If you're 70½ or older and you have a traditional IRA, there's a move that can shrink your tax bill and help a cause you care about at the same time.
It's called a qualified charitable distribution, or QCD, and it lets you send money straight from your IRA to a charity.
Normally, any withdrawal from a traditional IRA counts as taxable income.
With a QCD, the money goes directly to a qualified charity and never shows up as income on your return.
That can keep you in a lower tax bracket and reduce how much of your Social Security gets taxed.
For the 2025 tax year, you can move up to $108,000 per person this way, up from $105,000 in 2024.
A married couple with separate IRAs can each do it, doubling the household total.
The transfer must go directly from the IRA custodian to the charity.
If the check lands in your hands first, the IRS generally treats it as a taxable withdrawal.
You must be at least 70½ when the gift is made.
You don't have to be taking required minimum distributions yet, but once you are, a QCD can satisfy all or part of that obligation.
That's a big deal for retirees who don't need the RMD cash but are forced to pull it out and pay tax on it anyway.
Here's where it gets interesting for people who don't itemize.
Since the 2017 tax overhaul raised the standard deduction, many retirees no longer deduct charitable gifts at all.
You get the tax benefit without itemizing, because the money simply never counts as income in the first place.
The charity must be a legitimate 501(c)(3) organization, and it can't be a private foundation or a donor-advised fund.
Gifts to political groups or to individuals don't qualify.
You'll also want to keep the receipt and a record of the transfer in case the IRS asks questions.
One more wrinkle: QCDs count toward your RMD, but only if you make the gift before or during the year you're required to take it.
If you've already taken your full RMD for the year, a later QCD won't undo that.
Financial planners often suggest batching.
If you give to several charities, you can direct a single larger QCD and let each organization receive its share.
Some custodians charge nothing for this; others have a small processing fee, so it's worth a quick call.
It's a long-standing provision that a lot of eligible retirees simply overlook, often because their tax preparer never brings it up.
If you're charitably inclined and sitting on a traditional IRA, it's worth asking about before year-end.
Our take: the QCD is one of the few tax breaks that rewards generosity without asking you to jump through hoops.
Final Thoughts
If you're over 70½ and giving anyway, running the gift through your IRA instead of your checking account can be the difference between a deduction you can't use and income you never have to report.