Qualified Charitable Distributions–commonly known as QCDs–are a part of many Americans’ retirement plans, especially if they have a cause or charity they really care about. For others, it can be a spontaneous donation made during retirement, maybe after they come across a windfall or find that they aren’t spending down their nest egg as fast as intended. Whatever the reason, a QCD can be made to a charity of choice. There are some serious advantages to taking a QCD. First and foremost, it can can be a feel-good way to meet your required minimum distribution (RMD) for the year if you are of the required age. Furthermore, QCDs are not counted as taxable income, which makes them extra valuable if you plan on taking a standard deduction on your taxes. There are also some special advantages to QCDs for 2021, which make them even more valuable than years prior. In a effort to help charities during the pandemic, Congress has loosened some of the restrictions surrounding QCDs (yes, there are restrictions on QCDs as with all retirement-related distributions). First off, compared to years past, there is no limit on the size of the QCD you can make. Prior to 2021, the limit for a QCD was $100,000, but that is not the case for 2021. Also, in pre-2021 years, you were limited to charitable contributions counting for no more than 60% of your adjusted gross income (AGI) when it comes to your itemized deduction for such contributions. That 60% is waived for 2021 meaning that you can make a charitable donation of any size you want. In other words, you don’t need to put much thought or worry into the size of your QCD and how it might impact your taxes. Now there is one limit that stays in effect for all this and that’s the 10% early distribution penalty if you take advantage of this before hitting age 59 1/2. If you are considering taking advantage of a QCD this year because of the loosening of the rules, you should speak with a certified financial planner or wealth manager and talk over whether it’s a good decision for you and how much you can really afford to donate to charity.