Long Form The Retirement Tax Strategy Most People Never Use: Charitable Giving, QCDs, and Donor-Advi
LEGACY INVESTMENT SERVICES
YouTube Long Form Script | June 2025 | Week 4 - Long Form A
VIDEO TITLE: The Retirement Tax Strategy Most People Never Use: Charitable Giving, QCDs, and Donor-Advised Funds
ADVISOR: Jordan Cassiani
TARGET RUNTIME: 15-17 minutes
FORMAT: On-camera advisor, screen share for calculations/visuals
CTA: Link in bio for complimentary retirement income analysis
Securities and advisory services offered through Osaic Wealth, Inc., member FINRA/SIPC. Legacy Investment Services and Osaic Wealth are separate entities. Content is for educational purposes only. Not investment, tax, or legal advice. All scenarios are hypothetical illustrations. Investing involves risk including possible loss of principal.
Most people think about charitable giving as something you do after you have taken care of your own finances. Write a check at year-end, feel good about it, and move on. What most people do not realize is that charitable giving, when structured correctly, is one of the most powerful tax reduction strategies available to retirees. It can lower your taxable income, reduce your Medicare premiums, and in some cases allow you to give significantly more to the causes you care about without spending any more money.
I'm Jordan Cassiani with Legacy Investment Services. Today we are going to cover three specific tools: the qualified charitable distribution, the donor-advised fund, and charitable remainder trusts. These are not obscure loopholes. They are legitimate, IRS-sanctioned strategies that high-income retirees use every year, and most people who could benefit from them have never heard of them.
The Qualified Charitable Distribution: The Most Underused Tool in Retirement
If you are 70 and a half or older and you have a traditional IRA, you have access to one of the most tax-efficient charitable giving strategies that exists. It is called a qualified charitable distribution, or QCD, and the way it works is surprisingly simple.
Instead of taking money out of your IRA, paying income tax on it, and then writing a check to charity, you direct your IRA custodian to send the money directly from your IRA to a qualified charity. The amount transferred counts toward your required minimum distribution for that year, but it never shows up as taxable income on your return. You satisfy your RMD obligation and make a charitable gift, and not a single dollar of the transfer goes through your adjusted gross income.
In 2025, the limit is $105,000 per person per year. For a married couple where both spouses have IRAs, that is $210,000 that can be transferred to charity completely income-tax-free.
Here is why this matters beyond just the charitable deduction. Your adjusted gross income, your MAGI, is what determines whether you pay IRMAA surcharges on your Medicare premiums, how much of your Social Security is taxable, and what tax bracket you fall into. A large RMD that you do not actually need for living expenses pushes all of those numbers up. A QCD that satisfies part or all of your RMD keeps your MAGI lower, which can cascade into thousands of dollars of savings in Medicare premiums and reduced taxation of your Social Security benefit.
There is a catch: you cannot deduct a QCD as a charitable contribution on your return because you never paid tax on the money in the first place. But for most people in this situation, the MAGI reduction is worth far more than the deduction would have been.
The Standard Deduction Problem and How Donor-Advised Funds Solve It
Since the Tax Cuts and Jobs Act of 2017 nearly doubled the standard deduction, the majority of Americans no longer itemize deductions. In 2025, the standard deduction is $30,000 for married couples filing jointly. If your charitable contributions, mortgage interest, and other deductible expenses do not exceed that threshold, you take the standard deduction and receive no tax benefit from your charitable giving at all.
This is a real problem for people who give meaningfully to charity but not in amounts that justify itemizing in any given year. A donor-advised fund solves it through a strategy called bunching.
A donor-advised fund is an account held by a sponsoring organization, typically a large financial institution or a community foundation, where you make irrevocable contributions and then recommend grants to qualified charities over time. You get the tax deduction in the year you contribute to the fund, not necessarily in the year the charity actually receives the money.
Here is how bunching works. Instead of giving $10,000 per year to charity for five years, you contribute $50,000 to a donor-advised fund in year one. You take a $50,000 charitable deduction in year one, which combined with your other deductions easily clears the standard deduction threshold. You get a larger itemized deduction in year one, take the standard deduction in years two through five, and still distribute $10,000 per year from the donor-advised fund to your chosen charities on the same schedule you would have otherwise followed. The charities receive the same amount over five years. You get a better tax outcome.
Donor-advised funds also work particularly well with appreciated assets. If you have stock that has grown significantly in value and you contribute it to a donor-advised fund instead of selling it first, you avoid capital gains tax entirely and receive a deduction for the full fair market value. This is one of the most efficient asset transfers available.
Charitable Remainder Trusts: Advanced Strategy for Larger Estates
A charitable remainder trust, or CRT, is a more complex tool that works well for people with significant appreciated assets and a desire to create an income stream for themselves while eventually benefiting a charity.
Here is the basic structure. You transfer appreciated assets, often real estate or a concentrated stock position, into a charitable remainder trust. The trust sells those assets without triggering capital gains tax at the trust level. The proceeds are reinvested inside the trust, and the trust pays you an income stream, either a fixed amount or a percentage of the trust's value, for a defined period or for your lifetime. At the end of the trust term or at your death, the remaining assets pass to the charity you have named as the beneficiary.
The benefits are significant. You avoid the immediate capital gains tax that would have resulted from selling the appreciated asset yourself. You receive an immediate partial charitable deduction in the year you fund the trust. You generate an income stream from an asset that may not have been producing income before. And ultimately the charity receives the remainder.
The limitation is that once you transfer assets into a CRT, you cannot take them back. The charitable commitment is irrevocable. CRTs also have legal and administrative costs that make them practical primarily for larger asset transfers, typically $500,000 or more.
Combining These Strategies With Your RMD Planning
For retirees who are charitably inclined and who have large pre-tax retirement accounts, the most powerful version of this planning combines QCDs to reduce RMD income with donor-advised fund contributions from appreciated non-IRA assets to bunch deductions in high-income years.
Let's make that concrete. In a year where your RMD is $60,000 and you want to give $30,000 to charity, you can direct $30,000 of the RMD as a QCD. That $30,000 never hits your income. You take the remaining $30,000 as a normal distribution, pay tax on it, and in the same year contribute $50,000 of appreciated stock to your donor-advised fund. The charitable deduction from the appreciated stock contribution may be enough to push you over the standard deduction threshold, and you have now also avoided capital gains on the stock appreciation entirely.
This is the kind of multi-variable planning that most people do not stumble into on their own. It requires modeling, and it requires executing the pieces in the right sequence.
The Call to Action
If you are charitably inclined and you have significant retirement assets, there is a very good chance you are leaving meaningful tax savings on the table every single year. A complimentary retirement income analysis looks at your full picture including your RMD obligations, your charitable intentions, and your account types, and identifies where these strategies can make a real difference.
The link to book that is in my bio. Subscribe for more content like this every week. I'm Jordan Cassiani with Legacy Investment Services.
PRODUCTION NOTES
On camera throughout. The QCD example should be shown visually, a simple comparison of the old way versus the QCD approach, with the MAGI impact highlighted. This video has strong SEO potential on 'qualified charitable distribution IRA' and 'donor advised fund strategy'. Thumbnail: 'Give to Charity AND Pay Less Tax' or 'The Retirement Tax Strategy CPAs Forget to Mention'. Mid-video CTA after the donor-advised fund section and before the CRT section. This content skews toward higher-income retirees so the hook should signal that explicitly.
Legacy Investment Services | Jordan Cassiani | Week 4 Long Form A - Charitable Giving Tax Strategies