Making a Difference While Saving on Taxes:
The Power of Qualified Charitable Distributions
by Jay Poole – Financial Advisor
As a CERTIFIED FINANCIAL PLANNER® professional, I often work with clients who are passionate about giving back to their communities. One of the most tax-efficient ways to support charitable causes (especially for those age 70½ and older) is through a Qualified Charitable Distribution (QCD). If you’re looking to reduce your taxable income while making a meaningful impact, a QCD might be the perfect strategy.
What Is a Qualified Charitable Distribution?
A QCD is a direct transfer of funds from your Individual Retirement Account (IRA) to a qualified charity. This transfer can count toward your Required Minimum Distribution (RMD) but is excluded from your taxable income. This can be a powerful benefit for retirees looking to manage their tax liability.
Key Benefits of a QCD
1. Tax-Free* Giving
Unlike regular IRA withdrawals, which are taxed as ordinary income, QCDs are not included in your taxable income. This can help:
- Lower your Adjusted Gross Income (AGI)
- Reduce the impact on Social Security taxation
- Minimize exposure to Medicare premium surcharges
2. Satisfy Your RMD
If you’re 73 or older (as of 2026), you’re required to take RMDs from your IRA. A QCD allows you to satisfy all or part of your RMD without increasing your taxable income.
3. No Need to Itemize
Many taxpayers take the standard deduction and miss out on itemized charitable deductions. With a QCD, you can still receive a tax benefit for charitable giving even if you don’t itemize.
4. Support Causes You Care About
QCDs allow you to directly support qualified 501(c)(3) organizations, including churches, educational institutions, and public charities. You can make a meaningful impact while optimizing your financial plan.
2026 Update: Expanded Opportunities
The IRS now allows a one-time QCD election of up to $53,000 to fund a charitable remainder trust, charitable gift annuity, or charitable remainder annuity trust—a new option for those looking to combine philanthropy with income planning. [irs.gov]
Important Rules to Know
- You must be age 70½ or older at the time of the distribution.
- The maximum annual QCD amount is $111,000 per individual.
- The donation must go directly from your IRA to the charity.
- Only traditional IRAs qualify (not 401(k)s or other retirement plans).
- The charity must be a qualified 501(c)(3) organization.
Is a QCD Right for You?
If you’re retired, charitably inclined, and looking for ways to help reduce your tax burden, a QCD can be a smart strategy. It’s especially beneficial for:
- High-income retirees
- Those who don’t itemize deductions
- Individuals facing large RMDs
Let’s Talk Strategy
If you’re considering a QCD, I’d be happy to help you evaluate whether it fits into your broader financial plan. Together, we can ensure your giving is both impactful and tax-efficient.
*May be subject to state, local, and alternative minimum tax.
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
RMDs are generally subject to federal income tax and may be subject to state taxes.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Jay Poole and not necessarily those of Raymond James.
VICE PRESIDENT
Pentas Wealth Management
Financial Advisor
Raymond James
PHONE: 386.623.6591
EMAIL: Jay.Poole@RaymondJames.com