Did you move money out of your Solo 401k plan last year? If so, you might need to file form 1099-R with the IRS.
The following activities constitute a need for filing form 1099-R:
- In-plan Roth conversion
- Rollover from the Solo 401k to an IRA annuity
- Required Minimum Distribution
- Early withdrawal from the 401k
- Regular distribution from the 401k
- Rollover from the 401k to an IRA or other retirement plan
If you did any of the above during the last tax year, you may be required to file a 1099-R with the IRS.
What is Form 1099-R?
IRS form 1099-R is used to document anytime money leaves a retirement plan. Chances are, when you did the rollover from your old retirement plan to fund your Solo 401k, the releasing custodian created a 1099-R. In essence, the 1099-R creates a paper trail for the IRS to keep track of where retirement funds move from and to.
You’ll complete form 1099-R anytime you move money out of your Solo 401k. This might mean moving money to another retirement plan, such as an IRA, taking a required minimum distribution, a regular taxable withdrawal from the Solo 401k, or even completing an in-plan Roth conversion.
Who Submits the Form?
As your own Solo 401k plan administrator, you need to furnish a copy of the form to yourself by January 31st. The IRS should receive a physical copy by February 28th or an e-file of the form by April 1st.
You cannot simply print and mail a copy of form 1099-R to the IRS. You must order the official IRS forms online through their website and the IRS will require originals. You’ll submit form 1099-R in triplicate, with one copy going to the IRS, one going to the payer (your 401k trust) and one copy going to the recipient (you). You may not print and mail the .pdf file to the IRS.
Get Help Filing
Using a CPA or online filing service may be easier to ensure the form is filed and sent to the IRS on time.
The following services offer online filing of form 1099-R. Prices range from $2.90 to $4.50 per form:
These resources are provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Nabers Group LLC of any of the products, services or opinions of the corporation or organization or individual. Nabers Group LLC bears no responsibility for the accuracy, legality or content of the external party or for that of subsequent services.
Additionally, when filing form 1099-R, you may also be required to file IRS form 1096. This form summarizes the information you are sending to the IRS.
Leave it to the IRS to have you submit a form about why you’re submitting a form.
When to File
IRS form 1099-R must be filed by January 31st. As the recipient, you’ll receive a copy of the form by this date. The IRS will expects their copy to be filed by February 28th, or e-filed by April 1st.
Where to File
There are different locations to file your 1099-R, depending on where your business and trust are located.
If your business and 401k trust are located in:
Alabama, Arizona, Arkansas, Delaware, Florida, Georgia, Kentucky, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Texas, Vermont, Virginia…
You’ll file your form at:
Department of the Treasury
Internal Revenue ServiceCenter
Austin, TX 73301
If your business and 401k trust are located in:
Alaska, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Washington, Wisconsin, Wyoming…
You’ll file your form at:
Department of the Treasury
Internal Revenue Service Center
PO Box 219256
Kansas City, MO 64121–9256
If your business and 401k trust are located in:
California, Connecticut, District of Columbia, Louisiana, Maryland, Pennsylvania, Rhode Island, West Virginia…
You’ll file your form at:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201
Resources
Helpful Forms, Links and Articles:
- IRS Form 1099-R
- Instructions for IRS Form 1099-R
- IRS article: 401(k) Resource Guide – Plan Sponsors – Filing Requirements
- General Instructions for Certain Information Returns: contains information about where and when to file form 1099-R
The 1099-R is half the puzzle. Probably the easy half.
To take a distribution, you are usually subject to the mandatory 20% withholding (10% for an IRA). So as the employer, we need to do that withholding.
To do so, you need an account with EFTPS (the IRS’s online payment system), which I think must be opened under your employer EIN (not your SSN). This, in turn, must be linked to a bank account that carries the same EIN.
You then need to file a Form 945 to document the withheld funds.
Finally, the 1099-R matches the distributed funds to your personal tax account, usually under your SSN.
Can you help with that part of it? Am I missing some easier way?
Hi Lee, we typically recommend you have a CPA and/or accountant prepare the 1099-R. Usually it’s a small fee, and well worth it for their expertise! Let us know if you’d like a list of our Solo 401k literate CPAs!
Yes, a recommendation would be great…especially if they can also do the withholding and file the 945.
Thanks!
Sure thing, Lee! Click here for our CPA resources list: http://support.solo401k.com/en/articles/3652336-solo-401k-literate-cpa-list