Form 1099-R
Form 1099-R is a record of all distributions — including qualified distributions, premature distributions, and direct rollovers — taken from your retirement account. You will not receive a Form 1099-R if you transferred the assets into an account directly, from one trustee to another, or if you exchanged shares among funds held within the same retirement plan.
Your Questions Answered
Generally, retirement account distributions are reported in the Income section of your tax return. You may need to obtain IRS Form 5329 if this was a premature distribution.
IRS regulations generally require 10% withholding on distributions from retirement accounts, unless the shareholder elects otherwise. This serves as a prepayment of your income taxes and is not to be confused with any IRS penalties for premature withdrawals. Additionally, if your distribution was from a qualified plan or 403(b) account, IRS regulations require 20% withholding on amounts that are eligible to be rolled over to another custodian; this also serves as a prepayment of your income taxes and should not be confused with any IRS penalties.
Your conversion from your traditional IRA to your Roth IRA was a distribution from your traditional IRA and a contribution into your Roth IRA. This distribution is reported on Form 1099-R as taxable income and the Roth contribution is reported on Form 5498.
The recharacterization of your Roth IRA contribution (or previous conversion from a traditional IRA) must be reported in the calendar year in which it occurs. The recharacterization must be reported on Form 8606.
You received three copies of your Form 1099-R so that you may provide those copies to different agencies. Copy B is filed with your federal taxes. Copy C is for your own records, while Copy 2 should be used if you are required to file state taxes.
