Important information for those that have reached age 70½. If you have reached the age of 70½ you must take required minimum distributions (RMD) from your individual retirement accounts. The Internal Revenue Service imposes a severe penalty if you fail to make a required minimum distribution; 50% of the amount of the distribution that you should have taken. The good news is that there is a tax friendly mechanism for making charitable donations to tax exempt charities, such as TEAM and most churches. This is called a Qualified Charitable Distribution (QCD). A QCD is a direct transfer of funds from your IRA custodian to a qualified charity. QCDs can be counted toward satisfying your required minimum distribution for the year, as long as certain rules are met. The good part is that the amount of the QCD can be excluded from your taxable income. Most IRA custodians are familiar with this process and can easily arrange for charitable contributions directly from your IRA. Because each person’s tax situation is unique, we suggest that you consult a tax advisor to discuss your options for charitable giving.
You can find more information on Qualified Charitable Distributions on the IRS website.