Leverage your tax position to help NBF

If you are age 70 1⁄2 or older, please consider donating to the National Bonsai Foundation through a qualified charitable distribution (QCD).

IRS rules require you to take required minimum distributions (RMDs) each year from your tax-deferred retirement accounts. This additional taxable income may push you into a higher tax bracket and may also reduce your eligibility for certain tax credits and deductions. A QCD can eliminate or reduce the impact of RMD income.

A QCD is a direct transfer of funds from an IRA custodian, payable to a qualified charity such as NBF. Amounts distributed as a QCD can be counted toward satisfying your RMD for the year, up to $100,000, and can also be excluded from your taxable income. This is not the case with a regular withdrawal from an IRA, even if you use the money to make a charitable contribution later on. In this scenario, the funds would be counted as taxable income even if you later offset that income with the charitable contribution deduction.

Why is this distinction important? If you take the RMD as income, instead of as a QCD, your RMD will count as taxable income. Having higher taxable income can directly impact your eligibility for certain deductions and credits. For example, your taxable income helps determine the amount of your Social Security benefits that are subject to taxes. Keeping your taxable income level lower may also help reduce your potential exposure to the Medicare surtax. For more information, please contact Bobbie Alexander at 202-396-3510.