Qualified Charitable Distribution

Here is a win-win strategy if you take distributions from a traditional IRA. As you are probably aware, when you take a distribution from your traditional IRA, that distribution is considered taxable income. The IRS has created a Qualified Charitable Distribution (QCD) program that allows you to direct all or a portion of your IRA distribution to a qualified charity (FUMC meets that qualification) and you pay no taxes on the portion of income that is the QCD. The IRS also recognizes the QCD amount as counting toward your annual Required Minimum Distribution (RMD). In other words, the QCD amount is tax free to you, helps you meet your RMD, and supports the Church. It directly reduces income. It is not an itemized deduction. You cannot directly send the QCD money yourself. It must be done by the IRA Administrator. Talk to your IRA Administrator for details on how they handle QCD’s.

The IRA Charitable Rollover allows you to make “qualified charitable distributions” directly from a retirement plan. Gifts up to $100,000 are excluded from federal income. This favorable tax treatment is followed by most states. Please consult with your tax adviser to discuss state-specific guidance.