Am I required to file a 1099-R? Will I get into trouble if I don't file it? My 1099 shows federal tax was taken out. Why do I have to pay the tax again?

3 questions about 1099-R

posted

Connect with an expert

1 Best answer

Accepted Solutions

Am I required to file a 1099-R? Will I get into trouble if I don't file it? My 1099 shows federal tax was taken out. Why do I have to pay the tax again?

1) Yes

2) maybe...the IRS also gets a copy and will send you nasty letter if you don't include it...but that sometimes takes a year to happen.

3) The withholding done on the 1099-R distribution is just an estimated payment...just like withholding on a W-2.

Your tax return with ALL your income reported (and withholding credited) is the final accounting for the entire year. IF 20% was withheld, but your income level has you being taxed at 25%, then you may owe another 5% at tax time, but if your income level puts you in the 10% tax bracket, then you might get some back..

(I say "might" get some back, because you may have other income that you owe taxes for, and whatever withholding you have is lumped all together to pay off whatever taxes are assessed ..On EVERYTHING.)

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

View solution in original post

1 Reply

Am I required to file a 1099-R? Will I get into trouble if I don't file it? My 1099 shows federal tax was taken out. Why do I have to pay the tax again?

1) Yes

2) maybe...the IRS also gets a copy and will send you nasty letter if you don't include it...but that sometimes takes a year to happen.

3) The withholding done on the 1099-R distribution is just an estimated payment...just like withholding on a W-2.

Your tax return with ALL your income reported (and withholding credited) is the final accounting for the entire year. IF 20% was withheld, but your income level has you being taxed at 25%, then you may owe another 5% at tax time, but if your income level puts you in the 10% tax bracket, then you might get some back..

(I say "might" get some back, because you may have other income that you owe taxes for, and whatever withholding you have is lumped all together to pay off whatever taxes are assessed ..On EVERYTHING.)

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

Still have questions?