In 2013 you can support The Bishop Hill Heritage Association and save on the amount you pay the IRS in income tax. As a part of the “fiscal cliff” tax compromise the legislature passed last January, taxpayers’ may take required annual distributions from their IRA’s and contribute those withdrawals directly to charitable organizations, treating them as tax-free distributions. It is a convenient way to satisfy IRA distribution requirements, support charitable causes, and receive a tax break all at the same time.
This provision, called the qualified charitable distribution “QCD” rule was extended for 2013, but it is unknown whether QCDs will remain an option beyond the end of 2013.
General guidance on the QCD rule:
- The taxpayer must be 70 ½ or older at the time of the QCD.
- All of part of the taxpayer’s required minimum distribution (RMD) may be included in the QCD.
- QCD’s are limited to $100,000 per taxpayer.
- No charitable deduction is allowed for a QCD that is excluded from income.
If you have reached age 70 ½ and are faced with taking a required minimum distribution from your IRA, please consider a QCD to The Bishop Hill Heritage Association. Your tax professional can answer any additional questions you may have.