QCDs: A Charitable Win for Non-Itemizers
Many retirees give to charity but no longer itemize because the standard deduction is higher for most taxpayers. A Qualified Charitable Distribution (QCD) lets you support charities and get a real tax benefit—even when you don’t itemize.
Why QCDs matter now:
Most clients take the standard deduction, so their regular charitable gifts don’t reduce taxable income.
A QCD sends money directly from your IRA to a qualified charity, keeping that amount out of your adjusted gross income (AGI).
Lower AGI can also reduce the taxability of Social Security, exposure to the 3.8% NIIT, Medicare IRMAA surcharges, state income tax, and various phase-outs.
How it works (in plain English):
You must be age 70½ or older on the date of the gift.
The transfer must go custodian-to-charity from an IRA (traditional or inherited).
QCDs can satisfy all or part of your Required Minimum Distribution (RMD) for the year.
There’s an annual per-person limit (indexed for inflation). Married couples with separate IRAs can each use their own limit.
You’ll still need a standard acknowledgment letter from the charity for your records.
Where QCDs shine:
You give the same dollars you already planned—but reduce taxable income instead of claiming a deduction you’d never use.
Useful when managing AGI targets (e.g., keeping Medicare premiums down).
Quick guardrails:
Gift must clear the custodian by year-end to count for that tax year.
Don’t take possession of the funds—no reimbursements, no credit cards.
Keep QCDs separate from other IRA distributions to simplify reporting.
Action steps:
Confirm eligibility and target amount (coordinate with your RMD and AGI goals).
We’ll prepare custodian instructions for a direct IRA-to-charity transfer and verify the charity’s status.
Obtain and file the acknowledgment letter and ensure the 1099-R/QCD is reported correctly on your return.
Want to see how a QCD would affect your AGI, Medicare brackets, and income tax? We’ll run the numbers and draft the custodian letter for you.