Banknotes Blog
How We Became Lake Ridge Bank
We knew right from the start that one of the most important decisions we would need to make was what to name our new bank.
Free Money: Make Tax Reform Work for You
BY: Jeff Supple
Do all of these describe you?
- You are over the age of 70.5
- You have Traditional IRA assets
- You used to itemize your deductions but will not anymore because of tax reform
- You give to non-profit organizations on a regular basis
If you fit this profile you can take advantage of qualified charitable distributions from your IRA. Since the standard deduction nearly doubles ($24,000 for married individuals filing a joint return) for the tax year 2018 many individuals will not be able to deduct contributions that they made in the past.
Let’s say you give $5,000 to your church each year. If you’re now using the standard deduction you get no added benefit for the contribution. What you can do is talk to your IRA administrator and ask them to cut a check directly to the church from your IRA.
Previously when you took your annual Required Minimum Distribution from your IRA it was added to your ordinary income for the year. By electing a QCD, this amount does not get reported as income. In this case you just saved yourself $1,000 in Federal taxes from the $5,000 QCD (assuming your Federal effective tax rate is 20%).
Speak to one of Wealth Management Team members to learn more about how you can take advantage of this opportunity today!