The Royce CPA Firm

Certified Public Accountant specializing in personal, non-profit and forensic accounting and tax preparation

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Bigger Tax Breaks for Giving from Your IRA

If you’re age 70½ or older, you have a powerful—and often overlooked—way to support the causes you care about while cutting your tax bill: the Qualified Charitable Distribution, or QCD.

What Is a QCD?

A Qualified Charitable Distribution allows you to transfer funds directly from your IRA to a qualified charity—like your church, alma mater, or local nonprofit.

Here’s why it’s so powerful:

  • The money never hits your bank account
  • It doesn’t count as taxable income
  • And you still get credit for the full gift (even though you’re not itemizing)

It’s one of the few strategies where skipping a deduction actually works in your favor.

What’s New in 2025?

The annual QCD limit for 2025 has increased to $108,000 per person.

Married? If both you and your spouse have IRAs, you can each make a QCD of up to $108,000—that’s $216,000 of potential tax-free giving in one year.

5 Big Benefits of Using QCDs

  1. Lower Your Taxable Income
    Unlike regular IRA withdrawals, QCDs don’t count toward your adjusted gross income (AGI) or modified AGI (MAGI). That helps you avoid higher tax brackets, credit phaseouts, and income-based penalties.
  2. Bypass the New Itemized Deduction Limits
    Starting in 2026, OBBBA limits itemized charitable deductions with new AGI floors and thresholds. But QCDs are exempt from those rules, making them a more stable long-term giving tool.
  3. Satisfy Your RMD Without the Tax Hit
    If you’re 73 or older, QCDs can count toward your Required Minimum Distribution (RMD)—so you meet your obligation without increasing your taxable income.
  4. Preserve Other Tax Benefits
    Keeping your AGI lower can help you avoid:

    • Medicare premium surcharges
    • The 3.8% net investment income tax
    • Phaseouts on deductions like SALT (state and local taxes)
  5. Reduce Your Taxable Estate
    By moving money out of your IRA through QCDs, you lower the future taxable value of your estate—a subtle but smart move for long-term planning.

Is a QCD Right for You?

If you’re over 70½, don’t need all your IRA funds for personal spending, and want to support charitable work in a tax-efficient way, a QCD may be one of the best tools in your financial toolkit.

Let’s Talk Before Year-End

There are a few setup steps and reporting details to get right, so let’s make sure you’re set up for success. If you’re charitably inclined—and ready to maximize your giving and minimize your tax bill—we’re here to help you put QCDs to work.