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What Is A QCD?

Justin Mailhes with Argent Advisors in Monroe Explains

Question: Do you give to charities?

Question: Are you older than 70 ½ and currently taking Required Minimum Distributions (RMDs) from your IRA?

If you answered yes to the two above questions you might want to look at a QCDs, or Qualified Charitable Distributions. A QCD is an alternative way to give to a charity while lowering your taxable income. Basically, it allows people who are older than 70 ½ to direct their Required Minimum Distribution directly from their IRA to a charity.

QCDs have received renewed interest due to the higher standard deductions allowed for in the recently passed Tax Cuts and Jobs Act. It's estimated that millions of tax payers who formally itemized will no longer do so, meaning from a tax standpoint, they will not be benefiting from charitable contributions. A QCD is a possible solution. Normally any distribution from a traditional IRA is taxable, however the QCD passes to the charity directly and is not included in income. The charitable contribution is non-deductible, but once again many taxpayers will not be itemizing anyway. So, if your deductions fall below the standard deductions of $12,200 for single and $24,400 for married filing jointly then a QCD could be a good option.

There are also certain requirements that must be met for the distribution to qualify. The charities must be a 501(c)(3) organization to receive the QCD distribution, but some may still not be a qualifying charity. You should discuss QCDs with your CPA or financial advisor before making the distribution. They will be able to make sure the charities qualify and that a QCD would be good option for your situation.

For those with deductions above the standard limits there may still be reasons to consider a QCD. Please give us a call to talk about your options.

Why choose Argent Advisors in Monroe?

Our mission is to help establish, manage, and protect our clients' financial plans, and we take that very seriously. The Argent Advisors team in Monroe has over 60 years of combined financial planning experience. No matter where your objectives fall, we help our clients establish a definitive goal-oriented plan for current needs and for the future. Argent Advisors in Monroe are fee-based Registered Investment Advisors (RIAs). We agree on an annual management fee, and then we work for YOU. We make no money on account activity or the strategies selected. We have no proprietary products. Our independent process assures you that we are acting in your best interest, not in ours! If you have any question about your financial planning needs, please contact our office.