In 2015, Congress made permanent the Qualified Charitable Distribution (QCD) provision of the Tax Code. This provision allows people over age 70-1/2 transfer up to $100,000 from their IRA to a charity such as FLOW, and have it count as their Required Minimum Distribution (RMD) obligation without increasing their adjusted gross income. In addition, no taxes are due on the amount transferred to charity.
However, if you make a tax-free transfer to a charity, you can’t take a charitable deduction for that contribution. But the benefit to you is that making this transfer prevents an increase in your adjusted gross income helping you to avoid a higher tax bracket and might even keep your income below the threshold for the Medicare high-income surcharge, which boosts your Part B and Part D premiums.
Consult your tax advisor on your particular tax situation. Certain rules apply. Most important is that you have the check or electronic payment made out to the charity, not to you, so the money isn’t included in your adjusted gross income and counts as a tax-free transfer. Contact your IRA administrator.
FLOW is a 501(c)(3) and qualifies as a charity to which your transfer can be made. To learn how your contribution can benefit LOW, contact a FLOW board member.
