If you're 73 or older and you've been writing checks to charity from your bank account, you may be leaving money on the table.
There's a rule buried in the tax code called a qualified charitable distribution, and it lets you send money straight from an IRA to a charity.
The charity gets the full amount, and that withdrawal never shows up as taxable income.
Here's why that matters more than it sounds.
Once you hit 73, the IRS requires you to take a minimum withdrawal from your traditional IRA every year, whether you need the cash or not.
That required minimum distribution gets added to your taxable income, which can nudge you into a higher bracket, raise your Medicare premium, or shrink other benefits tied to your income.
A qualified charitable distribution, often shortened to QCD, sidesteps that whole problem.
You ask your IRA provider to send money directly to the charity.
Because it goes straight from the account, it counts toward your required withdrawal but never lands on your tax return as income.
You don't itemize, you don't need receipts for a deduction, and the standard deduction stays intact.
For 2025, you can move up to $108,000 per person from an IRA this way, and a married couple with separate IRAs can each do it.
That cap adjusts for inflation most years.
You have to be at least 70½ to make one, though the required withdrawals don't start until 73.
One detail trips people up constantly: the money has to go directly from the IRA to the charity.
If you take the distribution yourself and then write a check, it's just a normal taxable withdrawal, and you'd have to itemize to get any deduction.
Ask your provider for the right form and confirm they'll cut the check to the charity, not to you.
But 401(k)s, 403(b)s, and most workplace plans do not allow this move while you're still working and holding the account.
You'd need to roll that money into an IRA first, which is worth a call to your plan administrator.
The strategy shines for people who don't itemize.
Since the standard deduction went up years ago, most retirees no longer get any tax benefit from writing charity checks.
A QCD gives you the benefit anyway, because it works on the income side rather than the deduction side.
You can also use it to satisfy your required withdrawal for the year, killing two obligations with one transfer.
You can't send a QCD to a donor-advised fund, a private foundation, or a political group.
It has to go to a qualified public charity.
And the transfer can take a couple of weeks to process, so don't wait until late December to start the paperwork.
Keep the acknowledgment letter from the charity showing the amount and date, since the IRA provider's statement alone may not be enough if questions come up.
If you're charitably inclined and sitting on a traditional IRA, run the numbers with your tax preparer before year-end.
The savings can be real, and the paperwork is lighter than most people assume.
The bottom line: this is one of the few tax breaks that rewards doing something you probably already wanted to do.
Final Thoughts
It won't make anyone rich, but for retirees who give regularly, it's free money left sitting on the table.