Does my client have to file a tax return?

[MEtaxprep]

The only tax document is a 1099R for $37000 code g rollover.

[qbteachmt]

There is not enough information.

From what type of plan (account)?

To what type of plan (account)?

Rollover means, he got the money in between. Or, Transfer? Or, Conversion?

There will be a Box checkmarked, such as Roth or IRA. Or, numbers on which line(s)?

Are you tracking this person's Basis in their account(s) or do they know this info?

We need more details.

[MEtaxprep]

Thank you for your answer.  The 1099R is for a 401k being rolled over to a traditional IRA.

[qbteachmt]

Having a 401(k) means your client has or had an employer.

Having only the 1099-R doesn't mean the client has no other financial activity.

And, again, "rollover" as in, he got the funds in between the distribution and the deposit? Is there also a Form 5498?

And you would need to determine if that rollover is Qualified, met all the requirements for not being taxable, the age of the client matters, are they still employed there?

Are you familiar with retirement funds and tax reporting?

Have you used the IRS resources, such as:

https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-...

https://www.irs.gov/taxtopics/tc413

Or web resources:

https://www.investopedia.com/articles/personal-finance/072215/401k-rollovers-tax-implications.asp

You are the only one who can do the due diligence to know if this client must file a tax return or not.

[qbteachmt]

Oh, sorry. What does, "for a 401k being rolled" mean?

Being?

[MEtaxprep]

I would like to rephrase my question.  Is  the $37000 reported on a form 1099R code G rollover for a 401k to a Traditional IRA part of the "do I have to file"  calculation as it is not going to be  taxable income.

[MEtaxprep]

I'm sorry,  I should have used the past tense. - Was rolled.  Thanks for your help.

[dascpa · Accepted solution]

I would file for safety sake.  I agree the taxable income is below the filing threshold, but it guarantees any matching program the IRS has will not flag this transaction for non-reporting. But then I would charge a million dollars because you know the difference between code G and Code 7.

[PATAX]

Yes I would file, it does not hurt anything does it? Just my opinion

[MEtaxprep]

Thank you.

[qbteachmt]

I would file, because you don't know what else will showup. You likely need to deal with EIP 3 (recovery rebate). And 401(k) = employer, so there seems to be some employment info missing for that person (final W2)?

[IRonMaN]

What time will Bob be checking in to tell everyone not to be afraid of a notice somewhere down the road if you don't file 😉

[MEtaxprep]

Thank you for your help.

[MEtaxprep]

Thank you.

[MEtaxprep]

Thanks for your comment.

[PATAX]

You're welcome

[garman22]

If you know the client and his past and there are NO other documents, No, I personally would NOT file him. IF the IRS questions further, they will send notice asking for return information etc....

[IRonMaN]

I didn't even recognize you Bob😉

I think the bigger question is how much are you going to charge to prepare the return today (for a return that might not really be needed) vs maybe responding to a potential notice two years down the road?  When you come to a crossroads and aren't sure which way to travel, explain the two routes to the client and let them decide which route they prefer.  They are paying you for your services so they should be allowed to have some input on the decision making process.