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IRS Form 1099-R is filed for any person to whom a distribution, removal of excess contribution, conversion or recharacterization is made from a traditional, Roth, SEP or SIMPLE Form 1099-R may also be issued for other types of retirement accounts or plans, such as 401(k), 403(b), pension and profit sharing.
You either received full or partial distributions or direct rollovers or removed excess contributions from your Edward Jones self-directed retirement account, or completed a recharacterization and/or conversion during 2017. Trustee-to-trustee transfers are not considered distributions and therefore are generally not reportable to the IRS on Form 1099-R.
If you received more than one type of distribution from your IRA or qualified retirement plan, you will receive more than one Form 1099-R. For example, if you turned 59½ during calendar year 2017, you would receive one Form 1099-R reporting any distributions taken before age 59½ (distribution code 1) and another Form 1099-R reporting distributions taken after age 59½ (distribution code 7).
Generally, the amount in Box 2a is the taxable amount of your distribution. If there is no entry in Box 2a, Edward Jones may not have all the facts needed to figure the taxable amount. In that case, the first box in Box 2b (Taxable amount not determined) is checked.
Additionally, your distribution may not be taxable due to a rollover, distribution of a nondeductible contribution or other exception. In that case, the first box in Box 2b (Taxable amount not determined) may be checked. If you have nondeductible contributions, please see the instructions for IRS Form 8606.
If the distribution was removed from your IRA (other than a SEP or SIMPLE IRA) to directly fund a qualified health savings account (HSA), a transaction known as a qualified health funding distribution (QHFD), the amount will be reported in Box 1 of your 1099-R.
If your Form 1099-R shows distribution code 1 in Box 7, you may want to review the instructions for IRS Form 5329 to determine if this distribution may be exempt from the 10% early withdrawal penalty.
SIMPLE IRA participants who take distributions before age 59½ may be subject to a penalty unless an exception applies. If you have not been active in the plan for at least two years, the penalty is 25% of the distributed amount in addition to applicable ordinary income tax. For participants who have been in the plan for more than two years, the penalty is 10% of the distribution.
See the Form 5329 instructions for information on calculating the penalty.
As custodian, Edward Jones is required to report all distributions taken from an account due to death. As a beneficiary taking distributions from a decedent IRA, you will receive a 1099-R reporting the amount withdrawn (distribution code 4).
If you are the spouse beneficiary of a qualified retirement plan and have rolled the assets to your own IRA, you will receive a 1099-R reporting this amount (distribution code G4). The owner of the IRA that received the rollover will receive a Form 5498, which will be issued in May 2018.
If you are a non-spouse beneficiary of a qualified retirement plan and elected to have your benefits roll over to an inherited IRA (after the original account owner’s death), you will receive a 1099-R reporting that amount under distribution code G4. The rollover received in the IRA will be reported on your Form 5498, which is issued in May 2018.
If federal income tax was withheld, it will be reported in Box 4 of your Form 1099-R. Attach Copy B of your Form 1099-R to your federal income tax return if federal withholding is shown in Box 4.
If you recharacterized a contribution or a Roth conversion, the fair market value of the amount transferred will be reported in Box 1 of your Form 1099-R. The distribution code in Box 7 will indicate whether the original contribution or conversion was in the same year or a prior year.
Even if you recharacterized a contribution, Edward Jones is still required to report the original contribution or conversion on Form 5498, which will be issued in May 2018. Please see the instructions for IRS Form 8606 or consult your tax professional for details on reporting.
As custodian, Edward Jones is required to report ALL distributions taken from our clients’ self-directed retirement accounts. Any distributions, even those rolled to an IRA within the 60-day limit, are reported on Form 1099-R.
For tax questions, consult your tax professional. For investment-related questions, please contact your local financial advisor.
Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.
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