Let’s switch gears a bit this month and talk about Qualified Charitable Distributions. QCDs are cash donations that can be made by IRA owners and beneficiaries age 70.5 and over to IRS-approved public charities. These donations must come directly out of an IRA account to qualify as a QCD. They are federal income, tax free, but cannot be treated as an itemized write-off on your Form 1040 tax form. However, the tax free element presents an immediate 100% deduction without the concern of restrictions that can simply slow itemized deductions down.
QCDs must come from you or your IRA trustee and go directly to a qualified public charity. Or, the IRA trustee can provide you with a check made out to the charity that you then must deliver. There can be no middle man action where the funds go into another account before being turned over to the charity. Looking to donate to a private foundation?