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Turbotax military discount Publication 554 - Introductory Material Table of Contents What's New Reminders IntroductionVolunteer Income Tax Assistance and Tax Counseling for the Elderly. Turbotax military discount Ordering forms and publications. Turbotax military discount Tax questions. Turbotax military discount What's New Alternative minimum tax exemption increased. Turbotax military discount  The AMT exemption amount has increased to $51,900 ($80,800 if married filing jointly or qualifying widow(er); $40,400 if married filing separately). Turbotax military discount Earned income credit. Turbotax military discount  The maximum amount of income you can earn and still get the credit has increased. Turbotax military discount You may be able to take the credit if you earn less than: $14,340 ($19,680 if married filing jointly), do not have a qualifying child, and are at least 25 years old and under 65, $37,870 ($43,210 if married filing jointly), and you have one qualifying child, $43,038 ($48,378 if married filing jointly), and you have two qualifying children, or $46,227 ($51,567 if married filing jointly), and you have three or more qualifying children. Turbotax military discount For more information, see Earned Income Credit , later. Turbotax military discount Exemption phaseout. Turbotax military discount  You lose at least part of the benefit of your exemptions if your adjusted gross income is above a certain amount. Turbotax military discount For 2013, the phaseout begins at $150,000 for married individuals filing separate returns; $250,000 for single individuals; $275,000 for heads of household; and $300,000 for married individuals filing joint returns or qualifying widow(er)s. Turbotax military discount For more information, see Phaseout of Exemptions in Publication 501. Turbotax military discount Limit on itemized deductions. Turbotax military discount   Beginning January 1, 2013, itemized deductions for taxpayers with adjusted gross incomes above $150,000 may be reduced. Turbotax military discount See Overall limitation , later. Turbotax military discount Medical and dental expenses. Turbotax military discount   Beginning January 1, 2013, taxpayers 65 and older can deduct only the part of their medical and dental expenses that exceed 7. Turbotax military discount 5% of their adjusted gross income (10% for taxpayers under 65). Turbotax military discount Same-sex marriages. Turbotax military discount  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. Turbotax military discount For more information, see Publication 501. Turbotax military discount Reminders Future developments. Turbotax military discount  For the latest information about developments related to Publication 554, such as legislation enacted after it was published, go to www. Turbotax military discount irs. Turbotax military discount gov/pub554. Turbotax military discount Tax return preparers. Turbotax military discount  Choose your preparer carefully. Turbotax military discount If you pay someone to prepare your return, the preparer is required, under the law, to sign the return and fill in the other blanks in the Paid Preparer's area of your return. Turbotax military discount Remember, however, that you are still responsible for the accuracy of every item entered on your return. Turbotax military discount If there is any underpayment, you are responsible for paying it, plus any interest and penalty that may be due. Turbotax military discount Sale of home by surviving spouse. Turbotax military discount  If you are an unmarried widow or widower, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. Turbotax military discount For more information, see Sale of Home , later. Turbotax military discount Third party designee. Turbotax military discount  You can check the “Yes” box in the Third Party Designee area of your return to authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. Turbotax military discount This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your return. Turbotax military discount It also allows your designee to perform certain actions. Turbotax military discount See your income tax return instructions for details. Turbotax military discount Employment tax withholding. Turbotax military discount  Your wages are subject to withholding for income tax, social security tax, and Medicare tax even if you are receiving social security benefits. Turbotax military discount Photographs of missing children. Turbotax military discount  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Turbotax military discount Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Turbotax military discount You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Turbotax military discount Introduction The purpose of this publication is to provide a general overview of selected topics that are of interest to older taxpayers. Turbotax military discount The publication will help you determine if you need to file a return and, if so, what items to report on your return. Turbotax military discount Each topic is discussed only briefly, so you will find references to other free IRS publications that provide more detail on these topics if you need it. Turbotax military discount Table I has a list of questions you may have about filing your federal tax return. Turbotax military discount To the right of each question is the location of the answer in this publication. Turbotax military discount Also, at the back of this publication there is an index to help you search for the topic you need. Turbotax military discount While most federal income tax laws apply equally to all taxpayers, regardless of age, there are some provisions that give special treatment to older taxpayers. Turbotax military discount The following are some examples. Turbotax military discount Higher gross income threshold for filing. Turbotax military discount You must be age 65 or older at the end of the year to get this benefit. Turbotax military discount You are considered age 65 on the day before your 65th birthday. Turbotax military discount Therefore, you are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. Turbotax military discount Higher standard deduction. Turbotax military discount If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. Turbotax military discount You are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. Turbotax military discount Credit for the elderly or the disabled. Turbotax military discount If you qualify, you may benefit from the credit for the elderly or the disabled. Turbotax military discount To determine if you qualify and how to figure this credit, see Credit for the Elderly or the Disabled , later. Turbotax military discount Return preparation assistance. Turbotax military discount   The IRS wants to make it easier for you to file your federal tax return. Turbotax military discount You may find it helpful to visit a Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), or American Association of Retired Persons (AARP) Tax-Aide site near you. Turbotax military discount Volunteer Income Tax Assistance and Tax Counseling for the Elderly. Turbotax military discount   These programs provide free help for low-income taxpayers and taxpayers age 60 or older to fill in and file their returns. Turbotax military discount For the VITA/TCE site nearest you, contact your local IRS office. Turbotax military discount For more information, see Free help with your tax return under How To Get Tax Help. Turbotax military discount   For the location of an AARP Tax-Aide site in your community, call 1-888-227-7669. Turbotax military discount When asked, be ready to press in or speak your 5-digit ZIP code. Turbotax military discount Or, you can visit their website on the Internet at www. Turbotax military discount aarp. Turbotax military discount org/money/taxaide. Turbotax military discount Comments and suggestions. Turbotax military discount   We welcome your comments about this publication and your suggestions for future editions. Turbotax military discount   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Turbotax military discount NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Turbotax military discount Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Turbotax military discount   You can send your comments from www. Turbotax military discount irs. Turbotax military discount gov/formspubs/. Turbotax military discount Click on “More Information” and then on “Comment on Tax Forms and Publications. Turbotax military discount ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Turbotax military discount Ordering forms and publications. Turbotax military discount   Visit www. Turbotax military discount irs. Turbotax military discount gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 business days after your request is received. Turbotax military discount Internal Revenue Service 1201 N. Turbotax military discount Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Turbotax military discount   If you have a tax question, check the information available on IRS. Turbotax military discount gov or call 1-800-829-1040. Turbotax military discount We cannot answer tax questions sent to either of the above addresses. Turbotax military discount Table I. Turbotax military discount What You Should Know About Federal Taxes Note. Turbotax military discount The following is a list of questions you may have about filling out your federal income tax return. Turbotax military discount  To the right of each question is the location of the answer in this publication. Turbotax military discount What I Should Know Where To Find the Answer Do I need to file a return? See chapter 1. Turbotax military discount Is my income taxable or nontaxable?  If it is nontaxable, must I still report it? See chapter 2. Turbotax military discount How do I report benefits I received from the Social Security Administration or the Railroad Retirement Board?  Are these benefits taxable? See Social Security and Equivalent Railroad Retirement Benefits in chapter 2. Turbotax military discount Must I report the sale of my home?  If I had a gain, is any part of it taxable? See Sale of Home in chapter 2. Turbotax military discount What are some of the items that I can deduct to reduce my income? See chapters 3 and 4. Turbotax military discount How do I report the amounts I set aside for my IRA? See Individual Retirement Arrangement (IRA) Contributions and Deductions in chapter 3. Turbotax military discount Would it be better for me to claim the standard deduction or itemize my deductions? See chapter 4. Turbotax military discount What are some of the credits I can claim to reduce my tax? See chapter 5 for discussions on the credit for the elderly or the disabled, the child and dependent care credit, and the earned income credit. Turbotax military discount Must I make estimated tax payments? See chapter 6. Turbotax military discount How do I contact the IRS or get more information? See chapter 7. Turbotax military discount Prev  Up  Next   Home   More Online Publications
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The Turbotax Military Discount

Turbotax military discount Publication 575 - Main Content Table of Contents General InformationPension. Turbotax military discount Annuity. Turbotax military discount Qualified employee plan. Turbotax military discount Qualified employee annuity. Turbotax military discount Designated Roth account. Turbotax military discount Tax-sheltered annuity plan. Turbotax military discount Fixed-period annuities. Turbotax military discount Annuities for a single life. Turbotax military discount Joint and survivor annuities. Turbotax military discount Variable annuities. Turbotax military discount Disability pensions. Turbotax military discount Variable Annuities Section 457 Deferred Compensation Plans Disability Pensions Insurance Premiums for Retired Public Safety Officers Railroad Retirement Benefits Withholding Tax and Estimated Tax Cost (Investment in the Contract)Foreign employment contributions while a nonresident alien. Turbotax military discount Taxation of Periodic PaymentsPeriod of participation. Turbotax military discount Fully Taxable Payments Partly Taxable Payments Taxation of Nonperiodic PaymentsFiguring the Taxable Amount Loans Treated as Distributions Transfers of Annuity Contracts Lump-Sum Distributions RolloversExceptions. Turbotax military discount No tax withheld. Turbotax military discount Partial rollovers. Turbotax military discount Frozen deposits. Turbotax military discount Reasonable period of time. Turbotax military discount 20% Mandatory withholding. Turbotax military discount How to report. Turbotax military discount How to report. Turbotax military discount Special rule for Roth IRAs and designated Roth accounts. Turbotax military discount Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and BeneficiariesGuaranteed payments. Turbotax military discount How To Get Tax HelpLow Income Taxpayer Clinics General Information Definitions. Turbotax military discount   Some of the terms used in this publication are defined in the following paragraphs. Turbotax military discount Pension. Turbotax military discount   A pension is generally a series of definitely determinable payments made to you after you retire from work. Turbotax military discount Pension payments are made regularly and are based on such factors as years of service and prior compensation. Turbotax military discount Annuity. Turbotax military discount   An annuity is a series of payments under a contract made at regular intervals over a period of more than one full year. Turbotax military discount They can be either fixed (under which you receive a definite amount) or variable (not fixed). Turbotax military discount You can buy the contract alone or with the help of your employer. Turbotax military discount Qualified employee plan. Turbotax military discount   A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries and that meets Internal Revenue Code requirements. Turbotax military discount It qualifies for special tax benefits, such as tax deferral for employer contributions and capital gain treatment or the 10-year tax option for lump-sum distributions (if participants qualify). Turbotax military discount To determine whether your plan is a qualified plan, check with your employer or the plan administrator. Turbotax military discount Qualified employee annuity. Turbotax military discount   A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. Turbotax military discount Designated Roth account. Turbotax military discount   A designated Roth account is a separate account created under a qualified Roth contribution program to which participants may elect to have part or all of their elective deferrals to a 401(k), 403(b), or 457(b) plan designated as Roth contributions. Turbotax military discount Elective deferrals that are designated as Roth contributions are included in your income. Turbotax military discount However, qualified distributions (explained later) are not included in your income. Turbotax military discount You should check with your plan administrator to determine if your plan will accept designated Roth contributions. Turbotax military discount Tax-sheltered annuity plan. Turbotax military discount   A tax-sheltered annuity plan (often referred to as a 403(b) plan or a tax-deferred annuity plan) is a retirement plan for employees of public schools and certain tax-exempt organizations. Turbotax military discount Generally, a tax-sheltered annuity plan provides retirement benefits by purchasing annuity contracts for its participants. Turbotax military discount Types of pensions and annuities. Turbotax military discount   Pensions and annuities include the following types. Turbotax military discount Fixed-period annuities. Turbotax military discount   You receive definite amounts at regular intervals for a specified length of time. Turbotax military discount Annuities for a single life. Turbotax military discount   You receive definite amounts at regular intervals for life. Turbotax military discount The payments end at death. Turbotax military discount Joint and survivor annuities. Turbotax military discount   The first annuitant receives a definite amount at regular intervals for life. Turbotax military discount After he or she dies, a second annuitant receives a definite amount at regular intervals for life. Turbotax military discount The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. Turbotax military discount Variable annuities. Turbotax military discount   You receive payments that may vary in amount for a specified length of time or for life. Turbotax military discount The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds, cost-of-living indexes, or earnings from a mutual fund. Turbotax military discount Disability pensions. Turbotax military discount   You receive disability payments because you retired on disability and have not reached minimum retirement age. Turbotax military discount More than one program. Turbotax military discount   You may receive employee plan benefits from more than one program under a single trust or plan of your employer. Turbotax military discount If you participate in more than one program, you may have to treat each as a separate pension or annuity contract, depending upon the facts in each case. Turbotax military discount Also, you may be considered to have received more than one pension or annuity. Turbotax military discount Your former employer or the plan administrator should be able to tell you if you have more than one contract. Turbotax military discount Example. Turbotax military discount Your employer set up a noncontributory profit-sharing plan for its employees. Turbotax military discount The plan provides that the amount held in the account of each participant will be paid when that participant retires. Turbotax military discount Your employer also set up a contributory defined benefit pension plan for its employees providing for the payment of a lifetime pension to each participant after retirement. Turbotax military discount The amount of any distribution from the profit-sharing plan depends on the contributions (including allocated forfeitures) made for the participant and the earnings from those contributions. Turbotax military discount Under the pension plan, however, a formula determines the amount of the pension benefits. Turbotax military discount The amount of contributions is the amount necessary to provide that pension. Turbotax military discount Each plan is a separate program and a separate contract. Turbotax military discount If you get benefits from these plans, you must account for each separately, even though the benefits from both may be included in the same check. Turbotax military discount Distributions from a designated Roth account are treated separately from other distributions from the plan. Turbotax military discount Qualified domestic relations order (QDRO). Turbotax military discount   A QDRO is a judgment, decree, or order relating to payment of child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent of a participant in a retirement plan. Turbotax military discount The QDRO must contain certain specific information, such as the name and last known mailing address of the participant and each alternate payee, and the amount or percentage of the participant's benefits to be paid to each alternate payee. Turbotax military discount A QDRO may not award an amount or form of benefit that is not available under the plan. Turbotax military discount   A spouse or former spouse who receives part of the benefits from a retirement plan under a QDRO reports the payments received as if he or she were a plan participant. Turbotax military discount The spouse or former spouse is allocated a share of the participant's cost (investment in the contract) equal to the cost times a fraction. Turbotax military discount The numerator of the fraction is the present value of the benefits payable to the spouse or former spouse. Turbotax military discount The denominator is the present value of all benefits payable to the participant. Turbotax military discount   A distribution that is paid to a child or other dependent under a QDRO is taxed to the plan participant. Turbotax military discount Variable Annuities The tax rules in this publication apply both to annuities that provide fixed payments and to annuities that provide payments that vary in amount based on investment results or other factors. Turbotax military discount For example, they apply to commercial variable annuity contracts, whether bought by an employee retirement plan for its participants or bought directly from the issuer by an individual investor. Turbotax military discount Under these contracts, the owner can generally allocate the purchase payments among several types of investment portfolios or mutual funds and the contract value is determined by the performance of those investments. Turbotax military discount The earnings are not taxed until distributed either in a withdrawal or in annuity payments. Turbotax military discount The taxable part of a distribution is treated as ordinary income. Turbotax military discount Net investment income tax. Turbotax military discount   Beginning in 2013, annuities under a nonqualified plan are included in calculating your net investment income for the net investment income tax (NIIT). Turbotax military discount For information see the Instructions for Form 8960, Net Investment Income Tax — Individuals, Estates and Trusts. Turbotax military discount For information on the tax treatment of a transfer or exchange of a variable annuity contract, see Transfers of Annuity Contracts under Taxation of Nonperiodic Payments, later. Turbotax military discount Withdrawals. Turbotax military discount   If you withdraw funds before your annuity starting date and your annuity is under a qualified retirement plan, a ratable part of the amount withdrawn is tax free. Turbotax military discount The tax-free part is based on the ratio of your cost (investment in the contract) to your account balance under the plan. Turbotax military discount   If your annuity is under a nonqualified plan (including a contract you bought directly from the issuer), the amount withdrawn is allocated first to earnings (the taxable part) and then to your cost (the tax-free part). Turbotax military discount However, if you bought your annuity contract before August 14, 1982, a different allocation applies to the investment before that date and the earnings on that investment. Turbotax military discount To the extent the amount withdrawn does not exceed that investment and earnings, it is allocated first to your cost (the tax-free part) and then to earnings (the taxable part). Turbotax military discount   If you withdraw funds (other than as an annuity) on or after your annuity starting date, the entire amount withdrawn is generally taxable. Turbotax military discount   The amount you receive in a full surrender of your annuity contract at any time is tax free to the extent of any cost that you have not previously recovered tax free. Turbotax military discount The rest is taxable. Turbotax military discount   For more information on the tax treatment of withdrawals, see Taxation of Nonperiodic Payments , later. Turbotax military discount If you withdraw funds from your annuity before you reach age 59½, also see Tax on Early Distributions under Special Additional Taxes, later. Turbotax military discount Annuity payments. Turbotax military discount   If you receive annuity payments under a variable annuity plan or contract, you recover your cost tax free under either the Simplified Method or the General Rule, as explained under Taxation of Periodic Payments , later. Turbotax military discount For a variable annuity paid under a qualified plan, you generally must use the Simplified Method. Turbotax military discount For a variable annuity paid under a nonqualified plan (including a contract you bought directly from the issuer), you must use a special computation under the General Rule. Turbotax military discount For more information, see Variable annuities in Publication 939 under Computation Under the General Rule. Turbotax military discount Death benefits. Turbotax military discount    If you receive a single-sum distribution from a variable annuity contract because of the death of the owner or annuitant, the distribution is generally taxable only to the extent it is more than the unrecovered cost of the contract. Turbotax military discount If you choose to receive an annuity, the payments are subject to tax as described above. Turbotax military discount If the contract provides a joint and survivor annuity and the primary annuitant had received annuity payments before death, you figure the tax-free part of annuity payments you receive as the survivor in the same way the primary annuitant did. Turbotax military discount See Survivors and Beneficiaries , later. Turbotax military discount Section 457 Deferred Compensation Plans If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan. Turbotax military discount If your plan is an eligible plan, you are not taxed currently on pay that is deferred under the plan or on any earnings from the plan's investment of the deferred pay. Turbotax military discount You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. Turbotax military discount You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. Turbotax military discount Your 457(b) plan may have a designated Roth account option. Turbotax military discount If so, you may be able to roll over amounts to the designated Roth account or make contributions. Turbotax military discount Elective deferrals to a designated Roth account are included in your income. Turbotax military discount Qualified distributions (explained later) are not included in your income. Turbotax military discount See the Designated Roth accounts discussion under Taxation of Periodic Payments, later. Turbotax military discount This publication covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. Turbotax military discount For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525. Turbotax military discount Is your plan eligible?   To find out if your plan is an eligible plan, check with your employer. Turbotax military discount Plans that are not eligible section 457 plans include the following: Bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plans. Turbotax military discount Nonelective deferred compensation plans for nonemployees (independent contractors). Turbotax military discount Deferred compensation plans maintained by churches. Turbotax military discount Length of service award plans for bona fide volunteer firefighters and emergency medical personnel. Turbotax military discount An exception applies if the total amount paid to a volunteer exceeds $3,000 for any year of service. Turbotax military discount Disability Pensions If you retired on disability, you generally must include in income any disability pension you receive under a plan that is paid for by your employer. Turbotax military discount 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. Turbotax military discount Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Turbotax military discount You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Turbotax military discount For information on this credit, see Publication 524. Turbotax military discount Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Turbotax military discount Report the payments on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. Turbotax military discount Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) are not included in income. Turbotax military discount For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Turbotax military discount 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. Turbotax military discount The premiums can be for coverage for you, your spouse, or dependents. Turbotax military discount The distribution must be made directly from the plan to the insurance provider. Turbotax military discount You can exclude from income the smaller of the amount of the insurance premiums or $3,000. Turbotax military discount You can only make this election for amounts that would otherwise be included in your income. Turbotax military discount The amount excluded from your income cannot be used to claim a medical expense deduction. Turbotax military discount An eligible retirement plan is a governmental plan that is: a qualified trust, a section 403(a) plan, a section 403(b) annuity, or a section 457(b) plan. Turbotax military discount If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. Turbotax military discount The amount shown in box 2a of Form 1099-R does not reflect this exclusion. Turbotax military discount Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Turbotax military discount Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Turbotax military discount Enter “PSO” next to the appropriate line on which you report the taxable amount. Turbotax military discount If you are retired on disability and reporting your disability pension on line 7 of Form 1040 or Form 1040A, or line 8 of Form 1040NR, include only the taxable amount on that line and enter “PSO” and the amount excluded on the dotted line next to the applicable line. Turbotax military discount Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. Turbotax military discount These categories are treated differently for income tax purposes. Turbotax military discount 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. Turbotax military discount This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and you treat it for tax purposes like social security benefits. Turbotax military discount If you received, repaid, or had tax withheld from the SSEB portion of tier 1 benefits during 2013, you will receive Form RRB-1099, Payments by the Railroad Retirement Board (or Form RRB-1042S, Statement for Nonresident Alien Recipients of Payments by the Railroad Retirement Board, if you are a nonresident alien) from the U. Turbotax military discount S. Turbotax military discount Railroad Retirement Board (RRB). Turbotax military discount For more information about the tax treatment of the SSEB portion of tier 1 benefits and Forms RRB-1099 and RRB-1042S, see Publication 915. Turbotax military discount The second category contains the rest of the tier 1 railroad retirement benefits, called the non-social security equivalent benefit (NSSEB). Turbotax military discount It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. Turbotax military discount Treat this category of benefits, shown on Form RRB-1099-R, as an amount received from a qualified employee plan. Turbotax military discount 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. Turbotax military discount (The NSSEB and tier 2 benefits, less certain repayments, are combined into one amount called the Contributory Amount Paid on Form RRB-1099-R. Turbotax military discount ) Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. Turbotax military discount See Taxation of Periodic Payments , later, for information on how to report your benefits and how to recover the employee contributions tax free. Turbotax military discount Form RRB-1099-R is used for U. Turbotax military discount S. Turbotax military discount citizens, resident aliens, and nonresident aliens. Turbotax military discount Nonresident aliens. Turbotax military discount   A nonresident alien is an individual who is not a citizen or a resident alien of the United States. Turbotax military discount Nonresident aliens are subject to mandatory U. Turbotax military discount S. Turbotax military discount tax withholding unless exempt under a tax treaty between the United States and their country of legal residency. Turbotax military discount A tax treaty exemption may reduce or eliminate tax withholding from railroad retirement benefits. Turbotax military discount See Tax withholding next for more information. Turbotax military discount   If you are a nonresident alien and your tax withholding rate changed or your country of legal residence changed during the year, you may receive more than one Form RRB-1042S or Form RRB-1099-R. Turbotax military discount To determine your total benefits paid or repaid and total tax withheld for the year, you should add the amounts shown on all forms you received for that year. Turbotax military discount For information on filing requirements for aliens, see Publication 519, U. Turbotax military discount S. Turbotax military discount Tax Guide for Aliens. Turbotax military discount For information on tax treaties between the United States and other countries that may reduce or eliminate U. Turbotax military discount S. Turbotax military discount tax on your benefits, see Publication 901, U. Turbotax military discount S. Turbotax military discount Tax Treaties. Turbotax military discount Tax withholding. Turbotax military discount   To request or change your income tax withholding from SSEB payments, U. Turbotax military discount S. Turbotax military discount citizens should contact the IRS for Form W-4V, Voluntary Withholding Request, and file it with the RRB. Turbotax military discount To elect, revoke, or change your income tax withholding from NSSEB, tier 2, VDB, and supplemental annuity payments received, use Form RRB W-4P, Withholding Certificate for Railroad Retirement Payments. Turbotax military discount If you are a nonresident alien or a U. Turbotax military discount S. Turbotax military discount citizen living abroad, you should provide Form RRB-1001, Nonresident Questionnaire, to the RRB to furnish citizenship and residency information and to claim any treaty exemption from U. Turbotax military discount S. Turbotax military discount tax withholding. Turbotax military discount Nonresident U. Turbotax military discount S. Turbotax military discount citizens cannot elect to be exempt from withholding on payments delivered outside of the U. Turbotax military discount S. Turbotax military discount Help from the RRB. Turbotax military discount   To request an RRB form or to get help with questions about an RRB benefit, you should contact your nearest RRB field office if you reside in the United States (call 1-877-772-5772 for the nearest field office) or U. Turbotax military discount S. Turbotax military discount consulate/Embassy if you reside outside the United States. Turbotax military discount You can visit the RRB on the Internet at www. Turbotax military discount rrb. Turbotax military discount gov. Turbotax military discount Form RRB-1099-R. Turbotax military discount   The following discussion explains the items shown on Form RRB-1099-R. Turbotax military discount The amounts shown on this form are before any deduction for: Federal income tax withholding, Medicare premiums, Legal process garnishment payments, Recovery of a prior year overpayment of an NSSEB, tier 2 benefit, VDB, or supplemental annuity benefit, or Recovery of Railroad Unemployment Insurance Act benefits received while awaiting payment of your railroad retirement annuity. Turbotax military discount   The amounts shown on this form are after any offset for: Social Security benefits, Age reduction, Public Service pensions or public disability benefits, Dual railroad retirement entitlement under another RRB claim number, Work deductions, Legal process partition deductions, Actuarial adjustment, Annuity waiver, or Recovery of a current-year overpayment of NSSEB, tier 2, VDB, or supplemental annuity benefits. Turbotax military discount   The amounts shown on Form RRB-1099-R do not reflect any special rules, such as capital gain treatment or the special 10-year tax option for lump-sum payments, or tax-free rollovers. Turbotax military discount To determine if any of these rules apply to your benefits, see the discussions about them later. Turbotax military discount   Generally, amounts shown on your Form RRB-1099-R are considered a normal distribution. Turbotax military discount Use distribution code “7” if you are asked for a distribution code. Turbotax military discount Distribution codes are not shown on Form RRB-1099-R. Turbotax military discount   There are three copies of this form. Turbotax military discount Copy B is to be included with your income tax return if federal income tax is withheld. Turbotax military discount Copy C is for your own records. Turbotax military discount Copy 2 is filed with your state, city, or local income tax return, when required. Turbotax military discount See the illustrated Copy B (Form RRB-1099-R) above. Turbotax military discount       Each beneficiary will receive his or her own Form RRB-1099-R. Turbotax military discount If you receive benefits on more than one railroad retirement record, you may get more than one Form RRB-1099-R. Turbotax military discount So that you get your form timely, make sure the RRB always has your current mailing address. Turbotax military discount Please click here for the text description of the image. Turbotax military discount Form RRB-1099-R Box 1—Claim Number and Payee Code. Turbotax military discount   Your claim number is a six- or nine-digit number preceded by an alphabetical prefix. Turbotax military discount This is the number under which the RRB paid your benefits. Turbotax military discount Your payee code follows your claim number and is the last number in this box. Turbotax military discount It is used by the RRB to identify you under your claim number. Turbotax military discount In all your correspondence with the RRB, be sure to use the claim number and payee code shown in this box. Turbotax military discount Box 2—Recipient's Identification Number. Turbotax military discount   This is the recipient's U. Turbotax military discount S. Turbotax military discount taxpayer identification number. Turbotax military discount It is the social security number (SSN), individual taxpayer identification number (ITIN), or employer identification number (EIN), if known, for the person or estate listed as the recipient. Turbotax military discount If you are a resident or nonresident alien who must furnish a taxpayer identification number to the IRS and are not eligible to obtain an SSN, use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN. Turbotax military discount The Instructions for Form W-7 explain how and when to apply. Turbotax military discount Box 3—Employee Contributions. Turbotax military discount   This is the amount of taxes withheld from the railroad employee's earnings that exceeds the amount of taxes that would have been withheld had the earnings been covered under the social security system. Turbotax military discount This amount is the employee's cost that you use to figure the tax-free part of the NSSEB and tier 2 benefit you received (the amount shown in box 4). Turbotax military discount (For information on how to figure the tax-free part, see Partly Taxable Payments under Taxation of Periodic Payments, later. Turbotax military discount ) The amount shown is the total employee contribution amount, not reduced by any amounts that the RRB calculated as previously recovered. Turbotax military discount It is the latest amount reported for 2013 and may have increased or decreased from a previous Form RRB-1099-R. Turbotax military discount If this amount has changed, the change is retroactive. Turbotax military discount You may need to refigure the tax-free part of your NSSEB/tier 2 benefit for 2013 and prior tax years. Turbotax military discount If this box is blank, it means that the amount of your NSSEB and tier 2 payments shown in box 4 is fully taxable. Turbotax military discount    If you had a previous annuity entitlement that ended and you are figuring the tax-free part of your NSSEB/tier 2 benefit for your current annuity entitlement, you should contact the RRB for confirmation of your correct employee contribution amount. Turbotax military discount Box 4—Contributory Amount Paid. Turbotax military discount   This is the gross amount of the NSSEB and tier 2 benefit you received in 2013, less any 2013 benefits you repaid in 2013. Turbotax military discount (Any benefits you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. Turbotax military discount ) This amount is the total contributory pension paid in 2013. Turbotax military discount It may be partly taxable and partly tax free or fully taxable. Turbotax military discount If you determine you are eligible to compute a tax-free part as explained later in Partly Taxable Payments under Taxation of Periodic Payments, use the latest reported employee contribution amount shown in box 3 as the cost. Turbotax military discount Box 5—Vested Dual Benefit. Turbotax military discount   This is the gross amount of vested dual benefit (VDB) payments paid in 2013, less any 2013 VDB payments you repaid in 2013. Turbotax military discount It is fully taxable. Turbotax military discount VDB payments you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. Turbotax military discount Note. Turbotax military discount The amounts shown in boxes 4 and 5 may represent payments for 2013 and/or other years after 1983. Turbotax military discount Box 6—Supplemental Annuity. Turbotax military discount   This is the gross amount of supplemental annuity benefits paid in 2013, less any 2013 supplemental annuity benefits you repaid in 2013. Turbotax military discount It is fully taxable. Turbotax military discount Supplemental annuity benefits you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. Turbotax military discount Box 7—Total Gross Paid. Turbotax military discount   This is the sum of boxes 4, 5, and 6. Turbotax military discount The amount represents the total pension paid in 2013. Turbotax military discount Include this amount on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Turbotax military discount Box 8—Repayments. Turbotax military discount   This amount represents any NSSEB, tier 2 benefit, VDB, and supplemental annuity benefit you repaid to the RRB in 2013 for years before 2013 or for unknown years. Turbotax military discount The amount shown in this box has not been deducted from the amounts shown in boxes 4, 5, and 6. Turbotax military discount It only includes repayments of benefits that were taxable to you. Turbotax military discount This means it only includes repayments in 2013 of NSSEB benefits paid after 1985, tier 2 and VDB benefits paid after 1983, and supplemental annuity benefits paid in any year. Turbotax military discount If you included the benefits in your income in the year you received them, you may be able to deduct the repaid amount. Turbotax military discount For more information about repayments, see Repayment of benefits received in an earlier year , later. Turbotax military discount    You may have repaid an overpayment of benefits by returning a payment, by making a payment, or by having an amount withheld from your railroad retirement annuity payment. Turbotax military discount Box 9—Federal Income Tax Withheld. Turbotax military discount   This is the total federal income tax withheld from your NSSEB, tier 2 benefit, VDB, and supplemental annuity benefit. Turbotax military discount Include this on your income tax return as tax withheld. Turbotax military discount If you are a nonresident alien and your tax withholding rate and/or country of legal residence changed during 2013, you will receive more than one Form RRB-1099-R for 2013. Turbotax military discount Determine the total amount of U. Turbotax military discount S. Turbotax military discount federal income tax withheld from your 2013 RRB NSSEB, tier 2, VDB, and supplemental annuity payments by adding the amounts in box 9 of all original 2013 Forms RRB-1099-R, or the latest corrected or duplicate Forms RRB-1099-R you receive. Turbotax military discount Box 10—Rate of Tax. Turbotax military discount   If you are taxed as a U. Turbotax military discount S. Turbotax military discount citizen or resident alien, this box does not apply to you. Turbotax military discount If you are a nonresident alien, an entry in this box indicates the rate at which tax was withheld on the NSSEB, tier 2, VDB, and supplemental annuity payments that were paid to you in 2013. Turbotax military discount If you are a nonresident alien whose tax was withheld at more than one rate during 2013, you will receive a separate Form RRB-1099-R for each rate change during 2013. Turbotax military discount Box 11—Country. Turbotax military discount   If you are taxed as a U. Turbotax military discount S. Turbotax military discount citizen or resident alien, this box does not apply to you. Turbotax military discount If you are a nonresident alien, an entry in this box indicates the country of which you were a resident for tax purposes at the time you received railroad retirement payments in 2013. Turbotax military discount If you are a nonresident alien who was a resident of more than one country during 2013, you will receive a separate Form RRB-1099-R for each country of residence during 2013. Turbotax military discount Box 12—Medicare Premium Total. Turbotax military discount   This is for information purposes only. Turbotax military discount The amount shown in this box represents the total amount of Part B Medicare premiums deducted from your railroad retirement annuity payments in 2013. Turbotax military discount Medicare premium refunds are not included in the Medicare total. Turbotax military discount The Medicare total is normally shown on Form RRB-1099 (if you are a citizen or resident alien of the United States) or Form RRB-1042S (if you are a nonresident alien). Turbotax military discount However, if Form RRB-1099 or Form RRB-1042S is not required for 2013, then this total will be shown on Form RRB-1099-R. Turbotax military discount If your Medicare premiums were deducted from your social security benefits, paid by a third party, refunded to you, and/or you paid the premiums by direct billing, your Medicare total will not be shown in this box. Turbotax military discount Repayment of benefits received in an earlier year. Turbotax military discount   If you had to repay any railroad retirement benefits that you had included in your income in an earlier year because at that time you thought you had an unrestricted right to it, you can deduct the amount you repaid in the year in which you repaid it. Turbotax military discount   If you repaid $3,000 or less in 2013, deduct it on Schedule A (Form 1040), line 23. Turbotax military discount The 2%-of-adjusted-gross-income limit applies to this deduction. Turbotax military discount You cannot take this deduction if you file Form 1040A. Turbotax military discount    If you repaid more than $3,000 in 2013, you can either take a deduction for the amount repaid on Schedule A (Form 1040), line 28 or you can take a credit against your tax. Turbotax military discount For more information, see Repayments in Publication 525. Turbotax military discount Withholding Tax and Estimated Tax Your retirement plan distributions are subject to federal income tax withholding. Turbotax military discount However, you can choose not to have tax withheld on payments you receive unless they are eligible rollover distributions. Turbotax military discount (These are distributions, described later under Rollovers, that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. Turbotax military discount ) 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. Turbotax military discount See Estimated tax , later. Turbotax military discount The withholding rules apply to the taxable part of payments you receive from: An employer pension, annuity, profit-sharing, or stock bonus plan, Any other deferred compensation plan, A traditional individual retirement arrangement (IRA), or A commercial annuity. Turbotax military discount For this purpose, a commercial annuity means an annuity, endowment, or life insurance contract issued by an insurance company. Turbotax military discount There will be no withholding on any part of a distribution where it is reasonable to believe that it will not be includible in gross income. Turbotax military discount Choosing no withholding. Turbotax military discount   You can choose not to have income tax withheld from retirement plan payments unless they are eligible rollover distributions. Turbotax military discount You can make this choice on Form W-4P for periodic and nonperiodic payments. Turbotax military discount This choice generally remains in effect until you revoke it. Turbotax military discount   The payer will ignore your choice not to have tax withheld if: You do not give the payer your social security number (in the required manner), or The IRS notifies the payer, before the payment is made, that you gave an incorrect social security number. Turbotax military discount   To choose not to have tax withheld, a U. Turbotax military discount S. Turbotax military discount citizen or resident alien must give the payer a home address in the United States or its possessions. Turbotax military discount Without that address, the payer must withhold tax. Turbotax military discount For example, the payer has to withhold tax if the recipient has provided a U. Turbotax military discount S. Turbotax military discount address for a nominee, trustee, or agent to whom the benefits are delivered, but has not provided his or her own U. Turbotax military discount S. Turbotax military discount home address. Turbotax military discount   If you do not give the payer a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to the payer that you are not a U. Turbotax military discount S. Turbotax military discount citizen, a U. Turbotax military discount S. Turbotax military discount resident alien, or someone who left the country to avoid tax. Turbotax military discount But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. Turbotax military discount This 30% rate will not apply if you are exempt or subject to a reduced rate by treaty. Turbotax military discount For details, get Publication 519. Turbotax military discount Periodic payments. Turbotax military discount   Unless you choose no withholding, your annuity or similar periodic payments (other than eligible rollover distributions) will be treated like wages for withholding purposes. Turbotax military discount Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). Turbotax military discount You should give the payer a completed withholding certificate (Form W-4P or a similar form provided by the payer). Turbotax military discount If you do not, tax will be withheld as if you were married and claiming three withholding allowances. Turbotax military discount   Tax will be withheld as if you were single and were claiming no withholding allowances if: You do not give the payer your social security number (in the required manner), or The IRS notifies the payer (before any payment is made) that you gave an incorrect social security number. Turbotax military discount   You must file a new withholding certificate to change the amount of withholding. Turbotax military discount Nonperiodic distributions. Turbotax military discount    Unless you choose no withholding, the withholding rate for a nonperiodic distribution (a payment other than a periodic payment) that is not an eligible rollover distribution is 10% of the distribution. Turbotax military discount You can also ask the payer to withhold an additional amount using Form W-4P. Turbotax military discount The part of any loan treated as a distribution (except an offset amount to repay the loan), explained later, is subject to withholding under this rule. Turbotax military discount Eligible rollover distribution. Turbotax military discount    If you receive an eligible rollover distribution, 20% of it generally will be withheld for income tax. Turbotax military discount You cannot choose not to have tax withheld from an eligible rollover distribution. Turbotax military discount However, tax will not be withheld if you have the plan administrator pay the eligible rollover distribution directly to another qualified plan or an IRA in a direct rollover. Turbotax military discount For more information about eligible rollover distributions, see Rollovers , later. Turbotax military discount Estimated tax. Turbotax military discount   Your estimated tax is the total of your expected income tax, self-employment tax, and certain other taxes for the year, minus your expected credits and withheld tax. Turbotax military discount Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax (after subtracting your withholding and credits) and you expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your 2014 return, or 100% of the tax shown on your 2013 return. Turbotax military discount If your adjusted gross income for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above. Turbotax military discount For more information, get Publication 505, Tax Withholding and Estimated Tax. Turbotax military discount In figuring your withholding or estimated tax, remember that a part of your monthly social security or equivalent tier 1 railroad retirement benefits may be taxable. Turbotax military discount See Publication 915. Turbotax military discount You can choose to have income tax withheld from those benefits. Turbotax military discount Use Form W-4V to make this choice. Turbotax military discount Cost (Investment in the Contract) Distributions from your pension or annuity plan may include amounts treated as a recovery of your cost (investment in the contract). Turbotax military discount If any part of a distribution is treated as a recovery of your cost under the rules explained in this publication, that part is tax free. Turbotax military discount Therefore, the first step in figuring how much of a distribution is taxable is to determine the cost of your pension or annuity. Turbotax military discount In general, your cost is your net investment in the contract as of the annuity starting date (or the date of the distribution, if earlier). Turbotax military discount To find this amount, you must first figure the total premiums, contributions, or other amounts you paid. Turbotax military discount This includes the amounts your employer contributed that were taxable to you when paid. Turbotax military discount (However, see Foreign employment contributions , later. Turbotax military discount ) It does not include amounts withheld from your pay on a tax-deferred basis (money that was taken out of your gross pay before taxes were deducted). Turbotax military discount It also does not include amounts you contributed for health and accident benefits (including any additional premiums paid for double indemnity or disability benefits). Turbotax military discount From this total cost you must subtract the following amounts. Turbotax military discount Any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income and that you received by the later of the annuity starting date or the date on which you received your first payment. Turbotax military discount Any other tax-free amounts you received under the contract or plan by the later of the dates in (1). Turbotax military discount If you must use the Simplified Method for your annuity payments, the tax-free part of any single-sum payment received in connection with the start of the annuity payments, regardless of when you received it. Turbotax military discount (See Simplified Method , later, for information on its required use. Turbotax military discount ) If you use the General Rule for your annuity payments, the value of the refund feature in your annuity contract. Turbotax military discount (See General Rule , later, for information on its use. Turbotax military discount ) Your annuity contract has a refund feature if the annuity payments are for your life (or the lives of you and your survivor) and payments in the nature of a refund of the annuity's cost will be made to your beneficiary or estate if all annuitants die before a stated amount or a stated number of payments are made. Turbotax military discount For more information, see Publication 939. Turbotax military discount The tax treatment of the items described in (1) through (3) is discussed later under Taxation of Nonperiodic Payments . Turbotax military discount Form 1099-R. Turbotax military discount If you began receiving periodic payments of a life annuity in 2013, the payer should show your total contributions to the plan in box 9b of your 2013 Form 1099-R. Turbotax military discount Annuity starting date defined. Turbotax military discount   Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. Turbotax military discount Example. Turbotax military discount On January 1, you completed all your payments required under an annuity contract providing for monthly payments starting on August 1 for the period beginning July 1. Turbotax military discount The annuity starting date is July 1. Turbotax military discount This is the date you use in figuring the cost of the contract and selecting the appropriate number from Table 1 for line 3 of the Simplified Method Worksheet. Turbotax military discount Designated Roth accounts. Turbotax military discount   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. Turbotax military discount Your cost will also include any in-plan Roth rollovers you included in income. Turbotax military discount Foreign employment contributions. Turbotax military discount   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. Turbotax military discount The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (not including the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) but only if the contributions would be excludible from your gross income had they been paid directly to you. Turbotax military discount Foreign employment contributions while a nonresident alien. Turbotax military discount   In determining your cost, special rules apply if you are a U. Turbotax military discount S. Turbotax military discount citizen or resident alien who received distributions in 2013 from a plan to which contributions were made while you were a nonresident alien. Turbotax military discount Your contributions and your employer's contributions are not included in your cost if the contribution: Was made based on compensation which was for services performed outside the United States while you were a nonresident alien, and Was not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if paid as cash compensation when the services were performed. Turbotax military discount Taxation of Periodic Payments This section explains how the periodic payments you receive from a pension or annuity plan are taxed. Turbotax military discount Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). Turbotax military discount These payments are also known as amounts received as an annuity. Turbotax military discount If you receive an amount from your plan that is not a periodic payment, see Taxation of Nonperiodic Payments , later. Turbotax military discount In general, you can recover the cost of your pension or annuity tax free over the period you are to receive the payments. Turbotax military discount The amount of each payment that is more than the part that represents your cost is taxable (however, see Insurance Premiums for Retired Public Safety Officers , earlier). Turbotax military discount Designated Roth accounts. Turbotax military discount   If you receive a qualified distribution from a designated Roth account, the distribution is not included in your gross income. Turbotax military discount This applies to both your cost in the account and income earned on that account. Turbotax military discount 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. Turbotax military discount   If the distribution is not a qualified distribution, the rules discussed in this section apply. Turbotax military discount The designated Roth account is treated as a separate contract. Turbotax military discount Period of participation. Turbotax military discount   The 5-tax-year period of participation is the 5-tax-year period beginning with the first tax year for which the participant made a designated Roth contribution to the plan. Turbotax military discount Therefore, for designated Roth contributions made for 2013, the first year for which a qualified distribution can be made is 2018. Turbotax military discount   However, if a direct rollover is made to the plan from a designated Roth account under another plan, the 5-tax-year period for the recipient plan begins with the first tax year for which the participant first had designated Roth contributions made to the other plan. Turbotax military discount   Your 401(k), 403(b), or 457(b) plan may permit you to roll over amounts from those plans to a designated Roth account within the same plan. Turbotax military discount This is known as an in-plan Roth rollover. Turbotax military discount For more details, see In-plan Roth rollovers , later. Turbotax military discount Fully Taxable Payments The pension or annuity payments that you receive are fully taxable if you have no cost in the contract because any of the following situations applies to you (however, see Insurance Premiums for Retired Public Safety Officers , earlier). Turbotax military discount You did not pay anything or are not considered to have paid anything for your pension or annuity. Turbotax military discount Amounts withheld from your pay on a tax-deferred basis are not considered part of the cost of the pension or annuity payment. Turbotax military discount Your employer did not withhold contributions from your salary. Turbotax military discount You got back all of your contributions tax free in prior years (however, see Exclusion not limited to cost under Partly Taxable Payments, later). Turbotax military discount Report the total amount you got on Form 1040, line 16b; Form 1040A, line 12b; or on Form 1040NR, line 17b. Turbotax military discount You should make no entry on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Turbotax military discount Deductible voluntary employee contributions. Turbotax military discount   Distributions you receive that are based on your accumulated deductible voluntary employee contributions are generally fully taxable in the year distributed to you. Turbotax military discount Accumulated deductible voluntary employee contributions include net earnings on the contributions. Turbotax military discount If distributed as part of a lump sum, they do not qualify for the 10-year tax option or capital gain treatment, explained later. Turbotax military discount Partly Taxable Payments If you have a cost to recover from your pension or annuity plan (see Cost (Investment in the Contract) , earlier), you can exclude part of each annuity payment from income as a recovery of your cost. Turbotax military discount 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. Turbotax military discount The rest of each payment is taxable (however, see Insurance Premiums for Retired Public Safety Officers , earlier). Turbotax military discount You figure the tax-free part of the payment using one of the following methods. Turbotax military discount Simplified Method. Turbotax military discount 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). Turbotax military discount You cannot use this method if your annuity is paid under a nonqualified plan. Turbotax military discount General Rule. Turbotax military discount You must use this method if your annuity is paid under a nonqualified plan. Turbotax military discount You generally cannot use this method if your annuity is paid under a qualified plan. Turbotax military discount 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. Turbotax military discount If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. Turbotax military discount Qualified plan annuity starting before November 19, 1996. Turbotax military discount   If your annuity is paid under a qualified plan and your annuity starting date (defined earlier under Cost (Investment in the Contract) ) is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the Simplified Method or the General Rule. Turbotax military discount If your annuity starting date is before July 2, 1986, you use the General Rule unless your annuity qualified for the Three-Year Rule. Turbotax military discount If you used the Three-Year Rule (which was repealed for annuities starting after July 1, 1986), your annuity payments are generally now fully taxable. Turbotax military discount Exclusion limit. Turbotax military discount   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. Turbotax military discount Once your annuity starting date is determined, it does not change. Turbotax military discount If you calculate the taxable portion of your annuity payments using the simplified method worksheet, the annuity starting date determines the recovery period for your cost. Turbotax military discount That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. Turbotax military discount Exclusion limited to cost. Turbotax military discount   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. Turbotax military discount 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. Turbotax military discount This deduction is not subject to the 2%-of-adjusted-gross-income limit. Turbotax military discount Example 1. Turbotax military discount Your annuity starting date is after 1986, and you exclude $100 a month ($1,200 a year) under the Simplified Method. Turbotax military discount The total cost of your annuity is $12,000. Turbotax military discount Your exclusion ends when you have recovered your cost tax free, that is, after 10 years (120 months). Turbotax military discount After that, your annuity payments are generally fully taxable. Turbotax military discount Example 2. Turbotax military discount The facts are the same as in Example 1, except you die (with no surviving annuitant) after the eighth year of retirement. Turbotax military discount You have recovered tax free only $9,600 (8 × $1,200) of your cost. Turbotax military discount An itemized deduction for your unrecovered cost of $2,400 ($12,000 – $9,600) can be taken on your final return. Turbotax military discount Exclusion not limited to cost. Turbotax military discount   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Turbotax military discount 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. Turbotax military discount The total exclusion may be more than your cost. Turbotax military discount Simplified Method Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. Turbotax military discount For an annuity that is payable for the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Turbotax military discount For any other annuity, this number is the number of monthly annuity payments under the contract. Turbotax military discount Who must use the Simplified Method. Turbotax military discount   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you meet both of the following conditions. Turbotax military discount You receive your pension or annuity payments from any of the following plans. Turbotax military discount A qualified employee plan. Turbotax military discount A qualified employee annuity. Turbotax military discount A tax-sheltered annuity plan (403(b) plan). Turbotax military discount On your annuity starting date, at least one of the following conditions applies to you. Turbotax military discount You are under age 75. Turbotax military discount You are entitled to less than 5 years of guaranteed payments. Turbotax military discount Guaranteed payments. Turbotax military discount   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. Turbotax military discount 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. Turbotax military discount Annuity starting before November 19, 1996. Turbotax military discount   If your annuity starting date is after July 1, 1986, and before November 19, 1996, and you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. Turbotax military discount You could have chosen to use the Simplified Method if your annuity is payable for your life (or the lives of you and your survivor annuitant) and you met both of the conditions listed earlier under Who must use the Simplified Method . Turbotax military discount Who cannot use the Simplified Method. Turbotax military discount   You cannot use the Simplified Method if you receive your pension or annuity from a nonqualified plan or otherwise do not meet the conditions described in the preceding discussion. Turbotax military discount See General Rule , later. Turbotax military discount How to use the Simplified Method. Turbotax military discount    Complete Worksheet A in the back of this publication to figure your taxable annuity for 2013. Turbotax military discount Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. Turbotax military discount   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. Turbotax military discount How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. Turbotax military discount 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. Turbotax military discount    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. Turbotax military discount Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. Turbotax military discount Single-life annuity. Turbotax military discount   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. Turbotax military discount Enter on line 3 the number shown for your age on your annuity starting date. Turbotax military discount This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Turbotax military discount Multiple-lives annuity. Turbotax military discount   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. Turbotax military discount Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. Turbotax military discount 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. Turbotax military discount 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. Turbotax military discount Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. Turbotax military discount   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Turbotax military discount 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. Turbotax military discount This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Turbotax military discount Fixed-period annuity. Turbotax military discount   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. Turbotax military discount Line 6. Turbotax military discount   The amount on line 6 should include all amounts that could have been recovered in prior years. Turbotax military discount If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. Turbotax military discount Example. Turbotax military discount Bill Smith, age 65, began receiving retirement benefits in 2013 under a joint and survivor annuity. Turbotax military discount Bill's annuity starting date is January 1, 2013. Turbotax military discount The benefits are to be paid for the joint lives of Bill and his wife, Kathy, age 65. Turbotax military discount Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Turbotax military discount 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. Turbotax military discount 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. Turbotax military discount Because his annuity is payable over the lives of more than one annuitant, he uses his and Kathy's combined ages and Table 2 at the bottom of Worksheet A in completing line 3 of the worksheet. Turbotax military discount His completed worksheet is shown later. Turbotax military discount Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. Turbotax military discount Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Turbotax military discount The full amount of any annuity payments received after 310 payments are paid must be included in gross income. Turbotax military discount 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. Turbotax military discount This deduction is not subject to the 2%-of-adjusted-gross-income limit. Turbotax military discount Worksheet A. Turbotax military discount Simplified Method Worksheet for Bill Smith 1. Turbotax military discount Enter the total pension or annuity payments received this year. Turbotax military discount Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Turbotax military discount $14,400 2. Turbotax military discount Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion. Turbotax military discount * See Cost (Investment in the Contract) , earlier 2. Turbotax military discount 31,000   Note. Turbotax military discount 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). Turbotax military discount Otherwise, go to line 3. Turbotax military discount     3. Turbotax military discount Enter the appropriate number from Table 1 below. Turbotax military discount 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. Turbotax military discount 310 4. Turbotax military discount Divide line 2 by the number on line 3 4. Turbotax military discount 100 5. Turbotax military discount Multiply line 4 by the number of months for which this year's payments were made. Turbotax military discount If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Turbotax military discount Otherwise, go to line 6 5. Turbotax military discount 1,200 6. Turbotax military discount Enter any amount previously recovered tax free in years after 1986. Turbotax military discount This is the amount shown on line 10 of your worksheet for last year 6. Turbotax military discount -0- 7. Turbotax military discount Subtract line 6 from line 2 7. Turbotax military discount 31,000 8. Turbotax military discount Enter the smaller of line 5 or line 7 8. Turbotax military discount 1,200 9. Turbotax military discount Taxable amount for year. Turbotax military discount Subtract line 8 from line 1. Turbotax military discount Enter the result, but not less than zero. Turbotax military discount Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Turbotax military discount Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Turbotax military discount 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 9. Turbotax military discount $13,200 10. Turbotax military discount Was your annuity starting date before 1987? □ Yes. Turbotax military discount STOP. Turbotax military discount Do not complete the rest of this worksheet. Turbotax military discount  ☑ No. Turbotax military discount Add lines 6 and 8. Turbotax military discount This is the amount you have recovered tax free through 2013. Turbotax military discount You will need this number if you need to fill out this worksheet next year 10. Turbotax military discount 1,200 11. Turbotax military discount Balance of cost to be recovered. Turbotax military discount Subtract line 10 from line 2. Turbotax military discount If zero, you will not have to complete this worksheet next year. Turbotax military discount The payments you receive next year will generally be fully taxable 11. Turbotax military discount $29,800         * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Turbotax military discount           Table 1 for Line 3 Above       AND your annuity starting date was—     IF the age at annuity starting date was. Turbotax military discount . Turbotax military discount . Turbotax military discount BEFORE November 19, 1996, enter on line 3. Turbotax military discount . Turbotax military discount . Turbotax military discount AFTER November 18, 1996, enter on line 3. Turbotax military discount . Turbotax military discount . Turbotax military discount     55 or under 300 360     56-60 260 310     61-65 240 260     66-70 170 210     71 or older 120 160     Table 2 for Line 3 Above     IF the combined ages at  annuity starting date were. Turbotax military discount . Turbotax military discount . Turbotax military discount THEN enter on line 3. Turbotax military discount . Turbotax military discount . Turbotax military discount     110 or under   410     111-120   360     121-130   310     131-140   260     141 or older   210   Multiple annuitants. Turbotax military discount   If you and one or more other annuitants receive payments at the same time, you exclude from each annuity payment a pro rata share of the monthly tax-free amount. Turbotax military discount Figure your share by taking the following steps. Turbotax military discount Complete your worksheet through line 4 to figure the monthly tax-free amount. Turbotax military discount Divide the amount of your monthly payment by the total amount of the monthly payments to all annuitants. Turbotax military discount Multiply the amount on line 4 of your worksheet by the amount figured in (2) above. Turbotax military discount The result is your share of the monthly tax-free amount. Turbotax military discount   Replace the amount on line 4 of the worksheet with the result in (3) above. Turbotax military discount Enter that amount on line 4 of your worksheet each year. Turbotax military discount General Rule Under the General Rule, you determine the tax-free part of each annuity payment based on the ratio of the cost of the contract to the total expected return. Turbotax military discount Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. Turbotax military discount To figure it, you must use life expectancy (actuarial) tables prescribed by the IRS. Turbotax military discount Who must use the General Rule. Turbotax military discount   You must use the General Rule if you receive pension or annuity payments from: A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or A qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years. Turbotax military discount Annuity starting before November 19, 1996. Turbotax military discount   If your annuity starting date is after July 1, 1986, and before November 19, 1996, you had to use the General Rule for either circumstance just described. Turbotax military discount You also had to use it for any fixed-period annuity. Turbotax military discount If you did not have to use the General Rule, you could have chosen to use it. Turbotax military discount If your annuity starting date is before July 2, 1986, you had to use the General Rule unless you could use the Three-Year Rule. Turbotax military discount   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. Turbotax military discount Who cannot use the General Rule. Turbotax military discount   You cannot use the General Rule if you receive your pension or annuity from a qualified plan and none of the circumstances described in the preceding discussions apply to you. Turbotax military discount See Simplified Method , earlier. Turbotax military discount More information. Turbotax military discount   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. Turbotax military discount Taxation of Nonperiodic Payments This section of the publication explains how any nonperiodic distributions you receive under a pension or annuity plan are taxed. Turbotax military discount Nonperiodic distributions are also known as amounts not received as an annuity. Turbotax military discount They include all payments other than periodic payments and corrective distributions. Turbotax military discount For example, the following items are treated as nonperiodic distributions. Turbotax military discount Cash withdrawals. Turbotax military discount Distributions of current earnings (dividends) on your investment. Turbotax military discount However, do not include these distributions in your income to the extent the insurer keeps them to pay premiums or other consideration for the contract. Turbotax military discount Certain loans. Turbotax military discount See Loans Treated as Distributions , later. Turbotax military discount The value of annuity contracts transferred without full and adequate consideration. Turbotax military discount See Transfers of Annuity Contracts , later. Turbotax military discount Corrective distributions of excess plan contributions. Turbotax military discount   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. Turbotax military discount To correct an excess, your plan may distribute it to you (along with any income earned on the excess). Turbotax military discount Although the plan reports the corrective distributions on Form 1099-R, the distribution is not treated as a nonperiodic distribution from the plan. Turbotax military discount It is not subject to the allocation rules explained in the following discussion, it cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. Turbotax military discount    If your retirement plan made a corrective distribution of excess amounts (excess deferrals, excess contributions, or excess annual additions), your Form 1099-R should have the code “8,” “B,” “P,” or “E” in box 7. Turbotax military discount   For information on plan contribution limits and how to report corrective distributions of excess contributions, see Retirement Plan Contributions under Employee Compensation in Publication 525. Turbotax military discount Figuring the Taxable Amount How you figure the taxable amount of a nonperiodic distribution depends on whether it is made before the annuity starting date, or on or after the annuity starting date. Turbotax military discount If it is made before the annuity starting date, its tax treatment also depends on whether it is made under a qualified or nonqualified plan. Turbotax military discount If it is made under a nonqualified plan, its tax treatment depends on whether it fully discharges the contract, is received under certain life insurance or endowment contracts, or is allocable to an investment you made before August 14, 1982. Turbotax military discount You may be able to roll over the taxable amount of a nonperiodic distribution from a qualified retirement plan into another qualified retirement plan or a traditional IRA tax free. Turbotax military discount See Rollovers, later. Turbotax military discount If you do not make a tax-free rollover and the distribution qualifies as a lump-sum distribution, you may be able to elect an optional method of figuring the tax on the taxable amount. Turbotax military discount See Lump-Sum Distributions, later. Turbotax military discount Annuity starting date. Turbotax military discount   The annuity starting date is either the first day of the first period for which you receive an annuity payment under the contract or the date on which the obligation under the contract becomes fixed, whichever is later. Turbotax military discount Distributions of employer securities. Turbotax military discount    If you receive a distribution of employer securities from a qualified retirement plan, you may be able to defer the tax on the net unrealized appreciation (NUA) in the securities. Turbotax military discount The NUA is the net increase in the securities' value while they were in the trust. Turbotax military discount This tax deferral applies to distributions of the employer corporation's stocks, bonds, registered debentures, and debentures with interest coupons attached. Turbotax military discount   If the distribution is a lump-sum distribution, tax is deferred on all of the NUA unless you choose to include it in your income for the year of the distribution. Turbotax military discount    A lump-sum distribution for this purpose is the distribution or payment of a plan participant's entire balance (within a single tax year) from all of the employer's qualified plans of one kind (pension, profit-sharing, or stock bonus plans), but only if paid: Because of the plan participant's death, After the participant reaches age 59½, Because the participant, if an employee, separates from service, or After the participant, if a self-employed individual, becomes totally and permanently disabled. Turbotax military discount    If you choose to include NUA in your income for the year of the distribution and the participant was born before January 2, 1936, you may be able to figure the tax on the NUA using the optional methods described und