First time 1099-R, look okay?

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diy60
Posts: 154
Joined: Wed Sep 07, 2016 6:54 pm

First time 1099-R, look okay?

Post by diy60 » Tue Feb 13, 2018 9:22 pm

Recently retired and received my first ever 1099-R. Can someone please look at this info and suggest if it is correct? I can't get H&R Block software to handle this combined 1099-R correctly (or I don't know how to tweak the software input), but if I fake the input as 2 separate 1099-Rs then it appears to come out okay. I think.

Both events in the same 401K plan:
#1 Event: $100K after tax subaccount distribution; $70K after tax contribution to my Roth IRA, and $30K earnings on the after tax to my IRA. Both non-taxable moves.
# 2 Event: $5K in service IRR; $2K was after tax contribution, and $3K was earnings on the after tax contributions and is taxable.

Combined 1099-R:
Box 1 Gross distribution = $105K
Box 2a Taxable amount = $3K
Box 5 Emp. contribution = $72K
Box 7 Distribution code = G
Box 14 State Distr. = $3K

If I put the info in as separate 1099-Rs then I get:
1040 Line 16a "ROLLOVER", 16a = $105K
1040 Line 16b taxable = $3K

I've never received a distribution nor 1099-R before so just wanted ask for a quick check. Look okay?

Thanks in advance
DIY60

Alan S.
Posts: 7653
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: First time 1099-R, look okay?

Post by Alan S. » Tue Feb 13, 2018 10:07 pm

Yes, we have had reports of this problem when too many different types of rollovers are combined on a single 1099R. I think you would have had this problem even without the IRR.

The rollover to your Roth IRA and the IRR have the same reporting instructions - Box 2a shows the taxable amount and 5 the basis recovery.
But the direct rollover to the TIRA has different instructions - for these 1099R forms Box 2a is always 0 and Box 5 blank. Combining this with the above rollover does not mix well and produces incorrect results.

So the rollover to TIRA must be on a separate 1099R form with 2a 0 and 5 blank.

Now the test - is this how you divided up the 1099R? Doing 3 separate ones should also have worked.

diy60
Posts: 154
Joined: Wed Sep 07, 2016 6:54 pm

Re: First time 1099-R, look okay?

Post by diy60 » Wed Feb 14, 2018 12:41 pm

Alan S. wrote:
Tue Feb 13, 2018 10:07 pm
Now the test - is this how you divided up the 1099R? Doing 3 separate ones should also have worked.
No I did not. I divided into 2 separate 1099R forms; one for the after tax sub account distribution $70K(Roth IRA)/$30K (TIRA), and the 2nd 1099R for the $5K IRR. That breakout resulted in the correct numbers in my original post.

After reading your reply I went back and reworked the 1099Rs as 2 separate entries, but as; one 1099R for the $70K (Roth IRA)/$5K (IRR), and the 2nd 1099R for the $30K (TIRA). That also worked fine. As a final test I broke it out into 3 separate 1099Rs, and that worked as well. What didn't work was entering the data as the one 1099R I received in the mail.

I assume the one 1099R is okay for my records since 1040 Line 16 looks correct, or do I need to ask for 2 separate 1099Rs?

This was a great learning experience for me and thank you for the clarity in your response.

lstone19
Posts: 129
Joined: Fri Nov 03, 2017 3:33 pm

Re: First time 1099-R, look okay?

Post by lstone19 » Wed Feb 14, 2018 12:52 pm

Although your tax software asks you to enter the 1099-R as received, nothing that it sends on to the IRS (either e-file or printed) will show the 1099-R as input by you. The software merely uses that input to put the numbers in the correct place on your return. And if, as in your case, it doesn't handle it correctly so you divide it up into separate pieces for the different situations, the IRS is never going to know that you did so. In other words, there is zero chance of you getting a letter from the IRS saying "XYZ Corp sent you a single 1099-R but you entered it as two (or three) separate 1099-Rs. Please explain." So long as the information on your return is correct, you don't need separate 1099-Rs because that's a level of detail that's not needed.

diy60
Posts: 154
Joined: Wed Sep 07, 2016 6:54 pm

Re: First time 1099-R, look okay?

Post by diy60 » Wed Feb 14, 2018 1:14 pm

lstone19 wrote:
Wed Feb 14, 2018 12:52 pm
So long as the information on your return is correct, you don't need separate 1099-Rs because that's a level of detail that's not needed.
Okay, good to know, that's what I thought. Thanks.

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