If you are over 70 ½ years old and looking to make a contribution to your favorite charity, you should consider a Qualified Charitable Distribution (QCD) from your IRA. QCDs are easy to do, and have several benefits:
- Tax Savings: QCDs are not included in taxable income, which helps keep you from jumping into a higher tax bracket. This also keeps you from losing other tax deductions that have income phaseout limitations
- Required Minimum Distributions: Many IRAs have a required minimum distribution (RMD) for individuals 73 and older. QCDs count toward your RMD, while also lowering your taxable income.
- Impactful Giving: Because there is no tax deducted from QCD the charitable organization receives the full amount of your distribution.
- Higher limits: For 2025, an individual can make QCDs up to $108,000. Charitable donations on your 1040 are limited to a percentage of your adjusted gross income, which limits how much you can contribute and take as a deduction.
- Less Work: QCD reporting is easy, usually just a form you fill out for your IRA custodian. Other charitable donations require itemizing and receipts… ugh, paperwork.
Preparing to make a QCD:
- QCDs can only be done for the current calendar year (a QCD made in 2025 calendar year is applied to your 2025 tax return)
- The QCD must be made directly from your IRA custodian to an eligible charitable organization
- Make sure to confirm that the charitable organization is a 501(c)(3) and is eligible to receive QCDs
Qualified Charities:
- Churches, Synagogues, Mosques & other religious organizations
- Most non-profit charitable organizations
- Most non-profit education organizations, including colleges & museums
- Non-profit hospitals & medical research organizations
Conclusion: If you have money sitting in an IRA and you are thinking about sending some to your favorite charity, a QCD is a great way to make that contribution. It helps you do a good thing while at the same time lowering your tax bill and satisfying any RMD requirements you may have. Just give your IRA custodian a call, they will send you the forms to get started!
