Happy Half Birthday!

If you had a summer birthday when you were in grade school, you got to celebrate your half birthday during the school year.  Maybe since then you haven’t cared about it or would really prefer to forget your birthday altogether.  If you are turning 70 ½ this year though, you will join roughly 25 million Americans who need to mark their calendars.  For this first year, you can delay your required minimum distribution, or RMD, until April 1st of 2019.  For every year after, you must take your RMD from your traditional IRAs, SEP IRAs, SIMPLE IRAs or employer retirement plans by December 31st to avoid an IRS penalty.  

If you are now required to take an RMD and are also charitable-minded, you should consider a Qualified Charitable Distributions, or QCD. Under the new tax law, fewer taxpayers will be able to itemize with the increased standard deduction, which is giving QCDs elevated popularity.  The idea is that you would give your RMD directly to your favorite charity, which avoids income tax on the distribution and can also provide other tax benefits as a result of the decrease in adjusted gross income.

Call us for more details and to discuss the benefit to your personal tax situation!