• Charles Schwab
  • eMoney
Bernardo Group
  • Process
  • Team
  • Insight
  • Resources
  • 401(k)

October 10, 2019

Are you over 70 ½ and making charitable donations?

Because of the recent tax law changes, a large majority of Americans will use the standard deduction for 2019, instead of itemizing.  However, if you are still charitably inclined and over age 70 ½ there is another way to continue your donations and reduce your tax bill.  It’s called a Qualified Charitable Distribution (QCD).  For individuals age 70 ½ or older, you can exclude up to $100,000 from your gross income per year in IRA distributions if it is contributed to a qualified charity.  This amount would satisfy your RMD requirement WITHOUT causing the money to be taxed.  

Here’s an example of how this works:

A married couple, filing jointly, has income of $120,000 and an RMD of $20,000.  Their charitable contributions are $12,000 for the year.  They have $6,000 of other itemized deductions. 

SCENARIO A:  Take the RMD of $20,000 (added to gross income) and donate $12,000

Deductions = $6,000 + $12,000 = $18,000 ** Because this is less than the standard deduction of $24,000 they would take the standard deduction

Total Gross Income = $140,000

Total Taxable Income = $116,000 ($140,000 – $24,000 standard deduction)

SCENARIO B:  Make a QCD of $12,000 from the RMD to a qualified charity and take the remaining $8,000 of RMD as income

Deductions = $6,000 ** Because this is less than the standard deduction of $24,000 they would take the standard deduction

Total Gross Income = $128,000 ($140,000 – $12,000 QCD gets deducted right from gross income)

Total Taxable Income = $104,000 ($128,000 gross income – $24,000 standard deduction)

The tax savings from Scenario A vs Scenario B is $7,000!

Share this:

  • Click to share on Facebook (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)

Charitable Giving Financial planning IRA Distributions Tax Deductions

Previous Post Next Post

Categories

  • View All
  • Financial
  • Investment
  • Networking
  • Uncategorized
  • Wealth Planning

Popular Tags:

  • Stock volatility
  • trade
  • market commentary
  • Charitable Giving
  • economy
  • Market Volatility
  • Networking
  • Finance
  • Global Economy
  • Tax Deductions
  • Financial planning
  • Stocks
  • Financial Recap
  • Market Insight
  • investments
  • Investment
  • Market update
  • Job Growth
  • IRA Distributions
  • Recession Risk

Financial Insights

Market Commentary: May 2025

Markets experienced a volatile but ultimately resilient April, as equities rebounded from early-month losses triggered by escalating trade tensions on “Liberation Day.” Initially shaken by President Trump’s tariff threats, investors regained confidence after the administration delayed most tariffs by 90 days—pushing their implementation to early…
READ MORE

emX from eMoney Advisor

Your browser does not support the video tag.

We’re excited to introduce emX from eMoney Advisor. More than just Bernardo’s client portal, emX offers you a complete personal financial management website. It keeps your various banking, investment, and insurance accounts updated and organized, lets you manage your budgets and spending, and even helps us chart a path for your long-term-planning goals — all in one convenient online/mobile experience. Contact us to sign up.

READ MORE

Contact Us

267.500.1080

contact@bernardowealthplanning.com

Get Directions

272 Ruth Road // Harleysville, PA 19438

Connect With Us

Bernardo Wealth Planning LLC BBB Business Review

This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Bernardo Wealth Planning recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. © 2016 Bernardo Wealth Planning

Legal Disclosure

contact@bernardowealthplanning.com | 267-500-1080 | 272 Ruth Road, Harleysville, PA 19438