Are IRA and pension distributions taxable?
If you took a distribution from your IRA or pension plan, you (and the IRS) are sent a Form 1099-R. Your 1099-R form, plus some additional info you provide, will determine the taxable amount of your distribution.
When you enter your 1099-R form, the following boxes play a key role:
- Box 2a is used to determine the taxable portion of the distribution, but any amount given here could change once you provide us more information.
- If you see a ”0” (zero), none of the distribution amount is taxable.
- If the box is blank (empty), the taxable amount needs to be calculated.
- Box 2b can also help determine the taxable amount.
- If the “Total distribution” box is checked, we’ll see if you qualify for any special elections that may lower your tax.
- If the “Taxable amount not determined” box is checked, the payer didn’t know the taxable amount of your distribution.
- Box 7 provides important codes which identify the specific type of distribution you received and determine if you owe a 10% early distribution penalty or qualify for an exception.
Just enter the information as it appears on your 1099-R form. We’ll use it and your answers to a series of questions to determine the taxable amount of your distribution.
Follow this link if you’d like help entering your 1099-R or type “1099-R” in the Search box, and select the “Jump to” link from the drop-down list.