As you plan for retirement—or find yourself enjoying it already—you may be looking for ways to give back while also making smart tax decisions. If you’re age 70½ or older, there’s a powerful tool available that allows you to do both: the Qualified Charitable Distribution (QCD).

A Qualified Charitable Distribution is a direct transfer of funds from your IRA (Individual Retirement Account) to a qualified charity. Unlike regular withdrawals from your IRA, QCDs are excluded from your taxable income, even if you don’t itemize deductions on your tax return.

To take advantage of this tax benefit:

• You must be 70½ years or older at the time of the distribution.
• The distribution must go directly from your IRA to a qualified charitable organization—not to you first.

This strategy is especially valuable if you’re no longer itemizing deductions due to the increased standard deduction but still want to support causes you care about.

As of 2025, you can transfer up to $100,000 per year through a QCD and exclude that amount from your taxable income. However, under the SECURE 2.0 Act, this annual limit is now indexed for inflation. For 2025, that limit has increased to $108,000.

If you’re filing jointly, your spouse can also contribute up to the same amount from their own IRA, potentially doubling the benefit for couples.

QCDs offer several financial and tax advantages:

• Reduces your adjusted gross income (AGI), which can lower your overall tax liability and help you avoid certain Medicare premium surcharges or taxation on Social Security benefits.
• Counts toward your Required Minimum Distribution (RMD), but without the tax hit.
• Supports your favorite charities, allowing you to make a significant impact.

• The receiving organization must be a qualified 501(c)(3) charity. Donor-advised funds and private foundations do not qualify.
• Funds must be transferred directly from your IRA custodian to the charity.
• The distribution must occur by December 31st to count for that tax year.
• You must maintain documentation of the QCD for tax filing purposes.

Whether you’re managing your retirement income or planning your giving strategy, QCDs can be an incredibly effective tool. At Wilson Accounting Group, we specialize in personalized tax planning services, including:

• Evaluating whether QCDs are the right fit for your financial situation.
• Ensuring your charitable contributions meet IRS requirements.
• Coordinating directly with your IRA custodian for accurate recordkeeping.

If you’re over 70½ and interested in maximizing your charitable impact while reducing your tax burden, we’re here to help. Our experienced tax professionals can walk you through the entire QCD process—and ensure you’re making the most of every opportunity.