The Pelican-- An IRA RMD as a QCD for LAS- Say What?

By Kath Giel and Jane Burnham

​     Too many acronyms in the title above? Well, it’s all good news! As some of us enter our “twilight” years, we begin to think about our legacy and what we can contribute to the welfare of the world. Some of us have enjoyed many years of birding, and some of us recently discovered the joys of birding. We’ve met some great birds and friends through the Lahontan Audubon Society. Many of us may have been fortunate with the stock market and other investments and find ourselves with additional funds that could be put to good use. We wanted to let you know about a way that you can support the Lahontan Audubon Society which at the same time could be beneficial for your tax situation.

    If you have an Individual Retirement Account (IRA) and are approaching the time when you need to take required minimum distributions (RMD), there are some wonderful tax advantages to donating these distributions to non-profit organizations like Lahontan Audubon Society. Currently, you must start taking your RMD at age 72 and this distribution counts as income. The income from an RMD is added to any Social Security income you receive; this RMD income could significantly increase your taxes on your Social Security benefits as well as trigger a Medicare high-income surcharge.  To avoid these added costs and taxes, you can donate your RMD up to $100,000 directly to charity each year. This donation of part or all of your RMD is subtracted from your adjusted gross income for the year. It's called a qualified charitable distribution, or QCD, and you can transfer this income to a charitable organization any time during the year, but it must be done directly. Your IRA administrator or financial advisor can assist you with this process.

     Do you have a 401(k) instead of an IRA? You will need to roll your 401(k) over into an IRA to take advantage of this opportunity. Another easier option is to have LAS designated as a beneficiary of some or all your retirement account. This option is easy and quick, and again may have tax benefits for your estate. Your 401(k)/IRA administrator or financial advisor can help you with this.

     Your tax-free RMD or 401(k) donation to Lahontan Audubon Society could help in many ways, from a general fund donation to a specific project funding. Want to help protect a particular location in Reno? Want to fund field trips for schools? Want to fund benches in parks? LAS can help memorialize your contribution to birding and protecting our natural environment and include your name as requested.

     Please contact the Lahontan Audubon Society for more information; your IRA administrator can also help answer your questions. The following links can provide more insight on this opportunity:

https://www.forbes.com/sites/kristinmckenna/2021/08/23/how-to-donate-your-rmd-using-qualified-charitable-distributions/

https://www.forbes.com/sites/bobcarlson/2021/03/24/qualified-charitable-contributions-the-best-way-to-make-charitable-gifts-after-age-70/
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https://www.kiplinger.com/retirement/retirement-plans/required-minimum-distributions-rmds