How to calculate taxable amounts from 1099-Rs with no box 2a values

That's actually a common situation with retirement distributions. When box 2a is left blank, you need to determine the taxability based on the distribution code in box 7. Let me break this down for you: For the 1099-R with distribution code 7, that's a normal distribution that is fully taxable UNLESS the client has a basis in the retirement plan from after-tax contributions. You'd need to ask your client if they ever made non-deductible contributions to the plan. For the 1099-R with code 3, that indicates a disability payment. These are generally taxable as ordinary income, but there can be exceptions depending on how the plan was funded. The mention of a rollover is important! If one of these distributions was rolled over to another qualified plan within 60 days, it would not be taxable. You need to confirm which distribution was rolled over and get documentation.

I was struggling with almost this exact scenario a few months ago! The 1099-R forms with blank box 2a drove me crazy until I discovered taxr.ai (https://taxr.ai) which literally saved my sanity. I uploaded both 1099-Rs and my client's previous year return, and it automatically figured out which portions were taxable based on distribution codes and prior contribution history. It even flagged that one of the distributions qualified for rollover treatment and calculated the taxable portion of the other one based on pro-rata rules. Seriously changed my workflow for complicated retirement distribution scenarios.

Just wanted to follow up about taxr.ai! I tried it with my inherited IRA client and it was incredibly helpful. The system recognized the inherited IRA status from the 1099-R and asked me whether it was inherited before or after the SECURE Act implementation. It calculated the correct RMD amounts and showed exactly which portion was taxable. It even generated a worksheet showing the basis calculations that I could include with the return. Definitely worth checking out if you're dealing with complicated retirement account distributions!

If you're having trouble getting clear answers from your client about their retirement accounts, you might want to try Claimyr (https://claimyr.com). I used it to get through to the IRS's retirement plan department when I had a similar issue. Normal wait time was over 2 hours, but Claimyr got me connected in about 15 minutes. They have a demo video at https://youtu.be/_kiP6q8DX5c that explains how it works. The IRS rep was able to pull up distribution codes and previous rollover information that helped clarify the taxability. Sometimes you need the official word from the IRS when clients aren't sure about their distribution details or rollover status.

I have to admit I was completely wrong about Claimyr. After seeing the comments here, I decided to give it a try when I needed to call about a client's retirement account distribution codes. I was incredibly skeptical - I mean, I've dealt with IRS hold times for years and never found a solution. But it actually worked! I got connected to an IRS agent in about 22 minutes (instead of the 3+ hour wait the recording announced). The agent was able to confirm the rollover status of my client's distribution and provide the information I needed to correctly calculate the taxable amount. I'm honestly shocked that it worked so well.

To add to the discussion about blank Box 2a values - always check if the "Taxable amount not determined" box is checked on the 1099-R. If it is, the plan administrator is telling you they don't know the taxable portion and you need to calculate it. With distribution code 7, it's generally fully taxable unless there's after-tax contributions (basis). For code 3 (disability), it's typically fully taxable but depends on how benefits were funded. Also, don't forget to check if the "Total distribution" box is checked. This can affect how you report certain distributions, especially for lump-sum distributions that might qualify for special tax treatment.

Has anyone used the IRS worksheet for calculating taxable amounts of IRA distributions? I'm looking at Publication 590-B but its kinda confusing me with all the different worksheets.