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File tax 1040ez free online 10. File tax 1040ez free online   Retirement Plans, Pensions, and Annuities Table of Contents What's New Reminder IntroductionThe General Rule. File tax 1040ez free online Individual retirement arrangements (IRAs). File tax 1040ez free online Civil service retirement benefits. File tax 1040ez free online Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. File tax 1040ez free online How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. File tax 1040ez free online Exclusion not limited to cost. File tax 1040ez free online Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. File tax 1040ez free online Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries What's New For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). File tax 1040ez free online However, these distributions are taken into account when determining the modified adjusted gross income threshold. File tax 1040ez free online Distributions from a nonqualified retirement plan are included in net investment income. File tax 1040ez free online See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. File tax 1040ez free online Reminder Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. File tax 1040ez free online For more information, see Designated Roth accounts discussed later. File tax 1040ez free online Introduction This chapter discusses the tax treatment of distributions you receive from: An employee pension or annuity from a qualified plan, A disability retirement, and A purchased commercial annuity. File tax 1040ez free online What is not covered in this chapter. File tax 1040ez free online   The following topics are not discussed in this chapter. File tax 1040ez free online The General Rule. File tax 1040ez free online   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). File tax 1040ez free online For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. File tax 1040ez free online For more information about the General Rule, see Publication 939, General Rule for Pensions and Annuities. File tax 1040ez free online Individual retirement arrangements (IRAs). File tax 1040ez free online   Information on the tax treatment of amounts you receive from an IRA is in chapter 17. File tax 1040ez free online Civil service retirement benefits. File tax 1040ez free online    If you are retired from the federal government (regular, phased, or disability retirement), see Publication 721, Tax Guide to U. File tax 1040ez free online S. File tax 1040ez free online Civil Service Retirement Benefits. File tax 1040ez free online Publication 721 also covers the information that you need if you are the survivor or beneficiary of a federal employee or retiree who died. File tax 1040ez free online Useful Items - You may want to see: Publication 575 Pension and Annuity Income 721 Tax Guide to U. File tax 1040ez free online S. File tax 1040ez free online Civil Service Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. File tax 1040ez free online 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts General Information Designated Roth accounts. File tax 1040ez free online   A designated Roth account is a separate account created under a qualified Roth contribution program to which participants may elect to have part or all of their elective deferrals to a 401(k), 403(b), or 457(b) plan designated as Roth contributions. File tax 1040ez free online Elective deferrals that are designated as Roth contributions are included in your income. File tax 1040ez free online However, qualified distributions are not included in your income. File tax 1040ez free online See Publication 575 for more information. File tax 1040ez free online In-plan rollovers to designated Roth accounts. File tax 1040ez free online   If you are a participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. File tax 1040ez free online The rollover of any untaxed amounts must be included in income. File tax 1040ez free online See Publication 575 for more information. File tax 1040ez free online More than one program. File tax 1040ez free online   If you receive benefits from more than one program under a single trust or plan of your employer, such as a pension plan and a profit-sharing plan, you may have to figure the taxable part of each pension or annuity contract separately. File tax 1040ez free online Your former employer or the plan administrator should be able to tell you if you have more than one pension or annuity contract. File tax 1040ez free online Section 457 deferred compensation plans. File tax 1040ez free online    If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan. File tax 1040ez free online If your plan is an eligible plan, you are not taxed currently on pay that is deferred under the plan or on any earnings from the plan's investment of the deferred pay. File tax 1040ez free online You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. File tax 1040ez free online You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. File tax 1040ez free online   Your 457(b) plan may have a designated Roth account option. File tax 1040ez free online If so, you may be able to roll over amounts to the designated Roth account or make contributions. File tax 1040ez free online Elective deferrals to a designated Roth account are included in your income. File tax 1040ez free online Qualified distributions from a designated Roth account are not subject to tax. File tax 1040ez free online   This chapter covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. File tax 1040ez free online For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525, Taxable and Nontaxable Income. File tax 1040ez free online   For general information on these deferred compensation plans, see Section 457 Deferred Compensation Plans in Publication 575. File tax 1040ez free online Disability pensions. File tax 1040ez free online   If you retired on disability, you generally must include in income any disability pension you receive under a plan that is paid for by your employer. File tax 1040ez free online You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. File tax 1040ez free online Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. File tax 1040ez free online    You may be entitled to a tax credit if you were permanently and totally disabled when you retired. File tax 1040ez free online For information on the credit for the elderly or the disabled, see chapter 33. File tax 1040ez free online   Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. File tax 1040ez free online Report the payments on Form 1040, lines 16a and 16b, or on Form 1040A, lines 12a and 12b. File tax 1040ez free online    Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) are not included in income. File tax 1040ez free online For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. File tax 1040ez free online   For more information on how to report disability pensions, including military and certain government disability pensions, see chapter 5. File tax 1040ez free online Retired public safety officers. File tax 1040ez free online   An eligible retired public safety officer can elect to exclude from income distributions of up to $3,000 made directly from a government retirement plan to the provider of accident, health, or long-term disability insurance. File tax 1040ez free online See Insurance Premiums for Retired Public Safety Officers in Publication 575 for more information. File tax 1040ez free online Railroad retirement benefits. File tax 1040ez free online   Part of any railroad retirement benefits you receive is treated for tax purposes as social security benefits, and part is treated as an employee pension. File tax 1040ez free online For information about railroad retirement benefits treated as social security benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. File tax 1040ez free online For information about railroad retirement benefits treated as an employee pension, see Railroad Retirement Benefits in Publication 575. File tax 1040ez free online Withholding and estimated tax. File tax 1040ez free online   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable parts of amounts paid to you. File tax 1040ez free online You can tell the payer how much to withhold, or not to withhold, by filing Form W-4P. File tax 1040ez free online If you choose not to have tax withheld, or you do not have enough tax withheld, you may have to pay estimated tax. File tax 1040ez free online   If you receive an eligible rollover distribution, you cannot choose not to have tax withheld. File tax 1040ez free online Generally, 20% will be withheld, but no tax will be withheld on a direct rollover of an eligible rollover distribution. File tax 1040ez free online See Direct rollover option under Rollovers, later. File tax 1040ez free online   For more information, see Pensions and Annuities under Tax Withholding for 2014 in chapter 4. File tax 1040ez free online Qualified plans for self-employed individuals. File tax 1040ez free online   Qualified plans set up by self-employed individuals are sometimes called Keogh or H. File tax 1040ez free online R. File tax 1040ez free online 10 plans. File tax 1040ez free online Qualified plans can be set up by sole proprietors, partnerships (but not a partner), and corporations. File tax 1040ez free online They can cover self-employed persons, such as the sole proprietor or partners, as well as regular (common-law) employees. File tax 1040ez free online    Distributions from a qualified plan are usually fully taxable because most recipients have no cost basis. File tax 1040ez free online If you have an investment (cost) in the plan, however, your pension or annuity payments from a qualified plan are taxed under the Simplified Method. File tax 1040ez free online For more information about qualified plans, see Publication 560, Retirement Plans for Small Business. File tax 1040ez free online Purchased annuities. File tax 1040ez free online   If you receive pension or annuity payments from a privately purchased annuity contract from a commercial organization, such as an insurance company, you generally must use the General Rule to figure the tax-free part of each annuity payment. File tax 1040ez free online For more information about the General Rule, get Publication 939. File tax 1040ez free online Also, see Variable Annuities in Publication 575 for the special provisions that apply to these annuity contracts. File tax 1040ez free online Loans. File tax 1040ez free online   If you borrow money from your retirement plan, you must treat the loan as a nonperiodic distribution from the plan unless certain exceptions apply. File tax 1040ez free online This treatment also applies to any loan under a contract purchased under your retirement plan, and to the value of any part of your interest in the plan or contract that you pledge or assign. File tax 1040ez free online This means that you must include in income all or part of the amount borrowed. File tax 1040ez free online Even if you do not have to treat the loan as a nonperiodic distribution, you may not be able to deduct the interest on the loan in some situations. File tax 1040ez free online For details, see Loans Treated as Distributions in Publication 575. File tax 1040ez free online For information on the deductibility of interest, see chapter 23. File tax 1040ez free online Tax-free exchange. File tax 1040ez free online   No gain or loss is recognized on an exchange of an annuity contract for another annuity contract if the insured or annuitant remains the same. File tax 1040ez free online However, if an annuity contract is exchanged for a life insurance or endowment contract, any gain due to interest accumulated on the contract is ordinary income. File tax 1040ez free online See Transfers of Annuity Contracts in Publication 575 for more information about exchanges of annuity contracts. File tax 1040ez free online How To Report If you file Form 1040, report your total annuity on line 16a and the taxable part on line 16b. File tax 1040ez free online If your pension or annuity is fully taxable, enter it on line 16b; do not make an entry on line 16a. File tax 1040ez free online If you file Form 1040A, report your total annuity on line 12a and the taxable part on line 12b. File tax 1040ez free online If your pension or annuity is fully taxable, enter it on line 12b; do not make an entry on line 12a. File tax 1040ez free online More than one annuity. File tax 1040ez free online   If you receive more than one annuity and at least one of them is not fully taxable, enter the total amount received from all annuities on Form 1040, line 16a, or Form 1040A, line 12a, and enter the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. File tax 1040ez free online If all the annuities you receive are fully taxable, enter the total of all of them on Form 1040, line 16b, or Form 1040A, line 12b. File tax 1040ez free online Joint return. File tax 1040ez free online   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on Form 1040, line 16a, or Form 1040A, line 12a, and report the taxable part on Form 1040, line 16b, or Form 1040A, line 12b. File tax 1040ez free online Cost (Investment in the Contract) Before you can figure how much, if any, of a distribution from your pension or annuity plan is taxable, you must determine your cost (your investment in the contract) in the pension or annuity. File tax 1040ez free online Your total cost in the plan includes the total premiums, contributions, or other amounts you paid. File tax 1040ez free online This includes the amounts your employer contributed that were taxable to you when paid. File tax 1040ez free online Cost does not include any amounts you deducted or were excluded from your income. File tax 1040ez free online From this total cost, subtract any refunds of premiums, rebates, dividends, unrepaid loans that were not included in your income, or other tax-free amounts that you received by the later of the annuity starting date or the date on which you received your first payment. File tax 1040ez free online Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. File tax 1040ez free online Designated Roth accounts. File tax 1040ez free online   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. File tax 1040ez free online Your cost will also include any in-plan Roth rollovers you included in income. File tax 1040ez free online Foreign employment contributions. File tax 1040ez free online   If you worked in a foreign country and contributions were made to your retirement plan, special rules apply in determining your cost. File tax 1040ez free online See Foreign employment contributions under Cost (Investment in the Contract) in Publication 575. File tax 1040ez free online Taxation of Periodic Payments Fully taxable payments. File tax 1040ez free online   Generally, if you did not pay any part of the cost of your employee pension or annuity and your employer did not withhold part of the cost from your pay while you worked, the amounts you receive each year are fully taxable. File tax 1040ez free online You must report them on your income tax return. File tax 1040ez free online Partly taxable payments. File tax 1040ez free online   If you paid part of the cost of your pension or annuity, you are not taxed on the part of the pension or annuity you receive that represents a return of your cost. File tax 1040ez free online The rest of the amount you receive is generally taxable. File tax 1040ez free online You figure the tax-free part of the payment using either the Simplified Method or the General Rule. File tax 1040ez free online Your annuity starting date and whether or not your plan is qualified determine which method you must or may use. File tax 1040ez free online   If your annuity starting date is after November 18, 1996, and your payments are from a qualified plan, you must use the Simplified Method. File tax 1040ez free online Generally, you must use the General Rule if your annuity is paid under a nonqualified plan, and you cannot use this method if your annuity is paid under a qualified plan. File tax 1040ez free online   If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. File tax 1040ez free online   If your annuity is paid under a qualified plan and your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. File tax 1040ez free online Exclusion limit. File tax 1040ez free online   Your annuity starting date determines the total amount of annuity payments that you can exclude from your taxable income over the years. File tax 1040ez free online Once your annuity starting date is determined, it does not change. File tax 1040ez free online If you calculate the taxable portion of your annuity payments using the simplified method worksheet, the annuity starting date determines the recovery period for your cost. File tax 1040ez free online That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. File tax 1040ez free online Exclusion limited to cost. File tax 1040ez free online   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. File tax 1040ez free online Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. File tax 1040ez free online This deduction is not subject to the 2%-of-adjusted-gross-income limit. File tax 1040ez free online Exclusion not limited to cost. File tax 1040ez free online   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. File tax 1040ez free online If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. File tax 1040ez free online The total exclusion may be more than your cost. File tax 1040ez free online Simplified Method Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. File tax 1040ez free online For an annuity that is payable for the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. File tax 1040ez free online For any other annuity, this number is the number of monthly annuity payments under the contract. File tax 1040ez free online Who must use the Simplified Method. File tax 1040ez free online   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you both: Receive pension or annuity payments from a qualified employee plan, qualified employee annuity, or a tax-sheltered annuity (403(b)) plan, and On your annuity starting date, you were either under age 75, or entitled to less than 5 years of guaranteed payments. File tax 1040ez free online Guaranteed payments. File tax 1040ez free online   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. File tax 1040ez free online If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. File tax 1040ez free online How to use the Simplified Method. File tax 1040ez free online    Complete the Simplified Method Worksheet in Publication 575 to figure your taxable annuity for 2013. File tax 1040ez free online Single-life annuity. File tax 1040ez free online    If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. File tax 1040ez free online Enter on line 3 the number shown for your age at the annuity starting date. File tax 1040ez free online Multiple-lives annuity. File tax 1040ez free online   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. File tax 1040ez free online Enter on line 3 the number shown for the combined ages of you and the youngest survivor annuitant at the annuity starting date. File tax 1040ez free online   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. File tax 1040ez free online Instead you must use Table 1 and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. File tax 1040ez free online    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity next year. File tax 1040ez free online Example. File tax 1040ez free online Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. File tax 1040ez free online Bill's annuity starting date is January 1, 2013. File tax 1040ez free online The benefits are to be paid for the joint lives of Bill and his wife Kathy, age 65. File tax 1040ez free online Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. File tax 1040ez free online Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. File tax 1040ez free online Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. File tax 1040ez free online Because his annuity is payable over the lives of more than one annuitant, he uses his and Kathy's combined ages and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet. File tax 1040ez free online His completed worksheet is shown in Worksheet 10-A. File tax 1040ez free online Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. File tax 1040ez free online Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. File tax 1040ez free online The full amount of any annuity payments received after 310 payments are paid must be included in gross income. File tax 1040ez free online If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. File tax 1040ez free online This deduction is not subject to the 2%-of-adjusted- gross-income limit. File tax 1040ez free online Worksheet 10-A. File tax 1040ez free online Simplified Method Worksheet for Bill Smith 1. File tax 1040ez free online Enter the total pension or annuity payments received this year. File tax 1040ez free online Also, add this amount to the total for Form 1040, line 16a, or Form 1040A, line 12a 1. File tax 1040ez free online 14,400 2. File tax 1040ez free online Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion*. File tax 1040ez free online See Cost (Investment in the Contract) , earlier 2. File tax 1040ez free online 31,000       Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). File tax 1040ez free online Otherwise, go to line 3. File tax 1040ez free online         3. File tax 1040ez free online Enter the appropriate number from Table 1 below. File tax 1040ez free online But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. File tax 1040ez free online 310     4. File tax 1040ez free online Divide line 2 by the number on line 3 4. File tax 1040ez free online 100     5. File tax 1040ez free online Multiply line 4 by the number of months for which this year's payments were made. File tax 1040ez free online If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. File tax 1040ez free online Otherwise, go to line 6 5. File tax 1040ez free online 1,200     6. File tax 1040ez free online Enter any amounts previously recovered tax free in years after 1986. File tax 1040ez free online This is the amount shown on line 10 of your worksheet for last year 6. File tax 1040ez free online -0-     7. File tax 1040ez free online Subtract line 6 from line 2 7. File tax 1040ez free online 31,000     8. File tax 1040ez free online Enter the smaller of line 5 or line 7 8. File tax 1040ez free online 1,200 9. File tax 1040ez free online Taxable amount for year. File tax 1040ez free online Subtract line 8 from line 1. File tax 1040ez free online Enter the result, but not less than zero. File tax 1040ez free online Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b 9. File tax 1040ez free online 13,200   Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. File tax 1040ez free online If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers in Publication 575 before entering an amount on your tax return. File tax 1040ez free online     10. File tax 1040ez free online Was your annuity starting date before 1987? □ Yes. File tax 1040ez free online STOP. File tax 1040ez free online Do not complete the rest of this worksheet. File tax 1040ez free online  ☑ No. File tax 1040ez free online Add lines 6 and 8. File tax 1040ez free online This is the amount you have recovered tax free through 2013. File tax 1040ez free online You will need this number if you need to fill out this worksheet next year 10. File tax 1040ez free online 1,200 11. File tax 1040ez free online Balance of cost to be recovered. File tax 1040ez free online Subtract line 10 from line 2. File tax 1040ez free online If zero, you will not have to complete this worksheet next year. File tax 1040ez free online The payments you receive next year will generally be fully taxable 11. File tax 1040ez free online 29,800 TABLE 1 FOR LINE 3 ABOVE   AND your annuity starting date was— IF the age at annuity starting date was. File tax 1040ez free online . File tax 1040ez free online . File tax 1040ez free online before November 19, 1996, enter on line 3. File tax 1040ez free online . File tax 1040ez free online . File tax 1040ez free online after November 18, 1996, enter on line 3. File tax 1040ez free online . File tax 1040ez free online . File tax 1040ez free online 55 or under 300 360 56–60 260 310 61–65 240 260 66–70 170 210 71 or older 120 160 TABLE 2 FOR LINE 3 ABOVE IF the combined ages at annuity starting date were. File tax 1040ez free online . File tax 1040ez free online . File tax 1040ez free online   THEN enter on line 3. File tax 1040ez free online . File tax 1040ez free online . File tax 1040ez free online 110 or under   410 111–120   360 121–130   310 131–140   260 141 or older   210 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. File tax 1040ez free online Who must use the General Rule. File tax 1040ez free online   You must use the General Rule if you receive pension or annuity payments from: A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or A qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years. File tax 1040ez free online Annuity starting before November 19, 1996. File tax 1040ez free online   If your annuity starting date is after July 1, 1986, and before November 19, 1996, you had to use the General Rule for either circumstance just described. File tax 1040ez free online You also had to use it for any fixed-period annuity. File tax 1040ez free online If you did not have to use the General Rule, you could have chosen to use it. File tax 1040ez free online If your annuity starting date is before July 2, 1986, you had to use the General Rule unless you could use the Three-Year Rule. File tax 1040ez free online   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. File tax 1040ez free online Who cannot use the General Rule. File tax 1040ez free online   You cannot use the General Rule if you receive your pension or annuity from a qualified plan and none of the circumstances described in the preceding discussions apply to you. File tax 1040ez free online See Who must use the Simplified Method , earlier. File tax 1040ez free online More information. File tax 1040ez free online   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. File tax 1040ez free online Taxation of Nonperiodic Payments Nonperiodic distributions are also known as amounts not received as an annuity. File tax 1040ez free online They include all payments other than periodic payments and corrective distributions. File tax 1040ez free online Examples of nonperiodic payments are cash withdrawals, distributions of current earnings, certain loans, and the value of annuity contracts transferred without full and adequate consideration. File tax 1040ez free online Corrective distributions of excess plan contributions. File tax 1040ez free online   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. File tax 1040ez free online To correct an excess, your plan may distribute it to you (along with any income earned on the excess). File tax 1040ez free online For information on plan contribution limits and how to report corrective distributions of excess contributions, see Retirement Plan Contributions under Employee Compensation in Publication 525. File tax 1040ez free online Figuring the taxable amount of nonperiodic payments. File tax 1040ez free online   How you figure the taxable amount of a nonperiodic distribution depends on whether it is made before the annuity starting date, or on or after the annuity starting date. File tax 1040ez free online If it is made before the annuity starting date, its tax treatment also depends on whether it is made under a qualified or nonqualified plan. File tax 1040ez free online If it is made under a nonqualified plan, its tax treatment depends on whether it fully discharges the contract, is received under certain life insurance or endowment contracts, or is allocable to an investment you made before August 14, 1982. File tax 1040ez free online Annuity starting date. File tax 1040ez free online   The annuity starting date is either the first day of the first period for which you receive an annuity payment under the contract or the date on which the obligation under the contract becomes fixed, whichever is later. File tax 1040ez free online Distribution on or after annuity starting date. File tax 1040ez free online   If you receive a nonperiodic payment from your annuity contract on or after the annuity starting date, you generally must include all of the payment in gross income. File tax 1040ez free online Distribution before annuity starting date. File tax 1040ez free online   If you receive a nonperiodic distribution before the annuity starting date from a qualified retirement plan, you generally can allocate only part of it to the cost of the contract. File tax 1040ez free online You exclude from your gross income the part that you allocate to the cost. File tax 1040ez free online You include the remainder in your gross income. File tax 1040ez free online   If you receive a nonperiodic distribution before the annuity starting date from a plan other than a qualified retirement plan (nonqualified plan), it is allocated first to earnings (the taxable part) and then to the cost of the contract (the tax-free part). File tax 1040ez free online This allocation rule applies, for example, to a commercial annuity contract you bought directly from the issuer. File tax 1040ez free online    Distributions from nonqualified plans are subject to the net investment income tax. File tax 1040ez free online See the Instructions for Form 8960. File tax 1040ez free online   For more information, see Figuring the Taxable Amount under Taxation of Nonperiodic Payments in Publication 575. File tax 1040ez free online Lump-Sum Distributions This section on lump-sum distributions only applies if the plan participant was born before January 2, 1936. File tax 1040ez free online If the plan participant was born after January 1, 1936, the taxable amount of this nonperiodic payment is reported as discussed earlier. File tax 1040ez free online A lump-sum distribution is the distribution or payment in one tax year of a plan participant's entire balance from all of the employer's qualified plans of one kind (for example, pension, profit-sharing, or stock bonus plans). File tax 1040ez free online A distribution from a nonqualified plan (such as a privately purchased commercial annuity or a section 457 deferred compensation plan of a state or local government or tax-exempt organization) cannot qualify as a lump-sum distribution. File tax 1040ez free online The participant's entire balance from a plan does not include certain forfeited amounts. File tax 1040ez free online It also does not include any deductible voluntary employee contributions allowed by the plan after 1981 and before 1987. File tax 1040ez free online For more information about distributions that do not qualify as lump-sum distributions, see Distributions that do not qualify under Lump-Sum Distributions in Publication 575. File tax 1040ez free online If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. File tax 1040ez free online The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. File tax 1040ez free online The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. File tax 1040ez free online You may be able to use the 10-year tax option, discussed later, to figure tax on the ordinary income part. File tax 1040ez free online Use Form 4972 to figure the separate tax on a lump-sum distribution using the optional methods. File tax 1040ez free online The tax figured on Form 4972 is added to the regular tax figured on your other income. File tax 1040ez free online This may result in a smaller tax than you would pay by including the taxable amount of the distribution as ordinary income in figuring your regular tax. File tax 1040ez free online How to treat the distribution. File tax 1040ez free online   If you receive a lump-sum distribution, you may have the following options for how you treat the taxable part. File tax 1040ez free online Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and the part from participation after 1973 as ordinary income. File tax 1040ez free online Report the part of the distribution from participation before 1974 as a capital gain (if you qualify) and use the 10-year tax option to figure the tax on the part from participation after 1973 (if you qualify). File tax 1040ez free online Use the 10-year tax option to figure the tax on the total taxable amount (if you qualify). File tax 1040ez free online Roll over all or part of the distribution. File tax 1040ez free online See Rollovers , later. File tax 1040ez free online No tax is currently due on the part rolled over. File tax 1040ez free online Report any part not rolled over as ordinary income. File tax 1040ez free online Report the entire taxable part of the distribution as ordinary income on your tax return. File tax 1040ez free online   The first three options are explained in the following discussions. File tax 1040ez free online Electing optional lump-sum treatment. File tax 1040ez free online   You can choose to use the 10-year tax option or capital gain treatment only once after 1986 for any plan participant. File tax 1040ez free online If you make this choice, you cannot use either of these optional treatments for any future distributions for the participant. File tax 1040ez free online Taxable and tax-free parts of the distribution. File tax 1040ez free online    The taxable part of a lump-sum distribution is the employer's contributions and income earned on your account. File tax 1040ez free online You may recover your cost in the lump sum and any net unrealized appreciation (NUA) in employer securities tax free. File tax 1040ez free online Cost. File tax 1040ez free online   In general, your cost is the total of: The plan participant's nondeductible contributions to the plan, The plan participant's taxable costs of any life insurance contract distributed, Any employer contributions that were taxable to the plan participant, and Repayments of any loans that were taxable to the plan participant. File tax 1040ez free online You must reduce this cost by amounts previously distributed tax free. File tax 1040ez free online Net unrealized appreciation (NUA). File tax 1040ez free online   The NUA in employer securities (box 6 of Form 1099-R) received as part of a lump-sum distribution is generally tax free until you sell or exchange the securities. File tax 1040ez free online (For more information, see Distributions of employer securities under Taxation of Nonperiodic Payments in Publication 575. File tax 1040ez free online ) Capital Gain Treatment Capital gain treatment applies only to the taxable part of a lump-sum distribution resulting from participation in the plan before 1974. File tax 1040ez free online The amount treated as capital gain is taxed at a 20% rate. File tax 1040ez free online You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. File tax 1040ez free online Complete Part II of Form 4972 to choose the 20% capital gain election. File tax 1040ez free online For more information, see Capital Gain Treatment under Lump-Sum Distributions in Publication 575. File tax 1040ez free online 10-Year Tax Option The 10-year tax option is a special formula used to figure a separate tax on the ordinary income part of a lump-sum distribution. File tax 1040ez free online You pay the tax only once, for the year in which you receive the distribution, not over the next 10 years. File tax 1040ez free online You can elect this treatment only once for any plan participant, and only if the plan participant was born before January 2, 1936. File tax 1040ez free online The ordinary income part of the distribution is the amount shown in box 2a of the Form 1099-R given to you by the payer, minus the amount, if any, shown in box 3. File tax 1040ez free online You also can treat the capital gain part of the distribution (box 3 of Form 1099-R) as ordinary income for the 10-year tax option if you do not choose capital gain treatment for that part. File tax 1040ez free online Complete Part III of Form 4972 to choose the 10-year tax option. File tax 1040ez free online You must use the special Tax Rate Schedule shown in the instructions for Part III to figure the tax. File tax 1040ez free online Publication 575 illustrates how to complete Form 4972 to figure the separate tax. File tax 1040ez free online Rollovers If you withdraw cash or other assets from a qualified retirement plan in an eligible rollover distribution, you can defer tax on the distribution by rolling it over to another qualified retirement plan or a traditional IRA. File tax 1040ez free online For this purpose, the following plans are qualified retirement plans. File tax 1040ez free online A qualified employee plan. File tax 1040ez free online A qualified employee annuity. File tax 1040ez free online A tax-sheltered annuity plan (403(b) plan). File tax 1040ez free online An eligible state or local government section 457 deferred compensation plan. File tax 1040ez free online Eligible rollover distributions. File tax 1040ez free online   Generally, an eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan. File tax 1040ez free online For information about exceptions to eligible rollover distributions, see Publication 575. File tax 1040ez free online Rollover of nontaxable amounts. File tax 1040ez free online   You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another qualified retirement plan that is a qualified employee plan or a 403(b) plan, or to a traditional or Roth IRA. File tax 1040ez free online The transfer must be made either through a direct rollover to a qualified plan or 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional or Roth IRA. File tax 1040ez free online   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. File tax 1040ez free online   Any after-tax contributions that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. File tax 1040ez free online To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. File tax 1040ez free online For more information, see the Form 8606 instructions. File tax 1040ez free online Direct rollover option. File tax 1040ez free online   You can choose to have any part or all of an eligible rollover distribution paid directly to another qualified retirement plan that accepts rollover distributions or to a traditional or Roth IRA. File tax 1040ez free online If you choose the direct rollover option, or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. File tax 1040ez free online Payment to you option. File tax 1040ez free online   If an eligible rollover distribution is paid to you, 20% generally will be withheld for income tax. File tax 1040ez free online However, the full amount is treated as distributed to you even though you actually receive only 80%. File tax 1040ez free online You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional or Roth IRA. File tax 1040ez free online (See Pensions and Annuities under Tax Withholding for 2014 in chapter 4. File tax 1040ez free online )    If you decide to roll over an amount equal to the distribution before withholding, your contribution to the new plan or IRA must include other money (for example, from savings or amounts borrowed) to replace the amount withheld. File tax 1040ez free online Time for making rollover. File tax 1040ez free online   You generally must complete the rollover of an eligible rollover distribution paid to you by the 60th day following the day on which you receive the distribution from your employer's plan. File tax 1040ez free online (If an amount distributed to you becomes a frozen deposit in a financial institution during the 60-day period after you receive it, the rollover period is extended for the period during which the distribution is in a frozen deposit in a financial institution. File tax 1040ez free online )   The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. File tax 1040ez free online   The administrator of a qualified plan must give you a written explanation of your distribution options within a reasonable period of time before making an eligible rollover distribution. File tax 1040ez free online Qualified domestic relations order (QDRO). File tax 1040ez free online   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan that you receive under a QDRO. File tax 1040ez free online If you receive the distribution as an employee's spouse or former spouse (not as a nonspousal beneficiary), the rollover rules apply to you as if you were the employee. File tax 1040ez free online You can roll over the distribution from the plan into a traditional IRA or to another eligible retirement plan. File tax 1040ez free online See Rollovers in Publication 575 for more information on benefits received under a QDRO. File tax 1040ez free online Rollover by surviving spouse. File tax 1040ez free online   You may be able to roll over tax free all or part of a distribution from a qualified retirement plan you receive as the surviving spouse of a deceased employee. File tax 1040ez free online The rollover rules apply to you as if you were the employee. File tax 1040ez free online You can roll over a distribution into a qualified retirement plan or a traditional or Roth IRA. File tax 1040ez free online For a rollover to a Roth IRA, see Rollovers to Roth IRAs , later. File tax 1040ez free online    A distribution paid to a beneficiary other than the employee's surviving spouse is generally not an eligible rollover distribution. File tax 1040ez free online However, see Rollovers by nonspouse beneficiary next. File tax 1040ez free online Rollovers by nonspouse beneficiary. File tax 1040ez free online   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you may be able to roll over tax free all or a portion of a distribution you receive from an eligible retirement plan of the employee. File tax 1040ez free online The distribution must be a direct trustee-to-trustee transfer to your traditional or Roth IRA that was set up to receive the distribution. File tax 1040ez free online The transfer will be treated as an eligible rollover distribution and the receiving plan will be treated as an inherited IRA. File tax 1040ez free online For information on inherited IRAs, see What if You Inherit an IRA? in chapter 1 of Publication 590, Individual Retirement Arrangements (IRAs). File tax 1040ez free online Retirement bonds. File tax 1040ez free online   If you redeem retirement bonds purchased under a qualified bond purchase plan, you can roll over the proceeds that exceed your basis tax free into an IRA (as discussed in Publication 590) or a qualified employer plan. File tax 1040ez free online Designated Roth accounts. File tax 1040ez free online   You can roll over an eligible rollover distribution from a designated Roth account into another designated Roth account or a Roth IRA. File tax 1040ez free online If you want to roll over the part of the distribution that is not included in income, you must make a direct rollover of the entire distribution or you can roll over the entire amount (or any portion) to a Roth IRA. File tax 1040ez free online For more information on rollovers from designated Roth accounts, see Rollovers in Publication 575. File tax 1040ez free online In-plan rollovers to designated Roth accounts. File tax 1040ez free online   If you are a plan participant in a 401(k), 403(b), or 457(b) plan, your plan may permit you to roll over amounts in those plans to a designated Roth account within the same plan. File tax 1040ez free online The rollover of any untaxed amounts must be included in income. File tax 1040ez free online See Designated Roth accounts under Rollovers in Publication 575 for more information. File tax 1040ez free online Rollovers to Roth IRAs. File tax 1040ez free online   You can roll over distributions directly from a qualified retirement plan (other than a designated Roth account) to a Roth IRA. File tax 1040ez free online   You must include in your gross income distributions from a qualified retirement plan (other than a designated Roth account) that you would have had to include in income if you had not rolled them over into a Roth IRA. File tax 1040ez free online You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions to the plan that were taxable to you when paid. File tax 1040ez free online In addition, the 10% tax on early distributions does not apply. File tax 1040ez free online More information. File tax 1040ez free online   For more information on the rules for rolling over distributions, see Rollovers in Publication 575. File tax 1040ez free online Special Additional Taxes To discourage the use of pension funds for purposes other than normal retirement, the law imposes additional taxes on early distributions of those funds and on failures to withdraw the funds timely. File tax 1040ez free online Ordinarily, you will not be subject to these taxes if you roll over all early distributions you receive, as explained earlier, and begin drawing out the funds at a normal retirement age, in reasonable amounts over your life expectancy. File tax 1040ez free online These special additional taxes are the taxes on: Early distributions, and Excess accumulation (not receiving minimum distributions). File tax 1040ez free online These taxes are discussed in the following sections. File tax 1040ez free online If you must pay either of these taxes, report them on Form 5329. File tax 1040ez free online However, you do not have to file Form 5329 if you owe only the tax on early distributions and your Form 1099-R correctly shows a “1” in box 7. File tax 1040ez free online Instead, enter 10% of the taxable part of the distribution on Form 1040, line 58 and write “No” under the heading “Other Taxes” to the left of line 58. File tax 1040ez free online Even if you do not owe any of these taxes, you may have to complete Form 5329 and attach it to your Form 1040. File tax 1040ez free online This applies if you meet an exception to the tax on early distributions but box 7 of your Form 1099-R does not indicate an exception. File tax 1040ez free online Tax on Early Distributions Most distributions (both periodic and nonperiodic) from qualified retirement plans and nonqualified annuity contracts made to you before you reach age 59½ are subject to an additional tax of 10%. File tax 1040ez free online This tax applies to the part of the distribution that you must include in gross income. File tax 1040ez free online For this purpose, a qualified retirement plan is: A qualified employee plan, A qualified employee annuity plan, A tax-sheltered annuity plan, or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). File tax 1040ez free online 5% rate on certain early distributions from deferred annuity contracts. File tax 1040ez free online   If an early withdrawal from a deferred annuity is otherwise subject to the 10% additional tax, a 5% rate may apply instead. File tax 1040ez free online A 5% rate applies to distributions under a written election providing a specific schedule for the distribution of your interest in the contract if, as of March 1, 1986, you had begun receiving payments under the election. File tax 1040ez free online On line 4 of Form 5329, multiply the line 3 amount by 5% instead of 10%. File tax 1040ez free online Attach an explanation to your return. File tax 1040ez free online Distributions from Roth IRAs allocable to a rollover from an eligible retirement plan within the 5-year period. File tax 1040ez free online   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from an eligible retirement plan to a Roth IRA, you take a distribution from the Roth IRA, you may have to pay the additional 10% tax on early distributions. File tax 1040ez free online You generally must pay the 10% additional tax on any amount attributable to the part of the rollover that you had to include in income. File tax 1040ez free online The additional tax is figured on Form 5329. File tax 1040ez free online For more information, see Form 5329 and its instructions. File tax 1040ez free online For information on qualified distributions from Roth IRAs, see Additional Tax on Early Distributions in chapter 2 of Publication 590. File tax 1040ez free online Distributions from designated Roth accounts allocable to in-plan Roth rollovers within the 5-year period. File tax 1040ez free online   If, within the 5-year period starting with the first day of your tax year in which you rolled over an amount from a 401(k), 403(b), or 457(b) plan to a designated Roth account, you take a distribution from the designated Roth account, you may have to pay the additional 10% tax on early distributions. File tax 1040ez free online You generally must pay the 10% additional tax on any amount attributable to the part of the in-plan rollover that you had to include in income. File tax 1040ez free online The additional tax is figured on Form 5329. File tax 1040ez free online For more information, see Form 5329 and its instructions. File tax 1040ez free online For information on qualified distributions from designated Roth accounts, see Designated Roth accounts under Taxation of Periodic Payments in Publication 575. File tax 1040ez free online Exceptions to tax. File tax 1040ez free online    Certain early distributions are excepted from the early distribution tax. File tax 1040ez free online If the payer knows that an exception applies to your early distribution, distribution code “2,” “3,” or “4” should be shown in box 7 of your Form 1099-R and you do not have to report the distribution on Form 5329. File tax 1040ez free online If an exception applies but distribution code “1” (early distribution, no known exception) is shown in box 7, you must file Form 5329. File tax 1040ez free online Enter the taxable amount of the distribution shown in box 2a of your Form 1099-R on line 1 of Form 5329. File tax 1040ez free online On line 2, enter the amount that can be excluded and the exception number shown in the Form 5329 instructions. File tax 1040ez free online    If distribution code “1” is incorrectly shown on your Form 1099-R for a distribution received when you were age 59½ or older, include that distribution on Form 5329. File tax 1040ez free online Enter exception number “12” on line 2. File tax 1040ez free online General exceptions. File tax 1040ez free online   The tax does not apply to distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after your separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. File tax 1040ez free online Additional exceptions for qualified retirement plans. File tax 1040ez free online   The tax does not apply to distributions that are: From a qualified retirement plan (other than an IRA) after your separation from service in or after the year you reached age 55 (age 50 for qualified public safety employees), From a qualified retirement plan (other than an IRA) to an alternate payee under a qualified domestic relations order, From a qualified retirement plan to the extent you have deductible medical expenses that exceed 10% (or 7. File tax 1040ez free online 5% if you or your spouse are age 65 or older) of your adjusted gross income, whether or not you itemize your deductions for the year, From an employer plan under a written election that provides a specific schedule for distribution of your entire interest if, as of March 1, 1986, you had separated from service and had begun receiving payments under the election, From an employee stock ownership plan for dividends on employer securities held by the plan, From a qualified retirement plan due to an IRS levy of the plan, From elective deferral accounts under 401(k) or 403(b) plans or similar arrangements that are qualified reservist distributions, or Phased retirement annuity payments made to federal employees. File tax 1040ez free online See Pub. File tax 1040ez free online 721 for more information on the phased retirement program. File tax 1040ez free online Qualified public safety employees. File tax 1040ez free online   If you are a qualified public safety employee, distributions made from a governmental defined benefit pension plan are not subject to the additional tax on early distributions. File tax 1040ez free online You are a qualified public safety employee if you provide police protection, firefighting services, or emergency medical services for a state or municipality, and you separated from service in or after the year you attained age 50. File tax 1040ez free online Qualified reservist distributions. File tax 1040ez free online   A qualified reservist distribution is not subject to the additional tax on early distributions. File tax 1040ez free online A qualified reservist distribution is a distribution (a) from elective deferrals under a section 401(k) or 403(b) plan, or a similar arrangement, (b) to an individual ordered or called to active duty (because he or she is a member of a reserve component) for a period of more than 179 days or for an indefinite period, and (c) made during the period beginning on the date of the order or call and ending at the close of the active duty period. File tax 1040ez free online You must have been ordered or called to active duty after September 11, 2001. File tax 1040ez free online For more information, see Qualified reservist distributions under Special Additional Taxes in Publication 575. File tax 1040ez free online Additional exceptions for nonqualified annuity contracts. File tax 1040ez free online   The tax does not apply to distributions from: A deferred annuity contract to the extent allocable to investment in the contract before August 14, 1982, A deferred annuity contract under a qualified personal injury settlement, A deferred annuity contract purchased by your employer upon termination of a qualified employee plan or qualified employee annuity plan and held by your employer until your separation from service, or An immediate annuity contract (a single premium contract providing substantially equal annuity payments that start within 1 year from the date of purchase and are paid at least annually). File tax 1040ez free online Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date (defined later). File tax 1040ez free online The payments each year cannot be less than the required minimum distribution. File tax 1040ez free online Required distributions not made. File tax 1040ez free online   If the actual distributions to you in any year are less than the minimum required distribution for that year, you are subject to an additional tax. File tax 1040ez free online The tax equals 50% of the part of the required minimum distribution that was not distributed. File tax 1040ez free online   For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan)(for benefits accruing after 1986). File tax 1040ez free online Waiver. File tax 1040ez free online   The tax may be waived if you establish that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. File tax 1040ez free online See the Instructions for Form 5329 for the procedure to follow if you believe you qualify for a waiver of this tax. File tax 1040ez free online State insurer delinquency proceedings. File tax 1040ez free online   You might not receive the minimum distribution because assets are invested in a contract issued by an insurance company in state insurer delinquency proceedings. File tax 1040ez free online If your payments are reduced below the minimum due to these proceedings, you should contact your plan administrator. File tax 1040ez free online Under certain conditions, you will not have to pay the 50% excise tax. File tax 1040ez free online Required beginning date. File tax 1040ez free online   Unless the rule for 5% owners applies, you generally must begin to receive distributions from your qualified retirement plan by April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. File tax 1040ez free online However, your plan may require you to begin to receive distributions by April 1 of the year that follows the year in which you reach age 70½, even if you have not retired. File tax 1040ez free online   If you reached age 70½ in 2013, you may be required to receive your first distribution by April 1, 2014. File tax 1040ez free online Your required distribution then must be made for 2014 by December 31, 2014. File tax 1040ez free online 5% owners. File tax 1040ez free online   If you are a 5% owner, you must begin to receive distributions by April 1 of the year that follows the calendar year in which you reach age 70½. File tax 1040ez free online   You are a 5% owner if, for the plan year ending in the calendar year in which you reach age 70½, you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the outstanding stock (or more than 5% of the total voting power of all stock) of the employer, or more than 5% of the capital or profits interest in the employer. File tax 1040ez free online Age 70½. File tax 1040ez free online   You reach age 70½ on the date that is 6 calendar months after the date of your 70th birthday. File tax 1040ez free online   For example, if you are retired and your 70th birthday was on June 30, 2013, you were age 70½ on December 30, 2013. File tax 1040ez free online If your 70th birthday was on July 1, 2013, you reached age 70½ on January 1, 2014. File tax 1040ez free online Required distributions. File tax 1040ez free online   By the required beginning date, as explained earlier, you must either: Receive your entire interest in the plan (for a tax-sheltered annuity, your entire benefit accruing after 1986), or Begin receiving periodic distributions in annual amounts calculated to distribute your entire interest (for a tax-sheltered annuity, your entire benefit accruing after 1986) over your life or life expectancy or over the joint lives or joint life expectancies of you and a designated beneficiary (or over a shorter period). File tax 1040ez free online Additional information. File tax 1040ez free online   For more information on this rule, see Tax on Excess Accumulation in Publication 575. File tax 1040ez free online Form 5329. File tax 1040ez free online   You must file Form 5329 if you owe tax because you did not receive a minimum required distribution from your qualified retirement plan. File tax 1040ez free online Survivors and Beneficiaries Generally, a survivor or beneficiary reports pension or annuity income in the same way the plan participant would have. File tax 1040ez free online However, some special rules apply. File tax 1040ez free online See Publication 575 for more information. File tax 1040ez free online Survivors of employees. File tax 1040ez free online   If you are entitled to receive a survivor annuity on the death of an employee who died, you can exclude part of each annuity payment as a tax-free recovery of the employee's investment in the contract. File tax 1040ez free online You must figure the taxable and tax-free parts of your annuity payments using the method that applies as if you were the employee. File tax 1040ez free online Survivors of retirees. File tax 1040ez free online   If you receive benefits as a survivor under a joint and survivor annuity, include those benefits in income in the same way the retiree would have included them in income. File tax 1040ez free online If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule and recovered all of the cost tax free, your survivor payments are fully taxable. File tax 1040ez free online    If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage to your initial survivor annuity payment called for in the contract. File tax 1040ez free online The resulting tax-free amount will then remain fixed. File tax 1040ez free online Any increases in the survivor annuity are fully taxable. File tax 1040ez free online    If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. File tax 1040ez free online This amount remains fixed even if the annuity payments are increased or decreased. File tax 1040ez free online See Simplified Method , earlier. File tax 1040ez free online   In any case, if the annuity starting date is after 1986, the total exclusion over the years cannot be more than the cost. File tax 1040ez free online Estate tax deduction. File tax 1040ez free online   If your annuity was a joint and survivor annuity that was included in the decedent's estate, an estate tax may have been paid on it. File tax 1040ez free online You can deduct the part of the total estate tax that was based on the annuity. File tax 1040ez free online The deceased annuitant must have died after the annuity starting date. File tax 1040ez free online (For details, see section 1. File tax 1040ez free online 691(d)-1 of the regulations. File tax 1040ez free online ) Deduct it in equal amounts over your remaining life expectancy. File tax 1040ez free online   If the decedent died before the annuity starting date of a deferred annuity contract and you receive a death benefit under that contract, the amount you receive (either in a lump sum or as periodic payments) in excess of the decedent's cost is included in your gross income as income in respect of a decedent for which you may be able to claim an estate tax deduction. File tax 1040ez free online   You can take the estate tax deduction as an itemized deduction on Schedule A, Form 1040. File tax 1040ez free online This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. File tax 1040ez free online See Publication 559, Survivors, Executors, and Administrators, for more information on the estate tax deduction. 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File tax 1040ez free online Publication 556 - Introductory Material Table of Contents The IRS Mission Reminders IntroductionOrdering forms and publications. File tax 1040ez free online Tax questions. File tax 1040ez free online Useful Items - You may want to see: The IRS Mission Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. File tax 1040ez free online Reminders Penalty for filing erroneous claim for refund or credit. File tax 1040ez free online  You may have to pay a penalty if you file an erroneous claim for refund or credit. File tax 1040ez free online See Penalty for erroneous claim for refund, later under Claims for Refund. File tax 1040ez free online Interest and penalties suspended if notice not mailed within 36 months. File tax 1040ez free online  If you file your return timely (including extensions), interest and certain penalties will be suspended if the IRS does not mail a notice to you within 36 months. File tax 1040ez free online See Suspension of interest and penalties, later under Examination of Returns. File tax 1040ez free online Fast track mediation. File tax 1040ez free online  The IRS offers fast track mediation services to help taxpayers resolve many disputes resulting from: Examinations (audits), Offers in compromise, Trust fund recovery penalties, and Other collection actions. File tax 1040ez free online See Fast track mediation under If You Do Not Agree. File tax 1040ez free online Introduction The Internal Revenue Service (IRS) accepts most federal tax returns as filed. File tax 1040ez free online However, the IRS examines (or audits) some returns to determine if income, expenses, and credits are being reported accurately. File tax 1040ez free online If your return is selected for examination, it does not suggest that you made an error or are dishonest. File tax 1040ez free online Returns are chosen by computerized screening, by random sample, or by an income document matching program. File tax 1040ez free online See Examination selection criteria, later. File tax 1040ez free online You should also know that many examinations result in a refund or acceptance of the tax return without change. File tax 1040ez free online This publication discusses general rules and procedures that the IRS follows in examinations. File tax 1040ez free online It explains what happens during an examination and your appeal rights, both within the IRS and in the federal court system. File tax 1040ez free online It also explains how to file a claim for refund of tax you already paid. File tax 1040ez free online As a taxpayer, you have the right to be treated fairly, professionally, promptly, and courteously by IRS employees. File tax 1040ez free online Publication 1, Your Rights as a Taxpayer, explains your rights when dealing with the IRS. File tax 1040ez free online Comments and suggestions. File tax 1040ez free online   We welcome your comments about this publication and your suggestions for future editions. File tax 1040ez free online   You can write to us at the following address:  Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. File tax 1040ez free online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File tax 1040ez free online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File tax 1040ez free online   You can send your comments from www. File tax 1040ez free online irs. File tax 1040ez free online gov/formspubs/. File tax 1040ez free online Click on “More Information” and then on “Comment on Tax Forms and Publications. File tax 1040ez free online ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. File tax 1040ez free online Ordering forms and publications. File tax 1040ez free online   Visit www. File tax 1040ez free online irs. File tax 1040ez free online gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. File tax 1040ez free online  Internal Revenue Service  1201 N. File tax 1040ez free online Mitsubishi Motorway Bloomington, IL 61704-6613 Tax questions. File tax 1040ez free online   If you have a tax question, check the information available on www. File tax 1040ez free online irs. File tax 1040ez free online gov or call 1-800-829-1040. File tax 1040ez free online We cannot answer tax questions sent to either of the above addresses. File tax 1040ez free online Useful Items - You may want to see: Publication 1 Your Rights as a Taxpayer 5 Your Appeal Rights and How To Prepare a Protest If You Don't Agree 547 Casualties, Disasters, and Thefts 594 The IRS Collection Process 910 Guide to Free Tax Services 971 Innocent Spouse Relief 1546 Taxpayer Advocate Service–Your Voice at the IRS 1660 Collection Appeal Rights 3605 Fast Track Mediation 3920 Tax Relief for Victims of Terrorist Attacks 4134 Low Income Taxpayer Clinic List Form (and Instructions) 843 Claim for Refund and Request for Abatement 911 Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order) 1040X Amended U. File tax 1040ez free online S. File tax 1040ez free online Individual Income Tax Return 2848 Power of Attorney and Declaration of Representative 4506 Request for Copy of Tax Return 4506-T Request for Transcript of Tax Return 8379 Injured Spouse Allocation 8857 Request for Innocent Spouse Relief See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. File tax 1040ez free online Prev  Up  Next   Home   More Online Publications