Maximizing Your Charitable Giving: The Benefits of Qualified Charitable Distributions

December 2022

As a client of Rogowski Wealth Management, you may be looking for ways to make a positive impact on your community while also managing your finances effectively. One way to do this is through qualified charitable distributions (QCD) from your individual retirement account (IRA).

Let's consider the example of Meals On Wheels, a charity that provides nutritious meals to seniors who are unable to shop or cook for themselves. By making a QCD to this organization, you can help ensure that vulnerable members of your community have access to the food they need, while also benefiting from some important tax advantages.

First, let's define what a QCD is. When you make a donation directly from your IRA to a qualified charity, it is considered a QCD. This means that the donation counts towards satisfying your required minimum distribution (RMD) for the year, and it is excluded from your taxable income.

For example, let's say that you are required to take an RMD of $10,000 from your IRA this year. If you make a QCD of $10,000 to Meals On Wheels, that donation will satisfy your RMD for the year and you will not have to pay taxes on that money. This can be a significant benefit, particularly for individuals who are in a higher tax bracket or who are looking to reduce their taxable income.

In addition to the tax advantages, making a QCD allows you to support causes that are important to you without reducing your taxable estate. This means that you can continue to support Meals On Wheels and other charities throughout your lifetime and leave a lasting impact on your community.

If you have an IRA with Charles Schwab managed by Rogowski Wealth Management, you can easily make a QCD to Meals On Wheels or another qualified charity. Simply contact Rogowski Wealth Management and request a distribution from your IRA to the charity of your choice. Be sure to specify that you would like the distribution to be a QCD, and provide the charity's tax identification number.

By making a QCD from your IRA, you can support a worthy cause, reduce your taxable income, and leave a lasting impact on your community. So why not consider making a QCD to Meals On Wheels or another charity today? You'll be glad you did.

Please note: This information is for tax planning purposes only and is not intended as tax advice. You should always consult with a tax professional before making decisions related to your tax situation.