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1040x Form

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1040x Form

1040x form 5. 1040x form   Exemptions, Deductions, and Credits Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Items Related to Excluded Income Exemptions Contributions to Foreign Charitable Organizations Moving ExpensesAllocation of Moving Expenses Forms To File Contributions to Individual Retirement Arrangements Taxes of Foreign Countries and U. 1040x form S. 1040x form PossessionsCredit for Foreign Income Taxes Deduction for Foreign Income Taxes Deduction for Other Foreign Taxes How To Report Deductions Topics - This chapter discusses: The rules concerning items related to excluded income, Exemptions, Contributions to foreign charitable organizations, Moving expenses, Contributions to individual retirement arrangements (IRAs), Taxes of foreign countries and U. 1040x form S. 1040x form possessions, and How to report deductions. 1040x form Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 514 Foreign Tax Credit for Individuals 521 Moving Expenses 523 Selling Your Home 590 Individual Retirement Arrangements (IRAs) 597 Information on the United States—Canada Income Tax Treaty Form (and Instructions) 1116 Foreign Tax Credit 2106 Employee Business Expenses 2555 Foreign Earned Income 2555-EZ Foreign Earned Income Exclusion 3903 Moving Expenses Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business SS-5 Application for a Social Security Card W-7 Application for IRS Individual Taxpayer Identification Number See chapter 7 for information about getting these publications and forms. 1040x form Items Related to Excluded Income U. 1040x form S. 1040x form citizens and resident aliens living outside the United States generally are allowed the same deductions as citizens and residents living in the United States. 1040x form If you choose to exclude foreign earned income or housing amounts, you cannot deduct, exclude, or claim a credit for any item that can be allocated to or charged against the excluded amounts. 1040x form This includes any expenses, losses, and other normally deductible items that are allocable to the excluded income. 1040x form You can deduct only those expenses connected with earning includible income. 1040x form These rules apply only to items definitely related to the excluded earned income and they do not apply to other items that are not definitely related to any particular type of gross income. 1040x form These rules do not apply to items such as: Personal exemptions, Qualified retirement contributions, Alimony payments, Charitable contributions, Medical expenses, Mortgage interest, or Real estate taxes on your personal residence. 1040x form For purposes of these rules, your housing deduction is not treated as allocable to your excluded income, but the deduction for self- employment tax is. 1040x form If you receive foreign earned income in a tax year after the year in which you earned it, you may have to file an amended return for the earlier year to properly adjust the amounts of deductions, credits, or exclusions allocable to your foreign earned income and housing exclusions. 1040x form Example. 1040x form In 2012, you had $90,400 of foreign earned income and $9,500 of deductions allocable to your foreign earned income. 1040x form You did not have a housing exclusion. 1040x form Because you excluded all of your foreign earned income, you would not have been able to claim any of the deductions on your 2012 return. 1040x form In 2013, you received a $12,000 bonus for work you did abroad in 2012. 1040x form You can exclude $4,700 of the bonus because the limit on the foreign earned income exclusion for 2012 was $95,100 and you have already excluded $90,400. 1040x form Since you must include $7,300 of the bonus ($12,000 − $4,700) for work you did in 2012 in income, you can file an amended return for 2012 to claim $677 of the deductions. 1040x form This is the deductions allocable to the foreign earned income ($9,500) multiplied by the includible portion of the foreign earned income ($7,300) and divided by the total foreign earned income for 2012 ($102,400). 1040x form Exemptions You can claim an exemption for your nonresident alien spouse on your separate return, provided your spouse has no gross income for U. 1040x form S. 1040x form tax purposes and is not the dependent of another U. 1040x form S. 1040x form taxpayer. 1040x form You also can claim exemptions for individuals who qualify as your dependents. 1040x form To be your dependent, the individual must be a U. 1040x form S. 1040x form citizen, U. 1040x form S. 1040x form national, U. 1040x form S. 1040x form resident alien, or a resident of Canada or Mexico for some part of the calendar year in which your tax year begins. 1040x form Children. 1040x form   Children usually are citizens or residents of the same country as their parents. 1040x form If you were a U. 1040x form S. 1040x form citizen when your child was born, your child generally is a U. 1040x form S. 1040x form citizen. 1040x form This is true even if the child's other parent is a nonresident alien, the child was born in a foreign country, and the child lives abroad with the other parent. 1040x form   If you have a legally adopted child who is not a U. 1040x form S. 1040x form citizen, U. 1040x form S. 1040x form resident, or U. 1040x form S. 1040x form national, the child meets the citizen requirement if you are a U. 1040x form S. 1040x form citizen or U. 1040x form S. 1040x form national and the child lived with you as a member of your household all year. 1040x form Social security number. 1040x form   You must include on your return the social security number (SSN) of each dependent for whom you claim an exemption. 1040x form To get a social security number for a dependent, apply at a Social Security office or U. 1040x form S. 1040x form consulate. 1040x form You must provide original or certified copies of documents to verify the dependent's age, identity, and citizenship, and complete Form SS-5. 1040x form   If you do not have an SSN for a child who was born in 2013 and died in 2013, attach a copy of the child's birth certificate to your tax return. 1040x form Print “Died” in column (2) of line 6c of your Form 1040 or Form 1040A. 1040x form   If your dependent is a nonresident alien who is not eligible to get a social security number, you must list the dependent's individual taxpayer identification number (ITIN) instead of an SSN. 1040x form To apply for an ITIN, file Form W-7 with the IRS. 1040x form It usually takes 6 to 10 weeks to get an ITIN. 1040x form Enter your dependent's ITIN wherever an SSN is requested on your tax return. 1040x form More information. 1040x form   For more information about exemptions, see Publication 501. 1040x form Contributions to Foreign Charitable Organizations If you make contributions directly to a foreign church or other foreign charitable organization, you generally cannot deduct them. 1040x form Exceptions are explained under Canadian, Mexican, and Israeli charities, later. 1040x form You can deduct contributions to a U. 1040x form S. 1040x form organization that transfers funds to a charitable foreign organization if the U. 1040x form S. 1040x form organization controls the use of the funds by the foreign organization or if the foreign organization is just an administrative arm of the U. 1040x form S. 1040x form organization. 1040x form Canadian, Mexican, and Israeli charities. 1040x form   Under the income tax treaties with Canada, Mexico and Israel, you may be able to deduct contributions to certain Canadian, Mexican, and Israeli charitable organizations. 1040x form Generally, you must have income from sources in Canada, Mexico, or Israel, and the organization must meet certain requirements. 1040x form See Publication 597, Information on the United States-Canada Income Tax Treaty, and Publication 526, Charitable Contributions, for more information. 1040x form Moving Expenses If you moved to a new home in 2013 because of your job or business, you may be able to deduct the expenses of your move. 1040x form Generally, to be deductible, the moving expenses must have been paid or incurred in connection with starting work at a new job location. 1040x form See Publication 521 for a complete discussion of the deduction for moving expenses and information about moves within the United States. 1040x form Foreign moves. 1040x form   A foreign move is a move in connection with the start of work at a new job location outside the United States and its possessions. 1040x form A foreign move does not include a move back to the United States or its possessions. 1040x form Allocation of Moving Expenses When your new place of work is in a foreign country, your moving expenses are directly connected with the income earned in that foreign country. 1040x form If you exclude all or part of the income that you earn at the new location under the foreign earned income exclusion or the foreign housing exclusion, you cannot deduct the part of your moving expense that is allocable to the excluded income. 1040x form Also, you cannot deduct the part of the moving expense related to the excluded income for a move from a foreign country to the United States if you receive a reimbursement that you are able to treat as compensation for services performed in the foreign country. 1040x form Year to which expense is connected. 1040x form   The moving expense is connected with earning the income (including reimbursements, as discussed in chapter 4 under Reimbursement of moving expenses ) either entirely in the year of the move or in 2 years. 1040x form It is connected with earning the income entirely in the year of the move if you qualify for the foreign earned income exclusion under the bona fide residence test or physical presence test for at least 120 days during that tax year. 1040x form   If you do not qualify under either the bona fide residence test or the physical presence test for at least 120 days during the year of the move, the expense is connected with earning the income in 2 years. 1040x form The moving expense is connected with the year of the move and the following year if the move is from the United States to a foreign country. 1040x form The moving expense is connected with the year of the move and the preceding year if the move is from a foreign country to the United States. 1040x form Amount allocable to excluded income. 1040x form   To figure the amount of your moving expense that is allocable to your excluded foreign earned income (and not deductible), you must multiply your total moving expense deduction by a fraction. 1040x form The numerator (top number) of the fraction is the total of your excluded foreign earned income and housing amounts for both years and the denominator (bottom number) of the fraction is your total foreign earned income for both years. 1040x form Example. 1040x form On November 1, 2012, you transfer to Monaco. 1040x form Your tax home is in Monaco, and you are a bona fide resident of Monaco for the entire tax year 2013. 1040x form In 2012, you paid $6,000 for allowable moving expenses for your move from the United States to Monaco. 1040x form You were fully reimbursed (under a nonaccountable plan) for these expenses in the same year. 1040x form The reimbursement is included in your income. 1040x form Your only other income consists of $16,000 wages earned in 2012 after the date of your move, and $100,100 wages earned in Monaco for 2013. 1040x form Because you did not meet the bona fide residence test for at least 120 days during 2012, the year of the move, the moving expenses are for services you performed in both 2012 and the following year, 2013. 1040x form Your total foreign earned income for both years is $122,100, consisting of $16,000 wages for 2012, $100,100 wages for 2013, and $6,000 moving expense reimbursement for both years. 1040x form You have no housing exclusion. 1040x form The total amount you can exclude is $113,190, consisting of the $97,600 full-year exclusion for 2013 and a $15,590 part-year exclusion for 2012 ($95,100 times the fraction of 60 qualifying bona fide residence days over 366 total days in the year). 1040x form To find the part of your moving expenses that is not deductible, multiply your $6,000 total expenses by the fraction $113,190 over $122,100. 1040x form The result, $5,562, is your nondeductible amount. 1040x form    You must report the full amount of the moving expense reimbursement in the year in which you received the reimbursement. 1040x form In the preceding example, this year was 2012. 1040x form You attribute the reimbursement to both 2012 and 2013 only to figure the amount of foreign earned income eligible for exclusion for each year. 1040x form Move between foreign countries. 1040x form   If you move between foreign countries, your moving expense is allocable to income earned in the year of the move if you qualified under either the bona fide residence test or the physical presence test for a period that includes at least 120 days in the year of the move. 1040x form New place of work in U. 1040x form S. 1040x form   If your new place of work is in the United States, the deductible moving expenses are directly connected with the income earned in the United States. 1040x form If you treat a reimbursement from your employer as foreign earned income (see the discussion in chapter 4), you must allocate deductible moving expenses to foreign earned income. 1040x form Storage expenses. 1040x form   These expenses are attributable to work you do during the year in which you incur the storage expenses. 1040x form You cannot deduct the amount allocable to excluded income. 1040x form Moving Expense Attributable to Foreign Earnings in 2 Years If your moving expense deduction is attributable to your foreign earnings in 2 years (the year of the move and the following year), you should request an extension of time to file your return for the year of the move until after the end of the second year. 1040x form By then, you should have all the information needed to properly figure the moving expense deduction. 1040x form See Extensions under When To File and Pay in chapter 1. 1040x form If you do not request an extension, you should figure the part of the moving expense that you cannot deduct because it is allocable to the foreign earned income you are excluding. 1040x form You do this by multiplying the moving expense by a fraction, the numerator (top number) of which is your excluded foreign earned income for the year of the move, and the denominator (bottom number) of which is your total foreign earned income for the year of the move. 1040x form Once you know your foreign earnings and exclusion for the following year, you must either: Adjust the moving expense deduction by filing an amended return for the year of the move, or Recapture any additional unallowable amount as income on your return for the following year. 1040x form If, after you make the final computation, you have an additional amount of allowable moving expense deduction, you can claim this only on an amended return for the year of the move. 1040x form You cannot claim it on the return for the second year. 1040x form Forms To File Report your moving expenses on Form 3903. 1040x form Report your moving expense deduction on line 26 of Form 1040. 1040x form If you must reduce your moving expenses by the amount allocable to excluded income (as explained later under How To Report Deductions ), attach a statement to your return showing how you figured this amount. 1040x form For more information about figuring moving expenses, see Publication 521. 1040x form Contributions to Individual Retirement Arrangements Contributions to your individual retirement arrangements (IRAs) that are traditional IRAs or Roth IRAs are generally limited to the lesser of $5,500 ($6,500 if 50 or older) or your compensation that is includible in your gross income for the tax year. 1040x form In determining compensation for this purpose, do not take into account amounts you exclude under either the foreign earned income exclusion or the foreign housing exclusion. 1040x form Do not reduce your compensation by the foreign housing deduction. 1040x form If you are covered by an employer retirement plan at work, your deduction for your contributions to your traditional IRAs is generally limited based on your modified adjusted gross income. 1040x form This is your adjusted gross income figured without taking into account the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction. 1040x form Other modifications are also required. 1040x form For more information on IRAs, see Publication 590. 1040x form Taxes of Foreign Countries and U. 1040x form S. 1040x form Possessions You can take either a credit or a deduction for income taxes paid to a foreign country or a U. 1040x form S. 1040x form possession. 1040x form Taken as a deduction, foreign income taxes reduce your taxable income. 1040x form Taken as a credit, foreign income taxes reduce your tax liability. 1040x form You must treat all foreign income taxes the same way. 1040x form If you take a credit for any foreign income taxes, you cannot deduct any foreign income taxes. 1040x form However, you may be able to deduct other foreign taxes. 1040x form See Deduction for Other Foreign Taxes, later. 1040x form There is no rule to determine whether it is to your advantage to take a deduction or a credit for foreign income taxes. 1040x form In most cases, it is to your advantage to take foreign income taxes as a tax credit, which you subtract directly from your U. 1040x form S. 1040x form tax liability, rather than as a deduction in figuring taxable income. 1040x form However, if foreign income taxes were imposed at a high rate and the proportion of foreign income to U. 1040x form S. 1040x form income is small, a lower final tax may result from deducting the foreign income taxes. 1040x form In any event, you should figure your tax liability both ways and then use the one that is better for you. 1040x form You can make or change your choice within 10 years from the due date for filing the tax return on which you are entitled to take either the deduction or the credit. 1040x form Foreign income taxes. 1040x form   These are generally income taxes you pay to any foreign country or possession of the United States. 1040x form Foreign income taxes on U. 1040x form S. 1040x form return. 1040x form   Foreign income taxes can only be taken as a credit on Form 1040, line 47, or as an itemized deduction on Schedule A. 1040x form These amounts cannot be included as withheld income taxes on Form 1040, line 62. 1040x form Foreign taxes paid on excluded income. 1040x form   You cannot take a credit or deduction for foreign income taxes paid on earnings you exclude from tax under any of the following. 1040x form Foreign earned income exclusion. 1040x form Foreign housing exclusion. 1040x form Possession exclusion. 1040x form If your wages are completely excluded, you cannot deduct or take a credit for any of the foreign taxes paid on your wages. 1040x form   If only part of your wages is excluded, you cannot deduct or take a credit for the foreign income taxes allocable to the excluded part. 1040x form You find the taxes allocable to your excluded wages by applying a fraction to the foreign taxes paid on foreign earned income received during the tax year. 1040x form The numerator (top number) of the fraction is your excluded foreign earned income received during the tax year minus deductible expenses allocable to that income (not including the foreign housing deduction). 1040x form The denominator (bottom number) of the fraction is your total foreign earned income received during the tax year minus all deductible expenses allocable to that income (including the foreign housing deduction). 1040x form   If foreign law taxes both earned income and some other type of income and the taxes on the other type cannot be separated, the denominator of the fraction is the total amount of income subject to foreign tax minus deductible expenses allocable to that income. 1040x form    If you take a foreign tax credit for tax on income you could have excluded under your choice to exclude foreign earned income or your choice to exclude foreign housing costs, one or both of the choices may be considered revoked. 1040x form Credit for Foreign Income Taxes If you take the foreign tax credit, you may have to file Form 1116 with Form 1040. 1040x form Form 1116 is used to figure the amount of foreign tax paid or accrued that can be claimed as a foreign tax credit. 1040x form Do not include the amount of foreign tax paid or accrued as withheld federal income taxes on Form 1040, line 62. 1040x form The foreign income tax for which you can claim a credit is the amount of legal and actual tax liability you pay or accrue during the year. 1040x form The amount for which you can claim a credit is not necessarily the amount withheld by the foreign country. 1040x form You cannot take a foreign tax credit for income tax you paid to a foreign country that would be refunded by the foreign country if you made a claim for refund. 1040x form Subsidies. 1040x form   If a foreign country returns your foreign tax payments to you in the form of a subsidy, you cannot claim a foreign tax credit based on these payments. 1040x form This rule applies to a subsidy provided by any means that is determined, directly or indirectly, by reference to the amount of tax, or to the base used to figure the tax. 1040x form   Some ways of providing a subsidy are refunds, credits, deductions, payments, or discharges of obligations. 1040x form A credit is also not allowed if the subsidy is given to a person related to you, or persons who participated in a transaction or a related transaction with you. 1040x form Limit The foreign tax credit is limited to the part of your total U. 1040x form S. 1040x form tax that is in proportion to your taxable income from sources outside the United States compared to your total taxable income. 1040x form The allowable foreign tax credit cannot be more than your actual foreign tax liability. 1040x form Exemption from limit. 1040x form   You will not be subject to this limit and will not have to file Form 1116 if you meet all three of the following requirements. 1040x form Your only foreign source income for the year is passive income (dividends, interest, royalties, etc. 1040x form ) that is reported to you on a payee statement (such as a Form 1099-DIV or 1099-INT). 1040x form Your foreign taxes for the year that qualify for the credit are not more than $300 ($600 if you are filing a joint return) and are reported on a payee statement. 1040x form You elect this procedure. 1040x form If you make this election, you cannot carry back or carry over any unused foreign tax to or from this year. 1040x form Separate limit. 1040x form   You must figure the limit on a separate basis with regard to “passive category income” and “general category income” (see the instructions for Form 1116). 1040x form Figuring the limit. 1040x form   In figuring taxable income in each category, you take into account only the amount that you must include in income on your federal tax return. 1040x form Do not take any excluded amount into account. 1040x form   To determine your taxable income in each category, deduct expenses and losses that are definitely related to that income. 1040x form   Other expenses (such as itemized deductions or the standard deduction) not definitely related to specific items of income must be apportioned to the foreign income in each category by multiplying them by a fraction. 1040x form The numerator (top number) of the fraction is your gross foreign income in the separate limit category. 1040x form The denominator (bottom number) of the fraction is your gross income from all sources. 1040x form For this purpose, gross income includes income that is excluded under the foreign earned income provisions but does not include any other exempt income. 1040x form You must use special rules for deducting interest expenses. 1040x form For more information on allocating and apportioning your deductions, see Publication 514. 1040x form Exemptions. 1040x form   Do not take the deduction for exemptions for yourself, your spouse, or your dependents in figuring taxable income for purposes of the limit. 1040x form Recapture of foreign losses. 1040x form   If you have an overall foreign loss and the loss reduces your U. 1040x form S. 1040x form source income (resulting in a reduction of your U. 1040x form S. 1040x form tax liability), you must recapture the loss in later years when you have taxable income from foreign sources. 1040x form This is done by treating a part of your taxable income from foreign sources in later years as U. 1040x form S. 1040x form source income. 1040x form This reduces the numerator of the limiting fraction and the resulting foreign tax credit limit. 1040x form Recapture of domestic losses. 1040x form   If you have an overall domestic loss (resulting in no U. 1040x form S. 1040x form tax liability), you cannot claim a foreign tax credit for taxes paid during that year. 1040x form You must recapture the loss in later years when you have U. 1040x form S. 1040x form source taxable income. 1040x form This is done by treating a part of your taxable income from U. 1040x form S. 1040x form sources in later years as foreign source income. 1040x form This increases the numerator of the limiting fraction and the resulting foreign tax credit limit. 1040x form Foreign tax credit carryback and carryover. 1040x form   The amount of foreign income tax not allowed as a credit because of the limit can be carried back 1 year and carried forward 10 years. 1040x form   More information on figuring the foreign tax credit can be found in Publication 514. 1040x form Deduction for Foreign Income Taxes Instead of taking the foreign tax credit, you can deduct foreign income taxes as an itemized deduction on Schedule A (Form 1040). 1040x form You can deduct only foreign income taxes paid on income that is subject to U. 1040x form S. 1040x form tax. 1040x form You cannot deduct foreign taxes paid on earnings you exclude from tax under any of the following. 1040x form Foreign earned income exclusion. 1040x form Foreign housing exclusion. 1040x form Possession exclusion. 1040x form Example. 1040x form You are a U. 1040x form S. 1040x form citizen and qualify to exclude your foreign earned income. 1040x form Your excluded wages in Country X are $70,000 on which you paid income tax of $10,000. 1040x form You received dividends from Country X of $2,000 on which you paid income tax of $600. 1040x form You can deduct the $600 tax payment because the dividends relating to it are subject to U. 1040x form S. 1040x form tax. 1040x form Because you exclude your wages, you cannot deduct the income tax of $10,000. 1040x form If you exclude only a part of your wages, see the earlier discussion under Foreign taxes paid on excluded income. 1040x form Deduction for Other Foreign Taxes You can deduct real property taxes you pay that are imposed on you by a foreign country. 1040x form You take this deduction on Schedule A (Form 1040). 1040x form You cannot deduct other foreign taxes, such as personal property taxes, unless you incurred the expenses in a trade or business or in the production of income. 1040x form On the other hand, you generally can deduct personal property taxes when you pay them to U. 1040x form S. 1040x form possessions. 1040x form But if you claim the possession exclusion, see Publication 570. 1040x form The deduction for foreign taxes other than foreign income taxes is not related to the foreign tax credit. 1040x form You can take deductions for these miscellaneous foreign taxes and also claim the foreign tax credit for income taxes imposed by a foreign country. 1040x form How To Report Deductions If you exclude foreign earned income or housing amounts, how you show your deductions on your tax return and how you figure the amount allocable to your excluded income depends on whether the expenses are used in figuring adjusted gross income (Form 1040, line 38) or are itemized deductions. 1040x form If you have deductions used in figuring adjusted gross income, enter the total amount for each of these items on the appropriate lines and schedules of Form 1040. 1040x form Generally, you figure the amount of a deduction related to the excluded income by multiplying the deduction by a fraction, the numerator of which is your foreign earned income exclusion and the denominator of which is your foreign earned income. 1040x form Enter the amount of the deduction(s) related to excluded income on line 44 of Form 2555. 1040x form If you have itemized deductions related to excluded income, enter on Schedule A (Form 1040) only the part not related to excluded income. 1040x form You figure that amount by subtracting from the total deduction the amount related to excluded income. 1040x form Generally, you figure the amount that is related to the excluded income by multiplying the total deduction by a fraction, the numerator of which is your foreign earned income exclusion and the denominator of which is your foreign earned income. 1040x form Attach a statement to your return showing how you figured the deductible amount. 1040x form Example 1. 1040x form You are a U. 1040x form S. 1040x form citizen employed as an accountant. 1040x form Your tax home is in Germany for the entire tax year. 1040x form You meet the physical presence test. 1040x form Your foreign earned income for the year was $122,000 and your investment income was $10,380. 1040x form After excluding $97,600, your AGI is $34,780. 1040x form You had unreimbursed business expenses of $2,500 for travel and entertainment in earning your foreign income, of which $500 was for meals and entertainment. 1040x form These expenses are deductible only as miscellaneous deductions on Schedule A (Form 1040). 1040x form You also have $500 of miscellaneous expenses that are not related to your foreign income that you enter on line 23 of Schedule A. 1040x form You must fill out Form 2106. 1040x form On that form, reduce your deductible meal and entertainment expenses by 50% ($250). 1040x form You must reduce the remaining $2,250 of travel and entertainment expenses by 80% ($1,800) because you excluded 80% ($97,600/$122,000) of your foreign earned income. 1040x form You carry the remaining total of $450 to line 21 of Schedule A. 1040x form Add the $450 to the $500 that you have on line 23 and enter the total ($950) on line 24. 1040x form On line 26 of Schedule A, enter $696, which is 2% of your adjusted gross income of $34,780 (line 38, Form 1040) and subtract it from the amount on line 24. 1040x form Enter $254 on line 27 of Schedule A. 1040x form Example 2. 1040x form You are a U. 1040x form S. 1040x form citizen, have a tax home in Spain, and meet the physical presence test. 1040x form You are self-employed and personal services produce the business income. 1040x form Your gross income was $116,931, business expenses $66,895, and net income (profit) $50,036. 1040x form You choose the foreign earned income exclusion and exclude $97,600 of your gross income. 1040x form Since your excluded income is 83. 1040x form 47% of your total income, 83. 1040x form 47% of your business expenses are not deductible. 1040x form Report your total income and expenses on Schedule C (Form 1040). 1040x form On Form 2555 you will show the following: Line 20a, $116,931, gross income, Lines 42 and 43, $97,600, foreign earned income exclusion, and Line 44, $55,837 (83. 1040x form 47% × $66,895) business expenses attributable to the exclusion. 1040x form In this situation (Example 2), you cannot use Form 2555-EZ since you had self-employment income and business expenses. 1040x form Example 3. 1040x form Assume in Example 2 that both capital and personal services combine to produce the business income. 1040x form No more than 30% of your net income, or $15,011, assuming that this amount is a reasonable allowance for your services, is considered earned and can be excluded. 1040x form Your exclusion of $15,011 is 12. 1040x form 84% of your gross income ($15,011 ÷ $116,931). 1040x form Because you excluded 12. 1040x form 84% of your total income, $8,589 (. 1040x form 1284 x $66,895) of your business expenses is attributable to the excluded income and is not deductible. 1040x form Example 4. 1040x form You are a U. 1040x form S. 1040x form citizen, have a tax home in Brazil, and meet the physical presence test. 1040x form You are self-employed and both capital and personal services combine to produce business income. 1040x form Your gross income was $146,000, business expenses were $172,000, and your net loss was $26,000. 1040x form A reasonable allowance for the services you performed for the business is $77,000. 1040x form Because you incurred a net loss, the earned income limit of 30% of your net profit does not apply. 1040x form The $77,000 is foreign earned income. 1040x form If you choose to exclude the $77,000, you exclude 52. 1040x form 74% of your gross income ($77,000 ÷ $146,000), and 52. 1040x form 74% of your business expenses ($90,713) is attributable to that income and is not deductible. 1040x form Show your total income and expenses on Schedule C (Form 1040). 1040x form On Form 2555, exclude $77,000 and show $90,713 on line 44. 1040x form Subtract line 44 from line 43, and enter the difference as a negative (in parentheses) on line 45. 1040x form Because this amount is negative, enter it as a positive (no parentheses) on line 21, Form 1040, and combine it with your other income to arrive at total income on line 22 of Form 1040. 1040x form In this situation (Example 4), you would probably not want to choose the foreign earned income exclusion if this was the first year you were eligible. 1040x form If you had chosen the exclusion in an earlier year, you might want to revoke the choice for this year. 1040x form To do so would mean that you could not claim the exclusion again for the next 5 tax years without IRS approval. 1040x form See Choosing the Exclusion in chapter 4. 1040x form Example 5. 1040x form You are a U. 1040x form S. 1040x form citizen, have a tax home in Panama, and meet the bona fide residence test. 1040x form You have been performing services for clients as a partner in a firm that provides services exclusively in Panama. 1040x form Capital investment is not material in producing the partnership's income. 1040x form Under the terms of the partnership agreement, you are to receive 50% of the net profits. 1040x form The partnership received gross income of $244,000 and incurred operating expenses of $98,250. 1040x form Of the net profits of $145,750, you received $72,875 as your distributive share. 1040x form You choose to exclude $97,600 of your share of the gross income. 1040x form Because you exclude 80% ($97,600 ÷ $122,000) of your share of the gross income, you cannot deduct $39,300, 80% of your share of the operating expenses (. 1040x form 80 × $49,125). 1040x form Report $72,875, your distributive share of the partnership net profit, on Schedule E (Form 1040), Supplemental Income and Loss. 1040x form On Form 2555, show $97,600 on line 42 and show $39,300 on line 44. 1040x form Your exclusion on Form 2555 is $58,300. 1040x form In this situation (Example 5), you cannot use Form 2555-EZ since you had earned income other than salaries and wages and you had business expenses. 1040x form Prev  Up  Next   Home   More Online Publications
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SOI Tax Stats - Charities & Other Tax-Exempt Organizations Statistics

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Snapshot of Charities & Other Tax-Exempt Organizations Statistics

This section contains statistical tables, articles, and other information on charities and other tax-exempt organizations.

Nonprofit charitable organizations are exempt under Section 501(c)(3) of the Internal Revenue Code. Other tax-exempt organizations covered in this section include those exempt under Sections 501(c)(4) through 501(c)(9). Descriptions of these organizations are below:

501(c)(3)

Religious, educational, charitable, scientific, or literary organizations; testing for public safety organizations. Also, organizations preventing cruelty to children or animals, or fostering national or international amateur sports competition

501(c)(4)

Civic leagues, social welfare organizations, and local associations of employees

501(c)(5)

Labor, agriculture, and horticultural organizations

501(c)(6)

Business leagues, chambers of commerce, and real estate boards

501(c)(7)

Social and recreational clubs

501(c)(8)

Fraternal beneficiary societies and associations

501(c)(9)

Voluntary employee beneficiary associations

Data are compiled from Form 990, Return of Organization Exempt from Income Tax, and Form 990-EZ.

For information about selected terms and concepts, a description of the data sources and limitations, and links to recent revisions of Forms 990 and Forms 990-EZ, please visit the Charities and Other Tax-Exempt Organizations Study Metadata page.
 


Statistical Tables

The following tables are available as Microsoft Excel®  files.  A free Excel viewer is available for download, if needed.

501(c)(3) Organizations:
 Form 990 - Balance Sheet and Income Statement Items
  Classified by: Size of Total Assets
  Tax Years: 2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1996  1995  1994  1993  1992  1991  1989  1988
 
 Form 990 - Functional Expenses
  Classified by: Size of Contributions Received
  Tax Years: 1996  1989  1988
 
 Form 990-EZ - Balance Sheet and Income Statement Items
  Classified by: Size of Total Assets
  Tax Years: 1996

 
501(c)(3) through 501(c)(9) Organizations:
Form 990 - Balance Sheet and Income Statement Items
  Classified by: Internal Revenue Code Section
  Tax Years: 2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1995  1994  1993  1992  1991  1990  1989  1988
 
 Form 990Functional Expenses
  Classified by: Internal Revenue Code Section
  Tax Years: 2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1995  1994  1993  1992  1991  1989  1988
 
 Form 990-EZ - Balance Sheet and Income Statement Items
  Classified by: Internal Revenue Code Section
  Tax Years: 2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1995  1994  1993  1992  1991  1990  1989

 
Excise Taxes Reported by Charities, Private Foundations, and Split-Interest Trusts on Form 4720
  Classified by: Type of Excise Tax
  Calendar Years: 2011  2010  2009  2008  2007  2006  2005  2004  2003

 

To make customized tables using this data, please visit the Statistics of Income Tax Stats Table Wizard.

 

Historical Tables:
Table 16:  Nonprofit Charitable Organization and Domestic Private Foundation Information Returns, and Tax-Exempt Organization Business Income Tax Returns:  Selected Financial Data, Expanded
 Published as:   SOI Bulletin Historical Table 16

 

Projections
For selected tax returns, including the Form 990 (and 990-EZ), IRS's Office of Research produces annual forecasts of the number of returns that will be filed in future years.
  Projections of Returns to be Filed in Future Calendar Years
 

Publications and Papers

The following are available as PDF files. A free Adobe® reader is available for download, if needed.


Microdata Files

Microdata are individual organization-level data that can be used for research purposes.

The data are contained in ASCII flat files. Documentation to assist with the files is included. (Free Adobe Acrobat reader and Microsoft Excel viewer software is available for download, if needed.)
 

SOI Sample Data Files

This section contains microdata files for all Forms 990 and 990-EZ sampled for the annual SOI studies of tax-exempt organizations.

The annual samples include Internal Revenue Code section 501(c)(3) organizations and section 501(c)(4)–(9) organizations. Sampling rates ranged from 1 percent for small-asset classes to 100 percent for large-asset classes. Microdata records contain information on balance sheets and income statements, as well as weights (to estimate the population), for each organization.

To access the data, click on one of the following years to access a page with links to both data and documentation files.

2010  2009  2008  2007  2006  2005  2004  2003  2002  2001  2000  1999  1998  1997  1996  1995  1994  1993  1992  1991  1990  1989  1988  1987  1986  1985

To make customized tables using this data, please visit the Statistics of Income Tax Stats Table Wizard.
 

IRS Population Data

This page contains microdata files for all Forms 990, 990-EZ, and 990-PF returns filed by active organizations.  Data are from the IRS Exempt Organization Master File.


Other IRS Data and Related Links

For tax administration data on this topic, as well as other types of taxes, choose from the links below.

Return to Tax Stats home page

Page Last Reviewed or Updated: 27-Mar-2014

The 1040x Form

1040x form Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. 1040x form Gross monthly rate. 1040x form Your cost. 1040x form Choosing a survivor annuity after retirement. 1040x form Canceling a survivor annuity after retirement. 1040x form Annuity starting date after 1986. 1040x form Annuity starting date before 1987. 1040x form Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. 1040x form Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. 1040x form The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. 1040x form If the refund includes only your contributions, none of the refund is taxable. 1040x form If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). 1040x form If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. 1040x form See Rollover Rules in Part II for information on how to make a rollover. 1040x form Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. 1040x form Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. 1040x form If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040x form If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. 1040x form For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040x form A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. 1040x form Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. 1040x form OPM will tell you how to make the choice. 1040x form The choice for no withholding remains in effect until you change it. 1040x form These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. 1040x form If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. 1040x form You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. 1040x form Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. 1040x form For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. 1040x form Form CSA 1099R. 1040x form   Form CSA 1099R is mailed to you by OPM each year. 1040x form It will show any tax you had withheld. 1040x form File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. 1040x form    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. 1040x form servicesonline. 1040x form opm. 1040x form gov. 1040x form To log in, you will need your retirement CSA claim number and your personal identification number. 1040x form Choosing no withholding on payments outside the United States. 1040x form   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. 1040x form   To choose no withholding if you are a U. 1040x form S. 1040x form citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. 1040x form Otherwise, OPM has to withhold tax. 1040x form For example, OPM must withhold if you provide a U. 1040x form S. 1040x form address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. 1040x form S. 1040x form home address. 1040x form   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. 1040x form S. 1040x form citizen, a U. 1040x form S. 1040x form resident alien, or someone who left the United States to avoid tax. 1040x form But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. 1040x form For details, see Publication 519, U. 1040x form S. 1040x form Tax Guide for Aliens. 1040x form Withholding certificate. 1040x form   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. 1040x form The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. 1040x form If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. 1040x form To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040x form C. 1040x form calling area must call 202-606-0500). 1040x form No special form is needed. 1040x form You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. 1040x form If you have TTY/TDD equipment, call 1-855–887–4957. 1040x form If you need a PIN, call OPM's Retirement Information Office. 1040x form You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. 1040x form servicesonline. 1040x form opm. 1040x form gov. 1040x form You will need your retirement CSA or CSF claim number and your PIN. 1040x form Withholding from certain lump-sum payments. 1040x form   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. 1040x form Tax will be withheld at a 20% rate on the interest distributed. 1040x form However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. 1040x form If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. 1040x form Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. 1040x form See Rollover Rules in Part II. 1040x form If you receive only your contributions, no tax will be withheld. 1040x form Withholding from Thrift Savings Plan payments. 1040x form   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. 1040x form The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. 1040x form  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. 1040x form By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. 1040x form   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. 1040x form The above document is also available in the “Forms & Publications” section of the TSP website at www. 1040x form tsp. 1040x form gov. 1040x form Estimated tax. 1040x form   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). 1040x form The return must cover all 12 months. 1040x form   You do not have to pay estimated tax for 2014 if you were a U. 1040x form S. 1040x form citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. 1040x form   Publication 505 contains information that you can use to help you figure your estimated tax payments. 1040x form Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. 1040x form The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. 1040x form Children. 1040x form   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. 1040x form   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. 1040x form Form CSF 1099R. 1040x form   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. 1040x form It will show the total amount of the annuity you received in the past year. 1040x form It also should show, separately, the survivor annuity for a child or children. 1040x form Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. 1040x form   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. 1040x form    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. 1040x form servicesonline. 1040x form opm. 1040x form gov. 1040x form To log in you will need your retirement CSF claim number and personal identification number. 1040x form    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040x form C. 1040x form calling area must call 202-606-0500). 1040x form You will need your CSF claim number and your social security number when you call. 1040x form Taxable part of annuity. 1040x form   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. 1040x form To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. 1040x form Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. 1040x form If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. 1040x form However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. 1040x form Annuity statement. 1040x form   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). 1040x form You will use this information to figure the tax-free recovery of your cost. 1040x form Annuity starting date. 1040x form   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. 1040x form If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. 1040x form Gross monthly rate. 1040x form   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. 1040x form Your cost. 1040x form   Your monthly annuity payment contains an amount on which you have previously paid income tax. 1040x form This amount represents part of your contributions to the retirement plan. 1040x form Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. 1040x form   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. 1040x form If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. 1040x form (See Lump-sum credit under Alternative Annuity Option, later. 1040x form )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. 1040x form You cannot claim an interest deduction for any interest payments. 1040x form You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. 1040x form Recovering your cost tax free. 1040x form   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. 1040x form If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. 1040x form If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). 1040x form If your annuity starting date is after November 18, 1996, you must use the Simplified Method. 1040x form   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). 1040x form The tax-free part is a fixed dollar amount. 1040x form It remains the same, even if your annuity is increased. 1040x form Generally, this rule applies as long as you receive your annuity. 1040x form However, see Exclusion limit , later. 1040x form Choosing a survivor annuity after retirement. 1040x form    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. 1040x form   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. 1040x form To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. 1040x form Figure the expected return as of the date the reduced annuity begins. 1040x form For details on the General Rule, see Publication 939. 1040x form Canceling a survivor annuity after retirement. 1040x form   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. 1040x form The increased annuity does not change the cost recovery you figured at the annuity starting date. 1040x form The tax-free part of each annuity payment remains the same. 1040x form    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040x form C. 1040x form calling area must call 202-606-0500). 1040x form Exclusion limit. 1040x form   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. 1040x form Annuity starting date after 1986. 1040x form   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. 1040x form Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. 1040x form Example. 1040x form Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. 1040x form If your cost is $12,000, the exclusion ends after 10 years (120 months). 1040x form Thereafter, your entire annuity is generally fully taxable. 1040x form Annuity starting date before 1987. 1040x form   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. 1040x form If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. 1040x form The total exclusion may be more than your cost. 1040x form Deduction of unrecovered cost. 1040x form   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. 1040x form The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). 1040x form If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. 1040x form Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. 1040x form (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. 1040x form ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. 1040x form The Simplified Method does not apply if your annuity starting date is before July 2, 1986. 1040x form Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. 1040x form This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. 1040x form If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. 1040x form Worksheet A. 1040x form   Use Worksheet A. 1040x form Simplified Method (near the end of this publication), to figure your taxable annuity. 1040x form Be sure to keep the completed worksheet. 1040x form It will help you figure your taxable amounts for later years. 1040x form Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. 1040x form However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. 1040x form Line 2. 1040x form   See Your cost , earlier, for an explanation of your cost in the plan. 1040x form If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. 1040x form Line 3. 1040x form   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. 1040x form If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. 1040x form If your annuity starting date is before 1998, use Table 1. 1040x form Line 6. 1040x form   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. 1040x form If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. 1040x form Example. 1040x form Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. 1040x form His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. 1040x form He must use the Simplified Method to figure the tax-free part of his annuity benefits. 1040x form Bill's monthly annuity benefit is $1,000. 1040x form He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. 1040x form At his annuity starting date, he was 65 and Kathy was 57. 1040x form Bill's completed Worksheet A is shown later. 1040x form To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). 1040x form Bill keeps a copy of the completed worksheet for his records. 1040x form It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. 1040x form Bill's tax-free monthly amount is $100. 1040x form (See line 4 of the worksheet. 1040x form ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. 1040x form If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. 1040x form If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. 1040x form General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. 1040x form If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. 1040x form If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. 1040x form Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. 1040x form Figuring this percentage is complex and requires the use of actuarial tables. 1040x form For these tables and other information about using the General Rule, see Publication 939. 1040x form Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. 1040x form Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. 1040x form After your cost was recovered, all payments became fully taxable. 1040x form You cannot use another rule to again exclude amounts from income. 1040x form The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. 1040x form Worksheet A. 1040x form Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. 1040x form 1. 1040x form Enter the total pension or annuity payments received this year. 1040x form Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040x form $ 8,000 2. 1040x form Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. 1040x form See Your cost in Part II, Rules for Retirees, earlier 2. 1040x form 31,000 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040x form Otherwise, go to line 3. 1040x form   3. 1040x form Enter the appropriate number from Table 1 below. 1040x form But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. 1040x form 3. 1040x form 310 4. 1040x form Divide line 2 by the number on line 3 4. 1040x form 100 5. 1040x form Multiply line 4 by the number of months for which this year's payments were made. 1040x form If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040x form Otherwise, go to line 6 5. 1040x form 800 6. 1040x form Enter any amounts previously recovered tax free in years after 1986. 1040x form This is the amount shown on line 10 of your worksheet for last year 6. 1040x form 0 7. 1040x form Subtract line 6 from line 2 7. 1040x form 31,000 8. 1040x form Enter the smaller of line 5 or line 7 8. 1040x form 800 9. 1040x form Taxable amount for year. 1040x form Subtract line 8 from line 1. 1040x form Enter the result, but not less than zero. 1040x form Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. 1040x form If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. 1040x form If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. 1040x form If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. 1040x form $7,200 10. 1040x form Was your annuity starting date before 1987?   Yes. 1040x form Do not complete the rest of this worksheet. 1040x form    No. 1040x form Add lines 6 and 8. 1040x form This is the amount you have recovered tax free through 2013. 1040x form You will need this number if you need to fill out this worksheet next year 10. 1040x form 800 11. 1040x form Balance of cost to be recovered. 1040x form Subtract line 10 from line 2. 1040x form If zero, you will not have to complete this worksheet next year. 1040x form The payments you receive next year will generally be fully taxable 11. 1040x form $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. 1040x form Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. 1040x form If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. 1040x form You are eligible to make this choice if you meet all of the following requirements. 1040x form You are retiring, but not on disability. 1040x form You have a life-threatening illness or other critical medical condition. 1040x form You do not have a former spouse entitled to court ordered benefits based on your service. 1040x form If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. 1040x form Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. 1040x form The tax-free part represents part of your cost. 1040x form The taxable part represents part of the earnings on your annuity contract. 1040x form Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. 1040x form Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. 1040x form Your taxable amount may therefore be more than the lump-sum payment you receive. 1040x form You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. 1040x form If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. 1040x form See Rollover Rules , later, for information on how to make a rollover. 1040x form OPM can make a direct rollover only up to the amount of the lump-sum payment. 1040x form Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. 1040x form The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040x form It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. 1040x form For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040x form Worksheet B. 1040x form   Use Worksheet B. 1040x form Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. 1040x form Be sure to keep the completed worksheet for your records. 1040x form   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. 1040x form Lump-sum credit. 1040x form   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). 1040x form However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. 1040x form Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. 1040x form Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. 1040x form You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. 1040x form Present value of your annuity contract. 1040x form   The present value of your annuity contract is figured using actuarial tables provided by the IRS. 1040x form If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. 1040x form Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. 1040x form , NW Washington, DC 20224-0002 Example. 1040x form David Brown retired from the federal government in 2013, one month after his 55th birthday. 1040x form He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. 1040x form The present value of his annuity contract was $155,000. 1040x form The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. 1040x form The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. 1040x form See Reduced Annuity , later. 1040x form Worksheet B. 1040x form Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . 1040x form  1. 1040x form Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. 1040x form $ 31,000 2. 1040x form Enter the present value of your annuity contract 2. 1040x form 155,000 3. 1040x form Divide line 1 by line 2 3. 1040x form . 1040x form 20 4. 1040x form Tax-free amount. 1040x form Multiply line 1 by line 3. 1040x form (Caution: Do not include this amount on line 6 of Worksheet A in this publication. 1040x form ) 4. 1040x form $6,200 5. 1040x form Taxable amount (net cost in the plan). 1040x form Subtract line 4 from line 1. 1040x form Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. 1040x form Also, enter this amount on line 2 of Worksheet A in this publication. 1040x form 5. 1040x form $24,800   Lump-sum payment in installments. 1040x form   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. 1040x form You will receive the first installment after you make the choice upon retirement. 1040x form The second installment will be paid to you, with interest, in the next calendar year. 1040x form (Exceptions to the installment rule are provided for cases of critical medical need. 1040x form )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. 1040x form If the payment has a tax-free part, you must treat the taxable part as received first. 1040x form How to report. 1040x form   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. 1040x form Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. 1040x form    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. 1040x form Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. 1040x form These annuity payments each will have a tax-free and a taxable part. 1040x form To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). 1040x form For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. 1040x form To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. 1040x form Enter as your net cost on line 2 the amount from Worksheet B, line 5. 1040x form Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. 1040x form Example. 1040x form The facts are the same as in the example for David Brown in the preceding discussion. 1040x form In addition, David received 10 annuity payments in 2013 of $1,200 each. 1040x form Using Worksheet A, he figures the taxable part of his annuity payments. 1040x form He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. 1040x form His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). 1040x form He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. 1040x form David's filled-in Worksheet A is shown on the next page. 1040x form Worksheet A. 1040x form Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . 1040x form 1. 1040x form Enter the total pension or annuity payments received this year. 1040x form Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040x form $ 12,000 2. 1040x form Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. 1040x form See Your cost in Part II, Rules for Retirees, earlier 2. 1040x form 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040x form Otherwise, go to line 3. 1040x form   3. 1040x form Enter the appropriate number from Table 1 below. 1040x form But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. 1040x form 3. 1040x form 360 4. 1040x form Divide line 2 by the number on line 3 4. 1040x form 68. 1040x form 89 5. 1040x form Multiply line 4 by the number of months for which this year's payments were made. 1040x form If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040x form Otherwise, go to line 6 5. 1040x form 688. 1040x form 90 6. 1040x form Enter any amounts previously recovered tax free in years after 1986. 1040x form This is the amount shown on line 10 of your worksheet for last year 6. 1040x form 0 7. 1040x form Subtract line 6 from line 2 7. 1040x form 24,800 8. 1040x form Enter the smaller of line 5 or line 7 8. 1040x form 688. 1040x form 90 9. 1040x form Taxable amount for year. 1040x form Subtract line 8 from line 1. 1040x form Enter the result, but not less than zero. 1040x form Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. 1040x form If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. 1040x form If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. 1040x form If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. 1040x form $11,311. 1040x form 10 10. 1040x form Was your annuity starting date before 1987?   Yes. 1040x form Do not complete the rest of this worksheet. 1040x form    No. 1040x form Add lines 6 and 8. 1040x form This is the amount you have recovered tax free through 2013. 1040x form You will need this number if you need to fill out this worksheet next year 10. 1040x form 688. 1040x form 90 11. 1040x form Balance of cost to be recovered. 1040x form Subtract line 10 from line 2. 1040x form If zero, you will not have to complete this worksheet next year. 1040x form The payments you receive next year will generally be fully taxable 11. 1040x form $24,111. 1040x form 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. 1040x form Reemployment after choosing the alternative annuity option. 1040x form If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. 1040x form If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. 1040x form Annuity starting date before November 19, 1996. 1040x form   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. 1040x form Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. 1040x form However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. 1040x form Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. 1040x form The gift may be taxable for gift tax purposes. 1040x form The value of the gift is equal to the value of the annuity. 1040x form Joint and survivor annuity. 1040x form   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. 1040x form This will eliminate any gift tax liability with regard to that gift. 1040x form   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. 1040x form This may result in a taxable gift. 1040x form More information. 1040x form   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. 1040x form Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. 1040x form Annual leave. 1040x form   A payment for accrued annual leave received on retirement is a salary payment. 1040x form It is taxable as wages in the tax year you receive it. 1040x form Voluntary contributions. 1040x form   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. 1040x form They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. 1040x form Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. 1040x form See Thrift Savings Plan , later. 1040x form Additional annuity benefit. 1040x form   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. 1040x form This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. 1040x form It does not matter that you receive only one monthly check covering both benefits. 1040x form Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. 1040x form   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. 1040x form Refund of voluntary contributions. 1040x form   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. 1040x form If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. 1040x form See Rollover Rules , later. 1040x form The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040x form It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. 1040x form For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040x form Community property laws. 1040x form   State community property laws apply to your annuity. 1040x form These laws will affect your income tax only if you file a return separately from your spouse. 1040x form   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. 1040x form Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. 1040x form   At any time, you have only one domicile even though you may have more than one home. 1040x form Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. 1040x form The question of your domicile is mainly a matter of your intentions as indicated by your actions. 1040x form   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. 1040x form The division is based on your periods of service and domicile in community and noncommunity property states while you were married. 1040x form   For more information, see Publication 555, Community Property. 1040x form Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. 1040x form The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. 1040x form This amount is taxable as wages. 1040x form Your annuity will continue to be taxed just as it was before. 1040x form If you are still recovering your cost, you continue to do so. 1040x form If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. 1040x form Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. 1040x form A nonresident alien is an individual who is not a citizen or a resident alien of the United States. 1040x form Special rule for figuring your total contributions. 1040x form   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. 1040x form You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. 1040x form For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. 1040x form Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. 1040x form   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. 1040x form Limit on taxable amount. 1040x form   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. 1040x form Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. 1040x form The numerator of the fraction is the retiree's total U. 1040x form S. 1040x form Government basic pay, other than tax-exempt pay for services performed outside the United States. 1040x form The denominator is the retiree's total U. 1040x form S. 1040x form Government basic pay for all services. 1040x form    Basic pay includes regular pay plus any standby differential. 1040x form It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. 1040x form   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. 1040x form (For an annuity, first complete Worksheet A in this publication. 1040x form ) Worksheet C. 1040x form Limited Taxable Amount for Nonresident Alien 1. 1040x form Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040x form   2. 1040x form Enter the total U. 1040x form S. 1040x form Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040x form   3. 1040x form Enter the total U. 1040x form S. 1040x form Government basic pay for all services 3. 1040x form   4. 1040x form Divide line 2 by line 3 4. 1040x form   5. 1040x form Limited taxable amount. 1040x form Multiply line 1 by line 4. 1040x form Enter this amount on Form 1040NR, line 17b 5. 1040x form   Example 1. 1040x form You are a nonresident alien who performed all services for the U. 1040x form S. 1040x form Government abroad as a nonresident alien. 1040x form You retired and began to receive a monthly annuity of $200. 1040x form Your total basic pay for all services for the U. 1040x form S. 1040x form Government was $100,000. 1040x form All of your basic pay was tax exempt because it was not U. 1040x form S. 1040x form source income. 1040x form The taxable amount of your annuity using Worksheet A in this publication is $720. 1040x form You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. 1040x form Worksheet C. 1040x form Limited Taxable Amount for Nonresident Alien — Example 1 1. 1040x form Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040x form $ 720 2. 1040x form Enter the total U. 1040x form S. 1040x form Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040x form 0 3. 1040x form Enter the total U. 1040x form S. 1040x form Government basic pay for all services 3. 1040x form 100,000 4. 1040x form Divide line 2 by line 3 4. 1040x form 0 5. 1040x form Limited taxable amount. 1040x form Multiply line 1 by line 4. 1040x form Enter this amount on Form 1040NR, line 17b 5. 1040x form 0 Example 2. 1040x form You are a nonresident alien who performed services for the U. 1040x form S. 1040x form Government as a nonresident alien both within the United States and abroad. 1040x form You retired and began to receive a monthly annuity of $240. 1040x form Your total basic pay for your services for the U. 1040x form S. 1040x form Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. 1040x form The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. 1040x form S. 1040x form source income. 1040x form The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. 1040x form You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. 1040x form Worksheet C. 1040x form Limited Taxable Amount for Nonresident Alien — Example 2 1. 1040x form Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040x form $ 1,980 2. 1040x form Enter the total U. 1040x form S. 1040x form Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040x form 40,000 3. 1040x form Enter the total U. 1040x form S. 1040x form Government basic pay for all services 3. 1040x form 120,000 4. 1040x form Divide line 2 by line 3 4. 1040x form . 1040x form 333 5. 1040x form Limited taxable amount. 1040x form Multiply line 1 by line 4. 1040x form Enter this amount on Form 1040NR, line 17b 5. 1040x form 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. 1040x form (However, see Roth TSP balance and Uniformed services TSP accounts, next. 1040x form ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. 1040x form The way that you withdraw your account balance determines when you must pay the tax. 1040x form Roth TSP balance. 1040x form   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. 1040x form This means Roth TSP contributions are included in your income. 1040x form The contribution limits are the same as the traditional TSP. 1040x form You can elect to have part or all of your TSP contributions designated as a Roth TSP. 1040x form Agency contributions will be part of your traditional TSP balance. 1040x form Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. 1040x form   Qualified distributions from your Roth TSP are not included in income. 1040x form This applies to both your cost in the account and income earned on that account. 1040x form A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. 1040x form   For more information, go to the TSP website, www. 1040x form tsp. 1040x form gov, or the TSP Service Office. 1040x form See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. 1040x form Uniformed services TSP accounts. 1040x form   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. 1040x form However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. 1040x form See Roth TSP balance discussed previously to get more information about Roth contributions. 1040x form The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. 1040x form You can get more information from the TSP website, www. 1040x form tsp. 1040x form gov, or the TSP Service Office. 1040x form Direct rollover by the TSP. 1040x form   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. 1040x form However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. 1040x form Also, see Rollover Rules , later. 1040x form Direct rollover by the TSP to a Roth IRA. 1040x form   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. 1040x form However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. 1040x form Also, see Rollovers to Roth IRAs for more information, later. 1040x form Note. 1040x form A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. 1040x form This is because you already paid tax on those contributions. 1040x form You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. 1040x form TSP annuity. 1040x form   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. 1040x form The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. 1040x form However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. 1040x form See Roth TSP balance , earlier. 1040x form This is because you already paid tax on those contributions. 1040x form Cash withdrawals. 1040x form   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. 1040x form (See Rollover Rules , later. 1040x form ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. 1040x form See Lump-Sum Distributions in Publication 575 for details. 1040x form However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. 1040x form See Roth TSP balance , earlier. 1040x form    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. 1040x form   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. 1040x form If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. 1040x form See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. 1040x form However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. 1040x form See Roth TSP balance , earlier, for a discussion of those conditions. 1040x form Tax on early distributions. 1040x form   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. 1040x form However, this additional tax does not apply in certain situations, including any of the following. 1040x form You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. 1040x form You choose to receive your account balance in monthly payments based on your life expectancy. 1040x form You are totally and permanently disabled. 1040x form You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). 1040x form The earnings may be subject to the 10% tax depending on whether you met certain conditions. 1040x form See Roth TSP balance , earlier. 1040x form   For more information, see Tax on Early Distributions in Publication 575. 1040x form Outstanding loan. 1040x form   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. 1040x form The distribution also may be subject to the additional 10% tax on early distributions. 1040x form However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. 1040x form See Rollover Rules , later. 1040x form   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. 1040x form However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. 1040x form See Roth TSP balance , earlier. 1040x form More information. 1040x form   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. 1040x form Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). 1040x form    The above documents are also available on the TSP website at www. 1040x form tsp. 1040x form gov. 1040x form Select “Forms & Publications. 1040x form ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. 1040x form You do not include the amount rolled over in your income, and you cannot take a deduction for it. 1040x form The amount rolled over is taxed later as the new program pays that amount to you. 1040x form If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. 1040x form However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. 1040x form To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. 1040x form You can also roll over a distribution from a qualified retirement plan into a Roth IRA. 1040x form Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. 1040x form See Rollovers to Roth IRAs , later, for more information. 1040x form Qualified retirement plan. 1040x form   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. 1040x form The CSRS, FERS, and TSP are considered qualified retirement plans. 1040x form Distributions eligible for rollover treatment. 1040x form   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. 1040x form You cannot roll over any part of your CSRS or FERS annuity payments. 1040x form   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. 1040x form   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. 1040x form However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. 1040x form Direct rollover option. 1040x form   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. 1040x form   There is an automatic rollover requirement for mandatory distributions. 1040x form A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. 1040x form The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. 1040x form You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. 1040x form If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. 1040x form No tax withheld. 1040x form   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. 1040x form However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. 1040x form Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. 1040x form Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. 1040x form Payment to you option. 1040x form   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. 1040x form However, the full amount is treated as distributed to you even though you actually receive only 80%. 1040x form You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. 1040x form Rollovers to Roth IRAs are generally included in income. 1040x form Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. 1040x form If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. 1040x form However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). 1040x form Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. 1040x form See Roth TSP balance , earlier. 1040x form Also, see Tax on Early Distributions in Publication 575. 1040x form Exception to withholding. 1040x form   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. 1040x form Partial rollovers. 1040x form   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. 1040x form See Lump-Sum Distributions in Publication 575. 1040x form However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. 1040x form Rolling over more than amount received. 1040x form   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). 1040x form Example. 1040x form You left government service at age 53. 1040x form On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you