QCD over 70.5
Can you make a prior year SEP contribution if you are over 70.5, trustee transfer it to an IRA, and then QCD out the funds the following tax year when you have an RMD. I was reading about how active SEP cannot QCD and also how IRA contributions over 70.5 cannot qualify as a QCD. Would this strategy get around those rules and make the distributions eligible?
Permalink Submitted by Alan - IRA critic on Mon, 2024-02-19 22:16
Yes. You can transfer on going SEP IRA balances to a traditional IRA and then make a QCD from your traditional IRA after age 70.5, but the QCD will obviously not reduce your current tax bill until you are subject to RMDs.