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How To Fill Out An Amended Tax Return Form

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How To Fill Out An Amended Tax Return Form

How to fill out an amended tax return form 4. How to fill out an amended tax return form   Detailed Examples Table of Contents These examples use actual forms to help you prepare your income tax return. How to fill out an amended tax return form However, the information shown on the filled-in forms is not from any actual person or scenario. How to fill out an amended tax return form Example 1—Mortgage loan modification. How to fill out an amended tax return form    In 2007, Nancy Oak bought a main home for $435,000. How to fill out an amended tax return form Nancy took out a $420,000 mortgage loan to buy the home and made a down payment of $15,000. How to fill out an amended tax return form The loan was secured by the home. How to fill out an amended tax return form The mortgage loan was a recourse debt, meaning that Nancy was personally liable for the debt. How to fill out an amended tax return form In 2008, Nancy took out a second mortgage loan (also a recourse debt) in the amount of $30,000 that was used to substantially improve her kitchen. How to fill out an amended tax return form    In 2011, when the outstanding principal of the first and second mortgage loans was $440,000, Nancy refinanced the two recourse loans into one recourse loan in the amount of $475,000. How to fill out an amended tax return form The FMV of Nancy's home at the time of the refinancing was $500,000. How to fill out an amended tax return form Nancy used the additional $35,000 debt ($475,000 new mortgage loan minus $440,000 outstanding principal of Nancy's first and second mortgage loans immediately before the refinancing) to pay off personal credit cards and to pay college tuition for her son. How to fill out an amended tax return form After the refinancing, Nancy has qualified principal residence indebtedness in the amount of $440,000 because the refinanced debt is qualified principal residence indebtedness only to the extent the amount of debt is not more than the old mortgage principal just before the refinancing. How to fill out an amended tax return form   In 2013, Nancy was unable to make her mortgage loan payments. How to fill out an amended tax return form On August 31, 2013, when the outstanding balance of her refinanced mortgage loan was still $475,000 and the FMV of the property was $425,000, Nancy's bank agreed to a loan modification (a “workout”) that resulted in a $40,000 reduction in the principal balance of her loan. How to fill out an amended tax return form Nancy was neither insolvent nor in bankruptcy at the time of the loan modification. How to fill out an amended tax return form   Nancy received a 2013 Form 1099-C from her bank in January 2014 showing canceled debt of $40,000 in box 2. How to fill out an amended tax return form Identifiable event code "F" appears in box 6. How to fill out an amended tax return form This box shows the reason the creditor has filed Form 1099-C. How to fill out an amended tax return form To determine if she must include the canceled debt in her income, Nancy must determine whether she meets any of the exceptions or exclusions that apply to canceled debts. How to fill out an amended tax return form Nancy determines that the only exception or exclusion that applies to her is the qualified principal residence indebtedness exclusion. How to fill out an amended tax return form   Next, Nancy determines the amount, if any, of the $40,000 of canceled debt that was qualified principal residence indebtedness. How to fill out an amended tax return form Although Nancy has $440,000 of qualified principal residence indebtedness, part of her loan ($35,000) was not qualified principal residence indebtedness because it was used to pay off personal credit cards and college tuition for her son. How to fill out an amended tax return form Applying the ordering rule, the qualified principal residence indebtedness exclusion applies only to the extent the amount canceled is more than the amount of the debt (immediately before the cancellation) that is not qualified principal residence indebtedness. How to fill out an amended tax return form Thus, Nancy can exclude only $5,000 of the canceled debt as qualified principal residence indebtedness ($40,000 amount canceled minus $35,000 nonqualified debt). How to fill out an amended tax return form   Because Nancy does not meet any other exception or exclusion, she checks only the box on line 1e of Form 982 and enters $5,000 on line 2. How to fill out an amended tax return form Nancy must also enter $5,000 on line 10b and reduce the basis of her main home by the $5,000 she excluded from income, bringing the adjusted basis in her home to $460,000 ($435,000 purchase price plus $30,000 substantial improvement minus $5,000). How to fill out an amended tax return form Nancy must also include the $35,000 nonqualified debt portion in income on Form 1040, line 21. How to fill out an amended tax return form You can see Nancy's Form 1099-C and a portion of her Form 1040 below. How to fill out an amended tax return form Nancy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. How to fill out an amended tax return form Please click the link to view the image. How to fill out an amended tax return form Form 1099-C, Cancellation of Debt Nancy's 2013 Form 1040 This image is too large to be displayed in the current screen. How to fill out an amended tax return form Please click the link to view the image. How to fill out an amended tax return form Form 1040, U. How to fill out an amended tax return form S. How to fill out an amended tax return form Individual Income Tax Nancy's Form 982 This image is too large to be displayed in the current screen. How to fill out an amended tax return form Please click the link to view the image. How to fill out an amended tax return form Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)              Example 2—Mortgage loan foreclosure. How to fill out an amended tax return form    In 2005, John and Mary Elm bought a main home for $335,000. How to fill out an amended tax return form John and Mary took out a $320,000 mortgage loan to buy the home and made a down payment of $15,000. How to fill out an amended tax return form The loan was secured by the home and is a recourse debt, meaning John and Mary are personally liable for the debt. How to fill out an amended tax return form   John and Mary became unable to make their mortgage loan payments and on March 1, 2013, when the outstanding balance of the mortgage loan was $315,000 and the FMV of the property was $290,000, the bank foreclosed on the property and simultaneously canceled the remaining mortgage debt. How to fill out an amended tax return form Immediately before the foreclosure, John and Mary's only other assets and liabilities were a checking account with a balance of $6,000, retirement savings of $13,000, and credit card debt of $5,500. How to fill out an amended tax return form   John and Mary received a 2013 Form 1099-C showing canceled debt of $25,000 in box 2 ($315,000 outstanding balance minus $290,000 FMV) and an FMV of $290,000 in box 7. How to fill out an amended tax return form Identifiable event code "D" appears in box 6. How to fill out an amended tax return form This box shows the reason the creditor has filed Form 1099-C. How to fill out an amended tax return form In order to determine if John and Mary must include the canceled debt in income, they must first determine whether they meet any of the exceptions or exclusions that apply to canceled debts. How to fill out an amended tax return form In this example, John and Mary meet both the insolvency and qualified principal residence indebtedness exclusions. How to fill out an amended tax return form Their sample Form 1099-C is shown on this page. How to fill out an amended tax return form   John and Mary complete the insolvency worksheet and determine that they were insolvent immediately before the cancellation because at that time their liabilities exceeded the FMV of their assets by $11,500 ($320,500 total liabilities minus $309,000 FMV of total assets). How to fill out an amended tax return form However, because the entire debt canceled is qualified principal residence indebtedness, the insolvency exclusion only applies if John and Mary elect to apply the insolvency exclusion instead of the qualified principal residence exclusion. How to fill out an amended tax return form   John and Mary do not elect to apply the insolvency exclusion instead of the qualified principal residence exclusion because under the insolvency exclusion their exclusion would be limited to the amount by which they were insolvent ($11,500). How to fill out an amended tax return form Instead, John and Mary check box 1e of Form 982 to exclude the canceled debt under the qualified principal residence exclusion. How to fill out an amended tax return form Under the qualified principal residence exclusion, the amount that John and Mary can exclude is not limited because their qualified principal residence indebtedness is not more than $2 million and no portion of the loan was nonqualified debt. How to fill out an amended tax return form As a result, John and Mary enter the full $25,000 of canceled debt on line 2 of Form 982. How to fill out an amended tax return form Because John and Mary no longer own the home due to the foreclosure, John and Mary have no remaining basis in the home at the time of the debt cancellation. How to fill out an amended tax return form Thus, John and Mary leave line 10b of Form 982 blank. How to fill out an amended tax return form   John and Mary must also determine whether they have a gain or loss from the foreclosure. How to fill out an amended tax return form John and Mary complete Table 1-1 (shown below) and find that they have a $45,000 loss from the foreclosure. How to fill out an amended tax return form Because this loss relates to their home, it is a nondeductible loss. How to fill out an amended tax return form   John and Mary's Form 1099-C, Insolvency Worksheet, and Form 982 follow. How to fill out an amended tax return form John and Mary's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. How to fill out an amended tax return form Please click the link to view the image. How to fill out an amended tax return form Form 1099-C, Cancellation of Debt Table 1-1. How to fill out an amended tax return form Worksheet for Foreclosures and Repossessions (for John and Mary Elm) Part 1. How to fill out an amended tax return form Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). How to fill out an amended tax return form Otherwise, go to Part 2. How to fill out an amended tax return form 1. How to fill out an amended tax return form Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property $315,000. How to fill out an amended tax return form 00 2. How to fill out an amended tax return form Enter the fair market value of the transferred property $290,000. How to fill out an amended tax return form 00 3. How to fill out an amended tax return form Ordinary income from the cancellation of debt upon foreclosure or repossession. How to fill out an amended tax return form * Subtract line 2 from line 1. How to fill out an amended tax return form If less than zero, enter zero. How to fill out an amended tax return form Next, go to Part 2 $ 25,000. How to fill out an amended tax return form 00 Part 2. How to fill out an amended tax return form Gain or loss from foreclosure or repossession. How to fill out an amended tax return form   4. How to fill out an amended tax return form Enter the smaller of line 1 or line 2. How to fill out an amended tax return form If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property $290,000. How to fill out an amended tax return form 00 5. How to fill out an amended tax return form Enter any proceeds you received from the foreclosure sale   6. How to fill out an amended tax return form Add line 4 and line 5 $290,000. How to fill out an amended tax return form 00 7. How to fill out an amended tax return form Enter the adjusted basis of the transferred property $335,000. How to fill out an amended tax return form 00 8. How to fill out an amended tax return form Gain or loss from foreclosure or repossession. How to fill out an amended tax return form Subtract line 7 from line 6 ($ 45,000. How to fill out an amended tax return form 00) * The income may not be taxable. How to fill out an amended tax return form See chapter 1 for more details. How to fill out an amended tax return form Insolvency Worksheet—John and Mary Elm Date debt was canceled (mm/dd/yy) 03/01/13 Part I. How to fill out an amended tax return form Total liabilities immediately before the cancellation (do not include the same liability in more than one category) Liabilities (debts) Amount Owed Immediately Before the Cancellation 1. How to fill out an amended tax return form Credit card debt $ 5,500 2. How to fill out an amended tax return form Mortgage(s) on real property (including first and second mortgages and home equity loans) (mortgage(s) can be on personal residence, any additional residence, or property held for investment or used in a trade or business) $ 315,000 3. How to fill out an amended tax return form Car and other vehicle loans $ 4. How to fill out an amended tax return form Medical bills owed $ 5. How to fill out an amended tax return form Student loans $ 6. How to fill out an amended tax return form Accrued or past-due mortgage interest $ 7. How to fill out an amended tax return form Accrued or past-due real estate taxes $ 8. How to fill out an amended tax return form Accrued or past-due utilities (water, gas, electric) $ 9. How to fill out an amended tax return form Accrued or past-due child care costs $ 10. How to fill out an amended tax return form Federal or state income taxes remaining due (for prior tax years) $ 11. How to fill out an amended tax return form Judgments $ 12. How to fill out an amended tax return form Business debts (including those owed as a sole proprietor or partner) $ 13. How to fill out an amended tax return form Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. How to fill out an amended tax return form Other liabilities (debts) not included above $ 15. How to fill out an amended tax return form Total liabilities immediately before the cancellation. How to fill out an amended tax return form Add lines 1 through 14. How to fill out an amended tax return form $ 320,500 Part II. How to fill out an amended tax return form Fair market value (FMV) of assets owned immediately before the cancellation (do not include the FMV of the same asset in more than one category) Assets FMV Immediately Before  the Cancellation 16. How to fill out an amended tax return form Cash and bank account balances $ 6,000 17. How to fill out an amended tax return form Real property, including the value of land (can be main home, any additional home, or property held for investment or used in a trade or business) $ 290,000 18. How to fill out an amended tax return form Cars and other vehicles $ 19. How to fill out an amended tax return form Computers $ 20. How to fill out an amended tax return form Household goods and furnishings (for example, appliances, electronics, furniture, etc. How to fill out an amended tax return form ) $ 21. How to fill out an amended tax return form Tools $ 22. How to fill out an amended tax return form Jewelry $ 23. How to fill out an amended tax return form Clothing $ 24. How to fill out an amended tax return form Books $ 25. How to fill out an amended tax return form Stocks and bonds $ 26. How to fill out an amended tax return form Investments in coins, stamps, paintings, or other collectibles $ 27. How to fill out an amended tax return form Firearms, sports, photographic, and other hobby equipment $ 28. How to fill out an amended tax return form Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 13,000 29. How to fill out an amended tax return form Interest in a pension plan $ 30. How to fill out an amended tax return form Interest in education accounts $ 31. How to fill out an amended tax return form Cash value of life insurance $ 32. How to fill out an amended tax return form Security deposits with landlords, utilities, and others $ 33. How to fill out an amended tax return form Interests in partnerships $ 34. How to fill out an amended tax return form Value of investment in a business $ 35. How to fill out an amended tax return form Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. How to fill out an amended tax return form Other assets not included above $ 37. How to fill out an amended tax return form FMV of total assets immediately before the cancellation. How to fill out an amended tax return form Add lines 16 through 36. How to fill out an amended tax return form $ 309,000 Part III. How to fill out an amended tax return form Insolvency 38. How to fill out an amended tax return form Amount of Insolvency. How to fill out an amended tax return form Subtract line 37 from line 15. How to fill out an amended tax return form If zero or less, you are not insolvent. How to fill out an amended tax return form $ 11,500 John and Mary's Form 982 This image is too large to be displayed in the current screen. How to fill out an amended tax return form Please click the link to view the image. How to fill out an amended tax return form Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)          Example 3—Mortgage loan foreclosure with debt exceeding $2 million limit. How to fill out an amended tax return form    In 2011, Kathy and Frank Willow got married and entered into a contract with Hive Construction Corporation to build a house for $3,000,000 to be used as their main home. How to fill out an amended tax return form Kathy and Frank made a $400,000 down payment and took out a $2,600,000 mortgage to finance the remaining cost of the house. How to fill out an amended tax return form Kathy and Frank are personally liable for the mortgage loan, which is secured by the home. How to fill out an amended tax return form   In November 2013, when the outstanding principal balance on the mortgage loan was $2,500,000, the FMV of the property fell to $1,750,000 and Kathy and Frank abandoned the property by permanently moving out. How to fill out an amended tax return form The lender foreclosed on the property and, on December 5, 2013, sold the property to another buyer for $1,750,000. How to fill out an amended tax return form On December 26, 2013, the lender canceled the remaining debt. How to fill out an amended tax return form Kathy and Frank have no tax attributes other than basis of personal-use property. How to fill out an amended tax return form   The lender issued a 2013 Form 1099-C to Kathy and Frank showing canceled debt of $750,000 in box 2 (the remaining balance on the $2,500,000 mortgage debt after application of the foreclosure sale proceeds) and $1,750,000 in box 7 (FMV of the property). How to fill out an amended tax return form Identifiable event code "D" appears in box 6. How to fill out an amended tax return form This box shows the reason the creditor has filed Form 1099-C. How to fill out an amended tax return form Although Kathy and Frank abandoned the property, the lender did not need to also file a Form 1099-A because the lender canceled the debt in connection with the foreclosure in the same calendar year. How to fill out an amended tax return form Kathy and Frank are filing a joint return for 2013. How to fill out an amended tax return form   Because the foreclosure occurred prior to the debt cancellation, Kathy and Frank first calculate their gain or loss from the foreclosure using Table 1-1. How to fill out an amended tax return form Because Kathy and Frank remained personally liable for the $750,000 debt remaining after the foreclosure ($2,500,000 outstanding debt immediately before the foreclosure minus $1,750,000 satisfied through the sale of the home), Kathy and Frank enter $1,750,000 on line 1 of Table 1-1 ($2,500,000 outstanding debt immediately before the foreclosure minus the $750,000 for which they remained liable). How to fill out an amended tax return form Completing Table 1-1, Kathy and Frank find that they have no ordinary income from the cancellation of debt upon foreclosure and that they have a $1,250,000 loss. How to fill out an amended tax return form Because this loss relates to their home, it is a nondeductible loss. How to fill out an amended tax return form   Because the lender later canceled the remaining amount of the debt, Kathy and Frank must also determine whether that canceled debt is taxable. How to fill out an amended tax return form Immediately before the cancellation, Kathy and Frank had $15,000 in a savings account, household furnishings with an FMV of $17,000, a car with an FMV of $10,000, and $18,000 in credit card debt. How to fill out an amended tax return form Kathy and Frank also had the $750,000 remaining balance on the mortgage loan at that time. How to fill out an amended tax return form The household furnishings originally cost $30,000. How to fill out an amended tax return form The car had been fully paid off (so there was no related outstanding debt) and was originally purchased for $16,000. How to fill out an amended tax return form Kathy and Frank had no adjustments to the cost basis of the car. How to fill out an amended tax return form Kathy and Frank had no other assets or liabilities at the time of the cancellation. How to fill out an amended tax return form Kathy and Frank complete the insolvency worksheet to calculate that they were insolvent to the extent of $726,000 immediately before the cancellation ($768,000 of total liabilities minus $42,000 FMV of total assets). How to fill out an amended tax return form   At the beginning of 2014, Kathy and Frank had $9,000 in their savings account and $15,000 in credit card debt. How to fill out an amended tax return form Kathy and Frank also owned the same car at that time (still with an FMV of $10,000 and basis of $16,000) and the same household furnishings (still with an FMV of $17,000 and a basis of $30,000). How to fill out an amended tax return form Kathy and Frank had no other assets or liabilities at that time. How to fill out an amended tax return form Kathy and Frank no longer own the home because the lender foreclosed on it in 2013. How to fill out an amended tax return form   Because the canceled debt is qualified principal residence indebtedness, the insolvency exclusion does not apply unless Kathy and Frank elect to apply the insolvency exclusion instead of the qualified principal residence indebtedness exclusion. How to fill out an amended tax return form The maximum amount that Kathy and Frank can treat as qualified principal residence indebtedness is $2,000,000. How to fill out an amended tax return form The remaining $500,000 ($2,500,000 outstanding mortgage loan minus $2,000,000 limit on qualified principal residence indebtedness) is not qualified principal residence indebtedness. How to fill out an amended tax return form Because only a part of the loan is qualified principal residence indebtedness, Kathy and Frank must apply the ordering rule to the canceled debt. How to fill out an amended tax return form Under the ordering rule, the qualified principal residence indebtedness exclusion applies only to the extent that the amount canceled ($750,000) exceeds the amount of the loan (immediately before the cancellation) that is not qualified principal residence indebtedness ($500,000). How to fill out an amended tax return form This means that Kathy and Frank can only exclude $250,000 ($750,000 amount canceled minus $500,000 nonqualified debt) under the qualified principal residence indebtedness exclusion. How to fill out an amended tax return form   Kathy and Frank do not elect to have the insolvency exclusion apply instead of the qualified principal residence exclusion. How to fill out an amended tax return form Nonetheless, they can still apply the insolvency exclusion to the $500,000 nonqualified debt because it is not qualified principal residence indebtedness. How to fill out an amended tax return form Kathy and Frank can exclude the remaining $500,000 canceled debt under the insolvency exclusion because they were insolvent immediately before the cancellation to the extent of $726,000. How to fill out an amended tax return form Thus, Kathy and Frank check the boxes on lines 1b and 1e of Form 982 and enter $750,000 on line 2 ($250,000 excluded under the qualified principal residence indebtedness exclusion plus $500,000 excluded under the insolvency exclusion). How to fill out an amended tax return form   Next, Kathy and Frank reduce their tax attributes using Part II of Form 982. How to fill out an amended tax return form Because Kathy and Frank no longer own the home due to the foreclosure, Kathy and Frank have no remaining basis in the home at the time of the debt cancellation. How to fill out an amended tax return form Thus, Kathy and Frank leave line 10b of Form 982 blank. How to fill out an amended tax return form However, Kathy and Frank are also excluding nonqualified debt under the insolvency exclusion. How to fill out an amended tax return form As a result, Kathy and Frank must reduce the basis of property they own based on the amount of canceled debt they are excluding from income under the insolvency rules. How to fill out an amended tax return form Because Kathy and Frank have no tax attributes other than basis of personal-use property to reduce, Kathy and Frank figure the amount they must include on line 10a of Form 982 by taking the smallest of: The $46,000 bases of their personal-use property held at the beginning of 2014 ($16,000 basis in the car plus $30,000 basis in household furnishings), The $500,000 of the nonbusiness debt (other than qualified principal residence indebtedness) that they are excluding from income on line 2 of Form 982, or The $43,000 excess of the total bases of the property and the amount of money they held immediately after the cancellation over their total liabilities immediately after the cancellation ($15,000 in savings account plus $30,000 basis in household furnishings plus $16,000 adjusted basis in car minus $18,000 credit card debt). How to fill out an amended tax return form Kathy and Frank enter $43,000 on Form 982, line 10a and reduce their bases in the car and the household furnishings in proportion to the total adjusted bases in all their property. How to fill out an amended tax return form Kathy and Frank reduce the basis in the car by $14,956. How to fill out an amended tax return form 52 ($43,000 x $16,000/$46,000). How to fill out an amended tax return form And they reduce the basis in the household furnishings by $28,043. How to fill out an amended tax return form 48 ($43,000 x $30,000/$46,000). How to fill out an amended tax return form   Following are Kathy and Frank's sample forms and worksheets. How to fill out an amended tax return form Frank and Kathy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. How to fill out an amended tax return form Please click the link to view the image. How to fill out an amended tax return form Form 1099-C, Cancellation of Debt Table 1-1. How to fill out an amended tax return form Worksheet for Foreclosures and Repossessions (for Frank and Kathy Willow) Part 1. How to fill out an amended tax return form Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). How to fill out an amended tax return form Otherwise, go to Part 2. How to fill out an amended tax return form 1. How to fill out an amended tax return form Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property $1,750,000. How to fill out an amended tax return form 00 2. How to fill out an amended tax return form Enter the fair market value of the transferred property $1,750,000. How to fill out an amended tax return form 00 3. How to fill out an amended tax return form Ordinary income from the cancellation of debt upon foreclosure or repossession. How to fill out an amended tax return form * Subtract line 2 from line 1. How to fill out an amended tax return form If less than zero, enter zero. How to fill out an amended tax return form Next, go to Part 2 $0. How to fill out an amended tax return form 00 Part 2. How to fill out an amended tax return form Gain or loss from foreclosure or repossession. How to fill out an amended tax return form   4. How to fill out an amended tax return form Enter the smaller of line 1 or line 2. How to fill out an amended tax return form If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property. How to fill out an amended tax return form $1,750,000. How to fill out an amended tax return form 00 5. How to fill out an amended tax return form Enter any proceeds you received from the foreclosure sale   6. How to fill out an amended tax return form Add line 4 and line 5 $1,750,000. How to fill out an amended tax return form 00 7. How to fill out an amended tax return form Enter the adjusted basis of the transferred property $3,000,000. How to fill out an amended tax return form 00 8. How to fill out an amended tax return form Gain or loss from foreclosure or repossession. How to fill out an amended tax return form Subtract line 7 from line 6 ($1,250,000. How to fill out an amended tax return form 00) * The income may not be taxable. How to fill out an amended tax return form See chapter 1 for more details. How to fill out an amended tax return form    Insolvency Worksheet—Frank and Kathy Willow Date debt was canceled (mm/dd/yy) 12/26/13 Part I. How to fill out an amended tax return form Total liabilities immediately before the cancellation (do not include the same liability in more than one category) Liabilities (debts) Amount Owed Immediately Before the Cancellation 1. How to fill out an amended tax return form Credit card debt $ 18,000 2. How to fill out an amended tax return form Mortgage(s) on real property (including first and second mortgages and home equity loans) (mortgage(s) can be on personal residence, any additional residence, or property held for investment or used in a trade or business) $ 750,000 3. How to fill out an amended tax return form Car and other vehicle loans $ 4. How to fill out an amended tax return form Medical bills owed $ 5. How to fill out an amended tax return form Student loans $ 6. How to fill out an amended tax return form Accrued or past-due mortgage interest $ 7. How to fill out an amended tax return form Accrued or past-due real estate taxes $ 8. How to fill out an amended tax return form Accrued or past-due utilities (water, gas, electric) $ 9. How to fill out an amended tax return form Accrued or past-due child care costs $ 10. How to fill out an amended tax return form Federal or state income taxes remaining due (for prior tax years) $ 11. How to fill out an amended tax return form Judgments $ 12. How to fill out an amended tax return form Business debts (including those owed as a sole proprietor or partner) $ 13. How to fill out an amended tax return form Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. How to fill out an amended tax return form Other liabilities (debts) not included above $ 15. How to fill out an amended tax return form Total liabilities immediately before the cancellation. How to fill out an amended tax return form Add lines 1 through 14. How to fill out an amended tax return form $ 768,000 Part II. How to fill out an amended tax return form Fair market value (FMV) of assets owned immediately before the cancellation (do not include the FMV of the same asset in more than one category) Assets FMV Immediately Before  the Cancellation 16. How to fill out an amended tax return form Cash and bank account balances $ 15,000 17. How to fill out an amended tax return form Real property, including the value of land (can be main home, any additional home, or property held for investment or used in a trade or business) $ 18. How to fill out an amended tax return form Cars and other vehicles $ 10,000 19. How to fill out an amended tax return form Computers $ 20. How to fill out an amended tax return form Household goods and furnishings (for example, appliances, electronics, furniture, etc. How to fill out an amended tax return form ) $ 17,000 21. How to fill out an amended tax return form Tools $ 22. How to fill out an amended tax return form Jewelry $ 23. How to fill out an amended tax return form Clothing $ 24. How to fill out an amended tax return form Books $ 25. How to fill out an amended tax return form Stocks and bonds $ 26. How to fill out an amended tax return form Investments in coins, stamps, paintings, or other collectibles $ 27. How to fill out an amended tax return form Firearms, sports, photographic, and other hobby equipment $ 28. How to fill out an amended tax return form Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 29. How to fill out an amended tax return form Interest in a pension plan $ 30. How to fill out an amended tax return form Interest in education accounts $ 31. How to fill out an amended tax return form Cash value of life insurance $ 32. How to fill out an amended tax return form Security deposits with landlords, utilities, and others $ 33. How to fill out an amended tax return form Interests in partnerships $ 34. How to fill out an amended tax return form Value of investment in a business $ 35. How to fill out an amended tax return form Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. How to fill out an amended tax return form Other assets not included above $ 37. How to fill out an amended tax return form FMV of total assets immediately before the cancellation. How to fill out an amended tax return form Add lines 16 through 36. How to fill out an amended tax return form $ 42,000 Part III. How to fill out an amended tax return form Insolvency 38. How to fill out an amended tax return form Amount of Insolvency. How to fill out an amended tax return form Subtract line 37 from line 15. How to fill out an amended tax return form If zero or less, you are not insolvent. How to fill out an amended tax return form $ 726,000    Frank and Kathy's Form 982 This image is too large to be displayed in the current screen. How to fill out an amended tax return form Please click the link to view the image. How to fill out an amended tax return form Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Prev  Up  Next   Home   More Online Publications
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The How To Fill Out An Amended Tax Return Form

How to fill out an amended tax return form 2. How to fill out an amended tax return form   Taxable and Nontaxable Income Table of Contents Compensation for Services Retirement Plan DistributionsIndividual Retirement Arrangements (IRAs) Pensions and Annuities Social Security and Equivalent Railroad Retirement BenefitsAre Any of Your Benefits Taxable? How Much Is Taxable? How To Report Your Benefits Lump-Sum Election Repayments More Than Gross Benefits Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Life Insurance ProceedsInstallments for life. How to fill out an amended tax return form Surviving spouse. How to fill out an amended tax return form Endowment Contract Proceeds Accelerated Death Benefits Sale of HomeMaximum Amount of Exclusion Ownership and Use Tests Married Persons Business Use or Rental of Home Reporting the Sale Reverse Mortgages Other ItemsWelfare benefits. How to fill out an amended tax return form Payments from a state fund for victims of crime. How to fill out an amended tax return form Home Affordable Modification Program (HAMP). How to fill out an amended tax return form Mortgage assistance payments. How to fill out an amended tax return form Payments to reduce cost of winter energy use. How to fill out an amended tax return form Nutrition Program for the Elderly. How to fill out an amended tax return form Reemployment Trade Adjustment Assistance (RTAA). How to fill out an amended tax return form Generally, income is taxable unless it is specifically exempt (not taxed) by law. How to fill out an amended tax return form Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. How to fill out an amended tax return form Under special provisions of the law, certain items are partially or fully exempt from tax. How to fill out an amended tax return form Provisions that are of special interest to older taxpayers are discussed in this chapter. How to fill out an amended tax return form Compensation for Services Generally, you must include in gross income everything you receive in payment for personal services. How to fill out an amended tax return form In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. How to fill out an amended tax return form You need not receive the compensation in cash for it to be taxable. How to fill out an amended tax return form Payments you receive in the form of goods or services generally must be included in gross income at their fair market value. How to fill out an amended tax return form Volunteer work. How to fill out an amended tax return form   Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs. How to fill out an amended tax return form Retired Senior Volunteer Program (RSVP). How to fill out an amended tax return form Foster Grandparent Program. How to fill out an amended tax return form Senior Companion Program. How to fill out an amended tax return form Service Corps of Retired Executives (SCORE). How to fill out an amended tax return form Unemployment compensation. How to fill out an amended tax return form   You must include in income all unemployment compensation you or your spouse (if married filing jointly) received. How to fill out an amended tax return form More information. How to fill out an amended tax return form   See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income. How to fill out an amended tax return form Retirement Plan Distributions This section summarizes the tax treatment of amounts you receive from traditional individual retirement arrangements (IRA), employee pensions or annuities, and disability pensions or annuities. How to fill out an amended tax return form A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. How to fill out an amended tax return form A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and tax-free distributions. How to fill out an amended tax return form A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. How to fill out an amended tax return form More detailed information can be found in Publication 590, Individual Retirement Arrangements (IRAs), and Publication 575, Pension and Annuity Income. How to fill out an amended tax return form Individual Retirement Arrangements (IRAs) In general, distributions from a traditional IRA are taxable in the year you receive them. How to fill out an amended tax return form Exceptions to the general rule are rollovers, tax-free withdrawals of contributions, and the return of nondeductible contributions. How to fill out an amended tax return form These are discussed in Publication 590. How to fill out an amended tax return form If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. How to fill out an amended tax return form If you do not file Form 8606 with your return, you may have to pay a $50 penalty. How to fill out an amended tax return form Also, when you receive distributions from your traditional IRA, the amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. How to fill out an amended tax return form Early distributions. How to fill out an amended tax return form   Generally, early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age  59½. How to fill out an amended tax return form You must include early distributions of taxable amounts in your gross income. How to fill out an amended tax return form These taxable amounts are also subject to an additional 10% tax unless the distribution qualifies for an exception. How to fill out an amended tax return form For purposes of the additional 10% tax, an IRA is a qualified retirement plan. How to fill out an amended tax return form For more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later. How to fill out an amended tax return form After age 59½ and before age 70½. How to fill out an amended tax return form   After you reach age 59½, you can receive distributions from your traditional IRA without having to pay the 10% additional tax. How to fill out an amended tax return form Even though you can receive distributions after you reach age 59½, distributions are not required until you reach  age 70½. How to fill out an amended tax return form Required distributions. How to fill out an amended tax return form   If you are the owner of a traditional IRA, you generally must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 70½. How to fill out an amended tax return form See When Must You Withdraw Assets? (Required Minimum Distributions) in Publication 590. How to fill out an amended tax return form If distributions from your traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. How to fill out an amended tax return form For purposes of the 50% excise tax, an IRA is a qualified retirement plan. How to fill out an amended tax return form For more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. How to fill out an amended tax return form See also Excess Accumulations (Insufficient Distributions) in Publication 590. How to fill out an amended tax return form Pensions and Annuities Generally, if you did not pay any part of the cost of your employee pension or annuity, and your employer did not withhold part of the cost of the contract from your pay while you worked, the amounts you receive each year are fully taxable. How to fill out an amended tax return form However, see Insurance Premiums for Retired Public Safety Officers , later. How to fill out an amended tax return form If you paid part of the cost of your pension or annuity plan (see Cost , later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). How to fill out an amended tax return form 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 fill out an amended tax return form The rest of each payment is taxable. How to fill out an amended tax return form However, see Insurance Premiums for Retired Public Safety Officers , later. How to fill out an amended tax return form You figure the tax-free part of the payment using one of the following methods. How to fill out an amended tax return form Simplified Method. How to fill out an amended tax return form 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 fill out an amended tax return form You cannot use this method if your annuity is paid under a nonqualified plan. How to fill out an amended tax return form General Rule. How to fill out an amended tax return form You must use this method if your annuity is paid under a nonqualified plan. How to fill out an amended tax return form You generally cannot use this method if your annuity is paid under a qualified plan. How to fill out an amended tax return form Contact your employer or plan administrator to find out if your pension or annuity is paid under a qualified or nonqualified plan. How to fill out an amended tax return form 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 fill out an amended tax return form Exclusion limit. How to fill out an amended tax return form   If your annuity starting date is after 1986, the total amount of annuity income you can exclude over the years as a recovery of the cost cannot exceed your total cost. How to fill out an amended tax return form 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 fill out an amended tax return form This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. How to fill out an amended tax return form   If you contributed to your pension or annuity and your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. How to fill out an amended tax return form 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 fill out an amended tax return form The total exclusion may be more than your cost. How to fill out an amended tax return form Cost. How to fill out an amended tax return form   Before you can figure how much, if any, of your pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). How to fill out an amended tax return form Your total cost in the plan includes everything that you paid. How to fill out an amended tax return form It also includes amounts your employer contributed that were taxable to you when paid. How to fill out an amended tax return form However, see Foreign employment contributions , later. How to fill out an amended tax return form   From this total cost, subtract any refunded premiums, rebates, dividends, unrepaid loans, or other tax-free amounts you received by the later of the annuity starting date or the date on which you received your first payment. How to fill out an amended tax return form   The annuity starting date is the later of the first day of the first period for which you received a payment from the plan or the date on which the plan's obligations became fixed. How to fill out an amended tax return form    The amount of your contributions to the plan may be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. How to fill out an amended tax return form , that you receive. How to fill out an amended tax return form Foreign employment contributions. How to fill out an amended tax return form   If you worked abroad, certain amounts your employer paid into your retirement plan that were not includible in your gross income may be considered part of your cost. How to fill out an amended tax return form For details, see Foreign employment contributions in Publication 575. How to fill out an amended tax return form Withholding. How to fill out an amended tax return form   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable part of amounts paid to you. How to fill out an amended tax return form However, you can choose not to have tax withheld on the payments you receive, unless they are eligible rollover distributions. How to fill out an amended tax return form (These are distributions that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. How to fill out an amended tax return form ) See Withholding Tax and Estimated Tax and Rollovers in Publication 575 for more information. How to fill out an amended tax return form   For payments other than eligible rollover distributions, you can tell the payer how much to withhold by filing a Form W-4P, Withholding Certificate for Pension or Annuity Payments. How to fill out an amended tax return form Simplified Method. How to fill out an amended tax return form   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 fill out an amended tax return form For an annuity that is payable over the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. How to fill out an amended tax return form For any other annuity, this number is the number of monthly annuity payments under the contract. How to fill out an amended tax return form Who must use the Simplified Method. How to fill out an amended tax return form   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you receive your pension or annuity payments from a qualified plan or annuity, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments (defined next). How to fill out an amended tax return form   In addition, if your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use the Simplified Method for payments from a qualified plan, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments. How to fill out an amended tax return form If you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. How to fill out an amended tax return form Guaranteed payments. How to fill out an amended tax return form   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 fill out an amended tax return form 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 fill out an amended tax return form Who cannot use the Simplified Method. How to fill out an amended tax return form   You cannot use the Simplified Method and must use the General Rule if you receive pension or annuity payments from: A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan, or A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 years of guaranteed payments (defined above). How to fill out an amended tax return form   In addition, you had to use the General Rule for either circumstance described above if your annuity starting date is after July 1, 1986, and before November 19, 1996. How to fill out an amended tax return form If you did not have to use the General Rule, you could have chosen to use it. How to fill out an amended tax return form You also had to use the General Rule for payments from a qualified plan if your annuity starting date is before July 2, 1986, and you did not qualify to use the Three-Year Rule. How to fill out an amended tax return form   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 fill out an amended tax return form   Unless your annuity starting date was before 1987, once you have recovered all of your non-taxable investment, all of each remaining payment you receive is fully taxable. How to fill out an amended tax return form Once your remaining payments are fully taxable, there is no longer a concern with the General Rule or Simplified Method. How to fill out an amended tax return form   Complete information on the General Rule, including the actuarial tables you need, is contained in Publication 939, General Rule for Pensions and Annuities. How to fill out an amended tax return form How to use the Simplified Method. How to fill out an amended tax return form   Complete the Simplified Method Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions or in Publication 575 to figure your taxable annuity for 2013. How to fill out an amended tax return form Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. How to fill out an amended tax return form   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. How to fill out an amended tax return form How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. How to fill out an amended tax return form 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 fill out an amended tax return form    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 fill out an amended tax return form Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. How to fill out an amended tax return form Single-life annuity. How to fill out an amended tax return form   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 fill out an amended tax return form Enter on line 3 the number shown for your age on your annuity starting date. How to fill out an amended tax return form This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. How to fill out an amended tax return form Multiple-lives annuity. How to fill out an amended tax return form   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 fill out an amended tax return form Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. How to fill out an amended tax return form 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 fill out an amended tax return form 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 fill out an amended tax return form 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 fill out an amended tax return form   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. How to fill out an amended tax return form 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 fill out an amended tax return form This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. How to fill out an amended tax return form Fixed-period annuities. How to fill out an amended tax return form   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 fill out an amended tax return form Line 6. How to fill out an amended tax return form   The amount on line 6 should include all amounts that could have been recovered in prior years. How to fill out an amended tax return form 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 fill out an amended tax return form    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in later years. How to fill out an amended tax return form Example. How to fill out an amended tax return form Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. How to fill out an amended tax return form Bill's annuity starting date is January 1, 2013. How to fill out an amended tax return form The benefits are to be paid over the joint lives of Bill and his wife, Kathy, age 65. How to fill out an amended tax return form Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. How to fill out an amended tax return form 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 fill out an amended tax return form 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 fill out an amended tax return form See the illustrated Worksheet 2-A, Simplified Method Worksheet, later. How to fill out an amended tax return form You can find a blank version of this worksheet in Publication 575. How to fill out an amended tax return form (The references in the illustrated worksheet are to sections in Publication 575). How to fill out an amended tax return form His annuity is payable over the lives of more than one annuitant, so Bill uses his and Kathy's combined ages, 130 (65 + 65), and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet and finds the line 3 amount to be 310. How to fill out an amended tax return form Bill's tax-free monthly amount is $100 ($31,000 ÷ 310 as shown on line 4 of the worksheet). How to fill out an amended tax return form 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 fill out an amended tax return form The full amount of any annuity payments received after 310 payments are paid must generally be included in gross income. How to fill out an amended tax return form 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 fill out an amended tax return form This deduction is not subject to the 2%-of-adjusted-gross-income limit. How to fill out an amended tax return form Worksheet 2-A. How to fill out an amended tax return form Simplified Method Worksheet—Illustrated 1. How to fill out an amended tax return form Enter the total pension or annuity payments received this year. How to fill out an amended tax return form Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. How to fill out an amended tax return form $ 14,400 2. How to fill out an amended tax return form Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion* See Cost (Investment in the Contract), earlier 2. How to fill out an amended tax return form 31,000   Note. How to fill out an amended tax return form 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 fill out an amended tax return form Otherwise, go to line 3. How to fill out an amended tax return form     3. How to fill out an amended tax return form Enter the appropriate number from Table 1 below. How to fill out an amended tax return form 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 fill out an amended tax return form 310 4. How to fill out an amended tax return form Divide line 2 by the number on line 3 4. How to fill out an amended tax return form 100 5. How to fill out an amended tax return form Multiply line 4 by the number of months for which this year's payments were made. How to fill out an amended tax return form 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 fill out an amended tax return form Otherwise, go to line 6 5. How to fill out an amended tax return form 1,200 6. How to fill out an amended tax return form Enter any amount previously recovered tax free in years after 1986. How to fill out an amended tax return form This is the amount shown on line 10 of your worksheet for last year 6. How to fill out an amended tax return form 0 7. How to fill out an amended tax return form Subtract line 6 from line 2 7. How to fill out an amended tax return form 31,000 8. How to fill out an amended tax return form Enter the smaller of line 5 or line 7 8. How to fill out an amended tax return form 1,200 9. How to fill out an amended tax return form Taxable amount for year. How to fill out an amended tax return form Subtract line 8 from line 1. How to fill out an amended tax return form Enter the result, but not less than zero. How to fill out an amended tax return form Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. How to fill out an amended tax return form Note. How to fill out an amended tax return form If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. How to fill out an amended tax return form If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers, earlier, before entering an amount on your tax return. How to fill out an amended tax return form 9. How to fill out an amended tax return form $ 13,200 10. How to fill out an amended tax return form Was your annuity starting date before 1987? □ Yes. How to fill out an amended tax return form STOP. How to fill out an amended tax return form Do not complete the rest of this worksheet. How to fill out an amended tax return form  ☑ No. How to fill out an amended tax return form Add lines 6 and 8. How to fill out an amended tax return form This is the amount you have recovered tax free through 2013. How to fill out an amended tax return form You will need this number if you need to fill out this worksheet next year. How to fill out an amended tax return form 10. How to fill out an amended tax return form 1,200 11. How to fill out an amended tax return form Balance of cost to be recovered. How to fill out an amended tax return form Subtract line 10 from line 2. How to fill out an amended tax return form If zero, you will not have to complete this worksheet next year. How to fill out an amended tax return form The payments you receive next year will generally be fully taxable 11. How to fill out an amended tax return form $ 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 fill out an amended tax return form   Table 1 for Line 3 Above       AND your annuity starting date was—   IF your age on your annuity starting date was . How to fill out an amended tax return form . How to fill out an amended tax return form . How to fill out an amended tax return form   BEFORE November 19, 1996, enter on line 3 . How to fill out an amended tax return form . How to fill out an amended tax return form . How to fill out an amended tax return form AFTER November 18, 1996, enter on line 3 . How to fill out an amended tax return form . How to fill out an amended tax return form . How to fill out an amended tax return form   55 or under 300 360   56-60 260 310   61-65 240 260   66-70 170 210   71 or over 120 160 Table 2 for Line 3 Above   IF the annuitants' combined ages on your annuity starting date were . How to fill out an amended tax return form . How to fill out an amended tax return form . How to fill out an amended tax return form   THEN enter on line 3 . How to fill out an amended tax return form . How to fill out an amended tax return form . How to fill out an amended tax return form         110 or under   410         111-120   360         121-130   310         131-140   260         141 or over   210       Survivors of retirees. How to fill out an amended tax return form   Benefits paid to you as a survivor under a joint and survivor annuity must be included in your gross income in the same way the retiree would have included them in gross income. How to fill out an amended tax return form   If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule, include the total received in your income. How to fill out an amended tax return form The retiree's cost has already been recovered tax free. How to fill out an amended tax return form   If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for in the contract. How to fill out an amended tax return form The resulting tax-free amount will then remain fixed. How to fill out an amended tax return form Any increases in the survivor annuity are fully taxable. How to fill out an amended tax return form   If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. How to fill out an amended tax return form See Simplified Method , earlier. How to fill out an amended tax return form How to report. How to fill out an amended tax return form   If you file Form 1040, report your total annuity on line 16a, and the taxable part on line 16b. How to fill out an amended tax return form If your pension or annuity is fully taxable, enter it on line 16b. How to fill out an amended tax return form Do not make an entry on line 16a. How to fill out an amended tax return form   If you file Form 1040A, report your total annuity on line 12a, and the taxable part on line 12b. How to fill out an amended tax return form If your pension or annuity is fully taxable, enter it on line 12b. How to fill out an amended tax return form Do not make an entry on line 12a. How to fill out an amended tax return form   If you file Form 1040NR, report your total annuity on line 17a, and the taxable part on line 17b. How to fill out an amended tax return form If your pension or annuity is fully taxable, enter it on line 17b. How to fill out an amended tax return form Do not make an entry on line 17a. How to fill out an amended tax return form Example. How to fill out an amended tax return form You are a Form 1040 filer and you received monthly payments totaling $1,200 (12 months x $100) during 2013 from a pension plan that was completely financed by your employer. How to fill out an amended tax return form You had paid no tax on the payments that your employer made to the plan, and the payments were not used to pay for accident, health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public Safety Officers ). How to fill out an amended tax return form The entire $1,200 is taxable. How to fill out an amended tax return form You include $1,200 only on Form 1040, line 16b. How to fill out an amended tax return form Joint return. How to fill out an amended tax return form   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on line 16a of Form 1040, line 12a of Form 1040A, or line 17a of Form 1040NR. How to fill out an amended tax return form Report the total of the taxable parts on line 16b of Form 1040, line 12b of Form 1040A, or line 17b of Form 1040NR. How to fill out an amended tax return form Form 1099-R. How to fill out an amended tax return form   You should receive a Form 1099-R for your pension or annuity. How to fill out an amended tax return form Form 1099-R shows your pension or annuity for the year and any income tax withheld. How to fill out an amended tax return form You should receive a Form W-2 if you receive distributions from certain nonqualified plans. How to fill out an amended tax return form You must attach Forms 1099-R or Forms W-2 to your 2013 tax return if federal income tax was withheld. How to fill out an amended tax return form Generally, you should be sent these forms by January 31, 2014. How to fill out an amended tax return form Nonperiodic Distributions If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from your income as a recovery of your cost. How to fill out an amended tax return form Nonperiodic distributions include cash withdrawals, distributions of current earnings (dividends) on your investment, and certain loans. How to fill out an amended tax return form For information on how to figure the taxable amount of a nonperiodic distribution, see Taxation of Nonperiodic Payments in Publication 575. How to fill out an amended tax return form The taxable part of a nonperiodic distribution may be subject to an additional 10% tax. How to fill out an amended tax return form See Tax on Early Distributions, later. How to fill out an amended tax return form Lump-sum distributions. How to fill out an amended tax return form   If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. How to fill out an amended tax return form The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. How to fill out an amended tax return form The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. How to fill out an amended tax return form You may be able to use the 10-year tax option to figure tax on the ordinary income part. How to fill out an amended tax return form Form 1099-R. How to fill out an amended tax return form   If you receive a total distribution from a plan, you should receive a Form 1099-R. How to fill out an amended tax return form If the distribution qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. How to fill out an amended tax return form The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is the ordinary income part. How to fill out an amended tax return form More information. How to fill out an amended tax return form   For more detailed information on lump-sum distributions, see Publication 575 or Form 4972, Tax on Lump-Sum Distributions. How to fill out an amended tax return form Tax on Early Distributions Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you reach age 59½ are subject to an additional tax of 10%. How to fill out an amended tax return form The tax applies to the taxable part of the distribution. How to fill out an amended tax return form For this purpose, a qualified retirement plan is: A qualified employee plan (including a qualified cash or deferred arrangement (CODA) under Internal Revenue Code section 401(k)), A qualified employee annuity plan, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). How to fill out an amended tax return form  An IRA is also a qualified retirement plan for purposes of this tax. How to fill out an amended tax return form General exceptions to tax. How to fill out an amended tax return form   The early distribution tax does not apply to any distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. How to fill out an amended tax return form Additional exceptions. How to fill out an amended tax return form   There are additional exceptions to the early distribution tax for certain distributions from qualified retirement plans and nonqualified annuity contracts. How to fill out an amended tax return form See Publication 575 for details. How to fill out an amended tax return form Reporting tax. How to fill out an amended tax return form   If you owe only the tax on early distributions and distribution code 1 (early distribution, no known exception) is correctly shown in Form 1099-R, box 7, multiply the taxable part of the early distribution by 10% (. How to fill out an amended tax return form 10) and enter the result on Form 1040, line 58, or Form 1040NR, line 56. How to fill out an amended tax return form See the instructions for line 58 of Form 1040 or line 56 of Form 1040NR for more information about reporting the early distribution tax. How to fill out an amended tax return form Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date. How to fill out an amended tax return form Unless the rule for 5% owners applies, this is generally April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. How to fill out an amended tax return form However, your plan may require you to begin to receive payments by April 1 of the year that follows the year in which you reach 70½, even if you have not retired. How to fill out an amended tax return form For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan) (for benefits accruing after 1986). How to fill out an amended tax return form  An IRA is also a qualified retirement plan for purposes of this tax. How to fill out an amended tax return form An excess accumulation is the undistributed remainder of the required minimum distribution that was left in your qualified retirement plan. How to fill out an amended tax return form 5% owners. How to fill out an amended tax return form   If you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the company maintaining your qualified retirement plan, you must begin to receive distributions from the plan by April 1 of the year after the calendar year in which you reach age 70½. How to fill out an amended tax return form See Publication 575 for more information. How to fill out an amended tax return form Amount of tax. How to fill out an amended tax return form   If you do not receive the required minimum distribution, you are subject to an additional tax. How to fill out an amended tax return form The tax equals 50% of the difference between the amount that must be distributed and the amount that was distributed during the tax year. How to fill out an amended tax return form You can get this excise tax excused if you establish that the shortfall in distributions was due to reasonable error and that you are taking reasonable steps to remedy the shortfall. How to fill out an amended tax return form Form 5329. How to fill out an amended tax return form   You must file a Form 5329 if you owe a tax because you did not receive a minimum required distribution from your qualified retirement plan. How to fill out an amended tax return form Additional information. How to fill out an amended tax return form   For more detailed information on the tax on excess accumulation, see Publication 575. How to fill out an amended tax return form 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 fill out an amended tax return form The premiums can be for coverage for you, your spouse, or dependent(s). How to fill out an amended tax return form The distribution must be made directly from the plan to the insurance provider. How to fill out an amended tax return form You can exclude from income the smaller of the amount of the insurance premiums or $3,000. How to fill out an amended tax return form You can only make this election for amounts that would otherwise be included in your income. How to fill out an amended tax return form The amount excluded from your income cannot be used to claim a medical expense deduction. How to fill out an amended tax return form An eligible retirement plan is a governmental plan that is a: Qualified trust, Section 403(a) plan, Section 403(b) annuity, or Section 457(b) plan. How to fill out an amended tax return form If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. How to fill out an amended tax return form The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. How to fill out an amended tax return form Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. How to fill out an amended tax return form Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. How to fill out an amended tax return form Enter “PSO” next to the appropriate line on which you report the taxable amount. How to fill out an amended tax return form Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. How to fill out an amended tax return form These categories are treated differently for income tax purposes. How to fill out an amended tax return form Social security equivalent benefits. How to fill out an amended tax return form   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 fill out an amended tax return form This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. How to fill out an amended tax return form (See Social Security and Equivalent Railroad Retirement Benefits , later. How to fill out an amended tax return form ) Non-social security equivalent benefits. How to fill out an amended tax return form   The second category contains the rest of the tier 1 benefits, called the non-social security equivalent benefit (NSSEB). How to fill out an amended tax return form It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. How to fill out an amended tax return form This category of benefits is treated as an amount received from a qualified employee plan. How to fill out an amended tax return form 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 fill out an amended tax return form Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. How to fill out an amended tax return form More information. How to fill out an amended tax return form   For more information about railroad retirement benefits, see Publication 575. How to fill out an amended tax return form Military Retirement Pay Military retirement pay based on age or length of service is taxable and must be included in income as a pension on Form 1040, lines 16a and 16b; on Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. How to fill out an amended tax return form But, certain military and government disability pensions that are based on a percentage of disability from active service in the Armed Forces of any country generally are not taxable. How to fill out an amended tax return form For more information, including information about veterans' benefits and insurance, see Publication 525. How to fill out an amended tax return form Social Security and Equivalent Railroad Retirement Benefits This discussion explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. How to fill out an amended tax return form Social security benefits include monthly retirement, survivor, and disability benefits. How to fill out an amended tax return form They do not include supplemental security income (SSI) payments, which are not taxable. How to fill out an amended tax return form Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. How to fill out an amended tax return form They commonly are called the social security equivalent benefit (SSEB) portion of tier 1 benefits. How to fill out an amended tax return form If you received these benefits during 2013, you should have received a Form SSA-1099 or Form RRB-1099 (Form SSA-1042S or Form RRB-1042S if you are a nonresident alien), showing the amount of the benefits. How to fill out an amended tax return form Are Any of Your Benefits Taxable? Note. How to fill out an amended tax return form When the term “benefits” is used in this section, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. How to fill out an amended tax return form  To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. How to fill out an amended tax return form When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. How to fill out an amended tax return form S. How to fill out an amended tax return form savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned in American Samoa or Puerto Rico by bona fide residents. How to fill out an amended tax return form Figuring total income. How to fill out an amended tax return form   To figure the total of one-half of your benefits plus your other income, use Worksheet 2-B. How to fill out an amended tax return form If that total amount is more than your base amount, part of your benefits may be taxable. How to fill out an amended tax return form If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. How to fill out an amended tax return form Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. How to fill out an amended tax return form If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. How to fill out an amended tax return form If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. How to fill out an amended tax return form Worksheet 2-B. How to fill out an amended tax return form A Quick Way To Check if Your Benefits May Be Taxable A. How to fill out an amended tax return form Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. How to fill out an amended tax return form Include  the full amount of any lump-sum benefit payments received in 2013, for 2013 and  earlier years. How to fill out an amended tax return form (If you received more than one form, combine the amounts from box 5  and enter the total. How to fill out an amended tax return form ) A. How to fill out an amended tax return form     Note. How to fill out an amended tax return form If the amount on line A is zero or less, stop here; none of your benefits are  taxable this year. How to fill out an amended tax return form     B. How to fill out an amended tax return form Enter one-half of the amount on line A B. How to fill out an amended tax return form   C. How to fill out an amended tax return form Enter your taxable pensions, wages, interest, dividends, and other taxable income C. How to fill out an amended tax return form   D. How to fill out an amended tax return form Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income for: •Interest from qualified U. How to fill out an amended tax return form S. How to fill out an amended tax return form savings bonds, •Employer-provided adoption benefits, •Foreign earned income or foreign housing, or •Income earned in American Samoa or Puerto Rico by bona fide residents D. How to fill out an amended tax return form   E. How to fill out an amended tax return form Add lines B, C, and D and enter the total E. How to fill out an amended tax return form   F. How to fill out an amended tax return form If you are: •Married filing jointly, enter $32,000 •Single, head of household, qualifying widow(er), or married filing separately and you  lived apart from your spouse for all of 2013, enter $25,000 •Married filing separately and you lived with your spouse at any time during 2013,  enter -0- F. How to fill out an amended tax return form   G. How to fill out an amended tax return form Is the amount on line F less than or equal to the amount on line E? □ No. How to fill out an amended tax return form None of your benefits are taxable this year. How to fill out an amended tax return form  □ Yes. How to fill out an amended tax return form Some of your benefits may be taxable. How to fill out an amended tax return form To figure how much of your benefits  are taxable, see Which worksheet to use under How Much Is Taxable. How to fill out an amended tax return form     Base Amount Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er) with dependent child, $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $0 if you are married filing separately and lived with your spouse at any time during 2013. How to fill out an amended tax return form Repayment of Benefits Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. How to fill out an amended tax return form It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. How to fill out an amended tax return form If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. How to fill out an amended tax return form Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. How to fill out an amended tax return form Your repayments are shown in box 4. How to fill out an amended tax return form The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). How to fill out an amended tax return form Use the amount in box 5 to figure whether any of your benefits are taxable. How to fill out an amended tax return form Tax Withholding and Estimated Tax You can choose to have federal income tax withheld from your social security and/or the SSEB portion of your tier 1 railroad retirement benefits. How to fill out an amended tax return form If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Request. How to fill out an amended tax return form If you do not choose to have income tax withheld, you may have to request additional withholding from other income, or pay estimated tax during the year. How to fill out an amended tax return form For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. How to fill out an amended tax return form How Much Is Taxable? If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. How to fill out an amended tax return form Generally, the higher that total amount, the greater the taxable part of your benefits. How to fill out an amended tax return form Maximum taxable part. How to fill out an amended tax return form   The taxable part of your benefits usually cannot be more than 50%. How to fill out an amended tax return form However, up to 85% of your benefits can be taxable if either of the following situations applies to you. How to fill out an amended tax return form The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). How to fill out an amended tax return form You are married filing separately and lived with your spouse at any time during 2013. How to fill out an amended tax return form   If you are a nonresident alien, 85% of your benefits are taxable. How to fill out an amended tax return form However, this income is exempt under some tax treaties. How to fill out an amended tax return form Which worksheet to use. How to fill out an amended tax return form   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. How to fill out an amended tax return form However, you will need to use a different worksheet(s) if any of the following situations applies to you. How to fill out an amended tax return form You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse were covered by a retirement plan at work. How to fill out an amended tax return form In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. How to fill out an amended tax return form Situation (1) does not apply and you take one or more of the following exclusions. How to fill out an amended tax return form Interest from qualified U. How to fill out an amended tax return form S. How to fill out an amended tax return form savings bonds (Form 8815). How to fill out an amended tax return form Employer-provided adoption benefits (Form 8839). How to fill out an amended tax return form Foreign earned income or housing (Form 2555 or Form 2555-EZ). How to fill out an amended tax return form Income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. How to fill out an amended tax return form In these situations, you must use Worksheet 1 in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits. How to fill out an amended tax return form You received a lump-sum payment for an earlier year. How to fill out an amended tax return form In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. How to fill out an amended tax return form See Lump-Sum Election , later. How to fill out an amended tax return form How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040, Form 1040A, or Form 1040NR. How to fill out an amended tax return form You cannot use Form 1040EZ. How to fill out an amended tax return form Reporting on Form 1040. How to fill out an amended tax return form   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. How to fill out an amended tax return form If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. How to fill out an amended tax return form Reporting on Form 1040A. How to fill out an amended tax return form   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. How to fill out an amended tax return form If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. How to fill out an amended tax return form Reporting on Form 1040NR. How to fill out an amended tax return form   Report 85% of the total amount of your benefits (box 5 of your Form SSA-1042S or Form RRB-1042S) in the appropriate column of Form 1040NR, Schedule NEC, line 8. How to fill out an amended tax return form Benefits not taxable. How to fill out an amended tax return form   If you are filing Form 1040EZ, do not report any benefits on your tax return. How to fill out an amended tax return form If you are filing Form 1040 or Form 1040A, report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. How to fill out an amended tax return form Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. How to fill out an amended tax return form If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. How to fill out an amended tax return form Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. How to fill out an amended tax return form This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. How to fill out an amended tax return form No part of the lump-sum death benefit is subject to tax. How to fill out an amended tax return form For more information about the lump-sum death benefit, visit the Social Security Administration website at www. How to fill out an amended tax return form SSA. How to fill out an amended tax return form gov, and use keyword: death benefit. How to fill out an amended tax return form Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. How to fill out an amended tax return form However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. How to fill out an amended tax return form You can elect this method if it lowers your taxable benefits. How to fill out an amended tax return form See Publication 915 for more information. How to fill out an amended tax return form Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. How to fill out an amended tax return form If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. How to fill out an amended tax return form If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. How to fill out an amended tax return form If you have any questions about this negative figure, contact your local Social Security Administration office or your local U. How to fill out an amended tax return form S. How to fill out an amended tax return form Railroad Retirement Board field office. How to fill out an amended tax return form Joint return. How to fill out an amended tax return form   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5 but your spouse's does not, subtract the box 5 amount on your form from the box 5 amount on your spouse's form. How to fill out an amended tax return form You do this to get your net benefits when figuring if your combined benefits are taxable. How to fill out an amended tax return form Repayment of benefits received in an earlier year. How to fill out an amended tax return form   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. How to fill out an amended tax return form   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. How to fill out an amended tax return form Claim it on Schedule A (Form 1040), line 23. How to fill out an amended tax return form   If this deduction is more than $3,000, you have to follow some special instructions. How to fill out an amended tax return form See Publication 915 for those instructions. How to fill out an amended tax return form Sickness and Injury Benefits Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. How to fill out an amended tax return form If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. How to fill out an amended tax return form However, certain payments may not be taxable to you. How to fill out an amended tax return form Some of these payments are discussed later in this section. How to fill out an amended tax return form Also, see Military and Government Disability Pensions and Other Sickness and Injury Benefits in Publication 525. How to fill out an amended tax return form Cost paid by you. How to fill out an amended tax return form   If you pay the entire cost of an accident or health plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. How to fill out an amended tax return form If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. How to fill out an amended tax return form Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. How to fill out an amended tax return form 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 fill out an amended tax return form Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. How to fill out an amended tax return form If you were 65 or older by the end of 2013 or you were retired on permanent and total disability and received taxable disability income, you may be able to claim the credit for the elderly or the disabled. How to fill out an amended tax return form See Credit for the Elderly or the Disabled, later. How to fill out an amended tax return form For more information on this credit, see Publication 524, Credit for the Elderly or the Disabled. How to fill out an amended tax return form Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. How to fill out an amended tax return form Report the payments on lines 16a and 16b of Form 1040, on lines 12a and 12b of Form 1040A, or on lines 17a and 17b of Form 1040NR. How to fill out an amended tax return form For more information on pensions and annuities, see Publication 575. How to fill out an amended tax return form Retirement and profit-sharing plans. How to fill out an amended tax return form   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. How to fill out an amended tax return form The payments must be reported as a pension or annuity. How to fill out an amended tax return form Accrued leave payment. How to fill out an amended tax return form   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. How to fill out an amended tax return form The payment is not a disability payment. How to fill out an amended tax return form Include it in your income in the tax year you receive it. How to fill out an amended tax return form Long-Term Care Insurance Contracts In most cases, long-term care insurance contracts generally are treated as accident and health insurance contracts. How to fill out an amended tax return form Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. How to fill out an amended tax return form However, the amount you can exclude may be limited. How to fill out an amended tax return form Long-term care insurance contracts are discussed in more detail in Publication 525. How to fill out an amended tax return form Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. How to fill out an amended tax return form The exemption also applies to your survivors. How to fill out an amended tax return form The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. How to fill out an amended tax return form If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. How to fill out an amended tax return form For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. How to fill out an amended tax return form Return to work. How to fill out an amended tax return form   If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. How to fill out an amended tax return form Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. How to fill out an amended tax return form Federal Employees' Compensation Act (FECA). How to fill out an amended tax return form   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. How to fill out an amended tax return form However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. How to fill out an amended tax return form Report this income on Form 1040, line 7; Form 1040A, line 7; on Form 1040EZ, line 1; or Form 1040NR, line 8. How to fill out an amended tax return form Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. How to fill out an amended tax return form    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. How to fill out an amended tax return form For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. How to fill out an amended tax return form Other compensation. How to fill out an amended tax return form   Many other amounts you receive as compensation for sickness or injury are not taxable. How to fill out an amended tax return form These include the following amounts. How to fill out an amended tax return form Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. How to fill out an amended tax return form Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. How to fill out an amended tax return form Compensation you receive for permanent loss or loss of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). How to fill out an amended tax return form This compensation must be based only on the injury and not on the period of your absence from work. How to fill out an amended tax return form These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. How to fill out an amended tax return form Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. How to fill out an amended tax return form This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. How to fill out an amended tax return form Proceeds not received in installments. How to fill out an amended tax return form   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. How to fill out an amended tax return form If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. How to fill out an amended tax return form Proceeds received in installments. How to fill out an amended tax return form   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. How to fill out an amended tax return form   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. How to fill out an amended tax return form Include anything over this excluded part in your income as interest. How to fill out an amended tax return form Installments for life. How to fill out an amended tax return form   If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds in installments for the rest of your life without a refund or period-certain guarantee, you figure the excluded part of each installment by dividing the amount held by the insurance company by your life expectancy. How to fill out an amended tax return form If there is a refund or period-certain guarantee, the amount held by the insurance company for this purpose is reduced by the actuarial value of the guarantee. How to fill out an amended tax return form Surviving spouse. How to fill out an amended tax return form   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the interest included in the installments. How to fill out an amended tax return form If you remarry, you can continue to take the exclusion. How to fill out an amended tax return form Surrender of policy for cash. How to fill out an amended tax return form   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. How to fill out an amended tax return form In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. How to fill out an amended tax return form You should receive a Form 1099-R showing the total proceeds and the taxable part. How to fill out an amended tax return form Report these amounts on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b. How to fill out an amended tax return form Endowment Contract Proceeds An endowment contract is a policy that pays over to you a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. How to fill out an amended tax return form Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. How to fill out an amended tax return form To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. How to fill out an amended tax return form Include in your income the part of the lump-sum payment that is more than your cost. How to fill out an amended tax return form Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity of the policy are taxed as an annuity. How to fill out an amended tax return form The tax treatment of an annuity is explained in Publication 575. How to fill out an amended tax return form For this treatment to apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. How to fill out an amended tax return form This election must be made within 60 days after the lump-sum payment first becomes payable to you. How to fill out an amended tax return form Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are generally excluded from income if the insured is terminally or chronically ill. How to fill out an amended tax return form However, see Exception , later. How to fill out an amended tax return form For a chronically ill individual, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. How to fill out an amended tax return form Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to a limit. How to fill out an amended tax return form In addition, if any portion of a death benefit under a life insurance contract on the life of a terminally or chronically ill individual is sold or assigned to a viatical settlement provider, the amount received also is excluded from income. How to fill out an amended tax return form Generally, a viatical settlement provider is one who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill. How to fill out an amended tax return form To report taxable accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. How to fill out an amended tax return form Terminally or chronically ill defined. How to fill out an amended tax return form   A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. How to fill out an amended tax return form A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions. How to fill out an amended tax return form The person is unable to perform (without substantial help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more because of a loss of functional capacity. How to fill out an amended tax return form The person requires substantial supervision to protect himself or herself from threats to health and safety due to severe cognitive impairment. How to fill out an amended tax return form Exception. How to fill out an amended tax return form   The exclusion does not apply to any amount paid to a person other than the insured if that other person has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the other person, or Has a financial interest in the business of the other person. How to fill out an amended tax return form Sale of Home You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return in most cases) on the sale of your main home. How to fill out an amended tax return form Generally, if you can exclude all of the gain, you do not need to report the sale on your tax return. How to fill out an amended tax return form You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. How to fill out an amended tax return form Main home. How to fill out an amended tax return form   Usually, your main home is the home you live in most of the time and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. How to fill out an amended tax return form Repaying the first-time homebuyer credit because you sold your home. How to fill out an amended tax return form   If you claimed a first-time homebuyer credit for your main home and you sell it, you may have to repay the credit. How to fill out an amended tax return form For a home purchased in 2008 and used as your main home until sold in 2013, you must file Form 5405 and repay the balance of the unpaid credit on your 2013 tax return. How to fill out an amended tax return form   For a home purchased after 2008, you generally must repay the entire credit if the home was sold (or otherwise ceased to be your main home) within 36 months of the purchase date. How to fill out an amended tax return form If you purchased your home in 2009 and used it as your main home until sold in 2013, you do not have to repay the credit or file Form 5405. How to fill out an amended tax return form If you purchased your home in 2010 and used it as your main home until sold in 2013, you may have to file Form 5405 and repay the entire credit on your 2013 tax return. How to fill out an amended tax return form   See the Instructions for Form 5405 for more information about repaying the credit and exceptions to repayment that may apply to you. How to fill out an amended tax return form Maximum Amount of Exclusion You can generally exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. How to fill out an amended tax return form You meet the ownership test. How to fill out an amended tax return form You meet the use test. How to fill out an amended tax return form During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. How to fill out an amended tax return form You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . How to fill out an amended tax return form Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. How to fill out an amended tax return form This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). How to fill out an amended tax return form Exception to ownership and use tests. How to fill out an amended tax return form   If you owned and lived in the property as your main home for less than 2 years, you still can claim an exclusion in some cases. How to fill out an amended tax return form Generally, you must have sold the home due to a change in place of employment, health, or unforeseen circumstances. How to fill out an amended tax return form The maximum amount you can exclude will be reduced. How to fill out an amended tax return form See Publication 523, Selling Your Home, for more information. How to fill out an amended tax return form Exception to use test for individuals with a disability. How to fill out an amended tax return form   There is an exception to the use test if, during the 5-year period before the sale of your home: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year. How to fill out an amended tax return form Under this exception, you are considered to live in your home during any time that you own the home and live in a facility (including a nursing home) that is licensed by a state or political subdivision to care for persons in your condition. How to fill out an amended tax return form   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. How to fill out an amended tax return form Exception to ownership test for property acquired in a like-kind exchange. How to fill out an amended tax return form   You must have owned your main home for at least 5 years to qualify for the exclusion if you acquired your main home in a like-kind exchange. How to fill out an amended tax return form This special 5-year ownership rule continues to apply to a home you acquired in a like-kind exchange and gave to another person. How to fill out an amended tax return form A like-kind exchange is an exchange of property held for productive use in a trade or business or for investment. How to fill out an amended tax return form See Publication 523 for more information. How to fill out an amended tax return form Period of nonqualified use. How to fill out an amended tax return form   Generally, the gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gain is allocated to periods of nonqualified use. How to fill out an amended tax return form Nonqualified use is any period after December 31, 2008, during which the property is not used as the main home. How to fill out an amended tax return form See Publication 523 for more information. How to fill out an amended tax return form Married Persons In the special situations discussed below, if you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use test, you can exclude up to $250,000 of gain. How to fill out an amended tax return form However, see Special rules for joint returns , next. How to fill out an amended tax return form Special rules for joint returns. How to fill out an amended tax return form   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. How to fill out an amended tax return form You are married and file a joint return for the year. How to fill out an amended tax return form Either you or your spouse meets the ownership test. How to fill out an amended tax return form Both you and your spouse meet the use test. How to fill out an amended tax return form During the 2-year period ending on the date of the sale, neither you nor your spouse exclude gain from the sale of another home. How to fill out an amended tax return form Sale of home by surviving spouse. How to fill out an amended tax return form   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. How to fill out an amended tax return form   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2013. How to fill out an amended tax return form The sale or exchange took place no more than 2 years after the date of death of your spouse. How to fill out an amended tax return form You have not remarried. How to fill out an amended tax return form You and your spouse met the use test at the time of your spouse's death. How to fill out an amended tax return form You or your spouse met the ownership test at the time of your spouse's death. How to fill out an amended tax return form Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. How to fill out an amended tax return form Home transferred from spouse. How to fill out an amended tax return form   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. How to fill out an amended tax return form Use of home after divorce. How to fill out an amended tax return form   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. How to fill out an amended tax return form Business Use or Rental of Home You may be able to exclude gain from the sale of a home that you have used for business or to produce rental income. How to fill out an amended tax return form However, you must meet the ownership and use tests. How to fill out an amended tax return form See Publication 523 for more information. How to fill out an amended tax return form Depreciation after May 6, 1997. How to fill out an amended tax return form   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. How to fill out an amended tax return form See Publication 523 for more information. How to fill out an amended tax return form Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and you do not qualify to exclude all of it, You have a gain and you choose not to exclude it, or You received Form 1099-S. How to fill out an amended tax return form If you have a gain that you cannot or choose not to exclude, if you received a Form 1099-S, or if you have a deductible loss, report the sale on your tax return. How to fill out an amended tax return form Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. How to fill out an amended tax return form If you used your home for business or to produce rental income, you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. How to fill out an amended tax return form See Publication 523 for more information. How to fill out an amended tax return form Reverse Mortgages A revers