IRA Qualified Charitable Distributions

Tax Benefits of Making Qualified Charitable Distributions From Your IRA Account A Qualified Charitable Distribution, or QCD, from your traditional IRA account or employer-sponsored retirement account has several significant tax benefits for people age 70 ½ or older. Consult your tax advisor to determine whether a QCD is right for you. Normally, distributions from a traditional IRA or employer-sponsored retirement account are taxable when received. Not only are these distributions taxable, they can also bump you up into a higher tax bracket. Higher taxable income may also have a negative impact on your Social Security and Medicare benefits. Beginning at age 73, taxpayers are required to start withdrawing money each year from their traditional IRAs, employer-sponsored retirement accounts, and IRA-based plans such as SEPs and SIMPLE IRAs. The IRS has very specific rules about how to calculate the amount of your Required Minimum Distribution, or RMD, each year. However, the IRS allows taxpayers to give up to $100,000 each year directly to a charity from their IRA or employer-sponsored retirement account. This Qualified Charitable Distribution (QCD) can satisfy all or part of your Required Minimum Distribution without increasing your taxable income. A QCD may also reduce the amount of your RMD in future years, which are calculated, in part, based on the fund balance in your IRA or employer-sponsored retirement account. Again, consult your tax advisor to determine whether a QCD is right for you. Click here to learn more about IRA Qualified Charitable Distributions