Charitable deductions

[td10181947]

When reporting my rmd i showed  the deduction for direct paid charitable donations.  I also itemized these donations under the deductions for charitable donations.  Did I do this correctly or do I only report the data once?  If so, in what place? 

[ColeenD3]

No, you only enter it in the 1099-R section. This is a Qualified Charitable Distribution, not just a donation.

As you proceed through the interview, you will be able to elect this.

First, be sure that the distribution is from an IRA and that the IRA box is checked in the program. As you continue in the interview section, you will encounter the screen.

As you continue with the interview screens, you will be asked if you donated a portion or all of the distribution to charity. There are eligibility requirements. TurboTax will exclude this amount and will show the notation QCD.

You have to continue through the interview screen by screen. The screen that asks whether you transferred any of the distribution to charity doesn't say "QCD," but that's what it's about. If you answer that you transferred part of the distribution to charity, the next screen will ask you how much was transferred to charity. The next screen after that will tell you that the amount you specified is designated as a QCD. That last confirmation screen is the only place where you will actually see the term QCD.

A QCD is a direct transfer of funds from your IRA custodian, payable to a qualified charity. QCDs can be counted toward satisfying your minimum required distributions (MRDs) for the year, as long as certain rules are met.

In addition to the benefits of giving to charity, a QCD excludes the amount donated from taxable income, which is unlike regular withdrawals from an IRA. Keeping your taxable income lower may reduce the impact to certain tax credits and deductions, including Social Security and Medicare.

Can I make a QCD?

While many IRAs are eligible for QCDs—Traditional, Rollover, Inherited, SEP (inactive plans only), and SIMPLE (inactive plans only)* —there are requirements:

• You must be 70½ or older to be eligible to make a QCD.
• QCDs are limited to the amount that would otherwise be taxed as ordinary income. This excludes non-deductible contributions.
• The maximum annual amount that can qualify for a QCD is $100,000. This applies to the sum of QCDs made to one or more charities in a calendar year. (If, however, you file taxes jointly, your spouse can also make a QCD from his or her own IRA within the same tax year for up to $100,000.)
• For a QCD to count towards your current year’s MRD, the funds must come out of your IRA by your MRD deadline, generally December 31.

[SweetieJean]

Some states do not recognize QCD's, so you might owe state taxes on this.

[rudloffm]

So when I get to the charitable donation section I do not have to detail each charity I gave a  QCD to because that total amount of QCDs already offset the RMD amounts?  It would be great if I did not have to detail each charity as I must have 20 of them.  I do have the letters acknowledging the donations for backup.

[macuser_22]

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@rudloffm wrote:

So when I get to the charitable donation section I do not have to detail each charity I gave a  QCD to because that total amount of QCDs already offset the RMD amounts?  It would be great if I did not have to detail each charity as I must have 20 of them.  I do have the letters acknowledging the donations for backup.

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You do not enter anything about QCD's other then the amount.   QCD's are entered in the IRA 1099-R section, not the Schedule A charitable deduction section.

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 72 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.

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

In the online version the Charitable Donation question is on the "Do any of these situations apply to you?" screen.

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.]

[SweetieJean]

Again, you do not enter these in the Charitable donations section.  Rather, after you enter the 1099-R in Federal >  Wages and Income > Retirement, there is a question that addresses this.

In order to be a QCD: (1) the retirement plan administrator must have sent the funds directly to the charities; or (2) sent them to you, but with the checks made payable to applicable charities.  If they/you did otherwise, please post back.