IRA Contributions

QUALIFIED CHARITABLE DISTRIBUTION (QCD)

Mountain Top relies on monetary donations alongside state funding to support the program, maintain facilities, keep up facilities, and provide safe entertainment and care for the boys.

Qualified Charitable Distribution (QCD) is a great way for individuals to give a tax-free distribution to Mountain Top. If you would like assistance setting up a Qualified Charitable Distribution (QCD), please call our office at 706-397-8223.

Typically distributions from traditional IRAs are taxed as ordinary income. What you might not know is that these taxes can be avoided by a qualified charitable distribution (QCD).

WHAT IS A QUALIFIED CHARITABLE DISTRIBUTION (QCD)?

Typically, distributions from traditional IRAs are taxed as ordinary income, but what if you could avoid those taxes? That is where Qualified Charitable Distributions (QCD) come in. A QCD allows you to take a distribution from your traditional IRA and exclude it from your taxable income with no tax on the distribution. A QCD can also be used to satisfy all or a portion of your Required Minimum Distribution (RMD), allowing you to avoid being taxed on RMD.

HOW TO COMPLETE A QCD

  1. A QCD can only be made from a Traditional or Rollover IRA.

  2. Owner must be at least 70½ or older to take advantage of doing a QCD.

  3. The money must go directly from the IRA to the charitable organization. Funds cannot pass through the IRA holder, otherwise, the distribution becomes a taxable event. Most financial institutions (i.e. Fidelity, TD Ameritrade, Charles Schwab, Vanguard, etc.) have forms specifically created for facilitating the completion of a QCD.

  4. The maximum QCD allowable on an annual basis is $100,000.

  5. Donations cannot be directed toward Donor Advised Funds, Supporting Organizations, or Private Foundations.

  6. At the end of the year, you’ll receive a 1099 tax notice for your IRA. The QCD will automatically be included with all other taxable distributions as code 7 in box 7 on the form. You will need to inform your tax preparer what portion of your IRA distributions were done as a QCD.

WHY SHOULD I CONSIDER A QCD?

A QCD is most appropriate if you make charitable donations and only take the standard deduction on your tax return as it restores your ability to take advantage of the tax savings charitable diving provides. Even if you itemize, a QCD may still make sense.

For example, if your RMD bumps you into a higher tax bracket, which may also make more of your Social Security taxable, a QCD can help mitigate that. As always, before deciding whether a QCD is right for you, please talk with your qualified tax advisor or financial advisor.

If you would like to learn more about supporting our ministry, please contact us.

Contributions

Your financial support is greatly needed and appreciated. It takes steady financial resources to meet the needs of our youth, keep our program running smoothly, and employ qualified talent. Please consider a monetary contribution today.