The tax law changes have once again emphasized the effectiveness of utilizing your IRA distribution as the preferred vehicle to make your 2021 charitable contributions.
The “qualified charitable distribution” is a carryover from prior law that enables a taxpayer that is age 70 ½ or older that is receiving IRA distributions to direct all or a portion of those distributions to a charity such as St. Ann Church.
The beauty of the “qualified charitable distribution” is that the distribution satisfies your IRS obligation to take your required IRA distribution, but at the same time excludes those dollars from your taxable income for both Federal and State purposes.
If you’re concerned about being able to deduct your charitable contributions in 2021 …. please consider the “qualified charitable distribution” as a possible solution. As with most all tax planning options, there are some specific rules that need to be followed, so please touch base with your tax or investment advisor to ensure proper compliance and tax benefits.