Using Your Required Minimum Distribution (RMD) to Support LVAAS
The RMD is the minimum amount the IRS requires you to withdraw from your IRA and/or retirement plan account when you have reached 72, or if you have reached 70 ½ prior to January 1, 2020. Once an IRA or retirement plan account holder reaches 70 ½, you may give directly to qualified charity(ies) from an IRA. This is called a qualified charitable distribution. Any amounts given to qualified charities via QCD are considered non-taxable withdrawals and count toward your annual RMD amount. Qualified charitable distributions must be provided to 501(c)(3) organizations eligible to receive tax-deductible contributions. The maximum allowable annual amount of QCD’s is $100,000.
If you decide to make a QCD to the LVAAS please make the check payable to Lehigh Valley Amateur Astronomical Society and send it to:
Lehigh Valley Amateur Astronomical Society, Inc.
620 B East Rock Road
Allentown, PA 18103-7525
Please consult your investment advisor about the process for you to use to make this donation so that it is done properly for future tax purposes.
Thank you for considering this option to help the Lehigh Valley Amateur Astronomical Society.
What Donors Should Know About Making Gifts From IRAs
- Qualified charitable distributions, or QCDs, allow donors who are at least 70.5 years old to give charities up to $100,000 a year directly from their IRAs without it counting as taxable income.
- CDs count toward donors’ required minimum distribution, the amount of money they must withdraw from their IRA each year after they reach age 70.5.
- The distributions can’t go to donor-advised funds or life-income gifts, such as charitable remainder trusts or gift annuities.
- Donors are not allowed to get anything in return for a QCD gift, such as a meal or tickets to an event.
- QCD gifts can be made only from IRAs. To give retirement assets in a 401(k) or other vehicles, donors must first roll those funds over into a qualified IRA. Then they can direct the fund administrator to transfer money to a charity.
- Donors cannot count a QCD gift as a charitable deduction on their federal taxes even if they itemize. The potential tax benefit of a QCD gift is that it is transferred from an account directly to a charity so the money isn’t taxable income to the donor.
- State laws about charitable deductions and how QCDs are handled vary so please consult an adviser to discuss your specific situation.
by Mike Waddell, Director, Development
30 Nov. 2020