As retirees in Northern Arizona know all too well, turning 73 often brings a new financial obligation: Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s. These distributions provide income but also create taxable events that can increase your tax bracket, raise Medicare premiums, and make more of your Social Security benefits taxable.
The good news? There’s an IRS-approved strategy that can eliminate taxes on your RMDs—while directing those funds to causes you care about in Yavapai County.
In a recent episode of The Collective Podcast, host Lizzy McNett (Elevate Business Solutions) sat down with Wayne Brewer of New Life Financial and Chris Damron (Elevate Business Solutions) to explain these powerful tools in detail.
The Game-Changer: Qualified Charitable Distributions (QCDs)A Qualified Charitable Distribution (QCD) allows you to transfer money directly from your IRA to an eligible 501(c)(3) charity. The benefits are significant:
- Satisfies your full RMD requirement for the year
- Completely excluded from taxable income (even with the standard deduction)
- Lowers your Adjusted Gross Income (AGI)—reducing Medicare IRMAA surcharges and taxation on Social Security benefits
Wayne Brewer shared a real Prescott-area example: A local couple with a substantial RMD used QCDs to donate directly to food banks, meals-on-wheels programs, and their church. This move significantly lowered their taxable income, saving them thousands in federal taxes plus additional savings on Medicare Part B & D premiums—all while supporting neighbors in need.
Stack Arizona’s Generous Charitable Tax Credits
Wayne Brewer explained how Arizona residents can layer on even more savings. The state offers charitable tax credits of up to $1,339 per couple (2025 figures) for donations to Qualifying Charitable Organizations (QCOs) and Qualifying Foster Care Charitable Organizations (QFCOs).When planned correctly, QCDs can be structured to capture both federal exclusion and these state credits—keeping more money in Prescott, Prescott Valley, Chino Valley, and Dewey-Humboldt communities.
Additional Wealth-Protection Strategies
The discussion also covered proactive steps retirees can take:
- Strategic Roth conversions before RMD age to build future tax-free income
- Donor-Advised Funds for larger gifts with immediate tax advantages and flexible timing
- Coordinating medical expenses and giving to stay below Medicare IRMAA thresholds
- Careful distribution planning to avoid the “Social Security tax torpedo”
As Chris Damron put it, “Most retirees are accidentally volunteering to overpay Uncle Sam. A 30-minute conversation can change that forever.”
Resources & Next Steps
Ready to keep more of your money while giving generously?
- Book a retirement income strategy session with Wayne Brewer at New Life Financial
- Official IRS guidance on QCDs: irs.gov/retirement-plans/qualified-charitable-distributions
- 2025 Arizona Qualifying Charity List & Credit Amounts: azdor.gov/tax-credits
- List of local charities eligible for both QCDs and AZ credits: azdor.gov/tax-credits/qualifying-charitable-organizations
Stop sending extra money to taxes. Start directing it toward your family, your legacy, and the causes that matter most to you.
