Level 15

Retirement tax questions

Year-end balances are not used in calculating the taxable amounts of the distributions made from 401(k) A and 401(k) B.  The taxable amount is the amount normally shown in box 2a of the Forms 1099-R from these plans.

Year end balances are only used in calculating the taxable amounts of distributions made from traditional IRA accounts; a 401(k) is not an IRA.  When calculating in Part I of Form 8606 the taxable amount of a distribution from a traditional IRA, the amount to be included on line 6 is the amount on December 31 of the year of the Form 8606.