Tax Savings 101: send your RMD to a charity

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One of my favorite tax savings strategies we manage for clients is what is referred to as the Qualified Charitable Distribution or QCD.  Only the IRS can complicate the naming of a very simple and straight forward tax savings strategy.  Keep in mind, I always say every “Tax Simplification Act” only complicates the tax code further.

So what is the QCD?  We need to start with a basic understanding of your IRA withdrawal requirement once you turn 70 1/2.  Once you reach the age of 70 1/2 the IRS requires you to start taking withdrawals/distributions from your traditional IRA.  This withdrawal is commonly referred to as the Required Minimum Distribution or RMD.  You may have heard this referenced in every financial planning magazine and website or even from your custodian.

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