Key Points
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Roth IRA conversions can decrease your future RMDs, but they’ll raise your tax bill this year.
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A qualified charitable distribution (QCD) is an alternative to RMDs that won’t raise your tax bill.
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Money you withdraw and donate to a charity yourself won’t qualify as a QCD.
Required minimum distributions (RMDs) aren’t painful for everyone, but if yours are expected to substantially increase your 2026 tax bill, it’s natural to wonder whether there’s anything you can do to prevent this from happening year after year. The good news is that there are a couple of strategies that could help reduce your future RMDs. But they both come with trade-offs.
Here’s what you should know about the two options available to you so you can decide which makes the most sense.
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1. Do a Roth IRA conversion
A Roth IRA conversion involves taking some of your tax-deferred savings and moving them to a Roth account. This will enable you to take tax-free withdrawals in retirement, and you won’t have to worry about taking RMDs from Roth savings.
The downside to this move is that you must pay taxes on your converted funds in the year of the conversion. So you might reduce your 2027 RMDs, but it would come at the cost of further increasing your 2026 tax bill.
This could be a smart move if your income this year is substantially lower than in years past. But if you’re already in a high tax bracket, the higher tax bill this year might not be worth it to you.
2. Do a qualified charitable distribution (QCD)
A qualified charitable distribution (QCD) is your only alternative to an RMD. This is where you donate your RMD to a qualifying charitable organization. You still have to take the money from your account, but it won’t count toward your tax bill for the year.
To do a QCD correctly, you must tell your plan administrator which organization you’d like to donate the funds to. It will either handle the transfer for you or cut you a check written out to the charity that you can mail or hand over yourself.
You could technically still do this for your 2026 QCDs if you haven’t already taken withdrawals yourself. If the money passes through your hands, then it’s not considered a QCD, even if you donate everything to a charity afterward. But it’s also an option worth keeping in mind if you’re looking to reduce your 2027 tax bill.
Check with an accountant if you’re not sure how your RMDs could affect your tax bill in 2026 or 2027. Make sure you have a plan to cover these additional expenses. If you wind up with a bill and you cannot pay it with personal savings, you may have to set up a payment plan with the IRS.
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