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Required Minimum Distributions – Friend or Foe?

If you recognize the phrase ‘Required Minimum Distribution,’ then the question above might make some sense.  For many people, IRA distributions represent a key source of retirement income – you saved throughout your career and your IRA is a key part of your plan.  For others, however, these required distributions can sometimes create an unwelcomed tax liability. 

If you find yourself in the second category, there could be another option:  An IRA can be a terrific source of your philanthropy.

This gift option is called a Qualified Charitable Distribution.  It works best for people who:

• Have reached age 73 (must take RMDs)
• Claim the new, higher Standard Deduction for income tax purposes
• Do not need current income from their IRA
• Want to preserve available cash on hand
• Would like to support Trinidad State

Making a Qualified Charitable Distribution for Trinidad State will count towards your RMD – and it does so without creating any income tax liability.  In addition, although you do not claim a tax deduction for a QCD, if you’re already claiming the new, higher standard deduction then nothing is ‘lost.’  And making a gift from your IRA can also help preserve cash balances in your money market and bank accounts. 

If you find yourself with higher taxes from an unwanted RMD, donating some or all to Trinidad State with a QCD might be something to consider.  In the right situation, it represents a tax-wise opportunity.

For more information about Qualified Charitable Distributions, please contact Toni DeAngelis at 719-846-5520 or toni.deangelis@trinidadstate.edu.  Please know there is never any expectation or obligation to complete any gift.