A:



Distributions of after-tax amounts (amounts already taxed) will not be taxable when distributed to you.

However, you will be required to report the amount on your tax return as a non-taxable distribution. The plan should send you a Form 1099-R, which is used to report distributions from retirement accounts. The 1099-R should show the amount as non-taxable. Be sure to provide your tax preparer with a copy of the 1099-R, but first make sure it does not reflect the amount as taxable.



For more information, see Instructions For Forms 1099-R And 5498 on the IRS website.

This question was answered by Denise Appleby
(Contact Denise)



RELATED FAQS
  1. I have an IRA with after-tax money in it. How do I avoid being taxed again?

  2. Is an annuity payment from a government pension considered a required minimum distribution?

    On my taxes, I do have to say that some or all of the payments were Required Minimum Distribution. I also get a government ... Read Answer >>
  3. Can I elect to NOT have income tax withheld from an IRA (NOT ROTH) distribution before ...

  4. Do I have to claim the capital gain distribution on my federal return?

    Aren't capital gains only payable when you sell the underlying security? I'm getting a 1099-Div form from my mutual fund ... Read Answer >>
  5. Which amount should the brokerage use for the 1099-R?

    Assets in IRAs do not carry a cost basis for tax purposes. Read Answer >>
  6. What taxes does a beneficiary of a non-qualified variable annuity have to pay?

    I received a lump sum from a non-qualified variable annuity, upon the death of my father. A 1099R form came in the mail. ... Read Answer >>
Related Articles
  1. Retirement

    It's December - Do You Know Where Your IRA Statements Are?

    Don't discard these important documents with your junk mail - they may affect your taxes.
  2. Retirement

    After-Tax Balance Rules For Retirement Accounts

    Accumulating post-tax assets can work to your advantage. Find out how.
  3. Retirement

    Unexpected 1099-R Form: What To Do

    Did your IRA custodian report distributions you thought were non-reportable? Find out what went wrong.
  4. Personal Finance

    Tax-Saving Advice for IRA Holders

    Be informed about benefits and deductions that may apply to you and avoid costly mistakes on your return.
  5. Retirement

    Retirement Plan Tax Form 8606: When To File

    If you have a Roth IRA, you are responsible for keeping track of your pretax versus after-tax assets.
  6. Personal Finance

    How After-Tax Rollovers Affect Your IRA

    Consolidating retirement assets? Make sure you account for pre-tax and after-tax assets separately.
  7. Retirement

    Retirement Plan Tax Form 5329: When To File

    Read this if you've taken early distributions or owe excess-contribution or excess-accumulation penalties.
  8. Retirement

    9 Penalty-Free IRA Withdrawals

    If you need to take early distributions, find out which exemptions allow you to avoid expensive consequences.
  9. Personal Finance

    Exceptions To The 60-Day Retirement Account Rollover Rule

    A non-qualified distribution might still be tax and/or penalty free under certain conditions.
  10. Retirement

    How IRA Contributions Affect Your Taxes

    Learn how to work with the tax man to avoid getting gouged when you convert your plans.
RELATED TERMS
  1. Form 1099-R

    An Internal Revenue Service (IRS) form with which an individual ...
  2. Cash Liquidation Distribution

    The amount of capital that is returned to the investor or business ...
  3. Nontaxable Distribution

    A type of dividend that is paid to shareholders of a corporation ...
  4. Distribution

    1. When trading volume is higher than that of the previous day ...
  5. After-Tax Income

    The amount of money that an individual or company has left over ...
  6. Taxable Income

    The amount of income that is used to calculate an individual's ...
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center