by Mary Aumack
Executive Director
Before 2018, for many taxpayers there was no benefit in making a direct contribution to charity from a retirement account (Qualified Charitable Distribution). Previously, you could take an amount, say $10,000, report it as taxable income, then donate it to charity, and the net effect was the same as if the contribution had been made directly.
With the doubling of the standard deduction, that could change for many individuals and couples. If you take $10,000 out of an IRA and donate to charity, and are unable to itemize, you will pay full tax on that $10,000. In that case, making the direct distribution from the retirement account would save the full amount of tax. Qualified Charitable Distributions may not be deposited in Donor Advised Funds, but they may be contributed to institutional, field of interest, and family endowments. Learn more about all of our endowments here.
We have ideas that could be of great interest to your clients in this area. If you would like to discuss this idea and other strategies, contact us at info@cfoscc.org or 408.995.5219.