PPS Tax Preparation Classes: IRS Increases Charitable Donation Limit for IRA Owners to $105,000 in 2024

The Internal Revenue Service (IRS) is reminding IRA holders aged 70½ and older that they can make tax-free charitable contributions of up to $105,000 in 2024 through Qualified Charitable Distributions (QCDs). This marks an increase from the previous limit of $100,000 in prior years.

For individuals aged 73 and older, QCDs also count toward fulfilling their Required Minimum Distribution (RMD) for the year.

While traditional IRA withdrawals are generally taxable, QCDs remain tax-free if the funds are sent directly to a qualified charity by the IRA trustee. To ensure a QCD is processed in time for 2024, IRA owners should reach out to their trustee soon to complete the transaction before the end of the year.

Each eligible IRA owner can exclude up to $105,000 in QCDs from their taxable income. If both spouses meet the qualifications and have separate IRAs, they can jointly donate up to $210,000. Additionally, QCDs do not require itemizing deductions.

Looking ahead, the QCD limit will be adjusted annually for inflation. For 2025, the limit will increase to $108,000.