Don’t forget to start using the IRA (Q)ualified (C)haritable (D) istribution provision for your monthly giving in 2018! That’s right… You don’t have to wait until year-end to find out your (R)equired (M)inimum (D)istribution amount for the year and, in turn, to bless Cornerstone! The new Tax Cuts and Job Acts makes the QCD even more appealing for taxpayers because the standard deduction is being raised to $12,000 for individuals and $24,000 for married couples. Higher standard deductions means that fewer taxpayers will be itemizing deductions . With no tax deduction available, donating through your IRA may yield the biggest tax bang for your charitable buck.

With a QCD, regardless of your RMD amount, you can donate up to $100,000 annually to a qualifying charity, like Cornerstone, from an IRA if you are 70 ½ years of age or older. Any amounts given to charity using a QCD will count towards your IRA’s RMD, but will not be included in your taxable income. Although it seems like the results would be the same if you include the IRA distribution as income and then deduct the charitable contribution on your tax return, using the QCD is much better in many scenarios. For example:

  • Individuals who claim the standard deduction can benefit from the full charitable contribution even though they do not itemize.
  • The full amount of QCD can be excluded from income even when the charitable contribution exceeds the 60% adjusted gross income (AGI) limit on charitable contributions.
  • Distributions directly to Cornerstone keeps your AGI lower, which is beneficial when calculating other items such as: taxability of social security, medical expense floors, Medicare premiums, miscellaneous deduction floors, and the investment surtax.

If you support Cornerstone at all during the year (and are over 70 ½), use your IRA rather than your checkbook. Whether you give weekly, monthly, quarterly or annually, remember that you can instruct your IRA custodian to send checks on your behalf at any time, as well as periodically. Maximize your stewardship potential through the truly unique QCD strategy today!