By Bob Carlson
It’s time for IRA owners to be proactive by planning and implementing their strategies for the rest of the year. Consider these steps now and take those that are appropriate for you.
Caution: Don’t wait until the last few weeks of the year to consider your actions. IRA custodians are very busy then. Many won’t process requests for some types of transactions during the last couple weeks of the year or won’t guarantee they’ll be completed by December 31.
Use QCDs to make charitable contributions. It’s one of the best ways to make charitable contributions, though it’s available only to owners of traditional IRAs who are ages 70½ and older.
The Tax Cuts and Jobs Act made the qualified charitable distribution (QCD) even more valuable. The law increased the standard deduction and reduced the itemized expenses that can be deducted. The result is that fewer taxpayers will be itemizing expenses and deducting charitable contributions.
In a QCD, you direct the IRA custodian to send a contribution directly to the charity of your choice. Or you can have the custodian send you a check made payable to the charity, which you deliver to the charity.
The distribution isn’t included in your gross income, yet it counts toward your required minimum distribution (RMD) for the year. You receive no deduction for the contribution. You can use the QCD to make up to $100,000 of contributions each year.