IRS Form 1099 Reporting: File Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc

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January 03, 2014


File Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., for each person to whom you have made a designated distribution or are treated as having made a distribution of $10 or more from profit-sharing or retirement plans, any individual retirement arrangements (IRAs), annuities, pensions, insurance contracts, survivor income benefit plans, permanent and total disability payments under life insurance contracts, charitable gift annuities, etc.

Also, report on Form 1099-R death benefit payments made by employers that are not made as part of a pension, profit-sharing, or retirement plan, and also disability payments from a retirement plan. Military retirees or payments of survivor benefit annuities are reported on From 1099-R. Report military retirement pay awarded as a property settlement to a former spouse under the name and taxpayer identification number (TIN) of the recipient, not that of the military retiree. Report on Form 1099-R, not Form W-2, income tax withholding and distributions from a governmental section 457(b) plan maintained by a state or local government employer. Generally, do not report amounts totally exempt from tax, such as workers’ compensation and Department of Veterans Affairs (VA) payments. However, if part of the distribution is taxable and part is nontaxable, report the entire distribution.

Box 1. Gross distribution

Enter the total amount of the distribution before income tax or other deductions were withheld. Include direct rollovers, IRA rollovers to accepting employer plans, premiums paid by a trustee or custodian for the cost of current life or other insurance protection, including a recharacterization and a Roth IRA conversion. Also include in this box distributions to plan participants from governmental section 457(b) plans. Include in this box the value of U.S. Savings Bonds distributed from a plan. Include in box 1 amounts distributed from a qualified retirement plan for which the recipient elects to pay health insurance premiums under a cafeteria plan or that are paid directly to reimburse medical care expenses incurred by the recipient Include in box 1 charges or payments for qualified long-term care insurance contracts under combined arrangements.

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Box 2a. Taxable amount

Generally, you must enter the taxable amount in box 2a. However, if you are unable to reasonably obtain the data needed to compute the taxable amount, leave this box blank. Enter 0 (zero) in box 2a for:

  • A direct rollover (other than a qualified rollover contribution under section 408A(e) or an IRR) from a qualified plan, section 403(b) plan, a governmental section
  • 457(b) plan, or a rollover from a designated Roth account into a Roth IRA, · A traditional, SEP, or SIMPLE IRA directly transferred to an accepting employer plan,
  • An IRA recharacterization,· A nontaxable section 1035 exchange of life insurance, annuity, endowment or long-term care insurance contracts, or
  • A nontaxable charge or payment, for the purchase of a qualified long-term care insurance contract, against the cash value of an annuity contract or the cash surrender value of a life insurance contract.

Box 2b. Total distribution

Enter an “X” in this box only if the payment shown in box 1 is a total distribution. A total distribution is one or more distributions within 1 tax year in which the entire balance of the account is distributed. If periodic or installment payments are made, mark this box in the year the final payment is made.

Box 3. Capital gain (included in box 2a)

If any amount is taxable as a capital gain, report it in box 3.

Box 4. Federal income tax withheld

Enter any federal income tax withheld. This withholding under section 3405 is subject to deposit rules and the withholding tax return is Form 945. Backup withholding does not apply.

Box 5. Employee contributions/designated Roth contributions or insurance premiums

Enter the employee’s contributions to a profit-sharing or retirement plan, designated Roth contributions, or insurance premiums that the employee may recover tax free this year (even if they exceed the box 1 amount).

Box 6. Net unrealized appreciation (NUA) in employer’s securities

Use this box if a distribution from a qualified plan (except a qualified distribution from a designated Roth account) includes securities of the employer corporation (or a subsidiary or parent corporation) and you can compute the NUA in the employer’s securities.

Box 7. Distribution code(s)

Enter an “X” in the IRA/SEP/SIMPLE checkbox if the distribution is from a traditional IRA, SEP IRA, or SIMPLE IRA. Do not check the box for a distribution from a Roth IRA or for an IRA recharacterization. Enter the appropriate code(s) in box 7. Use the Guide to Distribution Codes to determine the appropriate code(s) to enter in box 7 for any amounts reported on Form 1099-R. Read the codes carefully and enter them accurately because the IRS uses the codes to help determine whether the recipient has properly reported the distribution. If the codes you enter are incorrect, the IRS may improperly propose changes to the recipient’s taxes.

Box 8. Other

Enter the current actuarial value of an annuity contract that is part of a lump-sum distribution. Do not include this item in boxes 1 and 2a.

Box 9a. Your percentage of total distribution

If this is a total distribution and it is made to more than one person, enter the percentage received by the person whose name appears on Form 1099-R. You need not complete this box for any IRA distributions or for a direct rollover.

Box 9b. Total employee contributions

You are not required to enter the total employee contributions or designated Roth contributions in box 9b. However, because this information may be helpful to the recipient, you may choose to report them.

Box 10. Amount allocable to IRR within 5 years

Enter the amount of the distribution allocable to an IRR made within the 5-year period beginning with the first day of the year in which the rollover was made.

Box 11. 1st year of desig. Roth contrib.

Enter the first year of the 5-taxable-year period. This is the year in which the designated

Roth account was first tax department. Copy 2 may be used as the recipient’s established by the recipient.

Boxes 12–17. State and local information

These boxes and Copies 1 and 2 are provided for your convenience only and need not be completed for the IRS. Use the state and local information boxes to report distributions and taxes for up to two states or localities.

Author: Jennifer A. Driskill, CPA, M.B.A., James Dee Johnson & Company, CPAs, P.C.

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