A QCD is a PDQ Way to Give to CharitySubmitted by Prosperity Advisory Group on August 3rd, 2018
by Dave Martin
Many of you reading this are at an age where you are required to take funds out of your IRAs, the magic age being 70.5. Many of you are also of a charitable bent. Given the new tax law changes, itemizing deductions may be a thing of the past for you. This is where a Qualified Charitable Deduction (QCD) comes into play.
For all individuals over the age of 70.5 (and fully retired), you can send your Required Minimum Distribution (RMD) up to $100,000 per individual directly to a charitable organization and not be taxed on this distribution. This action will satisfy your RMD for the year AND will not be taxable to you. It should be noted that the charitable organization in question cannot be a private foundation or a donor advised fund, but it can be your church, The United Way, Habitat for Humanity, or any one of thousands of charitable organizations across the country.
To do this, all you need to do is submit a written request to your IRA custodian to have the funds sent DIRECTLY to the charity. A check will be made payable to the charity but mailed to you to deliver to the charity. This part is crucial, because, if the check is made out to you, this will be considered a distribution by the IRS. Then, when tax time comes around, you (or your CPA) would put the amount of your donation on line 15a of your 1040.
Then, on line 15b of your 1040, write $0 and “QCD” next to it. Because a QCD is counted on page one of your 1040 (otherwise known as “above the line”), you do not need to itemize your deductions to take advantage of this.
So if you are someone who meets those criteria (over age 70.5, fully retired, wanting to give money to charity), contact us today and we can help you take care of a QCD ASAP.
*For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice.