What IRS Form 1099-R (2017) Is For
IRS Form 1099-R (2017) is an information return issued by the Internal Revenue Service to report distributions from pensions, annuities, retirement plans, profit-sharing plans, individual retirement accounts, and insurance contracts. It provides details such as the gross distribution (Box 1), the taxable amount (Box 2a), and any federal income tax withheld during the tax year. The form also includes specific distribution codes in Box 7, which identify the type of payment and help determine whether additional taxes or penalties may apply.
When You’d Use IRS Form 1099-R (2017)
You would use IRS Form 1099-R (2017) when you need to report income from distributions or corrections related to the 2017 tax year.
- Filing an amended return: You must file Form 1040-X if you later receive a corrected Form 1099-R or discover that a distribution was omitted from your original tax return.
- Late filing: If you filed your tax return before receiving all 1099-R forms, you are required to amend your return to include the missing income and tax details.
- Corrected forms: Payers may issue corrected forms when errors occur in the gross distribution, taxable amount, or when the distribution code identifies the incorrect transaction type.
- Missing Forms: If a form is not received, contact the payer to request a replacement. If unavailable, use your own records to estimate income and federal income tax withheld.
- State reporting: Include both federal income taxes and state tax withheld, especially when reporting to the California Franchise Tax Board or other state tax agencies.
Understanding the IRS collection process helps you take the right steps if you receive a notice about your retirement income or distributions.
Key Rules or Details for the 2017 Tax Year
IRS Form 1099-R (2017) follows specific rules that apply to distributions and rollovers from retirement accounts and insurance contracts during the 2017 tax year.
- Reporting threshold: Every financial institution must issue a separate form for any distribution of $10 or more from a qualified plan, pension, annuity, or individual retirement account.
- Minimum Required Distributions: Individuals who turned 70½ in 2017 were required to withdraw minimum distributions from their retirement plans or face a 50% excise tax.
- Roth conversions: Converting a traditional IRA to a Roth IRA in 2017 resulted in the conversion amount being taxable in the same year.
- Direct rollovers: Transfers between eligible accounts, such as 401(k) plans or IRAs, are reported with Code G and are not taxable if appropriately completed.
- Early distributions: Withdrawals made before age 59½ generally incur a 10% additional tax, unless a specific exception applies, such as disability or certain medical expenses.
- Designated Roth accounts: Qualified distributions after the five-year holding period are non-taxable and reported separately under the designated Roth section.
- Corrective distributions: If you withdrew excess contributions, they are taxable based on the amount in Box 2a, even when the taxable amount not determined box is checked.
Step-by-Step (High Level)
The following steps help you correctly review and report information from IRS Form 1099-R (2017) on your tax return.
- Review your form: Verify that your name, mailing address, account number, and total amount in Box 1 match your records.
- Understand key boxes: Check Box 2a for the taxable amount, Box 4 for federal income tax withheld, and Box 5 for after-tax contributions or designated Roth contributions.
- Interpret distribution codes: Read Box 7 carefully to identify the distribution code, which indicates whether the payment is an early withdrawal, a regular payment, or a direct rollover.
- Report on your tax return: Enter your pensions, annuities, and IRA distributions under the correct income section to ensure the Internal Revenue Service can match your data.
- Calculate additional taxes: If you took an early distribution without a qualified exception, complete Form 5329 to determine if the 10% additional tax applies.
- Attach documentation: Include Copy B of Form 1099-R if filing by mail; if filing electronically, retain all copies for your tax records throughout the calendar year.
Common Mistakes and How to Avoid Them
Taxpayers frequently make errors when handling IRS Form 1099-R (2017), but these can be avoided by following a few careful steps.
- Not reporting all forms: The Internal Revenue Service receives a copy of each Form 1099-R, so every distribution from a retirement account must be reported to avoid penalties.
- Misinterpreting distribution codes: Some taxpayers assume all early distributions are taxable, but specific codes indicate a known exception; always confirm using IRS Publication 575 or seek guidance from a professional tax adviser.
- Double-counting rollovers: Direct rollovers reported with Code G are not taxable, so ensure they are not included as income on your tax return.
- Ignoring after-tax contributions: Always verify employee contributions and after-tax portions to avoid paying taxes twice on the same funds.
- Miscalculating taxable amounts: If Box 2b shows “taxable amount not determined,” calculate it using IRS Publication 590-A or 590-B to ensure accuracy.
- Missing corrected forms: If you receive a corrected form showing changes in the gross distribution or state tax withheld, file an amended return promptly to avoid IRS notices.
Taking care of any unfiled individual returns helps ensure all retirement income is accurately reported and avoids penalties.
What Happens After You File
After submitting your tax return with IRS Form 1099-R (2017), the Internal Revenue Service reviews your information through automated matching against payer records. If there are discrepancies between the taxable amount or gross distribution, you may receive a notice requesting clarification or payment. Refunds and adjustments are processed based on standard timelines for the tax season.
Keep copies of every form, payment confirmation, and after-tax contribution record for at least three years, or longer if they affect future distributions from your retirement plan. If you owe additional taxes after reporting your retirement plan distributions, an IRS payment plan can help you manage your payments over time.
FAQs
What does IRS Form 1099-R (2017) report?
It reports distributions from pensions, annuities, retirement accounts, profit-sharing plans, and insurance contracts. The form includes key information, such as the gross distribution, taxable amount, and federal income tax withheld, all of which are used to ensure the accuracy of your tax return.
Is a direct rollover taxable?
No, a direct rollover between qualified plans or IRAs is not taxable, but it must still be reported to the Internal Revenue Service. Box 2a should show a zero taxable amount, and Box 7 should include Code G to indicate the rollover.
What if Box 2a on my form is blank?
If Box 2a is blank and marked as “taxable amount not determined,” you must calculate it using the proper IRS publication or seek assistance from a tax advisor. This ensures the correct taxable amount is reported.
Can after-tax contributions make my distribution non-taxable?
Yes, any non-taxable portion of your distribution that reflects after-tax or employee contributions is excluded from taxable income. These are recorded in Box 5 as total employee contributions.
Should I contact the IRS if there’s an error on my form?
Contact the payer first to request a corrected form. If unresolved, include a written explanation when filing your tax return and keep all documentation showing the correct amounts for the Internal Revenue Service.
