QCD vs Charitable Giving Calculator
Compare three strategies for charitable giving in retirement: QCD from your IRA, a cash donation, or donating appreciated securities. See the full tax impact including IRMAA surcharges and Social Security taxation.
Retirement Income
Appreciated Securities
If unchecked, Strategy 3 assumes 50% appreciation (cost basis = half of FMV). Check this box to enter your actual stock details.
Other Itemized Deductions
Needed to determine if cash/stock donation strategies benefit from itemizing vs standard deduction.
| QCD from IRA ★ | Cash Donation | Donate Appreciated Stock | |
|---|---|---|---|
| AGI | $540,000 | $550,000 | $550,000 |
| MAGI (for IRMAA) | $540,000 | $550,000 | $550,000 |
| Deduction Used | standard | standard | standard |
| Federal Tax | $125,372 | $129,014 | $129,014 |
| IRMAA Surcharge Medicare Part B + D | $6,356 Tier 4 | $6,356 Tier 4 | $6,356 Tier 4 |
| CG Tax Avoided | — | — | $940 |
| Total Tax Burden | $131,728 | $135,370 | $135,370 |
| Tax Savings vs No Donation | $3,642 | $0 | $0 |
| Net Cost of Giving | $6,359 64¢ per $1 | $10,000 100¢ per $1 | $10,000 100¢ per $1 |
IRMAA Medicare Surcharge Detail
With QCD, you are $210,000 below the next IRMAA cliff at $750,000 (MFJ).
How QCDs Work
A Qualified Charitable Distribution (QCD)is a direct transfer from your IRA to a qualified charity. Under IRC §408(d)(8), the distribution is excluded from gross incomeentirely — it's not a deduction, it's an exclusion. This is a critical distinction because the QCD reduces your MAGI, which has cascading benefits.
QCD Eligibility
- Must be age 70½ or older at the time of distribution
- Must go directly from IRA custodian to a qualified 501(c)(3) charity
- Annual limit: $105,000 per person (indexed for inflation under SECURE 2.0)
- Satisfies your Required Minimum Distribution (RMD)
- Cannot go to a Donor-Advised Fund or private foundation
- Only from IRAs (not 401(k), 403(b), etc. — roll over to IRA first)
QCD vs Cash Donation: Why QCD Usually Wins
A cash donation only saves taxes if you itemize. Since the TCJA roughly doubled the standard deduction, most retirees take the standard deduction and get zero tax benefit from cash donations. A QCD reduces income regardless of whether you itemize.
Even if you do itemize, the QCD is often better because the income exclusion reduces your MAGI, which can:
- Reduce the taxable portion of Social Security benefits (the “tax torpedo”)
- Lower or avoid IRMAA Medicare surcharges ($1,339–$4,694/yr per person)
- Reduce the senior deduction phaseout
When Donating Appreciated Securities Beats QCDs
For retirees who already itemize and hold highly appreciated stock, donating the stock directly can provide a double benefit: a full fair-market-value deduction plus avoiding capital gains tax on the appreciation. As Kitces has shown, this strategy can beat QCDs when:
- You already itemize (total deductions exceed the standard deduction)
- You have highly appreciated stock (large unrealized gains)
- You're not near an IRMAA cliff (where MAGI reduction matters most)
However, appreciated securities are subject to a 30% of AGI limit (vs 60% for cash), and the MAGI reduction benefit of QCDs often outweighs the capital gains avoidance.
SECURE 2.0 Changes
SECURE 2.0 (2022) made QCDs more powerful: the $100,000 annual limit is now indexed for inflation(currently ~$105,000), and there's a one-time $53,000 QCD allowed to a split-interest entity (charitable remainder trust or charitable gift annuity).