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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I received a 1099-R from my company indicating they distributed

Resolved Question:

I received a 1099-R from my company indicating they distributed my pension/retirement to me. However, they did not. Would they send me this form if it was rolled from one company to another without my knowledge? What do I need to obtain to not pay taxes on this?
Submitted: 5 years ago.
Category: Tax
Expert:  Merlo replied 5 years ago.
What did the employer tell you when you called them?

Did they indicate they changed investment firms to handle this money?

Was this part of a 401K plan?
Customer: replied 5 years ago.

I have worked for this company 14 years and have never received this form before.

 

One of my best friends left the company and they had to pay him his annuity/pension and I thought they moght have made an error and sent me his. However, he got his. We ahve had the same guy all 14 years handle their 401..or whatever you want to call it. I have no idea if he went to a new company.

 

If he did and that is what this is, will he send me another form?

 

Can I possibly just fill out my taxes and not use this? That seems very risky to me.

Expert:  Merlo replied 5 years ago.
Hello again red,

Even if the broker who handles your company's 401k account went to a new company, that would not be reason for a withdrawal of your funds. But if the actual investment firm was changed, then they could be the reason this occured, but you are really going to need to verify that information with your employer, because no one else would have that information.

Anytime that you move retirement funds from one investment firm to another (as long as it is done within 60 days of each other) it is considered to be a rollover. You would receive a 1099R form showing that the money was taken as a distribution, but at the same time you would indicate that the same amount was rolled over in to a new plan, and therefore eliminate any tax that was due by treating it as an outright withdrawal.

You cannot just ignore the form 1099R and not report it, because the IRS will also have a copy and will be looking for it to be reported on your return.

What seems very odd to me is that if your company did choose a new investment firm to handle your 401k account, they would normally advise their employees of the situation, so you would know why you were getting this 1099R form. In addition to that, I would certainly think that you would have been given new paper work by your employer to fill out for the new investment firm, as a new investment firm should not just take the information based on what you had on file with the previous firm. As a new account holder with a new firm, you generally start all over by filling out your account application with your personal information, and indicating your beneficiaries, etc. In addition to that, if they did choose a new investment firm to handle their 401K plan, then the new investment firm would have different funds for you to choose from for your investment choices, and you should have been given access to all that information.

So as I said previously, you are really going to need to verify with your employer just exactly what caused this form to be issued. If it was a rollover situation, then you simply report the amount as a distribution on your tax return, and at the same time indicate the entire amount was rolled over in to a new account. That will eliminate any tax being due.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
Merlo and 4 other Tax Specialists are ready to help you
Customer: replied 5 years ago.

Am I able to ask you another question involving the same question?

If so,

 

The form lists under box 1 Gross Disttribution and tehn gives the amount of xxx,xxx.00

However in box 2a it lists taxable amount and lists 0.00.

 

So the way I read this is that I am not liable for any taxes but for some unknown reason they sent me this form this year.

 

Does that sound correct to you?

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