Charity

Fix RMD Tax Problems With QCD

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irs taxes tax form

You’ve spent a lifetime saving for retirement, and you did a really great job. So great, in fact, that you don’t need to take money out of your IRAs. But, you’ve turned 70 1/2, and now the IRS is forcing you to withdraw money from your IRA every year in the form of a Required Minimum Distribution, or RMD. Is there any way to get around having to take an RMD? Mitigating Your RMD’s Affect On Your Taxes The IRS gave you years of tax relief on the funds in your IRA. They only did that to encourage you to save for retirement. Now, that you’re retired (or at least retirement aged) they want their money now in the form of taxes on your IRA withdrawals, but if you played your cards right, you might not ever need to withdraw, and the IRS would have to wait longer for that money. The IRS hates waiting.  The RMD keeps this from being the case. Once you turn 70 1/2 years old, you have to take some money out every year, and the government is there, waiting to tax it. Unfortunately, there is no way to get out of having to take …

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How To Save On Taxes And Help Other People For Free

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This year, many people find themselves in a position were donating money to charity just doesn’t seem like a good idea given their current situation.  But, there is still a way to help without spending a cent, and as a bonus, you can save on your taxes at the same time. Many charities run thrift stores.  If you haven’t thought it through all the way, it works like this. Someone donates a dresser.  The dresser is worth $40.  The charity puts it in its thrift shop with a price tag of $30.  Someone buys the dresser for $30.  Since the item was donated, the entire $30 is profit (minus the cost of running the store.)  So, it is like donating $30 in cash.  As a double bonus, it is possible that the person shopping in the thrift store is also having a tough time this holiday season and getting a good deal on a dresser can benefit them as well. Here is the great part for your pocketbook.  You get to deduct the $40 from your taxes.  If you are in the 30% tax bracket, that is like getting $12 from Uncle Sam.  Sure, you could have sold the dresser …

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