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Qualified Charitable Distributions
Did you know a qualified charitable distribution (QCD) can be made from a Roth or a traditional IRA?
There are specific rules that you must follow for this to qualify as a gift. You must be 70½ years old or older at the time of the gift. The transfer must be made directly to the charitable organization. You can give up to $100,000 per year, and your spouse can also give up to $100,000 from their IRA. You can make a QCD only to a public charity but not to a private foundation or a donor-advised fund.
Charitable Gift Strategy: If You Are 70½ or Older, Consider Making a QCD Gift
There are multiple benefits of making a QCD gift. A QCD can reduce your taxable income. In addition, if you have reached the age where you must take a required minimum distribution (RMD), your QCD gift can satisfy some or all of your RMD thereby reducing the amount you can be taxed on.
Recent legislation now allows for the $100,000 maximum annual QCD to be indexed for inflation beginning in 2024. It is quite simple to make a QCD. Ask your IRA administrator for their QCD form and any related procedures.
For more strategies and details, request our complimentary guide, 7 Smart Strategies for Year-End Tax Planning and Charitable Giving in 2023. |
