FEDERAL RETIREMENT, OPM and 1099

[Judge Mudge]

I read the strings of questions and responses but I am still quite confused over this OPM issue and taxable amount vs. gross distribution.  Can anyone assist in explaining what should actually be accurately entered?

[Judge Mudge]

I went back at looked at my 2019 taxes filed via Turbo and the same thing occurred.  Gross distribution was entered vice taxable amount - I just did not catch it last year.  I won't change 2019 but this is really confusing to me...and I used to teach Income Tax for undergraduates!

[Irene2805]

To make sure TurboTax uses the amount in box 2 of your CSA-1099R as the taxable amount, please follow these steps:

1. Enter your CSA-1099-R as it appears on the form you received.
2. On the screen, Any Periodic Payments? Mark the Yes radio button--you got regular payments from this retirement account.  [Screenshot #1]
3. On the screen Describe the Taxable Amount, mark the radio button that the taxable annuity amount was used as the taxable amount.  [Screenshot #2]

TurboTax will use the amount in Box 2 and NOT box one to add to your taxable income.

SCREENSHOT #1

SCREENSHOT #2

[Critter-3]

OPM violates the 1099-R rules by writing "helpful" information in the box rather than just the value or code like they are supposed to. OPM has done that for years and it causes more confusion than help. They put UNKNOWN in box 2a when it should be blank, and put "7 NONDISABILITY" in box 7 when is should only be "7", "1" or "2".

The taxable amount in box 2a is usually the box 1 amount unless you have after-tax contributions in the retirement plan and use the simplified method. If this is NOT the first year of receiving payments, then you should use the same method that was used last year - either the box 1 amount or the simplified method, using the carry forward simplified information from last year.

If box 2a is blank or UNKNOWN then there should be amount in box 9b to use with the simplified method. If no amount in 9b then contact OPM to find the account "basis".

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 under My Account) 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.]