As we approach the end of the year and the time when people typically make their charitable contributions, I wanted to take a moment to clarify a subject of great confusion.
I get the following question with some consistency:
After I made my charitable contribution, why did I get a 1099 form? What do I do with it?
If you’ve given to charity by doing a qualified charitable distribution from your IRA, you get a 1099-R form from the brokerage firm holding the IRA account in custody. This form basically tells the IRS the amount of the withdrawal, among other things.
Although a QCD does not count towards your taxable income, it’s still important to provide this information to the IRS when you file your taxes. Give this 1099-R form to your accountant or whoever is preparing your taxes, as this distribution must be recorded on your tax return.
If you have questions about the specifics, please send us a message and we’d be happy to discuss.