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1040 Ez Forms

1040 ez forms Publication 80 - Introductory Material Table of Contents Future Developments What's New Reminders Calendar Future Developments For the latest information about developments related to Publication 80 (Circular SS), such as legislation enacted after it was published, go to www. 1040 ez forms irs. 1040 ez forms gov/pub80. 1040 ez forms What's New Social security and Medicare tax for 2014. 1040 ez forms  The social security tax rate is 6. 1040 ez forms 2% each for the employee and employer, unchanged from 2013. 1040 ez forms The social security wage base limit is $117,000. 1040 ez forms The Medicare tax rate is 1. 1040 ez forms 45% each for the employee and employer, unchanged from 2013. 1040 ez forms There is no wage base limit for Medicare tax. 1040 ez forms Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. 1040 ez forms Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. 1040 ez forms Change of responsible party. 1040 ez forms . 1040 ez forms  Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party—Business, to report the latest change to its responsible party. 1040 ez forms Form 8822-B must be filed within 60 days of the change. 1040 ez forms If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. 1040 ez forms For a definition of “responsible party”, see the Form 8822-B instructions. 1040 ez forms Same-sex marriage. 1040 ez forms  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. 1040 ez forms For more information, see Revenue Ruling 2013-17, 2013-38 I. 1040 ez forms R. 1040 ez forms B. 1040 ez forms 201, available at www. 1040 ez forms irs. 1040 ez forms gov/irb/2013-38_IRB/ar07. 1040 ez forms html. 1040 ez forms Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. 1040 ez forms Notice 2013-61, 2013-44 I. 1040 ez forms R. 1040 ez forms B. 1040 ez forms 432, is available at www. 1040 ez forms irs. 1040 ez forms gov/irb/2013-44_IRB/ar10. 1040 ez forms html. 1040 ez forms Reminders Additional Medicare Tax withholding. 1040 ez forms  In addition to withholding Medicare tax at 1. 1040 ez forms 45%, you must withhold a 0. 1040 ez forms 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 1040 ez forms You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 1040 ez forms Additional Medicare Tax is only imposed on the employee. 1040 ez forms There is no employer share of Additional Medicare Tax. 1040 ez forms All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 1040 ez forms For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Employment and Payments , in section 12. 1040 ez forms For more information on Additional Medicare Tax, visit IRS. 1040 ez forms gov and enter “Additional Medicare Tax” in the search box. 1040 ez forms Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. 1040 ez forms  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. 1040 ez forms Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. 1040 ez forms For more information, visit IRS. 1040 ez forms gov and enter “work opportunity tax credit” in the search box. 1040 ez forms Outsourcing payroll duties. 1040 ez forms  Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. 1040 ez forms The employer remains responsible if the third party fails to perform any required action. 1040 ez forms If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. 1040 ez forms gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. 1040 ez forms Residents of the Philippines working in the Commonwealth of the Northern Mariana Islands (CNMI). 1040 ez forms  The IRS will not assert that an employer has understated liability for social security and Medicare taxes because they failed to treat services performed before January 1, 2015, in the CNMI by a resident of the Philippines as employment as defined under Internal Revenue Code section 3121(b). 1040 ez forms For more information, see Announcement 2012-43, 2012-51 I. 1040 ez forms R. 1040 ez forms B. 1040 ez forms 723, available at www. 1040 ez forms irs. 1040 ez forms gov/irb/2012-51_IRB/ar15. 1040 ez forms html. 1040 ez forms CNMI government employees now subject to social security and Medicare taxes. 1040 ez forms  Beginning in the fourth calendar quarter of 2012, CNMI government employees are subject to social security and Medicare taxes. 1040 ez forms COBRA premium assistance credit. 1040 ez forms  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008 and May 31, 2010, and to premiums paid for up to 15 months. 1040 ez forms See COBRA premium assistance credit in Publication 15 (Circular E), Employer's Tax Guide. 1040 ez forms You can get Publication 15 (Circular E) at IRS. 1040 ez forms gov. 1040 ez forms You must receive written notice from the IRS to file Form 944. 1040 ez forms  If you have been filing Forms 941-SS and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941-SS, you must contact the IRS to request to file Form 944. 1040 ez forms You must receive written notice from the IRS to file Form 944 instead of Forms 941-SS before you may file this form. 1040 ez forms For more information on requesting to file Form 944 visit IRS. 1040 ez forms gov and enter “file employment taxes annually” in the search box. 1040 ez forms Federal employers in the CNMI. 1040 ez forms  The U. 1040 ez forms S. 1040 ez forms Treasury Department and the CNMI Division of Revenue and Taxation entered into an agreement under 5 USC 5517 in December 2006. 1040 ez forms Under this agreement, all federal employers (including the Department of Defense) are required to withhold CNMI income taxes (rather than federal income taxes) and deposit the CNMI taxes with the CNMI Treasury for employees who are subject to CNMI taxes and whose regular place of federal employment is in the CNMI. 1040 ez forms Federal employers are also required to file quarterly and annual reports with the CNMI Division of Revenue and Taxation. 1040 ez forms For questions, contact the CNMI Division of Revenue and Taxation. 1040 ez forms Change of address. 1040 ez forms  Use Form 8822-B to notify the IRS of an address change. 1040 ez forms Do not mail Form 8822-B with your employment tax return. 1040 ez forms Federal tax deposits must be made by electronic funds transfer. 1040 ez forms  You must use electronic funds transfer to make all federal tax deposits. 1040 ez forms Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). 1040 ez forms If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. 1040 ez forms Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. 1040 ez forms EFTPS is a free service provided by the Department of Treasury. 1040 ez forms Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. 1040 ez forms For more information on making federal tax deposits, see How To Deposit in section 8. 1040 ez forms For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at www. 1040 ez forms eftps. 1040 ez forms gov or call 1-800-555-4477 (U. 1040 ez forms S. 1040 ez forms Virgin Islands only) or 303-967-5916 (toll call) or 1-800-733-4829 (TDD). 1040 ez forms Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. 1040 ez forms Electronic filing and payment. 1040 ez forms  Using electronic options can make filing a return and paying your federal tax easier. 1040 ez forms Use the Electronic Federal Tax Payment System (EFTPS) to make deposits or pay in full, whether you rely on a tax professional or prepare your own taxes. 1040 ez forms You can use IRS e-file to file certain returns. 1040 ez forms If there is a balance due on the return, you can e-file and e-pay in a single step by authorizing an electronic funds withdrawal (EFW) from your bank account while e-filing. 1040 ez forms Do not use EFW to pay taxes that are required to be deposited. 1040 ez forms Visit the IRS website at www. 1040 ez forms irs. 1040 ez forms gov/efile for more information on filing electronically. 1040 ez forms For more information on paying your taxes using EFW, visit the IRS website at www. 1040 ez forms irs. 1040 ez forms gov/e-pay. 1040 ez forms A fee may be charged to file electronically. 1040 ez forms For EFTPS, visit www. 1040 ez forms eftps. 1040 ez forms gov or call EFTPS Customer Service at 1-800-555-4477 (U. 1040 ez forms S. 1040 ez forms Virgin Islands only) or 303-967-5916 (toll call). 1040 ez forms For electronic filing of Forms W-2AS, W-2CM, W-2GU, W-2VI, Wage and Tax Statements; W-3SS, Transmittal of Wage and Tax Statements; and W-2c, Corrected Wage and Tax Statement, visit www. 1040 ez forms socialsecurity. 1040 ez forms gov/employer. 1040 ez forms If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. 1040 ez forms If a valid EIN is not provided, the return or payment will not be processed. 1040 ez forms This may result in penalties and delays in processing your return or payment. 1040 ez forms Electronic option for filing Forms W-2AS, W-2CM, W-2GU, or W-2VI. 1040 ez forms  Employers in American Samoa, the CNMI, Guam, and the U. 1040 ez forms S. 1040 ez forms Virgin Islands can now use the Social Security Administration's W-2 Online service to create, save, print, and submit up to 50 Forms W-2AS, W-2CM, W-2GU, or W-2VI at a time over the Internet. 1040 ez forms Form W-3SS will be generated automatically based on your Forms W-2AS, W-2CM, W-2GU, or W-2VI. 1040 ez forms For more information, visit Social Security Administration's SSA website at www. 1040 ez forms ssa. 1040 ez forms gov/bso/bsowelcome. 1040 ez forms htm. 1040 ez forms Credit or debit card payments. 1040 ez forms  For information on paying your taxes with a credit or debit card, visit the IRS website at www. 1040 ez forms irs. 1040 ez forms gov/e-pay. 1040 ez forms However, do not use credit or debit cards to make federal tax deposits. 1040 ez forms Hiring new employees. 1040 ez forms  Record the number and name from each new employee's social security card. 1040 ez forms An employee who does not have a social security card should apply for one on Form SS-5, Application for a Social Security Card. 1040 ez forms See section 3. 1040 ez forms Reporting discrepancies between Forms 941-SS (or Form 944) and Forms W-2. 1040 ez forms  File Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, to explain certain wage, tax, and payment discrepancies between Forms 941-SS (or Form 944), and Forms W-2 that were caused by acquisitions, statutory mergers, or consolidations. 1040 ez forms For more information, see the Instructions for Schedule D (Form 941). 1040 ez forms Apply for an employer identification number (EIN) online. 1040 ez forms  You can apply for an EIN online by visiting IRS. 1040 ez forms gov and clicking on the Apply for an EIN Online link under Tools. 1040 ez forms Dishonored payments. 1040 ez forms  Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. 1040 ez forms The penalty is $25 or 2% of the payment, whichever is more. 1040 ez forms However, the penalty on dishonored payments of $24. 1040 ez forms 99 or less is an amount equal to the payment. 1040 ez forms For example, a dishonored payment of $18 is charged a penalty of $18. 1040 ez forms Private delivery services. 1040 ez forms  You can use certain private delivery services designated by the IRS to send tax returns or payments. 1040 ez forms The list includes only the following: DHL Express (DHL): DHL Same Day Service. 1040 ez forms Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. 1040 ez forms United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. 1040 ez forms M. 1040 ez forms , UPS Worldwide Express Plus, and UPS Worldwide Express. 1040 ez forms For the IRS mailing address to use if you are using a private delivery service, go to IRS. 1040 ez forms gov and enter “private delivery service” in the search box. 1040 ez forms Your private delivery service can tell you how to get written proof of the mailing date. 1040 ez forms Private delivery services cannot deliver items to P. 1040 ez forms O. 1040 ez forms boxes. 1040 ez forms You must use the U. 1040 ez forms S. 1040 ez forms Postal Service to mail any item to an IRS P. 1040 ez forms O. 1040 ez forms box address. 1040 ez forms Recordkeeping. 1040 ez forms  Keep all records of employment taxes for 4 years. 1040 ez forms These should be available for IRS review. 1040 ez forms There is no required format for such records, but they should include your EIN; the amounts and dates of all wage payments (including fringe benefits) and tips reported; the names, addresses, and occupations of employees receiving such payments and their social security numbers; copies of returns filed; dates of employment; and the dates and amounts of deposits made. 1040 ez forms Farm employers must keep a record of the name, permanent address, and EIN of each crew leader. 1040 ez forms See Farm Crew Leaders in section 2. 1040 ez forms Disregarded entities and qualified subchapter S subsidiaries (QSubs). 1040 ez forms  Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. 1040 ez forms Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. 1040 ez forms See Regulations sections 1. 1040 ez forms 1361-4(a)(7) and 301. 1040 ez forms 7701-2(c)(2)(iv). 1040 ez forms Photographs of missing children. 1040 ez forms  The IRS is a proud partner with the National Center for Missing and Exploited Children. 1040 ez forms Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040 ez forms You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040 ez forms Calendar   If any date for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. 1040 ez forms A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. 1040 ez forms However, a statewide legal holiday does not delay the due date of federal tax deposits. 1040 ez forms See Deposits on Business Days Only in section 8. 1040 ez forms For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. 1040 ez forms S. 1040 ez forms Postal Service on or before the due date, or sent by an IRS-designated delivery service on or before the due date. 1040 ez forms See Private delivery services under Reminders. 1040 ez forms The following are important dates and responsibilities. 1040 ez forms Also see Publication 509, Tax Calendars. 1040 ez forms By January 31. 1040 ez forms   Furnish wage and tax statements to employees. 1040 ez forms Give each employee a completed Form W-2AS, W-2CM, W-2GU, or W-2VI. 1040 ez forms See section 10 for more information. 1040 ez forms File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, with the IRS. 1040 ez forms If you deposited all Form 943 taxes when due, you have 10 additional calendar days to file. 1040 ez forms U. 1040 ez forms S. 1040 ez forms Virgin Islands employers only must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. 1040 ez forms Pay or deposit (if more than $500) any balance of the tax due. 1040 ez forms If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. 1040 ez forms File Form 944 with the IRS if you were notified by the IRS to file Form 944 instead of quarterly Forms 941-SS. 1040 ez forms If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. 1040 ez forms By February 28. 1040 ez forms  File paper wage and tax statements with the Social Security Administration (SSA). 1040 ez forms File Copy A of Forms W-2AS, W-2CM, W-2GU, or W-2VI, and Form W-3SS with the Social Security Administration (SSA). 1040 ez forms For electronically filed returns, see By March 31 next. 1040 ez forms By March 31. 1040 ez forms  File electronic Forms W-2AS, W-2CM, W-2GU, or W-2VI with the SSA. 1040 ez forms Visit the SSA's Reporting Instructions & Information webpage at www. 1040 ez forms socialsecurity. 1040 ez forms gov/employer for more information. 1040 ez forms By April 30, July 31, October 31, and January 31. 1040 ez forms  File Form 941-SS with the IRS. 1040 ez forms If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. 1040 ez forms Do not file Forms 941-SS for these quarters if you have been notified to file Form 944 and you did not request to file quarterly Forms 941-SS. 1040 ez forms Deposit FUTA tax for the quarter (including any amount carried over from other quarters) if over $500. 1040 ez forms If $500 or less, carry it over to the next quarter. 1040 ez forms See section 11 for more information. 1040 ez forms Prev  Up  Next   Home   More Online Publications
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IRS Nationwide Tax Forum Information

What are the IRS Nationwide Tax Forums?

The IRS Nationwide Tax Forums offer three full days of seminars with the latest word from IRS leadership and experts in the fields of tax law, compliance and ethics. Attendees can:

  • Select from multiple live seminars and workshops
  • Earn up to 18 continuing professional education credits
  • Explore the expo hall for the latest tax professional products and services

How Do I Register?

Registration for the 2014 IRS Nationwide Tax Forums opens in early 2014.

Nationwide Tax Forums Website.

IRS Nationwide Tax Forums 2014 Locations and Dates
CHICAGO, IL Hyatt Regency Chicago July 1 - 3
SAN DIEGO, CA Town & Country Resort and Convention Center July 15 - 17
NEW ORLEANS, LA Hyatt Regency New Orleans July 22 - 24
WASHINGTON, DC Gaylord National Hotel and Convention Center August 19 - 21
ORLANDO, FL Orlando World Center Marriott August 26 - 28

Contact Us!

For questions about the Nationwide Tax Forums, send an email to: *TaxForums@irs.gov

IRS Nationwide Tax Forums Online

The IRS Nationwide Tax Forums Online (NTFO) provides courses based on taped seminars from previous IRS Nationwide Tax Forums.  NTFO courses may be taken for either CPE credit or audit.  

View Presentations from Past Forums

 

Page Last Reviewed or Updated: 14-Jan-2014

The 1040 Ez Forms

1040 ez forms 2. 1040 ez forms   Taxable and Nontaxable Income Table of Contents Compensation for Services Retirement Plan DistributionsIndividual Retirement Arrangements (IRAs) Pensions and Annuities Social Security and Equivalent Railroad Retirement BenefitsAre Any of Your Benefits Taxable? How Much Is Taxable? How To Report Your Benefits Lump-Sum Election Repayments More Than Gross Benefits Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Life Insurance ProceedsInstallments for life. 1040 ez forms Surviving spouse. 1040 ez forms Endowment Contract Proceeds Accelerated Death Benefits Sale of HomeMaximum Amount of Exclusion Ownership and Use Tests Married Persons Business Use or Rental of Home Reporting the Sale Reverse Mortgages Other ItemsWelfare benefits. 1040 ez forms Payments from a state fund for victims of crime. 1040 ez forms Home Affordable Modification Program (HAMP). 1040 ez forms Mortgage assistance payments. 1040 ez forms Payments to reduce cost of winter energy use. 1040 ez forms Nutrition Program for the Elderly. 1040 ez forms Reemployment Trade Adjustment Assistance (RTAA). 1040 ez forms Generally, income is taxable unless it is specifically exempt (not taxed) by law. 1040 ez forms Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. 1040 ez forms Under special provisions of the law, certain items are partially or fully exempt from tax. 1040 ez forms Provisions that are of special interest to older taxpayers are discussed in this chapter. 1040 ez forms Compensation for Services Generally, you must include in gross income everything you receive in payment for personal services. 1040 ez forms In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. 1040 ez forms You need not receive the compensation in cash for it to be taxable. 1040 ez forms Payments you receive in the form of goods or services generally must be included in gross income at their fair market value. 1040 ez forms Volunteer work. 1040 ez forms   Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs. 1040 ez forms Retired Senior Volunteer Program (RSVP). 1040 ez forms Foster Grandparent Program. 1040 ez forms Senior Companion Program. 1040 ez forms Service Corps of Retired Executives (SCORE). 1040 ez forms Unemployment compensation. 1040 ez forms   You must include in income all unemployment compensation you or your spouse (if married filing jointly) received. 1040 ez forms More information. 1040 ez forms   See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income. 1040 ez forms Retirement Plan Distributions This section summarizes the tax treatment of amounts you receive from traditional individual retirement arrangements (IRA), employee pensions or annuities, and disability pensions or annuities. 1040 ez forms A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. 1040 ez forms A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and tax-free distributions. 1040 ez forms A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. 1040 ez forms More detailed information can be found in Publication 590, Individual Retirement Arrangements (IRAs), and Publication 575, Pension and Annuity Income. 1040 ez forms Individual Retirement Arrangements (IRAs) In general, distributions from a traditional IRA are taxable in the year you receive them. 1040 ez forms Exceptions to the general rule are rollovers, tax-free withdrawals of contributions, and the return of nondeductible contributions. 1040 ez forms These are discussed in Publication 590. 1040 ez forms If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. 1040 ez forms If you do not file Form 8606 with your return, you may have to pay a $50 penalty. 1040 ez forms Also, when you receive distributions from your traditional IRA, the amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. 1040 ez forms Early distributions. 1040 ez forms   Generally, early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age  59½. 1040 ez forms You must include early distributions of taxable amounts in your gross income. 1040 ez forms These taxable amounts are also subject to an additional 10% tax unless the distribution qualifies for an exception. 1040 ez forms For purposes of the additional 10% tax, an IRA is a qualified retirement plan. 1040 ez forms For more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later. 1040 ez forms After age 59½ and before age 70½. 1040 ez forms   After you reach age 59½, you can receive distributions from your traditional IRA without having to pay the 10% additional tax. 1040 ez forms Even though you can receive distributions after you reach age 59½, distributions are not required until you reach  age 70½. 1040 ez forms Required distributions. 1040 ez forms   If you are the owner of a traditional IRA, you generally must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 70½. 1040 ez forms See When Must You Withdraw Assets? (Required Minimum Distributions) in Publication 590. 1040 ez forms If distributions from your traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. 1040 ez forms For purposes of the 50% excise tax, an IRA is a qualified retirement plan. 1040 ez forms For more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. 1040 ez forms See also Excess Accumulations (Insufficient Distributions) in Publication 590. 1040 ez forms Pensions and Annuities Generally, if you did not pay any part of the cost of your employee pension or annuity, and your employer did not withhold part of the cost of the contract from your pay while you worked, the amounts you receive each year are fully taxable. 1040 ez forms However, see Insurance Premiums for Retired Public Safety Officers , later. 1040 ez forms If you paid part of the cost of your pension or annuity plan (see Cost , later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). 1040 ez forms This tax-free part of the payment is figured when your annuity starts and remains the same each year, even if the amount of the payment changes. 1040 ez forms The rest of each payment is taxable. 1040 ez forms However, see Insurance Premiums for Retired Public Safety Officers , later. 1040 ez forms You figure the tax-free part of the payment using one of the following methods. 1040 ez forms Simplified Method. 1040 ez forms You generally must use this method if your annuity is paid under a qualified plan (a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan or contract). 1040 ez forms You cannot use this method if your annuity is paid under a nonqualified plan. 1040 ez forms General Rule. 1040 ez forms You must use this method if your annuity is paid under a nonqualified plan. 1040 ez forms You generally cannot use this method if your annuity is paid under a qualified plan. 1040 ez forms Contact your employer or plan administrator to find out if your pension or annuity is paid under a qualified or nonqualified plan. 1040 ez forms You determine which method to use when you first begin receiving your annuity, and you continue using it each year that you recover part of your cost. 1040 ez forms Exclusion limit. 1040 ez forms   If your annuity starting date is after 1986, the total amount of annuity income you can exclude over the years as a recovery of the cost cannot exceed your total cost. 1040 ez forms Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. 1040 ez forms This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. 1040 ez forms   If you contributed to your pension or annuity and your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. 1040 ez forms If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. 1040 ez forms The total exclusion may be more than your cost. 1040 ez forms Cost. 1040 ez forms   Before you can figure how much, if any, of your pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). 1040 ez forms Your total cost in the plan includes everything that you paid. 1040 ez forms It also includes amounts your employer contributed that were taxable to you when paid. 1040 ez forms However, see Foreign employment contributions , later. 1040 ez forms   From this total cost, subtract any refunded premiums, rebates, dividends, unrepaid loans, or other tax-free amounts you received by the later of the annuity starting date or the date on which you received your first payment. 1040 ez forms   The annuity starting date is the later of the first day of the first period for which you received a payment from the plan or the date on which the plan's obligations became fixed. 1040 ez forms    The amount of your contributions to the plan may be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040 ez forms , that you receive. 1040 ez forms Foreign employment contributions. 1040 ez forms   If you worked abroad, certain amounts your employer paid into your retirement plan that were not includible in your gross income may be considered part of your cost. 1040 ez forms For details, see Foreign employment contributions in Publication 575. 1040 ez forms Withholding. 1040 ez forms   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable part of amounts paid to you. 1040 ez forms However, you can choose not to have tax withheld on the payments you receive, unless they are eligible rollover distributions. 1040 ez forms (These are distributions that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. 1040 ez forms ) See Withholding Tax and Estimated Tax and Rollovers in Publication 575 for more information. 1040 ez forms   For payments other than eligible rollover distributions, you can tell the payer how much to withhold by filing a Form W-4P, Withholding Certificate for Pension or Annuity Payments. 1040 ez forms Simplified Method. 1040 ez forms   Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. 1040 ez forms For an annuity that is payable over the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. 1040 ez forms For any other annuity, this number is the number of monthly annuity payments under the contract. 1040 ez forms Who must use the Simplified Method. 1040 ez forms   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you receive your pension or annuity payments from a qualified plan or annuity, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments (defined next). 1040 ez forms   In addition, if your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use the Simplified Method for payments from a qualified plan, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments. 1040 ez forms If you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. 1040 ez forms Guaranteed payments. 1040 ez forms   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. 1040 ez forms If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. 1040 ez forms Who cannot use the Simplified Method. 1040 ez forms   You cannot use the Simplified Method and must use the General Rule if you receive pension or annuity payments from: A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan, or A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 years of guaranteed payments (defined above). 1040 ez forms   In addition, you had to use the General Rule for either circumstance described above if your annuity starting date is after July 1, 1986, and before November 19, 1996. 1040 ez forms If you did not have to use the General Rule, you could have chosen to use it. 1040 ez forms You also had to use the General Rule for payments from a qualified plan if your annuity starting date is before July 2, 1986, and you did not qualify to use the Three-Year Rule. 1040 ez forms   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. 1040 ez forms   Unless your annuity starting date was before 1987, once you have recovered all of your non-taxable investment, all of each remaining payment you receive is fully taxable. 1040 ez forms Once your remaining payments are fully taxable, there is no longer a concern with the General Rule or Simplified Method. 1040 ez forms   Complete information on the General Rule, including the actuarial tables you need, is contained in Publication 939, General Rule for Pensions and Annuities. 1040 ez forms How to use the Simplified Method. 1040 ez forms   Complete the Simplified Method Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions or in Publication 575 to figure your taxable annuity for 2013. 1040 ez forms Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. 1040 ez forms   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. 1040 ez forms How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. 1040 ez forms For this purpose, treat an annuity that is payable over the life of an annuitant as payable for that annuitant's life even if the annuity has a fixed-period feature or also provides a temporary annuity payable to the annuitant's child under age 25. 1040 ez forms    You do not need to complete line 3 of the worksheet or make the computation on line 4 if you received annuity payments last year and used last year's worksheet to figure your taxable annuity. 1040 ez forms Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. 1040 ez forms Single-life annuity. 1040 ez forms   If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. 1040 ez forms Enter on line 3 the number shown for your age on your annuity starting date. 1040 ez forms This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. 1040 ez forms Multiple-lives annuity. 1040 ez forms   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. 1040 ez forms Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. 1040 ez forms For an annuity payable to you as the primary annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. 1040 ez forms For an annuity that has no primary annuitant and is payable to you and others as survivor annuitants, combine the ages of the oldest and youngest annuitants. 1040 ez forms Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. 1040 ez forms   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. 1040 ez forms Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. 1040 ez forms This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. 1040 ez forms Fixed-period annuities. 1040 ez forms   If your annuity does not depend in whole or in part on anyone's life expectancy, the total number of expected monthly payments to enter on line 3 of the worksheet is the number of monthly annuity payments under the contract. 1040 ez forms Line 6. 1040 ez forms   The amount on line 6 should include all amounts that could have been recovered in prior years. 1040 ez forms If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. 1040 ez forms    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in later years. 1040 ez forms Example. 1040 ez forms Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. 1040 ez forms Bill's annuity starting date is January 1, 2013. 1040 ez forms The benefits are to be paid over the joint lives of Bill and his wife, Kathy, age 65. 1040 ez forms Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. 1040 ez forms Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. 1040 ez forms Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. 1040 ez forms See the illustrated Worksheet 2-A, Simplified Method Worksheet, later. 1040 ez forms You can find a blank version of this worksheet in Publication 575. 1040 ez forms (The references in the illustrated worksheet are to sections in Publication 575). 1040 ez forms His annuity is payable over the lives of more than one annuitant, so Bill uses his and Kathy's combined ages, 130 (65 + 65), and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet and finds the line 3 amount to be 310. 1040 ez forms Bill's tax-free monthly amount is $100 ($31,000 ÷ 310 as shown on line 4 of the worksheet). 1040 ez forms Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. 1040 ez forms The full amount of any annuity payments received after 310 payments are paid must generally be included in gross income. 1040 ez forms If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. 1040 ez forms This deduction is not subject to the 2%-of-adjusted-gross-income limit. 1040 ez forms Worksheet 2-A. 1040 ez forms Simplified Method Worksheet—Illustrated 1. 1040 ez forms Enter the total pension or annuity payments received this year. 1040 ez forms Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040 ez forms $ 14,400 2. 1040 ez forms Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion* See Cost (Investment in the Contract), earlier 2. 1040 ez forms 31,000   Note. 1040 ez forms 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). 1040 ez forms Otherwise, go to line 3. 1040 ez forms     3. 1040 ez forms Enter the appropriate number from Table 1 below. 1040 ez forms But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. 1040 ez forms 310 4. 1040 ez forms Divide line 2 by the number on line 3 4. 1040 ez forms 100 5. 1040 ez forms Multiply line 4 by the number of months for which this year's payments were made. 1040 ez forms If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040 ez forms Otherwise, go to line 6 5. 1040 ez forms 1,200 6. 1040 ez forms Enter any amount previously recovered tax free in years after 1986. 1040 ez forms This is the amount shown on line 10 of your worksheet for last year 6. 1040 ez forms 0 7. 1040 ez forms Subtract line 6 from line 2 7. 1040 ez forms 31,000 8. 1040 ez forms Enter the smaller of line 5 or line 7 8. 1040 ez forms 1,200 9. 1040 ez forms Taxable amount for year. 1040 ez forms Subtract line 8 from line 1. 1040 ez forms Enter the result, but not less than zero. 1040 ez forms Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. 1040 ez forms Note. 1040 ez forms If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. 1040 ez forms If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers, earlier, before entering an amount on your tax return. 1040 ez forms 9. 1040 ez forms $ 13,200 10. 1040 ez forms Was your annuity starting date before 1987? □ Yes. 1040 ez forms STOP. 1040 ez forms Do not complete the rest of this worksheet. 1040 ez forms  ☑ No. 1040 ez forms Add lines 6 and 8. 1040 ez forms This is the amount you have recovered tax free through 2013. 1040 ez forms You will need this number if you need to fill out this worksheet next year. 1040 ez forms 10. 1040 ez forms 1,200 11. 1040 ez forms Balance of cost to be recovered. 1040 ez forms Subtract line 10 from line 2. 1040 ez forms If zero, you will not have to complete this worksheet next year. 1040 ez forms The payments you receive next year will generally be fully taxable 11. 1040 ez forms $ 29,800 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. 1040 ez forms   Table 1 for Line 3 Above       AND your annuity starting date was—   IF your age on your annuity starting date was . 1040 ez forms . 1040 ez forms . 1040 ez forms   BEFORE November 19, 1996, enter on line 3 . 1040 ez forms . 1040 ez forms . 1040 ez forms AFTER November 18, 1996, enter on line 3 . 1040 ez forms . 1040 ez forms . 1040 ez forms   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 . 1040 ez forms . 1040 ez forms . 1040 ez forms   THEN enter on line 3 . 1040 ez forms . 1040 ez forms . 1040 ez forms         110 or under   410         111-120   360         121-130   310         131-140   260         141 or over   210       Survivors of retirees. 1040 ez forms   Benefits paid to you as a survivor under a joint and survivor annuity must be included in your gross income in the same way the retiree would have included them in gross income. 1040 ez forms   If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule, include the total received in your income. 1040 ez forms The retiree's cost has already been recovered tax free. 1040 ez forms   If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for in the contract. 1040 ez forms The resulting tax-free amount will then remain fixed. 1040 ez forms Any increases in the survivor annuity are fully taxable. 1040 ez forms   If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. 1040 ez forms See Simplified Method , earlier. 1040 ez forms How to report. 1040 ez forms   If you file Form 1040, report your total annuity on line 16a, and the taxable part on line 16b. 1040 ez forms If your pension or annuity is fully taxable, enter it on line 16b. 1040 ez forms Do not make an entry on line 16a. 1040 ez forms   If you file Form 1040A, report your total annuity on line 12a, and the taxable part on line 12b. 1040 ez forms If your pension or annuity is fully taxable, enter it on line 12b. 1040 ez forms Do not make an entry on line 12a. 1040 ez forms   If you file Form 1040NR, report your total annuity on line 17a, and the taxable part on line 17b. 1040 ez forms If your pension or annuity is fully taxable, enter it on line 17b. 1040 ez forms Do not make an entry on line 17a. 1040 ez forms Example. 1040 ez forms You are a Form 1040 filer and you received monthly payments totaling $1,200 (12 months x $100) during 2013 from a pension plan that was completely financed by your employer. 1040 ez forms You had paid no tax on the payments that your employer made to the plan, and the payments were not used to pay for accident, health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public Safety Officers ). 1040 ez forms The entire $1,200 is taxable. 1040 ez forms You include $1,200 only on Form 1040, line 16b. 1040 ez forms Joint return. 1040 ez forms   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on line 16a of Form 1040, line 12a of Form 1040A, or line 17a of Form 1040NR. 1040 ez forms Report the total of the taxable parts on line 16b of Form 1040, line 12b of Form 1040A, or line 17b of Form 1040NR. 1040 ez forms Form 1099-R. 1040 ez forms   You should receive a Form 1099-R for your pension or annuity. 1040 ez forms Form 1099-R shows your pension or annuity for the year and any income tax withheld. 1040 ez forms You should receive a Form W-2 if you receive distributions from certain nonqualified plans. 1040 ez forms You must attach Forms 1099-R or Forms W-2 to your 2013 tax return if federal income tax was withheld. 1040 ez forms Generally, you should be sent these forms by January 31, 2014. 1040 ez forms Nonperiodic Distributions If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from your income as a recovery of your cost. 1040 ez forms Nonperiodic distributions include cash withdrawals, distributions of current earnings (dividends) on your investment, and certain loans. 1040 ez forms For information on how to figure the taxable amount of a nonperiodic distribution, see Taxation of Nonperiodic Payments in Publication 575. 1040 ez forms The taxable part of a nonperiodic distribution may be subject to an additional 10% tax. 1040 ez forms See Tax on Early Distributions, later. 1040 ez forms Lump-sum distributions. 1040 ez forms   If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. 1040 ez forms The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. 1040 ez forms The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. 1040 ez forms You may be able to use the 10-year tax option to figure tax on the ordinary income part. 1040 ez forms Form 1099-R. 1040 ez forms   If you receive a total distribution from a plan, you should receive a Form 1099-R. 1040 ez forms If the distribution qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. 1040 ez forms The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is the ordinary income part. 1040 ez forms More information. 1040 ez forms   For more detailed information on lump-sum distributions, see Publication 575 or Form 4972, Tax on Lump-Sum Distributions. 1040 ez forms Tax on Early Distributions Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you reach age 59½ are subject to an additional tax of 10%. 1040 ez forms The tax applies to the taxable part of the distribution. 1040 ez forms For this purpose, a qualified retirement plan is: A qualified employee plan (including a qualified cash or deferred arrangement (CODA) under Internal Revenue Code section 401(k)), A qualified employee annuity plan, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). 1040 ez forms  An IRA is also a qualified retirement plan for purposes of this tax. 1040 ez forms General exceptions to tax. 1040 ez forms   The early distribution tax does not apply to any distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. 1040 ez forms Additional exceptions. 1040 ez forms   There are additional exceptions to the early distribution tax for certain distributions from qualified retirement plans and nonqualified annuity contracts. 1040 ez forms See Publication 575 for details. 1040 ez forms Reporting tax. 1040 ez forms   If you owe only the tax on early distributions and distribution code 1 (early distribution, no known exception) is correctly shown in Form 1099-R, box 7, multiply the taxable part of the early distribution by 10% (. 1040 ez forms 10) and enter the result on Form 1040, line 58, or Form 1040NR, line 56. 1040 ez forms See the instructions for line 58 of Form 1040 or line 56 of Form 1040NR for more information about reporting the early distribution tax. 1040 ez forms Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date. 1040 ez forms Unless the rule for 5% owners applies, this is generally April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. 1040 ez forms However, your plan may require you to begin to receive payments by April 1 of the year that follows the year in which you reach 70½, even if you have not retired. 1040 ez forms For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan) (for benefits accruing after 1986). 1040 ez forms  An IRA is also a qualified retirement plan for purposes of this tax. 1040 ez forms An excess accumulation is the undistributed remainder of the required minimum distribution that was left in your qualified retirement plan. 1040 ez forms 5% owners. 1040 ez forms   If you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the company maintaining your qualified retirement plan, you must begin to receive distributions from the plan by April 1 of the year after the calendar year in which you reach age 70½. 1040 ez forms See Publication 575 for more information. 1040 ez forms Amount of tax. 1040 ez forms   If you do not receive the required minimum distribution, you are subject to an additional tax. 1040 ez forms The tax equals 50% of the difference between the amount that must be distributed and the amount that was distributed during the tax year. 1040 ez forms You can get this excise tax excused if you establish that the shortfall in distributions was due to reasonable error and that you are taking reasonable steps to remedy the shortfall. 1040 ez forms Form 5329. 1040 ez forms   You must file a Form 5329 if you owe a tax because you did not receive a minimum required distribution from your qualified retirement plan. 1040 ez forms Additional information. 1040 ez forms   For more detailed information on the tax on excess accumulation, see Publication 575. 1040 ez forms Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. 1040 ez forms The premiums can be for coverage for you, your spouse, or dependent(s). 1040 ez forms The distribution must be made directly from the plan to the insurance provider. 1040 ez forms You can exclude from income the smaller of the amount of the insurance premiums or $3,000. 1040 ez forms You can only make this election for amounts that would otherwise be included in your income. 1040 ez forms The amount excluded from your income cannot be used to claim a medical expense deduction. 1040 ez forms An eligible retirement plan is a governmental plan that is a: Qualified trust, Section 403(a) plan, Section 403(b) annuity, or Section 457(b) plan. 1040 ez forms If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. 1040 ez forms The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. 1040 ez forms Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. 1040 ez forms Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. 1040 ez forms Enter “PSO” next to the appropriate line on which you report the taxable amount. 1040 ez forms Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. 1040 ez forms These categories are treated differently for income tax purposes. 1040 ez forms Social security equivalent benefits. 1040 ez forms   The first category is the amount of tier 1 railroad retirement benefits that equals the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. 1040 ez forms This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. 1040 ez forms (See Social Security and Equivalent Railroad Retirement Benefits , later. 1040 ez forms ) Non-social security equivalent benefits. 1040 ez forms   The second category contains the rest of the tier 1 benefits, called the non-social security equivalent benefit (NSSEB). 1040 ez forms It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. 1040 ez forms This category of benefits is treated as an amount received from a qualified employee plan. 1040 ez forms This allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits. 1040 ez forms Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. 1040 ez forms More information. 1040 ez forms   For more information about railroad retirement benefits, see Publication 575. 1040 ez forms Military Retirement Pay Military retirement pay based on age or length of service is taxable and must be included in income as a pension on Form 1040, lines 16a and 16b; on Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. 1040 ez forms But, certain military and government disability pensions that are based on a percentage of disability from active service in the Armed Forces of any country generally are not taxable. 1040 ez forms For more information, including information about veterans' benefits and insurance, see Publication 525. 1040 ez forms Social Security and Equivalent Railroad Retirement Benefits This discussion explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. 1040 ez forms Social security benefits include monthly retirement, survivor, and disability benefits. 1040 ez forms They do not include supplemental security income (SSI) payments, which are not taxable. 1040 ez forms 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. 1040 ez forms They commonly are called the social security equivalent benefit (SSEB) portion of tier 1 benefits. 1040 ez forms If you received these benefits during 2013, you should have received a Form SSA-1099 or Form RRB-1099 (Form SSA-1042S or Form RRB-1042S if you are a nonresident alien), showing the amount of the benefits. 1040 ez forms Are Any of Your Benefits Taxable? Note. 1040 ez forms When the term “benefits” is used in this section, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. 1040 ez forms  To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. 1040 ez forms When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. 1040 ez forms S. 1040 ez forms savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned in American Samoa or Puerto Rico by bona fide residents. 1040 ez forms Figuring total income. 1040 ez forms   To figure the total of one-half of your benefits plus your other income, use Worksheet 2-B. 1040 ez forms If that total amount is more than your base amount, part of your benefits may be taxable. 1040 ez forms 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. 1040 ez forms 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. 1040 ez forms 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. 1040 ez forms If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. 1040 ez forms Worksheet 2-B. 1040 ez forms A Quick Way To Check if Your Benefits May Be Taxable A. 1040 ez forms Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. 1040 ez forms Include  the full amount of any lump-sum benefit payments received in 2013, for 2013 and  earlier years. 1040 ez forms (If you received more than one form, combine the amounts from box 5  and enter the total. 1040 ez forms ) A. 1040 ez forms     Note. 1040 ez forms If the amount on line A is zero or less, stop here; none of your benefits are  taxable this year. 1040 ez forms     B. 1040 ez forms Enter one-half of the amount on line A B. 1040 ez forms   C. 1040 ez forms Enter your taxable pensions, wages, interest, dividends, and other taxable income C. 1040 ez forms   D. 1040 ez forms Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income for: •Interest from qualified U. 1040 ez forms S. 1040 ez forms savings bonds, •Employer-provided adoption benefits, •Foreign earned income or foreign housing, or •Income earned in American Samoa or Puerto Rico by bona fide residents D. 1040 ez forms   E. 1040 ez forms Add lines B, C, and D and enter the total E. 1040 ez forms   F. 1040 ez forms 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 •Married filing separately and you lived with your spouse at any time during 2013,  enter -0- F. 1040 ez forms   G. 1040 ez forms Is the amount on line F less than or equal to the amount on line E? □ No. 1040 ez forms None of your benefits are taxable this year. 1040 ez forms  □ Yes. 1040 ez forms Some of your benefits may be taxable. 1040 ez forms To figure how much of your benefits  are taxable, see Which worksheet to use under How Much Is Taxable. 1040 ez forms     Base Amount Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er) with dependent child, $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. 1040 ez forms Repayment of Benefits Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. 1040 ez forms It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. 1040 ez forms If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. 1040 ez forms Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. 1040 ez forms Your repayments are shown in box 4. 1040 ez forms The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). 1040 ez forms Use the amount in box 5 to figure whether any of your benefits are taxable. 1040 ez forms Tax Withholding and Estimated Tax You can choose to have federal income tax withheld from your social security and/or the SSEB portion of your tier 1 railroad retirement benefits. 1040 ez forms If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Request. 1040 ez forms 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. 1040 ez forms For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. 1040 ez forms How Much Is Taxable? If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. 1040 ez forms Generally, the higher that total amount, the greater the taxable part of your benefits. 1040 ez forms Maximum taxable part. 1040 ez forms   The taxable part of your benefits usually cannot be more than 50%. 1040 ez forms However, up to 85% of your benefits can be taxable if either of the following situations applies to you. 1040 ez forms 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). 1040 ez forms You are married filing separately and lived with your spouse at any time during 2013. 1040 ez forms   If you are a nonresident alien, 85% of your benefits are taxable. 1040 ez forms However, this income is exempt under some tax treaties. 1040 ez forms Which worksheet to use. 1040 ez forms   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. 1040 ez forms However, you will need to use a different worksheet(s) if any of the following situations applies to you. 1040 ez forms You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse were covered by a retirement plan at work. 1040 ez forms 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. 1040 ez forms Situation (1) does not apply and you take one or more of the following exclusions. 1040 ez forms Interest from qualified U. 1040 ez forms S. 1040 ez forms savings bonds (Form 8815). 1040 ez forms Employer-provided adoption benefits (Form 8839). 1040 ez forms Foreign earned income or housing (Form 2555 or Form 2555-EZ). 1040 ez forms Income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. 1040 ez forms In these situations, you must use Worksheet 1 in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits. 1040 ez forms You received a lump-sum payment for an earlier year. 1040 ez forms In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. 1040 ez forms See Lump-Sum Election , later. 1040 ez forms How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040, Form 1040A, or Form 1040NR. 1040 ez forms You cannot use Form 1040EZ. 1040 ez forms Reporting on Form 1040. 1040 ez forms   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. 1040 ez forms 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. 1040 ez forms Reporting on Form 1040A. 1040 ez forms   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. 1040 ez forms 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. 1040 ez forms Reporting on Form 1040NR. 1040 ez forms   Report 85% of the total amount of your benefits (box 5 of your Form SSA-1042S or Form RRB-1042S) in the appropriate column of Form 1040NR, Schedule NEC, line 8. 1040 ez forms Benefits not taxable. 1040 ez forms   If you are filing Form 1040EZ, do not report any benefits on your tax return. 1040 ez forms If you are filing Form 1040 or Form 1040A, report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. 1040 ez forms Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. 1040 ez forms 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. 1040 ez forms Lump-Sum Election 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. 1040 ez forms 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. 1040 ez forms No part of the lump-sum death benefit is subject to tax. 1040 ez forms For more information about the lump-sum death benefit, visit the Social Security Administration website at www. 1040 ez forms SSA. 1040 ez forms gov, and use keyword: death benefit. 1040 ez forms Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. 1040 ez forms 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. 1040 ez forms You can elect this method if it lowers your taxable benefits. 1040 ez forms See Publication 915 for more information. 1040 ez forms 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. 1040 ez forms 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. 1040 ez forms 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. 1040 ez forms If you have any questions about this negative figure, contact your local Social Security Administration office or your local U. 1040 ez forms S. 1040 ez forms Railroad Retirement Board field office. 1040 ez forms Joint return. 1040 ez forms   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 box 5 amount on your form from the box 5 amount on your spouse's form. 1040 ez forms You do this to get your net benefits when figuring if your combined benefits are taxable. 1040 ez forms Repayment of benefits received in an earlier year. 1040 ez forms   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. 1040 ez forms   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. 1040 ez forms Claim it on Schedule A (Form 1040), line 23. 1040 ez forms   If this deduction is more than $3,000, you have to follow some special instructions. 1040 ez forms See Publication 915 for those instructions. 1040 ez forms Sickness and Injury Benefits Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. 1040 ez forms If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. 1040 ez forms However, certain payments may not be taxable to you. 1040 ez forms Some of these payments are discussed later in this section. 1040 ez forms Also, see Military and Government Disability Pensions and Other Sickness and Injury Benefits in Publication 525. 1040 ez forms Cost paid by you. 1040 ez forms   If you pay the entire cost of an accident or health plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. 1040 ez forms If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. 1040 ez forms Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. 1040 ez forms You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A or on line 8 of Form 1040NR until you reach minimum retirement age. 1040 ez forms Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. 1040 ez forms If you were 65 or older by the end of 2013 or you were retired on permanent and total disability and received taxable disability income, you may be able to claim the credit for the elderly or the disabled. 1040 ez forms See Credit for the Elderly or the Disabled, later. 1040 ez forms For more information on this credit, see Publication 524, Credit for the Elderly or the Disabled. 1040 ez forms Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. 1040 ez forms Report the payments on lines 16a and 16b of Form 1040, on lines 12a and 12b of Form 1040A, or on lines 17a and 17b of Form 1040NR. 1040 ez forms For more information on pensions and annuities, see Publication 575. 1040 ez forms Retirement and profit-sharing plans. 1040 ez forms   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. 1040 ez forms The payments must be reported as a pension or annuity. 1040 ez forms Accrued leave payment. 1040 ez forms   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. 1040 ez forms The payment is not a disability payment. 1040 ez forms Include it in your income in the tax year you receive it. 1040 ez forms Long-Term Care Insurance Contracts In most cases, long-term care insurance contracts generally are treated as accident and health insurance contracts. 1040 ez forms Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. 1040 ez forms However, the amount you can exclude may be limited. 1040 ez forms Long-term care insurance contracts are discussed in more detail in Publication 525. 1040 ez forms Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. 1040 ez forms The exemption also applies to your survivors. 1040 ez forms The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. 1040 ez forms If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. 1040 ez forms For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. 1040 ez forms Return to work. 1040 ez forms   If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. 1040 ez forms Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. 1040 ez forms Federal Employees' Compensation Act (FECA). 1040 ez forms   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. 1040 ez forms However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. 1040 ez forms Report this income on Form 1040, line 7; Form 1040A, line 7; on Form 1040EZ, line 1; or Form 1040NR, line 8. 1040 ez forms Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. 1040 ez forms    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. 1040 ez forms For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. 1040 ez forms Other compensation. 1040 ez forms   Many other amounts you receive as compensation for sickness or injury are not taxable. 1040 ez forms These include the following amounts. 1040 ez forms Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. 1040 ez forms Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. 1040 ez forms Compensation you receive for permanent loss or loss of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). 1040 ez forms This compensation must be based only on the injury and not on the period of your absence from work. 1040 ez forms These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. 1040 ez forms Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. 1040 ez forms This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. 1040 ez forms Proceeds not received in installments. 1040 ez forms   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. 1040 ez forms If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. 1040 ez forms Proceeds received in installments. 1040 ez forms   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. 1040 ez forms   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. 1040 ez forms Include anything over this excluded part in your income as interest. 1040 ez forms Installments for life. 1040 ez forms   If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds in installments for the rest of your life without a refund or period-certain guarantee, you figure the excluded part of each installment by dividing the amount held by the insurance company by your life expectancy. 1040 ez forms If there is a refund or period-certain guarantee, the amount held by the insurance company for this purpose is reduced by the actuarial value of the guarantee. 1040 ez forms Surviving spouse. 1040 ez forms   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the interest included in the installments. 1040 ez forms If you remarry, you can continue to take the exclusion. 1040 ez forms Surrender of policy for cash. 1040 ez forms   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. 1040 ez forms In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. 1040 ez forms You should receive a Form 1099-R showing the total proceeds and the taxable part. 1040 ez forms Report these amounts on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b. 1040 ez forms Endowment Contract Proceeds An endowment contract is a policy that pays over to you a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. 1040 ez forms Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. 1040 ez forms To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. 1040 ez forms Include in your income the part of the lump-sum payment that is more than your cost. 1040 ez forms Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity of the policy are taxed as an annuity. 1040 ez forms The tax treatment of an annuity is explained in Publication 575. 1040 ez forms For this treatment to apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. 1040 ez forms This election must be made within 60 days after the lump-sum payment first becomes payable to you. 1040 ez forms Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are generally excluded from income if the insured is terminally or chronically ill. 1040 ez forms However, see Exception , later. 1040 ez forms For a chronically ill individual, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. 1040 ez forms Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to a limit. 1040 ez forms In addition, if any portion of a death benefit under a life insurance contract on the life of a terminally or chronically ill individual is sold or assigned to a viatical settlement provider, the amount received also is excluded from income. 1040 ez forms Generally, a viatical settlement provider is one who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill. 1040 ez forms To report taxable accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. 1040 ez forms Terminally or chronically ill defined. 1040 ez forms   A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. 1040 ez forms A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions. 1040 ez forms The person is unable to perform (without substantial help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more because of a loss of functional capacity. 1040 ez forms The person requires substantial supervision to protect himself or herself from threats to health and safety due to severe cognitive impairment. 1040 ez forms Exception. 1040 ez forms   The exclusion does not apply to any amount paid to a person other than the insured if that other person has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the other person, or Has a financial interest in the business of the other person. 1040 ez forms Sale of Home You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return in most cases) on the sale of your main home. 1040 ez forms Generally, if you can exclude all of the gain, you do not need to report the sale on your tax return. 1040 ez forms You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. 1040 ez forms Main home. 1040 ez forms   Usually, your main home is the home you live in most of the time and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. 1040 ez forms Repaying the first-time homebuyer credit because you sold your home. 1040 ez forms   If you claimed a first-time homebuyer credit for your main home and you sell it, you may have to repay the credit. 1040 ez forms For a home purchased in 2008 and used as your main home until sold in 2013, you must file Form 5405 and repay the balance of the unpaid credit on your 2013 tax return. 1040 ez forms   For a home purchased after 2008, you generally must repay the entire credit if the home was sold (or otherwise ceased to be your main home) within 36 months of the purchase date. 1040 ez forms If you purchased your home in 2009 and used it as your main home until sold in 2013, you do not have to repay the credit or file Form 5405. 1040 ez forms If you purchased your home in 2010 and used it as your main home until sold in 2013, you may have to file Form 5405 and repay the entire credit on your 2013 tax return. 1040 ez forms   See the Instructions for Form 5405 for more information about repaying the credit and exceptions to repayment that may apply to you. 1040 ez forms Maximum Amount of Exclusion You can generally exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. 1040 ez forms You meet the ownership test. 1040 ez forms You meet the use test. 1040 ez forms During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. 1040 ez forms You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . 1040 ez forms Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. 1040 ez forms This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). 1040 ez forms Exception to ownership and use tests. 1040 ez forms   If you owned and lived in the property as your main home for less than 2 years, you still can claim an exclusion in some cases. 1040 ez forms Generally, you must have sold the home due to a change in place of employment, health, or unforeseen circumstances. 1040 ez forms The maximum amount you can exclude will be reduced. 1040 ez forms See Publication 523, Selling Your Home, for more information. 1040 ez forms Exception to use test for individuals with a disability. 1040 ez forms   There is an exception to the use test if, during the 5-year period before the sale of your home: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year. 1040 ez forms Under this exception, you are considered to live in your home during any time that you own the home and live in a facility (including a nursing home) that is licensed by a state or political subdivision to care for persons in your condition. 1040 ez forms   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. 1040 ez forms Exception to ownership test for property acquired in a like-kind exchange. 1040 ez forms   You must have owned your main home for at least 5 years to qualify for the exclusion if you acquired your main home in a like-kind exchange. 1040 ez forms This special 5-year ownership rule continues to apply to a home you acquired in a like-kind exchange and gave to another person. 1040 ez forms A like-kind exchange is an exchange of property held for productive use in a trade or business or for investment. 1040 ez forms See Publication 523 for more information. 1040 ez forms Period of nonqualified use. 1040 ez forms   Generally, the gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gain is allocated to periods of nonqualified use. 1040 ez forms Nonqualified use is any period after December 31, 2008, during which the property is not used as the main home. 1040 ez forms See Publication 523 for more information. 1040 ez forms Married Persons In the special situations discussed below, if you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use test, you can exclude up to $250,000 of gain. 1040 ez forms However, see Special rules for joint returns , next. 1040 ez forms Special rules for joint returns. 1040 ez forms   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. 1040 ez forms You are married and file a joint return for the year. 1040 ez forms Either you or your spouse meets the ownership test. 1040 ez forms Both you and your spouse meet the use test. 1040 ez forms During the 2-year period ending on the date of the sale, neither you nor your spouse exclude gain from the sale of another home. 1040 ez forms Sale of home by surviving spouse. 1040 ez forms   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. 1040 ez forms   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2013. 1040 ez forms The sale or exchange took place no more than 2 years after the date of death of your spouse. 1040 ez forms You have not remarried. 1040 ez forms You and your spouse met the use test at the time of your spouse's death. 1040 ez forms You or your spouse met the ownership test at the time of your spouse's death. 1040 ez forms Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. 1040 ez forms Home transferred from spouse. 1040 ez forms   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. 1040 ez forms Use of home after divorce. 1040 ez forms   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. 1040 ez forms Business Use or Rental of Home You may be able to exclude gain from the sale of a home that you have used for business or to produce rental income. 1040 ez forms However, you must meet the ownership and use tests. 1040 ez forms See Publication 523 for more information. 1040 ez forms Depreciation after May 6, 1997. 1040 ez forms   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. 1040 ez forms See Publication 523 for more information. 1040 ez forms Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and you do not qualify to exclude all of it, You have a gain and you choose not to exclude it, or You received Form 1099-S. 1040 ez forms If you have a gain that you cannot or choose not to exclude, if you received a Form 1099-S, or if you have a deductible loss, report the sale on your tax return. 1040 ez forms Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. 1040 ez forms If you used your home for business or to produce rental income, you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. 1040 ez forms See Publication 523 for more information. 1040 ez forms Reverse Mortgages A revers