TurboTax with RMDs and QCD

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Topic Author
Indianrock
Posts: 199
Joined: Sat Jan 02, 2010 12:40 pm

TurboTax with RMDs and QCD

Post by Indianrock » Wed Jan 01, 2020 8:19 am

I'm looking for feedback from those who have taken Required Minimum Distributions and associated Qualified Charitable Distributions ( and tax withholding) from those RMDs who use TurboTax.

Last year was my first year for both RMDs and QCD -- the first one in January was actually for 2018 ( turned 70.5 November 2018 ) with the 2019 RMD/QCD/TaxWitholding taken October of 2019.
If I was king: once a stock is purchased, you hold it for 30 days.

Silk McCue
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Re: TurboTax with RMDs and QCD

Post by Silk McCue » Wed Jan 01, 2020 9:05 am

It isn't clear what sort of feedback are you looking for? However, I will tell you that I use TurboTax for my mother and she has been doing QCDs for years. Once you enter the distribution information from the IRA the interview process will ask you if you "Transfer to Charity?" You will select the appropriate box such as "I had part of this distribution transferred to charity" and then enter the amount of the QCD on the next screen. That is all there is to it.

Cheers
Last edited by Silk McCue on Wed Jan 01, 2020 9:10 am, edited 1 time in total.

Topic Author
Indianrock
Posts: 199
Joined: Sat Jan 02, 2010 12:40 pm

Re: TurboTax with RMDs and QCD

Post by Indianrock » Wed Jan 01, 2020 9:09 am

Thank Silk, that is exactly what I wanted to hear. RMDs are so common I couldn't imagine TurboTax hadn't incorporated it, but QCDs are a little more rare. ( although now with increased standard deductions I suspect the word is getting out on QCDs )
If I was king: once a stock is purchased, you hold it for 30 days.

Silk McCue
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Joined: Thu Feb 25, 2016 7:11 pm

Re: TurboTax with RMDs and QCD

Post by Silk McCue » Wed Jan 01, 2020 9:11 am

Indianrock wrote:
Wed Jan 01, 2020 9:09 am
Thank Silk, that is exactly what I wanted to hear. RMDs are so common I couldn't imagine TurboTax hadn't incorporated it, but QCDs are a little more rare. ( although now with increased standard deductions I suspect the word is getting out on QCDs )
Happy to help. Wishing you a wonderful year ahead.

Cheers

tomd37
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Location: Middle Tennessee

Re: TurboTax with RMDs and QCD

Post by tomd37 » Wed Jan 01, 2020 11:22 am

I have been doing QCDs associated with RMDs for eleven years now. I am also a volunteer in the AARP Foundation free tax preparation service Tax Counseling for the Elderly (also referred to as Tax-Aide) and the tax software we use also has a place to indicate that a non-taxable event is being handled and the RMD taxable amount is reduced by the QCD amount.

Just a reminder to those reading this post, you must have attained the age of 70.5 on or before the actual date of your QCD. Don't do it any earlier than that date otherwise it is not considered a QCD. Happy New Year to all!
:sharebeer
Tom D.

kaneohe
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Re: TurboTax with RMDs and QCD

Post by kaneohe » Wed Jan 01, 2020 12:16 pm

tomd37 wrote:
Wed Jan 01, 2020 11:22 am
I have been doing QCDs associated with RMDs for eleven years now. I am also a volunteer in the AARP Foundation free tax preparation service Tax Counseling for the Elderly (also referred to as Tax-Aide) and the tax software we use also has a place to indicate that a non-taxable event is being handled and the RMD taxable amount is reduced by the QCD amount.

Just a reminder to those reading this post, you must have attained the age of 70.5 on or before the actual date of your QCD. Don't do it any earlier than that date otherwise it is not considered a QCD. Happy New Year to all!
:sharebeer
tomd..........I just did a trial on TS for this alone. First I just manually adjusted the taxable amount down by the QCD amount. Later I found the non-taxable QCD box and checked it. There was no place to enter the QCD amount, just a reminder to reduce the 2a amount manually by the QCD amount. I thought that with the 2nd entry, at least there would be a notation somewhere about the QCD but I saw none, even on the pdf copy of the whole return. Is it there and I missed it or does TS not tell you that there is a QCD?

Topic Author
Indianrock
Posts: 199
Joined: Sat Jan 02, 2010 12:40 pm

Re: TurboTax with RMDs and QCD

Post by Indianrock » Wed Jan 01, 2020 12:20 pm

What does TS stand for?
If I was king: once a stock is purchased, you hold it for 30 days.

kaneohe
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Re: TurboTax with RMDs and QCD

Post by kaneohe » Wed Jan 01, 2020 2:28 pm

Indianrock wrote:
Wed Jan 01, 2020 12:20 pm
What does TS stand for?
TS is Taxslayer, the software used in the AARP Tax-Aide program. May not be relevant to TT.

Topic Author
Indianrock
Posts: 199
Joined: Sat Jan 02, 2010 12:40 pm

Re: TurboTax with RMDs and QCD

Post by Indianrock » Wed Jan 01, 2020 2:47 pm

If I was king: once a stock is purchased, you hold it for 30 days.

tomd37
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Location: Middle Tennessee

Re: TurboTax with RMDs and QCD

Post by tomd37 » Wed Jan 01, 2020 4:31 pm

Kanahoe,
Midway down on page 2 of my 2018 Form 1040 there is a small notation in the blank space that prints out as
4b: QCD. That lets the IRS know the reporting on lines 4a and 4b includes a QCD.
Tom D.

kaneohe
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Re: TurboTax with RMDs and QCD

Post by kaneohe » Wed Jan 01, 2020 4:57 pm

tomd37 wrote:
Wed Jan 01, 2020 4:31 pm
Kanahoe,
Midway down on page 2 of my 2018 Form 1040 there is a small notation in the blank space that prints out as
4b: QCD. That lets the IRS know the reporting on lines 4a and 4b includes a QCD.
tomd...........thanks! Maybe it's my Mac and old software. I found a notation 4b: QCD at the very bottom of that page. Never would have found it w/o your help.

tomd37
Posts: 3276
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: TurboTax with RMDs and QCD

Post by tomd37 » Wed Jan 01, 2020 5:07 pm

Kanahoe - On the 2017 Form 1040, under the TaxSlayer system, QCD printed just to the left of line 15b. I'll be looking to see where some notation prints for the 2019 return. Happy New Year!
:sharebeer
Tom D.

Retired1809
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Re: TurboTax with RMDs and QCD

Post by Retired1809 » Thu Mar 05, 2020 9:12 pm

I had a different experience in my 2019 Form 1040 using Turbotax to report my wife's QCD of all of her RMD. (In the 2017 tax return, I simply imported her 1099-R showing the same full amount of the distribution in Box 1 Gross Distribution as well as in Box 2a Taxable amount, without changing anything and I later got an official letter from the IRS claiming that I had understated our gross income by the amount of her QCD. I answered their letter with my own letter explaining the QCD/RMD and three months later, I got their letter that they agreed. I didn't want to face the hassle of answering the IRS again for our 2019 tax return.)

So this year to report her 2019 I entered her 1099-R of her QCD/RMD I entered the full amount of her QCD/RMD in Box 1 but entered a zero in Box 2a Taxable Amount, thinking I would thwart another letter from the IRS. It made sense to me at the time. But when I took one of the final Turbotax steps, "The Review step," I was flagged on my zero "Taxable amount" that I had entered in Box 2a with this message:
"Taxable amount should not be zero if there is no prior year excess traditional IRA contribution on line 10b, 2018 column of the Federal Worksheet. So to pass Turbotax's review, I entered the full amount of the QCD/RMD in box 2a (instead of zero). It seems illogical to me but it seems to have worked; it didn't change taxable income. I'm saving a forever stamp to respond to the IRS letter that I'm expecting to receive.

Am I correct in entering the full amount of the QCD/RMD in "Box 2a, Taxable Amount?" Just doesn't seem right even though there's the dialogue that follows about "The full amount of the RMD was the QCD" (or whatever). Glad I didn't wait until April 14 to prepare our 1040.

Silk McCue
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Re: TurboTax with RMDs and QCD

Post by Silk McCue » Thu Mar 05, 2020 9:57 pm

Retired1809 wrote:
Thu Mar 05, 2020 9:12 pm
I had a different experience in my 2019 Form 1040 using Turbotax to report my wife's QCD of all of her RMD. (In the 2017 tax return, I simply imported her 1099-R showing the same full amount of the distribution in Box 1 Gross Distribution as well as in Box 2a Taxable amount, without changing anything and I later got an official letter from the IRS claiming that I had understated our gross income by the amount of her QCD. I answered their letter with my own letter explaining the QCD/RMD and three months later, I got their letter that they agreed. I didn't want to face the hassle of answering the IRS again for our 2019 tax return.)

So this year to report her 2019 I entered her 1099-R of her QCD/RMD I entered the full amount of her QCD/RMD in Box 1 but entered a zero in Box 2a Taxable Amount, thinking I would thwart another letter from the IRS. It made sense to me at the time. But when I took one of the final Turbotax steps, "The Review step," I was flagged on my zero "Taxable amount" that I had entered in Box 2a with this message:
"Taxable amount should not be zero if there is no prior year excess traditional IRA contribution on line 10b, 2018 column of the Federal Worksheet. So to pass Turbotax's review, I entered the full amount of the QCD/RMD in box 2a (instead of zero). It seems illogical to me but it seems to have worked; it didn't change taxable income. I'm saving a forever stamp to respond to the IRS letter that I'm expecting to receive.

Am I correct in entering the full amount of the QCD/RMD in "Box 2a, Taxable Amount?" Just doesn't seem right even though there's the dialogue that follows about "The full amount of the RMD was the QCD" (or whatever). Glad I didn't wait until April 14 to prepare our 1040.
You should enter exactly what is on the 1099-R. As you progress through the interview it will ask you if there was any QCD taken out. You just need to respond with the amount and TurboTax will do this properly for you. I’ve been doing this for my moms return with TT for years now.

Cheers

pshonore
Posts: 6842
Joined: Sun Jun 28, 2009 2:21 pm

Re: TurboTax with RMDs and QCD

Post by pshonore » Fri Mar 06, 2020 10:02 am

Silk McCue wrote:
Thu Mar 05, 2020 9:57 pm
Retired1809 wrote:
Thu Mar 05, 2020 9:12 pm
I had a different experience in my 2019 Form 1040 using Turbotax to report my wife's QCD of all of her RMD. (In the 2017 tax return, I simply imported her 1099-R showing the same full amount of the distribution in Box 1 Gross Distribution as well as in Box 2a Taxable amount, without changing anything and I later got an official letter from the IRS claiming that I had understated our gross income by the amount of her QCD. I answered their letter with my own letter explaining the QCD/RMD and three months later, I got their letter that they agreed. I didn't want to face the hassle of answering the IRS again for our 2019 tax return.)

So this year to report her 2019 I entered her 1099-R of her QCD/RMD I entered the full amount of her QCD/RMD in Box 1 but entered a zero in Box 2a Taxable Amount, thinking I would thwart another letter from the IRS. It made sense to me at the time. But when I took one of the final Turbotax steps, "The Review step," I was flagged on my zero "Taxable amount" that I had entered in Box 2a with this message:
"Taxable amount should not be zero if there is no prior year excess traditional IRA contribution on line 10b, 2018 column of the Federal Worksheet. So to pass Turbotax's review, I entered the full amount of the QCD/RMD in box 2a (instead of zero). It seems illogical to me but it seems to have worked; it didn't change taxable income. I'm saving a forever stamp to respond to the IRS letter that I'm expecting to receive.

Am I correct in entering the full amount of the QCD/RMD in "Box 2a, Taxable Amount?" Just doesn't seem right even though there's the dialogue that follows about "The full amount of the RMD was the QCD" (or whatever). Glad I didn't wait until April 14 to prepare our 1040.
You should enter exactly what is on the 1099-R. As you progress through the interview it will ask you if there was any QCD taken out. You just need to respond with the amount and TurboTax will do this properly for you. I’ve been doing this for my moms return with TT for years now.

Cheers
And if you're working in Form Mode, after you enter exactly whats on the form, scroll down and fill in the QCD boxes. I always work in Form mode, but usually switch to Interview mode for a final check

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