Tag: IRA

Posted on by Jan Roberg

Women and Retirement: What You Need to Know

Whether you’ve been working for several years, or just starting on your career, it’s never to soon to start planning for your retirement.

There are three cold, hard facts you need to know:

  1. Women usually live longer than men.
  2. Women generally have lower lifetime earnings than men.
  3. Women usually reach retirement with smaller pensions and assets than men.

So, the question becomes, what are you going to do about it?

On average, Social Security only replaces about 40% of your pre-retirement earnings. If you want to have a comfortable retirement, you’re going to need other income.

What do I mean by other income in retirement?

In retirement, other income would include pensions, 401(k) money, IRAs, investments like stocks, bonds, CDs, or even real estate. It could even be income from a part-time job. Just remember, the older you get, the less you’re going to want to work. Retirement funds are for the long term. It’s not your Mad Money.

What’s Mad Money?

When I was a teenager, my mother always made me carry “mad money”. It was so that if I was out on a date and things weren’t going well, I could always grab a cab and go home. Back in my time, mad money was $20.

And while “mad money” sounds like a pretty old fashioned concept, women having their own money is a pretty sound strategy for all ages. What’s crazy is that we’re in the 21st century and I’m still writing about women having their own money.

As we talk about building your assets, the first account you need is your savings – or mad money. You should have enough to cover 6 months worth of expenses in case of emergency. This isn’t your Disney World or Hawaii fund, Mad Money is your “when the sh*t hits the fan” fund.

How Do I Save for Retirement?

While the Mad Money account is probably the most important thing you need, you don’t want to not save for retirement because you didn’t reach your Mad Money goal. Some people never seem to fully fund their Mad Money accounts so I suggest that you work on both at the same time.

First, you need to set a savings goal – whether it’s 10% of your income (always a good bench mark) or whether you need to be more modest, set a goal and stick to it. Put half of your savings into your Mad Money account and the other half into a Roth IRA. A Roth IRA grows tax free, and if you have an emergency, you can take out what you put into it without penalties or taxes.

Once you’ve fully funded your Mad Money account, you can be more aggressive with your retirement funds. I don’t like to see people only put money into their 401(k)s or traditional IRAs if they don’t have any other savings. If you get hit with an emergency and need the cash, not only do you have to pay tax on that money when you take it out of your 401(k), but there’s a 10% penalty for taking it out early (before age 59 and 1/2) so you don’t want to get burned.

Mad Money is Funded, What’s Next?

First, if you’ve fully funded your Mad Money account, pat yourself on the back, that’s pretty awesome! Next, is my list of how you should save for retirement. This list is my “opinion”. If you have access to a financial advisor, it’s a good idea to talk with her (or him) for more personalized advice.

The Savings Priority List

  1. If your employer has matching funds, you want to put at least as much into your work retirement plan as your employer matches. Think about it. An employer match is a 100% return on your investment. 100%! If you put money into a savings account at your bank and get a 2% interest rate that’s considered really good. So what’s a 100%? Phantasmagorical! (That must be a real word, my spell check didn’t blink.) An additional bonus here is that 401(k) contributions aren’t taxed until you withdraw them and the earnings grow tax free. I like the employer match if you can get it.
  2. Roth IRA/Roth 401(k). If you’ve maxed out on your employer match, then my next step is to put money into a Roth IRA or Roth 401(k) if that’s an option for you. Roths don’t give you any tax advantage up front like a traditonal IRA or 401(k), but the money you invest grows tax free and when you take the money out at retirement you pay no tax on it. Tax free retirement income is really nice to have. And Roth money is a good back up to your Mad Money when life throws you a curve ball.
  3. Traditional 401(k). If you’ve maxed out your Roth contributions and still have money left for retirement savings, it’s time to go back and fill up your 401(k).

If you have a job where you’re able to fully fund your 401(k) and still have funds to invest towards retirement, then it’s seriously time to get a financial advisor. There are all sorts of awesome investment opportunities available and clearly that’s way beyond the scope of this blog post.

Here’s the thing. If you’re in your 20’s or 30’s, retirement seems really far away, and saving for retirement seems almost impossible when you’re trying to buy a house, raise a family, or pay your student loans. But remember, the earlier you start, the better off you are. And – for those of you who are much closer to retirement age – it’s never too late to start!

Posted on by Jan Roberg

Death, Taxes and IRAs

IRAs are taxable after you die.

When people talk about “death” taxes, they usually mean “estate” taxes.  Now, for 2017, there is no federal estate tax if your estate is under $5,490,000.  So for most people, you don’t have to deal with estate tax.  But IRAs are a different animal!

 

An IRA is considered to be taxable income.  So – if you die, your beneficiary will have to pay tax on that IRA money.  So, maybe you don’t care – since you’ll be dead anyway.  But if you do care about leaving a taxable legacy to your heirs, here’s a few things to think about.

 

1.  Roth IRAs are not taxable.  Not to you, not to your heirs.  (I always like Roth IRAs.)

 

2.  A lot of people sign up for IRAs but they don’t know who the beneficiary should be (or they don’t have all the information they need to complete that part of the paperwork.)   When they sign up they just put “estate” down in the beneficiary box.   This is usually a bad thing.  What happens is that your heirs wind up having to file a form 1041, an Estate and Trust tax return.  Now, if you Google “estate tax” you’ll probably find all the tax rates on estates – and you’ll read the tax brackets for if you have over $5,450,000.   (And that’s a form 706 – it’s a different animal.)

 

The 1041 form for income tax on estates and trusts is for the income earned by the estate – which includes your IRA income.  The first $2,550 is taxed at 15%, the next bracket up to $6,000 is taxed at 25%, the next bracket up to $9,150 is at 28%, then up to $12,500 is at 33%, and anything over that is $39.6%.  It doesn’t take a whole lot of money to kick your IRA income into the top tax bracket!  Just to give you a comparison – a single person won’t hit the 39.6% tax bracket until he or she reaches $418,400 in taxable income.

 

So what does this mean?  Well, if your heirs aren’t rich, they’re going to be better off if they inherit your IRA directly from you instead of from your estate.

 

3.  If your goal is to leave a legacy to your children – life insurance is better than an IRA.  (I can’t tell you how much I hate sounding like a life insurance salesman but it’s true.)  Your IRA is your retirement account – it’s supposed to be money for you to spend during your retirement.  In a perfect world, you spend it all before you die.  (And of course, have enough to enjoy a long and happy retirement.)  Life insurance provides your loved ones with tax free cash after you die.

 

This is really a personal decision on your part.  Do you want to leave something for the kids or not?   For some people that’s a major priority, for others, not at all.  It’s your choice.  But not matter what you decide, be sure to work with your financial advisor to make sure your heirs are properly listed as beneficiaries to your taxable retirement accounts.

Posted on by Jan Roberg

The Three Sexiest Retirement Savings Strategies

Great retirement planning is sexy!

Start planning now to have the retirement you choose, not the one that’s forced on you.

 

I just used the words “sexy” and “retirement” in the same sentence and I’m serious! Everybody needs to save for retirement, we all know that. That’s not sexy, that’s just a fact of life. But if you can get free money or tax free income while you’re saving – well, that makes it downright sexy!

 

So what are the three sexiest retirement savings strategies? The employer match, the Roth IRA, and the solo 401(k). Let me explain why.

 

First: The Employer Match. An employer match is where your boss matches a certain amount of your 401(k) contribution. For example: let’s say you make $50,000 a year and your employer has a 3% match. Three percent of $50,000 is $1,500. Your employer will “match” what you put in, so you’ll need to contribute at least $1,500 into your 401(k) to get the $1,500 from your employer. That’s free money to you! When you contribute to your 401(k) – it’s not counted on your tax return, but you still pay social security and medicare withholding on that money. The employer match has no withholding on it. It’s a straight contribution to your retirement savings. Free money. Free money is sexy! If you work for a company with an employer matching program, you need to get in on the action!

 

Second: the Roth IRA. A Roth IRA has no up front tax benefits to it. You put the money in after you’ve already paid tax on that money. What’s sexy about the Roth is that your investment grows tax-free. And more importantly, when you retire – you take that money out tax-free! I cannot stress just how valuable being able to access tax-free income during your retirement is! The Roth is probably the most accessible of the retirement options I’m talking about, but there are limits as to who can contribute to a Roth. Here’s a link to the IRS website showing the current limitations: Roth Limitations

 

Third: The Solo 401(k).  If you’re a solo business owner, or you and your spouse own a business together, then a solo 401(k) might be the plan for you.   For one thing – you can contribute up to 100% of your earned income (up to the maximum contribution allowed) to your 401(k).  This is great for folks who are actively trying to “catch up” on their retirement savings (and also happen to have another source of income!)

 

A solo 401(k) also allows you to make an “employer match” of up to 25% of your earned income.  You see, when you work for yourself, you’re both the employer and the employee!

 

So how do those numbers work?  Let’s say you own an S Corporation and you pay yourself a wage of $50,000. You can make an elective deferral – that’s what they call your 401(k) contribution – of up to $18,000 (or $24,000 if you’re 50 or older.)   That means your W2 is going to show that you have $32,000 of taxable income.  ($50,000 minus the $18,000 that you applied towards your 401(k).  You’ll have paid social security and medicare taxes on the full $50,000 – because you still pay the FICA on your retirement savings, just like if you worked for someone else.

 

But now, you’re still allowed to make an employer match of up to 25% of your earned income – in this case, I mean wages.  So, you could contribute another $12,500 towards your 401(k) as an employer match TAX FREE!  You don’t pay regular income tax on that money because it’s a business expense, right?  So it’s deducted from your business income as an employee benefit (where you’re the employee.)   And, since it’s an employer match – you don’t pay FICA either.  How cool is that?

 

Saving for retirement is necessary for everybody, but if can manage to swing tax free savings or tax free income it makes saving much more exciting.  You might even call it sexy!

 

 

Posted on by Jan Roberg

Roth IRA Facts

Roth IRA distributions are tax free (as long as you've met the requirements.) Earnings on your Roth are tax free. If you die, your heirs inherit the money tax free. I just love things that are tax free!

Roth IRA distributions are tax free (as long as you’ve met the requirements.) Earnings on your Roth are tax free. If you die, your heirs inherit the money tax free. I just love things that are tax free!

________________________________________________________________________

I write about ROTH IRAs quite a bit, but someone recently asked me to explain ROTH IRAs so here we go:

 

A ROTH IRA is best defined by how it’s different from a regular (Traditional) IRA.  Here are the differences:

 

  1. You cannot deduct contributions to a ROTH IRA, so whatever money you invest into a Roth—you’re going to pay income tax on the year you invest it.
  2. If you satisfy the requirements, your ROTH distributions are tax-free.
  3. You can still make contributions to a Roth IRA even after you reach age 70 and ½.
  4. You can leave your money in your Roth IRA as long as you live.  (This is important for people who want to leave behind money for their heirs.  It also means you don’t have any required minimum distributions (RMDs) like you have with Traditional IRAs.  )
  5. You must designate the IRA as a Roth when you set it up (the default IRA setting is for a Traditional IRA.)

 

So why am I so gung ho about Roth IRAs?  I like things that are tax free.  The distributions are tax-free, the earnings are tax-free, and if you die, they go to your heirs tax-free.  That’s a lot of tax-free going on there.

 

Here’s another thing I really like about the Roth IRA—not only are the distributions tax-free, but the distributions don’t count towards your Adjusted Gross Income.  I realize I’m going into Tax Geek Speak here, but hear me out, because this is important.

 

Let’s say you’ve got a kid in college.  You haven’t saved enough money for tuition and you need $10,000 for the tuition payment.  Now you can take that money out of your Traditional IRA and not pay a penalty (because you won’t pay the penalty for early withdrawals when you use it for tuition), but you’ll still have to pay the regular income tax on it.  So if you’re in the 25% tax bracket, you’ll pay an additional $2500 in taxes to take that $10,000 out of your Traditional IRA.

 

Now, if you need the whole $10,000 then you’ll need to actually take $13,333 out and withhold $3,333 in order to have the $10,000 and still pay your taxes on it.  Plus, the IRA money that you take out goes on your tax return as income.  So if you’re applying for financial aid, your aid will be reduced because you’re showing $13,333 more in income than if you didn’t take any money out of your IRA.  (And you could use the financial aid—you couldn’t afford the tuition, right?)

 

Now, if you had a Roth IRA, you’d take out that $10,000 tax-free.  The $10,000 wouldn’t have an impact on your tax return and therefore, wouldn’t have the same negative impact on your FAFSA application.  See why I like the Roth IRA?

 

Here’s another example of where it’s useful.  Let’s say you’re retired and receiving Social Security income.  If your money is all in a traditional IRA or pension, your extra income can make your social security taxable—up to 85% of your Social Security income can be taxed.  But if you take money out of your Roth IRA, that will have no effect on whether your Social Security gets taxed or not.  The more you have in your Roth IRA, the more opportunity you’ve got to maneuver.

 

If you’re looking for a place to put some retirement money, my first choice is a Roth IRA.  Start saving today, you’ll be glad you did.

 

For more information about Roth IRAs, here’s a link to the IRS website:  http://www.irs.gov/Retirement-Plans/Traditional-and-Roth-IRAs

Posted on by Jan Roberg

How Much Can I Contribute to My 401(k)?

Piggy Bank

Photo by Danielle Elder on Flickr.com

Good question! Starting in 2012, you can put up to $17,000 away for retirement in a 401(k) plan. This figure also holds for people who have 403(b) plans and any of the 457 plans as well. If you happen to be over 50, you’re allowed what’s called a catch-up contribution so you can add an additional $5,500, making your total 401(k) contribution $22,500 for 2012.

Remember, money that goes into a 401(k) is tax-deferred so although you’re not paying tax on the money now, you will pay tax on it when you do withdraw it for retirement. If you take the money out of the plan before you reach the age of 59 ½, there’s a 10% additional penalty on top of the regular tax that you’ll pay. As much as I think 401(k) plans are a great deal, if you think that you’re going to need the money before you retire, you might want to re-think your contribution.

A good rule of thumb is that a person should be contributing 10% of his or her income into a retirement program. If you can afford 15%, that’s better, but 10% for sure.

Some companies have what’s called a Roth 401(k)—it basically works like a Roth IRA: you pay your income tax on your retirement plan contributions now, but when you take the money out later it’s tax free. Roth 401(k) plans have the same limits as regular 401(k) plans. If you have access to one of these plans you should seriously consider using it. For anyone who is in a 15% or lower tax bracket, choosing the Roth should be a no-brainer. If you’re in the 25% tax bracket and under 40, I’d still go with the Roth. After that, I’d start doing some serious considerations of what my future plans were, how early I’d want to retire, and other factors.

If your income is below $58,000, you can make fully deductible IRA contributions in addition to your 401(k) contributions (For married couples it’s $92,000.) This gives you some wiggle room. If you’re not comfortable committing to your 401(k) contribution rate, you can make up the rest with an IRA if you’ve got the funds at the end of the year.

If you haven’t started saving for retirement yet, this is the time to start.

Posted on by Jan Roberg

Cancelling Your Roth IRA Conversion

undo

Photo by voxtheory on Flickr.com

Whoa, that Roth IRA conversion you did last year seemed like such a great idea at the time didn’t it? I know I thought it was pretty wonderful. But things change and with the stock market tanking, your portfolio is probably not worth what it was back when you did the conversion. For some people, now might be a good time to – here’s the important IRS word: Recharacterize your IRA.

Basically, to recharacterize your IRA, you’re taking all the money that you “converted” and put it back into your Traditional IRA. You will need to talk with your financial adviser and fill out the proper forms to do this. You also have a deadline: you must complete the transaction by October 17th, so you don’t have a lot of time to work with here.

Once you recharacterize your Roth IRA, it will be like it never happened, so you’ll have to amend your tax return to eliminate the Roth conversion that you reported last April and claim a refund. But that might be the smartest tax move you ever made. Let’s take a look at an example:

Porky Pig is in the 25% tax bracket and he made a $10,000 Roth IRA conversion for tax year 2010. The cost of the conversion to Porky was $2500. But now, because of the stock market, Porky’s Roth IRA is only worth $8500. It’s like he paid $325 too much in tax. Is that enough for Porky to make a change? For me it is, but for some people it might not be.

Let’s take a look at Porky’s friend Bugs Bunny. Bugs did a larger conversion; he rolled over $50,000 into a ROTH IRA. Bugs has a tax rate of 33% so he paid $16,500 for his Roth IRA conversion. Bugs also had a bigger portfolio drop than Porky, his Roth IRA went down by 20% to $40,000. Bugs paid $3,300 too much in taxes for his Roth conversion. I would think that $3,300 has got to be too much tax by anyone’s standards.

So what should you do if you made a conversion and your portfolio tanked? First, you’ll want to make an analysis similar to Bugs and Porky’s. What’s the true cost to you in terms of taxes? Don’t forget how much it will cost to amend returns and pay your broker fees. If it makes sense to recharacterize, then by all means, do so.

Don’t get me wrong, I’m still a big fan of Roth IRAs and I still think that the Roth IRA conversion is a great tool, especially for people whose incomes are too high to make regular Roth contributions. It’s just that if recharacterizing your Roth can save you a large amount of tax money, you really should consider doing it.

Can you do a Roth conversion again later? Yes, but you’ll have to wait for at least 30 days before you do it. You’d be reporting the conversion on your 2011 return (unless you wait until 2012.) You would not get the advantage of being able to split the tax payment between two years.

I hope this sheds a little light on the situation. Remember, the deadline to recharacterize your Roth IRA to a Traditional IRA is October 17. Don’t wait until the last minute, remember that your financial adviser will need time to process the paperwork.

Posted on by Jan Roberg

IRAs for Dummies

Writer

 

Okay first and foremost, you’re not a dummy!  But I wanted to make a simple post with simple explanations about IRAs.  This isn’t the be all end all of IRA stuff.  But hopefully it will give you a little clue about them.

A traditional IRA lets you put money away for retirement and you can get a tax deduction for the money that you put into the IRA.  For example:  if you’re in the 25% tax bracket and you put $1,000 into an IRA then you will save $250 in taxes for the year you put the money in.  (The tricky part is that there are limits as to how much is deductible if you or your spouse have a retirement plan at work.  There are also complications if you’re using the married filing separately status.  I’m not covering that here.  If this sounds like you, give me a call and I can help you figure it out.)

A Roth IRA lets you put money away for retirement but you don’t get a tax deduction for the money you put in.  $1,000 into a Roth IRA gives you no tax savings.  (There are income limits for contributing to a Roth, the phase out starts at $167,000.  If you’re under that income level, you’re fine.)
Generally, the most you can contribute to an IRA in a year is $5,500.  If you’re married, you can contribute $5,500 for you and $5,500 for your spouse, even if your spouse doesn’t work.  You can’t put more money into an IRA than you earned (so if you only made $3,000 that’s going to be your maximum contribution.)   If  you’re over 50 years old, you can contribute up to $6,500 to your IRA.
Remember, the $5,500 is a maximum.  It’s fine to contribute less.  Most accounts are going to want at least a $1,000 to open, but you don’t have to have $5,500 to put into an IRA. Its not an all or nothing kind of investment.
When you take money out of your traditional IRA, the money you take out is taxable.  So, once again if you’re in the 25% tax bracket and you take $1,000 out of your IRA then you’ll pay $250 in taxes.  The concept is kind of like:  take a tax deduction now/pay taxes later.  Here’s where it’s tricky…if you take the $1,000 out before you are 59 1/2, not only will you pay the $250 in taxes, but you’ll also pay a 10% penalty making the total tax you pay $350.  There are exceptions to the penalty if you use the money to buy a house or pay tuition.  You will pay the tax no matter what, but sometimes you can escape the penalty.
With the traditional IRA you are playing a gambling game.  You’re betting that your taxes are higher now and will be lower when you retire.  That’s a good bet for many people.  So the traditional IRA is a good thing.
When you take money out of your Roth IRA, the money you take out is not taxable.  So, if you take out $1,000 from your Roth and you’re in the 25% tax bracket, you will pay zero tax on that $1,000.  If you take the $1,000 out before you turn 59 1/2, you may pay a 10% penalty on the earnings but not on the whole $1000.  Roth IRA means tax-free income later.
I really like the Roth IRA for a couple of reasons:
  1. It’s especially good for young people.  The Roth is a great savings tool that can be used for buying a home and paying college tuition.  If you invest in a Roth when you’re in the 15% tax bracket but wind up taking the money out when you’re in the 25% tax bracket:  zowie!  You win!  It’s like a little tax bonus.
  2. Even if you’re more mature and already in the 25%  tax bracket or higher, I still like the Roth.  When you’re retired and receiving social security payments, your social security isn’t taxable until you cross a certain income threshhold.  Once you cross that line, your social security becomes taxable and it’s like you’re paying double taxes.  For example:  let’s say your pension and social security put you right at the line where if you make any more money your social security would be taxable.  Once you cross that line you’ll pay tax on your social security income.  If you take money out of your traditional IRA, let’s use the $1,000 example again, and you’re in the 15% tax bracket, you won’t pay 15%–you’ll pay even more because now your social security will be taxed too.  It’s not exactly double, it’s more like one and  a half times more.  (Kind of a funky equation.)  Bottom line:  once you start receiving social security payments, extra income is actually taxed at an even higher rate than your real tax rate because they start taxing your social security.    Ouch!  Ask any senior citizen who’s been hit with this.  It hurts.
  3. Now  if your retirement income is so far over the threshold that you don’t need to worry about additional tax (because you’ve maxed out your taxable social security), or if it’s nowhere near the threshold, then it’s not really an issue for you.  But for many seniors, extra taxable income can be a big problem for them.  The Roth IRA can be a real lifesaver when you’re older.
If it’s not completely obvious yet, I’m a big Roth fan.  That said, if you need a tax deduction now, then traditional IRA is the way to go.  For example:  one  year, I needed to lower my personal income by $310 to claim a $2000 tax credit.  That’s a no brainer, of course I spent $310 on a traditional IRA to save $2,000.  I put the rest of my retirement money into a Roth.  You can do stuff like that when and if you need to.
There’s so much to know about IRAs and it can be really confusing.  This little post is just the tip of the iceberg.  For detailed information about IRAs, the IRS has a book called Publication 590.  Here’s a link to it:  Pub 590
Okay, I confess, that publication looks a little intimidating.  It’s 110 pages long.  But if you look at page one, the chapters and sections are set up based upon the questions people ask.  Look for your question and it will tell you the right page to find your answer.  It’s not so scary when you know that in advance.
Posted on by Jan Roberg

Qualified Charitable Distributions

 

Qualified Charitable Distributions help save on taxes

If you are over 70 and 1/2, you may be able to take advantage of a Qualified Charitable Distribution.

 

UPDATED FOR 2018

 

The Qualified Charitable Distribution (also known as a Charitable IRA Rollover) is is a great strategy for seniors to reduce their taxable income under the new tax code.

 

What is a Qualified Charitable Distribution (or QCD)?  If you’re 70 and 1/2 or   older, you’re required to make required minimum distributions (RMDs) from your Individual Retirement Account (IRA.)  Even if you don’t need the money, you have to take it out of your retirement account and you have to pay tax on it.  If you don’t, the penalties are even worse than any tax you’d have to pay. Additionally, many seniors don’t get the benefit of claiming their charitable donations on their income tax returns because they don’t have enough other things to deduct like mortgage interest. With the new, higher standard deduction for 2018, even fewer seniors will be able to itemize their deductions.

 

The Qualified Charitable Distribution helps with this problem by allowing you to take money out of your IRA and make a direct contribution to a charity.  The distribution counts towards your RMD and it’s tax free to you because it went to the charity.  That’s a win/win situation!

 

Another advantage to the QCD is that the income from the distribution never shows up as income on the face of your tax return.  This is really helpful for people who may be able to claim other deductions or benefits based on having a lower Adjusted Gross Income (or AGI.)  For example:  The taxability of your Social Security income is based upon your AGI, so for some people, a lower AGI could reduce how much of their Social Security income gets taxed.

 

Can you make a contribution for more than your RMD?  Yes you can.  You can actually make a charitable distribution of up to $100,000 from your IRA with no federal income tax impact.  $100,000 – that wasn’t a typo.  If you’re in a financial position to make a donation like this, that would be $100,000 to a charity of your choice with no limitations as to its deductibility because it’s part of an IRA charitable rollover.

 

Can you make a QCD if you’re less than 70 and 1/2 years old?  No, I’m afraid not.  You must be at least 70 and 1/2 at the time you make the distribution.

 

If you’re interested in making a Qualified Charitable Distribution, talk it over with your financial advisor and your charity.  You’ll want to make sure that it’s done correctly and you’ll want to keep good records in case there’s ever any question about your RMDs.

 

Can I still take a charitable deduction on my tax return for my QCD?   No, the QCD will be exempt from tax so you can’t claim it as an additional deduction.

 

The Qualified Charitable Deduction is one of the best ways for seniors to reduce their tax liability under the new tax code. If charitable donations are something you do, then definitely check out the QCD.