The 1099-R form for myRA from Comerica contains 0.00 in all boxes except the final distribution so it shows up as taxable income. It is impossible to get corrected 1099.

[dmertz · Accepted solution]

A myRA is nothing more than a Roth IRA with limited investment options.

You haven't indicated what you believe needs correcting on this Form 1099-R.  Regular distributions from a Roth IRA are reported with code J, T or Q, have the gross distribution amount in box 1, a blank box 2a and box 2b Taxable amount not determined marked.  If the code is J or T, the taxable amount of any portion not rolled over to another Roth IRA is determined on Form 8606 Part III using the gross distribution amount and the answers that you provide to the questions asked by TurboTax after clicking the Continue button on the Your 1099-R Entries page.  If the code is J, the taxable amount determined on Form 8606 is also subject to an early-distribution penalty on Form 5329 unless you have a penalty exception applies.

[anniepie33]

Thanks. I earned $34 on post tax montly contributions over two years but the total is showing up as income. The T box was selected. Where do I specify my contributions?

[dmertz]

After entering the Form 1099-R, click the Continue button on the Your 1099-R Entries page and enter your contributions made for years prior to 2018.  Also make sure that you enter as new 2018 Roth IRA contributions any contributions you made to the myRA for 2018.

Also answer the question indicating whether or not your first contribution to an Roth IRA was for some year before 2014.  If the contribution to the myRA was your first Roth IRA contribution answer No since myRA accounts were not available prior to 2014.

[anniepie33]

Thx. I found the pertinet question concernig post tax deposits and was able to obtain a correct 8606 form which adjusted my taxable retirement income.

[anniepie33]

For some reason, some Roth IRA custodial banks do not provide any information in the 1099 form except for the gross distribution. You can call them and ask for a final statement or figure out your post tax deposits from your own records. That information will be input into a question about nondeductible contributions, after the natural disaster questions, in the TurboTax queries after you fill out the 1099 form which will then show up in section 3 of the 8606 form. This obscure, convoluted requirement is ridiculous and I don't know why banks issuing the 1099-R forms are not required to provide taxable amounts.

[dmertz]

This is the result of the tax laws.  A Roth IRA custodian has no way to know your basis in Roth IRA contributions because the law treats all of your Roth IRA accounts as a single account for tax purposes, and any given Roth IRA custodian has no way to know of any Roth IRA activity you have in Roth IRAs at a different custodian.  That makes it entirely your responsibility to track Roth IRA contribution and conversion basis.

[anniepie33]

I am able to input multiple 1099-Rs with all of the pertinent information, so I don't see why the same wouldn't apply to Roth IRAs! Shouldn't Turbo Tax then compute all of the Roth 1099-Rs for final numbers??!!

[dmertz]

My previous comment explains why it's impossible for a given Roth IRA custodian to know your Roth IRA basis and determine the taxable amount.  No Roth IRA custodian has the necessary information to populate box 2a for a regular distribution from a Roth IRA, so the IRS *requires* box 2a to be blank and box 2b Taxable amount not determined to be marked.

[anniepie33]

Obviously you are more familiar than I am, and I clearly can't grasp the concept of other retirement funds providing their information while not being aware of other funds, while Roth IRAs can't do so.

[dmertz]

Retirement accounts other than IRAs are whole unto themselves.  The taxable amount for any distribution from one of those retirement accounts is determined entirely from information known to the plan administrator.

On the other hand, determining the taxable amount of any Roth IRA distribution depends on information knowable only to you, information that is not knowable by the Roth IRA custodian, because the law treats all of your Roth IRAs as a single account even though your Roth IRAs may be spread across multiple custodians who are not required to share contribution and distribution information with each other.  Since no one Roth IRA custodian has the information necessary to determine the taxable amount of any regular Roth IRA distribution, the Roth IRA custodian is required to report that they are unable to determine the taxable amount of a regular distribution.