Are You Over 70½, Have an IRA, and Write Checks to Charity?
If so, there's a good chance you're making charitable gifts without receiving a tax deduction. That’s because over 90% of taxpayers now take the standard deduction—which means they don’t itemize, and therefore can’t deduct charitable contributions made by check or credit card.
But there’s a smarter way to give: the Qualified Charitable Distribution (QCD).
What Is a QCD?
A Qualified Charitable Distribution allows individuals age 70½ or older to donate directly from their IRA to a qualified charity, without counting the distribution as taxable income. That means the IRS effectively shares in your gift by lowering your tax bill.
Benefits of QCDs
Tax-Free Giving
QCDs are excluded from your taxable income—unlike regular IRA withdrawals.Counts Toward Your RMD
If you're 73 or older, QCDs can satisfy part or all of your Required Minimum Distribution (RMD).Helps Reduce Income-Related Costs
Lower taxable income can help you avoid Medicare premium surcharges and the Net Investment Income Tax.No Need to Itemize
Even if you take the standard deduction, you still get the full tax benefit from a QCD.
How It Works
You must be age 70½ or older at the time of the distribution.
The annual QCD limit is $100,000 per person ($200,000 per couple if both qualify).
The funds must go directly from your IRA to a qualified 501(c)(3) charity—you can't take possession of the funds first.
QCDs must come from a traditional IRA or inherited IRA (not from a 401(k)).
Example
You're 75 and required to take a $30,000 RMD this year. You plan to give $15,000 to charity anyway. Instead of writing a check, you direct $15,000 from your IRA as a QCD. That $15,000 satisfies part of your RMD and doesn’t count as taxable income—a win-win.
What to Watch Out For
No Gifts in Return: You can't receive anything in exchange for your QCD—not even a dinner or small gift.
Deadline is December 31: The QCD must be processed by year-end to count for that tax year.
Documentation Matters: Get a receipt from the charity and notify your tax preparer that part of your IRA withdrawal was a QCD.
Coordinating QCDs with Other Tax Strategies
QCDs are especially valuable if:
You no longer itemize deductions
You're trying to reduce your AGI for Medicare or tax purposes
You're doing Roth conversions and want to manage your taxable income
If charitable giving is part of your values and you’re drawing from your IRA in retirement, a Qualified Charitable Distribution is one of the most powerful tools available—helping you give back and lower your taxes at the same time.