Entering 1099 R for a Trust

[klk-knoepfli]

Purchased Turbo Tax Business to do Trust filing.  It is not providing a place to enter the 1099 R forms received.  The Help features only provide information as if I was doing a standard 1040.  In "Business" Federal Taxes/Income I am finding no where to enter the information on the 1099 R.  Where is this information entered? 

[klk-knoepfli]

Thank you.  The instructions were great.  Why weren't they available through the help in the package I purchased.

[tagteam · Accepted solution]

TurboTax Business does not contain a screen dedicated to the entry of information from a 1099-R. 

In most instances, following the procedures outlined below will give you the correct result.

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Follow the steps below to enter the amount   on Form 1099-R (Box 2a) that is treated as ordinary income   :

1) Click the Federal Taxes tab and then click "Income".

2) Click the Start (or Update) button to the right of "Other income or loss".

3) On the Other Income page, enter "1099-R Box 2a" as the description (see first screenshot).

4) Enter the amount treated as ordinary income in Box 2a under "Amount" and click the Continue button.

5) Go into Forms mode (upper right side of screen). 

6) Under "Forms in My Return" (upper left side of screen), look for "Form 1041" and click that form.

7) Ensure that the Box 2a amount appears on Form 1041, Line 8, Other income. (see second screenshot).

[Luppoe]

Are these instructions correct for the 2019 version and when is this going to be added into the program?  I tried using the help inside the program and got the instructions for entering the information in a 1040 which is wrong.  The business program is expensive for something that we have to search for instructions on how to enter a standard IRS form, 1099-R, information to file trust taxes. 

[dmertz]

Retirement account distributions paid to a trust do not have the complexity of those paid to individuals because these distributions paid to a trust are never subject to an early-distribution penalty, never eligible for rollover, can never be a Qualified Charitable Distribution, an HSA Funding Distribution, be used to pay for health insurance of a Public Safety Office or have any of the other complexities of distributions made to individuals, so there is no need for any special section in TurboTax Business for the entry of Forms 1099-R.  The taxable amount is simply entered as Other Income, essentially one-line entry.

The Instructions for Form 1041, which should be your reference for preparing any trust income tax return, clearly state that these distributions are to be reported as Other Income.  The instructions for Form 1041 also indicate where on Schedules K-1 this Distributable Net Income is to be reported.

Form 1040 is the form for an individual tax return and has nothing to do with preparing a trust income tax return.  Instructions for preparing Form 1040 are generally not relevant to preparing Form 1041.

[dvm_tucson]

This is a common enough occurrence that Turbotax should anticipate it, rather than have the user input it as "Other Income."  The trust for which I am filing includes the IRA from which the distribution comes, so this doesn't seem like "income" to the trust since those funds are already there!  Wouldn't it be easy to have TurboTax ask, "Do you have a 1099-R?"

[DaveF1006]

Yes, in the trust account, 1099R income must be listed under "other income." I personally have filed Trust Tax returns this way and I never had any issue with the IRS.in the ten years i have been preparing Trust returns.

[dvm_tucson]

Don't get me wrong.  I totally trust, no pun intended, that the 1099-R income be entered as Other Income.  However, I use Turbotax so I don't have to search the internet and these forums to find out where to enter stuff.  I expect that it anticipates these relatively common situations and leads me through it.  

If I had not had a previous year's tax return prepared by an accountant that had a non-zero entry for trust income, I would have totally missed this and went on my merry way, not entering the 1099-R Box 2a amount as other income.

[DaveF1006]

Agreed. This is something that can easily be missed.

[Luppoe]

As my initial entry stated, when looking for the instructions for entering a 1099R for a trust in the business version it gave me the instructions for a 1040 and not the 1041 it should have. If TurboTax asked if a 1099R was received and collected the information just like it does for other forms received it would be much easier on the individuals working on the taxes.  Your comment only talks about the income listed on the 1099R, but what happens if there are other entries, like tax withholdings? Adding the 1099R form into the program should not be a difficult request and would make filing trust tax returns easier for all of us. We all paid good money for the program to make it easier on us, it took me over 30 minutes of research to find out where to enter the income and taxes withheld into the program, and when I found the information it was for a past tax year, not the current year. It should have taken less than a minute. 

[Luppoe]

We do not see it as a problem with the IRS but a problem with TurboTax.  A simple question, do you have an 1099R, if so a form to enter the income and taxes withheld which feeds the information to the correct locations is all we are asking.  Also the IRS 1041 instructions tell you to enter the income on the 1099R in Other Income but does not tell you it should be line 2A instead of line1.  There could be a big difference in the 2 lines depending on if it is qualified or nonqualified money. 

[iOne]

As of TurboTax Business 2021, the 1099-R form is still not included.  You have to enter it as "Other income" per the instructions in other answers.  Intuit appears to be letting this product die and wither on the vine.

[Luppoe]

So we pay +$100 for software to help us file our deceased relative's Trust taxes, and we need to use the answers from others users who might or might not be giving us the correct answer. 

[TiffanyL]

If you have a specific question you need help with, you can ask it here and we will do our best to assist you. This is a public forum and experts do answer questions here as well.

@Luppoe

[tagteam]

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@Luppoe wrote:

So we pay +$100 for software to help us file our deceased relative's Trust taxes, and we need to use the answers from others users who might or might not be giving us the correct answer. 

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The answers are generally correct and if you actually read the Guidance in TurboTax, you will see essentially the same direction for entering information from a 1099-R.