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Military Filing State Taxes

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Military Filing State Taxes

Military filing state taxes 5. Military filing state taxes   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. Military filing state taxes Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. Military filing state taxes When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. Military filing state taxes Otherwise, these are capital expenses that must be added to the basis of the land. Military filing state taxes (See chapter 6 for information on determining basis. Military filing state taxes ) Conservation expenses for land in a foreign country do not qualify for this special treatment. Military filing state taxes The deduction for conservation expenses cannot be more than 25% of your gross income from farming. Military filing state taxes See 25% Limit on Deduction , later. Military filing state taxes Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. Military filing state taxes These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. Military filing state taxes You must include in income most government payments for approved conservation practices. Military filing state taxes However, you can exclude some payments you receive under certain cost-sharing conservation programs. Military filing state taxes For more information, see Agricultural Program Payments in chapter 3. Military filing state taxes To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. Military filing state taxes Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. Military filing state taxes You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. Military filing state taxes You are not farming if you are engaged only in forestry or the growing of timber. Military filing state taxes Farm defined. Military filing state taxes   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. Military filing state taxes It also includes plantations, ranches, ranges, and orchards. Military filing state taxes A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. Military filing state taxes It does not include an area where they are merely caught or harvested. Military filing state taxes A plant nursery is a farm for purposes of deducting soil and water conservation expenses. Military filing state taxes Farm rental. Military filing state taxes   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. Military filing state taxes If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. Military filing state taxes   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. Military filing state taxes Example. Military filing state taxes You own a farm in Iowa and live in California. Military filing state taxes You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. Military filing state taxes You cannot deduct your soil conservation expenses for this farm. Military filing state taxes You must capitalize the expenses and add them to the basis of the land. Military filing state taxes     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. Military filing state taxes Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. Military filing state taxes If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. Military filing state taxes Keep a copy of the plan with your books and records to support your deductions. Military filing state taxes Conservation plan. Military filing state taxes   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. Military filing state taxes There are three types of approved plans. Military filing state taxes NRCS individual site plans. Military filing state taxes These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. Military filing state taxes NRCS county plans. Military filing state taxes These plans include a listing of farm conservation practices approved for the county where the farmland is located. Military filing state taxes You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. Military filing state taxes Comparable state agency plans. Military filing state taxes These plans are approved by state agencies and can be approved individual site plans or county plans. Military filing state taxes   A list of NRCS conservation programs is available at www. Military filing state taxes nrcs. Military filing state taxes usda. Military filing state taxes gov/programs. Military filing state taxes Individual site plans can be obtained from NRCS offices and the comparable state agencies. Military filing state taxes Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. Military filing state taxes These expenses include, but are not limited to, the following. Military filing state taxes The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. Military filing state taxes The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. Military filing state taxes The eradication of brush. Military filing state taxes The planting of windbreaks. Military filing state taxes You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. Military filing state taxes These expenses are added to the basis of the land. Military filing state taxes If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. Military filing state taxes See chapter 3 for information about payments eligible for the cost-sharing exclusion. Military filing state taxes New farm or farmland. Military filing state taxes   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. Military filing state taxes You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. Military filing state taxes The new farming activity does not have to be the same as the old farming activity. Military filing state taxes For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. Military filing state taxes Land not used for farming. Military filing state taxes   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. Military filing state taxes For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. Military filing state taxes You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. Military filing state taxes Depreciable conservation assets. Military filing state taxes   You generally cannot deduct your expenses for depreciable conservation assets. Military filing state taxes However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. Military filing state taxes See Assessment for Depreciable Property , later. Military filing state taxes   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. Military filing state taxes These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. Military filing state taxes You recover your capital investment through annual allowances for depreciation. Military filing state taxes   You can deduct soil and water conservation expenses for nondepreciable earthen items. Military filing state taxes Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. Military filing state taxes Water well. Military filing state taxes   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. Military filing state taxes It is a capital expense. Military filing state taxes You recover your cost through depreciation. Military filing state taxes You also must capitalize your cost for drilling a test hole. Military filing state taxes If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. Military filing state taxes You can recover the total cost through depreciation deductions. Military filing state taxes   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. Military filing state taxes Abandonment means that all economic benefits from the well are terminated. Military filing state taxes For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. Military filing state taxes Endangered species recovery expenses. Military filing state taxes   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. Military filing state taxes Otherwise, these are capital expenses that must be added to the basis of the land. Military filing state taxes   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. Military filing state taxes See Internal Revenue Code section 175 for more information. Military filing state taxes Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. Military filing state taxes You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. Military filing state taxes Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. Military filing state taxes This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. Military filing state taxes The depreciable property must be used in the district's soil and water conservation activities. Military filing state taxes However, the following limits apply to these assessments. Military filing state taxes The total assessment limit. Military filing state taxes The yearly assessment limit. Military filing state taxes After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. Military filing state taxes The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. Military filing state taxes See Table 5-1 for a brief summary of these limits. Military filing state taxes Table 5-1. Military filing state taxes Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. Military filing state taxes Your deductible share of the cost to the district for the property. Military filing state taxes Your gross income from farming. Military filing state taxes No one taxpayer can deduct more than 10% of the total assessment. Military filing state taxes Any amount over 10% is a capital expense and is added to the basis of your land. Military filing state taxes If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. Military filing state taxes If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. Military filing state taxes You can deduct the remainder in equal amounts over the next 9 tax years. Military filing state taxes Limit for all conservation expenses, including assessments for depreciable property. Military filing state taxes Amounts greater than 25% can be carried to the following year and added to that year's expenses. Military filing state taxes The total is then subject to the 25% of gross income from farming limit in that year. Military filing state taxes To ensure your deduction is within the deduction limits, keep records to show the following. Military filing state taxes The total assessment against all members of the district for the depreciable property. Military filing state taxes Your deductible share of the cost to the district for the depreciable property. Military filing state taxes Your gross income from farming. Military filing state taxes Total assessment limit. Military filing state taxes   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. Military filing state taxes This applies whether you pay the assessment in one payment or in installments. Military filing state taxes If your assessment is more than 10% of the total amount assessed, both the following rules apply. Military filing state taxes The amount over 10% is a capital expense and is added to the basis of your land. Military filing state taxes If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. Military filing state taxes Yearly assessment limit. Military filing state taxes   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. Military filing state taxes If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. Military filing state taxes If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. Military filing state taxes You can deduct the remainder in equal amounts over the next 9 tax years. Military filing state taxes Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. Military filing state taxes Example 1. Military filing state taxes This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. Military filing state taxes Of the assessment, $1,500 is for digging drainage ditches. Military filing state taxes You can deduct this part as a soil or conservation expense as if you had paid it directly. Military filing state taxes The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. Military filing state taxes The total amount assessed by the district against all its members for the depreciable equipment is $7,000. Military filing state taxes The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. Military filing state taxes The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. Military filing state taxes To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. Military filing state taxes Add $500 to the result for a total of $570. Military filing state taxes Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). Military filing state taxes You can deduct the balance at the rate of $70 a year over the next 9 years. Military filing state taxes You add $70 to the $1,500 portion of the assessment for drainage ditches. Military filing state taxes You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. Military filing state taxes Example 2. Military filing state taxes Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. Military filing state taxes The total amount assessed by the district against all its members for depreciable equipment is $5,500. Military filing state taxes The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. Military filing state taxes The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). Military filing state taxes Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. Military filing state taxes You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. Military filing state taxes Sale or other disposal of land during 9-year period. Military filing state taxes   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. Military filing state taxes Death of farmer during 9-year period. Military filing state taxes   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. Military filing state taxes 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. Military filing state taxes Gross income from farming. Military filing state taxes   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. Military filing state taxes Gains from sales of draft, breeding, or dairy livestock are included. Military filing state taxes Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. Military filing state taxes Carryover of deduction. Military filing state taxes   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. Military filing state taxes However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. Military filing state taxes Example. Military filing state taxes In 2012, you have gross income of $32,000 from two farms. Military filing state taxes During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. Military filing state taxes However, your deduction is limited to 25% of $32,000, or $8,000. Military filing state taxes The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. Military filing state taxes The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. Military filing state taxes Any expenses over the limit in that year are carried to 2014 and later years. Military filing state taxes Net operating loss. Military filing state taxes   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. Military filing state taxes If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. Military filing state taxes When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. Military filing state taxes If you do not choose to deduct the expenses, you must capitalize them. Military filing state taxes Change of method. Military filing state taxes   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. Military filing state taxes To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. Military filing state taxes You or your authorized representative must sign the request. Military filing state taxes   The request must include the following information. Military filing state taxes Your name and address. Military filing state taxes The first tax year the method or change of method is to apply. Military filing state taxes Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. Military filing state taxes If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. Military filing state taxes The total expenses you paid or incurred in the first tax year the method or change of method is to apply. Military filing state taxes A statement that you will account separately in your books for the expenses to which this method or change of method relates. Military filing state taxes Send your request to the following  address. Military filing state taxes  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. Military filing state taxes Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). Military filing state taxes However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. Military filing state taxes Gain on sale of farmland. Military filing state taxes   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. Military filing state taxes If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. Military filing state taxes See Section 1252 property under Other Gains in chapter 9. Military filing state taxes Prev  Up  Next   Home   More Online Publications
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The Military Filing State Taxes

Military filing state taxes 11. Military filing state taxes   Social Security and Equivalent Railroad Retirement Benefits Table of Contents Introduction Useful Items - You may want to see: Are Any of Your Benefits Taxable? How To Report Your BenefitsHow Much Is Taxable? Examples Deductions Related to Your BenefitsRepayments More Than Gross Benefits Introduction This chapter explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. Military filing state taxes It explains the following topics. Military filing state taxes How to figure whether your benefits are taxable. Military filing state taxes How to use the social security benefits worksheet (with examples). Military filing state taxes How to report your taxable benefits. Military filing state taxes How to treat repayments that are more than the benefits you received during the year. Military filing state taxes Social security benefits include monthly retirement, survivor, and disability benefits. Military filing state taxes They do not include supplemental security income (SSI) payments, which are not taxable. Military filing state taxes Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. Military filing state taxes They are commonly called the social security equivalent benefit (SSEB) portion of tier 1 benefits. Military filing state taxes If you received these benefits during 2013, you should have received a Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Payments by the Railroad Retirement Board. Military filing state taxes These forms show the amounts received and repaid, and taxes withheld for the year. Military filing state taxes You may receive more than one of these forms for the same year. Military filing state taxes You should add the amounts shown on all the Forms SSA-1099 and Forms RRB-1099 you receive for the year to determine the total amounts received and repaid, and taxes withheld for that year. Military filing state taxes See the Appendix at the end of Publication 915 for more information. Military filing state taxes Note. Military filing state taxes When the term “benefits” is used in this chapter, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. Military filing state taxes What is not covered in this chapter. Military filing state taxes   This chapter does not cover the tax rules for the following railroad retirement benefits. Military filing state taxes Non-social security equivalent benefit (NSSEB) portion of tier 1 benefits. Military filing state taxes Tier 2 benefits. Military filing state taxes Vested dual benefits. Military filing state taxes Supplemental annuity benefits. Military filing state taxes For information on these benefits, see Publication 575, Pension and Annuity Income. Military filing state taxes   This chapter does not cover the tax rules for social security benefits reported on Form SSA-1042S, Social Security Benefit Statement, or Form RRB-1042S, Statement for Nonresident Alien Recipients of: Payments by the Railroad Retirement Board. Military filing state taxes For information about these benefits, see Publication 519, U. Military filing state taxes S. Military filing state taxes Tax Guide for Aliens, and Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Military filing state taxes   This chapter also does not cover the tax rules for foreign social security benefits. Military filing state taxes These benefits are taxable as annuities, unless they are exempt from U. Military filing state taxes S. Military filing state taxes tax or treated as a U. Military filing state taxes S. Military filing state taxes social security benefit under a tax treaty. Military filing state taxes Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 915 Social Security and Equivalent Railroad Retirement Benefits Forms (and Instructions) 1040-ES Estimated Tax for Individuals SSA-1099 Social Security Benefit Statement RRB-1099 Payments by the Railroad Retirement Board W-4V Voluntary Withholding Request Are Any of Your Benefits Taxable? To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Military filing state taxes When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Military filing state taxes S. Military filing state taxes savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned by bona fide residents of American Samoa or Puerto Rico. Military filing state taxes Children's benefits. Military filing state taxes   The rules in this chapter apply to benefits received by children. Military filing state taxes See Who is taxed , later. Military filing state taxes Figuring total income. Military filing state taxes   To figure the total of one-half of your benefits plus your other income, use Worksheet 11-1 later in this discussion. Military filing state taxes If the total is more than your base amount, part of your benefits may be taxable. Military filing state taxes    If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Military filing state taxes Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Military filing state taxes    If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Military filing state taxes If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Military filing state taxes Base amount. Military filing state taxes   Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. Military filing state taxes Worksheet 11-1. Military filing state taxes   You can use Worksheet 11-1 to figure the amount of income to compare with your base amount. Military filing state taxes This is a quick way to check whether some of your benefits may be taxable. Military filing state taxes Worksheet 11-1. Military filing state taxes A Quick Way To Check if Your Benefits May Be Taxable A. Military filing state taxes Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Military filing state taxes Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Military filing state taxes (If you received more than one form, combine the amounts from box 5 and enter the total. Military filing state taxes ) A. Military filing state taxes   Note. Military filing state taxes If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Military filing state taxes B. Military filing state taxes Enter one-half of the amount on line A B. Military filing state taxes   C. Military filing state taxes Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Military filing state taxes   D. Military filing state taxes Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Military filing state taxes   E. Military filing state taxes Add lines B, C, and D E. Military filing state taxes   Note. Military filing state taxes Compare the amount on line E to your base amount for your filing status. Military filing state taxes If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Military filing state taxes If the amount on line E is more than your base amount, some of your benefits may be taxable. Military filing state taxes You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). Military filing state taxes If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits. Military filing state taxes Example. Military filing state taxes You and your spouse (both over 65) are filing a joint return for 2013 and you both received social security benefits during the year. Military filing state taxes In January 2014, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Military filing state taxes Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. Military filing state taxes You also received a taxable pension of $22,800 and interest income of $500. Military filing state taxes You did not have any tax-exempt interest income. Military filing state taxes Your benefits are not taxable for 2013 because your income, as figured in Worksheet 11-1, is not more than your base amount ($32,000) for married filing jointly. Military filing state taxes Even though none of your benefits are taxable, you must file a return for 2013 because your taxable gross income ($23,300) exceeds the minimum filing requirement amount for your filing status. Military filing state taxes Filled-in Worksheet 11-1. Military filing state taxes A Quick Way To Check if Your Benefits May Be Taxable A. Military filing state taxes Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Military filing state taxes Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Military filing state taxes (If you received more than one form, combine the amounts from box 5 and enter the total. Military filing state taxes ) A. Military filing state taxes $11,000 Note. Military filing state taxes If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Military filing state taxes B. Military filing state taxes Enter one-half of the amount on line A B. Military filing state taxes 5,500 C. Military filing state taxes Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Military filing state taxes 23,300 D. Military filing state taxes Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Military filing state taxes -0- E. Military filing state taxes Add lines B, C, and D E. Military filing state taxes $28,800 Note. Military filing state taxes Compare the amount on line E to your base amount for your filing status. Military filing state taxes If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Military filing state taxes If the amount on line E is more than your base amount, some of your benefits may be taxable. Military filing state taxes You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). Military filing state taxes If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits. Military filing state taxes Who is taxed. Military filing state taxes   Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. Military filing state taxes For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. Military filing state taxes One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to your child. Military filing state taxes Repayment of benefits. Military filing state taxes   Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Military filing state taxes It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Military filing state taxes If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Military filing state taxes   Your gross benefits are shown in box 3 of Form SSA-1099 or RRB-1099. Military filing state taxes Your repayments are shown in box 4. Military filing state taxes The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Military filing state taxes Use the amount in box 5 to figure whether any of your benefits are taxable. Military filing state taxes Tax withholding and estimated tax. Military filing state taxes   You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement benefits. Military filing state taxes If you choose to do this, you must complete a Form W-4V. Military filing state taxes   If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the year. Military filing state taxes For details, see Publication 505 or the instructions for Form 1040-ES. Military filing state taxes How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040 or Form 1040A. Military filing state taxes You cannot use Form 1040EZ. Military filing state taxes Reporting on Form 1040. Military filing state taxes   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 20a and the taxable part on line 20b. Military filing state taxes If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Military filing state taxes Reporting on Form 1040A. Military filing state taxes   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 14a and the taxable part on line 14b. Military filing state taxes If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Military filing state taxes Benefits not taxable. Military filing state taxes   If you are filing Form 1040EZ, do not report any benefits on your tax return. Military filing state taxes If you are filing Form 1040 or Form 1040A, report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Military filing state taxes Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Military filing state taxes If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Military filing state taxes How Much Is Taxable? If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Military filing state taxes Generally, the higher that total amount, the greater the taxable part of your benefits. Military filing state taxes Maximum taxable part. Military filing state taxes   Generally, up to 50% of your benefits will be taxable. Military filing state taxes However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Military filing state taxes The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Military filing state taxes You are married filing separately and lived with your spouse at any time during 2013. Military filing state taxes Which worksheet to use. Military filing state taxes   A worksheet you can use to figure your taxable benefits is in the instructions for your Form 1040 or Form 1040A. Military filing state taxes You can use either that worksheet or Worksheet 1 in Publication 915, unless any of the following situations applies to you. Military filing state taxes You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. Military filing state taxes In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Military filing state taxes Situation (1) does not apply and you take an exclusion for interest from qualified U. Military filing state taxes S. Military filing state taxes savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Military filing state taxes In this situation, you must use Worksheet 1 in Publication 915 to figure your taxable benefits. Military filing state taxes You received a lump-sum payment for an earlier year. Military filing state taxes In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. Military filing state taxes See Lump-sum election next. Military filing state taxes Lump-sum election. Military filing state taxes   You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Military filing state taxes    This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Military filing state taxes No part of the lump-sum death benefit is subject to tax. Military filing state taxes   Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Military filing state taxes However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Military filing state taxes You can elect this method if it lowers your taxable benefits. Military filing state taxes Making the election. Military filing state taxes   If you received a lump-sum benefit payment in 2013 that includes benefits for one or more earlier years, follow the instructions in Publication 915 under Lump-Sum Election to see whether making the election will lower your taxable benefits. Military filing state taxes That discussion also explains how to make the election. Military filing state taxes    Because the earlier year's taxable benefits are included in your 2013 income, no adjustment is made to the earlier year's return. Military filing state taxes Do not file an amended return for the earlier year. Military filing state taxes Examples The following are a few examples you can use as a guide to figure the taxable part of your benefits. Military filing state taxes Example 1. Military filing state taxes George White is single and files Form 1040 for 2013. Military filing state taxes He received the following income in 2013: Fully taxable pension $18,600 Wages from part-time job 9,400 Taxable interest income 990 Total $28,990 George also received social security benefits during 2013. Military filing state taxes The Form SSA-1099 he received in January 2014 shows $5,980 in box 5. Military filing state taxes To figure his taxable benefits, George completes the worksheet shown here. Military filing state taxes Filled-in Worksheet 1. Military filing state taxes Figuring Your Taxable Benefits 1. Military filing state taxes Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Military filing state taxes Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,980 2. Military filing state taxes Enter one-half of line 1 2,990 3. Military filing state taxes Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Military filing state taxes     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 28,990 4. Military filing state taxes Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Military filing state taxes Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Military filing state taxes Combine lines 2, 3, 4, and 5 31,980 7. Military filing state taxes Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Military filing state taxes     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0- 8. Military filing state taxes Is the amount on line 7 less than the amount on line 6?     No. Military filing state taxes None of your social security benefits are taxable. Military filing state taxes Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Military filing state taxes   Yes. Military filing state taxes Subtract line 7 from line 6 31,980 9. Military filing state taxes If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 25,000   Note. Military filing state taxes If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Military filing state taxes 85) and enter the result on line 17. Military filing state taxes Then go to line 18. Military filing state taxes   10. Military filing state taxes Is the amount on line 9 less than the amount on line 8?     No. Military filing state taxes None of your benefits are taxable. Military filing state taxes Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Military filing state taxes If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Military filing state taxes     Yes. Military filing state taxes Subtract line 9 from line 8 6,980 11. Military filing state taxes Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 9,000 12. Military filing state taxes Subtract line 11 from line 10. Military filing state taxes If zero or less, enter -0- -0- 13. Military filing state taxes Enter the smaller of line 10 or line 11 6,980 14. Military filing state taxes Enter one-half of line 13 3,490 15. Military filing state taxes Enter the smaller of line 2 or line 14 2,990 16. Military filing state taxes Multiply line 12 by 85% (. Military filing state taxes 85). Military filing state taxes If line 12 is zero, enter -0- -0- 17. Military filing state taxes Add lines 15 and 16 2,990 18. Military filing state taxes Multiply line 1 by 85% (. Military filing state taxes 85) 5,083 19. Military filing state taxes Taxable benefits. Military filing state taxes Enter the smaller of line 17 or line 18. Military filing state taxes Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $2,990 The amount on line 19 of George's worksheet shows that $2,990 of his social security benefits is taxable. Military filing state taxes On line 20a of his Form 1040, George enters his net benefits of $5,980. Military filing state taxes On line 20b, he enters his taxable benefits of $2,990. Military filing state taxes Example 2. Military filing state taxes Ray and Alice Hopkins file a joint return on Form 1040A for 2013. Military filing state taxes Ray is retired and received a fully taxable pension of $15,500. Military filing state taxes He also received social security benefits, and his Form SSA-1099 for 2013 shows net benefits of $5,600 in box 5. Military filing state taxes Alice worked during the year and had wages of $14,000. Military filing state taxes She made a deductible payment to her IRA account of $1,000. Military filing state taxes Ray and Alice have two savings accounts with a total of $250 in taxable interest income. Military filing state taxes They complete Worksheet 1, entering $29,750 ($15,500 + $14,000 + $250) on line 3. Military filing state taxes They find none of Ray's social security benefits are taxable. Military filing state taxes On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b. Military filing state taxes Filled-in Worksheet 1. Military filing state taxes Figuring Your Taxable Benefits 1. Military filing state taxes Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Military filing state taxes Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,600 2. Military filing state taxes Enter one-half of line 1 2,800 3. Military filing state taxes Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Military filing state taxes     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 29,750 4. Military filing state taxes Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Military filing state taxes Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Military filing state taxes Combine lines 2, 3, 4, and 5 32,550 7. Military filing state taxes Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Military filing state taxes     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 1,000 8. Military filing state taxes Is the amount on line 7 less than the amount on line 6?     No. Military filing state taxes None of your social security benefits are taxable. Military filing state taxes Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Military filing state taxes   Yes. Military filing state taxes Subtract line 7 from line 6 31,550 9. Military filing state taxes If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 32,000   Note. Military filing state taxes If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Military filing state taxes 85) and enter the result on line 17. Military filing state taxes Then go to line 18. Military filing state taxes   10. Military filing state taxes Is the amount on line 9 less than the amount on line 8?     No. Military filing state taxes None of your benefits are taxable. Military filing state taxes Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Military filing state taxes If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Military filing state taxes     Yes. Military filing state taxes Subtract line 9 from line 8   11. Military filing state taxes Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013   12. Military filing state taxes Subtract line 11 from line 10. Military filing state taxes If zero or less, enter -0-   13. Military filing state taxes Enter the smaller of line 10 or line 11   14. Military filing state taxes Enter one-half of line 13   15. Military filing state taxes Enter the smaller of line 2 or line 14   16. Military filing state taxes Multiply line 12 by 85% (. Military filing state taxes 85). Military filing state taxes If line 12 is zero, enter -0-   17. Military filing state taxes Add lines 15 and 16   18. Military filing state taxes Multiply line 1 by 85% (. Military filing state taxes 85)   19. Military filing state taxes Taxable benefits. Military filing state taxes Enter the smaller of line 17 or line 18. Military filing state taxes Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b   Example 3. Military filing state taxes Joe and Betty Johnson file a joint return on Form 1040 for 2013. Military filing state taxes Joe is a retired railroad worker and in 2013 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Military filing state taxes Joe's Form RRB-1099 shows $10,000 in box 5. Military filing state taxes Betty is a retired government worker and receives a fully taxable pension of $38,000. Military filing state taxes They had $2,300 in taxable interest income plus interest of $200 on a qualified U. Military filing state taxes S. Military filing state taxes savings bond. Military filing state taxes The savings bond interest qualified for the exclusion. Military filing state taxes They figure their taxable benefits by completing Worksheet 1. Military filing state taxes Because they have qualified U. Military filing state taxes S. Military filing state taxes savings bond interest, they follow the note at the beginning of the worksheet and use the amount from line 2 of their Schedule B (Form 1040A or 1040) on line 3 of the worksheet instead of the amount from line 8a of their Form 1040. Military filing state taxes On line 3 of the worksheet, they enter $40,500 ($38,000 + $2,500). Military filing state taxes Filled-in Worksheet 1. Military filing state taxes Figuring Your Taxable Benefits Before you begin: • If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Military filing state taxes • Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Military filing state taxes None of your benefits are taxable for 2013. Military filing state taxes For more information, see Repayments More Than Gross Benefits. Military filing state taxes • If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Military filing state taxes S. Military filing state taxes Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Military filing state taxes Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Military filing state taxes 1. Military filing state taxes Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Military filing state taxes Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $10,000 2. Military filing state taxes Enter one-half of line 1 5,000 3. Military filing state taxes Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Military filing state taxes     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 40,500 4. Military filing state taxes Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Military filing state taxes Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Military filing state taxes Combine lines 2, 3, 4, and 5 45,500 7. Military filing state taxes Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Military filing state taxes     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0- 8. Military filing state taxes Is the amount on line 7 less than the amount on line 6?     No. Military filing state taxes None of your social security benefits are taxable. Military filing state taxes Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Military filing state taxes   Yes. Military filing state taxes Subtract line 7 from line 6 45,500 9. Military filing state taxes If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 32,000   Note. Military filing state taxes If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Military filing state taxes 85) and enter the result on line 17. Military filing state taxes Then go to line 18. Military filing state taxes   10. Military filing state taxes Is the amount on line 9 less than the amount on line 8?     No. Military filing state taxes None of your benefits are taxable. Military filing state taxes Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Military filing state taxes If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Military filing state taxes     Yes. Military filing state taxes Subtract line 9 from line 8 13,500 11. Military filing state taxes Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 12,000 12. Military filing state taxes Subtract line 11 from line 10. Military filing state taxes If zero or less, enter -0- 1,500 13. Military filing state taxes Enter the smaller of line 10 or line 11 12,000 14. Military filing state taxes Enter one-half of line 13 6,000 15. Military filing state taxes Enter the smaller of line 2 or line 14 5,000 16. Military filing state taxes Multiply line 12 by 85% (. Military filing state taxes 85). Military filing state taxes If line 12 is zero, enter -0- 1,275 17. Military filing state taxes Add lines 15 and 16 6,275 18. Military filing state taxes Multiply line 1 by 85% (. Military filing state taxes 85) 8,500 19. Military filing state taxes Taxable benefits. Military filing state taxes Enter the smaller of line 17 or line 18. Military filing state taxes Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $6,275 More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. Military filing state taxes Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b. Military filing state taxes Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. Military filing state taxes Disability payments. Military filing state taxes   You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an earlier year. Military filing state taxes If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability payments, you can take an itemized deduction for the part of the payments you included in gross income in the earlier year. Military filing state taxes If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. Military filing state taxes Claim the deduction or credit in the same way explained under Repayments More Than Gross Benefits , later. Military filing state taxes Legal expenses. Military filing state taxes   You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection with the determination, collection, or refund of any tax. Military filing state taxes   Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Military filing state taxes Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Military filing state taxes If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Military filing state taxes Do not use a worksheet in this case. Military filing state taxes If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Military filing state taxes If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. Military filing state taxes Joint return. Military filing state taxes   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's does not, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. Military filing state taxes You do this to get your net benefits when figuring if your combined benefits are taxable. Military filing state taxes Example. Military filing state taxes John and Mary file a joint return for 2013. Military filing state taxes John received Form SSA-1099 showing $3,000 in box 5. Military filing state taxes Mary also received Form SSA-1099 and the amount in box 5 was ($500). Military filing state taxes John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable. Military filing state taxes Repayment of benefits received in an earlier year. Military filing state taxes   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Military filing state taxes Deduction $3,000 or less. Military filing state taxes   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Military filing state taxes Claim it on Schedule A (Form 1040), line 23. Military filing state taxes Deduction more than $3,000. Military filing state taxes    If this deduction is more than $3,000, you should figure your tax two ways: Figure your tax for 2013 with the itemized deduction included on Schedule A, line 28. Military filing state taxes Figure your tax for 2013 in the following steps. Military filing state taxes Figure the tax without the itemized deduction included on Schedule A, line 28. Military filing state taxes For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Military filing state taxes Then refigure the tax for that year. Military filing state taxes Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. Military filing state taxes Subtract the result in (c) from the result in (a). Military filing state taxes Compare the tax figured in methods (1) and (2). Military filing state taxes Your tax for 2013 is the smaller of the two amounts. Military filing state taxes If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. Military filing state taxes If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71. Military filing state taxes Check box d and enter “I. Military filing state taxes R. Military filing state taxes C. Military filing state taxes 1341” in the space next to that box. Military filing state taxes If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28. Military filing state taxes Prev  Up  Next   Home   More Online Publications