If you made a gift from your IRA directly to charity in 2020 (also known as a Qualified Charitable Distribution or QCD), then you need to be aware that the 1099 you’ll receive for distributions from your IRA will not break out the amount that was a Qualified Charitable Distribution.
Required Minimum Distributions (RMDs) were suspended for 2020 when the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed. Individuals who had taken their RMD prior to the CARES Act had the option to deposit the earlier distribution back into their IRA before the end of the year. If you completed this type of transaction in 2020, you will want to be sure you are reporting the correct amount in taxable distributions for the year. You should be aware that contributions to an IRA are not reflected on the 1099-R but rather on tax form 5498. Form 5498 is typically not mailed out until early May.
The 1099-R you receive from the custodian will show the total distributions from your IRA in box 1. It is the taxpayer’s responsibility to keep records of distributions made to charity and contributions to their IRA and account for those on their tax return.
Please contact your Foster Group advisory team if you have questions or need documentation of account activity from your IRA.