In December 2015, Congress passed a law allowing you to give up to $100,000 to charity directly from your individual retirement account (IRA) when you are over 70½ years old without counting the distribution as taxable income. This type of charitable gift is called a Qualified Charitable Distribution (QCD).
Qualified charitable distributions are particularly beneficial to charitably-inclined families whose IRA distributions would push them into the 15% federal capital gains bracket. By making a QCD instead, they are able to exclude the charitable IRA distribution from taxable income and benefit from 0% federal capital gains tax instead.
QCDs are also beneficial for people with most of their net worth in traditional IRAs, retirees who do not need all of their money, and the charitably-inclined who do not itemize.
As part of our Tax Planning service, we assess if you are a good candidate for QCDs. Then, as part of our Charitable Giving and Required Minimum Distributions services, we provide the administrative support necessary to oversee the entire distribution process.
Two Charitable Tax Savings for Spontaneous Donors
Utilizing tax-smart spontaneous giving only requires the smallest amount of planning ahead.
Q&A: Should I Donate QCDs When I Have a Nondeductible Basis?
Luckily for the charitably-inclined individuals with nondeductible balances, QCDs are excluded from your Form 8606 taxable and nontaxable calculations.