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10 40 easy Publication 179 - Introductory Material Table of Contents Acontecimientos futuros Qué hay de nuevo Recordatorios Calendario Introduction Acontecimientos futuros Si desea obtener la información más reciente sobre todo acontecimiento relacionado con la Publicación 179, tal como legislación promulgada después de que ésta fue publicada, acceda a www. 10 40 easy irs. 10 40 easy gov/pub179. 10 40 easy Qué hay de nuevo Contribuciones al Seguro Social y al Medicare para el 2014. 10 40 easy  La tasa de contribución para el Seguro Social permanece en 6. 10 40 easy 2% tanto para el empleado como para el patrono. 10 40 easy La base límite de salario para el Seguro Social es $117,000. 10 40 easy La tasa de la contribución al Medicare es 1. 10 40 easy 45% tanto para la parte del empleado como la del patrono, la misma tasa que correspondió para el año 2013. 10 40 easy No hay límite sobre la cantidad de salarios sujetos a la contribución al Medicare. 10 40 easy Las contribuciones al Seguro Social y al Medicare se aplican a los salarios de empleados domésticos a quienes usted les paga $1,900 o más en efectivo o de una forma equivalente de remuneración. 10 40 easy Las contribuciones al Seguro Social y al Medicare se aplican a los trabajadores electorales a quienes se les paga $1,600 o más en efectivo o una remuneración equivalente. 10 40 easy Cambio de parte responsable. 10 40 easy  Comenzando el 1 de enero del 2014, toda entidad jurídica que tiene asignado un número patronal tiene que presentar el Formulario 8822-B Change of Address or Responsible Party—Business (Cambio de dirección o Parte Responsable— de negocios), en inglés, para informar si ha cambiado la parte responsable del negocio. 10 40 easy El Formulario 8822-B tiene que presentarse dentro de los 60 días que cambió la parte responsable. 10 40 easy Si el cambio de la parte responsable ocurrió antes del año 2014 y no se ha notificado el cambio anteriormente al IRS presente el Formulario 8822-B antes del 1 de marzo del 2014 e informe solamente el cambio más reciente. 10 40 easy Para la definición de “parte reponsable” vea las Instrucciones del Formulario SS-4PR Solicitud de Número de Identificación Patronal (EIN). 10 40 easy Matrimonio entre personas del mismo sexo. 10 40 easy . 10 40 easy  Para propósitos de las contribuciones federales, las personas del mismo sexo se consideran casados legalmente ​​si se casaron en un estado (o país extranjero) cuyas leyes autorizan el matrimonio de personas del mismo sexo, aunque el estado (o país extranjero) en el que ahora viven no reconozca el matrimonio entre personas del mismo sexo. 10 40 easy Para obtener más información, consulte el Revenue Ruling 2013-17 (Reglamento de Rentas Internas 2013–17) disponible en www. 10 40 easy irs. 10 40 easy gov/irb/2013-38_IRB/ar07. 10 40 easy html. 10 40 easy El Notice 2013-61 (Aviso 2013-61) establece los procedimientos administrativos especiales para los patronos hacer reclamaciones para el reembolso o los ajustes de los pagos en exceso al Seguro Social y al Medicare con respecto a ciertos beneficios entre cónyuges del mismo sexo antes de la expiración del periodo de prescripción. 10 40 easy El Aviso 2013-61 que aparece en la página 432 del Internal Revenue Bulletin (Boletín de Rentas Internas 2013-44), en inglés, está disponible en www. 10 40 easy irs. 10 40 easy gov/irb/2013-44_IRB/ar10. 10 40 easy html. 10 40 easy Recordatorios Retención de la Contribución Adicional al Medicare. 10 40 easy  Además de la retención de la contribución Medicare de 1. 10 40 easy 45%, usted tiene que retener la Contribución Adicional al Medicare de 0. 10 40 easy 9% de los salarios en exceso de $200,000 que le paga a un empleado en un año natural. 10 40 easy Se le requiere a usted que comience a retener la Contribución Adicional al Medicare en el período de paga en el cual usted le paga salarios en exceso de $200,000 a un empleado. 10 40 easy Continúe reteniendo esta Contribución Adicional al Medicare en todo período de paga hasta que finalice el año natural. 10 40 easy La Contribución Adicional al Medicare sólo se le impone al empleado. 10 40 easy No hay una porción correspondiente al patrono de la Contribución Adicional al Medicare. 10 40 easy Todos los salarios que están sujetos a la contribución Medicare, están sujetos a la retención de la Contribución Adicional al Medicare si éstos exceden el límite de $200,000. 10 40 easy Si desea más información sobre cuáles salarios están sujetos a la Contribución Adicional al Medicare, vea la tabla Reglas especiales para varias clases de servicios y de pagos , en el apartado 15 de esta publicación. 10 40 easy Para más información, sobre la Contribución Adicional al Medicare visite IRS. 10 40 easy gov y escriba “ Additional Medicare Tax ” en inglés, en la casilla Search (Buscar). 10 40 easy La información está disponible en inglés. 10 40 easy El crédito contributivo por oportunidad de trabajo para organizaciones calificadas exentas de contribución que contratan a veteranos calificados ha sido extendido. 10 40 easy . 10 40 easy  El crédito contributivo por oportunidad de trabajo está disponible para veteranos desempleados que reúnan los requisitos que comiencen a trabajar antes del 1 de enero de 2014. 10 40 easy Anteriormente, el crédito estaba disponible para veteranos desempleados quienes comenzaron a trabajar a partir del 22 de noviembre de 2011, y antes del 1 de enero de 2013. 10 40 easy Las organizaciones exentas de contribuciones calificadas que contratan veteranos desempleados que reúnan los requisitos pueden reclamar el crédito contributivo por oportunidad de trabajo contra su contribución sobre la nómina utilizando el Formulario 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans (Crédito por oportunidad de trabajo para organizaciones exentas de contribuciones calificadas que contratan a veteranos calificados), en inglés. 10 40 easy Si desea más información, visite IRS. 10 40 easy gov y escriba “work opportunity tax credit” (crédito contributivo por oportunidad de trabajo), en inglés, en la casilla Search (Buscar). 10 40 easy La información está disponible en inglés. 10 40 easy Externalización de las obligaciones de la nómina. 10 40 easy . 10 40 easy  Los patronos son responsables de asegurar que las planillas de contribución se radiquen y que los depósitos y pagos se hagan, aun si el patrono contrata los servicios de un tercero para hacerlo. 10 40 easy El patrono sigue siendo el responsable aun si el tercero no cumple con la acción requerida. 10 40 easy Si opta por externalizar cualquier parte de su nómina y las obligaciones relacionadas con las contribuciones (es decir, retención, declarar y pagar las contribuciones al Seguro Social, al Medicare y FUTA) a un tercero pagador, tal como un proveedor de servicios de nómina o agente de reportación, visite el sitio web IRS. 10 40 easy gov y escriba “outsourcing payroll duties” (externalización de las obligaciones de nómina) en la casilla “Search” (Buscar), para información útil sobre este tema. 10 40 easy Dicha información está disponible en inglés. 10 40 easy El crédito de asistencia para las primas COBRA. 10 40 easy  El crédito por asistencia en los pagos de las primas COBRA se aplica a las primas pagadas por un máximo de 15 meses para los empleados que fueron despedidos entre el 1 de septiembre de 2008 y el 31 de mayo de 2010. 10 40 easy Vea COBRA premium assistance credit (Crédito de asistencia para las primas COBRA) en inglés, en la Publicación 15. 10 40 easy Vea la sección Crédito de asistencia para las primas de COBRA para detalles sobre el crédito. 10 40 easy El Formulario 944-PR está descontinuado. 10 40 easy  El Formulario 944-PR, Planilla para la Declaración Federal ANUAL del Patrono, ya no estará disponible después de 2011. 10 40 easy A partir del año contributivo 2012, los patronos que anteriormente presentaban el Formulario 944-PR presentarán anualmente el Formulario 944(SP), Declaración Federal ANUAL de Impuestos del Patrono o Empleador. 10 40 easy Por otra parte, los contribuyentes pueden solicitar que se les permita la radicación trimestral con el Formulario 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono, en vez del Formulario 944(SP) (o el Formulario 944, en inglés). 10 40 easy Para más información, consulte las Instrucciones para el Formulario 944(SP). 10 40 easy Para solicitar que se le permita radicar los formularios trimestrales 941-PR para informar sus contribuciones al Seguro Social y Medicare del año 2014, debe llamar al IRS al 1-800-829-4933 o al 267-941-1000 (llamada con cargos) a más tardar el 1 de abril de 2014. 10 40 easy O, puede enviar una solicitud por escrito (el matasellos debe estar fechado en o antes del 15 de marzo de 2014). 10 40 easy Después de comunicarse con el IRS, el IRS le enviará una notificación por escrito indicándole que su requisito de presentación ha cambiado. 10 40 easy Si usted no recibe este aviso, debe presentar el Formulario 944(SP) para el año natural 2014. 10 40 easy Para más información, consulte ¿Qué ocurre si quiere presentar Formularios 941, 941-SS o 941-PR en lugar del Formulario 944 (en inglés) o 944(SP)?, en las Instrucciones para el Formulario 944(SP) de 2013. 10 40 easy Usted tiene que recibir un aviso escrito del IRS para poder radicar el Formulario 944(SP). 10 40 easy  Si usted ha estado radicando los Formularios 941-PR y cree que sus contribuciones sobre la nómina para el año natural serán $1,000 o menos y desea radicar el Formulario 944(SP) (o el Formulario 944, en inglés) en vez de los Formularios 941-PR, tiene que comunicarse con el IRS para solicitar el permiso para poder radicar el Formulario 944(SP). 10 40 easy Antes de que pueda radicar este formulario, tiene que recibir un aviso escrito de parte del IRS que le otorgue el permiso para poder radicar el Formulario 944(SP) en vez de los Formularios 941-PR. 10 40 easy Si desea más información sobre cómo solicitar el permiso para radicar el Formulario 944(SP) o el Formulario 944, en vez de los Formularios 941-PR, vea el tema titulado ¿Qué ocurre si quiere presentar Formularios 941, 941-SS o 941-PR en lugar del Formulario 944 (en inglés) o 944(SP)?, en las Instrucciones para el Formulario 944(SP). 10 40 easy Cambio de dirección. 10 40 easy . 10 40 easy  Utilice el Formulario 8822-B, Change of Address or Responsible Party-Business (Cambio de dirección— o Parte Responsable— de negocios), en inglés, para notificarle al IRS sobre un cambio a su dirección. 10 40 easy No envíe el Formulario 8822-B junto con su planilla de contribuciones sobre la nómina. 10 40 easy Los depósitos de las contribuciones federales tienen que llevarse a cabo mediante transferencia electrónica de fondos. 10 40 easy  Usted tiene que depositar toda contribución mediante transferencia electrónica de fondos. 10 40 easy Generalmente, la transferencia electrónica de fondos se lleva a cabo usando el Electronic Federal Tax Payment System (Sistema electrónico de pagos de la contribución federal o EFTPS, por sus siglas en inglés). 10 40 easy Si no desea utilizar el EFTPS, puede hacer los arreglos para que su preparador, institución financiera, servicio de nómina u otro tercero de su confianza efectúe depósitos electrónicos en nombre suyo. 10 40 easy El EFTPS es un servicio gratuito provisto por el Departamento del Tesoro. 10 40 easy Los servicios provistos por su preparador profesional, institución financiera, servicio de nómina u otro tercero podría conllevar en un cargo. 10 40 easy Si desea más información sobre cómo efectuar depósitos de la contribución federal, vea Cómo hacer los depósitos , en el apartado 11. 10 40 easy Si desea más información sobre EFTPS o si desea inscribirse, visite el sitio web de EFTPS en www. 10 40 easy eftps. 10 40 easy gov o llame al 1-800-244-4829 (1-800-733-4829, si es usuario de equipo TDD). 10 40 easy Puede encontrar información adicional sobre EFTPS en la Publicación 966 (SP), Sistema de Pago Electrónico del Impuesto Federal: La Manera Segura de pagar los Impuestos Federales. 10 40 easy Radicación y pago por medios electrónicos. 10 40 easy  El uso de las opciones electrónicas puede hacer más fácil la radicación de una planilla y el pago de la contribución federal. 10 40 easy Utilice el EFTPS para efectuar depósitos o pagar la contribución en su totalidad, independientemente de si utiliza a un preparador o si prepara sus propias planillas. 10 40 easy Puede usar el sistema electrónico e-file del IRS para radicar ciertas planillas. 10 40 easy Si hay una suma por pagar en la planilla, puede radicarla con el sistema e-file y pagar electrónicamente (e-pay) en un solo paso al autorizar un retiro electrónico de fondos de su cuenta bancaria mientras está radicando electrónicamente. 10 40 easy No utilice el retiro electrónico de fondos para pagar contribuciones que se requiere que se depositen. 10 40 easy Visite el sitio web del IRS www. 10 40 easy irs. 10 40 easy gov/efile , en inglés, para más información sobre cómo radicar una planilla electrónicamente. 10 40 easy Si desea más información sobre cómo pagar sus contribuciones utilizando el retiro electrónico de fondos, visite la página del IRS en www. 10 40 easy irs. 10 40 easy gov/e-pay. 10 40 easy Se le podría cobrar un cargo por radicar electrónicamente. 10 40 easy Para EFTPS, visite www. 10 40 easy eftps. 10 40 easy gov o llame a la línea de servicio al cliente de EFTPS al 1-800-244-4829 o 1-800-733-4829, si es usuario de equipo TDD. 10 40 easy Para la radicación electrónica de los Formularios 499R-2/W-2PR y 499R-2/W-2cPR ante la Administración del Seguro Social, visite la página web www. 10 40 easy hacienda. 10 40 easy gobierno. 10 40 easy pr. 10 40 easy Si usted está radicando su planilla de contribuciones o si está pagando sus contribuciones federales electrónicamente, se necesita que provea un EIN válido. 10 40 easy Si no provee un EIN válido, la planilla o pago no se tramitará. 10 40 easy Esto podría resultarle en multas y demoras en la tramitación de su planilla o pago. 10 40 easy Pagos con tarjeta de crédito o débito. 10 40 easy  Para mayor información sobre cómo se pagan las contribuciones con tarjetas de crédito o débito, visite el sitio web del IRS, www. 10 40 easy irs. 10 40 easy gov/e-pay. 10 40 easy No obstante, no use una tarjeta de crédito o débito para pagar contribuciones que deben ser depositadas. 10 40 easy Contratación de empleados nuevos. 10 40 easy  Mantenga un registro con el nombre y número de cada uno de sus empleados nuevos según aparece en su tarjeta de Seguro Social. 10 40 easy Todo empleado que no tenga una tarjeta de Seguro Social deberá solicitarla usando el Formulario SS-5-SP, Solicitud para una Tarjeta de Seguro Social, en español. 10 40 easy Vea el apartado 4 . 10 40 easy Cómo informar las discrepancias entre los Formularios 941-PR (o 944(SP)) y los Formularios 499R-2/W-2PR. 10 40 easy . 10 40 easy  Utilice el Anexo D (Formulario 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations (Informe de discrepancias causadas por adquisiciones, fusiones o consolidaciones), en inglés. 10 40 easy En este anexo se explicarán las discrepancias en los salarios, contribuciones y pagos que han surgido entre los Formularios 941-PR (o el Formulario 944(SP)) debido a adquisiciones, fusiones o consolidaciones. 10 40 easy Si desea más información, vea las Instrucciones para el Anexo D (Formulario 941), disponibles en inglés. 10 40 easy Solicitud de un número de identificación patronal en línea (EIN). 10 40 easy  Usted puede solicitar un número de identificación patronal (EIN, por sus siglas en inglés) en línea al visitar el sitio web IRS. 10 40 easy gov, en inglés, y pulsar sobre el enlace “Apply for an EIN Online” (Solicitud de un número de identificación patronal en línea (EIN)), que se encuentra bajo Tools (Herramientas). 10 40 easy La información está provista en inglés. 10 40 easy Pagos rechazados. 10 40 easy  Cualquier forma de pago que ha sido rechazado y es devuelto por la institución financiera está sujeto a una penalidad. 10 40 easy Esta penalidad es $25 o el 2% de la cantidad del pago, lo mayor entre ambos. 10 40 easy Sin embargo, la penalidad en pagos rechazados de $24. 10 40 easy 99 o menos es igual a la cantidad del pago. 10 40 easy Por ejemplo, un pago por $18 que fue rechazado, la penalidad es $18 (la cantidad rechazada). 10 40 easy Remuneración pagada a trabajadores agrícolas con visa H-2A. 10 40 easy  La remuneración que le paga a trabajadores agrícolas por trabajo realizado con una visa H-2A no está sujeta a las contribuciones al Seguro Social, al Medicare o la Contribución Adicional al Medicare. 10 40 easy Por lo tanto, no debe informarla como remuneración sujeta a dichas contribuciones. 10 40 easy Verifique con las agencias del gobierno de Puerto Rico para verificar si tiene algún requisito estatal. 10 40 easy Servicios de entrega privados. 10 40 easy  Puede usar ciertos servicios de entrega privados designados por el IRS para enviar sus planillas o pagos de la contribución. 10 40 easy La lista incluye sólo los servicios siguientes: DHL Express (DHL): DHL Same Day Service. 10 40 easy Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority y FedEx International First. 10 40 easy United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. 10 40 easy M. 10 40 easy , UPS Worldwide Express Plus y UPS Worldwide Express. 10 40 easy Si desea obtener la dirección a dónde enviar la planilla o pago si utilizara un servicio de entrega privado, acceda a IRS. 10 40 easy gov y escriba “private delivery service” en la casilla Search (Buscar). 10 40 easy La información está disponible en inglés. 10 40 easy El proveedor de servicio de entrega privado que escoja puede informarle de cómo se obtiene verificación por escrito de la fecha de envío. 10 40 easy Los servicios de entrega privados no pueden entregar artículos de correo a los apartados postales. 10 40 easy Usted tiene que utilizar el Servicio Postal de los EE. 10 40 easy UU. 10 40 easy para enviar todo artículo de correo a una dirección que incluya un apartado postal del IRS. 10 40 easy Mantenimiento de récords. 10 40 easy  Conserve todos los récords de sus contribuciones sobre la nómina durante 4 años. 10 40 easy Los mismos deben estar disponibles para ser inspeccionados por funcionarios del IRS. 10 40 easy No se ha establecido ninguna manera especial de llevar estos récords. 10 40 easy Sin embargo, los mismos deberán incluir su EIN, las cantidades y fechas de todos los pagos de salarios (incluyendo beneficios marginales) y las propinas declaradas, así como los nombres, direcciones y ocupaciones de todos los empleados que reciban tales pagos, las fechas de empleo, además de los números de Seguro Social y los duplicados de las planillas de contribución radicadas anteriormente, incluyendo las fechas y cantidades de depósitos hechos según se explica en el apartado 11 . 10 40 easy Todo patrono agrícola tiene que llevar un registro en el cual consten el nombre, dirección permanente y el EIN de cada líder de cuadrilla. 10 40 easy Vea Líder de cuadrilla, en el apartado 1 . 10 40 easy Comentarios y sugerencias. 10 40 easy  Le agradecemos sus comentarios sobre esta publicación y sugerencias para ediciones futuras de la misma. 10 40 easy Puede escribirnos a la siguiente dirección: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 10 40 easy NW, IR-6526 Washington, DC 20224 Nosotros contestamos muchas cartas a través de llamadas telefónicas. 10 40 easy Por lo tanto, sería de ayuda si en su correspondencia incluye su número telefónico, junto con el código de área telefónico, en donde nos podamos comunicar con usted durante el día. 10 40 easy También, puede enviarnos comentarios a través de la página www. 10 40 easy irs. 10 40 easy gov/formspubs. 10 40 easy Pulse sobre el enlace titulado More Information (Más información) y luego pulse sobre el enlace titulado “Give us Feedback” (Proveer comentarios), en inglés. 10 40 easy Aunque no podemos contestar a cada comentario que recibimos, sí agradecemos sus sugerencias y las consideraremos al revisar nuestros productos contributivos. 10 40 easy Fotografías de niños desaparecidos. 10 40 easy  El Servicio de Rentas Internas siente orgullo en colaborar con el National Center for Missing and Exploited Children (Centro Nacional de Niños Desaparecidos y Explotados). 10 40 easy Las fotografías de niños desaparecidos que han sido seleccionadas por el Centro pueden aparecer en esta publicación en páginas que de otra manera estarían en blanco. 10 40 easy Usted puede ayudar a que estos niños regresen a sus hogares si al mirar sus fotografías los puede identificar y entonces llama libre de cargos al 1-800-THE-LOST (1-800-843-5678). 10 40 easy Calendario   Si alguna fecha indicada a continuación es un sábado, domingo o día festivo oficial, la fecha de vencimiento para radicar la planilla, presentar un formulario o depositar su contribución es el próximo día laborable. 10 40 easy Un día festivo oficial en Puerto Rico o en un estado posterga una fecha de vencimiento únicamente si la oficina del IRS donde usted tiene que radicar su planilla de contribución está localizada en tal estado o territorio. 10 40 easy Para propósitos de la fecha de vencimiento, se cumplen los requisitos para radicar la planilla si la misma se encuentra en un sobre que esté dirigido apropiadamente, que tenga suficiente franqueo y que el matasellos esté fechado a más tardar en la fecha de vencimiento. 10 40 easy Si se envía mediante un servicio de entrega privado aprobado por el IRS, la misma se tiene que enviar a más tardar en la fecha de vencimiento. 10 40 easy Vea el tema Servicios de entrega privados en Recordatorios. 10 40 easy A continuación encontrará una lista de las fechas y responsabilidades más importantes para usted. 10 40 easy Además, vea la Publicación 509, Tax Calendars (Calendarios contributivos), en inglés, para más información. 10 40 easy Para el 31 de enero:  Entregue a los empleados sus comprobantes de retención. 10 40 easy Entréguele a cada empleado un Formulario 499R-2/W-2PR, Comprobante de Retención, debidamente completado. 10 40 easy Vea el apartado 13 . 10 40 easy Radique el Formulario 943-PR, Planilla para la Declaración ANUAL de la Contribución Federal del Patrono de Empleados Agrícolas, ante el IRS. 10 40 easy Si depositó a tiempo la contribución correspondiente al Formulario 943-PR en su totalidad, tendrá hasta 10 días naturales adicionales a partir de la fecha de vencimiento indicada anteriormente para radicar su Formulario 943-PR. 10 40 easy Radique el Formulario 940-PR, Planilla para la Declaración Federal ANUAL del Patrono de la Contribución Federal para el Desempleo (FUTA), ante el IRS. 10 40 easy Pague o deposite todo saldo adeudado (si es más de $500). 10 40 easy Si depositó el total de las contribuciones adeudadas a su debido tiempo, tendrá hasta 10 días naturales adicionales a partir de la fecha de vencimiento indicada anteriormente para radicar el Formulario 940-PR. 10 40 easy Si antes radicaba el Formulario 944-PR, radique ahora el Formulario 944(SP), Declaración Federal ANUAL de Impuestos del Patrono o Empleador (o el Formulario 944, en inglés), ante el IRS si el mismo le notificó que debe radicar el Formulario 944(SP) en lugar de los Formularios 941-PR trimestrales. 10 40 easy Si depositó la cantidad total de contribuciones conforme a la fecha de vencimiento de éstas, tendrá 10 días naturales adicionales a partir de la fecha de vencimiento indicada anteriormente para radicar el Formulario 944(SP). 10 40 easy Para el 28 de febrero. 10 40 easy   Radique los comprobantes de retención ante la Administración del Seguro Social (SSA, por sus siglas en inglés). 10 40 easy Radique el Original del Formulario 499R-2/W-2PR, junto con el Formulario W-3PR, Informe de Comprobantes de Retención, ante la SSA. 10 40 easy Para las planillas radicadas por vías electrónicas, vea el siguiente tema. 10 40 easy Para el 31 de marzo. 10 40 easy  Radique el Formulario 499R-2/W-2PR por vías electrónicas (y no por medios magnéticos o en papel) ante la SSA. 10 40 easy Sin embargo, puede transmitir un archivo electrónico por medio de Internet. 10 40 easy Vea Employer W-2 Filing Instructions & Information (Instrucciones e información para patronos sobre la radicación de Formularios W-2), en inglés, en el sitio web www. 10 40 easy socialsecurity. 10 40 easy gov/employer de la SSA para más información. 10 40 easy Para el 30 de abril, 31 de julio, 31 de octubre y 31 de enero. 10 40 easy  Radique el Formulario 941-PR trimestralmente ante el IRS. 10 40 easy Si depositó el total de las contribuciones adeudadas a su debido tiempo, tendrá hasta 10 días naturales adicionales a partir de las fechas de vencimiento indicadas anteriormente para radicar el Formulario 941-PR. 10 40 easy No radique los Formularios 941-PR para dichos trimestres si el IRS le ha informado que debe radicar el Formulario 944(SP). 10 40 easy Deposite la contribución FUTA para el trimestre (incluyendo toda cantidad trasladada de un trimestre anterior) si la cantidad adeudada es más de $500. 10 40 easy Si es de $500 o menos, traspásela al trimestre siguiente. 10 40 easy Vea el apartado 10 , para más información. 10 40 easy Introduction Esta publicación deberá ser usada por patronos cuyo negocio principal está ubicado en Puerto Rico o que tienen empleados cuyos ingresos están sujetos a retención de la contribución estatal sobre los ingresos de Puerto Rico. 10 40 easy Generalmente, tanto los patronos como los empleados en Puerto Rico están sujetos a las contribuciones al Seguro Social y al seguro Medicare, conforme a la Federal Insurance Contributions Act (Ley de Contribuciones Federales al Seguro Social o FICA, por sus siglas en inglés). 10 40 easy Esta publicación resume las responsabilidades que tiene el patrono en cuanto al cobro, pago y declaración de dichas contribuciones. 10 40 easy Dondequiera que en esta publicación se use el término “Estados Unidos”, el mismo incluye a Puerto Rico, las Islas Vírgenes y los territorios autónomos y territorios no autónomos de los Estados Unidos. 10 40 easy Las secciones a las cuales se hace referencia en esta publicación corresponden al Código Federal de Rentas Internas, a menos que se indique lo contrario. 10 40 easy Esta publicación también proporciona a dichos patronos un resumen de sus responsabilidades en relación con las contribuciones bajo la Federal Unemployment Tax Act (Ley Federal de Contribución para el Desempleo o FUTA, por sus siglas en inglés). 10 40 easy Vea los apartados 9 y 10 . 10 40 easy Excepto por lo indicado en las tablas que se hallan en el apartado 15 , esas contribuciones corresponden a todo patrono que pague salarios tributables a empleados o que tenga empleados que declaran propinas. 10 40 easy En esta publicación no se incluye información relacionada con las contribuciones del trabajo por cuenta propia (Seguro Social y Medicare para personas que trabajan por cuenta propia). 10 40 easy Si necesita información sobre estas contribuciones, comuníquese con la oficina del IRS en Guaynabo o vea la Publicación 570, Tax Guide for Individuals With Income From U. 10 40 easy S. 10 40 easy Possessions (Guía tributaria para individuos con ingresos de fuentes en los territorios estadounidenses), en inglés. 10 40 easy Contribuciones sobre los ingresos de Puerto Rico. 10 40 easy   Esta publicación no incluye información relacionada con la retención de contribuciones federales sobre los ingresos. 10 40 easy Ésta sólo trata las contribuciones sobre la nómina para patronos que están en Puerto Rico. 10 40 easy   Si desea obtener información acerca de la contribución sobre ingresos de Puerto Rico, consulte con el Departamento de Hacienda de Puerto Rico. 10 40 easy Las personas que trabajan amparadas bajo el programa del Seguro Social elijen un plan de protección para sus familias y para sí mismas. 10 40 easy Entidades no consideradas como separadas de sus dueños y compañías subsidarias calificadas conforme al subcapítulo S (QSubs). 10 40 easy   Las entidades no consideradas como separadas de sus dueños (disregarded entities) que tienen un solo dueño y que cumplen los requisitos y las compañías subsidiarias calificadas conforme al subcapítulo S (QSubs, por sus siglas en inglés), son tratadas como si fueran entidades separadas de su dueño para propósitos de las contribuciones sobre la nómina. 10 40 easy Las entidades no consideradas como separadas de sus dueños que tienen un solo dueño y que cumplen los requisitos y no han optado por ser tratadas como corporación, tiene que declarar y pagar la contribución sobre la nómina correspondiente a los salarios de los empleados utilizando el nombre y EIN de dicha entidad. 10 40 easy Vea la sección 1. 10 40 easy 1361-4(a)(7) y la sección 301. 10 40 easy 7701-2(c)(2)(iv) de los Reglamentos, en inglés. 10 40 easy Crédito de asistencia para las primas de COBRA. 10 40 easy   La Consolidated Omnibus Budget Reconciliation Act of 1985 (Ley de Conciliación de Asignaciones del Presupuesto de 1985 o COBRA, por sus siglas en inglés) les provee a ciertos ex empleados, jubilados, cónyuges, ex cónyuges e hijos dependientes el derecho a recibir temporalmente cobertura de salud a tarifas especiales para grupos. 10 40 easy La ley COBRA, por lo general, cubre los planes de salud que incluyen a múltiples patronos y planes de salud que son mantenidos por patronos de la empresa privada (que no son iglesias) que tengan 20 o más empleados a tiempo completo o parcial. 10 40 easy A dichos planes les corresponden ciertos requisitos conforme a la Employee Retirement Income Security Act of 1974 (Ley para la Protección de los Ingresos de Jubilación para los Empleados de 1974 o ERISA, por sus siglas en inglés). 10 40 easy Conforme a la Public Health Service Act (Ley sobre el Servicio de Salud Pública), los requisitos del programa COBRA también le corresponden a los planes de salud que cubren a los empleados gubernamentales estatales y municipales. 10 40 easy Requisitos similares corresponden conforme al Federal Employees Health Benefits Program (Programa de Seguro Médico para los Empleados Federales (FEHBP, por sus siglas en inglés)) y ciertas leyes estatales. 10 40 easy Para tratar a la asistencia (o subsidio) para las primas de COBRA que se explican a continuación, a todos estos requisitos se les refiere como “requisitos de COBRA ”. 10 40 easy   La ley American Recovery and Reinvestment Act of 2009 (Ley de Recuperación y Reinversión Económica Estadounidense de 2009 o ARRA, por sus siglas en inglés) permite un crédito contra las contribuciones sobre la paga (dichas contribuciones se denominan “contribuciones sobre la nómina” en esta publicación), para proveer asistencia para las primas de COBRA a individuos que cumplen con los requisitos para recibir dicha asistencia. 10 40 easy Para los períodos de continuidad de cobertura COBRA que comienzan después del 16 de febrero de 2009, un plan de salud colectivo tiene que tratar a un individuo que reúne los requisitos para la asistencia como si hubiese pagado la prima de COBRA para la continuidad de cobertura requerida si el individuo optó por la cobertura COBRA y paga el 35% de la cantidad de la prima. 10 40 easy   Un individuo que reúne los requisitos para la asistencia es un beneficiario calificado que cumple con los requisitos para la continuidad de la cobertura COBRA durante el período que comienza el 1 de septiembre de 2008, y que termina el 31 de mayo de 2010, debido al cese involuntario de empleo de un empleado amparado por la cobertura durante el período y que opta por la continuidad de la cobertura de COBRA. 10 40 easy La asistencia para mantener la cobertura puede durar hasta 15 meses. 10 40 easy   Los empleados que fueron despedidos durante el período que comienza el 1 septiembre de 2008 y que termina el 31 de mayo de 2010, y recibieron ofertas de indemnización que retrasaron el inicio de la continuación de cobertura COBRA, pueden ser elegibles para recibir asistencia con las primas para la continuación de cobertura COBRA. 10 40 easy Para más información, vea Notice 2009-27 (Avisio 2009-27) que aparece en la página 838 del Internal Revenue Bulletin (Boletín de Rentas Internas 2009-16), en inglés, disponible en www. 10 40 easy irs. 10 40 easy gov/irb/2009-16_irb/ar09. 10 40 easy html. 10 40 easy   Los administradores de planes de salud colectivos (u otras entidades) que proveen o administran la continuación de la cobertura COBRA, tienen que notificarle a los individuos que cumplen con los requisitos para la asistencia de las primas de COBRA de que tienen derecho a dicha cobertura. 10 40 easy   El 65% de la prima que no es pagada por las personas que reúnen los requisitos para la asistencia se le reembolsa a los patronos que mantienen el plan de salud colectivo. 10 40 easy El reembolso se hace por medio de un crédito que se le aplica a las obligaciones de las contribuciones sobre la nómina del patrono. 10 40 easy Para obtener información sobre cómo reclamar el crédito, vea las Instrucciones para el Formulario 941-PR o las Instrucciones para el Formulario 944(SP). 10 40 easy El crédito se le trata como un depósito hecho en el primer día del período de la planilla (trimestre o año). 10 40 easy En el caso de un plan que cubre a múltiples patronos, el crédito es reclamado por el plan, en vez del patrono. 10 40 easy En el caso de un plan asegurado que está sujeto a los requisitos estatales para la continuidad de cobertura, el crédito es reclamado por la compañía de seguros, en vez del patrono. 10 40 easy   Todo individuo o entidad que reclama el crédito por los pagos para la asistencia COBRA tiene que conservar la siguiente información para comprobar su reclamación: Información sobre el recibo, incluyendo fechas y cantidades, de la parte del 35% de la prima que le corresponde a la persona que reúne los requisitos para la asistencia. 10 40 easy En el caso de un plan de seguro, una copia de la factura u otro documento comprobante emitido por la compañía aseguradora y prueba del pago a tiempo de la prima completa hecho a la compañía aseguradora que se requiere conforme los requisitos para la cobertura COBRA. 10 40 easy En el caso de un plan autoasegurado, documentos que comprueban la cantidad de la prima y la cobertura provista a las personas que reúnen los requisitos para la asistencia. 10 40 easy Atestiguación del cese involuntario, incluyendo la fecha de cesación (despido) involuntario para cada empleado amparado por la cobertura cuyo despido involuntario es la base para el derecho al subsidio. 10 40 easy Prueba de que cada persona reúne los requisitos para la asistencia de la cobertura COBRA y de que ha optado por dicha cobertura. 10 40 easy Un registro que tenga los números de Seguro Social de todos los empleados con cobertura, la cantidad del subsidio reembolsado con respecto a cada empleado con cobertura y que indique si el subsidio se debe a una persona o a dos o más personas. 10 40 easy   Para más información, visite IRS. 10 40 easy gov y escriba “COBRA” en la casilla Search (Buscar). 10 40 easy La información está disponible en inglés. 10 40 easy Ayuda para radicar documentos ante la SSA. 10 40 easy   Si necesita ayuda en español para radicar sus formularios contributivos ante la SSA (esto incluye la solicitud de un número de identificación personal (PIN, por sus siglas en inglés)), llame a la SSA al 1-800-772-6270. 10 40 easy Elegibilidad para empleo. 10 40 easy   Usted tiene que verificar que cada empleado nuevo tenga derecho a trabajar legalmente en los Estados Unidos. 10 40 easy Esto incluye completar el Formulario I-9, Employment Eligibility Verification (Verificación de elegibilidad para empleo), disponible en español, del Servicio de Ciudadanía e Inmigración de Estados Unidos (USCIS, por sus siglas en inglés). 10 40 easy Puede obtener el formulario llamando al USCIS al 1-800-870-3676. 10 40 easy Si desea más información, comuníquese con el USCIS al 1-800-375-5283 o visite la página web de USCIS en www. 10 40 easy uscis. 10 40 easy gov/espanol. 10 40 easy Prev  Up  Next   Home   More Online Publications
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10 40 easy Publication 939 - Main Content Table of Contents General Information Taxation of Periodic PaymentsInvestment in the Contract Expected Return Computation Under the General Rule How To Use Actuarial TablesUnisex Annuity Tables Special Elections Worksheets for Determining Taxable Annuity Actuarial Tables Requesting a Ruling on Taxation of Annuity How To Get Tax HelpLow Income Taxpayer Clinics General Information Some of the terms used in this publication are defined in the following paragraphs. 10 40 easy A pension is generally a series of payments made to you after you retire from work. 10 40 easy Pension payments are made regularly and are for past services with an employer. 10 40 easy An annuity is a series of payments under a contract. 10 40 easy You can buy the contract alone or you can buy it with the help of your employer. 10 40 easy Annuity payments are made regularly for more than one full year. 10 40 easy Note. 10 40 easy Distributions from pensions and annuities follow the same rules as outlined in this publication unless otherwise noted. 10 40 easy Types of pensions and annuities. 10 40 easy   Particular types of pensions and annuities include: Fixed period annuities. 10 40 easy You receive definite amounts at regular intervals for a definite length of time. 10 40 easy Annuities for a single life. 10 40 easy You receive definite amounts at regular intervals for life. 10 40 easy The payments end at death. 10 40 easy Joint and survivor annuities. 10 40 easy The first annuitant receives a definite amount at regular intervals for life. 10 40 easy After he or she dies, a second annuitant receives a definite amount at regular intervals for life. 10 40 easy The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. 10 40 easy Variable annuities. 10 40 easy You receive payments that may vary in amount for a definite length of time or for life. 10 40 easy The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds or cost-of-living indexes. 10 40 easy Disability pensions. 10 40 easy You are under minimum retirement age and receive payments because you retired on disability. 10 40 easy If, at the time of your retirement, you were permanently and totally disabled, you may be eligible for the credit for the elderly or the disabled discussed in Publication 524. 10 40 easy If your annuity starting date is after November 18, 1996, the General Rule cannot be used for the following qualified plans. 10 40 easy A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries. 10 40 easy This plan must meet Internal Revenue Code requirements. 10 40 easy It qualifies for special tax benefits, including tax deferral for employer contributions and rollover distributions. 10 40 easy However, you must use the General Rule if you were 75 or over and the annuity payments are guaranteed for more than 5 years. 10 40 easy A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. 10 40 easy A tax-sheltered annuity is a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization. 10 40 easy   The General Rule is used to figure the tax treatment of various types of pensions and annuities, including nonqualified employee plans. 10 40 easy A nonqualified employee plan is an employer's plan that does not meet Internal Revenue Code requirements. 10 40 easy It does not qualify for most of the tax benefits of a qualified plan. 10 40 easy Annuity worksheets. 10 40 easy   The worksheets found near the end of the text of this publication may be useful to you in figuring the taxable part of your annuity. 10 40 easy Request for a ruling. 10 40 easy   If you are unable to determine the income tax treatment of your pension or annuity, you may ask the Internal Revenue Service to figure the taxable part of your annuity payments. 10 40 easy This is treated as a request for a ruling. 10 40 easy See Requesting a Ruling on Taxation of Annuity near the end of this publication. 10 40 easy Withholding tax and estimated tax. 10 40 easy   Your pension or annuity is subject to federal income tax withholding unless you choose not to have tax withheld. 10 40 easy If you choose not to have tax withheld from your pension or annuity, or if you do not have enough income tax withheld, you may have to make estimated tax payments. 10 40 easy Taxation of Periodic Payments This section explains how the periodic payments you receive under a pension or annuity plan are taxed under the General Rule. 10 40 easy Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). 10 40 easy These payments are also known as amounts received as an annuity. 10 40 easy If you receive an amount from your plan that is a nonperiodic payment (amount not received as an annuity), see Taxation of Nonperiodic Payments in Publication 575. 10 40 easy In general, you can recover your net cost of the pension or annuity tax free over the period you are to receive the payments. 10 40 easy The amount of each payment that is more than the part that represents your net cost is taxable. 10 40 easy Under the General Rule, the part of each annuity payment that represents your net cost is in the same proportion that your investment in the contract is to your expected return. 10 40 easy These terms are explained in the following discussions. 10 40 easy Investment in the Contract In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract. 10 40 easy First, find your net cost of the contract as of the annuity starting date (defined later). 10 40 easy To find this amount, you must first figure the total premiums, contributions, or other amounts paid. 10 40 easy This includes the amounts your employer contributed if you were required to include these amounts in income. 10 40 easy It also includes amounts you actually contributed (except amounts for health and accident benefits and deductible voluntary employee contributions). 10 40 easy From this total cost you subtract: Any refunded premiums, rebates, dividends, or unrepaid loans (any of which were not included in your income) that you received by the later of the annuity starting date or the date on which you received your first payment. 10 40 easy Any additional premiums paid for double indemnity or disability benefits. 10 40 easy Any other tax-free amounts you received under the contract or plan before the later of the dates in (1). 10 40 easy The annuity starting date   is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed. 10 40 easy Example. 10 40 easy On January 1 you completed all your payments required under an annuity contract providing for monthly payments starting on August 1, for the period beginning July 1. 10 40 easy The annuity starting date is July 1. 10 40 easy This is the date you use in figuring your investment in the contract and your expected return (discussed later). 10 40 easy Adjustments If any of the following items apply, adjust (add or subtract) your total cost to find your net cost. 10 40 easy Foreign employment. 10 40 easy   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. 10 40 easy The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (without regard to the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer on your behalf if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) if the contributions would be excludible from your gross income had they been paid directly to you. 10 40 easy Foreign employment contributions while a nonresident alien. 10 40 easy   In determining your cost, special rules apply if you are a U. 10 40 easy S. 10 40 easy citizen or resident alien who received distributions from a plan to which contributions were made while you were a nonresident alien. 10 40 easy Your contributions and your employer's contributions are not included in your cost if the contributions: Were made based on compensation which was for services performed outside the United States which you were a nonresident alien, and Were not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if they had been paid as cash compensation when the services were performed. 10 40 easy Death benefit exclusion. 10 40 easy   If you are the beneficiary of a deceased employee (or former employee), who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000. 10 40 easy The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion. 10 40 easy How to adjust your total cost. 10 40 easy   If you are eligible, treat the amount of any allowable death benefit exclusion as additional cost paid by the employee. 10 40 easy Add it to the cost or unrecovered cost of the annuity at the annuity starting date. 10 40 easy See Example 3 under Computation Under General Rule for an illustration of the adjustment to the cost of the contract. 10 40 easy Net cost. 10 40 easy   Your total cost plus certain adjustments and minus other amounts already recovered before the annuity starting date is your net cost. 10 40 easy This is the unrecovered investment in the contract as of the annuity starting date. 10 40 easy If your annuity starting date is after 1986, this is the maximum amount that you may recover tax free under the contract. 10 40 easy Refund feature. 10 40 easy   Adjustment for the value of the refund feature is only applicable when you report your pension or annuity under the General Rule. 10 40 easy Your annuity contract has a refund feature if: The expected return ( discussed later) of an annuity depends entirely or partly on the life of one or more individuals, The contract provides that payments will be made to a beneficiary or the estate of an annuitant on or after the death of the annuitant if a stated amount or a stated number of payments has not been paid to the annuitant or annuitants before death, and The payments are a refund of the amount you paid for the annuity contract. 10 40 easy   If your annuity has a refund feature, you must reduce your net cost of the contract by the value of the refund feature (figured using Table III or VII at the end of this publication, also see How To Use Actuarial Tables , later) to find the investment in the contract. 10 40 easy Zero value of refund feature. 10 40 easy   For a joint and survivor annuity, the value of the refund feature is zero if: Both annuitants are age 74 or younger, The payments are guaranteed for less than 2½ years, and The survivor's annuity is at least 50% of the first annuitant's annuity. 10 40 easy   For a single-life annuity without survivor benefit, the value of the refund feature is zero if: The payments are guaranteed for less than 2½ years, and The annuitant is: Age 57 or younger (if using the new (unisex) annuity tables), Age 42 or younger (if male and using the old annuity tables), or Age 47 or younger (if female and using the old annuity tables). 10 40 easy   If you do not meet these requirements, you will have to figure the value of the refund feature, as explained in the following discussion. 10 40 easy Examples. 10 40 easy The first example shows how to figure the value of the refund feature when there is only one beneficiary. 10 40 easy Example 2 shows how to figure the value of the refund feature when the contract provides, in addition to a whole life annuity, one or more temporary life annuities for the lives of children. 10 40 easy In both examples, the taxpayer elects to use Tables V through VIII. 10 40 easy If you need the value of the refund feature for a joint and survivor annuity, write to the Internal Revenue Service as explained under Requesting a Ruling on Taxation of Annuity near the end of this publication. 10 40 easy Example 1. 10 40 easy At age 65, Barbara bought for $21,053 an annuity with a refund feature. 10 40 easy She will get $100 a month for life. 10 40 easy Barbara's contract provides that if she does not live long enough to recover the full $21,053, similar payments will be made to her surviving beneficiary until a total of $21,053 has been paid under the contract. 10 40 easy In this case, the contract cost and the total guaranteed return are the same ($21,053). 10 40 easy Barbara's investment in the contract is figured as follows: Net cost $21,053 Amount to be received annually $1,200   Number of years for which payment is guaranteed ($21,053 divided by $1,200) 17. 10 40 easy 54   Rounded to nearest whole number of years 18   Percentage from Actuarial Table VII for age 65 with 18 years of guaranteed payments 15%   Value of the refund feature (rounded to the nearest dollar)—15% of $21,053 3,158 Investment in the contract, adjusted for value of refund feature $17,895       If the total guaranteed return were less than the $21,053 net cost of the contract, Barbara would apply the appropriate percentage from the tables to the lesser amount. 10 40 easy For example, if the contract guaranteed the $100 monthly payments for 17 years to Barbara's estate or beneficiary if she were to die before receiving all the payments for that period, the total guaranteed return would be $20,400 ($100 × 12 × 17 years). 10 40 easy In this case, the value of the refund feature would be $2,856 (14% of $20,400) and Barbara's investment in the contract would be $18,197 ($21,053 minus $2,856) instead of $17,895. 10 40 easy Example 2. 10 40 easy John died while still employed. 10 40 easy His widow, Eleanor, age 48, receives $171 a month for the rest of her life. 10 40 easy John's son, Elmer, age 9, receives $50 a month until he reaches age 18. 10 40 easy John's contributions to the retirement fund totaled $7,559. 10 40 easy 45, with interest on those contributions of $1,602. 10 40 easy 53. 10 40 easy The guarantee or total refund feature of the contract is $9,161. 10 40 easy 98 ($7,559. 10 40 easy 45 plus $1,602. 10 40 easy 53). 10 40 easy The adjustment in the investment in the contract is figured as follows: A) Expected return:*       1) Widow's expected return:         Annual annuity ($171 × 12) $2,052       Multiplied by factor from Table V         (nearest age 48) 34. 10 40 easy 9 $71,614. 10 40 easy 80   2) Child's expected return:         Annual annuity ($50 × 12) $600       Multiplied by factor from         Table VIII (nearest age 9         for term of 9 years) 9. 10 40 easy 0 5,400. 10 40 easy 00   3) Total expected return   $77,014. 10 40 easy 80 B) Adjustment for refund feature:       1) Contributions (net cost) $7,559. 10 40 easy 45   2) Guaranteed amount (contributions of $7,559. 10 40 easy 45 plus interest of $1,602. 10 40 easy 53) $9,161. 10 40 easy 98   3) Minus: Expected return under child's (temporary life) annuity (A(2)) 5,400. 10 40 easy 00   4) Net guaranteed amount $3,761. 10 40 easy 98   5) Multiple from Table VII (nearest age 48 for 2 years duration (recovery of $3,761. 10 40 easy 98 at $171 a month to nearest whole year)) 0%   6) Adjustment required for value of refund feature rounded to the nearest whole dollar  (0% × $3,761. 10 40 easy 98, the smaller of B(3) or B(6)) 0 *Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. 10 40 easy See the discussion of expected return, later in this publication. 10 40 easy Free IRS help. 10 40 easy   If you need to request assistance to figure the value of the refund feature, see Requesting a Ruling on Taxation of Annuity near the end of this publication. 10 40 easy Expected Return Your expected return is the total amount you and other eligible annuitants can expect to receive under the contract. 10 40 easy The following discussions explain how to figure the expected return with each type of annuity. 10 40 easy A person's age, for purposes of figuring the expected return, is the age at the birthday nearest to the annuity starting date. 10 40 easy Fixed period annuity. 10 40 easy   If you will get annuity payments for a fixed number of years, without regard to your life expectancy, you must figure your expected return based on that fixed number of years. 10 40 easy It is the total amount you will get beginning at the annuity starting date. 10 40 easy You will receive specific periodic payments for a definite period of time, such as a fixed number of months (but not less than 13). 10 40 easy To figure your expected return, multiply the fixed number of months for which payments are to be made by the amount of the payment specified for each period. 10 40 easy Single life annuity. 10 40 easy   If you are to get annuity payments for the rest of your life, find your expected return as follows. 10 40 easy You must multiply the amount of the annual payment by a multiple based on your life expectancy as of the annuity starting date. 10 40 easy These multiples are set out in actuarial Tables I and V near the end of this publication (see How To Use Actuarial Tables , later). 10 40 easy   You may need to adjust these multiples if the payments are made quarterly, semiannually, or annually. 10 40 easy See Adjustments to Tables I, II, V, VI, and VIA following Table I. 10 40 easy Example. 10 40 easy Henry bought an annuity contract that will give him an annuity of $500 a month for his life. 10 40 easy If at the annuity starting date Henry's nearest birthday is 66, the expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table V, age 66 × 19. 10 40 easy 2 Expected return $115,200 If the payments were to be made to Henry quarterly and the first payment was made one full month after the annuity starting date, Henry would adjust the 19. 10 40 easy 2 multiple by +. 10 40 easy 1. 10 40 easy His expected return would then be $115,800 ($6,000 × 19. 10 40 easy 3). 10 40 easy Annuity for shorter of life or specified period. 10 40 easy   With this type of annuity, you are to get annuity payments either for the rest of your life or until the end of a specified period, whichever period is shorter. 10 40 easy To figure your expected return, multiply the amount of your annual payment by a multiple in Table IV or VIII for temporary life annuities. 10 40 easy Find the proper multiple based on your sex (if using Table IV), your age at the annuity starting date, and the nearest whole number of years in the specified period. 10 40 easy Example. 10 40 easy Harriet purchased an annuity this year that will pay her $200 each month for five years or until she dies, whichever period is shorter. 10 40 easy She was age 65 at her birthday nearest the annuity starting date. 10 40 easy She figures the expected return as follows: Annual payment ($200 × 12 months) $2,400 Multiple shown in Table VIII, age 65, 5-year term × 4. 10 40 easy 9 Expected return $11,760 She uses Table VIII (not Table IV) because all her contributions were made after June 30, 1986. 10 40 easy See Special Elections, later. 10 40 easy Joint and survivor annuities. 10 40 easy   If you have an annuity that pays you a periodic income for life and after your death provides an identical lifetime periodic income to your spouse (or some other person), you figure the expected return based on your combined life expectancies. 10 40 easy To figure the expected return, multiply the annual payment by a multiple in Table II or VI based on your joint life expectancies. 10 40 easy If your payments are made quarterly, semiannually, or annually, you may need to adjust these multiples. 10 40 easy See Adjustments to Tables I, II, V, VI, and VIA following Table I near the end of this publication. 10 40 easy Example. 10 40 easy John bought a joint and survivor annuity providing payments of $500 a month for his life, and, after his death, $500 a month for the remainder of his wife's life. 10 40 easy At John's annuity starting date, his age at his nearest birthday is 70 and his wife's at her nearest birthday is 67. 10 40 easy The expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table VI, ages 67 and 70 × 22. 10 40 easy 0 Expected return $132,000 Different payments to survivor. 10 40 easy   If your contract provides that payments to a survivor annuitant will be different from the amount you receive, you must use a computation which accounts for both the joint lives of the annuitants and the life of the survivor. 10 40 easy Example 1. 10 40 easy Gerald bought a contract providing for payments to him of $500 a month for life and, after his death, payments to his wife, Mary, of $350 a month for life. 10 40 easy If, at the annuity starting date, Gerald's nearest birthday is 70 and Mary's is 67, the expected return under the contract is figured as follows: Combined multiple for Gerald and Mary, ages 70 and 67 (from Table VI)   22. 10 40 easy 0 Multiple for Gerald, age 70 (from Table V)   16. 10 40 easy 0 Difference: Multiple applicable to Mary   6. 10 40 easy 0 Gerald's annual payment ($500 × 12) $6,000   Gerald's multiple 16. 10 40 easy 0   Gerald's expected return   $96,000 Mary's annual payment ($350 × 12) $4,200   Mary's multiple 6. 10 40 easy 0   Mary's expected return   25,200 Total expected return under the contract   $121,200 Example 2. 10 40 easy Your husband died while still employed. 10 40 easy Under the terms of his employer's retirement plan, you are entitled to get an immediate annuity of $400 a month for the rest of your life or until you remarry. 10 40 easy Your daughters, Marie and Jean, are each entitled to immediate temporary life annuities of $150 a month until they reach age 18. 10 40 easy You were 50 years old at the annuity starting date. 10 40 easy Marie was 16 and Jean was 14. 10 40 easy Using the multiples shown in Tables V and VIII at the end of this publication, the total expected return on the annuity starting date is $169,680, figured as follows: Widow, age 50 (multiple from Table V—33. 10 40 easy 1 × $4,800 annual payment) $158,880 Marie, age 16 for 2 years duration (multiple from Table VIII—2. 10 40 easy 0 × $1,800 annual payment) 3,600 Jean, age 14 for 4 years duration (multiple from Table VIII—4. 10 40 easy 0 × $1,800 annual payment) 7,200 Total expected return $169,680 No computation of expected return is made based on your husband's age at the date of death because he died before the annuity starting date. 10 40 easy Computation Under the General Rule Note. 10 40 easy Variable annuities use a different computation for determining the exclusion amounts. 10 40 easy See Variable annuities later. 10 40 easy Under the General Rule, you figure the taxable part of your annuity by using the following steps: Step 1. 10 40 easy   Figure the amount of your investment in the contract, including any adjustments for the refund feature and the death benefit exclusion, if applicable. 10 40 easy See Death benefit exclusion , earlier. 10 40 easy Step 2. 10 40 easy   Figure your expected return. 10 40 easy Step 3. 10 40 easy   Divide Step 1 by Step 2 and round to three decimal places. 10 40 easy This will give you the exclusion percentage. 10 40 easy Step 4. 10 40 easy   Multiply the exclusion percentage by the first regular periodic payment. 10 40 easy The result is the tax-free part of each pension or annuity payment. 10 40 easy   The tax-free part remains the same even if the total payment increases due to variation in the annuity amount such as cost of living increases, or you outlive the life expectancy factor used. 10 40 easy However, if your annuity starting date is after 1986, the total amount of annuity income that is tax free over the years cannot exceed your net cost. 10 40 easy   Each annuitant applies the same exclusion percentage to his or her initial payment called for in the contract. 10 40 easy Step 5. 10 40 easy   Multiply the tax-free part of each payment (step 4) by the number of payments received during the year. 10 40 easy This will give you the tax-free part of the total payment for the year. 10 40 easy    In the first year of your annuity, your first payment or part of your first payment may be for a fraction of the payment period. 10 40 easy This fractional amount is multiplied by your exclusion percentage to get the tax-free part. 10 40 easy Step 6. 10 40 easy   Subtract the tax-free part from the total payment you received. 10 40 easy The rest is the taxable part of your pension or annuity. 10 40 easy Example 1. 10 40 easy You purchased an annuity with an investment in the contract of $10,800. 10 40 easy Under its terms, the annuity will pay you $100 a month for life. 10 40 easy The multiple for your age (age 65) is 20. 10 40 easy 0 as shown in Table V. 10 40 easy Your expected return is $24,000 (20 × 12 × $100). 10 40 easy Your cost of $10,800, divided by your expected return of $24,000, equals 45. 10 40 easy 0%. 10 40 easy This is the percentage you will not have to include in income. 10 40 easy Each year, until your net cost is recovered, $540 (45% of $1,200) will be tax free and you will include $660 ($1,200 − $540) in your income. 10 40 easy If you had received only six payments of $100 ($600) during the year, your exclusion would have been $270 (45% of $100 × 6 payments). 10 40 easy Example 2. 10 40 easy Gerald bought a joint and survivor annuity. 10 40 easy Gerald's investment in the contract is $62,712 and the expected return is $121,200. 10 40 easy The exclusion percentage is 51. 10 40 easy 7% ($62,712 ÷ $121,200). 10 40 easy Gerald will receive $500 a month ($6,000 a year). 10 40 easy Each year, until his net cost is recovered, $3,102 (51. 10 40 easy 7% of his total payments received of $6,000) will be tax free and $2,898 ($6,000 − $3,102) will be included in his income. 10 40 easy If Gerald dies, his wife will receive $350 a month ($4,200 a year). 10 40 easy If Gerald had not recovered all of his net cost before his death, his wife will use the same exclusion percentage (51. 10 40 easy 7%). 10 40 easy Each year, until the entire net cost is recovered, his wife will receive $2,171. 10 40 easy 40 (51. 10 40 easy 7% of her payments received of $4,200) tax free. 10 40 easy She will include $2,028. 10 40 easy 60 ($4,200 − $2,171. 10 40 easy 40) in her income tax return. 10 40 easy Example 3. 10 40 easy Using the same facts as Example 2 under Different payments to survivor, you are to receive an annual annuity of $4,800 until you die or remarry. 10 40 easy Your two daughters each receive annual annuities of $1,800 until they reach age 18. 10 40 easy Your husband contributed $25,576 to the plan. 10 40 easy You are eligible for the $5,000 death benefit exclusion because your husband died before August 21, 1996. 10 40 easy Adjusted Investment in the Contract Contributions $25,576 Plus: Death benefit exclusion 5,000 Adjusted investment in the contract $30,576 The total expected return, as previously figured (in Example 2 under Different payments to survivor), is $169,680. 10 40 easy The exclusion percentage of 18. 10 40 easy 0% ($30,576 ÷ $169,680) applies to the annuity payments you and each of your daughters receive. 10 40 easy Each full year $864 (18. 10 40 easy 0% × $4,800) will be tax free to you, and you must include $3,936 in your income tax return. 10 40 easy Each year, until age 18, $324 (18. 10 40 easy 0% × $1,800) of each of your daughters' payments will be tax free and each must include the balance, $1,476, as income on her own income tax return. 10 40 easy Part-year payments. 10 40 easy   If you receive payments for only part of a year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments received during the year. 10 40 easy   If you receive amounts during the year that represent 12 payments, one for each month in that year, and an amount that represents payments for months in a prior year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments the amounts received represent. 10 40 easy For instance, if you received amounts during the year that represent the 12 payments for that year plus an amount that represents three payments for a prior year, multiply that amount by the 15 (12 + 3) payments received that the year. 10 40 easy   If you received a fractional payment, follow Step 5, discussed earlier. 10 40 easy This gives you the tax-free part of your total payment. 10 40 easy Example. 10 40 easy On September 28, Mary bought an annuity contract for $22,050 that will give her $125 a month for life, beginning October 30. 10 40 easy The applicable multiple from Table V is 23. 10 40 easy 3 (age 61). 10 40 easy Her expected return is $34,950 ($125 × 12 × 23. 10 40 easy 3). 10 40 easy Mary's investment in the contract of $22,050, divided by her expected return of $34,950, equals 63. 10 40 easy 1%. 10 40 easy Each payment received will consist of 63. 10 40 easy 1% return of cost and 36. 10 40 easy 9% taxable income, until her net cost of the contract is fully recovered. 10 40 easy During the first year, Mary received three payments of $125, or $375, of which $236. 10 40 easy 63 (63. 10 40 easy 1% × $375) is a return of cost. 10 40 easy The remaining $138. 10 40 easy 37 is included in income. 10 40 easy Increase in annuity payments. 10 40 easy   The tax-free amount remains the same as the amount figured at the annuity starting date, even if the payment increases. 10 40 easy All increases in the installment payments are fully taxable. 10 40 easy   However, if your annuity payments are scheduled to increase at a definite date in the future you must figure the expected return for that annuity using the method described in section 1. 10 40 easy 72-5(a)(5) of the regulations. 10 40 easy Example. 10 40 easy Joe's wife died while she was still employed and, as her beneficiary, he began receiving an annuity of $147 per month. 10 40 easy In figuring the taxable part, Joe elects to use Tables V through VIII. 10 40 easy The cost of the contract was $7,938, consisting of the sum of his wife's net contributions, adjusted for any refund feature. 10 40 easy His expected return as of the annuity starting date is $35,280 (age 65, multiple of 20. 10 40 easy 0 × $1,764 annual payment). 10 40 easy The exclusion percentage is $7,938 ÷ $35,280, or 22. 10 40 easy 5%. 10 40 easy During the year he received 11 monthly payments of $147, or $1,617. 10 40 easy Of this amount, 22. 10 40 easy 5% × $147 × 11 ($363. 10 40 easy 83) is tax free as a return of cost and the balance of $1,253. 10 40 easy 17 is taxable. 10 40 easy Later, because of a cost-of-living increase, his annuity payment was increased to $166 per month, or $1,992 a year (12 × $166). 10 40 easy The tax-free part is still only 22. 10 40 easy 5% of the annuity payments as of the annuity starting date (22. 10 40 easy 5% × $147 × 12 = $396. 10 40 easy 90 for a full year). 10 40 easy The increase of $228 ($1,992 − $1,764 (12 × $147)) is fully taxable. 10 40 easy Variable annuities. 10 40 easy   For variable annuity payments, figure the amount of each payment that is tax free by dividing your investment in the contract (adjusted for any refund feature) by the total number of periodic payments you expect to get under the contract. 10 40 easy   If the annuity is for a definite period, you determine the total number of payments by multiplying the number of payments to be made each year by the number of years you will receive payments. 10 40 easy If the annuity is for life, you determine the total number of payments by using a multiple from the appropriate actuarial table. 10 40 easy Example. 10 40 easy Frank purchased a variable annuity at age 65. 10 40 easy The total cost of the contract was $12,000. 10 40 easy The annuity starting date is January 1 of the year of purchase. 10 40 easy His annuity will be paid, starting July 1, in variable annual installments for his life. 10 40 easy The tax-free amount of each payment, until he has recovered his cost of his contract, is: Investment in the contract $12,000 Number of expected annual payments (multiple for age 65 from Table V) 20 Tax-free amount of each payment ($12,000 ÷ 20) $600 If Frank's first payment is $920, he includes only $320 ($920 − $600) in his gross income. 10 40 easy   If the tax-free amount for a year is more than the payments you receive in that year, you may choose, when you receive the next payment, to refigure the tax-free part. 10 40 easy Divide the amount of the periodic tax-free part that is more than the payment you received by the remaining number of payments you expect. 10 40 easy The result is added to the previously figured periodic tax-free part. 10 40 easy The sum is the amount of each future payment that will be tax free. 10 40 easy Example. 10 40 easy Using the facts of the previous example about Frank, assume that after Frank's $920 payment, he received $500 in the following year, and $1,200 in the year after that. 10 40 easy Frank does not pay tax on the $500 (second year) payment because $600 of each annual pension payment is tax free. 10 40 easy Since the $500 payment is less than the $600 annual tax-free amount, he may choose to refigure his tax-free part when he receives his $1,200 (third year) payment, as follows: Amount tax free in second year $600. 10 40 easy 00 Amount received in second year 500. 10 40 easy 00 Difference $100. 10 40 easy 00 Number of remaining payments after the first 2 payments (age 67, from Table V) 18. 10 40 easy 4 Amount to be added to previously determined annual tax-free part ($100 ÷ 18. 10 40 easy 4) $5. 10 40 easy 43 Revised annual tax-free part for third and later years ($600 + $5. 10 40 easy 43) $605. 10 40 easy 43 Amount taxable in third year ($1,200 − $605. 10 40 easy 43) $594. 10 40 easy 57 If you choose to refigure your tax-free amount,   you must file a statement with your income tax return stating that you are refiguring the tax-free amount in accordance with the rules of section 1. 10 40 easy 72–4(d)(3) of the Income Tax Regulations. 10 40 easy The statement must also show the following information: The annuity starting date and your age on that date. 10 40 easy The first day of the first period for which you received an annuity payment in the current year. 10 40 easy Your investment in the contract as originally figured. 10 40 easy The total of all amounts received tax free under the annuity from the annuity starting date through the first day of the first period for which you received an annuity payment in the current tax year. 10 40 easy Exclusion Limits Your annuity starting date determines the total amount of annuity income that you can exclude from income over the years. 10 40 easy Exclusion limited to net cost. 10 40 easy   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a return of your cost cannot exceed your net cost (figured without any reduction for a refund feature). 10 40 easy This is the unrecovered investment in the contract as of the annuity starting date. 10 40 easy   If your annuity starting date is after July 1, 1986, any unrecovered net cost at your (or last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. 10 40 easy This deduction is not subject to the 2%-of-adjusted-gross-income limit. 10 40 easy Example 1. 10 40 easy Your annuity starting date is after 1986. 10 40 easy Your total cost is $12,500, and your net cost is $10,000, taking into account certain adjustments. 10 40 easy There is no refund feature. 10 40 easy Your monthly annuity payment is $833. 10 40 easy 33. 10 40 easy Your exclusion ratio is 12% and you exclude $100 a month. 10 40 easy Your exclusion ends after 100 months, when you have excluded your net cost of $10,000. 10 40 easy Thereafter, your annuity payments are fully taxable. 10 40 easy Example 2. 10 40 easy The facts are the same as in Example 1, except that there is a refund feature, and you die after 5 years with no surviving annuitant. 10 40 easy The adjustment for the refund feature is $1,000, so the investment in the contract is $9,000. 10 40 easy The exclusion ratio is 10. 10 40 easy 8%, and your monthly exclusion is $90. 10 40 easy After 5 years (60 months), you have recovered tax free only $5,400 ($90 x 60). 10 40 easy An itemized deduction for the unrecovered net cost of $4,600 ($10,000 net cost minus $5,400) may be taken on your final income tax return. 10 40 easy Your unrecovered investment is determined without regard to the refund feature adjustment, discussed earlier, under Adjustments. 10 40 easy Exclusion not limited to net cost. 10 40 easy   If your annuity starting date was before 1987, you could continue to take your monthly exclusion for as long as you receive your annuity. 10 40 easy If you choose a joint and survivor annuity, your survivor continues to take the survivor's exclusion figured as of the annuity starting date. 10 40 easy The total exclusion may be more than your investment in the contract. 10 40 easy How To Use Actuarial Tables In figuring, under the General Rule, the taxable part of your annuity payments that you are to get for the rest of your life (rather than for a fixed number of years), you must use one or more of the actuarial tables in this publication. 10 40 easy Unisex Annuity Tables Effective July 1, 1986, the Internal Revenue Service adopted new annuity Tables V through VIII, in which your sex is not considered when determining the applicable factor. 10 40 easy These tables correspond to the old Tables I through IV. 10 40 easy In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986. 10 40 easy If you made no contributions to the plan after June 30, 1986, generally you must use only Tables I through IV. 10 40 easy However, if you received an annuity payment after June 30, 1986, you may elect to use Tables V through VIII (see Annuity received after June 30, 1986, later). 10 40 easy Special Elections Although you generally must use Tables V through VIII if you made contributions to the retirement plan after June 30, 1986, and Tables I through IV if you made no contributions after June 30, 1986, you can make the following special elections to select which tables to use. 10 40 easy Contributions made both before July 1986 and after June 1986. 10 40 easy   If you made contributions to the retirement plan both before July 1986 and after June 1986, you may elect to use Tables I through IV for the pre-July 1986 cost of the contract, and Tables V through VIII for the post-June 1986 cost. 10 40 easy (See the examples below. 10 40 easy )    Making the election. 10 40 easy Attach this statement to your income tax return for the first year in which you receive an annuity:    “I elect to apply the provisions of paragraph (d) of section 1. 10 40 easy 72–6 of the Income Tax Regulations. 10 40 easy ”   The statement must also include your name, address, social security number, and the amount of the pre-July 1986 investment in the contract. 10 40 easy   If your investment in the contract includes post-June 1986 contributions to the plan, and you do not make the election to use Tables I through IV and Tables V through VIII, then you can only use Tables V through VIII in figuring the taxable part of your annuity. 10 40 easy You must also use Tables V through VIII if you are unable or do not wish to determine the portions of your contributions which were made before July 1, 1986, and after June 30, 1986. 10 40 easy    Advantages of election. 10 40 easy In general, a lesser amount of each annual annuity payment is taxable if you separately figure your exclusion ratio for pre-July 1986 and post-June 1986 contributions. 10 40 easy    If you intend to make this election, save your records that substantiate your pre-July 1986 and post-June 1986 contributions. 10 40 easy If the death benefit exclusion applies (see discussion, earlier), you do not have to apportion it between the pre-July 1986 and the post-June 1986 investment in the contract. 10 40 easy   The following examples illustrate the separate computations required if you elect to use Tables I through IV for your pre-July 1986 investment in the contract and Tables V through VIII for your post-June 1986 investment in the contract. 10 40 easy Example 1. 10 40 easy Bill, who is single, contributed $42,000 to the retirement plan and will receive an annual annuity of $24,000 for life. 10 40 easy Payment of the $42,000 contribution is guaranteed under a refund feature. 10 40 easy Bill is 55 years old as of the annuity starting date. 10 40 easy For figuring the taxable part of Bill's annuity, he chose to make separate computations for his pre-July 1986 investment in the contract of $41,300, and for his post-June 1986 investment in the contract of $700. 10 40 easy       Pre- July 1986   Post- June 1986 A. 10 40 easy Adjustment for refund feature         1) Net cost $41,300   $700   2) Annual annuity—$24,000  ($41,300/$42,000 × $24,000) $23,600       ($700/$42,000 × $24,000)     $400   3) Guarantee under contract $41,300   $700   4) No. 10 40 easy of years payments  guaranteed (rounded), A(3) ÷ A(2) 2   2   5) Applicable percentage from  Tables III and VII 1%   0%   6) Adjustment for value of refund  feature, A(5) × smaller of A(1)  or A(3) $413   $0 B. 10 40 easy Investment in the contract         1) Net cost $41,300   $700   2) Minus: Amount in A(6) 413   0   3) Investment in the contract $40,887   $700 C. 10 40 easy Expected return         1) Annual annuity receivable $24,000   $24,000   2) Multiples from Tables I and V 21. 10 40 easy 7   28. 10 40 easy 6   3) Expected return, C(1) × C(2) $520,800   $686,400 D. 10 40 easy Tax-free part of annuity         1) Exclusion ratio as decimal,  B(3) ÷ C(3) . 10 40 easy 079   . 10 40 easy 001   2) Tax-free part, C(1) × D(1) $1,896   $24 The tax-free part of Bill's total annuity is $1,920 ($1,896 plus $24). 10 40 easy The taxable part of his annuity is $22,080 ($24,000 minus $1,920). 10 40 easy If the annuity starting date is after 1986, the exclusion over the years cannot exceed the net cost (figured without any reduction for a refund feature). 10 40 easy Example 2. 10 40 easy Al is age 62 at his nearest birthday to the annuity starting date. 10 40 easy Al's wife is age 60 at her nearest birthday to the annuity starting date. 10 40 easy The joint and survivor annuity pays $1,000 per month to Al for life, and $500 per month to Al's surviving wife after his death. 10 40 easy The pre-July 1986 investment in the contract is $53,100 and the post-June 1986 investment in the contract is $7,000. 10 40 easy Al makes the election described in Example 1 . 10 40 easy For purposes of this example, assume the refund feature adjustment is zero. 10 40 easy If an adjustment is required, IRS will figure the amount. 10 40 easy See Requesting a Ruling on Taxation of Annuity near the end of this publication. 10 40 easy       Pre-  July 1986   Post-  June 1986 A. 10 40 easy Adjustment for refund feature         1) Net cost $53,100   $7,000   2) Annual annuity—$12,000  ($53,100/$60,100 × $12,000) $10,602       ($7,000/$60,100 × $12,000)     $1,398   3) Guaranteed under the contract $53,100   $7,000   4) Number of years guaranteed,  rounded, A(3) ÷ A(2) 5   5   5) Applicable percentages 0%   0%   6) Refund feature adjustment, A(5) × smaller of A(1) or A(3) 0   0 B. 10 40 easy Investment in the contract         1) Net cost $53,100   $7,000   2) Refund feature adjustment 0   0   3) Investment in the contract adjusted for refund feature $53,100   $7,000 C. 10 40 easy Expected return         1) Multiple for both annuitants from Tables II and VI 25. 10 40 easy 4   28. 10 40 easy 8   2) Multiple for first annuitant from Tables I and V 16. 10 40 easy 9   22. 10 40 easy 5   3) Multiple applicable to surviving annuitant, subtract C(2) from C(1) 8. 10 40 easy 5   6. 10 40 easy 3   4) Annual annuity to surviving annuitant $6,000   $6,000   5) Portion of expected return for surviving annuitant, C(4) × C(3) $51,000   $37,800   6) Annual annuity to first annuitant $12,000   $12,000   7) Plus: Portion of expected return for first annuitant, C(6) × C(2) $202,800   $270,000   8) Expected return for both annuitants, C(5) + C(7) $253,800   $307,800 D. 10 40 easy Tax-free part of annuity         1) Exclusion ratio as a decimal, B(3) ÷ C(8) . 10 40 easy 209   . 10 40 easy 023   2) Retiree's tax-free part of annuity, C(6) × D(1) $2,508   $276   3) Survivor's tax-free part of annuity, C(4) × D(1) $1,254   $138 The tax-free part of Al's total annuity is $2,784 ($2,508 + $276). 10 40 easy The taxable part of his annuity is $9,216 ($12,000 − $2,784). 10 40 easy The exclusion over the years cannot exceed the net cost of the contract (figured without any reduction for a refund feature) if the annuity starting date is after 1986. 10 40 easy After Al's death, his widow will apply the same exclusion percentages (20. 10 40 easy 9% and 2. 10 40 easy 3%) to her annual annuity of $6,000 to figure the tax-free part of her annuity. 10 40 easy Annuity received after June 30, 1986. 10 40 easy   If you receive an annuity payment after June 30, 1986, (regardless of your annuity starting date), you may elect to treat the entire cost of the contract as post-June 1986 cost (even if you made no post-June 1986 contributions to the plan) and use Tables V through VIII. 10 40 easy Once made, you cannot revoke the election, which will apply to all payments during the year and in any later year. 10 40 easy    Make the election by attaching the following statement to your income tax return. 10 40 easy    “I elect, under section 1. 10 40 easy 72–9 of the Income Tax Regulations, to treat my entire cost of the contract as a post-June 1986 cost of the plan. 10 40 easy ”   The statement must also include your name, address, and social security number. 10 40 easy   You should also indicate you are making this election if you are unable or do not wish to determine the parts of your contributions which were made before July 1, 1986, and after June 30, 1986. 10 40 easy Disqualifying form of payment or settlement. 10 40 easy   If your annuity starting date is after June 30, 1986, and the contract provides for a disqualifying form of payment or settlement, such as an option to receive a lump sum in full discharge of the obligation under the contract, the entire investment in the contract is treated as post-June 1986 investment in the contract. 10 40 easy See regulations section 1. 10 40 easy 72–6(d)(3) for additional examples of disqualifying forms of payment or settlement. 10 40 easy You can find the Income Tax Regulations in many libraries and at Internal Revenue Service Offices. 10 40 easy Worksheets for Determining Taxable Annuity Worksheets I and II. 10 40 easy   Worksheets I and II follow for determining your taxable annuity under Regulations Section 1. 10 40 easy 72–6(d)(6) Election. 10 40 easy Worksheet I For Determining Taxable Annuity Under Regulations Section 1. 10 40 easy 72-6(d)(6) Election For Single Annuitant With No Survivor Annuity               Pre-July 1986   Post-June 1986 A. 10 40 easy   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. 10 40 easy )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)   Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages* from Tables III and VII                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. 10 40 easy If not, the IRS will calculate the refund feature percentage. 10 40 easy             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. 10 40 easy   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund feature:                   B(1) minus B(2)                             C. 10 40 easy   Expected Return             1)   Annual Annuity:                   12 times monthly annuity**             2)   Expected return multiples from Tables I and V             3)     Expected return:                   C(1) times C(2)                             D. 10 40 easy   Tax-Free Part of Annuity             1)     Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(3)             2)     Tax-free part of annuity:                   C(1) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. 10 40 easy     Worksheet II For Determining Taxable Annuity Under Regulations Section 1. 10 40 easy 72-6(d)(6) Election For Joint and Survivor Annuity               Pre-July 1986   Post-June 1986 A. 10 40 easy   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. 10 40 easy )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)     Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages*                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. 10 40 easy If not, the IRS will calculate the refund feature percentage. 10 40 easy             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. 10 40 easy   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund future:                   B(1) minus B(2)                             C. 10 40 easy   Expected Return             1)   Multiples for both annuitants, Tables II and VI             2)   Multiple for retiree. 10 40 easy Tables I and VI             3)   Multiple for survivor:                   C(1) minus C(2)             4)   Annual annuity to survivor:                   12 times potential monthly rate for survivor**             5)   Expected return for survivor:                   C(3) times C(4)             6)   Annual annuity to retiree:                   12 times monthly rate for retiree**             7)   Expected return for retiree:                   C(2) times C(6)             8)   Total expected return:                   C(5) plus C(7)                             D. 10 40 easy   Tax-Free Part of Annuity             1)   Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(8)             2)   Retiree's tax-free part of annuity:                   C(6) times D(1)             3)   Survivor's tax-free part of annuity, if surviving after death of retiree:                   C(4) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. 10 40 easy   Actuarial Tables Please click here for the text description of the image. 10 40 easy Actuarial Tables Please click here for the text description of the image. 10 40 easy Actuarial Tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 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easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Please click here for the text description of the image. 10 40 easy Actuarial tables Requesting a Ruling on Taxation of Annuity If you are a retiree, or the survivor of an employee or retiree, you may ask the Internal Revenue Service to help you determine the taxation of your annuity. 10 40 easy If you make this request, you are asking for a ruling. 10 40 easy User fee. 10 40 easy   Under the law in effect at the time this publication went to print, the IRS must charge a user fee for all ruling requests. 10 40 easy You should call the IRS for the proper fee. 10 40 easy A request solely for the value of the refund feature is not treated as a ruling request and requires no fee. 10 40 easy Send your request to:     Internal Revenue Service  Attention: EP Letter Rulings P. 10 40 easy O. 10 40 easy Box 27063 McPherson Station Washington, DC 20038 The user fee is allowed as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit. 10 40 easy When to make the request. 10 40 easy   Please note that requests sent between February 1 and April 15 may experience some delay. 10 40 easy We process requests in the order received, and we will reply to your request as soon as we can process it. 10 40 easy If you do not receive your ruling by the required filing date, you may use Form 4868, Application for Automatic Extension of Time To File U. 10 40 easy S. 10 40 easy Individual Income Tax Return, to get an extension of time to file. 10 40 easy Information you must furnish. 10 40 easy   You must furnish the information listed below so the IRS can comply with your request. 10 40 easy Failure to furnish the information will result in a delay in processing your request. 10 40 easy Please send only copies of the following documents, as the IRS retains all material sent for its records: A letter explaining the question(s) you wish to have resolved or the information you need from the ruling. 10 40 easy Copies of any documents showing distributions, annuity rates, and annuity options available to you. 10 40 easy A copy of any Form 1099–R you received since your annuity began. 10 40 easy A statement indicating whether you have filed your return for the year for which you are making the request. 10 40 easy If you have requested an extension of time to file that return, please indicate the extension date. 10 40 easy Your daytime phone number. 10 40 easy Your current mailing address. 10 40 easy A power of attorney if someone other than you, an attorney, a certified public accountant, or an enrolled agent is signing this request. 10 40 easy Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. 10 40 easy A completed Tax Information Sheet (or facsimile) shown on the next page. 10 40 easy Sign and date the Disclosure and Perjury Statement (or facsimile) at the end of the tax information sheet. 10 40 easy This statement must be signed by the retiree or the survivor annuitant. 10 40 easy It cannot be signed by a representative. 10 40 easy Tax Information Sheet Please click here for the text description of the image. 10 40 easy Tax Information Sheet Please click here for the text description of the image. 10 40 easy Tax Information Sheet (continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. 10 40 easy Free help with your tax return. 10 40 easy   You can get free help preparing your return nationwide from IRS-certified volunteers. 10 40 easy The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 10 40 easy The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 10 40 easy Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 10 40 easy In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 10 40 easy To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 10 40 easy gov, download the IRS2Go app, or call 1-800-906-9887. 10 40 easy   As part of the TCE program, AARP offers the Tax-Aide counseling program. 10 40 easy To find the nearest AARP Tax-Aide site, visit AARP's website at www. 10 40 easy aarp. 10 40 easy org/money/taxaide or call 1-888-227-7669. 10 40 easy For more information on these programs, go to IRS. 10 40 easy gov and enter “VITA” in the search box. 10 40 easy Internet. 10 40 easy    IRS. 10 40 easy gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 10 40 easy Download the free IRS2Go app from the iTunes app store or from Google Play. 10 40 easy Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 10 40 easy Check the status of your 2013 refund with the Where's My Refund? application on IRS. 10 40 easy gov or download the IRS2Go app and select the Refund Status option. 10 40 easy The IRS issues more than 9 out of 10 refunds in less than 21 days. 10 40 easy Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. 10 40 easy You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 10 40 easy The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 10 40 easy Use the Interactive Tax Assistant (ITA) to research your tax questions. 10 40 easy No need to wait on the phone or stand in line. 10 40 easy The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. 10 40 easy When you reach the response screen, you can print the entire interview and the final response for your records. 10 40 easy New subject areas are added on a regular basis. 10 40 easy  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 10 40 easy gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 10 40 easy You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 10 40 easy The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 10 40 easy When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. 10 40 easy Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. 10 40 easy You can also ask the IRS to mail a return or an account transcript to you. 10 40 easy Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 10 40 easy gov or by calling 1-800-908-9946. 10 40 easy Tax return and tax account transcripts are generally available for the current year and the past three years. 10 40 easy Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 10 40 easy Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 10 40 easy If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. 10 40 easy Check the status of your amended return using Where's My Amended Return? Go to IRS. 10 40 easy gov and enter Where's My Amended Return? in the search box. 10 40 easy You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 10 40 easy It can take up to 3 weeks from the date you mailed it to show up in our system. 10 40 easy Make a payment using one of several safe and convenient electronic payment options available on IRS. 10 40 easy gov. 10 40 easy Select the Payment tab on the front page of IRS. 10 40 easy gov for more information. 10 40 easy Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 10 40 easy Figure your income tax withholding with the IRS Withholding Calculator on IRS. 10 40 easy gov. 10 40 easy Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 10 40 easy Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 10 40 easy gov. 10 40 easy Request an Electronic Filing PIN by going to IRS. 10 40 easy gov and entering Electronic Filing PIN in the search box. 10 40 easy Download forms, instructions and publications, including accessible versions for people with disabilities. 10 40 easy Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 10 40 easy gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 10 40 easy An employee can answer questions about your tax account or help you set up a payment plan. 10 40 easy Before you visit, check the Office Locator on IRS. 10 40 easy gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 10 40 easy If you have a special need, such as a disability, you can request an appointment. 10 40 easy Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 10 40 easy Apply for an Employer Identification Number (EIN). 10 40 easy Go to IRS. 10 40 easy gov and enter Apply for an EIN in the search box. 10 40 easy Read the Internal Revenue Code, regulations, or other official guidance. 10 40 easy Read Internal Revenue Bulletins. 10 40 easy Sign up to receive local and national tax news and more by email. 10 40 easy Just click on “subscriptions” above the search box on IRS. 10 40 easy gov and choose from a variety of options. 10 40 easy    Phone. 10 40 easy You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 10 40 easy Download the free IRS2Go app from the iTunes app store or from Google Play. 10 40 easy Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 10 40 easy gov, or download the IRS2Go app. 10 40 easy Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 10 40 easy The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 10 40 easy Mos