IRA charitable rollover

You instruct your IRA custodian to send funds directly from your IRA to a qualified non-profit. The money never passes through your bank account — it goes straight from the custodian to the charity.

You can give up to a federally set annual limit per year through QCDs (the limit is indexed for inflation; check the current figure with your custodian or tax advisor). The transfer counts toward your required minimum distribution (RMD) for the year, if you have one.

For donors who don’t itemize their taxes, QCDs are particularly valuable — the distribution is excluded from your taxable income altogether, which is effectively a deduction that doesn’t require itemizing.

For donors taking RMDs, a QCD lets you satisfy the required distribution without increasing your taxable income — useful if the RMD would otherwise push you into a higher tax bracket or affect Medicare premiums.

QCDs are available only from traditional IRAs (not 401(k)s, 403(b)s, or other employer plans, though those can sometimes be rolled into an IRA first). You must be at least 70½ on the date of the distribution.

The annual QCD limit is set by federal law and adjusts for inflation. Talk to your tax advisor or IRA custodian to confirm the current year’s limit and whether a QCD is the right move for your situation.

Contact your IRA custodian and tell them you want to make a Qualified Charitable Distribution. They’ll send you a form (or take instructions by phone). You’ll need the non-profit’s legal name, address, and EIN.

Ask the non-profit to confirm receipt when the funds arrive, and keep a record of the transaction — even though QCDs aren’t reported as deductions, you’ll want documentation in case of any questions about your tax return.