What is a QCD? (Qualified Charitable Distribution)

A QCD, otherwise known as a qualified charitable distribution, is a special way for individuals who are 70 and a half or older to move money directly from their IRA to a charity.

Eventhough the RMD age is now higher at 72, 73 or 73 depending on when they were born, the age marker for a qualified charitable distribution is still 70 and a half.

This isn’t a big deal for people who do itemized deductions, but not many people are eligible for a benefit from doing itemized deductions.

If you make a qualified charitable distribution, it allows you to keep that income going to charity off your tax return all together and in many instances helps you have a lower tax liability.

[donwilliams]

You are so right, In 2024 I will pay my tithe from my IRA. That will lower the amount of income tax I pay on my social security. Lower my overall taxes to somewhere around 3 to 4%, and free the money up I would have given to church throughout the year for me to spend! Win-win. My standard deduction will be $30, 000 plus the amount I give to the church!

[jbondy]

Fidelity cannot handle QCds, because they report it as taxable income and you are forced to explain it on your tax return.