If you are age 70½ or older, you generally must withdraw a minimum amount each year from your traditional IRAs (Roth IRAs are excluded) and employer-sponsored retirement plans. Failure to take your required minimum distribution (RMD) by year-end could result in a stiff IRS penalty—50% of the amount you should have withdrawn.
TMLC Supporters aged 70 ½ or older with IRA accounts can make a 2013 charitable donation to the Thomas More Law Center (TMLC) in one of two ways, depending on when you make your distribution:
1. You may make a Qualified Charitable Distribution (QCD)
If the QCD is made directly by your IRA trustee to the Thomas More Law Center by December 31, 2013, the amount of those proceeds will be treated as a Qualified Charitable Distribution for this tax year. This means that the amount of the distribution to TMLC will not be considered income. Consequently, you will receive a 1099 from your trustee noted as “QCD.” Because you will be benefited by the fact that the amount of the distribution is not treated as income to you, no tax deduction of the amount will be allowed on Schedule A for 2013.
Individuals can make tax free Qualified Charitable Distribution donations up to $100,000 ($200,000 for married couples) from their IRA accounts. You have until December 31, 2013 to do so.
2. If you already received an IRA distribution in 2013
If you already received an IRA distribution in 2013, you can still make a gift of those proceeds to TMLC. However, your donation will be considered a charitable donation and eligible for a tax deduction on your 2013 federal tax returns, depending on your taxable bracket. For the donation to count on your 2013 tax return, you must make it by December 31, 2013.
Please contact Tom Lynch, Director of Mission Advancement, at (734) 827-2001 for more information.
Note: This Alert provides general financial information, not specific financial advice. The material contained in this section does not create or imply an advisor-client relationship with the Thomas More Law Center or any of its attorneys. For specific questions, consult a qualified financial and/or legal advisor.