Charitable Contributions From My IRA?

For those who give to 501(c)(3) charities and are 70 1/2 or over there’s a tax saving vehicle available when you give directly from your IRA. Qualified Charitable Distributions (QCD) made directly from the IRA to the charity can count toward Required Minimum Distribution (RMD) and can be made up to a max of $100k annually (per spouse) with some restrictions. A properly made QCD is reported on the account owner’s tax return but not included in income and not taxed. Since it isn’t included in income it doesn’t bump up income dependent taxes such as taxable Social Security benefits. Hence, QCDs lower overall tax vs. taking the RMD personally. Good strategy for those who qualify and want a tax advantaged way to give to charities.

SoundCPA Insights Financial & Tax Reporting