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Tax Guy: Beat the system with charitable donations from your IRA

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) can help you beat the federal income tax system in two different ways. Who wouldn’t like that?

Even better, you may be able to implement the QCD drill starting with your 2018 tax year even though 2018 is in your rearview mirror. That’s the situation if you turned 70½ last year and have not yet taken your initial IRA required minimum distribution RMD, which must be withdrawn by April 1.

Otherwise, you can do the QCD drill for this year (2019) as long as you will be age 70½ or older by 12/31/19.

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