If you are age 70+, you may consider making your donation directly from your Individual Retirement Account (IRA) to take advantage of certain tax benefits.
Contributing directly from your IRA to a nonprofit—known as a QUALIFIED CHARITABLE DONATION (QCD)—
is one of the most tax-efficient ways to give once you reach age 70½. Because the money goes directly to the charity, it never hits your bank account and is never reported as taxable income. This “above-the-line” exclusion offers several strategic advantages that a standard cash donation does not.
Making a Qualified Charitable Donation
1. Satisfies Your Required Minimum Distribution (RMD)
If you are age 70+, you are generally required to take a minimum amount out of your IRA each year and pay taxes on it.
• THE BENEFIT: A QCD counts toward satisfying your RMD for the year. By directing that money to a charity instead of taking it as a personal withdrawal, you avoid the spike in taxable income that typically comes with an RMD.
2. Lowers Your Adjusted Gross Income (AGI)
Standard charitable deductions are “below-the-line,” meaning they reduce your taxable income only after your AGI is calculated. A QCD, however, lowers the AGI itself. A lower AGI can provide secondary “hidden” savings:
• MEDICARE PREMIUMS: High-income surcharges (IRMAA) for Medicare Part B and Part D are based on your AGI. Keeping this number lower can help you avoid higher monthly premiums.
• SOCIAL SECURITY TAXATION: Lowering your AGI can reduce the percentage of your Social Security benefits that are subject to federal income tax.
3. Saves Itemizing
Since the Tax Cuts and Jobs Act of 2017, the standard deduction is quite high ($32,200 for joint filers in 2026). Most people no longer itemize their deductions.
• THE BENEFIT: If you take the standard deduction, a normal cash gift to charity provides little to no tax break. A QCD provides a full tax benefit regardless of whether you itemize because the money is simply excluded from your income from the start.
