Retirement tax questions


@momrose wrote:

Part III would generally be needed to report any nonqualified Roth IRA distribution, but if the entire distribution was taxable, the IRS probably wouldn't question it because the default is that the entire distribution is taxable.

 

I had held my Roth IRA for more than 5 years when I took a distribution, and I was older than 59-1/2 so the entire distribution from my Roth IRA was NOT taxable. I would assume that the default for Roth distributions is that they are NON taxable. I just didn't report it anywhere at all in my 2018 federal tax filing. 

 


Non-taxable or not the 1099-R is required to be reported on your tax return.    It is the 1099-R that needs to be filed that shows it not taxable.    The IRS can assume that the entire 1099-R box 1 amount was taxable and bill you for the tax.   (But the IRS receives a copy of the 1099-R form the issuer  so they should know it is not taxable.)

 

HOWEVER, an IRS letter  usually happens within a year or so from filing.   If you have not received a letter form the IRS by now, you probably will not.    I would not amend 2018 now to report it.   If the IRS does send a letter at this late date then a simple phone call to the contact number on the letter and a verbal explanation should take care of it.

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**