Using Form 1099R

Sometimes, keeping track of all of the various tax forms that exist and of which ones apply to you can be tough. However, the fact remains that there are some important forms you will likely need to know about in your lifetime, and Form 1099-R is one of them.  

This is the form that is used to report distributions of any retirement benefits, such as pensions or benefits from retirement plans. While there are some variations on this form, depending on the specifics of your situation, more often than not, the standard 1099-R form is what is used.

You will typically be given a copy of this form or one similar to it to fill out if you receive a distribution of at least $10 from a retirement plant.

Pension and Annuity Distributions

One of the most common types of retirement benefits that people receive come in the form of pension and annuity distributions. These are mostly given to retired and/or disabled employees or to the beneficiary of a deceased employee.

In most cases, the benefit amount is included in your taxable income unless after-tax contributions were made to the annuity or pension before distribution. When this happens, only some of the distribution is generally taxable.

Loans

Many people think that, when they take out a loan against their pension plan, these count as distributions. It is important to understand, however, that, in most cases, these loans have to later be repaid with interest and are not considered distributions.

You would usually only have to use Form 1099-R if, for some reason, you did not make your loan payment when you were supposed to. When this happens, the amount that you owe is then considered a distribution and may even be penalized.

As you can see, Form 1099-R and when to use it can be tricky, and there are always special circumstances and situations as well.  For that reason, if you think you have to use this form but are unsure or if you have questions about using it properly, remember that it is always best to talk these matters over with a tax professional for best results.

Related articles

• What is an IRS 1099 Form? (turbotax.intuit.com)