Retirees often want to support their favorite causes, but taxes can complicate the process. One powerful strategy – now more valuable than ever – is the Qualified Charitable Distribution (QCD).
What is a QCD?
A QCD allows IRA owners age 70½ or older to transfer funds directly from their traditional IRA to a qualified charity. These transfers can satisfy part (or all) of required minimum distributions (RMDs) starting at age 73 while reducing taxable income.
Why It Matters Now
Recent tax changes make QCDs especially attractive:
-
Reduce taxable income – Unlike itemized deductions, QCDs lower your adjusted gross income (AGI), which affects dozens of tax provisions.
-
Lower Medicare premiums – Keeping AGI below thresholds helps avoid costly IRMAA surcharges.
-
Extra senior tax perks – Combining QCDs with senior deductions can amplify tax savings.
-
No need to itemize – Benefits apply even if you take the standard deduction.
Key Details to Remember
-
Each IRA owner can give up to $108,000 in 2025 ($216,000 for couples).
-
Funds must be sent directly to a qualified charity—not to you first.
-
QCDs can’t be used for donor-advised funds or gala tickets with perks.
-
Timing is critical: Do QCDs before taking RMDs to ensure they count.
QCDs let retirees turn required withdrawals into meaningful gifts while keeping taxes lower. At Liberty One Wealth Advisors, we help clients align charitable giving with long-term financial goals.
This material is for informational purposes only and should not be considered personalized financial advice. Please consult a financial professional about your individual situation
