You can give any amount (up to a maximum of $108,000) per year from your IRA directly to a qualified charity such as Hudson Montessori School without having to pay income taxes on the withdrawn amount. Gifts of any value ($108,000 or less) are eligible for this benefit and you can feel good knowing you’re making a difference at HMS! 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).
If you are 70 1/2 or older, you now have the option to fund your gift annuity with IRA assets. You may make a one-time election for a QCD of up to $54,000 without being taxed on the gift. While there is no charitable deduction for a gift from your IRA assets, it is free of federal income tax and is excluded from your gross income. If you are required to take minimum distributions, you can satisfy all or part of that obligation. This option is only available for you and/or your spouse, and all payments are taxed as ordinary income.
Why consider this gift?
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Your gift will be put to use today, allowing you to see the difference your donation is making.
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Beginning in the year your turn 73, you can use your gift to satisfy all or part of your required minimum distribution.
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You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.
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Since the gift doesn’t count as income, it can reduce your annual income level. This may help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax.
