Back to Blog
If you took a distribution from a retirement account during the previous year, you should receive a Form 1099-R from New Direction Trust Company in early February. Once you have it, what are you supposed to do with it?
Need to review your account information? Access the Client Portal.
Preparing Your Tax Filing
The beauty of investing with a tax-advantaged plan is your ability to defer taxes on your annual earnings. However, with a pre-tax account like a Traditional IRA, those income taxes will be assessed when you take distributions from the account. Your Form 1099-R will show your gross distributions from the prior year, the taxable amount, and any taxes you withheld. You will receive one 1099 that will show the sum of all distributions from an account, and another for each account you took distributions from.
You’ll receive a Form 1099-R even if you took distributions from a post-tax account like a Roth IRA. Even though qualified Roth distributions are tax free, withdrawal activities are still reported to the IRS.
If your distributions are taxable, simply add the distribution amount to your income for the year. You do not need to submit a separate filing to pay taxes on distributions.
Verifying a Rollover
If you rolled funds from an employer plan into a self-directed IRA with NDTCO, you will receive a Form 1099-R for the rollover distribution. This is true even though you didn’t retain the funds outside of a qualified plan. This 1099 will come from your other plan administrator because that’s where the cash or assets came from.
To confirm receipt on our end, you’ll receive a Form 5498 that describes the corresponding rollover contribution (as well as any other contributions made to your NDTCO account over the prior year).
As long as the full distributed balance is re-deposited into a qualified plan within 60 days and the amounts on the 1099 and 5498 match, you won’t owe any taxes on your rollover distribution.
Receiving Your Tax Documents
Your Form 1099-R should arrive in the mail soon if it hasn’t already. You will not need to forward the form to the IRS or include it with your tax filing; the IRS will receive a separate copy. Don’t hesitate to give us a call at 877-742-1270 or send us a message through the Client Portal if you have questions or concerns about Form 1099-R.
