As valued supporters, you help make a lasting impact through your generosity and commitment to our mission. Today, we wanted to share some helpful information regarding smart giving strategies that can benefit both you and the cause you care about.
If you are 70½ or older, or approaching the age where Required Minimum Distributions (RMDs) apply to your tax-deferred retirement accounts (like traditional IRAs or 401(k)s), you may have unique opportunities to optimize your charitable giving.
Through a Qualified Charitable Distribution (QCD), individuals who are required to take annual distributions can transfer funds directly from an IRA to a qualified nonprofit like Pathways. Here is why many donors consider this approach:
- Satisfy Your RMD: Direct transfers can count toward your required distribution for the year. By directing funds annually from your IRA straight to a tax-exempt charity, you fulfill your legal distribution requirement without forcing extra cash into your checking account. This keeps you fully compliant with IRS rules while ensuring your retirement assets actively advance the causes you care about most.
- Be Tax Efficient: Because the funds go directly to charity, the gift is generally excluded from your adjusted gross income, which may help reduce your taxable income regardless of whether you itemize deductions. Keeping this distribution off your adjusted gross income can also prevent you from triggering higher Medicare Part B and D premiums or pushing your income into a higher tax bracket. It essentially functions as an above-the-line deduction, delivering maximum tax savings even if you claim the standard deduction.
- Maximize Your Impact: Your gift goes directly to support Pathways’ vital programs and community initiatives. Because the funds bypass your income, 100% of your gift goes straight to the community without a single dollar lost to income taxes. This direct transfer turns potential tax liabilities into powerful resources for those who rely on our services.
Even if RMDs are still a few years off for you, this information might be useful for parents, family members, or friends who are currently navigating their retirement planning and looking for impactful ways to support a mission close to their heart.
If you would like to learn more about how a gift through your RMD or QCD works, or if you’d like to discuss giving options, please feel free to reach out to liz@ptistl.org or consult with your financial and/or tax advisor.
Thank you for your continued partnership and for keeping Pathways in your heart and future plans.