Many charitably minded individual retirement account (IRA) owners use qualified charitable distributions (QCDs) to satisfy required minimum distributions (RMDs) while avoiding income tax. One simple mistake, however, can turn an otherwise tax-free QCD into fully taxable income.

After age 70 1/2, you may direct up to $111,000 in 2026 from your traditional IRA to a qualified charity; for married couples, each spouse may give that amount from their own IRA.

The QCD can count toward your RMD once you reach age 73, and the QCD stays out of your adjusted gross income. Lower adjusted gross income can help you avoid higher tax brackets, higher Medicare premiums, and taxation of Social Security benefits.

The trouble arises under the strict no-benefit rule.

You must send a QCD directly to a Section 501(c)(3) charity, not to a donor-advised fund. More importantly, you must not receive anything of value in return. If you do,…

Many IRA and retirement plan limits are indexed for inflation each year. Several of these key numbers have increased once again for 2026.

How much can you save in an IRA?

The maximum amount you can contribute to a traditional IRA or a Roth IRA in 2026 will be $7,500 (or 100% of your earned income, if less), up from $7,000 in 2025. The maximum catch-up contribution for those age 50 or older is $1,100, increased from $1,000 in 2025. You can contribute to both a traditional IRA and a Roth IRA in 2026, but your total contributions cannot exceed these annual limits.

Can you deduct your traditional IRA contributions?

If you (or both you and your spouse, if you're married) are not covered by a work-based retirement plan, your contributions to a traditional IRA are generally fully tax-deductible.

If you plan to make energy-efficient improvements or purchase clean energy vehicles, please note the cutoffs below.