TRANSCRIPT:

There’s a new law shaking up retirement tax planning. It’s called the One Big Beautiful Bill Act. And while most of the headlines are focused on higher SALT deductions and extended tax brackets, the real opportunity—the one most people are missing—is how the OOTBA quietly made qualified charitable distributions even more valuable.

I’m Hunter Brockway with Boca Retirement Strategies, and today we’re going to show you how this change can help you lower taxes, keep key deductions, and give even more to causes you care about.

At Boca Retirement Strategies, we help retirees make tax-smart decisions so they can live generously and confidently. And the OOTBA created a perfect storm of new phaseouts and deductions, which makes strategies like QCDs more powerful than ever.

Here’s a quick refresher on the OOTBA. It permanently extended the tax brackets from the old Tax Cuts and Jobs Act. It temporarily boosted the SALT deduction, and it created a new additional deduction for retirees aged 65 and older—$6,000 for singles or $12,000 for couples where both spouses are 65 plus.

But here’s the catch. Those deductions start to phase out as your modified adjusted gross income, or MAGI, climbs. Which means the more income that shows up on your tax return, the fewer of those deductions you actually keep. So keeping MAGI low is now even more valuable.

And that’s where the QCD—qualified charitable distribution—comes in. If you’re age 70½ or older, you can make up to $18,000 per year in 2025 in charitable gifts directly from your IRA to a qualified charity. The best part is that money never shows up in your adjusted gross income.

So unlike writing a check from your checking account, which still shows up as income before you deduct it, a QCD keeps your MAGI lower from the start.

For example, let’s say you’re 72 and you have a $40,000 required minimum distribution. You send $10,000 directly to your church through a QCD and then take the remaining $30,000 distribution for yourself. Only that $30,000 hits your tax return, which lowers your MAGI and helps you stay below OOTBA’s phaseout thresholds for those new deductions.

It’s like donating to charity and telling the IRS, “Don’t worry, I handled this before you even showed up.”

Before the One Big Beautiful Bill Act, QCDs were mainly a way to satisfy RMDs without raising taxes. Now they’re also a tool to unlock new deductions and avoid phaseouts. They can help keep your income under the limits for the extra senior deduction. They can preserve more of the enhanced SALT deduction. They can even help you avoid Medicare IRMAA surcharges, because those use MAGI too.

So every dollar you give via QCD does double duty—supporting a charity while protecting your tax benefits. That’s a charitable two-for-one special the IRS doesn’t advertise in their brochure.

If this video got you thinking about your own retirement planning, I’d like to offer you something to help you see the bigger picture. We’ve created a tax-smart, comprehensive retirement workbook for pre-retirees and retirees.

If there’s one thing I’ve noticed in my years of working with individuals, it’s that there’s always at least one aspect in the planning process where they say, “Hmm, I haven’t thought about that before.” No matter how smart they are or how much they’ve saved, something always comes up—whether they realize they can spend more than they thought, realize their tax bill is going to be high in retirement, or realize they’re leaving money on the table with their current Social Security claiming strategy.

This workbook is designed to help you walk through the most critical areas of retirement planning, with action steps, false beliefs, and areas for your own reflection.

You can download the workbook by going to the link below in the description. If you have any issues with that link, send us an email at contact@bocaretirement.com.

So let’s recap. The One Big Beautiful Bill Act expanded deductions but added MAGI phaseouts. Qualified charitable distributions lower your MAGI directly. That means bigger deductions, lower IRMAA risk, and more tax-efficient giving.

If you’re 70½ or older and already charitably inclined, qualified charitable distributions may be the most powerful gift you can give—both to others and to your future self.

If you want to see how QCDs or other tax-smart moves fit into your retirement plan under the new OBBBA, download our free tax-smart retirement workbook below. It walks through the process to align your retirement plan and goals.

I’m Hunter Brockway with Boca Retirement Strategies. Enjoy your successful retirement with more money, fewer taxes, and less stress. Bye.