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eagle2burk
New Member

I received a $12,000 inheritance from my mother's 401K. $2400 in federal tax was paid on it. I received a 1099-R from the bank. Do I need to report this as income?

 
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DoninGA
Level 15

I received a $12,000 inheritance from my mother's 401K. $2400 in federal tax was paid on it. I received a 1099-R from the bank. Do I need to report this as income?

The Form 1099-R has to be reported on your tax return.

To enter a form 1099-R -

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Wages and Income (Personal Income using Home and Business)
  • Click on I'll choose what I work on (if shown)
  • Scroll down to Retirement Plans and Social Security
  • On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

Or enter 1099-r in the Search box located in the upper right of the program screen.  Click on Jump to 1099-R

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2 Replies
DoninGA
Level 15

I received a $12,000 inheritance from my mother's 401K. $2400 in federal tax was paid on it. I received a 1099-R from the bank. Do I need to report this as income?

The Form 1099-R has to be reported on your tax return.

To enter a form 1099-R -

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Wages and Income (Personal Income using Home and Business)
  • Click on I'll choose what I work on (if shown)
  • Scroll down to Retirement Plans and Social Security
  • On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

Or enter 1099-r in the Search box located in the upper right of the program screen.  Click on Jump to 1099-R

dmertz
Level 15

I received a $12,000 inheritance from my mother's 401K. $2400 in federal tax was paid on it. I received a 1099-R from the bank. Do I need to report this as income?

The actual increase in tax liability resulting from the distribution will be determined on your tax return and the $2,400 of tax withholding will be credited on Form 1040 line 16 to be applied against your overall tax liability.  Depending on your overall income, it's possible that the 20% withheld for taxes will not quite cover the increase in your tax liability that resulted from this distribution.
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