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If you are over age 70 1/2 and have an IRA, you probably already know that Uncle Sam requires you to take a piece out of your IRA by year end, and pay tax on it. And while paying the taxes seems bad, the alternative is worse: a whopping 50% penalty on undistributed amounts. As IRS penalties go–short of putting you in jail–they don’t get much worse.

But if you don’t need the money to live on, and you are charitably inclined, there is a way to avoid paying the taxes on your “required minimum distribution” (RMD) — just give it directly to a qualified 501c3 charity.

This maneuver is called a “qualified charitable distribution” (QCD), and in years past it has been a popular planning topic in many advisors’ minds. The way it works is that if the withdrawal goes directly to the charity, then the income does not show up on your tax return. While at first glance this may seem like the same thing as writing off a gift as a itemized deduction, the net tax result may actually be quite different. This is because the income is completely excluded; therefore, it doesn’t affect the other tax deductions you may be eligible for.

Complicating issues even further is that Congress has yet to extend the law allowing these charitable rollovers for 2014. In years past they have waited until the eleventh hour to do this; we will see whether that happens again in 2014. If it doesn’t and you’ve already completed a charitable rollover, at least the RMD requirement has been met and you will get the itemized deduction (same as if you just gave it from your checking account). However the income exclusion benefit won’t be available.

Although this strategy has gotten a lot of good press, we are here to tell you that whether it benefits you or not depends entirely on your situation. For many retirees, it would not raise or lower your taxes at all. As with many tax issues, it depends on a host of other factors, including your overall income level, Social Security, Medicare part B premiums, itemized deductions, and more. The only way to know for sure is to have a expert run the numbers for you.

This is just one of the many ways we help clients.