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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

Amend A 2012 Tax Return

1040x Free Software Downloads2010 1040ez FormsH&r Block Free State FilingFree EfileEasy Tax FormForm 1040x FillableTax Forms 2012 FederalIrs 2011 Tax Forms2011 Tax Filing DeadlineTurbo Tax 1040ez2010 1040ezCheap Tax SoftwareFree 2007 Tax FilingForm 1040x FillableHow To File An Amended Tax Return For 2013Tax Software 2011I Need To File 2012 TaxesFree H & R Block FilingWhere Can I Get A 2012 Tax FormH And R Block File FreeMyfreetax.comI Need To Amend My 2011 Taxes1040 Ez EfileAmendment1040ez Printable Tax Forms2013 Tax Form 1040xHow To Amend Last Year's TaxesHow To File An Amended Federal Tax Return1040ez Forms Download FreeIrs Forms For 20122011 Form 1040Free Tax Services Online2010 1040ez FormHow To Fill Out A 1040ez Tax FormE File Tax ReturnsCan You Refile Your TaxesFree TaxFile An Amended Tax ReturnRi 1040nrFree Electronic Federal Tax Filing

Amend A 2012 Tax Return

Amend a 2012 tax return 10. Amend a 2012 tax return   Retirement Plans, Pensions, and Annuities Table of Contents What's New Reminder IntroductionThe General Rule. Amend a 2012 tax return Individual retirement arrangements (IRAs). Amend a 2012 tax return Civil service retirement benefits. Amend a 2012 tax return Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. Amend a 2012 tax return How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. Amend a 2012 tax return Exclusion not limited to cost. Amend a 2012 tax return Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. Amend a 2012 tax return Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries What's New For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Amend a 2012 tax return However, these distributions are taken into account when determining the modified adjusted gross income threshold. Amend a 2012 tax return Distributions from a nonqualified retirement plan are included in net investment income. Amend a 2012 tax return See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Amend a 2012 tax return Reminder Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. Amend a 2012 tax return For more information, see Designated Roth accounts discussed later. Amend a 2012 tax return Introduction This chapter discusses the tax treatment of distributions you receive from: An employee pension or annuity from a qualified plan, A disability retirement, and A purchased commercial annuity. Amend a 2012 tax return What is not covered in this chapter. Amend a 2012 tax return   The following topics are not discussed in this chapter. Amend a 2012 tax return The General Rule. Amend a 2012 tax return   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). Amend a 2012 tax return For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. Amend a 2012 tax return For more information about the General Rule, see Publication 939, General Rule for Pensions and Annuities. Amend a 2012 tax return Individual retirement arrangements (IRAs). Amend a 2012 tax return   Information on the tax treatment of amounts you receive from an IRA is in chapter 17. Amend a 2012 tax return Civil service retirement benefits. Amend a 2012 tax return    If you are retired from the federal government (regular, phased, or disability retirement), see Publication 721, Tax Guide to U. Amend a 2012 tax return S. Amend a 2012 tax return Civil Service Retirement Benefits. Amend a 2012 tax return Publication 721 also covers the information that you need if you are the survivor or beneficiary of a federal employee or retiree who died. Amend a 2012 tax return Useful Items - You may want to see: Publication 575 Pension and Annuity Income 721 Tax Guide to U. Amend a 2012 tax return S. Amend a 2012 tax return Civil Service Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Amend a 2012 tax return 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts General Information Designated Roth accounts. Amend a 2012 tax return   A designated Roth account is a separate account created under a qualified Roth contribution program to which participants may elect to have part or all of their elective deferrals to a 401(k), 403(b), or 457(b) plan designated as Roth contributions. Amend a 2012 tax return Elective deferrals that are designated as Roth contributions are included in your income. Amend a 2012 tax return However, qualified distributions are not included in your income. Amend a 2012 tax return See Publication 575 for more information. Amend a 2012 tax return In-plan rollovers to designated Roth accounts. Amend a 2012 tax return   If you are a participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. Amend a 2012 tax return The rollover of any untaxed amounts must be included in income. Amend a 2012 tax return See Publication 575 for more information. Amend a 2012 tax return More than one program. Amend a 2012 tax return   If you receive benefits from more than one program under a single trust or plan of your employer, such as a pension plan and a profit-sharing plan, you may have to figure the taxable part of each pension or annuity contract separately. Amend a 2012 tax return Your former employer or the plan administrator should be able to tell you if you have more than one pension or annuity contract. Amend a 2012 tax return Section 457 deferred compensation plans. Amend a 2012 tax return    If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan. Amend a 2012 tax return If your plan is an eligible plan, you are not taxed currently on pay that is deferred under the plan or on any earnings from the plan's investment of the deferred pay. Amend a 2012 tax return You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. Amend a 2012 tax return You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. Amend a 2012 tax return   Your 457(b) plan may have a designated Roth account option. Amend a 2012 tax return If so, you may be able to roll over amounts to the designated Roth account or make contributions. Amend a 2012 tax return Elective deferrals to a designated Roth account are included in your income. Amend a 2012 tax return Qualified distributions from a designated Roth account are not subject to tax. Amend a 2012 tax return   This chapter covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. Amend a 2012 tax return For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525, Taxable and Nontaxable Income. Amend a 2012 tax return   For general information on these deferred compensation plans, see Section 457 Deferred Compensation Plans in Publication 575. Amend a 2012 tax return Disability pensions. Amend a 2012 tax return   If you retired on disability, you generally must include in income any disability pension you receive under a plan that is paid for by your employer. Amend a 2012 tax return You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. Amend a 2012 tax return Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Amend a 2012 tax return    You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Amend a 2012 tax return For information on the credit for the elderly or the disabled, see chapter 33. Amend a 2012 tax return   Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Amend a 2012 tax return Report the payments on Form 1040, lines 16a and 16b, or on Form 1040A, lines 12a and 12b. Amend a 2012 tax return    Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) are not included in income. Amend a 2012 tax return For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Amend a 2012 tax return   For more information on how to report disability pensions, including military and certain government disability pensions, see chapter 5. Amend a 2012 tax return Retired public safety officers. Amend a 2012 tax return   An eligible retired public safety officer can elect to exclude from income distributions of up to $3,000 made directly from a government retirement plan to the provider of accident, health, or long-term disability insurance. Amend a 2012 tax return See Insurance Premiums for Retired Public Safety Officers in Publication 575 for more information. Amend a 2012 tax return Railroad retirement benefits. Amend a 2012 tax return   Part of any railroad retirement benefits you receive is treated for tax purposes as social security benefits, and part is treated as an employee pension. Amend a 2012 tax return For information about railroad retirement benefits treated as social security benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Amend a 2012 tax return For information about railroad retirement benefits treated as an employee pension, see Railroad Retirement Benefits in Publication 575. Amend a 2012 tax return Withholding and estimated tax. Amend a 2012 tax return   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable parts of amounts paid to you. Amend a 2012 tax return You can tell the payer how much to withhold, or not to withhold, by filing Form W-4P. Amend a 2012 tax return If you choose not to have tax withheld, or you do not have enough tax withheld, you may have to pay estimated tax. Amend a 2012 tax return   If you receive an eligible rollover distribution, you cannot choose not to have tax withheld. Amend a 2012 tax return Generally, 20% will be withheld, but no tax will be withheld on a direct rollover of an eligible rollover distribution. Amend a 2012 tax return See Direct rollover option under Rollovers, later. Amend a 2012 tax return   For more information, see Pensions and Annuities under Tax Withholding for 2014 in chapter 4. Amend a 2012 tax return Qualified plans for self-employed individuals. Amend a 2012 tax return   Qualified plans set up by self-employed individuals are sometimes called Keogh or H. Amend a 2012 tax return R. Amend a 2012 tax return 10 plans. Amend a 2012 tax return Qualified plans can be set up by sole proprietors, partnerships (but not a partner), and corporations. Amend a 2012 tax return They can cover self-employed persons, such as the sole proprietor or partners, as well as regular (common-law) employees. Amend a 2012 tax return    Distributions from a qualified plan are usually fully taxable because most recipients have no cost basis. Amend a 2012 tax return If you have an investment (cost) in the plan, however, your pension or annuity payments from a qualified plan are taxed under the Simplified Method. Amend a 2012 tax return For more information about qualified plans, see Publication 560, Retirement Plans for Small Business. Amend a 2012 tax return Purchased annuities. Amend a 2012 tax return   If you receive pension or annuity payments from a privately purchased annuity contract from a commercial organization, such as an insurance company, you generally must use the General Rule to figure the tax-free part of each annuity payment. Amend a 2012 tax return For more information about the General Rule, get Publication 939. Amend a 2012 tax return Also, see Variable Annuities in Publication 575 for the special provisions that apply to these annuity contracts. Amend a 2012 tax return Loans. Amend a 2012 tax return   If you borrow money from your retirement plan, you must treat the loan as a nonperiodic distribution from the plan unless certain exceptions apply. Amend a 2012 tax return This treatment also applies to any loan under a contract purchased under your retirement plan, and to the value of any part of your interest in the plan or contract that you pledge or assign. Amend a 2012 tax return This means that you must include in income all or part of the amount borrowed. Amend a 2012 tax return Even if you do not have to treat the loan as a nonperiodic distribution, you may not be able to deduct the interest on the loan in some situations. Amend a 2012 tax return For details, see Loans Treated as Distributions in Publication 575. Amend a 2012 tax return For information on the deductibility of interest, see chapter 23. Amend a 2012 tax return Tax-free exchange. Amend a 2012 tax return   No gain or loss is recognized on an exchange of an annuity contract for another annuity contract if the insured or annuitant remains the same. Amend a 2012 tax return However, if an annuity contract is exchanged for a life insurance or endowment contract, any gain due to interest accumulated on the contract is ordinary income. Amend a 2012 tax return See Transfers of Annuity Contracts in Publication 575 for more information about exchanges of annuity contracts. Amend a 2012 tax return How To Report If you file Form 1040, report your total annuity on line 16a and the taxable part on line 16b. Amend a 2012 tax return If your pension or annuity is fully taxable, enter it on line 16b; do not make an entry on line 16a. Amend a 2012 tax return If you file Form 1040A, report your total annuity on line 12a and the taxable part on line 12b. Amend a 2012 tax return If your pension or annuity is fully taxable, enter it on line 12b; do not make an entry on line 12a. Amend a 2012 tax return More than one annuity. Amend a 2012 tax return   If you receive more than one annuity and at least one of them is not fully taxable, enter the total amount received from all annuities on Form 1040, line 16a, or Form 1040A, line 12a, and enter the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. Amend a 2012 tax return If all the annuities you receive are fully taxable, enter the total of all of them on Form 1040, line 16b, or Form 1040A, line 12b. Amend a 2012 tax return Joint return. Amend a 2012 tax return   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on Form 1040, line 16a, or Form 1040A, line 12a, and report the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. Amend a 2012 tax return Cost (Investment in the Contract) Before you can figure how much, if any, of a distribution from your pension or annuity plan is taxable, you must determine your cost (your investment in the contract) in the pension or annuity. Amend a 2012 tax return Your total cost in the plan includes the total premiums, contributions, or other amounts you paid. Amend a 2012 tax return This includes the amounts your employer contributed that were taxable to you when paid. Amend a 2012 tax return Cost does not include any amounts you deducted or were excluded from your income. Amend a 2012 tax return From this total cost, subtract any refunds of premiums, rebates, dividends, unrepaid loans that were not included in your income, or other tax-free amounts that you received by the later of the annuity starting date or the date on which you received your first payment. Amend a 2012 tax return Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. Amend a 2012 tax return Designated Roth accounts. Amend a 2012 tax return   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. Amend a 2012 tax return Your cost will also include any in-plan Roth rollovers you included in income. Amend a 2012 tax return Foreign employment contributions. Amend a 2012 tax return   If you worked in a foreign country and contributions were made to your retirement plan, special rules apply in determining your cost. Amend a 2012 tax return See Foreign employment contributions under Cost (Investment in the Contract) in Publication 575. Amend a 2012 tax return Taxation of Periodic Payments Fully taxable payments. Amend a 2012 tax return   Generally, if you did not pay any part of the cost of your employee pension or annuity and your employer did not withhold part of the cost from your pay while you worked, the amounts you receive each year are fully taxable. Amend a 2012 tax return You must report them on your income tax return. Amend a 2012 tax return Partly taxable payments. Amend a 2012 tax return   If you paid part of the cost of your pension or annuity, you are not taxed on the part of the pension or annuity you receive that represents a return of your cost. Amend a 2012 tax return The rest of the amount you receive is generally taxable. Amend a 2012 tax return You figure the tax-free part of the payment using either the Simplified Method or the General Rule. Amend a 2012 tax return Your annuity starting date and whether or not your plan is qualified determine which method you must or may use. Amend a 2012 tax return   If your annuity starting date is after November 18, 1996, and your payments are from a qualified plan, you must use the Simplified Method. Amend a 2012 tax return Generally, you must use the General Rule if your annuity is paid under a nonqualified plan, and you cannot use this method if your annuity is paid under a qualified plan. Amend a 2012 tax return   If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. Amend a 2012 tax return   If your annuity is paid under a qualified plan and 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. Amend a 2012 tax return Exclusion limit. Amend a 2012 tax return   Your annuity starting date determines the total amount of annuity payments that you can exclude from your taxable income over the years. Amend a 2012 tax return Once your annuity starting date is determined, it does not change. Amend a 2012 tax return If you calculate the taxable portion of your annuity payments using the simplified method worksheet, the annuity starting date determines the recovery period for your cost. Amend a 2012 tax return That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. Amend a 2012 tax return Exclusion limited to cost. Amend a 2012 tax return   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. Amend a 2012 tax return Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. Amend a 2012 tax return This deduction is not subject to the 2%-of-adjusted-gross-income limit. Amend a 2012 tax return Exclusion not limited to cost. Amend a 2012 tax return   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Amend a 2012 tax return If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. Amend a 2012 tax return The total exclusion may be more than your cost. Amend a 2012 tax return Simplified Method Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. Amend a 2012 tax return For an annuity that is payable for the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Amend a 2012 tax return For any other annuity, this number is the number of monthly annuity payments under the contract. Amend a 2012 tax return Who must use the Simplified Method. Amend a 2012 tax return   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you both: Receive pension or annuity payments from a qualified employee plan, qualified employee annuity, or a tax-sheltered annuity (403(b)) plan, and On your annuity starting date, you were either under age 75, or entitled to less than 5 years of guaranteed payments. Amend a 2012 tax return Guaranteed payments. Amend a 2012 tax return   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. Amend a 2012 tax return If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. Amend a 2012 tax return How to use the Simplified Method. Amend a 2012 tax return    Complete the Simplified Method Worksheet in Publication 575 to figure your taxable annuity for 2013. Amend a 2012 tax return Single-life annuity. Amend a 2012 tax return    If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. Amend a 2012 tax return Enter on line 3 the number shown for your age at the annuity starting date. Amend a 2012 tax return Multiple-lives annuity. Amend a 2012 tax return   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. Amend a 2012 tax return Enter on line 3 the number shown for the combined ages of you and the youngest survivor annuitant at the annuity starting date. Amend a 2012 tax return   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Amend a 2012 tax return Instead you must use Table 1 and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. Amend a 2012 tax return    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity next year. Amend a 2012 tax return Example. Amend a 2012 tax return Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. Amend a 2012 tax return Bill's annuity starting date is January 1, 2013. Amend a 2012 tax return The benefits are to be paid for the joint lives of Bill and his wife Kathy, age 65. Amend a 2012 tax return Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Amend a 2012 tax return Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. Amend a 2012 tax return Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. Amend a 2012 tax return Because his annuity is payable over the lives of more than one annuitant, he uses his and Kathy's combined ages and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet. Amend a 2012 tax return His completed worksheet is shown in Worksheet 10-A. Amend a 2012 tax return Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. Amend a 2012 tax return Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Amend a 2012 tax return The full amount of any annuity payments received after 310 payments are paid must be included in gross income. Amend a 2012 tax return If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. Amend a 2012 tax return This deduction is not subject to the 2%-of-adjusted- gross-income limit. Amend a 2012 tax return Worksheet 10-A. Amend a 2012 tax return Simplified Method Worksheet for Bill Smith 1. Amend a 2012 tax return Enter the total pension or annuity payments received this year. Amend a 2012 tax return Also, add this amount to the total for Form 1040, line 16a, or Form 1040A, line 12a 1. Amend a 2012 tax return 14,400 2. Amend a 2012 tax return Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion*. Amend a 2012 tax return See Cost (Investment in the Contract) , earlier 2. Amend a 2012 tax return 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). Amend a 2012 tax return Otherwise, go to line 3. Amend a 2012 tax return         3. Amend a 2012 tax return Enter the appropriate number from Table 1 below. Amend a 2012 tax return 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 3. Amend a 2012 tax return 310     4. Amend a 2012 tax return Divide line 2 by the number on line 3 4. Amend a 2012 tax return 100     5. Amend a 2012 tax return Multiply line 4 by the number of months for which this year's payments were made. Amend a 2012 tax return If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Amend a 2012 tax return Otherwise, go to line 6 5. Amend a 2012 tax return 1,200     6. Amend a 2012 tax return Enter any amounts previously recovered tax free in years after 1986. Amend a 2012 tax return This is the amount shown on line 10 of your worksheet for last year 6. Amend a 2012 tax return -0-     7. Amend a 2012 tax return Subtract line 6 from line 2 7. Amend a 2012 tax return 31,000     8. Amend a 2012 tax return Enter the smaller of line 5 or line 7 8. Amend a 2012 tax return 1,200 9. Amend a 2012 tax return Taxable amount for year. Amend a 2012 tax return Subtract line 8 from line 1. Amend a 2012 tax return Enter the result, but not less than zero. Amend a 2012 tax return Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b 9. Amend a 2012 tax return 13,200   Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Amend a 2012 tax return If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers in Publication 575 before entering an amount on your tax return. Amend a 2012 tax return     10. Amend a 2012 tax return Was your annuity starting date before 1987? □ Yes. Amend a 2012 tax return STOP. Amend a 2012 tax return Do not complete the rest of this worksheet. Amend a 2012 tax return  ☑ No. Amend a 2012 tax return Add lines 6 and 8. Amend a 2012 tax return This is the amount you have recovered tax free through 2013. Amend a 2012 tax return You will need this number if you need to fill out this worksheet next year 10. Amend a 2012 tax return 1,200 11. Amend a 2012 tax return Balance of cost to be recovered. Amend a 2012 tax return Subtract line 10 from line 2. Amend a 2012 tax return If zero, you will not have to complete this worksheet next year. Amend a 2012 tax return The payments you receive next year will generally be fully taxable 11. Amend a 2012 tax return 29,800 TABLE 1 FOR LINE 3 ABOVE   AND your annuity starting date was— IF the age at annuity starting date was. Amend a 2012 tax return . Amend a 2012 tax return . Amend a 2012 tax return before November 19, 1996, enter on line 3. Amend a 2012 tax return . Amend a 2012 tax return . Amend a 2012 tax return after November 18, 1996, enter on line 3. Amend a 2012 tax return . Amend a 2012 tax return . Amend a 2012 tax return 55 or under 300 360 56–60 260 310 61–65 240 260 66–70 170 210 71 or older 120 160 TABLE 2 FOR LINE 3 ABOVE IF the combined ages at annuity starting date were. Amend a 2012 tax return . Amend a 2012 tax return . Amend a 2012 tax return   THEN enter on line 3. Amend a 2012 tax return . Amend a 2012 tax return . Amend a 2012 tax return 110 or under   410 111–120   360 121–130   310 131–140   260 141 or older   210 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Amend a 2012 tax return Who must use the General Rule. Amend a 2012 tax return   You must use the General Rule if you receive pension or annuity payments from: A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or A qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years. Amend a 2012 tax return Annuity starting before November 19, 1996. Amend a 2012 tax return   If your annuity starting date is after July 1, 1986, and before November 19, 1996, you had to use the General Rule for either circumstance just described. Amend a 2012 tax return You also had to use it for any fixed-period annuity. Amend a 2012 tax return If you did not have to use the General Rule, you could have chosen to use it. Amend a 2012 tax return If your annuity starting date is before July 2, 1986, you had to use the General Rule unless you could use the Three-Year Rule. Amend a 2012 tax return   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. Amend a 2012 tax return Who cannot use the General Rule. Amend a 2012 tax return   You cannot use the General Rule if you receive your pension or annuity from a qualified plan and none of the circumstances described in the preceding discussions apply to you. Amend a 2012 tax return See Who must use the Simplified Method , earlier. Amend a 2012 tax return More information. Amend a 2012 tax return   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. Amend a 2012 tax return Taxation of Nonperiodic Payments Nonperiodic distributions are also known as amounts not received as an annuity. Amend a 2012 tax return They include all payments other than periodic payments and corrective distributions. Amend a 2012 tax return Examples of nonperiodic payments are cash withdrawals, distributions of current earnings, certain loans, and the value of annuity contracts transferred without full and adequate consideration. Amend a 2012 tax return Corrective distributions of excess plan contributions. Amend a 2012 tax return   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. Amend a 2012 tax return To correct an excess, your plan may distribute it to you (along with any income earned on the excess). Amend a 2012 tax return For information on plan contribution limits and how to report corrective distributions of excess contributions, see Retirement Plan Contributions under Employee Compensation in Publication 525. Amend a 2012 tax return Figuring the taxable amount of nonperiodic payments. Amend a 2012 tax return   How you figure the taxable amount of a nonperiodic distribution depends on whether it is made before the annuity starting date, or on or after the annuity starting date. Amend a 2012 tax return If it is made before the annuity starting date, its tax treatment also depends on whether it is made under a qualified or nonqualified plan. Amend a 2012 tax return If it is made under a nonqualified plan, its tax treatment depends on whether it fully discharges the contract, is received under certain life insurance or endowment contracts, or is allocable to an investment you made before August 14, 1982. Amend a 2012 tax return Annuity starting date. Amend a 2012 tax return   The annuity starting date is either the first day of the first period for which you receive an annuity payment under the contract or the date on which the obligation under the contract becomes fixed, whichever is later. Amend a 2012 tax return Distribution on or after annuity starting date. Amend a 2012 tax return   If you receive a nonperiodic payment from your annuity contract on or after the annuity starting date, you generally must include all of the payment in gross income. Amend a 2012 tax return Distribution before annuity starting date. Amend a 2012 tax return   If you receive a nonperiodic distribution before the annuity starting date from a qualified retirement plan, you generally can allocate only part of it to the cost of the contract. Amend a 2012 tax return You exclude from your gross income the part that you allocate to the cost. Amend a 2012 tax return You include the remainder in your gross income. Amend a 2012 tax return   If you receive a nonperiodic distribution before the annuity starting date from a plan other than a qualified retirement plan (nonqualified plan), it is allocated first to earnings (the taxable part) and then to the cost of the contract (the tax-free part). Amend a 2012 tax return This allocation rule applies, for example, to a commercial annuity contract you bought directly from the issuer. Amend a 2012 tax return    Distributions from nonqualified plans are subject to the net investment income tax. Amend a 2012 tax return See the Instructions for Form 8960. Amend a 2012 tax return   For more information, see Figuring the Taxable Amount under Taxation of Nonperiodic Payments in Publication 575. Amend a 2012 tax return Lump-Sum Distributions This section on lump-sum distributions only applies if the plan participant was born before January 2, 1936. Amend a 2012 tax return If the plan participant was born after January 1, 1936, the taxable amount of this nonperiodic payment is reported as discussed earlier. Amend a 2012 tax return A lump-sum distribution is the distribution or payment in one tax year of a plan participant's entire balance from all of the employer's qualified plans of one kind (for example, pension, profit-sharing, or stock bonus plans). Amend a 2012 tax return A distribution from a nonqualified plan (such as a privately purchased commercial annuity or a section 457 deferred compensation plan of a state or local government or tax-exempt organization) cannot qualify as a lump-sum distribution. Amend a 2012 tax return The participant's entire balance from a plan does not include certain forfeited amounts. Amend a 2012 tax return It also does not include any deductible voluntary employee contributions allowed by the plan after 1981 and before 1987. Amend a 2012 tax return For more information about distributions that do not qualify as lump-sum distributions, see Distributions that do not qualify under Lump-Sum Distributions in Publication 575. Amend a 2012 tax return If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. Amend a 2012 tax return The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. Amend a 2012 tax return The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. Amend a 2012 tax return You may be able to use the 10-year tax option, discussed later, to figure tax on the ordinary income part. Amend a 2012 tax return Use Form 4972 to figure the separate tax on a lump-sum distribution using the optional methods. Amend a 2012 tax return The tax figured on Form 4972 is added to the regular tax figured on your other income. Amend a 2012 tax return This may result in a smaller tax than you would pay by including the taxable amount of the distribution as ordinary income in figuring your regular tax. Amend a 2012 tax return How to treat the distribution. Amend a 2012 tax return   If you receive a lump-sum distribution, you may have the following options for how you treat the taxable part. Amend a 2012 tax return Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and the part from participation after 1973 as ordinary income. Amend a 2012 tax return Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and use the 10-year tax option to figure the tax on the part from participation after 1973 (if you qualify). Amend a 2012 tax return Use the 10-year tax option to figure the tax on the total taxable amount (if you qualify). Amend a 2012 tax return Roll over all or part of the distribution. Amend a 2012 tax return See Rollovers , later. Amend a 2012 tax return No tax is currently due on the part rolled over. Amend a 2012 tax return Report any part not rolled over as ordinary income. Amend a 2012 tax return Report the entire taxable part of the distribution as ordinary income on your tax return. Amend a 2012 tax return   The first three options are explained in the following discussions. Amend a 2012 tax return Electing optional lump-sum treatment. Amend a 2012 tax return   You can choose to use the 10-year tax option or capital gain treatment only once after 1986 for any plan participant. Amend a 2012 tax return If you make this choice, you cannot use either of these optional treatments for any future distributions for the participant. Amend a 2012 tax return Taxable and tax-free parts of the distribution. Amend a 2012 tax return    The taxable part of a lump-sum distribution is the employer's contributions and income earned on your account. Amend a 2012 tax return You may recover your cost in the lump sum and any net unrealized appreciation (NUA) in employer securities tax free. Amend a 2012 tax return Cost. Amend a 2012 tax return   In general, your cost is the total of: The plan participant's nondeductible contributions to the plan, The plan participant's taxable costs of any life insurance contract distributed, Any employer contributions that were taxable to the plan participant, and Repayments of any loans that were taxable to the plan participant. Amend a 2012 tax return You must reduce this cost by amounts previously distributed tax free. Amend a 2012 tax return Net unrealized appreciation (NUA). Amend a 2012 tax return   The NUA in employer securities (box 6 of Form 1099-R) received as part of a lump-sum distribution is generally tax free until you sell or exchange the securities. Amend a 2012 tax return (For more information, see Distributions of employer securities under Taxation of Nonperiodic Payments in Publication 575. Amend a 2012 tax return ) Capital Gain Treatment Capital gain treatment applies only to the taxable part of a lump-sum distribution resulting from participation in the plan before 1974. Amend a 2012 tax return The amount treated as capital gain is taxed at a 20% rate. Amend a 2012 tax return You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. Amend a 2012 tax return Complete Part II of Form 4972 to choose the 20% capital gain election. Amend a 2012 tax return For more information, see Capital Gain Treatment under Lump-Sum Distributions in Publication 575. Amend a 2012 tax return 10-Year Tax Option The 10-year tax option is a special formula used to figure a separate tax on the ordinary income part of a lump-sum distribution. Amend a 2012 tax return You pay the tax only once, for the year in which you receive the distribution, not over the next 10 years. Amend a 2012 tax return You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. Amend a 2012 tax return The ordinary income part of the distribution is the amount shown in box 2a of the Form 1099-R given to you by the payer, minus the amount, if any, shown in box 3. Amend a 2012 tax return You also can treat the capital gain part of the distribution (box 3 of Form 1099-R) as ordinary income for the 10-year tax option if you do not choose capital gain treatment for that part. Amend a 2012 tax return Complete Part III of Form 4972 to choose the 10-year tax option. Amend a 2012 tax return You must use the special Tax Rate Schedule shown in the instructions for Part III to figure the tax. Amend a 2012 tax return Publication 575 illustrates how to complete Form 4972 to figure the separate tax. Amend a 2012 tax return Rollovers If you withdraw cash or other assets from a qualified retirement plan in an eligible rollover distribution, you can defer tax on the distribution by rolling it over to another qualified retirement plan or a traditional IRA. Amend a 2012 tax return For this purpose, the following plans are qualified retirement plans. Amend a 2012 tax return A qualified employee plan. Amend a 2012 tax return A qualified employee annuity. Amend a 2012 tax return A tax-sheltered annuity plan (403(b) plan). Amend a 2012 tax return An eligible state or local government section 457 deferred compensation plan. Amend a 2012 tax return Eligible rollover distributions. Amend a 2012 tax return   Generally, an eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan. Amend a 2012 tax return For information about exceptions to eligible rollover distributions, see Publication 575. Amend a 2012 tax return Rollover of nontaxable amounts. Amend a 2012 tax return   You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another qualified retirement plan that is a qualified employee plan or a 403(b) plan, or to a traditional or Roth IRA. Amend a 2012 tax return The transfer must be made either through a direct rollover to a qualified plan or 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional or Roth IRA. Amend a 2012 tax return   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. Amend a 2012 tax return   Any after-tax contributions that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Amend a 2012 tax return To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Amend a 2012 tax return For more information, see the Form 8606 instructions. Amend a 2012 tax return Direct rollover option. Amend a 2012 tax return   You can choose to have any part or all of an eligible rollover distribution paid directly to another qualified retirement plan that accepts rollover distributions or to a traditional or Roth IRA. Amend a 2012 tax return 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. Amend a 2012 tax return Payment to you option. Amend a 2012 tax return   If an eligible rollover distribution is paid to you, 20% generally will be withheld for income tax. Amend a 2012 tax return However, the full amount is treated as distributed to you even though you actually receive only 80%. Amend a 2012 tax return 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 or Roth IRA. Amend a 2012 tax return (See Pensions and Annuities under Tax Withholding for 2014 in chapter 4. Amend a 2012 tax return )    If you decide to roll over an amount equal to the distribution before withholding, your contribution to the new plan or IRA must include other money (for example, from savings or amounts borrowed) to replace the amount withheld. Amend a 2012 tax return Time for making rollover. Amend a 2012 tax return   You generally must complete the rollover of an eligible rollover distribution paid to you by the 60th day following the day on which you receive the distribution from your employer's plan. Amend a 2012 tax return (If an amount distributed to you becomes a frozen deposit in a financial institution during the 60-day period after you receive it, the rollover period is extended for the period during which the distribution is in a frozen deposit in a financial institution. Amend a 2012 tax return )   The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. Amend a 2012 tax return   The administrator of a qualified plan must give you a written explanation of your distribution options within a reasonable period of time before making an eligible rollover distribution. Amend a 2012 tax return Qualified domestic relations order (QDRO). Amend a 2012 tax return   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan that you receive under a QDRO. Amend a 2012 tax return If you receive the distribution as an employee's spouse or former spouse (not as a nonspousal beneficiary), the rollover rules apply to you as if you were the employee. Amend a 2012 tax return You can roll over the distribution from the plan into a traditional IRA or to another eligible retirement plan. Amend a 2012 tax return See Rollovers in Publication 575 for more information on benefits received under a QDRO. Amend a 2012 tax return Rollover by surviving spouse. Amend a 2012 tax return   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan you receive as the surviving spouse of a deceased employee. Amend a 2012 tax return The rollover rules apply to you as if you were the employee. Amend a 2012 tax return You can roll over a distribution into a qualified retirement plan or a traditional or Roth IRA. Amend a 2012 tax return For a rollover to a Roth IRA, see Rollovers to Roth IRAs , later. Amend a 2012 tax return    A distribution paid to a beneficiary other than the employee's surviving spouse is generally not an eligible rollover distribution. Amend a 2012 tax return However, see Rollovers by nonspouse beneficiary next. Amend a 2012 tax return Rollovers by nonspouse beneficiary. Amend a 2012 tax return   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you may be able to roll over tax free all or a portion of a distribution you receive from an eligible retirement plan of the employee. Amend a 2012 tax return The distribution must be a direct trustee-to-trustee transfer to your traditional or Roth IRA that was set up to receive the distribution. Amend a 2012 tax return The transfer will be treated as an eligible rollover distribution and the receiving plan will be treated as an inherited IRA. Amend a 2012 tax return For information on inherited IRAs, see What if You Inherit an IRA? in chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs). Amend a 2012 tax return Retirement bonds. Amend a 2012 tax return   If you redeem retirement bonds purchased under a qualified bond purchase plan, you can roll over the proceeds that exceed your basis tax free into an IRA (as discussed in Publication 590) or a qualified employer plan. Amend a 2012 tax return Designated Roth accounts. Amend a 2012 tax return   You can roll over an eligible rollover distribution from a designated Roth account into another designated Roth account or a Roth IRA. Amend a 2012 tax return If you want to roll over the part of the distribution that is not included in income, you must make a direct rollover of the entire distribution or you can roll over the entire amount (or any portion) to a Roth IRA. Amend a 2012 tax return For more information on rollovers from designated Roth accounts, see Rollovers in Publication 575. Amend a 2012 tax return In-plan rollovers to designated Roth accounts. Amend a 2012 tax return   If you are a plan participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. Amend a 2012 tax return The rollover of any untaxed amounts must be included in income. Amend a 2012 tax return See Designated Roth accounts under Rollovers in Publication 575 for more information. Amend a 2012 tax return Rollovers to Roth IRAs. Amend a 2012 tax return   You can roll over distributions directly from a qualified retirement plan (other than a designated Roth account) to a Roth IRA. Amend a 2012 tax return   You must include in your gross income distributions from a qualified retirement plan (other than a designated Roth account) that you would have had to include in income if you had not rolled them over into a Roth IRA. Amend a 2012 tax return You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions to the plan that were taxable to you when paid. Amend a 2012 tax return In addition, the 10% tax on early distributions does not apply. Amend a 2012 tax return More information. Amend a 2012 tax return   For more information on the rules for rolling over distributions, see Rollovers in Publication 575. Amend a 2012 tax return Special Additional Taxes To discourage the use of pension funds for purposes other than normal retirement, the law imposes additional taxes on early distributions of those funds and on failures to withdraw the funds timely. Amend a 2012 tax return Ordinarily, you will not be subject to these taxes if you roll over all early distributions you receive, as explained earlier, and begin drawing out the funds at a normal retirement age, in reasonable amounts over your life expectancy. Amend a 2012 tax return These special additional taxes are the taxes on: Early distributions, and Excess accumulation (not receiving minimum distributions). Amend a 2012 tax return These taxes are discussed in the following sections. Amend a 2012 tax return If you must pay either of these taxes, report them on Form 5329. Amend a 2012 tax return However, you do not have to file Form 5329 if you owe only the tax on early distributions and your Form 1099-R correctly shows a “1” in box 7. Amend a 2012 tax return Instead, enter 10% of the taxable part of the distribution on Form 1040, line 58 and write “No” under the heading “Other Taxes” to the left of line 58. Amend a 2012 tax return Even if you do not owe any of these taxes, you may have to complete Form 5329 and attach it to your Form 1040. Amend a 2012 tax return This applies if you meet an exception to the tax on early distributions but box 7 of your Form 1099-R does not indicate an exception. Amend a 2012 tax return Tax on Early Distributions Most distributions (both periodic and nonperiodic) from qualified retirement plans and nonqualified annuity contracts made to you before you reach age 59½ are subject to an additional tax of 10%. Amend a 2012 tax return This tax applies to the part of the distribution that you must include in gross income. Amend a 2012 tax return For this purpose, a qualified retirement plan is: A qualified employee plan, A qualified employee annuity plan, A tax-sheltered annuity plan, or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). Amend a 2012 tax return 5% rate on certain early distributions from deferred annuity contracts. Amend a 2012 tax return   If an early withdrawal from a deferred annuity is otherwise subject to the 10% additional tax, a 5% rate may apply instead. Amend a 2012 tax return A 5% rate applies to distributions under a written election providing a specific schedule for the distribution of your interest in the contract if, as of March 1, 1986, you had begun receiving payments under the election. Amend a 2012 tax return On line 4 of Form 5329, multiply the line 3 amount by 5% instead of 10%. Amend a 2012 tax return Attach an explanation to your return. Amend a 2012 tax return Distributions from Roth IRAs allocable to a rollover from an eligible retirement plan within the 5-year period. Amend a 2012 tax return   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from an eligible retirement plan to a Roth IRA, you take a distribution from the Roth IRA, you may have to pay the additional 10% tax on early distributions. Amend a 2012 tax return You generally must pay the 10% additional tax on any amount attributable to the part of the rollover that you had to include in income. Amend a 2012 tax return The additional tax is figured on Form 5329. Amend a 2012 tax return For more information, see Form 5329 and its instructions. Amend a 2012 tax return For information on qualified distributions from Roth IRAs, see Additional Tax on Early Distributions in chapter 2 of Publication 590. Amend a 2012 tax return Distributions from designated Roth accounts allocable to in-plan Roth rollovers within the 5-year period. Amend a 2012 tax return   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from a 401(k), 403(b), or 457(b) plan to a designated Roth account, you take a distribution from the designated Roth account, you may have to pay the additional 10% tax on early distributions. Amend a 2012 tax return You generally must pay the 10% additional tax on any amount attributable to the part of the in-plan rollover that you had to include in income. Amend a 2012 tax return The additional tax is figured on Form 5329. Amend a 2012 tax return For more information, see Form 5329 and its instructions. Amend a 2012 tax return For information on qualified distributions from designated Roth accounts, see Designated Roth accounts under Taxation of Periodic Payments in Publication 575. Amend a 2012 tax return Exceptions to tax. Amend a 2012 tax return    Certain early distributions are excepted from the early distribution tax. Amend a 2012 tax return If the payer knows that an exception applies to your early distribution, distribution code “2,” “3,” or “4” should be shown in box 7 of your Form 1099-R and you do not have to report the distribution on Form 5329. Amend a 2012 tax return If an exception applies but distribution code “1” (early distribution, no known exception) is shown in box 7, you must file Form 5329. Amend a 2012 tax return Enter the taxable amount of the distribution shown in box 2a of your Form 1099-R on line 1 of Form 5329. Amend a 2012 tax return On line 2, enter the amount that can be excluded and the exception number shown in the Form 5329 instructions. Amend a 2012 tax return    If distribution code “1” is incorrectly shown on your Form 1099-R for a distribution received when you were age 59½ or older, include that distribution on Form 5329. Amend a 2012 tax return Enter exception number “12” on line 2. Amend a 2012 tax return General exceptions. Amend a 2012 tax return   The tax does not apply to distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after your separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. Amend a 2012 tax return Additional exceptions for qualified retirement plans. Amend a 2012 tax return   The tax does not apply to distributions that are: From a qualified retirement plan (other than an IRA) after your separation from service in or after the year you reached age 55 (age 50 for qualified public safety employees), From a qualified retirement plan (other than an IRA) to an alternate payee under a qualified domestic relations order, From a qualified retirement plan to the extent you have deductible medical expenses that exceed 10% (or 7. Amend a 2012 tax return 5% if you or your spouse are age 65 or older) of your adjusted gross income, whether or not you itemize your deductions for the year, From an employer plan under a written election that provides a specific schedule for distribution of your entire interest if, as of March 1, 1986, you had separated from service and had begun receiving payments under the election, From an employee stock ownership plan for dividends on employer securities held by the plan, From a qualified retirement plan due to an IRS levy of the plan, From elective deferral accounts under 401(k) or 403(b) plans or similar arrangements that are qualified reservist distributions, or Phased retirement annuity payments made to federal employees. Amend a 2012 tax return See Pub. Amend a 2012 tax return 721 for more information on the phased retirement program. Amend a 2012 tax return Qualified public safety employees. Amend a 2012 tax return   If you are a qualified public safety employee, distributions made from a governmental defined benefit pension plan are not subject to the additional tax on early distributions. Amend a 2012 tax return You are a qualified public safety employee if you provide police protection, firefighting services, or emergency medical services for a state or municipality, and you separated from service in or after the year you attained age 50. Amend a 2012 tax return Qualified reservist distributions. Amend a 2012 tax return   A qualified reservist distribution is not subject to the additional tax on early distributions. Amend a 2012 tax return A qualified reservist distribution is a distribution (a) from elective deferrals under a section 401(k) or 403(b) plan, or a similar arrangement, (b) to an individual ordered or called to active duty (because he or she is a member of a reserve component) for a period of more than 179 days or for an indefinite period, and (c) made during the period beginning on the date of the order or call and ending at the close of the active duty period. Amend a 2012 tax return You must have been ordered or called to active duty after September 11, 2001. Amend a 2012 tax return For more information, see Qualified reservist distributions under Special Additional Taxes in Publication 575. Amend a 2012 tax return Additional exceptions for nonqualified annuity contracts. Amend a 2012 tax return   The tax does not apply to distributions from: A deferred annuity contract to the extent allocable to investment in the contract before August 14, 1982, A deferred annuity contract under a qualified personal injury settlement, A deferred annuity contract purchased by your employer upon termination of a qualified employee plan or qualified employee annuity plan and held by your employer until your separation from service, or An immediate annuity contract (a single premium contract providing substantially equal annuity payments that start within 1 year from the date of purchase and are paid at least annually). Amend a 2012 tax return Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date (defined later). Amend a 2012 tax return The payments each year cannot be less than the required minimum distribution. Amend a 2012 tax return Required distributions not made. Amend a 2012 tax return   If the actual distributions to you in any year are less than the minimum required distribution for that year, you are subject to an additional tax. Amend a 2012 tax return The tax equals 50% of the part of the required minimum distribution that was not distributed. Amend a 2012 tax return   For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan)(for benefits accruing after 1986). Amend a 2012 tax return Waiver. Amend a 2012 tax return   The tax may be waived if you establish that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. Amend a 2012 tax return See the Instructions for Form 5329 for the procedure to follow if you believe you qualify for a waiver of this tax. Amend a 2012 tax return State insurer delinquency proceedings. Amend a 2012 tax return   You might not receive the minimum distribution because assets are invested in a contract issued by an insurance company in state insurer delinquency proceedings. Amend a 2012 tax return If your payments are reduced below the minimum due to these proceedings, you should contact your plan administrator. Amend a 2012 tax return Under certain conditions, you will not have to pay the 50% excise tax. Amend a 2012 tax return Required beginning date. Amend a 2012 tax return   Unless the rule for 5% owners applies, you generally must begin to receive distributions from your qualified retirement plan by April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. Amend a 2012 tax return However, your plan may require you to begin to receive distributions by April 1 of the year that follows the year in which you reach age 70½, even if you have not retired. Amend a 2012 tax return   If you reached age 70½ in 2013, you may be required to receive your first distribution by April 1, 2014. Amend a 2012 tax return Your required distribution then must be made for 2014 by December 31, 2014. Amend a 2012 tax return 5% owners. Amend a 2012 tax return   If you are a 5% owner, you must begin to receive distributions by April 1 of the year that follows the calendar year in which you reach age 70½. Amend a 2012 tax return   You are a 5% owner if, for the plan year ending in the calendar year in which you reach age 70½, you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the outstanding stock (or more than 5% of the total voting power of all stock) of the employer, or more than 5% of the capital or profits interest in the employer. Amend a 2012 tax return Age 70½. Amend a 2012 tax return   You reach age 70½ on the date that is 6 calendar months after the date of your 70th birthday. Amend a 2012 tax return   For example, if you are retired and your 70th birthday was on June 30, 2013, you were age 70½ on December 30, 2013. Amend a 2012 tax return If your 70th birthday was on July 1, 2013, you reached age 70½ on January 1, 2014. Amend a 2012 tax return Required distributions. Amend a 2012 tax return   By the required beginning date, as explained earlier, you must either: Receive your entire interest in the plan (for a tax-sheltered annuity, your entire benefit accruing after 1986), or Begin receiving periodic distributions in annual amounts calculated to distribute your entire interest (for a tax-sheltered annuity, your entire benefit accruing after 1986) over your life or life expectancy or over the joint lives or joint life expectancies of you and a designated beneficiary (or over a shorter period). Amend a 2012 tax return Additional information. Amend a 2012 tax return   For more information on this rule, see Tax on Excess Accumulation in Publication 575. Amend a 2012 tax return Form 5329. Amend a 2012 tax return   You must file Form 5329 if you owe tax because you did not receive a minimum required distribution from your qualified retirement plan. Amend a 2012 tax return Survivors and Beneficiaries Generally, a survivor or beneficiary reports pension or annuity income in the same way the plan participant would have. Amend a 2012 tax return However, some special rules apply. Amend a 2012 tax return See Publication 575 for more information. Amend a 2012 tax return Survivors of employees. Amend a 2012 tax return   If you are entitled to receive a survivor annuity on the death of an employee who died, you can exclude part of each annuity payment as a tax-free recovery of the employee's investment in the contract. Amend a 2012 tax return You must figure the taxable and tax-free parts of your annuity payments using the method that applies as if you were the employee. Amend a 2012 tax return Survivors of retirees. Amend a 2012 tax return   If you receive benefits as a survivor under a joint and survivor annuity, include those benefits in income in the same way the retiree would have included them in income. Amend a 2012 tax return If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule and recovered all of the cost tax free, your survivor payments are fully taxable. Amend a 2012 tax return    If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage to your initial survivor annuity payment called for in the contract. Amend a 2012 tax return The resulting tax-free amount will then remain fixed. Amend a 2012 tax return Any increases in the survivor annuity are fully taxable. Amend a 2012 tax return    If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. Amend a 2012 tax return This amount remains fixed even if the annuity payments are increased or decreased. Amend a 2012 tax return See Simplified Method , earlier. Amend a 2012 tax return   In any case, if the annuity starting date is after 1986, the total exclusion over the years cannot be more than the cost. Amend a 2012 tax return Estate tax deduction. Amend a 2012 tax return   If your annuity was a joint and survivor annuity that was included in the decedent's estate, an estate tax may have been paid on it. Amend a 2012 tax return You can deduct the part of the total estate tax that was based on the annuity. Amend a 2012 tax return The deceased annuitant must have died after the annuity starting date. Amend a 2012 tax return (For details, see section 1. Amend a 2012 tax return 691(d)-1 of the regulations. Amend a 2012 tax return ) Deduct it in equal amounts over your remaining life expectancy. Amend a 2012 tax return   If the decedent died before the annuity starting date of a deferred annuity contract and you receive a death benefit under that contract, the amount you receive (either in a lump sum or as periodic payments) in excess of the decedent's cost is included in your gross income as income in respect of a decedent for which you may be able to claim an estate tax deduction. Amend a 2012 tax return   You can take the estate tax deduction as an itemized deduction on Schedule A, Form 1040. Amend a 2012 tax return This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. Amend a 2012 tax return See Publication 559, Survivors, Executors, and Administrators, for more information on the estate tax deduction. Amend a 2012 tax return Prev  Up  Next   Home   More Online Publications
Español

Free Commercial Downloads

Get software you may need to view or hear some content on government websites.

When you click on a link below, you will leave our site and go to a non-government website. USA.gov does not endorse these sites. We provide the links so you can get the free software needed to view some documents or to access audio and visual files on some websites.


Portable Document Format (PDF)

Some documents on government websites are in Portable Document Format (PDF). PDFs allow you to view publications in their original format regardless of what type of computer, browser, or operating system you use to access the Internet. In order to view, navigate, and print PDF documents, you'll need the free Acrobat Reader software. Instructions and a troubleshooting guide are available on the Adobe website. If you use a screen reader, you can download Adobe software to make PDF files more accessible.


Real Video/Audio Files

These files, which have the extension (".ram", ".ra", ".rm", ".rmm", ".rp", ".rms", ".rt", ".rmj"), require installation and use of the RealPlayer software. This free software is available from RealNetworks. The Real file format allows you to "stream" audio and video files, which means that you begin hearing and seeing the files without having to wait for the entire file to download. To hear audio on your computer, your system must also have speakers or earphones and a sound card.


RSS (Really Simple Syndication) Aggregators

RSS feeds, (which have the extension ".xml", ".rss", ".sfm", ".cfm", ".rdf", ".aspx", or ".php"), require installation and use of RSS aggregator software. An RSS aggregator allows you to subscribe to an RSS feed. There are many aggregators available; some are free and some are available for sale. RSS feeds are commonly used on weblogs (blogs), news websites, and other places with frequently updated content. An RSS aggregator gathers material from websites that you tell it to scan, and it brings new information from those sites to you. It's a convenient format because it allows you to view all the new content from multiple sources in one location on your desktop.


Podcasts

These files have the extension ".xml" and ".php" and require installation and use of podcatching software (a type of aggregator). This software is available for free from Juice (for PC, Mac, and Linux), iTunes (PC and Mac), and jPodder (PC). There is much more podcatching software available. Podcasting is a method of publishing audio broadcasts via the Internet, allowing users to subscribe to a feed of new files, usually MP3s. Listeners may subscribe to feeds using podcatching software, which periodically checks for and downloads new content automatically. Any digital audio player or computer with audio-playing software can play podcasts.


Other Audio Files

Some audio files on government websites have an ".au" extension. These sound files can be played using a standard sound player bundled with your computer's operating system, for example, Windows Media Player for Windows, SoundMachine for the Macintosh, and XPlayGizmo for Unix. To hear audio on your computer, your system must also have speakers or earphones and a sound card.

The Amend A 2012 Tax Return

Amend a 2012 tax return 4. Amend a 2012 tax return   Student Loan Interest Deduction Table of Contents Introduction Student Loan Interest DefinedQualified Student Loan Qualified Education Expenses Include As Interest Do Not Include As Interest When Must Interest Be Paid Can You Claim the DeductionNo Double Benefit Allowed Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Which Worksheet To Use Claiming the Deduction Introduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. Amend a 2012 tax return However, if your modified adjusted gross income (MAGI) is less than $75,000 ($155,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. Amend a 2012 tax return For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. Amend a 2012 tax return This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. Amend a 2012 tax return The student loan interest deduction is taken as an adjustment to income. Amend a 2012 tax return This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). Amend a 2012 tax return This chapter explains: What type of loan interest you can deduct, Whether you can claim the deduction, What expenses you must have paid with the student loan, Who is an eligible student, How to figure the deduction, and How to claim the deduction. Amend a 2012 tax return Table 4-1. Amend a 2012 tax return Student Loan Interest Deduction at a Glance This table summarizes the features of the student loan interest deduction. Amend a 2012 tax return Do not rely on this table alone. Amend a 2012 tax return Refer to the text for complete details. Amend a 2012 tax return Feature   Description Maximum benefit   You can reduce your income subject to tax by up to $2,500. Amend a 2012 tax return Loan qualifications   Your student loan: •must have been taken out solely to pay qualified education expenses, and •cannot be from a related person or made under a qualified employer plan. Amend a 2012 tax return Student qualifications   The student must be: •you, your spouse, or your dependent, and  •enrolled at least half-time in a degree program. Amend a 2012 tax return Time limit on deduction   You can deduct interest paid during the remaining period of your student loan. Amend a 2012 tax return Limit on modified adjusted gross income (MAGI)   $155,000 if married filing a joint return; $75,000 if single, head of household, or qualifying widow(er). Amend a 2012 tax return Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. Amend a 2012 tax return It includes both required and voluntary interest payments. Amend a 2012 tax return Qualified Student Loan This is a loan you took out solely to pay qualified education expenses (defined later) that were: For you, your spouse, or a person who was your dependent when you took out the loan, Paid or incurred within a reasonable period of time before or after you took out the loan, and For education provided during an academic period for an eligible student. Amend a 2012 tax return Loans from the following sources are not qualified student loans. Amend a 2012 tax return A related person. Amend a 2012 tax return A qualified employer plan. Amend a 2012 tax return Your dependent. Amend a 2012 tax return   Generally, your dependent is someone who is either a: Qualifying child, or Qualifying relative. Amend a 2012 tax return You can find more information about dependents in Publication 501. Amend a 2012 tax return Exceptions. Amend a 2012 tax return   For purposes of the student loan interest deduction, there are the following exceptions to the general rules for dependents. Amend a 2012 tax return An individual can be your dependent even if you are the dependent of another taxpayer. Amend a 2012 tax return An individual can be your dependent even if the individual files a joint return with a spouse. Amend a 2012 tax return An individual can be your dependent even if the individual had gross income for the year that was equal to or more than the exemption amount for the year ($3,900 for 2013). Amend a 2012 tax return Reasonable period of time. Amend a 2012 tax return   Qualified education expenses are treated as paid or incurred within a reasonable period of time before or after you take out the loan if they are paid with the proceeds of student loans that are part of a federal postsecondary education loan program. Amend a 2012 tax return   Even if not paid with the proceeds of that type of loan, the expenses are treated as paid or incurred within a reasonable period of time if both of the following requirements are met. Amend a 2012 tax return The expenses relate to a specific academic period, and The loan proceeds are disbursed within a period that begins 90 days before the start of that academic period and ends 90 days after the end of that academic period. Amend a 2012 tax return   If neither of the above situations applies, the reasonable period of time usually is determined based on all the relevant facts and circumstances. Amend a 2012 tax return Academic period. Amend a 2012 tax return   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Amend a 2012 tax return In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Amend a 2012 tax return Eligible student. Amend a 2012 tax return   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. Amend a 2012 tax return Enrolled at least half-time. Amend a 2012 tax return   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. Amend a 2012 tax return   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. Amend a 2012 tax return However, the standard may not be lower than any of those established by the U. Amend a 2012 tax return S. Amend a 2012 tax return Department of Education under the Higher Education Act of 1965. Amend a 2012 tax return Related person. Amend a 2012 tax return   You cannot deduct interest on a loan you get from a related person. Amend a 2012 tax return Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. Amend a 2012 tax return ), Your lineal descendants (children, grandchildren, etc. Amend a 2012 tax return ), and Certain corporations, partnerships, trusts, and exempt organizations. Amend a 2012 tax return Qualified employer plan. Amend a 2012 tax return   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. Amend a 2012 tax return Qualified Education Expenses For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. Amend a 2012 tax return They include amounts paid for the following items. Amend a 2012 tax return Tuition and fees. Amend a 2012 tax return Room and board. Amend a 2012 tax return Books, supplies, and equipment. Amend a 2012 tax return Other necessary expenses (such as transportation). Amend a 2012 tax return The cost of room and board qualifies only to the extent that it is not more than the greater of: The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student, or The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Amend a 2012 tax return Eligible educational institution. Amend a 2012 tax return   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Amend a 2012 tax return S. Amend a 2012 tax return Department of Education. Amend a 2012 tax return It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Amend a 2012 tax return   Certain educational institutions located outside the United States also participate in the U. Amend a 2012 tax return S. Amend a 2012 tax return Department of Education's Federal Student Aid (FSA) programs. Amend a 2012 tax return   For purposes of the student loan interest deduction, an eligible educational institution also includes an institution conducting an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training. Amend a 2012 tax return   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. Amend a 2012 tax return The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. Amend a 2012 tax return    The educational institution should be able to tell you if it is an eligible educational institution. Amend a 2012 tax return Adjustments to Qualified Education Expenses You must reduce your qualified education expenses by the total amount paid for them with the following tax-free items. Amend a 2012 tax return Employer-provided educational assistance. Amend a 2012 tax return See chapter 11, Employer-Provided Educational Assistance . Amend a 2012 tax return Tax-free distribution of earnings from a Coverdell education savings account (ESA). Amend a 2012 tax return See Tax-Free Distributions in chapter 7, Coverdell Education Savings Account. Amend a 2012 tax return Tax-free distribution of earnings from a qualified tuition program (QTP). Amend a 2012 tax return See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program. Amend a 2012 tax return U. Amend a 2012 tax return S. Amend a 2012 tax return savings bond interest that you exclude from income because it is used to pay qualified education expenses. Amend a 2012 tax return See chapter 10, Education Savings Bond Program . Amend a 2012 tax return The tax-free part of scholarships and fellowships. Amend a 2012 tax return See Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Amend a 2012 tax return Veterans' educational assistance. Amend a 2012 tax return See Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Amend a 2012 tax return Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Amend a 2012 tax return Include As Interest In addition to simple interest on the loan, if all other requirements are met, the items discussed below can be student loan interest. Amend a 2012 tax return Loan origination fee. Amend a 2012 tax return   In general, this is a one-time fee charged by the lender when a loan is made. Amend a 2012 tax return To be deductible as interest, a loan origination fee must be for the use of money rather than for property or services (such as commitment fees or processing costs) provided by the lender. Amend a 2012 tax return A loan origination fee treated as interest accrues over the term of the loan. Amend a 2012 tax return   Loan origination fees were not required to be reported on Form 1098-E, Student Loan Interest Statement, for loans made before September 1, 2004. Amend a 2012 tax return If loan origination fees are not included in the amount reported on your Form 1098-E, you can use any reasonable method to allocate the loan origination fees over the term of the loan. Amend a 2012 tax return The method shown in the example below allocates equal portions of the loan origination fee to each payment required under the terms of the loan. Amend a 2012 tax return A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable. Amend a 2012 tax return Example. Amend a 2012 tax return In August 2004, Bill took out a student loan for $16,000 to pay the tuition for his senior year of college. Amend a 2012 tax return The lender charged a 3% loan origination fee ($480) that was withheld from the funds Bill received. Amend a 2012 tax return Bill began making payments on his student loan in 2013. Amend a 2012 tax return Because the loan origination fee was not included in his 2013 Form 1098-E, Bill can use any reasonable method to allocate that fee over the term of the loan. Amend a 2012 tax return Bill's loan is payable in 120 equal monthly payments. Amend a 2012 tax return He allocates the $480 fee equally over the total number of payments ($480 ÷ 120 months = $4 per month). Amend a 2012 tax return Bill made 7 payments in 2013, so he paid $28 ($4 × 7) of interest attributable to the loan origination fee. Amend a 2012 tax return To determine his student loan interest deduction, he will add the $28 to the amount of other interest reported to him on Form 1098-E. Amend a 2012 tax return Capitalized interest. Amend a 2012 tax return   This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Amend a 2012 tax return Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. Amend a 2012 tax return No deduction for capitalized interest is allowed in a year in which no loan payments were made. Amend a 2012 tax return Interest on revolving lines of credit. Amend a 2012 tax return   This interest, which includes interest on credit card debt, is student loan interest if the borrower uses the line of credit (credit card) only to pay qualified education expenses. Amend a 2012 tax return See Qualified Education Expenses , earlier. Amend a 2012 tax return Interest on refinanced student loans. Amend a 2012 tax return   This includes interest on both: Consolidated loans—loans used to refinance more than one student loan of the same borrower, and Collapsed loans—two or more loans of the same borrower that are treated by both the lender and the borrower as one loan. Amend a 2012 tax return    If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified education expenses, you cannot deduct any interest paid on the refinanced loan. Amend a 2012 tax return Voluntary interest payments. Amend a 2012 tax return   These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status. Amend a 2012 tax return Example. Amend a 2012 tax return The payments on Roger's student loan were scheduled to begin in June 2012, 6 months after he graduated from college. Amend a 2012 tax return He began making payments as required. Amend a 2012 tax return In September 2013, Roger enrolled in graduate school on a full-time basis. Amend a 2012 tax return He applied for and was granted deferment of his loan payments while in graduate school. Amend a 2012 tax return Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2013. Amend a 2012 tax return Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November. Amend a 2012 tax return Allocating Payments Between Interest and Principal The allocation of payments between interest and principal for tax purposes might not be the same as the allocation shown on the Form 1098-E or other statement you receive from the lender or loan servicer. Amend a 2012 tax return To make the allocation for tax purposes, a payment generally applies first to stated interest that remains unpaid as of the date the payment is due, second to any loan origination fees allocable to the payment, third to any capitalized interest that remains unpaid as of the date the payment is due, and fourth to the outstanding principal. Amend a 2012 tax return Example. Amend a 2012 tax return In August 2012, Peg took out a $10,000 student loan to pay the tuition for her senior year of college. Amend a 2012 tax return The lender charged a 3% loan origination fee ($300) that was withheld from the funds Peg received. Amend a 2012 tax return The interest (5% simple) on this loan accrued while she completed her senior year and for 6 months after she graduated. Amend a 2012 tax return At the end of that period, the lender determined the amount to be repaid by capitalizing all accrued but unpaid interest ($625 interest accrued from August 2012 through October 2013) and adding it to the outstanding principal balance of the loan. Amend a 2012 tax return The loan is payable over 60 months, with a payment of $200. Amend a 2012 tax return 51 due on the first of each month, beginning November 2013. Amend a 2012 tax return Peg did not receive a Form 1098-E for 2013 from her lender because the amount of interest she paid did not require the lender to issue an information return. Amend a 2012 tax return However, she did receive an account statement from the lender that showed the following 2013 payments on her outstanding loan of $10,625 ($10,000 principal + $625 accrued but unpaid interest). Amend a 2012 tax return Payment Date   Payment   Stated Interest   Principal November 2013   $200. Amend a 2012 tax return 51   $44. Amend a 2012 tax return 27   $156. Amend a 2012 tax return 24 December 2013   $200. Amend a 2012 tax return 51   $43. Amend a 2012 tax return 62   $156. Amend a 2012 tax return 89 Totals   $401. Amend a 2012 tax return 02   $87. Amend a 2012 tax return 89   $313. Amend a 2012 tax return 13 To determine the amount of interest that could be deducted on the loan for 2013, Peg starts with the total amount of stated interest she paid, $87. Amend a 2012 tax return 89. Amend a 2012 tax return Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month). Amend a 2012 tax return A total of $10 ($5 of each of the two principal payments) should be treated as interest for tax purposes. Amend a 2012 tax return Peg then applies the unpaid capitalized interest ($625) to the two principal payments in the order in which they were made, and determines that the remaining amount of principal of both payments is treated as interest for tax purposes. Amend a 2012 tax return Assuming that Peg qualifies to take the student loan interest deduction, she can deduct $401. Amend a 2012 tax return 02 ($87. Amend a 2012 tax return 89 + $10 + $303. Amend a 2012 tax return 13). Amend a 2012 tax return For 2014, Peg will continue to allocate $5 of the loan origination fee to the principal portion of each monthly payment she makes and treat that amount as interest for tax purposes. Amend a 2012 tax return She also will apply the remaining amount of capitalized interest ($625 − $303. Amend a 2012 tax return 13 = $321. Amend a 2012 tax return 87) to the principal payments in the order in which they are made until the balance is zero, and treat those amounts as interest for tax purposes. Amend a 2012 tax return Do Not Include As Interest You cannot claim a student loan interest deduction for any of the following items. Amend a 2012 tax return Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. Amend a 2012 tax return Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. Amend a 2012 tax return Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs. Amend a 2012 tax return For more information, see Student Loan Repayment Assistance in chapter 5, Student Loan Cancellations and Repayment Assistance. Amend a 2012 tax return When Must Interest Be Paid You can deduct all interest you paid during the year on your student loan, including voluntary payments, until the loan is paid off. Amend a 2012 tax return Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. Amend a 2012 tax return Your filing status is any filing status except married filing separately. Amend a 2012 tax return No one else is claiming an exemption for you on his or her tax return. Amend a 2012 tax return You are legally obligated to pay interest on a qualified student loan. Amend a 2012 tax return You paid interest on a qualified student loan. Amend a 2012 tax return Claiming an exemption for you. Amend a 2012 tax return   Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c, or Form 1040NR, line 7c. Amend a 2012 tax return Example 1. Amend a 2012 tax return During 2013, Josh paid $600 interest on his qualified student loan. Amend a 2012 tax return Only he is legally obligated to make the payments. Amend a 2012 tax return No one claimed an exemption for Josh for 2013. Amend a 2012 tax return Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2013 Form 1040 or 1040A. Amend a 2012 tax return Example 2. Amend a 2012 tax return During 2013, Jo paid $1,100 interest on her qualified student loan. Amend a 2012 tax return Only she is legally obligated to make the payments. Amend a 2012 tax return Jo's parents claimed an exemption for her on their 2013 tax return. Amend a 2012 tax return In this case, neither Jo nor her parents may deduct the student loan interest Jo paid in 2013. Amend a 2012 tax return Interest paid by others. Amend a 2012 tax return   If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest. Amend a 2012 tax return Example 1. Amend a 2012 tax return Darla obtained a qualified student loan to attend college. Amend a 2012 tax return After Darla's graduation from college, she worked as an intern for a nonprofit organization. Amend a 2012 tax return As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. Amend a 2012 tax return This payment was treated as additional compensation and reported in box 1 of her Form W-2. Amend a 2012 tax return Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return. Amend a 2012 tax return Example 2. Amend a 2012 tax return Ethan obtained a qualified student loan to attend college. Amend a 2012 tax return After graduating from college, the first monthly payment on his loan was due in December. Amend a 2012 tax return As a gift, Ethan's mother made this payment for him. Amend a 2012 tax return No one is claiming a dependency exemption for Ethan on his or her tax return. Amend a 2012 tax return Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return. Amend a 2012 tax return No Double Benefit Allowed You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, as home mortgage interest). Amend a 2012 tax return Figuring the Deduction Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. Amend a 2012 tax return However, the amount determined above may be gradually reduced (phased out) or eliminated based on your filing status and MAGI as explained below. Amend a 2012 tax return You can use Worksheet 4-1. Amend a 2012 tax return Student Loan Interest Deduction Worksheet (at the end of this chapter) to figure both your MAGI and your deduction. Amend a 2012 tax return Form 1098-E. Amend a 2012 tax return   To help you figure your student loan interest deduction, you should receive Form 1098-E. Amend a 2012 tax return Generally, an institution (such as a bank or governmental agency) that received interest payments of $600 or more during 2013 on one or more qualified student loans must send Form 1098-E (or acceptable substitute) to each borrower by January 31, 2014. Amend a 2012 tax return   For qualified student loans taken out before September 1, 2004, the institution is required to include on Form 1098-E only payments of stated interest. Amend a 2012 tax return Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. Amend a 2012 tax return However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. Amend a 2012 tax return See Allocating Payments Between Interest and Principal , earlier. Amend a 2012 tax return    The lender may ask for a completed Form W-9S, or similar statement to obtain the borrower's name, address, and taxpayer identification number. Amend a 2012 tax return The form may also be used by the borrower to certify that the student loan was incurred solely to pay for qualified education expenses. Amend a 2012 tax return Effect of the Amount of Your Income on the Amount of Your Deduction The amount of your student loan interest deduction is phased out (gradually reduced) if your MAGI is between $60,000 and $75,000 ($125,000 and $155,000 if you file a joint return). Amend a 2012 tax return You cannot take a student loan interest deduction if your MAGI is $75,000 or more ($155,000 or more if you file a joint return). Amend a 2012 tax return Modified adjusted gross income (MAGI). Amend a 2012 tax return   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for student loan interest. Amend a 2012 tax return However, as discussed below, there may be other modifications. Amend a 2012 tax return Table 4-2 shows how the amount of your MAGI can affect your student loan interest deduction. Amend a 2012 tax return Table 4-2. Amend a 2012 tax return Effect of MAGI on Student Loan Interest Deduction IF your filing status is. Amend a 2012 tax return . Amend a 2012 tax return . Amend a 2012 tax return AND your MAGI is. Amend a 2012 tax return . Amend a 2012 tax return . Amend a 2012 tax return THEN your student loan interest deduction is. Amend a 2012 tax return . Amend a 2012 tax return . Amend a 2012 tax return single,  head of household, or qualifying widow(er) not more than $60,000 not affected by the phaseout. Amend a 2012 tax return more than $60,000  but less than $75,000 reduced because of the phaseout. Amend a 2012 tax return $75,000 or more eliminated by the phaseout. Amend a 2012 tax return married filing joint return not more than $125,000 not affected by the phaseout. Amend a 2012 tax return more than $125,000 but less than $155,000 reduced because of the phaseout. Amend a 2012 tax return $155,000 or more eliminated by the phaseout. Amend a 2012 tax return MAGI when using Form 1040A. Amend a 2012 tax return   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). Amend a 2012 tax return MAGI when using Form 1040. Amend a 2012 tax return   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any amount on line 33 (student loan interest deduction), line 34 (tuition and fees deduction), or line 35 (domestic production activities deduction), and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Amend a 2012 tax return MAGI when using Form 1040NR. Amend a 2012 tax return   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form figured without taking into account any amount on line 33 (student loan interest deduction) and line 34 (domestic production activities deduction). Amend a 2012 tax return MAGI when using Form 1040NR-EZ. Amend a 2012 tax return   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form figured without taking into account any amount on line 9 (student loan interest deduction). Amend a 2012 tax return Phaseout. Amend a 2012 tax return   If your MAGI is within the range of incomes where the credit must be reduced, you must figure your reduced deduction. Amend a 2012 tax return To figure the phaseout, multiply your interest deduction (before the phaseout) by a fraction. Amend a 2012 tax return The numerator is your MAGI minus $60,000 ($125,000 in the case of a joint return). Amend a 2012 tax return The denominator is $15,000 ($30,000 in the case of a joint return). Amend a 2012 tax return Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. Amend a 2012 tax return Example 1. Amend a 2012 tax return During 2013 you paid $800 interest on a qualified student loan. Amend a 2012 tax return Your 2013 MAGI is $145,000 and you are filing a joint return. Amend a 2012 tax return You must reduce your deduction by $533, figured as follows. Amend a 2012 tax return   $800 × $145,000 − $125,000  $30,000 = $533   Your reduced student loan interest deduction is $267 ($800 − $533). Amend a 2012 tax return Example 2. Amend a 2012 tax return The facts are the same as in Example 1 except that you paid $2,750 interest. Amend a 2012 tax return Your maximum deduction for 2013 is $2,500. Amend a 2012 tax return You must reduce your maximum deduction by $1,667, figured as follows. Amend a 2012 tax return   $2,500 × $145,000 − $125,000  $30,000 = $1,667   In this example, your reduced student loan interest deduction is $833 ($2,500 − $1,667). Amend a 2012 tax return Which Worksheet To Use Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR. Amend a 2012 tax return However, if you are filing Form 2555, Foreign Earned Income, Form 2555-EZ, Foreign Earned Income Exclusion, or Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1. Amend a 2012 tax return Student Loan Interest Deduction Worksheet at the end of this chapter. Amend a 2012 tax return Claiming the Deduction The student loan interest deduction is an adjustment to income. Amend a 2012 tax return To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ). Amend a 2012 tax return Worksheet 4-1. Amend a 2012 tax return Student Loan Interest Deduction Worksheet Use this worksheet instead of the worksheet in the Form 1040 instructions if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. Amend a 2012 tax return Before using this worksheet, you must complete Form 1040, lines 7 through 32, plus any amount to be entered on the dotted line next to line 36. Amend a 2012 tax return 1. Amend a 2012 tax return Enter the total interest you paid in 2013 on qualified student loans. Amend a 2012 tax return Do not enter  more than $2,500 1. Amend a 2012 tax return   2. Amend a 2012 tax return Enter the amount from Form 1040, line 22 2. Amend a 2012 tax return       3. Amend a 2012 tax return Enter the total of the amounts from Form 1040,  lines 23 through 32 3. Amend a 2012 tax return           4. Amend a 2012 tax return Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 4. Amend a 2012 tax return           5. Amend a 2012 tax return Add lines 3 and 4 5. Amend a 2012 tax return       6. Amend a 2012 tax return Subtract line 5 from line 2 6. Amend a 2012 tax return       7. Amend a 2012 tax return Enter any foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 7. Amend a 2012 tax return       8. Amend a 2012 tax return Enter any foreign housing deduction (Form 2555, line 50) 8. Amend a 2012 tax return       9. Amend a 2012 tax return Enter the amount of income from Puerto Rico you are excluding 9. Amend a 2012 tax return       10. Amend a 2012 tax return Enter the amount of income from American Samoa  you are excluding (Form 4563, line 15) 10. Amend a 2012 tax return       11. Amend a 2012 tax return Add lines 6 through 10. Amend a 2012 tax return This is your modified adjusted gross income 11. Amend a 2012 tax return   12. Amend a 2012 tax return Enter the amount shown below for your filing status 12. Amend a 2012 tax return     •Single, head of household, or qualifying widow(er)—$60,000       •Married filing jointly—$125,000     13. Amend a 2012 tax return Is the amount on line 11 more than the amount on line 12?       □ No. Amend a 2012 tax return Skip lines 13 and 14, enter -0- on line 15, and go to line 16. Amend a 2012 tax return       □ Yes. Amend a 2012 tax return Subtract line 12 from line 11 13. Amend a 2012 tax return   14. Amend a 2012 tax return Divide line 13 by $15,000 ($30,000 if married filing jointly). Amend a 2012 tax return Enter the result as a decimal  (rounded to at least three places). Amend a 2012 tax return If the result is 1. Amend a 2012 tax return 000 or more, enter 1. Amend a 2012 tax return 000 14. Amend a 2012 tax return . Amend a 2012 tax return 15. Amend a 2012 tax return Multiply line 1 by line 14 15. Amend a 2012 tax return   16. Amend a 2012 tax return Student loan interest deduction. Amend a 2012 tax return Subtract line 15 from line 1. Amend a 2012 tax return Enter the result here  and on Form 1040, line 33. Amend a 2012 tax return Do not include this amount in figuring any other  deduction on your return (such as on Schedule A, C, E, etc. Amend a 2012 tax return ) 16. Amend a 2012 tax return   Prev  Up  Next   Home   More Online Publications