Qualified Charitable Distribution
Do you give money to charity? Do you own an IRA? Are you over age 70 ½? If so, you have the option to give directly from your IRA to your charities of choice tax free! The IRS calls this arrangement a qualified charitable distribution (QCD) and it reduces your tax bill by excluding from income your charitable donation. The amount of savings will vary by individual, depending on your particular tax bracket. Below are a few rules to follow in order to lower your tax bill using this method:
IRA owner must be over the age of 70 ½
Contribution must be paid directly from your IRA to the charity
Can count towards your required minimum distribution (RMD) for the year (if applicable)
Able to exclude from gross income up to $100,000 of QCD
As you reflect on your giving, please consider how a QCD might help you and the charities you support reach your goals together.
This blog is for general educational purposes and does not constitute specific financial, tax, or legal advice. Please contact our firm for precise advice applicable to your personal financial situation.