I have made an extra $5000 QCD iRA distribution above the limit of $105,000 for 2024. How do I correct this, and will the extra $5000 taxable distribution be deductible as a charitable deduction if i meet the overall limits for charitable contributions?
You don’t need to and the custodian will not reclassify because the IRA custodian does not have any special reporting for QCDs. This is all self reported on your 1040. Your 1099R will look the same as if you did not do a QCD. But you must report on your Form 1040 as follows, assuming that 110,000 was your total distribution :
Line 4a – 110,000, enter QCD next to 4b, and 5,000 (taxable amount) on line 4b.
If you happen to have any IRA basis, you will need Form 8606, and the QCD is deemed to consist only of taxable amounts, so Form 8606 would only apply any IRA basis to the 5000 non QCD amount.
Permalink Submitted by Alan - IRA critic on Mon, 2024-10-21 11:03
Yes, you can only report 105k as a 2024 QCD, with the other 5k being taxable. But if you can itemize deductions, you could deduct the other 5k as a charitable contribution. Most seniors do not have enough itemized deductions to exceed the standard deduction, but you might.
There is no actual correction available, other than if you have already met your RMD, you could roll 5k back to your IRA using other funds. But you can only do one such rollover in a 12 month period, so probably not worth using up your rollover for 5k.
Permalink Submitted by William Solari on Mon, 2024-10-21 11:24
Thank you for the prompt response. I’m having my Brokerage account changed to reflect that the extra $5,000 is reclassified as part of my required RMD as a taxable distribution, and then claim the $5,000 as a charitable contribution.