Key Points

• The video explains how to report retirement income using IRS Form 1099-R on TurboTax.
• It covers the process of rolling over funds from a traditional IRA to a Roth IRA and the tax implications involved.
• Common codes on the 1099-R form are discussed, including penalties and exceptions for early withdrawals.

Introduction

In this video, the presenter discusses how to handle retirement income reporting using IRS Form 1099-R in TurboTax. The focus is on a rollover from a traditional IRA to a Roth IRA, which is a common scenario for many taxpayers.

Entering the 1099-R Information

The presenter demonstrates how to input the 1099-R information into TurboTax, emphasizing the importance of accuracy in the details provided, such as gross distributions and taxable amounts here.

Understanding 1099-R Codes

The video explains various codes found on the 1099-R form, particularly code 2, which indicates that the withdrawal is not subject to early withdrawal penalties due to the rollover to a Roth IRA here. The presenter also highlights the implications of other codes, such as code 1, which would incur penalties if funds were withdrawn directly.

Tax Implications

The presenter clarifies that while there is no early withdrawal penalty for the rollover, taxes must still be paid on the amount withdrawn from the traditional IRA here. This is crucial for viewers to understand as they prepare their tax returns.

Additional Scenarios

Other scenarios related to retirement distributions, such as disaster distributions from 2020, are briefly mentioned, explaining how they can be reported and the tax treatment involved here.

Conclusion

The video concludes with a reminder that the information provided is for educational purposes and encourages viewers to consult tax professionals for personalized advice here.