Is my distribution code wrong on Form 1099-R?

Forum|Forum|6 years ago
February 18, 2020
1 reply
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In February of 2019, I withdrew $34,000 from my Vanguard Roth IRA. None of this amount was earnings, only contributions with my last year of contributing to this fund back in 2010 (therefore all of it was older than five years). I am not 59 1/2 although this should not matter as I understand, since none of the withdrawal was earnings. I did in fact roll all of it into another Roth IRA in my wife's name, although as I understand this should not matter either, as the money is my original contributions to do with as I want. On my 1099-R, Box 7 shows a distribution code of "J." So in Turbo Tax under the Wages and Income section, if I choose "Did something else with it" instead of "Rolled it into another account," I get a hefty tax amount due. But if I choose "rolled it into another account," I am not taxed. Clearly I want to choose the untaxable choice, but my question is, did Vanguard assign me the wrong distribution code of "J" in Box 7 of my 1099-R? Should I just leave well enough alone and click "Rolled it into another account" even though it seems to me it should not matter what I did with my money, or should I contact Vanguard to issue me a corrected 1099-R?

KarenM90

Level 11

No, your 1099R is correct as issued.

If you continue through the IRA section, after you enter the 1099R (exactly as it was reported to you, with Code J in Box 7) TurboTax will ask you a series of questions regarding disasters and several other topics.

When you get to the end of that section it will ask you to Enter Prior Year Roth Contributions. When you enter the total amount of your contributions, only any amount of your withdrawal that exceeds this contribution will be taxed.

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jules13501Author

Level 2

Thanks Karen for your reply. I did continue through to the end of that section, and yes there were several questions relating to disaster ... but nowhere did it ask me to enter any prior Roth IRA contributions. I'm not being taxed on that withdrawal though. Regardless, I just want to be certain I'm doing this right and that everything is in order.