1099-R Box 7 code G but amount in 2a Taxable amount

[taxea]

The IRS doesn't even keep the state figures on file from the W2.

The easiest way to figure this out is to get a copy of the request for disbursement.

[David1980]

The IRS doesn't even keep the state figures on file from the W2.

The easiest way to figure this out is to get a copy of the request for disbursement.

Yes, good point. So obviously the IRS doesn't need the state lines on a W-2 for whatever matching they do. So are you as a preparer required to enter everything exactly as it appears as on the W-2, or can you change things to make the tax return correct as necessary? The only two things I absolutely know need to be entered as they are on the W-2 are the SSN and the address, since Pub 1345 says that. I'd assume changing box 1 is probably a no-no on a W-2. What about box 2a on a 1099-R? Or, does the IRS not really care at all as long as you're reporting the correct income on the 1040? Could be the only thing you really have to enter as-is is the SSN and address and other than that you just have to preparer the return correctly?

[Gary2]

Hello All: This is my first post in this forum. I have a client who told me he took some money from his retirement. He gave me his 1099-R, it has amount in line 2a but box 7 Distribution Code is G. He told me he received money from his retirement plan but the 1099-R box 7 code G indicates that it is rollover and nontaxable. What should I do. I thank you all for your help.

I ran into this one too. The client had rolled an old 401K over into a ROTH IRA. I had to change to code to "H" to get the software to handle it right.

There are a couple of things wrong here.

Code G does not indicate that it's not taxable. It just indicates a direct rollover from one type of retirement plan (except designated Roth retirement accounts, e.g. a Roth 401(k)) into another. The software should be questioning the type of account it was rolled into, and treating some or all as taxable if it was rolled into a Roth account. If your software isn't handling this, contact the vendor.

Changing it to code H shouldn't be solving the problem. Code "H" is for going from a designated Roth into a Roth IRA. Off the top of my head, I can't think of any circumstances where that would be taxable, so I don't see how that would have fixed things.

[taxea]

Yes, good point. So obviously the IRS doesn't need the state lines on a W-2 for whatever matching they do. So are you as a preparer required to enter everything exactly as it appears as on the W-2, or can you change things to make the tax return correct as necessary? The only two things I absolutely know need to be entered as they are on the W-2 are the SSN and the address, since Pub 1345 says that. I'd assume changing box 1 is probably a no-no on a W-2. What about box 2a on a 1099-R? Or, does the IRS not really care at all as long as you're reporting the correct income on the 1040? Could be the only thing you really have to enter as-is is the SSN and address and other than that you just have to preparer the return correctly?

The purpose of inputting everything on a W2 is so the program will transfer the state info to the state forms.
I would not change any figures on W2...it needs to be corrected by the issuing party if there are errors.
As for 1099 if you have documentation that it is incorrect. I change it with a statement or, in the case of amounts, by adjustment and a statement. This, of course, is done only when the issuer refuses to correct it.

[ddoshan]

As for 1099 if you have documentation that it is incorrect. I change it with a statement or, in the case of amounts, by adjustment and a statement. This, of course, is done only when the issuer refuses to correct it.

Again I would not change what or the way something is reported on the 1099R. I think you are treading on dangerous grounds if you do. They do occasionally issue one incorrectly but more often the client just plain does not understand or realize what they have done. And or occasionally the tax preparer, including myself, may misinterpret things.

I can't recall a situation where the client could not get a corrected 1099R, if indeed, it was incorrect. Just be careful as they can at times be very confusing situations.

[taxea]

As for 1099 if you have documentation that it is incorrect. I change it with a statement or, in the case of amounts, by adjustment and a statement. This, of course, is done only when the issuer refuses to correct it.

Again I would not change what or the way something is reported on the 1099R. I think you are treading on dangerous grounds if you do. They do occasionally issue one incorrectly but more often the client just plain does not understand or realize what they have done. And or occasionally the tax preparer, including myself, may misinterpret things.

I can't recall a situation where the client could not get a corrected 1099R, if indeed, it was incorrect. Just be careful as they can at times be very confusing situations.

thank you and let me reassure you...I don't do anything without considering and unless I am confident that I have documentation to prove what I have done and not without the approval/authority of my client after a very clear explanation of what and why I am suggesting it as an option.