My taxable amt on my OPM 1099r says unknown. CPA last year used 100$ less than gross payment. What do I use?

[BMcCalpin · Accepted solution]

Your pension income is normally 100% taxable except when you have "basis" in your pension. Basis (also called "cost") is the amount of after-tax contributions you made to the pension fund. Since this contribution was made with after-tax dollars, when it back comes out of the pension as a distribution, it is not taxed again.

If your CPA used a taxable amount that $100 less than the gross distribution, that means that he/she thought that you had basis in the plan, which is returned piecemeal over the your ratable lifetime.

Of course, I can't know why your CPA did this. But if your CPA ever said anything about cost or basis in the pension, then you can get TurboTax to calculate the correct taxable amount by entering your basis in the 1099-R dialogue in TurboTax.

And if you think your CPA knew what he/she was doing, then when you see the question "was there an amount in box 2 last year?" say "yes" and yes, you want to use it again.

Many taxpayers never made after-tax contributions to their pensions, but if you did, you need to find this number and keep it in your tax files, because you are charged with keeping track of it.

[taxfreezone]

My wife gets a pension from the local government. On the 1099-R it doesn't have an amount in box 2a, but box 2b is checked (taxable amount not determined). I just want to know which way to answer the question in turbo tax. Is the amount in box 1 fully taxable. She was a government employee.

[Critter]

Unless you know of a reason where part of the retirement is not taxable you should say yes it is all taxable. 

[taxfreezone]

Thank you very much.