A Qualified Charitable Distribution or “QCD” allows individuals age 70 ½ and older to donate up to $105,000 in 2024 directly from an IRA to a charity. A QCD can satisfy, in whole or in part, the “Required Minimum Distribution” that is required of those aged 73 and older in 2024. It is important to note that while the current RMD age is age 73 or older, anyone age 70 ½ or older may use a QCD.
Using a QCD means that the donation goes directly from one’s IRA to charity and is not reported on the 2024 tax return. Therefore, a QCD reduces Adjusted Gross Income on the 2024 tax return, which can help seniors in numerous ways, including but not limited to:
- Senior Real Estate Assessment Freeze
- Reducing taxation of Social Security benefits
- Income-Related Monthly Adjustment Amount (“IRMAA”), which is a Medicare Part B & D surcharge that reduces Social Security payments
- Reduction of taxable income/tax brackets
- “Effective Tax Deduction” for those who don’t itemize. You are not required to itemize to receive the tax benefits from a QCD
In summary, a QCD can be an effective way to give, which can also further enhance income tax planning. Please consider this option as you contemplate giving to the general fund, Making Space campaign, or any other charities. QCD’s do need to be made before the end of the year. If you have any questions, contact Kraig Mickelsen.
*Please note that this is not meant to be tax advice. Always consult your tax professional if you have any questions about tax matters
