If you are over 70½ and giving money to charity, there is a decent chance you are doing it the hard way.
A qualified charitable distribution, or QCD, lets you send money straight from an IRA to a charity.
For households that take the standard deduction, that last part matters more than it sounds.
After the 2017 tax law raised the standard deduction, most retirees no longer itemize.
If you do not itemize, your charitable gifts do nothing for your taxes.
Meanwhile, required minimum distributions keep forcing money out of your IRA whether you need it or not, and every dollar lands on your tax return.
The transfer goes directly from your IRA custodian to the charity.
It counts toward your required distribution for the year.
And because it never touches your income, it can keep you under thresholds that trigger higher Medicare premiums, taxes on Social Security benefits, and the new senior deduction phaseouts.
The rules are specific, so pay attention.
You must be at least 70½ on the day of the transfer.
The limit is $108,000 per person for 2025, and it is indexed for inflation.
Married couples with separate IRAs can each use the full amount.
The money must move directly to the charity, never through your checking account first.
Ask your custodian for their specific form, because the process is not the same at every brokerage.
Donor-advised funds and private foundations are out.
And you cannot take a charitable deduction for the same dollars on your return, which is fine, since most people are not itemizing anyway.
The IRS does not want this reported on your return as a deduction.
Instead, your custodian reports the distribution on Form 1099-R, and you exclude it from income.
If your tax software asks, the QCD is handled differently than a normal withdrawal, so do not just click through the screens.
There is also a quiet benefit for people who do not need the money.
You can use a QCD to satisfy your required distribution without adding to your taxable income, which can help preserve other tax breaks tied to income limits.
Transfers are not retroactive, and custodians get swamped in December, so start the paperwork in November if you can.
If you are charitably inclined and sitting on a traditional IRA, this is one of the few tax moves that rewards you for giving and costs you nothing to set up.
Final Thoughts
Call your custodian this week, not in late December when everyone else has the same idea.