TL;DR
Kiplinger Tax Letter editor Joy Taylor answered four reader questions about year-end tax planning involving IRAs and other retirement accounts. Her guidance covers late-year tax withholding, delaying a first required minimum distribution, qualified charitable distributions and potential Roth conversion costs.
Kiplinger Tax Letter editor Joy Taylor answered four reader questions about year-end tax planning with IRAs and other retirement accounts in a report published November 13. The guidance addresses whether retirees can use late-year withholding instead of quarterly estimated payments, the tax effect of postponing a first required minimum distribution, charitable IRA transfers and potential costs of Roth conversions.
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Taylor said retirees who expect to owe federal income tax may ask an IRA custodian to withhold additional tax from a November or December distribution. The report explains that federal tax withholding is treated as paid evenly through the year for income-tax purposes, which can help some retirees meet their payment obligations without quarterly estimated payments. IRA custodians generally withhold 10% by default unless the account holder gives different instructions; a customer may request a different amount, including no withholding or up to 100%.
For a first RMD, Taylor said the account holder may delay the distribution until April 1 of the year after the first RMD year. That postponement does not eliminate the tax: the deferred distribution and the next year’s RMD are both generally taxable in the following year. The resulting increase in adjusted gross income and taxable income may matter when assessing the year’s tax picture.
Taylor also described qualified charitable distributions, or QCDs, from traditional IRAs. According to the report, an eligible account holder age 70½ or older can transfer funds directly to charity. For 2026, the report gives a maximum QCD of $111,000. Such transfers are not taxable to the donor, are excluded from adjusted gross income and may count toward an RMD if completed before the full RMD is taken.
Four IRA Choices Can Shift Tax Bills
The answers concern decisions that can change when retirement income is taxed and how much income appears on a tax return. A late-year withholding request may help address a shortfall in federal tax payments, while deferring a first RMD can concentrate two distributions in one tax year. That difference can affect a taxpayer’s adjusted gross income and taxable income.
The charitable and conversion questions also show why the tax treatment of a transaction matters alongside its stated purpose. A QCD may let eligible retirees give from an IRA while keeping the transfer out of AGI, according to Taylor. A Roth conversion, by contrast, adds the converted amount to taxable income for the conversion year. Taylor cautioned that higher AGI may affect eligibility for deductions or other tax breaks with income limits and could contribute to higher Medicare premiums for some beneficiaries.
These are not universal recommendations. The effects depend on an individual’s income, account balances, age, charitable plans and eligibility for specific tax provisions. Taylor’s responses explain possible consequences, not a calculation of any reader’s personal tax bill.
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The Four Questions Behind the Advice
The material comes from Kiplinger’s recurring Ask the Tax Editor series, in which readers submit questions and Joy Taylor, editor of The Kiplinger Tax Letter, responds. This installment focuses on four situations readers may face near year-end: a retiree relying on RMDs and investment income, an account holder taking a first RMD, an older donor considering IRA-funded gifts, and a taxpayer weighing a Roth conversion.
The answers refer to 2026 rules and figures, including a QCD limit of $111,000 and Taylor’s statement that the starting RMD age rises to 75 in 2033. The report also notes that the standard first-year RMD deadline is generally later than the usual December 31 deadline. Readers should distinguish those dates and limits from rules that may apply to other tax years.
“Pretty much, yes.”
— Joy Taylor, editor of The Kiplinger Tax Letter
Personal Tax Effects Depend on Income
The report offers general answers, but it does not calculate tax outcomes for the readers or establish that a particular strategy is appropriate for every taxpayer. The effect of a delayed RMD or Roth conversion depends on the individual’s full tax situation, including other income and deductions. Taylor says higher AGI may affect income-tested tax breaks and Medicare premiums; the report does not determine which readers would lose a specific benefit or how much their premiums might change.
The supplied report excerpt ends partway through its discussion of Medicare income thresholds. It gives a 2024 modified adjusted gross income figure of more than $218,000, but does not provide the full threshold explanation in the available material. No further threshold or complete premium calculation can be confirmed from that excerpt.
Check Deadlines Before Year-End
Readers considering a year-end distribution, charitable transfer or conversion should confirm the applicable tax-year rules and transaction deadlines before acting. Those contemplating additional withholding can ask their IRA custodian what instructions are available. People deciding whether to delay a first RMD should compare the tax effect of taking one distribution in the first year with reporting two distributions in the next.
For QCDs, the report’s guidance calls for a direct transfer from the IRA to an eligible charity and says the transfer must occur before the full RMD is taken to count toward that year’s RMD. Anyone considering a Roth conversion should account for the taxable income in the conversion year and the possibility that higher AGI may affect other tax provisions. The article does not announce a later ruling or follow-up; the next step for readers is to check their circumstances and the rules for the year involved.
Key Questions
Can IRA withholding late in the year replace quarterly estimated tax payments?
It may for some retirees. Taylor said federal income tax withheld during the year is treated as paid evenly throughout the year. The report notes that IRA custodians generally withhold 10% unless the account holder requests another amount. Individual payment requirements can vary.
What happens if I delay my first RMD?
The report says a first RMD may generally be delayed until April 1 of the following year. If postponed, the deferred RMD and the next year’s RMD are both generally taxable in that following year, potentially increasing AGI and taxable income.
How does a qualified charitable distribution affect taxes?
According to Taylor, an eligible person age 70½ or older can transfer money directly from a traditional IRA to charity. The QCD is not taxable to the donor and is not added to AGI. It may count toward the annual RMD if made before the full RMD is taken.
What is a key tax risk of a Roth conversion?
The converted funds are taxable income in the year of conversion, Taylor said. A resulting increase in AGI may affect income-tested deductions or other tax breaks and could raise Medicare premiums for some people. The report also says a conversion cannot be undone if the Roth assets later lose value.
Source: kiplinger.com
