Qualified Charitable Distributions
Besides membership dues (see the link "JOIN - RENEW _DONATE" in the blue box at left) and (if your employer offers them) matching donations, you can contribute directly from your traditional IRA so long as you are at least age 70½ years. You can give any amount (up to a maximum of $100,000) per year from your IRA directly to a qualified charity such as CWAG.
If you need to take Required Minimum Distributions from a traditional IRA, Qualified Charitable Distributions (QCD's) are a very easy and tax-efficient way to donate to CWAG. These donations come "off the top" of your taxable income. No need to bother with deductions. In addition, a QCD will reduce your "modified adjusted gross income" and thus may help prevent having an "income-related monthly adjustment amount" added to Medicare premiums.
Here's how I do this with Vanguard. (Other IRA custodians should be similar). In my Vanguard IRA account, I select "Transfer Money" and "Withdraw from IRA" then select my (Money Market) Settlement Fund and enter the amount (for example $1000) and hit "Continue". In the next screen, I select "Send me a check payable to a charity" and enter the charity name (Citizens Water Advocacy Group). In the next screen, I select "Do not withhold" taxes, since this money will not be taxable and submit the transaction. Vanguard will then send me a check, which I forward to the CWAG treasurer: CWAG • P.O. Box 13145 • Prescott, AZ 86304.
At tax time, Vanguard will show the total IRA distribution as taxable but with the "taxable amount not determined" box checked. I tell my tax software that part of my distribution (for example $1000) is a QCD. The tax software will subtract this amount from my taxable income.
Vanguard suggests keeping a copy of the check (I make a digital pdf copy or take a smartphone photo) to prove the distribution was a donation. Vanguard has a $5000 limit for a QCD done this simple way (no signature guarantee req'd). There is no minimum.
Direct any questions to
--- Fred Oswald.