Are Qualified Charitable Distributions right for you?
At the very end of 2015 Congress passed legislation making qualified charitable distributions (QCDs) from individual retirement accounts permanent. A QCD allows annual direct transfers to a qualified charity totaling up to $100,000 of IRA savings. The funds must go directly to the charity and cannot be distributed to the IRA owner first. If you are required to take a Required Minimum Distribution (RMD) from your Traditional IRA and you normally give to a charity it may be beneficial for you. The advantage of a QCD is the amount transferred from the IRA isn't included in adjusted gross income for the year. This can potentially provide you with a tax break because it lowers your adjusted gross income. You must be 70-1/2 or older to take advantage of this type of distribution, and it does count towards your RMD. Please contact our office if you are wondering if a QCD would make sense in your situation.