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Blog by Greg Storen, MBA – Financial Advisor, Senior Tax Professional

It’s the time of year when leaves are falling, crisp air and tax planning! That is right, tax planning. We all need to take a few minutes and review our finances for 2019 and part of this is finalizing tax plans by year-end.

As part of this process, I would like to recommend those of you age 70.5 or older and required to take a minimum distribution from your IRA consider utilizing a Qualified Charitable Distribution or “QCD.” The QCD is an opportunity for individuals taking required minimum distributions to send all or part of the distribution to a 501c3 charity. Besides the good deed of donating dollars, you will not pay state or federal tax on these contributions.

The QCD became more prominent in 2018 when the tax law elevated the standard deduction and made itemizing more difficult. Therefore, many clients do not get a tax deduction for their charitable contributions. For those clients, the QCD is a great opportunity. One other reminder, the contribution must be paid directly from the IRA to the charity. Also, QCD’s cannot come from ERISA plans such as 401K, 403B or 457 plans.

If  you  have any questions at all about this information, please contact us now.


QCDs in the New Year – 2019 QCDs

Article from Ed Slott and Company, LLC

Throughout 2019, expect QCD usage to continue to surge. The Tax Cuts and Jobs Act introduced a new higher standard deduction that is now being used by more filers. (The standard deduction for married couples filing a joint return nearly doubled from $12,700 in 2017 to $24,400 in 2019.)

QCDs can effectively add to the standard deduction (or existing charitable deduction if still itemizing) by allowing donations made from IRAs to be excluded from income, thus lowering AGI. Continue reading more in this pdf newsletter.