Ask the Editor, October 17: QCDs and Tax-Planning

Each week, in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter Editor, answers questions on topics submitted by readers. In the Ask the Editor May 9 column, she answered five questions on QCDs. This week, she’s looking at seven more questions on the topic. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Itemizing and doing a QCD

Question: Can I itemize on Schedule A of the Form 1040 and do a qualified charitable distribution (QCD) this year? And does this make sense?

Joy Taylor: People age 70½ and older can transfer up to $108,000 in 2025 from a traditional IRA directly to charity. QCDs can be done only from an IRA, either one that you own or an inherited IRA. You can’t do them from a 401(k) or other workplace retirement plan.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

You can itemize on Schedule A and do a QCD, but you can’t deduct the QCD as a charitable contribution on Schedule A. QCDs are nontaxable and aren't included in your adjusted gross income (AGI). And they can count toward your required minimum distribution (RMD), thus reducing the taxable amount of the RMD, provided you do the QCD before withdrawing your full RMD for the year.

Because QCDs aren't included in adjusted gross income, they aren't counted in calculating your 2025 AGI for figuring out whether you would owe monthly surcharges on Medicare premiums for 2027. The fact that QCDs don't increase AGI has even more upside now because of the various new tax breaks in the "One Big Beautiful Bill" (enacted in July 2025) that begin to phase out at modified AGIs above a certain amount. These include the new $6,000 senior deduction for filers age 65 and older, the deductions for up to $25,000 of tips and $12,500 of overtime pay, the deduction for up to $10,000 of interest paid on an auto loan to buy a new vehicle, and the $40,000 cap on deducting state and local taxes on Schedule A. Depending on your circumstances and your income, you might be able to use the QCD strategy to keep your AGI below the various levels.

2. How to do a QCD

Question: I have check-writing privileges on my IRA. If I write a check from my IRA account to a charity and send it to the organization, will this qualify as a QCD?

Joy Taylor: It depends on the IRA custodian. It is true that only transfers from your IRA directly to charity are considered QCDs, but different IRA custodians have their own procedures for complying with this. Some will require that the check goes directly from the custodian to the charity. Others will, at the account owner’s request, have the check written from the IRA account and send the check to the IRA owner to forward to the charity. And others will allow IRA account owners with check-writing privileges to write the check and send it directly to the charity. Check with your IRA custodian to see what it sanctions before doing a QCD.

Note that it’s not acceptable for the custodian to write the check to the IRA owner, who then deposits the money and writes a check from his or her own account to the charity. It’s also not acceptable for an IRA owner with check-writing privileges to write a check from the IRA account to himself or herself and then make a donation to charity.

3. QCDs greater than the annual RMD

Question: I am of RMD age. Does it make sense to donate more money through a QCD over and above my annual RMD amount?

Joy Taylor: The answer depends on several factors. I'll discuss two of them here. First, if you are itemizing on Schedule A, then you would be able to deduct normal charitable contributions (those not made through a QCD). This is tax beneficial because it would reduce your taxable income and the amount of tax you would owe. Note that deducting a charitable contribution on Schedule A would not reduce your adjusted gross income. If you are not itemizing and you want to donate to charity, then doing a QCD over the RMD amount makes lots of sense.

Second, doing a QCD that exceeds your RMD would reduce your IRA balance for figuring RMDs in later years, which is a good thing.

For more information, I would suggest that you discuss with your financial advisor and a tax accountant whether it would be beneficial for you tax-wise to do a QCD in excess of your annual RMD.

4. Deductible IRA contributions and QCD

Question: I have made deductible contributions to my traditional IRA for the past few years. I am now 77. Do all of my post 70½ deductible IRA contributions count against me when attempting a QCD? Also, what about my wife’s post-70½ deductible contributions to her traditional IRA, which I have now inherited because she passed away? Do her deductible IRA contributions count against a QCD?

Joy Taylor: There’s a special rule if you do a QCD and you make tax-deductible contributions to a traditional IRA after 70½. Essentially, these post-70½ contributions reduce your allowable tax-free QCD amount until used up. Post-70½ deductible contributions to a SEP, SIMPLE IRA or a workplace retirement account aren’t affected by this rule.

Let’s take a simple example. A 75-year-old working man is planning to do a QCD for the first time in 2025. For 2021, 2022, 2023 and 2024, he made tax-deductible contributions to his traditional IRA totaling $23,000. In 2025, the man does a QCD and transfers $20,000 from his IRA directly to charity. He would owe income tax on the full $20,000 because it is less than the $23,000 of post-70½ tax-deductible IRA contributions. Let’s say that in 2026, he then transfers another $15,000 to charity directly from his IRA. $12,000 will be a nontaxable QCD, and $3,000 will be treated as a normal distribution.

Any post-2019 deductible contributions made to your IRAs when you were 70½ or older will reduce your allowable tax-free QCD amount until they are used up. Unfortunately, this rule applies to your original IRA and to the IRA you inherited from your wife (so her post-70½ deductible contributions would also reduce the tax-free QCD amount). IRS Publication 590-B, “Distributions from Individual Retirement Arrangements (IRAs)” has a QCD worksheet, titled "Appendix D Qualified Charitable Deduction (QCD) Adjustment Worksheet" that includes a line for reducing your QCD amount by the post-70½ deductible contributions made to the IRA.

Note that if you have already done what you thought was a QCD this year, and it turns out it is not a tax-free QCD because of your post-70½ deductible contributions, then the distribution would be taxable to you. But if you itemize, you can take a charitable deduction on Schedule A of your Form 1040.

5. 401(k) contributions and QCDs

Question: I am 76 and still working. I contribute to my employer-sponsored 401(k) account every year. I have also done QCDs from my traditional IRA since I turned 72 and was required to start taking required minimum distributions from the IRA. Can I get the full advantage of my QCDs even though I also contribute to my 401(k)?

Joy Taylor: As discussed in the answer to question 4 above, there is a special rule if you do a QCD and you make tax-deductible contributions to a traditional IRA after 70½. Essentially, these post-70½ contributions reduce your allowable tax-free QCD amount until used up. Post-70½ deductible contributions to a SEP, SIMPLE IRA or a workplace retirement account aren’t affected by this rule, so you don’t need to worry about it. Your 401(k) contributions won’t impact the QCD.

6. Documentation substantiating a QCD

Question: I’m planning to do a QCD for the first time this year. What documentation do I need from the charity to show that I made the donation from my IRA?

Joy Taylor: When you do a QCD, you will want to receive a letter from the charity acknowledging the gift and stating that you didn't receive anything in exchange for your charitable donation. This is similar to what you would receive from a charity if you made a normal charitable contribution of cash. The letter from the charity doesn’t need to specifically state that the donation was made through a QCD, and likely won’t include that language. Also, be sure to keep a copy of the check or electronic transfer you sent to the charity.

7. Reporting QCDs on your tax return

Question: I have a traditional IRA that I currently take RMDs from. Last year, I did a QCD from that IRA for the first time. The Form 1099-R that I received from my IRA custodian doesn’t separate the QCD amount from the remaining RMD. How do I report the QCD on my Form 1040?

Joy Taylor: It is true that if you do a QCD, the Form 1099-R that you receive won’t reflect the distribution as a QCD. It will show only the total amount of your distributions because IRA custodians lack firsthand knowledge to discern whether a particular distribution from a traditional IRA meets the QCD rules. This is normal procedure.

The IRS is aware of this, and the Form 1040 instructions explain how to report the QCD on your tax return. When filling out the 2024 Form 1040, you would include on line 4a the total amount of distributions reported on Form 1099-R. Then you subtract the amount that was transferred directly to charity (the QCD portion) and report the remainder, even if zero, on line 4b. Write “QCD” next to line 4b so that the IRS knows why the numbers don’t match. If using tax software, the program should do this for you once you report the 1099-R distribution and let the program know about the QCD.

For example, here is an explanation from TurboTax: "To report a qualified charitable distribution on your Form 1040 tax return, you'll use the 1099-R (even though there's no indication that it was a QCD). Enter the info as a 1099-R and you'll be asked in one of the follow-up questions if it was a Qualified Charitable Distribution. TurboTax includes the full amount of the distribution reported on your Form 1099-R on line 4a (IRA Distributions) of your Form 1040 or 1040-SR. The taxable amount reported on Line 4b will be the total distribution less the QCD amount and will have 'QCD' entered next to it."

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes related to the One Big Beautiful Bill and more. We will continue to answer these in future Ask the Editor round-ups. So keep those questions coming!

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Reader Questions on QCDs
• Ask the Editor: Questions on Capital Gains
• Ask the Editor: Questions on Four New Tax Deductions
• Ask the Editor: Questions on Inherited IRAs
• Ask the Editor: Questions on Home Sales and Taxes