Can I write a check from my IRA to use as a qualified charitable distribution (QCD)?
Can I write a check from my IRA to use as a qualified charitable distribution (QCD)? For example, if my required minimum distribution (RMD) is $50,000 and I need a total of $70,000 from my IRA, can I withdraw $50,000 in January and make QCDs totaling $5,000 in February, and withdraw $15,000 in March? Will the $5,000 QCD be okay to subtract from the $70,000 reported on Form 1099-R?
From your required minimum distributions you can send up to 100% of the RMD or to a max $100,000, whichever is lower, directly to charity. Writing a check is one of the preferred methods. Keep in mind that you will receive a 1099-R that does not show that the money went to charity. You have to make that adjustment when you report your taxes on your 1040.
The QCD is a great tax planning tool for those who are taking RMDs - especially in light of the new tax law.
Kudos to you for being proactive in your charitable planning!
If your custodian offers check writing priveleges, you should be able to write the check directly to the Charity. Another option is to set up direct distributions from the custodian to the charity. However, this can result in issues with tax withholding, if you're not careful!
What you do NOT want to do is to take the RMD yourself, and then write a check to the charity from those proceeds.
Two other charitable giving strategies that you might want to consider are Donor Advised Funds and donating appreciated securities.
Let me know if I can help! Helping charitably inclined folks is one of my favorite parts of my job!
You may write a check from your IRA and make it payable to a charity and it is considered a QCD. The RMD is the minimum amount that must be taken from your IRA from Jan 1 through Dec 31 of the year. Bear in mind that you must not take any promotional item from the charity otherwise, your entire contribution is disallowed as a QCD. The custodian does not track the QCD but only the amount of withdrawals. You will still need all of the documentation to substantiate the charitable contribution. In case you are not 70 1/2, bear in mind that the QCD must be made when you are that age or older, not a day before.