More than ever, advisors are recommending to their clients who are over 70 ½ to make their charitable gifts out of their IRAs with those distributions going directly from their IRA to the charity. The great advantage to the “QCD” is that although it counts toward your required minimum distribution from your IRA, it is not included in your taxable income.
What’s the big deal, you say?
The QCD lets you have your cake and eat it too. If you are over 70 ½, you can send up to $100,000 from your IRA directly to charity and not have any of that included in your income. That has a lot of potential perks that could result in lowering your Federal income taxes, your Georgia state income taxes, even your Medicare Part B premiums.
As with any financial decision, check with your financial advisor to see if the QCD is right for you.
One more thing. A QCD cannot be made to a Donor Advised Fund, but it can be made to numerous other types of funds that we offer at the Cobb Community Foundation. Let us help you figure out which is right for you.