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“WHERE’S THE QUALIFIED charitable distribution on Mom’s tax return?” Mom had never before executed a qualified charitable distribution, or QCD. Her tax return was 41 pages, and we weren’t sure where to find it.
There was a long pause. “I forgot your mom had made QCDs as I prepared her return,” allowed her tax preparer. “I’ll need to recalculate her taxes.”
A QCD can be a tax-efficient way to donate money for those who are charitably inclined—but only if it’s correctly documented on your tax return.
“LOOK RIGHT HERE, Charlie. If you click on the background of Windows Vista in just the right place, the script that I developed will launch and give you access to all my online passwords. You will need to know that if something were to happen to me.”
Dad was a self-taught computer nerd and paranoid about securing passwords. The year was 2007.
Dad died in 2018. I didn’t remember where to click to get his passwords.
I WAS AT WORK WHEN my daughter called. “Grandpa was taken to the hospital in an ambulance, and you need to meet Mom and Grandma there as soon as you can.”
I entered the hospital room 45 minutes later, and I saw my mom in tears standing next to my dad’s lifeless body. Dad’s hair and face were spotted with wood chips and dirt, and he was wearing a torn flannel shirt and old blue jeans.
Comments
Great article. I'm surprised at how few people know about QCDs or take advantage of them. At my church, there is only one person doing QCDs, but I would guess that there are 30 to 40 people who probably qualify for them. I wonder how many people dutifully collect chartible giving receits each year, provide them to a tax preparer, but end up simply using the standard deduction, so they never actually realize their chartible giving is not providing any tax benefit.
Post: QCDs and Me
Link to comment from March 7, 2024
Nice summary. I think the math on retirement is sometimes made more complicated than it needs to be. The reality is, you can't account for every contingency, and you don't necessarily need to. The older I get, the more I realize a simple plan that's easily followed is better than a complex plan that can't be followed.
Post: Is It That Hard?
Link to comment from October 21, 2023
When I calculated how much to put in my QCD set-aside account, I wasn't too worried about precision. My wife and I are going to leave my church as the beneficiary of the account anyway. An easy way to come up with a number is use something like https://ficalc.app/. For your Withdrawal Strategy on the tool, select "constant dollar amount" and put in your desired QCD (the amount you want to give to charity in the year you turn 70.5 years old) and click the box to adjust for inflation. You can adjust the account allocation to anything you're comfortable with. FIcalc will use historical data to calculate a success rate. Then keep adjusting the initial portfolio value to cover your joint lifetime at a level you feel comfortable with. Once you have that initial portfolio value, discount it from 70.5 years old to your age today. That was roughly my initial amount in my QCD set-aside account. There are probably a million ways to estimate the amount (all of them are estimates that won't match reality), but that's one way to do it.
Post: Easy to Miss
Link to comment from August 17, 2023
I may suggest our tax preparer add that question to his annual questionnaire as well. Great tip.
Post: Easy to Miss
Link to comment from August 17, 2023
Thanks for the correction!
Post: Easy to Miss
Link to comment from August 17, 2023
Ken, thanks for a thought-provoking article. As a retired engineer, I can probably give you a run for your money when it comes to being frugal—sometimes way too frugal. I have frequently thought about the fact that I might be penny wise and pound foolish in many of my spending decisions. I think you should get the new mower, but I also know it would be hard for me if I were in your shoes.
Post: Nothing Saved
Link to comment from July 11, 2023
Yes, I was surprised to find I have over 150 passwords and usernames. And you are right; the security of our information can easily be compromised by others. I have had my usernames and passwords listed in several cyber break-ins over the past few years. 1Password alerts you right away when this happens to allow you to quickly change login information.
Post: Passing Them On
Link to comment from July 7, 2023
Jeff, thanks. I will check out AskLeo.com. And you are right about the cost of a password manager, the value of the information, and the value of our time. They are well worth it, in my opinion.
Post: Passing Them On
Link to comment from July 7, 2023
These are all great points I had not considered. And I use 1Password as well.
Post: Passing Them On
Link to comment from July 7, 2023
Great point. We use 1Password and my wife has access to all our accounts.
Post: Passing Them On
Link to comment from July 7, 2023