If you're 70½ or older with money sitting in a traditional IRA, there's a move that can shrink your taxable income and fund a cause you care about 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.
Instead of taking a withdrawal from your IRA, paying tax on it, and then writing a check to a charity, you ask your IRA custodian to send the money directly to the charity.
The amount never lands in your checking account, so it never shows up as taxable income on your return.
For the 2025 tax year, you can move up to $108,000 per person this way.
If you're married and both of you have IRAs, that's up to $216,000 combined.
The limit adjusts for inflation each year, so it tends to creep up over time.
You have to be at least 70½ when the transfer happens — not just turning 70 that year.
And because the money must go straight from the custodian to the charity, a check made out to you personally won't qualify, even if you hand it over the same day.
Why does this matter more than a regular charitable deduction?
Because most retirees now take the standard deduction, which for 2025 is $15,000 for single filers and $30,000 for married couples filing jointly.
Unless your itemized deductions clear that bar, a normal charitable gift gives you no tax benefit at all.
A QCD sidesteps the problem entirely by keeping the money out of your income in the first place.
There's a second benefit that catches people by surprise.
Those required minimum distributions that kick in at age 73 can push you into a higher bracket and inflate your Medicare premiums.
A QCD counts toward your RMD for the year, so it can knock down both problems at once.
The mechanics are simpler than they sound.
Contact your IRA provider, ask for their QCD form, name the charity, and give them the amount.
Most large custodians have this down to a short online request.
You'll want to keep the confirmation letter, because the charity may not send you a receipt showing the gift came from your IRA — and the IRS wants that paper trail if anyone asks.
QCDs only work with traditional IRAs and inactive SEP or SIMPLE IRAs, not 401(k)s or Roth IRAs.
The charity has to be a legitimate 501(c)(3), and you can't use the transfer to fund a donor-advised fund or a private foundation.
You also can't double dip — if the money comes out as a QCD, you don't get to claim it again as a charitable deduction.
One more wrinkle: the one-time $54,000 option to fund a charitable gift annuity or remainder trust through a QCD, introduced a few years back, is now indexed for inflation too.
It's a niche tool, but it lets some retirees lock in lifetime income while still moving IRA money out of their taxable estate.
If you're charitably inclined and sitting on a traditional IRA, routing the gift directly from the account can beat writing a check and claiming a deduction you probably won't use anyway.
Final Thoughts
It won't help everyone, and it won't wipe out a tax bill, but for the right household it's free money that would otherwise go to the IRS.