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Got an IRA? Give to Charity? Save Big on Taxes with a QCD!


Got an IRA? Give to Charity? Save Big on Taxes with a QCD!

If you (or a loved one):

  • Utilize an individual retirement account (IRA), and...

  • Are aged 70 1/2 years young or up, and...

  • Give to charity...

...then read on to learn about a valuable planned giving option called a qualified charitable distribution ("QCD;" also known as an IRA charitable rollover) that can help your finances while also helping others.


Here's how it works:


Instead of donating cash-on-hand to charitable causes, consider directing a payout straight from your IRA to the charity because you will attain some worthwhile benefits, including:

  • Avoiding taxes on transfers of up to $100,000 from your IRA to the 501(c)(3) charitable organization

  • Making a gift that is not subject to the deduction limits on charitable gifts

  • Having the donation count toward your required minimum distribution (when you reach age 73) for the year, thus lowering your taxable income

Plus, if you direct your QCD into your named endowment fund managed by the Jewish Community Foundation, Inc., you will get to create your Jewish legacy that will last for many future generations, or you can add to an existing endowment fund.


Your endowment fund can launch at any dollar amount, you can add to it over time, and the fund can benefit any charitable cause you choose, such as the Jewish Federation of Southern New Jersey and its family of agencies, or local synagogue or day school.


In short, a QCD from your IRA into an endowment fund is a gift that keeps on giving!


Bonus Tip: You can designate a charitable organization as a beneficiary of your IRA to initiate an after-lifetime gift. By utilizing the JCF for your beneficiary designation, your gift will be added to your endowment fund so you may build your Jewish legacy for future generations.


Some notes to keep in mind:

  • You cannot initiate a QCD to a donor advised fund (DAF) due to IRS regulations.

  • Your QCD should occur before making withdrawals to satisfy your RMD due to the "first money out" rule. As you withdraw from your IRA, whether for charitable purposes or your personal income, that reduces your RMD amount for the year, so it helps to plan ahead to ensure your charitable distributions count for your RMD if that is your intention.

  • The JCF does not provide tax, financial, or legal advice, please consult your trusted advisor to learn more. We are, however, happy to work alongside you and your advisor to ensure we attain your philanthropic goals within your financial and estate parameters.

Interested in contributing to your own, personal endowment fund held by the JCF via a QCD? Contact us at 856-673-2560 or infojcf@jfedsnj.org and we will be happy to assist you.


Thank you and happy giving!

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