Tax Guy: A tax-smart move for 70-somethings with extra money on their hands

If you’ve reached age 70½, you can make cash donations to IRS-approved charities out of your IRA. These so-called qualified charitable distributions (QCDs) are now a permanent feature of the tax law — unless Congress changes its mind. To take maximum advantage for 2018, you should replace some or all of this year’s IRA required minimum distributions with tax-smart QCDs. Here’s what you need to know.

Qualified charitable distribution basics

Qualified charitable distributions (QCDs) can be taken out of your traditional IRA(s) free of any federal income hit. In contrast, other traditional IRA distributions are taxable (wholly or partially depending on whether you’ve made any nondeductible contributions over the years).

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