My wife and I must start taking required minimum distributions next year. We would like to take some of our RMDs in the form of qualified charitable distributions, but are confused about the exact method of doing so. Can the money be first sent to us in checks payable to the charity and then forwarded by us, or must it be sent by the brokerage firm directly to the charity?

Either of those methods is fine. What's important is that the QCD check is drawn on your individual retirement account and is payable to the charity. It can't be a check drawn on another account, or a check that's payable to you and that you endorse to the charity.

QCDs are charitable donations that count toward your required minimum distribution, but aren't taxable. If your RMD is $10,000, for example, and your IRA gives $4,000 in QCDs, you only need to withdraw an additional $6,000 to fulfill your RMD obligation — and only $6,000 of your RMD is taxable. You'll report $10,000 of total IRA distributions on Form 1040 of your federal tax return, and on the next line, report $4,000 of taxable IRA distributions.

If you have check-writing privileges on your IRA, you can write the QCD checks yourself. Alternatively, tell your IRA custodian to issue QCD checks payable to the charities you've chosen. If the custodian forwards those checks to you, mail them to the charities with a note asking for a receipt saying you received no goods or services for the donation, says Alan E. Weiner, a Plainview tax accountant. If the custodian mails the checks itself, make sure their mailing includes information identifying you as the donor.

A Qualified Charitable Distribution satisfies your RMD requirement without increasing your taxable income.

bit.ly/IRSpublication526

bit.ly/reducetaxesIRAdonation

My wife and I must start taking required minimum distributions next year. We would like to take some of our RMDs in the form of qualified charitable distributions, but are confused about the exact method of doing so. Can the money be first sent to us in checks payable to the charity and then forwarded by us, or must it be sent by the brokerage firm directly to the charity?

Either of those methods is fine. What's important is that the QCD check is drawn on your individual retirement account and is payable to the charity. It can't be a check drawn on another account, or a check that's payable to you and that you endorse to the charity.

QCDs are charitable donations that count toward your required minimum distribution, but aren't taxable. If your RMD is $10,000, for example, and your IRA gives $4,000 in QCDs, you only need to withdraw an additional $6,000 to fulfill your RMD obligation — and only $6,000 of your RMD is taxable. You'll report $10,000 of total IRA distributions on Form 1040 of your federal tax return, and on the next line, report $4,000 of taxable IRA distributions.

If you have check-writing privileges on your IRA, you can write the QCD checks yourself. Alternatively, tell your IRA custodian to issue QCD checks payable to the charities you've chosen. If the custodian forwards those checks to you, mail them to the charities with a note asking for a receipt saying you received no goods or services for the donation, says Alan E. Weiner, a Plainview tax accountant. If the custodian mails the checks itself, make sure their mailing includes information identifying you as the donor.

The bottom line

A Qualified Charitable Distribution satisfies your RMD requirement without increasing your taxable income.

More information

bit.ly/IRSpublication526

bit.ly/reducetaxesIRAdonation