Book Now Available

Turn Your RMD into Charitable Donations

RMD to Charitable Donation, represented by piggy bank

If you dream of your financial legacy leaving a lasting impact on the world, there’s a way you can make a difference. You can use your Required Minimum Distribution (RMD) to make charitable donations, a strategy that could benefit both you and the causes important to you.

Some important terms to know:

Turn Your RMD into Charitable Donations

According to the Secure 2.0 Act, you must withdraw money once you turn 73 if you have a traditional IRA– a change from the previous age of 72. These withdrawals, or RMDs, are taxed at the ordinary income tax rate, which can sometimes push your annual income into a higher tax bracket. This income increase can trigger phaseouts which limit or eliminate some kinds of tax deductions, and can increase your Medicare premiums.

However, there’s a strategy that may help you put these distributions to good use and can help manage your tax situation: the Qualified Charitable Distribution (QCD) rule. This rule allows traditional IRA owners to effectively lower their Adjusted Gross Income (AGI) by the amount donated directly to charity. Essentially, your QCD becomes tax-free. QCDs can even be started before RMDs are due- you only need to be 70.5 or older. The IRS puts a $105,000 limit on the total annual QCD per person. (2) 

Here’s how it works:

Once you decide to make a QCD, you choose one or more charities that qualify as charitable organizations under IRS rules. Let your IRA custodian know your intention to donate your distribution and the amount you’d like. The custodian will then send a check to the charity on your behalf.  If you are a Wealth Analytics client, you can contact us directly and we will take care of this process on your behalf. It’s important to remember that QCDs must be made directly from your IRA; you may lose the benefit if the distribution is paid to you first and then passed on to a charitable organization. (2, 3) If you prefer to write your own checks to charities throughout the calendar year, some custodians, like Schwab and SSG/Pershing, offer check writing ability on IRAs.  No taxes are withheld on these distributions. 

Who should consider using the QCD rule? It makes sense if:

  • You are required to take a minimum distribution from an IRA, but don’t need the funds and would face increased tax liabilities if you took the distribution as income.
  • You would like your RMD to benefit a charitable organization.
  • You want to potentially avoid paying Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) premium increases.

Consider speaking to a tax, legal, or accounting professional before modifying your charitable giving strategy. This approach can provide some tax relief while helping fulfill your philanthropic goals.

Once your QCD has been sent, it is important to obtain proof from the receiving charity usually by letter of receipt. When your tax document becomes available the following year, it will have a total amount distributed, but it is up to you to let your CPA know what portion of that was a QCD to ensure that you receive the tax-free benefit. Wealth Analytics clients receive an itemized list of QCDs after the calendar year ends to provide to their tax preparer.

If you have questions about QCDs, please reach out to us. This is a beneficial strategy for those who are charitably inclined and like to optimize the tax benefits of giving. Win-Win!  


1. United States Senate Committee on Finance. “SECURE 2.0 Act of 2022 
2., November 16, 2023.
3. The Internal Revenue Service has specific rules and guidelines for charitable contributions. Before taking any specific action, be sure to consult with your tax professional.
4. Once you reach age 73, you must begin taking the required minimum distributions from a traditional IRA in most circumstances. Note – the RMD age increases to 75 for retirees who attain age 74 after December 21, 2032. Withdrawals from traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Contributions to a traditional IRA may be fully or partially deductible, depending on your adjusted gross income.

Schedule a Meeting

“A groundbreaking book” Chicago Tribune

Insider share secrets about a shifting financial landscape where new trusted mentors can
create a plan where you win!

10,000 people will turn age 65 every day over the next decade! Are you one of them? This book was written for you! You can have an extraordinary retirement without financial worry!

Get your FREE copy!

Get Started

With our fee-only financial planners.