When planning for the RMD, an awareness of tax consequences can be helpful to the bottom line.
If the RMD hits the AGI, it can then find its way to taxable income.
The QCD has been permanent (???) in the tax code since the end of 2015. (The QCD has been around for a while, but I think before 2015, Congress announced it on an annual basis.)
If you are charitably inclined and are reaching RMD age (or already there) and are unaware of the QCD, you might want to learn all about it.
If you choose to use a QCD for your RMD, it must be done perfectly and with careful records so that the distribution does not hit the AGI. That
Q means the charity must be ‘Qualified’ which I think is explained under section 501(c)(3) of the tax code. (I am not an accountant. Please check everything I say if this info interests you.)
You cannot make a QCD to a Donor Advised Fund — like Fidelity Charitable, for instance. The donation must go directly to the qualified charity you choose.
(I had a long back and forth email argument with a friend who was believing his financial advisor instead of me. He was being advised to use his donor advised fund for a QCD. Donor Advised Funds can be helpful at tax time, but at RMD age, a QCD can work better.
I finally got his attention and then he got the attention of his financial advisor who was completely unaware of the specificity of the QCD. I have to wonder how many were steered wrong before some retired high school teacher — a girl! (gasp!) made those guys do their homework.)
So if this is new information to you, do your homework on potential tax consequences of the RMD that can be buffered with the QCD, if you are charitably inclined anyway. Do not forget to be aware of those Medicare thresholds for increased premiums should you decide to distribute a big chunk, as income, to get it over with. Two years later, you could be hit with a much higher Medicare premium.
— In other words — School Thyself.
