What is 'Form 1099-R'

Form 1099-R is a tax form for reporting distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions. It is required by the U.S Internal Revenue Service (IRS) from any individual who has a distribution of over $10. It is one of the forms in the 1099 series of forms that are known as "information returns." The 1099 forms are also used to report various types of income that a person may receive, other than salaries, such as independent contractor income, interest and dividends, government payment and many more.

Breaking Down 'Form 1099-R'

The following are some of the items included on the form: the gross distribution paid during the given tax year, the amount of the distribution that is taxable, the federal income tax that has been withheld, the contributions made to the investment or premiums paid, and a code that represents the type of distributions made to the holder of the plan.

As indicated by its full name, "Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.," the 1099-R deals specifically with passive income and retirement plans. Anyone who receives a 1099-R must include the amount shown on it in their income tax return and pay taxes accordingly.

Form 1099-R: Examples of Distributions

According to the IRS, the following are the types of distributions that give rise to the issuance of a 1099-R form:

  • Profit-sharing or retirement plans
  • Any individual retirement arrangements (IRAs)
  • Annuities, pensions, insurance contracts, survivor income benefit plans
  • Permanent and total disability payments under life insurance contracts
  • Charitable gift annuities, etc.

Form 1099-R: Information Included

Some of the items included on the form are the gross distribution paid during the given tax year, the amount of the distribution that is taxable, the federal income tax that has been withheld at source, if any, the contributions made to the investment or premiums paid, and a code that represents the type of distributions made to the holder of the plan.

Form 1099-R: When to Expect It

The IRS requires plan custodians to send the form to the owner of a plan if they have made distributions of $10 or more from the plan in a given year. The form must be mailed to the recipients at the latest by Jan. 31 of the year after the distribution was made. In some cases, the individual needs to attach a copy of Form 1099-R to their tax return. The plan owner, the IRS and the municipal or state tax department (if applicable) all receive a copy of the form. These copies are used to cross-reference individual tax returns to ensure compliance.

Any person who erroneously receives a 1099-R form should immediately contact the plan custodian who sent it in order to rectify the situation and avoid filing an incorrect tax return.

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