Did You Know?

Financial Tips by Victor

Using Your RMD to Support the Causes You Care About

Many people support charitable organizations each year with checks, credit card

donations, or gifts of stock. What many retirees don’t realize is that, if they have an IRA,

they may be able to make charitable gifts directly from that account while also receiving

valuable tax benefits. 

For those who are age 70 1⁄2 or older, a Qualified Charitable Distribution (QCD) can be an effective way to support meaningful causes and potentially reduce taxable income at the same time.

For many retirees, Required Minimum Distributions (RMDs) are simply a part of life.

Once RMDs begin, the amount withdrawn from a traditional IRA is generally included in

taxable income, whether the funds are needed for spending or not. A QCD allows

individuals age 70 1⁄2 or older to transfer funds directly from an IRA to a qualified charity.

For those who are required to take an RMD, the QCD can satisfy all or part of that

obligation. The key difference is that the amount distributed through a QCD is generally

excluded from taxable income.

This can be particularly valuable because lower taxable income may help reduce the

impact of taxes on Social Security benefits, Medicare premium surcharges, and other

income-based calculations. Unlike a charitable deduction, which may provide benefits

only to taxpayers who itemize deductions, a QCD may provide a tax benefit even for

those who claim the standard deduction.

Three important rules to follow: 

• The funds must be transferred directly from the IRA custodian to the qualified charitable organization

• Donor-advised funds are not eligible recipients of QCDs. 

• As with any tax-related strategy, individuals should consult their tax advisor regarding their personal circumstances.

Making an impact in ways that align with our values, compassion, and purpose is deeply

rewarding. For those who are charitably inclined and subject to RMDs, a Qualified

Charitable Distribution may be an effective way to support meaningful causes while

potentially improving tax efficiency.

 If you’re interested in making a QCD to JFS, please contact Kim Jackman, manager of philanthropy and community giving at kimj@jfssv.org or 408-761-1798 for instructions on directing your QCD to JFS.

Victor Adint, Private Wealth Advisor, CWS®, CFP®

237 W. Main Street, Los Gatos, CA 95030

408-402-3059

This material is provided for educational purposes only and should not be considered tax or legal advice. Changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC, marketed as Adint, Ramaekers and Associates. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.. Adint, Ramaekers and Associates. is separately owned and operated and not independently registered as a broker-dealer or investment adviser.