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H&r Block Printable Coupon

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H&r Block Printable Coupon

H&r block printable coupon Internal Revenue Bulletin:  2013-7  February 11, 2013  Rev. H&r block printable coupon Proc. H&r block printable coupon 2013-16 Table of Contents SECTION 1. H&r block printable coupon PURPOSE SECTION 2. H&r block printable coupon BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE SECTION 3. H&r block printable coupon BACKGROUND—APPLICABLE PROVISIONS OF LAW SECTION 4. H&r block printable coupon FEDERAL INCOME TAX TREATMENT SECTION 5. H&r block printable coupon INFORMATION-REPORTING OBLIGATIONS SECTION 6. H&r block printable coupon HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA SECTION 7. H&r block printable coupon PENALTY RELIEF FOR 2012 SECTION 8. H&r block printable coupon SCOPE AND EFFECTIVE DATE SECTION 9. H&r block printable coupon DRAFTING INFORMATION SECTION 1. H&r block printable coupon PURPOSE This revenue procedure provides guidance to mortgage loan holders, loan servicers, and borrowers who are participating in the Department of the Treasury’s (Treasury) and Department of Housing and Urban Development’s (HUD) Home Affordable Modification Program® (HAMP®). H&r block printable coupon Under HAMP, a borrower may be eligible for principal reduction of the outstanding balance of a qualifying mortgage pursuant to the program’s Principal Reduction AlternativeSM (PRA). H&r block printable coupon In appropriate cases, HAMP has been offering the PRA as part of a HAMP loan modification since the last quarter of 2010. H&r block printable coupon Current plans call for HAMP to continue accepting new borrowers through the end of 2013. H&r block printable coupon The Internal Revenue Service (Service) is providing this guidance to address the tax consequences for borrowers (HAMP-PRA borrowers) who are participating in the PRA and the reporting obligations for participating mortgage loan holders and servicers. H&r block printable coupon SECTION 2. H&r block printable coupon BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE . H&r block printable coupon 01 To help distressed borrowers lower their monthly mortgage payments, Treasury and HUD established HAMP for mortgage loans that are not owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). H&r block printable coupon A description of the program can be found at www. H&r block printable coupon makinghomeaffordable. H&r block printable coupon gov. H&r block printable coupon . H&r block printable coupon 02 Under HAMP, a participating loan servicer, acting on behalf of the mortgage loan holder, must consider a sequence of modification steps for each eligible borrower’s mortgage loan until the borrower’s monthly payment is reduced to a monthly payment amount determined under the HAMP guidelines. H&r block printable coupon These steps include a reduction in the mortgage loan’s interest rate, an extension of the mortgage loan’s term, and a reduction in the mortgage loan’s principal balance. H&r block printable coupon . H&r block printable coupon 03 In some cases, the unpaid principal balance of the modified mortgage loan is divided into (1) an amount that bears stated interest and that is used to calculate the borrower’s new monthly mortgage payment (the “Non-forbearance Portion”), and (2) a forbearance amount, which does not bear stated interest and on which periodic payments of stated principal are not required. H&r block printable coupon The stated principal of the forbearance amount is due upon the earliest of the borrower’s transfer of the property, payoff of the balance on the Non-forbearance Portion of the mortgage loan, or maturity of the mortgage loan. H&r block printable coupon However, as noted in section 2. H&r block printable coupon 06 of this revenue procedure, a HAMP-PRA borrower sometimes may not have to pay all or a portion of the forbearance amount. H&r block printable coupon (The forbearance amount associated with a HAMP-PRA principal reduction is called the “PRA Forbearance Amount. H&r block printable coupon ”) . H&r block printable coupon 04 If a mortgage loan is being considered for a HAMP modification and the amount owed on the mortgage loan is greater than 115 percent of the value of the property, then the servicer must consider whether principal reduction under PRA should be used as part of the HAMP modification. H&r block printable coupon . H&r block printable coupon 05 The first step toward a HAMP modification is a trial period plan, in which the borrower’s monthly mortgage payment is set at a monthly payment amount determined under the HAMP guidelines. H&r block printable coupon The trial period plan effective date is the due date for the first of the reduced payments that are to be made under the trial period plan. H&r block printable coupon (It is the first day of either the first or the second month after the servicer transmits the trial period notice to the borrower. H&r block printable coupon ) In general, the trial period is three months, and, during this period, the borrower must satisfy certain conditions before the changes to the terms of the mortgage loan become permanent (the “Trial Period Conditions”). H&r block printable coupon Specifically, depending on the borrower’s trial period payment history, the borrower’s compliance with HAMP and servicer guidelines, and his or her satisfaction of all other Trial Period Conditions, the borrower will be offered a permanent modification of the terms of the mortgage loan, including monthly mortgage payments that are lower than those under the old mortgage loan. H&r block printable coupon Until the effective date of a permanent modification, the terms of the existing mortgage loan continue to apply. H&r block printable coupon . H&r block printable coupon 06 After the mortgage loan is permanently modified under HAMP, if the modified mortgage loan is in good standing on the first, second, or third annual anniversary of the trial period plan effective date (the “Three-year Period”), the servicer must reduce the unpaid principal balance of the mortgage loan on the respective anniversary date by one-third of the initial PRA Forbearance Amount. H&r block printable coupon (The servicer allocates the entire reduction to the remaining PRA Forbearance Amount. H&r block printable coupon ) In general, if a HAMP-PRA borrower’s mortgage loan is in good standing and if the HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan prior to the reduction of the entire PRA Forbearance Amount, the servicer must reduce the remaining outstanding principal balance of the mortgage loan by the remaining PRA Forbearance Amount. H&r block printable coupon . H&r block printable coupon 07 In connection with every HAMP loan modification, the HAMP program administrator (acting on behalf of the federal government) provides incentives to the borrower, the servicer, and the investor (that is, the holder of the mortgage loan). H&r block printable coupon If a HAMP loan modification includes a PRA principal reduction, the HAMP program administrator makes additional incentive payments to the investor. H&r block printable coupon These additional incentives are called “PRA Investor Incentive Payments” and are generally spread over three years. H&r block printable coupon The size of the PRA Investor Incentive Payments depends on the amount of principal reduced, the loan-to-value ratio at the time of the HAMP modification, and the loan’s payment history before the modification. H&r block printable coupon The PRA Investor Incentive Payments range from 18 to 63 percent of the principal amounts reduced. H&r block printable coupon For purposes of this revenue procedure, the excess of the initial PRA Forbearance Amount of a mortgage loan over the aggregate PRA Investor Incentive Payments scheduled to be paid with respect to that loan is called the “PRA Adjusted Forbearance Amount. H&r block printable coupon ” . H&r block printable coupon 08 A PRA Investor Incentive Payment is earned by the investor on each date on which the servicer reduces the unpaid principal balance of the mortgage loan by a portion of the PRA Forbearance Amount (generally, on the first three annual anniversaries of the trial period plan effective date). H&r block printable coupon . H&r block printable coupon 09 If a HAMP-PRA borrower’s early payment in full of the Non-forbearance Portion of the mortgage loan accelerates the reduction of the remaining PRA Forbearance Amount (described above in section 2. H&r block printable coupon 06 of this revenue procedure), the remaining PRA Investor Incentive Payments from the HAMP program administrator are also accelerated. H&r block printable coupon . H&r block printable coupon 10 If, prior to completion of the Three-year Period, a mortgage loan ceases to be in good standing because of the HAMP-PRA borrower’s payment history, then the remaining PRA Forbearance Amount is not further reduced and is due when the HAMP-PRA borrower transfers the property, the HAMP-PRA borrower refinances, or otherwise pays off the Non-forbearance Portion of the mortgage loan, or the mortgage loan matures. H&r block printable coupon SECTION 3. H&r block printable coupon BACKGROUND—APPLICABLE PROVISIONS OF LAW . H&r block printable coupon 01 Under § 61 of the Internal Revenue Code, except as otherwise provided in subtitle A, gross income means all income from whatever source derived, including income from discharge of indebtedness. H&r block printable coupon See § 61(a)(12). H&r block printable coupon . H&r block printable coupon 02 Under § 1. H&r block printable coupon 1001-3 of the Income Tax Regulations, if a debt instrument undergoes a significant modification, then the modification results in an exchange of the original debt instrument for the modified debt instrument. H&r block printable coupon In general, an agreement to change a term of a debt instrument is a modification at the time the borrower and holder enter into the agreement, even if the change in term is not immediately effective. H&r block printable coupon However, if the change is conditioned on reasonable closing conditions, a modification occurs on the closing date of the agreement. H&r block printable coupon See § 1. H&r block printable coupon 1001-3(c)(6). H&r block printable coupon . H&r block printable coupon 03 Under § 108(e)(10), in the case of a debt-for-debt exchange (including a deemed exchange under § 1. H&r block printable coupon 1001-3), the borrower is treated as having satisfied the original debt instrument with an amount of money equal to the issue price of the new debt instrument. H&r block printable coupon If the amount of debt satisfied in this manner exceeds that issue price, the borrower realizes discharge of indebtedness income on the exchange. H&r block printable coupon See also § 1. H&r block printable coupon 61-12(c). H&r block printable coupon . H&r block printable coupon 04 The issue price of a non-publicly traded debt instrument issued for non-publicly traded property generally reflects the amount of principal that the borrower is required to pay to the holder of the instrument. H&r block printable coupon If a borrower has the ability to avoid paying certain amounts (including principal) without violating the terms of the instrument, the payment schedule for the instrument is generally determined based on an assumption that the borrower will avoid any requirement to make those payments. H&r block printable coupon See, e. H&r block printable coupon g. H&r block printable coupon , §§ 1. H&r block printable coupon 1272-1(c)(5) and 1. H&r block printable coupon 1274-2(d). H&r block printable coupon . H&r block printable coupon 05 Under § 108(a), gross income does not include any amount that but for § 108(a) would be includible in gross income by reason of the discharge (in whole or in part) of a taxpayer’s indebtedness if (1) the indebtedness discharged is qualified principal residence indebtedness that is discharged before January 1, 2014, or (2) the discharge occurs when the taxpayer is insolvent. H&r block printable coupon Section 108(a)(1)(E) and 108(a)(1)(B). H&r block printable coupon (Although § 108 contains other exclusions as well, this revenue procedure focuses on these two exclusions because they are the most likely to apply to the greatest number of HAMP-PRA borrowers. H&r block printable coupon ) . H&r block printable coupon 06 Under §§ 108(h) and 163(h)(3)(B), qualified principal residence indebtedness is any indebtedness that is incurred by a borrower to buy, build, or substantially improve the borrower’s principal residence and is secured by that residence. H&r block printable coupon . H&r block printable coupon 07 Qualified principal residence indebtedness also includes a loan secured by the borrower’s principal residence that refinances qualified principal residence indebtedness, but only to the extent of the amount of the refinanced indebtedness. H&r block printable coupon See §§ 108(h) and 163(h)(3)(B)(i). H&r block printable coupon . H&r block printable coupon 08 The maximum amount of discharged indebtedness that a borrower may exclude from gross income under the qualified principal residence indebtedness exclusion is $2,000,000 ($1,000,000 for a married individual filing a separate return). H&r block printable coupon Under § 108(h)(4), if only part of the discharged indebtedness is qualified principal residence indebtedness, then the exclusion applies only to the amount of the discharged indebtedness that exceeds the amount of the loan (determined immediately before the discharge) that is not qualified principal residence indebtedness. H&r block printable coupon . H&r block printable coupon 09 Under § 108(a)(3), the insolvency exclusion applies to the lesser of the amount of the debt discharged or the amount by which the taxpayer is insolvent immediately before the discharge. H&r block printable coupon . H&r block printable coupon 10 Section 108(d)(3) provides that, for purposes of the insolvency exclusion, a taxpayer is insolvent to the extent that the taxpayer’s total liabilities exceed the fair market value of all of the taxpayer’s assets immediately before the discharge of indebtedness. H&r block printable coupon Under § 108(a)(2)(C), the qualified principal residence indebtedness exclusion takes precedence over the insolvency exclusion when both exclusions apply to discharged indebtedness, unless the taxpayer elects to apply the insolvency exclusion. H&r block printable coupon . H&r block printable coupon 11 If an amount is excluded from gross income as a discharge of qualified principal residence indebtedness, the taxpayer must reduce the basis of the taxpayer’s principal residence. H&r block printable coupon See § 108(h)(1). H&r block printable coupon If a discharged amount is excluded from gross income because the taxpayer was insolvent when the discharge occurred, the taxpayer must reduce certain tax attributes (possibly including basis). H&r block printable coupon See § 108(b). H&r block printable coupon For further discussion of income from the discharge of indebtedness, the qualified principal residence indebtedness exclusion, the insolvency exclusion, and other exclusions from gross income that may apply, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). H&r block printable coupon . H&r block printable coupon 12 Taxpayers who exclude any discharged amounts from gross income report both the exclusion and the resulting reduction in basis or other tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). H&r block printable coupon See Form 982 instructions and Publication 4681. H&r block printable coupon This form is to be filed with the tax return for the taxable year in which the amount is discharged but is excluded from gross income. H&r block printable coupon . H&r block printable coupon 13 Governmental payments made to or on behalf of individuals or other persons are included within the broad definition of gross income under § 61 unless an exception applies. H&r block printable coupon See Notice 2003-18, 2003-1 C. H&r block printable coupon B. H&r block printable coupon 699, and Rev. H&r block printable coupon Rul. H&r block printable coupon 79-356, 1979-2 C. H&r block printable coupon B. H&r block printable coupon 28. H&r block printable coupon However, if disbursements are made by a governmental unit to individuals in the interest of the general welfare (that is, are generally based on individual or family need) and the disbursements do not represent compensation for services, then the amounts disbursed are excluded from the income of the recipient (general welfare exclusion). H&r block printable coupon See Rev. H&r block printable coupon Rul. H&r block printable coupon 2005-46, 2005-2 C. H&r block printable coupon B. H&r block printable coupon 120, and Rev. H&r block printable coupon Rul. H&r block printable coupon 75-246, 1975-1 C. H&r block printable coupon B. H&r block printable coupon 24. H&r block printable coupon . H&r block printable coupon 14 Under § 451 and § 1. H&r block printable coupon 451-1(a), a taxpayer that uses the cash receipts and disbursements method of accounting includes income in gross income when the taxpayer actually or constructively receives the income. H&r block printable coupon . H&r block printable coupon 15 Section 6041 requires every person engaged in a trade or business (including the United States and its agencies) to (1) file an information return (Form 1099-MISC, Miscellaneous Income, is used for this purpose) for each calendar year in which the person makes, in the course of its trade or business, payments to another person of fixed or determinable income aggregating $600 or more, and (2) furnish a copy of the information return to that other person. H&r block printable coupon See § 6041(a) and (d) and § 1. H&r block printable coupon 6041-1(a)(1) and (b). H&r block printable coupon . H&r block printable coupon 16 Section 6050P requires applicable entities (including the United States and its agencies, financial entities, and any organization a significant trade or business of which is the lending of money) to (1) file an information return (Form 1099-C, Cancellation of Debt, is used for this purpose) for each calendar year in which it discharges indebtedness of another person of $600 or more, and (2) furnish a copy of the information return to that other person. H&r block printable coupon See § 6050P(a)-(c) and §§ 1. H&r block printable coupon 6050P-1(a) and 1. H&r block printable coupon 6050P-2(a) and (d). H&r block printable coupon . H&r block printable coupon 17 Section 6721 imposes penalties with respect to information returns required to be filed with the Service. H&r block printable coupon These penalties apply in the case of a failure to timely file an information return, a failure to include all required information on the return, or the inclusion of incorrect information on the return. H&r block printable coupon Section 6724(d)(1) includes Forms 1099-MISC and 1099-C in the term “information return. H&r block printable coupon ” . H&r block printable coupon 18 Section 6722 imposes penalties with respect to payee statements required to be furnished to payees. H&r block printable coupon These penalties apply in the case of a failure to timely furnish a payee statement, a failure to include all required information on the statement, or the inclusion of incorrect information on the payee statement. H&r block printable coupon Section 6724(d)(2) includes in the term “payee statement” copies of Forms 1099-MISC and 1099-C that are required to be furnished to taxpayers. H&r block printable coupon SECTION 4. H&r block printable coupon FEDERAL INCOME TAX TREATMENT . H&r block printable coupon 01 Because a HAMP modification with a PRA principal reduction is a significant modification, it results in a deemed debt-for-debt exchange in which the HAMP-PRA borrower satisfies the old mortgage loan by issuing a new one. H&r block printable coupon See § 1. H&r block printable coupon 1001-3. H&r block printable coupon At the time of the modification, therefore, under § 108 and this revenue procedure, the HAMP-PRA borrower realizes discharge of indebtedness income equal to any excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new (post-modification) mortgage loan. H&r block printable coupon See also § 61(a)(12) and § 1. H&r block printable coupon 61-12(c). H&r block printable coupon . H&r block printable coupon 02 A HAMP-PRA borrower has the ability to avoid payment of the PRA Adjusted Forbearance Amount. H&r block printable coupon Because the HAMP-PRA borrower has this ability, that amount should not be taken into account in determining the issue price of the new mortgage loan. H&r block printable coupon Because the issue price of the new mortgage loan does not include the PRA Adjusted Forbearance Amount, the PRA Adjusted Forbearance Amount contributes to the excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new mortgage loan. H&r block printable coupon . H&r block printable coupon 03 On the other hand, the investor has not given up its right to receive the remainder of the PRA Forbearance Amount, because the HAMP program administrator is expected to make those payments on the HAMP-PRA borrower’s behalf by making the PRA Investor Incentive Payments. H&r block printable coupon Because the remainder of the PRA Forbearance Amount is payable in this manner, that remainder is included in the issue price of the new mortgage loan. H&r block printable coupon . H&r block printable coupon 04 The Trial Period Conditions are reasonable closing conditions that must be satisfied before the changes to the terms of the mortgage loan become permanent. H&r block printable coupon Therefore, for purposes of § 1. H&r block printable coupon 1001-3, the date of the modification is the date of the permanent modification. H&r block printable coupon . H&r block printable coupon 05 Unless an exclusion applies, the HAMP-PRA borrower includes in gross income the discharge of indebtedness income described in section 4. H&r block printable coupon 01 of this revenue procedure for the taxable year in which the permanent modification occurs. H&r block printable coupon Under certain conditions, however, section 6 of this revenue procedure permits a borrower to report the discharge of indebtedness under HAMP-PRA over the Three-year Period. H&r block printable coupon The qualified principal residence indebtedness exclusion under § 108(a)(1)(E) and the insolvency exclusion under § 108(a)(1)(B) are two exclusions that may apply to the discharge. H&r block printable coupon . H&r block printable coupon 06 The PRA Investor Incentive Payment is treated as a payment on the mortgage loan by the HAMP program administrator on behalf of the HAMP-PRA borrower. H&r block printable coupon . H&r block printable coupon 07 To the extent that the HAMP-PRA borrower uses the property as the HAMP-PRA borrower’s principal residence or the property is occupied by the HAMP-PRA borrower’s legal dependent, parent, or grandparent without rent being charged or collected, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the PRA Investor Incentive Payments that the HAMP program administrator makes to the investor in the mortgage loan. H&r block printable coupon This is consistent with Rev. H&r block printable coupon Rul. H&r block printable coupon 2009-19, 2009-28 I. H&r block printable coupon R. H&r block printable coupon B. H&r block printable coupon 111, which addressed the treatment of Pay-for-Performance Success Payments. H&r block printable coupon . H&r block printable coupon 08 To the extent that the HAMP-PRA borrower uses the property as a rental property or holds the property vacant and available for rent, the HAMP-PRA borrower includes PRA Investor Incentive Payments in gross income. H&r block printable coupon If the HAMP-PRA borrower uses the cash receipts and disbursements method of accounting, then the HAMP-PRA borrower includes a PRA Investor Incentive Payment in gross income in the taxable year in which it is applied as a payment on the HAMP-PRA borrower’s mortgage loan. H&r block printable coupon . H&r block printable coupon 09 As described in section 2. H&r block printable coupon 09 of this revenue procedure, if a HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan while the loan is in good standing and prior to completion of the Three-year Period, that payment accelerates both the reduction in the remaining PRA Forbearance Amount and the PRA Investor Incentive Payments from the HAMP program administrator. H&r block printable coupon To the extent that the HAMP-PRA borrower is described in section 4. H&r block printable coupon 07 of this revenue procedure, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the accelerated PRA Investor Incentive Payments. H&r block printable coupon To the extent that the HAMP-PRA borrower is described in section 4. H&r block printable coupon 08 of this revenue procedure, the HAMP-PRA borrower includes in income in the year of the acceleration the remaining amount of the PRA Investor Incentive Payment. H&r block printable coupon SECTION 5. H&r block printable coupon INFORMATION-REPORTING OBLIGATIONS . H&r block printable coupon 01 Under § 6050P, the investor is required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness of $600 or more. H&r block printable coupon A copy of this form is required to be furnished to the borrower. H&r block printable coupon . H&r block printable coupon 02 As stated in sections 4. H&r block printable coupon 01 and 4. H&r block printable coupon 04 of this revenue procedure, the HAMP-PRA discharge of indebtedness is realized at the time of the permanent modification of the mortgage loan. H&r block printable coupon . H&r block printable coupon 03 An investor is an applicable entity that is required under § 1. H&r block printable coupon 6050P-1 and this revenue procedure to issue a Form 1099-C for discharge of indebtedness. H&r block printable coupon Under § 1. H&r block printable coupon 6050P-1(b)(2)(F), the permanent modification of a mortgage loan is an identifiable event. H&r block printable coupon Identifiable events determine when Forms 1099-C have to be issued. H&r block printable coupon Thus, the Form 1099-C is issued for the calendar year in which the permanent mortgage loan modification occurs. H&r block printable coupon This rule under § 1. H&r block printable coupon 6050P-1(b)(2)(F) applies even if, under section 6 of this revenue procedure, the HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the times when the unpaid principal balance of the new mortgage loan is reduced. H&r block printable coupon . H&r block printable coupon 04 The investor (or the loan servicer acting on behalf of the investor) reports the full amount of the discharge on the Form 1099-C regardless of whether some or all of the amount is excludible from income under the qualified principal residence indebtedness exclusion, the insolvency exclusion, or any other exclusion that may apply. H&r block printable coupon That discharged amount will generally be the PRA Adjusted Forbearance Amount (which does not include the amounts expected to be satisfied by PRA Investor Incentive Payments). H&r block printable coupon . H&r block printable coupon 05 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. H&r block printable coupon 07 of this revenue procedure, the PRA Investor Incentive Payments are excluded from the gross income of the HAMP-PRA borrower, and thus they are not fixed or determinable income to the HAMP-PRA borrower. H&r block printable coupon Under § 6041, these payments are not subject to information reporting. H&r block printable coupon See Notice 2011-14, 2011-11 I. H&r block printable coupon R. H&r block printable coupon B. H&r block printable coupon 544, 546. H&r block printable coupon . H&r block printable coupon 06 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. H&r block printable coupon 08 of this revenue procedure, the PRA Investor Incentive Payments are includible in gross income as fixed or determinable income in the taxable year required by the HAMP-PRA borrower’s method of accounting. H&r block printable coupon The payment is subject to the information reporting requirements of § 6041, as described in section 3. H&r block printable coupon 15 of this revenue procedure. H&r block printable coupon Accordingly, the HAMP program administrator is required to issue a Form 1099-MISC reporting the PRA Investor Incentive Payment. H&r block printable coupon SECTION 6. H&r block printable coupon HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA . H&r block printable coupon 01 In general. H&r block printable coupon The HAMP-PRA program began in the last quarter of 2010, and since that time there has been uncertainty about whether the amount of the discharge of indebtedness should be reported in the year of the permanent modification or over the Three-year Period (when the unpaid principal balance on the new mortgage loan is reduced). H&r block printable coupon As a result, some HAMP-PRA borrowers have been reporting the discharge of indebtedness under HAMP-PRA over the Three-year Period. H&r block printable coupon Given the temporary nature of the program and the issuance of this guidance after participation in the program has begun, in the interests of equitable and sound tax administration, HAMP-PRA borrowers may report discharges of indebtedness under HAMP-PRA under the rules in this section 6. H&r block printable coupon A HAMP-PRA borrower may choose to report discharges of indebtedness under HAMP-PRA pursuant to the rules in this section 6 only if the borrower applies the same borrower option under section 6. H&r block printable coupon 02 of this revenue procedure consistently to the taxable year of the permanent modification and to all subsequent taxable years. H&r block printable coupon Thus, a HAMP-PRA borrower may not choose a borrower option under section 6. H&r block printable coupon 02 of this revenue procedure if a statute of limitations has expired for any of the taxable years that are necessary for consistent application of that option. H&r block printable coupon . H&r block printable coupon 02 HAMP-PRA borrower options. H&r block printable coupon A HAMP-PRA borrower may treat the HAMP-PRA discharge as being realized in either of the following ways— (1) One hundred percent of the PRA Adjusted Forbearance Amount at the time of the permanent modification; or (2) One third of the PRA Adjusted Forbearance Amount on each of the first three annual anniversaries of the trial period plan effective date (described in section 2. H&r block printable coupon 06 of this revenue procedure), when, as required by the terms of the new mortgage loan, the servicer reduces the unpaid principal balance of the new mortgage loan. H&r block printable coupon If some or all of the reduction in the unpaid principal balance is accelerated (as described in section 2. H&r block printable coupon 06 of this revenue procedure) because the HAMP-PRA borrower prepays the Non-forbearance Portion of the mortgage loan, then the HAMP-PRA discharge represented by the amount of the reduction that was accelerated is treated as being realized at the time of the accelerated reduction. H&r block printable coupon . H&r block printable coupon 03 HAMP-PRA borrowers who choose to realize the HAMP-PRA discharge at the time of the permanent modification. H&r block printable coupon (1) If a HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the time of the permanent modification, then for the taxable year in which the permanent modification occurs, the HAMP-PRA borrower reports on Form 982 the amount, if any, of the discharge that is excluded from gross income and includes in gross income any remaining discharge. H&r block printable coupon (2) If a HAMP-PRA borrower’s mortgage loan was permanently modified under HAMP in 2010 or 2011, and if the borrower was reporting the discharge of indebtedness using the method described in section 6. H&r block printable coupon 02(2) of this revenue procedure, then the borrower may change to reporting the discharge of indebtedness using the method described in section 6. H&r block printable coupon 02(1) of this revenue procedure by filing a 2012 Form 982 with the borrower’s timely filed (with extensions) 2012 income tax return. H&r block printable coupon This section 6. H&r block printable coupon 03(2) applies only if the change to reporting the discharge using the method described in section 6. H&r block printable coupon 02(1) of this revenue procedure does not change the borrower’s federal income tax liability (including any change in federal income tax liability due to a change in basis or tax attributes (under § 108(h)(1) or § 108(b))) for any taxable year prior to the borrower’s 2012 taxable year. H&r block printable coupon To make this change, the borrower must— (i) Compute the amount of discharge of indebtedness that would be included in income under § 61(a)(12) or excluded from gross income under § 108, basing the computation of the discharge on the facts as of the year of the permanent modification; and (ii) Report on a 2012 Form 982 the reduction in basis or tax attributes (under § 108(h)(1) or § 108(b)) due to the permanent modification that the borrower would have reported on the Form 982 for the taxable year of the permanent modification, minus any reductions due to the permanent modification that the borrower actually reported on Forms 982 for taxable years prior to 2012. H&r block printable coupon (3) Example. H&r block printable coupon The following example illustrates the application of section 6. H&r block printable coupon 03(2) of this revenue procedure. H&r block printable coupon In 2010, B’s basis in B’s principal residence was $330,000. H&r block printable coupon In 2010, B’s mortgage loan on the principal residence is permanently modified under HAMP-PRA. H&r block printable coupon B realized $30,000 of cancellation of indebtedness from the permanent modification, all of which qualifies for the exclusion from income for qualified principal residence indebtedness under § 108(a)(1)(E). H&r block printable coupon The trial period plan effective date also fell in 2010. H&r block printable coupon B’s federal income tax return for 2010 was consistent with B’s reporting this discharge of indebtedness using the method described in section 6. H&r block printable coupon 02(2) of this revenue procedure. H&r block printable coupon That is, B’s 2010 return did not include income from discharge of indebtedness under HAMP-PRA, nor did the return contain a Form 982 reporting exclusion of any such discharge of indebtedness. H&r block printable coupon The next year, B reported on line 10(b) of the 2011 Form 982 that B filed with B’s 2011 federal income tax return a $10,000 reduction in basis in the principal residence. H&r block printable coupon For 2012, B chooses to change to reporting the discharge of indebtedness using the method described in section 6. H&r block printable coupon 02(1) of this revenue procedure. H&r block printable coupon Thus, B files a 2012 Form 982 with B’s timely filed (including extensions) 2012 federal income tax return, and on line 10(b) of that form, B reports a $20,000 basis reduction in the principal residence ($30,000 basis reduction that B would have excluded from income in 2010 using the method described in section 6. H&r block printable coupon 02(1) of this revenue procedure, minus the $10,000 basis reduction that B reported on B’s 2011 Form 982). H&r block printable coupon (4) If a HAMP-PRA borrower reports the entire HAMP-PRA discharge using the method described in section 6. H&r block printable coupon 02(1) of this revenue procedure, and if that HAMP-PRA borrower’s mortgage loan ceases to be in good standing during the Three-year Period as described in section 2. H&r block printable coupon 10 of this revenue procedure, then some or all of the anticipated reductions in the PRA Adjusted Forbearance Amount will not take place. H&r block printable coupon Because the amount of these anticipated reductions was not included in determining the issue price of the new mortgage loan that, pursuant to § 1. H&r block printable coupon 1001-3, the HAMP-PRA borrower is deemed to issue in satisfaction of the old mortgage loan, the issue price of the new mortgage loan was understated. H&r block printable coupon Under these circumstances, the discharge of indebtedness income determined as of the date of the permanent modification will have been overstated. H&r block printable coupon (5) The Service will not challenge a HAMP-PRA borrower who is described in section 6. H&r block printable coupon 03(4) of this revenue procedure and who takes the following corrective measures: (i) If a HAMP-PRA borrower included any of the discharge of indebtedness in gross income, the HAMP-PRA borrower may file an amended return that does not include the amount of the discharge of indebtedness that was previously reported as gross income but that, because of the HAMP-PRA borrower’s failure to keep the new mortgage loan in good standing, was not ultimately discharged. H&r block printable coupon The amended return should be for the taxable year in which the income was included (that is, the year of the permanent modification), provided the applicable statute of limitations remains open for that taxable year. H&r block printable coupon (ii) If the HAMP-PRA borrower did not include any of the discharge of indebtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. H&r block printable coupon The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). H&r block printable coupon The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing. H&r block printable coupon . H&r block printable coupon 04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced. H&r block printable coupon (1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. H&r block printable coupon Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. H&r block printable coupon Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. H&r block printable coupon If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year. H&r block printable coupon (2) A HAMP-PRA borrower who has been using the method described in section 6. H&r block printable coupon 02(1) of this revenue procedure may change to the method described in section 6. H&r block printable coupon 02(2) but must comply with the consistency and open-year requirements described in section 6. H&r block printable coupon 01 of this revenue procedure. H&r block printable coupon SECTION 7. H&r block printable coupon PENALTY RELIEF FOR 2012 . H&r block printable coupon 01 The Service will not assert penalties under § 6721 or § 6722 against an investor for failing to timely file and furnish a 2012 Form 1099-C as required by section 5. H&r block printable coupon 03 through 5. H&r block printable coupon 04 and section 8. H&r block printable coupon 02 of this revenue procedure with respect to discharge of indebtedness resulting from HAMP-PRA permanent modifications that take place during calendar year 2012 if the following requirements are satisfied: (1) Not later than February 28, 2013, a statement is sent to the HAMP-PRA borrower containing the following: (a) The HAMP-PRA borrower’s name, address, and taxpayer identification number; and (b) The date and amount of the discharge of indebtedness (as described in sections 4. H&r block printable coupon 01 through 4. H&r block printable coupon 04 of this revenue procedure) that is required to be reported for 2012. H&r block printable coupon (2) Not later than March 28, 2013, a statement is sent to the Service. H&r block printable coupon It must be in the form of a single statement that separately lists for each HAMP-PRA borrower the information specified in section 7. H&r block printable coupon 01(1) of this revenue procedure. H&r block printable coupon The statement should be sent to the Service at the following address: Internal Revenue Service Center Stop 6728AUSC Austin, TX 73301 . H&r block printable coupon 02 The Service will not assert penalties under § 6721 or § 6722 with respect to any Forms 1099-MISC for 2012 that sections 5. H&r block printable coupon 06 and 8. H&r block printable coupon 02 of this revenue procedure require to be filed with the Service and furnished to taxpayers. H&r block printable coupon . H&r block printable coupon 03 Section 8. H&r block printable coupon 03 and 8. H&r block printable coupon 04 of this revenue procedure, below, describes penalty relief regarding Forms 1099-C and 1099-MISC for 2010 and 2011. H&r block printable coupon SECTION 8. H&r block printable coupon SCOPE AND EFFECTIVE DATE . H&r block printable coupon 01 This revenue procedure applies to all borrowers, investors, and servicers who participate, or have participated, in the HAMP-PRA, regardless of when the permanent modification occurs. H&r block printable coupon . H&r block printable coupon 02 Section 5 of this revenue procedure is effective for Forms 1099-C and 1099-MISC due or filed after January 24, 2013. H&r block printable coupon . H&r block printable coupon 03 Because of the effective date in section 8. H&r block printable coupon 02 of this revenue procedure, an investor is not subject to penalties under § 6721 or § 6722 on the grounds that the investor failed to timely file and furnish a 2010 or 2011 Form 1099-C as described in section 5. H&r block printable coupon 03 through 5. H&r block printable coupon 04 of this revenue procedure (or on the grounds that the investor filed or furnished a 2010 or 2011 Form 1099-C that is inconsistent with section 5. H&r block printable coupon 03 through 5. H&r block printable coupon 04 of this revenue procedure), provided that the investor demonstrates a good faith attempt to comply with the requirements of § 6050P and that the failure was not due to willful neglect. H&r block printable coupon . H&r block printable coupon 04 Because of the effective date in section 8. H&r block printable coupon 02 of this revenue procedure, the Service will not assert penalties under § 6721 or § 6722 on the grounds of a failure to timely file and furnish a 2010 or 2011 Form 1099-MISC, as described in section 5. H&r block printable coupon 06 of this revenue procedure. H&r block printable coupon SECTION 9. H&r block printable coupon DRAFTING INFORMATION The principal authors of this revenue procedure are Ronald J. H&r block printable coupon Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. H&r block printable coupon Pflanz and Sheldon A. H&r block printable coupon Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. H&r block printable coupon Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). H&r block printable coupon For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622-4910, Income Tax and Accounting branch 4 at (202) 622-4920, or Financial Institutions and Products branch 1 at (202) 622-3920 (not toll-free calls). H&r block printable coupon Prev  Up  Next   Home   More Internal Revenue Bulletins
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New Two-Year Period to Adopt Restated Pre-approved DC Plans

The IRS expects to issue most opinion and advisory letters for the latest round of pre-approved defined contribution plans on March 31, 2014. Employers using pre-approved defined contribution plan documents must adopt plan documents restated for the 2010 Cumulative List by April 30, 2016 (Announcement 2014-16).

Determination letters for pre-approved defined contribution plans

Starting May 1, 2014, and ending April 30, 2016, employers can submit applications for individual determination letters for pre-approved defined contribution plans.

An employer who adopts a master & prototype plan (standardized or non-standardized) may not apply for its own determination letter on Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans (instructions) – instead, the employer should rely on the letter issued to the plan sponsor.

However, an adopting employer who made limited modifications to its volume submitter plan may apply for a determination letter on Form 5307. If the modifications are extensive, causing the plan to be treated as an individually designed plan, the employer must instead file Form 5300, Application for Determination for Employee Benefit Plan.

See Revenue Procedure 2014-6, sections 8 and 9 for more information on determination letter applications for pre-approved plans.

Additional resources

 

Page Last Reviewed or Updated: 27-Mar-2014

The H&r Block Printable Coupon

H&r block printable coupon 11. H&r block printable coupon   Social Security and Equivalent Railroad Retirement Benefits Table of Contents Introduction Useful Items - You may want to see: Are Any of Your Benefits Taxable? How To Report Your BenefitsHow Much Is Taxable? Examples Deductions Related to Your BenefitsRepayments More Than Gross Benefits Introduction This chapter explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. H&r block printable coupon It explains the following topics. H&r block printable coupon How to figure whether your benefits are taxable. H&r block printable coupon How to use the social security benefits worksheet (with examples). H&r block printable coupon How to report your taxable benefits. H&r block printable coupon How to treat repayments that are more than the benefits you received during the year. H&r block printable coupon Social security benefits include monthly retirement, survivor, and disability benefits. H&r block printable coupon They do not include supplemental security income (SSI) payments, which are not taxable. H&r block printable coupon Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. H&r block printable coupon They are commonly called the social security equivalent benefit (SSEB) portion of tier 1 benefits. H&r block printable coupon If you received these benefits during 2013, you should have received a Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Payments by the Railroad Retirement Board. H&r block printable coupon These forms show the amounts received and repaid, and taxes withheld for the year. H&r block printable coupon You may receive more than one of these forms for the same year. H&r block printable coupon You should add the amounts shown on all the Forms SSA-1099 and Forms RRB-1099 you receive for the year to determine the total amounts received and repaid, and taxes withheld for that year. H&r block printable coupon See the Appendix at the end of Publication 915 for more information. H&r block printable coupon Note. H&r block printable coupon When the term “benefits” is used in this chapter, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. H&r block printable coupon What is not covered in this chapter. H&r block printable coupon   This chapter does not cover the tax rules for the following railroad retirement benefits. H&r block printable coupon Non-social security equivalent benefit (NSSEB) portion of tier 1 benefits. H&r block printable coupon Tier 2 benefits. H&r block printable coupon Vested dual benefits. H&r block printable coupon Supplemental annuity benefits. H&r block printable coupon For information on these benefits, see Publication 575, Pension and Annuity Income. H&r block printable coupon   This chapter does not cover the tax rules for social security benefits reported on Form SSA-1042S, Social Security Benefit Statement, or Form RRB-1042S, Statement for Nonresident Alien Recipients of: Payments by the Railroad Retirement Board. H&r block printable coupon For information about these benefits, see Publication 519, U. H&r block printable coupon S. H&r block printable coupon Tax Guide for Aliens, and Publication 915, Social Security and Equivalent Railroad Retirement Benefits. H&r block printable coupon   This chapter also does not cover the tax rules for foreign social security benefits. H&r block printable coupon These benefits are taxable as annuities, unless they are exempt from U. H&r block printable coupon S. H&r block printable coupon tax or treated as a U. H&r block printable coupon S. H&r block printable coupon social security benefit under a tax treaty. H&r block printable coupon Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 915 Social Security and Equivalent Railroad Retirement Benefits Forms (and Instructions) 1040-ES Estimated Tax for Individuals SSA-1099 Social Security Benefit Statement RRB-1099 Payments by the Railroad Retirement Board W-4V Voluntary Withholding Request Are Any of Your Benefits Taxable? To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. H&r block printable coupon When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. H&r block printable coupon S. H&r block printable coupon 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. H&r block printable coupon Children's benefits. H&r block printable coupon   The rules in this chapter apply to benefits received by children. H&r block printable coupon See Who is taxed , later. H&r block printable coupon Figuring total income. H&r block printable coupon   To figure the total of one-half of your benefits plus your other income, use Worksheet 11-1 later in this discussion. H&r block printable coupon If the total is more than your base amount, part of your benefits may be taxable. H&r block printable coupon    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. H&r block printable coupon 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. H&r block printable coupon    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. H&r block printable coupon If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. H&r block printable coupon Base amount. H&r block printable coupon   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. H&r block printable coupon Worksheet 11-1. H&r block printable coupon   You can use Worksheet 11-1 to figure the amount of income to compare with your base amount. H&r block printable coupon This is a quick way to check whether some of your benefits may be taxable. H&r block printable coupon Worksheet 11-1. H&r block printable coupon A Quick Way To Check if Your Benefits May Be Taxable A. H&r block printable coupon Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. H&r block printable coupon Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. H&r block printable coupon (If you received more than one form, combine the amounts from box 5 and enter the total. H&r block printable coupon ) A. H&r block printable coupon   Note. H&r block printable coupon If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. H&r block printable coupon B. H&r block printable coupon Enter one-half of the amount on line A B. H&r block printable coupon   C. H&r block printable coupon Enter your taxable pensions, wages, interest, dividends, and other taxable income C. H&r block printable coupon   D. H&r block printable coupon Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. H&r block printable coupon   E. H&r block printable coupon Add lines B, C, and D E. H&r block printable coupon   Note. H&r block printable coupon Compare the amount on line E to your base amount for your filing status. H&r block printable coupon 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. H&r block printable coupon If the amount on line E is more than your base amount, some of your benefits may be taxable. H&r block printable coupon You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). H&r block printable coupon 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. H&r block printable coupon Example. H&r block printable coupon You and your spouse (both over 65) are filing a joint return for 2013 and you both received social security benefits during the year. H&r block printable coupon In January 2014, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. H&r block printable coupon Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. H&r block printable coupon You also received a taxable pension of $22,800 and interest income of $500. H&r block printable coupon You did not have any tax-exempt interest income. H&r block printable coupon Your benefits are not taxable for 2013 because your income, as figured in Worksheet 11-1, is not more than your base amount ($32,000) for married filing jointly. H&r block printable coupon 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. H&r block printable coupon Filled-in Worksheet 11-1. H&r block printable coupon A Quick Way To Check if Your Benefits May Be Taxable A. H&r block printable coupon Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. H&r block printable coupon Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. H&r block printable coupon (If you received more than one form, combine the amounts from box 5 and enter the total. H&r block printable coupon ) A. H&r block printable coupon $11,000 Note. H&r block printable coupon If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. H&r block printable coupon B. H&r block printable coupon Enter one-half of the amount on line A B. H&r block printable coupon 5,500 C. H&r block printable coupon Enter your taxable pensions, wages, interest, dividends, and other taxable income C. H&r block printable coupon 23,300 D. H&r block printable coupon Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. H&r block printable coupon -0- E. H&r block printable coupon Add lines B, C, and D E. H&r block printable coupon $28,800 Note. H&r block printable coupon Compare the amount on line E to your base amount for your filing status. H&r block printable coupon 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. H&r block printable coupon If the amount on line E is more than your base amount, some of your benefits may be taxable. H&r block printable coupon You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). H&r block printable coupon 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. H&r block printable coupon Who is taxed. H&r block printable coupon   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. H&r block printable coupon 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. H&r block printable coupon 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. H&r block printable coupon Repayment of benefits. H&r block printable coupon   Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. H&r block printable coupon It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. H&r block printable coupon If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. H&r block printable coupon   Your gross benefits are shown in box 3 of Form SSA-1099 or RRB-1099. H&r block printable coupon Your repayments are shown in box 4. H&r block printable coupon The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). H&r block printable coupon Use the amount in box 5 to figure whether any of your benefits are taxable. H&r block printable coupon Tax withholding and estimated tax. H&r block printable coupon   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. H&r block printable coupon If you choose to do this, you must complete a Form W-4V. H&r block printable coupon   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. H&r block printable coupon For details, see Publication 505 or the instructions for Form 1040-ES. H&r block printable coupon How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040 or Form 1040A. H&r block printable coupon You cannot use Form 1040EZ. H&r block printable coupon Reporting on Form 1040. H&r block printable coupon   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. H&r block printable coupon 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. H&r block printable coupon Reporting on Form 1040A. H&r block printable coupon   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. H&r block printable coupon 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. H&r block printable coupon Benefits not taxable. H&r block printable coupon   If you are filing Form 1040EZ, do not report any benefits on your tax return. H&r block printable coupon 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. H&r block printable coupon Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block printable coupon 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. H&r block printable coupon 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. H&r block printable coupon Generally, the higher that total amount, the greater the taxable part of your benefits. H&r block printable coupon Maximum taxable part. H&r block printable coupon   Generally, up to 50% of your benefits will be taxable. H&r block printable coupon However, up to 85% of your benefits can be taxable if either of the following situations applies to you. H&r block printable coupon 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). H&r block printable coupon You are married filing separately and lived with your spouse at any time during 2013. H&r block printable coupon Which worksheet to use. H&r block printable coupon   A worksheet you can use to figure your taxable benefits is in the instructions for your Form 1040 or Form 1040A. H&r block printable coupon You can use either that worksheet or Worksheet 1 in Publication 915, unless any of the following situations applies to you. H&r block printable coupon You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. H&r block printable coupon 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. H&r block printable coupon Situation (1) does not apply and you take an exclusion for interest from qualified U. H&r block printable coupon S. H&r block printable coupon 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. H&r block printable coupon In this situation, you must use Worksheet 1 in Publication 915 to figure your taxable benefits. H&r block printable coupon You received a lump-sum payment for an earlier year. H&r block printable coupon In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. H&r block printable coupon See Lump-sum election next. H&r block printable coupon Lump-sum election. H&r block printable coupon   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. H&r block printable coupon    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. H&r block printable coupon No part of the lump-sum death benefit is subject to tax. H&r block printable coupon   Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. H&r block printable coupon 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. H&r block printable coupon You can elect this method if it lowers your taxable benefits. H&r block printable coupon Making the election. H&r block printable coupon   If you received a lump-sum benefit payment in 2013 that includes benefits for one or more earlier years, follow the instructions in Publication 915 under Lump-Sum Election to see whether making the election will lower your taxable benefits. H&r block printable coupon That discussion also explains how to make the election. H&r block printable coupon    Because the earlier year's taxable benefits are included in your 2013 income, no adjustment is made to the earlier year's return. H&r block printable coupon Do not file an amended return for the earlier year. H&r block printable coupon Examples The following are a few examples you can use as a guide to figure the taxable part of your benefits. H&r block printable coupon Example 1. H&r block printable coupon George White is single and files Form 1040 for 2013. H&r block printable coupon He received the following income in 2013: Fully taxable pension $18,600 Wages from part-time job 9,400 Taxable interest income 990 Total $28,990 George also received social security benefits during 2013. H&r block printable coupon The Form SSA-1099 he received in January 2014 shows $5,980 in box 5. H&r block printable coupon To figure his taxable benefits, George completes the worksheet shown here. H&r block printable coupon Filled-in Worksheet 1. H&r block printable coupon Figuring Your Taxable Benefits 1. H&r block printable coupon Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block printable coupon Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,980 2. H&r block printable coupon Enter one-half of line 1 2,990 3. H&r block printable coupon Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. H&r block printable coupon     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 28,990 4. H&r block printable coupon Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. H&r block printable coupon 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 -0-       6. H&r block printable coupon Combine lines 2, 3, 4, and 5 31,980 7. H&r block printable coupon Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block printable coupon     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0- 8. H&r block printable coupon Is the amount on line 7 less than the amount on line 6?     No. H&r block printable coupon None of your social security benefits are taxable. H&r block printable coupon Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block printable coupon   Yes. H&r block printable coupon Subtract line 7 from line 6 31,980 9. H&r block printable coupon 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 25,000   Note. H&r block printable coupon 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% (. H&r block printable coupon 85) and enter the result on line 17. H&r block printable coupon Then go to line 18. H&r block printable coupon   10. H&r block printable coupon Is the amount on line 9 less than the amount on line 8?     No. H&r block printable coupon None of your benefits are taxable. H&r block printable coupon Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block printable coupon 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. H&r block printable coupon     Yes. H&r block printable coupon Subtract line 9 from line 8 6,980 11. H&r block printable coupon 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 9,000 12. H&r block printable coupon Subtract line 11 from line 10. H&r block printable coupon If zero or less, enter -0- -0- 13. H&r block printable coupon Enter the smaller of line 10 or line 11 6,980 14. H&r block printable coupon Enter one-half of line 13 3,490 15. H&r block printable coupon Enter the smaller of line 2 or line 14 2,990 16. H&r block printable coupon Multiply line 12 by 85% (. H&r block printable coupon 85). H&r block printable coupon If line 12 is zero, enter -0- -0- 17. H&r block printable coupon Add lines 15 and 16 2,990 18. H&r block printable coupon Multiply line 1 by 85% (. H&r block printable coupon 85) 5,083 19. H&r block printable coupon Taxable benefits. H&r block printable coupon Enter the smaller of line 17 or line 18. H&r block printable coupon Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $2,990 The amount on line 19 of George's worksheet shows that $2,990 of his social security benefits is taxable. H&r block printable coupon On line 20a of his Form 1040, George enters his net benefits of $5,980. H&r block printable coupon On line 20b, he enters his taxable benefits of $2,990. H&r block printable coupon Example 2. H&r block printable coupon Ray and Alice Hopkins file a joint return on Form 1040A for 2013. H&r block printable coupon Ray is retired and received a fully taxable pension of $15,500. H&r block printable coupon He also received social security benefits, and his Form SSA-1099 for 2013 shows net benefits of $5,600 in box 5. H&r block printable coupon Alice worked during the year and had wages of $14,000. H&r block printable coupon She made a deductible payment to her IRA account of $1,000. H&r block printable coupon Ray and Alice have two savings accounts with a total of $250 in taxable interest income. H&r block printable coupon They complete Worksheet 1, entering $29,750 ($15,500 + $14,000 + $250) on line 3. H&r block printable coupon They find none of Ray's social security benefits are taxable. H&r block printable coupon On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b. H&r block printable coupon Filled-in Worksheet 1. H&r block printable coupon Figuring Your Taxable Benefits 1. H&r block printable coupon Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block printable coupon Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,600 2. H&r block printable coupon Enter one-half of line 1 2,800 3. H&r block printable coupon Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. H&r block printable coupon     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 29,750 4. H&r block printable coupon Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. H&r block printable coupon 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 -0-       6. H&r block printable coupon Combine lines 2, 3, 4, and 5 32,550 7. H&r block printable coupon Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block printable coupon     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 1,000 8. H&r block printable coupon Is the amount on line 7 less than the amount on line 6?     No. H&r block printable coupon None of your social security benefits are taxable. H&r block printable coupon Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block printable coupon   Yes. H&r block printable coupon Subtract line 7 from line 6 31,550 9. H&r block printable coupon 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 32,000   Note. H&r block printable coupon 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% (. H&r block printable coupon 85) and enter the result on line 17. H&r block printable coupon Then go to line 18. H&r block printable coupon   10. H&r block printable coupon Is the amount on line 9 less than the amount on line 8?     No. H&r block printable coupon None of your benefits are taxable. H&r block printable coupon Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block printable coupon 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. H&r block printable coupon     Yes. H&r block printable coupon Subtract line 9 from line 8   11. H&r block printable coupon 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   12. H&r block printable coupon Subtract line 11 from line 10. H&r block printable coupon If zero or less, enter -0-   13. H&r block printable coupon Enter the smaller of line 10 or line 11   14. H&r block printable coupon Enter one-half of line 13   15. H&r block printable coupon Enter the smaller of line 2 or line 14   16. H&r block printable coupon Multiply line 12 by 85% (. H&r block printable coupon 85). H&r block printable coupon If line 12 is zero, enter -0-   17. H&r block printable coupon Add lines 15 and 16   18. H&r block printable coupon Multiply line 1 by 85% (. H&r block printable coupon 85)   19. H&r block printable coupon Taxable benefits. H&r block printable coupon Enter the smaller of line 17 or line 18. H&r block printable coupon Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b   Example 3. H&r block printable coupon Joe and Betty Johnson file a joint return on Form 1040 for 2013. H&r block printable coupon Joe is a retired railroad worker and in 2013 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. H&r block printable coupon Joe's Form RRB-1099 shows $10,000 in box 5. H&r block printable coupon Betty is a retired government worker and receives a fully taxable pension of $38,000. H&r block printable coupon They had $2,300 in taxable interest income plus interest of $200 on a qualified U. H&r block printable coupon S. H&r block printable coupon savings bond. H&r block printable coupon The savings bond interest qualified for the exclusion. H&r block printable coupon They figure their taxable benefits by completing Worksheet 1. H&r block printable coupon Because they have qualified U. H&r block printable coupon S. H&r block printable coupon 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. H&r block printable coupon On line 3 of the worksheet, they enter $40,500 ($38,000 + $2,500). H&r block printable coupon Filled-in Worksheet 1. H&r block printable coupon 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. H&r block printable coupon • 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). H&r block printable coupon None of your benefits are taxable for 2013. H&r block printable coupon For more information, see Repayments More Than Gross Benefits. H&r block printable coupon • If you are filing Form 8815, Exclusion of Interest From Series EE and I U. H&r block printable coupon S. H&r block printable coupon 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. H&r block printable coupon Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. H&r block printable coupon 1. H&r block printable coupon Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. H&r block printable coupon Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $10,000 2. H&r block printable coupon Enter one-half of line 1 5,000 3. H&r block printable coupon Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. H&r block printable coupon     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 40,500 4. H&r block printable coupon Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. H&r block printable coupon 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 -0-       6. H&r block printable coupon Combine lines 2, 3, 4, and 5 45,500 7. H&r block printable coupon Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. H&r block printable coupon     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0- 8. H&r block printable coupon Is the amount on line 7 less than the amount on line 6?     No. H&r block printable coupon None of your social security benefits are taxable. H&r block printable coupon Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. H&r block printable coupon   Yes. H&r block printable coupon Subtract line 7 from line 6 45,500 9. H&r block printable coupon 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 32,000   Note. H&r block printable coupon 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% (. H&r block printable coupon 85) and enter the result on line 17. H&r block printable coupon Then go to line 18. H&r block printable coupon   10. H&r block printable coupon Is the amount on line 9 less than the amount on line 8?     No. H&r block printable coupon None of your benefits are taxable. H&r block printable coupon Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. H&r block printable coupon 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. H&r block printable coupon     Yes. H&r block printable coupon Subtract line 9 from line 8 13,500 11. H&r block printable coupon 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 12,000 12. H&r block printable coupon Subtract line 11 from line 10. H&r block printable coupon If zero or less, enter -0- 1,500 13. H&r block printable coupon Enter the smaller of line 10 or line 11 12,000 14. H&r block printable coupon Enter one-half of line 13 6,000 15. H&r block printable coupon Enter the smaller of line 2 or line 14 5,000 16. H&r block printable coupon Multiply line 12 by 85% (. H&r block printable coupon 85). H&r block printable coupon If line 12 is zero, enter -0- 1,275 17. H&r block printable coupon Add lines 15 and 16 6,275 18. H&r block printable coupon Multiply line 1 by 85% (. H&r block printable coupon 85) 8,500 19. H&r block printable coupon Taxable benefits. H&r block printable coupon Enter the smaller of line 17 or line 18. H&r block printable coupon Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $6,275 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. H&r block printable coupon Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b. H&r block printable coupon Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. H&r block printable coupon Disability payments. H&r block printable coupon   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. H&r block printable coupon 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. H&r block printable coupon If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. H&r block printable coupon Claim the deduction or credit in the same way explained under Repayments More Than Gross Benefits , later. H&r block printable coupon Legal expenses. H&r block printable coupon   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. H&r block printable coupon   Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. H&r block printable coupon 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. H&r block printable coupon 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. H&r block printable coupon Do not use a worksheet in this case. H&r block printable coupon 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. H&r block printable coupon If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. H&r block printable coupon Joint return. H&r block printable coupon   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. H&r block printable coupon You do this to get your net benefits when figuring if your combined benefits are taxable. H&r block printable coupon Example. H&r block printable coupon John and Mary file a joint return for 2013. H&r block printable coupon John received Form SSA-1099 showing $3,000 in box 5. H&r block printable coupon Mary also received Form SSA-1099 and the amount in box 5 was ($500). H&r block printable coupon 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. H&r block printable coupon Repayment of benefits received in an earlier year. H&r block printable coupon   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. H&r block printable coupon Deduction $3,000 or less. H&r block printable coupon   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. H&r block printable coupon Claim it on Schedule A (Form 1040), line 23. H&r block printable coupon Deduction more than $3,000. H&r block printable coupon    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. H&r block printable coupon Figure your tax for 2013 in the following steps. H&r block printable coupon Figure the tax without the itemized deduction included on Schedule A, line 28. H&r block printable coupon 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. H&r block printable coupon Then refigure the tax for that year. H&r block printable coupon Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. H&r block printable coupon Subtract the result in (c) from the result in (a). H&r block printable coupon Compare the tax figured in methods (1) and (2). H&r block printable coupon Your tax for 2013 is the smaller of the two amounts. H&r block printable coupon If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. H&r block printable coupon If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71. H&r block printable coupon Check box d and enter “I. H&r block printable coupon R. H&r block printable coupon C. H&r block printable coupon 1341” in the space next to that box. H&r block printable coupon If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28. H&r block printable coupon Prev  Up  Next   Home   More Online Publications