QCD timing?

Money
1

Maybe I am over thinking this, but have a question about QCD timing. Hoping for some expertise here as I am finding nothing online.

First though, a really brief description of the QCD mechanism. This is where you have traditional IRA money and a Required Minimum Distribution (RMD). RMD varies by how much you have and how old you are. Anyway you can order some (or maybe all) of your RMD to be paid directly to one or more charitable organizations, typically 501(c) qualified. There is a limit each year. Doing some QCD effectively un-taxes whatever you give.

Now suppose my RMD is 50k and I wanna spend. I take the 50K and spend it myself, and know well that I owe tax on it. Later in the year I feel charitable and order 100K to be paid to my qualified charity. Question: Can I claim the full 100k as charitable, or is the chairable part limited because I already drew 50K?

2

You will have withdrawn $150K from your IRA. If you met the QCD regs on the $100K contribution, you will report the $150K withdrawal and report the taxable portion as $50K. There are limits on QCDs. In 2026, they are $111K/single and $222K/married. If those limits are exceeded, the overage will be considered a taxable withdrawal. If you withdraw the money and then contribute it, it is not a QCD and you will have $150K taxable income. You may have a $100K tax deduction, but there are also limitations on those deductions.

I have seen some so-called financial web sites say you have to take the QCDs first, but they offer no underlying proofs of that requirement.. I have seen nothing on any IRS sites, written instructions or other materials that say that. We have accounts with Fidelity and Schwab, and neither of those firms say that.

3

I’d agree with Jim on this one.

You could also move any excess to a Roth IRA. Meaning you can’t move any RMDs to a Roth but any money you take out above the RMD can be put in a Roth if you so choose.

But yes you can exempt taxes on up to the limit per year. You may want to double check any particulars with a tax person you work with just to make sure we’re not missing anything

4

Thanks J2 that eases my anxiety. Will re-phrase: “Don’t worry about timing…”

Smart idea sounds reasonable – do some backdoor Roth with with excess taxed money-