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

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Www myfreetaxes com philly 10. Www myfreetaxes com philly   Employees of Foreign Governments and International Organizations Table of Contents Exemption Under Tax Treaty Exemption Under U. Www myfreetaxes com philly S. Www myfreetaxes com philly Tax LawCertification. Www myfreetaxes com philly Employees of foreign governments (including foreign municipalities) have two ways to get exemption of their governmental wages from U. Www myfreetaxes com philly S. Www myfreetaxes com philly income tax: By a provision in a tax treaty or consular convention between the United States and their country, or By meeting the requirements of U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax law. Www myfreetaxes com philly Employees of international organizations can exempt their wages either by a provision, if one exists, in the international agreement creating the international organization, or by meeting the requirements of U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax law. Www myfreetaxes com philly The exemption discussed in this chapter applies only to pay received for services performed for a foreign government or international organization. Www myfreetaxes com philly Other U. Www myfreetaxes com philly S. Www myfreetaxes com philly income received by persons who qualify for this exemption may be fully taxable or given favorable treatment under an applicable tax treaty provision. Www myfreetaxes com philly The proper treatment of this kind of income (interest, dividends, etc. Www myfreetaxes com philly ) is discussed earlier in this publication. Www myfreetaxes com philly Exemption Under Tax Treaty If you are from a country that has a tax treaty with the United States, you should first look at the treaty to see if there is a provision that exempts your income. Www myfreetaxes com philly The income of U. Www myfreetaxes com philly S. Www myfreetaxes com philly citizens and resident aliens working for foreign governments usually is not exempt. Www myfreetaxes com philly However, in a few instances, the income of a U. Www myfreetaxes com philly S. Www myfreetaxes com philly citizen with dual citizenship may qualify. Www myfreetaxes com philly Often the exemption is limited to the income of persons who also are nationals of the foreign country involved. Www myfreetaxes com philly Exemption Under U. Www myfreetaxes com philly S. Www myfreetaxes com philly Tax Law Employees of foreign governments who do not qualify under a tax treaty provision and employees of international organizations may qualify for exemption by meeting the following requirements of U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax law. Www myfreetaxes com philly The exemption under U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax law applies only to current employees and not to former employees. Www myfreetaxes com philly Pensions received by former employees living in the United States do not qualify for the exemption discussed here. Www myfreetaxes com philly Employees of foreign governments. Www myfreetaxes com philly   If you are not a U. Www myfreetaxes com philly S. Www myfreetaxes com philly citizen, or if you are a U. Www myfreetaxes com philly S. Www myfreetaxes com philly citizen but also a citizen of the Philippines, and you work for a foreign government in the United States, your foreign government salary is exempt from U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax if you perform services similar to those performed by U. Www myfreetaxes com philly S. Www myfreetaxes com philly government employees in that foreign country and that foreign government grants an equivalent exemption to U. Www myfreetaxes com philly S. Www myfreetaxes com philly government employees. Www myfreetaxes com philly Certification. Www myfreetaxes com philly   To qualify for the exemption under U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax law, either the Department of State must certify that you perform services similar to those performed by employees of the government of the United States in foreign countries and that your foreign government employer grants an equivalent exemption to U. Www myfreetaxes com philly S. Www myfreetaxes com philly government employees performing similar services in its country or you must establish those facts. Www myfreetaxes com philly However, see Aliens who keep immigrant status , later, for a special rule that may affect your qualifying for this exemption. Www myfreetaxes com philly Employees of international organizations. Www myfreetaxes com philly   If you work for an international organization in the United States and you are not a U. Www myfreetaxes com philly S. Www myfreetaxes com philly citizen (or you are a U. Www myfreetaxes com philly S. Www myfreetaxes com philly citizen but are also a citizen of the Philippines), your salary from that organization is exempt from U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax. Www myfreetaxes com philly However, see Aliens who keep immigrant status , later, for a special rule that may affect your qualifying for this exemption. Www myfreetaxes com philly   An international organization is an organization designated by the President of the United States through Executive Order to qualify for the privileges, exemptions, and immunities provided in the International Organizations Immunities Act. Www myfreetaxes com philly   You should find out if you have been made known to, and have been accepted by, the Secretary of State as an officer or an employee of that organization, or if you have been designated by the Secretary of State, before formal notification and acceptance, as a prospective officer or employee. Www myfreetaxes com philly   If you are claiming exemption, you should know the number of the Executive Order covering the international organization and should have some written evidence of your acceptance or designation by the Secretary of State. Www myfreetaxes com philly   The exemption is denied when, because the Secretary of State determines your presence in the United States is no longer desirable, you leave the United States (or after a reasonable time allowed for leaving the United States). Www myfreetaxes com philly The exemption is also denied when a foreign country does not allow similar exemptions to U. Www myfreetaxes com philly S. Www myfreetaxes com philly citizens. Www myfreetaxes com philly Then the Secretary of State can withdraw the privileges, exemptions, and immunities from the nationals of that foreign country. Www myfreetaxes com philly Aliens who keep immigrant status. Www myfreetaxes com philly   If you file the waiver provided by section 247(b) of the Immigration and Nationality Act (USCIS Form I-508) to keep your immigrant status (green card), you no longer qualify for the exemption from U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax under U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax law from the date of filing the waiver with the Attorney General. Www myfreetaxes com philly   However, you do not lose the exemption if you file the waiver, and meet either of the following conditions. Www myfreetaxes com philly You are exempt from U. Www myfreetaxes com philly S. Www myfreetaxes com philly tax under an income tax treaty, consular agreement, or international agreement between the United States and your foreign government employer. Www myfreetaxes com philly You work for an international organization and the international organization agreement creating the international organization provides that alien employees are exempt from U. Www myfreetaxes com philly S. Www myfreetaxes com philly income tax. Www myfreetaxes com philly Two international organizations that have such a provision are the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank). Www myfreetaxes com philly . Www myfreetaxes com philly   For more information about a specific foreign country or international organization, send an email to embassy@irs. Www myfreetaxes com philly gov. Www myfreetaxes com philly Prev  Up  Next   Home   More Online Publications