What is a QCD?

Qualified Charitable Distributions (QCDs) are a tax-saving strategy available to individuals who have reached the age of 70 and a half. A QCD allows individuals to make direct charitable contributions from their traditional Individual Retirement Account (IRA), with several added benefits. The primary advantage of a QCD is that it reduces taxable income. When funds are distributed from a traditional IRA to the account holder, they are considered taxable income. However, if individuals opt for a QCD, the funds are sent directly to a qualified charity, bypassing personal taxation. By utilizing a QCD, individuals can lower their taxable income, potentially reducing their overall tax liability. QCDs are particularly valuable for individuals who are charitably inclined and already planning to make donations. If you have reached the age of 70 and a half, you may be able to leverage QCDs to support the charity of your choice while enjoying tax benefits. Individuals who make charitable contributions through a QCD are typically not worse off financially compared to making the donation themselves.

To take advantage of a QCD, individuals should contact their financial advisor or IRA custodian to discuss their charitable intentions. The advisor can assist in determining if the individual meets the age requirement and identify the preferred charities. Once these details are confirmed, the necessary steps can be taken to process the QCD and direct the funds to the designated charities. You should discuss any tax or legal matters with the appropriate professional.

Advisory services provided by NewEdge Advisors, LLC doing business as Middlebrook Wealth, as a registered investment adviser. Securities offered through NewEdge Securities, LLC, Member FINRA/SIPC. NewEdge Advisors, LLC and NewEdge Securities, LLC. are wholly owned subsidiaries of NewEdge Capital Group, LLC.

The information in this material is not intended as tax or legal advice. Please consult your legal or tax professionals for specific information regarding your individual situation. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security..