Would You Rather Give to Charity or the IRS? | The Financial Commute (Ep. 115)

[@snort455]

Does the Qualified Charitable Distribution count toward my Social Security MAGI? Even tho I give from my IRA to my church, the full amount withdrawn from my IRA shows up on my 1099? How do i not have to declare it?

[@morton_wealth]

To answer your first question: No, a Qualified Charitable Distribution (QCD) does not count toward your Modified Adjusted Gross Income (MAGI) for Social Security purposes. By making a QCD, you can lower your MAGI, which could potentially reduce or eliminate the taxation of your Social Security benefits. To answer your second question: The full amount of your QCD will show up on your 1099-R form from your IRA custodian. This is because the IRA custodian reports the distribution but doesn't specify it as a QCD. When filing your taxes, you'll need to report the QCD correctly to ensure it's not counted as taxable income: 1) Report the total distribution on Form 1040, line 4a (IRA distributions) 2) On line 4b (taxable amount), write $0 if the entire distribution was a QCD 3) Write "QCD" next to line 4b to indicate it was a qualified charitable distribution ‍Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your financial, legal, and tax professionals before implementing any transactions and/or strategies concerning your finances.

[@francoisekalunga6880]

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