Qualified Charitable Distributions and the Tax Code

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If you are 73, you must take a required minimum distribution (RMD) from your traditional individual retirement account (IRA). If you have a lot of money stashed away, this could create a large tax liability.

But there is a way to lower your tax liability and help others. It’s a qualified charitable distribution (QCD). But what is a QCD, and how does it work?

How QCD Works

Once you reach 71½ , you may want to take a distribution from your traditional individual retirement account. Unfortunately, this increases your taxable income, but a QCD will lower that liability.