A qualified charitable distribution (QCD) allows individuals who are 70½ years old or older to donate up to $100,000 to a qualifying charity directly from a traditional IRA. This is an attractive option for people who need to take a required minimum distribution (RMD) but don’t need the income or want a potential tax hit.
Here are some of the top reasons a QCD gift makes sense for you and Auburn.
- Tax Advantages Aplenty: One of the primary reasons to make a QCD is the significant tax advantages it offers. By directly transferring funds from your IRA to a qualified charity, you can potentially satisfy your RMD without adding to your taxable income. This can be especially beneficial for retirees looking to minimize their tax liability while supporting the Auburn Family.
- Double Dip with the Standard Deduction: With the increase in the standard deduction in recent years, many individuals find it challenging to itemize deductions on their tax returns. However, a QCD allows you to still benefit from your charitable contributions. By making a direct transfer from your IRA to the Auburn University Foundation, you can enjoy the standard deduction while simultaneously supporting the programs and causes at Auburn that matter most to you.
- Preserve Social Security Benefits: If you’re receiving Social Security benefits, a higher taxable income can result in a portion of your benefits becoming taxable. Making a QCD helps keep your adjusted gross income lower, potentially reducing the taxable portion of your Social Security benefits. This strategy enables you to maintain more of your hard-earned retirement income while supporting charitable organizations.
- Efficient Estate Planning: QCDs can be a powerful tool for estate planning by helping you strategically reduce the size of your taxable estate. You can even add the Auburn University Foundation as a partial or full beneficiary of your IRA for an even greater effect. This can result in a more efficient transfer of wealth to your heirs while supporting the causes you care about. It’s a win-win that allows you to leave a lasting mark on the Auburn Family.
- Ensure the Auburn Experience: Beyond the financial benefits, making a QCD allows you to support Auburn University in a way that is most personal to you. Whether you want to fund a scholarship, empower outstanding faculty, or bolster your favorite program or department, a QCD empowers you to make a positive impact at Auburn University while optimizing your financial strategy.
Want to talk with a gift planning specialist to see if a QCD is right for you? Email plannedgiving@auburn.edu or call 334-844-7375.
If you’re ready to initiate a QCD gift now, follow these instructions to get started.
