IRS Increases Tax-Free Charitable Giving Limit for IRA Owners
In a recent announcement, the IRS increased the annual limit for tax-free charitable donations from IRAs, allowing eligible IRA owners aged 70½ and older to give up to $105,000 tax-free in 2024. These contributions, known as Qualified Charitable Distributions (QCDs), may help reduce taxable income while also benefiting eligible charitable organizations. For those aged 73 and older, QCDs count toward required minimum distributions (RMDs), providing additional tax planning opportunities. AAFCPAs advises that qualified clients consider leveraging this increased charitable giving limit as part of their year-end tax strategy, potentially reducing taxable income while supporting causes they value.
QCDs offer the ability to donate directly from your IRA to a qualified charity without incurring taxable income. IRA owners may exclude up to $105,000 in donations from taxable income, and married couples who each qualify may donate up to $210,000 combined. QCDs do not require itemized deductions, making them one of the most effective ways to support charitable causes while managing your tax burden.
As the QCD limit is now subject to annual inflation adjustments, it will rise to $108,000 in 2025, providing more opportunities for tax-free charitable giving.
How We Help
AAFCPAs applies more than 50 years of tax expertise to help clients navigate charitable giving opportunities and tax compliance. Our holistic approach integrates tax planning with charitable strategies, ensuring you meet your financial goals while minimizing tax liability. Our multidisciplinary team of CPAs, tax strategists, and CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals offer tailored advice to help you maximize charitable donations while ensuring compliance with evolving tax regulations.
If you have questions, please contact Daniel Seaman, CPA, Tax Partner at 774.512.4025 or dseaman@nullaafcpa.com, Jonathan Bloom, CFP®, AIF®, Director & Senior Wealth Advisor at 774.512.4081 or jbloom@nullaafwealth.com—or your AAFCPAs Partner.
About the Authors
