How can a qualified charitable distribution save you tax money?
Qualified Charitable Distributions paid from your traditional IRA represent an efficient method to collect your RMD without it being considered income by Uncle Sam and asked to pay the mandatory income taxes.
In other words, QCDs can help you lower your AGI and save more money than filing for tax-deductible for a charitable contribution, for which you would need to itemize.
How does a Qualified Charitable Distribution (QCD) function?
QCDs can help seniors lower their tax burden and avoid paying certain taxes or be put in a higher tax bracket. You can either make a partial transfer or pay your entire RMD from your custodian IRA to a qualified 501(c)(3) charity.
See also 7 Biggest Social Security and Medicare Changes in 2021.
