Donate your IRA Required Minimum Distribution to the Food Bank of the Albemarle for tax savings and maximize your gift potential
Click to Here to Learn MorePlanning your annual taxes and charitable giving can go hand-in-hand. Here’s a look at what Required Minimum Distributions (RMD) are and how they may be useful to your tax planning and charitable giving strategy to Food Bank of the Albemarle.
What is an RMD and How Can You Utilize this to Gift Benefit the Food Bank?
If you’re age 70 ½ (depending on birth year) or over and have a traditional IRA, you may be required to take a RMD each year. RMDs are typically taxed as ordinary income, which can increase your tax bill. However, donating part or all your RMD to Food Bank of the Albemarle through a Qualified Charitable Distribution (QCD) is a great way to make an impactful gift, supporting our mission with the possibility of tax benefits.
What is a Qualified Charitable Distribution (QCD)?
A QCD allows individuals aged meeting age requirement to directly transfer from their IRA to a qualified charity. The distribution counts toward your RMD but isn’t considered taxable income, which can help reduce your overall tax liability.
Benefits of Donating an RMD to a Non-Profit
Donating your RMD to the Food Bank is a generous way to ensure our organization has the funding we need to provide food and resources each year.
It’s also a tax savings for you as a donor.
Since the RMD is not counted as taxable income, it can reduce your adjusted gross income (AGI), which may help keep you in a lower tax bracket.
How to Make a QCD
Contact Your IRA Custodian: Inform them that you’d like to make a QCD and specify the Food Bank of the Albemarle and the amount you’d like to donate.
Giving your RMD can be a smart financial move while supporting FBA. If you’re considering this strategy, it’s wise to consult with a tax advisor or financial planner to ensure you meet all requirements and maximize the benefit of your charitable gift[DF2] .
For further information, please call Diana Flippo, Director of Development, Food Bank of the Albemarle at 252-562-4110.
Required Minimum Distributions (RMD) begin when you reach a certain age based on your birth year:
IRA Required Minimum Distribution (RMD)
If you are 70 ½ years or older, you can donate up to $108,000 directly from your IRA to your charities of choice. By doing this, you may avoid a higher income tax bracket and prevent phasing out of other tax deductions. There are some other limitations. Please consult your tax professional.
A Qualified Charitable Distribution (QCD) from your IRA will satisfy your Required Minimum Distribution (RMD).
How to donate an IRA gift?
- Contact your IRA provider.
- Applies to Traditional IRAs.
Distributions must be made payable to a qualifying charity (Food Bank of the Albemarle qualifies); you cannot first receive the distribution and then contribute to the charity.
- The transfer must be made by December 31 to count against the year’s RMD requirement.
- You may not receive anything of value from the charity in exchange for your contribution.
You can give any amount (up to a maximum of $108,000) this year from your IRA directly to a qualified charity such as Food Bank of the Albemarle without having to pay income taxes on the money.
This popular gift option is commonly called the IRA charitable rollover, but you may also see it referred to as a qualified charitable distribution, or QCD for short.
