If you’re 70½ or older and regularly give to charity, it’s worth looking at which account you give from. A qualified charitable distribution, or QCD, lets you send money directly from your IRA to an eligible charity. Because the distribution is generally excluded from your taxable income, it may be more useful than taking an IRA withdrawal and then writing the charity a check—especially if you take the standard deduction.
A QCD can also count toward your required minimum distribution (RMD). For example, if your RMD is $20,000 and you plan to give $5,000 to charity, sending that $5,000 directly from your IRA can satisfy part of your RMD without adding that amount to your taxable income. You don’t get a separate charitable deduction for the same gift, but keeping it out of your income may offer benefits beyond a deduction.
The details matter: the money must go directly from the IRA to an eligible charity, and gifts to donor-advised funds don’t qualify. If charitable giving is already part of your plan, a QCD may be a more tax-efficient way to make the gifts you intended to make.
