Donating your IRA distributions to a charity

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Edward Jones - Chad Choate, AAMS

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Dec 16, 2023

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Florida - Sarasota, Bradenton & Charlotte Counties

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A qualified charitable distribution (QCD) is a distribution from a traditional or Roth IRA made directly by the IRA trustee to a qualified charitable organization when the IRA owner is age 70½ or older. A QCD may satisfy the client’s required minimum distribution (RMD) and, for 2024, up to $105,000 of QCDs may be excluded annually

from an individual’s taxable income. Also for 2024, distributions are limited to a one-time $53,000 donation. These limits are adjusted annually for inflation

Eligibility

A qualified charitable distribution may be made:

    When the IRA holder is age 70½ or older

    Directly from the IRA to a qualified charity

    From a traditional or Roth IRA

 

Qualified charities

Generally, a qualified charity includes most public charities that are eligible to receive tax-deductible contributions — including religious institutions, certain veterans’ organizations, fraternal societies and community foundations that provide scholarships.

 

Limitations

Restrictions set on QCDs include the following:

       •    Distributions must be transferred to the charity no later than Dec. 31 of the current tax year.

    Deductible contributions made during or after the year an individual reaches age 70½ will reduce the amount that may be excluded.

    QCD must be a direct IRA distribution from the IRA custodian or trustee to a qualified charity.

    Not all charitable organizations qualify.

      •    QCDs are applicable only for traditional and Roth IRA distributions (excludes SEP and SIMPLE IRAs).

Making a QCD provides an opportunity to make

a charitable contribution that you might otherwise not have been able to make and/or receive potential tax benefits for charitable contributions that you are already making. You should consult your tax advisor and estate-planning attorney about your situation. Edward Jones, its financial advisors and employees do not provide tax or legal advice.

 

Key benefits

    For those who give larger gifts — Deductibility limits do not apply to QCDs, which means the QCD can be made in addition to other charitable contributions that may be limited by the annual maximum deductible percentage of income or phaseouts of itemized deductions.

    For those who don’t itemize deductions

If QCDs are used as the funding source for charitable donations, the donor will receive tax benefits when there otherwise would have been none due to the use of the standard deduction.

    For those who pay taxes on a portion of their Social Security benefits — Income for determining the taxation of Social Security

benefits is lower than if the IRA holder had taken the RMD, potentially reducing this taxation.


    For those whose income level subjects them to tax on net investment income, or phaseout of personal exemptions or itemized deductions — A QCD made in lieu of an RMD will result in lower adjusted gross income for the IRA holder, which may lessen the effect of this tax or applicable phaseouts.


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Edward Jones - Chad Choate, AAMS

Financial Advisor 828 3rd Ave. W., Bradenton, Florida, 34205

Experience and Background I am a financial advisor in Bradenton, FL, and began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.