An almost unknown tax tip for Seniors!

Qualified Charitable Distribution (QCD) is a way for people aged 70½ or older to donate money directly from their Individual Retirement Account (IRA) to a charity without paying income taxes on the withdrawal.

Why is this helpful?

Normally, when you take money out of a traditional IRA, you have to pay income tax on it. But with a QCD, the money goes straight to the charity—so you don’t owe taxes on that amount.

Key Benefits:

Tax Savings – The donation doesn’t count as taxable income.

Counts Toward Required Minimum Distributions (RMDs) – If you’re 73 or older, you must take RMDs from your IRA. A QCD can count toward your RMD without increasing your taxable income.

Supports Charities – The money must go to a qualified 501(c)(3) charity (not a private foundation or donor-advised fund).

The money needs to go directly to a charity, not through you. For those Seniors that tithe to their church, Big opportunity to reduce your taxes!

Key Rules:

You must be 70½ or older to use a QCD.

The maximum QCD amount is $100,000 per year (adjusted for inflation).

The check must go directly from your IRA to the charity (not to you first).

Example:

Let’s say John is 74 and has to take a $10,000 RMD from his IRA. Instead of withdrawing it and paying taxes, he donates $10,000 directly to his favorite charity via a QCD.

Now:

He satisfies his RMD requirement.

He avoids paying income tax on the $10,000.

The charity gets the full donation without tax deductions.

Would you like help determining if a QCD is a good option for a specific situation?

Call Coker Financial Services, I know lots of cool stuff an H&R Block-type tax business doesn't know, and certainly, as they are typing your return into their software aren't going to use their intuition to ask you questions that are not in their software.

Don't Misse this Opportunity! Plan ahead for next year's big refund!