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H&rblock online Publication 939 - Main Content Table of Contents General Information Taxation of Periodic PaymentsInvestment in the Contract Expected Return Computation Under the General Rule How To Use Actuarial TablesUnisex Annuity Tables Special Elections Worksheets for Determining Taxable Annuity Actuarial Tables Requesting a Ruling on Taxation of Annuity How To Get Tax HelpLow Income Taxpayer Clinics General Information Some of the terms used in this publication are defined in the following paragraphs. H&rblock online A pension is generally a series of payments made to you after you retire from work. H&rblock online Pension payments are made regularly and are for past services with an employer. H&rblock online An annuity is a series of payments under a contract. H&rblock online You can buy the contract alone or you can buy it with the help of your employer. H&rblock online Annuity payments are made regularly for more than one full year. H&rblock online Note. H&rblock online Distributions from pensions and annuities follow the same rules as outlined in this publication unless otherwise noted. H&rblock online Types of pensions and annuities. H&rblock online   Particular types of pensions and annuities include: Fixed period annuities. H&rblock online You receive definite amounts at regular intervals for a definite length of time. H&rblock online Annuities for a single life. H&rblock online You receive definite amounts at regular intervals for life. H&rblock online The payments end at death. H&rblock online Joint and survivor annuities. H&rblock online The first annuitant receives a definite amount at regular intervals for life. H&rblock online After he or she dies, a second annuitant receives a definite amount at regular intervals for life. H&rblock online The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. H&rblock online Variable annuities. H&rblock online You receive payments that may vary in amount for a definite length of time or for life. H&rblock online The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds or cost-of-living indexes. H&rblock online Disability pensions. H&rblock online You are under minimum retirement age and receive payments because you retired on disability. H&rblock online If, at the time of your retirement, you were permanently and totally disabled, you may be eligible for the credit for the elderly or the disabled discussed in Publication 524. H&rblock online If your annuity starting date is after November 18, 1996, the General Rule cannot be used for the following qualified plans. H&rblock online A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries. H&rblock online This plan must meet Internal Revenue Code requirements. H&rblock online It qualifies for special tax benefits, including tax deferral for employer contributions and rollover distributions. H&rblock online However, you must use the General Rule if you were 75 or over and the annuity payments are guaranteed for more than 5 years. H&rblock online A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. H&rblock online A tax-sheltered annuity is a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization. H&rblock online   The General Rule is used to figure the tax treatment of various types of pensions and annuities, including nonqualified employee plans. H&rblock online A nonqualified employee plan is an employer's plan that does not meet Internal Revenue Code requirements. H&rblock online It does not qualify for most of the tax benefits of a qualified plan. H&rblock online Annuity worksheets. H&rblock online   The worksheets found near the end of the text of this publication may be useful to you in figuring the taxable part of your annuity. H&rblock online Request for a ruling. H&rblock online   If you are unable to determine the income tax treatment of your pension or annuity, you may ask the Internal Revenue Service to figure the taxable part of your annuity payments. H&rblock online This is treated as a request for a ruling. H&rblock online See Requesting a Ruling on Taxation of Annuity near the end of this publication. H&rblock online Withholding tax and estimated tax. H&rblock online   Your pension or annuity is subject to federal income tax withholding unless you choose not to have tax withheld. H&rblock online If you choose not to have tax withheld from your pension or annuity, or if you do not have enough income tax withheld, you may have to make estimated tax payments. H&rblock online Taxation of Periodic Payments This section explains how the periodic payments you receive under a pension or annuity plan are taxed under the General Rule. H&rblock online Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). H&rblock online These payments are also known as amounts received as an annuity. H&rblock online If you receive an amount from your plan that is a nonperiodic payment (amount not received as an annuity), see Taxation of Nonperiodic Payments in Publication 575. H&rblock online In general, you can recover your net cost of the pension or annuity tax free over the period you are to receive the payments. H&rblock online The amount of each payment that is more than the part that represents your net cost is taxable. H&rblock online Under the General Rule, the part of each annuity payment that represents your net cost is in the same proportion that your investment in the contract is to your expected return. H&rblock online These terms are explained in the following discussions. H&rblock online Investment in the Contract In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract. H&rblock online First, find your net cost of the contract as of the annuity starting date (defined later). H&rblock online To find this amount, you must first figure the total premiums, contributions, or other amounts paid. H&rblock online This includes the amounts your employer contributed if you were required to include these amounts in income. H&rblock online It also includes amounts you actually contributed (except amounts for health and accident benefits and deductible voluntary employee contributions). H&rblock online From this total cost you subtract: Any refunded premiums, rebates, dividends, or unrepaid loans (any of which were not included in your income) that you received by the later of the annuity starting date or the date on which you received your first payment. H&rblock online Any additional premiums paid for double indemnity or disability benefits. H&rblock online Any other tax-free amounts you received under the contract or plan before the later of the dates in (1). H&rblock online The annuity starting date   is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed. H&rblock online Example. H&rblock online On January 1 you completed all your payments required under an annuity contract providing for monthly payments starting on August 1, for the period beginning July 1. H&rblock online The annuity starting date is July 1. H&rblock online This is the date you use in figuring your investment in the contract and your expected return (discussed later). H&rblock online Adjustments If any of the following items apply, adjust (add or subtract) your total cost to find your net cost. H&rblock online Foreign employment. H&rblock online   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. H&rblock online The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (without regard to the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer on your behalf if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) if the contributions would be excludible from your gross income had they been paid directly to you. H&rblock online Foreign employment contributions while a nonresident alien. H&rblock online   In determining your cost, special rules apply if you are a U. H&rblock online S. H&rblock online citizen or resident alien who received distributions from a plan to which contributions were made while you were a nonresident alien. H&rblock online Your contributions and your employer's contributions are not included in your cost if the contributions: Were made based on compensation which was for services performed outside the United States which you were a nonresident alien, and Were not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if they had been paid as cash compensation when the services were performed. H&rblock online Death benefit exclusion. H&rblock online   If you are the beneficiary of a deceased employee (or former employee), who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000. H&rblock online The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion. H&rblock online How to adjust your total cost. H&rblock online   If you are eligible, treat the amount of any allowable death benefit exclusion as additional cost paid by the employee. H&rblock online Add it to the cost or unrecovered cost of the annuity at the annuity starting date. H&rblock online See Example 3 under Computation Under General Rule for an illustration of the adjustment to the cost of the contract. H&rblock online Net cost. H&rblock online   Your total cost plus certain adjustments and minus other amounts already recovered before the annuity starting date is your net cost. H&rblock online This is the unrecovered investment in the contract as of the annuity starting date. H&rblock online If your annuity starting date is after 1986, this is the maximum amount that you may recover tax free under the contract. H&rblock online Refund feature. H&rblock online   Adjustment for the value of the refund feature is only applicable when you report your pension or annuity under the General Rule. H&rblock online Your annuity contract has a refund feature if: The expected return ( discussed later) of an annuity depends entirely or partly on the life of one or more individuals, The contract provides that payments will be made to a beneficiary or the estate of an annuitant on or after the death of the annuitant if a stated amount or a stated number of payments has not been paid to the annuitant or annuitants before death, and The payments are a refund of the amount you paid for the annuity contract. H&rblock online   If your annuity has a refund feature, you must reduce your net cost of the contract by the value of the refund feature (figured using Table III or VII at the end of this publication, also see How To Use Actuarial Tables , later) to find the investment in the contract. H&rblock online Zero value of refund feature. H&rblock online   For a joint and survivor annuity, the value of the refund feature is zero if: Both annuitants are age 74 or younger, The payments are guaranteed for less than 2½ years, and The survivor's annuity is at least 50% of the first annuitant's annuity. H&rblock online   For a single-life annuity without survivor benefit, the value of the refund feature is zero if: The payments are guaranteed for less than 2½ years, and The annuitant is: Age 57 or younger (if using the new (unisex) annuity tables), Age 42 or younger (if male and using the old annuity tables), or Age 47 or younger (if female and using the old annuity tables). H&rblock online   If you do not meet these requirements, you will have to figure the value of the refund feature, as explained in the following discussion. H&rblock online Examples. H&rblock online The first example shows how to figure the value of the refund feature when there is only one beneficiary. H&rblock online Example 2 shows how to figure the value of the refund feature when the contract provides, in addition to a whole life annuity, one or more temporary life annuities for the lives of children. H&rblock online In both examples, the taxpayer elects to use Tables V through VIII. H&rblock online If you need the value of the refund feature for a joint and survivor annuity, write to the Internal Revenue Service as explained under Requesting a Ruling on Taxation of Annuity near the end of this publication. H&rblock online Example 1. H&rblock online At age 65, Barbara bought for $21,053 an annuity with a refund feature. H&rblock online She will get $100 a month for life. H&rblock online Barbara's contract provides that if she does not live long enough to recover the full $21,053, similar payments will be made to her surviving beneficiary until a total of $21,053 has been paid under the contract. H&rblock online In this case, the contract cost and the total guaranteed return are the same ($21,053). H&rblock online Barbara's investment in the contract is figured as follows: Net cost $21,053 Amount to be received annually $1,200   Number of years for which payment is guaranteed ($21,053 divided by $1,200) 17. H&rblock online 54   Rounded to nearest whole number of years 18   Percentage from Actuarial Table VII for age 65 with 18 years of guaranteed payments 15%   Value of the refund feature (rounded to the nearest dollar)—15% of $21,053 3,158 Investment in the contract, adjusted for value of refund feature $17,895       If the total guaranteed return were less than the $21,053 net cost of the contract, Barbara would apply the appropriate percentage from the tables to the lesser amount. H&rblock online For example, if the contract guaranteed the $100 monthly payments for 17 years to Barbara's estate or beneficiary if she were to die before receiving all the payments for that period, the total guaranteed return would be $20,400 ($100 × 12 × 17 years). H&rblock online In this case, the value of the refund feature would be $2,856 (14% of $20,400) and Barbara's investment in the contract would be $18,197 ($21,053 minus $2,856) instead of $17,895. H&rblock online Example 2. H&rblock online John died while still employed. H&rblock online His widow, Eleanor, age 48, receives $171 a month for the rest of her life. H&rblock online John's son, Elmer, age 9, receives $50 a month until he reaches age 18. H&rblock online John's contributions to the retirement fund totaled $7,559. H&rblock online 45, with interest on those contributions of $1,602. H&rblock online 53. H&rblock online The guarantee or total refund feature of the contract is $9,161. H&rblock online 98 ($7,559. H&rblock online 45 plus $1,602. H&rblock online 53). H&rblock online The adjustment in the investment in the contract is figured as follows: A) Expected return:*       1) Widow's expected return:         Annual annuity ($171 × 12) $2,052       Multiplied by factor from Table V         (nearest age 48) 34. H&rblock online 9 $71,614. H&rblock online 80   2) Child's expected return:         Annual annuity ($50 × 12) $600       Multiplied by factor from         Table VIII (nearest age 9         for term of 9 years) 9. H&rblock online 0 5,400. H&rblock online 00   3) Total expected return   $77,014. H&rblock online 80 B) Adjustment for refund feature:       1) Contributions (net cost) $7,559. H&rblock online 45   2) Guaranteed amount (contributions of $7,559. H&rblock online 45 plus interest of $1,602. H&rblock online 53) $9,161. H&rblock online 98   3) Minus: Expected return under child's (temporary life) annuity (A(2)) 5,400. H&rblock online 00   4) Net guaranteed amount $3,761. H&rblock online 98   5) Multiple from Table VII (nearest age 48 for 2 years duration (recovery of $3,761. H&rblock online 98 at $171 a month to nearest whole year)) 0%   6) Adjustment required for value of refund feature rounded to the nearest whole dollar  (0% × $3,761. H&rblock online 98, the smaller of B(3) or B(6)) 0 *Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. H&rblock online See the discussion of expected return, later in this publication. H&rblock online Free IRS help. H&rblock online   If you need to request assistance to figure the value of the refund feature, see Requesting a Ruling on Taxation of Annuity near the end of this publication. H&rblock online Expected Return Your expected return is the total amount you and other eligible annuitants can expect to receive under the contract. H&rblock online The following discussions explain how to figure the expected return with each type of annuity. H&rblock online A person's age, for purposes of figuring the expected return, is the age at the birthday nearest to the annuity starting date. H&rblock online Fixed period annuity. H&rblock online   If you will get annuity payments for a fixed number of years, without regard to your life expectancy, you must figure your expected return based on that fixed number of years. H&rblock online It is the total amount you will get beginning at the annuity starting date. H&rblock online You will receive specific periodic payments for a definite period of time, such as a fixed number of months (but not less than 13). H&rblock online To figure your expected return, multiply the fixed number of months for which payments are to be made by the amount of the payment specified for each period. H&rblock online Single life annuity. H&rblock online   If you are to get annuity payments for the rest of your life, find your expected return as follows. H&rblock online You must multiply the amount of the annual payment by a multiple based on your life expectancy as of the annuity starting date. H&rblock online These multiples are set out in actuarial Tables I and V near the end of this publication (see How To Use Actuarial Tables , later). H&rblock online   You may need to adjust these multiples if the payments are made quarterly, semiannually, or annually. H&rblock online See Adjustments to Tables I, II, V, VI, and VIA following Table I. H&rblock online Example. H&rblock online Henry bought an annuity contract that will give him an annuity of $500 a month for his life. H&rblock online If at the annuity starting date Henry's nearest birthday is 66, the expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table V, age 66 × 19. H&rblock online 2 Expected return $115,200 If the payments were to be made to Henry quarterly and the first payment was made one full month after the annuity starting date, Henry would adjust the 19. H&rblock online 2 multiple by +. H&rblock online 1. H&rblock online His expected return would then be $115,800 ($6,000 × 19. H&rblock online 3). H&rblock online Annuity for shorter of life or specified period. H&rblock online   With this type of annuity, you are to get annuity payments either for the rest of your life or until the end of a specified period, whichever period is shorter. H&rblock online To figure your expected return, multiply the amount of your annual payment by a multiple in Table IV or VIII for temporary life annuities. H&rblock online Find the proper multiple based on your sex (if using Table IV), your age at the annuity starting date, and the nearest whole number of years in the specified period. H&rblock online Example. H&rblock online Harriet purchased an annuity this year that will pay her $200 each month for five years or until she dies, whichever period is shorter. H&rblock online She was age 65 at her birthday nearest the annuity starting date. H&rblock online She figures the expected return as follows: Annual payment ($200 × 12 months) $2,400 Multiple shown in Table VIII, age 65, 5-year term × 4. H&rblock online 9 Expected return $11,760 She uses Table VIII (not Table IV) because all her contributions were made after June 30, 1986. H&rblock online See Special Elections, later. H&rblock online Joint and survivor annuities. H&rblock online   If you have an annuity that pays you a periodic income for life and after your death provides an identical lifetime periodic income to your spouse (or some other person), you figure the expected return based on your combined life expectancies. H&rblock online To figure the expected return, multiply the annual payment by a multiple in Table II or VI based on your joint life expectancies. H&rblock online If your payments are made quarterly, semiannually, or annually, you may need to adjust these multiples. H&rblock online See Adjustments to Tables I, II, V, VI, and VIA following Table I near the end of this publication. H&rblock online Example. H&rblock online John bought a joint and survivor annuity providing payments of $500 a month for his life, and, after his death, $500 a month for the remainder of his wife's life. H&rblock online At John's annuity starting date, his age at his nearest birthday is 70 and his wife's at her nearest birthday is 67. H&rblock online The expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table VI, ages 67 and 70 × 22. H&rblock online 0 Expected return $132,000 Different payments to survivor. H&rblock online   If your contract provides that payments to a survivor annuitant will be different from the amount you receive, you must use a computation which accounts for both the joint lives of the annuitants and the life of the survivor. H&rblock online Example 1. H&rblock online Gerald bought a contract providing for payments to him of $500 a month for life and, after his death, payments to his wife, Mary, of $350 a month for life. H&rblock online If, at the annuity starting date, Gerald's nearest birthday is 70 and Mary's is 67, the expected return under the contract is figured as follows: Combined multiple for Gerald and Mary, ages 70 and 67 (from Table VI)   22. H&rblock online 0 Multiple for Gerald, age 70 (from Table V)   16. H&rblock online 0 Difference: Multiple applicable to Mary   6. H&rblock online 0 Gerald's annual payment ($500 × 12) $6,000   Gerald's multiple 16. H&rblock online 0   Gerald's expected return   $96,000 Mary's annual payment ($350 × 12) $4,200   Mary's multiple 6. H&rblock online 0   Mary's expected return   25,200 Total expected return under the contract   $121,200 Example 2. H&rblock online Your husband died while still employed. H&rblock online Under the terms of his employer's retirement plan, you are entitled to get an immediate annuity of $400 a month for the rest of your life or until you remarry. H&rblock online Your daughters, Marie and Jean, are each entitled to immediate temporary life annuities of $150 a month until they reach age 18. H&rblock online You were 50 years old at the annuity starting date. H&rblock online Marie was 16 and Jean was 14. H&rblock online Using the multiples shown in Tables V and VIII at the end of this publication, the total expected return on the annuity starting date is $169,680, figured as follows: Widow, age 50 (multiple from Table V—33. H&rblock online 1 × $4,800 annual payment) $158,880 Marie, age 16 for 2 years duration (multiple from Table VIII—2. H&rblock online 0 × $1,800 annual payment) 3,600 Jean, age 14 for 4 years duration (multiple from Table VIII—4. H&rblock online 0 × $1,800 annual payment) 7,200 Total expected return $169,680 No computation of expected return is made based on your husband's age at the date of death because he died before the annuity starting date. H&rblock online Computation Under the General Rule Note. H&rblock online Variable annuities use a different computation for determining the exclusion amounts. H&rblock online See Variable annuities later. H&rblock online Under the General Rule, you figure the taxable part of your annuity by using the following steps: Step 1. H&rblock online   Figure the amount of your investment in the contract, including any adjustments for the refund feature and the death benefit exclusion, if applicable. H&rblock online See Death benefit exclusion , earlier. H&rblock online Step 2. H&rblock online   Figure your expected return. H&rblock online Step 3. H&rblock online   Divide Step 1 by Step 2 and round to three decimal places. H&rblock online This will give you the exclusion percentage. H&rblock online Step 4. H&rblock online   Multiply the exclusion percentage by the first regular periodic payment. H&rblock online The result is the tax-free part of each pension or annuity payment. H&rblock online   The tax-free part remains the same even if the total payment increases due to variation in the annuity amount such as cost of living increases, or you outlive the life expectancy factor used. H&rblock online However, if your annuity starting date is after 1986, the total amount of annuity income that is tax free over the years cannot exceed your net cost. H&rblock online   Each annuitant applies the same exclusion percentage to his or her initial payment called for in the contract. H&rblock online Step 5. H&rblock online   Multiply the tax-free part of each payment (step 4) by the number of payments received during the year. H&rblock online This will give you the tax-free part of the total payment for the year. H&rblock online    In the first year of your annuity, your first payment or part of your first payment may be for a fraction of the payment period. H&rblock online This fractional amount is multiplied by your exclusion percentage to get the tax-free part. H&rblock online Step 6. H&rblock online   Subtract the tax-free part from the total payment you received. H&rblock online The rest is the taxable part of your pension or annuity. H&rblock online Example 1. H&rblock online You purchased an annuity with an investment in the contract of $10,800. H&rblock online Under its terms, the annuity will pay you $100 a month for life. H&rblock online The multiple for your age (age 65) is 20. H&rblock online 0 as shown in Table V. H&rblock online Your expected return is $24,000 (20 × 12 × $100). H&rblock online Your cost of $10,800, divided by your expected return of $24,000, equals 45. H&rblock online 0%. H&rblock online This is the percentage you will not have to include in income. H&rblock online Each year, until your net cost is recovered, $540 (45% of $1,200) will be tax free and you will include $660 ($1,200 − $540) in your income. H&rblock online If you had received only six payments of $100 ($600) during the year, your exclusion would have been $270 (45% of $100 × 6 payments). H&rblock online Example 2. H&rblock online Gerald bought a joint and survivor annuity. H&rblock online Gerald's investment in the contract is $62,712 and the expected return is $121,200. H&rblock online The exclusion percentage is 51. H&rblock online 7% ($62,712 ÷ $121,200). H&rblock online Gerald will receive $500 a month ($6,000 a year). H&rblock online Each year, until his net cost is recovered, $3,102 (51. H&rblock online 7% of his total payments received of $6,000) will be tax free and $2,898 ($6,000 − $3,102) will be included in his income. H&rblock online If Gerald dies, his wife will receive $350 a month ($4,200 a year). H&rblock online If Gerald had not recovered all of his net cost before his death, his wife will use the same exclusion percentage (51. H&rblock online 7%). H&rblock online Each year, until the entire net cost is recovered, his wife will receive $2,171. H&rblock online 40 (51. H&rblock online 7% of her payments received of $4,200) tax free. H&rblock online She will include $2,028. H&rblock online 60 ($4,200 − $2,171. H&rblock online 40) in her income tax return. H&rblock online Example 3. H&rblock online Using the same facts as Example 2 under Different payments to survivor, you are to receive an annual annuity of $4,800 until you die or remarry. H&rblock online Your two daughters each receive annual annuities of $1,800 until they reach age 18. H&rblock online Your husband contributed $25,576 to the plan. H&rblock online You are eligible for the $5,000 death benefit exclusion because your husband died before August 21, 1996. H&rblock online Adjusted Investment in the Contract Contributions $25,576 Plus: Death benefit exclusion 5,000 Adjusted investment in the contract $30,576 The total expected return, as previously figured (in Example 2 under Different payments to survivor), is $169,680. H&rblock online The exclusion percentage of 18. H&rblock online 0% ($30,576 ÷ $169,680) applies to the annuity payments you and each of your daughters receive. H&rblock online Each full year $864 (18. H&rblock online 0% × $4,800) will be tax free to you, and you must include $3,936 in your income tax return. H&rblock online Each year, until age 18, $324 (18. H&rblock online 0% × $1,800) of each of your daughters' payments will be tax free and each must include the balance, $1,476, as income on her own income tax return. H&rblock online Part-year payments. H&rblock online   If you receive payments for only part of a year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments received during the year. H&rblock online   If you receive amounts during the year that represent 12 payments, one for each month in that year, and an amount that represents payments for months in a prior year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments the amounts received represent. H&rblock online For instance, if you received amounts during the year that represent the 12 payments for that year plus an amount that represents three payments for a prior year, multiply that amount by the 15 (12 + 3) payments received that the year. H&rblock online   If you received a fractional payment, follow Step 5, discussed earlier. H&rblock online This gives you the tax-free part of your total payment. H&rblock online Example. H&rblock online On September 28, Mary bought an annuity contract for $22,050 that will give her $125 a month for life, beginning October 30. H&rblock online The applicable multiple from Table V is 23. H&rblock online 3 (age 61). H&rblock online Her expected return is $34,950 ($125 × 12 × 23. H&rblock online 3). H&rblock online Mary's investment in the contract of $22,050, divided by her expected return of $34,950, equals 63. H&rblock online 1%. H&rblock online Each payment received will consist of 63. H&rblock online 1% return of cost and 36. H&rblock online 9% taxable income, until her net cost of the contract is fully recovered. H&rblock online During the first year, Mary received three payments of $125, or $375, of which $236. H&rblock online 63 (63. H&rblock online 1% × $375) is a return of cost. H&rblock online The remaining $138. H&rblock online 37 is included in income. H&rblock online Increase in annuity payments. H&rblock online   The tax-free amount remains the same as the amount figured at the annuity starting date, even if the payment increases. H&rblock online All increases in the installment payments are fully taxable. H&rblock online   However, if your annuity payments are scheduled to increase at a definite date in the future you must figure the expected return for that annuity using the method described in section 1. H&rblock online 72-5(a)(5) of the regulations. H&rblock online Example. H&rblock online Joe's wife died while she was still employed and, as her beneficiary, he began receiving an annuity of $147 per month. H&rblock online In figuring the taxable part, Joe elects to use Tables V through VIII. H&rblock online The cost of the contract was $7,938, consisting of the sum of his wife's net contributions, adjusted for any refund feature. H&rblock online His expected return as of the annuity starting date is $35,280 (age 65, multiple of 20. H&rblock online 0 × $1,764 annual payment). H&rblock online The exclusion percentage is $7,938 ÷ $35,280, or 22. H&rblock online 5%. H&rblock online During the year he received 11 monthly payments of $147, or $1,617. H&rblock online Of this amount, 22. H&rblock online 5% × $147 × 11 ($363. H&rblock online 83) is tax free as a return of cost and the balance of $1,253. H&rblock online 17 is taxable. H&rblock online Later, because of a cost-of-living increase, his annuity payment was increased to $166 per month, or $1,992 a year (12 × $166). H&rblock online The tax-free part is still only 22. H&rblock online 5% of the annuity payments as of the annuity starting date (22. H&rblock online 5% × $147 × 12 = $396. H&rblock online 90 for a full year). H&rblock online The increase of $228 ($1,992 − $1,764 (12 × $147)) is fully taxable. H&rblock online Variable annuities. H&rblock online   For variable annuity payments, figure the amount of each payment that is tax free by dividing your investment in the contract (adjusted for any refund feature) by the total number of periodic payments you expect to get under the contract. H&rblock online   If the annuity is for a definite period, you determine the total number of payments by multiplying the number of payments to be made each year by the number of years you will receive payments. H&rblock online If the annuity is for life, you determine the total number of payments by using a multiple from the appropriate actuarial table. H&rblock online Example. H&rblock online Frank purchased a variable annuity at age 65. H&rblock online The total cost of the contract was $12,000. H&rblock online The annuity starting date is January 1 of the year of purchase. H&rblock online His annuity will be paid, starting July 1, in variable annual installments for his life. H&rblock online The tax-free amount of each payment, until he has recovered his cost of his contract, is: Investment in the contract $12,000 Number of expected annual payments (multiple for age 65 from Table V) 20 Tax-free amount of each payment ($12,000 ÷ 20) $600 If Frank's first payment is $920, he includes only $320 ($920 − $600) in his gross income. H&rblock online   If the tax-free amount for a year is more than the payments you receive in that year, you may choose, when you receive the next payment, to refigure the tax-free part. H&rblock online Divide the amount of the periodic tax-free part that is more than the payment you received by the remaining number of payments you expect. H&rblock online The result is added to the previously figured periodic tax-free part. H&rblock online The sum is the amount of each future payment that will be tax free. H&rblock online Example. H&rblock online Using the facts of the previous example about Frank, assume that after Frank's $920 payment, he received $500 in the following year, and $1,200 in the year after that. H&rblock online Frank does not pay tax on the $500 (second year) payment because $600 of each annual pension payment is tax free. H&rblock online Since the $500 payment is less than the $600 annual tax-free amount, he may choose to refigure his tax-free part when he receives his $1,200 (third year) payment, as follows: Amount tax free in second year $600. H&rblock online 00 Amount received in second year 500. H&rblock online 00 Difference $100. H&rblock online 00 Number of remaining payments after the first 2 payments (age 67, from Table V) 18. H&rblock online 4 Amount to be added to previously determined annual tax-free part ($100 ÷ 18. H&rblock online 4) $5. H&rblock online 43 Revised annual tax-free part for third and later years ($600 + $5. H&rblock online 43) $605. H&rblock online 43 Amount taxable in third year ($1,200 − $605. H&rblock online 43) $594. H&rblock online 57 If you choose to refigure your tax-free amount,   you must file a statement with your income tax return stating that you are refiguring the tax-free amount in accordance with the rules of section 1. H&rblock online 72–4(d)(3) of the Income Tax Regulations. H&rblock online The statement must also show the following information: The annuity starting date and your age on that date. H&rblock online The first day of the first period for which you received an annuity payment in the current year. H&rblock online Your investment in the contract as originally figured. H&rblock online The total of all amounts received tax free under the annuity from the annuity starting date through the first day of the first period for which you received an annuity payment in the current tax year. H&rblock online Exclusion Limits Your annuity starting date determines the total amount of annuity income that you can exclude from income over the years. H&rblock online Exclusion limited to net cost. H&rblock online   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a return of your cost cannot exceed your net cost (figured without any reduction for a refund feature). H&rblock online This is the unrecovered investment in the contract as of the annuity starting date. H&rblock online   If your annuity starting date is after July 1, 1986, any unrecovered net cost at your (or last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. H&rblock online This deduction is not subject to the 2%-of-adjusted-gross-income limit. H&rblock online Example 1. H&rblock online Your annuity starting date is after 1986. H&rblock online Your total cost is $12,500, and your net cost is $10,000, taking into account certain adjustments. H&rblock online There is no refund feature. H&rblock online Your monthly annuity payment is $833. H&rblock online 33. H&rblock online Your exclusion ratio is 12% and you exclude $100 a month. H&rblock online Your exclusion ends after 100 months, when you have excluded your net cost of $10,000. H&rblock online Thereafter, your annuity payments are fully taxable. H&rblock online Example 2. H&rblock online The facts are the same as in Example 1, except that there is a refund feature, and you die after 5 years with no surviving annuitant. H&rblock online The adjustment for the refund feature is $1,000, so the investment in the contract is $9,000. H&rblock online The exclusion ratio is 10. H&rblock online 8%, and your monthly exclusion is $90. H&rblock online After 5 years (60 months), you have recovered tax free only $5,400 ($90 x 60). H&rblock online An itemized deduction for the unrecovered net cost of $4,600 ($10,000 net cost minus $5,400) may be taken on your final income tax return. H&rblock online Your unrecovered investment is determined without regard to the refund feature adjustment, discussed earlier, under Adjustments. H&rblock online Exclusion not limited to net cost. H&rblock online   If your annuity starting date was before 1987, you could continue to take your monthly exclusion for as long as you receive your annuity. H&rblock online If you choose a joint and survivor annuity, your survivor continues to take the survivor's exclusion figured as of the annuity starting date. H&rblock online The total exclusion may be more than your investment in the contract. H&rblock online How To Use Actuarial Tables In figuring, under the General Rule, the taxable part of your annuity payments that you are to get for the rest of your life (rather than for a fixed number of years), you must use one or more of the actuarial tables in this publication. H&rblock online Unisex Annuity Tables Effective July 1, 1986, the Internal Revenue Service adopted new annuity Tables V through VIII, in which your sex is not considered when determining the applicable factor. H&rblock online These tables correspond to the old Tables I through IV. H&rblock online In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986. H&rblock online If you made no contributions to the plan after June 30, 1986, generally you must use only Tables I through IV. H&rblock online However, if you received an annuity payment after June 30, 1986, you may elect to use Tables V through VIII (see Annuity received after June 30, 1986, later). H&rblock online Special Elections Although you generally must use Tables V through VIII if you made contributions to the retirement plan after June 30, 1986, and Tables I through IV if you made no contributions after June 30, 1986, you can make the following special elections to select which tables to use. H&rblock online Contributions made both before July 1986 and after June 1986. H&rblock online   If you made contributions to the retirement plan both before July 1986 and after June 1986, you may elect to use Tables I through IV for the pre-July 1986 cost of the contract, and Tables V through VIII for the post-June 1986 cost. H&rblock online (See the examples below. H&rblock online )    Making the election. H&rblock online Attach this statement to your income tax return for the first year in which you receive an annuity:    “I elect to apply the provisions of paragraph (d) of section 1. H&rblock online 72–6 of the Income Tax Regulations. H&rblock online ”   The statement must also include your name, address, social security number, and the amount of the pre-July 1986 investment in the contract. H&rblock online   If your investment in the contract includes post-June 1986 contributions to the plan, and you do not make the election to use Tables I through IV and Tables V through VIII, then you can only use Tables V through VIII in figuring the taxable part of your annuity. H&rblock online You must also use Tables V through VIII if you are unable or do not wish to determine the portions of your contributions which were made before July 1, 1986, and after June 30, 1986. H&rblock online    Advantages of election. H&rblock online In general, a lesser amount of each annual annuity payment is taxable if you separately figure your exclusion ratio for pre-July 1986 and post-June 1986 contributions. H&rblock online    If you intend to make this election, save your records that substantiate your pre-July 1986 and post-June 1986 contributions. H&rblock online If the death benefit exclusion applies (see discussion, earlier), you do not have to apportion it between the pre-July 1986 and the post-June 1986 investment in the contract. H&rblock online   The following examples illustrate the separate computations required if you elect to use Tables I through IV for your pre-July 1986 investment in the contract and Tables V through VIII for your post-June 1986 investment in the contract. H&rblock online Example 1. H&rblock online Bill, who is single, contributed $42,000 to the retirement plan and will receive an annual annuity of $24,000 for life. H&rblock online Payment of the $42,000 contribution is guaranteed under a refund feature. H&rblock online Bill is 55 years old as of the annuity starting date. H&rblock online For figuring the taxable part of Bill's annuity, he chose to make separate computations for his pre-July 1986 investment in the contract of $41,300, and for his post-June 1986 investment in the contract of $700. H&rblock online       Pre- July 1986   Post- June 1986 A. H&rblock online Adjustment for refund feature         1) Net cost $41,300   $700   2) Annual annuity—$24,000  ($41,300/$42,000 × $24,000) $23,600       ($700/$42,000 × $24,000)     $400   3) Guarantee under contract $41,300   $700   4) No. H&rblock online of years payments  guaranteed (rounded), A(3) ÷ A(2) 2   2   5) Applicable percentage from  Tables III and VII 1%   0%   6) Adjustment for value of refund  feature, A(5) × smaller of A(1)  or A(3) $413   $0 B. H&rblock online Investment in the contract         1) Net cost $41,300   $700   2) Minus: Amount in A(6) 413   0   3) Investment in the contract $40,887   $700 C. H&rblock online Expected return         1) Annual annuity receivable $24,000   $24,000   2) Multiples from Tables I and V 21. H&rblock online 7   28. H&rblock online 6   3) Expected return, C(1) × C(2) $520,800   $686,400 D. H&rblock online Tax-free part of annuity         1) Exclusion ratio as decimal,  B(3) ÷ C(3) . H&rblock online 079   . H&rblock online 001   2) Tax-free part, C(1) × D(1) $1,896   $24 The tax-free part of Bill's total annuity is $1,920 ($1,896 plus $24). H&rblock online The taxable part of his annuity is $22,080 ($24,000 minus $1,920). H&rblock online If the annuity starting date is after 1986, the exclusion over the years cannot exceed the net cost (figured without any reduction for a refund feature). H&rblock online Example 2. H&rblock online Al is age 62 at his nearest birthday to the annuity starting date. H&rblock online Al's wife is age 60 at her nearest birthday to the annuity starting date. H&rblock online The joint and survivor annuity pays $1,000 per month to Al for life, and $500 per month to Al's surviving wife after his death. H&rblock online The pre-July 1986 investment in the contract is $53,100 and the post-June 1986 investment in the contract is $7,000. H&rblock online Al makes the election described in Example 1 . H&rblock online For purposes of this example, assume the refund feature adjustment is zero. H&rblock online If an adjustment is required, IRS will figure the amount. H&rblock online See Requesting a Ruling on Taxation of Annuity near the end of this publication. H&rblock online       Pre-  July 1986   Post-  June 1986 A. H&rblock online Adjustment for refund feature         1) Net cost $53,100   $7,000   2) Annual annuity—$12,000  ($53,100/$60,100 × $12,000) $10,602       ($7,000/$60,100 × $12,000)     $1,398   3) Guaranteed under the contract $53,100   $7,000   4) Number of years guaranteed,  rounded, A(3) ÷ A(2) 5   5   5) Applicable percentages 0%   0%   6) Refund feature adjustment, A(5) × smaller of A(1) or A(3) 0   0 B. H&rblock online Investment in the contract         1) Net cost $53,100   $7,000   2) Refund feature adjustment 0   0   3) Investment in the contract adjusted for refund feature $53,100   $7,000 C. H&rblock online Expected return         1) Multiple for both annuitants from Tables II and VI 25. H&rblock online 4   28. H&rblock online 8   2) Multiple for first annuitant from Tables I and V 16. H&rblock online 9   22. H&rblock online 5   3) Multiple applicable to surviving annuitant, subtract C(2) from C(1) 8. H&rblock online 5   6. H&rblock online 3   4) Annual annuity to surviving annuitant $6,000   $6,000   5) Portion of expected return for surviving annuitant, C(4) × C(3) $51,000   $37,800   6) Annual annuity to first annuitant $12,000   $12,000   7) Plus: Portion of expected return for first annuitant, C(6) × C(2) $202,800   $270,000   8) Expected return for both annuitants, C(5) + C(7) $253,800   $307,800 D. H&rblock online Tax-free part of annuity         1) Exclusion ratio as a decimal, B(3) ÷ C(8) . H&rblock online 209   . H&rblock online 023   2) Retiree's tax-free part of annuity, C(6) × D(1) $2,508   $276   3) Survivor's tax-free part of annuity, C(4) × D(1) $1,254   $138 The tax-free part of Al's total annuity is $2,784 ($2,508 + $276). H&rblock online The taxable part of his annuity is $9,216 ($12,000 − $2,784). H&rblock online The exclusion over the years cannot exceed the net cost of the contract (figured without any reduction for a refund feature) if the annuity starting date is after 1986. H&rblock online After Al's death, his widow will apply the same exclusion percentages (20. H&rblock online 9% and 2. H&rblock online 3%) to her annual annuity of $6,000 to figure the tax-free part of her annuity. H&rblock online Annuity received after June 30, 1986. H&rblock online   If you receive an annuity payment after June 30, 1986, (regardless of your annuity starting date), you may elect to treat the entire cost of the contract as post-June 1986 cost (even if you made no post-June 1986 contributions to the plan) and use Tables V through VIII. H&rblock online Once made, you cannot revoke the election, which will apply to all payments during the year and in any later year. H&rblock online    Make the election by attaching the following statement to your income tax return. H&rblock online    “I elect, under section 1. H&rblock online 72–9 of the Income Tax Regulations, to treat my entire cost of the contract as a post-June 1986 cost of the plan. H&rblock online ”   The statement must also include your name, address, and social security number. H&rblock online   You should also indicate you are making this election if you are unable or do not wish to determine the parts of your contributions which were made before July 1, 1986, and after June 30, 1986. H&rblock online Disqualifying form of payment or settlement. H&rblock online   If your annuity starting date is after June 30, 1986, and the contract provides for a disqualifying form of payment or settlement, such as an option to receive a lump sum in full discharge of the obligation under the contract, the entire investment in the contract is treated as post-June 1986 investment in the contract. H&rblock online See regulations section 1. H&rblock online 72–6(d)(3) for additional examples of disqualifying forms of payment or settlement. H&rblock online You can find the Income Tax Regulations in many libraries and at Internal Revenue Service Offices. H&rblock online Worksheets for Determining Taxable Annuity Worksheets I and II. H&rblock online   Worksheets I and II follow for determining your taxable annuity under Regulations Section 1. H&rblock online 72–6(d)(6) Election. H&rblock online Worksheet I For Determining Taxable Annuity Under Regulations Section 1. H&rblock online 72-6(d)(6) Election For Single Annuitant With No Survivor Annuity               Pre-July 1986   Post-June 1986 A. H&rblock online   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. H&rblock online )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)   Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages* from Tables III and VII                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. H&rblock online If not, the IRS will calculate the refund feature percentage. H&rblock online             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. H&rblock online   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund feature:                   B(1) minus B(2)                             C. H&rblock online   Expected Return             1)   Annual Annuity:                   12 times monthly annuity**             2)   Expected return multiples from Tables I and V             3)     Expected return:                   C(1) times C(2)                             D. H&rblock online   Tax-Free Part of Annuity             1)     Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(3)             2)     Tax-free part of annuity:                   C(1) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. H&rblock online     Worksheet II For Determining Taxable Annuity Under Regulations Section 1. H&rblock online 72-6(d)(6) Election For Joint and Survivor Annuity               Pre-July 1986   Post-June 1986 A. H&rblock online   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. H&rblock online )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)     Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages*                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. H&rblock online If not, the IRS will calculate the refund feature percentage. H&rblock online             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. H&rblock online   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund future:                   B(1) minus B(2)                             C. H&rblock online   Expected Return             1)   Multiples for both annuitants, Tables II and VI             2)   Multiple for retiree. H&rblock online Tables I and VI             3)   Multiple for survivor:                   C(1) minus C(2)             4)   Annual annuity to survivor:                   12 times potential monthly rate for survivor**             5)   Expected return for survivor:                   C(3) times C(4)             6)   Annual annuity to retiree:                   12 times monthly rate for retiree**             7)   Expected return for retiree:                   C(2) times C(6)             8)   Total expected return:                   C(5) plus C(7)                             D. H&rblock online   Tax-Free Part of Annuity             1)   Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(8)             2)   Retiree's tax-free part of annuity:                   C(6) times D(1)             3)   Survivor's tax-free part of annuity, if surviving after death of retiree:                   C(4) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. H&rblock online   Actuarial Tables Please click here for the text description of the image. H&rblock online Actuarial Tables Please click here for the text description of the image. H&rblock online Actuarial Tables Please click here for the text description of the image. H&rblock online Actuarial tables Please click here for the text description of the image. H&rblock online Actuarial tables Please click here for the text description of the image. 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H&rblock online Actuarial tables Please click here for the text description of the image. H&rblock online Actuarial tables Please click here for the text description of the image. H&rblock online Actuarial tables Please click here for the text description of the image. H&rblock online Actuarial tables Requesting a Ruling on Taxation of Annuity If you are a retiree, or the survivor of an employee or retiree, you may ask the Internal Revenue Service to help you determine the taxation of your annuity. H&rblock online If you make this request, you are asking for a ruling. H&rblock online User fee. H&rblock online   Under the law in effect at the time this publication went to print, the IRS must charge a user fee for all ruling requests. H&rblock online You should call the IRS for the proper fee. H&rblock online A request solely for the value of the refund feature is not treated as a ruling request and requires no fee. H&rblock online Send your request to:     Internal Revenue Service  Attention: EP Letter Rulings P. H&rblock online O. H&rblock online Box 27063 McPherson Station Washington, DC 20038 The user fee is allowed as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit. H&rblock online When to make the request. H&rblock online   Please note that requests sent between February 1 and April 15 may experience some delay. H&rblock online We process requests in the order received, and we will reply to your request as soon as we can process it. H&rblock online If you do not receive your ruling by the required filing date, you may use Form 4868, Application for Automatic Extension of Time To File U. H&rblock online S. H&rblock online Individual Income Tax Return, to get an extension of time to file. H&rblock online Information you must furnish. H&rblock online   You must furnish the information listed below so the IRS can comply with your request. H&rblock online Failure to furnish the information will result in a delay in processing your request. H&rblock online Please send only copies of the following documents, as the IRS retains all material sent for its records: A letter explaining the question(s) you wish to have resolved or the information you need from the ruling. H&rblock online Copies of any documents showing distributions, annuity rates, and annuity options available to you. H&rblock online A copy of any Form 1099–R you received since your annuity began. H&rblock online A statement indicating whether you have filed your return for the year for which you are making the request. H&rblock online If you have requested an extension of time to file that return, please indicate the extension date. H&rblock online Your daytime phone number. H&rblock online Your current mailing address. H&rblock online A power of attorney if someone other than you, an attorney, a certified public accountant, or an enrolled agent is signing this request. H&rblock online Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. H&rblock online A completed Tax Information Sheet (or facsimile) shown on the next page. H&rblock online Sign and date the Disclosure and Perjury Statement (or facsimile) at the end of the tax information sheet. H&rblock online This statement must be signed by the retiree or the survivor annuitant. H&rblock online It cannot be signed by a representative. H&rblock online Tax Information Sheet Please click here for the text description of the image. H&rblock online Tax Information Sheet Please click here for the text description of the image. H&rblock online Tax Information Sheet (continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. H&rblock online Free help with your tax return. H&rblock online   You can get free help preparing your return nationwide from IRS-certified volunteers. H&rblock online The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. H&rblock online The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. H&rblock online Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. H&rblock online In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. H&rblock online To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. H&rblock online gov, download the IRS2Go app, or call 1-800-906-9887. H&rblock online   As part of the TCE program, AARP offers the Tax-Aide counseling program. H&rblock online To find the nearest AARP Tax-Aide site, visit AARP's website at www. H&rblock online aarp. H&rblock online org/money/taxaide or call 1-888-227-7669. H&rblock online For more information on these programs, go to IRS. H&rblock online gov and enter “VITA” in the search box. H&rblock online Internet. H&rblock online    IRS. H&rblock online gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. H&rblock online Download the free IRS2Go app from the iTunes app store or from Google Play. H&rblock online Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. H&rblock online Check the status of your 2013 refund with the Where's My Refund? application on IRS. H&rblock online gov or download the IRS2Go app and select the Refund Status option. H&rblock online The IRS issues more than 9 out of 10 refunds in less than 21 days. H&rblock online Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. H&rblock online You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. H&rblock online The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. H&rblock online Use the Interactive Tax Assistant (ITA) to research your tax questions. H&rblock online No need to wait on the phone or stand in line. H&rblock online The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. H&rblock online When you reach the response screen, you can print the entire interview and the final response for your records. H&rblock online New subject areas are added on a regular basis. H&rblock online  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. H&rblock online gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. H&rblock online You can use the IRS Tax Map, to search publications and instructions by topic or keyword. H&rblock online The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. H&rblock online When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. H&rblock online Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. H&rblock online You can also ask the IRS to mail a return or an account transcript to you. H&rblock online Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. H&rblock online gov or by calling 1-800-908-9946. H&rblock online Tax return and tax account transcripts are generally available for the current year and the past three years. H&rblock online Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. H&rblock online Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. H&rblock online If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. H&rblock online Check the status of your amended return using Where's My Amended Return? Go to IRS. H&rblock online gov and enter Where's My Amended Return? in the search box. H&rblock online You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. H&rblock online It can take up to 3 weeks from the date you mailed it to show up in our system. H&rblock online Make a payment using one of several safe and convenient electronic payment options available on IRS. H&rblock online gov. H&rblock online Select the Payment tab on the front page of IRS. H&rblock online gov for more information. H&rblock online Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. H&rblock online Figure your income tax withholding with the IRS Withholding Calculator on IRS. H&rblock online gov. H&rblock online Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. H&rblock online Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. H&rblock online gov. H&rblock online Request an Electronic Filing PIN by going to IRS. H&rblock online gov and entering Electronic Filing PIN in the search box. H&rblock online Download forms, instructions and publications, including accessible versions for people with disabilities. H&rblock online Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. H&rblock online gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. H&rblock online An employee can answer questions about your tax account or help you set up a payment plan. H&rblock online Before you visit, check the Office Locator on IRS. H&rblock online gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. H&rblock online If you have a special need, such as a disability, you can request an appointment. H&rblock online Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. H&rblock online Apply for an Employer Identification Number (EIN). H&rblock online Go to IRS. H&rblock online gov and enter Apply for an EIN in the search box. H&rblock online Read the Internal Revenue Code, regulations, or other official guidance. H&rblock online Read Internal Revenue Bulletins. H&rblock online Sign up to receive local and national tax news and more by email. H&rblock online Just click on “subscriptions” above the search box on IRS. H&rblock online gov and choose from a variety of options. H&rblock online    Phone. H&rblock online You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. H&rblock online Download the free IRS2Go app from the iTunes app store or from Google Play. H&rblock online Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. H&rblock online gov, or download the IRS2Go app. H&rblock online Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. H&rblock online The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. H&rblock online Mos