How does a retirement plan withdrawal (Form 1099-R) affect my taxes?

Form 1099-R is for withdrawals (distributions) from 401(k) plans, IRAs, pensions, annuities, and other retirement plans. You get separate 1099-Rs for distributions from separate accounts. For example, you'd get one from your 401(k) and a separate one from your traditional IRA. 

There are a few variations:

• 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
• CSA 1099-R, Civil Service Retirement Benefits
• CSF 1099-R, Statement of Survivor Annuity Paid
• RRB-1099-R, Railroad Retirement Benefits

If your plan administrator doesn't send you a Form 1099-R, you can file a substitute form 1099-R. Enter your 1099-R as you normally would in TurboTax, giving as much info about the payer as you can. We’ll see if you need to file ‌a substitute form.

In general, if contributions to a retirement plan aren’t tax deductible, like a Roth IRA or Roth 401(k), then qualified distributions (withdrawals, usually in retirement) aren’t taxed. However, if the contributions are tax deductible, as with a traditional IRA or employer 401(k), then generally the distributions will be taxed. (Table I-2 shows some traditional IRA and Roth IRA differences).

Just enter your 1099-R as it appears and answer a few questions—we’ll figure out what, if anything, will be taxed.

A rollover is a (generally) tax-free distribution of funds from one plan to another plan that follows the IRS rules. A reason for doing this might be to keep the funds tax deferred until retirement.

You’ll still need to enter your 1099-R info and answer a few questions for us. We'll figure out what, if anything, will be taxed.

Early distributions before age 59 ½ generally get an extra 10% federal tax on top of your regular income tax rate. Some states also charge additional penalties. However, if you took money out of your retirement account under one of these exceptions, you might not have to pay the same penalties:

• Adoption or birth expense
• Death, or total and permanent disability
• Qualified Domestic Relations Order
• Equal periodic payments based on life expectancy
• Dividend pass through from an ESOP
• IRS levy
• Unreimbursed medical expenses that are more than a certain amount of your adjusted gross income
• Certain distributions to qualified military reservists called to active duty
• Separation from Service if age requirement is met
• In-plan Roth rollovers or eligible distributions contributed to another retirement plan or IRA within 60 days
• Distributions to qualified public safety employees after separation from service on or after December 30, 2022
• Distributions to terminally ill individuals certified by a physician after 12/29/2022
• Qualified disaster recovery distributions

Also, effective starting for tax year 2024:

• Victims of domestic abuse that occurred within the previous 12 months by a spouse or domestic partner
• Distributions using the financial emergency exception, once per calendar year to a maximum of $1,000
• Certain distributions on eligible work plans for short-term emergency needs under $2,500

Once you enter the distribution information from your 1099-R form, we'll help you check for any exceptions that could reduce the tax.

If you're over age 65, your Standard Deduction is higher. You may also get the Credit for the Elderly or Disabled (as much as $7,500) based on your age, income, and filing status. We’ll help you to see if you qualify, and show you how to claim it.