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The ABCs of IRAs: Learn the Acronyms and Plan Early!

A tax-free gift from your IRA (Individual Retirement Account) can be a taste of “alphabet soup.” IRA owners age 70½ or over have an option to transfer up to $100,000 to a not-for-profit like Road Scholar, tax-free each year. These transfers, known as QCDs (Qualified Charitable Distribution), offer eligible older Americans a great way to easily give to a charity.

This gift does not count toward your AGI (Adjusted Gross Income). Therefore, you will not pay income taxes on the amount distributed directly as gifts and keeping your taxable income lower may reduce the impact to certain tax credits and deductions, including Social Security and Medicare.

Once an individual turns 73, they must take their RMD (required minimum distribution) from their IRA. If the RMD is transferred directly from the donor’s Administrator to a qualified 501(c)(3) charitable organization, like Road Scholar, it is considered a QCD; in other words, it is tax-free. As a tax-free gift, QCDs can be up to $100,000. And, at your request, a Retirement Account Administrator can arrange for year-over-year giving to the charitable organizations of your choice. Your QCD may satisfy all or part of your RMD.

You can also name Road Scholar as a beneficiary for all or a percentage of your IRA. Because Road Scholar is tax-exempt, there are both income tax and estate tax benefits.

For further information about tax-wise giving with QCDs in 2024 and whether they qualify for part or all of your RMD, visit myimpact.roadscholar.org/qcd. To discuss how you may direct your gift to help us provide educational travel experiences for older adults, please contact Kase Martis, Philanthropy Officer, at kase.martis@roadscholar.org or toll free at (877) 737-0664.

 

Please contact your IRA administrator for instructions on how to direct your IRA. Road Scholar tax identification number: 04-2632526. This information is not intended as legal or financial advice. We recommend you consult your plan administrator and your tax advisor or personal attorney to understand how the distribution requirements apply to your personal circumstances.