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Can I File 2011 Taxes Online

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Can I File 2011 Taxes Online

Can i file 2011 taxes online 27. Can i file 2011 taxes online   Tax Benefits for Work-Related Education Table of Contents What's New Introduction Useful Items - You may want to see: Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. Can i file 2011 taxes online Transportation Expenses Travel Expenses No Double Benefit Allowed Reimbursements Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping What's New Standard mileage rate. Can i file 2011 taxes online  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013, through December 31, 2013, is 56½ cents per mile. Can i file 2011 taxes online For more information, see Transportation Expenses under What Expenses Can Be Deducted. Can i file 2011 taxes online Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. Can i file 2011 taxes online To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040) if you are an employee, File Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040) if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education . Can i file 2011 taxes online If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. Can i file 2011 taxes online Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. Can i file 2011 taxes online See chapter 28. Can i file 2011 taxes online If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. Can i file 2011 taxes online Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits (see chapter 35). Can i file 2011 taxes online You may qualify for these other benefits even if you do not meet the requirements listed earlier. Can i file 2011 taxes online Also, keep in mind that your work-related education expenses may qualify you to claim more than one tax benefit. Can i file 2011 taxes online Generally, you may claim any number of benefits as long as you use different expenses to figure each one. Can i file 2011 taxes online When you figure your taxes, you may want to compare these tax benefits so you can choose the method(s) that give you the lowest tax liability. Can i file 2011 taxes online Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 970 Tax Benefits for Education Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Schedule A (Form 1040) Itemized Deductions Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. Can i file 2011 taxes online This is education that meets at least one of the following two tests. Can i file 2011 taxes online The education is required by your employer or the law to keep your present salary, status, or job. Can i file 2011 taxes online The required education must serve a bona fide business purpose of your employer. Can i file 2011 taxes online The education maintains or improves skills needed in your present work. Can i file 2011 taxes online However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. Can i file 2011 taxes online You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. Can i file 2011 taxes online Use Figure 27-A, later, as a quick check to see if your education qualifies. Can i file 2011 taxes online Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. Can i file 2011 taxes online This additional education is qualifying work-related education if all three of the following requirements are met. Can i file 2011 taxes online It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. Can i file 2011 taxes online When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. Can i file 2011 taxes online See Education To Maintain or Improve Skills , later. Can i file 2011 taxes online Example. Can i file 2011 taxes online You are a teacher who has satisfied the minimum requirements for teaching. Can i file 2011 taxes online Your employer requires you to take an additional college course each year to keep your teaching job. Can i file 2011 taxes online If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. Can i file 2011 taxes online Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. Can i file 2011 taxes online This could include refresher courses, courses on current developments, and academic or vocational courses. Can i file 2011 taxes online Example. Can i file 2011 taxes online You repair televisions, radios, and stereo systems for XYZ Store. Can i file 2011 taxes online To keep up with the latest changes, you take special courses in radio and stereo service. Can i file 2011 taxes online These courses maintain and improve skills required in your work. Can i file 2011 taxes online Maintaining skills vs. Can i file 2011 taxes online qualifying for new job. Can i file 2011 taxes online   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. Can i file 2011 taxes online Education during temporary absence. Can i file 2011 taxes online   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Can i file 2011 taxes online Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Can i file 2011 taxes online Example. Can i file 2011 taxes online You quit your biology research job to become a full-time biology graduate student for one year. Can i file 2011 taxes online If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. Can i file 2011 taxes online Education during indefinite absence. Can i file 2011 taxes online   If you stop work for more than a year, your absence from your job is considered indefinite. Can i file 2011 taxes online Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. Can i file 2011 taxes online Therefore, it is not qualifying work-related education. Can i file 2011 taxes online Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. Can i file 2011 taxes online The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. Can i file 2011 taxes online Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. Can i file 2011 taxes online This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. Can i file 2011 taxes online You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. Can i file 2011 taxes online Example 1. Can i file 2011 taxes online You are a full-time engineering student. Can i file 2011 taxes online Although you have not received your degree or certification, you work part-time as an engineer for a firm that will employ you as a full-time engineer after you finish college. Can i file 2011 taxes online Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. Can i file 2011 taxes online The education is not qualifying work-related education. Can i file 2011 taxes online Example 2. Can i file 2011 taxes online You are an accountant and you have met the minimum educational requirements of your employer. Can i file 2011 taxes online Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. Can i file 2011 taxes online These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. Can i file 2011 taxes online Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. Can i file 2011 taxes online The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. Can i file 2011 taxes online If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. Can i file 2011 taxes online The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. Can i file 2011 taxes online You generally will be considered a faculty member when one or more of the following occurs. Can i file 2011 taxes online You have tenure. Can i file 2011 taxes online Your years of service count toward obtaining tenure. Can i file 2011 taxes online You have a vote in faculty decisions. Can i file 2011 taxes online Your school makes contributions for you to a retirement plan other than social security or a similar program. Can i file 2011 taxes online Example 1. Can i file 2011 taxes online The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. Can i file 2011 taxes online In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. Can i file 2011 taxes online If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. Can i file 2011 taxes online However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. Can i file 2011 taxes online Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. Can i file 2011 taxes online If you have all the required education except the fifth year, you have met the minimum educational requirements. Can i file 2011 taxes online The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. Can i file 2011 taxes online Figure 27-A Does Your Work-Related Education Qualify? Please click here for the text description of the image. Can i file 2011 taxes online Figure 27-A. Can i file 2011 taxes online Does Your Work-Related Education Qualify?" Example 2. Can i file 2011 taxes online Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. Can i file 2011 taxes online The additional four education courses can be qualifying work-related education. Can i file 2011 taxes online Although you do not have all the required courses, you have already met the minimum educational requirements. Can i file 2011 taxes online Example 3. Can i file 2011 taxes online Assume the same facts as in Example 1 except that you are hired with only 3 years of college. Can i file 2011 taxes online The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. Can i file 2011 taxes online They are needed to meet the minimum educational requirements for employment as a teacher. Can i file 2011 taxes online Example 4. Can i file 2011 taxes online You have a bachelor's degree and you work as a temporary instructor at a university. Can i file 2011 taxes online At the same time, you take graduate courses toward an advanced degree. Can i file 2011 taxes online The rules of the university state that you can become a faculty member only if you get a graduate degree. Can i file 2011 taxes online Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. Can i file 2011 taxes online You have not met the minimum educational requirements to qualify you as a faculty member. Can i file 2011 taxes online The graduate courses are not qualifying work-related education. Can i file 2011 taxes online Certification in a new state. Can i file 2011 taxes online   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. Can i file 2011 taxes online This is true even if you must get additional education to be certified in another state. Can i file 2011 taxes online Any additional education you need is qualifying work-related education. Can i file 2011 taxes online You have already met the minimum requirements for teaching. Can i file 2011 taxes online Teaching in another state is not a new trade or business. Can i file 2011 taxes online Example. Can i file 2011 taxes online You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. Can i file 2011 taxes online You move to State B and are promptly hired as a teacher. Can i file 2011 taxes online You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. Can i file 2011 taxes online These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. Can i file 2011 taxes online Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. Can i file 2011 taxes online This is true even if you do not plan to enter that trade or business. Can i file 2011 taxes online If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. Can i file 2011 taxes online Example 1. Can i file 2011 taxes online You are an accountant. Can i file 2011 taxes online Your employer requires you to get a law degree at your own expense. Can i file 2011 taxes online You register at a law school for the regular curriculum that leads to a law degree. Can i file 2011 taxes online Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. Can i file 2011 taxes online Example 2. Can i file 2011 taxes online You are a general practitioner of medicine. Can i file 2011 taxes online You take a 2-week course to review developments in several specialized fields of medicine. Can i file 2011 taxes online The course does not qualify you for a new profession. Can i file 2011 taxes online It is qualifying work-related education because it maintains or improves skills required in your present profession. Can i file 2011 taxes online Example 3. Can i file 2011 taxes online While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. Can i file 2011 taxes online The program will lead to qualifying you to practice psychoanalysis. Can i file 2011 taxes online The psychoanalytic training does not qualify you for a new profession. Can i file 2011 taxes online It is qualifying work-related education because it maintains or improves skills required in your present profession. Can i file 2011 taxes online Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. Can i file 2011 taxes online They are part of a program of study that can qualify you for a new profession. Can i file 2011 taxes online Teaching and Related Duties All teaching and related duties are considered the same general kind of work. Can i file 2011 taxes online A change in duties in any of the following ways is not considered a change to a new business. Can i file 2011 taxes online Elementary school teacher to secondary school teacher. Can i file 2011 taxes online Teacher of one subject, such as biology, to teacher of another subject, such as art. Can i file 2011 taxes online Classroom teacher to guidance counselor. Can i file 2011 taxes online Classroom teacher to school administrator. Can i file 2011 taxes online What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education , you can generally deduct your education expenses as business expenses. Can i file 2011 taxes online If you are not self-employed, you can deduct business expenses only if you itemize your deductions. Can i file 2011 taxes online You cannot deduct expenses related to tax-exempt and excluded income. Can i file 2011 taxes online Deductible expenses. Can i file 2011 taxes online   The following education expenses can be deducted. Can i file 2011 taxes online Tuition, books, supplies, lab fees, and similar items. Can i file 2011 taxes online Certain transportation and travel costs. Can i file 2011 taxes online Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. Can i file 2011 taxes online Nondeductible expenses. Can i file 2011 taxes online   You cannot deduct personal or capital expenses. Can i file 2011 taxes online For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. Can i file 2011 taxes online This amount is a personal expense. Can i file 2011 taxes online Unclaimed reimbursement. Can i file 2011 taxes online   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. Can i file 2011 taxes online Example. Can i file 2011 taxes online Your employer agrees to pay your education expenses if you file a voucher showing your expenses. Can i file 2011 taxes online You do not file a voucher, and you do not get reimbursed. Can i file 2011 taxes online Because you did not file a voucher, you cannot deduct the expenses on your tax return. Can i file 2011 taxes online Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. Can i file 2011 taxes online If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. Can i file 2011 taxes online Temporary basis. Can i file 2011 taxes online   You go to school on a temporary basis if either of the following situations applies to you. Can i file 2011 taxes online Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. Can i file 2011 taxes online Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Can i file 2011 taxes online Your attendance is temporary up to the date you determine it will last more than 1 year. Can i file 2011 taxes online Note. Can i file 2011 taxes online If you are in either situation (1) or (2), your attendance is not temporary if facts and circumstances indicate otherwise. Can i file 2011 taxes online Attendance not on a temporary basis. Can i file 2011 taxes online   You do not go to school on a temporary basis if either of the following situations apply to you. Can i file 2011 taxes online Your attendance at school is realistically expected to last more than 1 year. Can i file 2011 taxes online It does not matter how long you actually attend. Can i file 2011 taxes online Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Can i file 2011 taxes online Your attendance is not temporary after the date you determine it will last more than 1 year. Can i file 2011 taxes online Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. Can i file 2011 taxes online This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. Can i file 2011 taxes online Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Can i file 2011 taxes online Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. Can i file 2011 taxes online Example 1. Can i file 2011 taxes online You regularly work in a nearby town, and go directly from work to home. Can i file 2011 taxes online You also attend school every work night for 3 months to take a course that improves your job skills. Can i file 2011 taxes online Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. Can i file 2011 taxes online This is true regardless of the distance traveled. Can i file 2011 taxes online Example 2. Can i file 2011 taxes online Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. Can i file 2011 taxes online You can deduct your transportation expenses from your regular work site to school and then home. Can i file 2011 taxes online Example 3. Can i file 2011 taxes online Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. Can i file 2011 taxes online Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. Can i file 2011 taxes online Example 4. Can i file 2011 taxes online Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. Can i file 2011 taxes online Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. Can i file 2011 taxes online If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. Can i file 2011 taxes online If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. Can i file 2011 taxes online Using your car. Can i file 2011 taxes online   If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. Can i file 2011 taxes online The standard mileage rate for miles driven from January 1, 2013, through December 31, 2013 is 56½ cents per mile. Can i file 2011 taxes online Whichever method you use, you can also deduct parking fees and tolls. Can i file 2011 taxes online See chapter 26 for information on deducting your actual expenses of using a car. Can i file 2011 taxes online Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. Can i file 2011 taxes online Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. Can i file 2011 taxes online For more information, see chapter 26. Can i file 2011 taxes online You cannot deduct expenses for personal activities, such as sightseeing, visiting, or entertaining. Can i file 2011 taxes online Mainly personal travel. Can i file 2011 taxes online   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. Can i file 2011 taxes online You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. Can i file 2011 taxes online   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. Can i file 2011 taxes online An important factor is the comparison of time spent on personal activities with time spent on educational activities. Can i file 2011 taxes online If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. Can i file 2011 taxes online Example 1. Can i file 2011 taxes online John works in Newark, New Jersey. Can i file 2011 taxes online He traveled to Chicago to take a deductible 1-week course at the request of his employer. Can i file 2011 taxes online His main reason for going to Chicago was to take the course. Can i file 2011 taxes online While there, he took a sight-seeing trip, entertained some friends, and took a side trip to Pleasantville for a day. Can i file 2011 taxes online Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. Can i file 2011 taxes online He cannot deduct his transportation expenses of going to Pleasantville. Can i file 2011 taxes online He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. Can i file 2011 taxes online Example 2. Can i file 2011 taxes online Sue works in Boston. Can i file 2011 taxes online She went to a university in Michigan to take a course for work. Can i file 2011 taxes online The course is qualifying work-related education. Can i file 2011 taxes online She took one course, which is one-fourth of a full course load of study. Can i file 2011 taxes online She spent the rest of the time on personal activities. Can i file 2011 taxes online Her reasons for taking the course in Michigan were all personal. Can i file 2011 taxes online Sue's trip is mainly personal because three-fourths of her time is considered personal time. Can i file 2011 taxes online She cannot deduct the cost of her round-trip train ticket to Michigan. Can i file 2011 taxes online She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. Can i file 2011 taxes online Example 3. Can i file 2011 taxes online Dave works in Nashville and recently traveled to California to take a 2-week seminar. Can i file 2011 taxes online The seminar is qualifying work-related education. Can i file 2011 taxes online While there, he spent an extra 8 weeks on personal activities. Can i file 2011 taxes online The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. Can i file 2011 taxes online Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. Can i file 2011 taxes online He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. Can i file 2011 taxes online Cruises and conventions. Can i file 2011 taxes online   Certain cruises and conventions offer seminars or courses as part of their itinerary. Can i file 2011 taxes online Even if the seminars or courses are work-related, your deduction for travel may be limited. Can i file 2011 taxes online This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. Can i file 2011 taxes online   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. Can i file 2011 taxes online 50% limit on meals. Can i file 2011 taxes online   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. Can i file 2011 taxes online You cannot have been reimbursed for the meals. Can i file 2011 taxes online   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. Can i file 2011 taxes online Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. Can i file 2011 taxes online Example. Can i file 2011 taxes online You are a French language teacher. Can i file 2011 taxes online While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. Can i file 2011 taxes online You chose your itinerary and most of your activities to improve your French language skills. Can i file 2011 taxes online You cannot deduct your travel expenses as education expenses. Can i file 2011 taxes online This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. Can i file 2011 taxes online No Double Benefit Allowed You cannot do either of the following. Can i file 2011 taxes online Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, the tuition and fees deduction (see chapter 35). Can i file 2011 taxes online Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. Can i file 2011 taxes online See Adjustments to Qualifying Work-Related Education Expenses , next. Can i file 2011 taxes online Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. Can i file 2011 taxes online You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. Can i file 2011 taxes online For more information, see chapter 12 of Publication 970. Can i file 2011 taxes online Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see chapter 1 of Publication 970), The tax-free part of Pell grants (see chapter 1 of Publication 970), The tax-free part of employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received for education assistance. Can i file 2011 taxes online Amounts that do not reduce qualifying work-related education expenses. Can i file 2011 taxes online   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Can i file 2011 taxes online   Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. Can i file 2011 taxes online Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. Can i file 2011 taxes online There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. Can i file 2011 taxes online You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. Can i file 2011 taxes online For information on how to treat reimbursements under both accountable and nonaccountable plans, see Reimbursements in chapter 26. Can i file 2011 taxes online Deducting Business Expenses Self-employed persons and employees report business expenses differently. Can i file 2011 taxes online The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. Can i file 2011 taxes online Self-Employed Persons If you are self-employed, report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C, C-EZ, or F). Can i file 2011 taxes online If your educational expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. Can i file 2011 taxes online See the instructions for the form you file for information on how to complete it. Can i file 2011 taxes online Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. Can i file 2011 taxes online If either (1) or (2) applies, you can deduct the total qualifying cost. Can i file 2011 taxes online If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. Can i file 2011 taxes online In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21. Can i file 2011 taxes online (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Can i file 2011 taxes online ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Can i file 2011 taxes online See chapter 28. Can i file 2011 taxes online Form 2106 or 2106-EZ. Can i file 2011 taxes online   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or Form 2106-EZ. Can i file 2011 taxes online Form not required. Can i file 2011 taxes online   Do not complete either Form 2106 or Form 2106-EZ if: If amounts included in box 1 of your Form W-2, are not considered reimbursements, and You are not claiming travel, transportation, meal, or entertainment expenses. Can i file 2011 taxes online   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21. Can i file 2011 taxes online (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Can i file 2011 taxes online ) Using Form 2106-EZ. Can i file 2011 taxes online   This form is shorter and easier to use than Form 2106. Can i file 2011 taxes online Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. Can i file 2011 taxes online   If you do not meet both of these requirements, use Form 2106. Can i file 2011 taxes online Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. Can i file 2011 taxes online Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24. Can i file 2011 taxes online You do not have to itemize your deductions on Schedule A (Form 1040), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. Can i file 2011 taxes online You must complete Form 2106 or 2106-EZ to figure your deduction, even if you meet the requirements described earlier under Form not required . Can i file 2011 taxes online For more information on qualified performing artists, see chapter 6 of Publication 463. Can i file 2011 taxes online Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28. Can i file 2011 taxes online They are not subject to the 2%-of-adjusted-gross-income limit. Can i file 2011 taxes online To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . Can i file 2011 taxes online For more information on impairment-related work expenses, see chapter 6 of Publication 463. Can i file 2011 taxes online Recordkeeping You must keep records as proof of any deduction claimed on your tax return. Can i file 2011 taxes online Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. Can i file 2011 taxes online For specific information about keeping records of business expenses, see Recordkeeping in chapter 26. Can i file 2011 taxes online Prev  Up  Next   Home   More Online Publications
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Can i file 2011 taxes online 10. Can i file 2011 taxes online   Retirement Plans, Pensions, and Annuities Table of Contents What's New Reminder IntroductionThe General Rule. Can i file 2011 taxes online Individual retirement arrangements (IRAs). Can i file 2011 taxes online Civil service retirement benefits. Can i file 2011 taxes online Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. Can i file 2011 taxes online How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. Can i file 2011 taxes online Exclusion not limited to cost. Can i file 2011 taxes online Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. Can i file 2011 taxes online Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries What's New For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Can i file 2011 taxes online However, these distributions are taken into account when determining the modified adjusted gross income threshold. Can i file 2011 taxes online Distributions from a nonqualified retirement plan are included in net investment income. Can i file 2011 taxes online See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Can i file 2011 taxes online Reminder Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. Can i file 2011 taxes online For more information, see Designated Roth accounts discussed later. Can i file 2011 taxes online Introduction This chapter discusses the tax treatment of distributions you receive from: An employee pension or annuity from a qualified plan, A disability retirement, and A purchased commercial annuity. Can i file 2011 taxes online What is not covered in this chapter. Can i file 2011 taxes online   The following topics are not discussed in this chapter. Can i file 2011 taxes online The General Rule. Can i file 2011 taxes online   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). Can i file 2011 taxes online For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. Can i file 2011 taxes online For more information about the General Rule, see Publication 939, General Rule for Pensions and Annuities. Can i file 2011 taxes online Individual retirement arrangements (IRAs). Can i file 2011 taxes online   Information on the tax treatment of amounts you receive from an IRA is in chapter 17. Can i file 2011 taxes online Civil service retirement benefits. Can i file 2011 taxes online    If you are retired from the federal government (regular, phased, or disability retirement), see Publication 721, Tax Guide to U. Can i file 2011 taxes online S. Can i file 2011 taxes online Civil Service Retirement Benefits. Can i file 2011 taxes online Publication 721 also covers the information that you need if you are the survivor or beneficiary of a federal employee or retiree who died. Can i file 2011 taxes online Useful Items - You may want to see: Publication 575 Pension and Annuity Income 721 Tax Guide to U. Can i file 2011 taxes online S. Can i file 2011 taxes online Civil Service Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Can i file 2011 taxes online 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts General Information Designated Roth accounts. Can i file 2011 taxes online   A designated Roth account is a separate account created under a qualified Roth contribution program to which participants may elect to have part or all of their elective deferrals to a 401(k), 403(b), or 457(b) plan designated as Roth contributions. Can i file 2011 taxes online Elective deferrals that are designated as Roth contributions are included in your income. Can i file 2011 taxes online However, qualified distributions are not included in your income. Can i file 2011 taxes online See Publication 575 for more information. Can i file 2011 taxes online In-plan rollovers to designated Roth accounts. Can i file 2011 taxes online   If you are a participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. Can i file 2011 taxes online The rollover of any untaxed amounts must be included in income. Can i file 2011 taxes online See Publication 575 for more information. Can i file 2011 taxes online More than one program. Can i file 2011 taxes online   If you receive benefits from more than one program under a single trust or plan of your employer, such as a pension plan and a profit-sharing plan, you may have to figure the taxable part of each pension or annuity contract separately. Can i file 2011 taxes online Your former employer or the plan administrator should be able to tell you if you have more than one pension or annuity contract. Can i file 2011 taxes online Section 457 deferred compensation plans. Can i file 2011 taxes online    If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan. Can i file 2011 taxes online If your plan is an eligible plan, you are not taxed currently on pay that is deferred under the plan or on any earnings from the plan's investment of the deferred pay. Can i file 2011 taxes online You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. Can i file 2011 taxes online You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. Can i file 2011 taxes online   Your 457(b) plan may have a designated Roth account option. Can i file 2011 taxes online If so, you may be able to roll over amounts to the designated Roth account or make contributions. Can i file 2011 taxes online Elective deferrals to a designated Roth account are included in your income. Can i file 2011 taxes online Qualified distributions from a designated Roth account are not subject to tax. Can i file 2011 taxes online   This chapter covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. Can i file 2011 taxes online For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525, Taxable and Nontaxable Income. Can i file 2011 taxes online   For general information on these deferred compensation plans, see Section 457 Deferred Compensation Plans in Publication 575. Can i file 2011 taxes online Disability pensions. Can i file 2011 taxes online   If you retired on disability, you generally must include in income any disability pension you receive under a plan that is paid for by your employer. Can i file 2011 taxes online You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. Can i file 2011 taxes online Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Can i file 2011 taxes online    You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Can i file 2011 taxes online For information on the credit for the elderly or the disabled, see chapter 33. Can i file 2011 taxes online   Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Can i file 2011 taxes online Report the payments on Form 1040, lines 16a and 16b, or on Form 1040A, lines 12a and 12b. Can i file 2011 taxes online    Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) are not included in income. Can i file 2011 taxes online For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Can i file 2011 taxes online   For more information on how to report disability pensions, including military and certain government disability pensions, see chapter 5. Can i file 2011 taxes online Retired public safety officers. Can i file 2011 taxes online   An eligible retired public safety officer can elect to exclude from income distributions of up to $3,000 made directly from a government retirement plan to the provider of accident, health, or long-term disability insurance. Can i file 2011 taxes online See Insurance Premiums for Retired Public Safety Officers in Publication 575 for more information. Can i file 2011 taxes online Railroad retirement benefits. Can i file 2011 taxes online   Part of any railroad retirement benefits you receive is treated for tax purposes as social security benefits, and part is treated as an employee pension. Can i file 2011 taxes online For information about railroad retirement benefits treated as social security benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Can i file 2011 taxes online For information about railroad retirement benefits treated as an employee pension, see Railroad Retirement Benefits in Publication 575. Can i file 2011 taxes online Withholding and estimated tax. Can i file 2011 taxes online   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable parts of amounts paid to you. Can i file 2011 taxes online You can tell the payer how much to withhold, or not to withhold, by filing Form W-4P. Can i file 2011 taxes online If you choose not to have tax withheld, or you do not have enough tax withheld, you may have to pay estimated tax. Can i file 2011 taxes online   If you receive an eligible rollover distribution, you cannot choose not to have tax withheld. Can i file 2011 taxes online Generally, 20% will be withheld, but no tax will be withheld on a direct rollover of an eligible rollover distribution. Can i file 2011 taxes online See Direct rollover option under Rollovers, later. Can i file 2011 taxes online   For more information, see Pensions and Annuities under Tax Withholding for 2014 in chapter 4. Can i file 2011 taxes online Qualified plans for self-employed individuals. Can i file 2011 taxes online   Qualified plans set up by self-employed individuals are sometimes called Keogh or H. Can i file 2011 taxes online R. Can i file 2011 taxes online 10 plans. Can i file 2011 taxes online Qualified plans can be set up by sole proprietors, partnerships (but not a partner), and corporations. Can i file 2011 taxes online They can cover self-employed persons, such as the sole proprietor or partners, as well as regular (common-law) employees. Can i file 2011 taxes online    Distributions from a qualified plan are usually fully taxable because most recipients have no cost basis. Can i file 2011 taxes online If you have an investment (cost) in the plan, however, your pension or annuity payments from a qualified plan are taxed under the Simplified Method. Can i file 2011 taxes online For more information about qualified plans, see Publication 560, Retirement Plans for Small Business. Can i file 2011 taxes online Purchased annuities. Can i file 2011 taxes online   If you receive pension or annuity payments from a privately purchased annuity contract from a commercial organization, such as an insurance company, you generally must use the General Rule to figure the tax-free part of each annuity payment. Can i file 2011 taxes online For more information about the General Rule, get Publication 939. Can i file 2011 taxes online Also, see Variable Annuities in Publication 575 for the special provisions that apply to these annuity contracts. Can i file 2011 taxes online Loans. Can i file 2011 taxes online   If you borrow money from your retirement plan, you must treat the loan as a nonperiodic distribution from the plan unless certain exceptions apply. Can i file 2011 taxes online This treatment also applies to any loan under a contract purchased under your retirement plan, and to the value of any part of your interest in the plan or contract that you pledge or assign. Can i file 2011 taxes online This means that you must include in income all or part of the amount borrowed. Can i file 2011 taxes online Even if you do not have to treat the loan as a nonperiodic distribution, you may not be able to deduct the interest on the loan in some situations. Can i file 2011 taxes online For details, see Loans Treated as Distributions in Publication 575. Can i file 2011 taxes online For information on the deductibility of interest, see chapter 23. Can i file 2011 taxes online Tax-free exchange. Can i file 2011 taxes online   No gain or loss is recognized on an exchange of an annuity contract for another annuity contract if the insured or annuitant remains the same. Can i file 2011 taxes online However, if an annuity contract is exchanged for a life insurance or endowment contract, any gain due to interest accumulated on the contract is ordinary income. Can i file 2011 taxes online See Transfers of Annuity Contracts in Publication 575 for more information about exchanges of annuity contracts. Can i file 2011 taxes online How To Report If you file Form 1040, report your total annuity on line 16a and the taxable part on line 16b. Can i file 2011 taxes online If your pension or annuity is fully taxable, enter it on line 16b; do not make an entry on line 16a. Can i file 2011 taxes online If you file Form 1040A, report your total annuity on line 12a and the taxable part on line 12b. Can i file 2011 taxes online If your pension or annuity is fully taxable, enter it on line 12b; do not make an entry on line 12a. Can i file 2011 taxes online More than one annuity. Can i file 2011 taxes online   If you receive more than one annuity and at least one of them is not fully taxable, enter the total amount received from all annuities on Form 1040, line 16a, or Form 1040A, line 12a, and enter the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. Can i file 2011 taxes online If all the annuities you receive are fully taxable, enter the total of all of them on Form 1040, line 16b, or Form 1040A, line 12b. Can i file 2011 taxes online Joint return. Can i file 2011 taxes online   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on Form 1040, line 16a, or Form 1040A, line 12a, and report the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. Can i file 2011 taxes online Cost (Investment in the Contract) Before you can figure how much, if any, of a distribution from your pension or annuity plan is taxable, you must determine your cost (your investment in the contract) in the pension or annuity. Can i file 2011 taxes online Your total cost in the plan includes the total premiums, contributions, or other amounts you paid. Can i file 2011 taxes online This includes the amounts your employer contributed that were taxable to you when paid. Can i file 2011 taxes online Cost does not include any amounts you deducted or were excluded from your income. Can i file 2011 taxes online From this total cost, subtract any refunds of premiums, rebates, dividends, unrepaid loans that were not included in your income, or other tax-free amounts that you received by the later of the annuity starting date or the date on which you received your first payment. Can i file 2011 taxes online Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. Can i file 2011 taxes online Designated Roth accounts. Can i file 2011 taxes online   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. Can i file 2011 taxes online Your cost will also include any in-plan Roth rollovers you included in income. Can i file 2011 taxes online Foreign employment contributions. Can i file 2011 taxes online   If you worked in a foreign country and contributions were made to your retirement plan, special rules apply in determining your cost. Can i file 2011 taxes online See Foreign employment contributions under Cost (Investment in the Contract) in Publication 575. Can i file 2011 taxes online Taxation of Periodic Payments Fully taxable payments. Can i file 2011 taxes online   Generally, if you did not pay any part of the cost of your employee pension or annuity and your employer did not withhold part of the cost from your pay while you worked, the amounts you receive each year are fully taxable. Can i file 2011 taxes online You must report them on your income tax return. Can i file 2011 taxes online Partly taxable payments. Can i file 2011 taxes online   If you paid part of the cost of your pension or annuity, you are not taxed on the part of the pension or annuity you receive that represents a return of your cost. Can i file 2011 taxes online The rest of the amount you receive is generally taxable. Can i file 2011 taxes online You figure the tax-free part of the payment using either the Simplified Method or the General Rule. Can i file 2011 taxes online Your annuity starting date and whether or not your plan is qualified determine which method you must or may use. Can i file 2011 taxes online   If your annuity starting date is after November 18, 1996, and your payments are from a qualified plan, you must use the Simplified Method. Can i file 2011 taxes online Generally, you must use the General Rule if your annuity is paid under a nonqualified plan, and you cannot use this method if your annuity is paid under a qualified plan. Can i file 2011 taxes online   If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. Can i file 2011 taxes online   If your annuity is paid under a qualified plan and your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. Can i file 2011 taxes online Exclusion limit. Can i file 2011 taxes online   Your annuity starting date determines the total amount of annuity payments that you can exclude from your taxable income over the years. Can i file 2011 taxes online Once your annuity starting date is determined, it does not change. Can i file 2011 taxes online If you calculate the taxable portion of your annuity payments using the simplified method worksheet, the annuity starting date determines the recovery period for your cost. Can i file 2011 taxes online That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. Can i file 2011 taxes online Exclusion limited to cost. Can i file 2011 taxes online   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. Can i file 2011 taxes online 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. Can i file 2011 taxes online This deduction is not subject to the 2%-of-adjusted-gross-income limit. Can i file 2011 taxes online Exclusion not limited to cost. Can i file 2011 taxes online   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Can i file 2011 taxes online 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. Can i file 2011 taxes online The total exclusion may be more than your cost. Can i file 2011 taxes online Simplified Method Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. Can i file 2011 taxes online For an annuity that is payable for the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Can i file 2011 taxes online For any other annuity, this number is the number of monthly annuity payments under the contract. Can i file 2011 taxes online Who must use the Simplified Method. Can i file 2011 taxes online   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you both: Receive pension or annuity payments from a qualified employee plan, qualified employee annuity, or a tax-sheltered annuity (403(b)) plan, and On your annuity starting date, you were either under age 75, or entitled to less than 5 years of guaranteed payments. Can i file 2011 taxes online Guaranteed payments. Can i file 2011 taxes online   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. Can i file 2011 taxes online 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. Can i file 2011 taxes online How to use the Simplified Method. Can i file 2011 taxes online    Complete the Simplified Method Worksheet in Publication 575 to figure your taxable annuity for 2013. Can i file 2011 taxes online Single-life annuity. Can i file 2011 taxes online    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. Can i file 2011 taxes online Enter on line 3 the number shown for your age at the annuity starting date. Can i file 2011 taxes online Multiple-lives annuity. Can i file 2011 taxes online   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. Can i file 2011 taxes online Enter on line 3 the number shown for the combined ages of you and the youngest survivor annuitant at the annuity starting date. Can i file 2011 taxes online   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Can i file 2011 taxes online Instead you must use Table 1 and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. Can i file 2011 taxes online    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity next year. Can i file 2011 taxes online Example. Can i file 2011 taxes online Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. Can i file 2011 taxes online Bill's annuity starting date is January 1, 2013. Can i file 2011 taxes online The benefits are to be paid for the joint lives of Bill and his wife Kathy, age 65. Can i file 2011 taxes online Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Can i file 2011 taxes online 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. Can i file 2011 taxes online 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. Can i file 2011 taxes online Because his annuity is payable over the lives of more than one annuitant, he uses his and Kathy's combined ages and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet. Can i file 2011 taxes online His completed worksheet is shown in Worksheet 10-A. Can i file 2011 taxes online Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. Can i file 2011 taxes online Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Can i file 2011 taxes online The full amount of any annuity payments received after 310 payments are paid must be included in gross income. Can i file 2011 taxes online 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. Can i file 2011 taxes online This deduction is not subject to the 2%-of-adjusted- gross-income limit. Can i file 2011 taxes online Worksheet 10-A. Can i file 2011 taxes online Simplified Method Worksheet for Bill Smith 1. Can i file 2011 taxes online Enter the total pension or annuity payments received this year. Can i file 2011 taxes online Also, add this amount to the total for Form 1040, line 16a, or Form 1040A, line 12a 1. Can i file 2011 taxes online 14,400 2. Can i file 2011 taxes online Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion*. Can i file 2011 taxes online See Cost (Investment in the Contract) , earlier 2. Can i file 2011 taxes online 31,000       Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Can i file 2011 taxes online Otherwise, go to line 3. Can i file 2011 taxes online         3. Can i file 2011 taxes online Enter the appropriate number from Table 1 below. Can i file 2011 taxes online 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. Can i file 2011 taxes online 310     4. Can i file 2011 taxes online Divide line 2 by the number on line 3 4. Can i file 2011 taxes online 100     5. Can i file 2011 taxes online Multiply line 4 by the number of months for which this year's payments were made. Can i file 2011 taxes online If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Can i file 2011 taxes online Otherwise, go to line 6 5. Can i file 2011 taxes online 1,200     6. Can i file 2011 taxes online Enter any amounts previously recovered tax free in years after 1986. Can i file 2011 taxes online This is the amount shown on line 10 of your worksheet for last year 6. Can i file 2011 taxes online -0-     7. Can i file 2011 taxes online Subtract line 6 from line 2 7. Can i file 2011 taxes online 31,000     8. Can i file 2011 taxes online Enter the smaller of line 5 or line 7 8. Can i file 2011 taxes online 1,200 9. Can i file 2011 taxes online Taxable amount for year. Can i file 2011 taxes online Subtract line 8 from line 1. Can i file 2011 taxes online Enter the result, but not less than zero. Can i file 2011 taxes online Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b 9. Can i file 2011 taxes online 13,200   Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Can i file 2011 taxes online If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers in Publication 575 before entering an amount on your tax return. Can i file 2011 taxes online     10. Can i file 2011 taxes online Was your annuity starting date before 1987? □ Yes. Can i file 2011 taxes online STOP. Can i file 2011 taxes online Do not complete the rest of this worksheet. Can i file 2011 taxes online  ☑ No. Can i file 2011 taxes online Add lines 6 and 8. Can i file 2011 taxes online This is the amount you have recovered tax free through 2013. Can i file 2011 taxes online You will need this number if you need to fill out this worksheet next year 10. Can i file 2011 taxes online 1,200 11. Can i file 2011 taxes online Balance of cost to be recovered. Can i file 2011 taxes online Subtract line 10 from line 2. Can i file 2011 taxes online If zero, you will not have to complete this worksheet next year. Can i file 2011 taxes online The payments you receive next year will generally be fully taxable 11. Can i file 2011 taxes online 29,800 TABLE 1 FOR LINE 3 ABOVE   AND your annuity starting date was— IF the age at annuity starting date was. Can i file 2011 taxes online . Can i file 2011 taxes online . Can i file 2011 taxes online before November 19, 1996, enter on line 3. Can i file 2011 taxes online . Can i file 2011 taxes online . Can i file 2011 taxes online after November 18, 1996, enter on line 3. Can i file 2011 taxes online . Can i file 2011 taxes online . Can i file 2011 taxes online 55 or under 300 360 56–60 260 310 61–65 240 260 66–70 170 210 71 or older 120 160 TABLE 2 FOR LINE 3 ABOVE IF the combined ages at annuity starting date were. Can i file 2011 taxes online . Can i file 2011 taxes online . Can i file 2011 taxes online   THEN enter on line 3. Can i file 2011 taxes online . Can i file 2011 taxes online . Can i file 2011 taxes online 110 or under   410 111–120   360 121–130   310 131–140   260 141 or older   210 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Can i file 2011 taxes online Who must use the General Rule. Can i file 2011 taxes online   You must use the General Rule if you receive pension or annuity payments from: A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or A qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years. Can i file 2011 taxes online Annuity starting before November 19, 1996. Can i file 2011 taxes online   If your annuity starting date is after July 1, 1986, and before November 19, 1996, you had to use the General Rule for either circumstance just described. Can i file 2011 taxes online You also had to use it for any fixed-period annuity. Can i file 2011 taxes online If you did not have to use the General Rule, you could have chosen to use it. Can i file 2011 taxes online If your annuity starting date is before July 2, 1986, you had to use the General Rule unless you could use the Three-Year Rule. Can i file 2011 taxes online   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. Can i file 2011 taxes online Who cannot use the General Rule. Can i file 2011 taxes online   You cannot use the General Rule if you receive your pension or annuity from a qualified plan and none of the circumstances described in the preceding discussions apply to you. Can i file 2011 taxes online See Who must use the Simplified Method , earlier. Can i file 2011 taxes online More information. Can i file 2011 taxes online   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. Can i file 2011 taxes online Taxation of Nonperiodic Payments Nonperiodic distributions are also known as amounts not received as an annuity. Can i file 2011 taxes online They include all payments other than periodic payments and corrective distributions. Can i file 2011 taxes online Examples of nonperiodic payments are cash withdrawals, distributions of current earnings, certain loans, and the value of annuity contracts transferred without full and adequate consideration. Can i file 2011 taxes online Corrective distributions of excess plan contributions. Can i file 2011 taxes online   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. Can i file 2011 taxes online To correct an excess, your plan may distribute it to you (along with any income earned on the excess). Can i file 2011 taxes online For information on plan contribution limits and how to report corrective distributions of excess contributions, see Retirement Plan Contributions under Employee Compensation in Publication 525. Can i file 2011 taxes online Figuring the taxable amount of nonperiodic payments. Can i file 2011 taxes online   How you figure the taxable amount of a nonperiodic distribution depends on whether it is made before the annuity starting date, or on or after the annuity starting date. Can i file 2011 taxes online If it is made before the annuity starting date, its tax treatment also depends on whether it is made under a qualified or nonqualified plan. Can i file 2011 taxes online If it is made under a nonqualified plan, its tax treatment depends on whether it fully discharges the contract, is received under certain life insurance or endowment contracts, or is allocable to an investment you made before August 14, 1982. Can i file 2011 taxes online Annuity starting date. Can i file 2011 taxes online   The annuity starting date is either the first day of the first period for which you receive an annuity payment under the contract or the date on which the obligation under the contract becomes fixed, whichever is later. Can i file 2011 taxes online Distribution on or after annuity starting date. Can i file 2011 taxes online   If you receive a nonperiodic payment from your annuity contract on or after the annuity starting date, you generally must include all of the payment in gross income. Can i file 2011 taxes online Distribution before annuity starting date. Can i file 2011 taxes online   If you receive a nonperiodic distribution before the annuity starting date from a qualified retirement plan, you generally can allocate only part of it to the cost of the contract. Can i file 2011 taxes online You exclude from your gross income the part that you allocate to the cost. Can i file 2011 taxes online You include the remainder in your gross income. Can i file 2011 taxes online   If you receive a nonperiodic distribution before the annuity starting date from a plan other than a qualified retirement plan (nonqualified plan), it is allocated first to earnings (the taxable part) and then to the cost of the contract (the tax-free part). Can i file 2011 taxes online This allocation rule applies, for example, to a commercial annuity contract you bought directly from the issuer. Can i file 2011 taxes online    Distributions from nonqualified plans are subject to the net investment income tax. Can i file 2011 taxes online See the Instructions for Form 8960. Can i file 2011 taxes online   For more information, see Figuring the Taxable Amount under Taxation of Nonperiodic Payments in Publication 575. Can i file 2011 taxes online Lump-Sum Distributions This section on lump-sum distributions only applies if the plan participant was born before January 2, 1936. Can i file 2011 taxes online If the plan participant was born after January 1, 1936, the taxable amount of this nonperiodic payment is reported as discussed earlier. Can i file 2011 taxes online A lump-sum distribution is the distribution or payment in one tax year of a plan participant's entire balance from all of the employer's qualified plans of one kind (for example, pension, profit-sharing, or stock bonus plans). Can i file 2011 taxes online A distribution from a nonqualified plan (such as a privately purchased commercial annuity or a section 457 deferred compensation plan of a state or local government or tax-exempt organization) cannot qualify as a lump-sum distribution. Can i file 2011 taxes online The participant's entire balance from a plan does not include certain forfeited amounts. Can i file 2011 taxes online It also does not include any deductible voluntary employee contributions allowed by the plan after 1981 and before 1987. Can i file 2011 taxes online For more information about distributions that do not qualify as lump-sum distributions, see Distributions that do not qualify under Lump-Sum Distributions in Publication 575. Can i file 2011 taxes online 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. Can i file 2011 taxes online The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. Can i file 2011 taxes online The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. Can i file 2011 taxes online You may be able to use the 10-year tax option, discussed later, to figure tax on the ordinary income part. Can i file 2011 taxes online Use Form 4972 to figure the separate tax on a lump-sum distribution using the optional methods. Can i file 2011 taxes online The tax figured on Form 4972 is added to the regular tax figured on your other income. Can i file 2011 taxes online This may result in a smaller tax than you would pay by including the taxable amount of the distribution as ordinary income in figuring your regular tax. Can i file 2011 taxes online How to treat the distribution. Can i file 2011 taxes online   If you receive a lump-sum distribution, you may have the following options for how you treat the taxable part. Can i file 2011 taxes online Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and the part from participation after 1973 as ordinary income. Can i file 2011 taxes online Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and use the 10-year tax option to figure the tax on the part from participation after 1973 (if you qualify). Can i file 2011 taxes online Use the 10-year tax option to figure the tax on the total taxable amount (if you qualify). Can i file 2011 taxes online Roll over all or part of the distribution. Can i file 2011 taxes online See Rollovers , later. Can i file 2011 taxes online No tax is currently due on the part rolled over. Can i file 2011 taxes online Report any part not rolled over as ordinary income. Can i file 2011 taxes online Report the entire taxable part of the distribution as ordinary income on your tax return. Can i file 2011 taxes online   The first three options are explained in the following discussions. Can i file 2011 taxes online Electing optional lump-sum treatment. Can i file 2011 taxes online   You can choose to use the 10-year tax option or capital gain treatment only once after 1986 for any plan participant. Can i file 2011 taxes online If you make this choice, you cannot use either of these optional treatments for any future distributions for the participant. Can i file 2011 taxes online Taxable and tax-free parts of the distribution. Can i file 2011 taxes online    The taxable part of a lump-sum distribution is the employer's contributions and income earned on your account. Can i file 2011 taxes online You may recover your cost in the lump sum and any net unrealized appreciation (NUA) in employer securities tax free. Can i file 2011 taxes online Cost. Can i file 2011 taxes online   In general, your cost is the total of: The plan participant's nondeductible contributions to the plan, The plan participant's taxable costs of any life insurance contract distributed, Any employer contributions that were taxable to the plan participant, and Repayments of any loans that were taxable to the plan participant. Can i file 2011 taxes online You must reduce this cost by amounts previously distributed tax free. Can i file 2011 taxes online Net unrealized appreciation (NUA). Can i file 2011 taxes online   The NUA in employer securities (box 6 of Form 1099-R) received as part of a lump-sum distribution is generally tax free until you sell or exchange the securities. Can i file 2011 taxes online (For more information, see Distributions of employer securities under Taxation of Nonperiodic Payments in Publication 575. Can i file 2011 taxes online ) Capital Gain Treatment Capital gain treatment applies only to the taxable part of a lump-sum distribution resulting from participation in the plan before 1974. Can i file 2011 taxes online The amount treated as capital gain is taxed at a 20% rate. Can i file 2011 taxes online You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. Can i file 2011 taxes online Complete Part II of Form 4972 to choose the 20% capital gain election. Can i file 2011 taxes online For more information, see Capital Gain Treatment under Lump-Sum Distributions in Publication 575. Can i file 2011 taxes online 10-Year Tax Option The 10-year tax option is a special formula used to figure a separate tax on the ordinary income part of a lump-sum distribution. Can i file 2011 taxes online You pay the tax only once, for the year in which you receive the distribution, not over the next 10 years. Can i file 2011 taxes online You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. Can i file 2011 taxes online The ordinary income part of the distribution is the amount shown in box 2a of the Form 1099-R given to you by the payer, minus the amount, if any, shown in box 3. Can i file 2011 taxes online You also can treat the capital gain part of the distribution (box 3 of Form 1099-R) as ordinary income for the 10-year tax option if you do not choose capital gain treatment for that part. Can i file 2011 taxes online Complete Part III of Form 4972 to choose the 10-year tax option. Can i file 2011 taxes online You must use the special Tax Rate Schedule shown in the instructions for Part III to figure the tax. Can i file 2011 taxes online Publication 575 illustrates how to complete Form 4972 to figure the separate tax. Can i file 2011 taxes online Rollovers If you withdraw cash or other assets from a qualified retirement plan in an eligible rollover distribution, you can defer tax on the distribution by rolling it over to another qualified retirement plan or a traditional IRA. Can i file 2011 taxes online For this purpose, the following plans are qualified retirement plans. Can i file 2011 taxes online A qualified employee plan. Can i file 2011 taxes online A qualified employee annuity. Can i file 2011 taxes online A tax-sheltered annuity plan (403(b) plan). Can i file 2011 taxes online An eligible state or local government section 457 deferred compensation plan. Can i file 2011 taxes online Eligible rollover distributions. Can i file 2011 taxes online   Generally, an eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan. Can i file 2011 taxes online For information about exceptions to eligible rollover distributions, see Publication 575. Can i file 2011 taxes online Rollover of nontaxable amounts. Can i file 2011 taxes online   You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another qualified retirement plan that is a qualified employee plan or a 403(b) plan, or to a traditional or Roth IRA. Can i file 2011 taxes online The transfer must be made either through a direct rollover to a qualified plan or 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional or Roth IRA. Can i file 2011 taxes online   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. Can i file 2011 taxes online   Any after-tax contributions that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Can i file 2011 taxes online To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Can i file 2011 taxes online For more information, see the Form 8606 instructions. Can i file 2011 taxes online Direct rollover option. Can i file 2011 taxes online   You can choose to have any part or all of an eligible rollover distribution paid directly to another qualified retirement plan that accepts rollover distributions or to a traditional or Roth IRA. Can i file 2011 taxes online If you choose the direct rollover option, or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. Can i file 2011 taxes online Payment to you option. Can i file 2011 taxes online   If an eligible rollover distribution is paid to you, 20% generally will be withheld for income tax. Can i file 2011 taxes online However, the full amount is treated as distributed to you even though you actually receive only 80%. Can i file 2011 taxes online You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional or Roth IRA. Can i file 2011 taxes online (See Pensions and Annuities under Tax Withholding for 2014 in chapter 4. Can i file 2011 taxes online )    If you decide to roll over an amount equal to the distribution before withholding, your contribution to the new plan or IRA must include other money (for example, from savings or amounts borrowed) to replace the amount withheld. Can i file 2011 taxes online Time for making rollover. Can i file 2011 taxes online   You generally must complete the rollover of an eligible rollover distribution paid to you by the 60th day following the day on which you receive the distribution from your employer's plan. Can i file 2011 taxes online (If an amount distributed to you becomes a frozen deposit in a financial institution during the 60-day period after you receive it, the rollover period is extended for the period during which the distribution is in a frozen deposit in a financial institution. Can i file 2011 taxes online )   The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. Can i file 2011 taxes online   The administrator of a qualified plan must give you a written explanation of your distribution options within a reasonable period of time before making an eligible rollover distribution. Can i file 2011 taxes online Qualified domestic relations order (QDRO). Can i file 2011 taxes online   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan that you receive under a QDRO. Can i file 2011 taxes online If you receive the distribution as an employee's spouse or former spouse (not as a nonspousal beneficiary), the rollover rules apply to you as if you were the employee. Can i file 2011 taxes online You can roll over the distribution from the plan into a traditional IRA or to another eligible retirement plan. Can i file 2011 taxes online See Rollovers in Publication 575 for more information on benefits received under a QDRO. Can i file 2011 taxes online Rollover by surviving spouse. Can i file 2011 taxes online   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan you receive as the surviving spouse of a deceased employee. Can i file 2011 taxes online The rollover rules apply to you as if you were the employee. Can i file 2011 taxes online You can roll over a distribution into a qualified retirement plan or a traditional or Roth IRA. Can i file 2011 taxes online For a rollover to a Roth IRA, see Rollovers to Roth IRAs , later. Can i file 2011 taxes online    A distribution paid to a beneficiary other than the employee's surviving spouse is generally not an eligible rollover distribution. Can i file 2011 taxes online However, see Rollovers by nonspouse beneficiary next. Can i file 2011 taxes online Rollovers by nonspouse beneficiary. Can i file 2011 taxes online   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you may be able to roll over tax free all or a portion of a distribution you receive from an eligible retirement plan of the employee. Can i file 2011 taxes online The distribution must be a direct trustee-to-trustee transfer to your traditional or Roth IRA that was set up to receive the distribution. Can i file 2011 taxes online The transfer will be treated as an eligible rollover distribution and the receiving plan will be treated as an inherited IRA. Can i file 2011 taxes online For information on inherited IRAs, see What if You Inherit an IRA? in chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs). Can i file 2011 taxes online Retirement bonds. Can i file 2011 taxes online   If you redeem retirement bonds purchased under a qualified bond purchase plan, you can roll over the proceeds that exceed your basis tax free into an IRA (as discussed in Publication 590) or a qualified employer plan. Can i file 2011 taxes online Designated Roth accounts. Can i file 2011 taxes online   You can roll over an eligible rollover distribution from a designated Roth account into another designated Roth account or a Roth IRA. Can i file 2011 taxes online If you want to roll over the part of the distribution that is not included in income, you must make a direct rollover of the entire distribution or you can roll over the entire amount (or any portion) to a Roth IRA. Can i file 2011 taxes online For more information on rollovers from designated Roth accounts, see Rollovers in Publication 575. Can i file 2011 taxes online In-plan rollovers to designated Roth accounts. Can i file 2011 taxes online   If you are a plan participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. Can i file 2011 taxes online The rollover of any untaxed amounts must be included in income. Can i file 2011 taxes online See Designated Roth accounts under Rollovers in Publication 575 for more information. Can i file 2011 taxes online Rollovers to Roth IRAs. Can i file 2011 taxes online   You can roll over distributions directly from a qualified retirement plan (other than a designated Roth account) to a Roth IRA. Can i file 2011 taxes online   You must include in your gross income distributions from a qualified retirement plan (other than a designated Roth account) that you would have had to include in income if you had not rolled them over into a Roth IRA. Can i file 2011 taxes online You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions to the plan that were taxable to you when paid. Can i file 2011 taxes online In addition, the 10% tax on early distributions does not apply. Can i file 2011 taxes online More information. Can i file 2011 taxes online   For more information on the rules for rolling over distributions, see Rollovers in Publication 575. Can i file 2011 taxes online Special Additional Taxes To discourage the use of pension funds for purposes other than normal retirement, the law imposes additional taxes on early distributions of those funds and on failures to withdraw the funds timely. Can i file 2011 taxes online Ordinarily, you will not be subject to these taxes if you roll over all early distributions you receive, as explained earlier, and begin drawing out the funds at a normal retirement age, in reasonable amounts over your life expectancy. Can i file 2011 taxes online These special additional taxes are the taxes on: Early distributions, and Excess accumulation (not receiving minimum distributions). Can i file 2011 taxes online These taxes are discussed in the following sections. Can i file 2011 taxes online If you must pay either of these taxes, report them on Form 5329. Can i file 2011 taxes online However, you do not have to file Form 5329 if you owe only the tax on early distributions and your Form 1099-R correctly shows a “1” in box 7. Can i file 2011 taxes online Instead, enter 10% of the taxable part of the distribution on Form 1040, line 58 and write “No” under the heading “Other Taxes” to the left of line 58. Can i file 2011 taxes online Even if you do not owe any of these taxes, you may have to complete Form 5329 and attach it to your Form 1040. Can i file 2011 taxes online This applies if you meet an exception to the tax on early distributions but box 7 of your Form 1099-R does not indicate an exception. Can i file 2011 taxes online Tax on Early Distributions Most distributions (both periodic and nonperiodic) from qualified retirement plans and nonqualified annuity contracts made to you before you reach age 59½ are subject to an additional tax of 10%. Can i file 2011 taxes online This tax applies to the part of the distribution that you must include in gross income. Can i file 2011 taxes online For this purpose, a qualified retirement plan is: A qualified employee plan, A qualified employee annuity plan, A tax-sheltered annuity plan, or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). Can i file 2011 taxes online 5% rate on certain early distributions from deferred annuity contracts. Can i file 2011 taxes online   If an early withdrawal from a deferred annuity is otherwise subject to the 10% additional tax, a 5% rate may apply instead. Can i file 2011 taxes online A 5% rate applies to distributions under a written election providing a specific schedule for the distribution of your interest in the contract if, as of March 1, 1986, you had begun receiving payments under the election. Can i file 2011 taxes online On line 4 of Form 5329, multiply the line 3 amount by 5% instead of 10%. Can i file 2011 taxes online Attach an explanation to your return. Can i file 2011 taxes online Distributions from Roth IRAs allocable to a rollover from an eligible retirement plan within the 5-year period. Can i file 2011 taxes online   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from an eligible retirement plan to a Roth IRA, you take a distribution from the Roth IRA, you may have to pay the additional 10% tax on early distributions. Can i file 2011 taxes online You generally must pay the 10% additional tax on any amount attributable to the part of the rollover that you had to include in income. Can i file 2011 taxes online The additional tax is figured on Form 5329. Can i file 2011 taxes online For more information, see Form 5329 and its instructions. Can i file 2011 taxes online For information on qualified distributions from Roth IRAs, see Additional Tax on Early Distributions in chapter 2 of Publication 590. Can i file 2011 taxes online Distributions from designated Roth accounts allocable to in-plan Roth rollovers within the 5-year period. Can i file 2011 taxes online   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from a 401(k), 403(b), or 457(b) plan to a designated Roth account, you take a distribution from the designated Roth account, you may have to pay the additional 10% tax on early distributions. Can i file 2011 taxes online You generally must pay the 10% additional tax on any amount attributable to the part of the in-plan rollover that you had to include in income. Can i file 2011 taxes online The additional tax is figured on Form 5329. Can i file 2011 taxes online For more information, see Form 5329 and its instructions. Can i file 2011 taxes online For information on qualified distributions from designated Roth accounts, see Designated Roth accounts under Taxation of Periodic Payments in Publication 575. Can i file 2011 taxes online Exceptions to tax. Can i file 2011 taxes online    Certain early distributions are excepted from the early distribution tax. Can i file 2011 taxes online If the payer knows that an exception applies to your early distribution, distribution code “2,” “3,” or “4” should be shown in box 7 of your Form 1099-R and you do not have to report the distribution on Form 5329. Can i file 2011 taxes online If an exception applies but distribution code “1” (early distribution, no known exception) is shown in box 7, you must file Form 5329. Can i file 2011 taxes online Enter the taxable amount of the distribution shown in box 2a of your Form 1099-R on line 1 of Form 5329. Can i file 2011 taxes online On line 2, enter the amount that can be excluded and the exception number shown in the Form 5329 instructions. Can i file 2011 taxes online    If distribution code “1” is incorrectly shown on your Form 1099-R for a distribution received when you were age 59½ or older, include that distribution on Form 5329. Can i file 2011 taxes online Enter exception number “12” on line 2. Can i file 2011 taxes online General exceptions. Can i file 2011 taxes online   The tax does not apply to distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after your separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. Can i file 2011 taxes online Additional exceptions for qualified retirement plans. Can i file 2011 taxes online   The tax does not apply to distributions that are: From a qualified retirement plan (other than an IRA) after your separation from service in or after the year you reached age 55 (age 50 for qualified public safety employees), From a qualified retirement plan (other than an IRA) to an alternate payee under a qualified domestic relations order, From a qualified retirement plan to the extent you have deductible medical expenses that exceed 10% (or 7. Can i file 2011 taxes online 5% if you or your spouse are age 65 or older) of your adjusted gross income, whether or not you itemize your deductions for the year, From an employer plan under a written election that provides a specific schedule for distribution of your entire interest if, as of March 1, 1986, you had separated from service and had begun receiving payments under the election, From an employee stock ownership plan for dividends on employer securities held by the plan, From a qualified retirement plan due to an IRS levy of the plan, From elective deferral accounts under 401(k) or 403(b) plans or similar arrangements that are qualified reservist distributions, or Phased retirement annuity payments made to federal employees. Can i file 2011 taxes online See Pub. Can i file 2011 taxes online 721 for more information on the phased retirement program. Can i file 2011 taxes online Qualified public safety employees. Can i file 2011 taxes online   If you are a qualified public safety employee, distributions made from a governmental defined benefit pension plan are not subject to the additional tax on early distributions. Can i file 2011 taxes online You are a qualified public safety employee if you provide police protection, firefighting services, or emergency medical services for a state or municipality, and you separated from service in or after the year you attained age 50. Can i file 2011 taxes online Qualified reservist distributions. Can i file 2011 taxes online   A qualified reservist distribution is not subject to the additional tax on early distributions. Can i file 2011 taxes online A qualified reservist distribution is a distribution (a) from elective deferrals under a section 401(k) or 403(b) plan, or a similar arrangement, (b) to an individual ordered or called to active duty (because he or she is a member of a reserve component) for a period of more than 179 days or for an indefinite period, and (c) made during the period beginning on the date of the order or call and ending at the close of the active duty period. Can i file 2011 taxes online You must have been ordered or called to active duty after September 11, 2001. Can i file 2011 taxes online For more information, see Qualified reservist distributions under Special Additional Taxes in Publication 575. Can i file 2011 taxes online Additional exceptions for nonqualified annuity contracts. Can i file 2011 taxes online   The tax does not apply to distributions from: A deferred annuity contract to the extent allocable to investment in the contract before August 14, 1982, A deferred annuity contract under a qualified personal injury settlement, A deferred annuity contract purchased by your employer upon termination of a qualified employee plan or qualified employee annuity plan and held by your employer until your separation from service, or An immediate annuity contract (a single premium contract providing substantially equal annuity payments that start within 1 year from the date of purchase and are paid at least annually). Can i file 2011 taxes online Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date (defined later). Can i file 2011 taxes online The payments each year cannot be less than the required minimum distribution. Can i file 2011 taxes online Required distributions not made. Can i file 2011 taxes online   If the actual distributions to you in any year are less than the minimum required distribution for that year, you are subject to an additional tax. Can i file 2011 taxes online The tax equals 50% of the part of the required minimum distribution that was not distributed. Can i file 2011 taxes online   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). Can i file 2011 taxes online Waiver. Can i file 2011 taxes online   The tax may be waived if you establish that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. Can i file 2011 taxes online See the Instructions for Form 5329 for the procedure to follow if you believe you qualify for a waiver of this tax. Can i file 2011 taxes online State insurer delinquency proceedings. Can i file 2011 taxes online   You might not receive the minimum distribution because assets are invested in a contract issued by an insurance company in state insurer delinquency proceedings. Can i file 2011 taxes online If your payments are reduced below the minimum due to these proceedings, you should contact your plan administrator. Can i file 2011 taxes online Under certain conditions, you will not have to pay the 50% excise tax. Can i file 2011 taxes online Required beginning date. Can i file 2011 taxes online   Unless the rule for 5% owners applies, you generally must begin to receive distributions from your qualified retirement plan by April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. Can i file 2011 taxes online However, your plan may require you to begin to receive distributions by April 1 of the year that follows the year in which you reach age 70½, even if you have not retired. Can i file 2011 taxes online   If you reached age 70½ in 2013, you may be required to receive your first distribution by April 1, 2014. Can i file 2011 taxes online Your required distribution then must be made for 2014 by December 31, 2014. Can i file 2011 taxes online 5% owners. Can i file 2011 taxes online   If you are a 5% owner, you must begin to receive distributions by April 1 of the year that follows the calendar year in which you reach age 70½. Can i file 2011 taxes online   You are a 5% owner if, for the plan year ending in the calendar year in which you reach age 70½, you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the outstanding stock (or more than 5% of the total voting power of all stock) of the employer, or more than 5% of the capital or profits interest in the employer. Can i file 2011 taxes online Age 70½. Can i file 2011 taxes online   You reach age 70½ on the date that is 6 calendar months after the date of your 70th birthday. Can i file 2011 taxes online   For example, if you are retired and your 70th birthday was on June 30, 2013, you were age 70½ on December 30, 2013. Can i file 2011 taxes online If your 70th birthday was on July 1, 2013, you reached age 70½ on January 1, 2014. Can i file 2011 taxes online Required distributions. Can i file 2011 taxes online   By the required beginning date, as explained earlier, you must either: Receive your entire interest in the plan (for a tax-sheltered annuity, your entire benefit accruing after 1986), or Begin receiving periodic distributions in annual amounts calculated to distribute your entire interest (for a tax-sheltered annuity, your entire benefit accruing after 1986) over your life or life expectancy or over the joint lives or joint life expectancies of you and a designated beneficiary (or over a shorter period). Can i file 2011 taxes online Additional information. Can i file 2011 taxes online   For more information on this rule, see Tax on Excess Accumulation in Publication 575. Can i file 2011 taxes online Form 5329. Can i file 2011 taxes online   You must file Form 5329 if you owe tax because you did not receive a minimum required distribution from your qualified retirement plan. Can i file 2011 taxes online Survivors and Beneficiaries Generally, a survivor or beneficiary reports pension or annuity income in the same way the plan participant would have. Can i file 2011 taxes online However, some special rules apply. Can i file 2011 taxes online See Publication 575 for more information. Can i file 2011 taxes online Survivors of employees. Can i file 2011 taxes online   If you are entitled to receive a survivor annuity on the death of an employee who died, you can exclude part of each annuity payment as a tax-free recovery of the employee's investment in the contract. Can i file 2011 taxes online You must figure the taxable and tax-free parts of your annuity payments using the method that applies as if you were the employee. Can i file 2011 taxes online Survivors of retirees. Can i file 2011 taxes online   If you receive benefits as a survivor under a joint and survivor annuity, include those benefits in income in the same way the retiree would have included them in income. Can i file 2011 taxes online If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule and recovered all of the cost tax free, your survivor payments are fully taxable. Can i file 2011 taxes online    If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage to your initial survivor annuity payment called for in the contract. Can i file 2011 taxes online The resulting tax-free amount will then remain fixed. Can i file 2011 taxes online Any increases in the survivor annuity are fully taxable. Can i file 2011 taxes online    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. Can i file 2011 taxes online This amount remains fixed even if the annuity payments are increased or decreased. Can i file 2011 taxes online See Simplified Method , earlier. Can i file 2011 taxes online   In any case, if the annuity starting date is after 1986, the total exclusion over the years cannot be more than the cost. Can i file 2011 taxes online Estate tax deduction. Can i file 2011 taxes online   If your annuity was a joint and survivor annuity that was included in the decedent's estate, an estate tax may have been paid on it. Can i file 2011 taxes online You can deduct the part of the total estate tax that was based on the annuity. Can i file 2011 taxes online The deceased annuitant must have died after the annuity starting date. Can i file 2011 taxes online (For details, see section 1. Can i file 2011 taxes online 691(d)-1 of the regulations. Can i file 2011 taxes online ) Deduct it in equal amounts over your remaining life expectancy. Can i file 2011 taxes online   If the decedent died before the annuity starting date of a deferred annuity contract and you receive a death benefit under that contract, the amount you receive (either in a lump sum or as periodic payments) in excess of the decedent's cost is included in your gross income as income in respect of a decedent for which you may be able to claim an estate tax deduction. Can i file 2011 taxes online   You can take the estate tax deduction as an itemized deduction on Schedule A, Form 1040. Can i file 2011 taxes online This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. Can i file 2011 taxes online See Publication 559, Survivors, Executors, and Administrators, for more information on the estate tax deduction. Can i file 2011 taxes online Prev  Up  Next   Home   More Online Publications