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Https www freefilefillableforms com ffa checkstatus htm 2. Https www freefilefillableforms com ffa checkstatus htm   Taxable and Nontaxable Income Table of Contents Compensation for Services Retirement Plan DistributionsIndividual Retirement Arrangements (IRAs) Pensions and Annuities Social Security and Equivalent Railroad Retirement BenefitsAre Any of Your Benefits Taxable? How Much Is Taxable? How To Report Your Benefits Lump-Sum Election Repayments More Than Gross Benefits Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Life Insurance ProceedsInstallments for life. Https www freefilefillableforms com ffa checkstatus htm Surviving spouse. Https www freefilefillableforms com ffa checkstatus htm Endowment Contract Proceeds Accelerated Death Benefits Sale of HomeMaximum Amount of Exclusion Ownership and Use Tests Married Persons Business Use or Rental of Home Reporting the Sale Reverse Mortgages Other ItemsWelfare benefits. Https www freefilefillableforms com ffa checkstatus htm Payments from a state fund for victims of crime. Https www freefilefillableforms com ffa checkstatus htm Home Affordable Modification Program (HAMP). Https www freefilefillableforms com ffa checkstatus htm Mortgage assistance payments. Https www freefilefillableforms com ffa checkstatus htm Payments to reduce cost of winter energy use. Https www freefilefillableforms com ffa checkstatus htm Nutrition Program for the Elderly. Https www freefilefillableforms com ffa checkstatus htm Reemployment Trade Adjustment Assistance (RTAA). Https www freefilefillableforms com ffa checkstatus htm Generally, income is taxable unless it is specifically exempt (not taxed) by law. Https www freefilefillableforms com ffa checkstatus htm Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. Https www freefilefillableforms com ffa checkstatus htm Under special provisions of the law, certain items are partially or fully exempt from tax. Https www freefilefillableforms com ffa checkstatus htm Provisions that are of special interest to older taxpayers are discussed in this chapter. Https www freefilefillableforms com ffa checkstatus htm Compensation for Services Generally, you must include in gross income everything you receive in payment for personal services. Https www freefilefillableforms com ffa checkstatus htm In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. Https www freefilefillableforms com ffa checkstatus htm You need not receive the compensation in cash for it to be taxable. Https www freefilefillableforms com ffa checkstatus htm Payments you receive in the form of goods or services generally must be included in gross income at their fair market value. Https www freefilefillableforms com ffa checkstatus htm Volunteer work. Https www freefilefillableforms com ffa checkstatus htm   Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs. Https www freefilefillableforms com ffa checkstatus htm Retired Senior Volunteer Program (RSVP). Https www freefilefillableforms com ffa checkstatus htm Foster Grandparent Program. Https www freefilefillableforms com ffa checkstatus htm Senior Companion Program. Https www freefilefillableforms com ffa checkstatus htm Service Corps of Retired Executives (SCORE). Https www freefilefillableforms com ffa checkstatus htm Unemployment compensation. Https www freefilefillableforms com ffa checkstatus htm   You must include in income all unemployment compensation you or your spouse (if married filing jointly) received. Https www freefilefillableforms com ffa checkstatus htm More information. Https www freefilefillableforms com ffa checkstatus htm   See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income. Https www freefilefillableforms com ffa checkstatus htm Retirement Plan Distributions This section summarizes the tax treatment of amounts you receive from traditional individual retirement arrangements (IRA), employee pensions or annuities, and disability pensions or annuities. Https www freefilefillableforms com ffa checkstatus htm A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. Https www freefilefillableforms com ffa checkstatus htm A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and tax-free distributions. Https www freefilefillableforms com ffa checkstatus htm A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. Https www freefilefillableforms com ffa checkstatus htm More detailed information can be found in Publication 590, Individual Retirement Arrangements (IRAs), and Publication 575, Pension and Annuity Income. Https www freefilefillableforms com ffa checkstatus htm Individual Retirement Arrangements (IRAs) In general, distributions from a traditional IRA are taxable in the year you receive them. Https www freefilefillableforms com ffa checkstatus htm Exceptions to the general rule are rollovers, tax-free withdrawals of contributions, and the return of nondeductible contributions. Https www freefilefillableforms com ffa checkstatus htm These are discussed in Publication 590. Https www freefilefillableforms com ffa checkstatus htm If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. Https www freefilefillableforms com ffa checkstatus htm If you do not file Form 8606 with your return, you may have to pay a $50 penalty. Https www freefilefillableforms com ffa checkstatus htm Also, when you receive distributions from your traditional IRA, the amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Https www freefilefillableforms com ffa checkstatus htm Early distributions. Https www freefilefillableforms com ffa checkstatus htm   Generally, early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age  59½. Https www freefilefillableforms com ffa checkstatus htm You must include early distributions of taxable amounts in your gross income. Https www freefilefillableforms com ffa checkstatus htm These taxable amounts are also subject to an additional 10% tax unless the distribution qualifies for an exception. Https www freefilefillableforms com ffa checkstatus htm For purposes of the additional 10% tax, an IRA is a qualified retirement plan. Https www freefilefillableforms com ffa checkstatus htm For more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later. Https www freefilefillableforms com ffa checkstatus htm After age 59½ and before age 70½. Https www freefilefillableforms com ffa checkstatus htm   After you reach age 59½, you can receive distributions from your traditional IRA without having to pay the 10% additional tax. Https www freefilefillableforms com ffa checkstatus htm Even though you can receive distributions after you reach age 59½, distributions are not required until you reach  age 70½. Https www freefilefillableforms com ffa checkstatus htm Required distributions. Https www freefilefillableforms com ffa checkstatus htm   If you are the owner of a traditional IRA, you generally must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Https www freefilefillableforms com ffa checkstatus htm See When Must You Withdraw Assets? (Required Minimum Distributions) in Publication 590. Https www freefilefillableforms com ffa checkstatus htm If distributions from your traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. Https www freefilefillableforms com ffa checkstatus htm For purposes of the 50% excise tax, an IRA is a qualified retirement plan. Https www freefilefillableforms com ffa checkstatus htm For more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. Https www freefilefillableforms com ffa checkstatus htm See also Excess Accumulations (Insufficient Distributions) in Publication 590. Https www freefilefillableforms com ffa checkstatus htm Pensions and Annuities Generally, if you did not pay any part of the cost of your employee pension or annuity, and your employer did not withhold part of the cost of the contract from your pay while you worked, the amounts you receive each year are fully taxable. Https www freefilefillableforms com ffa checkstatus htm However, see Insurance Premiums for Retired Public Safety Officers , later. Https www freefilefillableforms com ffa checkstatus htm If you paid part of the cost of your pension or annuity plan (see Cost , later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). Https www freefilefillableforms com ffa checkstatus htm This tax-free part of the payment is figured when your annuity starts and remains the same each year, even if the amount of the payment changes. Https www freefilefillableforms com ffa checkstatus htm The rest of each payment is taxable. Https www freefilefillableforms com ffa checkstatus htm However, see Insurance Premiums for Retired Public Safety Officers , later. Https www freefilefillableforms com ffa checkstatus htm You figure the tax-free part of the payment using one of the following methods. Https www freefilefillableforms com ffa checkstatus htm Simplified Method. Https www freefilefillableforms com ffa checkstatus htm You generally must use this method if your annuity is paid under a qualified plan (a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan or contract). Https www freefilefillableforms com ffa checkstatus htm You cannot use this method if your annuity is paid under a nonqualified plan. Https www freefilefillableforms com ffa checkstatus htm General Rule. Https www freefilefillableforms com ffa checkstatus htm You must use this method if your annuity is paid under a nonqualified plan. Https www freefilefillableforms com ffa checkstatus htm You generally cannot use this method if your annuity is paid under a qualified plan. Https www freefilefillableforms com ffa checkstatus htm Contact your employer or plan administrator to find out if your pension or annuity is paid under a qualified or nonqualified plan. Https www freefilefillableforms com ffa checkstatus htm You determine which method to use when you first begin receiving your annuity, and you continue using it each year that you recover part of your cost. Https www freefilefillableforms com ffa checkstatus htm Exclusion limit. Https www freefilefillableforms com ffa checkstatus htm   If your annuity starting date is after 1986, the total amount of annuity income you can exclude over the years as a recovery of the cost cannot exceed your total cost. Https www freefilefillableforms com ffa checkstatus htm 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. Https www freefilefillableforms com ffa checkstatus htm This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. Https www freefilefillableforms com ffa checkstatus htm   If you contributed to your pension or annuity and your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Https www freefilefillableforms com ffa checkstatus htm 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. Https www freefilefillableforms com ffa checkstatus htm The total exclusion may be more than your cost. Https www freefilefillableforms com ffa checkstatus htm Cost. Https www freefilefillableforms com ffa checkstatus htm   Before you can figure how much, if any, of your pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). Https www freefilefillableforms com ffa checkstatus htm Your total cost in the plan includes everything that you paid. Https www freefilefillableforms com ffa checkstatus htm It also includes amounts your employer contributed that were taxable to you when paid. Https www freefilefillableforms com ffa checkstatus htm However, see Foreign employment contributions , later. Https www freefilefillableforms com ffa checkstatus htm   From this total cost, subtract any refunded premiums, rebates, dividends, unrepaid loans, or other tax-free amounts you received by the later of the annuity starting date or the date on which you received your first payment. Https www freefilefillableforms com ffa checkstatus htm   The annuity starting date is the later of the first day of the first period for which you received a payment from the plan or the date on which the plan's obligations became fixed. Https www freefilefillableforms com ffa checkstatus htm    The amount of your contributions to the plan may be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Https www freefilefillableforms com ffa checkstatus htm , that you receive. Https www freefilefillableforms com ffa checkstatus htm Foreign employment contributions. Https www freefilefillableforms com ffa checkstatus htm   If you worked abroad, certain amounts your employer paid into your retirement plan that were not includible in your gross income may be considered part of your cost. Https www freefilefillableforms com ffa checkstatus htm For details, see Foreign employment contributions in Publication 575. Https www freefilefillableforms com ffa checkstatus htm Withholding. Https www freefilefillableforms com ffa checkstatus htm   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable part of amounts paid to you. Https www freefilefillableforms com ffa checkstatus htm However, you can choose not to have tax withheld on the payments you receive, unless they are eligible rollover distributions. Https www freefilefillableforms com ffa checkstatus htm (These are distributions that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. Https www freefilefillableforms com ffa checkstatus htm ) See Withholding Tax and Estimated Tax and Rollovers in Publication 575 for more information. Https www freefilefillableforms com ffa checkstatus htm   For payments other than eligible rollover distributions, you can tell the payer how much to withhold by filing a Form W-4P, Withholding Certificate for Pension or Annuity Payments. Https www freefilefillableforms com ffa checkstatus htm Simplified Method. Https www freefilefillableforms com ffa checkstatus htm   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. Https www freefilefillableforms com ffa checkstatus htm For an annuity that is payable over the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Https www freefilefillableforms com ffa checkstatus htm For any other annuity, this number is the number of monthly annuity payments under the contract. Https www freefilefillableforms com ffa checkstatus htm Who must use the Simplified Method. Https www freefilefillableforms com ffa checkstatus htm   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you receive your pension or annuity payments from a qualified plan or annuity, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments (defined next). Https www freefilefillableforms com ffa checkstatus htm   In addition, if your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use the Simplified Method for payments from a qualified plan, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments. Https www freefilefillableforms com ffa checkstatus htm If you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. Https www freefilefillableforms com ffa checkstatus htm Guaranteed payments. Https www freefilefillableforms com ffa checkstatus htm   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. Https www freefilefillableforms com ffa checkstatus htm 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. Https www freefilefillableforms com ffa checkstatus htm Who cannot use the Simplified Method. Https www freefilefillableforms com ffa checkstatus htm   You cannot use the Simplified Method and must use the General Rule if you receive pension or annuity payments from: A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan, or A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 years of guaranteed payments (defined above). Https www freefilefillableforms com ffa checkstatus htm   In addition, you had to use the General Rule for either circumstance described above if your annuity starting date is after July 1, 1986, and before November 19, 1996. Https www freefilefillableforms com ffa checkstatus htm If you did not have to use the General Rule, you could have chosen to use it. Https www freefilefillableforms com ffa checkstatus htm You also had to use the General Rule for payments from a qualified plan if your annuity starting date is before July 2, 1986, and you did not qualify to use the Three-Year Rule. Https www freefilefillableforms com ffa checkstatus htm   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. Https www freefilefillableforms com ffa checkstatus htm   Unless your annuity starting date was before 1987, once you have recovered all of your non-taxable investment, all of each remaining payment you receive is fully taxable. Https www freefilefillableforms com ffa checkstatus htm Once your remaining payments are fully taxable, there is no longer a concern with the General Rule or Simplified Method. Https www freefilefillableforms com ffa checkstatus htm   Complete information on the General Rule, including the actuarial tables you need, is contained in Publication 939, General Rule for Pensions and Annuities. Https www freefilefillableforms com ffa checkstatus htm How to use the Simplified Method. Https www freefilefillableforms com ffa checkstatus htm   Complete the Simplified Method Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions or in Publication 575 to figure your taxable annuity for 2013. Https www freefilefillableforms com ffa checkstatus htm Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. Https www freefilefillableforms com ffa checkstatus htm   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. Https www freefilefillableforms com ffa checkstatus htm How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. Https www freefilefillableforms com ffa checkstatus htm For this purpose, treat an annuity that is payable over the life of an annuitant as payable for that annuitant's life even if the annuity has a fixed-period feature or also provides a temporary annuity payable to the annuitant's child under age 25. Https www freefilefillableforms com ffa checkstatus htm    You do not need to complete line 3 of the worksheet or make the computation on line 4 if you received annuity payments last year and used last year's worksheet to figure your taxable annuity. Https www freefilefillableforms com ffa checkstatus htm Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. Https www freefilefillableforms com ffa checkstatus htm Single-life annuity. Https www freefilefillableforms com ffa checkstatus htm   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. Https www freefilefillableforms com ffa checkstatus htm Enter on line 3 the number shown for your age on your annuity starting date. Https www freefilefillableforms com ffa checkstatus htm This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Https www freefilefillableforms com ffa checkstatus htm Multiple-lives annuity. Https www freefilefillableforms com ffa checkstatus htm   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. Https www freefilefillableforms com ffa checkstatus htm Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. Https www freefilefillableforms com ffa checkstatus htm For an annuity payable to you as the primary annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. Https www freefilefillableforms com ffa checkstatus htm For an annuity that has no primary annuitant and is payable to you and others as survivor annuitants, combine the ages of the oldest and youngest annuitants. Https www freefilefillableforms com ffa checkstatus htm Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. Https www freefilefillableforms com ffa checkstatus htm   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Https www freefilefillableforms com ffa checkstatus htm Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. Https www freefilefillableforms com ffa checkstatus htm This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Https www freefilefillableforms com ffa checkstatus htm Fixed-period annuities. Https www freefilefillableforms com ffa checkstatus htm   If your annuity does not depend in whole or in part on anyone's life expectancy, the total number of expected monthly payments to enter on line 3 of the worksheet is the number of monthly annuity payments under the contract. Https www freefilefillableforms com ffa checkstatus htm Line 6. Https www freefilefillableforms com ffa checkstatus htm   The amount on line 6 should include all amounts that could have been recovered in prior years. Https www freefilefillableforms com ffa checkstatus htm If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. Https www freefilefillableforms com ffa checkstatus htm    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in later years. Https www freefilefillableforms com ffa checkstatus htm Example. Https www freefilefillableforms com ffa checkstatus htm Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. Https www freefilefillableforms com ffa checkstatus htm Bill's annuity starting date is January 1, 2013. Https www freefilefillableforms com ffa checkstatus htm The benefits are to be paid over the joint lives of Bill and his wife, Kathy, age 65. Https www freefilefillableforms com ffa checkstatus htm Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Https www freefilefillableforms com ffa checkstatus htm 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. Https www freefilefillableforms com ffa checkstatus htm 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. Https www freefilefillableforms com ffa checkstatus htm See the illustrated Worksheet 2-A, Simplified Method Worksheet, later. Https www freefilefillableforms com ffa checkstatus htm You can find a blank version of this worksheet in Publication 575. Https www freefilefillableforms com ffa checkstatus htm (The references in the illustrated worksheet are to sections in Publication 575). Https www freefilefillableforms com ffa checkstatus htm His annuity is payable over the lives of more than one annuitant, so Bill uses his and Kathy's combined ages, 130 (65 + 65), and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet and finds the line 3 amount to be 310. Https www freefilefillableforms com ffa checkstatus htm Bill's tax-free monthly amount is $100 ($31,000 ÷ 310 as shown on line 4 of the worksheet). Https www freefilefillableforms com ffa checkstatus htm Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Https www freefilefillableforms com ffa checkstatus htm The full amount of any annuity payments received after 310 payments are paid must generally be included in gross income. Https www freefilefillableforms com ffa checkstatus htm 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. Https www freefilefillableforms com ffa checkstatus htm This deduction is not subject to the 2%-of-adjusted-gross-income limit. Https www freefilefillableforms com ffa checkstatus htm Worksheet 2-A. Https www freefilefillableforms com ffa checkstatus htm Simplified Method Worksheet—Illustrated 1. Https www freefilefillableforms com ffa checkstatus htm Enter the total pension or annuity payments received this year. Https www freefilefillableforms com ffa checkstatus htm Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Https www freefilefillableforms com ffa checkstatus htm $ 14,400 2. Https www freefilefillableforms com ffa checkstatus htm Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion* See Cost (Investment in the Contract), earlier 2. Https www freefilefillableforms com ffa checkstatus htm 31,000   Note. Https www freefilefillableforms com ffa checkstatus htm 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). Https www freefilefillableforms com ffa checkstatus htm Otherwise, go to line 3. Https www freefilefillableforms com ffa checkstatus htm     3. Https www freefilefillableforms com ffa checkstatus htm Enter the appropriate number from Table 1 below. Https www freefilefillableforms com ffa checkstatus htm 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. Https www freefilefillableforms com ffa checkstatus htm 310 4. Https www freefilefillableforms com ffa checkstatus htm Divide line 2 by the number on line 3 4. Https www freefilefillableforms com ffa checkstatus htm 100 5. Https www freefilefillableforms com ffa checkstatus htm Multiply line 4 by the number of months for which this year's payments were made. Https www freefilefillableforms com ffa checkstatus htm If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Https www freefilefillableforms com ffa checkstatus htm Otherwise, go to line 6 5. Https www freefilefillableforms com ffa checkstatus htm 1,200 6. Https www freefilefillableforms com ffa checkstatus htm Enter any amount previously recovered tax free in years after 1986. Https www freefilefillableforms com ffa checkstatus htm This is the amount shown on line 10 of your worksheet for last year 6. Https www freefilefillableforms com ffa checkstatus htm 0 7. Https www freefilefillableforms com ffa checkstatus htm Subtract line 6 from line 2 7. Https www freefilefillableforms com ffa checkstatus htm 31,000 8. Https www freefilefillableforms com ffa checkstatus htm Enter the smaller of line 5 or line 7 8. Https www freefilefillableforms com ffa checkstatus htm 1,200 9. Https www freefilefillableforms com ffa checkstatus htm Taxable amount for year. Https www freefilefillableforms com ffa checkstatus htm Subtract line 8 from line 1. Https www freefilefillableforms com ffa checkstatus htm Enter the result, but not less than zero. Https www freefilefillableforms com ffa checkstatus htm Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Https www freefilefillableforms com ffa checkstatus htm Note. Https www freefilefillableforms com ffa checkstatus htm If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Https www freefilefillableforms com ffa checkstatus htm If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers, earlier, before entering an amount on your tax return. Https www freefilefillableforms com ffa checkstatus htm 9. Https www freefilefillableforms com ffa checkstatus htm $ 13,200 10. Https www freefilefillableforms com ffa checkstatus htm Was your annuity starting date before 1987? □ Yes. Https www freefilefillableforms com ffa checkstatus htm STOP. Https www freefilefillableforms com ffa checkstatus htm Do not complete the rest of this worksheet. Https www freefilefillableforms com ffa checkstatus htm  ☑ No. Https www freefilefillableforms com ffa checkstatus htm Add lines 6 and 8. Https www freefilefillableforms com ffa checkstatus htm This is the amount you have recovered tax free through 2013. Https www freefilefillableforms com ffa checkstatus htm You will need this number if you need to fill out this worksheet next year. Https www freefilefillableforms com ffa checkstatus htm 10. Https www freefilefillableforms com ffa checkstatus htm 1,200 11. Https www freefilefillableforms com ffa checkstatus htm Balance of cost to be recovered. Https www freefilefillableforms com ffa checkstatus htm Subtract line 10 from line 2. Https www freefilefillableforms com ffa checkstatus htm If zero, you will not have to complete this worksheet next year. Https www freefilefillableforms com ffa checkstatus htm The payments you receive next year will generally be fully taxable 11. Https www freefilefillableforms com ffa checkstatus htm $ 29,800 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Https www freefilefillableforms com ffa checkstatus htm   Table 1 for Line 3 Above       AND your annuity starting date was—   IF your age on your annuity starting date was . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm   BEFORE November 19, 1996, enter on line 3 . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm AFTER November 18, 1996, enter on line 3 . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm   55 or under 300 360   56-60 260 310   61-65 240 260   66-70 170 210   71 or over 120 160 Table 2 for Line 3 Above   IF the annuitants' combined ages on your annuity starting date were . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm   THEN enter on line 3 . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm . Https www freefilefillableforms com ffa checkstatus htm         110 or under   410         111-120   360         121-130   310         131-140   260         141 or over   210       Survivors of retirees. Https www freefilefillableforms com ffa checkstatus htm   Benefits paid to you as a survivor under a joint and survivor annuity must be included in your gross income in the same way the retiree would have included them in gross income. Https www freefilefillableforms com ffa checkstatus htm   If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule, include the total received in your income. Https www freefilefillableforms com ffa checkstatus htm The retiree's cost has already been recovered tax free. Https www freefilefillableforms com ffa checkstatus htm   If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for in the contract. Https www freefilefillableforms com ffa checkstatus htm The resulting tax-free amount will then remain fixed. Https www freefilefillableforms com ffa checkstatus htm Any increases in the survivor annuity are fully taxable. Https www freefilefillableforms com ffa checkstatus htm   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. Https www freefilefillableforms com ffa checkstatus htm See Simplified Method , earlier. Https www freefilefillableforms com ffa checkstatus htm How to report. Https www freefilefillableforms com ffa checkstatus htm   If you file Form 1040, report your total annuity on line 16a, and the taxable part on line 16b. Https www freefilefillableforms com ffa checkstatus htm If your pension or annuity is fully taxable, enter it on line 16b. Https www freefilefillableforms com ffa checkstatus htm Do not make an entry on line 16a. Https www freefilefillableforms com ffa checkstatus htm   If you file Form 1040A, report your total annuity on line 12a, and the taxable part on line 12b. Https www freefilefillableforms com ffa checkstatus htm If your pension or annuity is fully taxable, enter it on line 12b. Https www freefilefillableforms com ffa checkstatus htm Do not make an entry on line 12a. Https www freefilefillableforms com ffa checkstatus htm   If you file Form 1040NR, report your total annuity on line 17a, and the taxable part on line 17b. Https www freefilefillableforms com ffa checkstatus htm If your pension or annuity is fully taxable, enter it on line 17b. Https www freefilefillableforms com ffa checkstatus htm Do not make an entry on line 17a. Https www freefilefillableforms com ffa checkstatus htm Example. Https www freefilefillableforms com ffa checkstatus htm You are a Form 1040 filer and you received monthly payments totaling $1,200 (12 months x $100) during 2013 from a pension plan that was completely financed by your employer. Https www freefilefillableforms com ffa checkstatus htm You had paid no tax on the payments that your employer made to the plan, and the payments were not used to pay for accident, health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public Safety Officers ). Https www freefilefillableforms com ffa checkstatus htm The entire $1,200 is taxable. Https www freefilefillableforms com ffa checkstatus htm You include $1,200 only on Form 1040, line 16b. Https www freefilefillableforms com ffa checkstatus htm Joint return. Https www freefilefillableforms com ffa checkstatus htm   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on line 16a of Form 1040, line 12a of Form 1040A, or line 17a of Form 1040NR. Https www freefilefillableforms com ffa checkstatus htm Report the total of the taxable parts on line 16b of Form 1040, line 12b of Form 1040A, or line 17b of Form 1040NR. Https www freefilefillableforms com ffa checkstatus htm Form 1099-R. Https www freefilefillableforms com ffa checkstatus htm   You should receive a Form 1099-R for your pension or annuity. Https www freefilefillableforms com ffa checkstatus htm Form 1099-R shows your pension or annuity for the year and any income tax withheld. Https www freefilefillableforms com ffa checkstatus htm You should receive a Form W-2 if you receive distributions from certain nonqualified plans. Https www freefilefillableforms com ffa checkstatus htm You must attach Forms 1099-R or Forms W-2 to your 2013 tax return if federal income tax was withheld. Https www freefilefillableforms com ffa checkstatus htm Generally, you should be sent these forms by January 31, 2014. Https www freefilefillableforms com ffa checkstatus htm Nonperiodic Distributions If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from your income as a recovery of your cost. Https www freefilefillableforms com ffa checkstatus htm Nonperiodic distributions include cash withdrawals, distributions of current earnings (dividends) on your investment, and certain loans. Https www freefilefillableforms com ffa checkstatus htm For information on how to figure the taxable amount of a nonperiodic distribution, see Taxation of Nonperiodic Payments in Publication 575. Https www freefilefillableforms com ffa checkstatus htm The taxable part of a nonperiodic distribution may be subject to an additional 10% tax. Https www freefilefillableforms com ffa checkstatus htm See Tax on Early Distributions, later. Https www freefilefillableforms com ffa checkstatus htm Lump-sum distributions. Https www freefilefillableforms com ffa checkstatus htm   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. Https www freefilefillableforms com ffa checkstatus htm The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. Https www freefilefillableforms com ffa checkstatus htm The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. Https www freefilefillableforms com ffa checkstatus htm You may be able to use the 10-year tax option to figure tax on the ordinary income part. Https www freefilefillableforms com ffa checkstatus htm Form 1099-R. Https www freefilefillableforms com ffa checkstatus htm   If you receive a total distribution from a plan, you should receive a Form 1099-R. Https www freefilefillableforms com ffa checkstatus htm If the distribution qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. Https www freefilefillableforms com ffa checkstatus htm The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is the ordinary income part. Https www freefilefillableforms com ffa checkstatus htm More information. Https www freefilefillableforms com ffa checkstatus htm   For more detailed information on lump-sum distributions, see Publication 575 or Form 4972, Tax on Lump-Sum Distributions. Https www freefilefillableforms com ffa checkstatus htm Tax on Early Distributions Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you reach age 59½ are subject to an additional tax of 10%. Https www freefilefillableforms com ffa checkstatus htm The tax applies to the taxable part of the distribution. Https www freefilefillableforms com ffa checkstatus htm For this purpose, a qualified retirement plan is: A qualified employee plan (including a qualified cash or deferred arrangement (CODA) under Internal Revenue Code section 401(k)), A qualified employee annuity plan, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). Https www freefilefillableforms com ffa checkstatus htm  An IRA is also a qualified retirement plan for purposes of this tax. Https www freefilefillableforms com ffa checkstatus htm General exceptions to tax. Https www freefilefillableforms com ffa checkstatus htm   The early distribution tax does not apply to any distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. Https www freefilefillableforms com ffa checkstatus htm Additional exceptions. Https www freefilefillableforms com ffa checkstatus htm   There are additional exceptions to the early distribution tax for certain distributions from qualified retirement plans and nonqualified annuity contracts. Https www freefilefillableforms com ffa checkstatus htm See Publication 575 for details. Https www freefilefillableforms com ffa checkstatus htm Reporting tax. Https www freefilefillableforms com ffa checkstatus htm   If you owe only the tax on early distributions and distribution code 1 (early distribution, no known exception) is correctly shown in Form 1099-R, box 7, multiply the taxable part of the early distribution by 10% (. Https www freefilefillableforms com ffa checkstatus htm 10) and enter the result on Form 1040, line 58, or Form 1040NR, line 56. Https www freefilefillableforms com ffa checkstatus htm See the instructions for line 58 of Form 1040 or line 56 of Form 1040NR for more information about reporting the early distribution tax. Https www freefilefillableforms com ffa checkstatus htm 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. Https www freefilefillableforms com ffa checkstatus htm Unless the rule for 5% owners applies, this is generally April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. Https www freefilefillableforms com ffa checkstatus htm However, your plan may require you to begin to receive payments by April 1 of the year that follows the year in which you reach 70½, even if you have not retired. Https www freefilefillableforms com ffa checkstatus htm 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). Https www freefilefillableforms com ffa checkstatus htm  An IRA is also a qualified retirement plan for purposes of this tax. Https www freefilefillableforms com ffa checkstatus htm An excess accumulation is the undistributed remainder of the required minimum distribution that was left in your qualified retirement plan. Https www freefilefillableforms com ffa checkstatus htm 5% owners. Https www freefilefillableforms com ffa checkstatus htm   If you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the company maintaining your qualified retirement plan, you must begin to receive distributions from the plan by April 1 of the year after the calendar year in which you reach age 70½. Https www freefilefillableforms com ffa checkstatus htm See Publication 575 for more information. Https www freefilefillableforms com ffa checkstatus htm Amount of tax. Https www freefilefillableforms com ffa checkstatus htm   If you do not receive the required minimum distribution, you are subject to an additional tax. Https www freefilefillableforms com ffa checkstatus htm The tax equals 50% of the difference between the amount that must be distributed and the amount that was distributed during the tax year. Https www freefilefillableforms com ffa checkstatus htm You can get this excise tax excused if you establish that the shortfall in distributions was due to reasonable error and that you are taking reasonable steps to remedy the shortfall. Https www freefilefillableforms com ffa checkstatus htm Form 5329. Https www freefilefillableforms com ffa checkstatus htm   You must file a Form 5329 if you owe a tax because you did not receive a minimum required distribution from your qualified retirement plan. Https www freefilefillableforms com ffa checkstatus htm Additional information. Https www freefilefillableforms com ffa checkstatus htm   For more detailed information on the tax on excess accumulation, see Publication 575. Https www freefilefillableforms com ffa checkstatus htm Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. Https www freefilefillableforms com ffa checkstatus htm The premiums can be for coverage for you, your spouse, or dependent(s). Https www freefilefillableforms com ffa checkstatus htm The distribution must be made directly from the plan to the insurance provider. Https www freefilefillableforms com ffa checkstatus htm You can exclude from income the smaller of the amount of the insurance premiums or $3,000. Https www freefilefillableforms com ffa checkstatus htm You can only make this election for amounts that would otherwise be included in your income. Https www freefilefillableforms com ffa checkstatus htm The amount excluded from your income cannot be used to claim a medical expense deduction. Https www freefilefillableforms com ffa checkstatus htm An eligible retirement plan is a governmental plan that is a: Qualified trust, Section 403(a) plan, Section 403(b) annuity, or Section 457(b) plan. Https www freefilefillableforms com ffa checkstatus htm If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. Https www freefilefillableforms com ffa checkstatus htm The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. Https www freefilefillableforms com ffa checkstatus htm Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Https www freefilefillableforms com ffa checkstatus htm Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Https www freefilefillableforms com ffa checkstatus htm Enter “PSO” next to the appropriate line on which you report the taxable amount. Https www freefilefillableforms com ffa checkstatus htm Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. Https www freefilefillableforms com ffa checkstatus htm These categories are treated differently for income tax purposes. Https www freefilefillableforms com ffa checkstatus htm Social security equivalent benefits. Https www freefilefillableforms com ffa checkstatus htm   The first category is the amount of tier 1 railroad retirement benefits that equals the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. Https www freefilefillableforms com ffa checkstatus htm This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. Https www freefilefillableforms com ffa checkstatus htm (See Social Security and Equivalent Railroad Retirement Benefits , later. Https www freefilefillableforms com ffa checkstatus htm ) Non-social security equivalent benefits. Https www freefilefillableforms com ffa checkstatus htm   The second category contains the rest of the tier 1 benefits, called the non-social security equivalent benefit (NSSEB). Https www freefilefillableforms com ffa checkstatus htm It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. Https www freefilefillableforms com ffa checkstatus htm This category of benefits is treated as an amount received from a qualified employee plan. Https www freefilefillableforms com ffa checkstatus htm This allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits. Https www freefilefillableforms com ffa checkstatus htm Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. Https www freefilefillableforms com ffa checkstatus htm More information. Https www freefilefillableforms com ffa checkstatus htm   For more information about railroad retirement benefits, see Publication 575. Https www freefilefillableforms com ffa checkstatus htm Military Retirement Pay Military retirement pay based on age or length of service is taxable and must be included in income as a pension on Form 1040, lines 16a and 16b; on Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. Https www freefilefillableforms com ffa checkstatus htm But, certain military and government disability pensions that are based on a percentage of disability from active service in the Armed Forces of any country generally are not taxable. Https www freefilefillableforms com ffa checkstatus htm For more information, including information about veterans' benefits and insurance, see Publication 525. Https www freefilefillableforms com ffa checkstatus htm Social Security and Equivalent Railroad Retirement Benefits This discussion explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. Https www freefilefillableforms com ffa checkstatus htm Social security benefits include monthly retirement, survivor, and disability benefits. Https www freefilefillableforms com ffa checkstatus htm They do not include supplemental security income (SSI) payments, which are not taxable. Https www freefilefillableforms com ffa checkstatus htm Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. Https www freefilefillableforms com ffa checkstatus htm They commonly are called the social security equivalent benefit (SSEB) portion of tier 1 benefits. Https www freefilefillableforms com ffa checkstatus htm If you received these benefits during 2013, you should have received a Form SSA-1099 or Form RRB-1099 (Form SSA-1042S or Form RRB-1042S if you are a nonresident alien), showing the amount of the benefits. Https www freefilefillableforms com ffa checkstatus htm Are Any of Your Benefits Taxable? Note. Https www freefilefillableforms com ffa checkstatus htm When the term “benefits” is used in this section, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. Https www freefilefillableforms com ffa checkstatus htm  To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Https www freefilefillableforms com ffa checkstatus htm When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Https www freefilefillableforms com ffa checkstatus htm S. Https www freefilefillableforms com ffa checkstatus htm savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned in American Samoa or Puerto Rico by bona fide residents. Https www freefilefillableforms com ffa checkstatus htm Figuring total income. Https www freefilefillableforms com ffa checkstatus htm   To figure the total of one-half of your benefits plus your other income, use Worksheet 2-B. Https www freefilefillableforms com ffa checkstatus htm If that total amount is more than your base amount, part of your benefits may be taxable. Https www freefilefillableforms com ffa checkstatus htm If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Https www freefilefillableforms com ffa checkstatus htm Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Https www freefilefillableforms com ffa checkstatus htm If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Https www freefilefillableforms com ffa checkstatus htm If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Https www freefilefillableforms com ffa checkstatus htm Worksheet 2-B. Https www freefilefillableforms com ffa checkstatus htm A Quick Way To Check if Your Benefits May Be Taxable A. Https www freefilefillableforms com ffa checkstatus htm Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Https www freefilefillableforms com ffa checkstatus htm Include  the full amount of any lump-sum benefit payments received in 2013, for 2013 and  earlier years. Https www freefilefillableforms com ffa checkstatus htm (If you received more than one form, combine the amounts from box 5  and enter the total. Https www freefilefillableforms com ffa checkstatus htm ) A. Https www freefilefillableforms com ffa checkstatus htm     Note. Https www freefilefillableforms com ffa checkstatus htm If the amount on line A is zero or less, stop here; none of your benefits are  taxable this year. Https www freefilefillableforms com ffa checkstatus htm     B. Https www freefilefillableforms com ffa checkstatus htm Enter one-half of the amount on line A B. Https www freefilefillableforms com ffa checkstatus htm   C. Https www freefilefillableforms com ffa checkstatus htm Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Https www freefilefillableforms com ffa checkstatus htm   D. Https www freefilefillableforms com ffa checkstatus htm Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income for: •Interest from qualified U. Https www freefilefillableforms com ffa checkstatus htm S. Https www freefilefillableforms com ffa checkstatus htm savings bonds, •Employer-provided adoption benefits, •Foreign earned income or foreign housing, or •Income earned in American Samoa or Puerto Rico by bona fide residents D. Https www freefilefillableforms com ffa checkstatus htm   E. Https www freefilefillableforms com ffa checkstatus htm Add lines B, C, and D and enter the total E. Https www freefilefillableforms com ffa checkstatus htm   F. Https www freefilefillableforms com ffa checkstatus htm If you are: •Married filing jointly, enter $32,000 •Single, head of household, qualifying widow(er), or married filing separately and you  lived apart from your spouse for all of 2013, enter $25,000 •Married filing separately and you lived with your spouse at any time during 2013,  enter -0- F. Https www freefilefillableforms com ffa checkstatus htm   G. Https www freefilefillableforms com ffa checkstatus htm Is the amount on line F less than or equal to the amount on line E? □ No. Https www freefilefillableforms com ffa checkstatus htm None of your benefits are taxable this year. Https www freefilefillableforms com ffa checkstatus htm  □ Yes. Https www freefilefillableforms com ffa checkstatus htm Some of your benefits may be taxable. Https www freefilefillableforms com ffa checkstatus htm To figure how much of your benefits  are taxable, see Which worksheet to use under How Much Is Taxable. Https www freefilefillableforms com ffa checkstatus htm     Base Amount Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er) with dependent child, $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $0 if you are married filing separately and lived with your spouse at any time during 2013. Https www freefilefillableforms com ffa checkstatus htm Repayment of Benefits Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Https www freefilefillableforms com ffa checkstatus htm It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Https www freefilefillableforms com ffa checkstatus htm If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Https www freefilefillableforms com ffa checkstatus htm Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Https www freefilefillableforms com ffa checkstatus htm Your repayments are shown in box 4. Https www freefilefillableforms com ffa checkstatus htm The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Https www freefilefillableforms com ffa checkstatus htm Use the amount in box 5 to figure whether any of your benefits are taxable. Https www freefilefillableforms com ffa checkstatus htm Tax Withholding and Estimated Tax You can choose to have federal income tax withheld from your social security and/or the SSEB portion of your tier 1 railroad retirement benefits. Https www freefilefillableforms com ffa checkstatus htm If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Request. Https www freefilefillableforms com ffa checkstatus htm If you do not choose to have income tax withheld, you may have to request additional withholding from other income, or pay estimated tax during the year. Https www freefilefillableforms com ffa checkstatus htm For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. Https www freefilefillableforms com ffa checkstatus htm How Much Is Taxable? If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. Https www freefilefillableforms com ffa checkstatus htm Generally, the higher that total amount, the greater the taxable part of your benefits. Https www freefilefillableforms com ffa checkstatus htm Maximum taxable part. Https www freefilefillableforms com ffa checkstatus htm   The taxable part of your benefits usually cannot be more than 50%. Https www freefilefillableforms com ffa checkstatus htm However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Https www freefilefillableforms com ffa checkstatus htm The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Https www freefilefillableforms com ffa checkstatus htm You are married filing separately and lived with your spouse at any time during 2013. Https www freefilefillableforms com ffa checkstatus htm   If you are a nonresident alien, 85% of your benefits are taxable. Https www freefilefillableforms com ffa checkstatus htm However, this income is exempt under some tax treaties. Https www freefilefillableforms com ffa checkstatus htm Which worksheet to use. Https www freefilefillableforms com ffa checkstatus htm   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. Https www freefilefillableforms com ffa checkstatus htm However, you will need to use a different worksheet(s) if any of the following situations applies to you. Https www freefilefillableforms com ffa checkstatus htm You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse were covered by a retirement plan at work. Https www freefilefillableforms com ffa checkstatus htm In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Https www freefilefillableforms com ffa checkstatus htm Situation (1) does not apply and you take one or more of the following exclusions. Https www freefilefillableforms com ffa checkstatus htm Interest from qualified U. Https www freefilefillableforms com ffa checkstatus htm S. Https www freefilefillableforms com ffa checkstatus htm savings bonds (Form 8815). Https www freefilefillableforms com ffa checkstatus htm Employer-provided adoption benefits (Form 8839). Https www freefilefillableforms com ffa checkstatus htm Foreign earned income or housing (Form 2555 or Form 2555-EZ). Https www freefilefillableforms com ffa checkstatus htm Income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Https www freefilefillableforms com ffa checkstatus htm In these situations, you must use Worksheet 1 in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits. Https www freefilefillableforms com ffa checkstatus htm You received a lump-sum payment for an earlier year. Https www freefilefillableforms com ffa checkstatus htm In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. Https www freefilefillableforms com ffa checkstatus htm See Lump-Sum Election , later. Https www freefilefillableforms com ffa checkstatus htm How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040, Form 1040A, or Form 1040NR. Https www freefilefillableforms com ffa checkstatus htm You cannot use Form 1040EZ. Https www freefilefillableforms com ffa checkstatus htm Reporting on Form 1040. Https www freefilefillableforms com ffa checkstatus htm   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. Https www freefilefillableforms com ffa checkstatus htm If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Https www freefilefillableforms com ffa checkstatus htm Reporting on Form 1040A. Https www freefilefillableforms com ffa checkstatus htm   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. Https www freefilefillableforms com ffa checkstatus htm If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Https www freefilefillableforms com ffa checkstatus htm Reporting on Form 1040NR. Https www freefilefillableforms com ffa checkstatus htm   Report 85% of the total amount of your benefits (box 5 of your Form SSA-1042S or Form RRB-1042S) in the appropriate column of Form 1040NR, Schedule NEC, line 8. Https www freefilefillableforms com ffa checkstatus htm Benefits not taxable. Https www freefilefillableforms com ffa checkstatus htm   If you are filing Form 1040EZ, do not report any benefits on your tax return. Https www freefilefillableforms com ffa checkstatus htm If you are filing Form 1040 or Form 1040A, report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Https www freefilefillableforms com ffa checkstatus htm Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Https www freefilefillableforms com ffa checkstatus htm If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Https www freefilefillableforms com ffa checkstatus htm Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Https www freefilefillableforms com ffa checkstatus htm This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Https www freefilefillableforms com ffa checkstatus htm No part of the lump-sum death benefit is subject to tax. Https www freefilefillableforms com ffa checkstatus htm For more information about the lump-sum death benefit, visit the Social Security Administration website at www. Https www freefilefillableforms com ffa checkstatus htm SSA. Https www freefilefillableforms com ffa checkstatus htm gov, and use keyword: death benefit. Https www freefilefillableforms com ffa checkstatus htm Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Https www freefilefillableforms com ffa checkstatus htm However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Https www freefilefillableforms com ffa checkstatus htm You can elect this method if it lowers your taxable benefits. Https www freefilefillableforms com ffa checkstatus htm See Publication 915 for more information. Https www freefilefillableforms com ffa checkstatus htm Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Https www freefilefillableforms com ffa checkstatus htm If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Https www freefilefillableforms com ffa checkstatus htm If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Https www freefilefillableforms com ffa checkstatus htm If you have any questions about this negative figure, contact your local Social Security Administration office or your local U. Https www freefilefillableforms com ffa checkstatus htm S. Https www freefilefillableforms com ffa checkstatus htm Railroad Retirement Board field office. Https www freefilefillableforms com ffa checkstatus htm Joint return. Https www freefilefillableforms com ffa checkstatus htm   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5 but your spouse's does not, subtract the box 5 amount on your form from the box 5 amount on your spouse's form. Https www freefilefillableforms com ffa checkstatus htm You do this to get your net benefits when figuring if your combined benefits are taxable. Https www freefilefillableforms com ffa checkstatus htm Repayment of benefits received in an earlier year. Https www freefilefillableforms com ffa checkstatus htm   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Https www freefilefillableforms com ffa checkstatus htm   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Https www freefilefillableforms com ffa checkstatus htm Claim it on Schedule A (Form 1040), line 23. Https www freefilefillableforms com ffa checkstatus htm   If this deduction is more than $3,000, you have to follow some special instructions. Https www freefilefillableforms com ffa checkstatus htm See Publication 915 for those instructions. Https www freefilefillableforms com ffa checkstatus htm Sickness and Injury Benefits Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. Https www freefilefillableforms com ffa checkstatus htm If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. Https www freefilefillableforms com ffa checkstatus htm However, certain payments may not be taxable to you. Https www freefilefillableforms com ffa checkstatus htm Some of these payments are discussed later in this section. Https www freefilefillableforms com ffa checkstatus htm Also, see Military and Government Disability Pensions and Other Sickness and Injury Benefits in Publication 525. Https www freefilefillableforms com ffa checkstatus htm Cost paid by you. Https www freefilefillableforms com ffa checkstatus htm   If you pay the entire cost of an accident or health plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. Https www freefilefillableforms com ffa checkstatus htm If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. Https www freefilefillableforms com ffa checkstatus htm Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. Https www freefilefillableforms com ffa checkstatus htm You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A or on line 8 of Form 1040NR until you reach minimum retirement age. Https www freefilefillableforms com ffa checkstatus htm Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Https www freefilefillableforms com ffa checkstatus htm If you were 65 or older by the end of 2013 or you were retired on permanent and total disability and received taxable disability income, you may be able to claim the credit for the elderly or the disabled. Https www freefilefillableforms com ffa checkstatus htm See Credit for the Elderly or the Disabled, later. Https www freefilefillableforms com ffa checkstatus htm For more information on this credit, see Publication 524, Credit for the Elderly or the Disabled. Https www freefilefillableforms com ffa checkstatus htm Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Https www freefilefillableforms com ffa checkstatus htm Report the payments on lines 16a and 16b of Form 1040, on lines 12a and 12b of Form 1040A, or on lines 17a and 17b of Form 1040NR. Https www freefilefillableforms com ffa checkstatus htm For more information on pensions and annuities, see Publication 575. Https www freefilefillableforms com ffa checkstatus htm Retirement and profit-sharing plans. Https www freefilefillableforms com ffa checkstatus htm   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. Https www freefilefillableforms com ffa checkstatus htm The payments must be reported as a pension or annuity. Https www freefilefillableforms com ffa checkstatus htm Accrued leave payment. Https www freefilefillableforms com ffa checkstatus htm   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Https www freefilefillableforms com ffa checkstatus htm The payment is not a disability payment. Https www freefilefillableforms com ffa checkstatus htm Include it in your income in the tax year you receive it. Https www freefilefillableforms com ffa checkstatus htm Long-Term Care Insurance Contracts In most cases, long-term care insurance contracts generally are treated as accident and health insurance contracts. Https www freefilefillableforms com ffa checkstatus htm Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. Https www freefilefillableforms com ffa checkstatus htm However, the amount you can exclude may be limited. Https www freefilefillableforms com ffa checkstatus htm Long-term care insurance contracts are discussed in more detail in Publication 525. Https www freefilefillableforms com ffa checkstatus htm Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. Https www freefilefillableforms com ffa checkstatus htm The exemption also applies to your survivors. Https www freefilefillableforms com ffa checkstatus htm The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. Https www freefilefillableforms com ffa checkstatus htm If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Https www freefilefillableforms com ffa checkstatus htm For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. Https www freefilefillableforms com ffa checkstatus htm Return to work. Https www freefilefillableforms com ffa checkstatus htm   If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. Https www freefilefillableforms com ffa checkstatus htm Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. Https www freefilefillableforms com ffa checkstatus htm Federal Employees' Compensation Act (FECA). Https www freefilefillableforms com ffa checkstatus htm   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. Https www freefilefillableforms com ffa checkstatus htm However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. Https www freefilefillableforms com ffa checkstatus htm Report this income on Form 1040, line 7; Form 1040A, line 7; on Form 1040EZ, line 1; or Form 1040NR, line 8. Https www freefilefillableforms com ffa checkstatus htm Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. Https www freefilefillableforms com ffa checkstatus htm    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Https www freefilefillableforms com ffa checkstatus htm For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. Https www freefilefillableforms com ffa checkstatus htm Other compensation. Https www freefilefillableforms com ffa checkstatus htm   Many other amounts you receive as compensation for sickness or injury are not taxable. Https www freefilefillableforms com ffa checkstatus htm These include the following amounts. Https www freefilefillableforms com ffa checkstatus htm Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. Https www freefilefillableforms com ffa checkstatus htm Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. Https www freefilefillableforms com ffa checkstatus htm Compensation you receive for permanent loss or loss of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). Https www freefilefillableforms com ffa checkstatus htm This compensation must be based only on the injury and not on the period of your absence from work. Https www freefilefillableforms com ffa checkstatus htm These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. Https www freefilefillableforms com ffa checkstatus htm Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Https www freefilefillableforms com ffa checkstatus htm This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Https www freefilefillableforms com ffa checkstatus htm Proceeds not received in installments. Https www freefilefillableforms com ffa checkstatus htm   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Https www freefilefillableforms com ffa checkstatus htm If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Https www freefilefillableforms com ffa checkstatus htm Proceeds received in installments. Https www freefilefillableforms com ffa checkstatus htm   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Https www freefilefillableforms com ffa checkstatus htm   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Https www freefilefillableforms com ffa checkstatus htm Include anything over this excluded part in your income as interest. Https www freefilefillableforms com ffa checkstatus htm Installments for life. Https www freefilefillableforms com ffa checkstatus htm   If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds in installments for the rest of your life without a refund or period-certain guarantee, you figure the excluded part of each installment by dividing the amount held by the insurance company by your life expectancy. Https www freefilefillableforms com ffa checkstatus htm If there is a refund or period-certain guarantee, the amount held by the insurance company for this purpose is reduced by the actuarial value of the guarantee. Https www freefilefillableforms com ffa checkstatus htm Surviving spouse. Https www freefilefillableforms com ffa checkstatus htm   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the interest included in the installments. Https www freefilefillableforms com ffa checkstatus htm If you remarry, you can continue to take the exclusion. Https www freefilefillableforms com ffa checkstatus htm Surrender of policy for cash. Https www freefilefillableforms com ffa checkstatus htm   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Https www freefilefillableforms com ffa checkstatus htm In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Https www freefilefillableforms com ffa checkstatus htm You should receive a Form 1099-R showing the total proceeds and the taxable part. Https www freefilefillableforms com ffa checkstatus htm Report these amounts on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b. Https www freefilefillableforms com ffa checkstatus htm Endowment Contract Proceeds An endowment contract is a policy that pays over to you a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Https www freefilefillableforms com ffa checkstatus htm Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Https www freefilefillableforms com ffa checkstatus htm To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. Https www freefilefillableforms com ffa checkstatus htm Include in your income the part of the lump-sum payment that is more than your cost. Https www freefilefillableforms com ffa checkstatus htm Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity of the policy are taxed as an annuity. Https www freefilefillableforms com ffa checkstatus htm The tax treatment of an annuity is explained in Publication 575. Https www freefilefillableforms com ffa checkstatus htm For this treatment to apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. Https www freefilefillableforms com ffa checkstatus htm This election must be made within 60 days after the lump-sum payment first becomes payable to you. Https www freefilefillableforms com ffa checkstatus htm Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are generally excluded from income if the insured is terminally or chronically ill. Https www freefilefillableforms com ffa checkstatus htm However, see Exception , later. Https www freefilefillableforms com ffa checkstatus htm For a chronically ill individual, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Https www freefilefillableforms com ffa checkstatus htm Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to a limit. Https www freefilefillableforms com ffa checkstatus htm In addition, if any portion of a death benefit under a life insurance contract on the life of a terminally or chronically ill individual is sold or assigned to a viatical settlement provider, the amount received also is excluded from income. Https www freefilefillableforms com ffa checkstatus htm Generally, a viatical settlement provider is one who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill. Https www freefilefillableforms com ffa checkstatus htm To report taxable accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Https www freefilefillableforms com ffa checkstatus htm Terminally or chronically ill defined. Https www freefilefillableforms com ffa checkstatus htm   A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. Https www freefilefillableforms com ffa checkstatus htm A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions. Https www freefilefillableforms com ffa checkstatus htm The person is unable to perform (without substantial help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more because of a loss of functional capacity. Https www freefilefillableforms com ffa checkstatus htm The person requires substantial supervision to protect himself or herself from threats to health and safety due to severe cognitive impairment. Https www freefilefillableforms com ffa checkstatus htm Exception. Https www freefilefillableforms com ffa checkstatus htm   The exclusion does not apply to any amount paid to a person other than the insured if that other person has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the other person, or Has a financial interest in the business of the other person. Https www freefilefillableforms com ffa checkstatus htm Sale of Home You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return in most cases) on the sale of your main home. Https www freefilefillableforms com ffa checkstatus htm Generally, if you can exclude all of the gain, you do not need to report the sale on your tax return. Https www freefilefillableforms com ffa checkstatus htm You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. Https www freefilefillableforms com ffa checkstatus htm Main home. Https www freefilefillableforms com ffa checkstatus htm   Usually, your main home is the home you live in most of the time and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. Https www freefilefillableforms com ffa checkstatus htm Repaying the first-time homebuyer credit because you sold your home. Https www freefilefillableforms com ffa checkstatus htm   If you claimed a first-time homebuyer credit for your main home and you sell it, you may have to repay the credit. Https www freefilefillableforms com ffa checkstatus htm For a home purchased in 2008 and used as your main home until sold in 2013, you must file Form 5405 and repay the balance of the unpaid credit on your 2013 tax return. Https www freefilefillableforms com ffa checkstatus htm   For a home purchased after 2008, you generally must repay the entire credit if the home was sold (or otherwise ceased to be your main home) within 36 months of the purchase date. Https www freefilefillableforms com ffa checkstatus htm If you purchased your home in 2009 and used it as your main home until sold in 2013, you do not have to repay the credit or file Form 5405. Https www freefilefillableforms com ffa checkstatus htm If you purchased your home in 2010 and used it as your main home until sold in 2013, you may have to file Form 5405 and repay the entire credit on your 2013 tax return. Https www freefilefillableforms com ffa checkstatus htm   See the Instructions for Form 5405 for more information about repaying the credit and exceptions to repayment that may apply to you. Https www freefilefillableforms com ffa checkstatus htm Maximum Amount of Exclusion You can generally exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. Https www freefilefillableforms com ffa checkstatus htm You meet the ownership test. Https www freefilefillableforms com ffa checkstatus htm You meet the use test. Https www freefilefillableforms com ffa checkstatus htm During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. Https www freefilefillableforms com ffa checkstatus htm You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . Https www freefilefillableforms com ffa checkstatus htm Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. Https www freefilefillableforms com ffa checkstatus htm This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). Https www freefilefillableforms com ffa checkstatus htm Exception to ownership and use tests. Https www freefilefillableforms com ffa checkstatus htm   If you owned and lived in the property as your main home for less than 2 years, you still can claim an exclusion in some cases. Https www freefilefillableforms com ffa checkstatus htm Generally, you must have sold the home due to a change in place of employment, health, or unforeseen circumstances. Https www freefilefillableforms com ffa checkstatus htm The maximum amount you can exclude will be reduced. Https www freefilefillableforms com ffa checkstatus htm See Publication 523, Selling Your Home, for more information. Https www freefilefillableforms com ffa checkstatus htm Exception to use test for individuals with a disability. Https www freefilefillableforms com ffa checkstatus htm   There is an exception to the use test if, during the 5-year period before the sale of your home: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year. Https www freefilefillableforms com ffa checkstatus htm Under this exception, you are considered to live in your home during any time that you own the home and live in a facility (including a nursing home) that is licensed by a state or political subdivision to care for persons in your condition. Https www freefilefillableforms com ffa checkstatus htm   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. Https www freefilefillableforms com ffa checkstatus htm Exception to ownership test for property acquired in a like-kind exchange. Https www freefilefillableforms com ffa checkstatus htm   You must have owned your main home for at least 5 years to qualify for the exclusion if you acquired your main home in a like-kind exchange. Https www freefilefillableforms com ffa checkstatus htm This special 5-year ownership rule continues to apply to a home you acquired in a like-kind exchange and gave to another person. Https www freefilefillableforms com ffa checkstatus htm A like-kind exchange is an exchange of property held for productive use in a trade or business or for investment. Https www freefilefillableforms com ffa checkstatus htm See Publication 523 for more information. Https www freefilefillableforms com ffa checkstatus htm Period of nonqualified use. Https www freefilefillableforms com ffa checkstatus htm   Generally, the gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gain is allocated to periods of nonqualified use. Https www freefilefillableforms com ffa checkstatus htm Nonqualified use is any period after December 31, 2008, during which the property is not used as the main home. Https www freefilefillableforms com ffa checkstatus htm See Publication 523 for more information. Https www freefilefillableforms com ffa checkstatus htm Married Persons In the special situations discussed below, if you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use test, you can exclude up to $250,000 of gain. Https www freefilefillableforms com ffa checkstatus htm However, see Special rules for joint returns , next. Https www freefilefillableforms com ffa checkstatus htm Special rules for joint returns. Https www freefilefillableforms com ffa checkstatus htm   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. Https www freefilefillableforms com ffa checkstatus htm You are married and file a joint return for the year. Https www freefilefillableforms com ffa checkstatus htm Either you or your spouse meets the ownership test. Https www freefilefillableforms com ffa checkstatus htm Both you and your spouse meet the use test. Https www freefilefillableforms com ffa checkstatus htm During the 2-year period ending on the date of the sale, neither you nor your spouse exclude gain from the sale of another home. Https www freefilefillableforms com ffa checkstatus htm Sale of home by surviving spouse. Https www freefilefillableforms com ffa checkstatus htm   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. Https www freefilefillableforms com ffa checkstatus htm   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2013. Https www freefilefillableforms com ffa checkstatus htm The sale or exchange took place no more than 2 years after the date of death of your spouse. Https www freefilefillableforms com ffa checkstatus htm You have not remarried. Https www freefilefillableforms com ffa checkstatus htm You and your spouse met the use test at the time of your spouse's death. Https www freefilefillableforms com ffa checkstatus htm You or your spouse met the ownership test at the time of your spouse's death. Https www freefilefillableforms com ffa checkstatus htm Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. Https www freefilefillableforms com ffa checkstatus htm Home transferred from spouse. Https www freefilefillableforms com ffa checkstatus htm   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. Https www freefilefillableforms com ffa checkstatus htm Use of home after divorce. Https www freefilefillableforms com ffa checkstatus htm   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. Https www freefilefillableforms com ffa checkstatus htm Business Use or Rental of Home You may be able to exclude gain from the sale of a home that you have used for business or to produce rental income. Https www freefilefillableforms com ffa checkstatus htm However, you must meet the ownership and use tests. Https www freefilefillableforms com ffa checkstatus htm See Publication 523 for more information. Https www freefilefillableforms com ffa checkstatus htm Depreciation after May 6, 1997. Https www freefilefillableforms com ffa checkstatus htm   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. Https www freefilefillableforms com ffa checkstatus htm See Publication 523 for more information. Https www freefilefillableforms com ffa checkstatus htm Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and you do not qualify to exclude all of it, You have a gain and you choose not to exclude it, or You received Form 1099-S. Https www freefilefillableforms com ffa checkstatus htm If you have a gain that you cannot or choose not to exclude, if you received a Form 1099-S, or if you have a deductible loss, report the sale on your tax return. Https www freefilefillableforms com ffa checkstatus htm Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. Https www freefilefillableforms com ffa checkstatus htm If you used your home for business or to produce rental income, you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. Https www freefilefillableforms com ffa checkstatus htm See Publication 523 for more information. Https www freefilefillableforms com ffa checkstatus htm Reverse Mortgages A revers
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Do I Have Cancellation of Debt Income on My Personal Residence?

Information You Will Need:

  • Filing Status
  • Form 1099-C, Cancellation of Debt, received from your mortgage lender

Note: This application is not designed to address the cancellation of debt that applies to a joint liability when debt was cancelled in bankruptcy and only 1 individual filed for bankruptcy. Please refer to Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals).

Estimated Completion Time: 10 minutes. However: 5 minutes of inactivity will end the interview and you will be forced to start over.

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Page Last Reviewed or Updated: 14-Feb-2014

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