Learning about 1099-R Form

[HF63]

Starting reporting year 2021 all our income is going to be reported as 1099-R instead a W-2 which it did for all my working years.


I need some help in understanding how this form works and where can I learn the basics. I did down loaded the IRS guidelines but is worst than Pepto-Bismol.


Any nice You tube videos or other links will be greatly appreciated.

 

[target2019]

For subjects like this I don't go to tube videos.

I use the help provided on the tax program's site. For me this would be a good start.
https://ttlc.intuit.com/community/entering-importing/help/where-do-i-enter-my-1099-r/00/26339

I've been using the tax program's interview mode for 1099-R forms. That works for us.

I believe a 1099-R is simpler that a W-2. But it is always possible to slip and not type something correctly, or maybe forget to choose the codes from your 1099-R.

 

[HF63]

Thanks for the link.


I am just old fashion since I need to understand how the form works and what goes in each box before I let a program enter the numbers.

 

[sengsational]

The form is mostly obvious, answering how much money came out, and how much was withheld.

The most interesting part of the form is box 7, and the IRA/SEP/SIMPLE box. Presuming you're 59 1/2+ it's pretty straight-forward. If you a normal distribution from a pension, box 7 is "7" and the box is not checked. If you do a Roth conversion, box 7 is "7" and the box is checked.

What is it you hope to discover?

 

[target2019]

Thanks for the link.

I am just old fashion since I need to understand how the form works and what goes in each box before I let a program enter the numbers.

1099-R forms are not always perfect when the institutions fill them out. They should be, though. So, their codes do not necessarily have to be the most accurate. But as mentioned you must use the code they give you, or a mismatch occurs, and a letter from the IRS follows at some point.

I do know that the follow-up questions in TurboTax interview clear up certain things by properly adding in a worksheet or necesssary form when necessary.

My rollovers had code G and Total Distribution checked.

 

[cathy63]

Tell us where your income is coming from and we can tell you more about what's in each box for your situation. Reading the IRS instructions won't help you because they're directed at the people who prepare 1099-Rs, which are used for many different types of accounts.

There are also different layouts for 1099-Rs. If you are collecting a government pension through OPM, or you have a railroad pension, your form is going to look a lot different than the one for someone who's making normal withdrawals from a tIRA.

For most people, the only boxes that have numbers are 1, 4 and 7, and sometimes 2 has the same number as 1. If you have a pension or have contributed after-tax money to a company plan, then boxes 2, 5 and 9 may also come into play. Also box 14 if your state has an income tax and you have set up withholding.

 

[HF63]

My wife's income is coming from pension, social security and required minimum distributions.


Mine is easy just very small pension.

 

[CaptTom]

Probably the simplest thing is to look at a blank 1040 form and see where it asks you to plug in the numbers from the 1099. For me the transition from W2 to 1099 was seamless. I just followed the directions on the forms.

I agree using tax software "interview" mode leaves you in the dark about what's going on behind the scenes. Maybe you can run thorough it once and print out the resulting forms, if your software allows that.

 

[cathy63]

My wife's income is coming from pension, social security and required minimum distributions.


Mine is easy just very small pension.

Your wife will get a 1099-SSA for her Social Security. You're going to use the numbers in Box 5 for net benefits paid; Box 6 for withholding; and the description of box 3 for her Medicare payments (if you itemize, these are deductible as medical expenses).

For your pensions, you'll have an amount in box 1 that is the amount received; an amount in box 2a that is the taxable amount; box 4 for withholding; and box 7 should have a 7 in it. If you contributed after-tax funds then you'll have numbers in boxes 5 and 9. These two boxes are mainly used to calculate the number in box 2a. The worst possible situation is you have numbers in boxes 5 or 9 and you have "taxable amount not determined" checked. I don't usually see that on 1099s for people who retired recently, so hopefully you won't either. If you do, then the calculation of the taxable amount is more complex. You may also have state withholding.

For her IRA, she'll have a number in box 1 and "taxable amount not determined" will be checked. If she made after-tax contributions to her IRA, you'll need to fill out form 8606 to figure the taxable portion of the withdrawal. She'll also have withholding in box 4, a 7 in box 7 and the IRA/SEP/SIMPLE box will be checked. Everything else should be blank unless there's also some state withholding.