If you are over 70½ years old, there is a smart way to give money to charity and lower your taxes at the same time. This method is called Qualified Charitable Distributions (QCDs) for people over 70½. It might sound like a big term, but it’s actually simple once you understand it.
This guide will help you learn what QCDs are, who can use them, how they work, and why they are helpful in 2025.
Page 1: What Are Qualified Charitable Distributions (QCDs)?
A Qualified Charitable Distribution (QCD) is a way for people age 70½ or older to give money straight from their Individual Retirement Account (IRA) to a charity. The good part? That money doesn’t count as income on your taxes.
Let’s break it down:
- If you are 70½ or older, the government says you need to take money out of your IRA every year. This is called a Required Minimum Distribution (RMD).
- But if you don’t need that money, or if you want to help others, you can send it directly to a charity. That’s a QCD!
- You can give up to $100,000 each year this way.
- You won’t pay income tax on the money you give through a QCD.
In 2025, these rules are still the same, so using Qualified Charitable Distributions (QCDs) for people over 70½ is a smart move if you want to support a cause and save on taxes.
Page 2: How Do QCDs Work?
Here’s how the process works in simple steps:
- You must be 70½ years old or older when you make the donation. If you are not that age yet, you can’t use a QCD.
- You must give the money from your IRA directly to a charity. This means the money can’t go to you first.
- The charity must be a qualified 501(c)(3) organization. That’s a type of nonprofit that is approved by the IRS.
- You can give up to $100,000 per year using QCDs. If you’re married and your spouse also has an IRA, they can do the same with their own $100,000.
- The amount you give counts toward your Required Minimum Distribution (RMD). But it doesn’t count as income for taxes.
Let’s say you are 72 and you must take out $15,000 from your IRA in 2025. If you give $15,000 directly to a charity using a QCD, then:
- You meet your RMD requirement.
- You don’t have to report that $15,000 as income.
- You still help a charity of your choice.
That’s why Qualified Charitable Distributions (QCDs) for people over 70½ are a helpful tool. They keep your taxes low while you do good in the world.
Page 3: Why Use QCDs in 2025?
In 2025, tax laws still allow you to give through QCDs and avoid extra taxes. This is important for people on a fixed income, like retirees.
Here are a few reasons QCDs are a smart idea:
1. Lower Your Taxable Income
When you give through a QCD, the amount does not count as part of your yearly income. This can help:
- Keep you in a lower tax bracket
- Lower the taxes you pay on Social Security
- Reduce what you owe for Medicare premiums
2. Meet Your RMD Requirement
If you don’t take out your Required Minimum Distribution each year, you can get a big penalty. A QCD lets you meet that rule without taking the money yourself.
3. Support a Good Cause
Whether you love helping animals, feeding the hungry, or supporting your local church, a QCD lets you give directly from your IRA to that cause.
4. No Need to Itemize Deductions
Usually, to get a tax break for giving, you need to itemize your deductions. But with a QCD, you get the tax benefit even if you take the standard deduction.
That’s why Qualified Charitable Distributions (QCDs) for people over 70½ continue to be a popular way to give in 2025.
Final Thoughts
If you’re over 70½ and have an IRA, think about using a QCD in 2025. It’s a simple way to meet your Required Minimum Distribution, lower your taxes, and help a cause that matters to you. Talk to your financial advisor or IRA manager to get started. They can help you send the money to the right place.
Remember: Qualified Charitable Distributions (QCDs) for people over 70½ are not just good for taxes—they’re good for your heart, too.
