There are ways to donate to your church that can save on taxes.

‍IMPORTANT! Always check with your financial advisor and tax preparer first. This is provided as information and not advice.

SUMMARY (as I understand it)

(1) Certain people are required by the IRS to take an amount from their retirement fund every year. This is called the “Required Minimal Distribution”.

(2) If the money is sent from your retirement account directly to the church, you pay no taxes. If you have it sent to you first and then to the church, it is taxable.

(3) This applies to gifts to any qualified non-profit.

(4) The amount is set as of December 31 of previous year so do not have to wait.

(5) If, when donating to Our Father you hit the $111,000. maximum allowed, the stewardship team will buy you a very nice lunch!!!

(6) This send directly to church option can be used for non-RMD withdrawals and may save you on taxes IF you are over 70.5 years old.

Donating an RMD to Charity to Reduce Taxes

Individuals who are required to take Required Minimum Distributions (RMDs) from their IRAs can significantly reduce taxes by using a strategy called a Qualified Charitable Distribution (QCD). Instead of taking the RMD into their bank account and then donating the money, a QCD allows the IRA owner to send funds directly from their IRA to a qualified charity.

When done correctly, the donated amount:

  • Counts toward the RMD for the year

  • Is excluded from taxable income

  • Does not increase adjusted gross income (AGI)

This is often more tax‑efficient than taking the RMD first and claiming a charitable deduction, because deductions do not reduce AGI and may be limited or not fully usable—especially for retirees who take the standard deduction on their taxes.

Why QCDs Are So Effective from a Tax Perspective

By keeping the RMD out of taxable income, a QCD can help:

  • Lower federal and state income taxes

  • Reduce or avoid Medicare surcharge thresholds (IRMAA)

  • Limit taxation of Social Security benefits

  • Prevent income-related phaseouts or surtaxes

These “downstream” benefits often make QCDs one of the most powerful charitable planning tools available for retirees who are charitably inclined.

Who Is Eligible

To make a Qualified Charitable Distribution:

  • The IRA owner must be age 70½ or older at the time of the distribution (this is earlier than the age at which RMDs begin)

  • The funds must come from a traditional IRA (not directly from a 401(k), though those can sometimes be rolled into an IRA first) Check with your financial advisor.

  • The charity must be a qualified 501(c)(3) public charity (donor‑advised funds and private foundations are not eligible)

Contribution Limits

Each individual can donate up to $111,000 per year (2026 amount, indexed for inflation) using QCDs. Married couples can each use their own IRA to donate up to the annual limit, potentially doubling the total charitable impact while keeping the full amount out of taxable income.

Key Planning Note

A QCD cannot also be claimed as a charitable deduction—but that’s intentional. The real benefit comes from never recognizing the income in the first place, which is often far more valuable than a deduction later.