March Madness and the ABCs of QCDs

After watching weeks of buzzer beaters and upsets, March Madness always creates one question: How do they do that?

The answer: Preparation.

Whether on the court or with your finances, the best way to make an impact is through careful preparation and creative thinking from a great coach. If you are thinking about charitable contributions as you look for a way to beat the buzzer at tax time, one solution may be a Qualified Charitable Distribution.

A Qualified Charitable Distribution (QCD) is a tax-advantaged way to make a charitable contribution from an individual retirement account (IRA). For the contribution to be considered a QCD, certain conditions must be met, including:

It must be made directly from the IRA to a qualified charity as defined by the IRS.

It must be made by an individual who is at least 70 1/2 years old.

It must be limited to $100,000 per taxpayer per year.

QCDs are a great way to support your favorite charities while also reducing your taxable income. In addition, since the contribution is made directly from an IRA, it helps satisfy your required minimum distributions.

Although you do not receive a charitable deduction for the amount donated through a QCD, the amount donated is excluded from your taxable income. This is an indirect way to reduce your tax liability. Making a QCD is relatively simple and involves less paperwork compared to other methods of donating to charity.

When it comes to March Madness, tax planning, or charitable giving, the best defense is often a good offense. With the right preparation, and leveraging our team as your coach on the sideline, you can make great things happen.

If you’d like to discuss the X’s and O’s of charitable giving, please reach out to our team and we can set up some time to talk.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment Advice offered through Flagship Harbor Advisors, a registered investment advisor. Munroe Morrow Wealth Management and Flagship Harbor Advisors are separate entities from LPL Financial.

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