I thought the pension amount should go into the 1099-R, but they gave me a 1099-MISC, are they right? Now, I've to pay taxes on the pension I deposited.
2007-03-21 09:52:55 · 4 answers · asked by S M 1 in Business & Finance ➔ Taxes ➔ United States
Unfortunately yes...you have to pay taxes on everything! A 1099 is generic and can always be a MISC. It depends on who sends it. Even if it were a 1099 r you would still have to pay taxes. A 1099 is for any income you recieved throughout the year. It could be interest payments from your IRA...whatever the reason, you still have to pay taxes on it. The IRS always wants their cut! Good luck!
2007-03-21 09:59:47 · answer #1 · answered by globalystic1 3 · 0⤊ 0⤋
If the 1099MISC reports distribution from a qualified plan, then that is an error and it needs to be reported on a 1099R. Ask your employer for a corrected 1099...if you have a qualified plan such as 401k, 403b, and a few others. If it is a cashout of a company pension, that is another matter which your HR Department needs to explain to you.
You have 60 days from the recept of the pension check from a qualified plan to deposit it into the traditional IRA to avoid taxes and penalty. If you are within the 60 day period, you have a rollover, even if the 1099 says it is an early distribution.
If you let the 60 days lapse, then unfortunately you owe taxes on the distribution, plus a 10% penalty. But, you can deduct the IRA contribution, assuming it is a traditional IRA.
Have a preparer handle this, to avoid the taxes and penalty to the extent possible.
2007-03-21 18:36:10 · answer #2 · answered by ninasgramma 7 · 2⤊ 0⤋
If you were trying to rollover a pension into an IRA (to avoid taxes) it was done wrong. The money is transferred from one account to the other by the companies. If the check was payable to you, it was considered a cash out regardless of what you then did with the money and it would be taxable.
2007-03-21 16:57:54 · answer #3 · answered by J M 4 · 0⤊ 1⤋
It would depend on the code used on the 1099-Misc.
Really, it would be good to find a tax professional to look at this for you.
I know that Jackson Hewitt will look at it for free and give you advice without charge unless they actually file for you.
good luck & bless
2007-03-21 17:36:48 · answer #4 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 0⤋