A Simple Tax-Savings Hack for Charitable Gifts

Sometimes a small, simple change on our end can make a huge difference for our clients, and that was definitely the case with this hack. 

Many of our clients at Tableaux Wealth are charitably inclined.  Throughout the year, they make a variety of gifts of differing sizes based on their financial situation.  When the Tax Cuts and Jobs Act of 2017 (aka the “first Trump tax bill”) went into effect, though, charitable giving changed significantly as a result of the doubling of the standard deduction.  

Many clients thought their charitable contributions would benefit them in the same way.  They’d dutifully add up their charitable contributions and give them to their CPA for deductions.  What they didn’t realize is that if your deductions don’t add up to more than the standard deduction, you get ZERO tax benefit from those deductions.  

However, those who are 70 ½ or older (a large portion of our client base) have a great option: the qualified charitable distribution (“QCD”).  Clients can distribute up to $108,000 per year for 2025 from pre-tax dollars in their Individual Retirement Accounts (e.g. Traditional IRA, SIMPLE IRA, SEP IRA) directly to charity, and none of those distributions are taxable, as distributions from pre-tax retirement accounts normally are. 

Even better, for those who have reached their required minimum distribution (“RMD”) age, QCDs count toward their annual RMD but do not count as income.  QCDs ensure that you get the full tax benefit of the charitable contribution and the benefit of the higher standard deduction at tax time.

A donation made by John F. Kennedy while serving as the 35th President of the U.S. (C) National Numismatic Collection at the Smithsonian Institution

We initially found, though, that while our 70 ½ and older clients did not mind contacting us to send checks for their major gifts directly to charities from their accounts, they didn’t want to bother us for all those smaller gifts to a broader and more varied population of charities. 

Big reveal.  We ordered checkbooks for client’s retirement account!  When those checks clear and the payee is a charity, the funds come directly out of the retirement account as QCDs.  All the client has to do is write the check and mail it off the old-fashioned way.  Simple solution, big impact.  Our favorite kind of financial planning magic.

End Note: the larger standard deduction was set to end in 2025, but was recently made permanent in the One Big Beautiful Bill Act (aka the “second Trump tax bill”), so this hack will continue to work going forward!