I manage my 95-year-old mother’s taxes and finances. She has her IRAs with Vanguard and several years ago we set it up for automatic RMD withdrawal’s. She had her RMD automatic RMD‘s done in early 2020 and then the Congress passed the CARES ACT in late March 2020. Upon learning that I put back into her IRA the amount distributed less the federal tax withheld. Now, I received the 1099-R tax form reflecting the entire distribution as taxable despite most of it being put back into the IRA to reflect the 2020 exemption. I contacted Vanguard about this and they indicated they will be sending me a Tax form in May 2021 to reflect the corrected amount of distribution. Obviously, this is after the April tax filing deadline. Any suggestion for how I should handle this with regards to calculating and filing my mom’s Taxes, do I do her taxes, include the income from the 1099 – R and then file a corrected tax return once I get the correction form from Vanguard? Alternatively, I could use the tax software to per project whether she owes any tax as a result of the Vanguard 1099 – R if not, file for extension?
taxes, do I do her taxes, include the income from the 1099 – R and then file a corrected tax return once I get the correction form from Vanguard? Alternatively, I could use the tax software to project whether she owes any tax as a result of the Vanguard 1099 – RN if not, file one extension? Any input on my question would be greatly appreciated.
Thank you,
Bill Borgeson