How retirees can get a bigger tax break for charitable gifts with QCDs
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If you’re 70½ or older, you can donate up to $108,000 in 2025. For married couples filing jointly, spouses 70½ or older may also transfer. $108,000 from their IRA. The QCD limit is now adjusted for inflation thanks to changes enacted through the Secure Act of 2022.
Here are other important things you need to know about QCDs and how the move could benefit retirees.
How does QCD tax relief work?
When you file taxes, you claim the standard deduction or itemized deductions, whichever is greater. Standard deduction for 2025 $15,750 for single filers and $31,500 for married couples filing jointly.
Your item deductions may include limited tax deductions for charitable gifts, medical expenses, and state and local taxes, among other items.
But, 90% of filers According to the latest IRS data, which prevents most taxpayers from claiming charitable deduction.
There is no tax deduction for a QCD, but CFP Juan Ros, partner at Forum Financial Management in California, told CNBC.
QCDs do not increase your adjusted gross income, or AGI, which can increase premiums for Medicare Part B and Part D as earnings increase. Lowering your AGI can minimize Fazouts, or benefit reductions, for other tax cuts enacted through President Donald Trump’s “Big Beautiful Bill.”
Satisfy your required withdrawals
Another benefit of QCDs is that transfers can help reduce your annuities. required minimum distributions, or RMDs.
Most retirees must take RMDs from their pre-tax retirement accounts starting at age 73 or Facing an IRS penalty. Your first due date is April 1 of the year after you turn 73, and December 31 is the due date in subsequent years.
RMDs can be a pain point for some retirees, depending on the size of their accounts. You Calculate VaRs It is based on your prior year-end balance and the IRS “Life Expectancy Factor.”
QCDs can be a great way to fulfill charitable intent without increasing AGI, according to Jim Guarino, CFP, managing director at Baker Newman Noyes in Woburn, Massachusetts. He is also a certified accountant.
“For my charitable clients, it’s almost a no-brainer,” he said.
