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If you took money out of your IRA and then wrote a check to the church, that does not count as a QCD (qualified charitable distribution).
The money must go directly from the IRA to the charity. If that is the case, it will not be designated anywhere on the 1099-R. After entering the 1099-R, in TurboTax (TT), the interview will ask you about the QCD. Answer yes and follow the rest of the interview. TT will enter the notation QCD on the dotted line between lines 4a and 4b, on form 1040, to explain the difference in taxable amount, and prepare a worksheet for your records.
When you make a Qualified Charitable Deduction (see topic at the bottom of this IRS web page) you get a 1099-R with the total distribution in box 1, and the box 2 "taxable amount" is reduced by the portion paid directly to the charity from the IRA. If all the RMD was paid to the charity, the box 2 amount should be zero.
On the line for the taxable amount, you enter "QCD". TurboTax will prompt you for whether any was donated to a charity, and complete your forms appropriately.
For a Traditional IRA box 2a is ALWAYS the same as box 1 and box 2b (not determined) must be checked, regardless of being a QCD or not.
A QCD is reported by the user in the 1099-R interview. The 1099-R issuer cannot determine if the direct transfer to a charity met the QCD requirements or not or if the charity provider the donor with the necessary acknowledgement pf the gift. The QCD distribution is reported on a 1099-R no different than any other Traditional IRA distribution.
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.] |
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