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Amended Tax Return 1098 T

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Amended Tax Return 1098 T

Amended tax return 1098 t 9. Amended tax return 1098 t   Education Exception to Additional Tax on Early IRA Distributions Table of Contents Introduction Who Is Eligible Figuring the Amount Not Subject to the 10% Tax Reporting Early Distributions Introduction Generally, if you take a distribution from your IRA before you reach age 59½, you must pay a 10% additional tax on the early distribution. Amended tax return 1098 t This applies to any IRA you own, whether it is a traditional IRA (including a SEP-IRA), a Roth IRA, or a SIMPLE IRA. Amended tax return 1098 t The additional tax on an early distribution from a SIMPLE IRA may be as high as 25%. Amended tax return 1098 t See Publication 560, Retirement Plans for Small Business, for information on SEP-IRAs, and Publication 590, for information about all other IRAs. Amended tax return 1098 t However, you can take distributions from your IRAs for qualified higher education expenses without having to pay the 10% additional tax. Amended tax return 1098 t You may owe income tax on at least part of the amount distributed, but you may not have to pay the 10% additional tax. Amended tax return 1098 t Generally, if the taxable part of the distribution is less than or equal to the adjusted qualified education expenses (AQEE), none of the distribution is subject to the additional tax. Amended tax return 1098 t If the taxable part of the distribution is more than the AQEE, only the excess is subject to the additional tax. Amended tax return 1098 t Who Is Eligible You can take a distribution from your IRA before you reach age 59½ and not have to pay the 10% additional tax if, for the year of the distribution, you pay qualified education expenses for: yourself, your spouse, or your or your spouse's child, foster child, adopted child, or descendant of any of them. Amended tax return 1098 t Qualified education expenses. Amended tax return 1098 t   For purposes of the 10% additional tax, these expenses are tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Amended tax return 1098 t They also include expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance. Amended tax return 1098 t   In addition, if the student is at least a half-time student, room and board are qualified education expenses. Amended tax return 1098 t   The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts. Amended tax return 1098 t 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. Amended tax return 1098 t The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Amended tax return 1098 t You will need to contact the eligible educational institution for qualified room and board costs. Amended tax return 1098 t Eligible educational institution. Amended tax return 1098 t   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. Amended tax return 1098 t S. Amended tax return 1098 t Department of Education. Amended tax return 1098 t It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Amended tax return 1098 t The educational institution should be able to tell you if it is an eligible educational institution. Amended tax return 1098 t   Certain educational institutions located outside the United States also participate in the U. Amended tax return 1098 t S. Amended tax return 1098 t Department of Education's Federal Student Aid (FSA) programs. Amended tax return 1098 t Half-time student. Amended tax return 1098 t   A student is enrolled “at least half-time” if he or she is enrolled for at least half the full-time academic work load for the course of study the student is pursuing as determined under the standards of the school where the student is enrolled. Amended tax return 1098 t Figuring the Amount Not Subject to the 10% Tax To determine the amount of your distribution that is not subject to the 10% additional tax, first figure your adjusted qualified education expenses. Amended tax return 1098 t You do this by reducing your total qualified education expenses by any tax-free educational assistance, which includes: Expenses used to figure the tax-free portion of distributions from a Coverdell education savings account (ESA) (see Distributions in chapter 7, Coverdell Education Savings Account), The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Amended tax return 1098 t Do not reduce the qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance given to either the student or the individual making the withdrawal, or A withdrawal from personal savings (including savings from a qualified tuition program (QTP)). Amended tax return 1098 t If your IRA distribution is equal to or less than your adjusted qualified education expenses, you are not subject to the 10% additional tax. Amended tax return 1098 t Example 1. Amended tax return 1098 t In 2013, Erin (age 32) took a year off from teaching to attend graduate school full-time. Amended tax return 1098 t She paid $5,800 of qualified education expenses from the following sources. Amended tax return 1098 t   Employer-provided educational assistance  (tax free) $5,000     Early distribution from IRA (includes $500 taxable earnings) 3,200           Before Erin can determine if she must pay the 10% additional tax on her IRA distribution, she must reduce her total qualified education expenses. Amended tax return 1098 t   Total qualified education expenses $5,800     Minus: Tax-free educational assistance −5,000     Equals: Adjusted qualified  education expenses (AQEE) $ 800   Because Erin's AQEE ($800) are more than the taxable portion of her IRA distribution ($500), she does not have to pay the 10% additional tax on any part of this distribution. Amended tax return 1098 t However, she must include the $500 taxable earnings in her gross income subject to income tax. Amended tax return 1098 t Example 2. Amended tax return 1098 t Assume the same facts as in Example 1 , except that Erin deducted some of the contributions to her IRA, so the taxable part of her early distribution is higher by $1,000. Amended tax return 1098 t This must be included in her income subject to income tax. Amended tax return 1098 t The taxable part of Erin's IRA distribution ($1,000) is larger than her $800 AQEE. Amended tax return 1098 t Therefore, she must pay the 10% additional tax on $200, the taxable part of her distribution ($1,000) that is more than her qualified education expenses ($800). Amended tax return 1098 t She does not have to pay the 10% additional tax on the remaining $800 of her taxable distribution. Amended tax return 1098 t Reporting Early Distributions By January 31, 2014, the payer of your IRA distribution should send you Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Amended tax return 1098 t The information on this form will help you determine how much of your distribution is taxable for income tax purposes and how much is subject to the 10% additional tax. Amended tax return 1098 t If you received an early distribution from your IRA, you must report the taxable earnings on Form 1040, line 15b (Form 1040NR, line 16b). Amended tax return 1098 t Then, if you qualify for an exception for qualified higher education expenses, you must file Form 5329 to show how much, if any, of your early distribution is subject to the 10% additional tax. Amended tax return 1098 t See the Instructions for Form 5329, Part I, for help in completing the form and entering the results on Form 1040 or 1040NR. Amended tax return 1098 t There are many other situations in which Form 5329 is required. Amended tax return 1098 t If, during 2013, you had other distributions from IRAs or qualified retirement plans, or have made excess contributions to certain tax-favored accounts, see the instructions for line 58 (Form 1040) or line 56 (Form 1040NR) to determine if you must file Form 5329. Amended tax return 1098 t Prev  Up  Next   Home   More Online Publications
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We are holding your refund because you have not filed one or more tax returns and we believe you will owe tax.


What you need to do

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Page Last Reviewed or Updated: 07-Mar-2014

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The Amended Tax Return 1098 T

Amended tax return 1098 t Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. Amended tax return 1098 t Gross monthly rate. Amended tax return 1098 t Your cost. Amended tax return 1098 t Choosing a survivor annuity after retirement. Amended tax return 1098 t Canceling a survivor annuity after retirement. Amended tax return 1098 t Annuity starting date after 1986. Amended tax return 1098 t Annuity starting date before 1987. Amended tax return 1098 t Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. Amended tax return 1098 t Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. Amended tax return 1098 t The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. Amended tax return 1098 t If the refund includes only your contributions, none of the refund is taxable. Amended tax return 1098 t If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). Amended tax return 1098 t If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Amended tax return 1098 t See Rollover Rules in Part II for information on how to make a rollover. Amended tax return 1098 t Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. Amended tax return 1098 t Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. Amended tax return 1098 t If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Amended tax return 1098 t If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. Amended tax return 1098 t For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Amended tax return 1098 t A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. Amended tax return 1098 t Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. Amended tax return 1098 t OPM will tell you how to make the choice. Amended tax return 1098 t The choice for no withholding remains in effect until you change it. Amended tax return 1098 t These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. Amended tax return 1098 t If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. Amended tax return 1098 t You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. Amended tax return 1098 t Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. Amended tax return 1098 t For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. Amended tax return 1098 t Form CSA 1099R. Amended tax return 1098 t   Form CSA 1099R is mailed to you by OPM each year. Amended tax return 1098 t It will show any tax you had withheld. Amended tax return 1098 t File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. Amended tax return 1098 t    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. Amended tax return 1098 t servicesonline. Amended tax return 1098 t opm. Amended tax return 1098 t gov. Amended tax return 1098 t To log in, you will need your retirement CSA claim number and your personal identification number. Amended tax return 1098 t Choosing no withholding on payments outside the United States. Amended tax return 1098 t   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. Amended tax return 1098 t   To choose no withholding if you are a U. Amended tax return 1098 t S. Amended tax return 1098 t citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. Amended tax return 1098 t Otherwise, OPM has to withhold tax. Amended tax return 1098 t For example, OPM must withhold if you provide a U. Amended tax return 1098 t S. Amended tax return 1098 t address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. Amended tax return 1098 t S. Amended tax return 1098 t home address. Amended tax return 1098 t   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. Amended tax return 1098 t S. Amended tax return 1098 t citizen, a U. Amended tax return 1098 t S. Amended tax return 1098 t resident alien, or someone who left the United States to avoid tax. Amended tax return 1098 t But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. Amended tax return 1098 t For details, see Publication 519, U. Amended tax return 1098 t S. Amended tax return 1098 t Tax Guide for Aliens. Amended tax return 1098 t Withholding certificate. Amended tax return 1098 t   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. Amended tax return 1098 t The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. Amended tax return 1098 t If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. Amended tax return 1098 t To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Amended tax return 1098 t C. Amended tax return 1098 t calling area must call 202-606-0500). Amended tax return 1098 t No special form is needed. Amended tax return 1098 t You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. Amended tax return 1098 t If you have TTY/TDD equipment, call 1-855–887–4957. Amended tax return 1098 t If you need a PIN, call OPM's Retirement Information Office. Amended tax return 1098 t You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. Amended tax return 1098 t servicesonline. Amended tax return 1098 t opm. Amended tax return 1098 t gov. Amended tax return 1098 t You will need your retirement CSA or CSF claim number and your PIN. Amended tax return 1098 t Withholding from certain lump-sum payments. Amended tax return 1098 t   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. Amended tax return 1098 t Tax will be withheld at a 20% rate on the interest distributed. Amended tax return 1098 t However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. Amended tax return 1098 t If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. Amended tax return 1098 t Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. Amended tax return 1098 t See Rollover Rules in Part II. Amended tax return 1098 t If you receive only your contributions, no tax will be withheld. Amended tax return 1098 t Withholding from Thrift Savings Plan payments. Amended tax return 1098 t   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. Amended tax return 1098 t The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. Amended tax return 1098 t  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. Amended tax return 1098 t By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. Amended tax return 1098 t   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. Amended tax return 1098 t The above document is also available in the “Forms & Publications” section of the TSP website at www. Amended tax return 1098 t tsp. Amended tax return 1098 t gov. Amended tax return 1098 t Estimated tax. Amended tax return 1098 t   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). Amended tax return 1098 t The return must cover all 12 months. Amended tax return 1098 t   You do not have to pay estimated tax for 2014 if you were a U. Amended tax return 1098 t S. Amended tax return 1098 t citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. Amended tax return 1098 t   Publication 505 contains information that you can use to help you figure your estimated tax payments. Amended tax return 1098 t Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. Amended tax return 1098 t The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. Amended tax return 1098 t Children. Amended tax return 1098 t   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. Amended tax return 1098 t   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. Amended tax return 1098 t Form CSF 1099R. Amended tax return 1098 t   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. Amended tax return 1098 t It will show the total amount of the annuity you received in the past year. Amended tax return 1098 t It also should show, separately, the survivor annuity for a child or children. Amended tax return 1098 t Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. Amended tax return 1098 t   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. Amended tax return 1098 t    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. Amended tax return 1098 t servicesonline. Amended tax return 1098 t opm. Amended tax return 1098 t gov. Amended tax return 1098 t To log in you will need your retirement CSF claim number and personal identification number. Amended tax return 1098 t    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Amended tax return 1098 t C. Amended tax return 1098 t calling area must call 202-606-0500). Amended tax return 1098 t You will need your CSF claim number and your social security number when you call. Amended tax return 1098 t Taxable part of annuity. Amended tax return 1098 t   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. Amended tax return 1098 t To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. Amended tax return 1098 t Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. Amended tax return 1098 t If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. Amended tax return 1098 t However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. Amended tax return 1098 t Annuity statement. Amended tax return 1098 t   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). Amended tax return 1098 t You will use this information to figure the tax-free recovery of your cost. Amended tax return 1098 t Annuity starting date. Amended tax return 1098 t   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. Amended tax return 1098 t If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. Amended tax return 1098 t Gross monthly rate. Amended tax return 1098 t   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. Amended tax return 1098 t Your cost. Amended tax return 1098 t   Your monthly annuity payment contains an amount on which you have previously paid income tax. Amended tax return 1098 t This amount represents part of your contributions to the retirement plan. Amended tax return 1098 t Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. Amended tax return 1098 t   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. Amended tax return 1098 t If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. Amended tax return 1098 t (See Lump-sum credit under Alternative Annuity Option, later. Amended tax return 1098 t )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. Amended tax return 1098 t You cannot claim an interest deduction for any interest payments. Amended tax return 1098 t You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. Amended tax return 1098 t Recovering your cost tax free. Amended tax return 1098 t   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. Amended tax return 1098 t If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. Amended tax return 1098 t If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). Amended tax return 1098 t If your annuity starting date is after November 18, 1996, you must use the Simplified Method. Amended tax return 1098 t   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). Amended tax return 1098 t The tax-free part is a fixed dollar amount. Amended tax return 1098 t It remains the same, even if your annuity is increased. Amended tax return 1098 t Generally, this rule applies as long as you receive your annuity. Amended tax return 1098 t However, see Exclusion limit , later. Amended tax return 1098 t Choosing a survivor annuity after retirement. Amended tax return 1098 t    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. Amended tax return 1098 t   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. Amended tax return 1098 t To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. Amended tax return 1098 t Figure the expected return as of the date the reduced annuity begins. Amended tax return 1098 t For details on the General Rule, see Publication 939. Amended tax return 1098 t Canceling a survivor annuity after retirement. Amended tax return 1098 t   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. Amended tax return 1098 t The increased annuity does not change the cost recovery you figured at the annuity starting date. Amended tax return 1098 t The tax-free part of each annuity payment remains the same. Amended tax return 1098 t    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Amended tax return 1098 t C. Amended tax return 1098 t calling area must call 202-606-0500). Amended tax return 1098 t Exclusion limit. Amended tax return 1098 t   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. Amended tax return 1098 t Annuity starting date after 1986. Amended tax return 1098 t   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. Amended tax return 1098 t Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. Amended tax return 1098 t Example. Amended tax return 1098 t Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. Amended tax return 1098 t If your cost is $12,000, the exclusion ends after 10 years (120 months). Amended tax return 1098 t Thereafter, your entire annuity is generally fully taxable. Amended tax return 1098 t Annuity starting date before 1987. Amended tax return 1098 t   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. Amended tax return 1098 t If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. Amended tax return 1098 t The total exclusion may be more than your cost. Amended tax return 1098 t Deduction of unrecovered cost. Amended tax return 1098 t   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. Amended tax return 1098 t The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). Amended tax return 1098 t If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. Amended tax return 1098 t Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. Amended tax return 1098 t (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. Amended tax return 1098 t ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. Amended tax return 1098 t The Simplified Method does not apply if your annuity starting date is before July 2, 1986. Amended tax return 1098 t Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. Amended tax return 1098 t This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Amended tax return 1098 t If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. Amended tax return 1098 t Worksheet A. Amended tax return 1098 t   Use Worksheet A. Amended tax return 1098 t Simplified Method (near the end of this publication), to figure your taxable annuity. Amended tax return 1098 t Be sure to keep the completed worksheet. Amended tax return 1098 t It will help you figure your taxable amounts for later years. Amended tax return 1098 t Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. Amended tax return 1098 t However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. Amended tax return 1098 t Line 2. Amended tax return 1098 t   See Your cost , earlier, for an explanation of your cost in the plan. Amended tax return 1098 t If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. Amended tax return 1098 t Line 3. Amended tax return 1098 t   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. Amended tax return 1098 t If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. Amended tax return 1098 t If your annuity starting date is before 1998, use Table 1. Amended tax return 1098 t Line 6. Amended tax return 1098 t   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. Amended tax return 1098 t If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. Amended tax return 1098 t Example. Amended tax return 1098 t Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. Amended tax return 1098 t His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. Amended tax return 1098 t He must use the Simplified Method to figure the tax-free part of his annuity benefits. Amended tax return 1098 t Bill's monthly annuity benefit is $1,000. Amended tax return 1098 t He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. Amended tax return 1098 t At his annuity starting date, he was 65 and Kathy was 57. Amended tax return 1098 t Bill's completed Worksheet A is shown later. Amended tax return 1098 t To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). Amended tax return 1098 t Bill keeps a copy of the completed worksheet for his records. Amended tax return 1098 t It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. Amended tax return 1098 t Bill's tax-free monthly amount is $100. Amended tax return 1098 t (See line 4 of the worksheet. Amended tax return 1098 t ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. Amended tax return 1098 t If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. Amended tax return 1098 t If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. Amended tax return 1098 t General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. Amended tax return 1098 t If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. Amended tax return 1098 t If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. Amended tax return 1098 t Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. Amended tax return 1098 t Figuring this percentage is complex and requires the use of actuarial tables. Amended tax return 1098 t For these tables and other information about using the General Rule, see Publication 939. Amended tax return 1098 t Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. Amended tax return 1098 t Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. Amended tax return 1098 t After your cost was recovered, all payments became fully taxable. Amended tax return 1098 t You cannot use another rule to again exclude amounts from income. Amended tax return 1098 t The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. Amended tax return 1098 t Worksheet A. Amended tax return 1098 t Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. Amended tax return 1098 t 1. Amended tax return 1098 t Enter the total pension or annuity payments received this year. Amended tax return 1098 t Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Amended tax return 1098 t $ 8,000 2. Amended tax return 1098 t Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Amended tax return 1098 t See Your cost in Part II, Rules for Retirees, earlier 2. Amended tax return 1098 t 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). Amended tax return 1098 t Otherwise, go to line 3. Amended tax return 1098 t   3. Amended tax return 1098 t Enter the appropriate number from Table 1 below. Amended tax return 1098 t 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. Amended tax return 1098 t 3. Amended tax return 1098 t 310 4. Amended tax return 1098 t Divide line 2 by the number on line 3 4. Amended tax return 1098 t 100 5. Amended tax return 1098 t Multiply line 4 by the number of months for which this year's payments were made. Amended tax return 1098 t If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Amended tax return 1098 t Otherwise, go to line 6 5. Amended tax return 1098 t 800 6. Amended tax return 1098 t Enter any amounts previously recovered tax free in years after 1986. Amended tax return 1098 t This is the amount shown on line 10 of your worksheet for last year 6. Amended tax return 1098 t 0 7. Amended tax return 1098 t Subtract line 6 from line 2 7. Amended tax return 1098 t 31,000 8. Amended tax return 1098 t Enter the smaller of line 5 or line 7 8. Amended tax return 1098 t 800 9. Amended tax return 1098 t Taxable amount for year. Amended tax return 1098 t Subtract line 8 from line 1. Amended tax return 1098 t Enter the result, but not less than zero. Amended tax return 1098 t Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Amended tax return 1098 t If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Amended tax return 1098 t If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Amended tax return 1098 t If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Amended tax return 1098 t $7,200 10. Amended tax return 1098 t Was your annuity starting date before 1987?   Yes. Amended tax return 1098 t Do not complete the rest of this worksheet. Amended tax return 1098 t    No. Amended tax return 1098 t Add lines 6 and 8. Amended tax return 1098 t This is the amount you have recovered tax free through 2013. Amended tax return 1098 t You will need this number if you need to fill out this worksheet next year 10. Amended tax return 1098 t 800 11. Amended tax return 1098 t Balance of cost to be recovered. Amended tax return 1098 t Subtract line 10 from line 2. Amended tax return 1098 t If zero, you will not have to complete this worksheet next year. Amended tax return 1098 t The payments you receive next year will generally be fully taxable 11. Amended tax return 1098 t $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Amended tax return 1098 t Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. Amended tax return 1098 t If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. Amended tax return 1098 t You are eligible to make this choice if you meet all of the following requirements. Amended tax return 1098 t You are retiring, but not on disability. Amended tax return 1098 t You have a life-threatening illness or other critical medical condition. Amended tax return 1098 t You do not have a former spouse entitled to court ordered benefits based on your service. Amended tax return 1098 t If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. Amended tax return 1098 t Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. Amended tax return 1098 t The tax-free part represents part of your cost. Amended tax return 1098 t The taxable part represents part of the earnings on your annuity contract. Amended tax return 1098 t Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. Amended tax return 1098 t Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. Amended tax return 1098 t Your taxable amount may therefore be more than the lump-sum payment you receive. Amended tax return 1098 t You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. Amended tax return 1098 t If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Amended tax return 1098 t See Rollover Rules , later, for information on how to make a rollover. Amended tax return 1098 t OPM can make a direct rollover only up to the amount of the lump-sum payment. Amended tax return 1098 t Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. Amended tax return 1098 t The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Amended tax return 1098 t It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. Amended tax return 1098 t For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Amended tax return 1098 t Worksheet B. Amended tax return 1098 t   Use Worksheet B. Amended tax return 1098 t Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. Amended tax return 1098 t Be sure to keep the completed worksheet for your records. Amended tax return 1098 t   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. Amended tax return 1098 t Lump-sum credit. Amended tax return 1098 t   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). Amended tax return 1098 t However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. Amended tax return 1098 t Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. Amended tax return 1098 t Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. Amended tax return 1098 t You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. Amended tax return 1098 t Present value of your annuity contract. Amended tax return 1098 t   The present value of your annuity contract is figured using actuarial tables provided by the IRS. Amended tax return 1098 t If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. Amended tax return 1098 t Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. Amended tax return 1098 t , NW Washington, DC 20224-0002 Example. Amended tax return 1098 t David Brown retired from the federal government in 2013, one month after his 55th birthday. Amended tax return 1098 t He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. Amended tax return 1098 t The present value of his annuity contract was $155,000. Amended tax return 1098 t The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. Amended tax return 1098 t The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. Amended tax return 1098 t See Reduced Annuity , later. Amended tax return 1098 t Worksheet B. Amended tax return 1098 t Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . Amended tax return 1098 t  1. Amended tax return 1098 t Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. Amended tax return 1098 t $ 31,000 2. Amended tax return 1098 t Enter the present value of your annuity contract 2. Amended tax return 1098 t 155,000 3. Amended tax return 1098 t Divide line 1 by line 2 3. Amended tax return 1098 t . Amended tax return 1098 t 20 4. Amended tax return 1098 t Tax-free amount. Amended tax return 1098 t Multiply line 1 by line 3. Amended tax return 1098 t (Caution: Do not include this amount on line 6 of Worksheet A in this publication. Amended tax return 1098 t ) 4. Amended tax return 1098 t $6,200 5. Amended tax return 1098 t Taxable amount (net cost in the plan). Amended tax return 1098 t Subtract line 4 from line 1. Amended tax return 1098 t Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Amended tax return 1098 t Also, enter this amount on line 2 of Worksheet A in this publication. Amended tax return 1098 t 5. Amended tax return 1098 t $24,800   Lump-sum payment in installments. Amended tax return 1098 t   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. Amended tax return 1098 t You will receive the first installment after you make the choice upon retirement. Amended tax return 1098 t The second installment will be paid to you, with interest, in the next calendar year. Amended tax return 1098 t (Exceptions to the installment rule are provided for cases of critical medical need. Amended tax return 1098 t )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. Amended tax return 1098 t If the payment has a tax-free part, you must treat the taxable part as received first. Amended tax return 1098 t How to report. Amended tax return 1098 t   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Amended tax return 1098 t Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. Amended tax return 1098 t    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. Amended tax return 1098 t Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. Amended tax return 1098 t These annuity payments each will have a tax-free and a taxable part. Amended tax return 1098 t To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). Amended tax return 1098 t For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. Amended tax return 1098 t To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. Amended tax return 1098 t Enter as your net cost on line 2 the amount from Worksheet B, line 5. Amended tax return 1098 t Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Amended tax return 1098 t Example. Amended tax return 1098 t The facts are the same as in the example for David Brown in the preceding discussion. Amended tax return 1098 t In addition, David received 10 annuity payments in 2013 of $1,200 each. Amended tax return 1098 t Using Worksheet A, he figures the taxable part of his annuity payments. Amended tax return 1098 t He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. Amended tax return 1098 t His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). Amended tax return 1098 t He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. Amended tax return 1098 t David's filled-in Worksheet A is shown on the next page. Amended tax return 1098 t Worksheet A. Amended tax return 1098 t Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . Amended tax return 1098 t 1. Amended tax return 1098 t Enter the total pension or annuity payments received this year. Amended tax return 1098 t Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Amended tax return 1098 t $ 12,000 2. Amended tax return 1098 t Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Amended tax return 1098 t See Your cost in Part II, Rules for Retirees, earlier 2. Amended tax return 1098 t 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Amended tax return 1098 t Otherwise, go to line 3. Amended tax return 1098 t   3. Amended tax return 1098 t Enter the appropriate number from Table 1 below. Amended tax return 1098 t 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. Amended tax return 1098 t 3. Amended tax return 1098 t 360 4. Amended tax return 1098 t Divide line 2 by the number on line 3 4. Amended tax return 1098 t 68. Amended tax return 1098 t 89 5. Amended tax return 1098 t Multiply line 4 by the number of months for which this year's payments were made. Amended tax return 1098 t If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Amended tax return 1098 t Otherwise, go to line 6 5. Amended tax return 1098 t 688. Amended tax return 1098 t 90 6. Amended tax return 1098 t Enter any amounts previously recovered tax free in years after 1986. Amended tax return 1098 t This is the amount shown on line 10 of your worksheet for last year 6. Amended tax return 1098 t 0 7. Amended tax return 1098 t Subtract line 6 from line 2 7. Amended tax return 1098 t 24,800 8. Amended tax return 1098 t Enter the smaller of line 5 or line 7 8. Amended tax return 1098 t 688. Amended tax return 1098 t 90 9. Amended tax return 1098 t Taxable amount for year. Amended tax return 1098 t Subtract line 8 from line 1. Amended tax return 1098 t Enter the result, but not less than zero. Amended tax return 1098 t Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Amended tax return 1098 t If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Amended tax return 1098 t If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Amended tax return 1098 t If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Amended tax return 1098 t $11,311. Amended tax return 1098 t 10 10. Amended tax return 1098 t Was your annuity starting date before 1987?   Yes. Amended tax return 1098 t Do not complete the rest of this worksheet. Amended tax return 1098 t    No. Amended tax return 1098 t Add lines 6 and 8. Amended tax return 1098 t This is the amount you have recovered tax free through 2013. Amended tax return 1098 t You will need this number if you need to fill out this worksheet next year 10. Amended tax return 1098 t 688. Amended tax return 1098 t 90 11. Amended tax return 1098 t Balance of cost to be recovered. Amended tax return 1098 t Subtract line 10 from line 2. Amended tax return 1098 t If zero, you will not have to complete this worksheet next year. Amended tax return 1098 t The payments you receive next year will generally be fully taxable 11. Amended tax return 1098 t $24,111. Amended tax return 1098 t 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Amended tax return 1098 t Reemployment after choosing the alternative annuity option. Amended tax return 1098 t If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. Amended tax return 1098 t If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. Amended tax return 1098 t Annuity starting date before November 19, 1996. Amended tax return 1098 t   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. Amended tax return 1098 t Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. Amended tax return 1098 t However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Amended tax return 1098 t Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. Amended tax return 1098 t The gift may be taxable for gift tax purposes. Amended tax return 1098 t The value of the gift is equal to the value of the annuity. Amended tax return 1098 t Joint and survivor annuity. Amended tax return 1098 t   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. Amended tax return 1098 t This will eliminate any gift tax liability with regard to that gift. Amended tax return 1098 t   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. Amended tax return 1098 t This may result in a taxable gift. Amended tax return 1098 t More information. Amended tax return 1098 t   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. Amended tax return 1098 t Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. Amended tax return 1098 t Annual leave. Amended tax return 1098 t   A payment for accrued annual leave received on retirement is a salary payment. Amended tax return 1098 t It is taxable as wages in the tax year you receive it. Amended tax return 1098 t Voluntary contributions. Amended tax return 1098 t   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. Amended tax return 1098 t They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. Amended tax return 1098 t Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. Amended tax return 1098 t See Thrift Savings Plan , later. Amended tax return 1098 t Additional annuity benefit. Amended tax return 1098 t   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. Amended tax return 1098 t This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. Amended tax return 1098 t It does not matter that you receive only one monthly check covering both benefits. Amended tax return 1098 t Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. Amended tax return 1098 t   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. Amended tax return 1098 t Refund of voluntary contributions. Amended tax return 1098 t   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. Amended tax return 1098 t If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. Amended tax return 1098 t See Rollover Rules , later. Amended tax return 1098 t The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Amended tax return 1098 t It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. Amended tax return 1098 t For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Amended tax return 1098 t Community property laws. Amended tax return 1098 t   State community property laws apply to your annuity. Amended tax return 1098 t These laws will affect your income tax only if you file a return separately from your spouse. Amended tax return 1098 t   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. Amended tax return 1098 t Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. Amended tax return 1098 t   At any time, you have only one domicile even though you may have more than one home. Amended tax return 1098 t Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. Amended tax return 1098 t The question of your domicile is mainly a matter of your intentions as indicated by your actions. Amended tax return 1098 t   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. Amended tax return 1098 t The division is based on your periods of service and domicile in community and noncommunity property states while you were married. Amended tax return 1098 t   For more information, see Publication 555, Community Property. Amended tax return 1098 t Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. Amended tax return 1098 t The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. Amended tax return 1098 t This amount is taxable as wages. Amended tax return 1098 t Your annuity will continue to be taxed just as it was before. Amended tax return 1098 t If you are still recovering your cost, you continue to do so. Amended tax return 1098 t If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. Amended tax return 1098 t Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. Amended tax return 1098 t A nonresident alien is an individual who is not a citizen or a resident alien of the United States. Amended tax return 1098 t Special rule for figuring your total contributions. Amended tax return 1098 t   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. Amended tax return 1098 t You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. Amended tax return 1098 t For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. Amended tax return 1098 t Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. Amended tax return 1098 t   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. Amended tax return 1098 t Limit on taxable amount. Amended tax return 1098 t   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. Amended tax return 1098 t Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. Amended tax return 1098 t The numerator of the fraction is the retiree's total U. Amended tax return 1098 t S. Amended tax return 1098 t Government basic pay, other than tax-exempt pay for services performed outside the United States. Amended tax return 1098 t The denominator is the retiree's total U. Amended tax return 1098 t S. Amended tax return 1098 t Government basic pay for all services. Amended tax return 1098 t    Basic pay includes regular pay plus any standby differential. Amended tax return 1098 t It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. Amended tax return 1098 t   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. Amended tax return 1098 t (For an annuity, first complete Worksheet A in this publication. Amended tax return 1098 t ) Worksheet C. Amended tax return 1098 t Limited Taxable Amount for Nonresident Alien 1. Amended tax return 1098 t Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Amended tax return 1098 t   2. Amended tax return 1098 t Enter the total U. Amended tax return 1098 t S. Amended tax return 1098 t Government basic pay other than tax-exempt pay for services performed outside the United States 2. Amended tax return 1098 t   3. Amended tax return 1098 t Enter the total U. Amended tax return 1098 t S. Amended tax return 1098 t Government basic pay for all services 3. Amended tax return 1098 t   4. Amended tax return 1098 t Divide line 2 by line 3 4. Amended tax return 1098 t   5. Amended tax return 1098 t Limited taxable amount. Amended tax return 1098 t Multiply line 1 by line 4. Amended tax return 1098 t Enter this amount on Form 1040NR, line 17b 5. Amended tax return 1098 t   Example 1. Amended tax return 1098 t You are a nonresident alien who performed all services for the U. Amended tax return 1098 t S. Amended tax return 1098 t Government abroad as a nonresident alien. Amended tax return 1098 t You retired and began to receive a monthly annuity of $200. Amended tax return 1098 t Your total basic pay for all services for the U. Amended tax return 1098 t S. Amended tax return 1098 t Government was $100,000. Amended tax return 1098 t All of your basic pay was tax exempt because it was not U. Amended tax return 1098 t S. Amended tax return 1098 t source income. Amended tax return 1098 t The taxable amount of your annuity using Worksheet A in this publication is $720. Amended tax return 1098 t You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Amended tax return 1098 t Worksheet C. Amended tax return 1098 t Limited Taxable Amount for Nonresident Alien — Example 1 1. Amended tax return 1098 t Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Amended tax return 1098 t $ 720 2. Amended tax return 1098 t Enter the total U. Amended tax return 1098 t S. Amended tax return 1098 t Government basic pay other than tax-exempt pay for services performed outside the United States 2. Amended tax return 1098 t 0 3. Amended tax return 1098 t Enter the total U. Amended tax return 1098 t S. Amended tax return 1098 t Government basic pay for all services 3. Amended tax return 1098 t 100,000 4. Amended tax return 1098 t Divide line 2 by line 3 4. Amended tax return 1098 t 0 5. Amended tax return 1098 t Limited taxable amount. Amended tax return 1098 t Multiply line 1 by line 4. Amended tax return 1098 t Enter this amount on Form 1040NR, line 17b 5. Amended tax return 1098 t 0 Example 2. Amended tax return 1098 t You are a nonresident alien who performed services for the U. Amended tax return 1098 t S. Amended tax return 1098 t Government as a nonresident alien both within the United States and abroad. Amended tax return 1098 t You retired and began to receive a monthly annuity of $240. Amended tax return 1098 t Your total basic pay for your services for the U. Amended tax return 1098 t S. Amended tax return 1098 t Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. Amended tax return 1098 t The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. Amended tax return 1098 t S. Amended tax return 1098 t source income. Amended tax return 1098 t The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. Amended tax return 1098 t You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Amended tax return 1098 t Worksheet C. Amended tax return 1098 t Limited Taxable Amount for Nonresident Alien — Example 2 1. Amended tax return 1098 t Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Amended tax return 1098 t $ 1,980 2. Amended tax return 1098 t Enter the total U. Amended tax return 1098 t S. Amended tax return 1098 t Government basic pay other than tax-exempt pay for services performed outside the United States 2. Amended tax return 1098 t 40,000 3. Amended tax return 1098 t Enter the total U. Amended tax return 1098 t S. Amended tax return 1098 t Government basic pay for all services 3. Amended tax return 1098 t 120,000 4. Amended tax return 1098 t Divide line 2 by line 3 4. Amended tax return 1098 t . Amended tax return 1098 t 333 5. Amended tax return 1098 t Limited taxable amount. Amended tax return 1098 t Multiply line 1 by line 4. Amended tax return 1098 t Enter this amount on Form 1040NR, line 17b 5. Amended tax return 1098 t 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. Amended tax return 1098 t (However, see Roth TSP balance and Uniformed services TSP accounts, next. Amended tax return 1098 t ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. Amended tax return 1098 t The way that you withdraw your account balance determines when you must pay the tax. Amended tax return 1098 t Roth TSP balance. Amended tax return 1098 t   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. Amended tax return 1098 t This means Roth TSP contributions are included in your income. Amended tax return 1098 t The contribution limits are the same as the traditional TSP. Amended tax return 1098 t You can elect to have part or all of your TSP contributions designated as a Roth TSP. Amended tax return 1098 t Agency contributions will be part of your traditional TSP balance. Amended tax return 1098 t Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. Amended tax return 1098 t   Qualified distributions from your Roth TSP are not included in income. Amended tax return 1098 t This applies to both your cost in the account and income earned on that account. Amended tax return 1098 t A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. Amended tax return 1098 t   For more information, go to the TSP website, www. Amended tax return 1098 t tsp. Amended tax return 1098 t gov, or the TSP Service Office. Amended tax return 1098 t See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. Amended tax return 1098 t Uniformed services TSP accounts. Amended tax return 1098 t   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. Amended tax return 1098 t However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. Amended tax return 1098 t See Roth TSP balance discussed previously to get more information about Roth contributions. Amended tax return 1098 t The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. Amended tax return 1098 t You can get more information from the TSP website, www. Amended tax return 1098 t tsp. Amended tax return 1098 t gov, or the TSP Service Office. Amended tax return 1098 t Direct rollover by the TSP. Amended tax return 1098 t   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. Amended tax return 1098 t However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Amended tax return 1098 t Also, see Rollover Rules , later. Amended tax return 1098 t Direct rollover by the TSP to a Roth IRA. Amended tax return 1098 t   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. Amended tax return 1098 t However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Amended tax return 1098 t Also, see Rollovers to Roth IRAs for more information, later. Amended tax return 1098 t Note. Amended tax return 1098 t A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. Amended tax return 1098 t This is because you already paid tax on those contributions. Amended tax return 1098 t You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. Amended tax return 1098 t TSP annuity. Amended tax return 1098 t   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. Amended tax return 1098 t The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. Amended tax return 1098 t However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. Amended tax return 1098 t See Roth TSP balance , earlier. Amended tax return 1098 t This is because you already paid tax on those contributions. Amended tax return 1098 t Cash withdrawals. Amended tax return 1098 t   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. Amended tax return 1098 t (See Rollover Rules , later. Amended tax return 1098 t ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. Amended tax return 1098 t See Lump-Sum Distributions in Publication 575 for details. Amended tax return 1098 t However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. Amended tax return 1098 t See Roth TSP balance , earlier. Amended tax return 1098 t    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. Amended tax return 1098 t   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. Amended tax return 1098 t If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. Amended tax return 1098 t See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. Amended tax return 1098 t However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. Amended tax return 1098 t See Roth TSP balance , earlier, for a discussion of those conditions. Amended tax return 1098 t Tax on early distributions. Amended tax return 1098 t   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. Amended tax return 1098 t However, this additional tax does not apply in certain situations, including any of the following. Amended tax return 1098 t You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. Amended tax return 1098 t You choose to receive your account balance in monthly payments based on your life expectancy. Amended tax return 1098 t You are totally and permanently disabled. Amended tax return 1098 t You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). Amended tax return 1098 t The earnings may be subject to the 10% tax depending on whether you met certain conditions. Amended tax return 1098 t See Roth TSP balance , earlier. Amended tax return 1098 t   For more information, see Tax on Early Distributions in Publication 575. Amended tax return 1098 t Outstanding loan. Amended tax return 1098 t   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. Amended tax return 1098 t The distribution also may be subject to the additional 10% tax on early distributions. Amended tax return 1098 t However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. Amended tax return 1098 t See Rollover Rules , later. Amended tax return 1098 t   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. Amended tax return 1098 t However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. Amended tax return 1098 t See Roth TSP balance , earlier. Amended tax return 1098 t More information. Amended tax return 1098 t   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. Amended tax return 1098 t Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). Amended tax return 1098 t    The above documents are also available on the TSP website at www. Amended tax return 1098 t tsp. Amended tax return 1098 t gov. Amended tax return 1098 t Select “Forms & Publications. Amended tax return 1098 t ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. Amended tax return 1098 t You do not include the amount rolled over in your income, and you cannot take a deduction for it. Amended tax return 1098 t The amount rolled over is taxed later as the new program pays that amount to you. Amended tax return 1098 t If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. Amended tax return 1098 t However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. Amended tax return 1098 t To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. Amended tax return 1098 t You can also roll over a distribution from a qualified retirement plan into a Roth IRA. Amended tax return 1098 t Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. Amended tax return 1098 t See Rollovers to Roth IRAs , later, for more information. Amended tax return 1098 t Qualified retirement plan. Amended tax return 1098 t   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. Amended tax return 1098 t The CSRS, FERS, and TSP are considered qualified retirement plans. Amended tax return 1098 t Distributions eligible for rollover treatment. Amended tax return 1098 t   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. Amended tax return 1098 t You cannot roll over any part of your CSRS or FERS annuity payments. Amended tax return 1098 t   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. Amended tax return 1098 t   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. Amended tax return 1098 t However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. Amended tax return 1098 t Direct rollover option. Amended tax return 1098 t   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. Amended tax return 1098 t   There is an automatic rollover requirement for mandatory distributions. Amended tax return 1098 t A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. Amended tax return 1098 t The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. Amended tax return 1098 t You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. Amended tax return 1098 t If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. Amended tax return 1098 t No tax withheld. Amended tax return 1098 t   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. Amended tax return 1098 t However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. Amended tax return 1098 t Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. Amended tax return 1098 t Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. Amended tax return 1098 t Payment to you option. Amended tax return 1098 t   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. Amended tax return 1098 t However, the full amount is treated as distributed to you even though you actually receive only 80%. Amended tax return 1098 t You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. Amended tax return 1098 t Rollovers to Roth IRAs are generally included in income. Amended tax return 1098 t Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. Amended tax return 1098 t If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. Amended tax return 1098 t However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). Amended tax return 1098 t Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. Amended tax return 1098 t See Roth TSP balance , earlier. Amended tax return 1098 t Also, see Tax on Early Distributions in Publication 575. Amended tax return 1098 t Exception to withholding. Amended tax return 1098 t   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. Amended tax return 1098 t Partial rollovers. Amended tax return 1098 t   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. Amended tax return 1098 t See Lump-Sum Distributions in Publication 575. Amended tax return 1098 t However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. Amended tax return 1098 t Rolling over more than amount received. Amended tax return 1098 t   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). Amended tax return 1098 t Example. Amended tax return 1098 t You left government service at age 53. Amended tax return 1098 t On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you