Tax Question...1099 R

[bbbamI]

Last year dh (65 yo) was going to take a withdrawal from his 401k (with Fidelity). The distribution was going to be taxed 20%. He didn't want that much tax taken out as it would result in a refund. Fido said he could roll the money into his IRA money market, then choose our chosen tax rate at 10%. That's what he did.

This year we have received two 1099 R's from Fido. One showing the gross distribution, the taxable amount and federal tax withheld. In box 7 it shows 7 (Normal Distribution) IRA/Sep/ Simple.

The second 1099 R shows the gross distribution and taxable amount (0.00). Box 7 shows G (Direct Rollover and Rollover Contribution) the IRA/SEP/SIMPLE is not checked.

A few days later we got Form 5498.

Since this is the first time he's done this, it's a bit confusing. I assume we need to report both 1099's on our federal tax form, but am unsure about the 5498.

He has contacted Fido and hasn't heard from them yet.

Any thoughts or advice is appreciated.

 

[rothlev]

Last year dh (65 yo) was going to take a withdrawal from his 401k (with Fidelity). The distribution was going to be taxed 20%. He didn't want that much tax taken out as it would result in a refund. Fido said he could roll the money into his IRA money market, then choose our chosen tax rate at 10%. That's what he did.

This year we have received two 1099 R's from Fido. One showing the gross distribution, the taxable amount and federal tax withheld. In box 7 it shows 7 (Normal Distribution) IRA/Sep/ Simple.

The second 1099 R shows the gross distribution and taxable amount (0.00). Box 7 shows G (Direct Rollover and Rollover Contribution) the IRA/SEP/SIMPLE is not checked.

A few days later we got Form 5498.

Since this is the first time he's done this, it's a bit confusing. I assume we need to report both 1099's on our federal tax form, but am unsure about the 5498.

He has contacted Fido and hasn't heard from them yet.

Any thoughts or advice is appreciated.

yes, report them both, you made 2 separate transactions. Only one is taxable. The 5498 is not a transaction. It is for your records showing the money was deposited into the IRA.

 

[jazz4cash]

That sounds right to me.
I presume the 1st 1099R with tax withheld is for the taxable distribution from the IRA.

The 2nd 1099R with no withholding is for the rollover from the 401k. When you report this you will indicate that it is a rollover and it will not be a taxable event. Not sure it that helps.

 

[bbbamI]

yes, report them both, you made 2 separate transactions. Only one is taxable. The 5498 is not a transaction. It is for your records showing the money was deposited into the IRA.

Ok...that's what I thought about the 5498 as we've received them before but did not have to report them. I wasn't quite sure in this case.

That sounds right to me.
I presume the 1st 1099R with tax withheld is for the taxable distribution from the IRA.

The 2nd 1099R with no withholding is for the rollover from the 401k. When you report this you will indicate that it is a rollover and it will not be a taxable event. Not sure it that helps.

That is correct. ...and yes it does help.

I get in a twist when it comes to taxes. It sounds like no mistake was made by Fido sending three forms.

Thank y'all so much for the advice.