Qualified charitable distributions allow you to take your retirement savings and donate it directly to charity.
The payoff: This strategy could result in big savings for retirees who are subject to required minimum distributions or RMDs, according to Ed Slott, founder of Ed Slott & Co.
"This is something you really want to get done by year end," Slott said.
Qualified charitable distributions, or QCDs, work best for retirees who must take money out of their retirement accounts and who also give to charity.
Most people need to start their required minimum distributions, or RMDs, from their retirement accounts when they turn 70½. But take note: The last day to take those distributions this year is Friday, Dec. 29.
Rather than writing a check to charity and including your RMD as income on your taxes, you can donate the funds directly to charity.
The result is that your adjusted gross income is lower, which reduces the likelihood that other benefits could be affected, Slott said. That includes more taxes on your Social Security income or higher Medicare premiums.
"By giving to charity this way, you're lowering your income and in effect getting a charitable deduction," Slott said. "If you give to charity already, give the same amount a better way and you'll pay less tax."
More from Personal Finance:
Missing this key retirement deadline could trigger a 50% tax penalty
This tax break for disaster losses largely disappears with new tax law
Smart ways to use your bonus to get ahead