(It’s a Good Thing)
 
Here's an idea that can save you money and help our foundation, The Rotary Foundation.
 
If you have an IRA and you are over 70.5 years old, you are Required to take a Minimum Distribution (RMD) each year. Some or even all that amount could be made to The Rotary Foundation (TRF) through a Qualified Charitable Distribution (QCD).
 
 
So, what?
 
Well, if a QCD is made from RMD it REDUCES your taxable income this year (2019) thus potentially lowering the tax you pay next year on this year's income. That sounds pretty good but how does it work?
 
If you make a QCD to TRF for say $1,000 towards your Paul Harris pledge, then the reportable RMD income is REDUCED by $1,000 and your gross income becomes $1,000 less for 2019. You save the tax that otherwise would have applied.
 
Better than a Deduction?  Sure, much better. If you took your RMD out and then made a gift to TRF you only get a deduction if you ITEMIZE and then only after certain thresholds are met. Using QCD no itemization is required (but you can't take both a reduction in total income and a charitable deduction for the same gift).
 
Your IRA administrator or trustee will know all about this and can make it happen, now.
 
You will want to talk this over with your advisors. It made sense to me, so this year my pledge to TRF will be paid by QCD.
 
R. Craig Wilson
Past District Governor 2012-2013