QCD stands for Qualified Charitable Distribution and can be an advantageous way to make a gift to your favorite charity. Kim Scott, CFP®, explains what a Qualified Charitable Distribution is, and how you could be able to take advantage of it.
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Welcome to Technical Tuesday from Financial Services Advisory, where we take a couple minutes to talk about a financial planning concept. My name is Kim Scott and I’m your host today.
Today’s question is: What is a QCD?
QCD stands for Qualified Charitable Distribution. Now this is when you want to give to a charity
directly from your IRA. Since you’re over the age of 70 1/2, this can actually count towards all or a portion of your Required Minimum Distribution.
Now if you’re wondering what an RMD is, please see our previous video.
Now your QCD doesn’t have to be limited to your Required Minimum Distribution amount. You can actually give up to $100,000 from your IRA each year.
What makes a QCD so advantageous is the amount that you’re giving to charity is actually excluded from your income.
So not only are you satisfying your Required Minimum Distribution, but you’re also giving that money tax free.
This strategy has gained in popularity over the last year, since the new tax laws went into effect. One of those changes was that they increased the Standard Deduction pretty significantly.
So people are finding that they’re not quite getting the same benefit of giving to charity since they’re not able to itemize their deductions. So one way to still get a similar benefit is to give directly from your IRA through this QCD concept.
One thing to note is that you can do a QCD from an inherited IRA. But keep in mind you do still have to be 70 1/2 or older to take advantage of this strategy.
If you have additional questions about QCDs, feel free to give us a call or email us.
For now, I’m Kim Scott, and this has been Technical Tuesday!
For more information on QCDs, feel free to give usa call or visit the IRS website.
To view our disclosures, including our Disclosure Brochure, please visit www.FSAinvest.com/disclosures.