First, Qualified Charitable Distributions (QCD’s) should be carefully considered by everyone over age 70 ½ who gives money to qualified charities. I think QCD’s may be the most accessible way to save on taxes that most eligible Americans don’t take advantage of – and many should. 

The bottom line is that with the much higher Standard Deductions available on out taxes returns, most taxpayers no longer itemize their deductions, thus deriving no tax benefit from their charitable gifting. QCD’s are a way to get the tax break back!  Unfortunately, we find many don’t even know about QCD’s and/or think it’s too complicated for them. You should, and they aren’t.

I’m not going to go into a long, technical analysis of QCD’s here – that information is available for anyone to Google if you want to dig into the details. Yes, at Hamilton Wealth Management we certainly do dig into the details for our clients aged 70 ½ and older.

However, the purpose of this article is to inform readers who haven’t even heard of or considered QCD’s to either learn about them (if you manage your finances yourself) or to discuss them with your financial advisor and/or CPA. That said, IF you are over age 70 ½ and your financial advisor’s eyes glaze over when you mention QCD’s….then get another advisor I guess.

QCD’s came out of the “Pension Protection Act” in 2006, so they aren’t new. They were used infrequently because many people still itemized back then. However, since the new Standard Deductions levels were introduced, this changed for many, even most taxpayers. So, what was originally only useful for a small segment of those over 70 ½ is now very useful for many in that age group. So yeah, you should know about this.

So again, here is a quick snapshot of the individuals or couples that should consider QCD’s :

1. You give money to qualified charities – church, synagogue, charities, etc. taxed as a 501c.
2. You are over age 70 ½

That’s it. I was going to add that you don’t itemize your deductions, but even for the small percentage that still itemize, you maybe still should look at QCD’s because maybe if you utilize QCD’s you can save on taxes without itemizing. Have a look.

So rather than complain about taxes, do something about it! Or….go ahead and complain but ALSO do something about it. Either way, check out the tax saving opportunity QCD’s may offer you.  Feel free to email us if you have any questions.

contact@hamiltonwealthmanagement.com