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Federal Tax Forms 2009

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Federal Tax Forms 2009

Federal tax forms 2009 5. Federal tax forms 2009   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. Federal tax forms 2009 Shared equity financing agreement. Federal tax forms 2009 Donation of use of the property. Federal tax forms 2009 Examples. Federal tax forms 2009 Days used for repairs and maintenance. Federal tax forms 2009 Days used as a main home before or after renting. Federal tax forms 2009 Reporting Income and DeductionsNot used as a home. Federal tax forms 2009 Used as a home but rented less than 15 days. Federal tax forms 2009 Used as a home and rented 15 days or more. Federal tax forms 2009 If you have any personal use of a dwelling unit (including a vacation home) that you rent, you must divide your expenses between rental use and personal use. Federal tax forms 2009 In general, your rental expenses will be no more than your total expenses multiplied by a fraction; the denominator of which is the total number of days the dwelling unit is used and the numerator of which is the total number of days actually rented at a fair rental price. Federal tax forms 2009 Only your rental expenses may deducted on Schedule E (Form 1040). Federal tax forms 2009 Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). Federal tax forms 2009 You must also determine if the dwelling unit is considered a home. Federal tax forms 2009 The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. Federal tax forms 2009 Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. Federal tax forms 2009 There is a special rule if you used the dwelling unit as a home and you rented it for less than 15 days during the year. Federal tax forms 2009 Dwelling unit. Federal tax forms 2009   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. Federal tax forms 2009 It also includes all structures or other property belonging to the dwelling unit. Federal tax forms 2009 A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. Federal tax forms 2009   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. Federal tax forms 2009 Property is used solely as a hotel, motel, inn, or similar establishment if it is regularly available for occupancy by paying customers and is not used by an owner as a home during the year. Federal tax forms 2009 Example. Federal tax forms 2009 You rent a room in your home that is always available for short-term occupancy by paying customers. Federal tax forms 2009 You do not use the room yourself and you allow only paying customers to use the room. Federal tax forms 2009 This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. Federal tax forms 2009 Dividing Expenses If you use a dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. Federal tax forms 2009 When dividing your expenses, follow these rules. Federal tax forms 2009 Any day that the unit is rented at a fair rental price is a day of rental use even if you used the unit for personal purposes that day. Federal tax forms 2009 (This rule does not apply when determining whether you used the unit as a home. Federal tax forms 2009 ) Any day that the unit is available for rent but not actually rented is not a day of rental use. Federal tax forms 2009 Fair rental price. Federal tax forms 2009   A fair rental price for your property generally is the amount of rent that a person who is not related to you would be willing to pay. Federal tax forms 2009 The rent you charge is not a fair rental price if it is substantially less than the rents charged for other properties that are similar to your property in your area. Federal tax forms 2009   Ask yourself the following questions when comparing another property with yours. Federal tax forms 2009 Is it used for the same purpose? Is it approximately the same size? Is it in approximately the same condition? Does it have similar furnishings? Is it in a similar location? If any of the answers are no, the properties probably are not similar. Federal tax forms 2009 Example. Federal tax forms 2009 Your beach cottage was available for rent from June 1 through August 31 (92 days). Federal tax forms 2009 Except for the first week in August (7 days), when you were unable to find a renter, you rented the cottage at a fair rental price during that time. Federal tax forms 2009 The person who rented the cottage for July allowed you to use it over the weekend (2 days) without any reduction in or refund of rent. Federal tax forms 2009 Your family also used the cottage during the last 2 weeks of May (14 days). Federal tax forms 2009 The cottage was not used at all before May 17 or after August 31. Federal tax forms 2009 You figure the part of the cottage expenses to treat as rental expenses as follows. Federal tax forms 2009 The cottage was used for rental a total of 85 days (92 − 7). Federal tax forms 2009 The days it was available for rent but not rented (7 days) are not days of rental use. Federal tax forms 2009 The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. Federal tax forms 2009 You used the cottage for personal purposes for 14 days (the last 2 weeks in May). Federal tax forms 2009 The total use of the cottage was 99 days (14 days personal use + 85 days rental use). Federal tax forms 2009 Your rental expenses are 85/99 (86%) of the cottage expenses. Federal tax forms 2009 Note. Federal tax forms 2009 When determining whether you used the cottage as a home, the July weekend (2 days) you used it is considered personal use even though you received a fair rental price for the weekend. Federal tax forms 2009 Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. Federal tax forms 2009 Because you used the cottage for personal purposes more than 14 days and more than 10% of the days of rental use (8 days), you used it as a home. Federal tax forms 2009 If you have a net loss, you may not be able to deduct all of the rental expenses. Federal tax forms 2009 See Dwelling Unit Used as a Home, next. Federal tax forms 2009 Dwelling Unit Used as a Home If you use a dwelling unit for both rental and personal purposes, the tax treatment of the rental expenses you figured earlier under Dividing Expenses and rental income depends on whether you are considered to be using the dwelling unit as a home. Federal tax forms 2009 You use a dwelling unit as a home during the tax year if you use it for personal purposes more than the greater of: 14 days, or 10% of the total days it is rented to others at a fair rental price. Federal tax forms 2009 See What is a day of personal use , later. Federal tax forms 2009 If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price (discussed earlier), do not count that day as a day of rental use in applying (2) above. Federal tax forms 2009 Instead, count it as a day of personal use in applying both (1) and (2) above. Federal tax forms 2009 What is a day of personal use?   A day of personal use of a dwelling unit is any day that the unit is used by any of the following persons. Federal tax forms 2009 You or any other person who owns an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). Federal tax forms 2009 However, see Days used as a main home before or after renting , later. Federal tax forms 2009 A member of your family or a member of the family of any other person who owns an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Federal tax forms 2009 Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. Federal tax forms 2009 ), and lineal descendants (children, grandchildren, etc. Federal tax forms 2009 ). Federal tax forms 2009 Anyone under an arrangement that lets you use some other dwelling unit. Federal tax forms 2009 Anyone at less than a fair rental price. Federal tax forms 2009 Main home. Federal tax forms 2009   If the other person or member of the family in (1) or (2) above has more than one home, his or her main home is ordinarily the one he or she lived in most of the time. Federal tax forms 2009 Shared equity financing agreement. Federal tax forms 2009   This is an agreement under which two or more persons acquire undivided interests for more than 50 years in an entire dwelling unit, including the land, and one or more of the co-owners is entitled to occupy the unit as his or her main home upon payment of rent to the other co-owner or owners. Federal tax forms 2009 Donation of use of the property. Federal tax forms 2009   You use a dwelling unit for personal purposes if: You donate the use of the unit to a charitable organization, The organization sells the use of the unit at a fund-raising event, and The “purchaser” uses the unit. Federal tax forms 2009 Examples. Federal tax forms 2009   The following examples show how to determine if you have days of personal use. Federal tax forms 2009 Example 1. Federal tax forms 2009 You and your neighbor are co-owners of a condominium at the beach. Federal tax forms 2009 Last year, you rented the unit to vacationers whenever possible. Federal tax forms 2009 The unit was not used as a main home by anyone. Federal tax forms 2009 Your neighbor used the unit for 2 weeks last year; you did not use it at all. Federal tax forms 2009 Because your neighbor has an interest in the unit, both of you are considered to have used the unit for personal purposes during those 2 weeks. Federal tax forms 2009 Example 2. Federal tax forms 2009 You and your neighbors are co-owners of a house under a shared equity financing agreement. Federal tax forms 2009 Your neighbors live in the house and pay you a fair rental price. Federal tax forms 2009 Even though your neighbors have an interest in the house, the days your neighbors live there are not counted as days of personal use by you. Federal tax forms 2009 This is because your neighbors rent the house as their main home under a shared equity financing agreement. Federal tax forms 2009 Example 3. Federal tax forms 2009 You own a rental property that you rent to your son. Federal tax forms 2009 Your son does not own any interest in this property. Federal tax forms 2009 He uses it as his main home and pays you a fair rental price. Federal tax forms 2009 Your son's use of the property is not personal use by you because your son is using it as his main home, he owns no interest in the property, and he is paying you a fair rental price. Federal tax forms 2009 Example 4. Federal tax forms 2009 You rent your beach house to Rosa. Federal tax forms 2009 Rosa rents her cabin in the mountains to you. Federal tax forms 2009 You each pay a fair rental price. Federal tax forms 2009 You are using your beach house for personal purposes on the days that Rosa uses it because your house is used by Rosa under an arrangement that allows you to use her cabin. Federal tax forms 2009 Example 5. Federal tax forms 2009 You rent an apartment to your mother at less than a fair rental price. Federal tax forms 2009 You are using the apartment for personal purposes on the days that your mother rents it because you rent it for less than a fair rental price. Federal tax forms 2009 Days used for repairs and maintenance. Federal tax forms 2009   Any day that you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. Federal tax forms 2009 Do not count such a day as a day of personal use even if family members use the property for recreational purposes on the same day. Federal tax forms 2009 Example. Federal tax forms 2009 Corey owns a cabin in the mountains that he rents for most of the year. Federal tax forms 2009 He spends a week at the cabin with family members. Federal tax forms 2009 Corey works on maintenance of the cabin 3 or 4 hours each day during the week and spends the rest of the time fishing, hiking, and relaxing. Federal tax forms 2009 Corey's family members, however, work substantially full time on the cabin each day during the week. Federal tax forms 2009 The main purpose of being at the cabin that week is to do maintenance work. Federal tax forms 2009 Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. Federal tax forms 2009 Days used as a main home before or after renting. Federal tax forms 2009   For purposes of determining whether a dwelling unit was used as a home, you may not have to count days you used the property as your main home before or after renting it or offering it for rent as days of personal use. Federal tax forms 2009 Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. Federal tax forms 2009 You rented or tried to rent the property for a period of less than 12 consecutive months and the period ended because you sold or exchanged the property. Federal tax forms 2009 However, this special rule does not apply when dividing expenses between rental and personal use. Federal tax forms 2009 See Property Changed to Rental Use in chapter 4. Federal tax forms 2009 Example 1. Federal tax forms 2009 On February 29, 2012, you moved out of the house you had lived in for 6 years because you accepted a job in another town. Federal tax forms 2009 You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). Federal tax forms 2009 On June 1, 2013, you moved back into your old house. Federal tax forms 2009 The days you used the house as your main home from January 1 to February 29, 2012, and from June 1 to December 31, 2013, are not counted as days of personal use. Federal tax forms 2009 Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. Federal tax forms 2009 Example 2. Federal tax forms 2009 On January 31, you moved out of the condominium where you had lived for 3 years. Federal tax forms 2009 You offered it for rent at a fair rental price beginning on February 1. Federal tax forms 2009 You were unable to rent it until April. Federal tax forms 2009 On September 15, you sold the condominium. Federal tax forms 2009 The days you used the condominium as your main home from January 1 to January 31 are not counted as days of personal use when determining whether you used it as a home. Federal tax forms 2009 Examples. Federal tax forms 2009   The following examples show how to determine whether you used your rental property as a home. Federal tax forms 2009 Example 1. Federal tax forms 2009 You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. Federal tax forms 2009 You rented the basement apartment at a fair rental price to college students during the regular school year. Federal tax forms 2009 You rented to them on a 9-month lease (273 days). Federal tax forms 2009 You figured 10% of the total days rented to others at a fair rental price is 27 days. Federal tax forms 2009 During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. Federal tax forms 2009 Your basement apartment was used as a home because you used it for personal purposes for 30 days. Federal tax forms 2009 Rent-free use by your brothers is considered personal use. Federal tax forms 2009 Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). Federal tax forms 2009 Example 2. Federal tax forms 2009 You rented the guest bedroom in your home at a fair rental price during the local college's homecoming, commencement, and football weekends (a total of 27 days). Federal tax forms 2009 Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. Federal tax forms 2009 You figured 10% of the total days rented to others at a fair rental price is 3 days. Federal tax forms 2009 The room was used as a home because you used it for personal purposes for 21 days. Federal tax forms 2009 That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). Federal tax forms 2009 Example 3. Federal tax forms 2009 You own a condominium apartment in a resort area. Federal tax forms 2009 You rented it at a fair rental price for a total of 170 days during the year. Federal tax forms 2009 For 12 of these days, the tenant was not able to use the apartment and allowed you to use it even though you did not refund any of the rent. Federal tax forms 2009 Your family actually used the apartment for 10 of those days. Federal tax forms 2009 Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. Federal tax forms 2009 You figured 10% of the total days rented to others at a fair rental price is 16 days. Federal tax forms 2009 Your family also used the apartment for 7 other days during the year. Federal tax forms 2009 You used the apartment as a home because you used it for personal purposes for 17 days. Federal tax forms 2009 That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). Federal tax forms 2009 Minimal rental use. Federal tax forms 2009   If you use the dwelling unit as a home and you rent it less than 15 days during the year, that period is not treated as rental activity. Federal tax forms 2009 See Used as a home but rented less than 15 days, later, for more information. Federal tax forms 2009 Limit on deductions. Federal tax forms 2009   Renting a dwelling unit that is considered a home is not a passive activity. Federal tax forms 2009 Instead, if your rental expenses are more than your rental income, some or all of the excess expenses cannot be used to offset income from other sources. Federal tax forms 2009 The excess expenses that cannot be used to offset income from other sources are carried forward to the next year and treated as rental expenses for the same property. Federal tax forms 2009 Any expenses carried forward to the next year will be subject to any limits that apply for that year. Federal tax forms 2009 This limitation will apply to expenses carried forward to another year even if you do not use the property as your home for that subsequent year. Federal tax forms 2009   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. Federal tax forms 2009 Reporting Income and Deductions Property not used for personal purposes. Federal tax forms 2009   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. Federal tax forms 2009 Property used for personal purposes. Federal tax forms 2009   If you do use a dwelling unit for personal purposes, then how you report your rental income and expenses depends on whether you used the dwelling unit as a home. Federal tax forms 2009 Not used as a home. Federal tax forms 2009   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. Federal tax forms 2009 Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in this chapter under Dividing Expenses . Federal tax forms 2009 The expenses for personal use are not deductible as rental expenses. Federal tax forms 2009   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. Federal tax forms 2009 Used as a home but rented less than 15 days. Federal tax forms 2009   If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function is not considered to be rental and it should not be reported on Schedule E (Form 1040). Federal tax forms 2009 You are not required to report the rental income and rental expenses from this activity. Federal tax forms 2009 The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). Federal tax forms 2009 See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. Federal tax forms 2009 Used as a home and rented 15 days or more. Federal tax forms 2009   If you use a dwelling unit as a home and rent it 15 days or more during the year, include all your rental income in your income. Federal tax forms 2009 Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in this chapter under Dividing Expenses . Federal tax forms 2009 The expenses for personal use are not deductible as rental expenses. Federal tax forms 2009   If you had a net profit from renting the dwelling unit for the year (that is, if your rental income is more than the total of your rental expenses, including depreciation), deduct all of your rental expenses. Federal tax forms 2009 You do not need to use Worksheet 5-1. Federal tax forms 2009   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. Federal tax forms 2009 To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. Federal tax forms 2009 Worksheet 5-1. Federal tax forms 2009 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Use this worksheet only if you answer “yes” to all of the following questions. Federal tax forms 2009 Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . Federal tax forms 2009 ) Did you rent the dwelling unit at a fair rental price 15 days or more this year? Is the total of your rental expenses and depreciation more than your rental income? PART I. Federal tax forms 2009 Rental Use Percentage A. Federal tax forms 2009 Total days available for rent at fair rental price A. Federal tax forms 2009       B. Federal tax forms 2009 Total days available for rent (line A) but not rented B. Federal tax forms 2009       C. Federal tax forms 2009 Total days of rental use. Federal tax forms 2009 Subtract line B from line A C. Federal tax forms 2009       D. Federal tax forms 2009 Total days of personal use (including days rented at less than fair rental price) D. Federal tax forms 2009       E. Federal tax forms 2009 Total days of rental and personal use. Federal tax forms 2009 Add lines C and D E. Federal tax forms 2009       F. Federal tax forms 2009 Percentage of expenses allowed for rental. Federal tax forms 2009 Divide line C by line E     F. Federal tax forms 2009 . Federal tax forms 2009 PART II. Federal tax forms 2009 Allowable Rental Expenses 1. Federal tax forms 2009 Enter rents received 1. Federal tax forms 2009   2a. Federal tax forms 2009 Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. Federal tax forms 2009       b. Federal tax forms 2009 Enter the rental portion of real estate taxes b. Federal tax forms 2009       c. Federal tax forms 2009 Enter the rental portion of deductible casualty and theft losses (see instructions) c. Federal tax forms 2009       d. Federal tax forms 2009 Enter direct rental expenses (see instructions) d. Federal tax forms 2009       e. Federal tax forms 2009 Fully deductible rental expenses. Federal tax forms 2009 Add lines 2a–2d. Federal tax forms 2009 Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. Federal tax forms 2009   3. Federal tax forms 2009 Subtract line 2e from line 1. Federal tax forms 2009 If zero or less, enter -0- 3. Federal tax forms 2009   4a. Federal tax forms 2009 Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. Federal tax forms 2009       b. Federal tax forms 2009 Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. Federal tax forms 2009       c. Federal tax forms 2009 Carryover of operating expenses from 2012 worksheet c. Federal tax forms 2009       d. Federal tax forms 2009 Add lines 4a–4c d. Federal tax forms 2009       e. Federal tax forms 2009 Allowable expenses. Federal tax forms 2009 Enter the smaller of line 3 or line 4d (see instructions) 4e. Federal tax forms 2009   5. Federal tax forms 2009 Subtract line 4e from line 3. Federal tax forms 2009 If zero or less, enter -0- 5. Federal tax forms 2009   6a. Federal tax forms 2009 Enter the rental portion of excess casualty and theft losses (see instructions) 6a. Federal tax forms 2009       b. Federal tax forms 2009 Enter the rental portion of depreciation of the dwelling unit b. Federal tax forms 2009       c. Federal tax forms 2009 Carryover of excess casualty losses and depreciation from 2012 worksheet c. Federal tax forms 2009       d. Federal tax forms 2009 Add lines 6a–6c d. Federal tax forms 2009       e. Federal tax forms 2009 Allowable excess casualty and theft losses and depreciation. Federal tax forms 2009 Enter the smaller of  line 5 or line 6d (see instructions) 6e. Federal tax forms 2009   PART III. Federal tax forms 2009 Carryover of Unallowed Expenses to Next Year 7a. Federal tax forms 2009 Operating expenses to be carried over to next year. Federal tax forms 2009 Subtract line 4e from line 4d 7a. Federal tax forms 2009   b. Federal tax forms 2009 Excess casualty and theft losses and depreciation to be carried over to next year. Federal tax forms 2009  Subtract line 6e from line 6d b. Federal tax forms 2009   Worksheet 5-1 Instructions. Federal tax forms 2009 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. Federal tax forms 2009 Use the percentage determined in Part I, line F, to figure the rental portions to enter on lines 2a–2c, 4a–4b, and 6a–6b of  Part II. Federal tax forms 2009 Line 2a. Federal tax forms 2009 Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. Federal tax forms 2009 Do not include interest on a loan that did not benefit the dwelling unit. Federal tax forms 2009 For example, do not include interest on a home equity loan used to pay off credit cards or other personal loans, buy a car, or pay college tuition. Federal tax forms 2009 Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. Federal tax forms 2009 Include the rental portion of this interest in the total you enter on line 2a of the worksheet. Federal tax forms 2009   Figure the qualified mortgage insurance premiums on the dwelling unit that you could deduct on line 13 of Schedule A as if you had not rented the unit. Federal tax forms 2009 See the Schedule A instructions. Federal tax forms 2009 However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. Federal tax forms 2009 See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Federal tax forms 2009 Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. Federal tax forms 2009   Note. Federal tax forms 2009 Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. Federal tax forms 2009 Instead, figure the personal portion on a separate Schedule A. Federal tax forms 2009 If you have deducted mortgage interest or qualified mortgage insurance premiums on the dwelling unit on other forms, such as Schedule C or F, remember to reduce your Schedule A deduction by that amount. Federal tax forms 2009           Line 2c. Federal tax forms 2009 Figure the casualty and theft losses related to the dwelling unit that you could deduct on Schedule A as if you had not rented the dwelling unit. Federal tax forms 2009 To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. Federal tax forms 2009 If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. Federal tax forms 2009 On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. Federal tax forms 2009 Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. Federal tax forms 2009   Note. Federal tax forms 2009 Do not file this Form 4684 or use it to figure your personal losses on Schedule A. Federal tax forms 2009 Instead, figure the personal portion on a separate Form 4684. Federal tax forms 2009           Line 2d. Federal tax forms 2009 Enter the total of your rental expenses that are directly related only to the rental activity. Federal tax forms 2009 These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. Federal tax forms 2009 Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. Federal tax forms 2009           Line 2e. Federal tax forms 2009 You can deduct the amounts on lines 2a, 2b, 2c, and 2d as rental expenses on Schedule E even if your rental expenses are more than your rental income. Federal tax forms 2009 Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. Federal tax forms 2009           Line 4b. Federal tax forms 2009 On line 2a, you entered the rental portion of the mortgage interest or qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. Federal tax forms 2009 If you had additional mortgage interest and qualified mortgage insurance premiums that would not be deductible on Schedule A because of limits imposed on them, enter on line 4b of this worksheet the rental portion of those excess amounts. Federal tax forms 2009 Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). Federal tax forms 2009           Line 4e. Federal tax forms 2009 You can deduct the amounts on lines 4a, 4b, and 4c as rental expenses on Schedule E only to the extent they are not more than the amount on line 4e. Federal tax forms 2009 *           Line 6a. Federal tax forms 2009 To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. Federal tax forms 2009   A. Federal tax forms 2009 Enter the amount from Form 4684, line 10       B. Federal tax forms 2009 Enter the rental portion of line A       C. Federal tax forms 2009 Enter the amount from line 2c of this worksheet       D. Federal tax forms 2009 Subtract line C from line B. Federal tax forms 2009 Enter the result here and on line 6a of this worksheet               Line 6e. Federal tax forms 2009 You can deduct the amounts on lines 6a, 6b, and 6c as rental expenses on Schedule E only to the extent they are not more than the amount on line 6e. Federal tax forms 2009 * *Allocating the limited deduction. Federal tax forms 2009 If you cannot deduct all of the amount on line 4d or 6d this year, you can allocate the allowable deduction in any way you wish among the expenses included on line 4d or 6d. Federal tax forms 2009 Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. Federal tax forms 2009 Prev  Up  Next   Home   More Online Publications

The Federal Tax Forms 2009

Federal tax forms 2009 10. Federal tax forms 2009   Retirement Plans, Pensions, and Annuities Table of Contents What's New Reminder IntroductionThe General Rule. Federal tax forms 2009 Individual retirement arrangements (IRAs). Federal tax forms 2009 Civil service retirement benefits. Federal tax forms 2009 Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. Federal tax forms 2009 How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. Federal tax forms 2009 Exclusion not limited to cost. Federal tax forms 2009 Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. Federal tax forms 2009 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). Federal tax forms 2009 However, these distributions are taken into account when determining the modified adjusted gross income threshold. Federal tax forms 2009 Distributions from a nonqualified retirement plan are included in net investment income. Federal tax forms 2009 See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Federal tax forms 2009 Reminder Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. Federal tax forms 2009 For more information, see Designated Roth accounts discussed later. Federal tax forms 2009 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. Federal tax forms 2009 What is not covered in this chapter. Federal tax forms 2009   The following topics are not discussed in this chapter. Federal tax forms 2009 The General Rule. Federal tax forms 2009   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). Federal tax forms 2009 For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. Federal tax forms 2009 For more information about the General Rule, see Publication 939, General Rule for Pensions and Annuities. Federal tax forms 2009 Individual retirement arrangements (IRAs). Federal tax forms 2009   Information on the tax treatment of amounts you receive from an IRA is in chapter 17. Federal tax forms 2009 Civil service retirement benefits. Federal tax forms 2009    If you are retired from the federal government (regular, phased, or disability retirement), see Publication 721, Tax Guide to U. Federal tax forms 2009 S. Federal tax forms 2009 Civil Service Retirement Benefits. Federal tax forms 2009 Publication 721 also covers the information that you need if you are the survivor or beneficiary of a federal employee or retiree who died. Federal tax forms 2009 Useful Items - You may want to see: Publication 575 Pension and Annuity Income 721 Tax Guide to U. Federal tax forms 2009 S. Federal tax forms 2009 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. Federal tax forms 2009 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts General Information Designated Roth accounts. Federal tax forms 2009   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. Federal tax forms 2009 Elective deferrals that are designated as Roth contributions are included in your income. Federal tax forms 2009 However, qualified distributions are not included in your income. Federal tax forms 2009 See Publication 575 for more information. Federal tax forms 2009 In-plan rollovers to designated Roth accounts. Federal tax forms 2009   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. Federal tax forms 2009 The rollover of any untaxed amounts must be included in income. Federal tax forms 2009 See Publication 575 for more information. Federal tax forms 2009 More than one program. Federal tax forms 2009   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. Federal tax forms 2009 Your former employer or the plan administrator should be able to tell you if you have more than one pension or annuity contract. Federal tax forms 2009 Section 457 deferred compensation plans. Federal tax forms 2009    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. Federal tax forms 2009 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. Federal tax forms 2009 You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. Federal tax forms 2009 You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. Federal tax forms 2009   Your 457(b) plan may have a designated Roth account option. Federal tax forms 2009 If so, you may be able to roll over amounts to the designated Roth account or make contributions. Federal tax forms 2009 Elective deferrals to a designated Roth account are included in your income. Federal tax forms 2009 Qualified distributions from a designated Roth account are not subject to tax. Federal tax forms 2009   This chapter covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. Federal tax forms 2009 For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525, Taxable and Nontaxable Income. Federal tax forms 2009   For general information on these deferred compensation plans, see Section 457 Deferred Compensation Plans in Publication 575. Federal tax forms 2009 Disability pensions. Federal tax forms 2009   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. Federal tax forms 2009 You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. Federal tax forms 2009 Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Federal tax forms 2009    You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Federal tax forms 2009 For information on the credit for the elderly or the disabled, see chapter 33. Federal tax forms 2009   Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Federal tax forms 2009 Report the payments on Form 1040, lines 16a and 16b, or on Form 1040A, lines 12a and 12b. Federal tax forms 2009    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. Federal tax forms 2009 For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Federal tax forms 2009   For more information on how to report disability pensions, including military and certain government disability pensions, see chapter 5. Federal tax forms 2009 Retired public safety officers. Federal tax forms 2009   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. Federal tax forms 2009 See Insurance Premiums for Retired Public Safety Officers in Publication 575 for more information. Federal tax forms 2009 Railroad retirement benefits. Federal tax forms 2009   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. Federal tax forms 2009 For information about railroad retirement benefits treated as social security benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Federal tax forms 2009 For information about railroad retirement benefits treated as an employee pension, see Railroad Retirement Benefits in Publication 575. Federal tax forms 2009 Withholding and estimated tax. Federal tax forms 2009   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. Federal tax forms 2009 You can tell the payer how much to withhold, or not to withhold, by filing Form W-4P. Federal tax forms 2009 If you choose not to have tax withheld, or you do not have enough tax withheld, you may have to pay estimated tax. Federal tax forms 2009   If you receive an eligible rollover distribution, you cannot choose not to have tax withheld. Federal tax forms 2009 Generally, 20% will be withheld, but no tax will be withheld on a direct rollover of an eligible rollover distribution. Federal tax forms 2009 See Direct rollover option under Rollovers, later. Federal tax forms 2009   For more information, see Pensions and Annuities under Tax Withholding for 2014 in chapter 4. Federal tax forms 2009 Qualified plans for self-employed individuals. Federal tax forms 2009   Qualified plans set up by self-employed individuals are sometimes called Keogh or H. Federal tax forms 2009 R. Federal tax forms 2009 10 plans. Federal tax forms 2009 Qualified plans can be set up by sole proprietors, partnerships (but not a partner), and corporations. Federal tax forms 2009 They can cover self-employed persons, such as the sole proprietor or partners, as well as regular (common-law) employees. Federal tax forms 2009    Distributions from a qualified plan are usually fully taxable because most recipients have no cost basis. Federal tax forms 2009 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. Federal tax forms 2009 For more information about qualified plans, see Publication 560, Retirement Plans for Small Business. Federal tax forms 2009 Purchased annuities. Federal tax forms 2009   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. Federal tax forms 2009 For more information about the General Rule, get Publication 939. Federal tax forms 2009 Also, see Variable Annuities in Publication 575 for the special provisions that apply to these annuity contracts. Federal tax forms 2009 Loans. Federal tax forms 2009   If you borrow money from your retirement plan, you must treat the loan as a nonperiodic distribution from the plan unless certain exceptions apply. Federal tax forms 2009 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. Federal tax forms 2009 This means that you must include in income all or part of the amount borrowed. Federal tax forms 2009 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. Federal tax forms 2009 For details, see Loans Treated as Distributions in Publication 575. Federal tax forms 2009 For information on the deductibility of interest, see chapter 23. Federal tax forms 2009 Tax-free exchange. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 See Transfers of Annuity Contracts in Publication 575 for more information about exchanges of annuity contracts. Federal tax forms 2009 How To Report If you file Form 1040, report your total annuity on line 16a and the taxable part on line 16b. Federal tax forms 2009 If your pension or annuity is fully taxable, enter it on line 16b; do not make an entry on line 16a. Federal tax forms 2009 If you file Form 1040A, report your total annuity on line 12a and the taxable part on line 12b. Federal tax forms 2009 If your pension or annuity is fully taxable, enter it on line 12b; do not make an entry on line 12a. Federal tax forms 2009 More than one annuity. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 Joint return. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 Your total cost in the plan includes the total premiums, contributions, or other amounts you paid. Federal tax forms 2009 This includes the amounts your employer contributed that were taxable to you when paid. Federal tax forms 2009 Cost does not include any amounts you deducted or were excluded from your income. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 Designated Roth accounts. Federal tax forms 2009   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. Federal tax forms 2009 Your cost will also include any in-plan Roth rollovers you included in income. Federal tax forms 2009 Foreign employment contributions. Federal tax forms 2009   If you worked in a foreign country and contributions were made to your retirement plan, special rules apply in determining your cost. Federal tax forms 2009 See Foreign employment contributions under Cost (Investment in the Contract) in Publication 575. Federal tax forms 2009 Taxation of Periodic Payments Fully taxable payments. Federal tax forms 2009   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. Federal tax forms 2009 You must report them on your income tax return. Federal tax forms 2009 Partly taxable payments. Federal tax forms 2009   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. Federal tax forms 2009 The rest of the amount you receive is generally taxable. Federal tax forms 2009 You figure the tax-free part of the payment using either the Simplified Method or the General Rule. Federal tax forms 2009 Your annuity starting date and whether or not your plan is qualified determine which method you must or may use. Federal tax forms 2009   If your annuity starting date is after November 18, 1996, and your payments are from a qualified plan, you must use the Simplified Method. Federal tax forms 2009 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. Federal tax forms 2009   If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. Federal tax forms 2009   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. Federal tax forms 2009 Exclusion limit. Federal tax forms 2009   Your annuity starting date determines the total amount of annuity payments that you can exclude from your taxable income over the years. Federal tax forms 2009 Once your annuity starting date is determined, it does not change. Federal tax forms 2009 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. Federal tax forms 2009 That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. Federal tax forms 2009 Exclusion limited to cost. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 This deduction is not subject to the 2%-of-adjusted-gross-income limit. Federal tax forms 2009 Exclusion not limited to cost. Federal tax forms 2009   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Federal tax forms 2009 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. Federal tax forms 2009 The total exclusion may be more than your cost. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 For any other annuity, this number is the number of monthly annuity payments under the contract. Federal tax forms 2009 Who must use the Simplified Method. Federal tax forms 2009   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. Federal tax forms 2009 Guaranteed payments. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 How to use the Simplified Method. Federal tax forms 2009    Complete the Simplified Method Worksheet in Publication 575 to figure your taxable annuity for 2013. Federal tax forms 2009 Single-life annuity. Federal tax forms 2009    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. Federal tax forms 2009 Enter on line 3 the number shown for your age at the annuity starting date. Federal tax forms 2009 Multiple-lives annuity. Federal tax forms 2009   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. Federal tax forms 2009 Enter on line 3 the number shown for the combined ages of you and the youngest survivor annuitant at the annuity starting date. Federal tax forms 2009   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Federal tax forms 2009 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. Federal tax forms 2009    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity next year. Federal tax forms 2009 Example. Federal tax forms 2009 Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. Federal tax forms 2009 Bill's annuity starting date is January 1, 2013. Federal tax forms 2009 The benefits are to be paid for the joint lives of Bill and his wife Kathy, age 65. Federal tax forms 2009 Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 His completed worksheet is shown in Worksheet 10-A. Federal tax forms 2009 Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. Federal tax forms 2009 Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Federal tax forms 2009 The full amount of any annuity payments received after 310 payments are paid must be included in gross income. Federal tax forms 2009 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. Federal tax forms 2009 This deduction is not subject to the 2%-of-adjusted- gross-income limit. Federal tax forms 2009 Worksheet 10-A. Federal tax forms 2009 Simplified Method Worksheet for Bill Smith 1. Federal tax forms 2009 Enter the total pension or annuity payments received this year. Federal tax forms 2009 Also, add this amount to the total for Form 1040, line 16a, or Form 1040A, line 12a 1. Federal tax forms 2009 14,400 2. Federal tax forms 2009 Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion*. Federal tax forms 2009 See Cost (Investment in the Contract) , earlier 2. Federal tax forms 2009 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). Federal tax forms 2009 Otherwise, go to line 3. Federal tax forms 2009         3. Federal tax forms 2009 Enter the appropriate number from Table 1 below. Federal tax forms 2009 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. Federal tax forms 2009 310     4. Federal tax forms 2009 Divide line 2 by the number on line 3 4. Federal tax forms 2009 100     5. Federal tax forms 2009 Multiply line 4 by the number of months for which this year's payments were made. Federal tax forms 2009 If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Federal tax forms 2009 Otherwise, go to line 6 5. Federal tax forms 2009 1,200     6. Federal tax forms 2009 Enter any amounts previously recovered tax free in years after 1986. Federal tax forms 2009 This is the amount shown on line 10 of your worksheet for last year 6. Federal tax forms 2009 -0-     7. Federal tax forms 2009 Subtract line 6 from line 2 7. Federal tax forms 2009 31,000     8. Federal tax forms 2009 Enter the smaller of line 5 or line 7 8. Federal tax forms 2009 1,200 9. Federal tax forms 2009 Taxable amount for year. Federal tax forms 2009 Subtract line 8 from line 1. Federal tax forms 2009 Enter the result, but not less than zero. Federal tax forms 2009 Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b 9. Federal tax forms 2009 13,200   Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Federal tax forms 2009 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. Federal tax forms 2009     10. Federal tax forms 2009 Was your annuity starting date before 1987? □ Yes. Federal tax forms 2009 STOP. Federal tax forms 2009 Do not complete the rest of this worksheet. Federal tax forms 2009  ☑ No. Federal tax forms 2009 Add lines 6 and 8. Federal tax forms 2009 This is the amount you have recovered tax free through 2013. Federal tax forms 2009 You will need this number if you need to fill out this worksheet next year 10. Federal tax forms 2009 1,200 11. Federal tax forms 2009 Balance of cost to be recovered. Federal tax forms 2009 Subtract line 10 from line 2. Federal tax forms 2009 If zero, you will not have to complete this worksheet next year. Federal tax forms 2009 The payments you receive next year will generally be fully taxable 11. Federal tax forms 2009 29,800 TABLE 1 FOR LINE 3 ABOVE   AND your annuity starting date was— IF the age at annuity starting date was. Federal tax forms 2009 . Federal tax forms 2009 . Federal tax forms 2009 before November 19, 1996, enter on line 3. Federal tax forms 2009 . Federal tax forms 2009 . Federal tax forms 2009 after November 18, 1996, enter on line 3. Federal tax forms 2009 . Federal tax forms 2009 . Federal tax forms 2009 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. Federal tax forms 2009 . Federal tax forms 2009 . Federal tax forms 2009   THEN enter on line 3. Federal tax forms 2009 . Federal tax forms 2009 . Federal tax forms 2009 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. Federal tax forms 2009 Who must use the General Rule. Federal tax forms 2009   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. Federal tax forms 2009 Annuity starting before November 19, 1996. Federal tax forms 2009   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. Federal tax forms 2009 You also had to use it for any fixed-period annuity. Federal tax forms 2009 If you did not have to use the General Rule, you could have chosen to use it. Federal tax forms 2009 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. Federal tax forms 2009   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. Federal tax forms 2009 Who cannot use the General Rule. Federal tax forms 2009   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. Federal tax forms 2009 See Who must use the Simplified Method , earlier. Federal tax forms 2009 More information. Federal tax forms 2009   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. Federal tax forms 2009 Taxation of Nonperiodic Payments Nonperiodic distributions are also known as amounts not received as an annuity. Federal tax forms 2009 They include all payments other than periodic payments and corrective distributions. Federal tax forms 2009 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. Federal tax forms 2009 Corrective distributions of excess plan contributions. Federal tax forms 2009   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. Federal tax forms 2009 To correct an excess, your plan may distribute it to you (along with any income earned on the excess). Federal tax forms 2009 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. Federal tax forms 2009 Figuring the taxable amount of nonperiodic payments. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 Annuity starting date. Federal tax forms 2009   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. Federal tax forms 2009 Distribution on or after annuity starting date. Federal tax forms 2009   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. Federal tax forms 2009 Distribution before annuity starting date. Federal tax forms 2009   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. Federal tax forms 2009 You exclude from your gross income the part that you allocate to the cost. Federal tax forms 2009 You include the remainder in your gross income. Federal tax forms 2009   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). Federal tax forms 2009 This allocation rule applies, for example, to a commercial annuity contract you bought directly from the issuer. Federal tax forms 2009    Distributions from nonqualified plans are subject to the net investment income tax. Federal tax forms 2009 See the Instructions for Form 8960. Federal tax forms 2009   For more information, see Figuring the Taxable Amount under Taxation of Nonperiodic Payments in Publication 575. Federal tax forms 2009 Lump-Sum Distributions This section on lump-sum distributions only applies if the plan participant was born before January 2, 1936. Federal tax forms 2009 If the plan participant was born after January 1, 1936, the taxable amount of this nonperiodic payment is reported as discussed earlier. Federal tax forms 2009 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). Federal tax forms 2009 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. Federal tax forms 2009 The participant's entire balance from a plan does not include certain forfeited amounts. Federal tax forms 2009 It also does not include any deductible voluntary employee contributions allowed by the plan after 1981 and before 1987. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. Federal tax forms 2009 The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. Federal tax forms 2009 You may be able to use the 10-year tax option, discussed later, to figure tax on the ordinary income part. Federal tax forms 2009 Use Form 4972 to figure the separate tax on a lump-sum distribution using the optional methods. Federal tax forms 2009 The tax figured on Form 4972 is added to the regular tax figured on your other income. Federal tax forms 2009 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. Federal tax forms 2009 How to treat the distribution. Federal tax forms 2009   If you receive a lump-sum distribution, you may have the following options for how you treat the taxable part. Federal tax forms 2009 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. Federal tax forms 2009 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). Federal tax forms 2009 Use the 10-year tax option to figure the tax on the total taxable amount (if you qualify). Federal tax forms 2009 Roll over all or part of the distribution. Federal tax forms 2009 See Rollovers , later. Federal tax forms 2009 No tax is currently due on the part rolled over. Federal tax forms 2009 Report any part not rolled over as ordinary income. Federal tax forms 2009 Report the entire taxable part of the distribution as ordinary income on your tax return. Federal tax forms 2009   The first three options are explained in the following discussions. Federal tax forms 2009 Electing optional lump-sum treatment. Federal tax forms 2009   You can choose to use the 10-year tax option or capital gain treatment only once after 1986 for any plan participant. Federal tax forms 2009 If you make this choice, you cannot use either of these optional treatments for any future distributions for the participant. Federal tax forms 2009 Taxable and tax-free parts of the distribution. Federal tax forms 2009    The taxable part of a lump-sum distribution is the employer's contributions and income earned on your account. Federal tax forms 2009 You may recover your cost in the lump sum and any net unrealized appreciation (NUA) in employer securities tax free. Federal tax forms 2009 Cost. Federal tax forms 2009   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. Federal tax forms 2009 You must reduce this cost by amounts previously distributed tax free. Federal tax forms 2009 Net unrealized appreciation (NUA). Federal tax forms 2009   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. Federal tax forms 2009 (For more information, see Distributions of employer securities under Taxation of Nonperiodic Payments in Publication 575. Federal tax forms 2009 ) 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. Federal tax forms 2009 The amount treated as capital gain is taxed at a 20% rate. Federal tax forms 2009 You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. Federal tax forms 2009 Complete Part II of Form 4972 to choose the 20% capital gain election. Federal tax forms 2009 For more information, see Capital Gain Treatment under Lump-Sum Distributions in Publication 575. Federal tax forms 2009 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. Federal tax forms 2009 You pay the tax only once, for the year in which you receive the distribution, not over the next 10 years. Federal tax forms 2009 You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 Complete Part III of Form 4972 to choose the 10-year tax option. Federal tax forms 2009 You must use the special Tax Rate Schedule shown in the instructions for Part III to figure the tax. Federal tax forms 2009 Publication 575 illustrates how to complete Form 4972 to figure the separate tax. Federal tax forms 2009 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. Federal tax forms 2009 For this purpose, the following plans are qualified retirement plans. Federal tax forms 2009 A qualified employee plan. Federal tax forms 2009 A qualified employee annuity. Federal tax forms 2009 A tax-sheltered annuity plan (403(b) plan). Federal tax forms 2009 An eligible state or local government section 457 deferred compensation plan. Federal tax forms 2009 Eligible rollover distributions. Federal tax forms 2009   Generally, an eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan. Federal tax forms 2009 For information about exceptions to eligible rollover distributions, see Publication 575. Federal tax forms 2009 Rollover of nontaxable amounts. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009   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. Federal tax forms 2009   Any after-tax contributions that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Federal tax forms 2009 To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Federal tax forms 2009 For more information, see the Form 8606 instructions. Federal tax forms 2009 Direct rollover option. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 Payment to you option. Federal tax forms 2009   If an eligible rollover distribution is paid to you, 20% generally will be withheld for income tax. Federal tax forms 2009 However, the full amount is treated as distributed to you even though you actually receive only 80%. Federal tax forms 2009 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. Federal tax forms 2009 (See Pensions and Annuities under Tax Withholding for 2014 in chapter 4. Federal tax forms 2009 )    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. Federal tax forms 2009 Time for making rollover. Federal tax forms 2009   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. Federal tax forms 2009 (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. Federal tax forms 2009 )   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. Federal tax forms 2009   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. Federal tax forms 2009 Qualified domestic relations order (QDRO). Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 You can roll over the distribution from the plan into a traditional IRA or to another eligible retirement plan. Federal tax forms 2009 See Rollovers in Publication 575 for more information on benefits received under a QDRO. Federal tax forms 2009 Rollover by surviving spouse. Federal tax forms 2009   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. Federal tax forms 2009 The rollover rules apply to you as if you were the employee. Federal tax forms 2009 You can roll over a distribution into a qualified retirement plan or a traditional or Roth IRA. Federal tax forms 2009 For a rollover to a Roth IRA, see Rollovers to Roth IRAs , later. Federal tax forms 2009    A distribution paid to a beneficiary other than the employee's surviving spouse is generally not an eligible rollover distribution. Federal tax forms 2009 However, see Rollovers by nonspouse beneficiary next. Federal tax forms 2009 Rollovers by nonspouse beneficiary. Federal tax forms 2009   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. Federal tax forms 2009 The distribution must be a direct trustee-to-trustee transfer to your traditional or Roth IRA that was set up to receive the distribution. Federal tax forms 2009 The transfer will be treated as an eligible rollover distribution and the receiving plan will be treated as an inherited IRA. Federal tax forms 2009 For information on inherited IRAs, see What if You Inherit an IRA? in chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs). Federal tax forms 2009 Retirement bonds. Federal tax forms 2009   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. Federal tax forms 2009 Designated Roth accounts. Federal tax forms 2009   You can roll over an eligible rollover distribution from a designated Roth account into another designated Roth account or a Roth IRA. Federal tax forms 2009 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. Federal tax forms 2009 For more information on rollovers from designated Roth accounts, see Rollovers in Publication 575. Federal tax forms 2009 In-plan rollovers to designated Roth accounts. Federal tax forms 2009   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. Federal tax forms 2009 The rollover of any untaxed amounts must be included in income. Federal tax forms 2009 See Designated Roth accounts under Rollovers in Publication 575 for more information. Federal tax forms 2009 Rollovers to Roth IRAs. Federal tax forms 2009   You can roll over distributions directly from a qualified retirement plan (other than a designated Roth account) to a Roth IRA. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 In addition, the 10% tax on early distributions does not apply. Federal tax forms 2009 More information. Federal tax forms 2009   For more information on the rules for rolling over distributions, see Rollovers in Publication 575. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 These special additional taxes are the taxes on: Early distributions, and Excess accumulation (not receiving minimum distributions). Federal tax forms 2009 These taxes are discussed in the following sections. Federal tax forms 2009 If you must pay either of these taxes, report them on Form 5329. Federal tax forms 2009 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. Federal tax forms 2009 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. Federal tax forms 2009 Even if you do not owe any of these taxes, you may have to complete Form 5329 and attach it to your Form 1040. Federal tax forms 2009 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. Federal tax forms 2009 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%. Federal tax forms 2009 This tax applies to the part of the distribution that you must include in gross income. Federal tax forms 2009 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). Federal tax forms 2009 5% rate on certain early distributions from deferred annuity contracts. Federal tax forms 2009   If an early withdrawal from a deferred annuity is otherwise subject to the 10% additional tax, a 5% rate may apply instead. Federal tax forms 2009 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. Federal tax forms 2009 On line 4 of Form 5329, multiply the line 3 amount by 5% instead of 10%. Federal tax forms 2009 Attach an explanation to your return. Federal tax forms 2009 Distributions from Roth IRAs allocable to a rollover from an eligible retirement plan within the 5-year period. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 The additional tax is figured on Form 5329. Federal tax forms 2009 For more information, see Form 5329 and its instructions. Federal tax forms 2009 For information on qualified distributions from Roth IRAs, see Additional Tax on Early Distributions in chapter 2 of Publication 590. Federal tax forms 2009 Distributions from designated Roth accounts allocable to in-plan Roth rollovers within the 5-year period. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 The additional tax is figured on Form 5329. Federal tax forms 2009 For more information, see Form 5329 and its instructions. Federal tax forms 2009 For information on qualified distributions from designated Roth accounts, see Designated Roth accounts under Taxation of Periodic Payments in Publication 575. Federal tax forms 2009 Exceptions to tax. Federal tax forms 2009    Certain early distributions are excepted from the early distribution tax. Federal tax forms 2009 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. Federal tax forms 2009 If an exception applies but distribution code “1” (early distribution, no known exception) is shown in box 7, you must file Form 5329. Federal tax forms 2009 Enter the taxable amount of the distribution shown in box 2a of your Form 1099-R on line 1 of Form 5329. Federal tax forms 2009 On line 2, enter the amount that can be excluded and the exception number shown in the Form 5329 instructions. Federal tax forms 2009    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. Federal tax forms 2009 Enter exception number “12” on line 2. Federal tax forms 2009 General exceptions. Federal tax forms 2009   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. Federal tax forms 2009 Additional exceptions for qualified retirement plans. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 See Pub. Federal tax forms 2009 721 for more information on the phased retirement program. Federal tax forms 2009 Qualified public safety employees. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009 Qualified reservist distributions. Federal tax forms 2009   A qualified reservist distribution is not subject to the additional tax on early distributions. Federal tax forms 2009 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. Federal tax forms 2009 You must have been ordered or called to active duty after September 11, 2001. Federal tax forms 2009 For more information, see Qualified reservist distributions under Special Additional Taxes in Publication 575. Federal tax forms 2009 Additional exceptions for nonqualified annuity contracts. Federal tax forms 2009   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). Federal tax forms 2009 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). Federal tax forms 2009 The payments each year cannot be less than the required minimum distribution. Federal tax forms 2009 Required distributions not made. Federal tax forms 2009   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. Federal tax forms 2009 The tax equals 50% of the part of the required minimum distribution that was not distributed. Federal tax forms 2009   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). Federal tax forms 2009 Waiver. Federal tax forms 2009   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. Federal tax forms 2009 See the Instructions for Form 5329 for the procedure to follow if you believe you qualify for a waiver of this tax. Federal tax forms 2009 State insurer delinquency proceedings. Federal tax forms 2009   You might not receive the minimum distribution because assets are invested in a contract issued by an insurance company in state insurer delinquency proceedings. Federal tax forms 2009 If your payments are reduced below the minimum due to these proceedings, you should contact your plan administrator. Federal tax forms 2009 Under certain conditions, you will not have to pay the 50% excise tax. Federal tax forms 2009 Required beginning date. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009   If you reached age 70½ in 2013, you may be required to receive your first distribution by April 1, 2014. Federal tax forms 2009 Your required distribution then must be made for 2014 by December 31, 2014. Federal tax forms 2009 5% owners. Federal tax forms 2009   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. Federal tax forms 2009   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. Federal tax forms 2009 Age 70½. Federal tax forms 2009   You reach age 70½ on the date that is 6 calendar months after the date of your 70th birthday. Federal tax forms 2009   For example, if you are retired and your 70th birthday was on June 30, 2013, you were age 70½ on December 30, 2013. Federal tax forms 2009 If your 70th birthday was on July 1, 2013, you reached age 70½ on January 1, 2014. Federal tax forms 2009 Required distributions. Federal tax forms 2009   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). Federal tax forms 2009 Additional information. Federal tax forms 2009   For more information on this rule, see Tax on Excess Accumulation in Publication 575. Federal tax forms 2009 Form 5329. Federal tax forms 2009   You must file Form 5329 if you owe tax because you did not receive a minimum required distribution from your qualified retirement plan. Federal tax forms 2009 Survivors and Beneficiaries Generally, a survivor or beneficiary reports pension or annuity income in the same way the plan participant would have. Federal tax forms 2009 However, some special rules apply. Federal tax forms 2009 See Publication 575 for more information. Federal tax forms 2009 Survivors of employees. Federal tax forms 2009   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. Federal tax forms 2009 You must figure the taxable and tax-free parts of your annuity payments using the method that applies as if you were the employee. Federal tax forms 2009 Survivors of retirees. Federal tax forms 2009   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. Federal tax forms 2009 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. Federal tax forms 2009    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. Federal tax forms 2009 The resulting tax-free amount will then remain fixed. Federal tax forms 2009 Any increases in the survivor annuity are fully taxable. Federal tax forms 2009    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. Federal tax forms 2009 This amount remains fixed even if the annuity payments are increased or decreased. Federal tax forms 2009 See Simplified Method , earlier. Federal tax forms 2009   In any case, if the annuity starting date is after 1986, the total exclusion over the years cannot be more than the cost. Federal tax forms 2009 Estate tax deduction. Federal tax forms 2009   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. Federal tax forms 2009 You can deduct the part of the total estate tax that was based on the annuity. Federal tax forms 2009 The deceased annuitant must have died after the annuity starting date. Federal tax forms 2009 (For details, see section 1. Federal tax forms 2009 691(d)-1 of the regulations. Federal tax forms 2009 ) Deduct it in equal amounts over your remaining life expectancy. Federal tax forms 2009   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. Federal tax forms 2009   You can take the estate tax deduction as an itemized deduction on Schedule A, Form 1040. Federal tax forms 2009 This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. Federal tax forms 2009 See Publication 559, Survivors, Executors, and Administrators, for more information on the estate tax deduction. Federal tax forms 2009 Prev  Up  Next   Home   More Online Publications