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Tax Time...Questions on the 1099-R

You may have received a 1099-R in your January mail if you did a distribution from an IRA or rolled over a 401k or 403b employer plan into your IRA.

 What the 1099-R tells you:

Box 1 of the form shows the total amount of your retirement fund that was distributed. The more important amount to you right now is in box 2a, the taxable amount. For direct rollovers from one qualified plan to another, that amount is generally zero.

Also check box 7, the distribution code. A letter or number should be here, explaining to the IRS exactly why your retirement money was taken out and just what was done with it. Direct rollovers to another qualified plan are coded with the letter "G." This includes transfers to another company's 401(k) plan, a tax-sheltered 403(b) annuity, a government 457(b) plan or an IRA.

Posted on Friday, February 10 by Registered CommenterWise Owl | Comments Off