Friday, March 11, 2011

Where's my 1099-R for my IRA rollover?

Q.  I just received another email from my tax preparer wanting a form called a 1099-R regarding an IRA rollover. I sent all the paperwork I had to her. What do I do now? JB, Kentucky

A.  Thank your lucky stars you have such a diligent tax preparer! Conservatively, I spent half my day today emailing clients regarding missing paperwork. All of us need to remember that when it comes to IRS tax forms, the IRS has them, even though you may not! The IRS computers will match all the forms they receive to your tax return, and if it doesn't match, expect that previously mentioned love letter from the IRS wanting more tax, interest, and possibly a penalty.

I found out something interesting yesterday from one of my full-time RV clients who is very investment savvy. At least one of the big investment houses do not report tax free roll-overs on a 1099-R. I don't know the why or how, but apparently they feel since it isn't taxable, they aren't going to report it.

This is the exception rather than the rule. Most big firms issue 1099s for all types of items, taxable or not, simply because it costs them more to pull them rather than to mail them. Do yourself and your tax preparer a favor. Call the brokerage house that handles your IRA and ask them if they issued a 1099-R. If yes, possibly you can download it, or request another copy. At least you won't be guessing!

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