QCDs Explained: Tax-Free Charitable Giving From Your IRA

A qualified charitable distribution, or QCD, lets IRA owners age 70.5 or older send money directly from an IRA to a qualifying charity each year, up to an annual limit, without paying income tax on the withdrawal. In this episode, Ryan explains why sending money straight from the IRA to the charity is so important: if you withdraw first and then donate, you lose the tax benefit entirely.He also explains why QCDs pair well with required minimum distributions. People who are required to take money out of their IRA but do not need the income can satisfy their RMD by directing it to charity and keep the full amount out of their taxable income. The charity must be an eligible 501(c)(3), and the transfer must go directly from the custodian to the organization. Work with your CPA to confirm the charity qualifies and that the distribution is processed correctly.Find "Your Fiscal Physical" the book on AmazonIf you have suggestions or feedback, please email us at: [email protected], as always, Stay the Course!