Qualified Charitable Deduction
A Qualified Charitable Distribution (QCD) lets traditional (non-Roth) IRA owners 70½ and older donate up to $108,000 (for 2025) and $111,000 (for 2026) tax-free directly from their IRA to CMC, satisfying Required Minimum Distributions (RMDs) and lowering taxable income.
Key Requirements & Benefits
- Age: Must be 70½ or older.
- Source: Funds must come directly from an IRA (not SEP/SIMPLE).
- Recipient: Must be a qualified 501(c)(3) public charity like CMC
- Direct Transfer: Trustee-to-charity transfer; you can't receive the money first.
- Tax Benefit: The amount isn't taxed as income and doesn't require itemizing deductions.
- RMD Fulfillment: Counts toward your annual RMD, reducing the taxable amount you withdraw.
- Annual Limit: $108,000 per individual in 2025; $111,000 in 2026.
How It Works
- Contact your IRA custodian (e.g., Fidelity, Vanguard) and request a QCD.
- Specify the charitable organization as “Calvary Memorial Church” and the amount.
- The custodian sends the funds directly to CMC.
- The distribution is reported on Form 1099-R, but you note it as a non-taxable QCD to exclude it from income.
Why Use a QCD?
- Lower Taxable Income: Avoids pushing you into higher tax brackets.
- Reduces Medicare Premiums: Lowers Adjusted Gross Income (AGI), potentially lowering Medicare Part B/D premiums.
- Strategic Giving: Efficiently supports favorite charities while meeting mandatory withdrawals.