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Level 1
June 5, 2019
Question

I entered a portion of my RMD to charity. However, it was not deducted from my IRA plan withdrawals and gross income. Why wasn't it deducted?

  • June 5, 2019
  • 3 replies
  • 38 views
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    3 replies

    macuser_22
    Alumni - Champ
    Alumni - Champ
    June 5, 2019

    Qualified charitable distributions.

    A qualified charitable distribution (QCD) generally is a nontaxable distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions. You must be at least age 70½ when the distribution was made. Also, you must have the same type of acknowledgment of your contribution that you would need to claim a deduction for a charitable contribution.

    If you are 70 1/2 or older, the interview will ask if you took the RMD. After that it will ask if you make a charitable contribution. Answer yes and then enter the QCD amount.

    The 1099-R box 1 amount will go in the 1040 form line 4b (taxable amount) minus the QCD amount and the total box 1 amount will go on line 4a with "QCD" next to it.

    Enter a 1099-R here:

    Federal Taxes,
    Wages & Income
    (I'll choose what I work on - if that screen comes up)
    Retirement Plans & Social Security,
    IRA, 401(k), Pension Plan Withdrawals (1099-R).

    OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

    Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
    Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

    [NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

    **Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
    Alumni - Champ
    June 5, 2019
    Just be aware that some states do not recognize QCD's, so you may still owe state taxes.
    Alumni - Champ
    June 5, 2019

    Did the plan administrator do a Qualified Charitable Distribution directly to the charity?  If so, there is a question that covers that after you enter the 1099-R.  The gross amount will not change, but the taxable figure will be shown on Form 1040 with the letters QCD next to it,

    Or did you make a charitable contribution yourself from the proceeds you received?