Qualified Charitable Deduction
Help ACS And Help Yourself!
There is an easy way to donate to ACS and at the same time minimize your taxes – take a Qualified Charitable Deduction (QCD) withdrawal from your IRA. Here is how it works.
- The IRS requires that anyone over 70 ½ years of age begin taking Minimum Required Distributions (MRDs) based on the value of their investments as of December 31st of the previous tax year.
- When this amount is transferred from your IRA, at a minimum 10% must be sent by your investment firm to the IRS for taxes you will owe on this transaction for the current tax year.
- The total amount you must pay in taxes for a regular IRA withdrawal will depend on your current income tax bracket, and could be as much as 37% ! For example, if you are in the 22% tax bracket and must withdraw $3000 from your IRA according to the IRS’s schedule, you will actually only receive $2340 and the IRS gets $660!
- Now here is the good part. If you take a QCD withdrawal, the total amount you transfer to ACS will be tax free; our school will get 100% of what you give. And, from the above example, if you give $1000 to ACS out of the $3000 you must withdraw, your personal tax liability for IRA withdrawals will only be $3000 minus $1000, or a total of $2000 which saves you $220 in federal taxes.
- The mechanics of contributing to ACS are simple. Just complete the QCD form which is usually found on your investment firm’s website (sometimes you can just make a phone call), mail it to the firm’s business address, and that’s it; your firm will send a check in the amount you designate to ACS where it will be used to better our school and your grandchildren’s education.