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Tax Tip of the Week | An IRA/Charitable Contribution (QCD) for Year-End Planning December 5, 2018

Posted by bradstreetblogger in : Deductions, General, tax changes, Tax Planning Tips, Tax Tip, Taxes, Uncategorized , trackback

An IRA/Charitable Contribution (QCD) for Year-End Planning

Over the last few years we continue to see an uptick in charitable contributions made from an IRA. I continue to believe this tax strategy is very often overlooked or just simply ignored. So as this year winds down and many people are making charitable donations, please remember the new tax law has made the way to make charitable contributions even more worthwhile to consider.

-Mark C. Bradstreet, CPA

Bob Carlson Contributor (excerpts from an article titled “7 IRA Strategies For The End of 2018”)

“It’s time for IRA owners to be proactive by planning and implementing their strategies for the rest of the year. Consider these steps now and take those that are appropriate for you.

Caution: Don’t wait until the last few weeks of the year to consider your actions. IRA custodians are very busy then. Many won’t process requests for some types of transactions during the last couple of weeks of the year or won’t guarantee they’ll be completed by December 31.

Use QCDs to make charitable contributions. It’s one of the best ways to make charitable contributions, though it’s available only to owners of traditional IRAs who are age 70 ½ and older.

The Tax Cuts and Jobs Act made the qualified charitable distribution (QCD) even more valuable. The law increased the standard deduction and reduced the itemized expenses that can be deducted.  The result is fewer taxpayers will be itemizing expenses and deducting charitable contributions.

In a QCD, you direct the IRA custodian to send a contribution directly to the charity of your choice. Or you can have the custodian send you a check made payable to the charity, which you deliver to the charity.

The distribution isn’t included in your gross income, yet it counts towards your required minimum distribution (RMD) for the year.”

Bob Carlson is the editor of Retirement Watch, a monthly newsletter and web site he founded in 1990. He researches and writes about all the financial issues of retirement and retirement planning, for both those planning retirement and already retired.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.

This Week’s Author – Mark C. Bradstreet, CPA

–until next week

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