Qualified Charitable Donations Make Even More Sense After Tax Reform
Thinking about making a charitable contribution? Are you 70 ½ or older? If you answered “yes” to both of these questions, you may want to consider making a qualified charitable distribution (QCD).
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A QCD is a transfer from an IRA (other than an ongoing SIMPLE or SEP IRA) made by the trustee directly to a qualified charity. What makes a QCD different than a regular contribution is that in lieu of getting an itemized charitable deduction, you are allowed to exclude the IRA distribution from your taxable income.
There are several benefits to this giving strategy, including:
- Counting the distribution as your required minimum distribution for the year
- Lowering your adjusted gross income resulting in a lower overall tax liability
- Giving you the benefit of making a tax-deductible contribution without the need to itemize your deductions
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There are a few things to keep in mind when considering this strategy, however. For example, QCDs are limited to $100,000 per person per year. In addition, a QCD is only tax-free if the entire amount transferred to the charity would otherwise be deductible (notwithstanding any adjusted gross income, or AGI, limitations).
So, if you don’t get a written acknowledgement from the charity or if you are receiving goods or services in exchange for the donation, then the entire distribution loses its tax-free status.
Also, if your distribution is made from an IRA which had nondeductible contributions, it is considered first to be paid out of the taxable income portion and the QCD is limited to the amount of the distribution that would otherwise be included in income.
If you aren’t 70 ½ yet but would like to take advantage of this opportunity when you reach that age, you can start some planning now by evaluating how much you save in tax-advantaged accounts. By using, or preparing to use, QCDs, you can meet your charitable and retirement goals while saving money on taxes both now and in the future. Please
let us know if we can help you with this tax-planning strategy—we are here to be of service.
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Our People Make a Difference
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The first-ever
U.S. Senior Women's Open, hosted by the
U.S. Golf Association (USGA), is being held July 12-15 at the
Chicago Golf Club in Wheaton. This exciting event is expected to bring thousands of people to Wheaton and
Mathieson, Moyski, Austin & Co. is proud to be part of the event.
The
City of Wheaton's
Fine and Cultural Arts Commission is leading a community art project for "
Wheaton's Summer of Golf," and we are proud to sponsor one of the many three-foot golf balls that will be displayed throughout Wheaton this summer. Local fine artists have been matched with sponsors and we are proud that
Patricia Melekus, pictured above, is our "artiste."
If you and your family would like to be featured on the "Community Ball," please contact
Laurie Swanson, one of the commissioners, for details and cost. We'll keep you posted as we get closer to the event, and if you live in and around Wheaton, look for those three-feet-in-diameter golf balls.
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We wrapped up another tax season and appreciate the support of everyone on our team who contributed their time and talent to meet our clients' needs. While we do take a deep breath and celebrate all that was accomplished, our work extends beyond the April deadline. Our team is dedicated throughout the year, not just to tax issues but to ongoing accounting and financial services that support individuals, families, businesses and organizations. We thank you for
your business and welcome your referrals as we continue to grow.
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Mike Moyski, CPA
Ron Austin, CPA
Brett Mathieson, CPA
John Straus, CPA
Brian Eisenmenger, CPA
Jim Mathieson, CPA, Of Counsel
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