If you're 70½ or older and sitting on a traditional IRA you don't really need, there's a move that lets you give to charity and shrink your taxable income at the same time.
It's called a qualified charitable distribution, or QCD, and it's one of the few tax breaks that survived the recent rule changes largely intact.
You ask your IRA custodian to send money directly from your account to a qualified charity.
The amount counts toward your required minimum distribution, but it never shows up as income on your tax return.
That last part matters more than most people realize.
Why it matters now: the standard deduction jumped to $15,000 for singles and $30,000 for married couples filing jointly in 2025.
That means far fewer people itemize, so the old strategy of deducting charitable gifts is worthless for most households.
A QCD sidesteps the problem entirely because it reduces your adjusted gross income rather than your taxable income after deductions.
A smaller AGI can mean less of your Social Security gets taxed, smaller Medicare Part B and Part D premiums, and protection from the net investment income tax.
For higher-income retirees, those knock-on effects can quietly add up to thousands of dollars a year.
You can give up to $108,000 per person in 2025, or $216,000 for a couple with separate IRAs.
The money has to move directly from the IRA to the charity.
If you withdraw it yourself first and write a check, the IRS treats it as a normal taxable distribution, and you lose the benefit.
You must be at least 70½ on the day of the gift, even if your RMD doesn't start until 73.
The charity has to be a legitimate 501(c)(3), and you can't use a QCD for a donor-advised fund or a private foundation.
You also won't get a charitable deduction for the same gift, but that's fine because you're already excluding it from income.
One timing trick worth knowing: you can make a QCD in January for the current tax year and have it count against that year's RMD.
Some custodians let you set this up online in a few minutes.
Others still require a paper form, so give yourself a cushion before the December 31 deadline.
The strategy shines brightest for retirees who don't need every dollar from their IRA and already give to a church, university, or local nonprofit.
Instead of writing checks from a bank account, you route the same generosity through the IRA and watch your tax bill fall.
Anyone weighing this should run the numbers with a tax professional, since every situation differs.
But for a lot of older Americans, a QCD is the rare move that helps charity and your own bottom line at once. **Our take:** The QCD is one of the most overlooked tools in retirement planning, mostly because it requires a small amount of paperwork and a conversation with your custodian.
Final Thoughts
If you're charitably inclined and over 70½, it's worth an hour of your time before year-end.