The Best Charitable Checkbook You Own

Taxes in Retirement

If you're over 70 and a half, give to your church or any charity, and still write those checks from your checking account, you're leaving money on the table every single year. Possibly a lot of it.

There's a better checkbook, and it's your IRA.

What a QCD is

A Qualified Charitable Distribution is a transfer sent DIRECTLY from your IRA to a charity. Not to you and then to the charity. From the custodian, to the organization, in one step.

Up to $108,000 per person per year in 2026, indexed for inflation. Married? Each spouse can do it from their own IRA. That's $216,000 a year of possible giving.

And here's why it beats every other way to give: a QCD never appears in your income. It's not a deduction that lowers your income after the fact. It's income that never happens.

Why "never happens" matters more than "deductible"

Ever since the standard deduction roughly doubled, most retirees don't itemize. Which means most retirees get ZERO tax benefit from ordinary charitable checks. The gift is generous. The tax code doesn't notice.

A QCD sidesteps the whole itemizing question. Since the money never hits your AGI:

It counts toward your RMD. Every QCD dollar reduces the required withdrawal you'd otherwise have to take and pay tax on. Someone with a $40,000 RMD who gives $15,000 via QCD only recognizes $25,000 of taxable income.

It stays out of provisional income, so it can keep the tax torpedo from firing.

It stays out of MAGI, so it can pull you under an IRMAA cliff.

It stays out of the calculation for the senior deduction phase-out.

Same gift to the same church. One version does nothing for your taxes. The other lowers your income, your Social Security taxation, and potentially your Medicare premiums at once.

A hypothetical couple, both ways

Invented for illustration, not real clients: both 74, combined RMDs of $52,000, giving $12,000 a year to their church and a couple of local causes.

Writing checks from checking: they take the full $52,000 RMD, it's all taxable, and the $12,000 in gifts don't clear the standard deduction, so no benefit. Taxable RMD income: $52,000.

Via QCD: $12,000 goes straight from the IRA to the charities, satisfying part of the RMD. Taxable RMD income: $40,000. In the 22% bracket, that's about $2,640 less federal tax, plus a smaller slice of Social Security taxed, plus a little more headroom under IRMAA. Same generosity, real money back.

Do it for fifteen years and the difference is a car.

The rules that trip people up

You must be 70 and a half on the day of the transfer, not just in the year you turn 70 and a half. The RMD age moved to 73, the QCD age didn't. So there's a window from 70 and a half to 73 where you can do QCDs before RMDs even start, using them to shrink the IRA ahead of the freight train.

It must go directly to the charity. If the check comes to you first, it's a taxable distribution, even if you hand it over the next day.

Donor-advised funds don't qualify. Private foundations don't either. Public charities, churches, and most nonprofits do.

The first RMD dollars out each year are the RMD. Take your RMD in January and do a QCD in June, and the QCD doesn't count toward that year's RMD. Sequence matters: QCDs first, then any additional withdrawals.

Get the receipt. The custodian's 1099-R will show it as a normal distribution; it's on you (and your tax preparer) to report it correctly as a QCD.

The bigger idea

The Traditional IRA is the WORST asset to leave to your kids (ten-year rule, taxed at their peak-earning rates) and the BEST asset to give to charity (nobody pays the tax, ever). Meanwhile taxable brokerage accounts get a step-up at death and are wonderful to leave to kids.

So the smartest households flip the default: give from the IRA, leave the brokerage. Same total, dramatically less tax across the whole family.

The generosity was always there. The checkbook was just wrong.