1099-R inherited Retirement upon death, am I double paying taxes?
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TurboTina2
New Member

1099-R inherited Retirement upon death, am I double paying taxes?

- Mom contributed to a retirement account during her years of work
- She passed away, the account was transferred to my name as a Deferred Annuity, which I had to Cash Out or Rollover into an outside 401k/Roth within 3 years
- At the end of 3 years I chose Cash Out, and paid a very large amount in Federal Taxes
- I received a 1099-R from the company holding the Deferred Annuity, so how do I file this, as Box 7 = 7(Normal Distribution)? Having already paid taxes on cashing it from the account holder, will I be paying taxes again on this income?
4 Replies
macuser_22
Level 15

1099-R inherited Retirement upon death, am I double paying taxes?

Is the tax withheld in box 4 that you paid?
**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.**
TurboTina2
New Member

1099-R inherited Retirement upon death, am I double paying taxes?

Yes
TurboTina2
New Member

1099-R inherited Retirement upon death, am I double paying taxes?

I just spoke with the Representative from the Company that held the Annuity, which I chose Cash Out from. It seems that this fund was unique from a standard retirement/401k/Roth/SEP/Simple, and I am 1 of 2 in the last 8 years that elected the Cash Out, and am under 59.5 YO.
The Representative could not tell me if it falls under a Qualified or Non-Qualified Plan within TurboTax, and will consult with their in-house Tax attorney to see how it should be entered/classified in TurboTax.
macuser_22
Level 15

1099-R inherited Retirement upon death, am I double paying taxes?

You didn't pay the tax, you had tax withheld, just like W-2 withholding that will be applied now to pay the tax.

The actual tax depends on your other income and margional tax bracket.  If not enough tax was withheld, you will owe more.

The box 4 (or box 12 state) withholding will be added to all other withholding, such as W-2 withholding, and be shown on line 64 on the 1040 form to offset your overall tax liability.   


**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.**
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