The end of the year is fast approaching, and with it come a few deadlines that you should consider. If you are age 70½ or older and have an individual retirement arrangement (IRA), one thing you should think about is whether you want to make a qualified charitable distribution (QCD) for 2024. Qualified IRA owners can make up to $105,000 in tax-free charitable donations during 2024 through qualified charitable distributions. That’s up from $100,000 in past years.
For those age 73 or older, qualified charitable distributions (QCDs) also count toward the year’s required minimum distribution (RMD).
Generally, IRA distributions are taxable, but QCDs remain tax-free if sent directly to a qualified charity by the trustee. If you would like to make a QCD for 2024, contact your IRA trustee soon to ensure the transaction completes by year-end.
Each eligible IRA owner can exclude up to $105,000 in QCDs from taxable income. Married couples, if both meet qualifications and have separate IRAs, can donate up to $210,000 combined. QCDs don’t require itemizing deductions.
For those planning ahead, starting this year, the QCD limit is subject to annual adjustment, based on inflation. For that reason, the annual QCD limit will rise to $108,000 in 2025.
This article carries no official authority, and its contents should not be acted upon without professional advice. For more information about this topic, please contact our office.