1099-R

[Jim-from-Ohio]

i file my clients 1099 NECs after they get me the figures for each subcontractor but my question is about a 1099-R.  they have a 401K through american funds and one person cashed out of their 401K plan in 2022.  american funds are saying that it is up to the client or their CPA to issue the 1099-R.  I see dozens of 1099-Rs during tax prep season, many from Capital Group (american funds).  i never saw a 1099-R prepared by a CPA.. they always come from the investment company.  Does this sound right. my client/me has to issue the 1099-R?

[IRonMaN]

Sounds screwy but it also sounds like they have determined that they are not the manager for the plan.

[Terry53029]

It sounds as if your client has a self directed 401K, and as @IRonMaN  said it seems as the broker is not managing the plan, but believes the client is. 

[abctax55]

I agree that this sounds like a self-directed plan.

I have a client that has one, he took a distribution in 2020 but no F 1099-R was issued.  Fast forward to earlier this year and 'oops' one should have been issued so time for amended returns.   And penalties/interest/my fee.

Self-directed plans carry a level of reporting responsibility that a lot of folks don't seem to realize.  

[PATAX]

Thanks for that information Jim. How difficult would it have been for them to give them the heads up on that? 

[Jim-from-Ohio]

i am having the client push back a bit on this.. telling them we feel this is their role, not our role

[Jim-from-Ohio]

so after my client gave a little push back she got this email:

American Funds will prepare and send the 1099R for any 2023 payout.  The 1099Rs will be mailed out by January 31, 2024.

ok.. back to me.. the first wtihdrawal i found out was in 2023 so we are good for 2022 also.