What form is typically used to report pension distributions?

The use of Form 1099-R is standard for reporting pension distributions. This form is specifically designed for reporting distributions from retirement accounts such as pensions, annuities, and profit-sharing plans. When an individual receives a pension distribution, the payer of that pension must complete Form 1099-R to document the amount distributed to the retiree and any withholding that may have occurred.

Form 1099-R includes important information, such as the taxable amount of the distribution, the distribution code that indicates the type of distribution (e.g., normal distribution, early distribution, etc.), and details about any taxes withheld. This information is essential for recipients when they file their income tax returns, as it helps determine their tax liability for the year.

Other forms mentioned serve different purposes: Form 1040 is the standard individual income tax return form on which taxpayers report their overall income; Form W-2 is used by employers to report wages paid to employees and the taxes withheld; while Form 1098 reports mortgage interest payments. Hence, these forms do not pertain to the direct reporting of pension distributions, making Form 1099-R the correct choice for this question.