topic Child’s 1099-R in Deductions & credits

Child’s 1099-R

CBrumley — Sun, 09 Feb 2025 03:06:44 GMT

My father open a Roth IRA for my son (16) a few years back. He decided to close it out and gave us the check for about $4500. It looks like my son needs to file his own tax returns because of it. Can he get any breaks because it wasn’t his decision to close it. We did not roll it into another account and used it for medical expenses (but not his). He is a full time student and has no other income.

What advise can you give on this situation?

Re: Child’s 1099-R

SabrinaD2 — Sun, 09 Feb 2025 03:59:05 GMT

Your son's Roth IRA withdrawal is likely taxable, even if it wasn't his decision to withdraw. Because it is a non-qualified distribution and he's below the age of 59½, there's no exemption since the funds weren't used for his medical expenses. If the funds were used to cover education expenses, the 10% early withdrawal penalty could be waived. The Standard Deduction for 2024 is $14,600 for single filers, which may reduce or eliminate his taxes.

Use this tool to determine Is the distribution from my Roth account taxable?
See Tax rates and standard deductions at this link: IRS provides tax inflation adjustments for tax year 2024

Re: Child’s 1099-R

dmertz — Sun, 09 Feb 2025 14:24:36 GMT

When preparing his tax return, your son needs to know the amount originally contributed and enter that into 2024 TurboTax when asked for contributions made prior to 2024. On Form 8606 Part III, that will be subtracted from the amount distributed to determine the taxable amount.