Charitable IRA Rollover

Charitable Giving Through IRAs: QCDs and RMDs

Qualified Charitable Distributions (QCDs)

What is a QCD? A Qualified Charitable Distribution (QCD) allows individuals aged 70 ½ or older to donate up to $105,000 annually from their Individual Retirement Account (IRA) directly to a qualified charity. This type of donation is excluded from taxable income, providing a tax benefit even if you do not itemize deductions.

Key Benefits of QCDs:

• Tax Efficiency: The amount donated through a QCD is not counted as taxable income.
• Satisfy RMDs: QCDs can count towards your Required Minimum Distribution (RMD) for the year, which you must begin taking at age 72.
• Support Charitable Causes: Directly support your favorite charities in a tax savvy way.

Eligibility:

• Must be 70 ½ or older at the time of the donation.
• Donations must come from a traditional IRA.
• To qualify for the tax-free treatment, the donor cannot claim a charitable income tax deduction for the gift or receive any goods or services in return for the charitable IRA rollover contribution.

Guidelines:

• Check must come directly from the IRA to the charity (Missouri State University Foundation)
  
  • Designate the organization (KSMU)
• Check should be mailed to:
  
  • Missouri State University Foundation, 300 S. Jefferson Ave, Suite 100, Springfield, MO 65806
• Missouri State University Foundation Tax ID # 431234200

To participate in the Charitable IRA Rollover program, contact your IRA representative. Checks must be issued directly from the IRA to the Missouri State University Foundation and should designate the recipient as KSMU.

Required Minimum Distribution (RMD)

What is an RMD? A Required Minimum Distribution (RMD) is the minimum amount you must withdraw annually from your retirement accounts, such as traditional IRAs and 401(k)s, starting at age 73.

Using RMDs for Charitable Giving:

• Combine with QCDs: You can use QCDs to satisfy your RMD without increasing your taxable income.

Benefits of Giving to KSMU Through Your IRA

• Tax Efficiency
  
  • Tax-free Withdrawals
  • Avoid higher tax bracket by lowering your taxable income
  • Reduces Adjusted Gross Income (AGI)
• Simplicity and Convenience
  
  • Direct transfers from your IRA to the charity simply donation process
  • No need to itemize- receive tax benefits even if you take standard deductions
• Reduction of Estate Taxes
  
  • Lower Estate Value: By donating directly from your IRA, you may reduce the size of your taxable estate, potentially lowering estate taxes for your heirs.
  • Charitable Estate Planning: Charities are exempt from being taxed on IRA contributions which makes this a good gift to designate in your will.

For more information, call Lori Street at 417-836-3506 or visit www.irs.gov/retirement-plans.