Tax-Advantaged Ways to Donate in 2025 Using Your IRA’s Required Minimum Distribution (RMD): Qualified Charitable Distribution (QCD)
Individuals who are age 70½ or older may instruct their IRA custodian to send funds directly to MDM, a registered 501(c)(3) charity, our EIN is 46-5051214. By using a Qualified Charitable Distribution (QCD). Funds transferred in this way:
- Are excluded from taxable income, even if you take the standard deduction and do not itemize.
- For those age 73 or older, qualified charitable distributions (QCDs) also count toward the year’s required minimum distribution (RMD).
- The maximum QCD per individual in 2025 is $108,000, indexed for inflation. Married couples, if both meet qualifications and have separate IRAs, can donate up to $216,000 combined. QCDs don’t require itemizing deductions.
- QCDs must go directly from the IRA custodian to the charity, not via the account holder.
- Deadlines: Ensure your QCD clears by December 31 to count for the current tax year.
Donating Appreciated Securities: Stocks, Bonds, Mutual Funds
Donating long-term appreciated securities (held at least one year) is a tax-efficient way to help MDM:
- You may claim a charitable deduction for the full fair market value of the asset on the day of transfer.
- No capital gains tax is owed by the donor or the charity—nonprofits are tax-exempt when they sell the securities.
- Gifts of appreciated securities to public charities are deductible up to 30% of your adjusted gross income (AGI) in 2025; excess amounts can be carried forward for five years.
- Instead of selling securities and donating cash, gifting the asset lets you make a larger impact since you avoid tax and deduct the full value.
What are the 2025 Charitable Deduction Limits?
- Cash Gifts to Public Charities: Generally, up to 60% of AGI (including donor-advised funds).
- Appreciated Securities or Property: Up to 30% of AGI for public charities; excess can be carried forward.
- The IRS introduces a new “charitable floor” starting in 2026: Only amounts exceeding 0.5% of AGI will be deductible. This does not affect 2025.
Key Requirements and Tips
- For QCDs: Eligible accounts include traditional IRAs, inherited IRAs, and certain inactive SEP/SIMPLE IRAs.
- For securities: The assets must be long-term (held >12 months); contact your broker (e.g., Fidelity, Vanguard) to start a transfer.
- Consult your tax, legal, or financial advisor to ensure these gifts fit your circumstances.