This tax move is 'one of the IRS’ best-kept secrets for retirees’. Why do 90% of retired Americans miss it?

Core Insights - The article discusses the benefits of Qualified Charitable Distributions (QCDs) for retirees, highlighting it as a tax-efficient way to donate to charities while reducing taxable income [2][6]. Group 1: Definition and Mechanism - A Qualified Charitable Distribution (QCD) is a direct transfer from a pretax IRA to a qualified charity, allowing retirees to avoid taxable income that would otherwise affect their adjusted gross income (AGI) [2][3]. - QCDs are particularly advantageous for retirees aged 70½ or older who are required to take minimum distributions from their IRAs [3][6]. Group 2: Financial Implications - For 2025, retirees aged 70½ or older can donate up to $108,000 via QCDs, with married couples able to each contribute this amount if both qualify [4]. - The majority of Americans, 91% of filers, take the standard deduction, which means regular charitable donations do not lower their taxable income [5]. Group 3: Advantages Over Standard Deductions - Unlike standard deductions, QCDs do not provide a deduction but exclude the donated amount from income, which is considered more beneficial [6]. - Retirees aged 73 or older must begin taking required minimum distributions (RMDs) from their pretax retirement accounts, and failing to do so incurs penalties from the IRS [6].