Charitable Giving Through Your IRA
A Tax-Smart Way to Support Your Favorite Charity, Church, or Alma Mater
If you're 70½ or older, you have a unique opportunity to support charities through your IRA. And if you haven’t yet reached that special age, send this to someone who has.
It's called a Qualified Charitable Distribution (QCD), also known as an IRA charitable rollover. This significant giving option allows one to direct funds from your IRA tax-free to a qualified nonprofit organization—including a charity that is important to you.
For donors aged 73 or older, QCDs can also count toward your Required Minimum Distribution (RMD)—the annual amount you are required to withdraw from your IRA. Rather than taking those funds as income and paying taxes on them, you can send them directly to a charity.
What is a Qualified Charitable Distribution (QCD)?
A QCD allows individuals aged 70½ or older to donate up to $108,000 per year directly from their traditional IRA to a qualified charity. This excludes the distribution from taxable income. This enables you to support a cause important to you while potentially reducing your tax liability.
- You must be age 70½ or older at the time of the gift.
- The gift must be made directly from your traditional IRA to a charity or charities.
- You can give up to $108,000 in 2025 (or up to $216,000 per couple if both spouses have separate IRAs and are eligible).
- If you are age 73 or older, your QCD gift can count toward your RMD.
This is one of the most tax-efficient ways to give. And more importantly, it helps your selected charity accomplish its mission.
Why Give from Your IRA?
For many generous supporters, giving from an IRA is an ideal way to align personal values with smart financial planning. Here's what makes it special:
- It’s tax efficient.
- It's simple. We can make the transfer for you.
- It saves you money. QCDs are not counted as income, which can reduce your overall tax liability and may even lower your Medicare premiums or reduce Social Security taxation.
- It fulfills your RMD. If you're 73 or older, your QCD can count toward your required annual withdrawal.
- While you may have planned giving in place triggered by your passing, a QCD has an immediate impact; one you can see while still alive.
Quick Guide to IRA Giving
We're here to help every step of the way. Whether you have questions about how to make a QCD or want to explore other planned giving options, we'd be honored to support you. Just call or email us to learn more.
Paul A. Gydosh, Jr. CFP®
Managing Director, Partner, and Founder
614.431.4336
Paul.Gydosh@KensingtonWealth.com