What does Form 1099-R report?

Form 1099-R is specifically used to report distributions from retirement accounts. This includes various types of distributions such as those from pensions, annuities, individual retirement accounts (IRAs), or other retirement plans. When a taxpayer receives money from their retirement accounts, the financial institution or plan administrator must issue this form to detail the amount of the distribution, whether it was taxable, and whether any taxes were withheld.

This information is crucial for taxpayers when they file their annual income tax returns, as it helps them understand their taxable income and any possible tax liabilities related to their retirement withdrawals. The accurate reporting of such distributions is also important for the IRS to ensure that taxpayers are compliant with tax laws concerning retirement income.