Don't Want RMDs Inflating Your Tax Bill? 3 Things You Can Try.

You’ve been saving in your retirement account for decades, and even though you’re now starting to take money out, it might not be fast enough for the federal government that’s waiting for its cut of your savings.

Once you turn 73, you have to start taking mandatory annual withdrawals, known as required minimum distributions (RMDs), from most retirement accounts. Unfortunately, if you don’t need the money, that could drive up your tax bill. If you’d like to avoid that, try the three steps listed below.

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1. Don’t take RMDs when you don’t have to

You typically have to take RMDs from all of your tax-deferred accounts, which include traditional IRAs and 401(k)s. But if you’re working, you can skip the RMD from your current 401(k) as long as you own less than 5% of the company.

You can put off RMDs from this account until the year you retire. Doing this can help you minimize the amount you have to pay taxes on this year.

2. Donate your RMD to a qualifying charity

The IRS won’t tax your RMDs if you donate the money to a qualifying tax-exempt organization. This move is known as a qualified charitable distribution (QCD). You can do this for up to $111,000 in RMDs in 2026.

But it’s key that you don’t withdraw the money yourself first. If you withdraw the funds and donate them to a charity, you may be able to write the donation off on your taxes, but it won’t be a QCD. To do a QCD properly, you must tell your plan administrator where you want the money sent, and it must handle that transfer for you.

You must complete all of your 2026 QCDs by Dec. 31, 2026 for them to count for that year. It’s best not to wait until the last few weeks to do this, as the transfer request may take some time to process.

3. Do Roth IRA conversions to reduce future RMDs

You aren’t required to take RMDs from Roth accounts, so the more of your savings you can keep here, the lower your future RMDs will be. The catch is, to convert tax-deferred savings to Roth savings, you must pay taxes on those funds in the year of the conversion.

For example, if you want to transfer $10,000 from your traditional IRA to a Roth IRA, the government will treat you as if you earned $10,000 more from your job than you actually did that year. And you won’t have easy access to the converted funds to help you cover that tax bill.

If you’re unsure how a move like this will affect your taxes, it’s best to speak with an accountant who can give you personalized advice. Then, you can decide whether you want to pay an upfront cost now to reduce your future RMDs, or if you’d rather take your RMDs as scheduled.