Jo Anna Fellon, Marcum’s Private Client Services Leader, was interviewed for a Forbes article on the pros and cons of a qualified charitable deduction.
By Julie Jason, JD, LLM
A qualified charitable distribution is a way to benefit charity while using money that would otherwise be taxed when withdrawn. There are limits and rules, but nonetheless, a QCD is definitely worth considering — with the help of your tax adviser.
“Annual required minimum distributions, or RMDs, are normally taxed as ordinary income and are includable in a taxpayer’s adjusted gross income,” according to Jo Anna Fellon, a partner and the National Leader of Private Client Services at Marcum LLP, a national accounting and advisory services firm.
“This is important to consider since the additional 3.8% tax on net investment income, taxes on Social Security benefits, Medicare premium expenses, as well as some tax credits are calculated based on a taxpayer’s AGI,” Fellon said. “The additional increase to a taxpayer’s AGI in a year when a RMD is taken can drive up the annual tax bill in a meaningful way.”