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Income Tax Form 1040ez

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Income Tax Form 1040ez

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

 Individuals
 & Families
 
 Employers
 
Other Organizations

 
The health care law addresses health insurance coverage and financial assistance options for individuals and families, including the premium tax credit. It also includes the individual shared responsibility provision and exemptions from that provision.The IRS administers the tax provisions included in the law. Visit HealthCare.gov for more information on coverage options and assistance.
 


 

   
The health care law contains many tax and other provisions for employers. The IRS administers the tax provisions included in the law. Visit HealthCare.gov and SBA.gov/healthcare for more information on other provisions.
 


 

 
  • Insurers
  • Certain Business Types
  • Tax-Exempt & Government Organizations

 


 

 

The Income Tax Form 1040ez

Income tax form 1040ez 3. Income tax form 1040ez   Dispositions of Business Property Table of Contents Introduction Useful Items - You may want to see: What Is a Disposition of Property?Like-kind exchanges. Income tax form 1040ez How Do I Figure a Gain or Loss?Is My Gain or Loss Ordinary or Capital? Is My Capital Gain or Loss Short Term or Long Term? Where Do I Report Gains and Losses? Introduction If you dispose of business property, you may have a gain or loss that you report on Form 1040. Income tax form 1040ez However, in some cases you may have a gain that is not taxable or a loss that is not deductible. Income tax form 1040ez This chapter discusses whether you have a disposition, how to figure the gain or loss, and where to report the gain or loss. Income tax form 1040ez Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 4797 Sales of Business Property Sch D (Form 1040) Capital Gains and Losses See chapter 12 for information about getting publications and forms. Income tax form 1040ez What Is a Disposition of Property? A disposition of property includes the following transactions. Income tax form 1040ez You sell property for cash or other property. Income tax form 1040ez You exchange property for other property. Income tax form 1040ez You receive money as a tenant for the cancellation of a lease. Income tax form 1040ez You receive money for granting the exclusive use of a copyright throughout its life in a particular medium. Income tax form 1040ez You transfer property to satisfy a debt. Income tax form 1040ez You abandon property. Income tax form 1040ez Your bank or other financial institution forecloses on your mortgage or repossesses your property. Income tax form 1040ez Your property is damaged, destroyed, or stolen, and you receive property or money in payment. Income tax form 1040ez Your property is condemned, or disposed of under the threat of condemnation, and you receive property or money in payment. Income tax form 1040ez For details about damaged, destroyed, or stolen property, see Publication 547, Casualties, Disasters, and Thefts. Income tax form 1040ez For details about other dispositions, see chapter 1 in Publication 544. Income tax form 1040ez Nontaxable exchanges. Income tax form 1040ez   Certain exchanges of property are not taxable. Income tax form 1040ez This means any gain from the exchange is not recognized and you cannot deduct any loss. Income tax form 1040ez Your gain or loss will not be recognized until you sell or otherwise dispose of the property you receive. Income tax form 1040ez Like-kind exchanges. Income tax form 1040ez   A like-kind exchange is the exchange of property for the same kind of property. Income tax form 1040ez It is the most common type of nontaxable exchange. Income tax form 1040ez To be a like-kind exchange, the property traded and the property received must be both of the following. Income tax form 1040ez Business or investment property. Income tax form 1040ez Like property. Income tax form 1040ez   Report the exchange of like-kind property on Form 8824, Like-Kind Exchanges. Income tax form 1040ez For more information about like-kind exchanges, see chapter 1 in Publication 544. Income tax form 1040ez Installment sales. Income tax form 1040ez   An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. Income tax form 1040ez If you finance the buyer's purchase of your property, instead of having the buyer get a loan or mortgage from a third party, you probably have an installment sale. Income tax form 1040ez   For more information about installment sales, see Publication 537, Installment Sales. Income tax form 1040ez Sale of a business. Income tax form 1040ez   The sale of a business usually is not a sale of one asset. Income tax form 1040ez Instead, all the assets of the business are sold. Income tax form 1040ez Generally, when this occurs, each asset is treated as being sold separately for determining the treatment of gain or loss. Income tax form 1040ez   Both the buyer and seller involved in the sale of a business must report to the IRS the allocation of the sales price among the business assets. Income tax form 1040ez Use Form 8594, Asset Acquisition Statement Under Section 1060, to provide this information. Income tax form 1040ez The buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred. Income tax form 1040ez   For more information about the sale of a business, see chapter 2 of Publication 544. Income tax form 1040ez How Do I Figure a Gain or Loss? Table 3-1. Income tax form 1040ez How To Figure a Gain or Loss IF your. Income tax form 1040ez . Income tax form 1040ez . Income tax form 1040ez THEN you have a. Income tax form 1040ez . Income tax form 1040ez . Income tax form 1040ez Adjusted basis is more than the amount realized Loss. Income tax form 1040ez Amount realized is more than the adjusted basis Gain. Income tax form 1040ez Basis, adjusted basis, amount realized, fair market value, and amount recognized are defined next. Income tax form 1040ez You need to know these definitions to figure your gain or loss. Income tax form 1040ez Basis. Income tax form 1040ez   The cost or purchase price of property is usually its basis for figuring the gain or loss from its sale or other disposition. Income tax form 1040ez However, if you acquired the property by gift, inheritance, or in some way other than buying it, you must use a basis other than its cost. Income tax form 1040ez For more information about basis, see Publication 551, Basis of Assets. Income tax form 1040ez Adjusted basis. Income tax form 1040ez   The adjusted basis of property is your original cost or other basis plus certain additions, and minus certain deductions such as depreciation and casualty losses. Income tax form 1040ez In determining gain or loss, the costs of transferring property to a new owner, such as selling expenses, are added to the adjusted basis of the property. Income tax form 1040ez Amount realized. Income tax form 1040ez   The amount you realize from a disposition is the total of all money you receive plus the fair market value of all property or services you receive. Income tax form 1040ez The amount you realize also includes any of your liabilities that were assumed by the buyer and any liabilities to which the property you transferred is subject, such as real estate taxes or a mortgage. Income tax form 1040ez Fair market value. Income tax form 1040ez   Fair market value is the price at which the property would change hands between a buyer and a seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. Income tax form 1040ez Amount recognized. Income tax form 1040ez   Your gain or loss realized from a disposition of property is usually a recognized gain or loss for tax purposes. Income tax form 1040ez Recognized gains must be included in gross income. Income tax form 1040ez Recognized losses are deductible from gross income. Income tax form 1040ez However, a gain or loss realized from certain exchanges of property is not recognized. Income tax form 1040ez See  Nontaxable exchanges, earlier. Income tax form 1040ez Also, you cannot deduct a loss from the disposition of property held for personal use. Income tax form 1040ez Is My Gain or Loss Ordinary or Capital? You must classify your gains and losses as either ordinary or capital gains or losses. Income tax form 1040ez You must do this to figure your net capital gain or loss. Income tax form 1040ez Generally, you will have a capital gain or loss if you dispose of a capital asset. Income tax form 1040ez For the most part, everything you own and use for personal purposes or investment is a capital asset. Income tax form 1040ez Certain property you use in your business is not a capital asset. Income tax form 1040ez A gain or loss from a disposition of this property is an ordinary gain or loss. Income tax form 1040ez However, if you held the property longer than 1 year, you may be able to treat the gain or loss as a capital gain or loss. Income tax form 1040ez These gains and losses are called section 1231 gains and losses. Income tax form 1040ez For more information about ordinary and capital gains and losses, see chapters 2 and 3 in Publication 544. Income tax form 1040ez Is My Capital Gain or Loss Short Term or Long Term? If you have a capital gain or loss, you must determine whether it is long term or short term. Income tax form 1040ez Whether a gain or loss is long or short term depends on how long you own the property before you dispose of it. Income tax form 1040ez The time you own property before disposing of it is called the holding period. Income tax form 1040ez Table 3-2. Income tax form 1040ez Do I Have a Short-Term or Long-Term Gain or Loss? IF you hold the property. Income tax form 1040ez . Income tax form 1040ez . Income tax form 1040ez THEN you have a. Income tax form 1040ez . Income tax form 1040ez . Income tax form 1040ez 1 year or less Short-term capital gain or loss. Income tax form 1040ez More than 1 year Long-term capital gain or loss. Income tax form 1040ez For more information about short-term and long-term capital gains and losses, see chapter 4 of Publication 544. Income tax form 1040ez Where Do I Report Gains and Losses? Report gains and losses from the following dispositions on the forms indicated. Income tax form 1040ez The instructions for the forms explain how to fill them out. Income tax form 1040ez Dispositions of business property and depreciable property. Income tax form 1040ez   Use Form 4797. Income tax form 1040ez If you have taxable gain, you may also have to use Schedule D (Form 1040). Income tax form 1040ez Like-kind exchanges. Income tax form 1040ez   Use Form 8824, Like-Kind Exchanges. Income tax form 1040ez You may also have to use Form 4797 and Schedule D (Form 1040). Income tax form 1040ez Installment sales. Income tax form 1040ez   Use Form 6252, Installment Sale Income. Income tax form 1040ez You may also have to use Form 4797 and Schedule D (Form 1040). Income tax form 1040ez Casualties and thefts. Income tax form 1040ez   Use Form 4684, Casualties and Thefts. Income tax form 1040ez You may also have to use Form 4797. Income tax form 1040ez Condemned property. Income tax form 1040ez   Use Form 4797. Income tax form 1040ez You may also have to use Schedule D (Form 1040). Income tax form 1040ez Prev  Up  Next   Home   More Online Publications