How does a qualified charitable distribution let me satisfy my IRA RMD tax-free?

Once you reach 70 and a half, the IRS lets you send money directly from your Traditional IRA to a qualified charity as a qualified charitable distribution, or QCD. The amount, up to an annual cap the IRS indexes for inflation, counts toward your required minimum distribution but is excluded from your taxable income entirely. That's better than taking the RMD and then donating, because it lowers your adjusted gross income, which can reduce taxes on Social Security and shrink Medicare IRMAA surcharges. The transfer must go straight from custodian to charity; you can't touch the money. QCDs are especially valuable now that many retirees take the standard deduction and can't itemize charitable gifts.