We have been doing charitable contributions through our DAF for years. Then shifted to using my IRA when I finally got a checkbook for the account and it was easier to simply write a check!!
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If your retired relative is receiving Social Security then realizing long-term capital gains may result in additional tax owed even when overall income is solidly in the 0% cap gains tax bracket.
The reason is capital gains are part of the combined income used to determine how much if any of Social Security income is taxable. Past a threshold, increases in combined income increase the taxable amount of Social Security benefits and are treated as ordinary income. Once ordinary income (exceeds the standard deduction (for those not itemizing) the increase results in more tax owed at ordinary income rates.
Itās a little complicated to figure out all the moving parts by hand. Before selling any stock itās worth running a tax estimator to see the impact such as this one: 1040 Tax Calculator
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QCDs are a much more tax-efficient method of making charitable donations. While most assets escape taxation on death (assuming the estate is under the federal an/or state tax exemption), IRAs do not and the assets within them are eventually subject to tax. Donating via QCDs removes a taxable asset from the invididualās estate.
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Iām on our church finance committee, and Iāve been trying to figure out how to encourage QCD. (Weāre an older congregation, alas few kids and no Sunday School). Many us RMD to cover their pledge, but QCD can start at age 70.5 - weāll do it first time this year as my husband now qualifies.
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This is a really good link. Maybe you could use it as a guide for communicating the benefits? Can You Give a QCD to Your Church to Satisfy Your RMD? | Thrivent
(Your church sounds like ours. H is on finance committee, and only a few members who could probably give through QCD do so.)
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Info on getting taxes withheld from Social Security