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How To File Tax Return

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How To File Tax Return

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

How to file tax return 4. How to file tax return   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. How to file tax return  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. How to file tax return For more information, see Publication 505. How to file tax return Reminders Estimated tax safe harbor for higher income taxpayers. How to file tax return  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. How to file tax return Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. How to file tax return In general, the federal income tax is a pay-as-you-go tax. How to file tax return There are two ways to pay as you go. How to file tax return Withholding. How to file tax return If you are an employee, your employer probably withholds income tax from your pay. How to file tax return Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. How to file tax return The amount withheld is paid to the IRS in your name. How to file tax return Estimated tax. How to file tax return If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. How to file tax return People who are in business for themselves generally will have to pay their tax this way. How to file tax return Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. How to file tax return Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. How to file tax return This chapter explains these methods. How to file tax return In addition, it also explains the following. How to file tax return Credit for withholding and estimated tax. How to file tax return When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. How to file tax return , and for the estimated tax you paid for 2013. How to file tax return Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). How to file tax return Underpayment penalty. How to file tax return If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. How to file tax return In most cases, the IRS can figure this penalty for you. How to file tax return See Underpayment Penalty for 2013 at the end of this chapter. How to file tax return Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. How to file tax return This section explains the rules for withholding tax from each of these types of income. How to file tax return This section also covers backup withholding on interest, dividends, and other payments. How to file tax return Salaries and Wages Income tax is withheld from the pay of most employees. How to file tax return Your pay includes your regular pay, bonuses, commissions, and vacation allowances. How to file tax return It also includes reimbursements and other expense allowances paid under a nonaccountable plan. How to file tax return See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. How to file tax return If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. How to file tax return This is explained under Exemption From Withholding , later. How to file tax return You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. How to file tax return If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . How to file tax return Military retirees. How to file tax return   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. How to file tax return Household workers. How to file tax return   If you are a household worker, you can ask your employer to withhold income tax from your pay. How to file tax return A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. How to file tax return   Tax is withheld only if you want it withheld and your employer agrees to withhold it. How to file tax return If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . How to file tax return Farmworkers. How to file tax return   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. How to file tax return Differential wage payments. How to file tax return    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. How to file tax return Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. How to file tax return The wages and withholding will be reported on Form W-2, Wage and Tax Statement. How to file tax return   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. How to file tax return Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. How to file tax return The amount you earn in each payroll period. How to file tax return The information you give your employer on Form W-4. How to file tax return Form W-4 includes four types of information that your employer will use to figure your withholding. How to file tax return Whether to withhold at the single rate or at the lower married rate. How to file tax return How many withholding allowances you claim (each allowance reduces the amount withheld). How to file tax return Whether you want an additional amount withheld. How to file tax return Whether you are claiming an exemption from withholding in 2014. How to file tax return See Exemption From Withholding , later. How to file tax return Note. How to file tax return You must specify a filing status and a number of withholding allowances on Form W-4. How to file tax return You cannot specify only a dollar amount of withholding. How to file tax return New Job When you start a new job, you must fill out Form W-4 and give it to your employer. How to file tax return Your employer should have copies of the form. How to file tax return If you need to change the information later, you must fill out a new form. How to file tax return If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. How to file tax return You may be able to avoid overwithholding if your employer agrees to use the part-year method. How to file tax return See Part-Year Method in chapter 1 of Publication 505 for more information. How to file tax return Employee also receiving pension income. How to file tax return   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. How to file tax return However, you can choose to split your withholding allowances between your pension and job in any manner. How to file tax return Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. How to file tax return When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. How to file tax return If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. How to file tax return Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. How to file tax return Changing your withholding for 2015. How to file tax return   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. How to file tax return If the event occurs in December 2014, submit a new Form W-4 within 10 days. How to file tax return Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. How to file tax return If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. How to file tax return You should try to have your withholding match your actual tax liability. How to file tax return If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. How to file tax return If too much tax is withheld, you will lose the use of that money until you get your refund. How to file tax return Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. How to file tax return Note. How to file tax return You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. How to file tax return Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. How to file tax return The worksheets are for your own records. How to file tax return Do not give them to your employer. How to file tax return Multiple jobs. How to file tax return   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. How to file tax return Then split your allowances between the Forms W-4 for each job. How to file tax return You cannot claim the same allowances with more than one employer at the same time. How to file tax return You can claim all your allowances with one employer and none with the other(s), or divide them any other way. How to file tax return Married individuals. How to file tax return   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. How to file tax return Use only one set of worksheets. How to file tax return You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. How to file tax return   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. How to file tax return Alternative method of figuring withholding allowances. How to file tax return   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. How to file tax return For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. How to file tax return Personal Allowances Worksheet. How to file tax return   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. How to file tax return Deduction and Adjustments Worksheet. How to file tax return   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. How to file tax return Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. How to file tax return Two-Earners/Multiple Jobs Worksheet. How to file tax return   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. How to file tax return Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. How to file tax return Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. How to file tax return You accurately complete all the Form W-4 worksheets that apply to you. How to file tax return You give your employer a new Form W-4 when changes occur. How to file tax return But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. How to file tax return This is most likely to happen in the following situations. How to file tax return You are married and both you and your spouse work. How to file tax return You have more than one job at a time. How to file tax return You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. How to file tax return You will owe additional amounts with your return, such as self-employment tax. How to file tax return Your withholding is based on obsolete Form W-4 information for a substantial part of the year. How to file tax return Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. How to file tax return You work only part of the year. How to file tax return You change the number of your withholding allowances during the year. How to file tax return Cumulative wage method. How to file tax return   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. How to file tax return You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. How to file tax return You must ask your employer in writing to use this method. How to file tax return   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. How to file tax return ) since the beginning of the year. How to file tax return Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. How to file tax return It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. How to file tax return It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. How to file tax return If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. How to file tax return You can use the IRS Withholding Calculator at www. How to file tax return irs. How to file tax return gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. How to file tax return Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. How to file tax return These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. How to file tax return New Form W-4. How to file tax return   When you start a new job, your employer should have you complete a Form W-4. How to file tax return Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. How to file tax return   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. How to file tax return The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. How to file tax return No Form W-4. How to file tax return   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. How to file tax return Repaying withheld tax. How to file tax return   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. How to file tax return Your employer cannot repay any of the tax previously withheld. How to file tax return Instead, claim the full amount withheld when you file your tax return. How to file tax return   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. How to file tax return Your employer can repay the amount that was withheld incorrectly. How to file tax return If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. How to file tax return Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. How to file tax return The exemption applies only to income tax, not to social security or Medicare tax. How to file tax return You can claim exemption from withholding for 2014 only if both of the following situations apply. How to file tax return For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. How to file tax return For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. How to file tax return Students. How to file tax return   If you are a student, you are not automatically exempt. How to file tax return See chapter 1 to find out if you must file a return. How to file tax return If you work only part time or only during the summer, you may qualify for exemption from withholding. How to file tax return Age 65 or older or blind. How to file tax return   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. How to file tax return Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. How to file tax return Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. How to file tax return Claiming exemption from withholding. How to file tax return   To claim exemption, you must give your employer a Form W-4. How to file tax return Do not complete lines 5 and 6. How to file tax return Enter “Exempt” on line 7. How to file tax return   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. How to file tax return If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. How to file tax return   Your claim of exempt status may be reviewed by the IRS. How to file tax return An exemption is good for only 1 year. How to file tax return   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. How to file tax return Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. How to file tax return The payer can figure withholding on supplemental wages using the same method used for your regular wages. How to file tax return However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. How to file tax return Expense allowances. How to file tax return   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. How to file tax return   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. How to file tax return   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. How to file tax return Penalties You may have to pay a penalty of $500 if both of the following apply. How to file tax return You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. How to file tax return You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. How to file tax return There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. How to file tax return The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. How to file tax return These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. How to file tax return A simple error or an honest mistake will not result in one of these penalties. How to file tax return For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. How to file tax return Tips The tips you receive while working on your job are considered part of your pay. How to file tax return You must include your tips on your tax return on the same line as your regular pay. How to file tax return However, tax is not withheld directly from tip income, as it is from your regular pay. How to file tax return Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. How to file tax return See chapter 6 for information on reporting your tips to your employer. How to file tax return For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. How to file tax return How employer figures amount to withhold. How to file tax return   The tips you report to your employer are counted as part of your income for the month you report them. How to file tax return Your employer can figure your withholding in either of two ways. How to file tax return By withholding at the regular rate on the sum of your pay plus your reported tips. How to file tax return By withholding at the regular rate on your pay plus a percentage of your reported tips. How to file tax return Not enough pay to cover taxes. How to file tax return   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. How to file tax return See Giving your employer money for taxes in chapter 6. How to file tax return Allocated tips. How to file tax return   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. How to file tax return Withholding is based only on your pay plus your reported tips. How to file tax return Your employer should refund to you any incorrectly withheld tax. How to file tax return See Allocated Tips in chapter 6 for more information. How to file tax return Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. How to file tax return Your employer generally must withhold income tax on these benefits from your regular pay. How to file tax return For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. How to file tax return Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. How to file tax return Your employer must notify you if this choice is made. How to file tax return For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. How to file tax return Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. How to file tax return To qualify as sick pay, it must be paid under a plan to which your employer is a party. How to file tax return If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. How to file tax return An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. How to file tax return However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. How to file tax return See Form W-4S , later. How to file tax return If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. How to file tax return Union agreements. How to file tax return   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. How to file tax return See your union representative or your employer for more information. How to file tax return Form W-4S. How to file tax return   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. How to file tax return Its instructions contain a worksheet you can use to figure the amount you want withheld. How to file tax return They also explain restrictions that may apply. How to file tax return   Give the completed form to the payer of your sick pay. How to file tax return The payer must withhold according to your directions on the form. How to file tax return Estimated tax. How to file tax return   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. How to file tax return If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. How to file tax return See Underpayment Penalty for 2013 at the end of this chapter. How to file tax return Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. How to file tax return This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. How to file tax return The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). How to file tax return Income tax withholding from an ERD is mandatory. How to file tax return More information. How to file tax return   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. How to file tax return For information on IRAs, see chapter 17. How to file tax return For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. How to file tax return Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. How to file tax return Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. How to file tax return Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. How to file tax return Any other wager, if the proceeds are at least 300 times the amount of the bet. How to file tax return It does not matter whether your winnings are paid in cash, in property, or as an annuity. How to file tax return Winnings not paid in cash are taken into account at their fair market value. How to file tax return Exception. How to file tax return   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. How to file tax return However, you may need to provide the payer with a social security number to avoid withholding. How to file tax return See Backup withholding on gambling winnings in chapter 1 of Publication 505. How to file tax return If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. How to file tax return See Estimated Tax for 2014 , later. How to file tax return If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to file tax return See Underpayment Penalty for 2013 at the end of this chapter. How to file tax return Form W-2G. How to file tax return   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. How to file tax return Report the tax withheld on line 62 of Form 1040. How to file tax return Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. How to file tax return To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. How to file tax return All unemployment compensation is taxable. How to file tax return So, if you do not have income tax withheld, you may have to pay estimated tax. How to file tax return See Estimated Tax for 2014 , later. How to file tax return If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to file tax return For information, see Underpayment Penalty for 2013 at the end of this chapter. How to file tax return Federal Payments You can choose to have income tax withheld from certain federal payments you receive. How to file tax return These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. How to file tax return S. How to file tax return C. How to file tax return 1421 et. How to file tax return seq. How to file tax return ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. How to file tax return To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. How to file tax return If you do not choose to have income tax withheld, you may have to pay estimated tax. How to file tax return See Estimated Tax for 2014 , later. How to file tax return If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to file tax return For information, see Underpayment Penalty for 2013 at the end of this chapter. How to file tax return More information. How to file tax return   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. How to file tax return Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. How to file tax return Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. How to file tax return The information return shows how much you were paid during the year. How to file tax return It also includes your name and taxpayer identification number (TIN). How to file tax return TINs are explained in chapter 1 under Social Security Number (SSN) . How to file tax return These payments generally are not subject to withholding. How to file tax return However, “backup” withholding is required in certain situations. How to file tax return Backup withholding can apply to most kinds of payments that are reported on Form 1099. How to file tax return The payer must withhold at a flat 28% rate in the following situations. How to file tax return You do not give the payer your TIN in the required manner. How to file tax return The IRS notifies the payer that the TIN you gave is incorrect. How to file tax return You are required, but fail, to certify that you are not subject to backup withholding. How to file tax return The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. How to file tax return The IRS will do this only after it has mailed you four notices over at least a 210-day period. How to file tax return See Backup Withholding in chapter 1 of Publication 505 for more information. How to file tax return Penalties. How to file tax return   There are civil and criminal penalties for giving false information to avoid backup withholding. How to file tax return The civil penalty is $500. How to file tax return The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. How to file tax return Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. How to file tax return This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. How to file tax return You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. How to file tax return Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. How to file tax return If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. How to file tax return If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. How to file tax return For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. How to file tax return Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. How to file tax return To do this, give a new Form W-4 to your employer. How to file tax return See chapter 1 of Publication 505. How to file tax return Estimated tax not required. How to file tax return   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. How to file tax return You had no tax liability for 2013. How to file tax return You were a U. How to file tax return S. How to file tax return citizen or resident alien for the whole year. How to file tax return Your 2013 tax year covered a 12-month period. How to file tax return   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. How to file tax return For the definition of “total tax” for 2013, see Publication 505, chapter 2. How to file tax return Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. How to file tax return You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. How to file tax return General rule. How to file tax return   In most cases, you must pay estimated tax for 2014 if both of the following apply. How to file tax return You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. How to file tax return You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). How to file tax return Your 2013 tax return must cover all 12 months. How to file tax return    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. How to file tax return Special rules for farmers, fishermen, and higher income taxpayers. How to file tax return   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. How to file tax return If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. How to file tax return See Figure 4-A and Publication 505, chapter 2 for more information. How to file tax return Figure 4-A. How to file tax return Do You Have To Pay Estimated Tax? Please click here for the text description of the image. How to file tax return Figure 4-A Do You Have To Pay Estimated Tax? Aliens. How to file tax return   Resident and nonresident aliens also may have to pay estimated tax. How to file tax return Resident aliens should follow the rules in this chapter unless noted otherwise. How to file tax return Nonresident aliens should get Form 1040-ES (NR), U. How to file tax return S. How to file tax return Estimated Tax for Nonresident Alien Individuals. How to file tax return   You are an alien if you are not a citizen or national of the United States. How to file tax return You are a resident alien if you either have a green card or meet the substantial presence test. How to file tax return For more information about the substantial presence test, see Publication 519, U. How to file tax return S. How to file tax return Tax Guide for Aliens. How to file tax return Married taxpayers. How to file tax return   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. How to file tax return   You and your spouse can make joint estimated tax payments even if you are not living together. How to file tax return   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). How to file tax return   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. How to file tax return Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. How to file tax return 2013 separate returns and 2014 joint return. How to file tax return   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. How to file tax return You filed a separate return if you filed as single, head of household, or married filing separately. How to file tax return 2013 joint return and 2014 separate returns. How to file tax return   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. How to file tax return You file a separate return if you file as single, head of household, or married filing separately. How to file tax return   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. How to file tax return Then multiply the tax on the joint return by the following fraction. How to file tax return     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. How to file tax return Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. How to file tax return Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. How to file tax return For 2014, they plan to file married filing separately. How to file tax return Joe figures his share of the tax on the 2013 joint return as follows. How to file tax return   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. How to file tax return 6%     Joe's share of tax on joint return  ($6,386 × 87. How to file tax return 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. How to file tax return When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. How to file tax return Use your 2013 federal tax return as a guide. How to file tax return You can use Form 1040-ES and Publication 505 to figure your estimated tax. How to file tax return Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). How to file tax return You must make adjustments both for changes in your own situation and for recent changes in the tax law. How to file tax return For a discussion of these changes, visit IRS. How to file tax return gov. How to file tax return For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. How to file tax return When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. How to file tax return Each period has a specific payment due date. How to file tax return If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. How to file tax return The payment periods and due dates for estimated tax payments are shown next. How to file tax return   For the period: Due date:*     Jan. How to file tax return 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. How to file tax return 15     Sept. How to file tax return 1– Dec. How to file tax return 31 Jan. How to file tax return 15, next year     *See Saturday, Sunday, holiday rule and January payment . How to file tax return Saturday, Sunday, holiday rule. How to file tax return   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. How to file tax return January payment. How to file tax return   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. How to file tax return Fiscal year taxpayers. How to file tax return   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. How to file tax return When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. How to file tax return If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. How to file tax return You can pay all your estimated tax at that time, or you can pay it in installments. How to file tax return If you choose to pay in installments, make your first payment by the due date for the first payment period. How to file tax return Make your remaining installment payments by the due dates for the later periods. How to file tax return No income subject to estimated tax during first period. How to file tax return    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. How to file tax return You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. How to file tax return The following chart shows when to make installment payments. How to file tax return If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. How to file tax return 15 Jan. How to file tax return 15 next year April 1–May 31 June 16 Sept. How to file tax return 15 Jan. How to file tax return 15 next year June 1–Aug. How to file tax return 31 Sept. How to file tax return 15 Jan. How to file tax return 15 next year After Aug. How to file tax return 31 Jan. How to file tax return 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . How to file tax return How much to pay to avoid a penalty. How to file tax return   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. How to file tax return How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. How to file tax return You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. How to file tax return These methods are described in chapter 2 of Publication 505. How to file tax return If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. How to file tax return If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. How to file tax return Underpayment penalty. How to file tax return   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. How to file tax return Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. How to file tax return See chapter 4 of Publication 505 for more information. How to file tax return Change in estimated tax. How to file tax return   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. How to file tax return Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. How to file tax return Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. How to file tax return You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. How to file tax return How To Pay Estimated Tax There are several ways to pay estimated tax. How to file tax return Credit an overpayment on your 2013 return to your 2014 estimated tax. How to file tax return Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. How to file tax return Send in your payment (check or money order) with a payment voucher from Form 1040-ES. How to file tax return Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. How to file tax return On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. How to file tax return Take the amount you have credited into account when figuring your estimated tax payments. How to file tax return You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. How to file tax return You also cannot use that overpayment in any other way. How to file tax return Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. How to file tax return You can pay using either of the following electronic payment methods. How to file tax return Direct transfer from your bank account. How to file tax return Credit or debit card. How to file tax return To pay your taxes online or for more information, go to www. How to file tax return irs. How to file tax return gov/e-pay. How to file tax return Pay by Phone Paying by phone is another safe and secure method of paying electronically. How to file tax return Use one of the following methods. How to file tax return Direct transfer from your bank account. How to file tax return Credit or debit card. How to file tax return To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). How to file tax return People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. How to file tax return To pay using a credit or debit card, you can call one of the following service providers. How to file tax return There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. How to file tax return WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. How to file tax return payUSAtax. How to file tax return com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. How to file tax return officialpayments. How to file tax return com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. How to file tax return PAY1040. How to file tax return com For the latest details on how to pay by phone, go to www. How to file tax return irs. How to file tax return gov/e-pay. How to file tax return Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. How to file tax return During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. How to file tax return The enclosed payment vouchers will be preprinted with your name, address, and social security number. How to file tax return Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. How to file tax return Use the window envelopes that came with your Form 1040-ES package. How to file tax return If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. How to file tax return Note. How to file tax return These criteria can change without notice. How to file tax return If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. How to file tax return irs. How to file tax return gov and print a copy of Form 1040-ES which includes four blank payment vouchers. How to file tax return Complete one of these and make your payment timely to avoid penalties for paying late. How to file tax return Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. How to file tax return If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. How to file tax return gov. How to file tax return Follow the instructions to make sure you use the vouchers correctly. How to file tax return Joint estimated tax payments. How to file tax return   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. How to file tax return Change of address. How to file tax return   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. How to file tax return Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. How to file tax return Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. How to file tax return Also take credit for the estimated tax you paid for 2013. How to file tax return These credits are subtracted from your total tax. How to file tax return Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. How to file tax return Two or more employers. How to file tax return   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. How to file tax return You may be able to claim the excess as a credit against your income tax when you file your return. How to file tax return See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. How to file tax return Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. How to file tax return Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. How to file tax return Forms W-2 and W-2G. How to file tax return   If you file a paper return, always file Form W-2 with your income tax return. How to file tax return File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. How to file tax return   You should get at least two copies of each form. How to file tax return If you file a paper return, attach one copy to the front of your federal income tax return. How to file tax return Keep one copy for your records. How to file tax return You also should receive copies to file with your state and local returns. How to file tax return Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. How to file tax return You should receive a separate Form W-2 from each employer you worked for. How to file tax return If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. How to file tax return However, your employer must provide or send it to you by January 31, 2014. How to file tax return If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. How to file tax return If you have not received your Form W-2 by January 31, you should ask your employer for it. How to file tax return If you do not receive it by February 15, call the IRS. How to file tax return Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. How to file tax return Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. How to file tax return In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. How to file tax return Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. How to file tax return If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. How to file tax return Report the amounts you won on line 21 of Form 1040. How to file tax return Take credit for the tax withheld on line 62 of Form 1040. How to file tax return If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. How to file tax return The 1099 Series Most forms in the 1099 series are not filed with your return. How to file tax return These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). How to file tax return Unless instructed to file any of these forms with your return, keep them for your records. How to file tax return There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. How to file tax return ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. How to file tax return If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. How to file tax return See the instructions to these forms for details. How to file tax return Form 1099-R. How to file tax return   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. How to file tax return Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. How to file tax return You cannot use Form 1040EZ if you received payments reported on Form 1099-R. How to file tax return Backup withholding. How to file tax return   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. How to file tax return Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. How to file tax return Call the telephone number or write to the address given for the payer on the form. How to file tax return The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. How to file tax return A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. How to file tax return In certain situations, you will receive two forms in place of the original incorrect form. How to file tax return This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). How to file tax return One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. How to file tax return This form will have an “X” in the “CORRECTED” box at the top of the form. How to file tax return The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). How to file tax return Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. How to file tax return S. How to file tax return Individual Income Tax Return. How to file tax return Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. How to file tax return Do not include any amount withheld from your spouse's income. How to file tax return However, different rules may apply if you live in a community property state. How to file tax return Community property states are listed in chapter 2. How to file tax return For more information on these rules, and some exceptions, see Publication 555, Community Property. How to file tax return Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. How to file tax return For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. How to file tax return Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. How to file tax return Include any overpayment from 2012 that you had credited to your 2013 estimated tax. How to file tax return You must use Form 1040 or Form 1040A if you paid estimated tax. How to file tax return You cannot use Form 1040EZ. How to file tax return Name changed. How to file tax return   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. How to file tax return The statement should cover payments you made jointly with your spouse as well as any you made separately. How to file tax return   Be sure to report the change to the Social Security Administration. How to file tax return This prevents delays in processing your return and issuing any refunds. How to file tax return Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. How to file tax return If you made joint estimated tax payments, you must decide how to divide the payments between your returns. How to file tax return One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. How to file tax return If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. How to file tax return Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. How to file tax return If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. How to file tax return If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. How to file tax return If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. How to file tax return Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. How to file tax return Generally, you will not have to pay a penalty for 2013 if any of the following apply. How to file tax return The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. How to file tax return The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. How to file tax return Your total 2013 tax minus your withholding and refundable credits is less than $1,000. How to file tax return You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. How to file tax return See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. How to file tax return Farmers and fishermen. How to file tax return   Special rules apply if you are a farmer or fisherman. How to file tax return See Farmers and Fishermen in chapter 4 of Publication 505 for more information. How to file tax return IRS can figure the penalty for you. How to file tax return   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. How to file tax return Generally, the IRS will figure the penalty for you and send you a bill. How to file tax return However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. How to file tax return See chapter 4 of Publication 505. How to file tax return Prev  Up  Next   Home   More Online Publications