Federal Government retirement

[gjgogol]

There are a series of questions that TTx is asking regarding my federal government retirement:

- what did you do with the money from Office of Personnel Management?

- any periodic payments?

- payment start year?

- describe the taxable amount?

- tell us the taxable amount method

is anyone familiar with TTx as it relates to Federal Government retirement?

[BillM223]

"what did you do with the money from Office of Personnel Management?" - this is asking, did you take this a personal income or did you roll it over to another retirement account? Most people, of course, use their pensions for personal use.

The following questions are trying to calculate how much of your OPM pension is taxable. If you made any after-tax contributions to your OPM pension while you were working, then when these amounts are returned to you, they are not added to your taxable income.

I take it that box 2a on your CSA-1099-R (taxable amount) is blank? This means that the OPM, for whatever reason, doesn't know if you made after-tax contributions to your OPM pension.

If there is an entry in box 2a, then before the questions you showed us above, there should have been a question in TurboTax asking if the amount in box 2a was the taxable amount last year. If so, then answer "yes" and you won't see the other questions.

"any periodic payments?" - this (and the following questions) are trying to establish whether or not you made after-tax contributions to your pension - when these are returned as periodic payment, they are not taxable (but they are spread out over your actuarial life). You got your OPM payment monthly or biweekly, right?

"payment start year?" This is part of the Simplified Method of calculating how much of your periodic distributions were non-taxable.

If you never made any after-tax contributions to your OPM pension, then your distribution is 100% taxable. Enter the date you started (if it is not exact, not a problem in this case), and enter 0 (zero) for your cost or basis. 

However, if you have a nonzero value in box 9b, come back and tell us, because this could be an indication that the OPM thinks that you made after-tax contributions after all.

[gjgogol]

have a nonzero value in box 9b

[BillM223]

On the CSA-1099-R, box 9b is reporting the amount of after-tax contributions that you still have left in your plan (i.e., has not been "recovered" by you yet).

Just to confirm, box 2a (Taxable amount) is blank? Odd, if they are tracking your contributions, they could have calculated the taxable amount of the distribution for you.

Well, when you are making the entries for the Simplified Method, if you know the original start date and plan cost, then enter them for the Simplified Method, and enter the difference between the original plan cost and the value in 9b for the tax-free amount previously recovered.

Make sense?

[gjgogol]

so here is the problem (that I subsequently learned)...i apparently screwed up last year and answered a question incorrectly. last year's 1099R has a number in the GROSS DISTRIBUTION box (#1) a smaller number in the TAXABLE AMOUNT box (#2a).  It appears that whatever I did last year I DID NOT go thru a series of questions regarding the original start date and plan cost etc or electing simplified method. Subsequently the amount that was used was the exact amount appearing in the TAXABLE AMOUNT box (#2a).  So when I did my taxes this year, there wasn't anything in the "TAX-FREE Amount Previously Recovered" box.  I also had/have trouble answering the "Describe the Taxable Amount" page. I was confused when it asked to either select "yes, the taxable annuity amount was used as the taxable amount" or "no, a different amount was taxable." I didn't know what the difference was between the "taxable annuity amount" and the "taxable amount".  Additionally, i was confused on regarding the sentence on the "Why we used simplified method to compute the taxable amount" page, i.e. "The taxable amount is $xxxx. We'll use this amount on your return, rather than the gross annuity amount shown on Form CSA/CSF 1099-R." What number are they referring to when they say "gross annuity amount"?

[ColeenD3]

The  "gross annuity amount" is the amount in Box 1. Please see this LINK for more information.

It's odd that there was an amount in Box 2a last year but not this one. Can you try to contact someone at OPM to ask why?

". I was confused when it asked to either select "yes, the taxable annuity amount was used as the taxable amount" or "no, a different amount was taxable."  If you answer "yes", it means that you agree that the Box 1 amount is the correct taxable amount. If you answer "no", it is because you believe that the taxable amount is a different amount than box 1.

[gjgogol]

there is an amount in my 2020 and 2019 box 2a.  i think the problem is with the way I answered the TTx page dealing with "Tell us about your joint annuity".  On that page, it asks, "Does this annuity cover more than one individual?" On face value my answer was "No, this annuity covers only (my name)", but I think this is incorrect for the following reason. When I retired I elected a survivor benefit for my spouse.  is the question referring to this survivor benefit for my spouse when it asks me if my annuity covers more than one individual? When I clicked on the "Learn more" link, it talked about "If you chose to receive a life annuity over the joint life of yourself and a non-spouse beneficiary...", so I thought that the question, i.e. "Does this annuity cover more than one individual?" was referring to a non-spouse beneficiary. So now I am totally confused.

[DawnC]

That question does refer to a NON-spouse beneficiary so you answered it correctly with NO.   When there is a total distribution, the percentage that belongs to you is listed in box 9a.

Since there is an amount in Box 2a, the OPM already knows that you made after-tax contributions to the account.   Since you have an amount in box 9b, this means that you have basis in the retirement plan.   The amounts in 9b are used to calculate the taxable portion of your distribution in 2a.   Because you have after-tax contributions that are not taxable to you, the taxable amount in 2a should be lower than the gross distribution in Box 1.   But it sounds like they have already done the calculation for you both this year and last year.   

You may want to delete the 1099-R and re-enter it to ensure your distribution is correctly reported.  

[wjbriggsr]

In my case, Turbotax Premium 2021 is reporting the gross distribution in box 1 of the 1099-R as the taxable income rather than the taxable amount shown in box 2a. Even after going through the calculations based on post taxed employee contributions and my annuity start date and stating that the taxable amount should actually be less than that reported in box 2a, it still inserted the gross distribution amount on the form. How does one get this corrected?

[ThomasM125]

The gross distribution amount will show on line 4(a) on your form 1040, but the taxable amount will show on line 4(b). I don't know if you are seeing it there or somewhere else in TurboTax. So, you might be seeing the gross distribution, but it may not be what is being included in your taxable income.

You can view your form 1040 while working in the online version of TurboTax by following these steps:

While working on your return in the Federal section of TurboTax:

   1.  Choose the Tax Tools icon on your left menu bar

   2.  Tools

   3.  View Tax Summary

   4.  Choose the Preview my 1040 on your left menu bar

@wjbriggsr