Quick ReadQualified Charitable Distributions are exclusive to IRAs, so a $450,000 401(k) must be rolled over to an IRA before any tax-free charitable gift can be made. Donating $20,000 directly from a 401(k) triggers roughly $4,400 in federal taxes plus potential IRMAA Medicare surcharges, versus $0 in added AGI via a QCD. A 71-year-old sits on a $450,000 401(k), wants to send $20,000 to a favorite church or food bank before December 31, and assumes the retirement account is the smartest wallet to open. Why the 401(k) Blocks the Best MoveThe Qualified Charitable Distribution is the cleanest charitable tool available to anyone 70½ or older. Money moves straight from a retirement account to a qualified charity, and the distribution never appears in adjusted gross income.