Do I Need a 1099-R Form When I Withdraw My IRA?

Due to the tax-advantaged nature of individual retirement arrangements, the IRS monitors any activity on these accounts carefully, particularly withdrawals. With a traditional IRA, most withdrawals are subject to income taxes, as well as penalties if you're under age 59 1/2. Roth IRA withdrawals are generally tax-free at retirement, and withdrawals of contributions are tax-free at any time. Regardless of the tax status of a withdrawal, a Form 1099-R must be completed by the IRA custodian each year that a withdrawal occurs.

Form Overview

Form 1099-R includes basic information about you as the recipient of the IRA distribution, such as your name and address. It also includes your taxpayer identification number, which is usually your Social Security number. It also includes the payer's taxpayer identification number. Other boxes on the form are used for information about your distribution, and some of these don't apply to IRA withdrawals.

Distributions

Box 1 of the Form 1099-R shows the total amount of distributions that you received from the IRA account. This includes any money that was paid directly to you, as well as any money that was transferred to another IRA account with a trustee-to-trustee transfer. This amount must be reported on your Form 1040, line 15a, or Form 1040A, line 11a, in the income section.

Taxable Amount

The taxable amount of your distribution shows in box 2a of Form 1099-R. If you're taking a distribution from a traditional IRA, the entire amount of the distribution will show here with some exceptions. If the distribution is non-taxable, this box should show a zero. This includes any rollovers as well. The taxable amounts are entered on Form 1040, line 15b, or Form 1040A, line 11b.

Withholding

Any federal taxes withheld from your IRA distributions are shown in box 4 on the 1099-R, with state and local taxes shown in box 12 and 15, respectively. Taxes withheld are entered on line 62 of Form 1040, or line 36 of Form 1040A. Add the amounts withheld in to any amounts withheld from your wages from your employment.

Distribution Code

Box 7 of Form 1099-R is for the IRS distribution code for the withdrawal. This helps determine how the distribution is treated for tax purposes, if it's subject to taxes and penalties. For example, code 1 applies to an early distribution that doesn't appear to have an exception and would likely be subject to taxes and penalties. Code 3 is for a disability, and code 4 is for the death of the taxpayer. Codes G and H apply to rollovers.

About the Author

Craig Woodman began writing professionally in 2007. Woodman's articles have been published in "Professional Distributor" magazine and in various online publications. He has written extensively on automotive issues, business, personal finance and recreational vehicles. Woodman is pursuing a Bachelor of Science in finance through online education.

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