Turning 73 This Year? The IRS Now Requires an IRA Withdrawal — and One Move Can Shrink the Tax on It

Miss the deadline and the penalty is 25% of what you should have taken out. Send the money straight to charity instead, and you can cut your income tax — and even your Medicare premium.

Forget to take a $40,000 required IRA withdrawal and the IRS can hit you with a $10,000 penalty — a 25% excise tax on the amount you missed (IRS, Retirement Plan and IRA RMD FAQs, 2026). That penalty used to be a brutal 50%; the SECURE 2.0 law cut it to 25%, and to just 10% if you fix the mistake promptly. Still, it’s a steep price for a deadline most people don’t see coming.

What the rule actually is

If you turn 73 in 2026, the government stops letting your traditional IRA and most 401(k) money grow untaxed forever. You must begin taking a Required Minimum Distribution (RMD) — a set amount, based on your age and account balance, that you withdraw each year and pay ordinary income tax on (IRS RMD FAQs, 2026). The age is 73 for anyone born between 1951 and 1959, and it rises to 75 in 2033 for those born in 1960 or later (SECURE 2.0 Act).

One deadline trips people up: your first RMD can be delayed until April 1 of the year after you turn 73 — but if you wait, you’ll take two RMDs in the same year and pay tax on both at once (IRS, 2026). Every RMD after that is due by December 31.

The move most seniors miss: give it straight to charity

Here’s the part the tax software won’t volunteer. If you’re 70½ or older, you can have your IRA send money directly to a qualified charity — a Qualified Charitable Distribution (QCD) — and that money never lands on your tax return as income. It counts toward your RMD, and in 2026 you can give up to $111,000 per person this way (Fidelity and Charles Schwab, 2026; the limit is indexed for inflation).

Why does that matter more than writing a check from your bank account? Because most people over 65 now take the standard deduction — especially with the new senior deduction — which means a regular donation gets them no tax break at all. A QCD is different: it lowers your taxable income whether you itemize or not.

What this means for your wallet — three savings, one move

Keeping that withdrawal out of your income does more than dodge the tax on it. Your “adjusted gross income” is the number Washington uses to decide two other things that cost seniors real money:

• How much of your Social Security gets taxed. Up to 85% of your benefit can become taxable once your income climbs — a lower AGI can keep more of it tax-free (IRS, taxation of Social Security benefits).
• Your Medicare premium. Medicare uses your income from two years ago to set your Part B and Part D premiums. Cross certain income lines and you pay an “IRMAA” surcharge on top of the standard 2026 Part B premium of $201.96 a month (Medicare/SSA, 2026). A QCD that keeps you under the next line can save you hundreds of dollars a year per spouse.

So a single $10,000 QCD can satisfy part of your RMD, erase the income tax on that $10,000, and — if it keeps you below an IRMAA threshold — quietly lower next year’s Medicare bill too. Three wins from one phone call to your IRA custodian.

The catch — do it right

A QCD only works if the money goes directly from your IRA to the charity; if it lands in your checking account first, it counts as a taxable withdrawal (IRS Pub. 590-B). It has to be a traditional IRA (not a 401(k)), the charity must be a qualified one (not a donor-advised fund), and the transfer must clear by December 31 to count for this year — which is exactly why summer, not December, is the time to set it up.

The takeaway

If you’re 73 or turning 73, two dates matter: your RMD deadline, and December 31. Ask your IRA custodian for your 2026 RMD amount now, and if you give to charity anyway, ask how to send part of it as a QCD. You’ll meet the IRS requirement, skip the penalty, and likely owe less — on your taxes and your Medicare premium.

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Senior Savers is independent and not affiliated with the IRS, Medicare, or any government agency. This article contains no affiliate links. Figures and limits are current as of June 2026 and may change; the 2026 QCD limit reflects IRS inflation indexing as reported by Fidelity and Charles Schwab.