Spiritual Formation Classes
I was preparing for tomorrow night’s class about the Holiness Tradition and was struck by the narrative about the Ten Commandments and not only following them, but following the spirit of the law. God desires holiness, purity, and virtue in our lives as a way to make our lives whole and pure. To trust and obey is at the heart of the Holiness Tradition.
This made me think about Matthew 22:34-40: “Love the Lord your God with all your heart and with all your soul and with all your mind. This is the first and greatest commandment. And the second is like it: Love your neighbor as yourself. All the Law and the Prophets hang on these two commandments.” I’ve always believed this strongly, but do struggle with the love your neighbor part. Ah well, 72 years old and still a work in progress.
Qualified Charitable Distributions
I was recently counting the Offertory with another Vestry member and noted that some of you may not be taking advantage of a qualified charitable distributions or QCD. According to the Internal Revenue Service (IRS) IRA owners age 70½ or over can transfer up to $100,000 to charity tax-free each year. For those who are at least 72, QCDs count toward the IRA owner’s required minimum distribution (RMD) for the year.
Normally, distributions from traditional IRAs are taxable when received, such as an electronic payment or a check made payable to the IRA owner. QCDs become tax-free as long as they’re paid directly from the IRA to an eligible charitable organization (e.g., St. John’s).
Each year, an IRA owner age 70½ or over can exclude from gross income up to $100,000 of these QCDs. For a married couple, if both spouses are age 70½ or over and both have IRAs, each spouse can exclude up to $100,000 for a total of up to $200,000 per year. The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A.
Assuming the QCD was made in 2023 it must be reported on the 2023 federal income tax return.
You will receive IRS Form 1099-R from the IRA trustee that shows any IRA distributions made during the year, including both regular distributions and QCDs.
QCDs are not deductible as charitable contributions on Schedule A. You will need to have written acknowledgement of your contribution from the charitable organization, before filing your return. In general, the acknowledgement must state the date and amount of the contribution and indicate whether the donor received anything of value in return. For more information about IRA distributions and QCDs, see Publication 590-B available on IRS.gov.
This is truly a way to put more of your own money into your pockets and benefit your charitable organization as well. As with any financial decision, you should check with your financial advisor and tax accountant before acting.