What is a QCD?
A QCD is a distribution that goes directly from an IRA to a qualified charity which provides potential tax advantages because QCDs can satisfy Required Minimum Distributions (RMDs) and are excluded from taxable income.
QCDs are allowed after you turn 70.5, and allow you to transfer up to $108,000 per individual per year from your IRA to a qualified charity in 2025.
This is especially advantageous when you are subject to RMDs because, if you make a QCD before or as part of your RMD
QCD amount counts toward satisfying your RMD for the year
QCDs are excluded from your AGI
So, if your RMDs are taking you above your preferred tax bracket or IRMAA tier and you are charitably inclined, you may want to consider QCDs.
Example: If your RMD for the year is $10,000 and you make a $5,000 QCD, only $5,000 of the remaining RMD must be withdrawn as taxable income.
Note: Timing matters
A QCD must be processed before any taxable RMD withdrawals to be excluded from taxable income.
If you withdraw your RMD first and then make a QCD, the withdrawal will be fully taxable, and the QCD won’t reduce your taxable income for the RMD.
How to model a QCD in Boldin
STEP 1: Navigate to My Plan > Expenses and Healthcare > Disbursements
STEP 2: Press add a Disbursement
STEP 3: Select January of the desired year for the start and stop date
STEP 4: Select "deductible”
STEP 3: Press Save
Only Deductible Disbursements entered in January will reduce the RMD. If there is residual RMD required, the planner will satisfy the requirement in December.
Note: Insights > taxes > Gross taxable income by source chart will include the RMD full amount and not the partial amount. However the net taxable income will not include the Deductible Disbursement.