topic Re: Instructions for simplified method for 1099-R in Retirement tax questions

I receive a 1099R statement of Survivor Annuity paid Box 2a on my survivor annuity shows UNKNOWN AS TAXABLE AMOUNT what amount should it be

vicki1941 — Wed, 05 Jun 2019 04:56:02 GMT

Is the 1099-R from OPM?

MargaretL — Wed, 05 Jun 2019 04:56:04 GMT

Is the 1099-R from OPM?

Yes

vicki1941 — Wed, 05 Jun 2019 04:56:05 GMT

Yes

1099 R survivor annuity box 2a taxable amount unknown

rhbauman123 — Wed, 05 Jun 2019 04:56:06 GMT

1099 R survivor annuity box 2a taxable amount unknown

what is the simplified method?

08-26-1942 — Wed, 05 Jun 2019 04:56:23 GMT

what is the simplified method?

The taxable amount is calculated for you, based on your f...

MargaretL — Wed, 05 Jun 2019 04:56:57 GMT

The taxable amount is calculated for you, based on your form's entries and follow up questions.

First, let's make sure that the form is entered correctly, not as a regular pension.

Please follow the steps below to enter CSA 1099-R.

1. Federal Taxes

2. Wages & Income, Jump to Full list

3. Scroll down and select IRA, 401(k), Pension Plans. On the screen Tell Us Which 1099-R you Have please be sure to select CSA-1099-R Civil Service survivor annuity (if you are survivor, but not the original owner). Select Continue and you will see automatically filled in information on OPM. Select Continue again and you will see Enter Annuity Information screen. You will be prompted to data entry and additional questions about your annuity.

Second, please be sure that the Form 1099-R is entered into Turbo Tax exactly as it appears (all fields, including the contributions); don't change any boxes, if they are blank or have "zeros" in them, please leave the fields in Turbo Tax blank. This will ensure proper calculation of the taxable amount.

How do I get to the correct Form to enter the data?

studer-ann — Wed, 05 Jun 2019 04:56:59 GMT

How do I get to the correct Form to enter the data?

Now what?

studer-ann — Wed, 05 Jun 2019 04:56:59 GMT

Now what?

How do I gat back to income?

studer-ann — Wed, 05 Jun 2019 04:57:01 GMT

How do I gat back to income?

I made the mistake of entering the non taxable amount in...

cbwagner1 — Wed, 05 Jun 2019 04:57:02 GMT

I made the mistake of entering the non taxable amount in Box 2. How do I get back into my Turbo Tax to correct this error.

Leave the field showing Unknown blank.

Anita01 — Wed, 05 Jun 2019 04:57:06 GMT

Leave the field showing Unknown blank.

If you receive an additional payment purchased by volunta...

turbokingmel — Wed, 05 Jun 2019 04:57:08 GMT

If you receive an additional payment purchased by voluntary contributions (amount is listed at the bottom of CSA 1099R), realize that the amount listed in 9b ONLY includes your contributions for your regular annuity, not the voluntary contributions you made for the additional annuity. If you don't , you're paying taxes again on all of your additional annuity.

Re: I receive a 1099R statement of Survivor Annuity paid Box 2a on my survivor annuity shows UNKNOWN AS TAXABLE AMOUNT what amount should it be

hookstom — Mon, 02 Mar 2020 01:48:06 GMT

The posted answer is very complete but does not match my copy of Turbo Tax Home and Business and I am still struggling with my original question.

The form that I received for OPM is form CSF 1099R.

The Box 1 entry is $2460

The Box 2 entry is UNKNOWN

The Box 3 entry is NONE

The Box 7 entry is 4 - DEATH - BENEFIT

The Box 9b entry is 2730.69

My question is " is the Box 1 Gross distribution taxable or is it treated as a non-taxable survivor benefit?"

I will appreciate the assistance.

Re: I receive a 1099R statement of Survivor Annuity paid Box 2a on my survivor annuity shows UNKN...

JohnB5677 — Mon, 02 Mar 2020 22:28:33 GMT

Box 1 is taxable unless you enter a corrected amount in box 2a. The IRS instructions state "Generally, you must enter the taxable amount in box 2a."

If the annuity was purchased with after-tax funds, then it’s non-qualified. Non-qualified annuities require tax payments on only the earnings.

The amount of taxes on non-qualified annuities is determined by something called the exclusion ratio. The exclusion ratio is used to determine what percentage of annuity income payments is taxable and how much is not. The idea is to determine the amount of a withdrawal or payment from an annuity is from the already-taxed principal and how much is considered taxable earnings.

Exclusion Ratio Example

Your life expectancy is 10 years at retirement.
You have an annuity purchased for $40,000 with after-tax money.
Annual payments of $4,000 – 10 percent of your original investment – is non-taxable.
You live longer than 10 years.
The money you receive beyond that 10-year-life expectation will be taxed as income.

Re: Is the 1099-R from OPM?

Bob78 — Sat, 07 Mar 2020 19:06:08 GMT

Yes a CSA 1099-R

Re: Is the 1099-R from OPM?

macuser_22 — Sat, 07 Mar 2020 19:12:25 GMT

OPM violates the 1099-R rules by writing "helpful" information in the box rather than just the value or code like they are supposed to. OPM has done that for years and it causes more confusion than help. They put UNKNOWN in box 2a when it should be blank, and put "7 NONDISABILITY" in box 7 when is should only be "7", "1" or "2".

The taxable amount in box 2a is usually the box 1 amount unless you have after-tax contributions in the retirement plan and use the simplified method. If this is NOT the first year of receiving payments, then you should use the same method that was used last year - either the box 1 amount of the simplified method, using the carry forward simplified information from last year.

If box 2a is blank or UNKNOWN then there should be amount in box 9b to use with the simplified method. If no amount in 9b then contact OPM to find the account "basis".

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

Re: Is the 1099-R from OPM?

phyzx — Fri, 29 May 2020 00:38:45 GMT

@ChampChiranand anybody else who wants to chime in.

I have gotten here by the rabbit hole.

My 2017 box 2a states unknown. So that means the Simplified method for a 12 month time frame. I even created a spread sheet for the next two years.

But my 2016 OPM 1099-r states the starting date of 06/01/2016. The box 2a has an amount in it. So I assumed the Simplified method starts in 2017 with no previous year recovery amount (0) for line 6.

But my concern is the later 6 months of 2016. If the box 2a has an amount am I to assume that 2016 is not included in the Simplified method worksheet and that box2a taxable amount is already correct?

I assume that the blank amount in box2a triggered the Simplified Method in TurboTax?

I hope I made this clear. I could have started a new question but it ties in here so clearly.

Thank you in advance.

I would really like to finish up at a decent hour. 8-)

Re: Is the 1099-R from OPM?

macuser_22 — Fri, 29 May 2020 00:54:05 GMT

@phyzx wrote:

@ChampChiranand anybody else who wants to chime in.

I have gotten here by the rabbit hole.

My 2017 box 2a states unknown. So that means the Simplified method for a 12 month time frame. I even created a spread sheet for the next two years.

But my 2016 OPM 1099-r states the starting date of 06/01/2016. The box 2a has an amount in it. So I assumed the Simplified method starts in 2017 with no previous year recovery amount (0) for line 6.

But my concern is the later 6 months of 2016. If the box 2a has an amount am I to assume that 2016 is not included in the Simplified method worksheet and that box2a taxable amount is already correct?

I assume that the blank amount in box2a triggered the Simplified Method in TurboTax?

I hope I made this clear. I could have started a new question but it ties in here so clearly.

Thank you in advance.

I would really like to finish up at a decent hour. 8-)

I suggest that you discuss this with the pension department at OPM. The simplified method is used to recover the tax free contributions that you made and are part of every monthly payment. If you have an unrecovered after-tax "basis" then you should have used the simplified method starting with the very first payment. You should ask them why the 2016 had a taxable amount and 2017 does not (it might have something to do with a part year pension, but only OPM can tell you their rules). They should also be able to tell you what start date to use.

See IRS Pub 971page 5 for information.

https://www.irs.gov/pub/irs-pdf/p721.pdf

Re: Is the 1099-R from OPM?

phyzx — Sat, 30 May 2020 02:41:58 GMT

I contact OPM and get this repeated dribble.

If your annuity started after July 2, 1986, a portion of each annuity payment is taxable and a portion is a tax-free return of your contributions to the retirement fund. Your retirement contributions are shown on the 1099R form we send you each January for tax filing purposes.
To assist you in determining the tax-free portion of your annuity, the Internal Revenue Service (IRS) offers Publication 721, "Tax Guide to U.S. Civil Service Retirement Benefits". This publication is available at https://www.irs.gov/pub/irs-pdf/p721.pdf

This info is what I read before that sent me down this rabbit hole. This is not an adequate answer.

The search for an I.R.S. and O.P.M. knowledgeable person is now underfoot. If anybody has links I would appreciate.

Re: Is the 1099-R from OPM?

macuser_22 — Sat, 30 May 2020 02:45:39 GMT

You need to actually talk to someone at OPM who can access your account and look up and figure out what that amount on your 1099-R should be and issue a revised 1099-R if necessary.