Key Points

Donating your RMD to a charity can help you avoid taxes on it.
Consider spreading your Roth IRA conversions out over several years to minimize the tax impact.
The new senior tax deduction makes 2026 a great year for seniors to do a Roth IRA conversion.
The $23,760 Social Security bonus most retirees completely overlook ›

You are concerned about your 2026 required minimum distribution (RMD) since it will increase your tax obligations. Avoiding the withdrawal offers no benefit because you would then incur a 25% penalty on the amount not taken.

You want to lower future RMD amounts, yet a Roth IRA conversion might also increase current taxes. This situation appears tricky, but a smart approach allows you to meet the 2026 RMD rules while cutting future distributions without a major tax increase.

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How to reduce taxes on your RMDs

Review the RMD guidelines carefully to avoid taking more than necessary. No RMDs apply to Roth IRAs or 401(k)s, and none are required from your current 401(k) if you continue working and hold under 5% ownership. Skipping these withdrawals can lower your overall tax load.

You might also explore a qualified charitable distribution (QCD) using part of your RMD. This lets you give the amount directly to a qualifying tax-exempt group, satisfying the IRS requirement while keeping the funds out of your taxable income.

Ensure your plan administrator transfers the money straight to the charity. If it goes through your account first, it will not qualify.

The QCD limit reaches $111,000 in 2026, which covers most needs. Contact your plan administrator with any questions on the process.

How to reduce taxes on your Roth IRA conversions

Perform Roth IRA conversions later in the year once you can better estimate your tax bracket. Include your RMD amounts when calculating taxable income.

Instead of moving a large amount at one time, use a Roth IRA conversion ladder. Convert only enough to reach the top of your current tax bracket, then repeat the process each year until you finish the desired total. This method spreads the tax cost evenly.

2026 offers a strong window for Roth IRA conversions because the new senior tax deduction can cut taxable income by as much as $6,000. Converting $6,000 from tax-deferred accounts this year creates a neutral tax effect compared to prior years, while building more Roth savings and lowering future RMDs.

The deduction stays active through 2028, making the coming years ideal for gradual Roth IRA conversions. Speak with an accountant if you have questions about your specific tax situation.

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