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

Find business frequently asked questions for various agencies, including IRS, Department of State, and U.S. Postal Service, plus many more.

The State Tax File For Free

State tax file for free 5. State tax file for free   Recordkeeping Table of Contents How To Prove ExpensesWhat Are Adequate Records? What If I Have Incomplete Records? Separating and Combining Expenses How Long To Keep Records and Receipts Examples of Records If you deduct travel, entertainment, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expense. State tax file for free This chapter discusses the records you need to keep to prove these expenses. State tax file for free If you keep timely and accurate records, you will have support to show the IRS if your tax return is ever examined. State tax file for free You will also have proof of expenses that your employer may require if you are reimbursed under an accountable plan. State tax file for free These plans are discussed in chapter 6 under Reimbursements . State tax file for free How To Prove Expenses Table 5-1 is a summary of records you need to prove each expense discussed in this publication. State tax file for free You must be able to prove the elements listed across the top portion of the chart. State tax file for free You prove them by having the information and receipts (where needed) for the expenses listed in the first column. State tax file for free You cannot deduct amounts that you approximate or estimate. State tax file for free You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. State tax file for free You must generally prepare a written record for it to be considered adequate. State tax file for free This is because written evidence is more reliable than oral evidence alone. State tax file for free However, if you prepare a record on a computer, it is considered an adequate record. State tax file for free What Are Adequate Records? You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. State tax file for free You should also keep documentary evidence that, together with your record, will support each element of an expense. State tax file for free Documentary evidence. State tax file for free   You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. State tax file for free Exception. State tax file for free   Documentary evidence is not needed if any of the following conditions apply. State tax file for free You have meals or lodging expenses while traveling away from home for which you account to your employer under an accountable plan, and you use a per diem allowance method that includes meals and/or lodging. State tax file for free ( Accountable plans and per diem allowances are discussed in chapter 6. State tax file for free ) Your expense, other than lodging, is less than $75. State tax file for free You have a transportation expense for which a receipt is not readily available. State tax file for free Adequate evidence. State tax file for free   Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense. State tax file for free   For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information. State tax file for free The name and location of the hotel. State tax file for free The dates you stayed there. State tax file for free Separate amounts for charges such as lodging, meals, and telephone calls. State tax file for free   A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information. State tax file for free The name and location of the restaurant. State tax file for free The number of people served. State tax file for free The date and amount of the expense. State tax file for free If a charge is made for items other than food and beverages, the receipt must show that this is the case. State tax file for free Canceled check. State tax file for free   A canceled check, together with a bill from the payee, ordinarily establishes the cost. State tax file for free However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose. State tax file for free Duplicate information. State tax file for free   You do not have to record information in your account book or other record that duplicates information shown on a receipt as long as your records and receipts complement each other in an orderly manner. State tax file for free   You do not have to record amounts your employer pays directly for any ticket or other travel item. State tax file for free However, if you charge these items to your employer, through a credit card or otherwise, you must keep a record of the amounts you spend. State tax file for free Timely-kept records. State tax file for free   You should record the elements of an expense or of a business use at or near the time of the expense or use and support it with sufficient documentary evidence. State tax file for free A timely-kept record has more value than a statement prepared later when generally there is a lack of accurate recall. State tax file for free   You do not need to write down the elements of every expense on the day of the expense. State tax file for free If you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely-kept record. State tax file for free   If you give your employer, client, or customer an expense account statement, it can also be considered a timely-kept record. State tax file for free This is true if you copy it from your account book, diary, log, statement of expense, trip sheets, or similar record. State tax file for free Proving business purpose. State tax file for free   You must generally provide a written statement of the business purpose of an expense. State tax file for free However, the degree of proof varies according to the circumstances in each case. State tax file for free If the business purpose of an expense is clear from the surrounding circumstances, then you do not need to give a written explanation. State tax file for free Example. State tax file for free If you are a sales representative who calls on customers on an established sales route, you do not have to give a written explanation of the business purpose for traveling that route. State tax file for free You can satisfy the requirements by recording the length of the delivery route once, the date of each trip at or near the time of the trips, and the total miles you drove the car during the tax year. State tax file for free You could also establish the date of each trip with a receipt, record of delivery, or other documentary evidence. State tax file for free Confidential information. State tax file for free   You do not need to put confidential information relating to an element of a deductible expense (such as the place, business purpose, or business relationship) in your account book, diary, or other record. State tax file for free However, you do have to record the information elsewhere at or near the time of the expense and have it available to fully prove that element of the expense. State tax file for free What If I Have Incomplete Records? If you do not have complete records to prove an element of an expense, then you must prove the element with: Your own written or oral statement containing specific information about the element, and Other supporting evidence that is sufficient to establish the element. State tax file for free If the element is the description of a gift, or the cost, time, place, or date of an expense, the supporting evidence must be either direct evidence or documentary evidence. State tax file for free Direct evidence can be written statements or the oral testimony of your guests or other witnesses setting forth detailed information about the element. State tax file for free Documentary evidence can be receipts, paid bills, or similar evidence. State tax file for free If the element is either the business relationship of your guests or the business purpose of the amount spent, the supporting evidence can be circumstantial rather than direct. State tax file for free For example, the nature of your work, such as making deliveries, provides circumstantial evidence of the use of your car for business purposes. State tax file for free Invoices of deliveries establish when you used the car for business. State tax file for free Table 5-1. State tax file for free How To Prove Certain Business Expenses IF you have expenses for . State tax file for free . State tax file for free THEN you must keep records that show details of the following elements . State tax file for free . State tax file for free . State tax file for free   Amount Time Place or  Description Business Purpose Business Relationship Travel Cost of each separate expense for travel, lodging, and meals. State tax file for free Incidental expenses may be totaled in reasonable categories such as taxis, fees and tips, etc. State tax file for free Dates you left and returned for each trip and number of days spent on business. State tax file for free Destination or area of your travel (name of city, town, or other designation). State tax file for free Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. State tax file for free    Relationship: N/A Entertainment Cost of each separate expense. State tax file for free Incidental expenses such as taxis, telephones, etc. State tax file for free , may be totaled on a daily basis. State tax file for free Date of entertainment. State tax file for free (Also see Business Purpose. State tax file for free ) Name and address or location of place of entertainment. State tax file for free Type of entertainment if not otherwise apparent. State tax file for free (Also see Business Purpose. State tax file for free ) Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. State tax file for free  For entertainment, the nature of the business discussion or activity. State tax file for free If the entertainment was directly before or after a business discussion: the date, place, nature, and duration of the business discussion, and the identities of the persons who took part in both the business discussion and the entertainment activity. State tax file for free    Relationship: Occupations or other information (such as names, titles, or other designations) about the recipients that shows their business relationship to you. State tax file for free  For entertainment, you must also prove that you or your employee was present if the entertainment was a business meal. State tax file for free Gifts Cost of the gift. State tax file for free Date of the gift. State tax file for free Description of the gift. State tax file for free   Transportation Cost of each separate expense. State tax file for free For car expenses, the cost of the car and any improvements, the date you started using it for business, the mileage for each business use, and the total miles for the year. State tax file for free Date of the expense. State tax file for free For car expenses, the date of the use of the car. State tax file for free Your business destination. State tax file for free Purpose: Business purpose for the expense. State tax file for free    Relationship: N/A Sampling. State tax file for free   You can keep an adequate record for parts of a tax year and use that record to prove the amount of business or investment use for the entire year. State tax file for free You must demonstrate by other evidence that the periods for which an adequate record is kept are representative of the use throughout the tax year. State tax file for free Example. State tax file for free You use your car to visit the offices of clients, meet with suppliers and other subcontractors, and pick up and deliver items to clients. State tax file for free There is no other business use of the car, but you and your family use the car for personal purposes. State tax file for free You keep adequate records during the first week of each month that show that 75% of the use of the car is for business. State tax file for free Invoices and bills show that your business use continues at the same rate during the later weeks of each month. State tax file for free Your weekly records are representative of the use of the car each month and are sufficient evidence to support the percentage of business use for the year. State tax file for free Exceptional circumstances. State tax file for free   You can satisfy the substantiation requirements with other evidence if, because of the nature of the situation in which an expense is made, you cannot get a receipt. State tax file for free This applies if all the following are true. State tax file for free You were unable to obtain evidence for an element of the expense or use that completely satisfies the requirements explained earlier under What Are Adequate Records . State tax file for free You are unable to obtain evidence for an element that completely satisfies the two rules listed earlier under What If I Have Incomplete Records . State tax file for free You have presented other evidence for the element that is the best proof possible under the circumstances. State tax file for free Destroyed records. State tax file for free   If you cannot produce a receipt because of reasons beyond your control, you can prove a deduction by reconstructing your records or expenses. State tax file for free Reasons beyond your control include fire, flood, and other casualties. State tax file for free    Table 5-2. State tax file for free Daily Business Mileage and Expense Log Name:       Odometer Readings Expenses Date Destination  (City, Town, or Area) Business Purpose Start Stop Miles  this trip Type  (Gas, oil, tolls, etc. State tax file for free ) Amount                                                                                                                   Weekly  Total             Total Year-to-Date             Separating and Combining Expenses This section explains when expenses must be kept separate and when expenses can be combined. State tax file for free Separating expenses. State tax file for free   Each separate payment is generally considered a separate expense. State tax file for free For example, if you entertain a customer or client at dinner and then go to the theater, the dinner expense and the cost of the theater tickets are two separate expenses. State tax file for free You must record them separately in your records. State tax file for free Season or series tickets. State tax file for free   If you buy season or series tickets for business use, you must treat each ticket in the series as a separate item. State tax file for free To determine the cost of individual tickets, divide the total cost (but not more than face value) by the number of games or performances in the series. State tax file for free You must keep records to show whether you use each ticket as a gift or entertainment. State tax file for free Also, you must be able to prove the cost of nonluxury box seat tickets if you rent a skybox or other private luxury box for more than one event. State tax file for free See Entertainment tickets in chapter 2. State tax file for free Combining items. State tax file for free   You can make one daily entry in your record for reasonable categories of expenses. State tax file for free Examples are taxi fares, telephone calls, or other incidental travel costs. State tax file for free Meals should be in a separate category. State tax file for free You can include tips for meal-related services with the costs of the meals. State tax file for free   Expenses of a similar nature occurring during the course of a single event are considered a single expense. State tax file for free For example, if during entertainment at a cocktail lounge, you pay separately for each serving of refreshments, the total expense for the refreshments is treated as a single expense. State tax file for free Car expenses. State tax file for free   You can account for several uses of your car that can be considered part of a single use, such as a round trip or uninterrupted business use, with a single record. State tax file for free Minimal personal use, such as a stop for lunch on the way between two business stops, is not an interruption of business use. State tax file for free Example. State tax file for free You make deliveries at several different locations on a route that begins and ends at your employer's business premises and that includes a stop at the business premises between two deliveries. State tax file for free You can account for these using a single record of miles driven. State tax file for free Gift expenses. State tax file for free   You do not always have to record the name of each recipient of a gift. State tax file for free A general listing will be enough if it is evident that you are not trying to avoid the $25 annual limit on the amount you can deduct for gifts to any one person. State tax file for free For example, if you buy a large number of tickets to local high school basketball games and give one or two tickets to each of many customers, it is usually enough to record a general description of the recipients. State tax file for free Allocating total cost. State tax file for free   If you can prove the total cost of travel or entertainment but you cannot prove how much it cost for each person who participated in the event, you may have to allocate the total cost among you and your guests on a pro rata basis. State tax file for free To do so, you must establish the number of persons who participated in the event. State tax file for free   An allocation would be needed, for example, if you did not have a business relationship with all of your guests. State tax file for free See Allocating between business and nonbusiness in chapter 2. State tax file for free If your return is examined. State tax file for free    If your return is examined, you may have to provide additional information to the IRS. State tax file for free This information could be needed to clarify or to establish the accuracy or reliability of information contained in your records, statements, testimony, or documentary evidence before a deduction is allowed. State tax file for free    THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Table 5-3. State tax file for free Weekly Traveling Expense and Entertainment Record From: To: Name: Expenses Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total 1. State tax file for free Travel Expenses: Airlines                                 Excess Baggage                                 Bus – Train                                 Cab and Limousine                                 Tips                                 Porter                                 2. State tax file for free Meals and Lodging:  Breakfast                                 Lunch                                 Dinner                                 Hotel and Motel  (Detail in Schedule B)                                 3. State tax file for free Entertainment  (Detail in Schedule C)                                 4. State tax file for free Other Expenses:  Postage                                 Telephone & Telegraph                                 Stationery & Printing                                 Stenographer                                 Sample Room                                 Advertising                                 Assistant(s)                                 Trade Shows                                 5. State tax file for free Car Expenses: (List all car expenses - the division between business and personal expenses may be made at the end of the year. State tax file for free ) (Detail mileage in Schedule A. State tax file for free ) Gas, oil, lube, wash                                 Repairs, parts                                 Tires, supplies                                 Parking fees, tolls                                 6. State tax file for free Other (Identify)                                 Total                                 Note: Attach receipted bills for (1) ALL lodging and (2) any other expenses of $75. State tax file for free 00 or more. State tax file for free Schedule A – Car Mileage: End                 Start                 Total                 Business Mileage                 Schedule B – Lodging Hotel or Motel Name                 City                 Schedule C – Entertainment Date Item Place Amount Business Purpose Business Relationship                                             WEEKLY REIMBURSEMENTS:     Travel and transportation expenses     Other reimbursements     TOTAL   How Long To Keep Records and Receipts You must keep records as long as they may be needed for the administration of any provision of the Internal Revenue Code. State tax file for free Generally, this means you must keep records that support your deduction (or an item of income) for 3 years from the date you file the income tax return on which the deduction is claimed. State tax file for free A return filed early is considered filed on the due date. State tax file for free For a more complete explanation of how long to keep records, see Publication 583, Starting a Business and Keeping Records. State tax file for free You must keep records of the business use of your car for each year of the recovery period. State tax file for free See More-than-50%-use test in chapter 4 under Depreciation Deduction. State tax file for free Reimbursed for expenses. State tax file for free   Employees who give their records and documentation to their employers and are reimbursed for their expenses generally do not have to keep copies of this information. State tax file for free However, you may have to prove your expenses if any of the following conditions apply. State tax file for free You claim deductions for expenses that are more than reimbursements. State tax file for free Your expenses are reimbursed under a nonaccountable plan. State tax file for free Your employer does not use adequate accounting procedures to verify expense accounts. State tax file for free You are related to your employer as defined under Per Diem and Car Allowances , in chapter 6. State tax file for free Reimbursements , adequate accounting , and nonaccountable plans are discussed in chapter 6. State tax file for free Examples of Records Table 5-2 and Table 5-3 are examples of worksheets which can be used for tracking business expenses. State tax file for free Prev  Up  Next   Home   More Online Publications