__The problem with most retirement plans is that eventually, you have to pay taxes on your distributions. Or *do* you?__

Would you believe there’s a way you can avoid paying those taxes *and* greatly increase your giving to God’s kingdom at the same time? It’s easy to do.

The Bible is clear that Christians should should pay their taxes. Romans 13:1-2 reads, *“Let every person be subject to the governing authorities. For there is no authority except from God, and those that exist have been instituted by God.”*

At the same time, we don’t want to pay more in taxes than we have to, because that wouldn’t be good stewardship. Fortunately, there’s a way you can legally (at least for now) avoid paying some taxes and practice amazing stewardship at the same time— through a [Qualified Charitable Distribution](https://www.irs.gov/newsroom/reminder-to-ira-owners-age-70-and-a-half-or-over-qualified-charitable-distributions-are-great-options-for-making-tax-free-gifts-to-charity#:~:text=These%20transfers%2C%20known%20as%20qualified,(RMD)%20for%20the%20year.) or QCD.

__This is a withdrawal of funds from your traditional IRA that goes directly to a qualified charity, such as your church or a ministry you’d like to support.__

To make a QCD, you have to be at least age 70 ½. This money is not subject to taxes and won’t be counted as taxable income. Even better, if you meet all the requirements, it will count as your Required Minimum Distribution, or RMD.

That’s important because now beginning at age 73, you must take RMDs on most qualified retirement plans, including a traditional IRA, but you can get around that rule by making a qualified charitable distribution instead.

You can also make a QCD from your SEP IRA if you have one, or a SIMPLE IRA. You can even do it from a Roth, but because no taxes are due on Roth distributions, there’s no advantage to it.

You cannot, however, make a QCD from a 401k or 403b retirement account. You would first have to roll the funds over to a traditional IRA and make the QCD from there.

Also, not every charity is eligible for a qualified charitable distribution. It must be a 501(c)(3) organization. Private foundations are ineligible. It’s a good idea to check with a tax professional to make sure your favorite charity can receive the gift.

Here’s how a QCD can reduce your federal taxes. First, even though it’s a withdrawal from your IRA, it won’t be counted as taxable income, as it would if you simply withdrew those funds from your account.

Second, you don’t have to itemize deductions on your return to make a QCD. That means if the standard deduction of $13,850 for a single filer, or $27,700 for married joint filers is higher, you can still take it, further reducing your federal taxes.

And third, because a qualified charitable distribution can be made instead of a required minimum distribution, it won’t increase your federal taxable income. That’s potentially huge, because often an RMD will push some of your income into a higher tax bracket. You won’t have to worry about that if you make a QCD instead.

__There are a few downsides to QCDs. You can’t make the donation directly. It must go through your retirement plan trustee to the charity.__

Also, you can’t claim a QCD as an itemized charitable donation and there’s an annual limit of $100,000— not a problem for most people.

To sum up, the Qualified Charitable Distribution is a powerful tool that enables you to lower your taxes by reducing your taxable income and it will satisfy your required minimum distribution, potentially keeping some of your income from being taxed at a higher rate.

The QCD is more than just a great way to lower your tax burden. For Christians, it gives us a chance to be more faithful stewards of the resources God entrusts to us. It’s an opportunity to be more generous that you shouldn’t pass up— if you’re able to use it.

__2 Corinthians 9 puts it like this: *“Whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully. And God is able to make all grace abound to you, so that having all sufficiency in all things at all times, you may abound in every good work. As it is written, ‘He has distributed freely, he has given to the poor; his righteousness endures forever.’”*__

You can also __[listen](https://www.faithfi.com/search?q=Qualified%20Charitable%20Distributions&videos=true&articles=true&podcasts=true&posts=true&groups=true&events=true&support=true)__ to the related podcast on this topic.

FaithFi

Articles

There’s a way you can avoid paying taxes in retirement & greatly increase your giving to God’s kingdom at the same time.

GIVING | Sep 8, 2025

Qualified Charitable Distributions

By: Rob West & Jim Henry

Where Faith Meets Finance

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