If you're 70½ or older with a traditional IRA, there's a tax maneuver that has been sitting in the federal code for years and still flies under the radar for most retirees.
It's called a qualified charitable distribution, or QCD, and it lets you send money straight from your IRA to a charity without it ever counting as taxable income.
Standard deduction amounts jumped again for 2025, which means fewer retirees itemize their taxes.
If you don't itemize, your charitable donations generally don't lower your tax bill at all.
A QCD sidesteps that problem entirely because the money never shows up as income in the first place.
Once you hit 70½, you can direct up to $108,000 per person in 2025 from a traditional IRA directly to a qualified charity.
The transfer has to go straight from the account to the organization.
If the check lands in your hands first, the IRS treats it as a normal withdrawal, and you lose the benefit.
The deadline pressure is real for a different group: anyone 73 or older who has already started taking required minimum distributions.
An RMD you don't want can push you into a higher bracket, raise your Medicare Part B and Part D premiums through IRMAA surcharges, and make more of your Social Security taxable.
A QCD made before or during the year can satisfy part or all of that RMD while keeping the distribution out of your adjusted gross income.
Each spouse can direct up to $108,000 from their own IRA, meaning a household could move $216,000 to charity this year.
Starting in 2024, the limit also indexes to inflation, so it should creep higher over time.
Don't try this with a 401(k) or a Roth IRA.
QCDs only work from traditional IRAs and inactive SEP or SIMPLE IRAs.
You also need to confirm the charity qualifies — most churches, hospitals, and public nonprofits do, but donor-advised funds and private foundations generally don't.
The charity should send an acknowledgment stating no goods or services were received.
One more wrinkle worth knowing: if you're 70½ or older, you can make a one-time election to fund a charitable gift annuity or remainder trust through a QCD, up to $54,000 in 2025.
That's a newer option that lets you lock in lifetime income while still getting the charitable tax treatment.
The catch is that most people learn about QCDs too late, usually after they've already written a check from their checking account and lost the tax advantage.
If you're charitably inclined and sitting on a traditional IRA you don't need for living expenses, this is one of the few moves that helps you and the charity at the same time.
Ask your IRA custodian for their QCD form before you write another personal check to a nonprofit.
The paperwork takes minutes, and the tax savings can run into the thousands.
Final Thoughts
Just confirm the details with a tax professional for your specific situation, since everyone's bracket and RMD math is different.