Happy Birthday, you turned 70 1/2 and now you are required to start taking money out of your IRA accounts. The required minimum distributions (RMD) must be taken each year after your 70 ½ birthday. This rule does not apply to ROTH IRA accounts.
Some retirees who have reached that magical age, might consider a Qualified Charitable Distribution (QCD). If you are making charitable donations anyway, the QCD is a good way to fulfill your RMD and reduce your tax liability.
You must transfer money from your IRA directly to your church or charity of your choice. If your RMD is $10,000 and you want to contribute $5,000 to charity, then you do the QCD directly to your charity and take the remaining $5,000 distribution. You will only be taxed on the $5,000. This is particularly a good move if you have very few itemized deductions (ie, no mortgage interest) and you will take the standard deduction. You can take the standard deduction and still get a tax benefit for the charitable donations that you are making.
When it comes to personal or business accounting services and tax preparation there’s nothing that brings more peace of mind and confidence, and nothing that helps you focus on the big picture, than knowing that your bottom line is on target and on time.
Working with a certified public accountant (CPA) who takes the time to understand the way you live your life and run your business, and invests in educating you so you can make informed decisions, will ensure that your bottom line is not only on target and on time but that it moves you along the road to your success and your goals.
That’s exactly how Sherwood Tax & Accounting approaches every client relationship. Sherwood Tax & Accounting understands that your dreams and goals are unique and that a pre-programmed, one-size-fits-all approach won’t provide the best outcome for you.
When you work with Sherwood Tax & Accounting, you’ll experience something very different. You’ll be working with a partner who goes well beyond simply crunching numbers and filing returns. Sherwood Tax & Accounting will provide you with a clear picture of your financial position and the knowledge you need to make decisions that will move you toward your goals.