What IRS Form 1099-R (2013) Is For
IRS Form 1099-R (2013) is issued by the Internal Revenue Service to report distributions from pensions, annuities, retirement plans, profit-sharing plans, IRAs, and insurance contracts. It records the total distribution, taxable amount, and federal income tax withheld. The form helps plan participants and beneficiaries accurately determine how much of their gross distribution is taxable, ensuring that all income from retirement accounts and related payments is appropriately included in their tax return.
When You’d Use IRS Form 1099-R (2013)
You’ll use this form whenever you receive a distribution from a qualified plan or retirement account during the calendar year.
- Normal retirement distributions: These are payments received after reaching the eligible service retirement age, and they are usually taxable unless a portion includes after-tax contributions that reduce the taxable amount.
- Early distributions: These occur when funds are withdrawn before age 59½ and may result in additional taxes unless a known exception applies under Internal Revenue Service rules.
- Rollovers and transfers: These are reported when funds are moved between qualified plans or Roth IRAs through a direct rollover that preserves the tax-deferred status of the distribution.
- Corrected form filings: These are necessary when a payer issues a corrected Form 1099-R to fix an error that affects the reported taxable amount or distribution code.
- Amended tax return filings: These are required when a corrected or late form changes the reported federal income tax withheld or the taxable portion of the gross distribution.
Key Rules or Details for Tax Year 2013
IRS Form 1099-R (2013) includes several important details that determine how distributions from retirement plans are reported and taxed.
- Reporting threshold: Payors must issue Form 1099-R for distributions of $10 or more, although smaller amounts may still be taxable and should be reported on the tax return.
- Distribution codes: Box 7 utilizes specific distribution codes to identify the type of payment. For example, Code 1 indicates an early distribution, Code 7 reflects a normal retirement distribution, and Code G represents a direct rollover to another qualified plan.
- Taxable amount not determined: When Box 2a is blank, taxpayers must calculate the taxable portion of their gross distribution using personal records or IRS Publication 575 to ensure accuracy.
- Federal income tax withholding: Distributions may be subject to automatic federal income tax withholding, and Box 4 on the form reports the total amount withheld.
- Required Minimum Distributions (RMDs): Individuals aged 70½ or older must take their required minimum distribution from qualified plans or IRAs; failure to do so may result in additional taxes equal to 50% of the amount not withdrawn.
Step-by-Step (High Level)
- Review the form carefully: Verify your name, mailing address, account number, and the total amount in Box 1 to ensure accuracy and that the distribution code correctly identifies the payment type.
- Confirm the taxable portion: Check Box 2a for the taxable amount, and if the “taxable amount not determined” box is checked, calculate it using the instructions in IRS Publication 590 or 575.
- Check withholding amounts: Confirm that the amount in Box 4 correctly lists the federal income tax withheld and that state taxes, such as those from the California Franchise Tax Board, are accurately reported in Boxes 12 through 17.
- Determine any non-taxable portion: Subtract your total employee contributions or after-tax contributions from the gross distribution to calculate the non-taxable portion.
- Report on your tax return: Enter IRA distributions on lines 15a and 15b of Form 1040 or pension and annuity payments on lines 16a and 16b, depending on the type of retirement plan.
- File corrections if necessary: Use Form 1040X if a corrected form or additional document affects the taxable amount, the federal income tax withheld, or any other key detail reported on your original return.
For help communicating with the IRS or correcting your Form 1099-R, you can appoint a Power of Attorney for IRS matters to represent your interests.
Common Mistakes and How to Avoid Them
Avoiding frequent filing errors ensures your IRS Form 1099-R (2013) is reported correctly and minimizes the risk of additional taxes or penalties.
- Misreporting Box 2a: Many taxpayers incorrectly report the entire gross amount as taxable income; always calculate the non-taxable portion to avoid overpaying taxes.
- Ignoring distribution codes: Each distribution code identifies a specific payment type, and misunderstanding these codes can cause inaccurate reporting and unnecessary penalties.
- Failing to report rollovers properly: Direct rollovers (Code G) must still be reported, but they are not taxable. Always mark “Rollover” next to the appropriate line on your tax return to clarify the transaction.
- Missing required minimum distributions: Failing to take the required minimum distribution from qualified plans can result in a 50% excise tax; use the IRS life expectancy tables to ensure you withdraw the correct amount each year.
- Treating Roth IRA withdrawals as automatically tax-free: Only qualified distributions after age 59½ and after five years are non-taxable; non-qualified withdrawals may include taxable earnings.
Filing all unfiled individual returns is important to avoid penalties and keep your retirement account distributions in compliance with IRS requirements.
What Happens After You File IRS Form 1099-R (2013)
After you file your tax return, the Internal Revenue Service compares your reported figures with the Form 1099-R submitted by your plan administrator. If the amounts differ, you may receive a CP2000 notice detailing the proposed adjustment to your taxable income. You must respond within 30 days and include any supporting documents to verify the reported amounts. If corrections affect your taxes owed or refund, file Form 1040X to amend your return.
If you’re facing penalties for errors or missed deadlines on your retirement distribution reporting, explore our IRS penalty abatement services to see if you qualify for relief.
FAQs
What if my distribution involved a qualified plan loan offset?
A qualified plan loan offset occurs when an unpaid loan balance from your retirement plan is treated as a distribution. The offset amount is taxable unless it is rolled over into another qualified plan or IRA within 60 days of receiving the Form 1099-R.
How does the IRS treat survivor benefits under Form 1099-R (2013)?
Survivor benefits are taxable to the beneficiary who receives them and must be reported as part of total income on the tax return. The distribution code identifies whether the payment resulted from the death of the original plan participant.
What does “taxable amount not determined” mean on Form 1099-R?
This phrase means the payer did not calculate your taxable portion. You must accurately determine the taxable and non-taxable portions using IRS Publication 575 or 590 and report the correct amount on your federal income tax return.
Can I claim an exception to the early withdrawal penalty for insurance premiums?
Yes, you can claim an exception if you used an early distribution to pay for qualified health insurance premiums while unemployed.
How do I report Code G and rollovers involving two forms?
When a direct rollover (Code G) occurs, you should report the total distribution on your return and write “Rollover” beside it. If you receive two forms for the same rollover, report the combined total once to avoid duplication.
