Qualified Charitable Distributions, or QCD’s, are tax-free donations made by eligible individuals directly from their IRA to a 501(c)3 registered charity, like Sound Foundations NW, instead of taking a required minimum distribution, which is taxable and may also have other consequences.
Ready to direct a QCD to Sound Foundations NW from your IRA?
A QCD needs to come directly from your IRA to the qualified charity of your choice, so your IRA administrator or tax professional can help facilitate the transfer. If SFNW will be the recipient, thank you, and our EIN number is 85-3697725. Please also send us an email to let us know your QCD is coming so that we may properly acknowledge your gift and also make sure your receipt reaches you directly.
Want more info on QCD’s?
According to Fidelity Charitable, Qualified Charitable Distributions, or QCD’s, “allow individuals who are 70½ years old or older to donate up to $100,000 total to one or more charities directly from a taxable IRA instead of taking their required minimum distributions. As a result, donors may avoid being pushed into higher income tax brackets and prevent phaseouts of other tax deductions, though there are some other limitations.”
Does a QCD Make Sense for You?
Everyone’s situation is different, and everyone has different goals and philosophies around their charitable giving, so please consult with your tax and/ or financial professionals before making a decision. However, a QCD can provide several potential benefits. Again, according to Fidelity Charitable, it may be a suitable giving strategy for donors who:
- Are required to take a minimum distribution from an IRA, but don’t need the funds and would face increased tax liabilities if they took the distribution as income.
- Would like to reduce the balance in an IRA to lower future required minimum distributions.
- Would like to make a larger charitable gift than they could if they simply donated cash or other assets. The value of charitable gifts that can be deducted from a tax return usually ranges from 20 to 60 percent of the donor’s adjusted gross income. This AGI-based limit does not apply to QCDs, allowing donors to make larger gifts.
- Do not wish to make their contribution to a foundation or donor-advised fund.
- Have identified which charities they want to support immediately with a substantial gift.