Retiree Cuts $60,377 RMD Tax to Near $0 by Using QCD Before 401(k)-to-IRA Rollover
Updated
Updated · 24/7 Wall St. · Jun 2
Retiree Cuts $60,377 RMD Tax to Near $0 by Using QCD Before 401(k)-to-IRA Rollover
3 articles · Updated · 24/7 Wall St. · Jun 2
Summary
$60,377 in first-year required withdrawals can be routed to charity and largely erased from taxable income for a 73-year-old retiree, cutting an estimated federal bill from about $10,166 to roughly $1,000.
The savings come from a qualified charitable distribution, which excludes the gift from AGI if the money goes directly from an IRA custodian to a qualified charity; the 2026 QCD cap is $111,000.
A 401(k) cannot send a QCD directly, so the workplace plan must be rolled into a traditional IRA before the RMD year starts or the withdrawal becomes fully taxable.
Sequence is critical inside the year: the QCD must occur before any other distribution, because the first dollars out are automatically treated as the RMD and cannot be retroactively sheltered.
Keeping AGI lower also helps preserve Medicare base premiums by avoiding the 2026 single-filer IRMAA threshold of $109,000, limiting future surcharges on Part B and Part D.