2021 QCD at Vanguard

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
stan1
Posts: 9950
Joined: Mon Oct 08, 2007 4:35 pm

2021 QCD at Vanguard

Post by stan1 »

Spouse is eligible for QCDs in 2021 (age 70.5 as of a few days ago). Plan is to use QCDs to donate to charity for the next few years before RMD starts.

As I understand it there are two ways to do a QCD: request check from Vanguard or get checkwriting on the Traditional IRA (e.g. settlement fund).

Vanguard's recent errors on issuing QCD checks are noted. Hopefully the problem is fixed and we know what to look for before sending the check onward to the charities.

Assuming Vanguard will now correctly issue the QCD checks, is there a preference for one way over the other?
RudyS
Posts: 2176
Joined: Tue Oct 27, 2015 10:11 am

Re: 2021 QCD at Vanguard

Post by RudyS »

For years I have using check writing on my VG settlement fund for QCDs. A simpler process. Initially there was some debate about whether this would be acceptable to the IRS, but by now the consensus seems to be that it is OK. The money really does go directly to the charity, it never passes through my hands.
Gill
Posts: 7235
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: 2021 QCD at Vanguard

Post by Gill »

What about the inscription on the check saying, "Not valid for less than $250"? There seems to be no problem getting a Vanguard issued check for less than $250. I have some over and some under so I just request all the checks from Vanguard.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

Gill wrote: Fri Jan 01, 2021 5:05 pm What about the inscription on the check saying, "Not valid for less than $250"? There seems to be no problem getting a Vanguard issued check for less than $250. I have some over and some under so I just request all the checks from Vanguard.
Gill
Vanguard has told me that the "not valid" note appears only for the mutual fund accounts. The checks from the brokerage accounts do not have this imprint. It seems very strange... :?:

My checks have the "not valid" imprint. So, I use those for amounts of $250 or more, and request Vanguard checks for smaller amounts.
Last edited by sport on Fri Jan 01, 2021 5:32 pm, edited 1 time in total.
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

With the problems at the USPS, I am reluctant to make QCDs for at least a few weeks. If you request the check from Vanguard, you have two mailings to be concerned about. If you write the check, you have only one. One of my utility bills normally arrives about the 13th of the month. I have not received it yet. Another one that arrives on the 16th showed up on 12/30.
Digital Dave
Posts: 65
Joined: Sat Mar 10, 2007 7:47 pm
Location: Western New York

Re: 2021 QCD at Vanguard

Post by Digital Dave »

I also turned 70.5 late last year and made my first QCD by requesting a check made out to the charity from Vanguard. Looks like this will be my preferred method of giving.
Being somewhat optimistic, I expect to be 72 next year. My plan is to do my QCDs first and then towards the end of the year doing the RMD. My question is will Vanguard notice my earlier in the year QCDs and deduct that amount from my RMD?
Thank you.
Investing in Mutual Funds, ETF's, Forever Stamps and Bittulips.
Topic Author
stan1
Posts: 9950
Joined: Mon Oct 08, 2007 4:35 pm

Re: 2021 QCD at Vanguard

Post by stan1 »

Is there a record-keeping reason why it is beneficial for Vanguard to issue the check and know it is a QCD? Spouse does plan to use Vanguard RMD service (and uses it for Inherited IRA today). Once we start the Traditional IRA RMD we would have federal/state taxes withheld.

If we write the check ourselves Vanguard will not know whether it is a QCD or a check to a car dealer. Does that matter in any way?
Alan S.
Posts: 10533
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: 2021 QCD at Vanguard

Post by Alan S. »

RudyS wrote: Fri Jan 01, 2021 5:01 pm For years I have using check writing on my VG settlement fund for QCDs. A simpler process. Initially there was some debate about whether this would be acceptable to the IRS, but by now the consensus seems to be that it is OK. The money really does go directly to the charity, it never passes through my hands.
There is no question that this is acceptable to the IRS. It's in Notice 2007-7.

However, one concern with IRA owner check writing is what happens if the charity loses the check, or negotiates it after year end? Does VG address how this situation is normally handled, eg your 1099R, year end TIRA value, etc?

Obviously, IRA owner check writing should conclude by Thanksgiving to reduce the chances of pitfalls.
Topic Author
stan1
Posts: 9950
Joined: Mon Oct 08, 2007 4:35 pm

Re: 2021 QCD at Vanguard

Post by stan1 »

Alan S. wrote: Fri Jan 01, 2021 5:43 pm Obviously, IRA owner check writing should conclude by Thanksgiving to reduce the chances of pitfalls.
That's why I'm asking on Jan 1st!
Alan S.
Posts: 10533
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: 2021 QCD at Vanguard

Post by Alan S. »

stan1 wrote: Fri Jan 01, 2021 5:39 pm Is there a record-keeping reason why it is beneficial for Vanguard to issue the check and know it is a QCD? Spouse does plan to use Vanguard RMD service (and uses it for Inherited IRA today). Once we start the Traditional IRA RMD we would have federal/state taxes withheld.

If we write the check ourselves Vanguard will not know whether it is a QCD or a check to a car dealer. Does that matter in any way?
No. The IRA custodian does not report QCDs differently than for any other distribution. There is no special 1099R code for QCDs. The issue is when VG becomes aware of the check, which I would expect to be not before it is negotiated.
Gill
Posts: 7235
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: 2021 QCD at Vanguard

Post by Gill »

Digital Dave wrote: Fri Jan 01, 2021 5:35 pm I also turned 70.5 late last year and made my first QCD by requesting a check made out to the charity from Vanguard. Looks like this will be my preferred method of giving.
Being somewhat optimistic, I expect to be 72 next year. My plan is to do my QCDs first and then towards the end of the year doing the RMD. My question is will Vanguard notice my earlier in the year QCDs and deduct that amount from my RMD?
Thank you.
It’s up to you to tell Vanguard how much to distribute as the balance.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

When you get your 1099R for your QCDs and other RMD distributions, the 1099 just lumps them together and calls them ordinary withdrawals. Vanguard cannot know and does not care if your donation went to a qualified charity. As far a V is concerned, you just withdrew money from the account. The includes you writing checks, V writing checks, transfers to your taxable account, and transfers to your bank account. QCDs are established on your tax return.
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

Gill wrote: Fri Jan 01, 2021 5:47 pm
Digital Dave wrote: Fri Jan 01, 2021 5:35 pm I also turned 70.5 late last year and made my first QCD by requesting a check made out to the charity from Vanguard. Looks like this will be my preferred method of giving.
Being somewhat optimistic, I expect to be 72 next year. My plan is to do my QCDs first and then towards the end of the year doing the RMD. My question is will Vanguard notice my earlier in the year QCDs and deduct that amount from my RMD?
Thank you.
It’s up to you to tell Vanguard how much to distribute as the balance.
Gill
Vanguard shows the amount of your RMD and the amount you have withdrawn to date. They also show the remaining amount you need to complete the RMD.
User avatar
GerryL
Posts: 3100
Joined: Fri Sep 20, 2013 11:40 pm

Re: 2021 QCD at Vanguard

Post by GerryL »

sport wrote: Fri Jan 01, 2021 5:54 pm
Gill wrote: Fri Jan 01, 2021 5:47 pm
Digital Dave wrote: Fri Jan 01, 2021 5:35 pm I also turned 70.5 late last year and made my first QCD by requesting a check made out to the charity from Vanguard. Looks like this will be my preferred method of giving.
Being somewhat optimistic, I expect to be 72 next year. My plan is to do my QCDs first and then towards the end of the year doing the RMD. My question is will Vanguard notice my earlier in the year QCDs and deduct that amount from my RMD?
Thank you.
It’s up to you to tell Vanguard how much to distribute as the balance.
Gill
Vanguard shows the amount of your RMD and the amount you have withdrawn to date. They also show the remaining amount you need to complete the RMD.
Once you reach RMD age and Vanguard calculates your RMD, anything you have distributed from your IRA is counted against your RMD. It is up to you to keep track of how much you have used for QCDs so you can report that when filling out your tax forms.

I execute QCDs early in the year by requesting checks printed and sent to me by Vanguard. I make an image of the check and the cover letter before sending to the charity, with the reminder that I need an acknowledgement.
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

GerryL wrote: Fri Jan 01, 2021 7:27 pm I make an image of the check and the cover letter before sending to the charity, with the reminder that I need an acknowledgement.
Do you send that large "stub" that Vanguard attaches to the check, or do you just send the check?
Digital Dave
Posts: 65
Joined: Sat Mar 10, 2007 7:47 pm
Location: Western New York

Re: 2021 QCD at Vanguard

Post by Digital Dave »

sport wrote: Fri Jan 01, 2021 5:54 pm Vanguard shows the amount of your RMD and the amount you have withdrawn to date. They also show the remaining amount you need to complete the RMD.
Thank you! I was hoping they would do it this way.
Investing in Mutual Funds, ETF's, Forever Stamps and Bittulips.
drzzzzz
Posts: 639
Joined: Sat Sep 22, 2012 9:56 pm

Re: 2021 QCD at Vanguard

Post by drzzzzz »

Our IRA checks on brokerage accounts do not have any minimum imprinted on them and we have written QCD checks for as small as $18 without any issues. In the past when we had mutual fund accounts and money market checks with the imprinted $250 minimum, we often wrote checks for less after Vanguard told us that they would honor them even if the amount is for less than the minimum.
tomd37
Posts: 3578
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: 2021 QCD at Vanguard

Post by tomd37 »

Sport - I do as Gerry L does, that is I make a copy of the whole document as it comes to me via mail from Vanguard, then tear off the check itself and send it along with a cover letter to the charity. In that letter I specifically request the charity to send me a proper receipt within a one month period. I have been doing this for the past ten years and have not had any issues other than one agency not sending a proper receipt. Called them and told them what to do. I am getting ready to do my QCDs in the next couple of months and then do the remaining RMD in October. That leaves me time to do any additional QCD that might arise later.

I am a little concerned about Vanguard's issuing the check improperly and a bit less concerned about USPS performance, but maybe both will improve before QCD time arrives.
Tom D.
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

drzzzzz wrote: Fri Jan 01, 2021 8:27 pm ...we have written QCD checks for as small as $18...
$18 is a very good number for a donation. :beer
jhawktx
Posts: 345
Joined: Thu May 19, 2011 8:15 am

Re: 2021 QCD at Vanguard

Post by jhawktx »

I'm a few years away from QCDs. Maybe by then there will be a more efficient way to handle these. VG snail mailing a check to me which I then snail mail to a charity seems very 1960's-ish. Does VG still use a typewriter to prepare the initial check with carbon paper for the check copy? I hope they type the check carefully and mistake free so they don't have to use white out for corrections.
User avatar
GerryL
Posts: 3100
Joined: Fri Sep 20, 2013 11:40 pm

Re: 2021 QCD at Vanguard

Post by GerryL »

sport wrote: Fri Jan 01, 2021 7:32 pm
GerryL wrote: Fri Jan 01, 2021 7:27 pm I make an image of the check and the cover letter before sending to the charity, with the reminder that I need an acknowledgement.
Do you send that large "stub" that Vanguard attaches to the check, or do you just send the check?
Just the check, and the cover letter. Stub is for my records.
I do 4-6 large contributions via QCD each year. The rest, mostly smaller, I do through my DAF.
I do the QCD early in the year so I can quickly request a match from my former employer. Get it all done and go on with life, such as it is.
carolinaman
Posts: 4551
Joined: Wed Dec 28, 2011 9:56 am
Location: North Carolina

Re: 2021 QCD at Vanguard

Post by carolinaman »

I have done QCDs from Vanguard for several years and have had no issues. I do early December and distribute to the charities I support.
Saving$
Posts: 2150
Joined: Sat Nov 05, 2011 8:33 pm

Re: 2021 QCD at Vanguard

Post by Saving$ »

I agree that snail mailing the check which the IRA owner then needs to snail mail or deliver to the charity, as the only option, is a bit antiquated.

However, keep in mind that prior to 2020, in order to obtain a QCD check, you had to call Vanguard, make a phone appointment, fax them your list of charities, then go through each QCD Charity and amount with the phone rep and hope they got it correct. THEN they would commence the snail mail procedure.

In 2020, I was pleasantly surprised to find Vanguard's website now allows those who do QCD's to do the data entry part themselves, online. THEN the snail mail procedure commences. And for some charities, the simplest way to get QCD money to them is via a snail mail check. They are just not set up for other methods.

Contrary to the poster above, if you are going to do both QCD's and DAF grants via Vanguard, I would think the smaller donations should be via QCD as there is apparently no minimum for QCD's. Vanguard's minimum DAF grant is $500. However, I suppose this is relative to your definition of "smaller donation."
tomd37
Posts: 3578
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: 2021 QCD at Vanguard

Post by tomd37 »

Saving$ - I did online QCDs starting in 2018. Prior to that I made an appointment with my Flagship representative, emailed him a list of the QCD recipients and the amounts the day before the telephone appointment, and then went through the ritual on the telephone. I think the online method was implemented before 2018 but I cannot be sure.
Tom D.
User avatar
Flobes
Posts: 1440
Joined: Tue Feb 16, 2010 12:40 am
Location: Home

Re: 2021 QCD at Vanguard

Post by Flobes »

I am watching this thread with keen personal interest.

In November 2021, I turn 70.5.

It's been my plan to then make QCDs from my Inherited IRA in lieu of (and perhaps in excess of) RMD. It has a much higher RMD factor than my own Traditional IRA will incur in two years when I'm 72. I've also used that Inherited IRA to withhold annual "safe harbor" taxes from distributions.

So I'm aiming for "On Your Mark-Get Set-Go" QCD execution near year's end. I can't act any sooner, other than to prepare. Any guidance is much appreciated.
stan1 wrote: Fri Jan 01, 2021 4:46 pm As I understand it there are two ways to do a QCD: request check from Vanguard or get checkwriting on the Traditional IRA...is there a preference for one way over the other?
My understanding is that if VG cuts the checks, then the transaction date is fixed by the date they handle the matter. However, if I write the checks, then the effective date is set by whenever the charity redeems it, which might or might not happen, especially problematic at year end.
carolinaman wrote: Sat Jan 02, 2021 9:30 am I have done QCDs from Vanguard for several years and have had no issues. I do early December...
That's reassuring.
Saving$ wrote: Sat Jan 02, 2021 10:08 am Vanguard's website now allows those who do QCD's to do the data entry part themselves, online. THEN the snail mail procedure commences.
tomd37 wrote: Sat Jan 02, 2021 10:19 am I did online QCDs...
Speaking with a VG rep a few weeks ago, he instructed that t day after I arrive >70.5, I call VG and relay all instructions on the phone, and VG will then issue checks to send to me to send to charities. He did not mention that I could handle these details on my own on the website.

Can you please point me to where on the Vanguard website QCD instructions are entered? I looked, and did not find it under the website website: "Retirement contributions, distributions & RMDs" tab. Is it within the account itself somewhere in the "• Buy • Sell• Exchange • Take RMD" choices?

FWIW This account is currently on the "old" platform but I'm planning to transition all my VG accounts to the "new" platform this month.
tomd37
Posts: 3578
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: 2021 QCD at Vanguard

Post by tomd37 »

Flobes - Follow this track after logging into your account

My Accounts>Retirement contributions, distributions & RMDs>RMD>Take your RMD now. I am on the old platform also.
Tom D.
User avatar
GerryL
Posts: 3100
Joined: Fri Sep 20, 2013 11:40 pm

Re: 2021 QCD at Vanguard

Post by GerryL »

Saving$ wrote: Sat Jan 02, 2021 10:08 am
Contrary to the poster above, if you are going to do both QCD's and DAF grants via Vanguard, I would think the smaller donations should be via QCD as there is apparently no minimum for QCD's. Vanguard's minimum DAF grant is $500. However, I suppose this is relative to your definition of "smaller donation."
But if your DAF is at Fidelity, the minimum is $50.
Now that I have a high confidence level about the long-term viability of my retirement plan, I am moving toward larger "small" donations. $50 has become $100 and $100 has become $200. I have been using QCDs for >$1000.

This will be year 3 of QCDs. I have only ever done them using the online tool. I don't think I've even called Vanguard since I got notice that my personal rep was taking a "temporary" absence.

-Poster Above
Topic Author
stan1
Posts: 9950
Joined: Mon Oct 08, 2007 4:35 pm

Re: 2021 QCD at Vanguard

Post by stan1 »

Also, I am not aware of a change, but the Vanguard RMD tool user interface seems to indicate that a QCD can be taken out of an Inherited Traditional IRA. I didn't click on the link.

Am I correct that a QCD cannot be made out of an Inherited IRA?
tomd37
Posts: 3578
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: 2021 QCD at Vanguard

Post by tomd37 »

stan1 - Google the following as it contains great info:

8 Things You Need to Know About Your Inherited IRA
Tom D.
User avatar
Flobes
Posts: 1440
Joined: Tue Feb 16, 2010 12:40 am
Location: Home

Re: 2021 QCD at Vanguard

Post by Flobes »

tomd37 wrote: Sat Jan 02, 2021 2:27 pm Flobes - Follow this track after logging into your account

My Accounts>Retirement contributions, distributions & RMDs>RMD>Take your RMD now. I am on the old platform also.
Thanks muchly for prompt response. QCD option is not visible there now. Likely because system knows that I'm not yet old enough to qualify. My options are taxable acct money market or my linked outside checking account, and 2021 RMD amount is displayed.
stan1 wrote: Sat Jan 02, 2021 2:35 pm Am I correct that a QCD cannot be made out of an Inherited IRA?
A QCD can be made from an Inherited IRA, but only after the "beneficiary" (not the original owner) attains >70.5 age. However, Roth conversions cannot be made from Inherited IRA.
Topic Author
stan1
Posts: 9950
Joined: Mon Oct 08, 2007 4:35 pm

Re: 2021 QCD at Vanguard

Post by stan1 »

Flobes wrote: Sat Jan 02, 2021 3:09 pm
stan1 wrote: Sat Jan 02, 2021 2:35 pm Am I correct that a QCD cannot be made out of an Inherited IRA?
A QCD can be made from an Inherited IRA, but only after the "beneficiary" (not the original owner) attains >70.5 age. However, Roth conversions cannot be made from Inherited IRA.
Thanks, I must have had my exceptions mixed up.
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

Flobes wrote: Sat Jan 02, 2021 2:05 pm Can you please point me to where on the Vanguard website QCD instructions are entered? I looked, and did not find it under the website website: "Retirement contributions, distributions & RMDs" tab. Is it within the account itself somewhere in the "• Buy • Sell• Exchange • Take RMD" choices?

FWIW This account is currently on the "old" platform but I'm planning to transition all my VG accounts to the "new" platform this month.
I am also on the old platform. To request a QCD check on line, I go to my IRA and enter a "sell". The next screen has a check box marked "Is this a QCD?" If you check that, then it asks for the name of the charity which you type in. If you are too young, the QCD option most likely will not be offered.
User avatar
Flobes
Posts: 1440
Joined: Tue Feb 16, 2010 12:40 am
Location: Home

Re: 2021 QCD at Vanguard

Post by Flobes »

sport wrote: Fri Jan 01, 2021 8:54 pm
drzzzzz wrote: Fri Jan 01, 2021 8:27 pm ...we have written QCD checks for as small as $18...
$18 is a very good number for a donation. :beer
Q1: When multiple QCD requests are made online, do they arrive together in a single package or are they mailed one by one?

So when I request 180 $18 QCD gifts, do I get one big envelope of 180 checks? Or #180 VG envelopes, each with a single check?

Q2: Or is there some limit on quantity of QCDs that can be processed @VG in a single year?
sport wrote: Sat Jan 02, 2021 3:13 pm ...The next screen has a check box marked "Is this a QCD?" If you check that, then it asks for the name of the charity which you type in.
What info about the charity is required? Name only?
sport wrote: Sat Jan 02, 2021 3:13 pm If you are too young, the QCD option most likely will not be offered.
That's my conclusion too as to why I'm not seeing QCD options...
tomd37
Posts: 3578
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: 2021 QCD at Vanguard

Post by tomd37 »

Flobes - You are best calling Vanguard and asking them all your questions, especially if you are not yet eligible for QCDs. I've been doing QCDs for twelve years now with no issues, but then my minimum QCDs have been $500 each and upward from there.
Tom D.
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

Flobes wrote: Sat Jan 02, 2021 3:42 pm
sport wrote: Fri Jan 01, 2021 8:54 pm
drzzzzz wrote: Fri Jan 01, 2021 8:27 pm ...we have written QCD checks for as small as $18...
$18 is a very good number for a donation. :beer
Q1: When multiple QCD requests are made online, do they arrive together in a single package or are they mailed one by one?
I believe each one gets its own envelope. It's most likely an automated process.
So when I request 180 $18 QCD gifts, do I get one big envelope of 180 checks? Or #180 VG envelopes, each with a single check?

Q2: Or is there some limit on quantity of QCDs that can be processed @VG in a single year?
Not that I know of.
sport wrote: Sat Jan 02, 2021 3:13 pm ...The next screen has a check box marked "Is this a QCD?" If you check that, then it asks for the name of the charity which you type in.
What info about the charity is required? Name only?
Yes, they send the check to your address.
sport wrote: Sat Jan 02, 2021 3:13 pm If you are too young, the QCD option most likely will not be offered.
That's my conclusion too as to why I'm not seeing QCD options...
Saving$
Posts: 2150
Joined: Sat Nov 05, 2011 8:33 pm

Re: 2021 QCD at Vanguard

Post by Saving$ »

sport wrote: Sat Jan 02, 2021 3:13 pm
Flobes wrote: Sat Jan 02, 2021 2:05 pm Can you please point me to where on the Vanguard website QCD instructions are entered? I looked, and did not find it under the website website: "Retirement contributions, distributions & RMDs" tab. Is it within the account itself somewhere in the "• Buy • Sell• Exchange • Take RMD" choices?

FWIW This account is currently on the "old" platform but I'm planning to transition all my VG accounts to the "new" platform this month.
I am also on the old platform. To request a QCD check on line, I go to my IRA and enter a "sell". The next screen has a check box marked "Is this a QCD?" If you check that, then it asks for the name of the charity which you type in. If you are too young, the QCD option most likely will not be offered.
This.
Topic Author
stan1
Posts: 9950
Joined: Mon Oct 08, 2007 4:35 pm

Re: 2021 QCD at Vanguard

Post by stan1 »

I guess I'd offer a little bit different advice given the backlog reported at Vanguard call centers. If you are too young to do a QCD wait until you are old enough to do one then the user interface will be available and if you still have questions that can't be answered with an internet search you can call Vanguard. At this point I'd only recommend people call Vanguard if they need to do something that cannot be done online. They are not staffed to answer questions (and may not do any better than a search engine) so help out your fellow investors and do your part to reduce call volume for those who need it.
User avatar
GerryL
Posts: 3100
Joined: Fri Sep 20, 2013 11:40 pm

Re: 2021 QCD at Vanguard

Post by GerryL »

stan1 wrote: Tue Jan 05, 2021 8:25 pm I guess I'd offer a little bit different advice given the backlog reported at Vanguard call centers. If you are too young to do a QCD wait until you are old enough to do one then the user interface will be available and if you still have questions that can't be answered with an internet search you can call Vanguard. At this point I'd only recommend people call Vanguard if they need to do something that cannot be done online. They are not staffed to answer questions (and may not do any better than a search engine) so help out your fellow investors and do your part to reduce call volume for those who need it.
I remember being antsy about wanting to see how to take RMDs and how to execute QCDs before I was "of age." When the time finally came, it was simple to figure out. And just a warning, the process may change between now and then, so any steps you learn from us old-timers may be bogus when it's your turn.
Alan S.
Posts: 10533
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: 2021 QCD at Vanguard

Post by Alan S. »

I think if too many people start requesting a ridiculous number of QCD checks, IRA custodians will start limiting the number of QCDs, and others will have to request check writing on their IRA accounts.

Remember, all these custodians have been in an ER and fee war the past few years, and now they are having to waive millions of MM fee operating expenses because of the low interest rates. These low rates are expected to continue for quite some time, at least 2 more years. This likely has a negative effect on the customer service budget and the menu of options to address this are running out of steam. Expect customer service to deteriorate further.
jhawktx
Posts: 345
Joined: Thu May 19, 2011 8:15 am

Re: 2021 QCD at Vanguard

Post by jhawktx »

It would cut down on the administrative burden if people would just use checkwriting for QCDs.
User avatar
Prokofiev
Posts: 1097
Joined: Mon Feb 19, 2007 9:45 pm
Location: New Orleans

Re: 2021 QCD at Vanguard

Post by Prokofiev »

Not being near 70.5 for several years, I had never thought much about QCDs. Sure, if you give away your IRA money, you are not taxed on it.
Big deal.

But now I start to see the utility. No need to hit a deductibility threshold with QCDs. You can take the full standard deduction AND 100% of the
QCD. That is usually better than giving appreciated stock from a taxable account or even starting a DAF. Also QCDs reduce AGI/MAGI. So in theory if one is near an IRMAA break-point, giving $1000 or less to charity could net you almost $1300 in savings. That could convince me to be more charitable!
Is my thinking here correct or do I misunderstand the math?
Last edited by Prokofiev on Tue Jan 05, 2021 9:47 pm, edited 1 time in total.
Everything should be made as simple as possible, but not simpler - Einstein
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

Prokofiev wrote: Tue Jan 05, 2021 9:34 pm Not being near 70.5 for several years, I had never thought much about QCDs. Sure, if you give away your IRA money, you are not taxed on it.
Big deal.

But now I start the see the utility. No need to hit a deductibility threshold with QCDs. You can take the full standard deduction AND 100% of the
QCD. That is usually better than giving appreciated stock from a taxable account or even starting a DAF. Also QCDs reduce AGI/MAGI. So in theory if one is near an IRMAA break-point, giving $1000 or less to charity could net you almost $1300 in savings. That could convince me to be more charitable!
Is my thinking here correct or do I misunderstand the math?
You are correct.
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

Alan S. wrote: Tue Jan 05, 2021 9:05 pm I think if too many people start requesting a ridiculous number of QCD checks, IRA custodians will start limiting the number of QCDs, and others will have to request check writing on their IRA accounts.
If Vanguard would stop printing "Not Valid for Less than $250" on their checks, people would most likely use more of them for smaller donations. I know I would. :annoyed
Lynette
Posts: 2166
Joined: Sun Jul 27, 2014 9:47 am

Re: 2021 QCD at Vanguard

Post by Lynette »

On Monday I called them to Vanguard to have a check made to a charity and mailed to me. The answering service said the wait time was over 30 minutes. So I used their software instead. I have just checked the Vanguard website under Transaction History for my IRA account, it mentions under check information the charity name c/o me and to be mailed to me. I will mail the check to the charity asking them to send me a receipt.

I did not know about the problems others had with Vanguard issuing the checks to the holder of the IRA instead of the charity. I will let you know if I have any problems.
sport
Posts: 10110
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: 2021 QCD at Vanguard

Post by sport »

Lynette wrote: Tue Jan 05, 2021 10:30 pm I did not know about the problems others had with Vanguard issuing the checks to the holder of the IRA instead of the charity. I will let you know if I have any problems.
At present, I am more concerned about the USPS than I am about Vanguard for QCDs. If I write the check, it gets mailed once. If Vanguard writes the check, it has to get mailed twice. I am ready to make a donation now, but I will wait until later in the month to let the USPS get through the holiday crunch. Upon further consideration, since it is a local donation, perhaps I should drive over there and hand deliver the check. We have spent so much time at home due to the pandemic, the car could use the exercise.
User avatar
GerryL
Posts: 3100
Joined: Fri Sep 20, 2013 11:40 pm

Re: 2021 QCD at Vanguard

Post by GerryL »

Prokofiev wrote: Tue Jan 05, 2021 9:34 pm Not being near 70.5 for several years, I had never thought much about QCDs. Sure, if you give away your IRA money, you are not taxed on it.
Big deal.

But now I start to see the utility. No need to hit a deductibility threshold with QCDs. You can take the full standard deduction AND 100% of the
QCD. That is usually better than giving appreciated stock from a taxable account or even starting a DAF. Also QCDs reduce AGI/MAGI. So in theory if one is near an IRMAA break-point, giving $1000 or less to charity could net you almost $1300 in savings. That could convince me to be more charitable!
Is my thinking here correct or do I misunderstand the math?
My whole RMD/QCD strategy is around keeping MAGI slightly below the IRMAA threshold.
Lynette
Posts: 2166
Joined: Sun Jul 27, 2014 9:47 am

Re: 2021 QCD at Vanguard

Post by Lynette »

GerryL wrote: Tue Jan 05, 2021 10:55 pm
Prokofiev wrote: Tue Jan 05, 2021 9:34 pm Not being near 70.5 for several years, I had never thought much about QCDs. Sure, if you give away your IRA money, you are not taxed on it.
Big deal.

But now I start to see the utility. No need to hit a deductibility threshold with QCDs. You can take the full standard deduction AND 100% of the
QCD. That is usually better than giving appreciated stock from a taxable account or even starting a DAF. Also QCDs reduce AGI/MAGI. So in theory if one is near an IRMAA break-point, giving $1000 or less to charity could net you almost $1300 in savings. That could convince me to be more charitable!
Is my thinking here correct or do I misunderstand the math?
My whole RMD/QCD strategy is around keeping MAGI slightly below the IRMAA threshold.
My strategy is exactly the same. IRMAA is based on income not on assets. I worked into my seventies so there was little chance to do Roth conversions. I have pensions and Social security so it is virtually impossible to avoid IRMAA. In retrospect I should possibly have put more money into taxable instead of an IRA. My advice to anyone planning to retire would be to model their taxes until at least their seventies. I did not even know about IRMAA.
Lynette
Posts: 2166
Joined: Sun Jul 27, 2014 9:47 am

Re: 2021 QCD at Vanguard

Post by Lynette »

I said I would report back on my recent experience with Vanguard. I submitted an order for a QCD on Monday, January 4. The documentation is correct on their website. Today, January 8, I received the check from Vanguard correctly made out to the charity c/o me. I also made two QCDs on the same date from the Fidelity website. I have not received them yet.
tomd37
Posts: 3578
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: 2021 QCD at Vanguard

Post by tomd37 »

Lynette - Not sure if it has any impact on your/my QCD request, but are you on the old system or have you transitioned? I am still on the old system. I have not had any issues with QCDs on the old system for the past twelve years and am ready to go with my QCDs now.
Tom D.
User avatar
GerryL
Posts: 3100
Joined: Fri Sep 20, 2013 11:40 pm

Re: 2021 QCD at Vanguard

Post by GerryL »

Lynette wrote: Fri Jan 08, 2021 6:50 pm I said I would report back on my recent experience with Vanguard. I submitted an order for a QCD on Monday, January 4. The documentation is correct on their website. Today, January 8, I received the check from Vanguard correctly made out to the charity c/o me. I also made two QCDs on the same date from the Fidelity website. I have not received them yet.
I executed orders for 4 checks using the new (brokerage account) system on Wednesday. I can look at my account online and see that they are recorded as submitted. I expect they will arrive in the mail by early next week -- so I'd better get ready preparing my cover letters.
Post Reply