Tax-Free Gift with an IRA

If you are 70½ years old or older, you can take advantage of a simple way to benefit St. Cecilia and receive tax benefits in return. You can give up to $100,000 from your IRA directly to a qualified charity such as ours without having to pay income taxes on the money. IRS refers to this as a “Qualified Charitable Deduction” (QCD).

This charitable gift option applies only to IRA and Roth IRA plans, not to other retirement plans such as 401(k), 403(b), pension, profit-sharing, Keogh, and employer-sponsored SEP IRAs and simple IRA plans. However, a donor may be able to roll assets tax-free from one of these plans to a traditional IRA, and then take advantage of the charitable rollover. Donors should consult their retirement plan administrator, or their tax or financial advisor to determine whether this option would be advantageous for each donor’s financial and tax circumstances.

Why Consider This Gift?

• Your gift will be put to use today, allowing you to see the difference your donation is making.
• You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.
• If you have not yet taken your required minimum distribution for the year, your gift can satisfy all or part of that requirement.

The IRA rollover’s key provisions are:

• The IRA rollover allows donors 70½ or older to transfer up to $100,000 directly from their IRA to a qualified 501c3 charity on an annual basis
• An IRA rollover gift is a tax-free distribution for the donor. Qualifying individuals can make charitable gifts using pre-tax IRA assets rather than taking a distribution, paying income taxes and using after-tax assets to make a charitable gift
• An IRA rollover gift can be used to meet all or part of an IRA’s annual required minimum distribution (RMD)
• Your gift will reduce your Adjusted Gross Income (AGI) and may lower your Medicare Part B and Part D premiums

IRA Qualified Charitable Deduction (QCD) key provisions are:

• A QCD allows donors 70½ or older to transfer up to $100,000 directly from their IRA to a qualified 501c3 charity

• A QCD is a tax-free distribution for the donor. Qualifying individuals can make charitable gifts using pre-tax IRA assets rather than taking a distribution, paying income taxes and using after-tax assets to make a charitable gift

• A QCD can be used to meet all or part of an IRA’s annual required minimum distribution (RMD)

The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results.