In 2018, many Federal income tax changes took effect. As a result, households that previously itemized deductions will likely choose to take a new higher standardized deduction. By doing so, the tax reduction received for charitable donations disappears. But there is a smart strategy available that allows you to continue to receive a tax deduction for up to $100,000 for charitable contributions.
To take advantage of this you must be older than 70 ½ and receiving required minimum distributions (RMDs) from a traditional IRA. You can then establish a Qualified Charitable Distribution (QCD) directly from your IRA to an eligible 501(c)3 charity. Any amount distributed to a charity counts toward your annual RMD. The QCD lowers both your adjusted gross income and taxable income, resulting in a lower tax liability. If this is of interest, be sure to discuss your personal situation with a qualified tax adviser to see if this strategy makes sense for you.
To satisfy the requirements of a QCD and receive a tax deduction, you must:
- Be 70 ½ or older
- Set up a direct transfer to the charity from an IRA (QCD)
- Not exceed $100,000 in gifts per person per year
- Select a qualified 501(c)3 charity to receive your donation(s)
A gift directed to the Connecticut Horticultural Society (CT Hort) can serve to support many of its ongoing activities including the speakers at monthly meetings, the CT Hort website and Newsletter, symposiums or other programs of the giver’s choice. One program of particular benefit to the Society is to provide endowed speakers for each of its monthly meetings. Such a gift can provide the funds necessary to pay for a distinguished lecturer and the endower is recognized as the sponsor of the lecture. Such contributions assure the best possible and most current educational information for members.
It should also be understood that the sustaining funds of the Society are a significant source of support to its ongoing budget. Because year-by-year expenditures from these sustaining funds constitute approximately one-third of the annual budget of the Society, these funds help to maintain annual dues at levels which make it possible for many members to afford membership. A larger fund would offer greater opportunities to expand activities without having to increase yearly dues.
The long history of CT Hort attests to the careful and considered use of sustaining and endowed funds. Additional gifts all provide opportunities both to the giver and the Society. Please share your questions and ideas with Herbert Isaacson, CT Hort Planned Giving Chairman, at Herbert.Isaacson@gmail.com.