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  • Editorial 


    NewRetirement

    San Francisco, CA

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  • The 1099-R is an important IRA tax form related to retirement savings accounts.

    Anytime you move any money out of a 401k, IRA or other retirement account, then you will probably have to file a 1099-R. Any of the following activities could trigger the need to file this form:
    -- Rolling over a 401k account from a previous employer
    -- Rolling over savings from a traditional IRA to a Roth IRA
    -- Any kind of rollover or retirement account consolidation
    -- Withdrawing money from a retirement account early to buy a house
    -- Withdrawing money to purchase a qualified long term care contract
    -- Simply withdrawing after retirement
    -- Receiving annuity payments from a qualified account
    -- Basically ANY withdrawal from a retirement account

    However, being asked to file this form does not necessarily mean that you will owe taxes on this money.

    Box 1 on the form will ask you about the the total amount that you withdrew or rolled over. However, boxes 2a and 2b will tell you how much might be taxable depending on your situation.

    The IRS has dense but useful instructions for form 1099-R, found here:
    --> http://www.irs.gov/pub/irs-pdf/i1099r.pdf

    Here is some background information on Distribution Rules and Rollovers: When rolling over 401k funds or consolidating IRAs, it is very important that you follow the distribution rules. In most cases you should probably do a Direct Rollover. With a Direct Rollover, a check for your retirement funds is made payable to the new IRA custodian or financial institution. This is the preferred way to conduct a rollover since there is no chance of there being tax consequences as is possible with an Indirect Rollover.

    With an Indirect Rollover the check for your funds is made payable to you. And you must forward the money yourself within the allotted time period. Respect the Plan’s Distribution Rules for Withdrawals: This is particularly important if you rollover your funds into a Traditional IRA. Withdrawals on a Traditional IRA (also known as distributions) can begin at age 59 1/2 and are mandatory by 70 1/2. (Withdrawals before age 59 and a half are usually subject to a 10 percent penalty.)

    With a Roth IRA, withdrawals may be taken at any time without penalty and there is no mandatory distribution age

    If you would like assistance with a qualified rollover, NewRetirement has some Rollover resources here:
    http://www.newretirement.com/rollover-marketplace.aspx

    We wish you all the BEST with your retirement planning.
    http://www.NewRetirement.com

  • Login to rate this answer:   Answered on 10/26/2012
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.