1099-R Pension Distribution

[nkustura]

I have a client who started receiving a Pension payments because she turned 50 years of age and worked for a company that was under Union for more than 10 years. This is taxable income??? Do I need to fill out any additional forms for this or just include it on form 1040 ?????

Any help is greatly appreciated.

Thanks

[Koss]

Retirement Income

The payments in question are retirement income, which is generally reported on Line 16 of Form 1040.

If you're lucky, the Form 1099-R will have an amount in Box 1, for the gross amount, and an amount in Box 2a, for the taxable amount. These amounts get reported on Lines 16a and 16b of Form 1040.

If you are really unlucky, Box 2a will be blank, and there will be an X in Box 2b, which says "Taxable amount not determined." That means that it becomes your job to determine what portion of the distribution is a recovery of the taxpayer's original contributions to the pension plan...

And that gets really complicated really fast.

Also, you'll need to pay attention to the code in Box 7. This determines whether the distribution is an early distribution, which makes it subject to an additional 10% penalty. But there are some exceptions to the penalty...

BMK

[Dusty2004]

What form was it reported on?

1099-R?

Dusty

[taxea]

I have a client who started receiving a Pension payments because she turned 50 years of age and worked for a company that was under Union for more than 10 years. This is taxable income??? Do I need to fill out any additional forms for this or just include it on form 1040 ?????

Any help is greatly appreciated.

Thanks

If the taxable amount not determined box is checked, Here is what you need from your client:
scroll down to the bottom part of the 1099R in your program
It has boxes to input
Date of retirement
document from the company that provides the total in the account at date of retirement,
the total contributed by the client, etc

All of this information, if not on the 1099R, from the company is what you need. Once you have input the information it will transfer each year into the current year.
If it doesn't put the taxable amount in box 2, scroll down the window, pick up the amount, then scroll back up and input it in bx 2.
You may need to do some calculations to come up with the right figures for the bottom of the page. If you need more help with this email me at taxea@hawaii.rr.com