Reporting Retirement Distributions

How are distributions from retirement plans reported?

Distributions from most retirement plans are reported to you on the tax form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Below is a sample copy of the 1099-R form and explanations of what each box of the 1099-R form means.

Box 1 of form 1099-R identifies the total amount of the distribution.

Box 2a identifies the part of the distribution that is taxable.

Box 5 contains your after tax contributions that were recovered tax free for the year. This is your cost in the contract (after tax contributions).

Box 7 has codes which identify the type of distribution you received. If there is an entry in box 4 (federal income tax withheld), attach a copy of the form 1099-R to your tax return.

Where to enter retirement income on the 1040 tax form?

Total pension and annuity income is entered on the tax form 1040, line 16a and the taxable portion is entered on line 16b. If the pension or annuity is fully taxable, enter it on line 16b of the form 1040 and leave line 16a blank. If you have more than one retirement plan that is not fully taxable, figure the taxable part of each separately.

IRA distributions are also reported on form 1099-R. You report IRA distributions on lines 15a and 15b of the tax form 1040. The additional tax on early distributions from IRAs and other retirement plans is reported on line 60 of the tax form 1040.