Get a Double Benefit From Your Charitable Contributions! (but only if you’re old)

If you’re over 70½, have an IRA, and give significantly to charitable organizations – pay attention! I’m writing about the Qualified Charitable Distribution – QCD – a great tax benefit.

Here are the specifics: you can do a direct distribution from an IRA to a charity without it being a taxable event to you, and, when you’re a bit older, this charitable distribution will do double duty and also count toward your RMD or required minimum distribution.

Here’s the Savings

Instead of distributing funds to yourself from an IRA, which would be a taxable event, and then writing a check, you route the money directly to the charity, with NO taxable event on the distribution. If you’re accustomed to making significant charitable gifts, this is the way to do it.

There’s another consideration here though: since you are not taxed on your QCD, you cannot deduct it as a charitable contribution when itemizing deductions on Schedule A. If your charitable deduction amount is enough to make Schedule A a better choice for you than the standard deduction, that’s about the only circumstance where you’d rather distribute and pay taxes before giving charitably.

Some specs to make this work:

• The funds must come from your IRA, not a qualified plan you have at your workplace. If that’s where your money is, then do an IRA rollover in the amount of the charitable gift.
• An IRA is an Individual Retirement Account — if you have a spouse who is also age 70½, your spouse can also make a QCD.
• Once you get to the age at which RMDs are necessary (currently 73 in 2026), your Qualified Charitable Distribution can also count as a Required Minimum Distribution.
• The maximum QCD is $111,000 in 2026.  This amount is indexed for inflation.
• To make a QCD you need to contact your IRA custodian with instructions as to how much to send out and to whom.

If you’re looking to send $25/month to a charity then a QCD probably isn’t the way to do it. But if you support your house of worship to the tune of, say, $6000/year, then you can do a simple $6000 QCD rather than giving $500/month.

A Companion piece to this one:  You Are Generous – Give Creatively.