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For a 1099-R, box 2a, TT asks: For the years you received these distributions, was the amount shown the taxable amount? "Learn more" doesn't help, so how would I know?

The 1099-R is from OPM, as I'm a Postal Service retiree.
"Learn more" says, "If you have basis - an amount of money you contributed and already paid taxes on - in your retirement funds, then you'll use one of two methods (Simplified method or General Rule) to determine the taxable amount..."
How/when could there be a situation where I contributed money to OPM and already paid taxes on it? Or how would I know if I did?
Note: I also clicked the links to "simplified method" and "general rule" but that info just raises *more* questions. I don't remember getting stuck here last year.
Oh here's another possible clue: Both this year and last year, the amount in box 2a of my 1099-R form was precisely $401.76 less than the box 1 "gross distribution" even though the gross distribution and taxable amounts between the two years are quite different. That seems incredibly coincidental and unlikely. I have no idea where the $401.76 came from.
And finally, from "Learn more" it says "Take a look at your 1099-R from last year.... Generally, the taxable amount would be on line 16b of your 2020 1040."  But there's no line 16b on last year's 1040. Moreover, line 16 is labeled "Tax," not "Taxable amount." I'm wondering if the mention of line 16b was a mistake by TurboTax.
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2 Replies
ColeenD3
Expert Alumni

For a 1099-R, box 2a, TT asks: For the years you received these distributions, was the amount shown the taxable amount? "Learn more" doesn't help, so how would I know?

If you contributed over the years, you would have an amount in Box 9a. If Box 2a is less than Box 1, this has already been calculated for you. If Box 2a is blank, then you need to work through the program and provide information to have the correct portion be taxable. The amount is Box 9a is used.

 

Tax rules for annuity benefits.

 

Part of the annuity benefits you receive is a tax-free recovery of your contributions to the CSRS or FERS. The rest of your benefits are taxable. If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the taxable and tax-free parts. If your annuity starting date is before November 19, 1996, you generally could have chosen to use the Simplified Method or the General Rule.

 

 

 

For a 1099-R, box 2a, TT asks: For the years you received these distributions, was the amount shown the taxable amount? "Learn more" doesn't help, so how would I know?

Coleen, thank you. That was helpful. Just a few more questions to be clear.

 

I let TurboTax import a pdf file of my 1099-R. Since it has no box 9a (only 9b), and since box 2a is less than box 1, but not blank (you said it's already been calculated for me), shouldn't TurboTax already "know" the answer to its own question? 

 

Back to the original question: "For the years you received these distributions, was the amount shown the taxable amount?"

The answer would then seem to be yes. Would you concur?

 

Less important but if you have another minute....

 

About the $401.76 difference between box 1 and box 2a: Before receiving your answer I realized that not only was that consistent for at least the last couple years, so was the amount in 1099-R box 9b, total employee contributions. Thinking they might therefore be related, I divided the total contributions by that mystery 401.76 figure and came up with 25.83... . My immediate thought: that's the number of times I got paid each year! (every other week, so 26). That seemed to make sense, and also to jibe with what you said --- "Part of the annuity benefits you receive is a tax-free recovery of your contributions" (to FERS in my case). With every paycheck I was contributing automatically, so is that a reasonable assumption about what the ~26 means? 

 

About that "1040 line 16b" part in the TurboTax instructions: could that be a mistake? (reference: the last paragraph of my original question)

 

Thank you!

 

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