Made contributions to a 457 account in 2017 and 2018. I then retired and rolled the funds over to an IRA account with Vanguard in 2H2018. The 457 firm then did an audit and notified me in February, 2019 I had made excess contributions in both 2017 and 2018 which were included in the rollover amount. Now trying to straighten it all out.
The 457 firm has issued two 1099-R for 2018: one with a Distribution Code (box 7) of "P - Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2017" and the second with a Distribution Code of "8 - Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2018."
Vanguard is returning the excess contributions and earnings and will issue a 1099-R for 2019 for that amount.
The 457 firm says their 1099-Rs are "informational only and do not need to be reported on my 2018 return." Instead, I will report the Vanguard 1099-R on my 2019 return (the year the funds were actually returned).
Would appreciate advice as to whether this interpretation is correct. Thanks in advance for your help.
You'll need to sign in or create an account to connect with an expert.
@jamesfsmithco- You were given bad advice. You are required to report the excess on your tax returns. The 1099-R box 1 and 2a (should be the same) amounts are taxable as wages in both 2017 and 2018 because they would have been deducted from your W-2 box 1 taxable wages - you must pay that tax now.
The 2018 1099-R with the code "P" must be reported on an amended 2017 tax return and will add the box 1 amount to the 1040 line 7 amount of taxable wages.
The 2018 1099-R with the code 8 is enter on your 2018 tax return and the box 1 amount will be added to the 2018 1040 form line 1 wages.
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
Enter a 1099-R here:
Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).
OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.
Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.
[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]
====
Amended returns can only be mailed. It is suggested that it be mailed certified with return receipt (or other tracking service) to verify that the IRS receives it.
https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed
https://ttlc.intuit.com/replies/3288565
You can check the status of the amended return here, but allow 3 weeks after mailing.
https://www.irs.gov/filing/individuals/amended-returns-form-1040-x-/wheres-my-amended-return-1
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
ItsMeZee23
New Member
Anonymous
Not applicable
aminhari
Level 2
brinkley2013
Returning Member
jamesfsmithco
Level 2
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.