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From a high level, QCDs are tax-free withdrawals from an IRA sent directly to a charity, which also count toward your required minimum distributions (RMDs). Additionally, they can be combined with the standard deduction.

Here, author Chris Cagle shares how his tax strategy changed in 2023 after becoming eligible for Qualified Charitable Distributions (QCDs) from his IRA at age 70½. Prior to 2023, he and his wife itemized deductions, primarily through charitable contributions. However, the ability to make QCDs made itemizing less beneficial. In Cagle’s case, using QCDs resulted in modest tax savings, but it can be more beneficial if you previously took the standard deduction.

Key takeaways: Within your retirement and tax strategies, there are four scenarios where QCDs can reduce taxes:

📌 For those who itemize and make large charitable contributions

📌 For those who can't itemize but still donate

📌 For those starting charitable donations at 70½

📌 For those using QCDs to meet RMDs