Our First RMD — Can we delay All or Part until April of 2023
Ok…I should know this yet with the changes in recent years, we’d like to verify…
Situation: We both have our 72nd Birthdays in 2022 where our income is expected to be larger due to a one time event where we will have 1099 income. We wish to avoid unnecessary Medicare IRMA charges because of this one time event that sends us $20-30,000 into the next bracket & IRMA cost.
Question:
1) You used to be able to delay ‘ALL or part’ of a 1st RMD year’s payout to April of the next year. Is that still allowed so that we could take part of our age 72 RMD and take the rest in early 2023 ?
2) We know we could do a 2022 QCD (reduces AGI & MAGI) and even do IRA contributions (reduces AGI & MAGI too) so if we were to do some RMD, QCD (check sent directly by Broker to the Charity before 12/31/2022) and/or IRA will my Brokerage
house’s Tax reporting documents code each of these 3 in some way at the end of the year so that we have no confusion
with the IRS ?
Thank you…..
Permalink Submitted by Alan - IRA critic on Thu, 2022-02-03 17:24
Yes, that is still allowed. You can defer all or any portion to 2023 you wish to. Note that deferral will result in a slightly higher 12/31/2022 balance that would slightly increase your 2023 RMD.
No. Any QCDs you do are self reported on your 1040, similar to doing a rollover where you reduce the taxable amount by the amount of the QCD. There is no 1099R coding for custodians so the 1099R will look as if you did not do a QCD.
Note however that there is an “anti abuse” provision from the Secure Act that applies to any deductible TIRA contribution you make after age 70.5. Congress does not want you to make a deductible contribution and then do a QCD with that money. Therefore, any deductible contribution claimed on Form 1040 will have to reduce the amount of any QCDs you can claim when you next make a QCD. Example: You make a 7000 deductible TIRA contribution at 72, and do a 20,000 QCD. You can only claim a QCD of 13,000 (20-7). If you do not make a QCD then your next QCD(s) would be reduced until the 7000 has been applied. If you were to make a non deductible contribution to the TIRA, then there is no QCD reduction required.