The holiday season brings something special—that warm feeling when we support causes close to our hearts. Whether you’re scrolling through Giving Tuesday posts or planning your year-end donations, there’s a charitable giving strategy you might not know about that could transform how you give while saving significantly on taxes.

When Retirement Meets Philanthropy

Here’s something most people don’t realize: your IRA and your charitable giving can work together beautifully through something called a Qualified Charitable Distribution, or QCD. If you’re over 70½ and facing required minimum distributions (RMDs), this strategy could be a game-changer.

What Exactly Is a Qualified Charitable Distribution?

Think of a QCD as a direct bridge between your IRA and your favorite charity. Instead of withdrawing money from your IRA, paying taxes on it, and then writing a check to charity, you send the funds directly from your IRA to the organization you support.

This simple shift makes all the difference. The distribution counts toward your RMD, but here’s the kicker—it never shows up as taxable income on your return.

Why QCDs Beat Traditional Charitable Giving

Let me paint a picture. Say you need to withdraw $10,000 from your IRA for your required distribution. Under the traditional approach:

• You withdraw the $10,000 (it’s now taxable income)
• You donate it to charity
• You might get a deduction—but only if you itemize

With today’s high standard deduction ($13,850 for individuals, $27,700 for married couples filing jointly in 2024), many people can’t itemize anymore. That means your charitable donation might not provide any tax benefit at all.

Enter the QCD: That same $10,000 goes directly from your IRA to charity. It satisfies your RMD, never becomes taxable income, and you don’t need to itemize to benefit. You’ve just avoided taxes on $10,000 while supporting a cause you believe in.

Real-World Impact: Where Your Donations Can Go

Many of us support incredible organizations making a real difference. From missionaries serving in Panama, Estonia, and Haiti to powerful groups like Voice of the Martyrs—which advocates for persecuted Christians worldwide—and International Justice Mission, which fights to end human slavery, there’s no shortage of worthy causes.

Using a QCD means more of your money reaches these organizations instead of going to the IRS first.

Who Should Consider a QCD?

This strategy shines brightest if you:

• Are 70½ or older
• Have a traditional IRA with required minimum distributions
• Don’t need the full RMD for living expenses
• Regularly give to charity
• Take the standard deduction instead of itemizing

Even if you’re not required to take RMDs yet, you can still use QCDs once you hit 70½—they count toward future RMDs and reduce your taxable IRA balance.

Making It Happen: The Practical Side

Implementing a QCD is straightforward, but you need to follow the rules:

1. Contact your IRA custodian – Request the specific forms for a qualified charitable distribution
2. Choose your charity – Make sure it’s a 501(c)(3) organization (donor-advised funds and private foundations don’t qualify)
3. Set the amount – You can donate up to $105,000 per year through QCDs (as of 2024)
4. Keep records – Maintain documentation showing the direct transfer from IRA to charity

The key detail? The funds must go directly from your IRA to the charity. If the check comes to you first, it doesn’t qualify—even if you immediately forward it to the organization.

The Tax Benefits Add Up

Beyond avoiding income tax on the distribution, QCDs offer other advantages:

• Lower adjusted gross income (AGI) – This can help you avoid Medicare premium surcharges and reduce taxes on Social Security benefits
• Preserve itemized deductions – By lowering your AGI, you might increase the value of other deductions
• Simplify tax filing – No need to track charitable contributions for itemization

Planning Throughout the Year

While the holiday season naturally inspires generosity, QCDs work year-round. Some strategic considerations:

• Make donations early in the year to satisfy RMDs before automatic distributions kick in
• Split donations among multiple charities if you support several causes
• Coordinate with your tax advisor to optimize timing

A Season of Intentional Giving

There’s something deeply satisfying about aligning your financial strategy with your values. A Qualified Charitable Distribution lets you redirect money that would otherwise go to taxes toward causes that matter to you—whether that’s supporting missionaries abroad, fighting injustice, or helping your local community.

The beauty of this approach is its simplicity. You’re taking money that must come out of your IRA anyway and ensuring it makes the maximum impact possible.

Questions About QCDs?

Navigating charitable giving strategies can feel complex, but you don’t have to figure it out alone. If you’re wondering whether a QCD makes sense for your situation or need help with implementation, professional guidance can make all the difference.

This giving season—and every season—you have the power to make a meaningful impact while being smart about taxes. That’s a win for you, a win for the causes you care about, and a win for the people they serve.

Ready to explore how QCDs can work for your charitable giving strategy? Schedule a personalized consultation to discuss your specific situation and create a giving plan that aligns with both your heart and your financial goals.

Wishing you a season filled with purposeful giving and financial wisdom!