Most people give the way they always have: a check to the church, a gift to a cause they believe in, and a hope that it helps at tax time. For a lot of retirees, it no longer does. The most tax-friendly dollar you give may be one that never touches your hands.

Since the standard deduction roughly doubled, most retirees no longer itemize, so the checks they write to charity earn them no tax benefit at all. The giving still matters. The deduction is simply gone. 

There is a better route for money in a traditional individual retirement account: the qualified charitable distribution, or QCD. A 401(k) does not qualify on its own, but you can roll one into an IRA tax-free when you retire, which opens the door. If you are 70 1/2 or older, you can have your IRA custodian send money straight from the account to a qualified charity. In 2026, you can give up to $111,000 this way per person, so a couple with their own IRAs can move up to $222,000. The gift never passes through your hands, and that is the whole point.

Here is why it beats writing a check. A QCD is not a deduction; it's an exclusion. The money leaves your IRA and never shows up as income at all. You don't have to itemize to benefit, because there is nothing to itemize. And because that IRA money would be taxed on the way out anyway, by you or your heirs, a QCD does not just save this year's tax; it erases a future one. 

Picture a Spokane couple in their mid-70s who give $10,000 a year to their church. They write those checks from a bank account while taking the standard deduction, as most retirees do, and the gift gives almost nothing back at tax time. But if they send that same $10,000 straight from an IRA as a QCD, it satisfies part of their required distribution and keeps $10,000 off their income, which can save thousands in tax. It's the same church and the same $10,000 gift, yet it results in a materially different tax bill.

One new rule is worth knowing. Starting in 2026, those who take the standard deduction can again write off a little cash giving, up to $1,000 for a single filer and $2,000 for a couple. It's a welcome change, but a small one — for anyone giving more than that, a drop in the bucket. It also trims taxable income rather than adjusted gross income. A QCD lowers your AGI, which can mean less of your Social Security is taxed and help keep you under the Medicare surcharge thresholds I wrote about earlier this fall. For IRA money and larger gifts, the QCD is still the stronger tool. 

The strategy gets even better once required minimum distributions begin, at 73 for most people today. The IRS makes you pull money from the IRA whether you need it or not, and taxes it when you do. A QCD lets you send that same dollar to a church or a nonprofit and satisfy the requirement without the tax. If you already give, you simply route it through the IRA instead, and it need not be one large gift; it can be spread across as many as you like. 

A few rules keep the benefit intact. The money must go directly from the IRA to the charity; if it lands in your checking account first, even for a day, the QCD is lost. The recipient has to be a 501(c)(3) organization, which most churches and nonprofits are. Donor-advised funds and private foundations don't count. And your custodian will most likely not flag the gift as a QCD on the tax form, so it falls to you, or your preparer, to report it correctly. 

Then there is the calendar, which is why this is a fall conversation. The distribution has to leave the IRA by Dec. 31, and with a QCD, that means the charity actually has the money, not just that you sent it. Custodians get busy in December, so a gift started too late simply counts next year. And if you give with a checkbook linked to your IRA, watch the clock: We have seen organizations, smaller ones especially, sit on a check until it clears in January, after the deadline, which can blow that year's required distribution and trigger a penalty. Send it early.

For those who have spent a life giving, the QCD is not a loophole. It's just the most efficient way to do what you already intended, so that more of what you give reaches the cause and less goes to tax. To be clear, giving is never the way to come out ahead; you will always keep more by paying the tax and holding onto the money. But if giving is already what you want to do, this simply lets a little more of it through. 

Noah Schwab, CFP, is a financial adviser and owner at Stewardship Concepts Financial Services in Spokane. He can be reached at [email protected].