We know that it is important to many of you to support the invaluable work of non-profit organizations. There are numerous ways to maximize your gift as well as your personal tax benefit – if you have an IRA, one way is a Qualified Charitable Distribution or QCD. A QCD is a distribution directly from your IRA to a public charity.
Let’s say that you want to give $500 to a charity of your choice. If you do a QCD – the $500 goes directly to the charity and you both avoid the tax bill. Conversely, if you withdraw $500 directly out of your IRA, you have to pay taxes on it and only have the remainder for the charity.
Keep in mind that you have to be over age 70.5 to do a QCD. The QCD has to go directly to the charity– you can’t cash the check and then send the charity the money. Finally, there is a maximum QCD (albeit high) of $100,000 per year per individual.
If you want to make a QCD, we strongly recommend that it is the very first money that comes out of your IRA in a calendar year. If you transfer money to yourself earlier in the year from your IRA, and then you want to make a QCD later in the year, it might not count for your Required Minimum Distribution (RMD) – this is the minimum amount that you must take out each year after reaching 70.5.
If this is a good fit for you, then email usto begin the process. We will need information from you regarding the charities by October 1st of each year, so the earlier you contact us, the better!