File 1099-R Online
Avalara 1099 & W-9 supports the efficient filing of many IRS form types, including the 1099-R for distributions from retirement accounts. Get started filing your 1099-Rs now.
What is a 1099-R?
Unlike the 1099-NEC and the 1099-MISC which are used to report to the IRS compensation paid to non-employees or for miscellaneous income, the 1099-R is used to report to the IRS distributions from various types of retirement accounts and other financial instruments.
- Purpose: The 1099-R is for distributions made to a taxpayer from their retirement accounts.
- Who Should File: Financial institutions responsible for making distributions from retirement accounts should file 1099-Rs.
- How to File: It's possible for financial institutions to e-file their 1099-Rs, which is often recommended over postal mail for the sake of efficiency and accuracy.
When is a 1099-R required?
Typically, financial institutions or retirement plan administrators in the United States are required to file a 1099-R with the IRS for taxpayers who collect a distribution over the course of a tax year. A financial institution needs to file a 1099-R when they offer a distribution to a United States taxpayer for:
- Retirement plans
- Profit-sharing plans
- Pensions
- Annuities
- IRAs
- Insurance contracts
- More
Can I file a 1099-R online?
Yes, you can file a 1099-R with the IRS on their website or submit it via traditional postal mail. Avalara 1099 & W-9 customers can also e-file 1099-R forms directly with the IRS.
For step-by-step instructions to e-file, e-deliver, and correct erroneous information in 1099-R forms with Avalara 1099 & W-9, watch our video tutorial:
When is the deadline to file a 1099-R?
The deadline for a financial institution to e-file a 1099-R with the IRS to report distributions from a retirement account for the previous year is March 31st. Businesses must also send a copy of the 1099-R to the recipient of the distribution by January 31st to ensure that the recipient’s income is accounted for in their annual tax filings.
How do I file a 1099-R?
The following steps are best practices for filing a 1099-R with the IRS:
- Step 1: Obtain a W-9 from the owner of a retirement account at the point of account creation, regardless of whether your institution expects them to collect more than $10 in distributions over the course of the tax year.
- Step 2: Validate that the retirement account owner’s legal name, address, and social security number in the W-9 are legible and accurate.
- Step 3: Obtain permission from the retirement account owner to receive their 1099-R via email in January.
- Step 4: t the end of the tax year, fill out a 1099-R with information from the W-9.
- Step 5: Electronically file the 1099-R with the IRS before the annual March 31st deadline.
- Step 6: E-deliver copy B of the 1099-R to the retirement account owner before the annual January 31st deadline. (Use postal mail for a retirement account owner who did not initially opt in to electronic delivery and make sure it is postmarked before January 31st.)
- Step 7: Retain a copy of the 1099-R for your business records in a safe and secure repository.
- Step 8: Investigate unique state requirements for additional 1099-R filings.
Note: All of these steps for 1099-R compliance can be automated using Avalara 1099 & W-9, including the necessary collection of account holder information at the point of account opening. This video tutorial explains how:
IRS Form 1099-R FAQs
These are some of the most common questions that Avalara receives about the 1099-R:
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Do I need to file multiple 1099-Rs if somebody collects multiple distributions from the same retirement account over the course of a tax year?
No. If a recipient collects multiple distributions during a single year, aggregate the amounts to determine if they met the threshold for a 1099-R and then file one 1099-R for the total amount.
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Are regular distributions the only types of distributions that count towards a 1099-R?
No. Regular distributions, early distributions, rollovers from one retirement account to another, disability payments, lump-sum payments, and payments from life insurance contracts are a partial list of all the types of distributions that count towards a 1099-R.
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Are B-notices relevant to the incorrect filing of a 1099-R?
Yes. The IRS may issue a CP-2100 to a financial institution if they uncover errors such as an incorrect taxpayer identification number in a submitted 1099-R. In that case, the institution will typically send a B-notice to their recipient and then have 30 days to respond with the correct information.