- Why am I receiving a Form 1099-R?
- The IRS requires Fidelity to issue a Form 1099-R if you took more than $10 in distributions from your retirement plan, IRA, annuity, pension, insurance contract, etc.
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- Am I required to report information contained on Form 1099-R?
- Yes, distributions from retirement accounts are generally reportable on Form 1040 or Form 1040A. Depending upon your circumstances, you may need to report:
- IRA distributions.
- pension and annuity distributions.
- tax on IRAs or other retirement plans (you may need to complete Form 5329).
- federal income tax withheld.
You are required to attach Copy B of your 1099-R to your federal income tax return only if federal income tax is withheld and an amount is shown in Box 4. Please refer to the official IRS instructions for Form 1040 or 1040A or consult your tax advisor for more information.
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- I make deductible contributions to my IRA. What portion of my distribution is taxed?
- If you always made deductible contributions, all the money you withdraw from your IRA is fully taxable. Generally, if you made any nondeductible IRA contributions, only the earnings portion of any distributions attributable to those contributions is taxable.
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- I make nondeductible contributions to my IRA. Do I have to pay taxes on that money?
- You will not have to pay federal income tax on the portion of your distribution attributable to your nondeductible contributions. However, you will have to pay taxes on the portion of your distribution attributable to any investment earnings and/or deductible contributions.
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- What happens if I take early distributions as substantially equal periodic payments?
- Fidelity generally reports IRA distributions taken prior to the account owner reaching age 59½ as "early distribution, no known exception." You will see this on your 1099-R in Box 7 as code 1. As a result, you may incur a 10% federal income tax early withdrawal penalty on your distribution(s) unless you file Form 5329 with your federal income tax return which indicates that you are eligible for an exception to the penalty. Please consult the IRS and/or your tax advisor for more information.
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- How can I report distributions from Form 1099-R that are generally not taxable?
- The IRS generally requires you to complete Form 8606 in addition to Form 1040 or Form 1040A if you:
- received a distribution from a retirement plan for which you made nondeductible contributions (Form 8606 must also be completed in the year in which nondeductible contributions are made).
- made conversions to a Roth IRA in 2012.
- recharacterized 2011 contributions to or from a Roth IRA.
- received a Roth IRA distribution in 2012 (you also may need to complete Form 5329).
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- I have a Roth IRA. Am I automatically free from paying federal income tax on my withdrawals?
- Qualified withdrawals from a Roth IRA are generally free from federal income tax. A qualified distribution is one that is taken after the five-year aging period and for which one of the following applies
- over age 59½
- for a first-time home purchase (up to a lifetime limit of $10,000)
- due to disability
- due to death
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- I had Fidelity make a direct rollover from my employer-sponsored retirement plan into my Fidelity IRA Rollover account. Why am I receiving a Form 1099-R?
- The IRS requires a trustee of an employer-sponsored retirement plan to report direct rollovers from the plan on Form 1099-R. However, direct rollovers are generally not taxable. If you directly rolled over your employer-sponsored plan account into a Fidelity IRA account, you will be receiving Form 5498, IRA Contribution Information, which should balance out the distribution on Form 1099-R.
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- I had Fidelity make a direct trustee-to-trustee transfer of my IRA account to Fidelity from another firm. Is it reported on Form 1099-R?
- Direct transfers between trustees involving the same type of plan are generally not reportable on Form 1099-R.
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- I transferred my retirement account to Fidelity during 2012. Who will send me my tax forms?
- If you transferred your account to Fidelity in 2012, your enclosed Form 1099-R only includes distribution activity from the time you began conducting business in this account with Fidelity. Your former firm should provide a Form 1099-R for any distribution activity that occurred before your account was transferred.
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- I make estimated tax payments. What issues do I need to consider?
- As you calculate your estimated tax payments, be sure to include taxable income you may receive from a minimum required distribution. If you underpay your estimated tax, you could be subject to penalties and interest. Withdrawals from your Fidelity IRA(s), Profit Sharing, Money Purchase, and Self-Employed 401(k) Plan(s) will be reported on Form 1099-R to you and to the IRS.
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