Did you know you could reduce taxes by donating to your favorite charity? To qualify, the charity must meet certain Internal Revenue Code requirements, which include the Achieva Foundation¹, specific types of churches, educational facilities, non-profits, and more. Additionally, donors with traditional IRAs can satisfy their required minimum distributions by giving to those qualified charities.
Through a qualified charitable distribution (QCD), individuals 70 1/2 or over can directly transfer up to $100,000 to one or more charities from their IRA. The IRA withdrawal goes directly to their chosen charity without the need to report or pay taxes on the QCD, even if they do not itemize deductions. QCDs can be made directly to the charity or by a check payable to the charity, and in some cases, electronically.
Don’t have an Individual Retirement Account but would like to know more about them? Read our related article about locking in your retirement here.
Key points about required minimum distributions (RMDs)
• RMD rules apply to retirement accounts into which you’ve made tax-deferred contributions, including traditional IRAs and other IRA-based plans.
• If you have an IRA account, regardless if you are retired or not, you must take your first RMD by April 1 of the year after you turn age 73. For each year after turning age 73, you must take the required minimum distributions by December 31.
• QCDs can count toward your RMD and won’t be included in your taxable income.
Make a qualified charitable distribution to the Achieva Foundation
IRA owners who want to support the Achieva Foundation should contact their local Achieva Wealth Advisor. Additionally, if you act now, you should have time to complete the transaction before the end of the year. In most cases, distributions from a traditional IRA are taxable when received. However, as explained above, QCDs become tax-free when paid directly from the IRA to an eligible charitable organization. Please note: If you personally take the distribution and then donate, it will be taxed².
The Achieva Foundation is a non-profit organization dedicated to improving the lives of our members and their surrounding communities. Contributions help others overcome financial hardships, support local classrooms and teachers, and provide scholarships to students pursuing degrees in education. For more information about the Achieva Foundation, contact our Member Service Center at 800-593-2274 (toll-free).
Need more financial content? Continue following the Achieva Life Blog for additional budgeting and lifestyle articles.
¹ The Achieva Foundation is a 501(c)(3) Corporation supporting the local communities that Achieva Credit Union serves. We are committed to supporting organizations that create opportunities for social and economic enrichment of the communities we serve. Individuals who do not live or work within Achieva’s field of membership are eligible for a membership by making a minimum required contribution to the Achieva Foundation. Membership through the Achieva Foundation does not change the residency restrictions on Achieva Credit Union loan applicants.
A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING TOLL-FREE (800-435-7352) WITHIN THE STATE. REGISTRATION DOES NOT IMPLY ENDORSEMENT, APPROVAL, OR RECOMMENDATION BY THE STATE. CH72927 .
² Achieva Credit Union, the Achieva Foundation and their representatives do not provide tax and/or legal advice. Please consult your personal tax and/or legal advisor(s) for applicable state and federal requirements and important information specific to your individual situation.
