Giving and Taxes

With the latest tax reform likely to lead more taxpayers to use the standard deduction instead of itemizing, the tax loophole known as the Qualified Charitable Distribution (QCD) takes on a new sheen for folks 70 and a half.
  1. A QCD allows taxpayers claiming the standard deduction to get a tax break for giving to CCPC.
  2. The QCD lets you transfer money from your traditional IRA directly to the church without the money being added to your adjusted gross income which may keep you in a lower tax bracket and below the annual income limits that trigger additional Medicare Part B insurance premiums.
  3. The money can count toward your required minimum distribution if the QCD is made before satisfying your Required Minimum Distribution for the year.
  4. There are some additional rules so check with your IRA custodian, tax professional, or financial adviser.
  5. Funds distributed directly to the IRA owner (you), which are then given to the church, do not qualify as a Qualified Charitable Distribution (QCD). The funds must go directly from the IRA to the church.

We hope this helps equip you with information on your charitable giving plans.