L1: 1099R codeI turned 53 in 2014 and retired. I had a 401k with Vanguard of which 54k was after tax contributions that was distributed to me. The rest of the 401k was directly rolled over to an IRA on which I started SEPP withdrawals in Sept. 2014. The 1099R for the direct rollover is code G and the 1099R for the SEPP distributions are code 2. No problem. The 1099R for the after tax distribution to me reads as follows: Box 1 gross distribution $54k. Box 2a taxable amount $0. Box 3 capital gains $0. Box 5 employee contributions $54k. Box 7 distribution code 1. Both Vanguard and Turbotax assure me that as there is no taxable amount and the distribution is all after tax contributions I do not need to worry about the code 1. Is this correct?2015-02-06 11:16, By: crj, IP: [18.104.22.168]
L2: 1099R codeYes, that is correct. The 10% penalty only applies to the taxable amount of the distribution (2a). Since the entire distribution is post tax there is NO taxable amount in 2a so there is nothing to penalize. But the issuer still must enter code 1 in Box 7 because you are under 55 when you separated.
Of course, none of this affects your SEPP. The 1099R for the IRA has the 2exception code so you do not even need to file a 5329. You willbe using both lines 15a and 15bto report the IRA SEPP distribution and lines 16a and 16b to report the distributions from the 401k. 16b will be0 becausethe 54kdistributed to you is non taxable.2015-02-06 16:45, By: Alan S, IP: [22.214.171.124]
L3: 1099R codeI started researching how to access and handle my money a couple of years before I retired and was fortunate to find this sight. I spoke with numerous financial planners and CPA’s during my research and was amazed at how little most know of 72t SEPP,s. All of you that contribute to this sight are wonderful for sharing your experience and knowledge. Thank you all.2015-02-07 09:42, By: crj, IP: [126.96.36.199]