You’ve probably seen the headlines about charitable deductions changing in 2026 and wondered, “How does this affect me?” This guide will help you determine whether a Qualified Charitable Distribution (QCD) fits your giving strategy and what other options to consider.
(For a deeper dive into QCDs and the new philanthropic giving changes from the One Big Beautiful Bill Act (OBBBA), read our Imagine That!™)
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Do You Have a Required Minimum Distribution to Satisfy?
If you have a traditional IRA and have reached RMD age (currently 73), the IRS requires you to take a minimum annual withdrawal. A QCD allows you to send some or all of that amount directly to a charity instead of receiving it as income. This reduces your taxable income and still fulfills your obligation! Hooray!
- If you need to satisfy an RMD and you don’t need the income, a QCD could be a tax-advantaged solution.
- If you don’t have an RMD, you can still give, but a QCD won’t be available until you reach the age requirement.
Are You at Least 70½ Years Old?
A QCD is only available to IRA owners (no 401(k)s or pension accumulations) and those who have reached 70½. If you’re younger, you can still donate cash or appreciated assets, but you won’t be able to count the gift toward your RMD or exclude it from your adjusted gross income.
- If you’re under 70½, review other strategies like donor-advised funds or bunching gifts.
- If you’re 70½ or older, you may use a QCD to donate up to $108,000 per person in 2025 (with projected increases in 2026.)
Do You Itemize or Take the Standard Deduction?
Under the new 2026 rules, you can only deduct charitable gifts that exceed 0.5% of your adjusted gross income if you itemize. The highest bracket also caps the benefit at 35 cents per dollar donated – not 37%. Non‑itemizers will have a $1,000 (single) or $2,000 (married) above‑the‑line deduction for cash gifts.
- If you typically take the standard deduction, a QCD allows you to support charity and reduce your taxable income without itemizing.
- If you itemize and your charitable giving exceeds 0.5% of AGI, you may still benefit from donating cash or appreciated assets.
Do You Want to Avoid Capital Gains on Appreciated Assets?
If you own stock, real estate, or other assets that have appreciated in value, donating them directly can eliminate capital gains taxes and provide a deduction (up to 30% or 20% of your AGI, depending on the type of asset and charity). This option can complement a QCD or serve as an alternative if a QCD isn’t appropriate.
- Gifting appreciated stock or real estate can help you avoid taxes on gains and still support your favorite causes.
- A QCD cannot accept non-cash assets, so use this strategy separately.
Will Your Charitable Gifts Exceed the QCD Limit?
For 2025, each person may give up to $108,000 via QCDs (couples get double). If your giving exceeds that amount or if you want to support charities that can’t receive QCDs (like donor‑advised funds or private foundations), you’ll need additional strategies.
- Consider bunching future year gifts into 2025 or 2027 to clear the 0.5% threshold.
- A donor-advised fund lets you take a deduction now and recommend grants later.
- Charitable trusts or gift annuities can provide income for life while benefiting charity.
- An insurance contract can create tax-free cash value earmarked for charitable giving.
Should You Consult with a Professional?
Tax law is complex! And everyone’s financial picture is different. Your best course of action depends on your income, the types of assets you hold, and your philanthropic goals. Working with a qualified advisor helps ensure you follow IRS rules and maximize the impact of your generosity.
- Get a personalized analysis of your RMDs, carryovers, and potential QCD benefits.
- Update your estate and beneficiary designations to reflect your charitable wishes.
As you prepare for 2026, ask yourself the questions above. Whether you choose a QCD, a donor‑advised fund, a trust, or another strategy, the goal is the same: support the causes you care about and minimize taxes.