InvestED | Qualified Charitable Distributions

Less Tax for You.  More Money to the Charity.  Nothing for the Government.  What’s not to love?

When you reach 73 years old, you are required to start taking minimum distributions from your traditional IRAs and certain other retirement accounts. These distributions are generally subject to income tax. If you are charitably inclined, you may be able to satisfy all or a portion of your required minimum distribution, lower your taxable income and give more to the charity by utilizing a special provision called a Qualified Charitable Distribution (QCD).  A QCD allows you to donate funds directly from your traditional Individual Retirement Accounts (IRAs) to eligible charitable organizations. The donated amount counts towards your Required Minimum Distribution (RMD) for the year AND is excluded from your taxable income.  This can result in a lower overall tax liability for you and potentially more money going directly to the charity.

As you seek ways to help to optimize your financial situation while making meaningful contributions to society, QCDs provide a versatile tool to achieve both objectives. Before making any decisions, it’s important to consult with a professional advisor who can help tailor this strategy to your specific circumstances and charitable goals. With proper planning, QCDs can serve as a win-win solution for retirees and the charitable organizations you support.