Helping Organizations in Need

Paul Miloe, CRPS®

Paul Helping Organizations In Need

The effects of COVID-19 on our lives, families, friends, and financials cannot be understated. In 2020, we’ve collectively faced a situation unlike any experienced prior for decades if not generations. While we all long for advancements in science and medicine (along with a healthy dose of faith) to get things back on track, the current struggle is quite real.

Despite their varying missions, charities and non-profits have been seriously affected during this crisis via a one-two punch. Following the increase in the IRS standard deduction, some taxpayers have reconsidered charitable giving now that a deduction is unlikely to be realized. What was win-win, is now solely based on the original intent of sharing with those in need. Charities were provided a partial save with the ability for taxpayers age 70 ½ and older to donate their Required Minimum Distributions (RMDs) via Qualified Charitable Distribution (QCD) from their IRAs. However, following the CARES Act in April 2020, RMDs were waived for the current year, and the related consequence may be less QCDs processed.

The good news is that although the CARES Act waived RMDs, the ability to do a QCD remains open in 2020. Although the RMD isn’t mandated by the IRS, any IRA owner 70 ½+ can still process a QCD and help support their given charity or non-profit. Values may be down, and human nature often leads us to hold our cards tight during these difficult times, but giving, even when it hurts, can make a tremendous difference to those in need.

While the IRS RMD formula establishes a maximum, partial QCDs are permitted, so you have flexibility in your QCD election. Processing a QCD in 2020 won’t directly reduce the amount of a future RMD, but it will lower the account balance. Likewise, some have asked if the RMD waiver in 2020 will require a double RMD in 2021? No. The formula remains the same – Year-end Balance/IRS Factor = RMD. With funding secured, charities can continue their missions to enhance our communities while remaining solvent for the better days to come.

To learn more about QCDs, please contact us. We’ll be here to help you help others! Take care.

Paul Miloe

CRPS®

Paul Miloe has been actively working as a financial advisor with Albitz/Miloe & Associates, Inc. since 1996. He graduated from University of California, Santa Barbara in 1994 with a Bachelor of Science degree. Paul is a Chartered Retirement Plans SpecialistSM. His focus centers on personal and retirement planning, life insurance, annuities, college savings plans, and senior issues, including long-term care insurance. In addition to his role as CCO of our firm, Paul is also a Branch Manager for Cetera Advisor Networks, LLC (member FINRA/SIPC). Paul, and his wife, Mary, are lifelong residents of the South Bay, and along with their two children, and are active in their community via sports, school, and community service.

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This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.