RMD Charitable Contribution
Assuming I don’t need my RMD: If I contribute my entire RMD as a charitable donation, am I able to avoid the income tax on that RMD? If so, are there any special steps I need to take or can I just contribute it to a 501c3 or other qualified charitable organization.
Permalink Submitted by Alan - IRA critic on Wed, 2016-01-27 20:35
If you are over 70.5 and take a QCD distribution at least equal to the RMD (but not more than 100k), the entire QCD will not be taxable. You report this on your 1040 similar to a rollover, but enter “QCD” next to line 15b instead of “rollover”. The custodian must issue a check made out to the qualified charity but it can be mailed to you to forward to the charity. The QCD must also be the first distribution of the year if you want your entire RMD to be offset. Note that your QCD can be smaller, equal or larger than your RMD, but if smaller the remainder of your RMD will be taxable.