There are several different tax forms that are important to be aware of and understand. One of the forms that many might not understand fully is the Form 1099-R. This is one that you want to watch out for and pay attention to as it can have an impact on your taxes. If you don’t understand what that form is, you have come to the right place. Mark Dicus & Company is here to explain what this form is and how it can impact your taxes.
What is the Form 1099-R
If you have gotten a Form 1099-R, it is because you have had some sort of eligible distribution has been made to you. Just like other forms, you will receive a copy of this form and then a copy will be sent to the IRS as well.
Does Everyone Get a 1099-R?
While anyone that is in retirement and taking any distributions from their retirement account will get a Form 1099-R, there are other instances where the Form is given as well. You will get one of these forms if you have any distribution over $10 given to you out of any of these different accounts:
– Individual Retirement Accounts (IRA)
– Profit-Sharing or Retirement Accounts
– Survivor Income Benefit Plans
– Insurance Contracts
– Permanent Disability Payments from Life Insurance Contracts
– Charitable Gift Annuities
What Do You Get a 1099-R For?
There are several different examples that are common and will include a Form 1099-R come tax season.
– 401k Loan: Sometimes, you may need a little money to help you make ends meet and may borrow from your 401k account. If you don’t pay back the amount that you borrowed before tax season comes around, it will be looked at as a distribution and you will get a 1099-R for it.
– Retirement Plan Rollover: If you move your retirement plan funds from one employer to another, it is tax-free when the process is done correctly. However, even when it is done correctly and no money is taken out, the IRS will want to know about it and a 1099-R will be issued.
– Early Retirement Distributions: If you couldn’t wait until retirement to dip into the money you have saved up, you can take money out and will get a 1099-R for it. You should be aware that there is usually a 10% penalty that you will be paying and would have avoided had you waited to take the money out.
Tax Preparation, Accountants & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you have any aspect of your taxes that are unclear or you don’t understand, you can rely on Mark Dicus & Company to help you get everything right. We provide tax preparation services that make your personal or business taxes a cinch. You can trust that we will do them correctly to help you avoid overpaying at tax season. Call us today!