Tax Saving Strategies for 2023 ~ Are Qualified Charitable Distributions Right for You?

Filing your taxes for the 2022 season may be in your rear-view mirror, but now is the time to think about tax savings strategies for 2023.  One of those strategies could be taking advantage of Qualified Charitable Distributions (QCD).

A QCD is a charitable distribution made directly from your Individual Retirement Account (IRA) to a qualified charity.

Important Requirements:

  • You must be 70 ½ or older to make a QCD.

  • The QCD is excluded from your taxable income, unlike regular withdrawals from an IRA.  You do not need to itemize your deductions on your tax return to receive the tax benefits from donating to a charity via a QCD. 

  • A QCD can count toward your Required Minimum Distribution which is required by the IRS if you are 73 or older.

  • The maximum annual distribution amount that can qualify for a QCD is $100,000.  If you’re a joint tax filer, both you and your spouse can each make $100,000 QCD from your own IRAs.

  • A QCD is reported by your IRA custodian as a normal distribution on your IRS Form 1099-R.  You should keep acknowledgement of the donation from the charity for your tax records. 

  • Beginning in 2023, a QCD may be taken to fund a Charitable Remainder UniTrust, Charitable Remainder Annuity Trust, or Charitable Gift Annuity up to a maximum one-time amount of $50,000.

Our Financial Planning team is here to help you determine if QCDs are right for you.  For a better understanding and additional details on QCDs, please reach out to your wealth advisor.

Rebecca McClure