The hot weather is finally behind us and fall is here. While it’s a great time to get flower beds in order and to start the preparations for the holiday, it’s also the time for end-of-year tax planning.

Have you looked at your finances recently? Will you be paying more taxes than planned? Will your income increase because of the sale of an asset or an estate gift? Has a bond or certificate of deposit come due?

And, if you are in your 70s, one of the most critical questions to look at is how a required minimum distribution from your IRAs will affect your taxes and your income level.

Think about this.

If you are 74 years old and you have an IRA with a value of $500,000, you are required to disperse $22,000 from the account.

If you take the cash, you will spend 22 percent of that money- $4,400 – donating to Uncle Sam and the IRS. While the annual charitable giving is tax-deductible, at that level of income, you are taking a standard deduction.

So, this is where a very unique tool comes in: Qualified Charitable Donations or QCDs.

Basically, instead of taking all cash and paying taxes on that money, the distribution is used for your charitable giving planning and is donated directly from your IRA to a qualified charitable organization.

Then, you are making a difference in the world, instead of paying the government your money and the charitable donation is part of your required distribution.

Another thing to consider is that when you take a distribution from your IRA, that will affect your adjusted gross income and could increase your Medicare premiums, and could increase your Social Security taxes, putting you into a new tax bracket.

To qualify, a charity must be a certified 501(c)(3) organization by the IRS and you must be over 70.5 years old, but other than that, you simply have to talk with your financial planner and designate your non-profit of choice.

We hope the non-profit you chose will be Rescue Outreach Mission. If you were to donate just $3,500 of that required distribution to Rescue Outreach Mission, you would be providing a night in our shelter for 100 people. If you wanted to give half, you could help almost 300 people.

And you would lower your tax bill.

If you would like to learn more, I am available to meet at your convenience to discuss estate planning. While I am not able to offer financial advice – that must come from your financial planner or accountant – I can assist in helping to frame your plans, just email me at Gene.Musser@romcfl.org or call me at 407-321-8224 ext. 105.