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Income Tax Amendment

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Income Tax Amendment

Income tax amendment Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. Income tax amendment Gross monthly rate. Income tax amendment Your cost. Income tax amendment Choosing a survivor annuity after retirement. Income tax amendment Canceling a survivor annuity after retirement. Income tax amendment Annuity starting date after 1986. Income tax amendment Annuity starting date before 1987. Income tax amendment Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. Income tax amendment Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. Income tax amendment The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. Income tax amendment If the refund includes only your contributions, none of the refund is taxable. Income tax amendment If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). Income tax amendment If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Income tax amendment See Rollover Rules in Part II for information on how to make a rollover. Income tax amendment Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. Income tax amendment Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. Income tax amendment If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Income tax amendment If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. Income tax amendment For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Income tax amendment A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. Income tax amendment Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. Income tax amendment OPM will tell you how to make the choice. Income tax amendment The choice for no withholding remains in effect until you change it. Income tax amendment These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. Income tax amendment If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. Income tax amendment You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. Income tax amendment Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. Income tax amendment For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. Income tax amendment Form CSA 1099R. Income tax amendment   Form CSA 1099R is mailed to you by OPM each year. Income tax amendment It will show any tax you had withheld. Income tax amendment File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. Income tax amendment    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. Income tax amendment servicesonline. Income tax amendment opm. Income tax amendment gov. Income tax amendment To log in, you will need your retirement CSA claim number and your personal identification number. Income tax amendment Choosing no withholding on payments outside the United States. Income tax amendment   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. Income tax amendment   To choose no withholding if you are a U. Income tax amendment S. Income tax amendment citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. Income tax amendment Otherwise, OPM has to withhold tax. Income tax amendment For example, OPM must withhold if you provide a U. Income tax amendment S. Income tax amendment address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. Income tax amendment S. Income tax amendment home address. Income tax amendment   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. Income tax amendment S. Income tax amendment citizen, a U. Income tax amendment S. Income tax amendment resident alien, or someone who left the United States to avoid tax. Income tax amendment But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. Income tax amendment For details, see Publication 519, U. Income tax amendment S. Income tax amendment Tax Guide for Aliens. Income tax amendment Withholding certificate. Income tax amendment   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. Income tax amendment The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. Income tax amendment If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. Income tax amendment To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Income tax amendment C. Income tax amendment calling area must call 202-606-0500). Income tax amendment No special form is needed. Income tax amendment You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. Income tax amendment If you have TTY/TDD equipment, call 1-855–887–4957. Income tax amendment If you need a PIN, call OPM's Retirement Information Office. Income tax amendment You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. Income tax amendment servicesonline. Income tax amendment opm. Income tax amendment gov. Income tax amendment You will need your retirement CSA or CSF claim number and your PIN. Income tax amendment Withholding from certain lump-sum payments. Income tax amendment   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. Income tax amendment Tax will be withheld at a 20% rate on the interest distributed. Income tax amendment However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. Income tax amendment If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. Income tax amendment Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. Income tax amendment See Rollover Rules in Part II. Income tax amendment If you receive only your contributions, no tax will be withheld. Income tax amendment Withholding from Thrift Savings Plan payments. Income tax amendment   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. Income tax amendment The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. Income tax amendment  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. Income tax amendment By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. Income tax amendment   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. Income tax amendment The above document is also available in the “Forms & Publications” section of the TSP website at www. Income tax amendment tsp. Income tax amendment gov. Income tax amendment Estimated tax. Income tax amendment   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). Income tax amendment The return must cover all 12 months. Income tax amendment   You do not have to pay estimated tax for 2014 if you were a U. Income tax amendment S. Income tax amendment citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. Income tax amendment   Publication 505 contains information that you can use to help you figure your estimated tax payments. Income tax amendment Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. Income tax amendment The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. Income tax amendment Children. Income tax amendment   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. Income tax amendment   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. Income tax amendment Form CSF 1099R. Income tax amendment   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. Income tax amendment It will show the total amount of the annuity you received in the past year. Income tax amendment It also should show, separately, the survivor annuity for a child or children. Income tax amendment Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. Income tax amendment   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. Income tax amendment    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. Income tax amendment servicesonline. Income tax amendment opm. Income tax amendment gov. Income tax amendment To log in you will need your retirement CSF claim number and personal identification number. Income tax amendment    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Income tax amendment C. Income tax amendment calling area must call 202-606-0500). Income tax amendment You will need your CSF claim number and your social security number when you call. Income tax amendment Taxable part of annuity. Income tax amendment   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. Income tax amendment To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. Income tax amendment Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. Income tax amendment If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. Income tax amendment However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. Income tax amendment Annuity statement. Income tax amendment   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). Income tax amendment You will use this information to figure the tax-free recovery of your cost. Income tax amendment Annuity starting date. Income tax amendment   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. Income tax amendment If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. Income tax amendment Gross monthly rate. Income tax amendment   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. Income tax amendment Your cost. Income tax amendment   Your monthly annuity payment contains an amount on which you have previously paid income tax. Income tax amendment This amount represents part of your contributions to the retirement plan. Income tax amendment Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. Income tax amendment   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. Income tax amendment If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. Income tax amendment (See Lump-sum credit under Alternative Annuity Option, later. Income tax amendment )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. Income tax amendment You cannot claim an interest deduction for any interest payments. Income tax amendment You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. Income tax amendment Recovering your cost tax free. Income tax amendment   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. Income tax amendment If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. Income tax amendment If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). Income tax amendment If your annuity starting date is after November 18, 1996, you must use the Simplified Method. Income tax amendment   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). Income tax amendment The tax-free part is a fixed dollar amount. Income tax amendment It remains the same, even if your annuity is increased. Income tax amendment Generally, this rule applies as long as you receive your annuity. Income tax amendment However, see Exclusion limit , later. Income tax amendment Choosing a survivor annuity after retirement. Income tax amendment    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. Income tax amendment   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. Income tax amendment To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. Income tax amendment Figure the expected return as of the date the reduced annuity begins. Income tax amendment For details on the General Rule, see Publication 939. Income tax amendment Canceling a survivor annuity after retirement. Income tax amendment   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. Income tax amendment The increased annuity does not change the cost recovery you figured at the annuity starting date. Income tax amendment The tax-free part of each annuity payment remains the same. Income tax amendment    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Income tax amendment C. Income tax amendment calling area must call 202-606-0500). Income tax amendment Exclusion limit. Income tax amendment   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. Income tax amendment Annuity starting date after 1986. Income tax amendment   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. Income tax amendment Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. Income tax amendment Example. Income tax amendment Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. Income tax amendment If your cost is $12,000, the exclusion ends after 10 years (120 months). Income tax amendment Thereafter, your entire annuity is generally fully taxable. Income tax amendment Annuity starting date before 1987. Income tax amendment   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. Income tax amendment If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. Income tax amendment The total exclusion may be more than your cost. Income tax amendment Deduction of unrecovered cost. Income tax amendment   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. Income tax amendment The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). Income tax amendment If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. Income tax amendment Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. Income tax amendment (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. Income tax amendment ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. Income tax amendment The Simplified Method does not apply if your annuity starting date is before July 2, 1986. Income tax amendment Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. Income tax amendment This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Income tax amendment If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. Income tax amendment Worksheet A. Income tax amendment   Use Worksheet A. Income tax amendment Simplified Method (near the end of this publication), to figure your taxable annuity. Income tax amendment Be sure to keep the completed worksheet. Income tax amendment It will help you figure your taxable amounts for later years. Income tax amendment Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. Income tax amendment However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. Income tax amendment Line 2. Income tax amendment   See Your cost , earlier, for an explanation of your cost in the plan. Income tax amendment If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. Income tax amendment Line 3. Income tax amendment   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. Income tax amendment If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. Income tax amendment If your annuity starting date is before 1998, use Table 1. Income tax amendment Line 6. Income tax amendment   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. Income tax amendment If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. Income tax amendment Example. Income tax amendment Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. Income tax amendment His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. Income tax amendment He must use the Simplified Method to figure the tax-free part of his annuity benefits. Income tax amendment Bill's monthly annuity benefit is $1,000. Income tax amendment He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. Income tax amendment At his annuity starting date, he was 65 and Kathy was 57. Income tax amendment Bill's completed Worksheet A is shown later. Income tax amendment To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). Income tax amendment Bill keeps a copy of the completed worksheet for his records. Income tax amendment It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. Income tax amendment Bill's tax-free monthly amount is $100. Income tax amendment (See line 4 of the worksheet. Income tax amendment ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. Income tax amendment If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. Income tax amendment If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. Income tax amendment General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. Income tax amendment If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. Income tax amendment If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. Income tax amendment Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. Income tax amendment Figuring this percentage is complex and requires the use of actuarial tables. Income tax amendment For these tables and other information about using the General Rule, see Publication 939. Income tax amendment Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. Income tax amendment Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. Income tax amendment After your cost was recovered, all payments became fully taxable. Income tax amendment You cannot use another rule to again exclude amounts from income. Income tax amendment The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. Income tax amendment Worksheet A. Income tax amendment Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. Income tax amendment 1. Income tax amendment Enter the total pension or annuity payments received this year. Income tax amendment Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Income tax amendment $ 8,000 2. Income tax amendment Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Income tax amendment See Your cost in Part II, Rules for Retirees, earlier 2. Income tax amendment 31,000 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Income tax amendment Otherwise, go to line 3. Income tax amendment   3. Income tax amendment Enter the appropriate number from Table 1 below. Income tax amendment 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. Income tax amendment 3. Income tax amendment 310 4. Income tax amendment Divide line 2 by the number on line 3 4. Income tax amendment 100 5. Income tax amendment Multiply line 4 by the number of months for which this year's payments were made. Income tax amendment If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Income tax amendment Otherwise, go to line 6 5. Income tax amendment 800 6. Income tax amendment Enter any amounts previously recovered tax free in years after 1986. Income tax amendment This is the amount shown on line 10 of your worksheet for last year 6. Income tax amendment 0 7. Income tax amendment Subtract line 6 from line 2 7. Income tax amendment 31,000 8. Income tax amendment Enter the smaller of line 5 or line 7 8. Income tax amendment 800 9. Income tax amendment Taxable amount for year. Income tax amendment Subtract line 8 from line 1. Income tax amendment Enter the result, but not less than zero. Income tax amendment Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Income tax amendment If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Income tax amendment If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Income tax amendment If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Income tax amendment $7,200 10. Income tax amendment Was your annuity starting date before 1987?   Yes. Income tax amendment Do not complete the rest of this worksheet. Income tax amendment    No. Income tax amendment Add lines 6 and 8. Income tax amendment This is the amount you have recovered tax free through 2013. Income tax amendment You will need this number if you need to fill out this worksheet next year 10. Income tax amendment 800 11. Income tax amendment Balance of cost to be recovered. Income tax amendment Subtract line 10 from line 2. Income tax amendment If zero, you will not have to complete this worksheet next year. Income tax amendment The payments you receive next year will generally be fully taxable 11. Income tax amendment $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   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   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Income tax amendment Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. Income tax amendment If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. Income tax amendment You are eligible to make this choice if you meet all of the following requirements. Income tax amendment You are retiring, but not on disability. Income tax amendment You have a life-threatening illness or other critical medical condition. Income tax amendment You do not have a former spouse entitled to court ordered benefits based on your service. Income tax amendment If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. Income tax amendment Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. Income tax amendment The tax-free part represents part of your cost. Income tax amendment The taxable part represents part of the earnings on your annuity contract. Income tax amendment Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. Income tax amendment Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. Income tax amendment Your taxable amount may therefore be more than the lump-sum payment you receive. Income tax amendment You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. Income tax amendment If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Income tax amendment See Rollover Rules , later, for information on how to make a rollover. Income tax amendment OPM can make a direct rollover only up to the amount of the lump-sum payment. Income tax amendment Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. Income tax amendment The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Income tax amendment It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. Income tax amendment For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Income tax amendment Worksheet B. Income tax amendment   Use Worksheet B. Income tax amendment Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. Income tax amendment Be sure to keep the completed worksheet for your records. Income tax amendment   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. Income tax amendment Lump-sum credit. Income tax amendment   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). Income tax amendment However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. Income tax amendment Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. Income tax amendment Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. Income tax amendment You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. Income tax amendment Present value of your annuity contract. Income tax amendment   The present value of your annuity contract is figured using actuarial tables provided by the IRS. Income tax amendment If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. Income tax amendment Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. Income tax amendment , NW Washington, DC 20224-0002 Example. Income tax amendment David Brown retired from the federal government in 2013, one month after his 55th birthday. Income tax amendment He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. Income tax amendment The present value of his annuity contract was $155,000. Income tax amendment The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. Income tax amendment The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. Income tax amendment See Reduced Annuity , later. Income tax amendment Worksheet B. Income tax amendment Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . Income tax amendment  1. Income tax amendment Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. Income tax amendment $ 31,000 2. Income tax amendment Enter the present value of your annuity contract 2. Income tax amendment 155,000 3. Income tax amendment Divide line 1 by line 2 3. Income tax amendment . Income tax amendment 20 4. Income tax amendment Tax-free amount. Income tax amendment Multiply line 1 by line 3. Income tax amendment (Caution: Do not include this amount on line 6 of Worksheet A in this publication. Income tax amendment ) 4. Income tax amendment $6,200 5. Income tax amendment Taxable amount (net cost in the plan). Income tax amendment Subtract line 4 from line 1. Income tax amendment Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Income tax amendment Also, enter this amount on line 2 of Worksheet A in this publication. Income tax amendment 5. Income tax amendment $24,800   Lump-sum payment in installments. Income tax amendment   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. Income tax amendment You will receive the first installment after you make the choice upon retirement. Income tax amendment The second installment will be paid to you, with interest, in the next calendar year. Income tax amendment (Exceptions to the installment rule are provided for cases of critical medical need. Income tax amendment )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. Income tax amendment If the payment has a tax-free part, you must treat the taxable part as received first. Income tax amendment How to report. Income tax amendment   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Income tax amendment Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. Income tax amendment    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. Income tax amendment Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. Income tax amendment These annuity payments each will have a tax-free and a taxable part. Income tax amendment To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). Income tax amendment For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. Income tax amendment To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. Income tax amendment Enter as your net cost on line 2 the amount from Worksheet B, line 5. Income tax amendment Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Income tax amendment Example. Income tax amendment The facts are the same as in the example for David Brown in the preceding discussion. Income tax amendment In addition, David received 10 annuity payments in 2013 of $1,200 each. Income tax amendment Using Worksheet A, he figures the taxable part of his annuity payments. Income tax amendment He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. Income tax amendment His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). Income tax amendment He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. Income tax amendment David's filled-in Worksheet A is shown on the next page. Income tax amendment Worksheet A. Income tax amendment Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . Income tax amendment 1. Income tax amendment Enter the total pension or annuity payments received this year. Income tax amendment Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Income tax amendment $ 12,000 2. Income tax amendment Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Income tax amendment See Your cost in Part II, Rules for Retirees, earlier 2. Income tax amendment 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Income tax amendment Otherwise, go to line 3. Income tax amendment   3. Income tax amendment Enter the appropriate number from Table 1 below. Income tax amendment 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. Income tax amendment 3. Income tax amendment 360 4. Income tax amendment Divide line 2 by the number on line 3 4. Income tax amendment 68. Income tax amendment 89 5. Income tax amendment Multiply line 4 by the number of months for which this year's payments were made. Income tax amendment If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Income tax amendment Otherwise, go to line 6 5. Income tax amendment 688. Income tax amendment 90 6. Income tax amendment Enter any amounts previously recovered tax free in years after 1986. Income tax amendment This is the amount shown on line 10 of your worksheet for last year 6. Income tax amendment 0 7. Income tax amendment Subtract line 6 from line 2 7. Income tax amendment 24,800 8. Income tax amendment Enter the smaller of line 5 or line 7 8. Income tax amendment 688. Income tax amendment 90 9. Income tax amendment Taxable amount for year. Income tax amendment Subtract line 8 from line 1. Income tax amendment Enter the result, but not less than zero. Income tax amendment Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Income tax amendment If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Income tax amendment If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Income tax amendment If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Income tax amendment $11,311. Income tax amendment 10 10. Income tax amendment Was your annuity starting date before 1987?   Yes. Income tax amendment Do not complete the rest of this worksheet. Income tax amendment    No. Income tax amendment Add lines 6 and 8. Income tax amendment This is the amount you have recovered tax free through 2013. Income tax amendment You will need this number if you need to fill out this worksheet next year 10. Income tax amendment 688. Income tax amendment 90 11. Income tax amendment Balance of cost to be recovered. Income tax amendment Subtract line 10 from line 2. Income tax amendment If zero, you will not have to complete this worksheet next year. Income tax amendment The payments you receive next year will generally be fully taxable 11. Income tax amendment $24,111. Income tax amendment 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   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   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Income tax amendment Reemployment after choosing the alternative annuity option. Income tax amendment If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. Income tax amendment If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. Income tax amendment Annuity starting date before November 19, 1996. Income tax amendment   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. Income tax amendment Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. Income tax amendment However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Income tax amendment Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. Income tax amendment The gift may be taxable for gift tax purposes. Income tax amendment The value of the gift is equal to the value of the annuity. Income tax amendment Joint and survivor annuity. Income tax amendment   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. Income tax amendment This will eliminate any gift tax liability with regard to that gift. Income tax amendment   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. Income tax amendment This may result in a taxable gift. Income tax amendment More information. Income tax amendment   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. Income tax amendment Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. Income tax amendment Annual leave. Income tax amendment   A payment for accrued annual leave received on retirement is a salary payment. Income tax amendment It is taxable as wages in the tax year you receive it. Income tax amendment Voluntary contributions. Income tax amendment   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. Income tax amendment They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. Income tax amendment Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. Income tax amendment See Thrift Savings Plan , later. Income tax amendment Additional annuity benefit. Income tax amendment   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. Income tax amendment This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. Income tax amendment It does not matter that you receive only one monthly check covering both benefits. Income tax amendment Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. Income tax amendment   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. Income tax amendment Refund of voluntary contributions. Income tax amendment   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. Income tax amendment If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. Income tax amendment See Rollover Rules , later. Income tax amendment The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Income tax amendment It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. Income tax amendment For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Income tax amendment Community property laws. Income tax amendment   State community property laws apply to your annuity. Income tax amendment These laws will affect your income tax only if you file a return separately from your spouse. Income tax amendment   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. Income tax amendment Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. Income tax amendment   At any time, you have only one domicile even though you may have more than one home. Income tax amendment Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. Income tax amendment The question of your domicile is mainly a matter of your intentions as indicated by your actions. Income tax amendment   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. Income tax amendment The division is based on your periods of service and domicile in community and noncommunity property states while you were married. Income tax amendment   For more information, see Publication 555, Community Property. Income tax amendment Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. Income tax amendment The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. Income tax amendment This amount is taxable as wages. Income tax amendment Your annuity will continue to be taxed just as it was before. Income tax amendment If you are still recovering your cost, you continue to do so. Income tax amendment If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. Income tax amendment Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. Income tax amendment A nonresident alien is an individual who is not a citizen or a resident alien of the United States. Income tax amendment Special rule for figuring your total contributions. Income tax amendment   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. Income tax amendment You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. Income tax amendment For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. Income tax amendment Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. Income tax amendment   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. Income tax amendment Limit on taxable amount. Income tax amendment   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. Income tax amendment Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. Income tax amendment The numerator of the fraction is the retiree's total U. Income tax amendment S. Income tax amendment Government basic pay, other than tax-exempt pay for services performed outside the United States. Income tax amendment The denominator is the retiree's total U. Income tax amendment S. Income tax amendment Government basic pay for all services. Income tax amendment    Basic pay includes regular pay plus any standby differential. Income tax amendment It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. Income tax amendment   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. Income tax amendment (For an annuity, first complete Worksheet A in this publication. Income tax amendment ) Worksheet C. Income tax amendment Limited Taxable Amount for Nonresident Alien 1. Income tax amendment Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Income tax amendment   2. Income tax amendment Enter the total U. Income tax amendment S. Income tax amendment Government basic pay other than tax-exempt pay for services performed outside the United States 2. Income tax amendment   3. Income tax amendment Enter the total U. Income tax amendment S. Income tax amendment Government basic pay for all services 3. Income tax amendment   4. Income tax amendment Divide line 2 by line 3 4. Income tax amendment   5. Income tax amendment Limited taxable amount. Income tax amendment Multiply line 1 by line 4. Income tax amendment Enter this amount on Form 1040NR, line 17b 5. Income tax amendment   Example 1. Income tax amendment You are a nonresident alien who performed all services for the U. Income tax amendment S. Income tax amendment Government abroad as a nonresident alien. Income tax amendment You retired and began to receive a monthly annuity of $200. Income tax amendment Your total basic pay for all services for the U. Income tax amendment S. Income tax amendment Government was $100,000. Income tax amendment All of your basic pay was tax exempt because it was not U. Income tax amendment S. Income tax amendment source income. Income tax amendment The taxable amount of your annuity using Worksheet A in this publication is $720. Income tax amendment You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Income tax amendment Worksheet C. Income tax amendment Limited Taxable Amount for Nonresident Alien — Example 1 1. Income tax amendment Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Income tax amendment $ 720 2. Income tax amendment Enter the total U. Income tax amendment S. Income tax amendment Government basic pay other than tax-exempt pay for services performed outside the United States 2. Income tax amendment 0 3. Income tax amendment Enter the total U. Income tax amendment S. Income tax amendment Government basic pay for all services 3. Income tax amendment 100,000 4. Income tax amendment Divide line 2 by line 3 4. Income tax amendment 0 5. Income tax amendment Limited taxable amount. Income tax amendment Multiply line 1 by line 4. Income tax amendment Enter this amount on Form 1040NR, line 17b 5. Income tax amendment 0 Example 2. Income tax amendment You are a nonresident alien who performed services for the U. Income tax amendment S. Income tax amendment Government as a nonresident alien both within the United States and abroad. Income tax amendment You retired and began to receive a monthly annuity of $240. Income tax amendment Your total basic pay for your services for the U. Income tax amendment S. Income tax amendment Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. Income tax amendment The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. Income tax amendment S. Income tax amendment source income. Income tax amendment The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. Income tax amendment You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Income tax amendment Worksheet C. Income tax amendment Limited Taxable Amount for Nonresident Alien — Example 2 1. Income tax amendment Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Income tax amendment $ 1,980 2. Income tax amendment Enter the total U. Income tax amendment S. Income tax amendment Government basic pay other than tax-exempt pay for services performed outside the United States 2. Income tax amendment 40,000 3. Income tax amendment Enter the total U. Income tax amendment S. Income tax amendment Government basic pay for all services 3. Income tax amendment 120,000 4. Income tax amendment Divide line 2 by line 3 4. Income tax amendment . Income tax amendment 333 5. Income tax amendment Limited taxable amount. Income tax amendment Multiply line 1 by line 4. Income tax amendment Enter this amount on Form 1040NR, line 17b 5. Income tax amendment 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. Income tax amendment (However, see Roth TSP balance and Uniformed services TSP accounts, next. Income tax amendment ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. Income tax amendment The way that you withdraw your account balance determines when you must pay the tax. Income tax amendment Roth TSP balance. Income tax amendment   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. Income tax amendment This means Roth TSP contributions are included in your income. Income tax amendment The contribution limits are the same as the traditional TSP. Income tax amendment You can elect to have part or all of your TSP contributions designated as a Roth TSP. Income tax amendment Agency contributions will be part of your traditional TSP balance. Income tax amendment Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. Income tax amendment   Qualified distributions from your Roth TSP are not included in income. Income tax amendment This applies to both your cost in the account and income earned on that account. Income tax amendment A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. Income tax amendment   For more information, go to the TSP website, www. Income tax amendment tsp. Income tax amendment gov, or the TSP Service Office. Income tax amendment See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. Income tax amendment Uniformed services TSP accounts. Income tax amendment   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. Income tax amendment However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. Income tax amendment See Roth TSP balance discussed previously to get more information about Roth contributions. Income tax amendment The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. Income tax amendment You can get more information from the TSP website, www. Income tax amendment tsp. Income tax amendment gov, or the TSP Service Office. Income tax amendment Direct rollover by the TSP. Income tax amendment   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. Income tax amendment However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Income tax amendment Also, see Rollover Rules , later. Income tax amendment Direct rollover by the TSP to a Roth IRA. Income tax amendment   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. Income tax amendment However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Income tax amendment Also, see Rollovers to Roth IRAs for more information, later. Income tax amendment Note. Income tax amendment A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. Income tax amendment This is because you already paid tax on those contributions. Income tax amendment You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. Income tax amendment TSP annuity. Income tax amendment   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. Income tax amendment The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. Income tax amendment However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. Income tax amendment See Roth TSP balance , earlier. Income tax amendment This is because you already paid tax on those contributions. Income tax amendment Cash withdrawals. Income tax amendment   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. Income tax amendment (See Rollover Rules , later. Income tax amendment ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. Income tax amendment See Lump-Sum Distributions in Publication 575 for details. Income tax amendment However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. Income tax amendment See Roth TSP balance , earlier. Income tax amendment    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. Income tax amendment   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. Income tax amendment If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. Income tax amendment See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. Income tax amendment However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. Income tax amendment See Roth TSP balance , earlier, for a discussion of those conditions. Income tax amendment Tax on early distributions. Income tax amendment   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. Income tax amendment However, this additional tax does not apply in certain situations, including any of the following. Income tax amendment You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. Income tax amendment You choose to receive your account balance in monthly payments based on your life expectancy. Income tax amendment You are totally and permanently disabled. Income tax amendment You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). Income tax amendment The earnings may be subject to the 10% tax depending on whether you met certain conditions. Income tax amendment See Roth TSP balance , earlier. Income tax amendment   For more information, see Tax on Early Distributions in Publication 575. Income tax amendment Outstanding loan. Income tax amendment   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. Income tax amendment The distribution also may be subject to the additional 10% tax on early distributions. Income tax amendment However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. Income tax amendment See Rollover Rules , later. Income tax amendment   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. Income tax amendment However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. Income tax amendment See Roth TSP balance , earlier. Income tax amendment More information. Income tax amendment   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. Income tax amendment Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). Income tax amendment    The above documents are also available on the TSP website at www. Income tax amendment tsp. Income tax amendment gov. Income tax amendment Select “Forms & Publications. Income tax amendment ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. Income tax amendment You do not include the amount rolled over in your income, and you cannot take a deduction for it. Income tax amendment The amount rolled over is taxed later as the new program pays that amount to you. Income tax amendment If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. Income tax amendment However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. Income tax amendment To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. Income tax amendment You can also roll over a distribution from a qualified retirement plan into a Roth IRA. Income tax amendment Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. Income tax amendment See Rollovers to Roth IRAs , later, for more information. Income tax amendment Qualified retirement plan. Income tax amendment   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. Income tax amendment The CSRS, FERS, and TSP are considered qualified retirement plans. Income tax amendment Distributions eligible for rollover treatment. Income tax amendment   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. Income tax amendment You cannot roll over any part of your CSRS or FERS annuity payments. Income tax amendment   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. Income tax amendment   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. Income tax amendment However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. Income tax amendment Direct rollover option. Income tax amendment   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. Income tax amendment   There is an automatic rollover requirement for mandatory distributions. Income tax amendment A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. Income tax amendment The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. Income tax amendment You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. Income tax amendment If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. Income tax amendment No tax withheld. Income tax amendment   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. Income tax amendment However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. Income tax amendment Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. Income tax amendment Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. Income tax amendment Payment to you option. Income tax amendment   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. Income tax amendment However, the full amount is treated as distributed to you even though you actually receive only 80%. Income tax amendment You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. Income tax amendment Rollovers to Roth IRAs are generally included in income. Income tax amendment Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. Income tax amendment If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. Income tax amendment However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). Income tax amendment Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. Income tax amendment See Roth TSP balance , earlier. Income tax amendment Also, see Tax on Early Distributions in Publication 575. Income tax amendment Exception to withholding. Income tax amendment   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. Income tax amendment Partial rollovers. Income tax amendment   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. Income tax amendment See Lump-Sum Distributions in Publication 575. Income tax amendment However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. Income tax amendment Rolling over more than amount received. Income tax amendment   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). Income tax amendment Example. Income tax amendment You left government service at age 53. Income tax amendment On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you
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SOI Tax Stats - Income from Trusts and Estates Statistics

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Snapshot of Estate and Trust Income Tax Statistics

The U.S. Income Tax Return for Estates and Trusts (Form 1041) is used to report the income, deductions, gains, and losses of estates and trusts, as well as distributions to beneficiaries and income tax liability. Entities are classified into types based on their purpose. These types include:

  • decedent's estates
  • simple trusts
  • complex trusts
  • qualified disability trusts
  • electing small business trust (ESBT)
  • grantor type trust
  • bankruptcy estates
  • pooled income funds

For information about selected terms and concepts, a description of the data sources and limitations, and links to recent revisions of Form 1041, please visit Income from Trusts and Estates Study Metadata.
 

Statistical Tables   SOI Bulletin Articles       Other IRS Data
 

 


Statistical Tables

The following tables are available as Microsoft Excel®  files.  A free Excel viewer is available for download, if needed.

Fiduciary Returns - Sources of Income, Deductions, and Tax Liability, by Tax Status and Size of Gross Income

Fiduciary Returns - Sources of Income, Deductions, and Tax Liability, by Type of Entity

Fiduciary Income and Deductions, by State and Entity Type

 

Archive - Fiduciary Income Tax Returns
 

To make customized tables using this data, please visit the Statistics of Income Tax Stats Table Wizard.

 

Projections

For selected tax returns, including the Form 1041, IRS's Office of Research produces annual forecasts of the number of returns that will be filed in future years.
    Projections of Returns to be Filed in Future Calendar Years


 

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SOI Bulletin Articles

The following are available as PDF files.  A free Adobe® reader is available for download, if needed.

 

  • Fiduciary Income Tax Returns

               2003-2004          1997          1982

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Other SOI Data on Trusts

Form 5227 is an information return filed by split-interest trusts, those who make distributions to both charitable and noncharitable beneficiaries, while providing tax benefits to their donor.  Certain charitable trusts, those treated as private foundations except that they are not exempt from income taxes, annually file Form 990-PF.

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Other IRS Data and Related Links

For tax administration data on this topic, as well as other types of taxes, choose from the links below.

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Page Last Reviewed or Updated: 06-Jan-2014

The Income Tax Amendment

Income tax amendment Publication 600 - Additional Material Table of Contents Please click here for the text description of the image. Income tax amendment Electronic Filing (E-file) Please click here for the text description of the image. Income tax amendment Electronic Filing (e-file) This image is too large to be displayed in the current screen. Income tax amendment Please click the link to view the image. Income tax amendment Electronic Filing (e-file) Please click here for the text description of the image. Income tax amendment Electronic Filing (e-file) Prev  Up     Home   More Online Publications