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Donating through Your IRA

Money 2696228 1920

Click here to download the IRA Charitable Rollover Form for 2023.

An Individual Retirement Account (IRA) is a wonderful way to build a nest egg for your retirement. It's also a great vehicle to make a charitable gift and realize tax savings, even if you don't itemize your deductions.

If you are at least 70 1/2 years old, you can make a charitable donation called an IRA Qualified Charitable Distribution (QCD) directly from your IRA to a nonprofit like St. Paul's. You can donate up to $100,000 each year through QCDs. Beginning in 2024, this limit will increase annually to account for inflation.

Why Give from an IRA?

Save Your Cash

An IRA is a great way to fund your philanthropy. You can support a charitable mission that's important to you without affecting your checking or savings account balance. This keeps your cash assets available to you for your personal use. In addition when you donate from your IRA, you are giving away money that has never been taxed, completely tax-free!

Meet Your RMD

Once you reach age 73, you have to take out a required minimum distribution (RMD) from your IRA each year. You can take out more if you want, but you have to at least take the required minimum distribution by December 31 each year. These distributions are considered taxable income.

For those who don't really need the money in their IRA for personal use, you are faced with a tricky situation. If you withdraw the minimum distribution, it will increase your taxable income and perhaps even bump you to a higher tax bracket. Why be penalized for an income that you don't really need?

Instead, if you transfer your distribution directly to a 501 (c)(3) not-for-profit organization like St. Paul's, it will be considered a donation instead of income and will be tax-free.

Help Your Heirs

Donating from your IRA is a good way to reduce the size of your taxable estate. IRAs are one of the most heavily-taxed assets you can leave to your children. Under the SECURE Act, they will only have 10 years to withdraw the full amount, which can create a heavy tax burden for them. By reducing the size of your IRA, you can reduce those taxes. You could also choose to designate other assets for your heirs that aren't as heavily-taxed, such as life insurance or cash.

Help the Residents at St. Paul's

There are a variety of ways you can direct your gift to enrich the lives of the residents at St. Paul's. Learn more.

How to Make a Gift from Your IRA

Just ask your IRA administrator to send a check directly to St. Paul's from your IRA account. Please note: if you withdraw the money yourself, deposit it in your checking account and then write a check to St. Paul's, you will be liable for income tax on that money. To be tax free, the donation must come directly from your IRA administrator to St. Paul's.

To get started, use the document below to send your request to your IRA administrator. We also encourage you to complete the second page to let St. Paul's know about your coming gift. At times we receive IRA charitable rollovers from plan administrators without the donor's name included. We want to be able to thank and recognize you for your generous gift!

New in 2023!

Use Your IRA to Start a Life Income Gift

You can now use an IRA charitable rollover to start a charitable gift annuity (CGA) or a charitable remainder trust (CRT). These are called life income gifts because in addition to benefiting your favorite charity they also provide you with an income for life.

Under the new Secure Act 2.0 law, you are allowed to make a $50,000 distribution from your IRA to start a life income gift. There are a few stipulations:

1. You can only do this once in your lifetime.

2. You can start more than one life income gift if desired, but it has to happen within the same tax year. For example, you could start a $25,000 CGA in February and then a second $25,000 CGA in October.

3. The income payments you receive are fully taxable, since you weren't taxed for the earnings of your IRA or the $50,000 withdrawal.

4. If your spouse also has an IRA, you can pool your gifts into a joint $100,000 CGA or CRT.

Click here to learn more about charitable gift annuities or charitable remainder trusts.

For more information about IRA giving, please contact Director of Strategic Giving Dawn Hartman at 724-589-4611.