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How To File An Ammended Return

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How To File An Ammended Return

How to file an ammended return 5. How to file an ammended return   Taxes Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: When To Deduct Taxes Real Estate TaxesSeparate elections. How to file an ammended return Making the election. How to file an ammended return Form 3115. How to file an ammended return Income TaxesAccrual of contested income taxes. How to file an ammended return Employment Taxes Other TaxesAdditional Medicare Tax. How to file an ammended return What's New Additional Medicare Tax. How to file an ammended return  Beginning in 2013, you must withhold a 0. How to file an ammended return 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. How to file an ammended return Also, self-employed individuals may be required to pay Additional Medicare Tax on self-employment income. How to file an ammended return See Employment Taxes , and Self-employment tax , later. How to file an ammended return Introduction You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses. How to file an ammended return You cannot deduct federal income taxes, estate and gift taxes, or state inheritance, legacy, and succession taxes. How to file an ammended return Topics - This chapter discusses: When to deduct taxes Real estate taxes Income taxes Employment taxes Other taxes Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 334 Tax Guide for Small Business 510 Excise Taxes 538 Accounting Periods and Methods 551 Basis of Assets Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch SE (Form 1040) Self-Employment Tax 3115 Application for Change in Accounting Method 8959 Additional Medicare Tax See chapter 12 for information about getting publications and forms. How to file an ammended return When To Deduct Taxes Generally, you can only deduct taxes in the year you pay them. How to file an ammended return This applies whether you use the cash method or an accrual method of accounting. How to file an ammended return Under an accrual method, you can deduct a tax before you pay it if you meet the exception for recurring items discussed under Economic Performance in Publication 538. How to file an ammended return You can also elect to ratably accrue real estate taxes as discussed later under Real Estate Taxes . How to file an ammended return Limit on accrual of taxes. How to file an ammended return   A taxing jurisdiction can require the use of a date for accruing taxes that is earlier than the date it originally required. How to file an ammended return However, if you use an accrual method, and can deduct the tax before you pay it, use the original accrual date for the year of change and all future years to determine when you can deduct the tax. How to file an ammended return Example. How to file an ammended return Your state imposes a tax on personal property used in a trade or business conducted in the state. How to file an ammended return This tax is assessed and becomes a lien as of July 1 (accrual date). How to file an ammended return In 2013, the state changed the assessment and lien dates from July 1, 2014, to December 31, 2013, for property tax year 2014. How to file an ammended return Use the original accrual date (July 1, 2014) to determine when you can deduct the tax. How to file an ammended return You must also use the July 1 accrual date for all future years to determine when you can deduct the tax. How to file an ammended return Uniform capitalization rules. How to file an ammended return   Uniform capitalization rules apply to certain taxpayers who produce real property or tangible personal property for use in a trade or business or for sale to customers. How to file an ammended return They also apply to certain taxpayers who acquire property for resale. How to file an ammended return Under these rules, you either include certain costs in inventory or capitalize certain expenses related to the property, such as taxes. How to file an ammended return For more information, see chapter 1. How to file an ammended return Carrying charges. How to file an ammended return   Carrying charges include taxes you pay to carry or develop real estate or to carry, transport, or install personal property. How to file an ammended return You can elect to capitalize carrying charges not subject to the uniform capitalization rules if they are otherwise deductible. How to file an ammended return For more information, see chapter 7. How to file an ammended return Refunds of taxes. How to file an ammended return   If you receive a refund for any taxes you deducted in an earlier year, include the refund in income to the extent the deduction reduced your federal income tax in the earlier year. How to file an ammended return For more information, see Recovery of amount deducted (tax benefit rule) in chapter 1. How to file an ammended return    You must include in income any interest you receive on tax refunds. How to file an ammended return Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real estate levied for the general public welfare. How to file an ammended return The taxing authority must base the taxes on the assessed value of the real estate and charge them uniformly against all property under its jurisdiction. How to file an ammended return Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. How to file an ammended return See Taxes for local benefits , later. How to file an ammended return If you use an accrual method, you generally cannot accrue real estate taxes until you pay them to the government authority. How to file an ammended return However, you can elect to ratably accrue the taxes during the year. How to file an ammended return See Electing to ratably accrue , later. How to file an ammended return Taxes for local benefits. How to file an ammended return   Generally, you cannot deduct taxes charged for local benefits and improvements that tend to increase the value of your property. How to file an ammended return These include assessments for streets, sidewalks, water mains, sewer lines, and public parking facilities. How to file an ammended return You should increase the basis of your property by the amount of the assessment. How to file an ammended return   You can deduct taxes for these local benefits only if the taxes are for maintenance, repairs, or interest charges related to those benefits. How to file an ammended return If part of the tax is for maintenance, repairs, or interest, you must be able to show how much of the tax is for these expenses to claim a deduction for that part of the tax. How to file an ammended return Example. How to file an ammended return To improve downtown commercial business, Waterfront City converted a downtown business area street into an enclosed pedestrian mall. How to file an ammended return The city assessed the full cost of construction, financed with 10-year bonds, against the affected properties. How to file an ammended return The city is paying the principal and interest with the annual payments made by the property owners. How to file an ammended return The assessments for construction costs are not deductible as taxes or as business expenses, but are depreciable capital expenses. How to file an ammended return The part of the payments used to pay the interest charges on the bonds is deductible as taxes. How to file an ammended return Charges for services. How to file an ammended return   Water bills, sewerage, and other service charges assessed against your business property are not real estate taxes, but are deductible as business expenses. How to file an ammended return Purchase or sale of real estate. How to file an ammended return   If real estate is sold, the real estate taxes must be allocated between the buyer and the seller. How to file an ammended return   The buyer and seller must allocate the real estate taxes according to the number of days in the real property tax year (the period to which the tax imposed relates) that each owned the property. How to file an ammended return Treat the seller as paying the taxes up to but not including the date of sale. How to file an ammended return Treat the buyer as paying the taxes beginning with the date of sale. How to file an ammended return You can usually find this information on the settlement statement you received at closing. How to file an ammended return   If you (the seller) use an accrual method and have not elected to ratably accrue real estate taxes, you are considered to have accrued your part of the tax on the date you sell the property. How to file an ammended return Example. How to file an ammended return Alberto Verde, a calendar year accrual method taxpayer, owns real estate in Olmo County. How to file an ammended return He has not elected to ratably accrue property taxes. How to file an ammended return November 30 of each year is the assessment and lien date for the current real property tax year, which is the calendar year. How to file an ammended return He sold the property on June 30, 2013. How to file an ammended return Under his accounting method he would not be able to claim a deduction for the taxes because the sale occurred before November 30. How to file an ammended return He is treated as having accrued his part of the tax, 181/366  (January 1–June 29), on June 30, and he can deduct it for 2013. How to file an ammended return Electing to ratably accrue. How to file an ammended return   If you use an accrual method, you can elect to accrue real estate tax related to a definite period ratably over that period. How to file an ammended return Example. How to file an ammended return Juan Sanchez is a calendar year taxpayer who uses an accrual method. How to file an ammended return His real estate taxes for the real property tax year, July 1, 2013, to June 30, 2014, are $1,200. How to file an ammended return July 1 is the assessment and lien date. How to file an ammended return If Juan elects to ratably accrue the taxes, $600 will accrue in 2013 ($1,200 × 6/12, July 1–December 31) and the balance will accrue in 2014. How to file an ammended return Separate elections. How to file an ammended return   You can elect to ratably accrue the taxes for each separate trade or business and for nonbusiness activities if you account for them separately. How to file an ammended return Once you elect to ratably accrue real estate taxes, you must use that method unless you get permission from the IRS to change. How to file an ammended return See Form 3115 , later. How to file an ammended return Making the election. How to file an ammended return   If you elect to ratably accrue the taxes for the first year in which you incur real estate taxes, attach a statement to your income tax return for that year. How to file an ammended return The statement should show all the following items. How to file an ammended return The trades or businesses to which the election applies and the accounting method or methods used. How to file an ammended return The period to which the taxes relate. How to file an ammended return The computation of the real estate tax deduction for that first year. How to file an ammended return   Generally, you must file your return by the due date (including extensions). How to file an ammended return However, if you timely filed your return for the year without electing to ratably accrue, you can still make the election by filing an amended return within 6 months after the due date of the return (excluding extensions). How to file an ammended return Attach the statement to the amended return and write “Filed pursuant to section 301. How to file an ammended return 9100-2” on the statement. How to file an ammended return File the amended return at the same address where you filed the original return. How to file an ammended return Form 3115. How to file an ammended return    If you elect to ratably accrue real estate taxes for a year after the first year in which you incur real estate taxes, or if you want to revoke your election to ratably accrue real estate taxes, file Form 3115. How to file an ammended return For more information, including applicable time frames for filing, see the Instructions for Form 3115. How to file an ammended return Note. How to file an ammended return If you are filing an application for a change in accounting method filed after January 9, 2011, for a year of change ending after April 29, 2010, see Revenue Procedure 2011-14, 2011-4 I. How to file an ammended return R. How to file an ammended return B. How to file an ammended return 330, as modified and clarified by Revenue Procedure 2012-19, 2012-14 I. How to file an ammended return R. How to file an ammended return B. How to file an ammended return 689, and Revenue Procedure 2012-20, 2012-14 I. How to file an ammended return R. How to file an ammended return B. How to file an ammended return 700, or any successor. How to file an ammended return Revenue Procedure 2011-14 is available at  www. How to file an ammended return irs. How to file an ammended return gov/irb/2011-04IRB/ar08. How to file an ammended return html. How to file an ammended return Income Taxes This section discusses federal, state, local, and foreign income taxes. How to file an ammended return Federal income taxes. How to file an ammended return   You cannot deduct federal income taxes. How to file an ammended return State and local income taxes. How to file an ammended return   A corporation or partnership can deduct state and local income taxes imposed on the corporation or partnership as business expenses. How to file an ammended return An individual can deduct state and local income taxes only as an itemized deduction on Schedule A (Form 1040). How to file an ammended return   However, an individual can deduct a state tax on gross income (as distinguished from net income) directly attributable to a trade or business as a business expense. How to file an ammended return Accrual of contested income taxes. How to file an ammended return   If you use an accrual method, and you contest a state or local income tax liability, you must accrue and deduct any contested amount in the tax year in which the liability is finally determined. How to file an ammended return   If additional state or local income taxes for a prior year are assessed in a later year, you can deduct the taxes in the year in which they were originally imposed (the prior year) if the tax liability is not contested. How to file an ammended return You cannot deduct them in the year in which the liability is finally determined. How to file an ammended return    The filing of an income tax return is not considered a contest and, in the absence of an overt act of protest, you can deduct the tax in the prior year. How to file an ammended return Also, you can deduct any additional taxes in the prior year if you do not show some affirmative evidence of denial of the liability. How to file an ammended return   However, if you consistently deduct additional assessments in the year they are paid or finally determined (including those for which there was no contest), you must continue to do so. How to file an ammended return You cannot take a deduction in the earlier year unless you receive permission to change your method of accounting. How to file an ammended return For more information on accounting methods, see When Can I Deduct an Expense in chapter 1. How to file an ammended return Foreign income taxes. How to file an ammended return   Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. How to file an ammended return S. How to file an ammended return possession. How to file an ammended return However, an individual cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. How to file an ammended return S. How to file an ammended return tax under the foreign earned income exclusion or the foreign housing exclusion. How to file an ammended return For information on these exclusions, see Publication 54, Tax Guide for U. How to file an ammended return S. How to file an ammended return Citizens and Resident Aliens Abroad. How to file an ammended return For information on the foreign tax credit, see Publication 514, Foreign Tax Credit for Individuals. How to file an ammended return Employment Taxes If you have employees, you must withhold various taxes from your employees' pay. How to file an ammended return Most employers must withhold their employees' share of social security, Medicare taxes, and Additional Medicare Tax (if applicable) along with state and federal income taxes. How to file an ammended return You may also need to pay certain employment taxes from your own funds. How to file an ammended return These include your share of social security and Medicare taxes as an employer, along with unemployment taxes. How to file an ammended return Note. How to file an ammended return Additional Medicare Tax is only imposed on the employee. How to file an ammended return There is no employer share of Additional Medicare Tax. How to file an ammended return Your deduction for wages paid is not reduced by the social security and Medicare taxes, Additional Medicare Tax, and income taxes you withhold from your employees. How to file an ammended return You can deduct the employment taxes you must pay from your own funds as taxes. How to file an ammended return Example. How to file an ammended return You pay your employee $18,000 a year. How to file an ammended return However, after you withhold various taxes, your employee receives $14,500. How to file an ammended return You also pay an additional $1,500 in employment taxes. How to file an ammended return You should deduct the full $18,000 as wages. How to file an ammended return You can deduct the $1,500 you pay from your own funds as taxes. How to file an ammended return For more information on employment taxes, see Publication 15 (Circular E). How to file an ammended return Unemployment fund taxes. How to file an ammended return   As an employer, you may have to make payments to a state unemployment compensation fund or to a state disability benefit fund. How to file an ammended return Deduct these payments as taxes. How to file an ammended return Other Taxes The following are other taxes you can deduct if you incur them in the ordinary course of your trade or business. How to file an ammended return Excise taxes. How to file an ammended return   Generally, you can deduct as a business expense all excise taxes that are ordinary and necessary expenses of carrying on your trade or business. How to file an ammended return However, see Fuel taxes , later. How to file an ammended return   For more information on excise taxes, see Publication 510. How to file an ammended return Franchise taxes. How to file an ammended return   You can deduct corporate franchise taxes as a business expense. How to file an ammended return Fuel taxes. How to file an ammended return   Generally, taxes on gasoline, diesel fuel, and other motor fuels that you use in your business are included as part of the cost of the fuel. How to file an ammended return Do not deduct these taxes as a separate item. How to file an ammended return   You may be entitled to a credit or refund for federal excise tax you paid on fuels used for certain purposes. How to file an ammended return For more information, see Publication 510. How to file an ammended return Occupational taxes. How to file an ammended return   You can deduct as a business expense an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. How to file an ammended return Personal property tax. How to file an ammended return   You can deduct any tax imposed by a state or local government on personal property used in your trade or business. How to file an ammended return Sales tax. How to file an ammended return   Treat any sales tax you pay on a service or on the purchase or use of property as part of the cost of the service or property. How to file an ammended return If the service or the cost or use of the property is a deductible business expense, you can deduct the tax as part of that service or cost. How to file an ammended return If the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. How to file an ammended return If the property is depreciable, add the sales tax to the basis for depreciation. How to file an ammended return For more information on basis, see Publication 551. How to file an ammended return    Do not deduct state and local sales taxes imposed on the buyer that you must collect and pay over to the state or local government. How to file an ammended return Also, do not include these taxes in gross receipts or sales. How to file an ammended return Self-employment tax. How to file an ammended return   You can deduct part of your self-employment tax as a business expense in figuring your adjusted gross income. How to file an ammended return This deduction only affects your income tax. How to file an ammended return It does not affect your net earnings from self-employment or your self-employment tax. How to file an ammended return   To deduct the tax, enter on Form 1040, line 27, the amount shown on the Deduction for one-half of self-employment tax line of Schedule SE (Form 1040). How to file an ammended return   For more information on self-employment tax, see Publication 334. How to file an ammended return Additional Medicare Tax. How to file an ammended return   Beginning in 2013, you may be required to pay Additional Medicare Tax on self-employment income. How to file an ammended return See Form 8959 and the Instructions for Form 8959 for more information on the Additional Medicare Tax. How to file an ammended return Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

South Dakota Office of the Attorney General

Website: South Dakota Office of the Attorney General

Address: South Dakota Office of the Attorney General
Consumer Protection
1302 E. Hwy. 14, Suite 3
Pierre, SD 57501-8503

Phone Number: 605-773-4400

Toll-free: 1-800-300-1986 (SD)

TTY: 605-773-6585

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Labor and Regulation

Website: Department of Labor and Regulation

Address: Department of Labor and Regulation
Division of Banking
217 1/2 W. Missouri Ave.
Pierre, SD 57501

Phone Number: 605-773-3421

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Labor and Regulation

Website: Department of Labor and Regulation

Address: Department of Labor and Regulation
Division of Insurance
445 E. Capitol Ave.
Pierre, SD 57501

Phone Number: 605-773-3563

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Department of Labor and Regulation

Website: Department of Labor and Regulation

Address: Department of Labor and Regulation
Division of Securities
445 E. Capitol Ave.
Pierre, SD 57501-3185

Phone Number: 605-773-4823

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Public Utilities Commission

Website: Public Utilities Commission

Address: Public Utilities Commission
Consumer Affairs
500 E. Capitol Ave.
Pierre, SD 57501-5070

Phone Number: 605-773-3201

Toll-free: 1-800-332-1782

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The How To File An Ammended Return

How to file an ammended return 2. How to file an ammended return   Taxable and Nontaxable Income Table of Contents Compensation for Services Retirement Plan DistributionsIndividual Retirement Arrangements (IRAs) Pensions and Annuities Social Security and Equivalent Railroad Retirement BenefitsAre Any of Your Benefits Taxable? How Much Is Taxable? How To Report Your Benefits Lump-Sum Election Repayments More Than Gross Benefits Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Life Insurance ProceedsInstallments for life. How to file an ammended return Surviving spouse. How to file an ammended return Endowment Contract Proceeds Accelerated Death Benefits Sale of HomeMaximum Amount of Exclusion Ownership and Use Tests Married Persons Business Use or Rental of Home Reporting the Sale Reverse Mortgages Other ItemsWelfare benefits. How to file an ammended return Payments from a state fund for victims of crime. How to file an ammended return Home Affordable Modification Program (HAMP). How to file an ammended return Mortgage assistance payments. How to file an ammended return Payments to reduce cost of winter energy use. How to file an ammended return Nutrition Program for the Elderly. How to file an ammended return Reemployment Trade Adjustment Assistance (RTAA). How to file an ammended return Generally, income is taxable unless it is specifically exempt (not taxed) by law. How to file an ammended return Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. How to file an ammended return Under special provisions of the law, certain items are partially or fully exempt from tax. How to file an ammended return Provisions that are of special interest to older taxpayers are discussed in this chapter. How to file an ammended return Compensation for Services Generally, you must include in gross income everything you receive in payment for personal services. How to file an ammended return In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. How to file an ammended return You need not receive the compensation in cash for it to be taxable. How to file an ammended return Payments you receive in the form of goods or services generally must be included in gross income at their fair market value. How to file an ammended return Volunteer work. How to file an ammended return   Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs. How to file an ammended return Retired Senior Volunteer Program (RSVP). How to file an ammended return Foster Grandparent Program. How to file an ammended return Senior Companion Program. How to file an ammended return Service Corps of Retired Executives (SCORE). How to file an ammended return Unemployment compensation. How to file an ammended return   You must include in income all unemployment compensation you or your spouse (if married filing jointly) received. How to file an ammended return More information. How to file an ammended return   See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income. How to file an ammended return Retirement Plan Distributions This section summarizes the tax treatment of amounts you receive from traditional individual retirement arrangements (IRA), employee pensions or annuities, and disability pensions or annuities. How to file an ammended return A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. How to file an ammended return A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and tax-free distributions. How to file an ammended return A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. How to file an ammended return More detailed information can be found in Publication 590, Individual Retirement Arrangements (IRAs), and Publication 575, Pension and Annuity Income. How to file an ammended return Individual Retirement Arrangements (IRAs) In general, distributions from a traditional IRA are taxable in the year you receive them. How to file an ammended return Exceptions to the general rule are rollovers, tax-free withdrawals of contributions, and the return of nondeductible contributions. How to file an ammended return These are discussed in Publication 590. How to file an ammended return If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. How to file an ammended return If you do not file Form 8606 with your return, you may have to pay a $50 penalty. How to file an ammended return Also, when you receive distributions from your traditional IRA, the amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. How to file an ammended return Early distributions. How to file an ammended return   Generally, early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age  59½. How to file an ammended return You must include early distributions of taxable amounts in your gross income. How to file an ammended return These taxable amounts are also subject to an additional 10% tax unless the distribution qualifies for an exception. How to file an ammended return For purposes of the additional 10% tax, an IRA is a qualified retirement plan. How to file an ammended return For more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later. How to file an ammended return After age 59½ and before age 70½. How to file an ammended return   After you reach age 59½, you can receive distributions from your traditional IRA without having to pay the 10% additional tax. How to file an ammended return Even though you can receive distributions after you reach age 59½, distributions are not required until you reach  age 70½. How to file an ammended return Required distributions. How to file an ammended return   If you are the owner of a traditional IRA, you generally must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 70½. How to file an ammended return See When Must You Withdraw Assets? (Required Minimum Distributions) in Publication 590. How to file an ammended return If distributions from your traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. How to file an ammended return For purposes of the 50% excise tax, an IRA is a qualified retirement plan. How to file an ammended return For more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. How to file an ammended return See also Excess Accumulations (Insufficient Distributions) in Publication 590. How to file an ammended return Pensions and Annuities Generally, if you did not pay any part of the cost of your employee pension or annuity, and your employer did not withhold part of the cost of the contract from your pay while you worked, the amounts you receive each year are fully taxable. How to file an ammended return However, see Insurance Premiums for Retired Public Safety Officers , later. How to file an ammended return If you paid part of the cost of your pension or annuity plan (see Cost , later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). How to file an ammended return This tax-free part of the payment is figured when your annuity starts and remains the same each year, even if the amount of the payment changes. How to file an ammended return The rest of each payment is taxable. How to file an ammended return However, see Insurance Premiums for Retired Public Safety Officers , later. How to file an ammended return You figure the tax-free part of the payment using one of the following methods. How to file an ammended return Simplified Method. How to file an ammended return You generally must use this method if your annuity is paid under a qualified plan (a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan or contract). How to file an ammended return You cannot use this method if your annuity is paid under a nonqualified plan. How to file an ammended return General Rule. How to file an ammended return You must use this method if your annuity is paid under a nonqualified plan. How to file an ammended return You generally cannot use this method if your annuity is paid under a qualified plan. How to file an ammended return Contact your employer or plan administrator to find out if your pension or annuity is paid under a qualified or nonqualified plan. How to file an ammended return You determine which method to use when you first begin receiving your annuity, and you continue using it each year that you recover part of your cost. How to file an ammended return Exclusion limit. How to file an ammended return   If your annuity starting date is after 1986, the total amount of annuity income you can exclude over the years as a recovery of the cost cannot exceed your total cost. How to file an ammended return Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. How to file an ammended return This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. How to file an ammended return   If you contributed to your pension or annuity and your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. How to file an ammended return If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. How to file an ammended return The total exclusion may be more than your cost. How to file an ammended return Cost. How to file an ammended return   Before you can figure how much, if any, of your pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). How to file an ammended return Your total cost in the plan includes everything that you paid. How to file an ammended return It also includes amounts your employer contributed that were taxable to you when paid. How to file an ammended return However, see Foreign employment contributions , later. How to file an ammended return   From this total cost, subtract any refunded premiums, rebates, dividends, unrepaid loans, or other tax-free amounts you received by the later of the annuity starting date or the date on which you received your first payment. How to file an ammended return   The annuity starting date is the later of the first day of the first period for which you received a payment from the plan or the date on which the plan's obligations became fixed. How to file an ammended return    The amount of your contributions to the plan may be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. How to file an ammended return , that you receive. How to file an ammended return Foreign employment contributions. How to file an ammended return   If you worked abroad, certain amounts your employer paid into your retirement plan that were not includible in your gross income may be considered part of your cost. How to file an ammended return For details, see Foreign employment contributions in Publication 575. How to file an ammended return Withholding. How to file an ammended return   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable part of amounts paid to you. How to file an ammended return However, you can choose not to have tax withheld on the payments you receive, unless they are eligible rollover distributions. How to file an ammended return (These are distributions that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. How to file an ammended return ) See Withholding Tax and Estimated Tax and Rollovers in Publication 575 for more information. How to file an ammended return   For payments other than eligible rollover distributions, you can tell the payer how much to withhold by filing a Form W-4P, Withholding Certificate for Pension or Annuity Payments. How to file an ammended return Simplified Method. How to file an ammended return   Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. How to file an ammended return For an annuity that is payable over the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. How to file an ammended return For any other annuity, this number is the number of monthly annuity payments under the contract. How to file an ammended return Who must use the Simplified Method. How to file an ammended return   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you receive your pension or annuity payments from a qualified plan or annuity, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments (defined next). How to file an ammended return   In addition, if your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use the Simplified Method for payments from a qualified plan, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments. How to file an ammended return If you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. How to file an ammended return Guaranteed payments. How to file an ammended return   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. How to file an ammended return If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. How to file an ammended return Who cannot use the Simplified Method. How to file an ammended return   You cannot use the Simplified Method and must use the General Rule if you receive pension or annuity payments from: A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan, or A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 years of guaranteed payments (defined above). How to file an ammended return   In addition, you had to use the General Rule for either circumstance described above if your annuity starting date is after July 1, 1986, and before November 19, 1996. How to file an ammended return If you did not have to use the General Rule, you could have chosen to use it. How to file an ammended return You also had to use the General Rule for payments from a qualified plan if your annuity starting date is before July 2, 1986, and you did not qualify to use the Three-Year Rule. How to file an ammended return   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. How to file an ammended return   Unless your annuity starting date was before 1987, once you have recovered all of your non-taxable investment, all of each remaining payment you receive is fully taxable. How to file an ammended return Once your remaining payments are fully taxable, there is no longer a concern with the General Rule or Simplified Method. How to file an ammended return   Complete information on the General Rule, including the actuarial tables you need, is contained in Publication 939, General Rule for Pensions and Annuities. How to file an ammended return How to use the Simplified Method. How to file an ammended return   Complete the Simplified Method Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions or in Publication 575 to figure your taxable annuity for 2013. How to file an ammended return Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. How to file an ammended return   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. How to file an ammended return How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. How to file an ammended return For this purpose, treat an annuity that is payable over the life of an annuitant as payable for that annuitant's life even if the annuity has a fixed-period feature or also provides a temporary annuity payable to the annuitant's child under age 25. How to file an ammended return    You do not need to complete line 3 of the worksheet or make the computation on line 4 if you received annuity payments last year and used last year's worksheet to figure your taxable annuity. How to file an ammended return Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. How to file an ammended return Single-life annuity. How to file an ammended return   If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. How to file an ammended return Enter on line 3 the number shown for your age on your annuity starting date. How to file an ammended return This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. How to file an ammended return Multiple-lives annuity. How to file an ammended return   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. How to file an ammended return Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. How to file an ammended return For an annuity payable to you as the primary annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. How to file an ammended return For an annuity that has no primary annuitant and is payable to you and others as survivor annuitants, combine the ages of the oldest and youngest annuitants. How to file an ammended return Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. How to file an ammended return   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. How to file an ammended return Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. How to file an ammended return This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. How to file an ammended return Fixed-period annuities. How to file an ammended return   If your annuity does not depend in whole or in part on anyone's life expectancy, the total number of expected monthly payments to enter on line 3 of the worksheet is the number of monthly annuity payments under the contract. How to file an ammended return Line 6. How to file an ammended return   The amount on line 6 should include all amounts that could have been recovered in prior years. How to file an ammended return If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. How to file an ammended return    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in later years. How to file an ammended return Example. How to file an ammended return Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. How to file an ammended return Bill's annuity starting date is January 1, 2013. How to file an ammended return The benefits are to be paid over the joint lives of Bill and his wife, Kathy, age 65. How to file an ammended return Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. How to file an ammended return Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. How to file an ammended return Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. How to file an ammended return See the illustrated Worksheet 2-A, Simplified Method Worksheet, later. How to file an ammended return You can find a blank version of this worksheet in Publication 575. How to file an ammended return (The references in the illustrated worksheet are to sections in Publication 575). How to file an ammended return His annuity is payable over the lives of more than one annuitant, so Bill uses his and Kathy's combined ages, 130 (65 + 65), and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet and finds the line 3 amount to be 310. How to file an ammended return Bill's tax-free monthly amount is $100 ($31,000 ÷ 310 as shown on line 4 of the worksheet). How to file an ammended return Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. How to file an ammended return The full amount of any annuity payments received after 310 payments are paid must generally be included in gross income. How to file an ammended return If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. How to file an ammended return This deduction is not subject to the 2%-of-adjusted-gross-income limit. How to file an ammended return Worksheet 2-A. How to file an ammended return Simplified Method Worksheet—Illustrated 1. How to file an ammended return Enter the total pension or annuity payments received this year. How to file an ammended return Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. How to file an ammended return $ 14,400 2. How to file an ammended return Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion* See Cost (Investment in the Contract), earlier 2. How to file an ammended return 31,000   Note. How to file an ammended return If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). How to file an ammended return Otherwise, go to line 3. How to file an ammended return     3. How to file an ammended return Enter the appropriate number from Table 1 below. How to file an ammended return But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. How to file an ammended return 310 4. How to file an ammended return Divide line 2 by the number on line 3 4. How to file an ammended return 100 5. How to file an ammended return Multiply line 4 by the number of months for which this year's payments were made. How to file an ammended return If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. How to file an ammended return Otherwise, go to line 6 5. How to file an ammended return 1,200 6. How to file an ammended return Enter any amount previously recovered tax free in years after 1986. How to file an ammended return This is the amount shown on line 10 of your worksheet for last year 6. How to file an ammended return 0 7. How to file an ammended return Subtract line 6 from line 2 7. How to file an ammended return 31,000 8. How to file an ammended return Enter the smaller of line 5 or line 7 8. How to file an ammended return 1,200 9. How to file an ammended return Taxable amount for year. How to file an ammended return Subtract line 8 from line 1. How to file an ammended return Enter the result, but not less than zero. How to file an ammended return Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. How to file an ammended return Note. How to file an ammended return If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. How to file an ammended return If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers, earlier, before entering an amount on your tax return. How to file an ammended return 9. How to file an ammended return $ 13,200 10. How to file an ammended return Was your annuity starting date before 1987? □ Yes. How to file an ammended return STOP. How to file an ammended return Do not complete the rest of this worksheet. How to file an ammended return  ☑ No. How to file an ammended return Add lines 6 and 8. How to file an ammended return This is the amount you have recovered tax free through 2013. How to file an ammended return You will need this number if you need to fill out this worksheet next year. How to file an ammended return 10. How to file an ammended return 1,200 11. How to file an ammended return Balance of cost to be recovered. How to file an ammended return Subtract line 10 from line 2. How to file an ammended return If zero, you will not have to complete this worksheet next year. How to file an ammended return The payments you receive next year will generally be fully taxable 11. How to file an ammended return $ 29,800 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. How to file an ammended return   Table 1 for Line 3 Above       AND your annuity starting date was—   IF your age on your annuity starting date was . How to file an ammended return . How to file an ammended return . How to file an ammended return   BEFORE November 19, 1996, enter on line 3 . How to file an ammended return . How to file an ammended return . How to file an ammended return AFTER November 18, 1996, enter on line 3 . How to file an ammended return . How to file an ammended return . How to file an ammended return   55 or under 300 360   56-60 260 310   61-65 240 260   66-70 170 210   71 or over 120 160 Table 2 for Line 3 Above   IF the annuitants' combined ages on your annuity starting date were . How to file an ammended return . How to file an ammended return . How to file an ammended return   THEN enter on line 3 . How to file an ammended return . How to file an ammended return . How to file an ammended return         110 or under   410         111-120   360         121-130   310         131-140   260         141 or over   210       Survivors of retirees. How to file an ammended return   Benefits paid to you as a survivor under a joint and survivor annuity must be included in your gross income in the same way the retiree would have included them in gross income. How to file an ammended return   If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule, include the total received in your income. How to file an ammended return The retiree's cost has already been recovered tax free. How to file an ammended return   If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for in the contract. How to file an ammended return The resulting tax-free amount will then remain fixed. How to file an ammended return Any increases in the survivor annuity are fully taxable. How to file an ammended return   If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. How to file an ammended return See Simplified Method , earlier. How to file an ammended return How to report. How to file an ammended return   If you file Form 1040, report your total annuity on line 16a, and the taxable part on line 16b. How to file an ammended return If your pension or annuity is fully taxable, enter it on line 16b. How to file an ammended return Do not make an entry on line 16a. How to file an ammended return   If you file Form 1040A, report your total annuity on line 12a, and the taxable part on line 12b. How to file an ammended return If your pension or annuity is fully taxable, enter it on line 12b. How to file an ammended return Do not make an entry on line 12a. How to file an ammended return   If you file Form 1040NR, report your total annuity on line 17a, and the taxable part on line 17b. How to file an ammended return If your pension or annuity is fully taxable, enter it on line 17b. How to file an ammended return Do not make an entry on line 17a. How to file an ammended return Example. How to file an ammended return You are a Form 1040 filer and you received monthly payments totaling $1,200 (12 months x $100) during 2013 from a pension plan that was completely financed by your employer. How to file an ammended return You had paid no tax on the payments that your employer made to the plan, and the payments were not used to pay for accident, health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public Safety Officers ). How to file an ammended return The entire $1,200 is taxable. How to file an ammended return You include $1,200 only on Form 1040, line 16b. How to file an ammended return Joint return. How to file an ammended return   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on line 16a of Form 1040, line 12a of Form 1040A, or line 17a of Form 1040NR. How to file an ammended return Report the total of the taxable parts on line 16b of Form 1040, line 12b of Form 1040A, or line 17b of Form 1040NR. How to file an ammended return Form 1099-R. How to file an ammended return   You should receive a Form 1099-R for your pension or annuity. How to file an ammended return Form 1099-R shows your pension or annuity for the year and any income tax withheld. How to file an ammended return You should receive a Form W-2 if you receive distributions from certain nonqualified plans. How to file an ammended return You must attach Forms 1099-R or Forms W-2 to your 2013 tax return if federal income tax was withheld. How to file an ammended return Generally, you should be sent these forms by January 31, 2014. How to file an ammended return Nonperiodic Distributions If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from your income as a recovery of your cost. How to file an ammended return Nonperiodic distributions include cash withdrawals, distributions of current earnings (dividends) on your investment, and certain loans. How to file an ammended return For information on how to figure the taxable amount of a nonperiodic distribution, see Taxation of Nonperiodic Payments in Publication 575. How to file an ammended return The taxable part of a nonperiodic distribution may be subject to an additional 10% tax. How to file an ammended return See Tax on Early Distributions, later. How to file an ammended return Lump-sum distributions. How to file an ammended return   If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. How to file an ammended return The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. How to file an ammended return The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. How to file an ammended return You may be able to use the 10-year tax option to figure tax on the ordinary income part. How to file an ammended return Form 1099-R. How to file an ammended return   If you receive a total distribution from a plan, you should receive a Form 1099-R. How to file an ammended return If the distribution qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. How to file an ammended return The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is the ordinary income part. How to file an ammended return More information. How to file an ammended return   For more detailed information on lump-sum distributions, see Publication 575 or Form 4972, Tax on Lump-Sum Distributions. How to file an ammended return Tax on Early Distributions Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you reach age 59½ are subject to an additional tax of 10%. How to file an ammended return The tax applies to the taxable part of the distribution. How to file an ammended return For this purpose, a qualified retirement plan is: A qualified employee plan (including a qualified cash or deferred arrangement (CODA) under Internal Revenue Code section 401(k)), A qualified employee annuity plan, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). How to file an ammended return  An IRA is also a qualified retirement plan for purposes of this tax. How to file an ammended return General exceptions to tax. How to file an ammended return   The early distribution tax does not apply to any distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. How to file an ammended return Additional exceptions. How to file an ammended return   There are additional exceptions to the early distribution tax for certain distributions from qualified retirement plans and nonqualified annuity contracts. How to file an ammended return See Publication 575 for details. How to file an ammended return Reporting tax. How to file an ammended return   If you owe only the tax on early distributions and distribution code 1 (early distribution, no known exception) is correctly shown in Form 1099-R, box 7, multiply the taxable part of the early distribution by 10% (. How to file an ammended return 10) and enter the result on Form 1040, line 58, or Form 1040NR, line 56. How to file an ammended return See the instructions for line 58 of Form 1040 or line 56 of Form 1040NR for more information about reporting the early distribution tax. How to file an ammended return Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date. How to file an ammended return Unless the rule for 5% owners applies, this is generally April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. How to file an ammended return However, your plan may require you to begin to receive payments by April 1 of the year that follows the year in which you reach 70½, even if you have not retired. How to file an ammended return For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan) (for benefits accruing after 1986). How to file an ammended return  An IRA is also a qualified retirement plan for purposes of this tax. How to file an ammended return An excess accumulation is the undistributed remainder of the required minimum distribution that was left in your qualified retirement plan. How to file an ammended return 5% owners. How to file an ammended return   If you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the company maintaining your qualified retirement plan, you must begin to receive distributions from the plan by April 1 of the year after the calendar year in which you reach age 70½. How to file an ammended return See Publication 575 for more information. How to file an ammended return Amount of tax. How to file an ammended return   If you do not receive the required minimum distribution, you are subject to an additional tax. How to file an ammended return The tax equals 50% of the difference between the amount that must be distributed and the amount that was distributed during the tax year. How to file an ammended return You can get this excise tax excused if you establish that the shortfall in distributions was due to reasonable error and that you are taking reasonable steps to remedy the shortfall. How to file an ammended return Form 5329. How to file an ammended return   You must file a Form 5329 if you owe a tax because you did not receive a minimum required distribution from your qualified retirement plan. How to file an ammended return Additional information. How to file an ammended return   For more detailed information on the tax on excess accumulation, see Publication 575. How to file an ammended return Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. How to file an ammended return The premiums can be for coverage for you, your spouse, or dependent(s). How to file an ammended return The distribution must be made directly from the plan to the insurance provider. How to file an ammended return You can exclude from income the smaller of the amount of the insurance premiums or $3,000. How to file an ammended return You can only make this election for amounts that would otherwise be included in your income. How to file an ammended return The amount excluded from your income cannot be used to claim a medical expense deduction. How to file an ammended return An eligible retirement plan is a governmental plan that is a: Qualified trust, Section 403(a) plan, Section 403(b) annuity, or Section 457(b) plan. How to file an ammended return If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. How to file an ammended return The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. How to file an ammended return Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. How to file an ammended return Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. How to file an ammended return Enter “PSO” next to the appropriate line on which you report the taxable amount. How to file an ammended return Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. How to file an ammended return These categories are treated differently for income tax purposes. How to file an ammended return Social security equivalent benefits. How to file an ammended return   The first category is the amount of tier 1 railroad retirement benefits that equals the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. How to file an ammended return This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. How to file an ammended return (See Social Security and Equivalent Railroad Retirement Benefits , later. How to file an ammended return ) Non-social security equivalent benefits. How to file an ammended return   The second category contains the rest of the tier 1 benefits, called the non-social security equivalent benefit (NSSEB). How to file an ammended return It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. How to file an ammended return This category of benefits is treated as an amount received from a qualified employee plan. How to file an ammended return This allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits. How to file an ammended return Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. How to file an ammended return More information. How to file an ammended return   For more information about railroad retirement benefits, see Publication 575. How to file an ammended return Military Retirement Pay Military retirement pay based on age or length of service is taxable and must be included in income as a pension on Form 1040, lines 16a and 16b; on Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. How to file an ammended return But, certain military and government disability pensions that are based on a percentage of disability from active service in the Armed Forces of any country generally are not taxable. How to file an ammended return For more information, including information about veterans' benefits and insurance, see Publication 525. How to file an ammended return Social Security and Equivalent Railroad Retirement Benefits This discussion explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. How to file an ammended return Social security benefits include monthly retirement, survivor, and disability benefits. How to file an ammended return They do not include supplemental security income (SSI) payments, which are not taxable. How to file an ammended return 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. How to file an ammended return They commonly are called the social security equivalent benefit (SSEB) portion of tier 1 benefits. How to file an ammended return If you received these benefits during 2013, you should have received a Form SSA-1099 or Form RRB-1099 (Form SSA-1042S or Form RRB-1042S if you are a nonresident alien), showing the amount of the benefits. How to file an ammended return Are Any of Your Benefits Taxable? Note. How to file an ammended return When the term “benefits” is used in this section, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. How to file an ammended return  To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. How to file an ammended return When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. How to file an ammended return S. How to file an ammended return savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned in American Samoa or Puerto Rico by bona fide residents. How to file an ammended return Figuring total income. How to file an ammended return   To figure the total of one-half of your benefits plus your other income, use Worksheet 2-B. How to file an ammended return If that total amount is more than your base amount, part of your benefits may be taxable. How to file an ammended return 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. How to file an ammended return 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. How to file an ammended return 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. How to file an ammended return If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. How to file an ammended return Worksheet 2-B. How to file an ammended return A Quick Way To Check if Your Benefits May Be Taxable A. How to file an ammended return Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. How to file an ammended return Include  the full amount of any lump-sum benefit payments received in 2013, for 2013 and  earlier years. How to file an ammended return (If you received more than one form, combine the amounts from box 5  and enter the total. How to file an ammended return ) A. How to file an ammended return     Note. How to file an ammended return If the amount on line A is zero or less, stop here; none of your benefits are  taxable this year. How to file an ammended return     B. How to file an ammended return Enter one-half of the amount on line A B. How to file an ammended return   C. How to file an ammended return Enter your taxable pensions, wages, interest, dividends, and other taxable income C. How to file an ammended return   D. How to file an ammended return Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income for: •Interest from qualified U. How to file an ammended return S. How to file an ammended return savings bonds, •Employer-provided adoption benefits, •Foreign earned income or foreign housing, or •Income earned in American Samoa or Puerto Rico by bona fide residents D. How to file an ammended return   E. How to file an ammended return Add lines B, C, and D and enter the total E. How to file an ammended return   F. How to file an ammended return 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 •Married filing separately and you lived with your spouse at any time during 2013,  enter -0- F. How to file an ammended return   G. How to file an ammended return Is the amount on line F less than or equal to the amount on line E? □ No. How to file an ammended return None of your benefits are taxable this year. How to file an ammended return  □ Yes. How to file an ammended return Some of your benefits may be taxable. How to file an ammended return To figure how much of your benefits  are taxable, see Which worksheet to use under How Much Is Taxable. How to file an ammended return     Base Amount Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er) with dependent child, $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. How to file an ammended return Repayment of Benefits Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. How to file an ammended return It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. How to file an ammended return If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. How to file an ammended return Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. How to file an ammended return Your repayments are shown in box 4. How to file an ammended return The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). How to file an ammended return Use the amount in box 5 to figure whether any of your benefits are taxable. How to file an ammended return Tax Withholding and Estimated Tax You can choose to have federal income tax withheld from your social security and/or the SSEB portion of your tier 1 railroad retirement benefits. How to file an ammended return If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Request. How to file an ammended return 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. How to file an ammended return For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. How to file an ammended return How Much Is Taxable? If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. How to file an ammended return Generally, the higher that total amount, the greater the taxable part of your benefits. How to file an ammended return Maximum taxable part. How to file an ammended return   The taxable part of your benefits usually cannot be more than 50%. How to file an ammended return However, up to 85% of your benefits can be taxable if either of the following situations applies to you. How to file an ammended return 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). How to file an ammended return You are married filing separately and lived with your spouse at any time during 2013. How to file an ammended return   If you are a nonresident alien, 85% of your benefits are taxable. How to file an ammended return However, this income is exempt under some tax treaties. How to file an ammended return Which worksheet to use. How to file an ammended return   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. How to file an ammended return However, you will need to use a different worksheet(s) if any of the following situations applies to you. How to file an ammended return You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse were covered by a retirement plan at work. How to file an ammended return 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. How to file an ammended return Situation (1) does not apply and you take one or more of the following exclusions. How to file an ammended return Interest from qualified U. How to file an ammended return S. How to file an ammended return savings bonds (Form 8815). How to file an ammended return Employer-provided adoption benefits (Form 8839). How to file an ammended return Foreign earned income or housing (Form 2555 or Form 2555-EZ). How to file an ammended return Income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. How to file an ammended return In these situations, you must use Worksheet 1 in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits. How to file an ammended return You received a lump-sum payment for an earlier year. How to file an ammended return In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. How to file an ammended return See Lump-Sum Election , later. How to file an ammended return How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040, Form 1040A, or Form 1040NR. How to file an ammended return You cannot use Form 1040EZ. How to file an ammended return Reporting on Form 1040. How to file an ammended return   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. How to file an ammended return 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. How to file an ammended return Reporting on Form 1040A. How to file an ammended return   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. How to file an ammended return 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. How to file an ammended return Reporting on Form 1040NR. How to file an ammended return   Report 85% of the total amount of your benefits (box 5 of your Form SSA-1042S or Form RRB-1042S) in the appropriate column of Form 1040NR, Schedule NEC, line 8. How to file an ammended return Benefits not taxable. How to file an ammended return   If you are filing Form 1040EZ, do not report any benefits on your tax return. How to file an ammended return If you are filing Form 1040 or Form 1040A, report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. How to file an ammended return Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. How to file an ammended return 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. How to file an ammended return Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. How to file an ammended return 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. How to file an ammended return No part of the lump-sum death benefit is subject to tax. How to file an ammended return For more information about the lump-sum death benefit, visit the Social Security Administration website at www. How to file an ammended return SSA. How to file an ammended return gov, and use keyword: death benefit. How to file an ammended return Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. How to file an ammended return 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. How to file an ammended return You can elect this method if it lowers your taxable benefits. How to file an ammended return See Publication 915 for more information. How to file an ammended return 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. How to file an ammended return 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. How to file an ammended return 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. How to file an ammended return If you have any questions about this negative figure, contact your local Social Security Administration office or your local U. How to file an ammended return S. How to file an ammended return Railroad Retirement Board field office. How to file an ammended return Joint return. How to file an ammended return   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 box 5 amount on your form from the box 5 amount on your spouse's form. How to file an ammended return You do this to get your net benefits when figuring if your combined benefits are taxable. How to file an ammended return Repayment of benefits received in an earlier year. How to file an ammended return   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. How to file an ammended return   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. How to file an ammended return Claim it on Schedule A (Form 1040), line 23. How to file an ammended return   If this deduction is more than $3,000, you have to follow some special instructions. How to file an ammended return See Publication 915 for those instructions. How to file an ammended return Sickness and Injury Benefits Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. How to file an ammended return If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. How to file an ammended return However, certain payments may not be taxable to you. How to file an ammended return Some of these payments are discussed later in this section. How to file an ammended return Also, see Military and Government Disability Pensions and Other Sickness and Injury Benefits in Publication 525. How to file an ammended return Cost paid by you. How to file an ammended return   If you pay the entire cost of an accident or health plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. How to file an ammended return If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. How to file an ammended return Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. How to file an ammended return You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A or on line 8 of Form 1040NR until you reach minimum retirement age. How to file an ammended return Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. How to file an ammended return If you were 65 or older by the end of 2013 or you were retired on permanent and total disability and received taxable disability income, you may be able to claim the credit for the elderly or the disabled. How to file an ammended return See Credit for the Elderly or the Disabled, later. How to file an ammended return For more information on this credit, see Publication 524, Credit for the Elderly or the Disabled. How to file an ammended return Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. How to file an ammended return Report the payments on lines 16a and 16b of Form 1040, on lines 12a and 12b of Form 1040A, or on lines 17a and 17b of Form 1040NR. How to file an ammended return For more information on pensions and annuities, see Publication 575. How to file an ammended return Retirement and profit-sharing plans. How to file an ammended return   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. How to file an ammended return The payments must be reported as a pension or annuity. How to file an ammended return Accrued leave payment. How to file an ammended return   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. How to file an ammended return The payment is not a disability payment. How to file an ammended return Include it in your income in the tax year you receive it. How to file an ammended return Long-Term Care Insurance Contracts In most cases, long-term care insurance contracts generally are treated as accident and health insurance contracts. How to file an ammended return Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. How to file an ammended return However, the amount you can exclude may be limited. How to file an ammended return Long-term care insurance contracts are discussed in more detail in Publication 525. How to file an ammended return Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. How to file an ammended return The exemption also applies to your survivors. How to file an ammended return The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. How to file an ammended return If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. How to file an ammended return For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. How to file an ammended return Return to work. How to file an ammended return   If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. How to file an ammended return Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. How to file an ammended return Federal Employees' Compensation Act (FECA). How to file an ammended return   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. How to file an ammended return However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. How to file an ammended return Report this income on Form 1040, line 7; Form 1040A, line 7; on Form 1040EZ, line 1; or Form 1040NR, line 8. How to file an ammended return Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. How to file an ammended return    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. How to file an ammended return For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. How to file an ammended return Other compensation. How to file an ammended return   Many other amounts you receive as compensation for sickness or injury are not taxable. How to file an ammended return These include the following amounts. How to file an ammended return Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. How to file an ammended return Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. How to file an ammended return Compensation you receive for permanent loss or loss of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). How to file an ammended return This compensation must be based only on the injury and not on the period of your absence from work. How to file an ammended return These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. How to file an ammended return Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. How to file an ammended return This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. How to file an ammended return Proceeds not received in installments. How to file an ammended return   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. How to file an ammended return If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. How to file an ammended return Proceeds received in installments. How to file an ammended return   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. How to file an ammended return   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. How to file an ammended return Include anything over this excluded part in your income as interest. How to file an ammended return Installments for life. How to file an ammended return   If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds in installments for the rest of your life without a refund or period-certain guarantee, you figure the excluded part of each installment by dividing the amount held by the insurance company by your life expectancy. How to file an ammended return If there is a refund or period-certain guarantee, the amount held by the insurance company for this purpose is reduced by the actuarial value of the guarantee. How to file an ammended return Surviving spouse. How to file an ammended return   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the interest included in the installments. How to file an ammended return If you remarry, you can continue to take the exclusion. How to file an ammended return Surrender of policy for cash. How to file an ammended return   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. How to file an ammended return In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. How to file an ammended return You should receive a Form 1099-R showing the total proceeds and the taxable part. How to file an ammended return Report these amounts on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b. How to file an ammended return Endowment Contract Proceeds An endowment contract is a policy that pays over to you a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. How to file an ammended return Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. How to file an ammended return To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. How to file an ammended return Include in your income the part of the lump-sum payment that is more than your cost. How to file an ammended return Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity of the policy are taxed as an annuity. How to file an ammended return The tax treatment of an annuity is explained in Publication 575. How to file an ammended return For this treatment to apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. How to file an ammended return This election must be made within 60 days after the lump-sum payment first becomes payable to you. How to file an ammended return Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are generally excluded from income if the insured is terminally or chronically ill. How to file an ammended return However, see Exception , later. How to file an ammended return For a chronically ill individual, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. How to file an ammended return Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to a limit. How to file an ammended return In addition, if any portion of a death benefit under a life insurance contract on the life of a terminally or chronically ill individual is sold or assigned to a viatical settlement provider, the amount received also is excluded from income. How to file an ammended return Generally, a viatical settlement provider is one who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill. How to file an ammended return To report taxable accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. How to file an ammended return Terminally or chronically ill defined. How to file an ammended return   A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. How to file an ammended return A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions. How to file an ammended return The person is unable to perform (without substantial help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more because of a loss of functional capacity. How to file an ammended return The person requires substantial supervision to protect himself or herself from threats to health and safety due to severe cognitive impairment. How to file an ammended return Exception. How to file an ammended return   The exclusion does not apply to any amount paid to a person other than the insured if that other person has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the other person, or Has a financial interest in the business of the other person. How to file an ammended return Sale of Home You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return in most cases) on the sale of your main home. How to file an ammended return Generally, if you can exclude all of the gain, you do not need to report the sale on your tax return. How to file an ammended return You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. How to file an ammended return Main home. How to file an ammended return   Usually, your main home is the home you live in most of the time and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. How to file an ammended return Repaying the first-time homebuyer credit because you sold your home. How to file an ammended return   If you claimed a first-time homebuyer credit for your main home and you sell it, you may have to repay the credit. How to file an ammended return For a home purchased in 2008 and used as your main home until sold in 2013, you must file Form 5405 and repay the balance of the unpaid credit on your 2013 tax return. How to file an ammended return   For a home purchased after 2008, you generally must repay the entire credit if the home was sold (or otherwise ceased to be your main home) within 36 months of the purchase date. How to file an ammended return If you purchased your home in 2009 and used it as your main home until sold in 2013, you do not have to repay the credit or file Form 5405. How to file an ammended return If you purchased your home in 2010 and used it as your main home until sold in 2013, you may have to file Form 5405 and repay the entire credit on your 2013 tax return. How to file an ammended return   See the Instructions for Form 5405 for more information about repaying the credit and exceptions to repayment that may apply to you. How to file an ammended return Maximum Amount of Exclusion You can generally exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. How to file an ammended return You meet the ownership test. How to file an ammended return You meet the use test. How to file an ammended return During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. How to file an ammended return You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . How to file an ammended return Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. How to file an ammended return This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). How to file an ammended return Exception to ownership and use tests. How to file an ammended return   If you owned and lived in the property as your main home for less than 2 years, you still can claim an exclusion in some cases. How to file an ammended return Generally, you must have sold the home due to a change in place of employment, health, or unforeseen circumstances. How to file an ammended return The maximum amount you can exclude will be reduced. How to file an ammended return See Publication 523, Selling Your Home, for more information. How to file an ammended return Exception to use test for individuals with a disability. How to file an ammended return   There is an exception to the use test if, during the 5-year period before the sale of your home: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year. How to file an ammended return Under this exception, you are considered to live in your home during any time that you own the home and live in a facility (including a nursing home) that is licensed by a state or political subdivision to care for persons in your condition. How to file an ammended return   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. How to file an ammended return Exception to ownership test for property acquired in a like-kind exchange. How to file an ammended return   You must have owned your main home for at least 5 years to qualify for the exclusion if you acquired your main home in a like-kind exchange. How to file an ammended return This special 5-year ownership rule continues to apply to a home you acquired in a like-kind exchange and gave to another person. How to file an ammended return A like-kind exchange is an exchange of property held for productive use in a trade or business or for investment. How to file an ammended return See Publication 523 for more information. How to file an ammended return Period of nonqualified use. How to file an ammended return   Generally, the gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gain is allocated to periods of nonqualified use. How to file an ammended return Nonqualified use is any period after December 31, 2008, during which the property is not used as the main home. How to file an ammended return See Publication 523 for more information. How to file an ammended return Married Persons In the special situations discussed below, if you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use test, you can exclude up to $250,000 of gain. How to file an ammended return However, see Special rules for joint returns , next. How to file an ammended return Special rules for joint returns. How to file an ammended return   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. How to file an ammended return You are married and file a joint return for the year. How to file an ammended return Either you or your spouse meets the ownership test. How to file an ammended return Both you and your spouse meet the use test. How to file an ammended return During the 2-year period ending on the date of the sale, neither you nor your spouse exclude gain from the sale of another home. How to file an ammended return Sale of home by surviving spouse. How to file an ammended return   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. How to file an ammended return   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2013. How to file an ammended return The sale or exchange took place no more than 2 years after the date of death of your spouse. How to file an ammended return You have not remarried. How to file an ammended return You and your spouse met the use test at the time of your spouse's death. How to file an ammended return You or your spouse met the ownership test at the time of your spouse's death. How to file an ammended return Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. How to file an ammended return Home transferred from spouse. How to file an ammended return   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. How to file an ammended return Use of home after divorce. How to file an ammended return   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. How to file an ammended return Business Use or Rental of Home You may be able to exclude gain from the sale of a home that you have used for business or to produce rental income. How to file an ammended return However, you must meet the ownership and use tests. How to file an ammended return See Publication 523 for more information. How to file an ammended return Depreciation after May 6, 1997. How to file an ammended return   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. How to file an ammended return See Publication 523 for more information. How to file an ammended return Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and you do not qualify to exclude all of it, You have a gain and you choose not to exclude it, or You received Form 1099-S. How to file an ammended return If you have a gain that you cannot or choose not to exclude, if you received a Form 1099-S, or if you have a deductible loss, report the sale on your tax return. How to file an ammended return Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. How to file an ammended return If you used your home for business or to produce rental income, you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. How to file an ammended return See Publication 523 for more information. How to file an ammended return Reverse Mortgages A revers