Qualified Charitable Distribution

Dave is 74 and sitting at his kitchen table sorting through the stack of tax documents needed to file his 2025 tax return. His accountant had mentioned this possibility, but seeing the numbers in black and white still catches him off guard. Because of the Required Minimum Distribution (RMD) he took from his IRA in 2025, his taxable income ended up higher than he expected.

At first, it simply looks like a larger tax bill. But as his accountant walks through the return, the ripple effects become clearer.

Taking the full RMD meant:

• A higher federal tax bill
• Potentially higher Medicare premiums (IRMAA surcharges)
• More of his Social Security benefits becoming taxable
• Less control over how those retirement dollars were used

As they finish reviewing the return, his accountant offers an important reminder:
“We can’t change 2025 — but we can plan for 2026.”

Dave had already planned to make a charitable gift this year. St. Mary’s Ryken holds a special place in his heart. A teacher there once helped his son discover his confidence and direction, and Dave has never forgotten the role the school played in shaping his family’s future.

His accountant explains that in 2026, instead of taking his entire RMD as taxable income, Dave could direct part of it straight from his IRA to St. Mary’s Ryken as a Qualified Charitable Distribution (QCD) — as long as the gift is made before December 31, 2026.

That simple step means:

• The gift counts toward his 2026 RMD requirement
• The amount donated is not included in his taxable income
• His overall tax exposure may be lower
• And the funds go directly to support scholarships and opportunities for students

Dave leaves the meeting with a new perspective. This year, instead of waiting until tax season to think about giving, he can plan ahead and make the gift directly from his IRA before the end of the year.

By doing so, he may reduce taxes, manage future income, and help ensure more students have access to a St. Mary’s Ryken education.

In the end, Dave realizes something powerful: rather than sending more money to the IRS, he can redirect part of his required distribution toward something that reflects his values.

Through thoughtful planning and generosity, Dave’s IRA distribution becomes more than a tax requirement — it becomes a legacy that helps future generations of students thrive at St. Mary’s Ryken.