Year-End Deadlines and Reminders
For those who are charitably inclined and/or are subject to Required Minimum Distributions (RMD), it is important to note that the year-end deadline is just around the corner. LPL has given us a deadline of December 15th to guarantee performance of time sensitive year-end instructions, including execution of required minimum distribution (RMD), qualified charitable distributions (QCDs) and gifting of appreciated securities.
Any paperwork received after LPL's December 15th deadline will be handled on a "best efforts" basis. Please contact your primary relationship manager as soon as possible to make arrangements.
What is RMD?
Required minimum distribution (RMD) is the amount of money that must be taken out of an individual’s retirement account each year so that the IRS can collect tax on these monies which had been growing tax deferred. RMD applies annually to those age 72 and older as well as most beneficiaries who inherited IRA accounts prior to January 1st 2020 . Those who miss taking their RMD are subject to penalties.
What is a QCD?
A qualified charitable distribution, also referred to as a QCD - is a tax free distribution of taxable assets from a traditional IRA or beneficiary IRA paid directly to a qualified charity.
Qualified Charitable Distribution Rules
- For eligible tax years, individuals age 70 1/2 or older can exclude up to $100,000 from gross income for donations paid directly to a qualified charity from their IRA.
- The donation counts towards any IRA required minimum distributions for the year.
- The amount excluded from gross income isn’t deductible.
- Married individuals filing a joint return may exclude up to $100,000 donated from each spouse’s own IRA.
If you have any specific questions about RMD or would like to discuss your own investment strategy or financial planning needs, we welcome you to call us at 302.234.5655 or email us at firstname.lastname@example.org to set up a mutually convenient date/time to speak.