End of Year Tax-Smart Charitable Giving

This year we’ve discussed different types of tax-smart charitable giving strategies with several clients. Click here for a short video from Charles Schwab that discusses some of these strategies. For individuals age 70.5 or older and required to take a minimum distribution from their traditional IRA’s (known as a required minimum distribution, or RMD for short), another method to give to charities is through the Qualified Charitable Distribution (QCD). The QCD is a distribution directly from a traditional IRA to a qualified charity. This method enables the individual to give directly to a qualified charity from their IRA while satisfying some or all of their RMD for the year. It is particularly beneficial for those that can no longer itemize deductions since the QCD amount goes directly to the charity and does not count towards taxable income. Thus, you receive the indirect benefit of not having to pay income tax on that amount.

Please give us a call to learn more about these strategies and to determine if they make sense for you.