Want to feel good? – Consider a Qualified Charitable Distribution
Our planning discussions revolve around devising strategies to meet a client’s Required Minimum Distributions (RMDs). One such strategy we often assist clients with involves the utilization of a Qualified Charitable Distribution (QCD).
A QCD empowers individuals aged 70 ½ or older to donate directly to one or more charities from a taxable IRA, bypassing the need to take their required minimum distribution.
But why might this approach be advantageous?
- Tax Savings: Channeling funds directly to the charity of your choice through a Qualified Charitable Distribution has the potential to reduce your overall tax liability, as the donated amount does not contribute to your taxable income for the year.
- Fulfilling Required Minimum Distribution:
- Supporting Worthy Causes/Charities: QCDs enable you to contribute to charities close to your heart, offering a deeply rewarding experience supporting meaningful causes.
- Estate Planning: Decreasing your IRA balance through a QCD also diminishes the size of your retirement assets, which can benefit your heirs regarding estate planning.