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Free tax return online Publication 597 - Main Content Table of Contents Application of Treaty Personal Services Pensions, Annuities, Social Security, and AlimonyRoth IRAs. Free tax return online Tax-deferred plans. Free tax return online Investment Income From Canadian Sources Other Income Charitable ContributionsQualified charities. Free tax return online Income Tax Credits Competent Authority Assistance How To Get Tax HelpText of Treaty U. Free tax return online S. Free tax return online Taxation Canadian Taxation Application of Treaty The benefits of the income tax treaty are generally provided on the basis of residence for income tax purposes. Free tax return online That is, a person who is recognized as a resident of the United States who has income from Canada, will often pay less income tax to Canada on that income than if no treaty was in effect. Free tax return online Article IV provides definitions of residents of Canada and the United States, and provides specific criteria for applying the treaty in cases where a taxpayer is considered by both countries to be a resident. Free tax return online Saving clause. Free tax return online   In most instances, a treaty does not affect the right of a country to tax its own residents (including those who are U. Free tax return online S. Free tax return online citizens) or of the United States to tax its residents or citizens (including U. Free tax return online S. Free tax return online citizens who are residents of the foreign country). Free tax return online This provision is known as the “saving clause. Free tax return online ”   For example, an individual who is a U. Free tax return online S. Free tax return online citizen and a resident of Canada may have dividend income from a U. Free tax return online S. Free tax return online corporation. Free tax return online The treaty provides a maximum rate of 15% on dividends received by a resident of Canada from sources in the United States. Free tax return online Even though a resident of Canada, the individual is a U. Free tax return online S. Free tax return online citizen and the saving clause overrides the treaty article that limits the U. Free tax return online S. Free tax return online tax to 15%. Free tax return online    Exceptions to the saving clause can be found in Article XXIX, paragraph 3. Free tax return online Treaty-based position. Free tax return online   If you take the position that any U. Free tax return online S. Free tax return online tax is overruled or otherwise reduced by a U. Free tax return online S. Free tax return online treaty (a treaty-based position), you generally must disclose that position on Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), and attach it to your return. Free tax return online Personal Services A U. Free tax return online S. Free tax return online citizen or resident who is temporarily present in Canada during the tax year is exempt from Canadian income taxes on pay for services performed, or remittances received from the United States, if the citizen or resident qualifies under one of the treaty exemption provisions set out below. Free tax return online Income from employment (Article XV). Free tax return online   Income U. Free tax return online S. Free tax return online residents receive for the performance of dependent personal services in Canada (except as public entertainers) is exempt from Canadian tax if it is not more than $10,000 in Canadian currency for the year. Free tax return online If it is more than $10,000 for the year, it is exempt only if: The residents are present in Canada for no more than 183 days in any 12-month period beginning or ending in the year concerned, and The income is not paid by, or on behalf of, a Canadian resident and is not borne by a permanent establishment in Canada. Free tax return online    Whether there is a permanent establishment in Canada is determined by the rules set forth in Article V. Free tax return online Example. Free tax return online You are a U. Free tax return online S. Free tax return online resident employed under an 8-month contract with a Canadian firm to install equipment in their Montreal plant. Free tax return online During the calendar year you were physically present in Canada for 179 days and were paid $16,500 (Canadian) for your services. Free tax return online Although you were in Canada for not more than 183 days during the year, your income is not exempt from Canadian income tax because it was paid by a Canadian resident and was more than $10,000 (Canadian) for the year. Free tax return online Pay received by a U. Free tax return online S. Free tax return online resident for work regularly done in more than one country as an employee on a ship, aircraft, motor vehicle, or train operated by a U. Free tax return online S. Free tax return online resident is exempt from Canadian tax. Free tax return online Income from self-employment (Article VII). Free tax return online   Income from services performed (other than those performed as an employee) are taxed in Canada if they are attributable to a permanent establishment in Canada. Free tax return online This income is treated as business profits, and deductions similar to those allowed under U. Free tax return online S. Free tax return online law are allowable. Free tax return online   If you carry on (or have carried on) business in both Canada and the United States, the business profits are attributable to each country based on the profits that the permanent establishment might be expected to make if it were a distinct and separate person engaged in the same or similar activities. Free tax return online The business profits attributable to the permanent establishment include only those profits derived from assets used, risks assumed, and activities performed by the permanent establishment. Free tax return online   You may be considered to have a permanent establishment if you meet certain conditions. Free tax return online For more information, see Article V (Permanent Establishment) and Article VII (Business Profits). Free tax return online Public entertainers (Article XVI). Free tax return online   The provisions under income from employment or income from self-employment do not apply to public entertainers (such as theater, motion picture, radio, or television artistes, musicians, or athletes) from the United States who receive more than $15,000 in gross receipts in Canadian currency, including reimbursed expenses, from their entertainment activities in Canada during the calendar year. Free tax return online However, this provision for public entertainers does not apply (and the other provisions will apply) to athletes participating in team sports in leagues with regularly scheduled games in both the United States and Canada. Free tax return online Compensation paid by the U. Free tax return online S. Free tax return online Government (Article XIX). Free tax return online   Wages, salaries, and similar income (other than pensions) paid to a U. Free tax return online S. Free tax return online citizen by the United States or any of its agencies, instrumentalities, or political subdivisions for discharging governmental functions are exempt from Canadian income tax. Free tax return online   The exemption does not apply to pay for services performed in connection with any trade or business carried on for profit by the United States, or any of its agencies, instrumentalities, or political subdivisions. Free tax return online Students and apprentices (Article XX). Free tax return online   A full-time student, apprentice, or business trainee who is in Canada to study or acquire business experience is exempt from Canadian income tax on remittances received from any source outside Canada for maintenance, education, or training. Free tax return online The recipient must be or must have been a U. Free tax return online S. Free tax return online resident immediately before visiting Canada. Free tax return online   An apprentice or business trainee can claim this exemption only for a period of one year from the date the individual first arrived in Canada for the purpose of training. Free tax return online Pensions, Annuities, Social Security, and Alimony Under Article XVIII, pensions and annuities from Canadian sources paid to U. Free tax return online S. Free tax return online residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity). Free tax return online Canadian pensions and annuities paid to U. Free tax return online S. Free tax return online residents may be taxed by the United States, but the amount of any pension included in income for U. Free tax return online S. Free tax return online tax purposes may not be more than the amount that would be included in income in Canada if the recipient were a Canadian resident. Free tax return online Pensions. Free tax return online   A pension includes any payment under a pension or other retirement arrangement, Armed Forces retirement pay, war veterans pensions and allowances, and payments under a sickness, accident, or disability plan. Free tax return online It includes pensions paid by private employers and the government for services rendered. Free tax return online   Pensions also include payments from individual retirement arrangements (IRAs) in the United States, registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs) in Canada. Free tax return online   Pensions do not include social security benefits. Free tax return online Roth IRAs. Free tax return online   A distribution from a Roth IRA is exempt from Canadian tax to the extent it would be exempt from U. Free tax return online S. Free tax return online tax if paid to a U. Free tax return online S. Free tax return online resident. Free tax return online In addition, you may elect to defer any tax in Canada on income accrued within the Roth IRA but not distributed by the Roth IRA. Free tax return online However, you cannot defer tax on any accruals due to contributions made after you become a Canadian resident. Free tax return online Tax-deferred plans. Free tax return online   Generally, income that accrues in a Canadian RRSP or RRIF is subject to U. Free tax return online S. Free tax return online tax, even if it is not distributed. Free tax return online However, a U. Free tax return online S. Free tax return online citizen or resident can elect to defer U. Free tax return online S. Free tax return online tax on income from the plan until the income is distributed. Free tax return online Form 8891 is used to make the election. Free tax return online Annuities. Free tax return online    An annuity is a stated sum payable periodically at stated times, during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). Free tax return online Annuities do not include: Non-periodic payments, or An annuity the cost of which was deductible for tax purposes. Free tax return online Special rules. Free tax return online    Special rules apply to pensions and annuities with respect to: Short-term assignments, Cross-border commuters, and Individuals who participate in a Canadian qualifying plan. Free tax return online Generally, distributions in such cases are deemed to be earned in the country in which the plan is established, without regard to where the services were rendered. Free tax return online Social security benefits. Free tax return online   U. Free tax return online S. Free tax return online social security benefits paid to a resident of Canada are taxed in Canada as if they were benefits under the Canada Pension Plan, except that 15% of the amount of the benefit is exempt from Canadian tax. Free tax return online Alimony. Free tax return online   Alimony and similar amounts (including child support payments) from Canadian sources paid to U. Free tax return online S. Free tax return online residents are exempt from Canadian tax. Free tax return online For purposes of U. Free tax return online S. Free tax return online tax, these amounts are excluded from income to the same extent they would be excluded from income in Canada if the recipient was a Canadian resident. Free tax return online Investment Income From Canadian Sources The treaty provides beneficial treatment for certain items of Canadian source income that result from an investment of capital. Free tax return online Dividends (Article X). Free tax return online   For Canadian source dividends received by U. Free tax return online S. Free tax return online residents, the Canadian income tax generally may not be more than 15%. Free tax return online   A 5% rate applies to intercorporate dividends paid from a subsidiary to a parent corporation owning at least 10% of the subsidiary's voting stock. Free tax return online However, a 10% rate applies if the payer of the dividend is a nonresident-owned Canadian investment corporation. Free tax return online   These rates do not apply if the owner of the dividends carries on, or has carried on, a business in Canada through a permanent establishment and the holding on which the income is paid is effectively connected with that permanent establishment. Free tax return online Interest (Article XI). Free tax return online   Generally, Canadian source interest received by U. Free tax return online S. Free tax return online residents is exempt from Canadian income tax. Free tax return online   The exemption does not apply if the owner of the interest carries on, or has carried on, a business in Canada through a permanent establishment and the debt on which the income is paid is effectively connected with that permanent establishment. Free tax return online Gains from the sale of property (Article XIII). Free tax return online   Generally, gains from the sale of personal property by a U. Free tax return online S. Free tax return online resident having no permanent establishment in Canada are exempt from Canadian income tax. Free tax return online However, the exemption from Canadian tax does not apply to gains realized by U. Free tax return online S. Free tax return online residents on Canadian real property, and on personal property belonging to a permanent establishment in Canada. Free tax return online   If the property subject to Canadian tax is a capital asset and was owned by the U. Free tax return online S. Free tax return online resident on September 26, 1980, not as part of the business property of a permanent establishment in Canada, generally the taxable gain is limited to the appreciation after 1984. Free tax return online Royalties (Article XII). Free tax return online   The following are exempt from Canadian tax: Copyright royalties and other like payments for the production or reproduction of any literary, dramatic, musical, or artistic work (other than payments for motion pictures and works on film, videotape, or other means of reproduction for use in connection with television, which may be taxed at 10%), Payments for the use of, or the right to use, computer software, Payments for the use of, or the right to use, any patent or any information concerning industrial, commercial, or scientific experience (but not within a rental or franchise agreement), and Payments for broadcasting as agreed to in an exchange of notes between the countries. Free tax return online   This rate or exemption does not apply if the owner of the royalties carries on, or has carried on, a business in Canada through a permanent establishment and the right or property on which the income is paid is effectively connected with that permanent establishment. Free tax return online   This exemption (or lower rate) does not apply to royalties to explore for or to exploit mineral deposits, timber, and other natural resources. Free tax return online Other Income Generally, Canadian source income that is not specifically mentioned in the treaty, may be taxed by Canada. Free tax return online Gambling losses. Free tax return online   Canadian residents may deduct gambling losses in the U. Free tax return online S. Free tax return online against gambling winnings in the U. Free tax return online S. Free tax return online in the same manner as a U. Free tax return online S. Free tax return online resident. Free tax return online Charitable Contributions United States income tax return. Free tax return online   Under Article XXI, you may deduct contributions to certain qualified Canadian charitable organizations on your United States income tax return. Free tax return online Besides being subject to the overall limits applicable to all your charitable contributions under U. Free tax return online S. Free tax return online tax law, your charitable contributions to Canadian organizations (other than contributions to a college or university at which you or a member of your family is or was enrolled) are subject to the U. Free tax return online S. Free tax return online percentage limits on charitable contributions, applied to your Canadian source income. Free tax return online If your return does not include gross income from Canadian sources, charitable contributions to Canadian organizations are generally not deductible. Free tax return online Example. Free tax return online You are a U. Free tax return online S. Free tax return online citizen living in Canada. Free tax return online You have both U. Free tax return online S. Free tax return online and Canadian source income. Free tax return online During your tax year, you contribute to Canadian organizations that would qualify as charitable organizations under U. Free tax return online S. Free tax return online tax law if they were U. Free tax return online S. Free tax return online organizations. Free tax return online To figure the maximum amount of the contribution to Canadian organizations that you can deduct on your U. Free tax return online S. Free tax return online income tax return, multiply your adjusted gross income from Canadian sources by the percentage limit that applies to contributions under U. Free tax return online S. Free tax return online income tax law. Free tax return online Then include this amount on your return along with all your domestic charitable contributions, subject to the appropriate percentage limit required for contributions under U. Free tax return online S. Free tax return online income tax law. Free tax return online The appropriate percentage limit for U. Free tax return online S. Free tax return online tax purposes is applied to your total adjusted gross income from all sources. Free tax return online Qualified charities. Free tax return online   These Canadian organizations must meet the qualifications that a U. Free tax return online S. Free tax return online charitable organization must meet under U. Free tax return online S. Free tax return online tax law. Free tax return online Usually an organization will notify you if it qualifies. Free tax return online For further information on charitable contributions and the U. Free tax return online S. Free tax return online percentage limits, see Publication 526, Charitable Contributions. Free tax return online Canadian income tax return. Free tax return online   Under certain conditions, contributions to qualified U. Free tax return online S. Free tax return online charitable organizations may also be claimed on your Canadian income tax return if you are a Canadian resident. Free tax return online Income Tax Credits The treaty contains a credit provision (Article XXIV) for the elimination of double taxation. Free tax return online In general, the United States and Canada both allow a credit against their income tax for the income tax paid to the other country on income from sources in that other country. Free tax return online For detailed discussions of the U. Free tax return online S. Free tax return online income tax treatment of tax paid to foreign countries, see Publication 514, Foreign Tax Credit for Individuals. Free tax return online See paragraphs (4) and (5) of Article XXIV for certain provisions that affect the computation of the credit allowed by the United States for Canadian income taxes paid by U. Free tax return online S. Free tax return online citizens residing in Canada. Free tax return online Competent Authority Assistance Under Article XXVI, a U. Free tax return online S. Free tax return online citizen or resident may request assistance from the U. Free tax return online S. Free tax return online competent authority when the actions of Canada, the United States, or both, potentially result in double taxation or taxation contrary to the treaty. Free tax return online The U. Free tax return online S. Free tax return online competent authority may then consult with the Canadian competent authority to determine if the double taxation or denial of treaty benefits in question can be avoided. Free tax return online If the competent authorities are not able to reach agreement in a case, binding arbitration proceedings may apply. Free tax return online It is important that your request for competent authority assistance be made as soon as you have been notified by either Canada or the United States of proposed adjustments that would result in denial of treaty benefits or in double taxation. Free tax return online This is so that implementation of any agreement reached by the competent authorities is not barred by administrative, legal, or procedural barriers. Free tax return online For information that you should include with your request for competent authority assistance, see Revenue Procedure 2006-54, 2006-49 IRB 1035, available at www. Free tax return online irs. Free tax return online gov/irb/2006-49_IRB/ar13. Free tax return online html. Free tax return online The request should be addressed to:  Deputy Commissioner (International) Large Business and International Division Attn: Office of Tax Treaty  Internal Revenue Service 1111 Constitution Ave. Free tax return online , NW Routing: MA3-322A Washington, D. Free tax return online C. Free tax return online 20024 In addition to a timely request for assistance, you should take the following measures: File a timely protective claim for credit or refund of U. Free tax return online S. Free tax return online taxes on Form 1040X, Form 1120X, or amended Form 1041, whichever is appropriate. Free tax return online This will, among other things, give you the benefit of a foreign tax credit in case you do not qualify for the treaty benefit in question. Free tax return online For figuring this credit, attach either Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), or Form 1118, Foreign Tax Credit — Corporations, as appropriate. Free tax return online Attach your protective claim to your request for competent authority assistance. Free tax return online Take appropriate action under Canadian procedures to avoid the lapse or termination of your right of appeal under Canadian income tax law. Free tax return online How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS and the Canada Revenue Agency in several ways. Free tax return online Text of Treaty You can get the text of the U. Free tax return online S. Free tax return online —Canada income tax treaty from: Superintendent of Documents U. Free tax return online S. Free tax return online Government Printing Office P. Free tax return online O. Free tax return online Box 371954 Pittsburgh, PA 15250-7954 The treaty can also be found on the Internet at IRS. Free tax return online gov. Free tax return online U. Free tax return online S. Free tax return online Taxation During the filing season, the IRS conducts a taxpayer assistance program in Canada. Free tax return online To find out if IRS personnel will be in your area, you should contact the consular office at the nearest U. Free tax return online S. Free tax return online Embassy or consulate. Free tax return online Mail. Free tax return online For answers to technical or account questions, you can write to:   Internal Revenue Service International Section Philadelphia, PA 19255-0525 Phone. Free tax return online You can call the IRS for help at (267) 941-1000 (not a toll-free call). Free tax return online Canadian Taxation You can get information on Canadian taxation from the Canada Revenue Agency. Free tax return online The International Tax Services Office can be contacted on 1-800-267-5177 (from anywhere in Canada and the U. Free tax return online S. Free tax return online ) or on the Internet at www. Free tax return online cra-arc. 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The Free Tax Return Online

Free tax return online Publication 915 - Main Content Table of Contents Are Any of Your Benefits Taxable?Worksheet A. Free tax return online Exemption from withholding. Free tax return online How To Report Your Benefits How Much Is Taxable?Examples Lump-Sum ElectionExample Deductions Related to Your BenefitsRepayments More Than Gross Benefits Worksheets AppendixForm SSA-1099, Social Security Benefit Statement 2013 Form SSA-1042S, Social Security Benefit Statement 2013 (Nonresident Aliens) Form RRB-1099, Payments by the Railroad Retirement Board 2013 Form RRB-1042S, Payments by the Railroad Retirement Board 2013 (Nonresident Aliens) How To Get Tax HelpLow Income Taxpayer Clinics Are Any of Your Benefits Taxable? To find out whether any of your benefits shown on Forms SSA-1099 and RRB-1099 may be taxable, compare the base amount (explained later) for your filing status with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Free tax return online When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Free tax return online S. Free tax return online savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned by bona fide residents of American Samoa or Puerto Rico. Free tax return online Children's benefits. Free tax return online   The rules in this publication apply to benefits received by children. Free tax return online See Who is taxed , later. Free tax return online The SSA issues Form SSA-1099 and Form SSA-1042S. Free tax return online The RRB issues Form RRB-1099 and Form RRB-1042S. Free tax return online These forms (tax statements) report the amounts paid and repaid, and taxes withheld for a tax year. Free tax return online You may receive more than one of these forms for the same tax year. Free tax return online See the Appendix at the end of this publication for more information. Free tax return online Each original Form RRB-1099 or Form RRB-1042S is valid unless it has been corrected. Free tax return online The RRB will issue a corrected Form RRB-1099 or Form RRB-1042S if there is an error in the original. Free tax return online A corrected Form RRB-1099 or Form RRB-1042S is indicated as “CORRECTED” and replaces the corresponding original Form RRB-1099 or Form RRB-1042S. Free tax return online You must use the latest corrected Form RRB-1099 or Form RRB-1042S you received and any original Form RRB-1099 or Form RRB-1042S that the RRB has not corrected when you determine what amounts to report on your tax return. Free tax return online Figuring total income. Free tax return online   To figure the total of one-half of your benefits plus your other income, use Worksheet A, discussed later. Free tax return online If the total is more than your base amount, part of your benefits may be taxable. Free tax return online   If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Free tax return online Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Free tax return online If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Free tax return online If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Free tax return online Base amount. Free tax return online   Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. Free tax return online Worksheet A. Free tax return online   You can use Worksheet A to figure the amount of income to compare with your base amount. Free tax return online This is a quick way to check whether some of your benefits may be taxable. Free tax return online     Worksheet A. Free tax return online A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. Free tax return online Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Free tax return online Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Free tax return online (If you received more than one form, combine the amounts from box 5 and enter the total. Free tax return online ) A. Free tax return online   Note. Free tax return online If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Free tax return online B. Free tax return online Enter one-half of the amount on line A B. Free tax return online   C. Free tax return online Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Free tax return online   D. Free tax return online Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Free tax return online   E. Free tax return online Add lines B, C, and D E. Free tax return online   Note. Free tax return online Compare the amount on line E to your base amount for your filing status. Free tax return online If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Free tax return online If the amount on line E is more than your base amount, some of your benefits may be taxable. Free tax return online You need to complete Worksheet 1, shown later. Free tax return online If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits . Free tax return online   Example. Free tax return online You and your spouse (both over 65) are filing a joint return for 2013 and you both received social security benefits during the year. Free tax return online In January 2014, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Free tax return online Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. Free tax return online You also received a taxable pension of $22,800 and interest income of $500. Free tax return online You did not have any tax-exempt interest income. Free tax return online Your benefits are not taxable for 2013 because your income, as figured in Worksheet A below, is not more than your base amount ($32,000) for married filing jointly. Free tax return online   Even though none of your benefits are taxable, you must file a return for 2013 because your taxable gross income ($23,300) exceeds the minimum filing requirement amount for your filing status. Free tax return online     Filled-in Worksheet A. Free tax return online A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. Free tax return online Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Free tax return online Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Free tax return online (If you received more than one form, combine the amounts from box 5 and enter the total. Free tax return online ) A. Free tax return online $11,000 Note. Free tax return online If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Free tax return online B. Free tax return online Enter one-half of the amount on line A B. Free tax return online 5,500 C. Free tax return online Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Free tax return online 23,300 D. Free tax return online Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Free tax return online -0- E. Free tax return online Add lines B, C, and D E. Free tax return online $28,800 Note. Free tax return online Compare the amount on line E to your base amount for your filing status. Free tax return online If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Free tax return online If the amount on line E is more than your base amount, some of your benefits may be taxable. Free tax return online You need to complete Worksheet 1, shown later. Free tax return online If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits . Free tax return online   Who is taxed. Free tax return online   Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. Free tax return online For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. Free tax return online One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to your child. Free tax return online Repayment of benefits. Free tax return online   Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Free tax return online It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Free tax return online If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Free tax return online   Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Free tax return online Your repayments are shown in box 4. Free tax return online The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Free tax return online Use the amount in box 5 to figure whether any of your benefits are taxable. Free tax return online Example. Free tax return online In 2012, you received $3,000 in social security benefits, and in 2013 you received $2,700. Free tax return online In March 2013, SSA notified you that you should have received only $2,500 in benefits in 2012. Free tax return online During 2013, you repaid $500 to SSA. Free tax return online The Form SSA-1099 you received for 2013 shows $2,700 in box 3 (gross amount) and $500 in box 4 (repayment). Free tax return online The amount in box 5 shows your net benefits of $2,200 ($2,700 minus $500). Free tax return online Tax withholding and estimated tax. Free tax return online   You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement benefits. Free tax return online If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Statement. Free tax return online   If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the year. Free tax return online For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. Free tax return online U. Free tax return online S. Free tax return online citizens residing abroad. Free tax return online   U. Free tax return online S. Free tax return online citizens who are residents of the following countries are exempt from U. Free tax return online S. Free tax return online tax on their benefits. Free tax return online Canada. Free tax return online Egypt. Free tax return online Germany. Free tax return online Ireland. Free tax return online Israel. Free tax return online Italy. Free tax return online (You must also be a citizen of Italy for the exemption to apply. Free tax return online ) Romania. Free tax return online United Kingdom. Free tax return online   The SSA will not withhold U. Free tax return online S. Free tax return online tax from your benefits if you are a U. Free tax return online S. Free tax return online citizen. Free tax return online   The RRB will withhold U. Free tax return online S. Free tax return online tax from your benefits unless you file Form RRB-1001, Nonresident Questionnaire, with the RRB to provide citizenship and residency information. Free tax return online If you do not file Form RRB-1001, the RRB will consider you a nonresident alien and withhold tax from your railroad retirement benefits at a 30% rate. Free tax return online Contact the RRB to get this form. Free tax return online Lawful permanent residents. Free tax return online   For U. Free tax return online S. Free tax return online income tax purposes, lawful permanent residents (green card holders) are considered resident aliens until their lawful permanent resident status under the immigration laws is either taken away or is administratively or judicially determined to have been abandoned. Free tax return online Social security benefits paid to a green card holder are not subject to 30% withholding. Free tax return online If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. Free tax return online SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. Free tax return online If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. Free tax return online You must also attach the following information to your Form 1040 or 1040A: A copy of the Form SSA-1042S, Social Security Benefit Statement, A copy of the “green card,” and A signed declaration that includes the following statements:    “The SSA should not have withheld federal income tax from my social security benefits because I am a U. Free tax return online S. Free tax return online lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. Free tax return online I am filing a U. Free tax return online S. Free tax return online income tax return for the tax year as a resident alien reporting all of my worldwide income. Free tax return online I have not claimed benefits for the tax year under an income tax treaty as a nonresident alien. Free tax return online ” Nonresident aliens. Free tax return online   A nonresident alien is an individual who is not a citizen or resident of the United States. Free tax return online If you are a nonresident alien, the rules discussed in this publication do not apply to you. Free tax return online Instead, 85% of your benefits are taxed at a 30% rate, unless exempt (or subject to a lower rate) by treaty. Free tax return online You will receive a Form SSA-1042S or Form RRB-1042S showing the amount of your benefits. Free tax return online These forms will also show the tax rate and the amount of tax withheld from your benefits. Free tax return online   Under tax treaties with the following countries, residents of these countries are exempt from U. Free tax return online S. Free tax return online tax on their benefits. Free tax return online Canada. Free tax return online Egypt. Free tax return online Germany. Free tax return online Ireland. Free tax return online Israel. Free tax return online Italy. Free tax return online Japan. Free tax return online Romania. Free tax return online United Kingdom. Free tax return online   Under a treaty with India, benefits paid to individuals who are both residents and nationals of India are exempt from U. Free tax return online S. Free tax return online tax if the benefits are for services performed for the United States, its subdivisions, or local government authorities. Free tax return online   If you are a resident of Switzerland, your total benefit amount will be taxed at a 15% rate. Free tax return online   For more information on whether you are a nonresident alien, see Publication 519, U. Free tax return online S. Free tax return online Tax Guide for Aliens. Free tax return online Exemption from withholding. Free tax return online   If your social security benefits are exempt from tax because you are a resident of one of the treaty countries listed, the SSA will not withhold U. Free tax return online S. Free tax return online tax from your benefits. Free tax return online   If your railroad retirement benefits are exempt from tax because you are a resident of one of the treaty countries listed, you can claim an exemption from withholding by filing Form RRB-1001 with the RRB. Free tax return online Contact the RRB to get this form. Free tax return online Canadian or German social security benefits paid to U. Free tax return online S. Free tax return online residents. Free tax return online   Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U. Free tax return online S. Free tax return online residents are treated for U. Free tax return online S. Free tax return online income tax purposes as if they were paid under the social security legislation of the United States. Free tax return online If you receive social security benefits from Canada or Germany, include them on line 1 of Worksheet 1, shown later. Free tax return online How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040 or Form 1040A. Free tax return online You cannot use Form 1040EZ. Free tax return online Reporting on Form 1040. Free tax return online   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 20a and the taxable part on line 20b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Free tax return online Reporting on Form 1040A. Free tax return online   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 14a and the taxable part on line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Free tax return online Benefits not taxable. Free tax return online   If you are filing Form 1040EZ, do not report any benefits on your tax return. Free tax return online If you are filing Form 1040 or Form 1040A, report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online How Much Is Taxable? If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Free tax return online Generally, the higher that total amount, the greater the taxable part of your benefits. Free tax return online Maximum taxable part. Free tax return online   Generally, up to 50% of your benefits will be taxable. Free tax return online However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Free tax return online The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Free tax return online You are married filing separately and lived with your spouse at any time during 2013. Free tax return online Which worksheet to use. Free tax return online   A worksheet you can use to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. Free tax return online You can use either that worksheet or Worksheet 1 in this publication, unless any of the following situations applies to you. Free tax return online You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. Free tax return online In this situation you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Free tax return online Situation (1) does not apply and you take an exclusion for interest from qualified U. Free tax return online S. Free tax return online savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Free tax return online In this situation, you must use Worksheet 1 in this publication to figure your taxable benefits. Free tax return online You received a lump-sum payment for an earlier year. Free tax return online In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in this publication. Free tax return online See Lump-Sum Election , later. Free tax return online Examples A few examples you can use as a guide to figure the taxable part of your benefits follow. Free tax return online Filled-in Worksheet 1. Free tax return online Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Free tax return online None of your benefits are taxable for 2013. Free tax return online For more information, see Repayments More Than Gross Benefits . Free tax return online If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Free tax return online S. Free tax return online Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Free tax return online Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Free tax return online 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Free tax return online Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Free tax return online $5,980         2. Free tax return online Enter one-half of line 1 2. Free tax return online 2,990     3. Free tax return online Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Free tax return online 28,990     4. Free tax return online Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Free tax return online -0-     5. Free tax return online Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Free tax return online -0-     6. Free tax return online Combine lines 2, 3, 4, and 5 6. Free tax return online 31,980     7. Free tax return online Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Free tax return online  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Free tax return online -0-     8. Free tax return online Is the amount on line 7 less than the amount on line 6?             No. Free tax return online None of your social security benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Free tax return online             Yes. Free tax return online Subtract line 7 from line 6 8. Free tax return online 31,980     9. Free tax return online If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Free tax return online 25,000       Note. Free tax return online If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then go to line 18. Free tax return online         10. Free tax return online Is the amount on line 9 less than the amount on line 8?             No. Free tax return online None of your benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Free tax return online             Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online 6,980     11. Free tax return online Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Free tax return online 9,000     12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online -0-     13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online 6,980     14. Free tax return online Enter one-half of line 13 14. Free tax return online 3,490     15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online 2,990     16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online -0-     17. Free tax return online Add lines 15 and 16 17. Free tax return online 2,990     18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online 5,083     19. Free tax return online Taxable benefits. Free tax return online Enter the smaller of line 17 or line 18. Free tax return online Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Free tax return online $2,990       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Free tax return online         Example 1. Free tax return online George White is single and files Form 1040 for 2013. Free tax return online In addition to receiving social security payments, he received a fully taxable pension of $18,600, wages from a part-time job of $9,400, and taxable interest income of $990, for a total of $28,990. Free tax return online He received a Form SSA-1099 in January 2014 that shows his net social security benefits of $5,980 in box 5. Free tax return online   To figure his taxable benefits, George completes Worksheet 1, shown below. Free tax return online On line 20a of his Form 1040, George enters his net benefits of $5,980. Free tax return online On line 20b, he enters his taxable benefits of $2,990. Free tax return online Example 2. Free tax return online Ray and Alice Hopkins file a joint return on Form 1040A for 2013. Free tax return online Ray is retired and received a fully taxable pension of $15,500. Free tax return online He also received social security benefits and his Form SSA-1099 for 2013 shows net benefits of $5,600 in box 5. Free tax return online Alice worked during the year and had wages of $14,000. Free tax return online She made a deductible payment to her IRA account of $1,000. Free tax return online Ray and Alice have two savings accounts with a total of $250 in taxable interest income. Free tax return online They complete Worksheet 1, entering $29,750 ($15,500 + $14,000 + $250) on line 3. Free tax return online They find none of Ray's social security benefits are taxable. Free tax return online On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b. Free tax return online Filled-in Worksheet 1. Free tax return online Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Free tax return online None of your benefits are taxable for 2013. Free tax return online For more information, see Repayments More Than Gross Benefits . Free tax return online If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Free tax return online S. Free tax return online Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Free tax return online Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Free tax return online 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Free tax return online Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Free tax return online $5,600         2. Free tax return online Enter one-half of line 1 2. Free tax return online 2,800     3. Free tax return online Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Free tax return online 29,750     4. Free tax return online Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Free tax return online -0-     5. Free tax return online Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Free tax return online -0-     6. Free tax return online Combine lines 2, 3, 4, and 5 6. Free tax return online 32,550     7. Free tax return online Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Free tax return online  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Free tax return online 1,000     8. Free tax return online Is the amount on line 7 less than the amount on line 6?             No. Free tax return online None of your social security benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Free tax return online             Yes. Free tax return online Subtract line 7 from line 6 8. Free tax return online 31,550     9. Free tax return online If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Free tax return online 32,000       Note. Free tax return online If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then go to line 18. Free tax return online         10. Free tax return online Is the amount on line 9 less than the amount on line 8?             No. Free tax return online None of your benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Free tax return online             Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online       11. Free tax return online Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Free tax return online       12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online       13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online       14. Free tax return online Enter one-half of line 13 14. Free tax return online       15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online       16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online       17. Free tax return online Add lines 15 and 16 17. Free tax return online       18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online       19. Free tax return online Taxable benefits. Free tax return online Enter the smaller of line 17 or line 18. Free tax return online Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Free tax return online         If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Free tax return online         Example 3. Free tax return online Joe and Betty Johnson file a joint return on Form 1040 for 2013. Free tax return online Joe is a retired railroad worker and in 2013 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Free tax return online Joe's Form RRB-1099 shows $10,000 in box 5. Free tax return online Betty is a retired government worker and received a fully taxable pension of $38,000. Free tax return online They had $2,300 in taxable interest income plus interest of $200 on a qualified U. Free tax return online S. Free tax return online savings bond. Free tax return online The savings bond interest qualified for the exclusion. Free tax return online They figure their taxable benefits by completing Worksheet 1 below. Free tax return online Because they have qualified U. Free tax return online S. Free tax return online savings bond interest, they follow the note at the beginning of the worksheet and use the amount from line 2 of their Schedule B (Form 1040A or 1040) on line 3 of the worksheet instead of the amount from line 8a of their Form 1040. Free tax return online On line 3 of the worksheet, they enter $40,500 ($38,000 + $2,500). Free tax return online More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. Free tax return online (See Maximum taxable part under How Much Is Taxable earlier. Free tax return online ) Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b. Free tax return online Filled-in Worksheet 1. Free tax return online Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Free tax return online None of your benefits are taxable for 2013. Free tax return online For more information, see Repayments More Than Gross Benefits . Free tax return online If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Free tax return online S. Free tax return online Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Free tax return online Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Free tax return online 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Free tax return online Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Free tax return online $10,000         2. Free tax return online Enter one-half of line 1 2. Free tax return online 5,000     3. Free tax return online Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Free tax return online 40,500     4. Free tax return online Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Free tax return online -0-     5. Free tax return online Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Free tax return online -0-     6. Free tax return online Combine lines 2, 3, 4, and 5 6. Free tax return online 45,500     7. Free tax return online Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Free tax return online  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Free tax return online -0-     8. Free tax return online Is the amount on line 7 less than the amount on line 6?             No. Free tax return online None of your social security benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Free tax return online             Yes. Free tax return online Subtract line 7 from line 6 8. Free tax return online 45,500     9. Free tax return online If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Free tax return online 32,000       Note. Free tax return online If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then go to line 18. Free tax return online         10. Free tax return online Is the amount on line 9 less than the amount on line 8?             No. Free tax return online None of your benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Free tax return online             Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online 13,500     11. Free tax return online Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Free tax return online 12,000     12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online 1,500     13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online 12,000     14. Free tax return online Enter one-half of line 13 14. Free tax return online 6,000     15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online 5,000     16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online 1,275     17. Free tax return online Add lines 15 and 16 17. Free tax return online 6,275     18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online 8,500     19. Free tax return online Taxable benefits. Free tax return online Enter the smaller of line 17 or line 18. Free tax return online Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Free tax return online $6,275       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Free tax return online         Filled-in Worksheet 1. Free tax return online Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Free tax return online None of your benefits are taxable for 2013. Free tax return online For more information, see Repayments More Than Gross Benefits . Free tax return online If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Free tax return online S. Free tax return online Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Free tax return online Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Free tax return online 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Free tax return online Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Free tax return online $4,000         2. Free tax return online Enter one-half of line 1 2. Free tax return online 2,000     3. Free tax return online Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Free tax return online 8,000     4. Free tax return online Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Free tax return online -0-     5. Free tax return online Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Free tax return online -0-     6. Free tax return online Combine lines 2, 3, 4, and 5 6. Free tax return online 10,000     7. Free tax return online Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Free tax return online  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Free tax return online -0-     8. Free tax return online Is the amount on line 7 less than the amount on line 6?             No. Free tax return online None of your social security benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Free tax return online             Yes. Free tax return online Subtract line 7 from line 6 8. Free tax return online 10,000     9. Free tax return online If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Free tax return online         Note. Free tax return online If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then go to line 18. Free tax return online         10. Free tax return online Is the amount on line 9 less than the amount on line 8?             No. Free tax return online None of your benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Free tax return online             Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online       11. Free tax return online Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Free tax return online       12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online       13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online       14. Free tax return online Enter one-half of line 13 14. Free tax return online       15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online       16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online       17. Free tax return online Add lines 15 and 16 17. Free tax return online 8,500     18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online 3,400     19. Free tax return online Taxable benefits. Free tax return online Enter the smaller of line 17 or line 18. Free tax return online Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Free tax return online $3,400       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Free tax return online         Example 4. Free tax return online Bill and Eileen Jones are married and live together, but file separate Form 1040 returns for 2013. Free tax return online Bill earned $8,000 during 2013. Free tax return online The only other income he had for the year was $4,000 net social security benefits (box 5 of his Form SSA-1099). Free tax return online Bill figures his taxable benefits by completing Worksheet 1 below. Free tax return online He must include 85% of his social security benefits in his taxable income because he is married filing separately and lived with his spouse during 2013. Free tax return online See How Much Is Taxable earlier. Free tax return online Bill enters $4,000 on his Form 1040, line 20a, and $3,400 on Form 1040, line 20b. Free tax return online Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Free tax return online This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Free tax return online No part of the lump-sum death benefit is subject to tax. Free tax return online Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Free tax return online However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Free tax return online You can elect this method if it lowers your taxable benefits. Free tax return online Under the lump-sum election method, you refigure the taxable part of all your benefits for the earlier year (including the lump-sum payment) using that year's income. Free tax return online Then you subtract any taxable benefits for that year that you previously reported. Free tax return online The remainder is the taxable part of the lump-sum payment. Free tax return online Add it to the taxable part of your benefits for 2013 (figured without the lump-sum payment for the earlier year). Free tax return online Because the earlier year's taxable benefits are included in your 2013 income, no adjustment is made to the earlier year's return. Free tax return online Do not file an amended return for the earlier year. Free tax return online Will the lump-sum election method lower your taxable benefits?   To find out, take the following steps. Free tax return online Complete Worksheet 1 in this publication. Free tax return online Complete Worksheet 2 and Worksheet 3 as appropriate. Free tax return online Use Worksheet 2 if your lump-sum payment was for a year after 1993. Free tax return online Use Worksheet 3 if it was for 1993 or an earlier year. Free tax return online Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received the lump-sum payment. Free tax return online Complete Worksheet 4. Free tax return online Compare the taxable benefits on line 19 of Worksheet 1 with the taxable benefits on line 21 of Worksheet 4. Free tax return online If the taxable benefits on Worksheet 4 are lower than the taxable benefits on Worksheet 1, you can elect to report the lower amount on your return. Free tax return online Making the election. Free tax return online   If you elect to report your taxable benefits under the lump-sum election method, follow the instructions at the bottom of Worksheet 4. Free tax return online Do not attach the completed worksheets to your return. Free tax return online Keep them with your records. Free tax return online    Once you elect this method of figuring the taxable part of a lump-sum payment, you can revoke your election only with the consent of the IRS. Free tax return online Lump-sum payment reported on Form SSA-1099 or RRB-1099. Free tax return online   If you received a lump-sum payment in 2013 that includes benefits for one or more earlier years after 1983, it will be included in box 3 of either Form SSA-1099 or Form RRB-1099. Free tax return online That part of any lump-sum payment for years before 1984 is not taxed and will not be shown on the form. Free tax return online The form will also show the year (or years) the payment is for. Free tax return online However, Form RRB-1099 will not show a breakdown by year (or years) of any lump-sum payment for years before 2011. Free tax return online You must contact the RRB for a breakdown by year for any amount shown in box 9. Free tax return online Example Jane Jackson is single. Free tax return online In 2012 she applied for social security disability benefits but was told she was ineligible. Free tax return online She appealed the decision and won. Free tax return online In 2013, she received a lump-sum payment of $6,000, of which $2,000 was for 2012 and $4,000 was for 2013. Free tax return online Jane also received $5,000 in social security benefits in 2013, so her total benefits in 2013 were $11,000. Free tax return online Jane's other income for 2012 and 2013 is as follows. Free tax return online   Income 2012 2013     Wages $20,000 $ 3,500     Interest income 2,000 2,500     Dividend income 1,000 1,500     Fully taxable pension   18,000     Total $23,000 $25,500   To see if the lump-sum election method results in lower taxable benefits, she completes Worksheets 1, 2, and 4 from this publication. Free tax return online She does not need to complete Worksheet 3 because her lump-sum payment was for years after 1993. Free tax return online Jane completes Worksheet 1 to find the amount of her taxable benefits for 2013 under the regular method. Free tax return online She completes Worksheet 2 to find the taxable part of the lump-sum payment for 2012 under the lump-sum election method. Free tax return online She completes Worksheet 4 to decide if the lump-sum election method will lower her taxable benefits. Free tax return online After completing the worksheets, Jane compares the amounts from Worksheet 4, line 21, and Worksheet 1, line 19. Free tax return online Because the amount on Worksheet 4 is smaller, she chooses to use the lump-sum election method. Free tax return online To do this, she prints “LSE” to the left of Form 1040, line 20a. Free tax return online She then enters $11,000 on Form 1040, line 20a, and her taxable benefits of $2,500 on line 20b. Free tax return online Jane's filled-in worksheets (1, 2, and 4) follow. Free tax return online Jane Jackson's Filled-in Worksheet 1. Free tax return online Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Free tax return online None of your benefits are taxable for 2013. Free tax return online For more information, see Repayments More Than Gross Benefits . Free tax return online If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Free tax return online S. Free tax return online Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Free tax return online Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Free tax return online 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Free tax return online Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Free tax return online $11,000         2. Free tax return online Enter one-half of line 1 2. Free tax return online 5,500     3. Free tax return online Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Free tax return online 25,500     4. Free tax return online Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Free tax return online -0-     5. Free tax return online Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Free tax return online -0-     6. Free tax return online Combine lines 2, 3, 4, and 5 6. Free tax return online 31,000     7. Free tax return online Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Free tax return online  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Free tax return online -0-     8. Free tax return online Is the amount on line 7 less than the amount on line 6?             No. Free tax return online None of your social security benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Free tax return online             Yes. Free tax return online Subtract line 7 from line 6 8. Free tax return online 31,000     9. Free tax return online If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Free tax return online 25,000       Note. Free tax return online If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then go to line 18. Free tax return online         10. Free tax return online Is the amount on line 9 less than the amount on line 8?             No. Free tax return online None of your benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Free tax return online             Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online 6,000     11. Free tax return online Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Free tax return online 9,000     12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online -0-     13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online 6,000     14. Free tax return online Enter one-half of line 13 14. Free tax return online 3,000     15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online 3,000     16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online -0-     17. Free tax return online Add lines 15 and 16 17. Free tax return online 3,000     18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online 9,350     19. Free tax return online Taxable benefits. Free tax return online Enter the smaller of line 17 or line 18. Free tax return online Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Free tax return online $3,000       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Free tax return online         Jane Jackson's Filled-in Worksheet 2. Free tax return online Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)     Enter earlier year 2012 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Free tax return online $2,000           Note. Free tax return online If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21. Free tax return online Otherwise, go on to line 2. Free tax return online             2. Free tax return online Enter one-half of line 1 2. Free tax return online 1,000   3. Free tax return online Enter your adjusted gross income for the earlier year 3. Free tax return online 23,000   4. Free tax return online Enter the total of any exclusions/adjustments you claimed in the earlier year for: Adoption benefits (Form 8839) Qualified U. Free tax return online S. Free tax return online savings bond interest (Form 8815) Student loan interest (Form 1040, page 1, or Form 1040A, page 1) Tuition and fees (Form 1040, page 1, or Form 1040A, page 1) Domestic production activities (for 2005 through 2012) (Form 1040, page 1) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Free tax return online -0-   5. Free tax return online Enter any tax-exempt interest received in the earlier year 5. Free tax return online -0-   6. Free tax return online Add lines 2 through 5 6. Free tax return online 24,000   7. Free tax return online Enter your taxable benefits for the earlier year that you previously reported 7. Free tax return online -0-   8. Free tax return online Subtract line 7 from line 6 8. Free tax return online 24,000   9. Free tax return online If, for the earlier year, you were:     Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000 9. Free tax return online 25,000     Note. Free tax return online If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then go to line 18. Free tax return online         10. Free tax return online Is the amount on line 8 more than the amount on line 9?       No. Free tax return online Skip lines 10 through 20 and enter -0- on line 21. Free tax return online       Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online     11. Free tax return online Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year 11. Free tax return online     12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online     13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online     14. Free tax return online Enter one-half of line 13 14. Free tax return online     15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online     16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online     17. Free tax return online Add lines 15 and 16 17. Free tax return online     18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online     19. Free tax return online Refigured taxable benefits. Free tax return online Enter the smaller of line 17 or line 18 19. Free tax return online     20. Free tax return online Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum payment for the year) 20. Free tax return online     21. Free tax return online Additional taxable benefits. Free tax return online Subtract line 20 from line 19. Free tax return online Also enter this amount on Worksheet 4, line 20 21. Free tax return online -0-     Do not file an amended return for this earlier year. Free tax return online Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lump-sum payment in 2013. Free tax return online   Jane Jackson's Filled-in Worksheet 4. Free tax return online Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3)     Complete Worksheet 1 and Worksheets 2 and 3 as appropriate before completing this worksheet. Free tax return online 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for 2013, minus the lump-sum payment for years before 2013 1. Free tax return online $9,000         Note. Free tax return online If line 1 is zero or less, skip lines 2 through 18, enter -0- on line 19 and go to line 20. Free tax return online Otherwise, go on to line 2. Free tax return online           2. Free tax return online Enter one-half of line 1 2. Free tax return online 4,500   3. Free tax return online Enter the amount from Worksheet 1, line 3 3. Free tax return online 25,500   4. Free tax return online Enter the amount from Worksheet 1, line 4 4. Free tax return online -0-   5. Free tax return online Enter the amount from Worksheet 1, line 5 5. Free tax return online -0-   6. Free tax return online Combine lines 2, 3, 4, and 5 6. Free tax return online 30,000   7. Free tax return online Enter the amount from Worksheet 1, line 7 7. Free tax return online -0-   8. Free tax return online Subtract line 7 from line 6 8. Free tax return online 30,000   9. Free tax return online Enter the amount from Worksheet 1, line 9. Free tax return online But if you are married filing separately and lived with your spouse at any time during 2013, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then, go to line 18 9. Free tax return online 25,000   10. Free tax return online Is the amount on line 8 more than the amount on line 9? No. Free tax return online Skip lines 10 through 18, enter -0- on line 19, and go to line 20. Free tax return online  Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online 5,000   11. Free tax return online Enter the amount from Worksheet 1, line 11 11. Free tax return online 9,000   12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online -0-   13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online 5,000   14. Free tax return online Enter one-half of line 13 14. Free tax return online 2,500   15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online 2,500   16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online -0-   17. Free tax return online Add lines 15 and 16 17. Free tax return online 2,500   18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online 7,650   19. Free tax return online Enter the smaller of line 17 or line 18 19. Free tax return online 2,500   20. Free tax return online Enter the total of the amounts from Worksheet 2, line 21, and Worksheet 3, line 14, for all earlier years for which the lump-sum payment was received 20. Free tax return online -0-   21. Free tax return online Taxable benefits under lump-sum election method. Free tax return online Add lines 19 and 20 21. Free tax return online $2,500   Next. Free tax return online Is line 21 above smaller than Worksheet 1, line 19? No. Free tax return online Do not use this method to figure your taxable benefits. Free tax return online Follow the instructions on Worksheet 1 to report your benefits. Free tax return online  Yes. Free tax return online You can elect to report your taxable benefits under this method. Free tax return online To elect this method:     Enter “LSE” to the left of Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online If line 21 above is zero, follow the instructions in line 10 for “No” on Worksheet 1. Free tax return online Otherwise: Enter the amount from Worksheet 1, line 1, on Form 1040, line 20a, or on Form 1040A, line 14a. Free tax return online Enter the amount from line 21 above on Form 1040, line 20b, or on Form 1040A, line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online   Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. Free tax return online Disability payments. Free tax return online   You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an earlier year. Free tax return online If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability payments, you can take an itemized deduction for the part of the payments you included in gross income in the earlier year. Free tax return online If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. Free tax return online Claim the deduction or credit in the same way explained under Repayment of benefits received in an earlier year in the section Repayments More Than Gross Benefits , later. Free tax return online Legal expenses. Free tax return online   You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection with the determination, collection, or refund of any tax. Free tax return online   Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Free tax return online Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Free tax return online If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Free tax return online Do not use Worksheet 1 in this case. Free tax return online If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Free tax return online If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. Free tax return online Joint return. Free tax return online   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's does not, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. Free tax return online You do this to get your net benefits when figuring if your combined benefits are taxable. Free tax return online Example. Free tax return online John and Mary file a joint return for 2013. Free tax return online John received Form SSA-1099 showing $3,000 in box 5. Free tax return online Mary also received Form SSA-1099 and the amount in box 5 was ($500). Free tax return online John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable. Free tax return online Repayment of benefits received in an earlier year. Free tax return online   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Free tax return online Deduction $3,000 or less. Free tax return online   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Free tax return online Claim it on Schedule A (Form 1040), line 23. Free tax return online Deduction more than $3,000. Free tax return online   If this deduction is more than $3,000, you should figure your tax two ways: Figure your tax for 2013 with the itemized deduction included on Schedule A, line 28. Free tax return online Figure your tax for 2013 in the following steps: Figure the tax without the itemized deduction included on Schedule A, line 28. Free tax return online For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Free tax return online Then refigure the tax for that year. Free tax return online Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. Free tax return online Subtract the result in (c) from the result in (a). Free tax return online   Compare the tax figured in methods (1) and (2). Free tax return online Your tax for 2013 is the smaller of the two amounts. Free tax return online If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. Free tax return online If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71. Free tax return online Check box d and enter “I. Free tax return online R. Free tax return online C. Free tax return online 1341” in the space next to that box. Free tax return online If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28. Free tax return online Worksheets Blank Worksheets 1 through 4 are provided in this section: Worksheet 1, Figuring Your Taxable Benefits; Worksheet 2, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993); Worksheet 3, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994); Worksheet 4, Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3). Free tax return online Worksheet 1. Free tax return online Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax return online Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Free tax return online None of your benefits are taxable for 2013. Free tax return online For more information, see Repayments More Than Gross Benefits . Free tax return online If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Free tax return online S. Free tax return online Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Free tax return online Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Free tax return online 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Free tax return online Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Free tax return online           2. Free tax return online Enter one-half of line 1 2. Free tax return online       3. Free tax return online Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Free tax return online       4. Free tax return online Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Free tax return online       5. Free tax return online Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Free tax return online       6. Free tax return online Combine lines 2, 3, 4, and 5 6. Free tax return online       7. Free tax return online Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Free tax return online  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Free tax return online       8. Free tax return online Is the amount on line 7 less than the amount on line 6?             No. Free tax return online None of your social security benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Free tax return online             Yes. Free tax return online Subtract line 7 from line 6 8. Free tax return online       9. Free tax return online If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Free tax return online         Note. Free tax return online If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then go to line 18. Free tax return online         10. Free tax return online Is the amount on line 9 less than the amount on line 8?             No. Free tax return online None of your benefits are taxable. Free tax return online Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Free tax return online If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Free tax return online             Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online       11. Free tax return online Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Free tax return online       12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online       13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online       14. Free tax return online Enter one-half of line 13 14. Free tax return online       15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online       16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online       17. Free tax return online Add lines 15 and 16 17. Free tax return online       18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online       19. Free tax return online Taxable benefits. Free tax return online Enter the smaller of line 17 or line 18. Free tax return online Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Free tax return online         If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Free tax return online         Worksheet 2. Free tax return online Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)     Enter earlier year 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Free tax return online             Note. Free tax return online If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21. Free tax return online Otherwise, go on to line 2. Free tax return online             2. Free tax return online Enter one-half of line 1 2. Free tax return online     3. Free tax return online Enter your adjusted gross income for the earlier year 3. Free tax return online     4. Free tax return online Enter the total of any exclusions/adjustments you claimed in the earlier year for: Adoption benefits (Form 8839) Qualified U. Free tax return online S. Free tax return online savings bond interest (Form 8815) Student loan interest (Form 1040, page 1, or Form 1040A, page 1) Tuition and fees (Form 1040, page 1, or Form 1040A, page 1) Domestic production activities (for 2005 through 2012) (Form 1040, page 1) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Free tax return online     5. Free tax return online Enter any tax-exempt interest received in the earlier year 5. Free tax return online     6. Free tax return online Add lines 2 through 5 6. Free tax return online     7. Free tax return online Enter your taxable benefits for the earlier year that you previously reported 7. Free tax return online     8. Free tax return online Subtract line 7 from line 6 8. Free tax return online     9. Free tax return online If, for the earlier year, you were:     Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000 9. Free tax return online       Note. Free tax return online If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (. Free tax return online 85) and enter the result on line 17. Free tax return online Then go to line 18. Free tax return online         10. Free tax return online Is the amount on line 8 more than the amount on line 9?       No. Free tax return online Skip lines 10 through 20 and enter -0- on line 21. Free tax return online       Yes. Free tax return online Subtract line 9 from line 8 10. Free tax return online     11. Free tax return online Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year 11. Free tax return online     12. Free tax return online Subtract line 11 from line 10. Free tax return online If zero or less, enter -0- 12. Free tax return online     13. Free tax return online Enter the smaller of line 10 or line 11 13. Free tax return online     14. Free tax return online Enter one-half of line 13 14. Free tax return online     15. Free tax return online Enter the smaller of line 2 or line 14 15. Free tax return online     16. Free tax return online Multiply line 12 by 85% (. Free tax return online 85). Free tax return online If line 12 is zero, enter -0- 16. Free tax return online     17. Free tax return online Add lines 15 and 16 17. Free tax return online     18. Free tax return online Multiply line 1 by 85% (. Free tax return online 85) 18. Free tax return online     19. Free tax return online Refigured taxable benefits. Free tax return online Enter the smaller of line 17 or line 18 19. Free tax return online     20. Free tax return online Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum payment for the year) 20. Free tax return online     21. Free tax return online Additional taxable benefits. Free tax return online Subtract line 20 from line 19. Free tax return online Also enter this amount on Worksheet 4, line 20 21. Free tax return online       Do not file an amended return for this earlier year. Free tax return online Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lump-sum payment in 2013. Free tax return online   Worksheet 3. Free tax return online Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994) Enter earlier year 1. Free tax return online Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Free tax return online           Note. Free tax return online If line 1 is zero or less, skip lines 2 through 13 and enter -0- on line 14. Free tax return online Otherwise, go on to line 2. Free tax return online           2. Free tax return online Enter one-half of line 1 2. Free tax return online     3. Free tax return online Enter your adjusted gross income for the earlier year 3. Free tax return online     4. Free tax return online Enter the total of any exclusions/adjustments you claimed in the earlier year for: Qualified U. Free tax return online S. Free tax return online savings bond interest (Form 8815) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Free tax return online     5. Free tax return online Enter any tax-exempt interest received in the earlier year 5. Free tax return online     6. Free tax return online Add lines 2 through 5 6. Free tax return online     7. Free tax return online Enter your taxable benefits for the earlier year that you previously reported 7. Free tax return online     8. Free tax return online Subtract line 7 from line 6 8. Free tax return online     9. Free tax return online Enter $25,000 ($32,000 if married filing jointly for the earlier year; $-0- if married filing separately for the earlier year and you lived with your spouse at any time during the earlier year) 9. Free tax return online     10. Free tax return online Is the amount on line 8 more than the amount on line 9? No. Free tax return online Skip lines 10 through 13 and enter -0- on line 14. Free tax return online  Yes. Free tax return online Subtract line 9 from line 8. Free tax return online 10. Free tax return online     11. Free tax return online Enter one-half of line 10 11. Free tax return online     12. Free tax return online Refigured taxable benefits. Free tax return online Enter the smaller of line 2 or line 11 12. Free tax return online     13. Free tax return online Enter your taxable benefits for the earlier year (or as refigured due to a previous