It is That Time of Year!

It's RMD time. You may be planning on taking your year-end required distribution from your IRA now. On the charitable gift planning front, you should be aware of the QCD (Qualified Charitable Distribution) option. This approved IRS procedure allows you to distribute a part or your full RMD from any traditional IRA you may have (not a 401k) and direct the distribution to a charity of your choice. This has several benefits. You avoid income recognition of RMD distributions. This can reduce taxes and the tax impact of the RMD on other parts of your return. It can reduce the Medicare IRMA tax and other tax penalties subject to income restrictions. At some higher income levels, you lose certain deductions and other tax benefits. In order to make this choice, you need to contact your IRA custodian and complete their forms. You must be over age 70 1/2 and the distribution must go directly to the charity. You can use this technique as well for inherited IRAs. Consult with your tax preparer on the benefits of this charitable technique. For BPC related questions, contact Sue Haldeman at sue.haldeman@bpcusa.org.