The IRS provides qualifying taxpayers a way to direct money from their IRAs to charitable organizations. When used correctly, this strategy can:
- Satisfy RMD (required minimum distribution) requirements
- Fund local charities – you decide which ones and how much
- Reduce your AGI (adjusted gross income) – this can potentially reduce your tax liability in a number of ways: reducing taxable social security, increasing allowable medical expenses, eliminating state income tax, to mention a few benefits
For taxpayers taking RMDs and contributing to their church or favorite charity, the QCD is something to consider. The IRS has a very helpful site IRA FAQs and it is something we would be happy to discuss with you.