ or older. A qualified charitable distribution (QCD), sometimes called the “IRA Charitable Rollover,” can provide you with the same tax benefit as a charitable deduction even if you do not itemize.

Ordinarily, you will owe income tax on any withdrawal from your IRA. However, there is no income tax on a QCD. Because a QCD contribution is not included in your taxable income, the tax result is like a tax-deductible gift to charity. In fact, a QCD can be even better than a charitable deduction because lowering your taxable income can also reduce taxes you might owe for Social Security as well as your Medicare premiums. Finally, if you must take required minimum distributions (RMD), your QCD contribution will count toward your RMD without adding to your taxable income.

These are some of the requirements for a QCD contribution:

• You must be 70½ or older at the time of your contribution
• Your contribution must go directly from your IRA to the Christian Brothers of the Midwest
• The total of all your QCD gifts for 2024 cannot exceed $105,000 per person however, your spouse with a separate IRA can make a QCD of up to $105,000 in 2024 if they otherwise qualify

Of course, in addition to the tax savings, you will be making an immediate impact on the lives of those who need the Christian Brothers of the Midwest the most. If you are 70½ or older, and especially if you no longer itemize your income tax deduction, a QCD can be a tax-smart strategy.

Your IRA administrator can help you make a QCD. Often, it is as simple as completing a form on their website directing a QCD to the Christian Brothers of the Midwest. We would be happy to work with you to complete your QCD contribution.