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The 1099-R form for your IRA distributions will not show how much was contributed to charity. It will just show the total amount that you withdrew for the year. You do not get a separate 1099-R for the amount you contributed to charity. You get one 1099-R for the total amount that you withdrew from your IRA. After you enter the 1099-R in TurboTax, continue through the interview questions in sequence and read the screens carefully. One of them will ask you whether part of the total was distributed to charity, and if so, how much. When you enter that information, TurboTax will exclude the charitable distribution amount from your adjusted gross income and make the necessary notation to indicate a Qualified Charitable Distribution.
An important point to remember: IRC 408(d)(8)(C) states that "a distribution...shall qualify as a qualified charitable distribution only if a deduction for the entire (emphasis added) distirbution would be allowed under section 170 ..." So if you write a check on your IRA account to a qualified organization for $200 and $5 is not tax deductible, $0 is the amount of your qualified contribution deduction. You can still deduct $195 if you itemize.
Solution is to send two checks--one for $195, which is then a qualified contribution distribution, and one for $5, which is not.
The software does not seem to be working correctly. The amount is still included in my AGI. Also, there is no place to enter the amount of the distribution that was already not-taxable.
Enter the 1099R and indicate "Taxable amount not determined". After you finish input you will come back the 1099R summary screen then continue. Eventually you will get to the nondeductible contribution screens. Enter the non-taxable potion of the IRA there then continue through and check your taxable amount on line 4b of our 1040.
TurboTax is not asking the "RMD" question after completing the 1099 entries. The QCD amount is part of the RMD question and gets skipped because (apparently) I am not old enough to be required to take an RMD but am old enough to make a QCD from my IRA. Please assist me in entering my QCD amount.
EDIT: I decided to test my hypothesis and changed my age in a copy. By 'becoming 'older' (well past RMD age), I was able to enter the numbers (RMD and QCD) as described in the help pages. It worked as advertised as long as I was over 72.
EDIT #2: I received an email from a TurboTax Employee:
Re: The 1099-R form for your IRA distributions will not show... |
Yes. In 2020 the Secures Act increased the the RMD age to 72 but only if you turned 70 1/2 in 2020. if you were already taking RMD from turning 70 1/2 in a previous year, then you have to continue taking your RMD. Of course, for 2020 no RMD was required. You handled the age work around correctly in TurboTax but make sure to change your age back when you are done. |
Although this work around method works, it shows an error in the TurboTax program itself. This minor variation should be available. I am concerned that it won't "stick" during updates, etc. and will decide to switch back on its own. The use of a QCD withdrawal is a substantial tax benefit when using the standard deduction.
Yes. In 2020 the Secures Act increased the the RMD age to 72 but only if you turned 70 1/2 in 2020. If you were already taking RMD from turning 70 1/2 in a previous year, then you have to continue taking your RMD. Of course, for 2020 no RMD was required. You handled the age work around correctly in TurboTax but make sure to change your age back when you are done.
Although this work around method works, it shows an error/oversight in the TurboTax program itself. This minor variation should be available. I am concerned that it won't "stick" during updates, etc. and will decide to switch back on its own. The use of a QCD withdrawal is a substantial tax benefit when using the standard deduction.
Currently the software is not asking if any part of the RMD was a QCD. It has always done this in the past.
When will this be fixed?
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