File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

How To File 1040x Electronically

2012 Tax Filing For FreeMyfreetaxes ComLowest Price State Tax FilingFree State Tax Return FormsFree Tax ActIrs 2009 Tax Forms10 40 Ez Form 2012Ohio 1040ez InstructionsH&r Block 1040xIrs Forms PublicationsFree State Taxes FileH&rblock Free Online2012 1040ez FormForm 1040-ez 2013File Free H&r BlockFile 2010 Taxes With TurbotaxWhat If I Didn T File Taxes In 2011Amend Taxes TurbotaxFiling 2012 Taxes Late OnlineMy1040ezFree Tax Return Filing2009 Tax ReturnsFree State Tax ServiceAmend My 2012 Tax ReturnFree State Tax Return File1040nr InstructionsDo Unemployed People File TaxesCan I File 2012 Taxes Without Filing 2011Irs EfileFree E-file 1040ezE File State Taxes Only FreeTaxact 2013 Free2011 1040xFile A 1040x OnlineEfile 2009 Taxes1040 Es Form2011 1040ez Tax FormH&r Block Free Tax FilingTurbotax 2011 Free Federal EditionTax Return Form

How To File 1040x Electronically

How to file 1040x electronically Publication 939 - Main Content Table of Contents General Information Taxation of Periodic PaymentsInvestment in the Contract Expected Return Computation Under the General Rule How To Use Actuarial TablesUnisex Annuity Tables Special Elections Worksheets for Determining Taxable Annuity Actuarial Tables Requesting a Ruling on Taxation of Annuity How To Get Tax HelpLow Income Taxpayer Clinics General Information Some of the terms used in this publication are defined in the following paragraphs. How to file 1040x electronically A pension is generally a series of payments made to you after you retire from work. How to file 1040x electronically Pension payments are made regularly and are for past services with an employer. How to file 1040x electronically An annuity is a series of payments under a contract. How to file 1040x electronically You can buy the contract alone or you can buy it with the help of your employer. How to file 1040x electronically Annuity payments are made regularly for more than one full year. How to file 1040x electronically Note. How to file 1040x electronically Distributions from pensions and annuities follow the same rules as outlined in this publication unless otherwise noted. How to file 1040x electronically Types of pensions and annuities. How to file 1040x electronically   Particular types of pensions and annuities include: Fixed period annuities. How to file 1040x electronically You receive definite amounts at regular intervals for a definite length of time. How to file 1040x electronically Annuities for a single life. How to file 1040x electronically You receive definite amounts at regular intervals for life. How to file 1040x electronically The payments end at death. How to file 1040x electronically Joint and survivor annuities. How to file 1040x electronically The first annuitant receives a definite amount at regular intervals for life. How to file 1040x electronically After he or she dies, a second annuitant receives a definite amount at regular intervals for life. How to file 1040x electronically The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. How to file 1040x electronically Variable annuities. How to file 1040x electronically You receive payments that may vary in amount for a definite length of time or for life. How to file 1040x electronically The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds or cost-of-living indexes. How to file 1040x electronically Disability pensions. How to file 1040x electronically You are under minimum retirement age and receive payments because you retired on disability. How to file 1040x electronically If, at the time of your retirement, you were permanently and totally disabled, you may be eligible for the credit for the elderly or the disabled discussed in Publication 524. How to file 1040x electronically If your annuity starting date is after November 18, 1996, the General Rule cannot be used for the following qualified plans. How to file 1040x electronically A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries. How to file 1040x electronically This plan must meet Internal Revenue Code requirements. How to file 1040x electronically It qualifies for special tax benefits, including tax deferral for employer contributions and rollover distributions. How to file 1040x electronically However, you must use the General Rule if you were 75 or over and the annuity payments are guaranteed for more than 5 years. How to file 1040x electronically A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. How to file 1040x electronically A tax-sheltered annuity is a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization. How to file 1040x electronically   The General Rule is used to figure the tax treatment of various types of pensions and annuities, including nonqualified employee plans. How to file 1040x electronically A nonqualified employee plan is an employer's plan that does not meet Internal Revenue Code requirements. How to file 1040x electronically It does not qualify for most of the tax benefits of a qualified plan. How to file 1040x electronically Annuity worksheets. How to file 1040x electronically   The worksheets found near the end of the text of this publication may be useful to you in figuring the taxable part of your annuity. How to file 1040x electronically Request for a ruling. How to file 1040x electronically   If you are unable to determine the income tax treatment of your pension or annuity, you may ask the Internal Revenue Service to figure the taxable part of your annuity payments. How to file 1040x electronically This is treated as a request for a ruling. How to file 1040x electronically See Requesting a Ruling on Taxation of Annuity near the end of this publication. How to file 1040x electronically Withholding tax and estimated tax. How to file 1040x electronically   Your pension or annuity is subject to federal income tax withholding unless you choose not to have tax withheld. How to file 1040x electronically If you choose not to have tax withheld from your pension or annuity, or if you do not have enough income tax withheld, you may have to make estimated tax payments. How to file 1040x electronically Taxation of Periodic Payments This section explains how the periodic payments you receive under a pension or annuity plan are taxed under the General Rule. How to file 1040x electronically Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). How to file 1040x electronically These payments are also known as amounts received as an annuity. How to file 1040x electronically If you receive an amount from your plan that is a nonperiodic payment (amount not received as an annuity), see Taxation of Nonperiodic Payments in Publication 575. How to file 1040x electronically In general, you can recover your net cost of the pension or annuity tax free over the period you are to receive the payments. How to file 1040x electronically The amount of each payment that is more than the part that represents your net cost is taxable. How to file 1040x electronically Under the General Rule, the part of each annuity payment that represents your net cost is in the same proportion that your investment in the contract is to your expected return. How to file 1040x electronically These terms are explained in the following discussions. How to file 1040x electronically Investment in the Contract In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract. How to file 1040x electronically First, find your net cost of the contract as of the annuity starting date (defined later). How to file 1040x electronically To find this amount, you must first figure the total premiums, contributions, or other amounts paid. How to file 1040x electronically This includes the amounts your employer contributed if you were required to include these amounts in income. How to file 1040x electronically It also includes amounts you actually contributed (except amounts for health and accident benefits and deductible voluntary employee contributions). How to file 1040x electronically From this total cost you subtract: Any refunded premiums, rebates, dividends, or unrepaid loans (any of which were not included in your income) that you received by the later of the annuity starting date or the date on which you received your first payment. How to file 1040x electronically Any additional premiums paid for double indemnity or disability benefits. How to file 1040x electronically Any other tax-free amounts you received under the contract or plan before the later of the dates in (1). How to file 1040x electronically The annuity starting date   is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed. How to file 1040x electronically Example. How to file 1040x electronically On January 1 you completed all your payments required under an annuity contract providing for monthly payments starting on August 1, for the period beginning July 1. How to file 1040x electronically The annuity starting date is July 1. How to file 1040x electronically This is the date you use in figuring your investment in the contract and your expected return (discussed later). How to file 1040x electronically Adjustments If any of the following items apply, adjust (add or subtract) your total cost to find your net cost. How to file 1040x electronically Foreign employment. How to file 1040x electronically   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. How to file 1040x electronically The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (without regard to the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer on your behalf if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) if the contributions would be excludible from your gross income had they been paid directly to you. How to file 1040x electronically Foreign employment contributions while a nonresident alien. How to file 1040x electronically   In determining your cost, special rules apply if you are a U. How to file 1040x electronically S. How to file 1040x electronically citizen or resident alien who received distributions from a plan to which contributions were made while you were a nonresident alien. How to file 1040x electronically Your contributions and your employer's contributions are not included in your cost if the contributions: Were made based on compensation which was for services performed outside the United States which you were a nonresident alien, and Were not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if they had been paid as cash compensation when the services were performed. How to file 1040x electronically Death benefit exclusion. How to file 1040x electronically   If you are the beneficiary of a deceased employee (or former employee), who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000. How to file 1040x electronically The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion. How to file 1040x electronically How to adjust your total cost. How to file 1040x electronically   If you are eligible, treat the amount of any allowable death benefit exclusion as additional cost paid by the employee. How to file 1040x electronically Add it to the cost or unrecovered cost of the annuity at the annuity starting date. How to file 1040x electronically See Example 3 under Computation Under General Rule for an illustration of the adjustment to the cost of the contract. How to file 1040x electronically Net cost. How to file 1040x electronically   Your total cost plus certain adjustments and minus other amounts already recovered before the annuity starting date is your net cost. How to file 1040x electronically This is the unrecovered investment in the contract as of the annuity starting date. How to file 1040x electronically If your annuity starting date is after 1986, this is the maximum amount that you may recover tax free under the contract. How to file 1040x electronically Refund feature. How to file 1040x electronically   Adjustment for the value of the refund feature is only applicable when you report your pension or annuity under the General Rule. How to file 1040x electronically Your annuity contract has a refund feature if: The expected return ( discussed later) of an annuity depends entirely or partly on the life of one or more individuals, The contract provides that payments will be made to a beneficiary or the estate of an annuitant on or after the death of the annuitant if a stated amount or a stated number of payments has not been paid to the annuitant or annuitants before death, and The payments are a refund of the amount you paid for the annuity contract. How to file 1040x electronically   If your annuity has a refund feature, you must reduce your net cost of the contract by the value of the refund feature (figured using Table III or VII at the end of this publication, also see How To Use Actuarial Tables , later) to find the investment in the contract. How to file 1040x electronically Zero value of refund feature. How to file 1040x electronically   For a joint and survivor annuity, the value of the refund feature is zero if: Both annuitants are age 74 or younger, The payments are guaranteed for less than 2½ years, and The survivor's annuity is at least 50% of the first annuitant's annuity. How to file 1040x electronically   For a single-life annuity without survivor benefit, the value of the refund feature is zero if: The payments are guaranteed for less than 2½ years, and The annuitant is: Age 57 or younger (if using the new (unisex) annuity tables), Age 42 or younger (if male and using the old annuity tables), or Age 47 or younger (if female and using the old annuity tables). How to file 1040x electronically   If you do not meet these requirements, you will have to figure the value of the refund feature, as explained in the following discussion. How to file 1040x electronically Examples. How to file 1040x electronically The first example shows how to figure the value of the refund feature when there is only one beneficiary. How to file 1040x electronically Example 2 shows how to figure the value of the refund feature when the contract provides, in addition to a whole life annuity, one or more temporary life annuities for the lives of children. How to file 1040x electronically In both examples, the taxpayer elects to use Tables V through VIII. How to file 1040x electronically If you need the value of the refund feature for a joint and survivor annuity, write to the Internal Revenue Service as explained under Requesting a Ruling on Taxation of Annuity near the end of this publication. How to file 1040x electronically Example 1. How to file 1040x electronically At age 65, Barbara bought for $21,053 an annuity with a refund feature. How to file 1040x electronically She will get $100 a month for life. How to file 1040x electronically Barbara's contract provides that if she does not live long enough to recover the full $21,053, similar payments will be made to her surviving beneficiary until a total of $21,053 has been paid under the contract. How to file 1040x electronically In this case, the contract cost and the total guaranteed return are the same ($21,053). How to file 1040x electronically Barbara's investment in the contract is figured as follows: Net cost $21,053 Amount to be received annually $1,200   Number of years for which payment is guaranteed ($21,053 divided by $1,200) 17. How to file 1040x electronically 54   Rounded to nearest whole number of years 18   Percentage from Actuarial Table VII for age 65 with 18 years of guaranteed payments 15%   Value of the refund feature (rounded to the nearest dollar)—15% of $21,053 3,158 Investment in the contract, adjusted for value of refund feature $17,895       If the total guaranteed return were less than the $21,053 net cost of the contract, Barbara would apply the appropriate percentage from the tables to the lesser amount. How to file 1040x electronically For example, if the contract guaranteed the $100 monthly payments for 17 years to Barbara's estate or beneficiary if she were to die before receiving all the payments for that period, the total guaranteed return would be $20,400 ($100 × 12 × 17 years). How to file 1040x electronically In this case, the value of the refund feature would be $2,856 (14% of $20,400) and Barbara's investment in the contract would be $18,197 ($21,053 minus $2,856) instead of $17,895. How to file 1040x electronically Example 2. How to file 1040x electronically John died while still employed. How to file 1040x electronically His widow, Eleanor, age 48, receives $171 a month for the rest of her life. How to file 1040x electronically John's son, Elmer, age 9, receives $50 a month until he reaches age 18. How to file 1040x electronically John's contributions to the retirement fund totaled $7,559. How to file 1040x electronically 45, with interest on those contributions of $1,602. How to file 1040x electronically 53. How to file 1040x electronically The guarantee or total refund feature of the contract is $9,161. How to file 1040x electronically 98 ($7,559. How to file 1040x electronically 45 plus $1,602. How to file 1040x electronically 53). How to file 1040x electronically The adjustment in the investment in the contract is figured as follows: A) Expected return:*       1) Widow's expected return:         Annual annuity ($171 × 12) $2,052       Multiplied by factor from Table V         (nearest age 48) 34. How to file 1040x electronically 9 $71,614. How to file 1040x electronically 80   2) Child's expected return:         Annual annuity ($50 × 12) $600       Multiplied by factor from         Table VIII (nearest age 9         for term of 9 years) 9. How to file 1040x electronically 0 5,400. How to file 1040x electronically 00   3) Total expected return   $77,014. How to file 1040x electronically 80 B) Adjustment for refund feature:       1) Contributions (net cost) $7,559. How to file 1040x electronically 45   2) Guaranteed amount (contributions of $7,559. How to file 1040x electronically 45 plus interest of $1,602. How to file 1040x electronically 53) $9,161. How to file 1040x electronically 98   3) Minus: Expected return under child's (temporary life) annuity (A(2)) 5,400. How to file 1040x electronically 00   4) Net guaranteed amount $3,761. How to file 1040x electronically 98   5) Multiple from Table VII (nearest age 48 for 2 years duration (recovery of $3,761. How to file 1040x electronically 98 at $171 a month to nearest whole year)) 0%   6) Adjustment required for value of refund feature rounded to the nearest whole dollar  (0% × $3,761. How to file 1040x electronically 98, the smaller of B(3) or B(6)) 0 *Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. How to file 1040x electronically See the discussion of expected return, later in this publication. How to file 1040x electronically Free IRS help. How to file 1040x electronically   If you need to request assistance to figure the value of the refund feature, see Requesting a Ruling on Taxation of Annuity near the end of this publication. How to file 1040x electronically Expected Return Your expected return is the total amount you and other eligible annuitants can expect to receive under the contract. How to file 1040x electronically The following discussions explain how to figure the expected return with each type of annuity. How to file 1040x electronically A person's age, for purposes of figuring the expected return, is the age at the birthday nearest to the annuity starting date. How to file 1040x electronically Fixed period annuity. How to file 1040x electronically   If you will get annuity payments for a fixed number of years, without regard to your life expectancy, you must figure your expected return based on that fixed number of years. How to file 1040x electronically It is the total amount you will get beginning at the annuity starting date. How to file 1040x electronically You will receive specific periodic payments for a definite period of time, such as a fixed number of months (but not less than 13). How to file 1040x electronically To figure your expected return, multiply the fixed number of months for which payments are to be made by the amount of the payment specified for each period. How to file 1040x electronically Single life annuity. How to file 1040x electronically   If you are to get annuity payments for the rest of your life, find your expected return as follows. How to file 1040x electronically You must multiply the amount of the annual payment by a multiple based on your life expectancy as of the annuity starting date. How to file 1040x electronically These multiples are set out in actuarial Tables I and V near the end of this publication (see How To Use Actuarial Tables , later). How to file 1040x electronically   You may need to adjust these multiples if the payments are made quarterly, semiannually, or annually. How to file 1040x electronically See Adjustments to Tables I, II, V, VI, and VIA following Table I. How to file 1040x electronically Example. How to file 1040x electronically Henry bought an annuity contract that will give him an annuity of $500 a month for his life. How to file 1040x electronically If at the annuity starting date Henry's nearest birthday is 66, the expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table V, age 66 × 19. How to file 1040x electronically 2 Expected return $115,200 If the payments were to be made to Henry quarterly and the first payment was made one full month after the annuity starting date, Henry would adjust the 19. How to file 1040x electronically 2 multiple by +. How to file 1040x electronically 1. How to file 1040x electronically His expected return would then be $115,800 ($6,000 × 19. How to file 1040x electronically 3). How to file 1040x electronically Annuity for shorter of life or specified period. How to file 1040x electronically   With this type of annuity, you are to get annuity payments either for the rest of your life or until the end of a specified period, whichever period is shorter. How to file 1040x electronically To figure your expected return, multiply the amount of your annual payment by a multiple in Table IV or VIII for temporary life annuities. How to file 1040x electronically Find the proper multiple based on your sex (if using Table IV), your age at the annuity starting date, and the nearest whole number of years in the specified period. How to file 1040x electronically Example. How to file 1040x electronically Harriet purchased an annuity this year that will pay her $200 each month for five years or until she dies, whichever period is shorter. How to file 1040x electronically She was age 65 at her birthday nearest the annuity starting date. How to file 1040x electronically She figures the expected return as follows: Annual payment ($200 × 12 months) $2,400 Multiple shown in Table VIII, age 65, 5-year term × 4. How to file 1040x electronically 9 Expected return $11,760 She uses Table VIII (not Table IV) because all her contributions were made after June 30, 1986. How to file 1040x electronically See Special Elections, later. How to file 1040x electronically Joint and survivor annuities. How to file 1040x electronically   If you have an annuity that pays you a periodic income for life and after your death provides an identical lifetime periodic income to your spouse (or some other person), you figure the expected return based on your combined life expectancies. How to file 1040x electronically To figure the expected return, multiply the annual payment by a multiple in Table II or VI based on your joint life expectancies. How to file 1040x electronically If your payments are made quarterly, semiannually, or annually, you may need to adjust these multiples. How to file 1040x electronically See Adjustments to Tables I, II, V, VI, and VIA following Table I near the end of this publication. How to file 1040x electronically Example. How to file 1040x electronically John bought a joint and survivor annuity providing payments of $500 a month for his life, and, after his death, $500 a month for the remainder of his wife's life. How to file 1040x electronically At John's annuity starting date, his age at his nearest birthday is 70 and his wife's at her nearest birthday is 67. How to file 1040x electronically The expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table VI, ages 67 and 70 × 22. How to file 1040x electronically 0 Expected return $132,000 Different payments to survivor. How to file 1040x electronically   If your contract provides that payments to a survivor annuitant will be different from the amount you receive, you must use a computation which accounts for both the joint lives of the annuitants and the life of the survivor. How to file 1040x electronically Example 1. How to file 1040x electronically Gerald bought a contract providing for payments to him of $500 a month for life and, after his death, payments to his wife, Mary, of $350 a month for life. How to file 1040x electronically If, at the annuity starting date, Gerald's nearest birthday is 70 and Mary's is 67, the expected return under the contract is figured as follows: Combined multiple for Gerald and Mary, ages 70 and 67 (from Table VI)   22. How to file 1040x electronically 0 Multiple for Gerald, age 70 (from Table V)   16. How to file 1040x electronically 0 Difference: Multiple applicable to Mary   6. How to file 1040x electronically 0 Gerald's annual payment ($500 × 12) $6,000   Gerald's multiple 16. How to file 1040x electronically 0   Gerald's expected return   $96,000 Mary's annual payment ($350 × 12) $4,200   Mary's multiple 6. How to file 1040x electronically 0   Mary's expected return   25,200 Total expected return under the contract   $121,200 Example 2. How to file 1040x electronically Your husband died while still employed. How to file 1040x electronically Under the terms of his employer's retirement plan, you are entitled to get an immediate annuity of $400 a month for the rest of your life or until you remarry. How to file 1040x electronically Your daughters, Marie and Jean, are each entitled to immediate temporary life annuities of $150 a month until they reach age 18. How to file 1040x electronically You were 50 years old at the annuity starting date. How to file 1040x electronically Marie was 16 and Jean was 14. How to file 1040x electronically Using the multiples shown in Tables V and VIII at the end of this publication, the total expected return on the annuity starting date is $169,680, figured as follows: Widow, age 50 (multiple from Table V—33. How to file 1040x electronically 1 × $4,800 annual payment) $158,880 Marie, age 16 for 2 years duration (multiple from Table VIII—2. How to file 1040x electronically 0 × $1,800 annual payment) 3,600 Jean, age 14 for 4 years duration (multiple from Table VIII—4. How to file 1040x electronically 0 × $1,800 annual payment) 7,200 Total expected return $169,680 No computation of expected return is made based on your husband's age at the date of death because he died before the annuity starting date. How to file 1040x electronically Computation Under the General Rule Note. How to file 1040x electronically Variable annuities use a different computation for determining the exclusion amounts. How to file 1040x electronically See Variable annuities later. How to file 1040x electronically Under the General Rule, you figure the taxable part of your annuity by using the following steps: Step 1. How to file 1040x electronically   Figure the amount of your investment in the contract, including any adjustments for the refund feature and the death benefit exclusion, if applicable. How to file 1040x electronically See Death benefit exclusion , earlier. How to file 1040x electronically Step 2. How to file 1040x electronically   Figure your expected return. How to file 1040x electronically Step 3. How to file 1040x electronically   Divide Step 1 by Step 2 and round to three decimal places. How to file 1040x electronically This will give you the exclusion percentage. How to file 1040x electronically Step 4. How to file 1040x electronically   Multiply the exclusion percentage by the first regular periodic payment. How to file 1040x electronically The result is the tax-free part of each pension or annuity payment. How to file 1040x electronically   The tax-free part remains the same even if the total payment increases due to variation in the annuity amount such as cost of living increases, or you outlive the life expectancy factor used. How to file 1040x electronically However, if your annuity starting date is after 1986, the total amount of annuity income that is tax free over the years cannot exceed your net cost. How to file 1040x electronically   Each annuitant applies the same exclusion percentage to his or her initial payment called for in the contract. How to file 1040x electronically Step 5. How to file 1040x electronically   Multiply the tax-free part of each payment (step 4) by the number of payments received during the year. How to file 1040x electronically This will give you the tax-free part of the total payment for the year. How to file 1040x electronically    In the first year of your annuity, your first payment or part of your first payment may be for a fraction of the payment period. How to file 1040x electronically This fractional amount is multiplied by your exclusion percentage to get the tax-free part. How to file 1040x electronically Step 6. How to file 1040x electronically   Subtract the tax-free part from the total payment you received. How to file 1040x electronically The rest is the taxable part of your pension or annuity. How to file 1040x electronically Example 1. How to file 1040x electronically You purchased an annuity with an investment in the contract of $10,800. How to file 1040x electronically Under its terms, the annuity will pay you $100 a month for life. How to file 1040x electronically The multiple for your age (age 65) is 20. How to file 1040x electronically 0 as shown in Table V. How to file 1040x electronically Your expected return is $24,000 (20 × 12 × $100). How to file 1040x electronically Your cost of $10,800, divided by your expected return of $24,000, equals 45. How to file 1040x electronically 0%. How to file 1040x electronically This is the percentage you will not have to include in income. How to file 1040x electronically Each year, until your net cost is recovered, $540 (45% of $1,200) will be tax free and you will include $660 ($1,200 − $540) in your income. How to file 1040x electronically If you had received only six payments of $100 ($600) during the year, your exclusion would have been $270 (45% of $100 × 6 payments). How to file 1040x electronically Example 2. How to file 1040x electronically Gerald bought a joint and survivor annuity. How to file 1040x electronically Gerald's investment in the contract is $62,712 and the expected return is $121,200. How to file 1040x electronically The exclusion percentage is 51. How to file 1040x electronically 7% ($62,712 ÷ $121,200). How to file 1040x electronically Gerald will receive $500 a month ($6,000 a year). How to file 1040x electronically Each year, until his net cost is recovered, $3,102 (51. How to file 1040x electronically 7% of his total payments received of $6,000) will be tax free and $2,898 ($6,000 − $3,102) will be included in his income. How to file 1040x electronically If Gerald dies, his wife will receive $350 a month ($4,200 a year). How to file 1040x electronically If Gerald had not recovered all of his net cost before his death, his wife will use the same exclusion percentage (51. How to file 1040x electronically 7%). How to file 1040x electronically Each year, until the entire net cost is recovered, his wife will receive $2,171. How to file 1040x electronically 40 (51. How to file 1040x electronically 7% of her payments received of $4,200) tax free. How to file 1040x electronically She will include $2,028. How to file 1040x electronically 60 ($4,200 − $2,171. How to file 1040x electronically 40) in her income tax return. How to file 1040x electronically Example 3. How to file 1040x electronically Using the same facts as Example 2 under Different payments to survivor, you are to receive an annual annuity of $4,800 until you die or remarry. How to file 1040x electronically Your two daughters each receive annual annuities of $1,800 until they reach age 18. How to file 1040x electronically Your husband contributed $25,576 to the plan. How to file 1040x electronically You are eligible for the $5,000 death benefit exclusion because your husband died before August 21, 1996. How to file 1040x electronically Adjusted Investment in the Contract Contributions $25,576 Plus: Death benefit exclusion 5,000 Adjusted investment in the contract $30,576 The total expected return, as previously figured (in Example 2 under Different payments to survivor), is $169,680. How to file 1040x electronically The exclusion percentage of 18. How to file 1040x electronically 0% ($30,576 ÷ $169,680) applies to the annuity payments you and each of your daughters receive. How to file 1040x electronically Each full year $864 (18. How to file 1040x electronically 0% × $4,800) will be tax free to you, and you must include $3,936 in your income tax return. How to file 1040x electronically Each year, until age 18, $324 (18. How to file 1040x electronically 0% × $1,800) of each of your daughters' payments will be tax free and each must include the balance, $1,476, as income on her own income tax return. How to file 1040x electronically Part-year payments. How to file 1040x electronically   If you receive payments for only part of a year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments received during the year. How to file 1040x electronically   If you receive amounts during the year that represent 12 payments, one for each month in that year, and an amount that represents payments for months in a prior year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments the amounts received represent. How to file 1040x electronically For instance, if you received amounts during the year that represent the 12 payments for that year plus an amount that represents three payments for a prior year, multiply that amount by the 15 (12 + 3) payments received that the year. How to file 1040x electronically   If you received a fractional payment, follow Step 5, discussed earlier. How to file 1040x electronically This gives you the tax-free part of your total payment. How to file 1040x electronically Example. How to file 1040x electronically On September 28, Mary bought an annuity contract for $22,050 that will give her $125 a month for life, beginning October 30. How to file 1040x electronically The applicable multiple from Table V is 23. How to file 1040x electronically 3 (age 61). How to file 1040x electronically Her expected return is $34,950 ($125 × 12 × 23. How to file 1040x electronically 3). How to file 1040x electronically Mary's investment in the contract of $22,050, divided by her expected return of $34,950, equals 63. How to file 1040x electronically 1%. How to file 1040x electronically Each payment received will consist of 63. How to file 1040x electronically 1% return of cost and 36. How to file 1040x electronically 9% taxable income, until her net cost of the contract is fully recovered. How to file 1040x electronically During the first year, Mary received three payments of $125, or $375, of which $236. How to file 1040x electronically 63 (63. How to file 1040x electronically 1% × $375) is a return of cost. How to file 1040x electronically The remaining $138. How to file 1040x electronically 37 is included in income. How to file 1040x electronically Increase in annuity payments. How to file 1040x electronically   The tax-free amount remains the same as the amount figured at the annuity starting date, even if the payment increases. How to file 1040x electronically All increases in the installment payments are fully taxable. How to file 1040x electronically   However, if your annuity payments are scheduled to increase at a definite date in the future you must figure the expected return for that annuity using the method described in section 1. How to file 1040x electronically 72-5(a)(5) of the regulations. How to file 1040x electronically Example. How to file 1040x electronically Joe's wife died while she was still employed and, as her beneficiary, he began receiving an annuity of $147 per month. How to file 1040x electronically In figuring the taxable part, Joe elects to use Tables V through VIII. How to file 1040x electronically The cost of the contract was $7,938, consisting of the sum of his wife's net contributions, adjusted for any refund feature. How to file 1040x electronically His expected return as of the annuity starting date is $35,280 (age 65, multiple of 20. How to file 1040x electronically 0 × $1,764 annual payment). How to file 1040x electronically The exclusion percentage is $7,938 ÷ $35,280, or 22. How to file 1040x electronically 5%. How to file 1040x electronically During the year he received 11 monthly payments of $147, or $1,617. How to file 1040x electronically Of this amount, 22. How to file 1040x electronically 5% × $147 × 11 ($363. How to file 1040x electronically 83) is tax free as a return of cost and the balance of $1,253. How to file 1040x electronically 17 is taxable. How to file 1040x electronically Later, because of a cost-of-living increase, his annuity payment was increased to $166 per month, or $1,992 a year (12 × $166). How to file 1040x electronically The tax-free part is still only 22. How to file 1040x electronically 5% of the annuity payments as of the annuity starting date (22. How to file 1040x electronically 5% × $147 × 12 = $396. How to file 1040x electronically 90 for a full year). How to file 1040x electronically The increase of $228 ($1,992 − $1,764 (12 × $147)) is fully taxable. How to file 1040x electronically Variable annuities. How to file 1040x electronically   For variable annuity payments, figure the amount of each payment that is tax free by dividing your investment in the contract (adjusted for any refund feature) by the total number of periodic payments you expect to get under the contract. How to file 1040x electronically   If the annuity is for a definite period, you determine the total number of payments by multiplying the number of payments to be made each year by the number of years you will receive payments. How to file 1040x electronically If the annuity is for life, you determine the total number of payments by using a multiple from the appropriate actuarial table. How to file 1040x electronically Example. How to file 1040x electronically Frank purchased a variable annuity at age 65. How to file 1040x electronically The total cost of the contract was $12,000. How to file 1040x electronically The annuity starting date is January 1 of the year of purchase. How to file 1040x electronically His annuity will be paid, starting July 1, in variable annual installments for his life. How to file 1040x electronically The tax-free amount of each payment, until he has recovered his cost of his contract, is: Investment in the contract $12,000 Number of expected annual payments (multiple for age 65 from Table V) 20 Tax-free amount of each payment ($12,000 ÷ 20) $600 If Frank's first payment is $920, he includes only $320 ($920 − $600) in his gross income. How to file 1040x electronically   If the tax-free amount for a year is more than the payments you receive in that year, you may choose, when you receive the next payment, to refigure the tax-free part. How to file 1040x electronically Divide the amount of the periodic tax-free part that is more than the payment you received by the remaining number of payments you expect. How to file 1040x electronically The result is added to the previously figured periodic tax-free part. How to file 1040x electronically The sum is the amount of each future payment that will be tax free. How to file 1040x electronically Example. How to file 1040x electronically Using the facts of the previous example about Frank, assume that after Frank's $920 payment, he received $500 in the following year, and $1,200 in the year after that. How to file 1040x electronically Frank does not pay tax on the $500 (second year) payment because $600 of each annual pension payment is tax free. How to file 1040x electronically Since the $500 payment is less than the $600 annual tax-free amount, he may choose to refigure his tax-free part when he receives his $1,200 (third year) payment, as follows: Amount tax free in second year $600. How to file 1040x electronically 00 Amount received in second year 500. How to file 1040x electronically 00 Difference $100. How to file 1040x electronically 00 Number of remaining payments after the first 2 payments (age 67, from Table V) 18. How to file 1040x electronically 4 Amount to be added to previously determined annual tax-free part ($100 ÷ 18. How to file 1040x electronically 4) $5. How to file 1040x electronically 43 Revised annual tax-free part for third and later years ($600 + $5. How to file 1040x electronically 43) $605. How to file 1040x electronically 43 Amount taxable in third year ($1,200 − $605. How to file 1040x electronically 43) $594. How to file 1040x electronically 57 If you choose to refigure your tax-free amount,   you must file a statement with your income tax return stating that you are refiguring the tax-free amount in accordance with the rules of section 1. How to file 1040x electronically 72–4(d)(3) of the Income Tax Regulations. How to file 1040x electronically The statement must also show the following information: The annuity starting date and your age on that date. How to file 1040x electronically The first day of the first period for which you received an annuity payment in the current year. How to file 1040x electronically Your investment in the contract as originally figured. How to file 1040x electronically The total of all amounts received tax free under the annuity from the annuity starting date through the first day of the first period for which you received an annuity payment in the current tax year. How to file 1040x electronically Exclusion Limits Your annuity starting date determines the total amount of annuity income that you can exclude from income over the years. How to file 1040x electronically Exclusion limited to net cost. How to file 1040x electronically   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a return of your cost cannot exceed your net cost (figured without any reduction for a refund feature). How to file 1040x electronically This is the unrecovered investment in the contract as of the annuity starting date. How to file 1040x electronically   If your annuity starting date is after July 1, 1986, any unrecovered net cost at your (or last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. How to file 1040x electronically This deduction is not subject to the 2%-of-adjusted-gross-income limit. How to file 1040x electronically Example 1. How to file 1040x electronically Your annuity starting date is after 1986. How to file 1040x electronically Your total cost is $12,500, and your net cost is $10,000, taking into account certain adjustments. How to file 1040x electronically There is no refund feature. How to file 1040x electronically Your monthly annuity payment is $833. How to file 1040x electronically 33. How to file 1040x electronically Your exclusion ratio is 12% and you exclude $100 a month. How to file 1040x electronically Your exclusion ends after 100 months, when you have excluded your net cost of $10,000. How to file 1040x electronically Thereafter, your annuity payments are fully taxable. How to file 1040x electronically Example 2. How to file 1040x electronically The facts are the same as in Example 1, except that there is a refund feature, and you die after 5 years with no surviving annuitant. How to file 1040x electronically The adjustment for the refund feature is $1,000, so the investment in the contract is $9,000. How to file 1040x electronically The exclusion ratio is 10. How to file 1040x electronically 8%, and your monthly exclusion is $90. How to file 1040x electronically After 5 years (60 months), you have recovered tax free only $5,400 ($90 x 60). How to file 1040x electronically An itemized deduction for the unrecovered net cost of $4,600 ($10,000 net cost minus $5,400) may be taken on your final income tax return. How to file 1040x electronically Your unrecovered investment is determined without regard to the refund feature adjustment, discussed earlier, under Adjustments. How to file 1040x electronically Exclusion not limited to net cost. How to file 1040x electronically   If your annuity starting date was before 1987, you could continue to take your monthly exclusion for as long as you receive your annuity. How to file 1040x electronically If you choose a joint and survivor annuity, your survivor continues to take the survivor's exclusion figured as of the annuity starting date. How to file 1040x electronically The total exclusion may be more than your investment in the contract. How to file 1040x electronically How To Use Actuarial Tables In figuring, under the General Rule, the taxable part of your annuity payments that you are to get for the rest of your life (rather than for a fixed number of years), you must use one or more of the actuarial tables in this publication. How to file 1040x electronically Unisex Annuity Tables Effective July 1, 1986, the Internal Revenue Service adopted new annuity Tables V through VIII, in which your sex is not considered when determining the applicable factor. How to file 1040x electronically These tables correspond to the old Tables I through IV. How to file 1040x electronically In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986. How to file 1040x electronically If you made no contributions to the plan after June 30, 1986, generally you must use only Tables I through IV. How to file 1040x electronically However, if you received an annuity payment after June 30, 1986, you may elect to use Tables V through VIII (see Annuity received after June 30, 1986, later). How to file 1040x electronically Special Elections Although you generally must use Tables V through VIII if you made contributions to the retirement plan after June 30, 1986, and Tables I through IV if you made no contributions after June 30, 1986, you can make the following special elections to select which tables to use. How to file 1040x electronically Contributions made both before July 1986 and after June 1986. How to file 1040x electronically   If you made contributions to the retirement plan both before July 1986 and after June 1986, you may elect to use Tables I through IV for the pre-July 1986 cost of the contract, and Tables V through VIII for the post-June 1986 cost. How to file 1040x electronically (See the examples below. How to file 1040x electronically )    Making the election. How to file 1040x electronically Attach this statement to your income tax return for the first year in which you receive an annuity:    “I elect to apply the provisions of paragraph (d) of section 1. How to file 1040x electronically 72–6 of the Income Tax Regulations. How to file 1040x electronically ”   The statement must also include your name, address, social security number, and the amount of the pre-July 1986 investment in the contract. How to file 1040x electronically   If your investment in the contract includes post-June 1986 contributions to the plan, and you do not make the election to use Tables I through IV and Tables V through VIII, then you can only use Tables V through VIII in figuring the taxable part of your annuity. How to file 1040x electronically You must also use Tables V through VIII if you are unable or do not wish to determine the portions of your contributions which were made before July 1, 1986, and after June 30, 1986. How to file 1040x electronically    Advantages of election. How to file 1040x electronically In general, a lesser amount of each annual annuity payment is taxable if you separately figure your exclusion ratio for pre-July 1986 and post-June 1986 contributions. How to file 1040x electronically    If you intend to make this election, save your records that substantiate your pre-July 1986 and post-June 1986 contributions. How to file 1040x electronically If the death benefit exclusion applies (see discussion, earlier), you do not have to apportion it between the pre-July 1986 and the post-June 1986 investment in the contract. How to file 1040x electronically   The following examples illustrate the separate computations required if you elect to use Tables I through IV for your pre-July 1986 investment in the contract and Tables V through VIII for your post-June 1986 investment in the contract. How to file 1040x electronically Example 1. How to file 1040x electronically Bill, who is single, contributed $42,000 to the retirement plan and will receive an annual annuity of $24,000 for life. How to file 1040x electronically Payment of the $42,000 contribution is guaranteed under a refund feature. How to file 1040x electronically Bill is 55 years old as of the annuity starting date. How to file 1040x electronically For figuring the taxable part of Bill's annuity, he chose to make separate computations for his pre-July 1986 investment in the contract of $41,300, and for his post-June 1986 investment in the contract of $700. How to file 1040x electronically       Pre- July 1986   Post- June 1986 A. How to file 1040x electronically Adjustment for refund feature         1) Net cost $41,300   $700   2) Annual annuity—$24,000  ($41,300/$42,000 × $24,000) $23,600       ($700/$42,000 × $24,000)     $400   3) Guarantee under contract $41,300   $700   4) No. How to file 1040x electronically of years payments  guaranteed (rounded), A(3) ÷ A(2) 2   2   5) Applicable percentage from  Tables III and VII 1%   0%   6) Adjustment for value of refund  feature, A(5) × smaller of A(1)  or A(3) $413   $0 B. How to file 1040x electronically Investment in the contract         1) Net cost $41,300   $700   2) Minus: Amount in A(6) 413   0   3) Investment in the contract $40,887   $700 C. How to file 1040x electronically Expected return         1) Annual annuity receivable $24,000   $24,000   2) Multiples from Tables I and V 21. How to file 1040x electronically 7   28. How to file 1040x electronically 6   3) Expected return, C(1) × C(2) $520,800   $686,400 D. How to file 1040x electronically Tax-free part of annuity         1) Exclusion ratio as decimal,  B(3) ÷ C(3) . How to file 1040x electronically 079   . How to file 1040x electronically 001   2) Tax-free part, C(1) × D(1) $1,896   $24 The tax-free part of Bill's total annuity is $1,920 ($1,896 plus $24). How to file 1040x electronically The taxable part of his annuity is $22,080 ($24,000 minus $1,920). How to file 1040x electronically If the annuity starting date is after 1986, the exclusion over the years cannot exceed the net cost (figured without any reduction for a refund feature). How to file 1040x electronically Example 2. How to file 1040x electronically Al is age 62 at his nearest birthday to the annuity starting date. How to file 1040x electronically Al's wife is age 60 at her nearest birthday to the annuity starting date. How to file 1040x electronically The joint and survivor annuity pays $1,000 per month to Al for life, and $500 per month to Al's surviving wife after his death. How to file 1040x electronically The pre-July 1986 investment in the contract is $53,100 and the post-June 1986 investment in the contract is $7,000. How to file 1040x electronically Al makes the election described in Example 1 . How to file 1040x electronically For purposes of this example, assume the refund feature adjustment is zero. How to file 1040x electronically If an adjustment is required, IRS will figure the amount. How to file 1040x electronically See Requesting a Ruling on Taxation of Annuity near the end of this publication. How to file 1040x electronically       Pre-  July 1986   Post-  June 1986 A. How to file 1040x electronically Adjustment for refund feature         1) Net cost $53,100   $7,000   2) Annual annuity—$12,000  ($53,100/$60,100 × $12,000) $10,602       ($7,000/$60,100 × $12,000)     $1,398   3) Guaranteed under the contract $53,100   $7,000   4) Number of years guaranteed,  rounded, A(3) ÷ A(2) 5   5   5) Applicable percentages 0%   0%   6) Refund feature adjustment, A(5) × smaller of A(1) or A(3) 0   0 B. How to file 1040x electronically Investment in the contract         1) Net cost $53,100   $7,000   2) Refund feature adjustment 0   0   3) Investment in the contract adjusted for refund feature $53,100   $7,000 C. How to file 1040x electronically Expected return         1) Multiple for both annuitants from Tables II and VI 25. How to file 1040x electronically 4   28. How to file 1040x electronically 8   2) Multiple for first annuitant from Tables I and V 16. How to file 1040x electronically 9   22. How to file 1040x electronically 5   3) Multiple applicable to surviving annuitant, subtract C(2) from C(1) 8. How to file 1040x electronically 5   6. How to file 1040x electronically 3   4) Annual annuity to surviving annuitant $6,000   $6,000   5) Portion of expected return for surviving annuitant, C(4) × C(3) $51,000   $37,800   6) Annual annuity to first annuitant $12,000   $12,000   7) Plus: Portion of expected return for first annuitant, C(6) × C(2) $202,800   $270,000   8) Expected return for both annuitants, C(5) + C(7) $253,800   $307,800 D. How to file 1040x electronically Tax-free part of annuity         1) Exclusion ratio as a decimal, B(3) ÷ C(8) . How to file 1040x electronically 209   . How to file 1040x electronically 023   2) Retiree's tax-free part of annuity, C(6) × D(1) $2,508   $276   3) Survivor's tax-free part of annuity, C(4) × D(1) $1,254   $138 The tax-free part of Al's total annuity is $2,784 ($2,508 + $276). How to file 1040x electronically The taxable part of his annuity is $9,216 ($12,000 − $2,784). How to file 1040x electronically The exclusion over the years cannot exceed the net cost of the contract (figured without any reduction for a refund feature) if the annuity starting date is after 1986. How to file 1040x electronically After Al's death, his widow will apply the same exclusion percentages (20. How to file 1040x electronically 9% and 2. How to file 1040x electronically 3%) to her annual annuity of $6,000 to figure the tax-free part of her annuity. How to file 1040x electronically Annuity received after June 30, 1986. How to file 1040x electronically   If you receive an annuity payment after June 30, 1986, (regardless of your annuity starting date), you may elect to treat the entire cost of the contract as post-June 1986 cost (even if you made no post-June 1986 contributions to the plan) and use Tables V through VIII. How to file 1040x electronically Once made, you cannot revoke the election, which will apply to all payments during the year and in any later year. How to file 1040x electronically    Make the election by attaching the following statement to your income tax return. How to file 1040x electronically    “I elect, under section 1. How to file 1040x electronically 72–9 of the Income Tax Regulations, to treat my entire cost of the contract as a post-June 1986 cost of the plan. How to file 1040x electronically ”   The statement must also include your name, address, and social security number. How to file 1040x electronically   You should also indicate you are making this election if you are unable or do not wish to determine the parts of your contributions which were made before July 1, 1986, and after June 30, 1986. How to file 1040x electronically Disqualifying form of payment or settlement. How to file 1040x electronically   If your annuity starting date is after June 30, 1986, and the contract provides for a disqualifying form of payment or settlement, such as an option to receive a lump sum in full discharge of the obligation under the contract, the entire investment in the contract is treated as post-June 1986 investment in the contract. How to file 1040x electronically See regulations section 1. How to file 1040x electronically 72–6(d)(3) for additional examples of disqualifying forms of payment or settlement. How to file 1040x electronically You can find the Income Tax Regulations in many libraries and at Internal Revenue Service Offices. How to file 1040x electronically Worksheets for Determining Taxable Annuity Worksheets I and II. How to file 1040x electronically   Worksheets I and II follow for determining your taxable annuity under Regulations Section 1. How to file 1040x electronically 72–6(d)(6) Election. How to file 1040x electronically Worksheet I For Determining Taxable Annuity Under Regulations Section 1. How to file 1040x electronically 72-6(d)(6) Election For Single Annuitant With No Survivor Annuity               Pre-July 1986   Post-June 1986 A. How to file 1040x electronically   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. How to file 1040x electronically )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)   Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages* from Tables III and VII                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. How to file 1040x electronically If not, the IRS will calculate the refund feature percentage. How to file 1040x electronically             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. How to file 1040x electronically   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund feature:                   B(1) minus B(2)                             C. How to file 1040x electronically   Expected Return             1)   Annual Annuity:                   12 times monthly annuity**             2)   Expected return multiples from Tables I and V             3)     Expected return:                   C(1) times C(2)                             D. How to file 1040x electronically   Tax-Free Part of Annuity             1)     Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(3)             2)     Tax-free part of annuity:                   C(1) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. How to file 1040x electronically     Worksheet II For Determining Taxable Annuity Under Regulations Section 1. How to file 1040x electronically 72-6(d)(6) Election For Joint and Survivor Annuity               Pre-July 1986   Post-June 1986 A. How to file 1040x electronically   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. How to file 1040x electronically )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)     Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages*                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. How to file 1040x electronically If not, the IRS will calculate the refund feature percentage. How to file 1040x electronically             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. How to file 1040x electronically   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund future:                   B(1) minus B(2)                             C. How to file 1040x electronically   Expected Return             1)   Multiples for both annuitants, Tables II and VI             2)   Multiple for retiree. How to file 1040x electronically Tables I and VI             3)   Multiple for survivor:                   C(1) minus C(2)             4)   Annual annuity to survivor:                   12 times potential monthly rate for survivor**             5)   Expected return for survivor:                   C(3) times C(4)             6)   Annual annuity to retiree:                   12 times monthly rate for retiree**             7)   Expected return for retiree:                   C(2) times C(6)             8)   Total expected return:                   C(5) plus C(7)                             D. How to file 1040x electronically   Tax-Free Part of Annuity             1)   Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(8)             2)   Retiree's tax-free part of annuity:                   C(6) times D(1)             3)   Survivor's tax-free part of annuity, if surviving after death of retiree:                   C(4) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. How to file 1040x electronically   Actuarial Tables Please click here for the text description of the image. How to file 1040x electronically Actuarial Tables Please click here for the text description of the image. How to file 1040x electronically Actuarial Tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Please click here for the text description of the image. How to file 1040x electronically Actuarial tables Requesting a Ruling on Taxation of Annuity If you are a retiree, or the survivor of an employee or retiree, you may ask the Internal Revenue Service to help you determine the taxation of your annuity. How to file 1040x electronically If you make this request, you are asking for a ruling. How to file 1040x electronically User fee. How to file 1040x electronically   Under the law in effect at the time this publication went to print, the IRS must charge a user fee for all ruling requests. How to file 1040x electronically You should call the IRS for the proper fee. How to file 1040x electronically A request solely for the value of the refund feature is not treated as a ruling request and requires no fee. How to file 1040x electronically Send your request to:     Internal Revenue Service  Attention: EP Letter Rulings P. How to file 1040x electronically O. How to file 1040x electronically Box 27063 McPherson Station Washington, DC 20038 The user fee is allowed as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit. How to file 1040x electronically When to make the request. How to file 1040x electronically   Please note that requests sent between February 1 and April 15 may experience some delay. How to file 1040x electronically We process requests in the order received, and we will reply to your request as soon as we can process it. How to file 1040x electronically If you do not receive your ruling by the required filing date, you may use Form 4868, Application for Automatic Extension of Time To File U. How to file 1040x electronically S. How to file 1040x electronically Individual Income Tax Return, to get an extension of time to file. How to file 1040x electronically Information you must furnish. How to file 1040x electronically   You must furnish the information listed below so the IRS can comply with your request. How to file 1040x electronically Failure to furnish the information will result in a delay in processing your request. How to file 1040x electronically Please send only copies of the following documents, as the IRS retains all material sent for its records: A letter explaining the question(s) you wish to have resolved or the information you need from the ruling. How to file 1040x electronically Copies of any documents showing distributions, annuity rates, and annuity options available to you. How to file 1040x electronically A copy of any Form 1099–R you received since your annuity began. How to file 1040x electronically A statement indicating whether you have filed your return for the year for which you are making the request. How to file 1040x electronically If you have requested an extension of time to file that return, please indicate the extension date. How to file 1040x electronically Your daytime phone number. How to file 1040x electronically Your current mailing address. How to file 1040x electronically A power of attorney if someone other than you, an attorney, a certified public accountant, or an enrolled agent is signing this request. How to file 1040x electronically Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. How to file 1040x electronically A completed Tax Information Sheet (or facsimile) shown on the next page. How to file 1040x electronically Sign and date the Disclosure and Perjury Statement (or facsimile) at the end of the tax information sheet. How to file 1040x electronically This statement must be signed by the retiree or the survivor annuitant. How to file 1040x electronically It cannot be signed by a representative. How to file 1040x electronically Tax Information Sheet Please click here for the text description of the image. How to file 1040x electronically Tax Information Sheet Please click here for the text description of the image. How to file 1040x electronically Tax Information Sheet (continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. How to file 1040x electronically Free help with your tax return. How to file 1040x electronically   You can get free help preparing your return nationwide from IRS-certified volunteers. How to file 1040x electronically The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. How to file 1040x electronically The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. How to file 1040x electronically Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. How to file 1040x electronically In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. How to file 1040x electronically To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. How to file 1040x electronically gov, download the IRS2Go app, or call 1-800-906-9887. How to file 1040x electronically   As part of the TCE program, AARP offers the Tax-Aide counseling program. How to file 1040x electronically To find the nearest AARP Tax-Aide site, visit AARP's website at www. How to file 1040x electronically aarp. How to file 1040x electronically org/money/taxaide or call 1-888-227-7669. How to file 1040x electronically For more information on these programs, go to IRS. How to file 1040x electronically gov and enter “VITA” in the search box. How to file 1040x electronically Internet. How to file 1040x electronically    IRS. How to file 1040x electronically gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. How to file 1040x electronically Download the free IRS2Go app from the iTunes app store or from Google Play. How to file 1040x electronically Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. How to file 1040x electronically Check the status of your 2013 refund with the Where's My Refund? application on IRS. How to file 1040x electronically gov or download the IRS2Go app and select the Refund Status option. How to file 1040x electronically The IRS issues more than 9 out of 10 refunds in less than 21 days. How to file 1040x electronically Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. How to file 1040x electronically You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. How to file 1040x electronically The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. How to file 1040x electronically Use the Interactive Tax Assistant (ITA) to research your tax questions. How to file 1040x electronically No need to wait on the phone or stand in line. How to file 1040x electronically The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. How to file 1040x electronically When you reach the response screen, you can print the entire interview and the final response for your records. How to file 1040x electronically New subject areas are added on a regular basis. How to file 1040x electronically  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. How to file 1040x electronically gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. How to file 1040x electronically You can use the IRS Tax Map, to search publications and instructions by topic or keyword. How to file 1040x electronically The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. How to file 1040x electronically When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. How to file 1040x electronically Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. How to file 1040x electronically You can also ask the IRS to mail a return or an account transcript to you. How to file 1040x electronically Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. How to file 1040x electronically gov or by calling 1-800-908-9946. How to file 1040x electronically Tax return and tax account transcripts are generally available for the current year and the past three years. How to file 1040x electronically Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. How to file 1040x electronically Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. How to file 1040x electronically If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. How to file 1040x electronically Check the status of your amended return using Where's My Amended Return? Go to IRS. How to file 1040x electronically gov and enter Where's My Amended Return? in the search box. How to file 1040x electronically You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. How to file 1040x electronically It can take up to 3 weeks from the date you mailed it to show up in our system. How to file 1040x electronically Make a payment using one of several safe and convenient electronic payment options available on IRS. How to file 1040x electronically gov. How to file 1040x electronically Select the Payment tab on the front page of IRS. How to file 1040x electronically gov for more information. How to file 1040x electronically Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. How to file 1040x electronically Figure your income tax withholding with the IRS Withholding Calculator on IRS. How to file 1040x electronically gov. How to file 1040x electronically Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. How to file 1040x electronically Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. How to file 1040x electronically gov. How to file 1040x electronically Request an Electronic Filing PIN by going to IRS. How to file 1040x electronically gov and entering Electronic Filing PIN in the search box. How to file 1040x electronically Download forms, instructions and publications, including accessible versions for people with disabilities. How to file 1040x electronically Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. How to file 1040x electronically gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. How to file 1040x electronically An employee can answer questions about your tax account or help you set up a payment plan. How to file 1040x electronically Before you visit, check the Office Locator on IRS. How to file 1040x electronically gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. How to file 1040x electronically If you have a special need, such as a disability, you can request an appointment. How to file 1040x electronically Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. How to file 1040x electronically Apply for an Employer Identification Number (EIN). How to file 1040x electronically Go to IRS. How to file 1040x electronically gov and enter Apply for an EIN in the search box. How to file 1040x electronically Read the Internal Revenue Code, regulations, or other official guidance. How to file 1040x electronically Read Internal Revenue Bulletins. How to file 1040x electronically Sign up to receive local and national tax news and more by email. How to file 1040x electronically Just click on “subscriptions” above the search box on IRS. How to file 1040x electronically gov and choose from a variety of options. How to file 1040x electronically    Phone. How to file 1040x electronically You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. How to file 1040x electronically Download the free IRS2Go app from the iTunes app store or from Google Play. How to file 1040x electronically Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. How to file 1040x electronically gov, or download the IRS2Go app. How to file 1040x electronically Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. How to file 1040x electronically The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. How to file 1040x electronically Mos
Print - Click this link to Print this page

Understanding your CP23 Notice

We made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You have a balance due because of these changes.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice carefully — it will explain how much money you owe on your taxes.
  • Check the list of payments we applied to your account to see if we applied all the payments you made.
  • Correct the copy of your tax return that you kept for your records.
  • Pay the amount you owe by the date on the notice's payment coupon if you agree with the notice.
  • If you disagree with the notice, please contact us at the toll-free number listed on its top right-hand corner (within 60 days of the notice’s date).
  • Make payment arrangements if you can't pay the full amount you owe.

You may want to...


Answers to Common Questions

What should I do if I find you misapplied a payment or haven't credited a payment that I made?
Contact us with your information at the toll-free number listed on your notice. Please have your documentation (such as cancelled checks, amended return, etc.) ready when you call. Our representative will discuss the issue with you and give you further instructions.

What should I do if I disagree with the changes you made?
Contact us at the toll free number listed on the top right-hand corner of your notice.

How do I adjust my estimated tax payments?
You can adjust your estimated tax payments by completing a Form 1040-ES, Estimated Tax for Individuals. See Publication 505, Tax Withholding and Estimated Tax for more information.

What should I do if I need to make another correction to my tax return?
You'll need to file Form 1040X, Amended U.S. Individual Income Tax Return.

Do I have to pay interest on the amount I owe?
Interest will accrue on the amount you owe unless you pay it by the requested date on the notice's payment coupon.

Do I receive a penalty if I cannot pay the full amount?
Yes. You usually will receive a late payment penalty. Notice 746, Information About Your Notice, Penalty and Interest has more information about penalties and interest.

What happens if I cannot pay the full amount I owe?
You can arrange to make a payment plan with us if you can't pay the full amount you owe.

How can I set up a payment plan?
Call the toll-free number listed on the top right-hand corner of your notice to discuss payment options, or learn more about payment arrangements.

What happens if I don't pay?
We can file a Notice of Federal Tax Lien. The lien gives us a legal claim to your property for payment for your tax debt.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 03-Mar-2014

The How To File 1040x Electronically

How to file 1040x electronically Publication 535 - Additional Material Prev  Up  Next   Home   More Online Publications