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The Gift of Giving Through Qualified Charitable Distributions

December 11th, 2017 | Written by

The year-end seems to be a popular time for people to donate to their favorite charities, especially as the holidays approach.  If you are looking for a way to combine both your desire to help charities and to save on taxes, then you should consider a Qualified Charitable Distribution to accomplish both goals.   A Qualified Charitable Distribution (QCD) is a tax-free distribution from your IRA account directly to a qualified charitable organization.  This strategy allows you to donate your IRA distribution to satisfy all or part of your Required Minimum Distribution (RMD) and the amount donated is excluded from your taxable income.   Seniors still working who have large distributions, or are in a higher tax-bracket can benefit from this strategy.

To make a charitable distribution directly from your IRA, you must comply with these rules:

  • Age 70 ½ years or older
  • Have a Traditional IRA or Inherited IRA (employer sponsor retirement accounts, like SIMPLE or SEP, do not qualify for this tax advantage)
  • Do not exceed a total of $100,000 max from your IRA per year
  • The charitable organization must qualify for the tax-deductible contribution. Check out the IRS website here to find out if your favorite charity qualifies.
  • The distribution must come directly from your IRA to a qualified charity
  • Meet the deadline of December 31st each year

 

Giving is good, but smart giving is better, especially if you are able to reduce your taxable income while you make an impact by donating to great causes.  If you believe Qualified Charitable Distributions are the right fit for you, then reach out to us today.

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    This information is intended for educational purposes only. It is not intended to provide any investment advice or provide the basis for any investment decisions. You should consult your financial advisor prior to making any decision based on any specific information contained herein.

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