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New Member

1099R

Hello, Last year my husband tried to start an IRA account. However, a couple of days later, he had to close the account due to a family emergency. He has received a 1099R from the bank. Nevermind, that the person at the bank that set it up didn't do so correctly. Does he have to report the 1099R on his taxes, even though he closed the account within the window that the bank told him he could do so without incurring the necessity to pay early distribution taxes/fees? Reporting it takes him from a refund to owing.  Thanks.

2 Replies
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Employee Tax Expert

1099R

He does have to report this on his return, as the IRS has also received a copy of the 1099-R. They will be looking to see if your husband reported the distribution on his return. If it is not reported, they will be in contact with you, and you may incur penalties and interest for not reporting it timely.

 

However, there are exceptions to the 10% penalty for early distributions. Click here to see if your situation met any of the exceptions.

 

Once you enter the distribution information from your 1099-R form, we'll help you check for any exceptions that could reduce the tax.

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Level 15

1099R

To avoid tax and 10% penalty, you need to get a corrected 1099-R from the bank.

Consider filing a request for extension of time to file Form 4868.