Recent legislation made permanent the provision for individuals age 70 ½ and older to be allowed to make tax-free distributions of any of their required minimum distribution or up to $100,000 from individual retirement accounts (IRAs) to a qualified charitable organization. These types of IRA distributions are being referred to as “Qualified Charitable Distributions” or “QCD”.
As this money is not included in taxable income, it is not included in charitable contributions if you itemize deductions for income tax purposes. For some people, you may have the same bottom line tax result by using the QCD or making the contribution from personal funds. For others, especially those who do not itemize, it could help you save taxes.
For a few people, the QCD could possibly reduce the portion of Social Security which is taxed on Form 1040, and possibly help higher income Medicare participants to reduce the additional premium for Medicare Part B or prescription drug coverage.
If you feel this may apply to your tax situation or need more information, please contact us as soon as possible. If you do not contact us, we will assume that we can proceed with the required minimum distribution withdrawal as currently scheduled.