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Share the Love This Valentine's Day: Who would have thought a QCD could be a romantic gesture!

Share the Love This Valentine's Day: Who would have thought a QCD could be a romantic gesture!

February 14, 2024

Valentine's Day could be filled with chocolate hearts and roses – but this Valentine's Day, let's spread the love that truly lasts. How? Opening our hearts to worthy charities can be amplified with a powerful tool called the Qualified Charitable Distribution (QCD).

Remember that warm, fuzzy feeling of giving back? Imagine doubling it, knowing you're not just helping a cause but also benefiting your own financial future. That's the romance of the QCD. Everyone feels the love.

What is a QCD?

It's a simple yet powerful strategy for donors aged 70 ½ and older. Instead of paying income taxes on a portion of your required minimum distribution (RMD) from your IRA, you can direct that sum directly to qualified charities. Think of it as a direct donation from your IRA, bypassing your taxable income.

Why is it a Valentine's Day match made in heaven?

  • Double the Impact: Your donation stretches your charitable giving while minimizing your tax burden. Think of Cupid's arrow hitting the charity and your financial well-being.
  • Flexible Giving: Choose any qualified charity that resonates with you and your loved ones. Support animal shelters, fight for environmental causes, empower children, or give to your church, parish or temple; these are just a few examples.
  • Reduce Taxable Income: By directing a portion of your RMD to charity, you can potentially lower your taxable income, resulting in lower taxes or moving you to a lower tax bracket. Talk about a sweet financial bonus!
  • Simplify Tax Filing: QCDs simplify your tax filing by excluding the donated amount from your taxable income. There is no need for complicated deductions or itemizing – just pure, straightforward giving. *You must inform your CPA or tax professional of the QCD. The 1099 you will receive does not reflect that a QCD was done, so verbal confirmation is necessary, along with proof.

Beyond Valentine's Day:

Remember, spreading love and generosity doesn't have to be confined to one day. QCDs can be used up to $100,000 annually, allowing you to consistently support the causes you care about while managing your RMDs tax-efficiently.

Ready to share the love?

Talk to our Dixon Financial Group advisors about incorporating QCDs into your gifting strategy. We can help you navigate the specific details and maximize the benefits for you and the charities you love.

This Valentine's Day, go beyond chocolates, roses, and cards. Opt for a gift that keeps on giving: the gift of compassion, the gift of impact, and the gift of a brighter financial future. Let's make this a season of love, not just for each other, but for the causes that improve our world.

Remember, a QCD-powered donation can be your Cupid's arrow, hitting the bullseye of generosity and financial wisdom. So, spread the love, share the knowledge, and make this Valentine's Day (and beyond) genuinely memorable.

Happy Valentine's Day and happy giving!

David S. Dixon, CFP®

Jacob S. Bierstedt, CFP®, ChFC


P.S. Consult your financial advisor to discuss your situation and ensure a QCD is the right choice. But trust us, the potential benefits for you and your favorite charities are worth exploring! The Dixon Financial Group, LLC advisors are not tax professionals; please consult a tax professional to discuss the impact a QCD could have on your taxes.

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