If you're 70½ or older with money in a traditional IRA, there's a tax trick that lets you give to charity without ever touching your taxable income.
It's called a qualified charitable distribution, or QCD, and it's one of the few remaining ways to move money without the IRS taking a cut.
You ask your IRA custodian to send money directly from your account to a qualified charity.
Because the money never passes through your hands, it doesn't count as income.
That's different from taking a withdrawal, paying tax on it, and then writing a check.
The timing matters more than most people realize.
Once you hit 73, required minimum distributions kick in, and those RMDs are taxable whether you need the cash or not.
A QCD can satisfy all or part of that requirement, which means you could wipe out a tax bill you'd otherwise owe.
You can give up to $108,000 per person from your IRA this way, and that limit is indexed for inflation.
Married couples with separate IRAs can each use the full amount.
The money has to go straight from the custodian to the charity — a check made out to you, even if you hand it over immediately, doesn't qualify.
QCDs don't work with 401(k)s, 403(b)s, or most other workplace plans.
You'd need to roll that money into an IRA first.
And you can't use a QCD to fund a donor-advised fund or a private foundation while you're alive — it has to go to a public charity.
Because a lot of retirees give to their church, alma mater, or local food bank anyway.
If that money is sitting in a traditional IRA, the QCD route can be more efficient than writing a check from a savings account.
You keep your standard deduction intact and still support the causes you care about.
One more detail worth flagging: starting this year, the QCD limit gets a one-time bump for certain gifts.
If you're considering a larger donation, it's worth a call to your custodian before December 31, since these transfers can take a few weeks to process.
The paperwork is simpler than you'd expect.
Most major brokerage firms have a form on their website, and some let you set up recurring QCDs so you don't have to remember each year.
Just confirm the charity is eligible — the IRS has a search tool — and keep your receipt.
For retirees who already tithe or donate regularly, this isn't a loophole so much as a cleaner path to the same destination.
The tax code rewards giving this way, and the window closes each December. **Our take:** Most retirees give from the wrong account.
If you're charitably inclined and sitting on a traditional IRA, it's worth 20 minutes with your custodian to see whether a QCD fits your situation better than a plain check.
Final Thoughts
The rules are specific, so run your own numbers or talk to a tax pro before moving money — but the potential savings are real for people who plan ahead.