Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Free Irs Extension

FreetaxWhere Can I File 2012 TaxesIrs File 2012 TaxesCan I File Previous Years Taxes OnlineAmending Tax Returns OnlineE File 2010 Tax Return FreeFiling 2012 Tax Return Late1040x 2010 InstructionsHow Can I File My 2012 State Taxes For Free1040 Ez 2010Form 1040ez 2011Www H&r Block ComAmended Tax ReturnIrs Free File 20122009 Tax ReturnsTax Cut Free FileFree H&r BlockHow Do I Amend A Tax Return2013 1040ez Form InstructionsHow To Do An Amended Tax ReturnFiling And Amended Tax ReturnCan I File My 2012 Taxes Online Now1040x Online FreeH And R Block 1040x1040ez.comE File 1040ezH&r Block Federal FreeFree Tax Filing2014 1040 Ez Tax FormIrs Ez Tax FormFiling 1040ezHow To Complete A 1040xEfile State Income TaxIrs 1040ez 2013Free Turbo Tax Filing 2012Need To File 2010 Tax Return2011 1040ez InstructionsFree Federal And State Taxes1040x Irs FormFiling 2010 Taxes Late

Free Irs Extension

Free irs extension 7. Free irs extension   Excess Contributions Table of Contents How Do I Know If I Have Excess Contributions? What Happens If I Have Excess Contributions?Excess Annual Addition Excess Elective Deferral If your actual contributions are greater than your MAC, you have an excess contribution. Free irs extension Excess contributions can result in income tax, additional taxes, and penalties. Free irs extension The effect of excess contributions depends on the type of excess contribution. Free irs extension This chapter discusses excess contributions to your 403(b) account. Free irs extension How Do I Know If I Have Excess Contributions? At the end of the year or the beginning of the next year, you should refigure your MAC based on your actual compensation and actual contributions made to your account. Free irs extension If the actual contributions to your account are greater than your MAC, you have excess contributions. Free irs extension If, at any time during the year, your employment status or your compensation changes, you should refigure your MAC using a revised estimate of compensation to prevent excess contributions. Free irs extension What Happens If I Have Excess Contributions? Certain excess contributions in a 403(b) account can be corrected. Free irs extension The effect of an excess 403(b) contribution will depend on the type of excess contribution. Free irs extension Types of excess contributions. Free irs extension   If, after checking your actual contributions, you determine that you have an excess, the first thing is to identify the type of excess that you have. Free irs extension Excess contributions to a 403(b) account are categorized as either an: Excess annual addition, or Excess elective deferral. Free irs extension Excess Annual Addition An excess annual addition is a contribution that is more than your limit on annual additions. Free irs extension To determine your limit on annual additions, see chapter 3 (chapter 5 for ministers or church employees). Free irs extension In the year that your contributions are more than your limit on annual additions, the excess amount will be included in your income. Free irs extension Excise Tax If your 403(b) account invests in mutual funds, and you exceed your limit on annual additions, you may be subject to a 6% excise tax on the excess contribution. Free irs extension The excise tax does not apply to funds in an annuity account or to excess deferrals. Free irs extension You must pay the excise tax each year in which there are excess contributions in your account. Free irs extension Excess contributions can be corrected by contributing less than the applicable limit in later years or by making permissible distributions. Free irs extension See chapter 8 for a discussion on permissible distributions. Free irs extension You cannot deduct the excise tax. Free irs extension Reporting requirement. Free irs extension   You must file Form 5330 if there has been an excess contribution to a custodial account and that excess has not been corrected. Free irs extension Excess Elective Deferral An excess elective deferral is the amount that is more than your limit on elective deferrals. Free irs extension To determine your limit on elective deferrals, see chapter 4. Free irs extension Your employer's 403(b) plan may contain language permitting it to distribute excess deferrals. Free irs extension If so, it may require that in order to get a distribution of excess deferrals, you either notify the plan of the amount of excess deferrals or designate a distribution as an excess deferral. Free irs extension The plan may require that the notification or designation be in writing and may require that you certify or otherwise establish that the designated amount is an excess deferral. Free irs extension A plan is not required to permit distribution of excess deferrals. Free irs extension Correction of excess deferrals during year. Free irs extension   If you have excess deferrals for a year, a corrective distribution may be made only if both of the following conditions are satisfied. Free irs extension The plan and either you or your employer designate the distribution as an excess deferral to the extent you have excess deferrals for the year. Free irs extension The correcting distribution is made after the date on which the excess deferral was made. Free irs extension Correction of excess deferrals after the year. Free irs extension   If you have excess deferrals for a year, you may receive a correcting distribution of the excess deferral no later than April 15 of the following year. Free irs extension The plan can distribute the excess deferral (and any income allocable to the excess) no later than April 15 of the year following the year the excess deferral was made. Free irs extension Tax treatment of excess deferrals not attributable to Roth contributions. Free irs extension   If the excess deferral is distributed by April 15, it is included in your income in the year contributed and the earnings on the excess deferral will be taxed in the year distributed. Free irs extension Tax treatment of excess deferrals attributable to Roth contributions. Free irs extension   For these rules, see Regulations section 1. Free irs extension 402(g)-1(e). Free irs extension Prev  Up  Next   Home   More Online Publications
Español

Unsolicited commercial e-mail, usually called spam, is not just unwanted, it can be offensive. Pornographic spam causes many consumer complaints. Decrease the number of spam e-mails you receive by making it difficult for spammers to get and use your e-mail address.

  • Never reply to a spam e-mail. 
  • Don't use an obvious e-mail address, such as JaneDoe@isp.com. Instead use numbers or other digits, such as Jane4oe6@isp.com.
  • Use one e-mail address for close friends and family and another for everyone else. Free addresses are available from Yahoo! and Hotmail. You can also get a disposable forwarding address from the Spam Motel. If an address attracts too much spam, get rid of it and establish a new one.
  • Don't post your e-mail address on a public web page. Spammers use software that harvests text addresses. Substitute "janedoe at isp.com" for "janedoe@isp.com." Or display your address as a graphic image, not text.
  • Don't enter your address on a website before you check its privacy policy.
  • Uncheck any check boxes. These often grant the site or its partners permission to contact you.
  • Don't click on an e-mail's "unsubscribe" link unless you trust the sender. This action tells the sender you're there.
  • Never forward chain letters, petitions or virus warnings. All could be a spammer's trick to collect addresses.
  • Disable your e-mail "preview pane." This stops spam from reporting to its sender that you've received it.
  • Choose an Internet Service Provider (ISP) that filters e-mail. If you get lots of spam, your ISP may not be filtering effectively.
  • Use spam-blocking software. Web browser software often includes free filtering options. You can also purchase special software that will accomplish this task.
  • Report spam. Alert your ISP that spam is slipping through its filters. The Federal Trade Commission (FTC) also wants to know about "unsolicited commercial e-mail." Forward spam to spam@uce.gov.

Be Suspicious of Mass E-mails

Many mass e-mails contain false alarms, misleading requests for donations or fictitious offers of money and free goods. You can check the validity of almost any mass e-mail at the Snopes website. Don't forward an e-mail unless you're sure that it contains accurate information. Not only do such e-mails confuse recipients, they are often used to collect e-mail addresses for spammers.

E-mail Data Breach

Do you ever share your e-mail address with your favorite retailer to be notified of sales, coupons, and new arrivals? What happens if the company’s e-mail database is hacked? You should receive a notice from the company to let you know about the data breach. After that, you may see an increase in phishing e-mail you receive. Your best advice is to “do nothing”: don’t respond or verify personal information.

The Free Irs Extension

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