Today’s show is focused on seniors who must take required distributions from their IRAs and how they can take steps to benefit from special new provisions for making qualified charitable distributions (QCDs).What's the problem with IRA distributions?Ordinarily, distributions from a traditional IRA are taxed at ordinary rates, topping out at 37%1. People who itemize can deduct distributions they donate to charity. 2. RMDs may create tax issues around net investment income tax (NIIT)3. For this reason, seniors who don’t need the income often choose to postpone distributions for as long as possible4. If you don’t need the IRA income, itemize deductions, and want to donate to charity, you can deduct the distributions you take from your IRA and give them to charitable organizations.5. However, deductions only offset the federal income tax due on the distributions — and donors who take the standard deduction receive no benefitWhat is a qualified charitable deduction (QCD)?A provision in the Internal Revenue Code that allows people in their 70s and older to transfer funds directly from an IRA to a charity without any adverse tax consequencesQCDs were available before SECURE 2.0, and they were useful for tax-planning purposes. New rules under SECURE 2.0 improve the advantages of QCDs in two waysRules around QCDs are complex and are not right for everyone. For example, they reduce your adjusted gross income for other tax purposes and could affect deductions and credits you may want to claim, as well as cause the alternative minimum tax and NIIT to kick in. Be sure to check with a financial advisor or accountant to see whether this tax planning tool makes sense for your situation.SECURE 2.0 expands the definition of QLAC exemption There’s another way to avoid taking RMDs on a portfolio of your qualified retirement account that doesn’t require getting a charity involved.A Qualified Longevity Annuity Contract (QLAC) allows you to use a portion of your retirement account balance, such as a traditional IRA, 401(k), 403(b), or 457(b) plan to purchase a deferred income annuity and not have that money be subject to RMDs starting at age 73 (per the new age rules)QLAC delivers a guaranteed stream of lifetime income on a date you select. You can buy one at age 65 and start taking income at age 75; the longer the deferral period the higher the income

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