Qualified Charitable Distributions (QCDs) Explained

💼 What Is a QCD?

A Qualified Charitable Distribution (QCD) allows individuals age 70½ and older to donate directly from their IRA to a qualified charity. The donation counts toward your Required Minimum Distribution (RMD) but is excluded from your taxable income.

✅ Key Benefits of QCDs

  • Satisfies all or part of your RMD

  • Lowers taxable income, potentially reducing tax brackets and IRMAA premiums

  • Allows giving even if you don’t itemize deductions

  • Can help manage exposure to Social Security taxation

📆 When Can You Use a QCD?

  • Starting at age 70½, even if you're not yet taking RMDs

  • Annually, up to $100,000 per person (indexed for inflation starting in 2024)

  • Must go directly from IRA custodian to the charity

📃 Requirements to Qualify

  • Must be age 70½ or older at the time of distribution

  • Must be made from a Traditional IRA (not from a 401(k) or Roth IRA)

  • Charity must be a qualified 501(c)(3) organization

  • Cannot go to donor-advised funds or private foundations

👀 Watch-Outs

  • QCDs do not also count as a charitable deduction—it’s either/or

  • If you already took your RMD for the year, a later QCD won’t offset it

  • Coordinate with your advisor or tax preparer to report correctly on Form 1099-R and tax return

🌟 Pro Tip:

Use QCDs early in the year to satisfy your RMD and avoid accidental over-withdrawals.

This resource is for educational purposes only and does not constitute tax or financial advice. Please consult a qualified professional before making financial decisions.

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Tax Bracket Management in Retirement