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Eztaxform

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Eztaxform

Eztaxform Publication 915 - Main Content Table of Contents Are Any of Your Benefits Taxable?Worksheet A. Eztaxform Exemption from withholding. Eztaxform How To Report Your Benefits How Much Is Taxable?Examples Lump-Sum ElectionExample Deductions Related to Your BenefitsRepayments More Than Gross Benefits Worksheets AppendixForm SSA-1099, Social Security Benefit Statement 2013 Form SSA-1042S, Social Security Benefit Statement 2013 (Nonresident Aliens) Form RRB-1099, Payments by the Railroad Retirement Board 2013 Form RRB-1042S, Payments by the Railroad Retirement Board 2013 (Nonresident Aliens) How To Get Tax HelpLow Income Taxpayer Clinics Are Any of Your Benefits Taxable? To find out whether any of your benefits shown on Forms SSA-1099 and RRB-1099 may be taxable, compare the base amount (explained later) for your filing status with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Eztaxform When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Eztaxform S. Eztaxform savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned by bona fide residents of American Samoa or Puerto Rico. Eztaxform Children's benefits. Eztaxform   The rules in this publication apply to benefits received by children. Eztaxform See Who is taxed , later. Eztaxform The SSA issues Form SSA-1099 and Form SSA-1042S. Eztaxform The RRB issues Form RRB-1099 and Form RRB-1042S. Eztaxform These forms (tax statements) report the amounts paid and repaid, and taxes withheld for a tax year. Eztaxform You may receive more than one of these forms for the same tax year. Eztaxform See the Appendix at the end of this publication for more information. Eztaxform Each original Form RRB-1099 or Form RRB-1042S is valid unless it has been corrected. Eztaxform The RRB will issue a corrected Form RRB-1099 or Form RRB-1042S if there is an error in the original. Eztaxform A corrected Form RRB-1099 or Form RRB-1042S is indicated as “CORRECTED” and replaces the corresponding original Form RRB-1099 or Form RRB-1042S. Eztaxform You must use the latest corrected Form RRB-1099 or Form RRB-1042S you received and any original Form RRB-1099 or Form RRB-1042S that the RRB has not corrected when you determine what amounts to report on your tax return. Eztaxform Figuring total income. Eztaxform   To figure the total of one-half of your benefits plus your other income, use Worksheet A, discussed later. Eztaxform If the total is more than your base amount, part of your benefits may be taxable. Eztaxform   If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Eztaxform Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Eztaxform If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Eztaxform If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Eztaxform Base amount. Eztaxform   Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. Eztaxform Worksheet A. Eztaxform   You can use Worksheet A to figure the amount of income to compare with your base amount. Eztaxform This is a quick way to check whether some of your benefits may be taxable. Eztaxform     Worksheet A. Eztaxform A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. Eztaxform Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Eztaxform Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Eztaxform (If you received more than one form, combine the amounts from box 5 and enter the total. Eztaxform ) A. Eztaxform   Note. Eztaxform If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Eztaxform B. Eztaxform Enter one-half of the amount on line A B. Eztaxform   C. Eztaxform Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Eztaxform   D. Eztaxform Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Eztaxform   E. Eztaxform Add lines B, C, and D E. Eztaxform   Note. Eztaxform Compare the amount on line E to your base amount for your filing status. Eztaxform If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Eztaxform If the amount on line E is more than your base amount, some of your benefits may be taxable. Eztaxform You need to complete Worksheet 1, shown later. Eztaxform If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits . Eztaxform   Example. Eztaxform You and your spouse (both over 65) are filing a joint return for 2013 and you both received social security benefits during the year. Eztaxform In January 2014, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Eztaxform Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. Eztaxform You also received a taxable pension of $22,800 and interest income of $500. Eztaxform You did not have any tax-exempt interest income. Eztaxform Your benefits are not taxable for 2013 because your income, as figured in Worksheet A below, is not more than your base amount ($32,000) for married filing jointly. Eztaxform   Even though none of your benefits are taxable, you must file a return for 2013 because your taxable gross income ($23,300) exceeds the minimum filing requirement amount for your filing status. Eztaxform     Filled-in Worksheet A. Eztaxform A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. Eztaxform Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Eztaxform Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Eztaxform (If you received more than one form, combine the amounts from box 5 and enter the total. Eztaxform ) A. Eztaxform $11,000 Note. Eztaxform If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Eztaxform B. Eztaxform Enter one-half of the amount on line A B. Eztaxform 5,500 C. Eztaxform Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Eztaxform 23,300 D. Eztaxform Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Eztaxform -0- E. Eztaxform Add lines B, C, and D E. Eztaxform $28,800 Note. Eztaxform Compare the amount on line E to your base amount for your filing status. Eztaxform If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Eztaxform If the amount on line E is more than your base amount, some of your benefits may be taxable. Eztaxform You need to complete Worksheet 1, shown later. Eztaxform If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits . Eztaxform   Who is taxed. Eztaxform   Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. Eztaxform For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. Eztaxform One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to your child. Eztaxform Repayment of benefits. Eztaxform   Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Eztaxform It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Eztaxform If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Eztaxform   Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Eztaxform Your repayments are shown in box 4. Eztaxform The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Eztaxform Use the amount in box 5 to figure whether any of your benefits are taxable. Eztaxform Example. Eztaxform In 2012, you received $3,000 in social security benefits, and in 2013 you received $2,700. Eztaxform In March 2013, SSA notified you that you should have received only $2,500 in benefits in 2012. Eztaxform During 2013, you repaid $500 to SSA. Eztaxform The Form SSA-1099 you received for 2013 shows $2,700 in box 3 (gross amount) and $500 in box 4 (repayment). Eztaxform The amount in box 5 shows your net benefits of $2,200 ($2,700 minus $500). Eztaxform Tax withholding and estimated tax. Eztaxform   You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement benefits. Eztaxform If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Statement. Eztaxform   If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the year. Eztaxform For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. Eztaxform U. Eztaxform S. Eztaxform citizens residing abroad. Eztaxform   U. Eztaxform S. Eztaxform citizens who are residents of the following countries are exempt from U. Eztaxform S. Eztaxform tax on their benefits. Eztaxform Canada. Eztaxform Egypt. Eztaxform Germany. Eztaxform Ireland. Eztaxform Israel. Eztaxform Italy. Eztaxform (You must also be a citizen of Italy for the exemption to apply. Eztaxform ) Romania. Eztaxform United Kingdom. Eztaxform   The SSA will not withhold U. Eztaxform S. Eztaxform tax from your benefits if you are a U. Eztaxform S. Eztaxform citizen. Eztaxform   The RRB will withhold U. Eztaxform S. Eztaxform tax from your benefits unless you file Form RRB-1001, Nonresident Questionnaire, with the RRB to provide citizenship and residency information. Eztaxform If you do not file Form RRB-1001, the RRB will consider you a nonresident alien and withhold tax from your railroad retirement benefits at a 30% rate. Eztaxform Contact the RRB to get this form. Eztaxform Lawful permanent residents. Eztaxform   For U. Eztaxform S. Eztaxform income tax purposes, lawful permanent residents (green card holders) are considered resident aliens until their lawful permanent resident status under the immigration laws is either taken away or is administratively or judicially determined to have been abandoned. Eztaxform Social security benefits paid to a green card holder are not subject to 30% withholding. Eztaxform If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. Eztaxform SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. Eztaxform If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. Eztaxform You must also attach the following information to your Form 1040 or 1040A: A copy of the Form SSA-1042S, Social Security Benefit Statement, A copy of the “green card,” and A signed declaration that includes the following statements:    “The SSA should not have withheld federal income tax from my social security benefits because I am a U. Eztaxform S. Eztaxform lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. Eztaxform I am filing a U. Eztaxform S. Eztaxform income tax return for the tax year as a resident alien reporting all of my worldwide income. Eztaxform I have not claimed benefits for the tax year under an income tax treaty as a nonresident alien. Eztaxform ” Nonresident aliens. Eztaxform   A nonresident alien is an individual who is not a citizen or resident of the United States. Eztaxform If you are a nonresident alien, the rules discussed in this publication do not apply to you. Eztaxform Instead, 85% of your benefits are taxed at a 30% rate, unless exempt (or subject to a lower rate) by treaty. Eztaxform You will receive a Form SSA-1042S or Form RRB-1042S showing the amount of your benefits. Eztaxform These forms will also show the tax rate and the amount of tax withheld from your benefits. Eztaxform   Under tax treaties with the following countries, residents of these countries are exempt from U. Eztaxform S. Eztaxform tax on their benefits. Eztaxform Canada. Eztaxform Egypt. Eztaxform Germany. Eztaxform Ireland. Eztaxform Israel. Eztaxform Italy. Eztaxform Japan. Eztaxform Romania. Eztaxform United Kingdom. Eztaxform   Under a treaty with India, benefits paid to individuals who are both residents and nationals of India are exempt from U. Eztaxform S. Eztaxform tax if the benefits are for services performed for the United States, its subdivisions, or local government authorities. Eztaxform   If you are a resident of Switzerland, your total benefit amount will be taxed at a 15% rate. Eztaxform   For more information on whether you are a nonresident alien, see Publication 519, U. Eztaxform S. Eztaxform Tax Guide for Aliens. Eztaxform Exemption from withholding. Eztaxform   If your social security benefits are exempt from tax because you are a resident of one of the treaty countries listed, the SSA will not withhold U. Eztaxform S. Eztaxform tax from your benefits. Eztaxform   If your railroad retirement benefits are exempt from tax because you are a resident of one of the treaty countries listed, you can claim an exemption from withholding by filing Form RRB-1001 with the RRB. Eztaxform Contact the RRB to get this form. Eztaxform Canadian or German social security benefits paid to U. Eztaxform S. Eztaxform residents. Eztaxform   Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U. Eztaxform S. Eztaxform residents are treated for U. Eztaxform S. Eztaxform income tax purposes as if they were paid under the social security legislation of the United States. Eztaxform If you receive social security benefits from Canada or Germany, include them on line 1 of Worksheet 1, shown later. Eztaxform How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040 or Form 1040A. Eztaxform You cannot use Form 1040EZ. Eztaxform Reporting on Form 1040. Eztaxform   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 20a and the taxable part on line 20b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Eztaxform Reporting on Form 1040A. Eztaxform   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 14a and the taxable part on line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Eztaxform Benefits not taxable. Eztaxform   If you are filing Form 1040EZ, do not report any benefits on your tax return. Eztaxform If you are filing Form 1040 or Form 1040A, report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform How Much Is Taxable? If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Eztaxform Generally, the higher that total amount, the greater the taxable part of your benefits. Eztaxform Maximum taxable part. Eztaxform   Generally, up to 50% of your benefits will be taxable. Eztaxform However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Eztaxform The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Eztaxform You are married filing separately and lived with your spouse at any time during 2013. Eztaxform Which worksheet to use. Eztaxform   A worksheet you can use to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. Eztaxform You can use either that worksheet or Worksheet 1 in this publication, unless any of the following situations applies to you. Eztaxform You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. Eztaxform In this situation you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Eztaxform Situation (1) does not apply and you take an exclusion for interest from qualified U. Eztaxform S. Eztaxform savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Eztaxform In this situation, you must use Worksheet 1 in this publication to figure your taxable benefits. Eztaxform You received a lump-sum payment for an earlier year. Eztaxform In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in this publication. Eztaxform See Lump-Sum Election , later. Eztaxform Examples A few examples you can use as a guide to figure the taxable part of your benefits follow. Eztaxform Filled-in Worksheet 1. Eztaxform Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Eztaxform None of your benefits are taxable for 2013. Eztaxform For more information, see Repayments More Than Gross Benefits . Eztaxform If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Eztaxform S. Eztaxform Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Eztaxform Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Eztaxform 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Eztaxform Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Eztaxform $5,980         2. Eztaxform Enter one-half of line 1 2. Eztaxform 2,990     3. Eztaxform Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Eztaxform 28,990     4. Eztaxform Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Eztaxform -0-     5. Eztaxform Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Eztaxform -0-     6. Eztaxform Combine lines 2, 3, 4, and 5 6. Eztaxform 31,980     7. Eztaxform Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Eztaxform  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Eztaxform -0-     8. Eztaxform Is the amount on line 7 less than the amount on line 6?             No. Eztaxform None of your social security benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Eztaxform             Yes. Eztaxform Subtract line 7 from line 6 8. Eztaxform 31,980     9. Eztaxform If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Eztaxform 25,000       Note. Eztaxform If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then go to line 18. Eztaxform         10. Eztaxform Is the amount on line 9 less than the amount on line 8?             No. Eztaxform None of your benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Eztaxform             Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform 6,980     11. Eztaxform Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Eztaxform 9,000     12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform -0-     13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform 6,980     14. Eztaxform Enter one-half of line 13 14. Eztaxform 3,490     15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform 2,990     16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform -0-     17. Eztaxform Add lines 15 and 16 17. Eztaxform 2,990     18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform 5,083     19. Eztaxform Taxable benefits. Eztaxform Enter the smaller of line 17 or line 18. Eztaxform Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Eztaxform $2,990       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Eztaxform         Example 1. Eztaxform George White is single and files Form 1040 for 2013. Eztaxform In addition to receiving social security payments, he received a fully taxable pension of $18,600, wages from a part-time job of $9,400, and taxable interest income of $990, for a total of $28,990. Eztaxform He received a Form SSA-1099 in January 2014 that shows his net social security benefits of $5,980 in box 5. Eztaxform   To figure his taxable benefits, George completes Worksheet 1, shown below. Eztaxform On line 20a of his Form 1040, George enters his net benefits of $5,980. Eztaxform On line 20b, he enters his taxable benefits of $2,990. Eztaxform Example 2. Eztaxform Ray and Alice Hopkins file a joint return on Form 1040A for 2013. Eztaxform Ray is retired and received a fully taxable pension of $15,500. Eztaxform He also received social security benefits and his Form SSA-1099 for 2013 shows net benefits of $5,600 in box 5. Eztaxform Alice worked during the year and had wages of $14,000. Eztaxform She made a deductible payment to her IRA account of $1,000. Eztaxform Ray and Alice have two savings accounts with a total of $250 in taxable interest income. Eztaxform They complete Worksheet 1, entering $29,750 ($15,500 + $14,000 + $250) on line 3. Eztaxform They find none of Ray's social security benefits are taxable. Eztaxform On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b. Eztaxform Filled-in Worksheet 1. Eztaxform Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Eztaxform None of your benefits are taxable for 2013. Eztaxform For more information, see Repayments More Than Gross Benefits . Eztaxform If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Eztaxform S. Eztaxform Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Eztaxform Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Eztaxform 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Eztaxform Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Eztaxform $5,600         2. Eztaxform Enter one-half of line 1 2. Eztaxform 2,800     3. Eztaxform Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Eztaxform 29,750     4. Eztaxform Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Eztaxform -0-     5. Eztaxform Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Eztaxform -0-     6. Eztaxform Combine lines 2, 3, 4, and 5 6. Eztaxform 32,550     7. Eztaxform Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Eztaxform  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Eztaxform 1,000     8. Eztaxform Is the amount on line 7 less than the amount on line 6?             No. Eztaxform None of your social security benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Eztaxform             Yes. Eztaxform Subtract line 7 from line 6 8. Eztaxform 31,550     9. Eztaxform If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Eztaxform 32,000       Note. Eztaxform If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then go to line 18. Eztaxform         10. Eztaxform Is the amount on line 9 less than the amount on line 8?             No. Eztaxform None of your benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Eztaxform             Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform       11. Eztaxform Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Eztaxform       12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform       13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform       14. Eztaxform Enter one-half of line 13 14. Eztaxform       15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform       16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform       17. Eztaxform Add lines 15 and 16 17. Eztaxform       18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform       19. Eztaxform Taxable benefits. Eztaxform Enter the smaller of line 17 or line 18. Eztaxform Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Eztaxform         If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Eztaxform         Example 3. Eztaxform Joe and Betty Johnson file a joint return on Form 1040 for 2013. Eztaxform Joe is a retired railroad worker and in 2013 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Eztaxform Joe's Form RRB-1099 shows $10,000 in box 5. Eztaxform Betty is a retired government worker and received a fully taxable pension of $38,000. Eztaxform They had $2,300 in taxable interest income plus interest of $200 on a qualified U. Eztaxform S. Eztaxform savings bond. Eztaxform The savings bond interest qualified for the exclusion. Eztaxform They figure their taxable benefits by completing Worksheet 1 below. Eztaxform Because they have qualified U. Eztaxform S. Eztaxform savings bond interest, they follow the note at the beginning of the worksheet and use the amount from line 2 of their Schedule B (Form 1040A or 1040) on line 3 of the worksheet instead of the amount from line 8a of their Form 1040. Eztaxform On line 3 of the worksheet, they enter $40,500 ($38,000 + $2,500). Eztaxform More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. Eztaxform (See Maximum taxable part under How Much Is Taxable earlier. Eztaxform ) Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b. Eztaxform Filled-in Worksheet 1. Eztaxform Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Eztaxform None of your benefits are taxable for 2013. Eztaxform For more information, see Repayments More Than Gross Benefits . Eztaxform If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Eztaxform S. Eztaxform Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Eztaxform Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Eztaxform 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Eztaxform Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Eztaxform $10,000         2. Eztaxform Enter one-half of line 1 2. Eztaxform 5,000     3. Eztaxform Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Eztaxform 40,500     4. Eztaxform Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Eztaxform -0-     5. Eztaxform Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Eztaxform -0-     6. Eztaxform Combine lines 2, 3, 4, and 5 6. Eztaxform 45,500     7. Eztaxform Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Eztaxform  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Eztaxform -0-     8. Eztaxform Is the amount on line 7 less than the amount on line 6?             No. Eztaxform None of your social security benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Eztaxform             Yes. Eztaxform Subtract line 7 from line 6 8. Eztaxform 45,500     9. Eztaxform If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Eztaxform 32,000       Note. Eztaxform If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then go to line 18. Eztaxform         10. Eztaxform Is the amount on line 9 less than the amount on line 8?             No. Eztaxform None of your benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Eztaxform             Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform 13,500     11. Eztaxform Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Eztaxform 12,000     12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform 1,500     13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform 12,000     14. Eztaxform Enter one-half of line 13 14. Eztaxform 6,000     15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform 5,000     16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform 1,275     17. Eztaxform Add lines 15 and 16 17. Eztaxform 6,275     18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform 8,500     19. Eztaxform Taxable benefits. Eztaxform Enter the smaller of line 17 or line 18. Eztaxform Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Eztaxform $6,275       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Eztaxform         Filled-in Worksheet 1. Eztaxform Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Eztaxform None of your benefits are taxable for 2013. Eztaxform For more information, see Repayments More Than Gross Benefits . Eztaxform If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Eztaxform S. Eztaxform Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Eztaxform Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Eztaxform 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Eztaxform Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Eztaxform $4,000         2. Eztaxform Enter one-half of line 1 2. Eztaxform 2,000     3. Eztaxform Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Eztaxform 8,000     4. Eztaxform Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Eztaxform -0-     5. Eztaxform Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Eztaxform -0-     6. Eztaxform Combine lines 2, 3, 4, and 5 6. Eztaxform 10,000     7. Eztaxform Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Eztaxform  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Eztaxform -0-     8. Eztaxform Is the amount on line 7 less than the amount on line 6?             No. Eztaxform None of your social security benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Eztaxform             Yes. Eztaxform Subtract line 7 from line 6 8. Eztaxform 10,000     9. Eztaxform If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Eztaxform         Note. Eztaxform If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then go to line 18. Eztaxform         10. Eztaxform Is the amount on line 9 less than the amount on line 8?             No. Eztaxform None of your benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Eztaxform             Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform       11. Eztaxform Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Eztaxform       12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform       13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform       14. Eztaxform Enter one-half of line 13 14. Eztaxform       15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform       16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform       17. Eztaxform Add lines 15 and 16 17. Eztaxform 8,500     18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform 3,400     19. Eztaxform Taxable benefits. Eztaxform Enter the smaller of line 17 or line 18. Eztaxform Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Eztaxform $3,400       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Eztaxform         Example 4. Eztaxform Bill and Eileen Jones are married and live together, but file separate Form 1040 returns for 2013. Eztaxform Bill earned $8,000 during 2013. Eztaxform The only other income he had for the year was $4,000 net social security benefits (box 5 of his Form SSA-1099). Eztaxform Bill figures his taxable benefits by completing Worksheet 1 below. Eztaxform He must include 85% of his social security benefits in his taxable income because he is married filing separately and lived with his spouse during 2013. Eztaxform See How Much Is Taxable earlier. Eztaxform Bill enters $4,000 on his Form 1040, line 20a, and $3,400 on Form 1040, line 20b. Eztaxform Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Eztaxform This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Eztaxform No part of the lump-sum death benefit is subject to tax. Eztaxform Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Eztaxform However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Eztaxform You can elect this method if it lowers your taxable benefits. Eztaxform Under the lump-sum election method, you refigure the taxable part of all your benefits for the earlier year (including the lump-sum payment) using that year's income. Eztaxform Then you subtract any taxable benefits for that year that you previously reported. Eztaxform The remainder is the taxable part of the lump-sum payment. Eztaxform Add it to the taxable part of your benefits for 2013 (figured without the lump-sum payment for the earlier year). Eztaxform Because the earlier year's taxable benefits are included in your 2013 income, no adjustment is made to the earlier year's return. Eztaxform Do not file an amended return for the earlier year. Eztaxform Will the lump-sum election method lower your taxable benefits?   To find out, take the following steps. Eztaxform Complete Worksheet 1 in this publication. Eztaxform Complete Worksheet 2 and Worksheet 3 as appropriate. Eztaxform Use Worksheet 2 if your lump-sum payment was for a year after 1993. Eztaxform Use Worksheet 3 if it was for 1993 or an earlier year. Eztaxform Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received the lump-sum payment. Eztaxform Complete Worksheet 4. Eztaxform Compare the taxable benefits on line 19 of Worksheet 1 with the taxable benefits on line 21 of Worksheet 4. Eztaxform If the taxable benefits on Worksheet 4 are lower than the taxable benefits on Worksheet 1, you can elect to report the lower amount on your return. Eztaxform Making the election. Eztaxform   If you elect to report your taxable benefits under the lump-sum election method, follow the instructions at the bottom of Worksheet 4. Eztaxform Do not attach the completed worksheets to your return. Eztaxform Keep them with your records. Eztaxform    Once you elect this method of figuring the taxable part of a lump-sum payment, you can revoke your election only with the consent of the IRS. Eztaxform Lump-sum payment reported on Form SSA-1099 or RRB-1099. Eztaxform   If you received a lump-sum payment in 2013 that includes benefits for one or more earlier years after 1983, it will be included in box 3 of either Form SSA-1099 or Form RRB-1099. Eztaxform That part of any lump-sum payment for years before 1984 is not taxed and will not be shown on the form. Eztaxform The form will also show the year (or years) the payment is for. Eztaxform However, Form RRB-1099 will not show a breakdown by year (or years) of any lump-sum payment for years before 2011. Eztaxform You must contact the RRB for a breakdown by year for any amount shown in box 9. Eztaxform Example Jane Jackson is single. Eztaxform In 2012 she applied for social security disability benefits but was told she was ineligible. Eztaxform She appealed the decision and won. Eztaxform In 2013, she received a lump-sum payment of $6,000, of which $2,000 was for 2012 and $4,000 was for 2013. Eztaxform Jane also received $5,000 in social security benefits in 2013, so her total benefits in 2013 were $11,000. Eztaxform Jane's other income for 2012 and 2013 is as follows. Eztaxform   Income 2012 2013     Wages $20,000 $ 3,500     Interest income 2,000 2,500     Dividend income 1,000 1,500     Fully taxable pension   18,000     Total $23,000 $25,500   To see if the lump-sum election method results in lower taxable benefits, she completes Worksheets 1, 2, and 4 from this publication. Eztaxform She does not need to complete Worksheet 3 because her lump-sum payment was for years after 1993. Eztaxform Jane completes Worksheet 1 to find the amount of her taxable benefits for 2013 under the regular method. Eztaxform She completes Worksheet 2 to find the taxable part of the lump-sum payment for 2012 under the lump-sum election method. Eztaxform She completes Worksheet 4 to decide if the lump-sum election method will lower her taxable benefits. Eztaxform After completing the worksheets, Jane compares the amounts from Worksheet 4, line 21, and Worksheet 1, line 19. Eztaxform Because the amount on Worksheet 4 is smaller, she chooses to use the lump-sum election method. Eztaxform To do this, she prints “LSE” to the left of Form 1040, line 20a. Eztaxform She then enters $11,000 on Form 1040, line 20a, and her taxable benefits of $2,500 on line 20b. Eztaxform Jane's filled-in worksheets (1, 2, and 4) follow. Eztaxform Jane Jackson's Filled-in Worksheet 1. Eztaxform Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Eztaxform None of your benefits are taxable for 2013. Eztaxform For more information, see Repayments More Than Gross Benefits . Eztaxform If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Eztaxform S. Eztaxform Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Eztaxform Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Eztaxform 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Eztaxform Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Eztaxform $11,000         2. Eztaxform Enter one-half of line 1 2. Eztaxform 5,500     3. Eztaxform Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Eztaxform 25,500     4. Eztaxform Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Eztaxform -0-     5. Eztaxform Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Eztaxform -0-     6. Eztaxform Combine lines 2, 3, 4, and 5 6. Eztaxform 31,000     7. Eztaxform Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Eztaxform  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Eztaxform -0-     8. Eztaxform Is the amount on line 7 less than the amount on line 6?             No. Eztaxform None of your social security benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Eztaxform             Yes. Eztaxform Subtract line 7 from line 6 8. Eztaxform 31,000     9. Eztaxform If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Eztaxform 25,000       Note. Eztaxform If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then go to line 18. Eztaxform         10. Eztaxform Is the amount on line 9 less than the amount on line 8?             No. Eztaxform None of your benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Eztaxform             Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform 6,000     11. Eztaxform Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Eztaxform 9,000     12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform -0-     13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform 6,000     14. Eztaxform Enter one-half of line 13 14. Eztaxform 3,000     15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform 3,000     16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform -0-     17. Eztaxform Add lines 15 and 16 17. Eztaxform 3,000     18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform 9,350     19. Eztaxform Taxable benefits. Eztaxform Enter the smaller of line 17 or line 18. Eztaxform Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Eztaxform $3,000       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Eztaxform         Jane Jackson's Filled-in Worksheet 2. Eztaxform Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)     Enter earlier year 2012 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Eztaxform $2,000           Note. Eztaxform If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21. Eztaxform Otherwise, go on to line 2. Eztaxform             2. Eztaxform Enter one-half of line 1 2. Eztaxform 1,000   3. Eztaxform Enter your adjusted gross income for the earlier year 3. Eztaxform 23,000   4. Eztaxform Enter the total of any exclusions/adjustments you claimed in the earlier year for: Adoption benefits (Form 8839) Qualified U. Eztaxform S. Eztaxform savings bond interest (Form 8815) Student loan interest (Form 1040, page 1, or Form 1040A, page 1) Tuition and fees (Form 1040, page 1, or Form 1040A, page 1) Domestic production activities (for 2005 through 2012) (Form 1040, page 1) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Eztaxform -0-   5. Eztaxform Enter any tax-exempt interest received in the earlier year 5. Eztaxform -0-   6. Eztaxform Add lines 2 through 5 6. Eztaxform 24,000   7. Eztaxform Enter your taxable benefits for the earlier year that you previously reported 7. Eztaxform -0-   8. Eztaxform Subtract line 7 from line 6 8. Eztaxform 24,000   9. Eztaxform If, for the earlier year, you were:     Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000 9. Eztaxform 25,000     Note. Eztaxform If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then go to line 18. Eztaxform         10. Eztaxform Is the amount on line 8 more than the amount on line 9?       No. Eztaxform Skip lines 10 through 20 and enter -0- on line 21. Eztaxform       Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform     11. Eztaxform Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year 11. Eztaxform     12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform     13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform     14. Eztaxform Enter one-half of line 13 14. Eztaxform     15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform     16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform     17. Eztaxform Add lines 15 and 16 17. Eztaxform     18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform     19. Eztaxform Refigured taxable benefits. Eztaxform Enter the smaller of line 17 or line 18 19. Eztaxform     20. Eztaxform Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum payment for the year) 20. Eztaxform     21. Eztaxform Additional taxable benefits. Eztaxform Subtract line 20 from line 19. Eztaxform Also enter this amount on Worksheet 4, line 20 21. Eztaxform -0-     Do not file an amended return for this earlier year. Eztaxform Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lump-sum payment in 2013. Eztaxform   Jane Jackson's Filled-in Worksheet 4. Eztaxform Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3)     Complete Worksheet 1 and Worksheets 2 and 3 as appropriate before completing this worksheet. Eztaxform 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for 2013, minus the lump-sum payment for years before 2013 1. Eztaxform $9,000         Note. Eztaxform If line 1 is zero or less, skip lines 2 through 18, enter -0- on line 19 and go to line 20. Eztaxform Otherwise, go on to line 2. Eztaxform           2. Eztaxform Enter one-half of line 1 2. Eztaxform 4,500   3. Eztaxform Enter the amount from Worksheet 1, line 3 3. Eztaxform 25,500   4. Eztaxform Enter the amount from Worksheet 1, line 4 4. Eztaxform -0-   5. Eztaxform Enter the amount from Worksheet 1, line 5 5. Eztaxform -0-   6. Eztaxform Combine lines 2, 3, 4, and 5 6. Eztaxform 30,000   7. Eztaxform Enter the amount from Worksheet 1, line 7 7. Eztaxform -0-   8. Eztaxform Subtract line 7 from line 6 8. Eztaxform 30,000   9. Eztaxform Enter the amount from Worksheet 1, line 9. Eztaxform But if you are married filing separately and lived with your spouse at any time during 2013, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then, go to line 18 9. Eztaxform 25,000   10. Eztaxform Is the amount on line 8 more than the amount on line 9? No. Eztaxform Skip lines 10 through 18, enter -0- on line 19, and go to line 20. Eztaxform  Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform 5,000   11. Eztaxform Enter the amount from Worksheet 1, line 11 11. Eztaxform 9,000   12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform -0-   13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform 5,000   14. Eztaxform Enter one-half of line 13 14. Eztaxform 2,500   15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform 2,500   16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform -0-   17. Eztaxform Add lines 15 and 16 17. Eztaxform 2,500   18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform 7,650   19. Eztaxform Enter the smaller of line 17 or line 18 19. Eztaxform 2,500   20. Eztaxform Enter the total of the amounts from Worksheet 2, line 21, and Worksheet 3, line 14, for all earlier years for which the lump-sum payment was received 20. Eztaxform -0-   21. Eztaxform Taxable benefits under lump-sum election method. Eztaxform Add lines 19 and 20 21. Eztaxform $2,500   Next. Eztaxform Is line 21 above smaller than Worksheet 1, line 19? No. Eztaxform Do not use this method to figure your taxable benefits. Eztaxform Follow the instructions on Worksheet 1 to report your benefits. Eztaxform  Yes. Eztaxform You can elect to report your taxable benefits under this method. Eztaxform To elect this method:     Enter “LSE” to the left of Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform If line 21 above is zero, follow the instructions in line 10 for “No” on Worksheet 1. Eztaxform Otherwise: Enter the amount from Worksheet 1, line 1, on Form 1040, line 20a, or on Form 1040A, line 14a. Eztaxform Enter the amount from line 21 above on Form 1040, line 20b, or on Form 1040A, line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform   Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. Eztaxform Disability payments. Eztaxform   You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an earlier year. Eztaxform If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability payments, you can take an itemized deduction for the part of the payments you included in gross income in the earlier year. Eztaxform If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. Eztaxform Claim the deduction or credit in the same way explained under Repayment of benefits received in an earlier year in the section Repayments More Than Gross Benefits , later. Eztaxform Legal expenses. Eztaxform   You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection with the determination, collection, or refund of any tax. Eztaxform   Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Eztaxform Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Eztaxform If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Eztaxform Do not use Worksheet 1 in this case. Eztaxform If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Eztaxform If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. Eztaxform Joint return. Eztaxform   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's does not, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. Eztaxform You do this to get your net benefits when figuring if your combined benefits are taxable. Eztaxform Example. Eztaxform John and Mary file a joint return for 2013. Eztaxform John received Form SSA-1099 showing $3,000 in box 5. Eztaxform Mary also received Form SSA-1099 and the amount in box 5 was ($500). Eztaxform John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable. Eztaxform Repayment of benefits received in an earlier year. Eztaxform   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Eztaxform Deduction $3,000 or less. Eztaxform   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Eztaxform Claim it on Schedule A (Form 1040), line 23. Eztaxform Deduction more than $3,000. Eztaxform   If this deduction is more than $3,000, you should figure your tax two ways: Figure your tax for 2013 with the itemized deduction included on Schedule A, line 28. Eztaxform Figure your tax for 2013 in the following steps: Figure the tax without the itemized deduction included on Schedule A, line 28. Eztaxform For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Eztaxform Then refigure the tax for that year. Eztaxform Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. Eztaxform Subtract the result in (c) from the result in (a). Eztaxform   Compare the tax figured in methods (1) and (2). Eztaxform Your tax for 2013 is the smaller of the two amounts. Eztaxform If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. Eztaxform If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71. Eztaxform Check box d and enter “I. Eztaxform R. Eztaxform C. Eztaxform 1341” in the space next to that box. Eztaxform If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28. Eztaxform Worksheets Blank Worksheets 1 through 4 are provided in this section: Worksheet 1, Figuring Your Taxable Benefits; Worksheet 2, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993); Worksheet 3, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994); Worksheet 4, Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3). Eztaxform Worksheet 1. Eztaxform Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Eztaxform Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Eztaxform None of your benefits are taxable for 2013. Eztaxform For more information, see Repayments More Than Gross Benefits . Eztaxform If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Eztaxform S. Eztaxform Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Eztaxform Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Eztaxform 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Eztaxform Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Eztaxform           2. Eztaxform Enter one-half of line 1 2. Eztaxform       3. Eztaxform Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Eztaxform       4. Eztaxform Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Eztaxform       5. Eztaxform Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Eztaxform       6. Eztaxform Combine lines 2, 3, 4, and 5 6. Eztaxform       7. Eztaxform Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Eztaxform  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Eztaxform       8. Eztaxform Is the amount on line 7 less than the amount on line 6?             No. Eztaxform None of your social security benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Eztaxform             Yes. Eztaxform Subtract line 7 from line 6 8. Eztaxform       9. Eztaxform If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Eztaxform         Note. Eztaxform If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then go to line 18. Eztaxform         10. Eztaxform Is the amount on line 9 less than the amount on line 8?             No. Eztaxform None of your benefits are taxable. Eztaxform Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Eztaxform If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Eztaxform             Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform       11. Eztaxform Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Eztaxform       12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform       13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform       14. Eztaxform Enter one-half of line 13 14. Eztaxform       15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform       16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform       17. Eztaxform Add lines 15 and 16 17. Eztaxform       18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform       19. Eztaxform Taxable benefits. Eztaxform Enter the smaller of line 17 or line 18. Eztaxform Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Eztaxform         If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Eztaxform         Worksheet 2. Eztaxform Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)     Enter earlier year 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Eztaxform             Note. Eztaxform If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21. Eztaxform Otherwise, go on to line 2. Eztaxform             2. Eztaxform Enter one-half of line 1 2. Eztaxform     3. Eztaxform Enter your adjusted gross income for the earlier year 3. Eztaxform     4. Eztaxform Enter the total of any exclusions/adjustments you claimed in the earlier year for: Adoption benefits (Form 8839) Qualified U. Eztaxform S. Eztaxform savings bond interest (Form 8815) Student loan interest (Form 1040, page 1, or Form 1040A, page 1) Tuition and fees (Form 1040, page 1, or Form 1040A, page 1) Domestic production activities (for 2005 through 2012) (Form 1040, page 1) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Eztaxform     5. Eztaxform Enter any tax-exempt interest received in the earlier year 5. Eztaxform     6. Eztaxform Add lines 2 through 5 6. Eztaxform     7. Eztaxform Enter your taxable benefits for the earlier year that you previously reported 7. Eztaxform     8. Eztaxform Subtract line 7 from line 6 8. Eztaxform     9. Eztaxform If, for the earlier year, you were:     Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000 9. Eztaxform       Note. Eztaxform If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (. Eztaxform 85) and enter the result on line 17. Eztaxform Then go to line 18. Eztaxform         10. Eztaxform Is the amount on line 8 more than the amount on line 9?       No. Eztaxform Skip lines 10 through 20 and enter -0- on line 21. Eztaxform       Yes. Eztaxform Subtract line 9 from line 8 10. Eztaxform     11. Eztaxform Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year 11. Eztaxform     12. Eztaxform Subtract line 11 from line 10. Eztaxform If zero or less, enter -0- 12. Eztaxform     13. Eztaxform Enter the smaller of line 10 or line 11 13. Eztaxform     14. Eztaxform Enter one-half of line 13 14. Eztaxform     15. Eztaxform Enter the smaller of line 2 or line 14 15. Eztaxform     16. Eztaxform Multiply line 12 by 85% (. Eztaxform 85). Eztaxform If line 12 is zero, enter -0- 16. Eztaxform     17. Eztaxform Add lines 15 and 16 17. Eztaxform     18. Eztaxform Multiply line 1 by 85% (. Eztaxform 85) 18. Eztaxform     19. Eztaxform Refigured taxable benefits. Eztaxform Enter the smaller of line 17 or line 18 19. Eztaxform     20. Eztaxform Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum payment for the year) 20. Eztaxform     21. Eztaxform Additional taxable benefits. Eztaxform Subtract line 20 from line 19. Eztaxform Also enter this amount on Worksheet 4, line 20 21. Eztaxform       Do not file an amended return for this earlier year. Eztaxform Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lump-sum payment in 2013. Eztaxform   Worksheet 3. Eztaxform Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994) Enter earlier year 1. Eztaxform Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Eztaxform           Note. Eztaxform If line 1 is zero or less, skip lines 2 through 13 and enter -0- on line 14. Eztaxform Otherwise, go on to line 2. Eztaxform           2. Eztaxform Enter one-half of line 1 2. Eztaxform     3. Eztaxform Enter your adjusted gross income for the earlier year 3. Eztaxform     4. Eztaxform Enter the total of any exclusions/adjustments you claimed in the earlier year for: Qualified U. Eztaxform S. Eztaxform savings bond interest (Form 8815) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Eztaxform     5. Eztaxform Enter any tax-exempt interest received in the earlier year 5. Eztaxform     6. Eztaxform Add lines 2 through 5 6. Eztaxform     7. Eztaxform Enter your taxable benefits for the earlier year that you previously reported 7. Eztaxform     8. Eztaxform Subtract line 7 from line 6 8. Eztaxform     9. Eztaxform Enter $25,000 ($32,000 if married filing jointly for the earlier year; $-0- if married filing separately for the earlier year and you lived with your spouse at any time during the earlier year) 9. Eztaxform     10. Eztaxform Is the amount on line 8 more than the amount on line 9? No. Eztaxform Skip lines 10 through 13 and enter -0- on line 14. Eztaxform  Yes. Eztaxform Subtract line 9 from line 8. Eztaxform 10. Eztaxform     11. Eztaxform Enter one-half of line 10 11. Eztaxform     12. Eztaxform Refigured taxable benefits. Eztaxform Enter the smaller of line 2 or line 11 12. Eztaxform     13. Eztaxform Enter your taxable benefits for the earlier year (or as refigured due to a previous
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Rural Utilities Service

The Department of Agriculture's Rural Utilities Service provides funding, through grants, loans, loan guarantees, and payments, for the development of rural utilities infrastructure such as water, waste management, power and telecommunications.

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Website: Rural Utilities Service

Contact In-Person: Find an Office in Your State

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Phone Number: (202) 720-9540

TTY: (800) 877-8339 (Federal Relay Service)

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The Eztaxform

Eztaxform 7. Eztaxform   Interest Income Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationSSN for joint account. Eztaxform Custodian account for your child. Eztaxform Penalty for failure to supply SSN. Eztaxform Reporting backup withholding. Eztaxform Savings account with parent as trustee. Eztaxform Interest not reported on Form 1099-INT. Eztaxform Nominees. Eztaxform Incorrect amount. Eztaxform Information reporting requirement. Eztaxform Taxable InterestInterest subject to penalty for early withdrawal. Eztaxform Money borrowed to invest in certificate of deposit. Eztaxform U. Eztaxform S. Eztaxform Savings Bonds Education Savings Bond Program U. Eztaxform S. Eztaxform Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Original Issue Discount (OID) When To Report Interest IncomeConstructive receipt. Eztaxform How To Report Interest IncomeSchedule B (Form 1040A or 1040). Eztaxform Reporting tax-exempt interest. Eztaxform U. Eztaxform S. Eztaxform savings bond interest previously reported. Eztaxform Reminder Foreign-source income. Eztaxform  If you are a U. Eztaxform S. Eztaxform citizen with interest income from sources outside the United States (foreign income), you must report that income on your tax return unless it is exempt by U. Eztaxform S. Eztaxform law. Eztaxform This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Eztaxform Introduction This chapter discusses the following topics. Eztaxform Different types of interest income. Eztaxform What interest is taxable and what interest is nontaxable. Eztaxform When to report interest income. Eztaxform How to report interest income on your tax return. Eztaxform In general, any interest you receive or that is credited to your account and can be withdrawn is taxable income. Eztaxform Exceptions to this rule are discussed later in this chapter. Eztaxform You may be able to deduct expenses you have in earning this income on Schedule A (Form 1040) if you itemize your deductions. Eztaxform See Money borrowed to invest in certificate of deposit , later, and chapter 28. Eztaxform Useful Items - You may want to see: Publication 537 Installment Sales 550 Investment Income and Expenses 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends 8815 Exclusion of Interest From Series EE and I U. Eztaxform S. Eztaxform Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. Eztaxform S. Eztaxform Savings Bonds Issued After 1989 General Information A few items of general interest are covered here. Eztaxform Recordkeeping. Eztaxform You should keep a list showing sources and interest amounts received during the year. Eztaxform Also, keep the forms you receive showing your interest income (Forms 1099-INT, for example) as an important part of your records. Eztaxform Tax on unearned income of certain children. Eztaxform    Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Eztaxform If so, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. Eztaxform If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Eztaxform   Some parents can choose to include the child's interest and dividends on the parent's return. Eztaxform If you can, use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. Eztaxform   For more information about the tax on unearned income of children and the parents' election, see chapter 31. Eztaxform Beneficiary of an estate or trust. Eztaxform   Interest you receive as a beneficiary of an estate or trust is generally taxable income. Eztaxform You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Eztaxform , from the fiduciary. Eztaxform Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Eztaxform Social security number (SSN). Eztaxform   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. Eztaxform This includes payers of interest. Eztaxform If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. Eztaxform SSN for joint account. Eztaxform   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. Eztaxform (For information on who owns the funds in a joint account, see Joint accounts , later. Eztaxform ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. Eztaxform This is because only one name and SSN can be shown on Form 1099. Eztaxform   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. Eztaxform For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. Eztaxform Custodian account for your child. Eztaxform   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. Eztaxform For example, you must give your child's SSN to the payer of interest on an account owned by your child, even though the interest is paid to you as custodian. Eztaxform Penalty for failure to supply SSN. Eztaxform   If you do not give your SSN to the payer of interest, you may have to pay a penalty. Eztaxform See Failure to supply SSN under Penalties in chapter 1. Eztaxform Backup withholding also may apply. Eztaxform Backup withholding. Eztaxform   Your interest income is generally not subject to regular withholding. Eztaxform However, it may be subject to backup withholding to ensure that income tax is collected on the income. Eztaxform Under backup withholding, the payer of interest must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Eztaxform   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. Eztaxform For more information, see Backup Withholding in chapter 4. Eztaxform Reporting backup withholding. Eztaxform   If backup withholding is deducted from your interest income, the payer must give you a Form 1099-INT for the year indicating the amount withheld. Eztaxform The Form 1099-INT will show any backup withholding as “Federal income tax withheld. Eztaxform ” Joint accounts. Eztaxform   If two or more persons hold property (such as a savings account or bond) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest from the property is determined by local law. Eztaxform Income from property given to a child. Eztaxform   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. Eztaxform   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. Eztaxform Savings account with parent as trustee. Eztaxform   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. Eztaxform The savings account legally belongs to the child. Eztaxform The parents are not legally permitted to use any of the funds to support the child. Eztaxform Form 1099-INT. Eztaxform   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. Eztaxform This form shows you the interest you received during the year. Eztaxform Keep this form for your records. Eztaxform You do not have to attach it to your tax return. Eztaxform   Report on your tax return the total interest income you receive for the tax year. Eztaxform Interest not reported on Form 1099-INT. Eztaxform   Even if you do not receive Form 1099-INT, you must still report all of your interest income. Eztaxform For example, you may receive distributive shares of interest from partnerships or S corporations. Eztaxform This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deduction, Credits, etc. Eztaxform , or Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Eztaxform Nominees. Eztaxform   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. Eztaxform   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on nominee distributions under How To Report Interest Income in chapter 1 of Publication 550, or Schedule B (Form 1040A or 1040) instructions. Eztaxform Incorrect amount. Eztaxform   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Eztaxform The new Form 1099-INT you receive will be marked “Corrected. Eztaxform ” Form 1099-OID. Eztaxform   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. Eztaxform For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. Eztaxform Exempt-interest dividends. Eztaxform   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Eztaxform (However, see Information reporting requirement , next. Eztaxform ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Eztaxform You do not reduce your basis for distributions that are exempt-interest dividends. Eztaxform Information reporting requirement. Eztaxform   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. Eztaxform This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. Eztaxform Note. Eztaxform Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Eztaxform See Alternative Minimum Tax (AMT) in chapter 30 for more information. Eztaxform Chapter 1 of Publication 550 contains a discussion on private activity bonds under State or Local Government Obligations. Eztaxform Interest on VA dividends. Eztaxform   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. Eztaxform This includes interest paid on dividends on converted United States Government Life Insurance and on National Service Life Insurance policies. Eztaxform Individual retirement arrangements (IRAs). Eztaxform   Interest on a Roth IRA generally is not taxable. Eztaxform Interest on a traditional IRA is tax deferred. Eztaxform You generally do not include it in your income until you make withdrawals from the IRA. Eztaxform See chapter 17. Eztaxform Taxable Interest Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. Eztaxform The following are some sources of taxable interest. Eztaxform Dividends that are actually interest. Eztaxform   Certain distributions commonly called dividends are actually interest. Eztaxform You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. Eztaxform  The “dividends” will be shown as interest income on Form 1099-INT. Eztaxform Money market funds. Eztaxform   Money market funds pay dividends and are offered by nonbank financial institutions, such as mutual funds and stock brokerage houses. Eztaxform Generally, amounts you receive from money market funds should be reported as dividends, not as interest. Eztaxform Certificates of deposit and other deferred interest accounts. Eztaxform   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. Eztaxform You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. Eztaxform The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. Eztaxform If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. Eztaxform Interest subject to penalty for early withdrawal. Eztaxform   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. Eztaxform You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. Eztaxform See Penalty on early withdrawal of savings in chapter 1 of Publication 550 for more information on how to report the interest and deduct the penalty. Eztaxform Money borrowed to invest in certificate of deposit. Eztaxform   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. Eztaxform You must report the total interest you earn on the certificate in your income. Eztaxform If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. Eztaxform See Interest Expenses in chapter 3 of Publication 550. Eztaxform Example. Eztaxform You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. Eztaxform The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. Eztaxform The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. Eztaxform The bank also gives you a statement showing that you paid $310 interest for 2013. Eztaxform You must include the $575 in your income. Eztaxform If you itemize your deductions on Schedule A (Form 1040), you can deduct $310, subject to the net investment income limit. Eztaxform Gift for opening account. Eztaxform   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. Eztaxform   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. Eztaxform For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. Eztaxform The value is determined by the cost to the financial institution. Eztaxform Example. Eztaxform You open a savings account at your local bank and deposit $800. Eztaxform The account earns $20 interest. Eztaxform You also receive a $15 calculator. Eztaxform If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. Eztaxform You must report $35 interest income on your tax return. Eztaxform Interest on insurance dividends. Eztaxform   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. Eztaxform However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. Eztaxform Prepaid insurance premiums. Eztaxform   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. Eztaxform U. Eztaxform S. Eztaxform obligations. Eztaxform   Interest on U. Eztaxform S. Eztaxform obligations, such as U. Eztaxform S. Eztaxform Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. Eztaxform Interest on tax refunds. Eztaxform   Interest you receive on tax refunds is taxable income. Eztaxform Interest on condemnation award. Eztaxform   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. Eztaxform Installment sale payments. Eztaxform   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. Eztaxform That interest is taxable when you receive it. Eztaxform If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. Eztaxform See Unstated Interest and Original Issue Discount in Publication 537, Installment Sales. Eztaxform Interest on annuity contract. Eztaxform   Accumulated interest on an annuity contract you sell before its maturity date is taxable. Eztaxform Usurious interest. Eztaxform   Usurious interest is interest charged at an illegal rate. Eztaxform This is taxable as interest unless state law automatically changes it to a payment on the principal. Eztaxform Interest income on frozen deposits. Eztaxform   Exclude from your gross income interest on frozen deposits. Eztaxform A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state where the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. Eztaxform   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). Eztaxform If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income in chapter 1 of Publication 550, for information about reporting this interest income exclusion on your tax return. Eztaxform   The interest you exclude is treated as credited to your account in the following year. Eztaxform You must include it in income in the year you can withdraw it. Eztaxform Example. Eztaxform $100 of interest was credited on your frozen deposit during the year. Eztaxform You withdrew $80 but could not withdraw any more as of the end of the year. Eztaxform You must include $80 in your income and exclude $20 from your income for the year. Eztaxform You must include the $20 in your income for the year you can withdraw it. Eztaxform Bonds traded flat. Eztaxform   If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. Eztaxform The defaulted or unpaid interest is not income and is not taxable as interest if paid later. Eztaxform When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. Eztaxform Interest that accrues after the date of purchase, however, is taxable interest income for the year it is received or accrued. Eztaxform See Bonds Sold Between Interest Dates , later, for more information. Eztaxform Below-market loans. Eztaxform   In general, a below-market loan is a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. Eztaxform See Below-Market Loans in chapter 1 of Publication 550 for more information. Eztaxform U. Eztaxform S. Eztaxform Savings Bonds This section provides tax information on U. Eztaxform S. Eztaxform savings bonds. Eztaxform It explains how to report the interest income on these bonds and how to treat transfers of these bonds. Eztaxform For other information on U. Eztaxform S. Eztaxform savings bonds, write to:  For series EE and I paper savings bonds: Bureau of the Public Debt Division of Customer Assistance P. Eztaxform O. Eztaxform Box 7012 Parkersburg, WV 26106-7012  For series EE and I electronic bonds: Bureau of the Public Debt Division of Customer Assistance P. Eztaxform O. Eztaxform Box 7015 Parkersburg, WV 26106–7015  For series HH/H: Bureau of the Public Debt Division of Customer Assistance P. Eztaxform O. Eztaxform Box 2186 Parkersburg, WV 26106-2186 Or, on the Internet, visit: www. Eztaxform treasurydirect. Eztaxform gov/indiv/indiv. Eztaxform htm. Eztaxform Accrual method taxpayers. Eztaxform   If you use an accrual method of accounting, you must report interest on U. Eztaxform S. Eztaxform savings bonds each year as it accrues. Eztaxform You cannot postpone reporting interest until you receive it or until the bonds mature. Eztaxform Accrual methods of accounting are explained in chapter 1 under Accounting Methods . Eztaxform Cash method taxpayers. Eztaxform   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. Eztaxform S. Eztaxform savings bonds when you receive it. Eztaxform The cash method of accounting is explained in chapter 1 under Accounting Methods. Eztaxform But see Reporting options for cash method taxpayers , later. Eztaxform Series HH bonds. Eztaxform    These bonds were issued at face value. Eztaxform Interest is paid twice a year by direct deposit to your bank account. Eztaxform If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. Eztaxform   Series HH bonds were first offered in 1980 and last offered in August 2004. Eztaxform Before 1980, series H bonds were issued. Eztaxform Series H bonds are treated the same as series HH bonds. Eztaxform If you are a cash method taxpayer, you must report the interest when you receive it. Eztaxform   Series H bonds have a maturity period of 30 years. Eztaxform Series HH bonds mature in 20 years. Eztaxform The last series H bonds matured in 2009. Eztaxform Series EE and series I bonds. Eztaxform   Interest on these bonds is payable when you redeem the bonds. Eztaxform The difference between the purchase price and the redemption value is taxable interest. Eztaxform Series EE bonds. Eztaxform   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. Eztaxform   Before July 1980, series E bonds were issued. Eztaxform The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. Eztaxform Paper series EE and series E bonds are issued at a discount. Eztaxform The face value is payable to you at maturity. Eztaxform Electronic series EE bonds are issued at their face value. Eztaxform The face value plus accrued interest is payable to you at maturity. Eztaxform As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. Eztaxform   Owners of paper series EE bonds can convert them to electronic bonds. Eztaxform These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). Eztaxform Series I bonds. Eztaxform   Series I bonds were first offered in 1998. Eztaxform These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. Eztaxform The face value plus all accrued interest is payable to you at maturity. Eztaxform Reporting options for cash method taxpayers. Eztaxform   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. Eztaxform Method 1. Eztaxform Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year they mature. Eztaxform (However, see Savings bonds traded , later. Eztaxform )  Note. Eztaxform Series EE bonds issued in 1983 matured in 2013. Eztaxform If you have used method 1, you generally must report the interest on these bonds on your 2013 return. Eztaxform The last series E bonds were issued in 1980 and matured in 2010. Eztaxform If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. Eztaxform Method 2. Eztaxform Choose to report the increase in redemption value as interest each year. Eztaxform You must use the same method for all series EE, series E, and series I bonds you own. Eztaxform If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. Eztaxform    If you plan to cash your bonds in the same year you will pay for higher education expenses, you may want to use method 1 because you may be able to exclude the interest from your income. Eztaxform To learn how, see Education Savings Bond Program, later. Eztaxform Change from method 1. Eztaxform   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. Eztaxform In the year of change you must report all interest accrued to date and not previously reported for all your bonds. Eztaxform   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. Eztaxform Change from method 2. Eztaxform   To change from method 2 to method 1, you must request permission from the IRS. Eztaxform Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. Eztaxform You have typed or printed the following number at the top: “131. Eztaxform ” It includes your name and social security number under “131. Eztaxform ” It includes the year of change (both the beginning and ending dates). Eztaxform It identifies the savings bonds for which you are requesting this change. Eztaxform It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. Eztaxform   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). Eztaxform   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. Eztaxform On the statement, type or print “Filed pursuant to section 301. Eztaxform 9100-2. Eztaxform ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). Eztaxform    By the date you file the original statement with your return, you must also send a signed copy to the address below. Eztaxform   Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. Eztaxform O. Eztaxform Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. Eztaxform   Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW  Washington, DC 20224   Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115, Application for Change in Accounting Method. Eztaxform In that case, follow the form instructions for an automatic change. Eztaxform No user fee is required. Eztaxform Co-owners. Eztaxform   If a U. Eztaxform S. Eztaxform savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. Eztaxform One co-owner's funds used. Eztaxform    If you used your funds to buy the bond, you must pay the tax on the interest. Eztaxform This is true even if you let the other co-owner redeem the bond and keep all the proceeds. Eztaxform Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. Eztaxform The co-owner who redeemed the bond is a “nominee. Eztaxform ” See Nominee distributions under How To Report Interest Income in chapter 1 of Publication 550 for more information about how a person who is a nominee reports interest income belonging to another person. Eztaxform Both co-owners' funds used. Eztaxform   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. Eztaxform Community property. Eztaxform   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. Eztaxform If you file separate returns, each of you generally must report one-half of the bond interest. Eztaxform For more information about community property, see Publication 555. Eztaxform Table 7-1. Eztaxform   These rules are also shown in Table 7-1. Eztaxform Ownership transferred. Eztaxform   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. Eztaxform But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. Eztaxform   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. Eztaxform Purchased jointly. Eztaxform   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. Eztaxform The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. Eztaxform This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. Eztaxform   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. Eztaxform But the new co-owner will report only his or her share of the interest earned after the transfer. Eztaxform   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. Eztaxform    Table 7-1. Eztaxform Who Pays the Tax on U. Eztaxform S. Eztaxform Savings Bond Interest IF . Eztaxform . Eztaxform . Eztaxform THEN the interest must be reported by . Eztaxform . Eztaxform . Eztaxform you buy a bond in your name and the name of another person as co-owners, using only your own funds you. Eztaxform you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. Eztaxform you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. Eztaxform you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. Eztaxform If you file separate returns, both you and your spouse generally report one-half of the interest. Eztaxform Example 1. Eztaxform You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. Eztaxform The bond was issued to you and your spouse as co-owners. Eztaxform You both postpone reporting interest on the bond. Eztaxform You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Eztaxform At that time neither you nor your spouse has to report the interest earned to the date of reissue. Eztaxform Example 2. Eztaxform You bought a $1,000 series EE savings bond entirely with your own funds. Eztaxform The bond was issued to you and your spouse as co-owners. Eztaxform You both postpone reporting interest on the bond. Eztaxform You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Eztaxform You must report half the interest earned to the date of reissue. Eztaxform Transfer to a trust. Eztaxform   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. Eztaxform However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. Eztaxform You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. Eztaxform   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. Eztaxform See Savings bonds traded , later. Eztaxform Decedents. Eztaxform   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. Eztaxform This is explained in chapter 1 of Publication 550. Eztaxform Savings bonds traded. Eztaxform   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. Eztaxform (You cannot trade series I bonds for series HH bonds. Eztaxform After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. Eztaxform ) Any cash you received is income up to the amount of the interest earned on the bonds traded. Eztaxform When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. Eztaxform Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. Eztaxform Example. Eztaxform You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. Eztaxform You reported the $223 as taxable income on your tax return. Eztaxform At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. Eztaxform You hold the series HH bonds until maturity, when you receive $2,500. Eztaxform You must report $300 as interest income in the year of maturity. Eztaxform This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). Eztaxform (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. Eztaxform ) Choice to report interest in year of trade. Eztaxform   You could have chosen to treat all of the previously unreported accrued interest on the series EE or series E bonds traded for series HH bonds as income in the year of the trade. Eztaxform If you made this choice, it is treated as a change from method 1. Eztaxform See Change from method 1 under Series EE and series I bonds, earlier. Eztaxform Form 1099-INT for U. Eztaxform S. Eztaxform savings bonds interest. Eztaxform   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. Eztaxform Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. Eztaxform However, your Form 1099-INT may show more interest than you have to include on your income tax return. Eztaxform For example, this may happen if any of the following are true. Eztaxform You chose to report the increase in the redemption value of the bond each year. Eztaxform The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. Eztaxform You received the bond from a decedent. Eztaxform The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. Eztaxform Ownership of the bond was transferred. Eztaxform The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. Eztaxform You were named as a co-owner, and the other co-owner contributed funds to buy the bond. Eztaxform The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. Eztaxform (See Co-owners , earlier in this chapter, for more information about the reporting requirements. Eztaxform ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. Eztaxform The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. Eztaxform (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Eztaxform , for the year of distribution. Eztaxform )   For more information on including the correct amount of interest on your return, see How To Report Interest Income , later. Eztaxform Publication 550 includes examples showing how to report these amounts. Eztaxform    Interest on U. Eztaxform S. Eztaxform savings bonds is exempt from state and local taxes. Eztaxform The Form 1099-INT you receive will indicate the amount that is for U. Eztaxform S. Eztaxform savings bond interest in box 3. Eztaxform Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. Eztaxform S. Eztaxform savings bonds during the year if you pay qualified higher educational expenses during the same year. Eztaxform This exclusion is known as the Education Savings Bond Program. Eztaxform You do not qualify for this exclusion if your filing status is married filing separately. Eztaxform Form 8815. Eztaxform   Use Form 8815 to figure your exclusion. Eztaxform Attach the form to your Form 1040 or Form 1040A. Eztaxform Qualified U. Eztaxform S. Eztaxform savings bonds. Eztaxform   A qualified U. Eztaxform S. Eztaxform savings bond is a series EE bond issued after 1989 or a series I bond. Eztaxform The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). Eztaxform You must be at least 24 years old before the bond's issue date. Eztaxform For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. Eztaxform    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. Eztaxform Beneficiary. Eztaxform   You can designate any individual (including a child) as a beneficiary of the bond. Eztaxform Verification by IRS. Eztaxform   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of the Treasury. Eztaxform Qualified expenses. Eztaxform   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. Eztaxform   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. Eztaxform   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. Eztaxform Eligible educational institutions. Eztaxform   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the U. Eztaxform S. Eztaxform Department of Education. Eztaxform Reduction for certain benefits. Eztaxform   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. Eztaxform Tax-free part of scholarships and fellowships (see Scholarships and fellowships in chapter 12). Eztaxform Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. Eztaxform Expenses used to figure the tax-free portion of distributions from a qualified tuition program. Eztaxform Any tax-free payments (other than gifts or inheritances) received for educational expenses, such as Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. Eztaxform Any expense used in figuring the American Opportunity and lifetime learning credits. Eztaxform Amount excludable. Eztaxform   If the total proceeds (interest and principal) from the qualified U. Eztaxform S. Eztaxform savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. Eztaxform If the proceeds are more than the expenses, you may be able to exclude only part of the interest. Eztaxform   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. Eztaxform The numerator of the fraction is the qualified higher educational expenses you paid during the year. Eztaxform The denominator of the fraction is the total proceeds you received during the year. Eztaxform Example. Eztaxform In February 2013, Mark and Joan, a married couple, cashed a qualified series EE U. Eztaxform S. Eztaxform savings bond they bought in April 1997. Eztaxform They received proceeds of $8,372 representing principal of $5,000 and interest of $3,372. Eztaxform In 2013, they paid $4,000 of their daughter's college tuition. Eztaxform They are not claiming an education credit for that amount, and their daughter does not have any tax-free educational assistance. Eztaxform They can exclude $1,611 ($3,372 × ($4,000 ÷ $8,372)) of interest in 2013. Eztaxform They must pay tax on the remaining $1,761 ($3,372 − $1,611) interest. Eztaxform Modified adjusted gross income limit. Eztaxform   The interest exclusion is limited if your modified adjusted gross income (modified AGI) is: $74,700 to $89,700 for taxpayers filing single or head of household, and $112,050 to $142,050 for married taxpayers filing jointly or for a qualifying widow(er) with dependent child. Eztaxform You do not qualify for the interest exclusion if your modified AGI is equal to or more than the upper limit for your filing status. Eztaxform   Modified AGI, for purposes of this exclusion, is adjusted gross income (Form 1040, line 37, or Form 1040A, line 21) figured before the interest exclusion, and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion and deduction, Exclusion of income for bona fide residents of American Samoa, Exclusion for income from Puerto Rico, Exclusion for adoption benefits received under an employer's adoption assistance program, Deduction for tuition and fees, Deduction for student loan interest, and Deduction for domestic production activities. Eztaxform   Use the Line 9 Worksheet in the Form 8815 instructions to figure your modified AGI. Eztaxform If you claim any of the exclusion or deduction items listed above (except items 6, 7, and 8), add the amount of the exclusion or deduction (except items 6, 7, and 8) to the amount on line 5 of the worksheet, and enter the total on Form 8815, line 9, as your modified AGI. Eztaxform   If you have investment interest expense incurred to earn royalties and other investment income, see Education Savings Bond Program in chapter 1 of Publication 550. Eztaxform Recordkeeping. Eztaxform If you claim the interest exclusion, you must keep a written record of the qualified U. Eztaxform S. Eztaxform savings bonds you redeem. Eztaxform Your record must include the serial number, issue date, face value, and total redemption proceeds (principal and interest) of each bond. Eztaxform You can use Form 8818 to record this information. Eztaxform You should also keep bills, receipts, canceled checks, or other documentation that shows you paid qualified higher educational expenses during the year. Eztaxform U. Eztaxform S. Eztaxform Treasury Bills, Notes, and Bonds Treasury bills, notes, and bonds are direct debts (obligations) of the U. Eztaxform S. Eztaxform Government. Eztaxform Taxation of interest. Eztaxform   Interest income from Treasury bills, notes, and bonds is subject to federal income tax but is exempt from all state and local income taxes. Eztaxform You should receive Form 1099-INT showing the interest (in box 3) paid to you for the year. Eztaxform   Payments of principal and interest generally will be credited to your designated checking or savings account by direct deposit through the TreasuryDirect® system. Eztaxform Treasury bills. Eztaxform   These bills generally have a 4-week, 13-week, 26-week, or 52-week maturity period. Eztaxform They are generally issued at a discount in the amount of $100 and multiples of $100. Eztaxform The difference between the discounted price you pay for the bills and the face value you receive at maturity is interest income. Eztaxform Generally, you report this interest income when the bill is paid at maturity. Eztaxform If you paid a premium for a bill (more than the face value), you generally report the premium as a section 171 deduction when the bill is paid at maturity. Eztaxform Treasury notes and bonds. Eztaxform   Treasury notes have maturity periods of more than 1 year, ranging up to 10 years. Eztaxform Maturity periods for Treasury bonds are longer than 10 years. Eztaxform Both generally are issued in denominations of $100 to $1 million and generally pay interest every 6 months. Eztaxform Generally, you report this interest for the year paid. Eztaxform For more information, see U. Eztaxform S. Eztaxform Treasury Bills, Notes, and Bonds in chapter 1 of Publication 550. Eztaxform For other information on Treasury notes or bonds, write to:  Bureau of the Public Debt P. Eztaxform O. Eztaxform Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. Eztaxform treasurydirect. Eztaxform gov/indiv/indiv. Eztaxform htm. Eztaxform For information on series EE, series I, and series HH savings bonds, see U. Eztaxform S. Eztaxform Savings Bonds , earlier. Eztaxform Treasury inflation-protected securities (TIPS). Eztaxform   These securities pay interest twice a year at a fixed rate, based on a principal amount adjusted to take into account inflation and deflation. Eztaxform For the tax treatment of these securities, see Inflation-Indexed Debt Instruments under Original Issue Discount (OID), in Publication 550. Eztaxform Bonds Sold Between Interest Dates If you sell a bond between interest payment dates, part of the sales price represents interest accrued to the date of sale. Eztaxform You must report that part of the sales price as interest income for the year of sale. Eztaxform If you buy a bond between interest payment dates, part of the purchase price represents interest accrued before the date of purchase. Eztaxform When that interest is paid to you, treat it as a return of your capital investment, rather than interest income, by reducing your basis in the bond. Eztaxform See Accrued interest on bonds under How To Report Interest Income in chapter 1 of Publication 550 for information on reporting the payment. Eztaxform Insurance Life insurance proceeds paid to you as beneficiary of the insured person are usually not taxable. Eztaxform But if you receive the proceeds in installments, you must usually report a part of each installment payment as interest income. Eztaxform For more information about insurance proceeds received in installments, see Publication 525, Taxable and Nontaxable Income. Eztaxform Annuity. Eztaxform   If you buy an annuity with life insurance proceeds, the annuity payments you receive are taxed as pension and annuity income from a nonqualified plan, not as interest income. Eztaxform See chapter 10 for information on pension and annuity income from nonqualified plans. Eztaxform State or Local Government Obligations Interest on a bond used to finance government operations generally is not taxable if the bond is issued by a state, the District of Columbia, a possession of the United States, or any of their political subdivisions. Eztaxform Bonds issued after 1982 (including tribal economic development bonds issued after February 17, 2009) by an Indian tribal government are treated as issued by a state. Eztaxform Interest on these bonds is generally tax exempt if the bonds are part of an issue of which substantially all proceeds are to be used in the exercise of any essential government function. Eztaxform For information on federally guaranteed bonds, mortgage revenue bonds, arbitrage bonds, private activity bonds, qualified tax credit bonds, and Build America bonds, see State or Local Government Obligations in chapter 1 of Publication 550. Eztaxform Information reporting requirement. Eztaxform   If you must file a tax return, you are required to show any tax-exempt interest you received on your return. Eztaxform This is an information reporting requirement only. Eztaxform It does not change tax-exempt interest to taxable interest. Eztaxform Original Issue Discount (OID) Original issue discount (OID) is a form of interest. Eztaxform You generally include OID in your income as it accrues over the term of the debt instrument, whether or not you receive any payments from the issuer. Eztaxform A debt instrument generally has OID when the instrument is issued for a price that is less than its stated redemption price at maturity. Eztaxform OID is the difference between the stated redemption price at maturity and the issue price. Eztaxform All debt instruments that pay no interest before maturity are presumed to be issued at a discount. Eztaxform Zero coupon bonds are one example of these instruments. Eztaxform The OID accrual rules generally do not apply to short-term obligations (those with a fixed maturity date of 1 year or less from date of issue). Eztaxform See Discount on Short-Term Obligations in chapter 1 of Publication 550. Eztaxform De minimis OID. Eztaxform   You can treat the discount as zero if it is less than one-fourth of 1% (. Eztaxform 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. Eztaxform This small discount is known as “de minimis” OID. Eztaxform Example 1. Eztaxform You bought a 10-year bond with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. Eztaxform One-fourth of 1% of $1,000 (stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. Eztaxform Because the $20 discount is less than $25, the OID is treated as zero. Eztaxform (If you hold the bond at maturity, you will recognize $20 ($1,000 − $980) of capital gain. Eztaxform ) Example 2. Eztaxform The facts are the same as in Example 1, except that the bond was issued at $950. Eztaxform The OID is $50. Eztaxform Because the $50 discount is more than the $25 figured in Example 1, you must include the OID in income as it accrues over the term of the bond. Eztaxform Debt instrument bought after original issue. Eztaxform   If you buy a debt instrument with de minimis OID at a premium, the discount is not includible in income. Eztaxform If you buy a debt instrument with de minimis OID at a discount, the discount is reported under the market discount rules. Eztaxform See Market Discount Bonds in chapter 1 of Publication 550. Eztaxform Exceptions to reporting OID. Eztaxform   The OID rules discussed in this chapter do not apply to the following debt instruments. Eztaxform Tax-exempt obligations. Eztaxform (However, see Stripped tax-exempt obligations under Stripped Bonds and Coupons in chapter 1 of Publication 550). Eztaxform U. Eztaxform S. Eztaxform savings bonds. Eztaxform Short-term debt instruments (those with a fixed maturity date of not more than 1 year from the date of issue). Eztaxform Obligations issued by an individual before March 2, 1984. Eztaxform Loans between individuals if all the following are true. Eztaxform The lender is not in the business of lending money. Eztaxform The amount of the loan, plus the amount of any outstanding prior loans between the same individuals, is $10,000 or less. Eztaxform Avoiding any federal tax is not one of the principal purposes of the loan. Eztaxform Form 1099-OID. Eztaxform   The issuer of the debt instrument (or your broker if you held the instrument through a broker) should give you Form 1099-OID, or a similar statement, if the total OID for the calendar year is $10 or more. Eztaxform Form 1099-OID will show, in box 1, the amount of OID for the part of the year that you held the bond. Eztaxform It also will show, in box 2, the stated interest you must include in your income. Eztaxform A copy of Form 1099-OID will be sent to the IRS. Eztaxform Do not file your copy with your return. Eztaxform Keep it for your records. Eztaxform   In most cases, you must report the entire amount in boxes 1 and 2 of Form 1099-OID as interest income. Eztaxform But see Refiguring OID shown on Form 1099-OID, later in this discussion, for more information. Eztaxform Form 1099-OID not received. Eztaxform   If you had OID for the year but did not receive a Form 1099-OID, you can find tables on IRS. Eztaxform gov that list total OID on certain debt instruments and have information that will help you figure OID. Eztaxform For the latest OID tables, go to www. Eztaxform irs. Eztaxform gov and enter “OID tables” in the Search box. Eztaxform If your debt instrument is not listed, consult the issuer for further information about the accrued OID for the year. Eztaxform Nominee. Eztaxform   If someone else is the holder of record (the registered owner) of an OID instrument belonging to you and receives a Form 1099-OID on your behalf, that person must give you a Form 1099-OID. Eztaxform Refiguring OID shown on Form 1099-OID. Eztaxform   You must refigure the OID shown in box 1 or box 8 of Form 1099-OID if either of the following apply. Eztaxform You bought the debt instrument after its original issue and paid a premium or an acquisition premium. Eztaxform The debt instrument is a stripped bond or a stripped coupon (including certain zero coupon instruments). Eztaxform For information about figuring the correct amount of OID to include in your income, see Figuring OID on Long-Term Debt Instruments in Publication 1212. Eztaxform Refiguring periodic interest shown on Form 1099-OID. Eztaxform   If you disposed of a debt instrument or acquired it from another holder during the year, see Bonds Sold Between Interest Dates , earlier, for information about the treatment of periodic interest that may be shown in box 2 of Form 1099-OID for that instrument. Eztaxform Certificates of deposit (CDs). Eztaxform   If you buy a CD with a maturity of more than 1 year, you must include in income each year a part of the total interest due and report it in the same manner as other OID. Eztaxform   This also applies to similar deposit arrangements with banks, building and loan associations, etc. Eztaxform , including: Time deposits, Bonus plans, Savings certificates, Deferred income certificates, Bonus savings certificates, and Growth savings certificates. Eztaxform Bearer CDs. Eztaxform   CDs issued after 1982 generally must be in registered form. Eztaxform Bearer CDs are CDs not in registered form. Eztaxform They are not issued in the depositor's name and are transferable from one individual to another. Eztaxform   Banks must provide the IRS and the person redeeming a bearer CD with a Form 1099-INT. Eztaxform More information. Eztaxform   See chapter 1 of Publication 550 for more information about OID and related topics, such as market discount bonds. Eztaxform When To Report Interest Income When to report your interest income depends on whether you use the cash method or an accrual method to report income. Eztaxform Cash method. Eztaxform   Most individual taxpayers use the cash method. Eztaxform If you use this method, you generally report your interest income in the year in which you actually or constructively receive it. Eztaxform However, there are special rules for reporting the discount on certain debt instruments. Eztaxform See U. Eztaxform S. Eztaxform Savings Bonds and Original Issue Discount (OID) , earlier. Eztaxform Example. Eztaxform On September 1, 2011, you loaned another individual $2,000 at 12%, compounded annually. Eztaxform You are not in the business of lending money. Eztaxform The note stated that principal and interest would be due on August 31, 2013. Eztaxform In 2013, you received $2,508. Eztaxform 80 ($2,000 principal and $508. Eztaxform 80 interest). Eztaxform If you use the cash method, you must include in income on your 2013 return the $508. Eztaxform 80 interest you received in that year. Eztaxform Constructive receipt. Eztaxform   You constructively receive income when it is credited to your account or made available to you. Eztaxform You do not need to have physical possession of it. Eztaxform For example, you are considered to receive interest, dividends, or other earnings on any deposit or account in a bank, savings and loan, or similar financial institution, or interest on life insurance policy dividends left to accumulate, when they are credited to your account and subject to your withdrawal. Eztaxform This is true even if they are not yet entered in your passbook. Eztaxform   You constructively receive income on the deposit or account even if you must: Make withdrawals in multiples of even amounts, Give a notice to withdraw before making the withdrawal, Withdraw all or part of the account to withdraw the earnings, or Pay a penalty on early withdrawals, unless the interest you are to receive on an early withdrawal or redemption is substantially less than the interest payable at maturity. Eztaxform Accrual method. Eztaxform   If you use an accrual method, you report your interest income when you earn it, whether or not you have received it. Eztaxform Interest is earned over the term of the debt instrument. Eztaxform Example. Eztaxform If, in the previous example, you use an accrual method, you must include the interest in your income as you earn it. Eztaxform You would report the interest as follows: 2011, $80; 2012, $249. Eztaxform 60; and 2013, $179. Eztaxform 20. Eztaxform Coupon bonds. Eztaxform   Interest on coupon bonds is taxable in the year the coupon becomes due and payable. Eztaxform It does not matter when you mail the coupon for payment. Eztaxform How To Report Interest Income Generally, you report all your taxable interest income on Form 1040, line 8a; Form 1040A, line 8a; or Form 1040EZ, line 2. Eztaxform You cannot use Form 1040EZ if your taxable interest income is more than $1,500. Eztaxform Instead, you must use Form 1040A or Form 1040. Eztaxform Form 1040A. Eztaxform   You must complete Schedule B (Form 1040A or 1040), Part I, if you file Form 1040A and any of the following are true. Eztaxform Your taxable interest income is more than $1,500. Eztaxform You are claiming the interest exclusion under the Education Savings Bond Program (discussed earlier). Eztaxform You received interest from a seller-financed mortgage, and the buyer used the property as a home. Eztaxform You received a Form 1099-INT for U. Eztaxform S. Eztaxform savings bond interest that includes amounts you reported before 2013. Eztaxform You received, as a nominee, interest that actually belongs to someone else. Eztaxform You received a Form 1099-INT for interest on frozen deposits. Eztaxform You are reporting OID in an amount less than the amount shown on Form 1099-OID. Eztaxform You received a Form 1099-INT for interest on a bond you bought between interest payment dates. Eztaxform You acquired taxable bonds after 1987 and choose to reduce interest income from the bonds by any amortizable bond premium (see Bond Premium Amortization in chapter 3 of Publication 550). Eztaxform List each payer's name and the amount of interest income received from each payer on line 1. Eztaxform If you received a Form 1099-INT or Form 1099-OID from a brokerage firm, list the brokerage firm as the payer. Eztaxform   You cannot use Form 1040A if you must use Form 1040, as described next. Eztaxform Form 1040. Eztaxform   You must use Form 1040 instead of Form 1040A or Form 1040EZ if: You forfeited interest income because of the early withdrawal of a time deposit; You acquired taxable bonds after 1987, you choose to reduce interest income from the bonds by any amortizable bond premium, and you are deducting the excess of bond premium amortization for the accrual period over the qualified stated interest for the period (see Bond Premium Amortization in chapter 3 of Publication 550); or You received tax-exempt interest from private activity bonds issued after August 7, 1986. Eztaxform Schedule B (Form 1040A or 1040). Eztaxform   You must complete Schedule B (Form 1040A or 1040), Part I, if you file Form 1040 and any of the following apply. Eztaxform Your taxable interest income is more than $1,500. Eztaxform You are claiming the interest exclusion under the Education Savings Bond Program (discussed earlier). Eztaxform You received interest from a seller-financed mortgage, and the buyer used the property as a home. Eztaxform You received a Form 1099-INT for U. Eztaxform S. Eztaxform savings bond interest that includes amounts you reported before 2013. Eztaxform You received, as a nominee, interest that actually belongs to someone else. Eztaxform You received a Form 1099-INT for interest on frozen deposits. Eztaxform You received a Form 1099-INT for interest on a bond you bought between interest payment dates. Eztaxform You are reporting OID in an amount less than the amount shown on Form 1099-OID. Eztaxform Statement (2) in the preceding list under Form 1040 is true. Eztaxform In Part I, line 1, list each payer's name and the amount received from each. Eztaxform If you received a Form 1099-INT or Form 1099-OID from a brokerage firm, list the brokerage firm as the payer. Eztaxform Reporting tax-exempt interest. Eztaxform   Total your tax-exempt interest (such as interest or accrued OID on certain state and municipal bonds, including tax-exempt interest on zero coupon municipal bonds) and exempt-interest dividends from a mutual fund as shown on Form 1099-INT, box 8, and on Form 1099-DIV, box 10. Eztaxform Add these amounts to any other tax-exempt interest you received. Eztaxform Report the total on line 8b of Form 1040A or 1040. Eztaxform   If you file Form 1040EZ, enter “TEI” and the amount in the space to the left of line 2. Eztaxform Do not add tax-exempt interest in the total on Form 1040EZ, line 2. Eztaxform   Form 1099-INT, box 9, and Form 1099-DIV, box 11, show the tax-exempt interest subject to the alternative minimum tax on Form 6251. Eztaxform These amounts are already included in the amounts on Form 1099-INT, box 8, and Form 1099-DIV, box 10. Eztaxform Do not add the amounts in Form 1099-INT, box 9 and Form 1099-DIV, box 11 to, or subtract them from, the amounts on Form 1099-INT, box 8, and Form 1099-DIV, box 10. Eztaxform    Do not report interest from an individual retirement account (IRA) as tax-exempt interest. Eztaxform Form 1099-INT. Eztaxform   Your taxable interest income, except for interest from U. Eztaxform S. Eztaxform savings bonds and Treasury obligations, is shown in box 1 of Form 1099-INT. Eztaxform Add this amount to any other taxable interest income you received. Eztaxform You must report all of your taxable interest income even if you do not receive a Form 1099-INT. Eztaxform Generally, contact your financial institution if you do not receive a Form 1099-INT by February 15. Eztaxform Your identifying number may be truncated on any paper Form 1099-INT you receive. Eztaxform   If you forfeited interest income because of the early withdrawal of a time deposit, the deductible amount will be shown on Form 1099-INT in box 2. Eztaxform See Penalty on early withdrawal of savings in chapter 1 of Publication 550. Eztaxform   Box 3 of Form 1099-INT shows the interest income you received from U. Eztaxform S. Eztaxform savings bonds, Treasury bills, Treasury notes, and Treasury bonds. Eztaxform Add the amount shown in box 3 to any other taxable interest income you received, unless part of the amount in box 3 was previously included in your interest income. Eztaxform If part of the amount shown in box 3 was previously included in your interest income, see U. Eztaxform S. Eztaxform savings bond interest previously reported , later. Eztaxform   Box 4 of Form 1099-INT will contain an amount if you were subject to backup withholding. Eztaxform Report the amount from box 4 on Form 1040EZ, line 7; on Form 1040A, line 36; or Form 1040, line 62 (federal income tax withheld). Eztaxform   Box 5 of Form 1099-INT shows investment expenses you may be able to deduct as an itemized deduction. Eztaxform See chapter 28 for more information about investment expenses. Eztaxform   If there are entries in boxes 6 and 7 of Form 1099-INT, you must file Form 1040. Eztaxform You may be able to take a credit for the amount shown in box 6 unless you deduct this amount on line 8 of Schedule A (Form 1040). Eztaxform To take the credit, you may have to file Form 1116, Foreign Tax Credit. Eztaxform For more information, see Publication 514, Foreign Tax Credit for Individuals. Eztaxform U. Eztaxform S. Eztaxform savings bond interest previously reported. Eztaxform   If you received a Form 1099-INT for U. Eztaxform S. Eztaxform savings bond interest, the form may show interest you do not have to report. Eztaxform See Form 1099-INT for U. Eztaxform S. Eztaxform savings bonds interest , earlier, under U. Eztaxform S. Eztaxform Savings Bonds. Eztaxform   On Schedule B (Form 1040A or 1040), Part I, line 1, report all the interest shown on your Form 1099-INT. Eztaxform Then follow these steps. Eztaxform Several lines above line 2, enter a subtotal of all interest listed on line 1. Eztaxform Below the subtotal enter “U. Eztaxform S. Eztaxform Savings Bond Interest Previously Reported” and enter amounts previously reported or interest accrued before you received the bond. Eztaxform Subtract these amounts from the subtotal and enter the result on line 2. Eztaxform More information. Eztaxform   For more information about how to report interest income, see chapter 1 of Publication 550 or the instructions for the form you must file. Eztaxform Prev  Up  Next   Home   More Online Publications