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Income Tax Forms

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Income Tax Forms

Income tax forms 10. Income tax forms   Retirement Plans, Pensions, and Annuities Table of Contents What's New Reminder IntroductionThe General Rule. Income tax forms Individual retirement arrangements (IRAs). Income tax forms Civil service retirement benefits. Income tax forms Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. Income tax forms How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. Income tax forms Exclusion not limited to cost. Income tax forms Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. Income tax forms Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries What's New For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Income tax forms However, these distributions are taken into account when determining the modified adjusted gross income threshold. Income tax forms Distributions from a nonqualified retirement plan are included in net investment income. Income tax forms See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Income tax forms Reminder Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. Income tax forms For more information, see Designated Roth accounts discussed later. Income tax forms Introduction This chapter discusses the tax treatment of distributions you receive from: An employee pension or annuity from a qualified plan, A disability retirement, and A purchased commercial annuity. Income tax forms What is not covered in this chapter. Income tax forms   The following topics are not discussed in this chapter. Income tax forms The General Rule. Income tax forms   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). Income tax forms For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. Income tax forms For more information about the General Rule, see Publication 939, General Rule for Pensions and Annuities. Income tax forms Individual retirement arrangements (IRAs). Income tax forms   Information on the tax treatment of amounts you receive from an IRA is in chapter 17. Income tax forms Civil service retirement benefits. Income tax forms    If you are retired from the federal government (regular, phased, or disability retirement), see Publication 721, Tax Guide to U. Income tax forms S. Income tax forms Civil Service Retirement Benefits. Income tax forms Publication 721 also covers the information that you need if you are the survivor or beneficiary of a federal employee or retiree who died. Income tax forms Useful Items - You may want to see: Publication 575 Pension and Annuity Income 721 Tax Guide to U. Income tax forms S. Income tax forms Civil Service Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Income tax forms 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts General Information Designated Roth accounts. Income tax forms   A designated Roth account is a separate account created under a qualified Roth contribution program to which participants may elect to have part or all of their elective deferrals to a 401(k), 403(b), or 457(b) plan designated as Roth contributions. Income tax forms Elective deferrals that are designated as Roth contributions are included in your income. Income tax forms However, qualified distributions are not included in your income. Income tax forms See Publication 575 for more information. Income tax forms In-plan rollovers to designated Roth accounts. Income tax forms   If you are a participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. Income tax forms The rollover of any untaxed amounts must be included in income. Income tax forms See Publication 575 for more information. Income tax forms More than one program. Income tax forms   If you receive benefits from more than one program under a single trust or plan of your employer, such as a pension plan and a profit-sharing plan, you may have to figure the taxable part of each pension or annuity contract separately. Income tax forms Your former employer or the plan administrator should be able to tell you if you have more than one pension or annuity contract. Income tax forms Section 457 deferred compensation plans. Income tax forms    If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan. Income tax forms If your plan is an eligible plan, you are not taxed currently on pay that is deferred under the plan or on any earnings from the plan's investment of the deferred pay. Income tax forms You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. Income tax forms You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. Income tax forms   Your 457(b) plan may have a designated Roth account option. Income tax forms If so, you may be able to roll over amounts to the designated Roth account or make contributions. Income tax forms Elective deferrals to a designated Roth account are included in your income. Income tax forms Qualified distributions from a designated Roth account are not subject to tax. Income tax forms   This chapter covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. Income tax forms For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525, Taxable and Nontaxable Income. Income tax forms   For general information on these deferred compensation plans, see Section 457 Deferred Compensation Plans in Publication 575. Income tax forms Disability pensions. Income tax forms   If you retired on disability, you generally must include in income any disability pension you receive under a plan that is paid for by your employer. Income tax forms You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. Income tax forms Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Income tax forms    You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Income tax forms For information on the credit for the elderly or the disabled, see chapter 33. Income tax forms   Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Income tax forms Report the payments on Form 1040, lines 16a and 16b, or on Form 1040A, lines 12a and 12b. Income tax forms    Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) are not included in income. Income tax forms For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Income tax forms   For more information on how to report disability pensions, including military and certain government disability pensions, see chapter 5. Income tax forms Retired public safety officers. Income tax forms   An eligible retired public safety officer can elect to exclude from income distributions of up to $3,000 made directly from a government retirement plan to the provider of accident, health, or long-term disability insurance. Income tax forms See Insurance Premiums for Retired Public Safety Officers in Publication 575 for more information. Income tax forms Railroad retirement benefits. Income tax forms   Part of any railroad retirement benefits you receive is treated for tax purposes as social security benefits, and part is treated as an employee pension. Income tax forms For information about railroad retirement benefits treated as social security benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Income tax forms For information about railroad retirement benefits treated as an employee pension, see Railroad Retirement Benefits in Publication 575. Income tax forms Withholding and estimated tax. Income tax forms   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable parts of amounts paid to you. Income tax forms You can tell the payer how much to withhold, or not to withhold, by filing Form W-4P. Income tax forms If you choose not to have tax withheld, or you do not have enough tax withheld, you may have to pay estimated tax. Income tax forms   If you receive an eligible rollover distribution, you cannot choose not to have tax withheld. Income tax forms Generally, 20% will be withheld, but no tax will be withheld on a direct rollover of an eligible rollover distribution. Income tax forms See Direct rollover option under Rollovers, later. Income tax forms   For more information, see Pensions and Annuities under Tax Withholding for 2014 in chapter 4. Income tax forms Qualified plans for self-employed individuals. Income tax forms   Qualified plans set up by self-employed individuals are sometimes called Keogh or H. Income tax forms R. Income tax forms 10 plans. Income tax forms Qualified plans can be set up by sole proprietors, partnerships (but not a partner), and corporations. Income tax forms They can cover self-employed persons, such as the sole proprietor or partners, as well as regular (common-law) employees. Income tax forms    Distributions from a qualified plan are usually fully taxable because most recipients have no cost basis. Income tax forms If you have an investment (cost) in the plan, however, your pension or annuity payments from a qualified plan are taxed under the Simplified Method. Income tax forms For more information about qualified plans, see Publication 560, Retirement Plans for Small Business. Income tax forms Purchased annuities. Income tax forms   If you receive pension or annuity payments from a privately purchased annuity contract from a commercial organization, such as an insurance company, you generally must use the General Rule to figure the tax-free part of each annuity payment. Income tax forms For more information about the General Rule, get Publication 939. Income tax forms Also, see Variable Annuities in Publication 575 for the special provisions that apply to these annuity contracts. Income tax forms Loans. Income tax forms   If you borrow money from your retirement plan, you must treat the loan as a nonperiodic distribution from the plan unless certain exceptions apply. Income tax forms This treatment also applies to any loan under a contract purchased under your retirement plan, and to the value of any part of your interest in the plan or contract that you pledge or assign. Income tax forms This means that you must include in income all or part of the amount borrowed. Income tax forms Even if you do not have to treat the loan as a nonperiodic distribution, you may not be able to deduct the interest on the loan in some situations. Income tax forms For details, see Loans Treated as Distributions in Publication 575. Income tax forms For information on the deductibility of interest, see chapter 23. Income tax forms Tax-free exchange. Income tax forms   No gain or loss is recognized on an exchange of an annuity contract for another annuity contract if the insured or annuitant remains the same. Income tax forms However, if an annuity contract is exchanged for a life insurance or endowment contract, any gain due to interest accumulated on the contract is ordinary income. Income tax forms See Transfers of Annuity Contracts in Publication 575 for more information about exchanges of annuity contracts. Income tax forms How To Report If you file Form 1040, report your total annuity on line 16a and the taxable part on line 16b. Income tax forms If your pension or annuity is fully taxable, enter it on line 16b; do not make an entry on line 16a. Income tax forms If you file Form 1040A, report your total annuity on line 12a and the taxable part on line 12b. Income tax forms If your pension or annuity is fully taxable, enter it on line 12b; do not make an entry on line 12a. Income tax forms More than one annuity. Income tax forms   If you receive more than one annuity and at least one of them is not fully taxable, enter the total amount received from all annuities on Form 1040, line 16a, or Form 1040A, line 12a, and enter the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. Income tax forms If all the annuities you receive are fully taxable, enter the total of all of them on Form 1040, line 16b, or Form 1040A, line 12b. Income tax forms Joint return. Income tax forms   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on Form 1040, line 16a, or Form 1040A, line 12a, and report the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. Income tax forms Cost (Investment in the Contract) Before you can figure how much, if any, of a distribution from your pension or annuity plan is taxable, you must determine your cost (your investment in the contract) in the pension or annuity. Income tax forms Your total cost in the plan includes the total premiums, contributions, or other amounts you paid. Income tax forms This includes the amounts your employer contributed that were taxable to you when paid. Income tax forms Cost does not include any amounts you deducted or were excluded from your income. Income tax forms From this total cost, subtract any refunds of premiums, rebates, dividends, unrepaid loans that were not included in your income, or other tax-free amounts that you received by the later of the annuity starting date or the date on which you received your first payment. Income tax forms Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. Income tax forms Designated Roth accounts. Income tax forms   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. Income tax forms Your cost will also include any in-plan Roth rollovers you included in income. Income tax forms Foreign employment contributions. Income tax forms   If you worked in a foreign country and contributions were made to your retirement plan, special rules apply in determining your cost. Income tax forms See Foreign employment contributions under Cost (Investment in the Contract) in Publication 575. Income tax forms Taxation of Periodic Payments Fully taxable payments. Income tax forms   Generally, if you did not pay any part of the cost of your employee pension or annuity and your employer did not withhold part of the cost from your pay while you worked, the amounts you receive each year are fully taxable. Income tax forms You must report them on your income tax return. Income tax forms Partly taxable payments. Income tax forms   If you paid part of the cost of your pension or annuity, you are not taxed on the part of the pension or annuity you receive that represents a return of your cost. Income tax forms The rest of the amount you receive is generally taxable. Income tax forms You figure the tax-free part of the payment using either the Simplified Method or the General Rule. Income tax forms Your annuity starting date and whether or not your plan is qualified determine which method you must or may use. Income tax forms   If your annuity starting date is after November 18, 1996, and your payments are from a qualified plan, you must use the Simplified Method. Income tax forms Generally, you must use the General Rule if your annuity is paid under a nonqualified plan, and you cannot use this method if your annuity is paid under a qualified plan. Income tax forms   If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. Income tax forms   If your annuity is paid under a qualified plan and your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. Income tax forms Exclusion limit. Income tax forms   Your annuity starting date determines the total amount of annuity payments that you can exclude from your taxable income over the years. Income tax forms Once your annuity starting date is determined, it does not change. Income tax forms If you calculate the taxable portion of your annuity payments using the simplified method worksheet, the annuity starting date determines the recovery period for your cost. Income tax forms That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. Income tax forms Exclusion limited to cost. Income tax forms   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. Income tax forms Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. Income tax forms This deduction is not subject to the 2%-of-adjusted-gross-income limit. Income tax forms Exclusion not limited to cost. Income tax forms   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Income tax forms If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. Income tax forms The total exclusion may be more than your cost. Income tax forms Simplified Method Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. Income tax forms For an annuity that is payable for the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Income tax forms For any other annuity, this number is the number of monthly annuity payments under the contract. Income tax forms Who must use the Simplified Method. Income tax forms   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you both: Receive pension or annuity payments from a qualified employee plan, qualified employee annuity, or a tax-sheltered annuity (403(b)) plan, and On your annuity starting date, you were either under age 75, or entitled to less than 5 years of guaranteed payments. Income tax forms Guaranteed payments. Income tax forms   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. Income tax forms If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. Income tax forms How to use the Simplified Method. Income tax forms    Complete the Simplified Method Worksheet in Publication 575 to figure your taxable annuity for 2013. Income tax forms Single-life annuity. Income tax forms    If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. Income tax forms Enter on line 3 the number shown for your age at the annuity starting date. Income tax forms Multiple-lives annuity. Income tax forms   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. Income tax forms Enter on line 3 the number shown for the combined ages of you and the youngest survivor annuitant at the annuity starting date. Income tax forms   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Income tax forms Instead you must use Table 1 and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. Income tax forms    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity next year. Income tax forms Example. Income tax forms Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. Income tax forms Bill's annuity starting date is January 1, 2013. Income tax forms The benefits are to be paid for the joint lives of Bill and his wife Kathy, age 65. Income tax forms Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Income tax forms Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. Income tax forms Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. Income tax forms Because his annuity is payable over the lives of more than one annuitant, he uses his and Kathy's combined ages and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet. Income tax forms His completed worksheet is shown in Worksheet 10-A. Income tax forms Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. Income tax forms Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Income tax forms The full amount of any annuity payments received after 310 payments are paid must be included in gross income. Income tax forms If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. Income tax forms This deduction is not subject to the 2%-of-adjusted- gross-income limit. Income tax forms Worksheet 10-A. Income tax forms Simplified Method Worksheet for Bill Smith 1. Income tax forms Enter the total pension or annuity payments received this year. Income tax forms Also, add this amount to the total for Form 1040, line 16a, or Form 1040A, line 12a 1. Income tax forms 14,400 2. Income tax forms Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion*. Income tax forms See Cost (Investment in the Contract) , earlier 2. Income tax forms 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 forms Otherwise, go to line 3. Income tax forms         3. Income tax forms Enter the appropriate number from Table 1 below. Income tax forms But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. Income tax forms 310     4. Income tax forms Divide line 2 by the number on line 3 4. Income tax forms 100     5. Income tax forms Multiply line 4 by the number of months for which this year's payments were made. Income tax forms 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 forms Otherwise, go to line 6 5. Income tax forms 1,200     6. Income tax forms Enter any amounts previously recovered tax free in years after 1986. Income tax forms This is the amount shown on line 10 of your worksheet for last year 6. Income tax forms -0-     7. Income tax forms Subtract line 6 from line 2 7. Income tax forms 31,000     8. Income tax forms Enter the smaller of line 5 or line 7 8. Income tax forms 1,200 9. Income tax forms Taxable amount for year. Income tax forms Subtract line 8 from line 1. Income tax forms Enter the result, but not less than zero. Income tax forms Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b 9. Income tax forms 13,200   Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Income tax forms If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers in Publication 575 before entering an amount on your tax return. Income tax forms     10. Income tax forms Was your annuity starting date before 1987? □ Yes. Income tax forms STOP. Income tax forms Do not complete the rest of this worksheet. Income tax forms  ☑ No. Income tax forms Add lines 6 and 8. Income tax forms This is the amount you have recovered tax free through 2013. Income tax forms You will need this number if you need to fill out this worksheet next year 10. Income tax forms 1,200 11. Income tax forms Balance of cost to be recovered. Income tax forms Subtract line 10 from line 2. Income tax forms If zero, you will not have to complete this worksheet next year. Income tax forms The payments you receive next year will generally be fully taxable 11. Income tax forms 29,800 TABLE 1 FOR LINE 3 ABOVE   AND your annuity starting date was— IF the age at annuity starting date was. Income tax forms . Income tax forms . Income tax forms before November 19, 1996, enter on line 3. Income tax forms . Income tax forms . Income tax forms after November 18, 1996, enter on line 3. Income tax forms . Income tax forms . Income tax forms 55 or under 300 360 56–60 260 310 61–65 240 260 66–70 170 210 71 or older 120 160 TABLE 2 FOR LINE 3 ABOVE IF the combined ages at annuity starting date were. Income tax forms . Income tax forms . Income tax forms   THEN enter on line 3. Income tax forms . Income tax forms . Income tax forms 110 or under   410 111–120   360 121–130   310 131–140   260 141 or older   210 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Income tax forms Who must use the General Rule. Income tax forms   You must use the General Rule if you receive pension or annuity payments from: A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or A qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years. Income tax forms Annuity starting before November 19, 1996. Income tax forms   If your annuity starting date is after July 1, 1986, and before November 19, 1996, you had to use the General Rule for either circumstance just described. Income tax forms You also had to use it for any fixed-period annuity. Income tax forms If you did not have to use the General Rule, you could have chosen to use it. Income tax forms If your annuity starting date is before July 2, 1986, you had to use the General Rule unless you could use the Three-Year Rule. Income tax forms   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. Income tax forms Who cannot use the General Rule. Income tax forms   You cannot use the General Rule if you receive your pension or annuity from a qualified plan and none of the circumstances described in the preceding discussions apply to you. Income tax forms See Who must use the Simplified Method , earlier. Income tax forms More information. Income tax forms   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. Income tax forms Taxation of Nonperiodic Payments Nonperiodic distributions are also known as amounts not received as an annuity. Income tax forms They include all payments other than periodic payments and corrective distributions. Income tax forms Examples of nonperiodic payments are cash withdrawals, distributions of current earnings, certain loans, and the value of annuity contracts transferred without full and adequate consideration. Income tax forms Corrective distributions of excess plan contributions. Income tax forms   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. Income tax forms To correct an excess, your plan may distribute it to you (along with any income earned on the excess). Income tax forms For information on plan contribution limits and how to report corrective distributions of excess contributions, see Retirement Plan Contributions under Employee Compensation in Publication 525. Income tax forms Figuring the taxable amount of nonperiodic payments. Income tax forms   How you figure the taxable amount of a nonperiodic distribution depends on whether it is made before the annuity starting date, or on or after the annuity starting date. Income tax forms If it is made before the annuity starting date, its tax treatment also depends on whether it is made under a qualified or nonqualified plan. Income tax forms If it is made under a nonqualified plan, its tax treatment depends on whether it fully discharges the contract, is received under certain life insurance or endowment contracts, or is allocable to an investment you made before August 14, 1982. Income tax forms Annuity starting date. Income tax forms   The annuity starting date is either the first day of the first period for which you receive an annuity payment under the contract or the date on which the obligation under the contract becomes fixed, whichever is later. Income tax forms Distribution on or after annuity starting date. Income tax forms   If you receive a nonperiodic payment from your annuity contract on or after the annuity starting date, you generally must include all of the payment in gross income. Income tax forms Distribution before annuity starting date. Income tax forms   If you receive a nonperiodic distribution before the annuity starting date from a qualified retirement plan, you generally can allocate only part of it to the cost of the contract. Income tax forms You exclude from your gross income the part that you allocate to the cost. Income tax forms You include the remainder in your gross income. Income tax forms   If you receive a nonperiodic distribution before the annuity starting date from a plan other than a qualified retirement plan (nonqualified plan), it is allocated first to earnings (the taxable part) and then to the cost of the contract (the tax-free part). Income tax forms This allocation rule applies, for example, to a commercial annuity contract you bought directly from the issuer. Income tax forms    Distributions from nonqualified plans are subject to the net investment income tax. Income tax forms See the Instructions for Form 8960. Income tax forms   For more information, see Figuring the Taxable Amount under Taxation of Nonperiodic Payments in Publication 575. Income tax forms Lump-Sum Distributions This section on lump-sum distributions only applies if the plan participant was born before January 2, 1936. Income tax forms If the plan participant was born after January 1, 1936, the taxable amount of this nonperiodic payment is reported as discussed earlier. Income tax forms A lump-sum distribution is the distribution or payment in one tax year of a plan participant's entire balance from all of the employer's qualified plans of one kind (for example, pension, profit-sharing, or stock bonus plans). Income tax forms A distribution from a nonqualified plan (such as a privately purchased commercial annuity or a section 457 deferred compensation plan of a state or local government or tax-exempt organization) cannot qualify as a lump-sum distribution. Income tax forms The participant's entire balance from a plan does not include certain forfeited amounts. Income tax forms It also does not include any deductible voluntary employee contributions allowed by the plan after 1981 and before 1987. Income tax forms For more information about distributions that do not qualify as lump-sum distributions, see Distributions that do not qualify under Lump-Sum Distributions in Publication 575. Income tax forms If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. Income tax forms The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. Income tax forms The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. Income tax forms You may be able to use the 10-year tax option, discussed later, to figure tax on the ordinary income part. Income tax forms Use Form 4972 to figure the separate tax on a lump-sum distribution using the optional methods. Income tax forms The tax figured on Form 4972 is added to the regular tax figured on your other income. Income tax forms This may result in a smaller tax than you would pay by including the taxable amount of the distribution as ordinary income in figuring your regular tax. Income tax forms How to treat the distribution. Income tax forms   If you receive a lump-sum distribution, you may have the following options for how you treat the taxable part. Income tax forms Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and the part from participation after 1973 as ordinary income. Income tax forms Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and use the 10-year tax option to figure the tax on the part from participation after 1973 (if you qualify). Income tax forms Use the 10-year tax option to figure the tax on the total taxable amount (if you qualify). Income tax forms Roll over all or part of the distribution. Income tax forms See Rollovers , later. Income tax forms No tax is currently due on the part rolled over. Income tax forms Report any part not rolled over as ordinary income. Income tax forms Report the entire taxable part of the distribution as ordinary income on your tax return. Income tax forms   The first three options are explained in the following discussions. Income tax forms Electing optional lump-sum treatment. Income tax forms   You can choose to use the 10-year tax option or capital gain treatment only once after 1986 for any plan participant. Income tax forms If you make this choice, you cannot use either of these optional treatments for any future distributions for the participant. Income tax forms Taxable and tax-free parts of the distribution. Income tax forms    The taxable part of a lump-sum distribution is the employer's contributions and income earned on your account. Income tax forms You may recover your cost in the lump sum and any net unrealized appreciation (NUA) in employer securities tax free. Income tax forms Cost. Income tax forms   In general, your cost is the total of: The plan participant's nondeductible contributions to the plan, The plan participant's taxable costs of any life insurance contract distributed, Any employer contributions that were taxable to the plan participant, and Repayments of any loans that were taxable to the plan participant. Income tax forms You must reduce this cost by amounts previously distributed tax free. Income tax forms Net unrealized appreciation (NUA). Income tax forms   The NUA in employer securities (box 6 of Form 1099-R) received as part of a lump-sum distribution is generally tax free until you sell or exchange the securities. Income tax forms (For more information, see Distributions of employer securities under Taxation of Nonperiodic Payments in Publication 575. Income tax forms ) Capital Gain Treatment Capital gain treatment applies only to the taxable part of a lump-sum distribution resulting from participation in the plan before 1974. Income tax forms The amount treated as capital gain is taxed at a 20% rate. Income tax forms You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. Income tax forms Complete Part II of Form 4972 to choose the 20% capital gain election. Income tax forms For more information, see Capital Gain Treatment under Lump-Sum Distributions in Publication 575. Income tax forms 10-Year Tax Option The 10-year tax option is a special formula used to figure a separate tax on the ordinary income part of a lump-sum distribution. Income tax forms You pay the tax only once, for the year in which you receive the distribution, not over the next 10 years. Income tax forms You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. Income tax forms The ordinary income part of the distribution is the amount shown in box 2a of the Form 1099-R given to you by the payer, minus the amount, if any, shown in box 3. Income tax forms You also can treat the capital gain part of the distribution (box 3 of Form 1099-R) as ordinary income for the 10-year tax option if you do not choose capital gain treatment for that part. Income tax forms Complete Part III of Form 4972 to choose the 10-year tax option. Income tax forms You must use the special Tax Rate Schedule shown in the instructions for Part III to figure the tax. Income tax forms Publication 575 illustrates how to complete Form 4972 to figure the separate tax. Income tax forms Rollovers If you withdraw cash or other assets from a qualified retirement plan in an eligible rollover distribution, you can defer tax on the distribution by rolling it over to another qualified retirement plan or a traditional IRA. Income tax forms For this purpose, the following plans are qualified retirement plans. Income tax forms A qualified employee plan. Income tax forms A qualified employee annuity. Income tax forms A tax-sheltered annuity plan (403(b) plan). Income tax forms An eligible state or local government section 457 deferred compensation plan. Income tax forms Eligible rollover distributions. Income tax forms   Generally, an eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan. Income tax forms For information about exceptions to eligible rollover distributions, see Publication 575. Income tax forms Rollover of nontaxable amounts. Income tax forms   You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another qualified retirement plan that is a qualified employee plan or a 403(b) plan, or to a traditional or Roth IRA. Income tax forms The transfer must be made either through a direct rollover to a qualified plan or 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional or Roth IRA. Income tax forms   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. Income tax forms   Any after-tax contributions that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Income tax forms To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Income tax forms For more information, see the Form 8606 instructions. Income tax forms Direct rollover option. Income tax forms   You can choose to have any part or all of an eligible rollover distribution paid directly to another qualified retirement plan that accepts rollover distributions or to a traditional or Roth IRA. Income tax forms 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 forms Payment to you option. Income tax forms   If an eligible rollover distribution is paid to you, 20% generally will be withheld for income tax. Income tax forms However, the full amount is treated as distributed to you even though you actually receive only 80%. Income tax forms You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional or Roth IRA. Income tax forms (See Pensions and Annuities under Tax Withholding for 2014 in chapter 4. Income tax forms )    If you decide to roll over an amount equal to the distribution before withholding, your contribution to the new plan or IRA must include other money (for example, from savings or amounts borrowed) to replace the amount withheld. Income tax forms Time for making rollover. Income tax forms   You generally must complete the rollover of an eligible rollover distribution paid to you by the 60th day following the day on which you receive the distribution from your employer's plan. Income tax forms (If an amount distributed to you becomes a frozen deposit in a financial institution during the 60-day period after you receive it, the rollover period is extended for the period during which the distribution is in a frozen deposit in a financial institution. Income tax forms )   The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. Income tax forms   The administrator of a qualified plan must give you a written explanation of your distribution options within a reasonable period of time before making an eligible rollover distribution. Income tax forms Qualified domestic relations order (QDRO). Income tax forms   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan that you receive under a QDRO. Income tax forms If you receive the distribution as an employee's spouse or former spouse (not as a nonspousal beneficiary), the rollover rules apply to you as if you were the employee. Income tax forms You can roll over the distribution from the plan into a traditional IRA or to another eligible retirement plan. Income tax forms See Rollovers in Publication 575 for more information on benefits received under a QDRO. Income tax forms Rollover by surviving spouse. Income tax forms   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan you receive as the surviving spouse of a deceased employee. Income tax forms The rollover rules apply to you as if you were the employee. Income tax forms You can roll over a distribution into a qualified retirement plan or a traditional or Roth IRA. Income tax forms For a rollover to a Roth IRA, see Rollovers to Roth IRAs , later. Income tax forms    A distribution paid to a beneficiary other than the employee's surviving spouse is generally not an eligible rollover distribution. Income tax forms However, see Rollovers by nonspouse beneficiary next. Income tax forms Rollovers by nonspouse beneficiary. Income tax forms   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you may be able to roll over tax free all or a portion of a distribution you receive from an eligible retirement plan of the employee. Income tax forms The distribution must be a direct trustee-to-trustee transfer to your traditional or Roth IRA that was set up to receive the distribution. Income tax forms The transfer will be treated as an eligible rollover distribution and the receiving plan will be treated as an inherited IRA. Income tax forms For information on inherited IRAs, see What if You Inherit an IRA? in chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs). Income tax forms Retirement bonds. Income tax forms   If you redeem retirement bonds purchased under a qualified bond purchase plan, you can roll over the proceeds that exceed your basis tax free into an IRA (as discussed in Publication 590) or a qualified employer plan. Income tax forms Designated Roth accounts. Income tax forms   You can roll over an eligible rollover distribution from a designated Roth account into another designated Roth account or a Roth IRA. Income tax forms If you want to roll over the part of the distribution that is not included in income, you must make a direct rollover of the entire distribution or you can roll over the entire amount (or any portion) to a Roth IRA. Income tax forms For more information on rollovers from designated Roth accounts, see Rollovers in Publication 575. Income tax forms In-plan rollovers to designated Roth accounts. Income tax forms   If you are a plan participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. Income tax forms The rollover of any untaxed amounts must be included in income. Income tax forms See Designated Roth accounts under Rollovers in Publication 575 for more information. Income tax forms Rollovers to Roth IRAs. Income tax forms   You can roll over distributions directly from a qualified retirement plan (other than a designated Roth account) to a Roth IRA. Income tax forms   You must include in your gross income distributions from a qualified retirement plan (other than a designated Roth account) that you would have had to include in income if you had not rolled them over into a Roth IRA. Income tax forms You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions to the plan that were taxable to you when paid. Income tax forms In addition, the 10% tax on early distributions does not apply. Income tax forms More information. Income tax forms   For more information on the rules for rolling over distributions, see Rollovers in Publication 575. Income tax forms Special Additional Taxes To discourage the use of pension funds for purposes other than normal retirement, the law imposes additional taxes on early distributions of those funds and on failures to withdraw the funds timely. Income tax forms Ordinarily, you will not be subject to these taxes if you roll over all early distributions you receive, as explained earlier, and begin drawing out the funds at a normal retirement age, in reasonable amounts over your life expectancy. Income tax forms These special additional taxes are the taxes on: Early distributions, and Excess accumulation (not receiving minimum distributions). Income tax forms These taxes are discussed in the following sections. Income tax forms If you must pay either of these taxes, report them on Form 5329. Income tax forms However, you do not have to file Form 5329 if you owe only the tax on early distributions and your Form 1099-R correctly shows a “1” in box 7. Income tax forms Instead, enter 10% of the taxable part of the distribution on Form 1040, line 58 and write “No” under the heading “Other Taxes” to the left of line 58. Income tax forms Even if you do not owe any of these taxes, you may have to complete Form 5329 and attach it to your Form 1040. Income tax forms This applies if you meet an exception to the tax on early distributions but box 7 of your Form 1099-R does not indicate an exception. Income tax forms Tax on Early Distributions Most distributions (both periodic and nonperiodic) from qualified retirement plans and nonqualified annuity contracts made to you before you reach age 59½ are subject to an additional tax of 10%. Income tax forms This tax applies to the part of the distribution that you must include in gross income. Income tax forms For this purpose, a qualified retirement plan is: A qualified employee plan, A qualified employee annuity plan, A tax-sheltered annuity plan, or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). Income tax forms 5% rate on certain early distributions from deferred annuity contracts. Income tax forms   If an early withdrawal from a deferred annuity is otherwise subject to the 10% additional tax, a 5% rate may apply instead. Income tax forms A 5% rate applies to distributions under a written election providing a specific schedule for the distribution of your interest in the contract if, as of March 1, 1986, you had begun receiving payments under the election. Income tax forms On line 4 of Form 5329, multiply the line 3 amount by 5% instead of 10%. Income tax forms Attach an explanation to your return. Income tax forms Distributions from Roth IRAs allocable to a rollover from an eligible retirement plan within the 5-year period. Income tax forms   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from an eligible retirement plan to a Roth IRA, you take a distribution from the Roth IRA, you may have to pay the additional 10% tax on early distributions. Income tax forms You generally must pay the 10% additional tax on any amount attributable to the part of the rollover that you had to include in income. Income tax forms The additional tax is figured on Form 5329. Income tax forms For more information, see Form 5329 and its instructions. Income tax forms For information on qualified distributions from Roth IRAs, see Additional Tax on Early Distributions in chapter 2 of Publication 590. Income tax forms Distributions from designated Roth accounts allocable to in-plan Roth rollovers within the 5-year period. Income tax forms   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from a 401(k), 403(b), or 457(b) plan to a designated Roth account, you take a distribution from the designated Roth account, you may have to pay the additional 10% tax on early distributions. Income tax forms You generally must pay the 10% additional tax on any amount attributable to the part of the in-plan rollover that you had to include in income. Income tax forms The additional tax is figured on Form 5329. Income tax forms For more information, see Form 5329 and its instructions. Income tax forms For information on qualified distributions from designated Roth accounts, see Designated Roth accounts under Taxation of Periodic Payments in Publication 575. Income tax forms Exceptions to tax. Income tax forms    Certain early distributions are excepted from the early distribution tax. Income tax forms If the payer knows that an exception applies to your early distribution, distribution code “2,” “3,” or “4” should be shown in box 7 of your Form 1099-R and you do not have to report the distribution on Form 5329. Income tax forms If an exception applies but distribution code “1” (early distribution, no known exception) is shown in box 7, you must file Form 5329. Income tax forms Enter the taxable amount of the distribution shown in box 2a of your Form 1099-R on line 1 of Form 5329. Income tax forms On line 2, enter the amount that can be excluded and the exception number shown in the Form 5329 instructions. Income tax forms    If distribution code “1” is incorrectly shown on your Form 1099-R for a distribution received when you were age 59½ or older, include that distribution on Form 5329. Income tax forms Enter exception number “12” on line 2. Income tax forms General exceptions. Income tax forms   The tax does not apply to distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after your separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. Income tax forms Additional exceptions for qualified retirement plans. Income tax forms   The tax does not apply to distributions that are: From a qualified retirement plan (other than an IRA) after your separation from service in or after the year you reached age 55 (age 50 for qualified public safety employees), From a qualified retirement plan (other than an IRA) to an alternate payee under a qualified domestic relations order, From a qualified retirement plan to the extent you have deductible medical expenses that exceed 10% (or 7. Income tax forms 5% if you or your spouse are age 65 or older) of your adjusted gross income, whether or not you itemize your deductions for the year, From an employer plan under a written election that provides a specific schedule for distribution of your entire interest if, as of March 1, 1986, you had separated from service and had begun receiving payments under the election, From an employee stock ownership plan for dividends on employer securities held by the plan, From a qualified retirement plan due to an IRS levy of the plan, From elective deferral accounts under 401(k) or 403(b) plans or similar arrangements that are qualified reservist distributions, or Phased retirement annuity payments made to federal employees. Income tax forms See Pub. Income tax forms 721 for more information on the phased retirement program. Income tax forms Qualified public safety employees. Income tax forms   If you are a qualified public safety employee, distributions made from a governmental defined benefit pension plan are not subject to the additional tax on early distributions. Income tax forms You are a qualified public safety employee if you provide police protection, firefighting services, or emergency medical services for a state or municipality, and you separated from service in or after the year you attained age 50. Income tax forms Qualified reservist distributions. Income tax forms   A qualified reservist distribution is not subject to the additional tax on early distributions. Income tax forms A qualified reservist distribution is a distribution (a) from elective deferrals under a section 401(k) or 403(b) plan, or a similar arrangement, (b) to an individual ordered or called to active duty (because he or she is a member of a reserve component) for a period of more than 179 days or for an indefinite period, and (c) made during the period beginning on the date of the order or call and ending at the close of the active duty period. Income tax forms You must have been ordered or called to active duty after September 11, 2001. Income tax forms For more information, see Qualified reservist distributions under Special Additional Taxes in Publication 575. Income tax forms Additional exceptions for nonqualified annuity contracts. Income tax forms   The tax does not apply to distributions from: A deferred annuity contract to the extent allocable to investment in the contract before August 14, 1982, A deferred annuity contract under a qualified personal injury settlement, A deferred annuity contract purchased by your employer upon termination of a qualified employee plan or qualified employee annuity plan and held by your employer until your separation from service, or An immediate annuity contract (a single premium contract providing substantially equal annuity payments that start within 1 year from the date of purchase and are paid at least annually). Income tax forms Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date (defined later). Income tax forms The payments each year cannot be less than the required minimum distribution. Income tax forms Required distributions not made. Income tax forms   If the actual distributions to you in any year are less than the minimum required distribution for that year, you are subject to an additional tax. Income tax forms The tax equals 50% of the part of the required minimum distribution that was not distributed. Income tax forms   For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan)(for benefits accruing after 1986). Income tax forms Waiver. Income tax forms   The tax may be waived if you establish that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. Income tax forms See the Instructions for Form 5329 for the procedure to follow if you believe you qualify for a waiver of this tax. Income tax forms State insurer delinquency proceedings. Income tax forms   You might not receive the minimum distribution because assets are invested in a contract issued by an insurance company in state insurer delinquency proceedings. Income tax forms If your payments are reduced below the minimum due to these proceedings, you should contact your plan administrator. Income tax forms Under certain conditions, you will not have to pay the 50% excise tax. Income tax forms Required beginning date. Income tax forms   Unless the rule for 5% owners applies, you generally must begin to receive distributions from your qualified retirement plan by April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. Income tax forms However, your plan may require you to begin to receive distributions by April 1 of the year that follows the year in which you reach age 70½, even if you have not retired. Income tax forms   If you reached age 70½ in 2013, you may be required to receive your first distribution by April 1, 2014. Income tax forms Your required distribution then must be made for 2014 by December 31, 2014. Income tax forms 5% owners. Income tax forms   If you are a 5% owner, you must begin to receive distributions by April 1 of the year that follows the calendar year in which you reach age 70½. Income tax forms   You are a 5% owner if, for the plan year ending in the calendar year in which you reach age 70½, you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the outstanding stock (or more than 5% of the total voting power of all stock) of the employer, or more than 5% of the capital or profits interest in the employer. Income tax forms Age 70½. Income tax forms   You reach age 70½ on the date that is 6 calendar months after the date of your 70th birthday. Income tax forms   For example, if you are retired and your 70th birthday was on June 30, 2013, you were age 70½ on December 30, 2013. Income tax forms If your 70th birthday was on July 1, 2013, you reached age 70½ on January 1, 2014. Income tax forms Required distributions. Income tax forms   By the required beginning date, as explained earlier, you must either: Receive your entire interest in the plan (for a tax-sheltered annuity, your entire benefit accruing after 1986), or Begin receiving periodic distributions in annual amounts calculated to distribute your entire interest (for a tax-sheltered annuity, your entire benefit accruing after 1986) over your life or life expectancy or over the joint lives or joint life expectancies of you and a designated beneficiary (or over a shorter period). Income tax forms Additional information. Income tax forms   For more information on this rule, see Tax on Excess Accumulation in Publication 575. Income tax forms Form 5329. Income tax forms   You must file Form 5329 if you owe tax because you did not receive a minimum required distribution from your qualified retirement plan. Income tax forms Survivors and Beneficiaries Generally, a survivor or beneficiary reports pension or annuity income in the same way the plan participant would have. Income tax forms However, some special rules apply. Income tax forms See Publication 575 for more information. Income tax forms Survivors of employees. Income tax forms   If you are entitled to receive a survivor annuity on the death of an employee who died, you can exclude part of each annuity payment as a tax-free recovery of the employee's investment in the contract. Income tax forms You must figure the taxable and tax-free parts of your annuity payments using the method that applies as if you were the employee. Income tax forms Survivors of retirees. Income tax forms   If you receive benefits as a survivor under a joint and survivor annuity, include those benefits in income in the same way the retiree would have included them in income. Income tax forms If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule and recovered all of the cost tax free, your survivor payments are fully taxable. Income tax forms    If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage to your initial survivor annuity payment called for in the contract. Income tax forms The resulting tax-free amount will then remain fixed. Income tax forms Any increases in the survivor annuity are fully taxable. Income tax forms    If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. Income tax forms This amount remains fixed even if the annuity payments are increased or decreased. Income tax forms See Simplified Method , earlier. Income tax forms   In any case, if the annuity starting date is after 1986, the total exclusion over the years cannot be more than the cost. Income tax forms Estate tax deduction. Income tax forms   If your annuity was a joint and survivor annuity that was included in the decedent's estate, an estate tax may have been paid on it. Income tax forms You can deduct the part of the total estate tax that was based on the annuity. Income tax forms The deceased annuitant must have died after the annuity starting date. Income tax forms (For details, see section 1. Income tax forms 691(d)-1 of the regulations. Income tax forms ) Deduct it in equal amounts over your remaining life expectancy. Income tax forms   If the decedent died before the annuity starting date of a deferred annuity contract and you receive a death benefit under that contract, the amount you receive (either in a lump sum or as periodic payments) in excess of the decedent's cost is included in your gross income as income in respect of a decedent for which you may be able to claim an estate tax deduction. Income tax forms   You can take the estate tax deduction as an itemized deduction on Schedule A, Form 1040. Income tax forms This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. Income tax forms See Publication 559, Survivors, Executors, and Administrators, for more information on the estate tax deduction. Income tax forms Prev  Up  Next   Home   More Online Publications
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"Slamming" occurs when a phone company illegally switches your phone service without your permission. If you notice a different company name on your bill or see phone charges that are higher than normal, take action:

  • Contact the company that slammed you and ask to be switched back to your original company. Tell the company you are exercising your right to refuse to pay any charges.
  • Report the problem to your original company and ask to be enrolled in your previous calling plan. If you're unable to resolve your complaint, contact the FCC.

"Cramming" occurs when companies add charges to your telephone bill without your permission. These charges may be for services such as voice mail, ringtones, or club memberships. You may not notice these monthly charges because they are relatively small, $5 to $30, and look like your regular phone charges.

Take These Steps to Avoid Slammers and Crammers:

  • Block changes to your phone service. Ask your telephone service provider if they offer a blocking service, which usually requires the company to notify you before making any changes to your service.
  • Read the fine print on contest entry forms and coupons. You could be agreeing to switch your phone service or buy optional services.
  • Watch out for impostors. Companies could falsely claim to be your regular phone company and offer some type of discount plan or change in billing. They might also say they are taking a survey or pretend to be a government agency.
  • Beware of "negative option notices". You can be switched or signed up for optional services unless you say "NO" to telemarketers.
  • Examine your telephone bill carefully, including pages that show the details, and look for suspicious charges.

Your phone service cannot be shut off for refusal to pay for unauthorized services. For help, contact your local or state consumer protection agency, state public utilities commission, or the FCC.

Beware: Caller ID Spoofing

Scammers have adopted the practice of Caller ID spoofing to obtain personal information from consumers. In this fraud, someone calls you using a false name and phone number for the Caller ID screen. During the call, the scammer describes an urgent scenario, such as the cancellation of an account. The caller may say you can avoid the cancellation if you provide your bank account or credit card number to pay the company. If you give the sensitive information, he can use it to steal your identity, or use your bank accounts.
You can prevent being a victim of caller ID spoofing. Don’t give out personal information on an incoming call. Hang up and call the customer service phone number printed on your statement, the company’s website or in the phonebook.
Report caller ID spoofers to the Federal Communications Commission online or 1-888-225-5322.

Beware: GPS Enabled Apps on Your Mobile Phone

GPS enabled apps on mobile phones make it easy to share your fun adventures through social media. Some apps let others know your general vicinity, while others allow you to virtually “check in” at your favorite places so that you can earn free merchandise. Beware: this same information in the wrong hands can make you vulnerable to stalking, home burglary, or worse. Take advantage of the privacy settings on these apps and only share your location with people that you know and trust.

The Income Tax Forms

Income tax forms Index A Abatement of interest and penalties, Abatement of interest and penalties. Income tax forms Accidents, Deductible losses. Income tax forms , Nondeductible losses. Income tax forms Adjusted basis, Adjusted Basis Adjustments to basis, Basis adjustment to corporation's property. Income tax forms , Adjustments to Basis Amended returns, Amended return. Income tax forms Appraisals, Appraisal. Income tax forms , Costs of photographs and appraisals. Income tax forms Assistance (see Tax help) B Bad debts, Nonbusiness bad debt. Income tax forms Basis Adjusted, Adjusted Basis Adjustments to, Basis adjustment to corporation's property. Income tax forms , Adjustments to Basis Replacement property, Basis of replacement property. Income tax forms Business or income-producing property, Business or income-producing property. Income tax forms Business purposes, property used partly for, Property used partly for business and partly for personal purposes. Income tax forms C Cars Accidents, Deductible losses. Income tax forms Fair market value of, Car value. Income tax forms Cash gifts, Cash gifts. Income tax forms Casualty losses, Table 3. Income tax forms When To Deduct a Casualty or Theft Loss Deductible losses, Deductible losses. Income tax forms Definition, Casualty Deposits, loss on, Casualty loss or ordinary loss. Income tax forms Nondeductible losses, Nondeductible losses. Income tax forms Progressive deterioration, Progressive deterioration. Income tax forms Proof of, Casualty loss proof. Income tax forms When to report, Losses. Income tax forms Workbooks for listing property, Workbooks for casualties and thefts. Income tax forms Clean up costs, Cost of cleaning up or making repairs. Income tax forms Condemnation, Condemnations. Income tax forms Corrosive drywall, Special Procedure for Damage From Corrosive Drywall Costs Appraisals, Costs of photographs and appraisals. Income tax forms Clean up, Cost of cleaning up or making repairs. Income tax forms Incidental expenses, Related expenses. Income tax forms Landscaping, Landscaping. Income tax forms Photographs taken after loss, Costs of photographs and appraisals. Income tax forms Protection, Cost of protection. Income tax forms Repair, Cost of cleaning up or making repairs. Income tax forms Replacement, Replacement cost. Income tax forms D Death of taxpayer Postponement of gain, Death of a taxpayer. Income tax forms Deductible losses, Deductible losses. Income tax forms Deduction limits, Deduction Limits $100 rule, $100 Rule 10% rule, 10% Rule 2% rule, 2% Rule Deposit losses, Mislaid or lost property. Income tax forms , Table 3. Income tax forms When To Deduct a Casualty or Theft Loss Reporting of (Table 1), Table 1. Income tax forms Reporting Loss on Deposits When to report, Loss on deposits. Income tax forms Disaster area losses, Lessee's loss. Income tax forms Claiming on amended return, Claiming a disaster loss on an amended return. Income tax forms Federal loan canceled, Federal loan canceled. Income tax forms Federally declared disaster, Business or income-producing property located in a federally declared disaster area. Income tax forms , Disaster Area Losses Figuring loss deduction, Figuring the loss deduction. Income tax forms Form 1040X, How to report the loss on Form 1040X. Income tax forms Home made unsafe, Home made unsafe by disaster. Income tax forms How to deduct loss in preceding year, How to deduct your loss in the preceding year. Income tax forms Inventory, Disaster loss to inventory. Income tax forms Main home rules, Main home in disaster area. Income tax forms , Gains. Income tax forms Qualified disaster mitigation payments, Qualified disaster mitigation payments. Income tax forms Qualified disaster relief payments, Qualified disaster relief payments. Income tax forms Records to keep, Records. Income tax forms Tax deadlines postponed, Covered disaster area. Income tax forms When to deduct, When to deduct the loss. Income tax forms Table 3, Table 3. Income tax forms When To Deduct a Casualty or Theft Loss Disaster mitigation payments, Qualified disaster mitigation payments. Income tax forms Disaster relief grants, Disaster relief. Income tax forms Drywall, corrosive, Special Procedure for Damage From Corrosive Drywall Due dates Tax deadlines postponed, Postponed Tax Deadlines E Employer's emergency disaster fund, Employer's emergency disaster fund. Income tax forms F Fair market value (FMV) Decline in value of property in or near casualty area, Decline in market value of property in or near casualty area. Income tax forms Measuring decrease in, Decrease in Fair Market Value Items not to consider, Figuring Decrease in FMV — Items Not To Consider Items to consider, Figuring Decrease in FMV — Items To Consider Federal disaster relief grants, Federal disaster relief grants. Income tax forms Federal Emergency Management Agency (FEMA), contacting, Contacting the Federal Emergency Management Agency (FEMA) Federally declared disasters, Business or income-producing property located in a federally declared disaster area. Income tax forms , Disaster Area Losses Figuring gain, Property used partly for business and partly for personal purposes. Income tax forms Figuring loss, Theft loss proof. Income tax forms , Figuring the Deduction Adjusted basis, Adjusted Basis Disaster area losses, Figuring the loss deduction. Income tax forms Insurance and other reimbursements, Insurance and Other Reimbursements Form 1040, Schedule A, Personal-use property. Income tax forms Form 1040, Schedule D, Personal-use property. Income tax forms Form 1040X Disaster area losses, How to report the loss on Form 1040X. Income tax forms Form 4684 Reporting gains and losses on personal-use property, Personal-use property. Income tax forms Free tax services, Free help with your tax return. Income tax forms G Gains Figuring, Figuring a Gain Postponement of, Postponement of Gain, How To Postpone a Gain Reimbursements, Gain from reimbursement. Income tax forms Reporting of, Contacting the Federal Emergency Management Agency (FEMA) When to report, Changing your mind. Income tax forms H Help (see Tax help) I Incidental expenses, Related expenses. Income tax forms Insurance, Insurance and Other Reimbursements Living expenses, payments for, Insurance payments for living expenses. Income tax forms Interest abatement, Abatement of interest and penalties. Income tax forms Inventory losses, Loss of inventory. Income tax forms Disaster area losses, Disaster loss to inventory. Income tax forms L Landscaping, Landscaping. Income tax forms Leased property, Leased property. Income tax forms When to report, Lessee's loss. Income tax forms Losses Casualty (see Casualty losses) Deposits (see Deposit losses) Disaster areas (see Disaster area losses) Figuring amount (see Figuring loss) Proof of, Deducted loss recovered. Income tax forms Records of, Theft loss proof. Income tax forms Reporting of, Contacting the Federal Emergency Management Agency (FEMA) Theft (see Theft losses) When to report, Changing your mind. Income tax forms (Table 3), Table 3. Income tax forms When To Deduct a Casualty or Theft Loss M Married taxpayers Deduction limits, Married taxpayers. Income tax forms , Married taxpayers. Income tax forms Mislaid or lost property, Mislaid or lost property. Income tax forms Missing children, photographs of, Reminders N Nonbusiness bad debts, Nonbusiness bad debt. Income tax forms Nondeductible losses, Nondeductible losses. Income tax forms P Payments for living expenses, Insurance payments for living expenses. Income tax forms Penalty abatement, Abatement of interest and penalties. Income tax forms Personal property Loss deduction, figuring of, Personal property. Income tax forms Personal-use property Reporting gains and losses, Personal-use property. Income tax forms Personal-use real property, Exception for personal-use real property. Income tax forms Photographs Documentation of loss, Costs of photographs and appraisals. Income tax forms Ponzi-type investment schemes, Losses from Ponzi-type investment schemes. Income tax forms Postponed tax deadlines, Postponed Tax Deadlines Postponement of gain, Postponement of Gain, How To Postpone a Gain Amended return, Amended return. Income tax forms Changing mind, Changing your mind. Income tax forms Replacement property acquired after return filed, Replacement property acquired after return filed. Income tax forms Replacement property acquired before return filed, Replacement property acquired before return filed. Income tax forms Required statement, Required statement. Income tax forms Substituting replacement property, Substituting replacement property. Income tax forms Three-year limit, Three-year limit. Income tax forms Proof of loss, Proof of Loss Protection costs, Cost of protection. Income tax forms Publications (see Tax help) R Records of loss, Theft loss proof. Income tax forms Recovered stolen property, Recovered stolen property. Income tax forms Reimbursements Cash gifts, Cash gifts. Income tax forms Disaster relief, Disaster relief. Income tax forms Employer's emergency disaster fund, Employer's emergency disaster fund. Income tax forms Failure to file a claim, Failure to file a claim for reimbursement. Income tax forms Received after deducting loss, Reimbursement Received After Deducting Loss Types of, Types of Reimbursements Related expenses, Related expenses. Income tax forms Related person, replacement property bought from, Buying replacement property from a related person. Income tax forms Repair costs, Cost of cleaning up or making repairs. Income tax forms Replacement cost, Replacement cost. Income tax forms Replacement period, Replacement Period Extension of, Extension. Income tax forms Replacement property, Replacement Property Advance payment, Advance payment. Income tax forms Basis adjustment to corporation's property, Basis adjustment to corporation's property. Income tax forms Basis of, Basis of replacement property. Income tax forms Main home, Main home replaced. Income tax forms In disaster area, Main home in disaster area. Income tax forms Postponement of gain, Replacement property acquired before return filed. Income tax forms Reporting gains and losses, Reporting a gain. Income tax forms , How To Report Gains and Losses Basis, adjustments to, Adjustments to Basis Business and income-producing property, Business and income-producing property. Income tax forms Deductions exceeding income, If Deductions Are More Than Income Deposits, How to report. Income tax forms Table 1, Table 1. Income tax forms Reporting Loss on Deposits Disaster area losses, How to report the loss on Form 1040X. Income tax forms Personal-use property, Personal-use property. Income tax forms Timing of, When To Report Gains and Losses S Sentimental value, Sentimental value. Income tax forms State disaster relief grants for businesses, State disaster relief grants for businesses. Income tax forms Stolen property (see Theft losses) T Tables and figures Reporting loss on deposits (Table 1), Table 1. Income tax forms Reporting Loss on Deposits When to deduct losses (Table 3), Table 3. Income tax forms When To Deduct a Casualty or Theft Loss Tax help, How To Get Tax Help Theft losses, Theft FMV of stolen property, FMV of stolen property. Income tax forms Mislaid or lost property, Mislaid or lost property. Income tax forms Proof of, Theft loss proof. Income tax forms When to deduct (Table 3), Table 3. Income tax forms When To Deduct a Casualty or Theft Loss When to report, Losses. Income tax forms Workbooks for listing property, Workbooks for casualties and thefts. Income tax forms Timber loss, Timber loss. Income tax forms W Workbooks for property lost due to casualties and thefts, Workbooks for casualties and thefts. Income tax forms Prev  Up     Home   More Online Publications