What Is a Qualified Charitable Distribution (QCD)? And How It Can Save You on Taxes in Retirement

At Kamish & Associates, we’re always looking for ways to help you make smarter moves with your money—especially when it comes to retirement and charitable giving. One often-overlooked strategy is the Qualified Charitable Distribution (QCD). It’s a tax-savvy way to support causes you care about and reduce your taxable income at the same time.

Let’s break it down.

What Is a QCD?

A Qualified Charitable Distribution allows individuals aged 70½ or older to donate directly from their traditional IRA to a qualified charity, without counting it as taxable income.

In other words: Instead of taking money out of your IRA, paying tax on it, and then donating it, you can send the funds straight from your IRA to a charity, and skip the tax altogether.

How Much Can You Donate?

You can donate up to $100,000 per year (per person) through a QCD. If you’re married and both you and your spouse qualify, you can each contribute $100,000.

This amount can also count toward your Required Minimum Distribution (RMD), so it’s a great way to satisfy the IRS rules and give back at the same time.

Why Use a QCD Instead of Just Donating?

Here’s where it gets smart:

• Reduces Your Taxable Income: Since the money never hits your adjusted gross income (AGI), you avoid taxes on that distribution.

• Better Than an Itemized Deduction: If you don’t itemize on your tax return, a QCD gives you the benefit of a charitable contribution without needing to.

• Can Lower Medicare Premiums and Tax on Social Security: A lower AGI means less chance of income-related Medicare surcharges or taxation of Social Security benefits.

What Counts as a Qualified Charity?

Not all donations qualify. The funds must go directly to a 501(c)(3) public charity. That means:

✅ Churches, nonprofit hospitals, educational institutions

❌ Donor-advised funds, private foundations, or charitable gift annuities

We can help you verify the organization before you send anything out.

What If You Already Took Your RMD?

Unfortunately, QCDs must be made before you take your distribution to qualify. That’s why it’s important to plan early in the year—and check in with us before making any moves.

How to Set Up a QCD

It’s usually as simple as contacting your IRA custodian and requesting a direct transfer to your chosen charity. But timing and documentation matter. We recommend letting us help coordinate the transfer so everything is reported correctly on your tax return.

Final Thoughts

If you're over 70½ and want to give to charity in a tax-efficient way, QCDs are a smart tool to consider. They’re simple, impactful, and can help you reduce taxes while making a difference.

Need help setting up a QCD or reviewing your retirement tax plan? We’re here to guide you through it. Give us a call or send us a message, we’ll make sure your giving (and your taxes) are done right.

Kamish & Associates - Smart guidance. Personal service. Tax strategies that actually work.