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January 21, 2024
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How do I change on income tax form it's not retirement it a inherited checked box

  • January 21, 2024
  • 1 reply
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On my income tax form I have my ira as retirement its a inherited to to correct it
Best answer by JulieS

Income from an inherited IRA account is still retirement income and is usually taxable as well. 

 

While most things you inherit aren't taxable, a tax-deferred account is an exception because the original owner of the account didn't pay tax on it. 

 

A tax-deferred account includes traditional IRAs, employer retirement accounts like 401(k) plans, and some annuities. 

 

Here's the process for entering an inherited IRA:

 

  1. Open your return.
  2. Select Federal, then Wages & Income.
  3. Scroll down to IRA, 401(k), Pension Plan Withdrawals (1099-R), under Retirement Plans and Social Security, select Start or Revisit to the right.
  4. Answer Yes to Did you get a 1099-R in 2023?
  5. Select Inherited a retirement account, and select Continue.
  6. Follow the screen instructions to enter the 1099-R form.
  7. On the screen titled, Do any of these situations apply to you? select I inherited this IRA from the list. 
  8. Select Continue.
  9. Carefully answer the questions about the original owner of the account.
  10. On the screen Did you have nondeductible contributions for this IRA?, don't select Yes unless you have documentation showing that the original owner made nondeductible contributions.
  11. Answer the rest of the questions in the section.

 

The amount form box 2a on your 1099-R form will show on line 4b on your 1040. It's taxable income, but you won't pay an early withdrawal penalty on it even if you are under 59-1/2 years old. 

 

 

 

 

 

 

 

 

1 reply

JulieSAnswer
January 21, 2024

Income from an inherited IRA account is still retirement income and is usually taxable as well. 

 

While most things you inherit aren't taxable, a tax-deferred account is an exception because the original owner of the account didn't pay tax on it. 

 

A tax-deferred account includes traditional IRAs, employer retirement accounts like 401(k) plans, and some annuities. 

 

Here's the process for entering an inherited IRA:

 

  1. Open your return.
  2. Select Federal, then Wages & Income.
  3. Scroll down to IRA, 401(k), Pension Plan Withdrawals (1099-R), under Retirement Plans and Social Security, select Start or Revisit to the right.
  4. Answer Yes to Did you get a 1099-R in 2023?
  5. Select Inherited a retirement account, and select Continue.
  6. Follow the screen instructions to enter the 1099-R form.
  7. On the screen titled, Do any of these situations apply to you? select I inherited this IRA from the list. 
  8. Select Continue.
  9. Carefully answer the questions about the original owner of the account.
  10. On the screen Did you have nondeductible contributions for this IRA?, don't select Yes unless you have documentation showing that the original owner made nondeductible contributions.
  11. Answer the rest of the questions in the section.

 

The amount form box 2a on your 1099-R form will show on line 4b on your 1040. It's taxable income, but you won't pay an early withdrawal penalty on it even if you are under 59-1/2 years old. 

 

 

 

 

 

 

 

 

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