Form 1099r distribution:Will I be taxed on a CapitalOneInvesting Roth acct. It was in a "cash available to purchase" holding acct? Money txrfd from my checking acct?

[mmdy1970]

This Capital One Investing Roth account was started by me with money transferred regularly from my checking account in a Capital One Investing "cash available" account.  When I had enough money to purchase some stocks, I would  use this money and purchase stocks and etc.  I decided to rollover this account to my work Roth IRA, but I had $678 in the "cash available" account, so I transferred that back into my checking account. I received a 1099-R from Capital One Investing, will I have to pay taxes on this money that originally came from my checking account that I had already paid taxes on?

[MaryK1 · Accepted solution]

Yes, it is a distribution from a retirement account so you will have to pay the early withdrawal penalty if the money was not in the ROTH IRA account for at least five years.  Your 1099-R should indicate that it was a ROTH distribution in Box 7 so the amount you contributed is not taxed.

[mmdy1970]

That sounds a bit unfair since I now will have to pay taxes twice on this $678 because it was never in a pre-taxed state and I never actually purchased any stocks with it.   So will I end up having to pay 30% tax on this since I am only 46 years old?

[macuser_22 · Accepted solution]

I have to question what you said:  "... I decided to rollover this account to my work Roth IRA,..."   If you mean a designated Roth - a 401(k) Roth - at work, a Roth IRA is not eligible to be rolled into any other account type except another Roth IRA.  You should check to make sure that this was a legal rollover or not - it could be costly if not corrected before the extended due date of Oct 18, 2017 if rolled into the wrong type of account.
See IRS Pub 590A on allowable rollovers. - <a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p590a/ch01.html#en_US_2016_publink1000230568">https://www.irs.gov/p...>

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As to the $678 --

You can always withdraw your own Roth contributions tax and penalty free.  Only the earnings would be subject to the penalty and tax.   Roth distributions are your own contributions first and then any earnings.  Since I am sure that you previously contributed more than $678 in after-tax money to the Roth.   Enter that amount in the prior year contribution when asked for and it will not be taxed again.

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.]

One of the followup questions will ask for your prior year contributions not previously withdrawn.   Those contributions that still remain in the Roth will not be taxed or subject to a early withdrawal penalty.