Rick Lotz loves to drive the Blue Ridge Parkway, and not just from behind the wheel. His support drives enhancements within the national park. He wants more Blue Ridge Parkway Foundation donors to know about the tax advantages of qualified charitable distributions (QCDs) from individual retirement accounts (IRAs).
“I don’t itemize deductions on my taxes, so I don’t get any tax benefit if I just write checks to nonprofits,” Lotz explains. “By gifting charities with QCD funds from my IRA, I can save on my taxes.” Distributions from a traditional IRA to the owner are normally subject to income tax and could push a person into a higher tax bracket. With QCDs, however, IRA funds go directly to nonprofits, so donors are helping their favorite charities with money that is never taxed.
To utilize the QCD option, individuals age 70½ and older simply instruct their IRA administrator to send funds to one or more qualifying charities. While IRA holders can donate up to $100,000 per year, smaller gifts are common and beneficial to donors and nonprofit organizations.
“I would like to see QCDs catch on with more donors,” Lotz adds. “To me, it’s a question of would you prefer that the government decides how much of your tax money supports the Parkway, or would you rather make that decision yourself?”