Investing with Faith / Kimberly Pohovey

Qualified charitable distributions are an effective vehicle for giving

As leaves change color and fall to the ground and the holidays appear on the horizon, our thoughts turn naturally toward the end of the year. As the season of generosity is upon us, we find ourselves grateful for God’s many blessings and wondering how we can share some of our blessings with others.

For many, the autumn lull before Thanksgiving and Christmas is also an opportunity to take stock of financial obligations and review the requirements that must be met before the end of 2023.

For seniors, that may include determining how much to take from an individual retirement account (IRA) without pushing income levels into a higher tax bracket. Figuring that out can be a challenge, especially if you hope to share some of what you have with others.

Before the qualified charitable distribution option, the only way to make a charitable gift using IRA assets was to make a withdrawal, pay the tax, send the proceeds to us, and hope that the charitable deduction would offset the income tax due on the withdrawal.

The good news is all that has changed.

Now, if you are over age 70 ½, you are eligible to make a qualified charitable distribution (QCD) directly from your IRA. This can be a great way to maximize your ability to give while minimizing the impact of taxes.

Gifts made directly from an IRA are often the most tax-advantaged way to give each year—even for those who don’t itemize. In fact, you may want to consider using your IRA as a source of charitable funds before giving cash or writing a check.

Here’s why:

—QCDs don’t count as income. Any donations made directly from your IRA do not add to your taxable income.

—QCDs are tax-free. Direct contributions to the ministries and institutions closest to your heart are not taxed. That applies to gifts up to $100,000 annually.

—QCDs count toward your required minimum distribution (RMD) for the year. This applies to anyone 73+ years of age.

—QCDs are effective vehicles for planned giving either all at once, or strategically throughout the year. That means that the people who work to bring the love of Christ to those in need can better plan how use the resources they can expect to receive.

Interested in making a QCD? The process is simple. Just notify your IRA custodian to make a direct transfer of an amount you specify from your IRA to us at any time of the year. To give to any of our archdiocesan parishes, schools or ministries, you will need to complete the form found at www.archindy.org/IRAdonation. Submitting the form helps ensure we are able to match the check when it’s received to your intentions.

End-of-year rush

We recommend that you contact the archdiocesan Catholic Community Foundation sooner than later if you plan to make a QCD. We experience a high volume of giving from now through December. Additionally, the Archbishop Edward T. O’Meara Catholic

Center in Indianapolis will be officially closed from Dec. 22, 2023, through Jan. 1, 2024. While we continue to monitor mail and gifts as they arrive, to qualify as a 2023 contribution, all gifts must be postmarked no later than Dec. 31, 2023.

We’re here to help. Please contact us at 317-236-1482 or ccf@archindy.org for more information.
 

(Kimberly Pohovey is the director of major and planned gifts for the archdiocese. Tax or legal information provided herein is not intended as tax or legal advice. Always consult with your legal, tax or financial advisors before implementing any gift plan. For more information on the Catholic Community Foundation, visit www.archindy.org/CCF, e-mail ccf@archindy.org, or call 317-236-1482.) †