In 1974, Congress established the Individual Retirement Account (IRA) to encourage working people to save for retirement and supplement their social security retirement income. Funds in a traditional IRA are sheltered from income taxes until withdrawn. But to ensure that money isn’t sheltered from taxes indefinitely, Required Minimum Distributions (RMDs) were established. Currently, starting at age 73, IRA owners are required to distribute a portion of their account each year. These distributions are taxed.
In 2006, Congress established the Qualified Charitable Distribution (QCD). A QCD is a powerful strategy that allows you to support your favorite charities directly from your IRA. To utilize QCDs you must be 70 ½ or older (you don’t have to wait until an RMD is required) making it an ideal option for retirees seeking meaningful ways to give back while reducing taxable income. Importantly, QCD distributions are EXCLUDED from taxable income, and they can be made throughout the year.
QCD payments must be made directly from your traditional IRA to a “qualified” charity as defined by the IRS. The maximum amount of the QCD per taxpayer is $100,000 per year.
The QCD is not a deductible item on your tax return. It just offsets the taxes on an IRA distribution. This can be particularly beneficial if you are taking the standard deduction instead of itemizing deductions. QCDs allow you to support charities while still enjoying tax advantages.
The SaddleBrooke Community Outreach Scholarship (SBCO) Endowment Fund is a qualified charity focused on supporting students from the “Copper Corridor” area that want to attend college and have qualified to receive SBCO Scholarships. These students are the best of the best and need our help to continue their education and reach their career goals.
The endowment fund invests all donations in long term investments that will provide support for students over many years. To contribute a QCD, you just need to direct the administrator of your traditional IRA to send a check made payable to the Community Foundation of Southern Arizona (CFSA), administrator of the SBCO Endowment Fund. On the check memo line designate “SBCO Scholarship Endowment Fund” (CFSA’s Tax ID is 94-2681765). Donations should be sent to the following address: The SBCO Scholarship Fund, Community Foundation of Southern Arizona, 5049 E. Broadway Blvd., Suite 201, Tucson, AZ 85711.
The minimum contribution requested is $5,000.
SBCO will keep you informed of scholarships awarded by the fund and specific areas the students are pursuing.
We recommend that you seek advice from your tax adviser to ensure you are getting the best tax advantage from your contribution.
Longtime Tucson bar sold, to be redeveloped
