We received a 1099-R on this distribution, but had been advised this distribution was only a disbursement of money we put into the Roth IRA, which contributions made after taxes. Why would this be considered taxable?
Roth IRA's are deemed to come first from contributions, so the taxable amount should be zero in your example. HOWEVER, Roth IRA distributions are subject to the same 10% penalty as traditional IRA's unless you meet one of the exceptions such as medical expenses, educational expenses, firt-time home buyer, etc.
Withdrawing your own previous contributions are neither taxable or subject to the 10% penalty - only if the earnings might be.
You can always withdraw your own Roth contributions tax and penalty free.
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One of the followup questions will ask for your prior year contributions not previously withdrawn.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.