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Efile free 19. Efile free   Ajustes Tributarios por Estudios Table of Contents Introduction Useful Items - You may want to see: Deducción por Intereses sobre Préstamos de EstudiosDefinición de los Intereses sobre Préstamos de Estudios ¿Puede Reclamar la Deducción? ¿Cuánto Puede Deducir? ¿Cómo Calcular la Deducción? Deducción por Matrícula y Cuotas Escolares¿Puede Reclamar la Deducción? Gastos que Califican Estudiante que Reúne los Requisitos Quién Puede Reclamar los Gastos de un Dependiente Cuánto se Puede Deducir Gastos del Educador Introduction Este capítulo trata de ajustes relacionados con la educación que puede deducir al calcular el ingreso bruto ajustado. Efile free Este capítulo incluye información sobre la deducción por intereses sobre préstamos de estudios, la deducción de matrículas y cuotas escolares y la deducción por gastos del educador. Efile free Useful Items - You may want to see: Publicación 970 Tax Benefits for Education (Beneficios tributarios por estudios), en inglés Deducción por Intereses sobre Préstamos de Estudios Por lo general, los intereses personales que pague, salvo ciertos intereses hipotecarios, no son deducibles en la declaración de impuestos. Efile free No obstante, si su ingreso bruto ajustado modificado (MAGI, por sus siglas en inglés) es menos de $75,000 ($155,000 si presenta una declaración conjunta), se permite una deducción especial por los intereses pagados sobre préstamos de estudios (también conocidos como préstamos educativos) utilizados para enseñanza superior. Efile free Para la mayoría de los contribuyentes, el MAGI es el ingreso bruto ajustado en la declaración de impuestos federales sobre el ingreso antes de restar deducción alguna por intereses sobre préstamos de estudios. Efile free Esta deducción puede reducir la cantidad de su ingreso sujeto a impuestos hasta un máximo de $2,500 en el año 2013. Efile free La Tabla 19-1 resume características de la deducción por intereses sobre préstamos de estudios. Efile free Tabla 19-1. Efile free Resumen de la Deducción por Intereses sobre Préstamos de Estudios No se base únicamente en esta tabla. Efile free Consulte el texto para más detalles. Efile free Característica Descripción Beneficio máximo Puede reducir su ingreso tributable hasta un máximo de $2,500. Efile free Requisitos para obtener un préstamo Su préstamo de estudios: •  tiene que haber sido obtenido sólo para pagar gastos de estudios calificados y   • no puede ser de un pariente ni puede haberse hecho conforme a un plan calificado provisto por su empleador. Efile free Requisitos para estudiantes El estudiante tiene que: • ser usted, su cónyuge o su dependiente y   • estar matriculado por lo menos a tiempo parcial en un programa que lleve a obtener un título, certificación o cualquier otra credencial educacional en una institución educativa que reúne los requisitos. Efile free Plazo de la deducción Puede deducir intereses pagados durante el período que quede del préstamo de estudios. Efile free Eliminación gradual por fases La cantidad a deducir depende del nivel de ingresos. Efile free Definición de los Intereses sobre Préstamos de Estudios Los “intereses sobre préstamos de estudios” son intereses que usted pagó durante el año sobre un préstamo de estudios calificado. Efile free Incluyen tanto pagos de intereses obligatorios como pagos de intereses voluntarios. Efile free Préstamo de estudios calificado Éste es un préstamo que se obtuvo únicamente para pagar gastos de estudios calificados (definidos más adelante) que fueran: Para usted, su cónyuge o una persona que fue dependiente de usted (según se define en el capítulo 3) cuando obtuvo el préstamo; Pagados o incurridos dentro de un plazo razonable antes o después de que obtuviera el préstamo y Para estudios provistos durante un período académico cuando un estudiante reúne los requisitos. Efile free Los préstamos de las siguientes fuentes no son préstamos de estudios calificados: Un pariente. Efile free Un plan calificado proporcionado por un empleador. Efile free Excepciones. Efile free   Para propósitos de la deducción de intereses sobre un préstamo de estudios, las siguientes excepciones corresponden a las reglas generales para dependientes: Una persona puede ser su dependiente aunque usted mismo sea el dependiente de otro contribuyente. Efile free Una persona puede ser su dependiente aunque dicha persona presente una declaración conjunta con un cónyuge. Efile free Una persona puede ser su dependiente aunque dicha persona tuviera un ingreso bruto ese año que fuera igual o superior a la cantidad de exención para el año ($3,900 para el año 2013). Efile free Plazo razonable. Efile free   Los gastos de estudios calificados se consideran pagados u ocasionados dentro de un plazo razonable, antes o después de obtener el préstamo, si se pagan con fondos de préstamos de estudios que son parte de un programa federal de préstamos de estudios postsecundarios. Efile free   Aun si no se pagan con fondos de dicho tipo de préstamo, los gastos se consideran pagados u ocasionados dentro de un plazo razonable si se reúnen los dos siguientes requisitos: Los gastos se relacionan con un período académico específico. Efile free Los fondos del préstamo se desembolsan dentro de un período que comience 90 días antes del período académico y termine 90 días después del fin de dicho período. Efile free   Si ninguna de las situaciones indicadas anteriormente le corresponde, el plazo razonable se determina basándose en todos los hechos y circunstancias pertinentes. Efile free Período académico. Efile free   Un período académico incluye un semestre, trimestre, un cuatrimestre del año escolar u otro período de estudios (tal como un curso escolar de verano) según lo determine de manera razonable una institución de enseñanza superior. Efile free En el caso de una institución de enseñanza superior que no tenga períodos académicos, sino horas de crédito u horas de reloj, cada período de pago se puede considerar un período académico. Efile free Estudiante que reúne los requisitos. Efile free   Es un estudiante que estaba matriculado por lo menos a medio tiempo en un programa para obtener una licenciatura, un certificado u otro título educativo reconocido. Efile free Matriculado por lo menos a medio tiempo. Efile free   Un estudiante se considera que estaba matriculado por lo menos a medio tiempo si estaba tomando al menos la mitad de los cursos normales a tiempo completo de su programa de estudios. Efile free   Cada institución de enseñanza superior que reúna los requisitos establece lo que se considera la mitad de la carga académica habitual para ser estudiante a tiempo completo. Efile free No obstante, este estándar establecido no puede ser inferior a cualquiera que haya establecido el Departamento de Educación de los Estados Unidos conforme a la Higher Education Act (Ley de Enseñanza Superior) de 1965. Efile free Pariente. Efile free   No puede deducir intereses sobre un préstamo que obtenga de un pariente. Efile free Los parientes incluyen: Su cónyuge; Sus hermanos y hermanas; Sus medios hermanos y medias hermanas; Sus antecesores (padres, abuelos, etc. Efile free ); Sus descendientes en línea directa (hijos, nietos, etc. Efile free ) y Ciertas sociedades anónimas, sociedades colectivas, fideicomisos y organizaciones exentas de impuestos. Efile free Plan calificado proporcionado por un empleador. Efile free   No puede deducir intereses sobre un préstamo conforme a un plan calificado proporcionado por un empleador o bajo un contrato comprado conforme a tal plan. Efile free Gastos de Estudios Calificados Para propósitos de la deducción por intereses sobre préstamos de estudios, estos gastos son el total del costo de asistir a una institución de enseñanza superior que reúna los requisitos, incluyendo instituciones para estudios de posgrado. Efile free Incluyen cantidades pagadas por los siguientes conceptos: Matrícula y cuotas escolares. Efile free Alojamiento y comida. Efile free Libros, materiales y equipo. Efile free Otros gastos necesarios (tales como los de transporte). Efile free Los gastos de alojamiento y comida reúnen los requisitos sólo en la medida en que no sobrepasen las siguientes cantidades: La asignación para alojamiento y comida, según lo determine la institución de enseñanza superior correspondiente, que se incluyó en los gastos de asistencia a dicha institución (para propósitos de ayuda financiera federal) durante un período académico específico y alojamiento del estudiante, o Si es mayor, la cantidad exacta cobrada si el estudiante vive en alojamiento que sea propiedad de la institución de enseñanza superior que reúna los requisitos o sea operado por la misma. Efile free Institución de enseñanza superior que reúne los requisitos. Efile free   Una institución de enseñanza superior que reúne los requisitos es todo colegio universitario, universidad, escuelas de enseñanza técnica u otra institución de enseñanza superior todas con derecho a participar en un programa de asistencia financiera al estudiante, administrado por el Departamento de Educación de los Estados Unidos. Efile free Esta clase de institución abarca prácticamente todas las instituciones acreditadas de enseñanza superior públicas y sin fines de lucro así como las privadas con fines de lucro. Efile free   Determinadas instituciones de enseñanza superior ubicadas fuera de los Estados Unidos participan también en los programas de asistencia financiera al estudiante (Federal Student Aid (FSA, por sus siglas en inglés)) del Departamento de Educación de los Estados Unidos. Efile free   Para propósitos de la deducción por intereses sobre préstamos de estudios, una institución de enseñanza superior que reúne los requisitos incluye también una institución que administre un programa de estudiantes practicantes o de residencia para recibir un título universitario o un certificado de una institución de enseñanza superior, un hospital o un centro de atención médica que ofrezca capacitación de posgrado. Efile free   Una institución de enseñanza superior tiene que reunir los criterios establecidos en el párrafo anterior solamente durante el (los) período(s) académico(s) para el (los) cual(es) se incurrió el préstamo de estudios. Efile free La posibilidad de deducir los intereses sobre el préstamo no se ve afectada si la institución deja de reunir los requisitos más tarde. Efile free    La institución de enseñanza superior debe poder indicarle si la misma reúne los requisitos. Efile free Ajustes tributarios a gastos de estudios calificados. Efile free   Tiene que reducir sus gastos de estudios calificados por ciertos artículos exentos de impuestos (tales como la parte exenta de impuestos de becas de estudios y becas de investigación (becas de desarrollo profesional)). Efile free Vea el capítulo 4 de la Publicación 970, en inglés, para más detalles. Efile free Incluya estas Partidas como Intereses Además de los intereses simples sobre el préstamo, ciertos costos originarios del préstamo, intereses capitalizados, intereses sobre líneas de crédito rotativas e intereses sobre préstamos de estudios refinanciados pueden ser intereses sobre préstamos de estudios si se reúnen todos los demás requisitos. Efile free Costo originario del préstamo. Efile free   Normalmente, esto es un cargo que el prestamista cobra solamente una vez, al hacer un préstamo. Efile free Para ser deducible como intereses, dicho cargo tiene que ser por el uso de dinero en vez de bienes o servicios (como cargos por compromisos o costos de tramitación) proporcionados por el prestamista. Efile free Un costo originario del préstamo tratado como intereses se acumula a lo largo del plazo del préstamo. Efile free Intereses capitalizados. Efile free    Son intereses por pagar sobre un préstamo de estudios que el prestamista añade al saldo pendiente del capital del préstamo. Efile free Intereses sobre líneas de crédito rotativas. Efile free   Estos intereses, los cuales incluyen interés sobre deudas de tarjetas de crédito, es interés sobre préstamos de estudios si el prestatario usa la línea de crédito (tarjeta de crédito) sólo para pagar gastos de estudios calificados. Efile free Vea Gastos de Estudios Calificados , anteriormente. Efile free Intereses sobre préstamos de estudios refinanciados. Efile free   Incluyen intereses sobre lo siguiente: Préstamos consolidados —préstamos que se usan para refinanciar más de un préstamo de estudios del mismo prestatario y Préstamos conjuntos —dos o más préstamos del mismo prestatario que son tratados como un solo préstamo tanto por el prestamista como por el prestatario. Efile free Si refinancia un préstamo de estudios calificado por más del préstamo original y usa la cantidad adicional para algún propósito que no sea gastos de estudios calificados, no puede deducir los intereses pagados sobre el préstamo refinanciado. Efile free Pagos de intereses voluntarios. Efile free   Son pagos hechos sobre un préstamo de estudios calificado durante un período en el que los pagos de intereses no son obligatorios, por ejemplo, si al prestatario se le ha concedido un aplazamiento o si todavía no han empezado los reintegros del préstamo. Efile free No Incluya estas Partidas como Intereses No puede reclamar una deducción de intereses sobre préstamos de estudios por: Intereses que pagó sobre un préstamo si, según las condiciones del mismo, usted no está obligado legalmente a hacer pagos de intereses. Efile free Costos originarios del préstamo pagados por propiedad o servicios proporcionados por el prestamista, tales como cargos por compromiso o costos de tramitación. Efile free Intereses que pagó sobre un préstamo en la medida en que los pagos hayan sido hechos a través de su participación en el National Health Service Corps Loan Repayment Program (Programa para Reintegros de Préstamos del Cuerpo Nacional de Servicios de Salud), conocido también como el “ NHSC Loan Repayment Program ” (Programa para Reintegros de Préstamos del NHSC) o a través de otros programas de asistencia para el reintegro de préstamos. Efile free Para más información, vea Student Loan Repayment Assistance (Asistencia para el reintegro de préstamos de estudios) en el capítulo 5 de la Publicación 970, en inglés. Efile free ¿Puede Reclamar la Deducción? Normalmente, puede reclamar la deducción si se cumplen todos los requisitos siguientes: Su estado civil para efectos de la declaración es cualquier estado civil excepto casado que presenta su declaración por separado. Efile free Nadie más reclama una exención por usted en su declaración de impuestos. Efile free Está obligado por ley a pagar intereses sobre un préstamo de estudios calificado. Efile free Usted pagó intereses sobre un préstamo de estudios calificado. Efile free Intereses pagados por otros. Efile free   Si usted es la persona legalmente obligada a pagar intereses y otra persona los paga por usted, a usted se le trata como si hubiese recibido el pago de la otra persona y, a su vez, hubiese pagado los intereses. Efile free Vea el capítulo 4 de la Publicación 970, en inglés, para más información. Efile free No se Permite Beneficio Doble No puede deducir como intereses sobre un préstamo de estudios una cantidad que sea deducible conforme a alguna otra disposición de la ley tributaria (por ejemplo, intereses hipotecarios). Efile free ¿Cuánto Puede Deducir? Su deducción por intereses sobre préstamos de estudios para el año 2013 es normalmente la cantidad que sea menor entre: $2,500 o Los intereses que usted pagó en el año 2013. Efile free Sin embargo, la cantidad determinada anteriormente se reduce paulatinamente si su MAGI está entre $60,000 y $75,000 ($125,000 y $155,000 si presenta una declaración conjunta). Efile free No puede tomar una deducción por intereses sobre préstamos de estudios si su MAGI es $75,000 o más ($155,000 o más si presenta una declaración conjunta). Efile free Para más detalles sobre cómo calcular su MAGI, vea el capítulo 4 de la Publicación 970, en inglés. Efile free ¿Cómo Calcular la Deducción? Para calcular la deducción, se suele usar la Student Loan Interest Deduction Worksheet (Hoja de trabajo de la deducción de intereses sobre préstamos de estudios), de las instrucciones del Formulario 1040 o del Formulario 1040A. Efile free No obstante, si presenta el Formulario 2555, 2555-EZ o 4563, o si excluye ingresos de fuentes dentro de Puerto Rico, tiene que llenar la Hoja de Trabajo 4-1 del capítulo 4 de la Publicación 970, en inglés. Efile free Para ayudarle a calcular la deducción por intereses sobre préstamos de estudios, debe recibir el Formulario 1098-E, Student Loan Interest Statement (Declaración de intereses sobre préstamos de estudios), en inglés. Efile free Generalmente, una institución (como un banco o una agencia gubernamental) que recibió pagos de intereses de $600 o más durante el año 2013 sobre uno o más préstamos de estudios calificados tiene que enviarle el Formulario 1098-E (o documento sustitutivo aceptable) a cada prestatario a más tardar el 31 de enero del año 2014. Efile free Para los préstamos de estudios calificados que se obtuvieron antes del 1 de septiembre de 2004, la institución está obligada a anotar en el Formulario 1098-E solamente los pagos de intereses establecidos. Efile free Puede ser que otros pagos de intereses, tales como ciertos costos originarios del préstamo e intereses capitalizados, no aparezcan en el formulario que usted reciba. Efile free No obstante, si paga intereses calificados que no se incluyen en el Formulario 1098-E, también puede deducir esas cantidades. Efile free Para información sobre cómo dividir pagos de intereses y pagos de capital, vea el capítulo 4 de la Publicación 970, en inglés. Efile free Para reclamar la deducción, anote la cantidad permisible en la línea 33 del Formulario 1040 o la línea 18 del Formulario 1040A. Efile free Deducción por Matrícula y Cuotas Escolares Quizás pueda deducir los gastos de estudios calificados que haya pagado durante el año para usted, su cónyuge o dependiente(s). Efile free No puede reclamar esta deducción si su estado civil para efectos de la declaración es casado que presenta la declaración por separado o si otra persona puede reclamar una exención por usted como dependiente en la declaración de impuestos de él o ella. Efile free Los gastos calificados tienen que ser por educación superior, tal como se explica más adelante en Gastos que Califican . Efile free La deducción por matrícula y cuotas escolares puede reducir la cantidad de sus ingresos sujetos a impuesto por hasta $4,000. Efile free La Tabla 19-2 resume las características de la deducción por matrícula y cuotas escolares. Efile free Quizás pueda tomar un crédito por sus gastos de estudios en lugar de una deducción. Efile free Puede escoger la opción que le proporcione una cantidad de impuesto menor. Efile free Vea el capítulo 35, Créditos Tributarios por Estudios , para saber detalles sobre los créditos. Efile free ¿Puede Reclamar la Deducción? Las siguientes reglas le pueden ayudar a determinar si puede reclamar la deducción por matrícula y cuotas escolares. Efile free Quién Puede Reclamar la Deducción La deducción por matrícula y gastos de estudios normalmente se puede reclamar si usted cumple los tres siguientes requisitos: Pagó gastos de educación superior calificados en 2013 para los períodos académicos que comienzan en 2013 y los que comienzan en los primeros tres meses de 2014. Efile free Pagó los gastos de estudios de un estudiante que reúne los requisitos. Efile free El estudiante que cumple los requisitos es usted mismo, su cónyuge o dependiente por el cual reclama una exención (que se define en el capítulo 3) en su declaración de impuestos. Efile free Los gastos de estudios calificados se definen bajo Gastos que Califican . Efile free La definición de “estudiantes que reúnen los requisitos” se puede ver más adelante bajo Estudiante que Reúne los Requisitos . Efile free Quién No Puede Reclamar la Deducción No puede reclamar la deducción por matrícula y cuotas escolares si le corresponde cualquiera de las siguientes situaciones: Su estado civil para efectos de la declaración de impuestos es casado que presenta por separado. Efile free Otra persona puede reclamar una exención por usted en la declaración de impuestos de él o ella. Efile free Usted no puede tomar la deducción aun si la otra persona de hecho no reclama la exención. Efile free Su MAGI es mayor que $80,000 ($160,000 si presenta una declaración conjunta). Efile free Usted (o su cónyuge) era un extranjero no residente en cualquier momento durante el año 2013 y dicho extranjero no residente no optó por ser tratado como extranjero residente para propósitos tributarios. Efile free Puede leer más información sobre extranjeros no residentes en la Publicación 519, U. Efile free S. Efile free Tax Guide for Aliens (Guía tributaria para extranjeros), en inglés. Efile free Usted o cualquier otra persona puede reclamar un crédito tributario de oportunidad para los estadounidenses o un crédito vitalicio por aprendizaje en el año 2013 en lo que concierne a los gastos del estudiante por el cual se pagaron gastos de estudios calificados. Efile free No obstante, el recibir un crédito por parte de su estado no lo descalifica de reclamar una deducción por matrícula y cuotas. Efile free Tabla 19-2. Efile free Resumen de las Características de la Deducción por Matrícula y Cuotas Escolares No se base únicamente en lo que aparece en esta tabla. Efile free Consulte el texto de este capítulo para más detalles. Efile free Pregunta Respuesta ¿Cuál es la cantidad máxima del beneficio? Usted puede reducir la cantidad de sus ingresos sujetos a impuestos por hasta $4,000. Efile free ¿Dónde se toma la deducción? Se toma como ajuste a los ingresos en la línea 34 del Formulario 1040 o en la línea 19 del Formulario 1040A. Efile free ¿Para quién tienen que ser pagados los gastos? Un estudiante que está matriculado en una institución de enseñanza superior que reúne los requisitos quien es: usted, su cónyuge o su dependiente por el cual reclama una exención. Efile free ¿Qué matrícula y cuotas escolares son deducibles? La matrícula y cuotas escolares requeridas para matricularse o para asistir a una institución de enseñanza superior que reúne los requisitos, pero que no incluyen gastos personales, de manutención ni gastos de familia, tales como alojamiento y comida. Efile free Gastos que Califican La deducción por matrícula y cuotas escolares se basa en los gastos de estudios calificados que paga por usted mismo, su cónyuge o por un dependiente por el cual usted reclama una exención en su declaración de impuestos. Efile free La deducción normalmente se permite por gastos de estudios calificados que fueron pagados en el año 2013 relacionados con la matriculación en una institución de educación superior durante el año 2013 o por un período académico (que se definió anteriormente bajo Deducción por Intereses sobre Préstamos de Estudios ) comenzando en 2013 o en los primeros 3 meses de 2014. Efile free Pagos hechos con fondos de un préstamo. Efile free   Puede reclamar una deducción por matrícula y cuotas escolares en base de gastos de estudios calificados que pagó con los fondos de un préstamo. Efile free Utilice los gastos para calcular la deducción para el año en que se pagaron los gastos, no para el año en que se liquidó el préstamo. Efile free Trate los pagos del préstamo que fueron enviados directamente a la institución de educación como si hubieran sido pagados en la fecha en que dicha institución abona la cuenta del estudiante. Efile free Estudiante que se da de baja de su(s) clase(s). Efile free   Usted puede reclamar una deducción por matrícula y cuotas escolares en base de gastos de estudios calificados que no se reembolsan cuando un estudiante se da de baja (retira) de su(s) clase(s). Efile free Gastos de Estudios Calificados Para propósitos de la deducción por matrícula y cuotas escolares, los gastos de estudios calificados son la matrícula y ciertos gastos relacionados que son requisitos para la matriculación o asistencia en una institución de educación superior que reúne los requisitos. Efile free Institución de educación que reúne los requisitos. Efile free   Una “institución de educación superior que reúne los requisitos” es cualquier colegio universitario, universidad, escuela de enseñanza técnica u otra institución de enseñanza superior con derecho a participar en un programa de asistencia financiera al estudiante, administrado por el Departamento de Educación de los Estados Unidos. Efile free Incluye prácticamente a casi todas las instituciones acreditadas de enseñanza superior públicas y sin fines de lucro así como las privadas con fines de lucro. Efile free La institución de educación superior deberá poder indicarle si la misma reúne los requisitos. Efile free   Ciertas instituciones de educación ubicadas fuera de los Estados Unidos participan también en los programas de FSA del Departamento de Educación de los Estados Unidos. Efile free Período académico. Efile free   Un período académico abarca un semestre, trimestre, un cuatrimestre o cualquier otro período de estudios según lo determine de manera razonable una institución de educación que reúne los requisitos. Efile free Si una institución de educación que reúne los requisitos no tiene períodos académicos sino horas de crédito, cada período de pago se puede considerar como un período académico. Efile free Gastos relacionados. Efile free   Las cuotas correspondientes a las actividades escolares y los gastos incurridos por los textos, útiles y equipo escolares se incluyen en los gastos de estudios calificados únicamente si las cuotas y gastos tienen que ser pagados a la institución como requisito de la matriculación o asistencia en dicha institución. Efile free Gastos pagados por adelantado. Efile free   Gastos de estudios calificados pagados en el año 2013 para un período académico que comienza en los primeros tres meses de 2014, sólo se pueden utilizar para calcular la deducción por matrícula y cuotas escolares de 2013. Efile free Vea Período académico, anteriormente. Efile free Por ejemplo, si usted paga $2,000 en diciembre de 2013 para matrícula calificada por el cuatrimestre del invierno de 2014 que comienza en enero de 2014, puede utilizar los $2,000 en el cálculo de la deducción por matrícula y cuotas escolares sólo para 2013, únicamente si reúne todos los otros requisitos. Efile free No puede utilizar cantidad alguna que pagó en 2012 ó 2014 para calcular los gastos de estudios calificados que utiliza para el cálculo de su deducción por matrícula y cuotas escolares de 2013. Efile free No Se Permite Beneficio Doble No se le permite deducir lo siguiente: Los gastos de estudios calificados que usted deduce conforme a cualquier otra disposición de la ley, como, por ejemplo, un gasto de negocios. Efile free Los gastos de estudios calificados de un estudiante en su declaración de impuestos si usted o cualquier otra persona reclama un crédito tributario de oportunidad para los estadounidenses o un crédito vitalicio por aprendizaje por el mismo estudiante en el mismo año. Efile free Los gastos de estudios calificados que se utilizaron para calcular la parte libre de impuestos de una distribución proveniente de una cuenta Coverdell de ahorros para la educación (ESA, por sus siglas en inglés) o de un programa de matrículas calificado (QTP, por sus siglas en inglés). Efile free En el caso de un QTP, esto corresponde sólo a la cantidad de ganancias exentas de impuesto que fueron distribuidas, no a la recuperación de las contribuciones hechas al programa. Efile free Vea los temas titulados Figuring the Taxable Portion of a Distribution (Cálculo de la parte sujeta a impuesto de una distribución) del capítulo 7 (Coverdell Education Savings Account (ESA) (Cuenta Coverdell de ahorros para la educación (ESA)) y del capítulo 8 (Qualified Tuition Progam (QTP)) (Programa de matrícula calificado (QTP)), de la Publicación 970, en inglés. Efile free Los gastos de estudios calificados que han sido pagados con intereses exentos de impuestos provenientes de un bono de ahorros de los Estados Unidos (Formulario 8815, en inglés). Efile free Vea Figuring the Tax-Free Amount (Cálculo de la cantidad libre de impuestos), en el capítulo 10 de la Publicación 970, en inglés. Efile free Los gastos de estudios calificados que han sido pagados con ayuda económica para los estudios que estén exentos de impuestos, tales como becas de estudios, subvenciones o ayuda económica para los estudios provista por el empleador. Efile free Vea a continuación el tema titulado Ajustes a los gastos de estudios calificados. Efile free Ajustes a los gastos de estudios calificados. Efile free   Para cada estudiante, se tienen que reducir los gastos de estudios calificados pagados por o en nombre de dicho estudiante bajo las siguientes reglas. Efile free El resultado es el ajuste a los gastos de estudios calificados por cada estudiante. Efile free Ayuda económica para los estudios exenta de impuestos. Efile free   Por la ayuda económica para los estudios exenta de impuestos que recibió en 2013, tiene que reducir los gastos de estudios calificados para cada período académico por la cantidad de la ayuda económica para los estudios exenta de impuestos de dicho período. Efile free Vea Período académico, anteriormente. Efile free   Dicha asistencia incluye: La parte libre de impuestos de becas de estudios y becas de investigación (becas de desarrollo profesional), incluidas las subvenciones federales Pell (vea el capítulo 1 de la Publicación 970); La parte libre de impuestos de toda ayuda económica para estudios provista por el empleador (vea el capítulo 11 de la Publicación 970); Ayuda económica para estudios ofrecida a veteranos (vea el capítulo 1 de la Publicación 970) y Todo otro pago exento de impuestos (que no sean regalos o herencias) que se recibe en concepto de ayuda para estudios. Efile free   Por lo general, todas las becas de estudios o becas de investigación (becas de desarrollo profesional) son tratadas como una ayuda económica para los estudios exenta de impuestos. Efile free Sin embargo, una beca de estudios o beca de investigación (becas de desarrollo profesional) no será tratada como asistencia exenta de impuestos al punto de que es incluida como ingreso bruto (si tiene que presentar una declaración de impuestos) para el año que reciba la beca de estudios o para investigación (becas de desarrollo profesional) si uno de estos dos puntos aplica: La beca de estudios o beca de investigación (becas de desarrollo profesional) (o cualquier parte de dicha beca) tiene que ser aplicada (por sus condiciones) a gastos (como de alojamiento y comida) que no sean gastos de estudios calificados como se define en el capítulo 1, Qualified education expenses (Gastos de educación calificados), de la Publicación 970, en inglés. Efile free La beca de estudios o beca de investigación (becas de desarrollo profesional) (o cualquier parte de dicha beca) puede ser aplicada (por sus condiciones) a gastos (como de alojamiento y comida) que no sean gastos de estudios calificados como se define en el capítulo 1, Qualified education expenses (Gastos de estudios calificados), de la Publicación 970, en inglés. Efile free    Podría aumentar el valor combinado de la deducción por matrícula y cuotas escolares y cierta ayuda económica para los estudios si incluye alguna parte o toda la ayuda económica para los estudios en sus ingresos en el año en que recibió dicha ayuda. Efile free Para detalles, vea Adjustments to Qualified Education Expenses (Ajustes a los gastos de estudios calificados), en el capítulo 6 de la Publicación 970, en inglés. Efile free   Cierta ayuda económica para los estudios exenta de impuestos recibida después de 2013 podría ser considerada como un reembolso de gastos de estudios calificados que se pagó en 2013. Efile free La ayuda económica para los estudios exenta de impuestos incluye toda ayuda económica para los estudios exenta de impuestos que usted o cualquier otra persona ha recibido después de 2013 por gastos de estudios calificados pagados en nombre de un estudiante en 2013 (o atribuible a la matriculación en una institución educativa calificada durante 2013). Efile free   Si la ayuda económica para los estudios exenta de impuestos se recibe después de 2013 pero antes de presentar su declaración de impuestos sobre los ingresos para 2013, vea Reembolsos recibidos después de 2013 pero antes de presentar su declaración de impuestos sobre los ingresos, más adelante. Efile free Si la ayuda económica para los estudios exenta de impuestos se recibe después de 2013 y después de que presenta su declaración de impuestos sobre los ingresos para 2013, vea Reembolsos recibidos después de 2013 y después de presentar su declaración de impuestos sobre los ingresos, más adelante. Efile free Reembolsos. Efile free   Un reembolso de gastos de estudios calificados puede reducir los ajustes a los gastos de estudios calificados por el año tributable o puede requerir que reintegre parte o el total del reembolso en su ingreso bruto para el año en que recibe el reembolso. Efile free Vea el capítulo 6 de la Publicación 970 para obtener más información. Efile free Alguna ayuda económica para los estudios exenta de impuestos recibida después de 2013 puede ser tratada como un reembolso. Efile free Vea Ayuda económica para los estudios exenta de impuestos, anteriormente. Efile free Reembolsos recibidos en 2013. Efile free   Por cada estudiante, calcule los gastos de estudios calificados ajustados de 2013 sumando todos los gastos de estudios calificados pagados en 2013 y restando todos los reembolsos de esos gastos recibidos de la institución educativa que reúne los requisitos durante 2013. Efile free Reembolsos recibidos después de 2013 pero antes de presentar su declaración de impuestos sobre los ingresos. Efile free   Si alguien recibe un reembolso después de 2013 por gastos de estudios calificados pagados en nombre de un estudiante en 2013 y el reembolso es recibido antes de presentar su declaración de impuestos sobre los ingresos de 2013, reduzca la cantidad de gastos de estudios calificados de 2013 por la cantidad del reembolso. Efile free Reembolsos recibidos después de 2013 y después de presentar su declaración de impuestos sobre los ingresos. Efile free   Si recibe un reembolso después de 2013 por gastos de estudios calificados pagados en 2013 y el reembolso es recibido después de presentar su declaración de impuestos sobre los ingresos de 2013, puede ser que tenga que incluir parte o todo el reembolso en su ingreso bruto del año en que recibió el reembolso. Efile free Vea el capítulo 6 de la Publicación 970, en inglés, para más información. Efile free Coordinación con cuentas Coverdell de ahorros para la educación y programas calificados de matrícula. Efile free   Debe reducir sus gastos de estudios calificados por los gastos de estudios calificados utilizados para calcular la exclusión del ingreso bruto de (a) los intereses recibidos bajo un programa de bonos de ahorro educativos o (b) cualquier distribución desde una cuenta Coverdell de ahorros para la educación o programa calificado de matrícula (QTP, por sus siglas en inglés). Efile free Para un programa QTP, esto se aplica solamente a la cantidad exenta de impuestos que fueron distribuidos, no a la recuperación de contribuciones al programa. Efile free Cantidades que no reducen los gastos de estudios calificados. Efile free   No reduzca los gastos de estudios calificados por las cantidades pagadas con fondos que el estudiante ha recibido por concepto de: Pagos por prestar servicios, como salarios, Un préstamo, Un regalo, Una herencia o Un retiro de fondos de una cuenta de ahorros personal del estudiante. Efile free   No reduzca los gastos de estudios calificados por cantidades de becas de estudios o becas de investigación (becas de desarrollo profesional) que se declaran como ingresos en la declaración de impuestos del estudiante en las siguientes circunstancias: El uso de dinero se restringe, por los términos de la beca de estudios o beca de investigación (becas de desarrollo profesional), a los costos de asistencia (como alojamiento y comida) que no sean gastos de estudios calificados. Efile free El uso de dinero no se restringe. Efile free Gastos que no Califican Los gastos de estudios calificados no incluyen cantidades pagadas en concepto de: Seguros; Gastos médicos (incluidas las cuotas del seguro médico escolar ofrecido por la institución); Alojamiento y comida; Transporte o Gastos personales, de manutención o relacionados a la familia que sean semejantes. Efile free Esto corresponde aun si se tienen que pagar dichas cantidades a la institución como requisito de matriculación o asistencia. Efile free Deportes, juegos, pasatiempos y cursos que no ofrecen créditos académicos. Efile free   Normalmente, los gastos de estudios calificados no incluyen gastos que corresponden a un curso de enseñanza u otro curso educativo en que se desempeñen deportes, juegos, pasatiempos o un curso que no ofrece créditos académicos. Efile free No obstante, si el curso de enseñanza u otro curso educativo es parte del programa de estudios del estudiante para obtener una licenciatura u otro título educativo reconocido, los gastos entonces sí pueden calificar. Efile free Cuotas íntegras o en conjunto. Efile free   Algunas instituciones de educación superior que reúnen los requisitos combinan o consolidan todas sus cuotas para un período académico en una sola cantidad. Efile free Si no recibe, o no tiene acceso a un estado de cuentas o asignación que muestra cuánto pagó usted en concepto de gastos de estudios calificados y cuánto pagó en concepto de gastos personales, como los que se mencionaron anteriormente, comuníquese con la institución. Efile free La institución tiene la obligación de redactar ese estado de cuentas o asignación y de proveerle a usted información sobre la cantidad que usted pagó (o que se le facturó) por los gastos de estudios calificados en el Formulario 1098-T, Tuition Statement (Información sobre el pago de matrícula), en inglés. Efile free Vea el tema Cómo se Calcula la Deducción , más adelante, para mayor información sobre el Formulario 1098-T. Efile free Estudiante que Reúne los Requisitos Para propósitos de la deducción por matrícula y cuotas escolares, un “estudiante que reúne los requisitos” es aquél que está matriculado en uno o más cursos en una institución de educación superior que reúne los requisitos (que se definió anteriormente). Efile free Quién Puede Reclamar los Gastos de un Dependiente Para poder reclamar la deducción por matrícula y cuotas escolares de un dependiente, usted tiene, normalmente, que: Haber pagado los gastos y Reclamar una exención de dependiente por el estudiante. Efile free La Tabla 19-3 resume quién puede reclamar la deducción. Efile free Cuánto se Puede Deducir La cantidad máxima por concepto de matrícula y cuotas escolares para 2013 es $4,000, $2,000 o $0, dependiendo de la cantidad de su MAGI. Efile free Para detalles sobre el cálculo de su MAGI, vea el capítulo 6 de la Publicación 970. Efile free Cómo se Calcula la Deducción Calcule la deducción utilizando el Formulario 8917, Tuition and Fees Deduction (Deducción por matrícula y cuotas), en inglés. Efile free Para ayudarle a calcular su deducción por matrícula y cuotas escolares, debe recibir el Formulario 1098-T, Tuition Statement (Información sobre el pago de matrícula), en inglés. Efile free Por lo general, una institución de educación superior que reúne los requisitos (como un colegio universitario o universidad) tiene que enviarle el Formulario 1098-T (o una declaración sustitutiva similar y aceptable) a cada estudiante matriculado para el 31 de enero de 2014. Efile free Para reclamar la deducción, anote la cantidad permitida en la línea 34 del Formulario 1040 o en la línea 19 del Formulario 1040A, y adjunte el Formulario 8917 que ha completado debidamente. Efile free Tabla 19-3. Efile free Quién Puede Reclamar los Gastos de un Dependiente No se base únicamente en lo que aparece en esta tabla. Efile free Consulte Who can claim a Dependent's Expenses (Quién puede reclamar los gastos de un dependiente), en el capítulo 6 de la Publicación 970, en inglés. Efile free SI su dependiente es un estudiante que reúne los requisitos y usted . Efile free . Efile free . Efile free Y. Efile free . Efile free . Efile free ENTONCES. Efile free . Efile free . Efile free reclama una exención por su dependiente usted paga todos los gastos de estudios calificados de su dependiente sólo usted puede deducir los gastos de estudios calificados que usted pagó. Efile free Su dependiente no puede tomar la deducción. Efile free reclama una exención por su dependiente su dependiente pagó todos los gastos de estudios calificados a nadie se le permite tomar la deducción. Efile free no reclama una exención por su dependiente usted pagó todos los gastos de estudios calificados a nadie se le permite tomar la deducción. Efile free no reclama una exención por su dependiente su dependiente pagó todos los gastos de estudios calificados a nadie se le permite tomar la deducción. Efile free Gastos del Educador Si usted fue un educador que reúne los requisitos en el año 2013, puede deducir en la línea 23 del Formulario 1040 o en la línea 16 del Formulario 1040A, hasta $250 por concepto de gastos calificados que usted pagó en 2013. Efile free Si usted y su cónyuge están presentando una declaración de impuestos conjunta y si ambos de ustedes son educadores que reúnen los requisitos, la cantidad máxima que pueden deducir es $500. Efile free No obstante eso, ningún cónyuge puede deducir más de $250 en gastos calificados que él o ella ha pagado en la línea 23 del Formulario 1040 o en la línea 16 del Formulario 1040A. Efile free Usted quizás pueda deducir gastos que son mayores del límite de $250 (o $500) en la línea 21 del Anexo A (Formulario 1040). Efile free Educador que reúne los requisitos. Efile free   Un “educador que reúne los requisitos” es un maestro de primaria, instructor, consejero, director o ayudante, de kínder (jardín de infancia) hasta doceavo grado, que ha trabajado por lo menos 900 horas durante el año escolar. Efile free Gastos calificados. Efile free   En los gastos calificados se incluyen los gastos ordinarios (normales) y necesarios que se han pagado por libros, útiles, equipo (incluyendo equipo, programas y servicios para la computadora) y otros suministros y materiales que se utilizan en el aula. Efile free Un “gasto ordinario” es aquél que es común y aceptado en el campo educativo. Efile free Un “gasto necesario” es uno que es útil y apropiado en el desempeño de su profesión de educador. Efile free Un gasto no tiene que ser obligatorio para considerarse necesario. Efile free   Los gastos calificados no incluyen los gastos por enseñanza impartida en el hogar ni por artículos para cursos de salud o de educación física que no se usan en el desempeño del deporte. Efile free   Usted tiene que restar de sus gastos calificados las siguientes cantidades: Intereses de bonos de ahorros de los Estados Unidos de la serie EE y de la serie I que pueden excluirse de los ingresos y que provienen del Formulario 8815, Exclusion of Interest From Series EE and I U. Efile free S. Efile free Savings Bonds Issued After 1989 (Exclusión de los intereses provenientes de bonos de ahorros estadounidenses de las series EE e I emitidos después de 1989), en inglés. Efile free Vea el tema titulado Figuring the Tax-Free Amount (Cálculo de la cantidad exenta de impuestos), en el capítulo 10 de la Publicación 970, en inglés. Efile free Distribuciones o ganancias provenientes de un programa de matrícula calificado que no están sujetas a impuestos. Efile free Vea el tema titulado Figuring the Taxable Portion of a Distribution (Cálculo de la parte de una distribución sujeta a impuestos), en el capítulo 8 de la Publicación 970. Efile free Una distribución de ganancias no sujeta a impuestos proveniente de una cuenta Coverdell de ahorros para la educación. Efile free Vea el tema titulado Figuring the Taxable Portion of a Distribution (Cálculo de la parte de una distribución sujeta a impuestos), en el capítulo 7 de la Publicación 970. Efile free Todo reembolso de dichos gastos que haya recibido y del cual no se le haya informado en el recuadro 1 del Formulario W-2. Efile free Prev  Up  Next   Home   More Online Publications
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Efile free 2. Efile free   Taxable and Nontaxable Income Table of Contents Compensation for Services Retirement Plan DistributionsIndividual Retirement Arrangements (IRAs) Pensions and Annuities Social Security and Equivalent Railroad Retirement BenefitsAre Any of Your Benefits Taxable? How Much Is Taxable? How To Report Your Benefits Lump-Sum Election Repayments More Than Gross Benefits Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Life Insurance ProceedsInstallments for life. Efile free Surviving spouse. Efile free Endowment Contract Proceeds Accelerated Death Benefits Sale of HomeMaximum Amount of Exclusion Ownership and Use Tests Married Persons Business Use or Rental of Home Reporting the Sale Reverse Mortgages Other ItemsWelfare benefits. Efile free Payments from a state fund for victims of crime. Efile free Home Affordable Modification Program (HAMP). Efile free Mortgage assistance payments. Efile free Payments to reduce cost of winter energy use. Efile free Nutrition Program for the Elderly. Efile free Reemployment Trade Adjustment Assistance (RTAA). Efile free Generally, income is taxable unless it is specifically exempt (not taxed) by law. Efile free Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. Efile free Under special provisions of the law, certain items are partially or fully exempt from tax. Efile free Provisions that are of special interest to older taxpayers are discussed in this chapter. Efile free Compensation for Services Generally, you must include in gross income everything you receive in payment for personal services. Efile free In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. Efile free You need not receive the compensation in cash for it to be taxable. Efile free Payments you receive in the form of goods or services generally must be included in gross income at their fair market value. Efile free Volunteer work. Efile free   Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs. Efile free Retired Senior Volunteer Program (RSVP). Efile free Foster Grandparent Program. Efile free Senior Companion Program. Efile free Service Corps of Retired Executives (SCORE). Efile free Unemployment compensation. Efile free   You must include in income all unemployment compensation you or your spouse (if married filing jointly) received. Efile free More information. Efile free   See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income. Efile free Retirement Plan Distributions This section summarizes the tax treatment of amounts you receive from traditional individual retirement arrangements (IRA), employee pensions or annuities, and disability pensions or annuities. Efile free A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. Efile free A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and tax-free distributions. Efile free A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. Efile free More detailed information can be found in Publication 590, Individual Retirement Arrangements (IRAs), and Publication 575, Pension and Annuity Income. Efile free Individual Retirement Arrangements (IRAs) In general, distributions from a traditional IRA are taxable in the year you receive them. Efile free Exceptions to the general rule are rollovers, tax-free withdrawals of contributions, and the return of nondeductible contributions. Efile free These are discussed in Publication 590. Efile free If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. Efile free If you do not file Form 8606 with your return, you may have to pay a $50 penalty. Efile free Also, when you receive distributions from your traditional IRA, the amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Efile free Early distributions. Efile free   Generally, early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age  59½. Efile free You must include early distributions of taxable amounts in your gross income. Efile free These taxable amounts are also subject to an additional 10% tax unless the distribution qualifies for an exception. Efile free For purposes of the additional 10% tax, an IRA is a qualified retirement plan. Efile free For more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later. Efile free After age 59½ and before age 70½. Efile free   After you reach age 59½, you can receive distributions from your traditional IRA without having to pay the 10% additional tax. Efile free Even though you can receive distributions after you reach age 59½, distributions are not required until you reach  age 70½. Efile free Required distributions. Efile free   If you are the owner of a traditional IRA, you generally must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Efile free See When Must You Withdraw Assets? (Required Minimum Distributions) in Publication 590. Efile free If distributions from your traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. Efile free For purposes of the 50% excise tax, an IRA is a qualified retirement plan. Efile free For more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. Efile free See also Excess Accumulations (Insufficient Distributions) in Publication 590. Efile free Pensions and Annuities Generally, if you did not pay any part of the cost of your employee pension or annuity, and your employer did not withhold part of the cost of the contract from your pay while you worked, the amounts you receive each year are fully taxable. Efile free However, see Insurance Premiums for Retired Public Safety Officers , later. Efile free If you paid part of the cost of your pension or annuity plan (see Cost , later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). Efile free This tax-free part of the payment is figured when your annuity starts and remains the same each year, even if the amount of the payment changes. Efile free The rest of each payment is taxable. Efile free However, see Insurance Premiums for Retired Public Safety Officers , later. Efile free You figure the tax-free part of the payment using one of the following methods. Efile free Simplified Method. Efile free You generally must use this method if your annuity is paid under a qualified plan (a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan or contract). Efile free You cannot use this method if your annuity is paid under a nonqualified plan. Efile free General Rule. Efile free You must use this method if your annuity is paid under a nonqualified plan. Efile free You generally cannot use this method if your annuity is paid under a qualified plan. Efile free Contact your employer or plan administrator to find out if your pension or annuity is paid under a qualified or nonqualified plan. Efile free You determine which method to use when you first begin receiving your annuity, and you continue using it each year that you recover part of your cost. Efile free Exclusion limit. Efile free   If your annuity starting date is after 1986, the total amount of annuity income you can exclude over the years as a recovery of the cost cannot exceed your total cost. Efile free Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. Efile free This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. Efile free   If you contributed to your pension or annuity and your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Efile free If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. Efile free The total exclusion may be more than your cost. Efile free Cost. Efile free   Before you can figure how much, if any, of your pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). Efile free Your total cost in the plan includes everything that you paid. Efile free It also includes amounts your employer contributed that were taxable to you when paid. Efile free However, see Foreign employment contributions , later. Efile free   From this total cost, subtract any refunded premiums, rebates, dividends, unrepaid loans, or other tax-free amounts you received by the later of the annuity starting date or the date on which you received your first payment. Efile free   The annuity starting date is the later of the first day of the first period for which you received a payment from the plan or the date on which the plan's obligations became fixed. Efile free    The amount of your contributions to the plan may be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Efile free , that you receive. Efile free Foreign employment contributions. Efile free   If you worked abroad, certain amounts your employer paid into your retirement plan that were not includible in your gross income may be considered part of your cost. Efile free For details, see Foreign employment contributions in Publication 575. Efile free Withholding. Efile free   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable part of amounts paid to you. Efile free However, you can choose not to have tax withheld on the payments you receive, unless they are eligible rollover distributions. Efile free (These are distributions that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. Efile free ) See Withholding Tax and Estimated Tax and Rollovers in Publication 575 for more information. Efile free   For payments other than eligible rollover distributions, you can tell the payer how much to withhold by filing a Form W-4P, Withholding Certificate for Pension or Annuity Payments. Efile free Simplified Method. Efile free   Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. Efile free For an annuity that is payable over the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Efile free For any other annuity, this number is the number of monthly annuity payments under the contract. Efile free Who must use the Simplified Method. Efile free   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you receive your pension or annuity payments from a qualified plan or annuity, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments (defined next). Efile free   In addition, if your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use the Simplified Method for payments from a qualified plan, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments. Efile free If you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. Efile free Guaranteed payments. Efile free   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. Efile free If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. Efile free Who cannot use the Simplified Method. Efile free   You cannot use the Simplified Method and must use the General Rule if you receive pension or annuity payments from: A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan, or A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 years of guaranteed payments (defined above). Efile free   In addition, you had to use the General Rule for either circumstance described above if your annuity starting date is after July 1, 1986, and before November 19, 1996. Efile free If you did not have to use the General Rule, you could have chosen to use it. Efile free You also had to use the General Rule for payments from a qualified plan if your annuity starting date is before July 2, 1986, and you did not qualify to use the Three-Year Rule. Efile free   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. Efile free   Unless your annuity starting date was before 1987, once you have recovered all of your non-taxable investment, all of each remaining payment you receive is fully taxable. Efile free Once your remaining payments are fully taxable, there is no longer a concern with the General Rule or Simplified Method. Efile free   Complete information on the General Rule, including the actuarial tables you need, is contained in Publication 939, General Rule for Pensions and Annuities. Efile free How to use the Simplified Method. Efile free   Complete the Simplified Method Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions or in Publication 575 to figure your taxable annuity for 2013. Efile free Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. Efile free   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. Efile free How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. Efile free For this purpose, treat an annuity that is payable over the life of an annuitant as payable for that annuitant's life even if the annuity has a fixed-period feature or also provides a temporary annuity payable to the annuitant's child under age 25. Efile free    You do not need to complete line 3 of the worksheet or make the computation on line 4 if you received annuity payments last year and used last year's worksheet to figure your taxable annuity. Efile free Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. Efile free Single-life annuity. Efile free   If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. Efile free Enter on line 3 the number shown for your age on your annuity starting date. Efile free This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Efile free Multiple-lives annuity. Efile free   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. Efile free Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. Efile free For an annuity payable to you as the primary annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. Efile free For an annuity that has no primary annuitant and is payable to you and others as survivor annuitants, combine the ages of the oldest and youngest annuitants. Efile free Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. Efile free   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Efile free Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. Efile free This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Efile free Fixed-period annuities. Efile free   If your annuity does not depend in whole or in part on anyone's life expectancy, the total number of expected monthly payments to enter on line 3 of the worksheet is the number of monthly annuity payments under the contract. Efile free Line 6. Efile free   The amount on line 6 should include all amounts that could have been recovered in prior years. Efile free If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. Efile free    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in later years. Efile free Example. Efile free Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. Efile free Bill's annuity starting date is January 1, 2013. Efile free The benefits are to be paid over the joint lives of Bill and his wife, Kathy, age 65. Efile free Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Efile free Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. Efile free Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. Efile free See the illustrated Worksheet 2-A, Simplified Method Worksheet, later. Efile free You can find a blank version of this worksheet in Publication 575. Efile free (The references in the illustrated worksheet are to sections in Publication 575). Efile free His annuity is payable over the lives of more than one annuitant, so Bill uses his and Kathy's combined ages, 130 (65 + 65), and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet and finds the line 3 amount to be 310. Efile free Bill's tax-free monthly amount is $100 ($31,000 ÷ 310 as shown on line 4 of the worksheet). Efile free Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Efile free The full amount of any annuity payments received after 310 payments are paid must generally be included in gross income. Efile free If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. Efile free This deduction is not subject to the 2%-of-adjusted-gross-income limit. Efile free Worksheet 2-A. Efile free Simplified Method Worksheet—Illustrated 1. Efile free Enter the total pension or annuity payments received this year. Efile free Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Efile free $ 14,400 2. Efile free Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion* See Cost (Investment in the Contract), earlier 2. Efile free 31,000   Note. Efile free If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Efile free Otherwise, go to line 3. Efile free     3. Efile free Enter the appropriate number from Table 1 below. Efile free But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. Efile free 310 4. Efile free Divide line 2 by the number on line 3 4. Efile free 100 5. Efile free Multiply line 4 by the number of months for which this year's payments were made. Efile free If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Efile free Otherwise, go to line 6 5. Efile free 1,200 6. Efile free Enter any amount previously recovered tax free in years after 1986. Efile free This is the amount shown on line 10 of your worksheet for last year 6. Efile free 0 7. Efile free Subtract line 6 from line 2 7. Efile free 31,000 8. Efile free Enter the smaller of line 5 or line 7 8. Efile free 1,200 9. Efile free Taxable amount for year. Efile free Subtract line 8 from line 1. Efile free Enter the result, but not less than zero. Efile free Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Efile free Note. Efile free If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Efile free If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers, earlier, before entering an amount on your tax return. Efile free 9. Efile free $ 13,200 10. Efile free Was your annuity starting date before 1987? □ Yes. Efile free STOP. Efile free Do not complete the rest of this worksheet. Efile free  ☑ No. Efile free Add lines 6 and 8. Efile free This is the amount you have recovered tax free through 2013. Efile free You will need this number if you need to fill out this worksheet next year. Efile free 10. Efile free 1,200 11. Efile free Balance of cost to be recovered. Efile free Subtract line 10 from line 2. Efile free If zero, you will not have to complete this worksheet next year. Efile free The payments you receive next year will generally be fully taxable 11. Efile free $ 29,800 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Efile free   Table 1 for Line 3 Above       AND your annuity starting date was—   IF your age on your annuity starting date was . Efile free . Efile free . Efile free   BEFORE November 19, 1996, enter on line 3 . Efile free . Efile free . Efile free AFTER November 18, 1996, enter on line 3 . Efile free . Efile free . Efile free   55 or under 300 360   56-60 260 310   61-65 240 260   66-70 170 210   71 or over 120 160 Table 2 for Line 3 Above   IF the annuitants' combined ages on your annuity starting date were . Efile free . Efile free . Efile free   THEN enter on line 3 . Efile free . Efile free . Efile free         110 or under   410         111-120   360         121-130   310         131-140   260         141 or over   210       Survivors of retirees. Efile free   Benefits paid to you as a survivor under a joint and survivor annuity must be included in your gross income in the same way the retiree would have included them in gross income. Efile free   If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule, include the total received in your income. Efile free The retiree's cost has already been recovered tax free. Efile free   If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for in the contract. Efile free The resulting tax-free amount will then remain fixed. Efile free Any increases in the survivor annuity are fully taxable. Efile free   If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. Efile free See Simplified Method , earlier. Efile free How to report. Efile free   If you file Form 1040, report your total annuity on line 16a, and the taxable part on line 16b. Efile free If your pension or annuity is fully taxable, enter it on line 16b. Efile free Do not make an entry on line 16a. Efile free   If you file Form 1040A, report your total annuity on line 12a, and the taxable part on line 12b. Efile free If your pension or annuity is fully taxable, enter it on line 12b. Efile free Do not make an entry on line 12a. Efile free   If you file Form 1040NR, report your total annuity on line 17a, and the taxable part on line 17b. Efile free If your pension or annuity is fully taxable, enter it on line 17b. Efile free Do not make an entry on line 17a. Efile free Example. Efile free You are a Form 1040 filer and you received monthly payments totaling $1,200 (12 months x $100) during 2013 from a pension plan that was completely financed by your employer. Efile free You had paid no tax on the payments that your employer made to the plan, and the payments were not used to pay for accident, health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public Safety Officers ). Efile free The entire $1,200 is taxable. Efile free You include $1,200 only on Form 1040, line 16b. Efile free Joint return. Efile free   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on line 16a of Form 1040, line 12a of Form 1040A, or line 17a of Form 1040NR. Efile free Report the total of the taxable parts on line 16b of Form 1040, line 12b of Form 1040A, or line 17b of Form 1040NR. Efile free Form 1099-R. Efile free   You should receive a Form 1099-R for your pension or annuity. Efile free Form 1099-R shows your pension or annuity for the year and any income tax withheld. Efile free You should receive a Form W-2 if you receive distributions from certain nonqualified plans. Efile free You must attach Forms 1099-R or Forms W-2 to your 2013 tax return if federal income tax was withheld. Efile free Generally, you should be sent these forms by January 31, 2014. Efile free Nonperiodic Distributions If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from your income as a recovery of your cost. Efile free Nonperiodic distributions include cash withdrawals, distributions of current earnings (dividends) on your investment, and certain loans. Efile free For information on how to figure the taxable amount of a nonperiodic distribution, see Taxation of Nonperiodic Payments in Publication 575. Efile free The taxable part of a nonperiodic distribution may be subject to an additional 10% tax. Efile free See Tax on Early Distributions, later. Efile free Lump-sum distributions. Efile free   If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. Efile free The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. Efile free The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. Efile free You may be able to use the 10-year tax option to figure tax on the ordinary income part. Efile free Form 1099-R. Efile free   If you receive a total distribution from a plan, you should receive a Form 1099-R. Efile free If the distribution qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. Efile free The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is the ordinary income part. Efile free More information. Efile free   For more detailed information on lump-sum distributions, see Publication 575 or Form 4972, Tax on Lump-Sum Distributions. Efile free Tax on Early Distributions Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you reach age 59½ are subject to an additional tax of 10%. Efile free The tax applies to the taxable part of the distribution. Efile free For this purpose, a qualified retirement plan is: A qualified employee plan (including a qualified cash or deferred arrangement (CODA) under Internal Revenue Code section 401(k)), A qualified employee annuity plan, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). Efile free  An IRA is also a qualified retirement plan for purposes of this tax. Efile free General exceptions to tax. Efile free   The early distribution tax does not apply to any distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. Efile free Additional exceptions. Efile free   There are additional exceptions to the early distribution tax for certain distributions from qualified retirement plans and nonqualified annuity contracts. Efile free See Publication 575 for details. Efile free Reporting tax. Efile free   If you owe only the tax on early distributions and distribution code 1 (early distribution, no known exception) is correctly shown in Form 1099-R, box 7, multiply the taxable part of the early distribution by 10% (. Efile free 10) and enter the result on Form 1040, line 58, or Form 1040NR, line 56. Efile free See the instructions for line 58 of Form 1040 or line 56 of Form 1040NR for more information about reporting the early distribution tax. Efile free Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date. Efile free Unless the rule for 5% owners applies, this is generally April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. Efile free However, your plan may require you to begin to receive payments by April 1 of the year that follows the year in which you reach 70½, even if you have not retired. Efile free For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan) (for benefits accruing after 1986). Efile free  An IRA is also a qualified retirement plan for purposes of this tax. Efile free An excess accumulation is the undistributed remainder of the required minimum distribution that was left in your qualified retirement plan. Efile free 5% owners. Efile free   If you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the company maintaining your qualified retirement plan, you must begin to receive distributions from the plan by April 1 of the year after the calendar year in which you reach age 70½. Efile free See Publication 575 for more information. Efile free Amount of tax. Efile free   If you do not receive the required minimum distribution, you are subject to an additional tax. Efile free The tax equals 50% of the difference between the amount that must be distributed and the amount that was distributed during the tax year. Efile free You can get this excise tax excused if you establish that the shortfall in distributions was due to reasonable error and that you are taking reasonable steps to remedy the shortfall. Efile free Form 5329. Efile free   You must file a Form 5329 if you owe a tax because you did not receive a minimum required distribution from your qualified retirement plan. Efile free Additional information. Efile free   For more detailed information on the tax on excess accumulation, see Publication 575. Efile free Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. Efile free The premiums can be for coverage for you, your spouse, or dependent(s). Efile free The distribution must be made directly from the plan to the insurance provider. Efile free You can exclude from income the smaller of the amount of the insurance premiums or $3,000. Efile free You can only make this election for amounts that would otherwise be included in your income. Efile free The amount excluded from your income cannot be used to claim a medical expense deduction. Efile free An eligible retirement plan is a governmental plan that is a: Qualified trust, Section 403(a) plan, Section 403(b) annuity, or Section 457(b) plan. Efile free If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. Efile free The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. Efile free Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Efile free Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Efile free Enter “PSO” next to the appropriate line on which you report the taxable amount. Efile free Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. Efile free These categories are treated differently for income tax purposes. Efile free Social security equivalent benefits. Efile free   The first category is the amount of tier 1 railroad retirement benefits that equals the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. Efile free This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. Efile free (See Social Security and Equivalent Railroad Retirement Benefits , later. Efile free ) Non-social security equivalent benefits. Efile free   The second category contains the rest of the tier 1 benefits, called the non-social security equivalent benefit (NSSEB). Efile free It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. Efile free This category of benefits is treated as an amount received from a qualified employee plan. Efile free This allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits. Efile free Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. Efile free More information. Efile free   For more information about railroad retirement benefits, see Publication 575. Efile free Military Retirement Pay Military retirement pay based on age or length of service is taxable and must be included in income as a pension on Form 1040, lines 16a and 16b; on Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. Efile free But, certain military and government disability pensions that are based on a percentage of disability from active service in the Armed Forces of any country generally are not taxable. Efile free For more information, including information about veterans' benefits and insurance, see Publication 525. Efile free Social Security and Equivalent Railroad Retirement Benefits This discussion explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. Efile free Social security benefits include monthly retirement, survivor, and disability benefits. Efile free They do not include supplemental security income (SSI) payments, which are not taxable. Efile free Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. Efile free They commonly are called the social security equivalent benefit (SSEB) portion of tier 1 benefits. Efile free If you received these benefits during 2013, you should have received a Form SSA-1099 or Form RRB-1099 (Form SSA-1042S or Form RRB-1042S if you are a nonresident alien), showing the amount of the benefits. Efile free Are Any of Your Benefits Taxable? Note. Efile free When the term “benefits” is used in this section, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. Efile free  To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Efile free When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Efile free S. Efile free savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned in American Samoa or Puerto Rico by bona fide residents. Efile free Figuring total income. Efile free   To figure the total of one-half of your benefits plus your other income, use Worksheet 2-B. Efile free If that total amount is more than your base amount, part of your benefits may be taxable. Efile free If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Efile free Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Efile free If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Efile free If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Efile free Worksheet 2-B. Efile free A Quick Way To Check if Your Benefits May Be Taxable A. Efile free Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Efile free Include  the full amount of any lump-sum benefit payments received in 2013, for 2013 and  earlier years. Efile free (If you received more than one form, combine the amounts from box 5  and enter the total. Efile free ) A. Efile free     Note. Efile free If the amount on line A is zero or less, stop here; none of your benefits are  taxable this year. Efile free     B. Efile free Enter one-half of the amount on line A B. Efile free   C. Efile free Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Efile free   D. Efile free Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income for: •Interest from qualified U. Efile free S. Efile free savings bonds, •Employer-provided adoption benefits, •Foreign earned income or foreign housing, or •Income earned in American Samoa or Puerto Rico by bona fide residents D. Efile free   E. Efile free Add lines B, C, and D and enter the total E. Efile free   F. Efile free If you are: •Married filing jointly, enter $32,000 •Single, head of household, qualifying widow(er), or married filing separately and you  lived apart from your spouse for all of 2013, enter $25,000 •Married filing separately and you lived with your spouse at any time during 2013,  enter -0- F. Efile free   G. Efile free Is the amount on line F less than or equal to the amount on line E? □ No. Efile free None of your benefits are taxable this year. Efile free  □ Yes. Efile free Some of your benefits may be taxable. Efile free To figure how much of your benefits  are taxable, see Which worksheet to use under How Much Is Taxable. Efile free     Base Amount Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er) with dependent child, $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $0 if you are married filing separately and lived with your spouse at any time during 2013. Efile free Repayment of Benefits Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Efile free It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Efile free If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Efile free Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Efile free Your repayments are shown in box 4. Efile free The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Efile free Use the amount in box 5 to figure whether any of your benefits are taxable. Efile free Tax Withholding and Estimated Tax You can choose to have federal income tax withheld from your social security and/or the SSEB portion of your tier 1 railroad retirement benefits. Efile free If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Request. Efile free If you do not choose to have income tax withheld, you may have to request additional withholding from other income, or pay estimated tax during the year. Efile free For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. Efile free How Much Is Taxable? If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. Efile free Generally, the higher that total amount, the greater the taxable part of your benefits. Efile free Maximum taxable part. Efile free   The taxable part of your benefits usually cannot be more than 50%. Efile free However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Efile free The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Efile free You are married filing separately and lived with your spouse at any time during 2013. Efile free   If you are a nonresident alien, 85% of your benefits are taxable. Efile free However, this income is exempt under some tax treaties. Efile free Which worksheet to use. Efile free   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. Efile free However, you will need to use a different worksheet(s) if any of the following situations applies to you. Efile free You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse were covered by a retirement plan at work. Efile free In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Efile free Situation (1) does not apply and you take one or more of the following exclusions. Efile free Interest from qualified U. Efile free S. Efile free savings bonds (Form 8815). Efile free Employer-provided adoption benefits (Form 8839). Efile free Foreign earned income or housing (Form 2555 or Form 2555-EZ). Efile free Income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Efile free In these situations, you must use Worksheet 1 in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits. Efile free You received a lump-sum payment for an earlier year. Efile free In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. Efile free See Lump-Sum Election , later. Efile free How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040, Form 1040A, or Form 1040NR. Efile free You cannot use Form 1040EZ. Efile free Reporting on Form 1040. Efile free   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. Efile free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Efile free Reporting on Form 1040A. Efile free   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. Efile free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Efile free Reporting on Form 1040NR. Efile free   Report 85% of the total amount of your benefits (box 5 of your Form SSA-1042S or Form RRB-1042S) in the appropriate column of Form 1040NR, Schedule NEC, line 8. Efile free Benefits not taxable. Efile free   If you are filing Form 1040EZ, do not report any benefits on your tax return. Efile free If you are filing Form 1040 or Form 1040A, report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Efile free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Efile free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Efile free Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Efile free This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Efile free No part of the lump-sum death benefit is subject to tax. Efile free For more information about the lump-sum death benefit, visit the Social Security Administration website at www. Efile free SSA. Efile free gov, and use keyword: death benefit. Efile free Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Efile free However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Efile free You can elect this method if it lowers your taxable benefits. Efile free See Publication 915 for more information. Efile free Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Efile free If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Efile free If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Efile free If you have any questions about this negative figure, contact your local Social Security Administration office or your local U. Efile free S. Efile free Railroad Retirement Board field office. Efile free Joint return. Efile free   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5 but your spouse's does not, subtract the box 5 amount on your form from the box 5 amount on your spouse's form. Efile free You do this to get your net benefits when figuring if your combined benefits are taxable. Efile free Repayment of benefits received in an earlier year. Efile free   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Efile free   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Efile free Claim it on Schedule A (Form 1040), line 23. Efile free   If this deduction is more than $3,000, you have to follow some special instructions. Efile free See Publication 915 for those instructions. Efile free Sickness and Injury Benefits Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. Efile free If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. Efile free However, certain payments may not be taxable to you. Efile free Some of these payments are discussed later in this section. Efile free Also, see Military and Government Disability Pensions and Other Sickness and Injury Benefits in Publication 525. Efile free Cost paid by you. Efile free   If you pay the entire cost of an accident or health plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. Efile free If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. Efile free Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. Efile free You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A or on line 8 of Form 1040NR until you reach minimum retirement age. Efile free Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Efile free If you were 65 or older by the end of 2013 or you were retired on permanent and total disability and received taxable disability income, you may be able to claim the credit for the elderly or the disabled. Efile free See Credit for the Elderly or the Disabled, later. Efile free For more information on this credit, see Publication 524, Credit for the Elderly or the Disabled. Efile free Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Efile free Report the payments on lines 16a and 16b of Form 1040, on lines 12a and 12b of Form 1040A, or on lines 17a and 17b of Form 1040NR. Efile free For more information on pensions and annuities, see Publication 575. Efile free Retirement and profit-sharing plans. Efile free   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. Efile free The payments must be reported as a pension or annuity. Efile free Accrued leave payment. Efile free   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Efile free The payment is not a disability payment. Efile free Include it in your income in the tax year you receive it. Efile free Long-Term Care Insurance Contracts In most cases, long-term care insurance contracts generally are treated as accident and health insurance contracts. Efile free Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. Efile free However, the amount you can exclude may be limited. Efile free Long-term care insurance contracts are discussed in more detail in Publication 525. Efile free Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. Efile free The exemption also applies to your survivors. Efile free The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. Efile free If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Efile free For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. Efile free Return to work. Efile free   If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. Efile free Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. Efile free Federal Employees' Compensation Act (FECA). Efile free   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. Efile free However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. Efile free Report this income on Form 1040, line 7; Form 1040A, line 7; on Form 1040EZ, line 1; or Form 1040NR, line 8. Efile free Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. Efile free    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Efile free For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. Efile free Other compensation. Efile free   Many other amounts you receive as compensation for sickness or injury are not taxable. Efile free These include the following amounts. Efile free Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. Efile free Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. Efile free Compensation you receive for permanent loss or loss of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). Efile free This compensation must be based only on the injury and not on the period of your absence from work. Efile free These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. Efile free Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Efile free This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Efile free Proceeds not received in installments. Efile free   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Efile free If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Efile free Proceeds received in installments. Efile free   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Efile free   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Efile free Include anything over this excluded part in your income as interest. Efile free Installments for life. Efile free   If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds in installments for the rest of your life without a refund or period-certain guarantee, you figure the excluded part of each installment by dividing the amount held by the insurance company by your life expectancy. Efile free If there is a refund or period-certain guarantee, the amount held by the insurance company for this purpose is reduced by the actuarial value of the guarantee. Efile free Surviving spouse. Efile free   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the interest included in the installments. Efile free If you remarry, you can continue to take the exclusion. Efile free Surrender of policy for cash. Efile free   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Efile free In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Efile free You should receive a Form 1099-R showing the total proceeds and the taxable part. Efile free Report these amounts on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b. Efile free Endowment Contract Proceeds An endowment contract is a policy that pays over to you a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Efile free Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Efile free To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. Efile free Include in your income the part of the lump-sum payment that is more than your cost. Efile free Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity of the policy are taxed as an annuity. Efile free The tax treatment of an annuity is explained in Publication 575. Efile free For this treatment to apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. Efile free This election must be made within 60 days after the lump-sum payment first becomes payable to you. Efile free Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are generally excluded from income if the insured is terminally or chronically ill. Efile free However, see Exception , later. Efile free For a chronically ill individual, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Efile free Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to a limit. Efile free In addition, if any portion of a death benefit under a life insurance contract on the life of a terminally or chronically ill individual is sold or assigned to a viatical settlement provider, the amount received also is excluded from income. Efile free Generally, a viatical settlement provider is one who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill. Efile free To report taxable accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Efile free Terminally or chronically ill defined. Efile free   A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. Efile free A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions. Efile free The person is unable to perform (without substantial help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more because of a loss of functional capacity. Efile free The person requires substantial supervision to protect himself or herself from threats to health and safety due to severe cognitive impairment. Efile free Exception. Efile free   The exclusion does not apply to any amount paid to a person other than the insured if that other person has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the other person, or Has a financial interest in the business of the other person. Efile free Sale of Home You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return in most cases) on the sale of your main home. Efile free Generally, if you can exclude all of the gain, you do not need to report the sale on your tax return. Efile free You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. Efile free Main home. Efile free   Usually, your main home is the home you live in most of the time and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. Efile free Repaying the first-time homebuyer credit because you sold your home. Efile free   If you claimed a first-time homebuyer credit for your main home and you sell it, you may have to repay the credit. Efile free For a home purchased in 2008 and used as your main home until sold in 2013, you must file Form 5405 and repay the balance of the unpaid credit on your 2013 tax return. Efile free   For a home purchased after 2008, you generally must repay the entire credit if the home was sold (or otherwise ceased to be your main home) within 36 months of the purchase date. Efile free If you purchased your home in 2009 and used it as your main home until sold in 2013, you do not have to repay the credit or file Form 5405. Efile free If you purchased your home in 2010 and used it as your main home until sold in 2013, you may have to file Form 5405 and repay the entire credit on your 2013 tax return. Efile free   See the Instructions for Form 5405 for more information about repaying the credit and exceptions to repayment that may apply to you. Efile free Maximum Amount of Exclusion You can generally exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. Efile free You meet the ownership test. Efile free You meet the use test. Efile free During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. Efile free You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . Efile free Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. Efile free This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). Efile free Exception to ownership and use tests. Efile free   If you owned and lived in the property as your main home for less than 2 years, you still can claim an exclusion in some cases. Efile free Generally, you must have sold the home due to a change in place of employment, health, or unforeseen circumstances. Efile free The maximum amount you can exclude will be reduced. Efile free See Publication 523, Selling Your Home, for more information. Efile free Exception to use test for individuals with a disability. Efile free   There is an exception to the use test if, during the 5-year period before the sale of your home: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year. Efile free Under this exception, you are considered to live in your home during any time that you own the home and live in a facility (including a nursing home) that is licensed by a state or political subdivision to care for persons in your condition. Efile free   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. Efile free Exception to ownership test for property acquired in a like-kind exchange. Efile free   You must have owned your main home for at least 5 years to qualify for the exclusion if you acquired your main home in a like-kind exchange. Efile free This special 5-year ownership rule continues to apply to a home you acquired in a like-kind exchange and gave to another person. Efile free A like-kind exchange is an exchange of property held for productive use in a trade or business or for investment. Efile free See Publication 523 for more information. Efile free Period of nonqualified use. Efile free   Generally, the gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gain is allocated to periods of nonqualified use. Efile free Nonqualified use is any period after December 31, 2008, during which the property is not used as the main home. Efile free See Publication 523 for more information. Efile free Married Persons In the special situations discussed below, if you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use test, you can exclude up to $250,000 of gain. Efile free However, see Special rules for joint returns , next. Efile free Special rules for joint returns. Efile free   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. Efile free You are married and file a joint return for the year. Efile free Either you or your spouse meets the ownership test. Efile free Both you and your spouse meet the use test. Efile free During the 2-year period ending on the date of the sale, neither you nor your spouse exclude gain from the sale of another home. Efile free Sale of home by surviving spouse. Efile free   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. Efile free   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2013. Efile free The sale or exchange took place no more than 2 years after the date of death of your spouse. Efile free You have not remarried. Efile free You and your spouse met the use test at the time of your spouse's death. Efile free You or your spouse met the ownership test at the time of your spouse's death. Efile free Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. Efile free Home transferred from spouse. Efile free   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. Efile free Use of home after divorce. Efile free   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. Efile free Business Use or Rental of Home You may be able to exclude gain from the sale of a home that you have used for business or to produce rental income. Efile free However, you must meet the ownership and use tests. Efile free See Publication 523 for more information. Efile free Depreciation after May 6, 1997. Efile free   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. Efile free See Publication 523 for more information. Efile free Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and you do not qualify to exclude all of it, You have a gain and you choose not to exclude it, or You received Form 1099-S. Efile free If you have a gain that you cannot or choose not to exclude, if you received a Form 1099-S, or if you have a deductible loss, report the sale on your tax return. Efile free Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. Efile free If you used your home for business or to produce rental income, you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. Efile free See Publication 523 for more information. Efile free Reverse Mortgages A revers