2025 Donation

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Hey Old People --- YES, YOU!

If you are in this picture (or older than them) and you have an IRA or 401K, 

READ THIS!  (warning, it gets slightly wonky)

If you turned 73 or older this year and have an IRA (401K), you already know you are required to withdraw minimum amounts from your IRA each year (called Required Minimum Distribution or RMD for short).   For many, a big problem is that you get hit with a huge tax bill.  

But you think you can make some donations (to us of course) and that will put you in a lower tax bracket.  However, with the tax laws in place over the past 6 years or so, most of us can't deduct contributions.  And that is where this tactic comes in.  You may be able to reduce your taxes by making a donation using a Qualified Charitable Distributions (QCD - this is the last acronym we will use here).

So you know, we are not financial advisors so for details, reach out

to a tax and finance expert to guide you through this process.  Also,

if donating to us, we can get you in touch with someone from the

Community Foundation for Western PA & Eastern OH that knows about QCDs.

In short, a QCD is a donation made directly from your IRA to any valid charitable organization like us.  The timing is important so talk to your money person before taking from your RMD or making a QCD. We won't go any further into the weeds of financial jargon now but here are a few highlights of this strategy.

• If you turned 73 this year, to reduce the tax obligation resulting from RMD is to make a QCD to your favorite charities (such as the RWLC!). This must be done very soon. 

  • A QCD counts as part of the RMD and can reduce taxes required. 

  • Just so you know, someone 70 1/2 years old to 73 1/2 can make a QCD too but you don't get the tax advantage since you aren't taking an RMD.

• A QCD allows you to donate without touching your personal savings and checking account which helps your monthly cash flow. 

• It is Tax Free since you are using money that was never taxed. 

• Reducing the final RMD that goes to you also may reduce the costs of your Medicare fees charged to you since monthly Medicare prices rise with more income 

We hope all of you donate to some worthy cause if you are financially able to.  And of course, we hope we are included in your consideration!