A Qualified Charitable Distribution (QCD) allows individuals who are 70½ years old or older to donate money directly from their Individual Retirement Account (IRA) to a qualified nonprofit organization without incurring income tax on the distribution. Here is a general process for making a QCD to Prescott Farmers Market:
- Eligibility: To make a QCD, you must be at least 70½ years old at the time of the distribution.
- Contact Your IRA Custodian: Reach out to the financial institution that holds your IRA account and let them know you want to make a QCD to Prescott Farmers Market. They will guide you through the process, including providing any necessary forms or instructions.
- Decide on the Amount: Determine the amount you want to donate as a QCD. The annual limit for QCDs is $100,000 per individual. This amount is not deductible as a charitable contribution on your tax return because it’s already excluded from your taxable income.
- Request the Distribution: Fill out any required paperwork provided by your IRA custodian to request the QCD. Prescott Farmers Market’s EIN is 86-0931587. Your IRA custodian can contact Kathleen with additional questions: email@example.com
- Direct Transfer: The IRA custodian will transfer the designated amount directly to Prescott Farmers Market. This transfer must be done electronically or by check made payable to the charity. You should not receive the distribution yourself, as this would make it subject to regular income tax.
- Recordkeeping: Keep records of the QCD, including the amount donated, the date of the distribution, and any correspondence or acknowledgments from Prescott Farmers Market. These records will be useful for tax reporting.
- Report on Your Tax Return: While the QCD amount is not taxable income, you should report the QCD on your annual tax return. This helps ensure that you receive proper credit for your donation.
Consult with a Tax Professional: Tax laws can change, and individual circumstances vary, so it’s advisable to consult with a tax professional or financial advisor to ensure compliance with current regulations and to get personalized advice based on your specific situation.