Donors who are 70 1/2 or older and have a traditional IRA are eligible to make tax-free contributions to the Entertainment Community Fund from directly these accounts, known as Qualified Charitable Distributions (QCDs). Since the money is going directly to the Fund, it won’t be taxed as it would have if you had just withdrawn it from your account.
At age 73 you become subject to what’s called the Required Minimum Distribution or RMD (the IRS-determined minimum amount you must withdraw from your account each year). If you make a QCD to the Fund, that amount can be counted towards your IRA and you won’t be forced to pay income tax on it. You may contribute more than your RMD to charity as long as you do not exceed $100,000 in a calendar year.
In basic terms: the Entertainment Community Fund gets a generous gift, and you lower your tax-liability!
This type of gift used to mean a lot of time spent coordinating with your financial advisor. But we’ve partnered with FreeWill, who has created a free tool that makes the process of donating to the Entertainment Community Fund from your IRA quick and efficient.
How it works:
- Use this free tool to calculate an estimate of how much you are required by law to withdraw from your IRA this year. It will also give you a sense of you how much that withdrawal will increase your tax bill and how much of a tax penalty you’ll incur if you don’t withdraw those funds.
- Choose how much of that sum you’d like to donate to Entertainment Community Fund as a tax-free QCD
- Follow the personalized instructions based on which financial institution manages your IRA, and then sit back and relax in the knowledge that you’ve both supported artists across the country and saved money on your tax bill.
For more information about QCDs, please get in touch with:
Jay Haddad, Manager of Principal & Planned Giving
jhaddad@entertainmentcommunity.org
917.281.5928
