I recently spoke with a donor who had a Required Minimum Distribution (RMD) due from his IRA this year. He knew taking the distribution would increase his taxable income, but he was also planning to make charitable gifts before year-end.
As we talked through his options, he realized he could accomplish both goals through a Qualified Charitable Distribution (QCD). By giving directly from his IRA, he could satisfy his RMD and support Focus on the Family, all in one step, without increasing his taxable income for the year.
Many donors are surprised to learn this option exists. If you’re age 70½ or older and have an IRA, a QCD may be the simple and tax-wise giving tool you’ve been looking for.
If you’re considering a QCD this year, don’t wait until December. A QCD can help satisfy your RMD, but it must be completed by December 31 to count for the current tax year. To allow time for processing, we recommend submitting your request to your IRA custodian by December 1.
And while you’re connecting with your IRA custodian, consider taking a quick look at your beneficiary designations to ensure they still align with your family’s goals and charitable priorities.
To learn more about QCDs and how they work, click HERE.
