November is typically a time when people make charitable donations to causes they care about. Here are the most common questions we get about how to give charitably in a tax-efficient way.
Just a reminder that we are not CPAs. Nothing herein can be interpreted as tax advice; if you require guidance specific to your situation, please consult with a tax advisor.
And now, onto the article!
#1 What is a QCD and how does it work?
A QCD is a Qualified Charitable Distribution. If you are older than 701/2, you can make a QCD from a qualified retirement account, such as a Traditional, SEP, or inherited IRA. The IRS limit for the QCD is $108,000 per person in 2025.
- This distribution can be made without penalty fees and taxes – but it must go to a qualifying charity (or charities). The distribution must be done directly by the custodian who holds the IRA account.
- If you are of RMD age or older, QCD’s count towards your Required Minimum Distribution (RMD) amount for the year in which the withdrawal was made. If your RMD’s are deducted automatically from your account and you are taking QCD’s separately, be careful not to exceed the RMD limit.
- After you make the QCD, you should get a 1099 from your brokerage firm. Save it, because you will need to submit it when you file your taxes. As of this year, Box 7, Code Y on the IRS 1099 form will be used to indicate the QCD amount.
QCD’s should be done as part of the RMD, not after the RMD. QCD’s are beneficial for a few reasons. They allow you to bypass the tax obligation you otherwise would have paid had you taken the amount as an RMD (you would have paid ordinary income tax on it) and make the donation yourself. It also may allow you to donate more to the charity than you would have been able to if you drew it from other sources, such as spare cash.
This can be a great strategy to try, if it makes sense for you!
#2 Can I give appreciated shares?
Yes, you can give appreciated shares of stock. By doing so, you will potentially avoid paying capital gains tax on the appreciated amount, and receive a tax deduction for the market value amount of the appreciated shares. To do so, you must have held the shares for at least one year.
There are two ways to do this.
- Contact the charity directly and notify them of your intention. They will provide instructions about how to transfer the shares directly into their brokerage account.
- Establish a Donor Advised Fund (DAF) and gift the shares to the account. The shares are liquidated by the custodian holding the account, and granted to the charity upon your request.
Please note in order to receive the tax benefits of donating appreciated stock, the charity must be a verified charity under IRS rules, holding 501( c)(3) status.
#3 Do I get a tax deduction for writing a check to a charity?
We often hear something like this: “If I am writing a check or donating cash directly to a charity, do I get a tax deduction anymore?”
Yes, you can still get a tax deduction, as long as it’s made to a qualifying charitable organization.
If you are itemizing your deductions, you’d list these contributions on Schedule A of Form 1040. Check with your CPA, but people generally do not itemize unless their total itemized deductions are higher than the standard deduction. The standard deduction in 2025 is $15,750, $23,625 for heads of household, and $31,500 for married couples filing jointly. For many people, itemizing small donations doesn’t make sense – but this may change in 2026 due to the One Big Beautiful Bill.
Remember to save your receipts!
Ready to give?
We’re not giving tax advice – check with your accountant or tax preparer for details about how this may apply specifically to you– but as financial advisors we can say that charitable giving can be a great thing for your family’s legacy.
If you have questions about how to put this in place during this year’s giving season, please set up a time to meet.