In the past, the rules regarding qualified charitable distributions were vague and unclear. In 2018, the IRS updated its rules pertaining to qualified charitable distributions and estate planning attorneys and wealth advisors are using them to their clients’ advantage.
Now charitable donations made from a tax-deferred account will be exempt from taxation up to $100,000 as long as the distribution comes from a qualified account and is donated to an IRS approved charity.
Once you reach age 70 ½ you are required to withdraw a minimum distribution from all of your qualified accounts. Now, you can invoke the new charitable distribution rules and sustain your favorite charity while avoiding taxes on those qualified distributions up to $100,000 per year. The two major benefits here are that you are helping your charity while minimizing taxes on your qualified accounts.
The qualified charitable distribution rules can be an instrumental tool for your overall wealth management strategy, but you should discuss the implications with a trusted advisor and experienced estate planning attorney like Stouffer Legal, serving the Baltimore area. Contact us at 443-470-3599 to schedule your Estate Planning Consultation today.