2019 1099-R (2018&2019 Excess Roth Contributions)

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
patrickscott
Posts: 94
Joined: Thu Feb 01, 2018 8:53 am

2019 1099-R (2018&2019 Excess Roth Contributions)

Post by patrickscott » Tue Jan 14, 2020 12:26 pm

Greetings,

This topic may have already been answered elsewhere, if so, I apologize for this post, but I could not find the solution to my particular problem.

Background:
In 2018 and 2019 I made some excess ROTH contributions and Bogleheads --PARTICULAR THANKS TO ALAN S-- once again came to my rescue and helped me with my 2018 Amended Return which was quickly approved with no penalties. (See How to Correct RMD to ROTH Rollover.)

I have now received my 2019 Form 1099-R (with taxable amounts for 2018 and 2019) and am trying to enter the information on my H&R Block's software.

This is what my 2019 Form 1099-R is showing:

Contributory IRA

VTSAX

Gross Distributions $40,000 - taxable amount $40,000; Distribution Code (Box 7) 07; IRA/SEP/SIMPLE X


ROTH IRA

VTSAX

Gross Distribution $15,913.46 - taxable amount $1,542.86; Distribution Code (Box 7) PJ [for year 2018]

Gross Distribution $13,607.06 - taxable amount $774.27; Distribution Code (Box 7) 8J [for year 2019]

Since the H&R Block software does not allow me to enter three Gross Amounts, three Taxable amounts, three Distribution Codes, etc., I contacted H&R Block and, after a lengthy chat with them at various levels, I was told that I should complete a separate 1099-R Questionnaire for each of my Gross Distributions; in other words, I should pretend that I had received three 1099-R forms from Vanguard. My primary concern is that if I complete three 1099-R Questionnaires, IRS will wonder why they did not receive three 1099-R from Vanguard.

Question: How should I enter the 2019 Form 1099-R information on my tax return?

At first, I thought that a possible solution would be to add the three Gross Distributions, then, the three Taxable Amounts, but the problem is that the software does not allow me to enter all the Distribution Codes: 07, PJ and 8J.

If I am to fill out three separate 1099-R Questionnaires, it would seem that the safest course of action would be to print the return and mail it in with a cover letter explaining why I completed three Questionnaires.

As always, your thoughts, advice and help are greatly appreciated.

Pat

Gryphon
Posts: 138
Joined: Sat May 07, 2016 11:43 am
Location: Missouri

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by Gryphon » Tue Jan 14, 2020 1:45 pm

If it was me, I would do what H&R Block suggested, and not even bother with a cover letter. As long as all the information from the 1099-R winds up reported on your tax return, I don't think the IRS is going to care whether you were sent one form or three.

Alan S.
Posts: 8944
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by Alan S. » Tue Jan 14, 2020 1:57 pm

patrickscott wrote:
Tue Jan 14, 2020 12:26 pm
Greetings,

This topic may have already been answered elsewhere, if so, I apologize for this post, but I could not find the solution to my particular problem.

Background:
In 2018 and 2019 I made some excess ROTH contributions and Bogleheads --PARTICULAR THANKS TO ALAN S-- once again came to my rescue and helped me with my 2018 Amended Return which was quickly approved with no penalties. (See How to Correct RMD to ROTH Rollover.)

I have now received my 2019 Form 1099-R (with taxable amounts for 2018 and 2019) and am trying to enter the information on my H&R Block's software.

This is what my 2019 Form 1099-R is showing:

Contributory IRA

VTSAX

Gross Distributions $40,000 - taxable amount $40,000; Distribution Code (Box 7) 07; IRA/SEP/SIMPLE X


ROTH IRA

VTSAX

Gross Distribution $15,913.46 - taxable amount $1,542.86; Distribution Code (Box 7) PJ [for year 2018]

Gross Distribution $13,607.06 - taxable amount $774.27; Distribution Code (Box 7) 8J [for year 2019]

Since the H&R Block software does not allow me to enter three Gross Amounts, three Taxable amounts, three Distribution Codes, etc., I contacted H&R Block and, after a lengthy chat with them at various levels, I was told that I should complete a separate 1099-R Questionnaire for each of my Gross Distributions; in other words, I should pretend that I had received three 1099-R forms from Vanguard. My primary concern is that if I complete three 1099-R Questionnaires, IRS will wonder why they did not receive three 1099-R from Vanguard.

Question: How should I enter the 2019 Form 1099-R information on my tax return?

At first, I thought that a possible solution would be to add the three Gross Distributions, then, the three Taxable Amounts, but the problem is that the software does not allow me to enter all the Distribution Codes: 07, PJ and 8J.

If I am to fill out three separate 1099-R Questionnaires, it would seem that the safest course of action would be to print the return and mail it in with a cover letter explaining why I completed three Questionnaires.

As always, your thoughts, advice and help are greatly appreciated.

Pat
Pat, do not even enter the PJ coded 1099R on your 2019 return as that applies to 2018. That should eliminate the issue for 2019, but the bad news is that you have to amend your 2018 return to report that 1099R. It will add 1543 to your taxable income for 2018, and will also be subject to the 10% penalty unless you qualify for a penalty waiver in 2018.

You can go ahead and complete your 2019 return, only entering the other 2 1099R forms.

lstone19
Posts: 522
Joined: Fri Nov 03, 2017 3:33 pm

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by lstone19 » Tue Jan 14, 2020 4:13 pm

patrickscott wrote:
Tue Jan 14, 2020 12:26 pm
Since the H&R Block software does not allow me to enter three Gross Amounts, three Taxable amounts, three Distribution Codes, etc., I contacted H&R Block and, after a lengthy chat with them at various levels, I was told that I should complete a separate 1099-R Questionnaire for each of my Gross Distributions; in other words, I should pretend that I had received three 1099-R forms from Vanguard. My primary concern is that if I complete three 1099-R Questionnaires, IRS will wonder why they did not receive three 1099-R from Vanguard.
The last sentence is not a concern as not all the 1099 data you enter in the software is passed on to the IRS. Only the totals will be sent (just as if you printed your return and mailed it - you do not attach 1099s to your return*). The IRS matches totals, not details (and more specifically, wants to see totals greater or equal to what they are expecting from the 1099s they received).

* The only 1099s you ever need to attach are ones that show withholding. Why? Because they're your receipt for amounts paid via withholding.

Katietsu
Posts: 2766
Joined: Sun Sep 22, 2013 1:48 am

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by Katietsu » Tue Jan 14, 2020 4:45 pm

First of all, I suspect you have received 3 1099-R’s. Just because they all came from the same institution, in the same envelope does not mean they are not independent 1099-R forms.

Secondly, they do not all belong on your 2019 return as mentioned by Alan S. (Wouldn’t have answered if I had seen his post first. :happy ) The one with code PJ belongs to 2018 as you already understand. If you have already submitted an amended return that accounts for the the 1099-R with code PJ, you can just drop it in your files. You do nothing with it on your 2019 return.

The other two should be entered independently as advised by H and R Block.

Topic Author
patrickscott
Posts: 94
Joined: Thu Feb 01, 2018 8:53 am

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by patrickscott » Tue Jan 14, 2020 5:51 pm

Gryphon wrote:
Tue Jan 14, 2020 1:45 pm
If it was me, I would do what H&R Block suggested, and not even bother with a cover letter. As long as all the information from the 1099-R winds up reported on your tax return, I don't think the IRS is going to care whether you were sent one form or three.
Thanks.

Topic Author
patrickscott
Posts: 94
Joined: Thu Feb 01, 2018 8:53 am

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by patrickscott » Tue Jan 14, 2020 6:50 pm

Alan S. wrote:
Tue Jan 14, 2020 1:57 pm
patrickscott wrote:
Tue Jan 14, 2020 12:26 pm
Greetings,

This topic may have already been answered elsewhere, if so, I apologize for this post, but I could not find the solution to my particular problem.

Background:
In 2018 and 2019 I made some excess ROTH contributions and Bogleheads --PARTICULAR THANKS TO ALAN S-- once again came to my rescue and helped me with my 2018 Amended Return which was quickly approved with no penalties. (See How to Correct RMD to ROTH Rollover.)

I have now received my 2019 Form 1099-R (with taxable amounts for 2018 and 2019) and am trying to enter the information on my H&R Block's software.

This is what my 2019 Form 1099-R is showing:

Contributory IRA

VTSAX

Gross Distributions $40,000 - taxable amount $40,000; Distribution Code (Box 7) 07; IRA/SEP/SIMPLE X


ROTH IRA

VTSAX

Gross Distribution $15,913.46 - taxable amount $1,542.86; Distribution Code (Box 7) PJ [for year 2018]

Gross Distribution $13,607.06 - taxable amount $774.27; Distribution Code (Box 7) 8J [for year 2019]

Since the H&R Block software does not allow me to enter three Gross Amounts, three Taxable amounts, three Distribution Codes, etc., I contacted H&R Block and, after a lengthy chat with them at various levels, I was told that I should complete a separate 1099-R Questionnaire for each of my Gross Distributions; in other words, I should pretend that I had received three 1099-R forms from Vanguard. My primary concern is that if I complete three 1099-R Questionnaires, IRS will wonder why they did not receive three 1099-R from Vanguard.

Question: How should I enter the 2019 Form 1099-R information on my tax return?

At first, I thought that a possible solution would be to add the three Gross Distributions, then, the three Taxable Amounts, but the problem is that the software does not allow me to enter all the Distribution Codes: 07, PJ and 8J.

If I am to fill out three separate 1099-R Questionnaires, it would seem that the safest course of action would be to print the return and mail it in with a cover letter explaining why I completed three Questionnaires.

As always, your thoughts, advice and help are greatly appreciated.

Pat
Pat, do not even enter the PJ coded 1099R on your 2019 return as that applies to 2018. That should eliminate the issue for 2019, but the bad news is that you have to amend your 2018 return to report that 1099R. It will add 1543 to your taxable income for 2018, and will also be subject to the 10% penalty unless you qualify for a penalty waiver in 2018.

You can go ahead and complete your 2019 return, only entering the other 2 1099R forms.
Thanks Alan. If I am understanding you correctly, I will have to do the following:

(I) Send in a 2018 Amended Return to include/add the $1,543 to the recently (last year) submitted 2018 Amended Tax Return. Since this amount, $1,543, belongs to 2018, I will not report it/add it and its code anywhere on my 2019 tax return.

(II) Complete (when I prepare my 2019 Tax Return) one 1099-R Questionnaire to enter
(A) the Contributory IRA VTSAX Gross Distributions $40,000 - taxable amount $40,000; Distribution Code (Box 7) 07; IRA/SEP/SIMPLE X
AND
(B) the ROTH IRA VTSAX Gross Distribution $13,607.06 - taxable amount $774.27; Distribution Code (Box 7) 8J (for year 2019).
(If, for some reason, I cannot enter both the 2019 Contributory IRA and the ROTH IRA on one Questionnaire, I will complete two 1099-R Questionnaires.)

Thanks again Alan for your detailed answer.

Topic Author
patrickscott
Posts: 94
Joined: Thu Feb 01, 2018 8:53 am

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by patrickscott » Tue Jan 14, 2020 6:52 pm

lstone19 wrote:
Tue Jan 14, 2020 4:13 pm
patrickscott wrote:
Tue Jan 14, 2020 12:26 pm
Since the H&R Block software does not allow me to enter three Gross Amounts, three Taxable amounts, three Distribution Codes, etc., I contacted H&R Block and, after a lengthy chat with them at various levels, I was told that I should complete a separate 1099-R Questionnaire for each of my Gross Distributions; in other words, I should pretend that I had received three 1099-R forms from Vanguard. My primary concern is that if I complete three 1099-R Questionnaires, IRS will wonder why they did not receive three 1099-R from Vanguard.
The last sentence is not a concern as not all the 1099 data you enter in the software is passed on to the IRS. Only the totals will be sent (just as if you printed your return and mailed it - you do not attach 1099s to your return*). The IRS matches totals, not details (and more specifically, wants to see totals greater or equal to what they are expecting from the 1099s they received).

* The only 1099s you ever need to attach are ones that show withholding. Why? Because they're your receipt for amounts paid via withholding.
Thanks for your clarification, that makes sense.
Last edited by patrickscott on Wed Jan 15, 2020 6:37 am, edited 1 time in total.

Topic Author
patrickscott
Posts: 94
Joined: Thu Feb 01, 2018 8:53 am

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by patrickscott » Tue Jan 14, 2020 6:59 pm

Katietsu wrote:
Tue Jan 14, 2020 4:45 pm
First of all, I suspect you have received 3 1099-R’s. Just because they all came from the same institution, in the same envelope does not mean they are not independent 1099-R forms.

Secondly, they do not all belong on your 2019 return as mentioned by Alan S. (Wouldn’t have answered if I had seen his post first. :happy ) The one with code PJ belongs to 2018 as you already understand. If you have already submitted an amended return that accounts for the 1099-R with code PJ, you can just drop it in your files. You do nothing with it on your 2019 return.

The other two should be entered independently as advised by H and R Block.
Thanks for your reply. All the information shown above appeared on a single 2019 FORM 1099-R. Clarification: Vanguard issued, on their website under "Forms and documents, one Form 1099-R, which I downloaded and printed.

I just checked my 2018 Amended Return and, to my greatest pleasure :D , noted that on my amended 2018 tax return I had already included and paid taxes on the 2018 $1,543 earnings. I look forward to doing what you suggested, "for the 1099-R with code PJ, you can just drop it in your files. You do nothing with it on your 2019 return." THANKS.
Last edited by patrickscott on Wed Jan 15, 2020 6:49 am, edited 4 times in total.

Alan S.
Posts: 8944
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by Alan S. » Tue Jan 14, 2020 7:09 pm

patrickscott wrote:
Tue Jan 14, 2020 6:59 pm
Katietsu wrote:
Tue Jan 14, 2020 4:45 pm
First of all, I suspect you have received 3 1099-R’s. Just because they all came from the same institution, in the same envelope does not mean they are not independent 1099-R forms.

Secondly, they do not all belong on your 2019 return as mentioned by Alan S. (Wouldn’t have answered if I had seen his post first. :happy ) The one with code PJ belongs to 2018 as you already understand. If you have already submitted an amended return that accounts for the the 1099-R with code PJ, you can just drop it in your files. You do nothing with it on your 2019 return.

The other two should be entered independently as advised by H and R Block.
Thanks for your reply. All the information shown above appeared on a single 2019 FORM 1099-R.
If there was only one 1099R physical form, there must have been a breakdown to show the data as it would have appeared on 3 separate forms. But that does not change the prior advice.

You are correct when stating what you need to do, a 2018 1040X for the PJ 1099R (no immediate rush), and the rest are reported on your 2019 return.

Topic Author
patrickscott
Posts: 94
Joined: Thu Feb 01, 2018 8:53 am

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by patrickscott » Wed Jan 15, 2020 6:19 am

Alan S. wrote:
Tue Jan 14, 2020 7:09 pm
patrickscott wrote:
Tue Jan 14, 2020 6:59 pm
Katietsu wrote:
Tue Jan 14, 2020 4:45 pm
First of all, I suspect you have received 3 1099-R’s. Just because they all came from the same institution, in the same envelope does not mean they are not independent 1099-R forms.

Secondly, they do not all belong on your 2019 return as mentioned by Alan S. (Wouldn’t have answered if I had seen his post first. :happy ) The one with code PJ belongs to 2018 as you already understand. If you have already submitted an amended return that accounts for the the 1099-R with code PJ, you can just drop it in your files. You do nothing with it on your 2019 return.

The other two should be entered independently as advised by H and R Block.
Thanks for your reply. All the information shown above appeared on a single 2019 FORM 1099-R.
If there was only one 1099R physical form, there must have been a breakdown to show the data as it would have appeared on 3 separate forms. But that does not change the prior advice.

You are correct when stating what you need to do, a 2018 1040X for the PJ 1099R (no immediate rush), and the rest are reported on your 2019 return.
I was getting ready to work on my latest Amended 2018 Return --of my previously submitted, on Sept 30,2018, 2018 Amended Return-- when I noticed, to my greatest surprise and pleasure, that on my previously submitted amended 2018 tax return I had already included and paid taxes on the 2018 $1,543 earnings.:D NOTE: IRS, when they sent their 1040X approval notice, waived the penalty/interest charge. :happy

I am greatly relieved to know that now all I have to do is prepare my 2019 Tax Return, showing only the amounts and code for 2019.

Once again, a big, BIG THANK YOU to ALL for your insight, advice and patience!!! :sharebeer

Topic Author
patrickscott
Posts: 94
Joined: Thu Feb 01, 2018 8:53 am

Re: 2019 1099-R (2018&2019 Excess Roth Contributions)

Post by patrickscott » Fri Jan 24, 2020 10:37 am

patrickscott wrote:
Wed Jan 15, 2020 6:19 am
Alan S. wrote:
Tue Jan 14, 2020 7:09 pm
patrickscott wrote:
Tue Jan 14, 2020 6:59 pm
Katietsu wrote:
Tue Jan 14, 2020 4:45 pm
First of all, I suspect you have received 3 1099-R’s. Just because they all came from the same institution, in the same envelope does not mean they are not independent 1099-R forms.

Secondly, they do not all belong on your 2019 return as mentioned by Alan S. (Wouldn’t have answered if I had seen his post first. :happy ) The one with code PJ belongs to 2018 as you already understand. If you have already submitted an amended return that accounts for the the 1099-R with code PJ, you can just drop it in your files. You do nothing with it on your 2019 return.

The other two should be entered independently as advised by H and R Block.
Thanks for your reply. All the information shown above appeared on a single 2019 FORM 1099-R.
If there was only one 1099R physical form, there must have been a breakdown to show the data as it would have appeared on 3 separate forms. But that does not change the prior advice.

You are correct when stating what you need to do, a 2018 1040X for the PJ 1099R (no immediate rush), and the rest are reported on your 2019 return.
I was getting ready to work on my latest Amended 2018 Return --of my previously submitted, on Sept 30,2018, 2018 Amended Return-- when I noticed, to my greatest surprise and pleasure, that on my previously submitted amended 2018 tax return I had already included and paid taxes on the 2018 $1,543 earnings.:D NOTE: IRS, when they sent their 1040X approval notice, waived the penalty/interest charge. :happy

I am greatly relieved to know that now all I have to do is prepare my 2019 Tax Return, showing only the amounts and code for 2019.

Once again, a big, BIG THANK YOU to ALL for your insight, advice and patience!!! :sharebeer
Just a brief update:

As Katietsu and Alan S mentioned, even though the information was shown in one form, the information was shown "as it would have appeared on 3 separate forms." and "should be entered independently as advised by H and R Block."

I entered the 2019 data from the two separate accounts (shown on the one 1099-R) on two separate forms.

Thanks again to all, in particular to Katietsu and Alan S.

Post Reply