Many high-net-worth individuals also align RMD planning with philanthropic goals using a qualified charitable distribution (QCD). “By electing to have your RMD flow directly to a public charity, you can offset the RMD income with a charitable deduction in one step,” Mezzanotte says, adding that the current limit of QCD’s in one year is $100,000.”
Adds Musumeci, “Keeping AGI lower may preserve other tax benefits at risk of phase-out and is a preferred approach compared to taking a taxable IRA distribution then claiming an itemized deduction for the charitable contribution.”
Among other tactics Lamb recommends, if your client is not a 5 percent or more owner of a business and continues working past age 70½, and your client’s 401(k) permits it, your client may be exempt from RMDs until he or she quits working.