File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

1040 Ez File

2013 Federal 1040ez FormCan I File 2012 And 2013 Taxes TogetherIrs Forms PublicationsIrs 2012 Tax Forms 1040ezHr Block Online Tax1040 Ez 2010H&r Block FreeAmendment Form2010 Tax Software FreeIrs Forms 1040ez InstructionsAmend Tax Return OnlineFillable 1040ez 2013Irs Form 1040ez 2010Tax Planning Us 1040ez1040ez 2011 Tax FormUnemployment And TaxesI Need A 1040x Form1040 InstructionsFree Tax PrepIrs Tax ReturnIndividual Income Tax ReturnHow Long Do I Have To File An Amended Tax ReturnFree Tax Preparation OnlineDownload 1040ez2012 Taxes Online FreeTaxes 1040ez1040ez Tax Forms To PrintTax Forms 2012 FederalFree 2011 Tax Return Online2010 TaxactFile My 2011 Taxes Online FreeState Tax Forms 2013Filing State Taxes OnlineHow To File An Amended Tax Return For 20121040x Tax FormWhere To Mail 1040xE File State Tax For FreeHow To Fill Out 1040x Step By StepFree Efile Of State Taxes1040 Tax Form 2010

1040 Ez File

1040 ez file Publication 939 - Main Content Table of Contents General Information Taxation of Periodic PaymentsInvestment in the Contract Expected Return Computation Under the General Rule How To Use Actuarial TablesUnisex Annuity Tables Special Elections Worksheets for Determining Taxable Annuity Actuarial Tables Requesting a Ruling on Taxation of Annuity How To Get Tax HelpLow Income Taxpayer Clinics General Information Some of the terms used in this publication are defined in the following paragraphs. 1040 ez file A pension is generally a series of payments made to you after you retire from work. 1040 ez file Pension payments are made regularly and are for past services with an employer. 1040 ez file An annuity is a series of payments under a contract. 1040 ez file You can buy the contract alone or you can buy it with the help of your employer. 1040 ez file Annuity payments are made regularly for more than one full year. 1040 ez file Note. 1040 ez file Distributions from pensions and annuities follow the same rules as outlined in this publication unless otherwise noted. 1040 ez file Types of pensions and annuities. 1040 ez file   Particular types of pensions and annuities include: Fixed period annuities. 1040 ez file You receive definite amounts at regular intervals for a definite length of time. 1040 ez file Annuities for a single life. 1040 ez file You receive definite amounts at regular intervals for life. 1040 ez file The payments end at death. 1040 ez file Joint and survivor annuities. 1040 ez file The first annuitant receives a definite amount at regular intervals for life. 1040 ez file After he or she dies, a second annuitant receives a definite amount at regular intervals for life. 1040 ez file The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. 1040 ez file Variable annuities. 1040 ez file You receive payments that may vary in amount for a definite length of time or for life. 1040 ez file The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds or cost-of-living indexes. 1040 ez file Disability pensions. 1040 ez file You are under minimum retirement age and receive payments because you retired on disability. 1040 ez file If, at the time of your retirement, you were permanently and totally disabled, you may be eligible for the credit for the elderly or the disabled discussed in Publication 524. 1040 ez file If your annuity starting date is after November 18, 1996, the General Rule cannot be used for the following qualified plans. 1040 ez file A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries. 1040 ez file This plan must meet Internal Revenue Code requirements. 1040 ez file It qualifies for special tax benefits, including tax deferral for employer contributions and rollover distributions. 1040 ez file However, you must use the General Rule if you were 75 or over and the annuity payments are guaranteed for more than 5 years. 1040 ez file A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. 1040 ez file A tax-sheltered annuity is a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization. 1040 ez file   The General Rule is used to figure the tax treatment of various types of pensions and annuities, including nonqualified employee plans. 1040 ez file A nonqualified employee plan is an employer's plan that does not meet Internal Revenue Code requirements. 1040 ez file It does not qualify for most of the tax benefits of a qualified plan. 1040 ez file Annuity worksheets. 1040 ez file   The worksheets found near the end of the text of this publication may be useful to you in figuring the taxable part of your annuity. 1040 ez file Request for a ruling. 1040 ez file   If you are unable to determine the income tax treatment of your pension or annuity, you may ask the Internal Revenue Service to figure the taxable part of your annuity payments. 1040 ez file This is treated as a request for a ruling. 1040 ez file See Requesting a Ruling on Taxation of Annuity near the end of this publication. 1040 ez file Withholding tax and estimated tax. 1040 ez file   Your pension or annuity is subject to federal income tax withholding unless you choose not to have tax withheld. 1040 ez file If you choose not to have tax withheld from your pension or annuity, or if you do not have enough income tax withheld, you may have to make estimated tax payments. 1040 ez file Taxation of Periodic Payments This section explains how the periodic payments you receive under a pension or annuity plan are taxed under the General Rule. 1040 ez file Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). 1040 ez file These payments are also known as amounts received as an annuity. 1040 ez file If you receive an amount from your plan that is a nonperiodic payment (amount not received as an annuity), see Taxation of Nonperiodic Payments in Publication 575. 1040 ez file In general, you can recover your net cost of the pension or annuity tax free over the period you are to receive the payments. 1040 ez file The amount of each payment that is more than the part that represents your net cost is taxable. 1040 ez file Under the General Rule, the part of each annuity payment that represents your net cost is in the same proportion that your investment in the contract is to your expected return. 1040 ez file These terms are explained in the following discussions. 1040 ez file Investment in the Contract In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract. 1040 ez file First, find your net cost of the contract as of the annuity starting date (defined later). 1040 ez file To find this amount, you must first figure the total premiums, contributions, or other amounts paid. 1040 ez file This includes the amounts your employer contributed if you were required to include these amounts in income. 1040 ez file It also includes amounts you actually contributed (except amounts for health and accident benefits and deductible voluntary employee contributions). 1040 ez file From this total cost you subtract: Any refunded premiums, rebates, dividends, or unrepaid loans (any of which were not included in your income) that you received by the later of the annuity starting date or the date on which you received your first payment. 1040 ez file Any additional premiums paid for double indemnity or disability benefits. 1040 ez file Any other tax-free amounts you received under the contract or plan before the later of the dates in (1). 1040 ez file The annuity starting date   is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed. 1040 ez file Example. 1040 ez file On January 1 you completed all your payments required under an annuity contract providing for monthly payments starting on August 1, for the period beginning July 1. 1040 ez file The annuity starting date is July 1. 1040 ez file This is the date you use in figuring your investment in the contract and your expected return (discussed later). 1040 ez file Adjustments If any of the following items apply, adjust (add or subtract) your total cost to find your net cost. 1040 ez file Foreign employment. 1040 ez file   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. 1040 ez file The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (without regard to the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer on your behalf if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) if the contributions would be excludible from your gross income had they been paid directly to you. 1040 ez file Foreign employment contributions while a nonresident alien. 1040 ez file   In determining your cost, special rules apply if you are a U. 1040 ez file S. 1040 ez file citizen or resident alien who received distributions from a plan to which contributions were made while you were a nonresident alien. 1040 ez file Your contributions and your employer's contributions are not included in your cost if the contributions: Were made based on compensation which was for services performed outside the United States which you were a nonresident alien, and Were not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if they had been paid as cash compensation when the services were performed. 1040 ez file Death benefit exclusion. 1040 ez file   If you are the beneficiary of a deceased employee (or former employee), who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000. 1040 ez file The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion. 1040 ez file How to adjust your total cost. 1040 ez file   If you are eligible, treat the amount of any allowable death benefit exclusion as additional cost paid by the employee. 1040 ez file Add it to the cost or unrecovered cost of the annuity at the annuity starting date. 1040 ez file See Example 3 under Computation Under General Rule for an illustration of the adjustment to the cost of the contract. 1040 ez file Net cost. 1040 ez file   Your total cost plus certain adjustments and minus other amounts already recovered before the annuity starting date is your net cost. 1040 ez file This is the unrecovered investment in the contract as of the annuity starting date. 1040 ez file If your annuity starting date is after 1986, this is the maximum amount that you may recover tax free under the contract. 1040 ez file Refund feature. 1040 ez file   Adjustment for the value of the refund feature is only applicable when you report your pension or annuity under the General Rule. 1040 ez file Your annuity contract has a refund feature if: The expected return ( discussed later) of an annuity depends entirely or partly on the life of one or more individuals, The contract provides that payments will be made to a beneficiary or the estate of an annuitant on or after the death of the annuitant if a stated amount or a stated number of payments has not been paid to the annuitant or annuitants before death, and The payments are a refund of the amount you paid for the annuity contract. 1040 ez file   If your annuity has a refund feature, you must reduce your net cost of the contract by the value of the refund feature (figured using Table III or VII at the end of this publication, also see How To Use Actuarial Tables , later) to find the investment in the contract. 1040 ez file Zero value of refund feature. 1040 ez file   For a joint and survivor annuity, the value of the refund feature is zero if: Both annuitants are age 74 or younger, The payments are guaranteed for less than 2½ years, and The survivor's annuity is at least 50% of the first annuitant's annuity. 1040 ez file   For a single-life annuity without survivor benefit, the value of the refund feature is zero if: The payments are guaranteed for less than 2½ years, and The annuitant is: Age 57 or younger (if using the new (unisex) annuity tables), Age 42 or younger (if male and using the old annuity tables), or Age 47 or younger (if female and using the old annuity tables). 1040 ez file   If you do not meet these requirements, you will have to figure the value of the refund feature, as explained in the following discussion. 1040 ez file Examples. 1040 ez file The first example shows how to figure the value of the refund feature when there is only one beneficiary. 1040 ez file Example 2 shows how to figure the value of the refund feature when the contract provides, in addition to a whole life annuity, one or more temporary life annuities for the lives of children. 1040 ez file In both examples, the taxpayer elects to use Tables V through VIII. 1040 ez file If you need the value of the refund feature for a joint and survivor annuity, write to the Internal Revenue Service as explained under Requesting a Ruling on Taxation of Annuity near the end of this publication. 1040 ez file Example 1. 1040 ez file At age 65, Barbara bought for $21,053 an annuity with a refund feature. 1040 ez file She will get $100 a month for life. 1040 ez file Barbara's contract provides that if she does not live long enough to recover the full $21,053, similar payments will be made to her surviving beneficiary until a total of $21,053 has been paid under the contract. 1040 ez file In this case, the contract cost and the total guaranteed return are the same ($21,053). 1040 ez file Barbara's investment in the contract is figured as follows: Net cost $21,053 Amount to be received annually $1,200   Number of years for which payment is guaranteed ($21,053 divided by $1,200) 17. 1040 ez file 54   Rounded to nearest whole number of years 18   Percentage from Actuarial Table VII for age 65 with 18 years of guaranteed payments 15%   Value of the refund feature (rounded to the nearest dollar)—15% of $21,053 3,158 Investment in the contract, adjusted for value of refund feature $17,895       If the total guaranteed return were less than the $21,053 net cost of the contract, Barbara would apply the appropriate percentage from the tables to the lesser amount. 1040 ez file For example, if the contract guaranteed the $100 monthly payments for 17 years to Barbara's estate or beneficiary if she were to die before receiving all the payments for that period, the total guaranteed return would be $20,400 ($100 × 12 × 17 years). 1040 ez file In this case, the value of the refund feature would be $2,856 (14% of $20,400) and Barbara's investment in the contract would be $18,197 ($21,053 minus $2,856) instead of $17,895. 1040 ez file Example 2. 1040 ez file John died while still employed. 1040 ez file His widow, Eleanor, age 48, receives $171 a month for the rest of her life. 1040 ez file John's son, Elmer, age 9, receives $50 a month until he reaches age 18. 1040 ez file John's contributions to the retirement fund totaled $7,559. 1040 ez file 45, with interest on those contributions of $1,602. 1040 ez file 53. 1040 ez file The guarantee or total refund feature of the contract is $9,161. 1040 ez file 98 ($7,559. 1040 ez file 45 plus $1,602. 1040 ez file 53). 1040 ez file The adjustment in the investment in the contract is figured as follows: A) Expected return:*       1) Widow's expected return:         Annual annuity ($171 × 12) $2,052       Multiplied by factor from Table V         (nearest age 48) 34. 1040 ez file 9 $71,614. 1040 ez file 80   2) Child's expected return:         Annual annuity ($50 × 12) $600       Multiplied by factor from         Table VIII (nearest age 9         for term of 9 years) 9. 1040 ez file 0 5,400. 1040 ez file 00   3) Total expected return   $77,014. 1040 ez file 80 B) Adjustment for refund feature:       1) Contributions (net cost) $7,559. 1040 ez file 45   2) Guaranteed amount (contributions of $7,559. 1040 ez file 45 plus interest of $1,602. 1040 ez file 53) $9,161. 1040 ez file 98   3) Minus: Expected return under child's (temporary life) annuity (A(2)) 5,400. 1040 ez file 00   4) Net guaranteed amount $3,761. 1040 ez file 98   5) Multiple from Table VII (nearest age 48 for 2 years duration (recovery of $3,761. 1040 ez file 98 at $171 a month to nearest whole year)) 0%   6) Adjustment required for value of refund feature rounded to the nearest whole dollar  (0% × $3,761. 1040 ez file 98, the smaller of B(3) or B(6)) 0 *Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. 1040 ez file See the discussion of expected return, later in this publication. 1040 ez file Free IRS help. 1040 ez file   If you need to request assistance to figure the value of the refund feature, see Requesting a Ruling on Taxation of Annuity near the end of this publication. 1040 ez file Expected Return Your expected return is the total amount you and other eligible annuitants can expect to receive under the contract. 1040 ez file The following discussions explain how to figure the expected return with each type of annuity. 1040 ez file A person's age, for purposes of figuring the expected return, is the age at the birthday nearest to the annuity starting date. 1040 ez file Fixed period annuity. 1040 ez file   If you will get annuity payments for a fixed number of years, without regard to your life expectancy, you must figure your expected return based on that fixed number of years. 1040 ez file It is the total amount you will get beginning at the annuity starting date. 1040 ez file You will receive specific periodic payments for a definite period of time, such as a fixed number of months (but not less than 13). 1040 ez file To figure your expected return, multiply the fixed number of months for which payments are to be made by the amount of the payment specified for each period. 1040 ez file Single life annuity. 1040 ez file   If you are to get annuity payments for the rest of your life, find your expected return as follows. 1040 ez file You must multiply the amount of the annual payment by a multiple based on your life expectancy as of the annuity starting date. 1040 ez file These multiples are set out in actuarial Tables I and V near the end of this publication (see How To Use Actuarial Tables , later). 1040 ez file   You may need to adjust these multiples if the payments are made quarterly, semiannually, or annually. 1040 ez file See Adjustments to Tables I, II, V, VI, and VIA following Table I. 1040 ez file Example. 1040 ez file Henry bought an annuity contract that will give him an annuity of $500 a month for his life. 1040 ez file If at the annuity starting date Henry's nearest birthday is 66, the expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table V, age 66 × 19. 1040 ez file 2 Expected return $115,200 If the payments were to be made to Henry quarterly and the first payment was made one full month after the annuity starting date, Henry would adjust the 19. 1040 ez file 2 multiple by +. 1040 ez file 1. 1040 ez file His expected return would then be $115,800 ($6,000 × 19. 1040 ez file 3). 1040 ez file Annuity for shorter of life or specified period. 1040 ez file   With this type of annuity, you are to get annuity payments either for the rest of your life or until the end of a specified period, whichever period is shorter. 1040 ez file To figure your expected return, multiply the amount of your annual payment by a multiple in Table IV or VIII for temporary life annuities. 1040 ez file Find the proper multiple based on your sex (if using Table IV), your age at the annuity starting date, and the nearest whole number of years in the specified period. 1040 ez file Example. 1040 ez file Harriet purchased an annuity this year that will pay her $200 each month for five years or until she dies, whichever period is shorter. 1040 ez file She was age 65 at her birthday nearest the annuity starting date. 1040 ez file She figures the expected return as follows: Annual payment ($200 × 12 months) $2,400 Multiple shown in Table VIII, age 65, 5-year term × 4. 1040 ez file 9 Expected return $11,760 She uses Table VIII (not Table IV) because all her contributions were made after June 30, 1986. 1040 ez file See Special Elections, later. 1040 ez file Joint and survivor annuities. 1040 ez file   If you have an annuity that pays you a periodic income for life and after your death provides an identical lifetime periodic income to your spouse (or some other person), you figure the expected return based on your combined life expectancies. 1040 ez file To figure the expected return, multiply the annual payment by a multiple in Table II or VI based on your joint life expectancies. 1040 ez file If your payments are made quarterly, semiannually, or annually, you may need to adjust these multiples. 1040 ez file See Adjustments to Tables I, II, V, VI, and VIA following Table I near the end of this publication. 1040 ez file Example. 1040 ez file John bought a joint and survivor annuity providing payments of $500 a month for his life, and, after his death, $500 a month for the remainder of his wife's life. 1040 ez file At John's annuity starting date, his age at his nearest birthday is 70 and his wife's at her nearest birthday is 67. 1040 ez file The expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table VI, ages 67 and 70 × 22. 1040 ez file 0 Expected return $132,000 Different payments to survivor. 1040 ez file   If your contract provides that payments to a survivor annuitant will be different from the amount you receive, you must use a computation which accounts for both the joint lives of the annuitants and the life of the survivor. 1040 ez file Example 1. 1040 ez file Gerald bought a contract providing for payments to him of $500 a month for life and, after his death, payments to his wife, Mary, of $350 a month for life. 1040 ez file If, at the annuity starting date, Gerald's nearest birthday is 70 and Mary's is 67, the expected return under the contract is figured as follows: Combined multiple for Gerald and Mary, ages 70 and 67 (from Table VI)   22. 1040 ez file 0 Multiple for Gerald, age 70 (from Table V)   16. 1040 ez file 0 Difference: Multiple applicable to Mary   6. 1040 ez file 0 Gerald's annual payment ($500 × 12) $6,000   Gerald's multiple 16. 1040 ez file 0   Gerald's expected return   $96,000 Mary's annual payment ($350 × 12) $4,200   Mary's multiple 6. 1040 ez file 0   Mary's expected return   25,200 Total expected return under the contract   $121,200 Example 2. 1040 ez file Your husband died while still employed. 1040 ez file Under the terms of his employer's retirement plan, you are entitled to get an immediate annuity of $400 a month for the rest of your life or until you remarry. 1040 ez file Your daughters, Marie and Jean, are each entitled to immediate temporary life annuities of $150 a month until they reach age 18. 1040 ez file You were 50 years old at the annuity starting date. 1040 ez file Marie was 16 and Jean was 14. 1040 ez file Using the multiples shown in Tables V and VIII at the end of this publication, the total expected return on the annuity starting date is $169,680, figured as follows: Widow, age 50 (multiple from Table V—33. 1040 ez file 1 × $4,800 annual payment) $158,880 Marie, age 16 for 2 years duration (multiple from Table VIII—2. 1040 ez file 0 × $1,800 annual payment) 3,600 Jean, age 14 for 4 years duration (multiple from Table VIII—4. 1040 ez file 0 × $1,800 annual payment) 7,200 Total expected return $169,680 No computation of expected return is made based on your husband's age at the date of death because he died before the annuity starting date. 1040 ez file Computation Under the General Rule Note. 1040 ez file Variable annuities use a different computation for determining the exclusion amounts. 1040 ez file See Variable annuities later. 1040 ez file Under the General Rule, you figure the taxable part of your annuity by using the following steps: Step 1. 1040 ez file   Figure the amount of your investment in the contract, including any adjustments for the refund feature and the death benefit exclusion, if applicable. 1040 ez file See Death benefit exclusion , earlier. 1040 ez file Step 2. 1040 ez file   Figure your expected return. 1040 ez file Step 3. 1040 ez file   Divide Step 1 by Step 2 and round to three decimal places. 1040 ez file This will give you the exclusion percentage. 1040 ez file Step 4. 1040 ez file   Multiply the exclusion percentage by the first regular periodic payment. 1040 ez file The result is the tax-free part of each pension or annuity payment. 1040 ez file   The tax-free part remains the same even if the total payment increases due to variation in the annuity amount such as cost of living increases, or you outlive the life expectancy factor used. 1040 ez file However, if your annuity starting date is after 1986, the total amount of annuity income that is tax free over the years cannot exceed your net cost. 1040 ez file   Each annuitant applies the same exclusion percentage to his or her initial payment called for in the contract. 1040 ez file Step 5. 1040 ez file   Multiply the tax-free part of each payment (step 4) by the number of payments received during the year. 1040 ez file This will give you the tax-free part of the total payment for the year. 1040 ez file    In the first year of your annuity, your first payment or part of your first payment may be for a fraction of the payment period. 1040 ez file This fractional amount is multiplied by your exclusion percentage to get the tax-free part. 1040 ez file Step 6. 1040 ez file   Subtract the tax-free part from the total payment you received. 1040 ez file The rest is the taxable part of your pension or annuity. 1040 ez file Example 1. 1040 ez file You purchased an annuity with an investment in the contract of $10,800. 1040 ez file Under its terms, the annuity will pay you $100 a month for life. 1040 ez file The multiple for your age (age 65) is 20. 1040 ez file 0 as shown in Table V. 1040 ez file Your expected return is $24,000 (20 × 12 × $100). 1040 ez file Your cost of $10,800, divided by your expected return of $24,000, equals 45. 1040 ez file 0%. 1040 ez file This is the percentage you will not have to include in income. 1040 ez file Each year, until your net cost is recovered, $540 (45% of $1,200) will be tax free and you will include $660 ($1,200 − $540) in your income. 1040 ez file If you had received only six payments of $100 ($600) during the year, your exclusion would have been $270 (45% of $100 × 6 payments). 1040 ez file Example 2. 1040 ez file Gerald bought a joint and survivor annuity. 1040 ez file Gerald's investment in the contract is $62,712 and the expected return is $121,200. 1040 ez file The exclusion percentage is 51. 1040 ez file 7% ($62,712 ÷ $121,200). 1040 ez file Gerald will receive $500 a month ($6,000 a year). 1040 ez file Each year, until his net cost is recovered, $3,102 (51. 1040 ez file 7% of his total payments received of $6,000) will be tax free and $2,898 ($6,000 − $3,102) will be included in his income. 1040 ez file If Gerald dies, his wife will receive $350 a month ($4,200 a year). 1040 ez file If Gerald had not recovered all of his net cost before his death, his wife will use the same exclusion percentage (51. 1040 ez file 7%). 1040 ez file Each year, until the entire net cost is recovered, his wife will receive $2,171. 1040 ez file 40 (51. 1040 ez file 7% of her payments received of $4,200) tax free. 1040 ez file She will include $2,028. 1040 ez file 60 ($4,200 − $2,171. 1040 ez file 40) in her income tax return. 1040 ez file Example 3. 1040 ez file Using the same facts as Example 2 under Different payments to survivor, you are to receive an annual annuity of $4,800 until you die or remarry. 1040 ez file Your two daughters each receive annual annuities of $1,800 until they reach age 18. 1040 ez file Your husband contributed $25,576 to the plan. 1040 ez file You are eligible for the $5,000 death benefit exclusion because your husband died before August 21, 1996. 1040 ez file Adjusted Investment in the Contract Contributions $25,576 Plus: Death benefit exclusion 5,000 Adjusted investment in the contract $30,576 The total expected return, as previously figured (in Example 2 under Different payments to survivor), is $169,680. 1040 ez file The exclusion percentage of 18. 1040 ez file 0% ($30,576 ÷ $169,680) applies to the annuity payments you and each of your daughters receive. 1040 ez file Each full year $864 (18. 1040 ez file 0% × $4,800) will be tax free to you, and you must include $3,936 in your income tax return. 1040 ez file Each year, until age 18, $324 (18. 1040 ez file 0% × $1,800) of each of your daughters' payments will be tax free and each must include the balance, $1,476, as income on her own income tax return. 1040 ez file Part-year payments. 1040 ez file   If you receive payments for only part of a year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments received during the year. 1040 ez file   If you receive amounts during the year that represent 12 payments, one for each month in that year, and an amount that represents payments for months in a prior year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments the amounts received represent. 1040 ez file For instance, if you received amounts during the year that represent the 12 payments for that year plus an amount that represents three payments for a prior year, multiply that amount by the 15 (12 + 3) payments received that the year. 1040 ez file   If you received a fractional payment, follow Step 5, discussed earlier. 1040 ez file This gives you the tax-free part of your total payment. 1040 ez file Example. 1040 ez file On September 28, Mary bought an annuity contract for $22,050 that will give her $125 a month for life, beginning October 30. 1040 ez file The applicable multiple from Table V is 23. 1040 ez file 3 (age 61). 1040 ez file Her expected return is $34,950 ($125 × 12 × 23. 1040 ez file 3). 1040 ez file Mary's investment in the contract of $22,050, divided by her expected return of $34,950, equals 63. 1040 ez file 1%. 1040 ez file Each payment received will consist of 63. 1040 ez file 1% return of cost and 36. 1040 ez file 9% taxable income, until her net cost of the contract is fully recovered. 1040 ez file During the first year, Mary received three payments of $125, or $375, of which $236. 1040 ez file 63 (63. 1040 ez file 1% × $375) is a return of cost. 1040 ez file The remaining $138. 1040 ez file 37 is included in income. 1040 ez file Increase in annuity payments. 1040 ez file   The tax-free amount remains the same as the amount figured at the annuity starting date, even if the payment increases. 1040 ez file All increases in the installment payments are fully taxable. 1040 ez file   However, if your annuity payments are scheduled to increase at a definite date in the future you must figure the expected return for that annuity using the method described in section 1. 1040 ez file 72-5(a)(5) of the regulations. 1040 ez file Example. 1040 ez file Joe's wife died while she was still employed and, as her beneficiary, he began receiving an annuity of $147 per month. 1040 ez file In figuring the taxable part, Joe elects to use Tables V through VIII. 1040 ez file The cost of the contract was $7,938, consisting of the sum of his wife's net contributions, adjusted for any refund feature. 1040 ez file His expected return as of the annuity starting date is $35,280 (age 65, multiple of 20. 1040 ez file 0 × $1,764 annual payment). 1040 ez file The exclusion percentage is $7,938 ÷ $35,280, or 22. 1040 ez file 5%. 1040 ez file During the year he received 11 monthly payments of $147, or $1,617. 1040 ez file Of this amount, 22. 1040 ez file 5% × $147 × 11 ($363. 1040 ez file 83) is tax free as a return of cost and the balance of $1,253. 1040 ez file 17 is taxable. 1040 ez file Later, because of a cost-of-living increase, his annuity payment was increased to $166 per month, or $1,992 a year (12 × $166). 1040 ez file The tax-free part is still only 22. 1040 ez file 5% of the annuity payments as of the annuity starting date (22. 1040 ez file 5% × $147 × 12 = $396. 1040 ez file 90 for a full year). 1040 ez file The increase of $228 ($1,992 − $1,764 (12 × $147)) is fully taxable. 1040 ez file Variable annuities. 1040 ez file   For variable annuity payments, figure the amount of each payment that is tax free by dividing your investment in the contract (adjusted for any refund feature) by the total number of periodic payments you expect to get under the contract. 1040 ez file   If the annuity is for a definite period, you determine the total number of payments by multiplying the number of payments to be made each year by the number of years you will receive payments. 1040 ez file If the annuity is for life, you determine the total number of payments by using a multiple from the appropriate actuarial table. 1040 ez file Example. 1040 ez file Frank purchased a variable annuity at age 65. 1040 ez file The total cost of the contract was $12,000. 1040 ez file The annuity starting date is January 1 of the year of purchase. 1040 ez file His annuity will be paid, starting July 1, in variable annual installments for his life. 1040 ez file The tax-free amount of each payment, until he has recovered his cost of his contract, is: Investment in the contract $12,000 Number of expected annual payments (multiple for age 65 from Table V) 20 Tax-free amount of each payment ($12,000 ÷ 20) $600 If Frank's first payment is $920, he includes only $320 ($920 − $600) in his gross income. 1040 ez file   If the tax-free amount for a year is more than the payments you receive in that year, you may choose, when you receive the next payment, to refigure the tax-free part. 1040 ez file Divide the amount of the periodic tax-free part that is more than the payment you received by the remaining number of payments you expect. 1040 ez file The result is added to the previously figured periodic tax-free part. 1040 ez file The sum is the amount of each future payment that will be tax free. 1040 ez file Example. 1040 ez file Using the facts of the previous example about Frank, assume that after Frank's $920 payment, he received $500 in the following year, and $1,200 in the year after that. 1040 ez file Frank does not pay tax on the $500 (second year) payment because $600 of each annual pension payment is tax free. 1040 ez file Since the $500 payment is less than the $600 annual tax-free amount, he may choose to refigure his tax-free part when he receives his $1,200 (third year) payment, as follows: Amount tax free in second year $600. 1040 ez file 00 Amount received in second year 500. 1040 ez file 00 Difference $100. 1040 ez file 00 Number of remaining payments after the first 2 payments (age 67, from Table V) 18. 1040 ez file 4 Amount to be added to previously determined annual tax-free part ($100 ÷ 18. 1040 ez file 4) $5. 1040 ez file 43 Revised annual tax-free part for third and later years ($600 + $5. 1040 ez file 43) $605. 1040 ez file 43 Amount taxable in third year ($1,200 − $605. 1040 ez file 43) $594. 1040 ez file 57 If you choose to refigure your tax-free amount,   you must file a statement with your income tax return stating that you are refiguring the tax-free amount in accordance with the rules of section 1. 1040 ez file 72–4(d)(3) of the Income Tax Regulations. 1040 ez file The statement must also show the following information: The annuity starting date and your age on that date. 1040 ez file The first day of the first period for which you received an annuity payment in the current year. 1040 ez file Your investment in the contract as originally figured. 1040 ez file The total of all amounts received tax free under the annuity from the annuity starting date through the first day of the first period for which you received an annuity payment in the current tax year. 1040 ez file Exclusion Limits Your annuity starting date determines the total amount of annuity income that you can exclude from income over the years. 1040 ez file Exclusion limited to net cost. 1040 ez file   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a return of your cost cannot exceed your net cost (figured without any reduction for a refund feature). 1040 ez file This is the unrecovered investment in the contract as of the annuity starting date. 1040 ez file   If your annuity starting date is after July 1, 1986, any unrecovered net cost at your (or last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. 1040 ez file This deduction is not subject to the 2%-of-adjusted-gross-income limit. 1040 ez file Example 1. 1040 ez file Your annuity starting date is after 1986. 1040 ez file Your total cost is $12,500, and your net cost is $10,000, taking into account certain adjustments. 1040 ez file There is no refund feature. 1040 ez file Your monthly annuity payment is $833. 1040 ez file 33. 1040 ez file Your exclusion ratio is 12% and you exclude $100 a month. 1040 ez file Your exclusion ends after 100 months, when you have excluded your net cost of $10,000. 1040 ez file Thereafter, your annuity payments are fully taxable. 1040 ez file Example 2. 1040 ez file The facts are the same as in Example 1, except that there is a refund feature, and you die after 5 years with no surviving annuitant. 1040 ez file The adjustment for the refund feature is $1,000, so the investment in the contract is $9,000. 1040 ez file The exclusion ratio is 10. 1040 ez file 8%, and your monthly exclusion is $90. 1040 ez file After 5 years (60 months), you have recovered tax free only $5,400 ($90 x 60). 1040 ez file An itemized deduction for the unrecovered net cost of $4,600 ($10,000 net cost minus $5,400) may be taken on your final income tax return. 1040 ez file Your unrecovered investment is determined without regard to the refund feature adjustment, discussed earlier, under Adjustments. 1040 ez file Exclusion not limited to net cost. 1040 ez file   If your annuity starting date was before 1987, you could continue to take your monthly exclusion for as long as you receive your annuity. 1040 ez file If you choose a joint and survivor annuity, your survivor continues to take the survivor's exclusion figured as of the annuity starting date. 1040 ez file The total exclusion may be more than your investment in the contract. 1040 ez file How To Use Actuarial Tables In figuring, under the General Rule, the taxable part of your annuity payments that you are to get for the rest of your life (rather than for a fixed number of years), you must use one or more of the actuarial tables in this publication. 1040 ez file Unisex Annuity Tables Effective July 1, 1986, the Internal Revenue Service adopted new annuity Tables V through VIII, in which your sex is not considered when determining the applicable factor. 1040 ez file These tables correspond to the old Tables I through IV. 1040 ez file In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986. 1040 ez file If you made no contributions to the plan after June 30, 1986, generally you must use only Tables I through IV. 1040 ez file However, if you received an annuity payment after June 30, 1986, you may elect to use Tables V through VIII (see Annuity received after June 30, 1986, later). 1040 ez file Special Elections Although you generally must use Tables V through VIII if you made contributions to the retirement plan after June 30, 1986, and Tables I through IV if you made no contributions after June 30, 1986, you can make the following special elections to select which tables to use. 1040 ez file Contributions made both before July 1986 and after June 1986. 1040 ez file   If you made contributions to the retirement plan both before July 1986 and after June 1986, you may elect to use Tables I through IV for the pre-July 1986 cost of the contract, and Tables V through VIII for the post-June 1986 cost. 1040 ez file (See the examples below. 1040 ez file )    Making the election. 1040 ez file Attach this statement to your income tax return for the first year in which you receive an annuity:    “I elect to apply the provisions of paragraph (d) of section 1. 1040 ez file 72–6 of the Income Tax Regulations. 1040 ez file ”   The statement must also include your name, address, social security number, and the amount of the pre-July 1986 investment in the contract. 1040 ez file   If your investment in the contract includes post-June 1986 contributions to the plan, and you do not make the election to use Tables I through IV and Tables V through VIII, then you can only use Tables V through VIII in figuring the taxable part of your annuity. 1040 ez file You must also use Tables V through VIII if you are unable or do not wish to determine the portions of your contributions which were made before July 1, 1986, and after June 30, 1986. 1040 ez file    Advantages of election. 1040 ez file In general, a lesser amount of each annual annuity payment is taxable if you separately figure your exclusion ratio for pre-July 1986 and post-June 1986 contributions. 1040 ez file    If you intend to make this election, save your records that substantiate your pre-July 1986 and post-June 1986 contributions. 1040 ez file If the death benefit exclusion applies (see discussion, earlier), you do not have to apportion it between the pre-July 1986 and the post-June 1986 investment in the contract. 1040 ez file   The following examples illustrate the separate computations required if you elect to use Tables I through IV for your pre-July 1986 investment in the contract and Tables V through VIII for your post-June 1986 investment in the contract. 1040 ez file Example 1. 1040 ez file Bill, who is single, contributed $42,000 to the retirement plan and will receive an annual annuity of $24,000 for life. 1040 ez file Payment of the $42,000 contribution is guaranteed under a refund feature. 1040 ez file Bill is 55 years old as of the annuity starting date. 1040 ez file For figuring the taxable part of Bill's annuity, he chose to make separate computations for his pre-July 1986 investment in the contract of $41,300, and for his post-June 1986 investment in the contract of $700. 1040 ez file       Pre- July 1986   Post- June 1986 A. 1040 ez file Adjustment for refund feature         1) Net cost $41,300   $700   2) Annual annuity—$24,000  ($41,300/$42,000 × $24,000) $23,600       ($700/$42,000 × $24,000)     $400   3) Guarantee under contract $41,300   $700   4) No. 1040 ez file of years payments  guaranteed (rounded), A(3) ÷ A(2) 2   2   5) Applicable percentage from  Tables III and VII 1%   0%   6) Adjustment for value of refund  feature, A(5) × smaller of A(1)  or A(3) $413   $0 B. 1040 ez file Investment in the contract         1) Net cost $41,300   $700   2) Minus: Amount in A(6) 413   0   3) Investment in the contract $40,887   $700 C. 1040 ez file Expected return         1) Annual annuity receivable $24,000   $24,000   2) Multiples from Tables I and V 21. 1040 ez file 7   28. 1040 ez file 6   3) Expected return, C(1) × C(2) $520,800   $686,400 D. 1040 ez file Tax-free part of annuity         1) Exclusion ratio as decimal,  B(3) ÷ C(3) . 1040 ez file 079   . 1040 ez file 001   2) Tax-free part, C(1) × D(1) $1,896   $24 The tax-free part of Bill's total annuity is $1,920 ($1,896 plus $24). 1040 ez file The taxable part of his annuity is $22,080 ($24,000 minus $1,920). 1040 ez file If the annuity starting date is after 1986, the exclusion over the years cannot exceed the net cost (figured without any reduction for a refund feature). 1040 ez file Example 2. 1040 ez file Al is age 62 at his nearest birthday to the annuity starting date. 1040 ez file Al's wife is age 60 at her nearest birthday to the annuity starting date. 1040 ez file The joint and survivor annuity pays $1,000 per month to Al for life, and $500 per month to Al's surviving wife after his death. 1040 ez file The pre-July 1986 investment in the contract is $53,100 and the post-June 1986 investment in the contract is $7,000. 1040 ez file Al makes the election described in Example 1 . 1040 ez file For purposes of this example, assume the refund feature adjustment is zero. 1040 ez file If an adjustment is required, IRS will figure the amount. 1040 ez file See Requesting a Ruling on Taxation of Annuity near the end of this publication. 1040 ez file       Pre-  July 1986   Post-  June 1986 A. 1040 ez file Adjustment for refund feature         1) Net cost $53,100   $7,000   2) Annual annuity—$12,000  ($53,100/$60,100 × $12,000) $10,602       ($7,000/$60,100 × $12,000)     $1,398   3) Guaranteed under the contract $53,100   $7,000   4) Number of years guaranteed,  rounded, A(3) ÷ A(2) 5   5   5) Applicable percentages 0%   0%   6) Refund feature adjustment, A(5) × smaller of A(1) or A(3) 0   0 B. 1040 ez file Investment in the contract         1) Net cost $53,100   $7,000   2) Refund feature adjustment 0   0   3) Investment in the contract adjusted for refund feature $53,100   $7,000 C. 1040 ez file Expected return         1) Multiple for both annuitants from Tables II and VI 25. 1040 ez file 4   28. 1040 ez file 8   2) Multiple for first annuitant from Tables I and V 16. 1040 ez file 9   22. 1040 ez file 5   3) Multiple applicable to surviving annuitant, subtract C(2) from C(1) 8. 1040 ez file 5   6. 1040 ez file 3   4) Annual annuity to surviving annuitant $6,000   $6,000   5) Portion of expected return for surviving annuitant, C(4) × C(3) $51,000   $37,800   6) Annual annuity to first annuitant $12,000   $12,000   7) Plus: Portion of expected return for first annuitant, C(6) × C(2) $202,800   $270,000   8) Expected return for both annuitants, C(5) + C(7) $253,800   $307,800 D. 1040 ez file Tax-free part of annuity         1) Exclusion ratio as a decimal, B(3) ÷ C(8) . 1040 ez file 209   . 1040 ez file 023   2) Retiree's tax-free part of annuity, C(6) × D(1) $2,508   $276   3) Survivor's tax-free part of annuity, C(4) × D(1) $1,254   $138 The tax-free part of Al's total annuity is $2,784 ($2,508 + $276). 1040 ez file The taxable part of his annuity is $9,216 ($12,000 − $2,784). 1040 ez file The exclusion over the years cannot exceed the net cost of the contract (figured without any reduction for a refund feature) if the annuity starting date is after 1986. 1040 ez file After Al's death, his widow will apply the same exclusion percentages (20. 1040 ez file 9% and 2. 1040 ez file 3%) to her annual annuity of $6,000 to figure the tax-free part of her annuity. 1040 ez file Annuity received after June 30, 1986. 1040 ez file   If you receive an annuity payment after June 30, 1986, (regardless of your annuity starting date), you may elect to treat the entire cost of the contract as post-June 1986 cost (even if you made no post-June 1986 contributions to the plan) and use Tables V through VIII. 1040 ez file Once made, you cannot revoke the election, which will apply to all payments during the year and in any later year. 1040 ez file    Make the election by attaching the following statement to your income tax return. 1040 ez file    “I elect, under section 1. 1040 ez file 72–9 of the Income Tax Regulations, to treat my entire cost of the contract as a post-June 1986 cost of the plan. 1040 ez file ”   The statement must also include your name, address, and social security number. 1040 ez file   You should also indicate you are making this election if you are unable or do not wish to determine the parts of your contributions which were made before July 1, 1986, and after June 30, 1986. 1040 ez file Disqualifying form of payment or settlement. 1040 ez file   If your annuity starting date is after June 30, 1986, and the contract provides for a disqualifying form of payment or settlement, such as an option to receive a lump sum in full discharge of the obligation under the contract, the entire investment in the contract is treated as post-June 1986 investment in the contract. 1040 ez file See regulations section 1. 1040 ez file 72–6(d)(3) for additional examples of disqualifying forms of payment or settlement. 1040 ez file You can find the Income Tax Regulations in many libraries and at Internal Revenue Service Offices. 1040 ez file Worksheets for Determining Taxable Annuity Worksheets I and II. 1040 ez file   Worksheets I and II follow for determining your taxable annuity under Regulations Section 1. 1040 ez file 72–6(d)(6) Election. 1040 ez file Worksheet I For Determining Taxable Annuity Under Regulations Section 1. 1040 ez file 72-6(d)(6) Election For Single Annuitant With No Survivor Annuity               Pre-July 1986   Post-June 1986 A. 1040 ez file   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. 1040 ez file )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)   Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages* from Tables III and VII                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. 1040 ez file If not, the IRS will calculate the refund feature percentage. 1040 ez file             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. 1040 ez file   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund feature:                   B(1) minus B(2)                             C. 1040 ez file   Expected Return             1)   Annual Annuity:                   12 times monthly annuity**             2)   Expected return multiples from Tables I and V             3)     Expected return:                   C(1) times C(2)                             D. 1040 ez file   Tax-Free Part of Annuity             1)     Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(3)             2)     Tax-free part of annuity:                   C(1) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. 1040 ez file     Worksheet II For Determining Taxable Annuity Under Regulations Section 1. 1040 ez file 72-6(d)(6) Election For Joint and Survivor Annuity               Pre-July 1986   Post-June 1986 A. 1040 ez file   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. 1040 ez file )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)     Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages*                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. 1040 ez file If not, the IRS will calculate the refund feature percentage. 1040 ez file             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. 1040 ez file   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund future:                   B(1) minus B(2)                             C. 1040 ez file   Expected Return             1)   Multiples for both annuitants, Tables II and VI             2)   Multiple for retiree. 1040 ez file Tables I and VI             3)   Multiple for survivor:                   C(1) minus C(2)             4)   Annual annuity to survivor:                   12 times potential monthly rate for survivor**             5)   Expected return for survivor:                   C(3) times C(4)             6)   Annual annuity to retiree:                   12 times monthly rate for retiree**             7)   Expected return for retiree:                   C(2) times C(6)             8)   Total expected return:                   C(5) plus C(7)                             D. 1040 ez file   Tax-Free Part of Annuity             1)   Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(8)             2)   Retiree's tax-free part of annuity:                   C(6) times D(1)             3)   Survivor's tax-free part of annuity, if surviving after death of retiree:                   C(4) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. 1040 ez file   Actuarial Tables Please click here for the text description of the image. 1040 ez file Actuarial Tables Please click here for the text description of the image. 1040 ez file Actuarial Tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Please click here for the text description of the image. 1040 ez file Actuarial tables Requesting a Ruling on Taxation of Annuity If you are a retiree, or the survivor of an employee or retiree, you may ask the Internal Revenue Service to help you determine the taxation of your annuity. 1040 ez file If you make this request, you are asking for a ruling. 1040 ez file User fee. 1040 ez file   Under the law in effect at the time this publication went to print, the IRS must charge a user fee for all ruling requests. 1040 ez file You should call the IRS for the proper fee. 1040 ez file A request solely for the value of the refund feature is not treated as a ruling request and requires no fee. 1040 ez file Send your request to:     Internal Revenue Service  Attention: EP Letter Rulings P. 1040 ez file O. 1040 ez file Box 27063 McPherson Station Washington, DC 20038 The user fee is allowed as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit. 1040 ez file When to make the request. 1040 ez file   Please note that requests sent between February 1 and April 15 may experience some delay. 1040 ez file We process requests in the order received, and we will reply to your request as soon as we can process it. 1040 ez file If you do not receive your ruling by the required filing date, you may use Form 4868, Application for Automatic Extension of Time To File U. 1040 ez file S. 1040 ez file Individual Income Tax Return, to get an extension of time to file. 1040 ez file Information you must furnish. 1040 ez file   You must furnish the information listed below so the IRS can comply with your request. 1040 ez file Failure to furnish the information will result in a delay in processing your request. 1040 ez file Please send only copies of the following documents, as the IRS retains all material sent for its records: A letter explaining the question(s) you wish to have resolved or the information you need from the ruling. 1040 ez file Copies of any documents showing distributions, annuity rates, and annuity options available to you. 1040 ez file A copy of any Form 1099–R you received since your annuity began. 1040 ez file A statement indicating whether you have filed your return for the year for which you are making the request. 1040 ez file If you have requested an extension of time to file that return, please indicate the extension date. 1040 ez file Your daytime phone number. 1040 ez file Your current mailing address. 1040 ez file A power of attorney if someone other than you, an attorney, a certified public accountant, or an enrolled agent is signing this request. 1040 ez file Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. 1040 ez file A completed Tax Information Sheet (or facsimile) shown on the next page. 1040 ez file Sign and date the Disclosure and Perjury Statement (or facsimile) at the end of the tax information sheet. 1040 ez file This statement must be signed by the retiree or the survivor annuitant. 1040 ez file It cannot be signed by a representative. 1040 ez file Tax Information Sheet Please click here for the text description of the image. 1040 ez file Tax Information Sheet Please click here for the text description of the image. 1040 ez file Tax Information Sheet (continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. 1040 ez file Free help with your tax return. 1040 ez file   You can get free help preparing your return nationwide from IRS-certified volunteers. 1040 ez file The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 1040 ez file The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1040 ez file Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1040 ez file In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 1040 ez file To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 1040 ez file gov, download the IRS2Go app, or call 1-800-906-9887. 1040 ez file   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040 ez file To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1040 ez file aarp. 1040 ez file org/money/taxaide or call 1-888-227-7669. 1040 ez file For more information on these programs, go to IRS. 1040 ez file gov and enter “VITA” in the search box. 1040 ez file Internet. 1040 ez file    IRS. 1040 ez file gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 1040 ez file Download the free IRS2Go app from the iTunes app store or from Google Play. 1040 ez file Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 1040 ez file Check the status of your 2013 refund with the Where's My Refund? application on IRS. 1040 ez file gov or download the IRS2Go app and select the Refund Status option. 1040 ez file The IRS issues more than 9 out of 10 refunds in less than 21 days. 1040 ez file Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. 1040 ez file You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040 ez file The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 1040 ez file Use the Interactive Tax Assistant (ITA) to research your tax questions. 1040 ez file No need to wait on the phone or stand in line. 1040 ez file The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. 1040 ez file When you reach the response screen, you can print the entire interview and the final response for your records. 1040 ez file New subject areas are added on a regular basis. 1040 ez file  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 1040 ez file gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 1040 ez file You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 1040 ez file The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 1040 ez file When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. 1040 ez file Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. 1040 ez file You can also ask the IRS to mail a return or an account transcript to you. 1040 ez file Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 1040 ez file gov or by calling 1-800-908-9946. 1040 ez file Tax return and tax account transcripts are generally available for the current year and the past three years. 1040 ez file Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 1040 ez file Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 1040 ez file If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. 1040 ez file Check the status of your amended return using Where's My Amended Return? Go to IRS. 1040 ez file gov and enter Where's My Amended Return? in the search box. 1040 ez file You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 1040 ez file It can take up to 3 weeks from the date you mailed it to show up in our system. 1040 ez file Make a payment using one of several safe and convenient electronic payment options available on IRS. 1040 ez file gov. 1040 ez file Select the Payment tab on the front page of IRS. 1040 ez file gov for more information. 1040 ez file Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 1040 ez file Figure your income tax withholding with the IRS Withholding Calculator on IRS. 1040 ez file gov. 1040 ez file Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 1040 ez file Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 1040 ez file gov. 1040 ez file Request an Electronic Filing PIN by going to IRS. 1040 ez file gov and entering Electronic Filing PIN in the search box. 1040 ez file Download forms, instructions and publications, including accessible versions for people with disabilities. 1040 ez file Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 1040 ez file gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 1040 ez file An employee can answer questions about your tax account or help you set up a payment plan. 1040 ez file Before you visit, check the Office Locator on IRS. 1040 ez file gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 1040 ez file If you have a special need, such as a disability, you can request an appointment. 1040 ez file Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1040 ez file Apply for an Employer Identification Number (EIN). 1040 ez file Go to IRS. 1040 ez file gov and enter Apply for an EIN in the search box. 1040 ez file Read the Internal Revenue Code, regulations, or other official guidance. 1040 ez file Read Internal Revenue Bulletins. 1040 ez file Sign up to receive local and national tax news and more by email. 1040 ez file Just click on “subscriptions” above the search box on IRS. 1040 ez file gov and choose from a variety of options. 1040 ez file    Phone. 1040 ez file You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1040 ez file Download the free IRS2Go app from the iTunes app store or from Google Play. 1040 ez file Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 1040 ez file gov, or download the IRS2Go app. 1040 ez file Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040 ez file The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1040 ez file Mos
Español

Supreme Court of the United States

The U.S. Supreme Court is the final appellate court of the U.S. judicial system, having the power to review and overturn the decisions of lower courts. The Supreme Court also has original jurisdiction (being the first and final court to hear a case) in certain cases involving public officials, ambassadors, or disputes between states.

Contact the Agency or Department

Website: Supreme Court of the United States

Address: 1 First St NE
Washington, DC 20543

Phone Number: (202) 479-3000(202) 479-3030 (Visitor Information)

TTY: (202) 479-3472

The 1040 Ez File

1040 ez file 3. 1040 ez file   Savings Incentive Match Plans for Employees (SIMPLE) Table of Contents Introduction What Is a SIMPLE Plan?Eligible Employees How Are Contributions Made? How Much Can Be Contributed on Your Behalf?Matching contributions less than 3%. 1040 ez file Traditional IRA mistakenly moved to SIMPLE IRA. 1040 ez file When Can You Withdraw or Use Assets?Are Distributions Taxable? Introduction This chapter is for employees who need information about savings incentive match plans for employees (SIMPLE plans). 1040 ez file It explains what a SIMPLE plan is, contributions to a SIMPLE plan, and distributions from a SIMPLE plan. 1040 ez file Under a SIMPLE plan, SIMPLE retirement accounts for participating employees can be set up either as: Part of a 401(k) plan, or A plan using IRAs (SIMPLE IRA). 1040 ez file This chapter only discusses the SIMPLE plan rules that relate to SIMPLE IRAs. 1040 ez file See chapter 3 of Publication 560 for information on any special rules for SIMPLE plans that do not use IRAs. 1040 ez file If your employer maintains a SIMPLE plan, you must be notified, in writing, that you can choose the financial institution that will serve as trustee for your SIMPLE IRA and that you can roll over or transfer your SIMPLE IRA to another financial institution. 1040 ez file See Rollovers and Transfers Exception, later under When Can You Withdraw or Use Assets. 1040 ez file What Is a SIMPLE Plan? A SIMPLE plan is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. 1040 ez file See chapter 3 of Publication 560 for information on the requirements employers must satisfy to set up a SIMPLE plan. 1040 ez file A SIMPLE plan is a written agreement (salary reduction agreement) between you and your employer that allows you, if you are an eligible employee (including a self-employed individual), to choose to: Reduce your compensation (salary) by a certain percentage each pay period, and Have your employer contribute the salary reductions to a SIMPLE IRA on your behalf. 1040 ez file These contributions are called salary reduction contributions. 1040 ez file All contributions under a SIMPLE IRA plan must be made to SIMPLE IRAs, not to any other type of IRA. 1040 ez file The SIMPLE IRA can be an individual retirement account or an individual retirement annuity, described in chapter 1. 1040 ez file Contributions are made on behalf of eligible employees. 1040 ez file (See Eligible Employees below. 1040 ez file ) Contributions are also subject to various limits. 1040 ez file (See How Much Can Be Contributed on Your Behalf , later. 1040 ez file ) In addition to salary reduction contributions, your employer must make either matching contributions or nonelective contributions. 1040 ez file See How Are Contributions Made , later. 1040 ez file You may be able to claim a credit for contributions to your SIMPLE plan. 1040 ez file For more information, see chapter 4. 1040 ez file Eligible Employees You must be allowed to participate in your employer's SIMPLE plan if you: Received at least $5,000 in compensation from your employer during any 2 years prior to the current year, and Are reasonably expected to receive at least $5,000 in compensation during the calendar year for which contributions are made. 1040 ez file Self-employed individual. 1040 ez file   For SIMPLE plan purposes, the term employee includes a self-employed individual who received earned income. 1040 ez file Excludable employees. 1040 ez file   Your employer can exclude the following employees from participating in the SIMPLE plan. 1040 ez file Employees whose retirement benefits are covered by a collective bargaining agreement (union contract). 1040 ez file Employees who are nonresident aliens and received no earned income from sources within the United States. 1040 ez file Employees who would not have been eligible employees if an acquisition, disposition, or similar transaction had not occurred during the year. 1040 ez file Compensation. 1040 ez file   For purposes of the SIMPLE plan rules, your compensation for a year generally includes the following amounts. 1040 ez file Wages, tips, and other pay from your employer that is subject to income tax withholding. 1040 ez file Deferred amounts elected under any 401(k) plans, 403(b) plans, government (section 457) plans, SEP plans, and SIMPLE plans. 1040 ez file Self-employed individual compensation. 1040 ez file   For purposes of the SIMPLE plan rules, if you are self-employed, your compensation for a year is your net earnings from self-employment (Schedule SE (Form 1040), Section A, line 4, or Section B, line 6) before subtracting any contributions made to a SIMPLE IRA on your behalf. 1040 ez file   For these purposes, net earnings from self-employment include services performed while claiming exemption from self-employment tax as a member of a group conscientiously opposed to social security benefits. 1040 ez file How Are Contributions Made? Contributions under a salary reduction agreement are called salary reduction contributions. 1040 ez file They are made on your behalf by your employer. 1040 ez file Your employer must also make either matching contributions or nonelective contributions. 1040 ez file Salary reduction contributions. 1040 ez file   During the 60-day period before the beginning of any year, and during the 60-day period before you are eligible, you can choose salary reduction contributions expressed either as a percentage of compensation, or as a specific dollar amount (if your employer offers this choice). 1040 ez file You can choose to cancel the election at any time during the year. 1040 ez file   Salary reduction contributions are also referred to as “elective deferrals. 1040 ez file ”   Your employer cannot place restrictions on the contributions amount (such as by limiting the contributions percentage), except to comply with the salary reduction contributions limit, discussed under How Much Can Be Contributed on Your Behalf, later. 1040 ez file Matching contributions. 1040 ez file   Unless your employer chooses to make nonelective contributions, your employer must make contributions equal to the salary reduction contributions you choose (elect), but only up to certain limits. 1040 ez file See How Much Can Be Contributed on Your Behalf below. 1040 ez file These contributions are in addition to the salary reduction contributions and must be made to the SIMPLE IRAs of all eligible employees (defined earlier) who chose salary reductions. 1040 ez file These contributions are referred to as matching contributions. 1040 ez file   Matching contributions on behalf of a self-employed individual are not treated as salary reduction contributions. 1040 ez file Nonelective contributions. 1040 ez file   Instead of making matching contributions, your employer may be able to choose to make nonelective contributions on behalf of all eligible employees. 1040 ez file These nonelective contributions must be made on behalf of each eligible employee who has at least $5,000 of compensation from your employer, whether or not the employee chose salary reductions. 1040 ez file   One of the requirements your employer must satisfy is notifying the employees that the election was made. 1040 ez file For other requirements that your employer must satisfy, see chapter 3 of Publication 560. 1040 ez file How Much Can Be Contributed on Your Behalf? The limits on contributions to a SIMPLE IRA vary with the type of contribution that is made. 1040 ez file Salary reduction contributions limit. 1040 ez file   Salary reduction contributions (employee-chosen contributions or elective deferrals) that your employer can make on your behalf under a SIMPLE plan are limited to $12,000 for 2013. 1040 ez file The limitation remains at $12,000 for 2014. 1040 ez file If you are a participant in any other employer plans during 2013 and you have elective salary reductions or deferred compensation under those plans, the salary reduction contributions under the SIMPLE plan also are included in the annual limit of $17,500 for 2013 on exclusions of salary reductions and other elective deferrals. 1040 ez file You, not your employer, are responsible for monitoring compliance with these limits. 1040 ez file Additional elective deferrals can be contributed to your SIMPLE plan if: You reached age 50 by the end of 2013, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions, such as the regular annual limit. 1040 ez file The most that can be contributed in additional elective deferrals to your SIMPLE plan is the lesser of the following two amounts. 1040 ez file $2,500 for 2013, or Your compensation for the year reduced by your other elective deferrals for the year. 1040 ez file The additional deferrals are not subject to any other contribution limit and are not taken into account in applying other contribution limits. 1040 ez file The additional deferrals are not subject to the nondiscrimination rules as long as all eligible participants are allowed to make them. 1040 ez file Matching employer contributions limit. 1040 ez file   Generally, your employer must make matching contributions to your SIMPLE IRA in an amount equal to your salary reduction contributions. 1040 ez file These matching contributions cannot be more than 3% of your compensation for the calendar year. 1040 ez file See Matching contributions less than 3% below. 1040 ez file Example 1. 1040 ez file In 2013, Joshua was a participant in his employer's SIMPLE plan. 1040 ez file His compensation, before SIMPLE plan contributions, was $41,600 ($800 per week). 1040 ez file Instead of taking it all in cash, Joshua elected to have 12. 1040 ez file 5% of his weekly pay ($100) contributed to his SIMPLE IRA. 1040 ez file For the full year, Joshua's salary reduction contributions were $5,200, which is less than the $12,000 limit on these contributions. 1040 ez file Under the plan, Joshua's employer was required to make matching contributions to Joshua's SIMPLE IRA. 1040 ez file Because his employer's matching contributions must equal Joshua's salary reductions, but cannot be more than 3% of his compensation (before salary reductions) for the year, his employer's matching contribution was limited to $1,248 (3% of $41,600). 1040 ez file Example 2. 1040 ez file Assume the same facts as in Example 1 , except that Joshua's compensation for the year was $408,163 and he chose to have 2. 1040 ez file 94% of his weekly pay contributed to his SIMPLE IRA. 1040 ez file In this example, Joshua's salary reduction contributions for the year (2. 1040 ez file 94% × $408,163) were equal to the 2013 limit for salary reduction contributions ($12,000). 1040 ez file Because 3% of Joshua's compensation ($12,245) is more than the amount his employer was required to match ($12,000), his employer's matching contributions were limited to $12,000. 1040 ez file In this example, total contributions made on Joshua's behalf for the year were $24,000 ($12,000 (Joshua's contributions) + $12,000 (matching contributions)), the maximum contributions permitted under a SIMPLE IRA for 2013. 1040 ez file Matching contributions less than 3%. 1040 ez file   Your employer can reduce the 3% limit on matching contributions for a calendar year, but only if: The limit is not reduced below 1%, The limit is not reduced for more than 2 years out of the 5-year period that ends with (and includes) the year for which the election is effective, and Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which they can enter into salary reduction agreements. 1040 ez file   For purposes of applying the rule in item (2) in determining whether the limit was reduced below 3% for the year, any year before the first year in which your employer (or a former employer) maintains a SIMPLE IRA plan will be treated as a year for which the limit was 3%. 1040 ez file If your employer chooses to make nonelective contributions for a year, that year also will be treated as a year for which the limit was 3%. 1040 ez file Nonelective employer contributions limit. 1040 ez file   If your employer chooses to make nonelective contributions, instead of matching contributions, to each eligible employee's SIMPLE IRA, contributions must be 2% of your compensation for the entire year. 1040 ez file For 2013, only $255,000 of your compensation can be taken into account to figure the contribution limit. 1040 ez file   Your employer can substitute the 2% nonelective contribution for the matching contribution for a year if both of the following requirements are met. 1040 ez file Eligible employees are notified that a 2% nonelective contribution will be made instead of a matching contribution. 1040 ez file This notice is provided within a reasonable period during which employees can enter into salary reduction agreements. 1040 ez file Example 3. 1040 ez file Assume the same facts as in Example 2 , except that Joshua's employer chose to make nonelective contributions instead of matching contributions. 1040 ez file Because his employer's nonelective contributions are limited to 2% of up to $255,000 of Joshua's compensation, his employer's contribution to Joshua's SIMPLE IRA was limited to $5,100. 1040 ez file In this example, total contributions made on Joshua's behalf for the year were $17,100 (Joshua's salary reductions of $12,000 plus his employer's contribution of $5,100). 1040 ez file Traditional IRA mistakenly moved to SIMPLE IRA. 1040 ez file   If you mistakenly roll over or transfer an amount from a traditional IRA to a SIMPLE IRA, you can later recharacterize the amount as a contribution to another traditional IRA. 1040 ez file For more information, see Recharacterizations in chapter 1. 1040 ez file Recharacterizing employer contributions. 1040 ez file   You cannot recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. 1040 ez file SEPs are discussed in chapter 2 of Publication 560. 1040 ez file SIMPLE plans are discussed in this chapter. 1040 ez file Converting from a SIMPLE IRA. 1040 ez file   Generally, you can convert an amount in your SIMPLE IRA to a Roth IRA under the same rules explained in chapter 1 under Converting From Any Traditional IRA Into a Roth IRA . 1040 ez file    However, you cannot convert any amount distributed from the SIMPLE IRA during the 2-year period beginning on the date you first participated in any SIMPLE IRA plan maintained by your employer. 1040 ez file When Can You Withdraw or Use Assets? Generally, the same distribution (withdrawal) rules that apply to traditional IRAs apply to SIMPLE IRAs. 1040 ez file These rules are discussed in chapter 1. 1040 ez file Your employer cannot restrict you from taking distributions from a SIMPLE IRA. 1040 ez file Are Distributions Taxable? Generally, distributions from a SIMPLE IRA are fully taxable as ordinary income. 1040 ez file If the distribution is an early distribution (discussed in chapter 1), it may be subject to the additional tax on early distributions. 1040 ez file See Additional Tax on Early Distributions, later. 1040 ez file Rollovers and Transfers Exception Generally, rollovers and trustee-to-trustee transfers are not taxable distributions. 1040 ez file Two-year rule. 1040 ez file   To qualify as a tax-free rollover (or a tax-free trustee-to-trustee transfer), a rollover distribution (or a transfer) made from a SIMPLE IRA during the 2-year period beginning on the date on which you first participated in your employer's SIMPLE plan must be contributed (or transferred) to another SIMPLE IRA. 1040 ez file The 2-year period begins on the first day on which contributions made by your employer are deposited in your SIMPLE IRA. 1040 ez file   After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan), or deferred compensation plan of a state or local government (section 457 plan). 1040 ez file Additional Tax on Early Distributions The additional tax on early distributions (discussed in chapter 1) applies to SIMPLE IRAs. 1040 ez file If a distribution is an early distribution and occurs during the 2-year period following the date on which you first participated in your employer's SIMPLE plan, the additional tax on early distributions is increased from 10% to 25%. 1040 ez file If a rollover distribution (or transfer) from a SIMPLE IRA does not satisfy the 2-year rule, and is otherwise an early distribution, the additional tax imposed because of the early distribution is increased from 10% to 25% of the amount distributed. 1040 ez file Prev  Up  Next   Home   More Online Publications