Donate Your IRA Distributions to Charity to Reduce Your Taxable Income

For many Jacksonville retirees, the time will come when you’re required to start taking withdrawals from your retirement accounts—known as required minimum distributions, or RMDs. But what if you don’t actually need that money? Instead of increasing your taxable income, there’s a smart, charitable strategy to consider: making a qualified charitable distribution, or QCD.

Let’s explore how giving from your IRA can benefit both your favorite cause and your financial future.

What are Required Minimum Distributions (RMDs)?

Required Minimum Distributions (RMDs) are the amounts that individuals must withdraw each year from their traditional IRAs and certain employer-sponsored retirement plans, starting at age 73 under current federal tax law. For some retirees, especially those who don’t need the extra income, RMDs can feel like an unwanted tax burden since the withdrawals are added to taxable income. That’s where a Qualified Charitable Distribution (QCD) comes in. Note that Roth IRAs and designated Roth accounts, such as Roth 401(k)s or 403(b)s, do not have the same distribution requirements during the account owner’s lifetime. However, once the account owner passes away, the beneficiaries are required to follow the RMD rules for those inherited accounts.

What Is a Qualified Charitable Distribution?

A Qualified Charitable Distribution (QCD) is a provision in the tax code that allows eligible individuals to transfer money directly from their IRA to a qualified charity. The amount donated counts toward your RMD but doesn’t count as taxable income. It’s a powerful way to satisfy IRS rules while supporting the causes close to your heart.

Who Is Eligible to Make a QCD?

According to the IRS, you must be at least 70½ years old at the time of the distribution to take advantage of this strategy. Even though RMDs don’t begin until age 73 for most individuals (as of 2025), the QCD option is available earlier. This opens the door for tax planning even before your RMDs officially kick in.

What’s the Maximum Amount You Can Donate?

Each year, individuals age 70½ or older can donate up to $100,000 tax-free from their IRA to a qualified charity. For married couples, if both spouses have IRAs and meet the age requirement, they can each donate $108,000 for a total of $216,000 (effective in 2025).  This limit applies even if your RMD is less than $1080,000—so there’s room to be generous while reducing your taxable income significantly.

How Does It Work?

Step-by-Step Process

1. Contact your IRA trustee or custodian and request a direct transfer to the qualified charity.

2. Make sure the check is made payable to the charity, not to you personally. This is especially important for the distribution to be considered a QCD.

3. The receiving organization must be a public charity approved by the IRS.

4. Obtain a written acknowledgment from the charity to support your tax filing.

5. Report the QCD on your federal income tax return (usually on Line 4 of Form 1040 with “QCD” noted).

Remember, if the funds pass through your hands—even briefly—they’ll be treated as income and taxed accordingly.

Why Choose a QCD Over a Regular Charitable Deduction?

Since the 2017 tax law changes, many people no longer itemize deductions due to the increased standard deduction. This means your usual charitable contributions may not result in any tax savings.

A QCD solves that problem by providing a tax benefit even if you don’t itemize. You reduce your taxable income directly—making this strategy ideal for tax-conscious retirees.

Important Notes About QCDs and Jacksonville Retirement Plan Distributions

• QCDs can only be made from IRAs. Other retirement plans like 401(k)s and 403(b)s don’t qualify—unless you roll those funds into an IRA first.
• Also, if your QCD is less than your full RMD, you’ll still need to take the remainder as a regular taxable distribution.
• So, for example, if your RMD is $25,000 and you donate $10,000 as a QCD, you must withdraw the remaining $15,000 and pay taxes on it.

Using QCDs for Your IRA Distributions Provides Several Benefits

The beauty of the QCD strategy is in its simplicity and effectiveness. You can:

• Reduce your taxable income.
• Satisfy your RMD requirements.
• Support charitable causes that matter to you.

In fact, this approach is especially helpful if you’re concerned about moving into a higher tax bracket or losing deductions due to higher income levels caused by RMDs.

Why It Matters for Jacksonville Retirees

If you live in or around Jacksonville and have a retirement plan distribution coming up, this might be the perfect time to evaluate your options. Whether you’re supporting your church, a local nonprofit, or a national cause, your IRA could be a meaningful funding source—with a tax-savvy twist.

At Legacy Planning Law Group, we’ve helped many Florida families turn complex financial decisions into clear, confident action. Schedule a Discovery Call with Team Legacy to ensure your plan reflects your values and gains the most benefit financially for you and your loved ones now and in the future.

Key Takeaways

• A Qualified Charitable Distribution (QCD) allows you to donate directly from your IRA to charity, tax-free.
• You must be at least 70½ to make a QCD—even if RMDs start at age 73.
• QCDs count toward your RMD and can lower your taxable income.
• The annual limit is $108,000 per person (2025).
• Funds must be transferred directly from your IRA to the charity.
• QCDs are a great option if you don’t itemize deductions or want to reduce taxable income.
• Only traditional IRAs qualify—other accounts must be rolled into IRAs first.
• A QCD is a smart estate and income tax planning tool for Jacksonville retirement plan distribution strategies.

References: Internal Revenue Service (March 13, 2025) “Retirement plan and IRA required minimum distributions FAQs” and (Nov. 16, 2023) “Qualified charitable distributions allow eligible IRA owners up to $100,000 in tax-free gifts to charity“