Did We Achieve Our Giving Goal?

The first goal for 2023 was to focus on the glory and wisdom of God. Every other goal should flow from that perspective. The second goal was a dividend income goal. The 2023 goal was 9% growth, and as I said in an update, we achieved that goal. That goal might seem self-focused. It could look like an effort to build bigger barns to store temporary treasure. The real goal isn’t more for us, but more for God’s kingdom, his glory, and to share with others from what is temporarily in our hands and in our investment accounts.

2023 Goal was related to charitable giving.

The goal was simple: Increase 2023’s giving by at least 10% over the previous year. The math is simple. I looked at our 2022 total giving, which is an itemized deduction on our Federal income tax returns and then compared that number to our total 2023 giving.

The Results

What I am about to share is not intended to be boasting. I won’t share the actual dollar amounts, but our giving increased by 50%. There is a reason why we were able to do more, and it has to do with my age. Age, sometimes, has great value.

Why It Increased 50% Instead of 10%

The simple answer is found in an abbreviation. The letters QCD stand for Qualified Charitable Distribution. If you were 70.5 years old or older in 2023, you could have given away up to $100,000 from a traditional IRA account. The entire amount is a gift, and there are no taxes required when you give this way. When you report this on the IRS 1040 form, there is a line to report IRA distributions. On line 4a you put the total amount reported on the 1099-R you receive from your broker. However, right next to that there is box 4b, which is the “Taxable amount.” Therefore, just because cash came out of your IRA, it doesn’t mean you have to pay tax on the total amount listed on the 1099-R.

IRS 1040 Form and IRA Distributions less giving equals “Taxable Amount”

Obviously, you have to keep track of QCD payments, and the recipient organization must acknowledge the gift. So, for example, if your total IRA withdrawal was $73K, but $70K was QCD giving, then only $3K is taxable.

As a result, your giving becomes more fruitful or powerful. By using this approach in 2023, we saved roughly $6,000 in taxes. This did not go to the Federal or state governments. Rather, the extra money went to the charities we support.

2024 Change

The amount eligible for QCD giving has been increased to $105,000 per person per year. If Cindie was as old as me (she isn’t) then as a couple we could give away $210,000 from my IRA without paying taxes.

Easy Income Strategy

Because I have an easy income strategy, our dividend income grew by 9% last year. That makes it easier to give more generously. While I don’t expect our dividend income to increase by 9% in 2024, it seems very reasonable to set a higher giving goal for 2024. In my next post I will share that goal and why it is possible. I will also share how it works to our advantage from a tax perspective for all of the following years of my life.

Does Your Life Pay Dividends?

It is far too easy to be distracted by or satisfied with the accumulation of wealth. Once again let me remind you of King Solomon. The general principle in the Proverbs is to hold what God gives you with an open hand. That means we should be generous. It also means we will trust God for our futures. When God asks us to give him the first part of the harvest, it is really just a way for us to acknowledge that he is worthy of that portion and that he can be trusted to care for us.

We don’t need the first portion of anything he gives us if we really have trust in his care for our needs. The reality is that he takes care of sparrows, so I have fewer worries knowing he understands and meets our needs in ways that only he can and does.

“Honor the Lord with your wealth and with the firstfruits of all your produce; then your barns will be filled with plenty, and your vats will be bursting with wine.” Proverbs 3:9-10

In future posts I will be talking about the 2024 giving and dividend growth goals. But I wanted to focus on something far more important in this post: stewardship and giving. What you have isn’t just for your use and pleasure.

All scripture passages are from the English Standard Version except as otherwise noted.