Putting Your 2017 QCD on Your Tax Return: Four Things You MUST Know | Ed Slott and Company, LLC

Putting Your 2017 QCD on Your Tax Return: Four Things You MUST Know

Wednesday, April 04, 2018
By Beverly DeVeny
Director of Retirement Education
Follow Us on Twitter: @theslottreport
 
A QCD is a qualified charitable distribution. It is a way to transfer funds from your IRA to a qualifying charity as a non-taxable distribution. It can also satisfy your RMD (required minimum distribution) for the year. You must be at least age 70½ at the time of the transaction to qualify.  Here are four things you must know about your QCD and your tax return:
 
  1. The IRA custodian does not do any special tax reporting of your QCD. They simply report the total amount of your distributions for the year.
  2. Your tax preparer won’t know you did a QCD unless you tell him/her. If you don’t tell them, you will be taxed on your QCD.
  3. You are responsible for telling IRS about your QCD transaction on your federal income tax return. 
  4. The instructions for reporting a QCD can be found in the instructions for Form 1040 (or other form you might be using for your return). You may need to share these instructions with your tax preparer.
 
From the instructions for Form 1040, page 25, Lines 15a and 15b.
 
Exception 3.
If all or part of the distribution is a qualified charitable distribution (QCD), enter the total distribution on line 15a. If the total amount distributed is a QCD, enter -0- on line 15b. If only part of the distribution is a QCD, enter the part that is not a QCD on line 15b unless Exception 2 applies to that part. Enter “QCD” next to line 15b.
 
 
 
 

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Tax Planning

Posted in: beverly deveny, Tax, IRS, QCD

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