distribution from Roth 457 plan

meinfeldt — Fri, 15 Feb 2019 04:09:10 GMT

A friend quit her job and cashed out her Roth 457 plan. She is 52 years old. Her 1099-R shows the following amounts:

Line 1 $1285 Gross Distribution

Line 2a $1285 Taxable Amount

Line 4 $ 10 Fed tax w/h

Line 5 $1238 Employee Roth Contributions

Line 7 Code 2

Does it appear that this is the proper way to account for this type of distribution?

I believe the taxable amount should be $1285 - $1238 or $47. How is it entered into the tax software?

Any help would be appreciated...

Re: distribution from Roth 457 plan

NCperson — Fri, 15 Feb 2019 12:59:31 GMT

Assuming this is a 'designated Roth Account'. the form is correct

withdrawals from designated Roth 457 plans are fully taxable is you are under 59.5 years old, but there is no 10% penalty for early withdrawal

please see this IRS chart at this link. note that it states that

https://www.irs.gov/retirement-plans/roth-comparison-chart

Withdrawals of contributions and earnings are not taxed provided it’s a qualified distribution – the account is held for at least 5 years and made:

On account of disability,
On or after death, or
On or after attainment of age 59½.

but since your friend is under 59.5 and doesn't meet the criteria, contributions and earnings ARE taxable and therefore line 1 and 2a are correctly the same.

best to reconfirm the type of Roth with the issuer of the form

topic distribution from Roth 457 plan in Get your taxes done using TurboTax

distribution from Roth 457 plan

Re: distribution from Roth 457 plan