A Tax-Savvy Way to Give Back

Most of us have causes near and dear to our hearts. We love to support these causes and organizations for the work they do—not because we’re looking for a reward.

But what if there was a way to support those causes while also minimizing taxes?

Enter: Qualified Charitable Distributions (QCDs)

What’s a QCD?
For those over age 70 ½, QCDs allow you to send money directly from your IRA to a qualified nonprofit, bypassing your tax return altogether. It’s a powerful tool for folks who are already making charitable donations and want to do so in a more tax-efficient way.

Here’s the key: for retirees who are required to take Required Minimum Distributions (RMDs) from their IRAs each year, a QCD can satisfy all or part of that RMD—without adding taxable income.

Understanding RMDs
To understand QCDs, first we have to discuss Required Minimum Distributions (RMDs). Once you hit age 73 (as of 2025), the IRS says you must start taking money out of your traditional IRA each year—whether you need it or not.

Because RMDs are taxable income, they can cause other complications, such as bumping up your tax bracket, increasing your Medicare premiums, or even making your Social Security benefits more taxable.

Not exactly a win.

QCDs can offset your required minimum distribution by up to $108,000 in 2025.

The bottom line:
You’re already giving from the heart. A Qualified Charitable Distribution lets you give with your head too—putting more money in the hands of the causes you care about and less in the hands of the IRS.

If you’d like help making a QCD, or figuring out whether it makes sense for your situation, we’re always here to chat.

Q&A:
How is this different from a regular charitable donation?

Good question. If you’re already taking RMDs and writing checks to your favorite causes, this is where the QCD really shines. When you take money from your IRA and then write a check, that withdrawal is considered taxable income, even if you itemize your deductions.

But when you use a QCD, that money never hits your bank account. It goes straight from your IRA to the nonprofit, and you avoid the income tax altogether.
 
How do I know if the non-profit is qualified for QCDs?

Not every organization qualifies for QCDs, so you’ll want to check before sending funds. The IRS has a handy search tool you can use here: https://www.irs.gov/charities-non-profits/search-for-tax-exempt-organizations

I’m not of RMD age, but I am over 70 ½ – do QCDs make sense for me?
 
If you are over the age of 70 ½ but not yet RMD age (73), QCDs can lower future tax exposure by lowering your IRA balance now. This can especially make sense if you already give generously to nonprofits.

This commentary reflects the personal opinions, viewpoints and analyses of the Bourke Wealth Management employees providing such comments, and should not be regarded as a description of advisory services provided by Bourke Wealth Management or performance returns of any Bourke Wealth Management client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Bourke Wealth Management manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.