Seniors Can Reduce Tax Burden by Donating to Charities Through Their IRA

Charitable Tax Strategies

In most cases, distributions from a traditional IRA are taxable in the year the account owner received them. There are some exceptions. A qualified charitable distribution (QCD) is one exception.

Some QCD guidelines:

Taxpayers who make QCDs must be at least 70½ on the day of the distribution.
A QCD counts toward Required Minimum Distribution (RMD).
Maximum annual exclusion for QCD is $100,000.
When filing a joint return, each spouse can have a QCD up to $100,000.

An older couple sitting on a couch looking over paperwork.

Taxpayers do not have to worry about meeting the standard deduction or itemizing deductions with a QCD.

The QCD age is different from the required minimum distribution (RMD) age. Taxpayers generally must begin withdrawals from traditional IRA, SEP IRA, SIMPLE IRA, and retirement plan accounts when reaching age 72 (if reaching age 72 after Dec. 31, 2022, then RMDs begin at age 73).