If you're 70½ or older and you have money sitting in a traditional IRA, there's a tax move that a lot of retirees still don't know about.
It's called a qualified charitable distribution, or QCD, and it lets you send money straight from your IRA to a charity without ever counting it as taxable income.
Normally, when you pull money out of a traditional IRA, the withdrawal gets added to your taxable income for the year.
But with a QCD, the money goes directly from your IRA custodian to a qualified charity.
Because you never touched it, the IRS doesn't count it as income.
You don't get a charitable deduction, but you also don't pay tax on the withdrawal — and that trade-off often works out better.
For 2025, you can move up to $108,000 per person per year through QCDs, and that cap is indexed for inflation.
If you're married, each spouse can use their own IRA and their own limit.
That means a couple could direct more than $200,000 to charity in a single year without triggering a tax hit.
The detail that trips people up is the age.
You can start making QCDs at 70½, which is earlier than the age when required minimum distributions kick in.
Once you hit RMD age — currently 73 for most people — you're forced to withdraw a certain amount from your IRA each year whether you need the money or not.
A QCD can count toward that required amount, so you can satisfy the RMD without adding a dollar to your taxable income.
Why does this matter so much for ordinary households?
Because a lot of retirees give to their church, a local food bank, or a favorite nonprofit anyway.
If you're writing those checks from a taxable account or from cash, you might be missing a chance to shrink your tax bill at the same time.
The money has to go directly to the charity, though.
If it lands in your checking account first, the IRS treats it as a normal withdrawal, and the trick is gone.
Contact your IRA custodian and ask for their QCD form or process — most major brokers have one.
Get the charity's exact legal name and tax ID.
Request the check be made out to the charity, not to you.
Keep your receipts and the custodian statements, because you'll want documentation if questions come up.
And remember that not every account qualifies; QCDs work with traditional IRAs and inactive SEP or SIMPLE IRAs, but not with 401(k)s while you're still working for that employer.
The catch is that this strategy rewards people who plan ahead.
It won't help you after the year ends, and it doesn't make sense if you need the money yourself.
But for retirees who are charitably inclined and worried about their tax bracket, it's one of the few moves that lets you give more while keeping less of your income on the government's radar.
Our take: this is one of those rare rules that actually puts money back in your pocket without a catch, and far too many retirees never hear about it because nobody's selling anything.
If you give to charity and you're past 70½, it's worth one phone call to your broker to see if it fits your situation.
Final Thoughts
Small paperwork, potentially real savings.