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Tax-Free Charitable Giving From An IRA

Seniors age 70 ½ or older can make tax-free charitable donation from IRAs that count toward satisfying required minimum distribution and reduce taxable income.

What is a Qualified Charitable Distribution (QCD)?

A QCD is a tax-free charitable distribution of funds directly from the IRA trustee (custodian) of an eligible IRA account payable to a qualified charitable organization that can receive a tax-deductible contribution. A tax-free QCD is defined in IRS Publication 17 – Your Federal Income Tax for Individuals on page 126.

Normal distribution from an IRA of deductible contributions and earning is included in income and taxed as ordinary income. The tax-free QCD removes the distribution from taxable income. QCDs are recorded on Form 1040, U.S. Individual Tax Return 2018 – the sum total QCD distribution is included on line 4 a – IRA distribution, and the abbreviation ‘QCD’ is written on line 4 b – taxable amount.

Who is Eligible to Make a tax-free QCD?

IRA account owners and beneficiaries age 70 ½ or older on the date the tax-free QCD is made to one or more qualified charitable organizations.
Taxpayers who now claim the standard deduction can still make tax-free QCDs.

What type of IRA accounts are eligible for a QCD?

Traditional IRA, Rollover IRA, Inherited IRA accounts and non-active SEP and Simple IRA accounts are eligible for a tax free QCD. Active SEP or Simple IRA account currently receiving employee or employer contributions is not eligible.

Roth IRA accounts are eligible but a tax-free QCD will not lower income tax because distributions from Roth IRAs are already tax-free and not included in income.

What type of retirement savings accounts are ineligible for a QCD?

Employer-sponsored retirement plans, such as 401(k)s, 403(b)s and 457(b)s are not eligible for tax-free QCD. A normal or tax-free QCD distribution to satisfy the IRA RMD requirement in a given tax year cannot count toward satisfying the RMD requirement for employer-sponsored requirement plans.

However, an employer-sponsored plan account owner may consider a direct transfer rollover to an IRA Rollover account that would then be eligible for tax-free QCDs. RMD calculations for tax-deferred IRAs and employer-sponsored retirement plans for the current tax year will be based upon the fair market value of the account at the close of business on December 31 of the prior year, factored by your age and life expectancy. Therefore, before implementing a rollover strategy the time and suitability should be taken into consideration.

What is the tax-free QCD distribution limit?

Seniors age 70 ½ or older may make tax-free charitable donations and exclude up to $100,000 from gross income per tax year by making tax-free QCD’s directly from an IRA. There is no carry-over from year to year. Your spouse may also make a tax-free charitable donation and exclude up to $100,000 from gross income per tax year for a combined total of $200,000.

Does a tax-free QCD distribution count towards Requirement Minimum Distribution (RMD)?

Yes. A tax-free QCD may be an appropriate strategy for individuals who are charitable inclined and do not need RMDs for living expenses. A tax-free QCD can potentially reduce income tax liability on RMDs to zero. A tax-free QCD can be counted toward satisfying your RMD requirements for IRA accounts.

Here is an example of a normal IRA distribution of $5,000 at ordinary income tax rates:
22% 24% 32% 35% 37%

22% 24% 32% 35% 37%
IRA Distribution $5,000 $5,000 $5,000 $5,000 $5,000
Income tax 1,100 1,200 1,600 1,750 1,850
Net Distribution 3,900 3,800 3,400 3,250 3,150

 

Assume you are in the 24 percent income tax bracket – you make a tax-free QCD of $5,000 to count towards satisfying your RMD requirement, provide an income tax break of $1,200, lower taxable income, and help fulfil your philanthropic goals.

The annual RMD must be calculated by you or your custodian for each IRA account, but the sum RMD may be aggregated and distributed from one or more IRA accounts. Note – RMD for employer sponsored retirement accounts cannot be aggregated and distributed from IRAs.

The first distributions from an IRA are consider to satisfy the annual IRA RMD requirement. If you have already taken a portion of your RMD requirement earlier this year, you may consider a tax-free QCD for the remaining balance of the RMD requirement that needs to be distributed before the year-end deadline. The only exception to the year-end RMD requirement deadline is in the first year an IRA account owner turns age 70 ½.

What charities qualify to receive a tax-free QCD?

As defined by IRS Publication 590-B Distributions from Individual Retirement Arrangements (IRAs,) a charity eligible to receive a QCD is a “qualified 501(c)(3) organization (a charitable organization eligible to receive tax-deductible contributions.)” Donor advised funds and private foundations are not eligible to receive tax-free QCDs. Upon request a charity can provide you their IRS issued ‘Letter of Determination’ verifying tax-exempt status. Additionally, please find information about a tax-exempt organization’s federal tax filing status on the IRS web site at www.irs.gov.

How to set up direct payment to the charitable organization?

To make a tax-free QCD, there must be direct payment by the IRA trustee (custodian) on behalf of the IRA account owner to the charitable organization. You may call your IRA trustee (custodian) and request a check made payable to a charitable organization and delivered to you so that you may forward to the charity. (IRS Notice 2007-7, Q&A-41). Consider including a ‘Letter of Intent’ with the check to describe your wishes and purpose of the charitable gift. Check with you IRA trustee (custodian) for year-end processing deadlines for issuing checks. As normal, you will need to keep records to include written acknowledge from the charitable organization for your tax-exempt charitable donation.

What are key benefits of lowering taxable income, Adjusted Gross Income (AGI) for seniors?

A tax-free QCD can count towards satisfying your RMD requirement but does not add to your taxable income, AGI. You may benefit from lowering your taxable income to lower Medicare Part B premium and prescription drug premium for high income earners, lower taxable percentage of Social Security benefits, and larger deductions for medical expenses; among other benefits.

Medicare Premium for High Income Beneficiaries – Potential lower AGI to qualify for lower income threshold to lower income related monthly adjustment amounts for Medicare Part B and Prescription Drugs premiums. For more information, please view Social Security Administration publication – Medicare Premiums: Rules for Higher-Income Beneficiaries.

Itemized Deduction for Medical Expense – Potential lower AGI to reduce threshold for claiming unreimbursed medical and dental expenses you paid. The Tax Cuts and Jobs Act of 2017 (TCJA) lowered the AGI threshold for medical expenses from 10 percent to 7.5 percent for 2017 and 2018 for all taxpayers and reverts back to 10 percent in 2019.

Percentage of Social Security Benefits to be Taxed – Potential lower ‘combined income’ to qualify for a lesser portion of your Social Security benefits to be taxed. For more information, please visit Social Security Administration web page – Benefits Planner | Income Taxes and Your Social Security Benefits.

Summary

Tax-free QCDs may be an effective strategy to fulfill your philanthropic goals and make a lasting charitable impact in your community. Before implementing any strategy, please consult your professional tax accountant, estate planning attorney and/or investment adviser.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Any investments and strategies mentioned here may not be suitable for everyone. While every attempt is made to provide accurate information, we cannot guarantee the accuracy and completeness of this content. Christine does not provide legal or tax advice.

Written by Christine Parker, CPF®, president of Parker Financial, LLC and member of Sagepoint Senior Services Foundation Board of Officers and Directors.

A Brief Guide to Medicare and Understanding Your Options

By Sharon Wagner, SeniorFriendly.info




Medicare is a blessing to many seniors, but navigating all of your options and deciding on a plan can be extremely overwhelming. How are you supposed to know which plan you need, which insurance companies to trust, and how to enroll? There are many things to consider when choosing your plan and nearly endless options when you look beyond the basic federal program. Hopefully, this guide can clear up a few things and point you in the right direction.

Finding Plans in Your Area

To start, it’s important to know what kinds of Medicare plans are available in your area. The government website Medicare.gov provides a handy search tool for finding Medicare Part C and Part D plans. This can help you narrow down your choices based on certain criteria, such as whether you need drug coverage and which pharmacies you would like included in your plan. Take a look at this useful step-by-step guide for help using the search tool.

Learning About Basic Medicare

Original Medicare, also called Medicare Part A and B, is the most basic coverage provided by the government for seniors 65 and older. Original Medicare covers things like hospital stays and outpatient doctor’s services. Most people will not have to pay anything for Part A, but everyone must pay a monthly premium for Part B. It’s also important to understand that Original Medicare will not pay for 100 percent of the services it covers; you will still have out-of-pocket costs from deductibles and copayments. This is why many people supplement their Medicare plans.

Understanding Medicare Advantage

Medicare Advantage plans are offered by private insurance companies and are similar to health insurance plans you may have signed up for in the past. In addition to everything covered by Medicare Parts A and B, Medicare Advantage plans offer additional coverage for things like hearing, vision, and dental. These plans may also include daily living assistance and lifestyle support, such as transportation or meal delivery services. US News explains the pros and cons of Medicare Advantage based on different criteria you may have.

You’ll notice that many Medicare Advantage plans have no premiums. These can be a good option for people who are healthy and looking to save money while still being protected from large medical expenses. These zero-premium plans typically have high deductibles, meaning you’ll have to pay more for your services before your plan will cover the rest. Choosing a plan with a higher premium may be a better option if you have a chronic condition or some other reason to require regular medical care.

Medicare Part D for Drug Coverage

Medicare Part D, which is also offered by private insurance companies, covers prescription drugs. You can add Part D to your Original Medicare plan. However, the majority of Medicare Advantage plans include Part D. According to Investopedia, the costs associated with Medicare Part D are fairly similar to the premiums, deductibles, and copayments of any standard medical insurance plan. Before picking a plan, it’s important to consider the particular drugs you need to be covered since certain plans cover different drugs. Using the Medicare.gov search tool mentioned above can help you find Part D plans that will cover your prescriptions.

Considering Medigap

Finally, Medigap is yet another option for supplementary coverage offered by private insurance companies. Medigap specifically covers the gaps in Original Medicare. This can be beneficial for people who anticipate future chronic conditions and are worried about expensive healthcare needs. There are several Medigap plans to choose from, so think carefully about the kind of coverage you need most. Some plans have coverage for travel emergencies, whereas others are better for covering the deductibles and copayments from your Original Medicare plan.

Getting the most out of Medicare means taking the time to learn about your plans and coverage options. Continue to do your research and check out some of the resources mentioned here. Although it will take some serious planning to evaluate your choices, consider your criteria, and anticipate your future care needs, this will help you secure your health for the future.

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February 19: CNA/GNA/Home Health Aide Job Fair

Home Care Division Seeking CNAs/GNAs/Home Health Aides

Sagepoint Senior Living Services will be holding a job fair on Tuesday, February 19th from 11am-1pm and again from 4pm-6pm at our Prince Frederick location (301 Steeple Chase Drive, Suite 104, Prince Frederick, MD). We are in search of CNA/GNAs and Home Health Aides. Interested candidates should have an updated resume available for review. Interviews will be conducted on site. Registration encouraged- walkins welcome. We hope to see you there.

RSVP: Heather at 410-257-1900

It takes a special person to work for Sagepoint. Our management team and our caregivers care deeply about serving the needs of our seniors, our patients, and their families.

Our goal as an organization is to attract and retain highly qualified staff who share our philosophy.

Sagepoint is an Equal Opportunity Employer that respects and values:

  • Reliability, personal discipline, and accountability from each and every employee.
  • Compassion, a nurturing and respectful attitude.
  • Competency, critical thinking and improvement through professional development.
  • Friendliness and excellent people skills.

Sagepoint employs more than 350 people. We provide our employees with market-competitive wages, excellent benefits, education advancement, and recognition programs.

View our current open positions here.

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Sagepoint Launches Fourth Annual Photo Contest

We are excited to announce our fourth annual Images of Aging Photo Contest and hope you will enter! To enter, submit a photo of a senior(s) and their favorite pet. During the first week of March, you and everyone else can vote for your favorite entries. You can even share your uploaded photos with your friends to boost your votes. The winning photo recreation, as determined via Facebook/Instagram (likes), will receive $200 (USD) in the form of a gift card. Two additional winners, as determined via the Sagepoint Community and Sagepoint Staff, will each receive $50 (USD) in the form of a gift card. Entries must be submitted electronically via our submission form below. There is no entry fee, however individuals may only submit one (1) entry into the contest. The contest ends Wednesday, February 28, 2019 at 11:59 p.m. EST (U.S.).

Sagepoint Selected As 2019 Best of Senior Living Winner

Families’ Online Reviews Rank the Best of the Best of North American Senior Care

Sagepoint Senior Living Services was selected as a 2019 Best of Senior Living Award winner by SeniorAdvisor.com. The Best of 2019 Awards celebrate the communities and agencies that have consistently received outstanding feedback from families on the SeniorAdvisor.com website. Of the nearly 45,000 communities currently listed on SeniorAdvisor.com, just over 1,600 were recognized with this prestigious award. This exclusive designation places the winners in the top one percent of senior care providers according to those who matter most – their families.

President/CEO Andrea Dwyer remarks, “We are very honored to be recognized for our quality care. We certainly extend this recognition to all our wonderful employees who work hard each and every day to ensure that our residents receive the best service. As the only community recognized in Southern Maryland, we are very pleased by this acknowledgement.”

Winners of the SeniorAdvisor.com Best of 2019 Awards are located all over the country and represent the top tier of in-home care, assisted living, and other senior living providers in the country. The award places winners in the top one percent of senior care providers nationwide. Similar to over half of the winners, Sagepoint offers more than one type of care. Care options offered include: Home Care, Adult Day Services, Rehabilitation, Assisted Living, Long-term Care, and Memory Care.

 

 

 

 

 

 

Resident Adoption Tree Now Up

Help Us Make the Holidays Even Merrier For Our Residents

LA PLATA, MD (November 19, 2018)

Sagepoint Senior Living Services is excited to announce that our Resident Adoption Tree is now up! We strive to make all occasions extra special for our residents and the Adoption Tree is a simple way to spread joy among our facility this Holiday Season. The program helps us ensure that every single resident will have something for them under the Christmas tree. The wish lists were developed by the residents themselves or with their needs in mind. Adopt a resident today and help us brighten their holiday this season!

Activities Director Erin Johnson remarks, “Our adoption tree is a fun way for members of the community to help seniors in need. It is the generosity of the members of our community that allow us to grant each resident a wish during the holidays. If you are able, we ask that you consider adopting one of our residents this year from our Resident Adoption Tree. We promise, it’s a fun way to give back!”

If you are interested in adopting a resident for the holidays, come in and select a resident off the Resident Adoption Tree or email Erin Johnson, Activities Director, at ejohnson@sagepointcare.org. Upon adopting a resident, you will receive the Resident’s Wish List and we ask that you return gifts wrapped in gift bags by Friday, December 14, 2018. The gifts will be delivered during our Annual Christmas Party.

In addition to resident adoptions, supplemental donations are also needed to ensure equality among the gifts received by each resident. These include personal items, bathroom accessories, and comfort and room decor. A full list can be found below.



Core Receives State Recognition for Board Service

Sagepoint Board Chair Recognized for Significant Board Service and Contributions

La Plata, MD (October 23, 2018) – The Governor’s Office on Service and Volunteerism hosted the 35th Annual Governor’s Service Awards on Tuesday, October 16th, to celebrate the outstanding volunteer contributions of Maryland residents and organizations. This year, 170 nominations were submitted. We are proud to announce that our very own board chair, Carolyn Core, was recognized for her significant contributions to our organization! Carolyn’s service to both Sagepoint and the community we serve has gone above and beyond her board commitment and we are so very appreciative of her continual selfless service.

Since her time as chair of the board, Carolyn has initiated Sagepoint’s Advisory Committee; started an annual review of the performance of the board; increased the board’s diversity; prepared for the transition of the organization’s CEO; and taken the lead in orchestrating contact between Sagepoint and The University of Maryland’s Charles Regional Medical Center to implement effective relationships so that each individual in Sagepoint’s care is ensured the highest quality of care. Carolyn also played a vital role in the development of Sagepoint’s new assisted living community, the expansion of its existing rehabilitation center, and the recent kick-off of a philanthropy program.

“We are overjoyed to see Carolyne Core recognized for her board service that goes far above and beyond what is expected of our board members,” remarked Andrea Dwyer, Sagepoint Senior Living Services President and CEO. “In fact, Sagepoint is fortunate to have a team of many supremely dedicated board members and we are very grateful for all of their service; they are truly invaluable assets to this organization!”

For more information on the Governor’s Service Awards, visit: www.gosv.maryland.gov/governors–service-awards-recipients-2018.


 

Another Story Made Possible by Your Incredible Support



While most of the care we provide at Sagepoint is for seniors, that’s not always the case. We thought you’d like to hear this story of a young married couple and the medical challenges they are overcoming– thanks in large part to the support of donors like you.

‘A 100% Miracle’

Karen Shifflett remembers her second wedding anniversary all too vividly. She sat at her husband’s beside in a hospital intensive care unit. Driving home from work in February 2013, John’s car was struck by a train in Brandywine, MD.

“After his first week in the hospital, the doctors told me to make arrangements for a nursing home- that he’d be a vegetable for the rest of his life.”

John, age 29, arrived at Sagepoint a month later. From the very beginning, Karen says, “the care was like nothing we had ever experienced. It was phenomenal.”

John arrived still very much in a “vegetative” state. After two months of speech, occupational, and physical therapy, he was eating a soft diet, sitting up, and responding to his family.

Today John continues to improve with the help of a walker and a wheelchair. He attends Sagepoint’s Adult Day Services every Saturday. Karen calls him a “100% miracle” and credits the staff and aides at Sagepoint.

“The time they put in with the therapy… they didn’t give up. They pushed him and they were always so positive. Just to know that he wasn’t alone meant everything to me.”

We Need Your Help Once More

Because of the high costs of the care we provide and the limitations of government funding, we’ve set a goal to raise $1 million to enhance and expand care for our patients and residents by 2021. The first phase of this campaign we are calling Forever Grateful and our first goal is to raise $150,00 by the end of 2018. We know that you can’t give to every worthy cause, but as you consider your year-end donations, please consider donating to Sagepoint.

Your Support Makes Stories Like This Possible




To our friends and supporters of Sagepoint Senior Living, we thought that you’d like to know a little bit about what your donations make possible. This is Miriam Kimball’s story:

A Tale of Two Parents

When Miriam Kimball’s father grew increasingly fragile from Parkinson’s disease, she moved him from a Pittsburgh nursing home to Sagepoint. Her mother, Miriam Donnellon, soon became a fixture there. Her daily visits cultivated close relationships with the staff, so close, in fact, she often invited staff members to her home for tea and cookies.

Years later after her father passed away, her mother needed care for severe dementia. Miriam Kimball again chose Sagepoint.

“Because my mom was in that frightened state, she was desperate for a friend,” Miriam Kimball said. “So many of the aides remembered her from when she cared for my dad. Even though my mother was not very lovable at times, they still provided her with loving care. The aides and nurses are simply outstanding human beings who will listen and help anytime, day or night.”

We Need Your Help Once More

Because of the high costs of the care we provide and the limitations of government funding, we’ve set a goal to raise $1 million to enhance and expand care for our patients and residents by 2021. The first phase of this campaign we are calling Forever Grateful and our first goal is to raise $150,00 by the end of 2018. We know that you can’t give to every worthy cause, but as you consider your year-end donations, please consider donating to Sagepoint.

Nicholson Named New Workforce Development Board Chair

Nicholson Named New Workforce Development Board Chair

La Plata, MD (October 8, 2018) – The Southern Maryland Workforce Development Board has elected Michelle Nicholson, Sagepoint Senior Living Services Director of Human Resources, as the organization’s new Board Chair. Unanimously elected during their September meeting, Nicholson will serve a three-year term as Chair of the Board.

Nicholson is an empathetic, innovative and deliberate human resources professional with over 10 years of progressive experience in human resources management. She is a thought leader with a proven track record of talent engagement and motivation, strategic human capital planning and employment law expertise. Nicholson received a Master of Arts degree from Webster University in Human Resources Management and a second master’s degree in Human Resources Development. Her formal training is an added benefit to her high degree of professional integrity and insightful strategy to build collaborating teams to improve organizational efficiency and human interaction. Her purpose is to uplift, inspire, encourage and support others to be their best self. She hopes to motivate others to strive for their secret and known dreams irrespective of challenges and obstacles.

“This is an exciting time for the Workforce Development Board,” says Ms. Nicholson. “I am looking forward to working with staff and my fellow Board members to tackle a number of priorities, including how we can reconnect opportunity youth to school and work, expand job training programs for ex-offenders, assist businesses in upskilling their employees, and updating the local strategic plan that embraces the new technology and training choices job seekers have now and will have in the future.”

The Workforce Development Board provides oversight and funding direction to Southern Maryland JobSource and has representatives from education, public sector leaders, organized labor, and leaders and advocates for workforce development. For more information about the Workforce Development Board, visit www.tccsmd.org.