1099-R

[carolynm]

I"m doing a return with a 1099-R. Client had total distribution of $40,000. Box 2A Taxable Amount-blank. Check if taxable amount is undetermined is checked.. Total Distribution is checked off. Distribution code: 1

The program is not calculating the penalty if I don't enter the taxable amount of the distribution on the 1099-r. However the income of $40,000 is flowing to the 1040. IS there a worksheet or somewhere that I should be entered the taxable amount? I can enter it on the 1099-r but since this is not how the 1099-r is completed, I'm thinking this is not the correct place to enter it.

If I add the form 5329 and click on the bunny beside Line 1 it takes me to a worksheet and the $40000 can be entered here...it seems awkward and the kind of thing that could be missed in a rush...am I doing this correctly?

Thanks

carolyn

[Pacun]

Very good question and maybe I am doing it wrong too.

Since the bank didn't know the taxable amount when they issued the 1099-R, they didn't entered anything in box 2. Since I know that the whole thing is taxable, I enter it and no problem. Of course we all know that TP has to pay taxes and penalty if not over 59.5. So, I don't see any problems with my system.

[TAXBILLY]

Is it an IRA distribution?

If so, were there any non deductible contributions?

taxbilly

[carolynm]

Yes it is an IRA distribution. I have no problem with the slip it is done correctly. My question is where do you enter the taxable portion of the distribution in ATX if it is not via the slip?

[Kimberly K]

Yes it is an IRA distribution. I have no problem with the slip it is done correctly. My question is where do you enter the taxable portion of the distribution in ATX if it is not via the slip?

I guess I just do not understand your question. Box 1 shows the 40000 and box 2 blank ( since this is a Traditional IRA, this is normal) I think it was Taxbilly that asked if any of the contributions that the taxpayer made were NON-Deductible? ( This is where you would figure out the taxable portion of the distribution on the 5329.) If all of the contributions were deductible then the whole 40000 would be taxable. It is up to the client and his preparer to keep good records in determining the taxable portion. Form 5329 is the right form!

Kim

[Kimberly K]

I just reread your post and this is not a tax question but an ATX program question, right?

[TAXBILLY]

Since it is an IRA and the taxpayer is under 59 1/2, the bank puts in Code 1 and doesn't know whether any or all of it is taxable. You put in the taxable amount.

Form 5329 would be needed if there is an exception to all or part of the distribution. Did the client use some of the money, for example, for education or medical expenses or buying a personal residence?

taxbilly

[chuck]

If all is taxable put 40000 in box 2 as well. I would then uncheck the box to say taxable amount not determined because you determined it was all taxable.

[carolynm]

I just reread your post and this is not a tax question but an ATX program question, right?

Yes an ATX question. It seems wrong to input a slip not as shown. I completed the return by entering a dollar value by drilling back from the 1040. There was a spot I could enter the taxable amount without overriding. It just seemed awkward.