It's tax document season, and for retirees over age 70½, a common tax filing mistake could be costing you thousands in unnecessary taxes. In this episode, Garrett Crawford, CFP® and Adam Reed discuss an important and commonly missed reporting issue with Qualified Charitable Distributions (QCDs). While the IRS recently introduced Code Y to explicitly label these gifts on Form 1099-R, many major custodians are still using the generic Code 7 (Normal Distribution) in for tax year 2025.

Unless you remember to tell your tax preparer about these distributions, your tax return will likely treat your tax-free gift as fully taxable income, potentially triggering higher tax bills and potentially unexpected Medicare IRMAA surcharges. We break down how to review your tax return and what to look for in Box 7 of your 1099-R, and how to fix prior-year errors through the amendment process.

Timestamps:

(00:00) – Intro

(01:02) – Tax Documents

(02:25) – QCD Mistake

(04:40) – 1099-R discussion

(07:31) – Code 7 and Code Y

(09:50) – Can it be Fixed?

(13:10) – Conclusion

(15:05) – Outro

Year-End Tax Planning Checklist for HNW Retirees: https://www.retirementtaxmatters.com/checklist

Disclosures:

www.retirementtaxmatters.com/disclosures

How to Handle Your 1099-R Code 7 to Ensure Your QCD Stays 100% Tax-Free | Episode 23

Retirement Tax Matters | Advanced Tax Planning for High-Net-Worth Retirees

How to Handle Your 1099-R Code 7 to Ensure Your QCD Stays 100% Tax-Free | Episode 23