# RMD and Taxes



## Space1950 (Jun 29, 2022)

If I have to make a RMD this year of $10000.00 and I ask the IRA Custodian to send 10% to IRA n STATE?  What happens? I get a Net check for 9800.00 with $100 sent each to IRS and STATE? 
OR
Do I get a net check of $10000.00 and $100 from my IRA cash goes to IRS and $100 from my IRA cash goes to STATE?

I think the answer is 9800 net comes to me from IRA and $100 each goes to IRS n STATE - for a grand total Distribution from my IRA of 10,000 (which is my requirement).


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## Timewise 60+ (Jul 3, 2022)

I agree with you option number two choice.  Your payments to the IRS and State do qualify as a part of your Required Minimum Distribution.   Good Luck!

We must be the same age; I also have my first RMD do this year...we donated ours, to offset some taxes due this year!


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## bowmore (Jul 3, 2022)

I agree donating from your IRA is a smart thing. I donated about 20% of my RMD  and it saved me $6000 in taxes. BUT it must be donated directly to the charity to qualify as a QCD(Qualified Charitable Donation). The check from the IRA custodian must be made out to the charity.


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## OneEyedDiva (Jul 4, 2022)

I agree that donating if not all, at least part of your RMD is the way to go to save taxes (IF you are included to donate to charities in the first place). For the last 3 years and I'll do it again this year, my RMDs are sent directly from Schwab to St. Jude, therefore are not taxed because they are qualified charitable deductions (QCDs).


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## StarSong (Jul 4, 2022)

OneEyedDiva said:


> I agree that donating if not all, at least part of your RMD is the way to go to save taxes (IF you are included to donate to charities in the first place). For the last 3 years and I'll do it again this year, my RMDs are sent directly from Schwab to St. Jude, therefore are not taxed because they are qualified charitable deductions (QCDs).


Is this any greater tax savings that taking the IRA distribution yourself and donating that same amount to charity?  I'm not quite at the age of RMD distribution and don't know the ins and outs of it.


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## C50 (Jul 4, 2022)

Gosh how great a feeling to save all that money for all those years and then you end up donating it to avoid taxes.  I'm a very charitable person but that's not how I planned using my 401(k) money.


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## ManjaroKDE (Jul 4, 2022)

>>>>


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## OneEyedDiva (Jul 5, 2022)

StarSong said:


> Is this any greater tax savings that taking the IRA distribution yourself and donating that same amount to charity?  I'm not quite at the age of RMD distribution and don't know the ins and outs of it.


Yes, it's a greater tax savings and for those who's RMDs are much bigger than mine there would be an even bigger tax advantage. The RMDs that get sent directly to (in my case) St. Jude from the brokerage are not taxed at all. If I received the distributions myself then sent them to St. Jude, the RMDs would be taxed at regular rates.

@C50 That's why I  worded my response *IF* one intends to donate to charity in the first place. Eg. I was already donating to St. Jude as a Partner in Hope for years before I started taking my RMDs. Now I'm getting a tax benefit from it. So let's say someone usually donates $1,000 to a particular charity each year. The smart move is to *wait *until it's RMD time and have the brokerage send that amount to the charity. I'd rather St. Jude get my money than Uncle Sam.


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## StarSong (Jul 5, 2022)

OneEyedDiva said:


> Yes, it's a greater tax savings and for those who's RMDs are much bigger than mine there would be an even bigger tax advantage. The RMDs that get sent directly to (in my case) St. Jude from the brokerage are not taxed at all. If I receive the distributions myself then send them to St. Jude, the RMDs would be taxed at regular rates.
> 
> @C50 That's why I  worded my response *IF* one intends to donate to charity in the first place. Eg. I was already donating to St. Jude as a Partner in Hope for years before I started taking my RMDs. Now I'm getting a tax benefit from it. So let's say someone usually donates $1,000 to a particular charity each year. The smart move is to *wait *until it's RMD time and have the brokerage send that amount to the charity. I'd rather St. Jude get my money than Uncle Sam.


Thank you for this info.  DH and I support several charities on a regular basis.


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## C50 (Jul 5, 2022)

OneEyedDiva said:


> Yes, it's a greater tax savings and for those who's RMDs are much bigger than mine there would be an even bigger tax advantage. The RMDs that get sent directly to (in my case) St. Jude from the brokerage are not taxed at all. If I receive the distributions myself then send them to St. Jude, the RMDs would be taxed at regular rates.
> 
> @C50 That's why I  worded my response *IF* one intends to donate to charity in the first place. Eg. I was already donating to St. Jude as a Partner in Hope for years before I started taking my RMDs. Now I'm getting a tax benefit from it. So let's say someone usually donates $1,000 to a particular charity each year. The smart move is to *wait *until it's RMD time and have the brokerage send that amount to the charity. I'd rather St. Jude get my money than Uncle Sam.


I'm glad to have read your post, and when I get there that is how I will contribute.  Also thank you for supporting St. Jude, their organization gets the bulk of my yearly contribution.


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## bowmore (Jul 5, 2022)

StarSong said:


> Is this any greater tax savings that taking the IRA distribution yourself and donating that same amount to charity?  I'm not quite at the age of RMD distribution and don't know the ins and outs of it.


The rules are very straightforward. If you take the distribution yourself and then donate  to charity you report it as adeduction. With the standard deduction at $13,700 for single, $ 27,400 for MFJ, most people use that.
For it to be a QCD, the check must be written with the payee being the charity.


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## OneEyedDiva (Jul 5, 2022)

C50 said:


> I'm glad to have read your post, and when I get there that is how I will contribute.  Also thank you for supporting St. Jude, their organization gets the bulk of my yearly contribution.


Thank you for saying this: _"I'm glad to have read your post" _and you're welcome, of course.


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## Timewise 60+ (Jul 5, 2022)

OneEyedDiva said:


> I agree that donating if not all, at least part of your RMD is the way to go to save taxes (IF you are included to donate to charities in the first place). For the last 3 years and I'll do it again this year, my RMDs are sent directly from Schwab to St. Jude, therefore are not taxed because they are qualified charitable deductions (QCDs).


Exactly what we did from Schwab to St. Jude!


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## Timewise 60+ (Jul 5, 2022)

C50 said:


> Gosh how great a feeling to save all that money for all those years and then you end up donating it to avoid taxes.  I'm a very charitable person but that's not how I planned using my 401(k) money.


I have donated all of my life to charities.  I planned my retirement accordingly...


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## OneEyedDiva (Jul 5, 2022)

Timewise 60+ said:


> Exactly what we did from Schwab to St. Jude!





Timewise 60+ said:


> Exactly what we did from Schwab to St. Jude!


I love the convenience of dealing with Schwab. I noticed that since I took my last RMD, Schwab now offers the ability to fill out the RMD QCD form online. The last couple of years I filled out the paper form, scanned it and uploaded the pages to Schwab's secure message center, which was way better than having to mail it in or fax it, especially since I no longer have a fax machine.


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## OneEyedDiva (Jul 6, 2022)

Timewise 60+ said:


> I have donated all of my life to charities.  I planned my retirement accordingly...


I did the online RMD yesterday. When doing the online RMD QCD request, what's different from last times is that instead of Schwab sending the check directly to St. Jude (or whatever charity), it now makes the check out in the charity's name, mails it to the client and we have to mail the check(s) to the charity(s) of our choice ourselves. It's an easier process for sure but I sure hope I get the check then St. Jude gets it without issue. I haven't had much trust in the postal system for years.


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## Timewise 60+ (Jul 7, 2022)

I agree with your concern on the USPS!  Schwab sent our donation to St. Jude direct.   We have not received a conformation letter from St. Jude, which concerns me.  I will wait a couple more weeks and if they do not send some confirmation, I will call them...

I need this in case the IRS comes calling...


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## OneEyedDiva (Jul 29, 2022)

Timewise 60+ said:


> I agree with your concern on the USPS!  Schwab sent our donation to St. Jude direct.   We have not received a conformation letter from St. Jude, which concerns me.  I will wait a couple more weeks and if they do not send some confirmation, I will call them...
> 
> I need this in case the IRS comes calling...


Sorry for the late reply; I didn't see that you had replied to me until today. If you click Reply at the bottom of the person's post you are responding to, that you did so will show up in that person's notifications. Hopefully you've gotten your letter from St. Jude by now. I mailed the check certified on July 15th.  Look at this tracking information which had me concerned:
*July 23, 2022*
In Transit, Arriving Late
Your package will arrive later than expected, but is still on its way. It is currently in transit to the next facility.
*July 19, 2022, 2:59 am*
Departed USPS Regional Destination Facility
MEMPHIS TN DISTRIBUTION CENTER 
*July 18, 2022, 6:32 am*
Arrived at USPS Regional Destination Facility
MEMPHIS TN DISTRIBUTION CENTER 

A couple of days after checking, I received the confirmation letter from St. Jude which was dated *July 21st*! Yet another thing that speaks to the unreliability of the USPS. I like that the letter was worded _"Your gift (the amount) was deposited directly from your IRA custodian Charles Schwab"  _I put a copy of these letters with other tax documents that come in. I also keep digital copies in iDrive (not an Apple app).


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