Each year, the Internal Revenue Service (IRS) requires Americans age 73 and older to take required minimum distributions (RMDs) from their individual retirement accounts (IRAs)—whether they need the cash or not. Those distributions are taxed as ordinary income.
For charitably inclined clients, this often creates an unnecessary tax bill and quietly erodes the impact of their giving.
Why It Matters: The Default Is Expensive
For tax year 2025, a Qualified Charitable Distribution (QCD) allows IRA owners age 70½ and older to direct up to $108,000 straight from their IRA to a qualified charity—satisfying all or part of their RMD without the distribution ever becoming taxable income. For married couples, each with their own IRA, that’s up to $216,000.1
The benefit is both immediate and powerful. Because a QCD never appears as taxable income, it directly reduces adjusted gross income—potentially lowering overall tax exposure, helping manage income-based households, and preserving more of what clients have worked to accumulate. And unlike a standard charitable deduction, a QCD is effective whether or not the
client itemizes.
And yet—for many clients—this conversation never happens. The RMD is taken, the taxes are paid, and the opportunity is gone.
The advisor who gets there first doesn’t just solve a tax issue—they earn long-term trust and relevance.
The Catch—and the Fix
Historically, QCDs have come with a significant limitation: they cannot go directly to a donor-advised fund (DAF).1 Clients have been forced to choose between the tax efficiency of a QCD and the flexibility of a DAF—but not both.
The fix is straightforward. Modern DAF platforms that support single charity funds can accept QCDs directly into a single charity structure. The result: tax‑free RMD satisfaction, continued investment potential, and flexible, advisor‑guided giving—all within the advisor’s existing ecosystem.
In the End
The RMD is mandatory. The tax on it is not—at least not when a client has charitable intent and an advisor is paying attention.
The planning window opens at age 70½. Start the conversation early, and turn a required distribution into a tax‑efficient, purpose‑driven strategy.
Important Disclosures & Definitions
Tax treatment varies by individual circumstances. Consult your financial or tax advisor.
1 IRS Publication 590-B. Distributions from Individual Retirement Arrangements (IRAs). For use in preparing 2025 Returns. Department of Treasury.
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