Save Taxes and Help Your Community

The hot weather is finally behind us and fall is here. While it’s a great time to get flower beds in order and to start the preparations for the holiday, it’s also the time for end-of-year tax planning.

Have you looked at your finances recently? Will you be paying more taxes than planned? Will your income increase because of the sale of an asset or an estate gift? Has a bond or certificate of deposit come due?

And, if you are in your 70s, one of the most critical questions to look at is how a required minimum distribution from your IRAs will affect your taxes and your income level.

Think about this.

If you are 74 years old and you have an IRA with a value of $500,000, you are required to disperse $22,000 from the account.

If you take the cash, you will spend 22 percent of that money- $4,400 – donating to Uncle Sam and the IRS. While the annual charitable giving is tax-deductible, at that level of income, you are taking a standard deduction.

So, this is where a very unique tool comes in: Qualified Charitable Donations or QCDs.

Basically, instead of taking all cash and paying taxes on that money, the distribution is used for your charitable giving planning and is donated directly from your IRA to a qualified charitable organization.

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