Maximizing Your Charitable Contributions: Tax Benefits and Strategies for 2025
As you may be reviewing your year-end finances soon, we wanted to share a unique way to support the organizations that are important to you, including Soroptimist. A Qualified Charitable Distribution (QCD) and Donor Advised Funds (DAFs) can help you avoid tax burdens while making a difference in the lives of women and girls.
What is a Qualified Charitable Distribution, and what are the benefits?
If you are 70 ½ and older, you have the ability to withdraw a set amount (called a Required Minimum Distribution, or RMD) from your retirement account holdings each year. If the RMD is not met, the amount not withdrawn could be taxed at rates up to 25%.
If you find yourself needing to make a distribution, you may be able to take advantage of the unique benefits of a QCD.
Making a QCD from a retirement account, such as an Individual Retirement Account (IRA), can often satisfy your requirement. It’s possible you could:
Avoid the penalty for not meeting the minimum withdrawal amount
Reduce your Adjusted Gross Income, therefore reducing your tax burden and potentially moving you to a lower tax bracket
Make a lasting impact through your support of Soroptimist’s programs!
What is a Donor Advised Fund, and what are the benefits?
A Donor Advised Fund (DAF) is a philanthropic vehicle that allows donors to contribute assets to a fund and recommend grants from that fund over time. DAFs allow you to recommend a grant to Soroptimist at your convenience, which means you can take your time deciding where your funds will have the most impact.
When you contribute to a DAF, you receive an immediate tax deduction, allowing you to maximize your charitable giving in a particular year. This is especially useful if you anticipate higher income or tax rates in 2025.
Contributions to a DAF can be invested, allowing your donations to grow over time. This means you can potentially give more to organizations in the future as your fund appreciates.
By making a QCD or gift through a DAF to Soroptimist, you will be helping women like Adriana and Kiyomi who have made the decision to pursue their dream of education and a better life for themselves and their families.
**This information is not intended as tax advice. In 2025, eligible IRA owners can make up to $108,000 in QCDs. Please consult with your tax professional or financial advisor to determine if these options are appropriate for your individual circumstances.
| If you have any questions, please contact Soroptimist's Fund Development Department at development@soroptimist.org or call +1 215-893-9000. |
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