#63: Tax Planning Strategy for IRA Holders: Skip the Government and Give from Your IRA Tax-Free

In this special episode of Blue Chip NOW!, Managing Partner Dan Seder, CFA®, CMT, CFP® and Associate Financial Advisor Hayden Kibbey talk about one of our favorite ways to bypass the government when pulling money from an IRA account. 

Qualified Charitable Distributions (QCD) are a tax-efficient way for people aged 70.5 and older to donate directly from their Individual Retirement Account (IRA) to charities. QCDs can take the place of Required Minimum Distributions (RMD) and don’t count as income, benefiting both the charity and the donor.  

• QCDs are direct donations from your IRA to the charity; the money bypasses the individual and therefore avoids income taxes, maximizing the donation 

• Individuals can give a QCD of up to $108,000 in 2025 

• The receiving charity must be a properly registered 501(c)3 to qualify for a QCD 

Listen in to learn more about this donation strategy’s benefits and things to remember.

Disclosure: This information has been prepared by Blue Chip Partners, LLC, a registered investment advisor, for your informational purposes only. It is not intended to provide, and should not be depended upon, as tax advice. You are strongly encouraged to seek counsel of a qualified tax professional to discuss this information and its relevance in the context of your own personal situation.

Hosts:

Dan Seder, CFA®, CMT, CFP®, 

Hayden Kibbey, Associate Financial Advisor

Key Points From This Episode:

[00:00:00] Introduction to Blue Chip Now and the episode’s focus on year-round charitable planning.

[00:01:00] Overview of typical charitable giving methods, such as donations from checking or savings accounts.

[00:02:32] Discussion of retirees' financial concerns and the importance of efficient giving methods.

[00:03:05] Explanation of Qualified Charitable Distributions (QCDs) and the benefits of donating directly from IRAs.

[00:04:18] How QCDs bypass the need to pay federal and state taxes on IRA distributions.

[00:05:20] Confirmation that QCDs allow donations to bypass taxation entirely.

[00:06:00] Key benefits of QCDs: reducing taxable income and satisfying required minimum distributions (RMDs).

[00:07:15] Explanation of how QCDs reduce future RMDs by lowering IRA balances.

[00:08:22] The impact of QCDs on Medicare premiums and Social Security taxation.

[00:09:35] The significance of QCDs in avoiding the need to itemize deductions.

[00:10:45] Clarification on the benefits of QCDs when compared to standard deduction thresholds.

[00:11:45] Important requirements for QCDs: qualified charities and annual limits.

[00:12:30] Direct transfer requirements for QCDs and how checks can be delivered directly to charities.

[00:13:12] Age requirements for QCD eligibility and how it overlaps with RMDs.

[00:14:15] The importance of completing QCDs before the year-end deadline of December 31.

[00:15:05] Steps for executing a QCD through financial advisors or IRA custodians.

[00:16:12] Key takeaways: maximizing charitable impact and avoiding taxes with QCDs.

[00:17:10] Final remarks encouraging early planning and reaching out for guidance.

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