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Turbotax Military Discount

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Turbotax Military Discount

Turbotax military discount Publication 575 - Main Content Table of Contents General InformationPension. Turbotax military discount Annuity. Turbotax military discount Qualified employee plan. Turbotax military discount Qualified employee annuity. Turbotax military discount Designated Roth account. Turbotax military discount Tax-sheltered annuity plan. Turbotax military discount Fixed-period annuities. Turbotax military discount Annuities for a single life. Turbotax military discount Joint and survivor annuities. Turbotax military discount Variable annuities. Turbotax military discount Disability pensions. Turbotax military discount Variable Annuities Section 457 Deferred Compensation Plans Disability Pensions Insurance Premiums for Retired Public Safety Officers Railroad Retirement Benefits Withholding Tax and Estimated Tax Cost (Investment in the Contract)Foreign employment contributions while a nonresident alien. Turbotax military discount Taxation of Periodic PaymentsPeriod of participation. Turbotax military discount Fully Taxable Payments Partly Taxable Payments Taxation of Nonperiodic PaymentsFiguring the Taxable Amount Loans Treated as Distributions Transfers of Annuity Contracts Lump-Sum Distributions RolloversExceptions. Turbotax military discount No tax withheld. Turbotax military discount Partial rollovers. Turbotax military discount Frozen deposits. Turbotax military discount Reasonable period of time. Turbotax military discount 20% Mandatory withholding. Turbotax military discount How to report. Turbotax military discount How to report. Turbotax military discount Special rule for Roth IRAs and designated Roth accounts. Turbotax military discount Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and BeneficiariesGuaranteed payments. Turbotax military discount How To Get Tax HelpLow Income Taxpayer Clinics General Information Definitions. Turbotax military discount   Some of the terms used in this publication are defined in the following paragraphs. Turbotax military discount Pension. Turbotax military discount   A pension is generally a series of definitely determinable payments made to you after you retire from work. Turbotax military discount Pension payments are made regularly and are based on such factors as years of service and prior compensation. Turbotax military discount Annuity. Turbotax military discount   An annuity is a series of payments under a contract made at regular intervals over a period of more than one full year. Turbotax military discount They can be either fixed (under which you receive a definite amount) or variable (not fixed). Turbotax military discount You can buy the contract alone or with the help of your employer. Turbotax military discount Qualified employee plan. Turbotax military discount   A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries and that meets Internal Revenue Code requirements. Turbotax military discount It qualifies for special tax benefits, such as tax deferral for employer contributions and capital gain treatment or the 10-year tax option for lump-sum distributions (if participants qualify). Turbotax military discount To determine whether your plan is a qualified plan, check with your employer or the plan administrator. Turbotax military discount Qualified employee annuity. Turbotax military discount   A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. Turbotax military discount Designated Roth account. Turbotax military discount   A designated Roth account is a separate account created under a qualified Roth contribution program to which participants may elect to have part or all of their elective deferrals to a 401(k), 403(b), or 457(b) plan designated as Roth contributions. Turbotax military discount Elective deferrals that are designated as Roth contributions are included in your income. Turbotax military discount However, qualified distributions (explained later) are not included in your income. Turbotax military discount You should check with your plan administrator to determine if your plan will accept designated Roth contributions. Turbotax military discount Tax-sheltered annuity plan. Turbotax military discount   A tax-sheltered annuity plan (often referred to as a 403(b) plan or a tax-deferred annuity plan) is a retirement plan for employees of public schools and certain tax-exempt organizations. Turbotax military discount Generally, a tax-sheltered annuity plan provides retirement benefits by purchasing annuity contracts for its participants. Turbotax military discount Types of pensions and annuities. Turbotax military discount   Pensions and annuities include the following types. Turbotax military discount Fixed-period annuities. Turbotax military discount   You receive definite amounts at regular intervals for a specified length of time. Turbotax military discount Annuities for a single life. Turbotax military discount   You receive definite amounts at regular intervals for life. Turbotax military discount The payments end at death. Turbotax military discount Joint and survivor annuities. Turbotax military discount   The first annuitant receives a definite amount at regular intervals for life. Turbotax military discount After he or she dies, a second annuitant receives a definite amount at regular intervals for life. Turbotax military discount The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. Turbotax military discount Variable annuities. Turbotax military discount   You receive payments that may vary in amount for a specified length of time or for life. Turbotax military discount The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds, cost-of-living indexes, or earnings from a mutual fund. Turbotax military discount Disability pensions. Turbotax military discount   You receive disability payments because you retired on disability and have not reached minimum retirement age. Turbotax military discount More than one program. Turbotax military discount   You may receive employee plan benefits from more than one program under a single trust or plan of your employer. Turbotax military discount If you participate in more than one program, you may have to treat each as a separate pension or annuity contract, depending upon the facts in each case. Turbotax military discount Also, you may be considered to have received more than one pension or annuity. Turbotax military discount Your former employer or the plan administrator should be able to tell you if you have more than one contract. Turbotax military discount Example. Turbotax military discount Your employer set up a noncontributory profit-sharing plan for its employees. Turbotax military discount The plan provides that the amount held in the account of each participant will be paid when that participant retires. Turbotax military discount Your employer also set up a contributory defined benefit pension plan for its employees providing for the payment of a lifetime pension to each participant after retirement. Turbotax military discount The amount of any distribution from the profit-sharing plan depends on the contributions (including allocated forfeitures) made for the participant and the earnings from those contributions. Turbotax military discount Under the pension plan, however, a formula determines the amount of the pension benefits. Turbotax military discount The amount of contributions is the amount necessary to provide that pension. Turbotax military discount Each plan is a separate program and a separate contract. Turbotax military discount If you get benefits from these plans, you must account for each separately, even though the benefits from both may be included in the same check. Turbotax military discount Distributions from a designated Roth account are treated separately from other distributions from the plan. Turbotax military discount Qualified domestic relations order (QDRO). Turbotax military discount   A QDRO is a judgment, decree, or order relating to payment of child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent of a participant in a retirement plan. Turbotax military discount The QDRO must contain certain specific information, such as the name and last known mailing address of the participant and each alternate payee, and the amount or percentage of the participant's benefits to be paid to each alternate payee. Turbotax military discount A QDRO may not award an amount or form of benefit that is not available under the plan. Turbotax military discount   A spouse or former spouse who receives part of the benefits from a retirement plan under a QDRO reports the payments received as if he or she were a plan participant. Turbotax military discount The spouse or former spouse is allocated a share of the participant's cost (investment in the contract) equal to the cost times a fraction. Turbotax military discount The numerator of the fraction is the present value of the benefits payable to the spouse or former spouse. Turbotax military discount The denominator is the present value of all benefits payable to the participant. Turbotax military discount   A distribution that is paid to a child or other dependent under a QDRO is taxed to the plan participant. Turbotax military discount Variable Annuities The tax rules in this publication apply both to annuities that provide fixed payments and to annuities that provide payments that vary in amount based on investment results or other factors. Turbotax military discount For example, they apply to commercial variable annuity contracts, whether bought by an employee retirement plan for its participants or bought directly from the issuer by an individual investor. Turbotax military discount Under these contracts, the owner can generally allocate the purchase payments among several types of investment portfolios or mutual funds and the contract value is determined by the performance of those investments. Turbotax military discount The earnings are not taxed until distributed either in a withdrawal or in annuity payments. Turbotax military discount The taxable part of a distribution is treated as ordinary income. Turbotax military discount Net investment income tax. Turbotax military discount   Beginning in 2013, annuities under a nonqualified plan are included in calculating your net investment income for the net investment income tax (NIIT). Turbotax military discount For information see the Instructions for Form 8960, Net Investment Income Tax — Individuals, Estates and Trusts. Turbotax military discount For information on the tax treatment of a transfer or exchange of a variable annuity contract, see Transfers of Annuity Contracts under Taxation of Nonperiodic Payments, later. Turbotax military discount Withdrawals. Turbotax military discount   If you withdraw funds before your annuity starting date and your annuity is under a qualified retirement plan, a ratable part of the amount withdrawn is tax free. Turbotax military discount The tax-free part is based on the ratio of your cost (investment in the contract) to your account balance under the plan. Turbotax military discount   If your annuity is under a nonqualified plan (including a contract you bought directly from the issuer), the amount withdrawn is allocated first to earnings (the taxable part) and then to your cost (the tax-free part). Turbotax military discount However, if you bought your annuity contract before August 14, 1982, a different allocation applies to the investment before that date and the earnings on that investment. Turbotax military discount To the extent the amount withdrawn does not exceed that investment and earnings, it is allocated first to your cost (the tax-free part) and then to earnings (the taxable part). Turbotax military discount   If you withdraw funds (other than as an annuity) on or after your annuity starting date, the entire amount withdrawn is generally taxable. Turbotax military discount   The amount you receive in a full surrender of your annuity contract at any time is tax free to the extent of any cost that you have not previously recovered tax free. Turbotax military discount The rest is taxable. Turbotax military discount   For more information on the tax treatment of withdrawals, see Taxation of Nonperiodic Payments , later. Turbotax military discount If you withdraw funds from your annuity before you reach age 59½, also see Tax on Early Distributions under Special Additional Taxes, later. Turbotax military discount Annuity payments. Turbotax military discount   If you receive annuity payments under a variable annuity plan or contract, you recover your cost tax free under either the Simplified Method or the General Rule, as explained under Taxation of Periodic Payments , later. Turbotax military discount For a variable annuity paid under a qualified plan, you generally must use the Simplified Method. Turbotax military discount For a variable annuity paid under a nonqualified plan (including a contract you bought directly from the issuer), you must use a special computation under the General Rule. Turbotax military discount For more information, see Variable annuities in Publication 939 under Computation Under the General Rule. Turbotax military discount Death benefits. Turbotax military discount    If you receive a single-sum distribution from a variable annuity contract because of the death of the owner or annuitant, the distribution is generally taxable only to the extent it is more than the unrecovered cost of the contract. Turbotax military discount If you choose to receive an annuity, the payments are subject to tax as described above. Turbotax military discount If the contract provides a joint and survivor annuity and the primary annuitant had received annuity payments before death, you figure the tax-free part of annuity payments you receive as the survivor in the same way the primary annuitant did. Turbotax military discount See Survivors and Beneficiaries , later. Turbotax military discount Section 457 Deferred Compensation Plans If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan. Turbotax military discount If your plan is an eligible plan, you are not taxed currently on pay that is deferred under the plan or on any earnings from the plan's investment of the deferred pay. Turbotax military discount You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. Turbotax military discount You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. Turbotax military discount Your 457(b) plan may have a designated Roth account option. Turbotax military discount If so, you may be able to roll over amounts to the designated Roth account or make contributions. Turbotax military discount Elective deferrals to a designated Roth account are included in your income. Turbotax military discount Qualified distributions (explained later) are not included in your income. Turbotax military discount See the Designated Roth accounts discussion under Taxation of Periodic Payments, later. Turbotax military discount This publication covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. Turbotax military discount For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525. Turbotax military discount Is your plan eligible?   To find out if your plan is an eligible plan, check with your employer. Turbotax military discount Plans that are not eligible section 457 plans include the following: Bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plans. Turbotax military discount Nonelective deferred compensation plans for nonemployees (independent contractors). Turbotax military discount Deferred compensation plans maintained by churches. Turbotax military discount Length of service award plans for bona fide volunteer firefighters and emergency medical personnel. Turbotax military discount An exception applies if the total amount paid to a volunteer exceeds $3,000 for any year of service. Turbotax military discount Disability Pensions If you retired on disability, you generally must include in income any disability pension you receive under a plan that is paid for by your employer. Turbotax military discount 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. Turbotax military discount Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Turbotax military discount You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Turbotax military discount For information on this credit, see Publication 524. Turbotax military discount Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Turbotax military discount Report the payments on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. Turbotax military discount Disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies) are not included in income. Turbotax military discount For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Turbotax military discount 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. Turbotax military discount The premiums can be for coverage for you, your spouse, or dependents. Turbotax military discount The distribution must be made directly from the plan to the insurance provider. Turbotax military discount You can exclude from income the smaller of the amount of the insurance premiums or $3,000. Turbotax military discount You can only make this election for amounts that would otherwise be included in your income. Turbotax military discount The amount excluded from your income cannot be used to claim a medical expense deduction. Turbotax military discount An eligible retirement plan is a governmental plan that is: a qualified trust, a section 403(a) plan, a section 403(b) annuity, or a section 457(b) plan. Turbotax military discount If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. Turbotax military discount The amount shown in box 2a of Form 1099-R does not reflect this exclusion. Turbotax military discount Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Turbotax military discount Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Turbotax military discount Enter “PSO” next to the appropriate line on which you report the taxable amount. Turbotax military discount If you are retired on disability and reporting your disability pension on line 7 of Form 1040 or Form 1040A, or line 8 of Form 1040NR, include only the taxable amount on that line and enter “PSO” and the amount excluded on the dotted line next to the applicable line. Turbotax military discount Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. Turbotax military discount These categories are treated differently for income tax purposes. Turbotax military discount 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. Turbotax military discount This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and you treat it for tax purposes like social security benefits. Turbotax military discount If you received, repaid, or had tax withheld from the SSEB portion of tier 1 benefits during 2013, you will receive Form RRB-1099, Payments by the Railroad Retirement Board (or Form RRB-1042S, Statement for Nonresident Alien Recipients of Payments by the Railroad Retirement Board, if you are a nonresident alien) from the U. Turbotax military discount S. Turbotax military discount Railroad Retirement Board (RRB). Turbotax military discount For more information about the tax treatment of the SSEB portion of tier 1 benefits and Forms RRB-1099 and RRB-1042S, see Publication 915. Turbotax military discount The second category contains the rest of the tier 1 railroad retirement benefits, called the non-social security equivalent benefit (NSSEB). Turbotax military discount It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. Turbotax military discount Treat this category of benefits, shown on Form RRB-1099-R, as an amount received from a qualified employee plan. Turbotax military discount 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. Turbotax military discount (The NSSEB and tier 2 benefits, less certain repayments, are combined into one amount called the Contributory Amount Paid on Form RRB-1099-R. Turbotax military discount ) Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. Turbotax military discount See Taxation of Periodic Payments , later, for information on how to report your benefits and how to recover the employee contributions tax free. Turbotax military discount Form RRB-1099-R is used for U. Turbotax military discount S. Turbotax military discount citizens, resident aliens, and nonresident aliens. Turbotax military discount Nonresident aliens. Turbotax military discount   A nonresident alien is an individual who is not a citizen or a resident alien of the United States. Turbotax military discount Nonresident aliens are subject to mandatory U. Turbotax military discount S. Turbotax military discount tax withholding unless exempt under a tax treaty between the United States and their country of legal residency. Turbotax military discount A tax treaty exemption may reduce or eliminate tax withholding from railroad retirement benefits. Turbotax military discount See Tax withholding next for more information. Turbotax military discount   If you are a nonresident alien and your tax withholding rate changed or your country of legal residence changed during the year, you may receive more than one Form RRB-1042S or Form RRB-1099-R. Turbotax military discount To determine your total benefits paid or repaid and total tax withheld for the year, you should add the amounts shown on all forms you received for that year. Turbotax military discount For information on filing requirements for aliens, see Publication 519, U. Turbotax military discount S. Turbotax military discount Tax Guide for Aliens. Turbotax military discount For information on tax treaties between the United States and other countries that may reduce or eliminate U. Turbotax military discount S. Turbotax military discount tax on your benefits, see Publication 901, U. Turbotax military discount S. Turbotax military discount Tax Treaties. Turbotax military discount Tax withholding. Turbotax military discount   To request or change your income tax withholding from SSEB payments, U. Turbotax military discount S. Turbotax military discount citizens should contact the IRS for Form W-4V, Voluntary Withholding Request, and file it with the RRB. Turbotax military discount To elect, revoke, or change your income tax withholding from NSSEB, tier 2, VDB, and supplemental annuity payments received, use Form RRB W-4P, Withholding Certificate for Railroad Retirement Payments. Turbotax military discount If you are a nonresident alien or a U. Turbotax military discount S. Turbotax military discount citizen living abroad, you should provide Form RRB-1001, Nonresident Questionnaire, to the RRB to furnish citizenship and residency information and to claim any treaty exemption from U. Turbotax military discount S. Turbotax military discount tax withholding. Turbotax military discount Nonresident U. Turbotax military discount S. Turbotax military discount citizens cannot elect to be exempt from withholding on payments delivered outside of the U. Turbotax military discount S. Turbotax military discount Help from the RRB. Turbotax military discount   To request an RRB form or to get help with questions about an RRB benefit, you should contact your nearest RRB field office if you reside in the United States (call 1-877-772-5772 for the nearest field office) or U. Turbotax military discount S. Turbotax military discount consulate/Embassy if you reside outside the United States. Turbotax military discount You can visit the RRB on the Internet at www. Turbotax military discount rrb. Turbotax military discount gov. Turbotax military discount Form RRB-1099-R. Turbotax military discount   The following discussion explains the items shown on Form RRB-1099-R. Turbotax military discount The amounts shown on this form are before any deduction for: Federal income tax withholding, Medicare premiums, Legal process garnishment payments, Recovery of a prior year overpayment of an NSSEB, tier 2 benefit, VDB, or supplemental annuity benefit, or Recovery of Railroad Unemployment Insurance Act benefits received while awaiting payment of your railroad retirement annuity. Turbotax military discount   The amounts shown on this form are after any offset for: Social Security benefits, Age reduction, Public Service pensions or public disability benefits, Dual railroad retirement entitlement under another RRB claim number, Work deductions, Legal process partition deductions, Actuarial adjustment, Annuity waiver, or Recovery of a current-year overpayment of NSSEB, tier 2, VDB, or supplemental annuity benefits. Turbotax military discount   The amounts shown on Form RRB-1099-R do not reflect any special rules, such as capital gain treatment or the special 10-year tax option for lump-sum payments, or tax-free rollovers. Turbotax military discount To determine if any of these rules apply to your benefits, see the discussions about them later. Turbotax military discount   Generally, amounts shown on your Form RRB-1099-R are considered a normal distribution. Turbotax military discount Use distribution code “7” if you are asked for a distribution code. Turbotax military discount Distribution codes are not shown on Form RRB-1099-R. Turbotax military discount   There are three copies of this form. Turbotax military discount Copy B is to be included with your income tax return if federal income tax is withheld. Turbotax military discount Copy C is for your own records. Turbotax military discount Copy 2 is filed with your state, city, or local income tax return, when required. Turbotax military discount See the illustrated Copy B (Form RRB-1099-R) above. Turbotax military discount       Each beneficiary will receive his or her own Form RRB-1099-R. Turbotax military discount If you receive benefits on more than one railroad retirement record, you may get more than one Form RRB-1099-R. Turbotax military discount So that you get your form timely, make sure the RRB always has your current mailing address. Turbotax military discount Please click here for the text description of the image. Turbotax military discount Form RRB-1099-R Box 1—Claim Number and Payee Code. Turbotax military discount   Your claim number is a six- or nine-digit number preceded by an alphabetical prefix. Turbotax military discount This is the number under which the RRB paid your benefits. Turbotax military discount Your payee code follows your claim number and is the last number in this box. Turbotax military discount It is used by the RRB to identify you under your claim number. Turbotax military discount In all your correspondence with the RRB, be sure to use the claim number and payee code shown in this box. Turbotax military discount Box 2—Recipient's Identification Number. Turbotax military discount   This is the recipient's U. Turbotax military discount S. Turbotax military discount taxpayer identification number. Turbotax military discount It is the social security number (SSN), individual taxpayer identification number (ITIN), or employer identification number (EIN), if known, for the person or estate listed as the recipient. Turbotax military discount If you are a resident or nonresident alien who must furnish a taxpayer identification number to the IRS and are not eligible to obtain an SSN, use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN. Turbotax military discount The Instructions for Form W-7 explain how and when to apply. Turbotax military discount Box 3—Employee Contributions. Turbotax military discount   This is the amount of taxes withheld from the railroad employee's earnings that exceeds the amount of taxes that would have been withheld had the earnings been covered under the social security system. Turbotax military discount This amount is the employee's cost that you use to figure the tax-free part of the NSSEB and tier 2 benefit you received (the amount shown in box 4). Turbotax military discount (For information on how to figure the tax-free part, see Partly Taxable Payments under Taxation of Periodic Payments, later. Turbotax military discount ) The amount shown is the total employee contribution amount, not reduced by any amounts that the RRB calculated as previously recovered. Turbotax military discount It is the latest amount reported for 2013 and may have increased or decreased from a previous Form RRB-1099-R. Turbotax military discount If this amount has changed, the change is retroactive. Turbotax military discount You may need to refigure the tax-free part of your NSSEB/tier 2 benefit for 2013 and prior tax years. Turbotax military discount If this box is blank, it means that the amount of your NSSEB and tier 2 payments shown in box 4 is fully taxable. Turbotax military discount    If you had a previous annuity entitlement that ended and you are figuring the tax-free part of your NSSEB/tier 2 benefit for your current annuity entitlement, you should contact the RRB for confirmation of your correct employee contribution amount. Turbotax military discount Box 4—Contributory Amount Paid. Turbotax military discount   This is the gross amount of the NSSEB and tier 2 benefit you received in 2013, less any 2013 benefits you repaid in 2013. Turbotax military discount (Any benefits you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. Turbotax military discount ) This amount is the total contributory pension paid in 2013. Turbotax military discount It may be partly taxable and partly tax free or fully taxable. Turbotax military discount If you determine you are eligible to compute a tax-free part as explained later in Partly Taxable Payments under Taxation of Periodic Payments, use the latest reported employee contribution amount shown in box 3 as the cost. Turbotax military discount Box 5—Vested Dual Benefit. Turbotax military discount   This is the gross amount of vested dual benefit (VDB) payments paid in 2013, less any 2013 VDB payments you repaid in 2013. Turbotax military discount It is fully taxable. Turbotax military discount VDB payments you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. Turbotax military discount Note. Turbotax military discount The amounts shown in boxes 4 and 5 may represent payments for 2013 and/or other years after 1983. Turbotax military discount Box 6—Supplemental Annuity. Turbotax military discount   This is the gross amount of supplemental annuity benefits paid in 2013, less any 2013 supplemental annuity benefits you repaid in 2013. Turbotax military discount It is fully taxable. Turbotax military discount Supplemental annuity benefits you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. Turbotax military discount Box 7—Total Gross Paid. Turbotax military discount   This is the sum of boxes 4, 5, and 6. Turbotax military discount The amount represents the total pension paid in 2013. Turbotax military discount Include this amount on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Turbotax military discount Box 8—Repayments. Turbotax military discount   This amount represents any NSSEB, tier 2 benefit, VDB, and supplemental annuity benefit you repaid to the RRB in 2013 for years before 2013 or for unknown years. Turbotax military discount The amount shown in this box has not been deducted from the amounts shown in boxes 4, 5, and 6. Turbotax military discount It only includes repayments of benefits that were taxable to you. Turbotax military discount This means it only includes repayments in 2013 of NSSEB benefits paid after 1985, tier 2 and VDB benefits paid after 1983, and supplemental annuity benefits paid in any year. Turbotax military discount If you included the benefits in your income in the year you received them, you may be able to deduct the repaid amount. Turbotax military discount For more information about repayments, see Repayment of benefits received in an earlier year , later. Turbotax military discount    You may have repaid an overpayment of benefits by returning a payment, by making a payment, or by having an amount withheld from your railroad retirement annuity payment. Turbotax military discount Box 9—Federal Income Tax Withheld. Turbotax military discount   This is the total federal income tax withheld from your NSSEB, tier 2 benefit, VDB, and supplemental annuity benefit. Turbotax military discount Include this on your income tax return as tax withheld. Turbotax military discount If you are a nonresident alien and your tax withholding rate and/or country of legal residence changed during 2013, you will receive more than one Form RRB-1099-R for 2013. Turbotax military discount Determine the total amount of U. Turbotax military discount S. Turbotax military discount federal income tax withheld from your 2013 RRB NSSEB, tier 2, VDB, and supplemental annuity payments by adding the amounts in box 9 of all original 2013 Forms RRB-1099-R, or the latest corrected or duplicate Forms RRB-1099-R you receive. Turbotax military discount Box 10—Rate of Tax. Turbotax military discount   If you are taxed as a U. Turbotax military discount S. Turbotax military discount citizen or resident alien, this box does not apply to you. Turbotax military discount If you are a nonresident alien, an entry in this box indicates the rate at which tax was withheld on the NSSEB, tier 2, VDB, and supplemental annuity payments that were paid to you in 2013. Turbotax military discount If you are a nonresident alien whose tax was withheld at more than one rate during 2013, you will receive a separate Form RRB-1099-R for each rate change during 2013. Turbotax military discount Box 11—Country. Turbotax military discount   If you are taxed as a U. Turbotax military discount S. Turbotax military discount citizen or resident alien, this box does not apply to you. Turbotax military discount If you are a nonresident alien, an entry in this box indicates the country of which you were a resident for tax purposes at the time you received railroad retirement payments in 2013. Turbotax military discount If you are a nonresident alien who was a resident of more than one country during 2013, you will receive a separate Form RRB-1099-R for each country of residence during 2013. Turbotax military discount Box 12—Medicare Premium Total. Turbotax military discount   This is for information purposes only. Turbotax military discount The amount shown in this box represents the total amount of Part B Medicare premiums deducted from your railroad retirement annuity payments in 2013. Turbotax military discount Medicare premium refunds are not included in the Medicare total. Turbotax military discount The Medicare total is normally shown on Form RRB-1099 (if you are a citizen or resident alien of the United States) or Form RRB-1042S (if you are a nonresident alien). Turbotax military discount However, if Form RRB-1099 or Form RRB-1042S is not required for 2013, then this total will be shown on Form RRB-1099-R. Turbotax military discount If your Medicare premiums were deducted from your social security benefits, paid by a third party, refunded to you, and/or you paid the premiums by direct billing, your Medicare total will not be shown in this box. Turbotax military discount Repayment of benefits received in an earlier year. Turbotax military discount   If you had to repay any railroad retirement benefits that you had included in your income in an earlier year because at that time you thought you had an unrestricted right to it, you can deduct the amount you repaid in the year in which you repaid it. Turbotax military discount   If you repaid $3,000 or less in 2013, deduct it on Schedule A (Form 1040), line 23. Turbotax military discount The 2%-of-adjusted-gross-income limit applies to this deduction. Turbotax military discount You cannot take this deduction if you file Form 1040A. Turbotax military discount    If you repaid more than $3,000 in 2013, you can either take a deduction for the amount repaid on Schedule A (Form 1040), line 28 or you can take a credit against your tax. Turbotax military discount For more information, see Repayments in Publication 525. Turbotax military discount Withholding Tax and Estimated Tax Your retirement plan distributions are subject to federal income tax withholding. Turbotax military discount However, you can choose not to have tax withheld on payments you receive unless they are eligible rollover distributions. Turbotax military discount (These are distributions, described later under Rollovers, that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. Turbotax military discount ) If you choose not to have tax withheld or if you do not have enough tax withheld, you may have to make estimated tax payments. Turbotax military discount See Estimated tax , later. Turbotax military discount The withholding rules apply to the taxable part of payments you receive from: An employer pension, annuity, profit-sharing, or stock bonus plan, Any other deferred compensation plan, A traditional individual retirement arrangement (IRA), or A commercial annuity. Turbotax military discount For this purpose, a commercial annuity means an annuity, endowment, or life insurance contract issued by an insurance company. Turbotax military discount There will be no withholding on any part of a distribution where it is reasonable to believe that it will not be includible in gross income. Turbotax military discount Choosing no withholding. Turbotax military discount   You can choose not to have income tax withheld from retirement plan payments unless they are eligible rollover distributions. Turbotax military discount You can make this choice on Form W-4P for periodic and nonperiodic payments. Turbotax military discount This choice generally remains in effect until you revoke it. Turbotax military discount   The payer will ignore your choice not to have tax withheld if: You do not give the payer your social security number (in the required manner), or The IRS notifies the payer, before the payment is made, that you gave an incorrect social security number. Turbotax military discount   To choose not to have tax withheld, a U. Turbotax military discount S. Turbotax military discount citizen or resident alien must give the payer a home address in the United States or its possessions. Turbotax military discount Without that address, the payer must withhold tax. Turbotax military discount For example, the payer has to withhold tax if the recipient has provided a U. Turbotax military discount S. Turbotax military discount address for a nominee, trustee, or agent to whom the benefits are delivered, but has not provided his or her own U. Turbotax military discount S. Turbotax military discount home address. Turbotax military discount   If you do not give the payer a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to the payer that you are not a U. Turbotax military discount S. Turbotax military discount citizen, a U. Turbotax military discount S. Turbotax military discount resident alien, or someone who left the country to avoid tax. Turbotax military discount But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. Turbotax military discount This 30% rate will not apply if you are exempt or subject to a reduced rate by treaty. Turbotax military discount For details, get Publication 519. Turbotax military discount Periodic payments. Turbotax military discount   Unless you choose no withholding, your annuity or similar periodic payments (other than eligible rollover distributions) will be treated like wages for withholding purposes. Turbotax military discount Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). Turbotax military discount You should give the payer a completed withholding certificate (Form W-4P or a similar form provided by the payer). Turbotax military discount If you do not, tax will be withheld as if you were married and claiming three withholding allowances. Turbotax military discount   Tax will be withheld as if you were single and were claiming no withholding allowances if: You do not give the payer your social security number (in the required manner), or The IRS notifies the payer (before any payment is made) that you gave an incorrect social security number. Turbotax military discount   You must file a new withholding certificate to change the amount of withholding. Turbotax military discount Nonperiodic distributions. Turbotax military discount    Unless you choose no withholding, the withholding rate for a nonperiodic distribution (a payment other than a periodic payment) that is not an eligible rollover distribution is 10% of the distribution. Turbotax military discount You can also ask the payer to withhold an additional amount using Form W-4P. Turbotax military discount The part of any loan treated as a distribution (except an offset amount to repay the loan), explained later, is subject to withholding under this rule. Turbotax military discount Eligible rollover distribution. Turbotax military discount    If you receive an eligible rollover distribution, 20% of it generally will be withheld for income tax. Turbotax military discount You cannot choose not to have tax withheld from an eligible rollover distribution. Turbotax military discount However, tax will not be withheld if you have the plan administrator pay the eligible rollover distribution directly to another qualified plan or an IRA in a direct rollover. Turbotax military discount For more information about eligible rollover distributions, see Rollovers , later. Turbotax military discount Estimated tax. Turbotax military discount   Your estimated tax is the total of your expected income tax, self-employment tax, and certain other taxes for the year, minus your expected credits and withheld tax. Turbotax military discount Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax (after subtracting your withholding and credits) and you expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your 2014 return, or 100% of the tax shown on your 2013 return. Turbotax military discount If your adjusted gross income for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above. Turbotax military discount For more information, get Publication 505, Tax Withholding and Estimated Tax. Turbotax military discount In figuring your withholding or estimated tax, remember that a part of your monthly social security or equivalent tier 1 railroad retirement benefits may be taxable. Turbotax military discount See Publication 915. Turbotax military discount You can choose to have income tax withheld from those benefits. Turbotax military discount Use Form W-4V to make this choice. Turbotax military discount Cost (Investment in the Contract) Distributions from your pension or annuity plan may include amounts treated as a recovery of your cost (investment in the contract). Turbotax military discount If any part of a distribution is treated as a recovery of your cost under the rules explained in this publication, that part is tax free. Turbotax military discount Therefore, the first step in figuring how much of a distribution is taxable is to determine the cost of your pension or annuity. Turbotax military discount In general, your cost is your net investment in the contract as of the annuity starting date (or the date of the distribution, if earlier). Turbotax military discount To find this amount, you must first figure the total premiums, contributions, or other amounts you paid. Turbotax military discount This includes the amounts your employer contributed that were taxable to you when paid. Turbotax military discount (However, see Foreign employment contributions , later. Turbotax military discount ) It does not include amounts withheld from your pay on a tax-deferred basis (money that was taken out of your gross pay before taxes were deducted). Turbotax military discount It also does not include amounts you contributed for health and accident benefits (including any additional premiums paid for double indemnity or disability benefits). Turbotax military discount From this total cost you must subtract the following amounts. Turbotax military discount Any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income and that you received by the later of the annuity starting date or the date on which you received your first payment. Turbotax military discount Any other tax-free amounts you received under the contract or plan by the later of the dates in (1). Turbotax military discount If you must use the Simplified Method for your annuity payments, the tax-free part of any single-sum payment received in connection with the start of the annuity payments, regardless of when you received it. Turbotax military discount (See Simplified Method , later, for information on its required use. Turbotax military discount ) If you use the General Rule for your annuity payments, the value of the refund feature in your annuity contract. Turbotax military discount (See General Rule , later, for information on its use. Turbotax military discount ) Your annuity contract has a refund feature if the annuity payments are for your life (or the lives of you and your survivor) and payments in the nature of a refund of the annuity's cost will be made to your beneficiary or estate if all annuitants die before a stated amount or a stated number of payments are made. Turbotax military discount For more information, see Publication 939. Turbotax military discount The tax treatment of the items described in (1) through (3) is discussed later under Taxation of Nonperiodic Payments . Turbotax military discount Form 1099-R. Turbotax military discount If you began receiving periodic payments of a life annuity in 2013, the payer should show your total contributions to the plan in box 9b of your 2013 Form 1099-R. Turbotax military discount Annuity starting date defined. Turbotax military discount   Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed. Turbotax military discount Example. Turbotax military discount On January 1, you completed all your payments required under an annuity contract providing for monthly payments starting on August 1 for the period beginning July 1. Turbotax military discount The annuity starting date is July 1. Turbotax military discount This is the date you use in figuring the cost of the contract and selecting the appropriate number from Table 1 for line 3 of the Simplified Method Worksheet. Turbotax military discount Designated Roth accounts. Turbotax military discount   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. Turbotax military discount Your cost will also include any in-plan Roth rollovers you included in income. Turbotax military discount Foreign employment contributions. Turbotax military discount   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. Turbotax military discount The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (not including the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) but only if the contributions would be excludible from your gross income had they been paid directly to you. Turbotax military discount Foreign employment contributions while a nonresident alien. Turbotax military discount   In determining your cost, special rules apply if you are a U. Turbotax military discount S. Turbotax military discount citizen or resident alien who received distributions in 2013 from a plan to which contributions were made while you were a nonresident alien. Turbotax military discount Your contributions and your employer's contributions are not included in your cost if the contribution: Was made based on compensation which was for services performed outside the United States while you were a nonresident alien, and Was not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if paid as cash compensation when the services were performed. Turbotax military discount Taxation of Periodic Payments This section explains how the periodic payments you receive from a pension or annuity plan are taxed. Turbotax military discount Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). Turbotax military discount These payments are also known as amounts received as an annuity. Turbotax military discount If you receive an amount from your plan that is not a periodic payment, see Taxation of Nonperiodic Payments , later. Turbotax military discount In general, you can recover the cost of your pension or annuity tax free over the period you are to receive the payments. Turbotax military discount The amount of each payment that is more than the part that represents your cost is taxable (however, see Insurance Premiums for Retired Public Safety Officers , earlier). Turbotax military discount Designated Roth accounts. Turbotax military discount   If you receive a qualified distribution from a designated Roth account, the distribution is not included in your gross income. Turbotax military discount This applies to both your cost in the account and income earned on that account. Turbotax military discount A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. Turbotax military discount   If the distribution is not a qualified distribution, the rules discussed in this section apply. Turbotax military discount The designated Roth account is treated as a separate contract. Turbotax military discount Period of participation. Turbotax military discount   The 5-tax-year period of participation is the 5-tax-year period beginning with the first tax year for which the participant made a designated Roth contribution to the plan. Turbotax military discount Therefore, for designated Roth contributions made for 2013, the first year for which a qualified distribution can be made is 2018. Turbotax military discount   However, if a direct rollover is made to the plan from a designated Roth account under another plan, the 5-tax-year period for the recipient plan begins with the first tax year for which the participant first had designated Roth contributions made to the other plan. Turbotax military discount   Your 401(k), 403(b), or 457(b) plan may permit you to roll over amounts from those plans to a designated Roth account within the same plan. Turbotax military discount This is known as an in-plan Roth rollover. Turbotax military discount For more details, see In-plan Roth rollovers , later. Turbotax military discount Fully Taxable Payments The pension or annuity payments that you receive are fully taxable if you have no cost in the contract because any of the following situations applies to you (however, see Insurance Premiums for Retired Public Safety Officers , earlier). Turbotax military discount You did not pay anything or are not considered to have paid anything for your pension or annuity. Turbotax military discount Amounts withheld from your pay on a tax-deferred basis are not considered part of the cost of the pension or annuity payment. Turbotax military discount Your employer did not withhold contributions from your salary. Turbotax military discount You got back all of your contributions tax free in prior years (however, see Exclusion not limited to cost under Partly Taxable Payments, later). Turbotax military discount Report the total amount you got on Form 1040, line 16b; Form 1040A, line 12b; or on Form 1040NR, line 17b. Turbotax military discount You should make no entry on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Turbotax military discount Deductible voluntary employee contributions. Turbotax military discount   Distributions you receive that are based on your accumulated deductible voluntary employee contributions are generally fully taxable in the year distributed to you. Turbotax military discount Accumulated deductible voluntary employee contributions include net earnings on the contributions. Turbotax military discount If distributed as part of a lump sum, they do not qualify for the 10-year tax option or capital gain treatment, explained later. Turbotax military discount Partly Taxable Payments If you have a cost to recover from your pension or annuity plan (see Cost (Investment in the Contract) , earlier), you can exclude part of each annuity payment from income as a recovery of your cost. Turbotax military discount 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. Turbotax military discount The rest of each payment is taxable (however, see Insurance Premiums for Retired Public Safety Officers , earlier). Turbotax military discount You figure the tax-free part of the payment using one of the following methods. Turbotax military discount Simplified Method. Turbotax military discount 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). Turbotax military discount You cannot use this method if your annuity is paid under a nonqualified plan. Turbotax military discount General Rule. Turbotax military discount You must use this method if your annuity is paid under a nonqualified plan. Turbotax military discount You generally cannot use this method if your annuity is paid under a qualified plan. Turbotax military discount 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. Turbotax military discount If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. Turbotax military discount Qualified plan annuity starting before November 19, 1996. Turbotax military discount   If your annuity is paid under a qualified plan and your annuity starting date (defined earlier under Cost (Investment in the Contract) ) is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the Simplified Method or the General Rule. Turbotax military discount If your annuity starting date is before July 2, 1986, you use the General Rule unless your annuity qualified for the Three-Year Rule. Turbotax military discount If you used the Three-Year Rule (which was repealed for annuities starting after July 1, 1986), your annuity payments are generally now fully taxable. Turbotax military discount Exclusion limit. Turbotax military discount   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. Turbotax military discount Once your annuity starting date is determined, it does not change. Turbotax military discount If you calculate the taxable portion of your annuity payments using the simplified method worksheet, the annuity starting date determines the recovery period for your cost. Turbotax military discount That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. Turbotax military discount Exclusion limited to cost. Turbotax military discount   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a recovery of the cost cannot exceed your total cost. Turbotax military discount 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. Turbotax military discount This deduction is not subject to the 2%-of-adjusted-gross-income limit. Turbotax military discount Example 1. Turbotax military discount Your annuity starting date is after 1986, and you exclude $100 a month ($1,200 a year) under the Simplified Method. Turbotax military discount The total cost of your annuity is $12,000. Turbotax military discount Your exclusion ends when you have recovered your cost tax free, that is, after 10 years (120 months). Turbotax military discount After that, your annuity payments are generally fully taxable. Turbotax military discount Example 2. Turbotax military discount The facts are the same as in Example 1, except you die (with no surviving annuitant) after the eighth year of retirement. Turbotax military discount You have recovered tax free only $9,600 (8 × $1,200) of your cost. Turbotax military discount An itemized deduction for your unrecovered cost of $2,400 ($12,000 – $9,600) can be taken on your final return. Turbotax military discount Exclusion not limited to cost. Turbotax military discount   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Turbotax military discount 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. Turbotax military discount The total exclusion may be more than your cost. Turbotax military discount Simplified Method Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. Turbotax military discount For an annuity that is payable for the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Turbotax military discount For any other annuity, this number is the number of monthly annuity payments under the contract. Turbotax military discount Who must use the Simplified Method. Turbotax military discount   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you meet both of the following conditions. Turbotax military discount You receive your pension or annuity payments from any of the following plans. Turbotax military discount A qualified employee plan. Turbotax military discount A qualified employee annuity. Turbotax military discount A tax-sheltered annuity plan (403(b) plan). Turbotax military discount On your annuity starting date, at least one of the following conditions applies to you. Turbotax military discount You are under age 75. Turbotax military discount You are entitled to less than 5 years of guaranteed payments. Turbotax military discount Guaranteed payments. Turbotax military discount   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. Turbotax military discount 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. Turbotax military discount Annuity starting before November 19, 1996. Turbotax military discount   If your annuity starting date is after July 1, 1986, and before November 19, 1996, and you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. Turbotax military discount You could have chosen to use the Simplified Method if your annuity is payable for your life (or the lives of you and your survivor annuitant) and you met both of the conditions listed earlier under Who must use the Simplified Method . Turbotax military discount Who cannot use the Simplified Method. Turbotax military discount   You cannot use the Simplified Method if you receive your pension or annuity from a nonqualified plan or otherwise do not meet the conditions described in the preceding discussion. Turbotax military discount See General Rule , later. Turbotax military discount How to use the Simplified Method. Turbotax military discount    Complete Worksheet A in the back of this publication to figure your taxable annuity for 2013. Turbotax military discount Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. Turbotax military discount   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. Turbotax military discount How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. Turbotax military discount 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. Turbotax military discount    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. Turbotax military discount Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. Turbotax military discount Single-life annuity. Turbotax military discount   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. Turbotax military discount Enter on line 3 the number shown for your age on your annuity starting date. Turbotax military discount This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Turbotax military discount Multiple-lives annuity. Turbotax military discount   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. Turbotax military discount Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. Turbotax military discount 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. Turbotax military discount 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. Turbotax military discount Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. Turbotax military discount   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Turbotax military discount 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. Turbotax military discount This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Turbotax military discount Fixed-period annuity. Turbotax military discount   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. Turbotax military discount Line 6. Turbotax military discount   The amount on line 6 should include all amounts that could have been recovered in prior years. Turbotax military discount If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. Turbotax military discount Example. Turbotax military discount Bill Smith, age 65, began receiving retirement benefits in 2013 under a joint and survivor annuity. Turbotax military discount Bill's annuity starting date is January 1, 2013. Turbotax military discount The benefits are to be paid for the joint lives of Bill and his wife, Kathy, age 65. Turbotax military discount Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Turbotax military discount 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. Turbotax military discount 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. Turbotax military discount Because his annuity is payable over the lives of more than one annuitant, he uses his and Kathy's combined ages and Table 2 at the bottom of Worksheet A in completing line 3 of the worksheet. Turbotax military discount His completed worksheet is shown later. Turbotax military discount Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. Turbotax military discount Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Turbotax military discount The full amount of any annuity payments received after 310 payments are paid must be included in gross income. Turbotax military discount 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. Turbotax military discount This deduction is not subject to the 2%-of-adjusted-gross-income limit. Turbotax military discount Worksheet A. Turbotax military discount Simplified Method Worksheet for Bill Smith 1. Turbotax military discount Enter the total pension or annuity payments received this year. Turbotax military discount Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Turbotax military discount $14,400 2. Turbotax military discount Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion. Turbotax military discount * See Cost (Investment in the Contract) , earlier 2. Turbotax military discount 31,000   Note. Turbotax military discount 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). Turbotax military discount Otherwise, go to line 3. Turbotax military discount     3. Turbotax military discount Enter the appropriate number from Table 1 below. Turbotax military discount 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. Turbotax military discount 310 4. Turbotax military discount Divide line 2 by the number on line 3 4. Turbotax military discount 100 5. Turbotax military discount Multiply line 4 by the number of months for which this year's payments were made. Turbotax military discount If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Turbotax military discount Otherwise, go to line 6 5. Turbotax military discount 1,200 6. Turbotax military discount Enter any amount previously recovered tax free in years after 1986. Turbotax military discount This is the amount shown on line 10 of your worksheet for last year 6. Turbotax military discount -0- 7. Turbotax military discount Subtract line 6 from line 2 7. Turbotax military discount 31,000 8. Turbotax military discount Enter the smaller of line 5 or line 7 8. Turbotax military discount 1,200 9. Turbotax military discount Taxable amount for year. Turbotax military discount Subtract line 8 from line 1. Turbotax military discount Enter the result, but not less than zero. Turbotax military discount Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Turbotax military discount Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Turbotax military discount If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers , earlier, before entering an amount on your tax return 9. Turbotax military discount $13,200 10. Turbotax military discount Was your annuity starting date before 1987? □ Yes. Turbotax military discount STOP. Turbotax military discount Do not complete the rest of this worksheet. Turbotax military discount  ☑ No. Turbotax military discount Add lines 6 and 8. Turbotax military discount This is the amount you have recovered tax free through 2013. Turbotax military discount You will need this number if you need to fill out this worksheet next year 10. Turbotax military discount 1,200 11. Turbotax military discount Balance of cost to be recovered. Turbotax military discount Subtract line 10 from line 2. Turbotax military discount If zero, you will not have to complete this worksheet next year. Turbotax military discount The payments you receive next year will generally be fully taxable 11. Turbotax military discount $29,800         * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Turbotax military discount           Table 1 for Line 3 Above       AND your annuity starting date was—     IF the age at annuity starting date was. Turbotax military discount . Turbotax military discount . Turbotax military discount BEFORE November 19, 1996, enter on line 3. Turbotax military discount . Turbotax military discount . Turbotax military discount AFTER November 18, 1996, enter on line 3. Turbotax military discount . Turbotax military discount . Turbotax military discount     55 or under 300 360     56-60 260 310     61-65 240 260     66-70 170 210     71 or older 120 160     Table 2 for Line 3 Above     IF the combined ages at  annuity starting date were. Turbotax military discount . Turbotax military discount . Turbotax military discount THEN enter on line 3. Turbotax military discount . Turbotax military discount . Turbotax military discount     110 or under   410     111-120   360     121-130   310     131-140   260     141 or older   210   Multiple annuitants. Turbotax military discount   If you and one or more other annuitants receive payments at the same time, you exclude from each annuity payment a pro rata share of the monthly tax-free amount. Turbotax military discount Figure your share by taking the following steps. Turbotax military discount Complete your worksheet through line 4 to figure the monthly tax-free amount. Turbotax military discount Divide the amount of your monthly payment by the total amount of the monthly payments to all annuitants. Turbotax military discount Multiply the amount on line 4 of your worksheet by the amount figured in (2) above. Turbotax military discount The result is your share of the monthly tax-free amount. Turbotax military discount   Replace the amount on line 4 of the worksheet with the result in (3) above. Turbotax military discount Enter that amount on line 4 of your worksheet each year. Turbotax military discount General Rule Under the General Rule, you determine the tax-free part of each annuity payment based on the ratio of the cost of the contract to the total expected return. Turbotax military discount Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. Turbotax military discount To figure it, you must use life expectancy (actuarial) tables prescribed by the IRS. Turbotax military discount Who must use the General Rule. Turbotax military discount   You must use the General Rule if you receive pension or annuity payments from: A nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or A qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years. Turbotax military discount Annuity starting before November 19, 1996. Turbotax military discount   If your annuity starting date is after July 1, 1986, and before November 19, 1996, you had to use the General Rule for either circumstance just described. Turbotax military discount You also had to use it for any fixed-period annuity. Turbotax military discount If you did not have to use the General Rule, you could have chosen to use it. Turbotax military discount If your annuity starting date is before July 2, 1986, you had to use the General Rule unless you could use the Three-Year Rule. Turbotax military discount   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. Turbotax military discount Who cannot use the General Rule. Turbotax military discount   You cannot use the General Rule if you receive your pension or annuity from a qualified plan and none of the circumstances described in the preceding discussions apply to you. Turbotax military discount See Simplified Method , earlier. Turbotax military discount More information. Turbotax military discount   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. Turbotax military discount Taxation of Nonperiodic Payments This section of the publication explains how any nonperiodic distributions you receive under a pension or annuity plan are taxed. Turbotax military discount Nonperiodic distributions are also known as amounts not received as an annuity. Turbotax military discount They include all payments other than periodic payments and corrective distributions. Turbotax military discount For example, the following items are treated as nonperiodic distributions. Turbotax military discount Cash withdrawals. Turbotax military discount Distributions of current earnings (dividends) on your investment. Turbotax military discount However, do not include these distributions in your income to the extent the insurer keeps them to pay premiums or other consideration for the contract. Turbotax military discount Certain loans. Turbotax military discount See Loans Treated as Distributions , later. Turbotax military discount The value of annuity contracts transferred without full and adequate consideration. Turbotax military discount See Transfers of Annuity Contracts , later. Turbotax military discount Corrective distributions of excess plan contributions. Turbotax military discount   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. Turbotax military discount To correct an excess, your plan may distribute it to you (along with any income earned on the excess). Turbotax military discount Although the plan reports the corrective distributions on Form 1099-R, the distribution is not treated as a nonperiodic distribution from the plan. Turbotax military discount It is not subject to the allocation rules explained in the following discussion, it cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. Turbotax military discount    If your retirement plan made a corrective distribution of excess amounts (excess deferrals, excess contributions, or excess annual additions), your Form 1099-R should have the code “8,” “B,” “P,” or “E” in box 7. Turbotax military discount   For information on plan contribution limits and how to report corrective distributions of excess contributions, see Retirement Plan Contributions under Employee Compensation in Publication 525. Turbotax military discount Figuring the Taxable Amount How you figure the taxable amount of a nonperiodic distribution depends on whether it is made before the annuity starting date, or on or after the annuity starting date. Turbotax military discount If it is made before the annuity starting date, its tax treatment also depends on whether it is made under a qualified or nonqualified plan. Turbotax military discount If it is made under a nonqualified plan, its tax treatment depends on whether it fully discharges the contract, is received under certain life insurance or endowment contracts, or is allocable to an investment you made before August 14, 1982. Turbotax military discount You may be able to roll over the taxable amount of a nonperiodic distribution from a qualified retirement plan into another qualified retirement plan or a traditional IRA tax free. Turbotax military discount See Rollovers, later. Turbotax military discount If you do not make a tax-free rollover and the distribution qualifies as a lump-sum distribution, you may be able to elect an optional method of figuring the tax on the taxable amount. Turbotax military discount See Lump-Sum Distributions, later. Turbotax military discount Annuity starting date. Turbotax military discount   The annuity starting date is either the first day of the first period for which you receive an annuity payment under the contract or the date on which the obligation under the contract becomes fixed, whichever is later. Turbotax military discount Distributions of employer securities. Turbotax military discount    If you receive a distribution of employer securities from a qualified retirement plan, you may be able to defer the tax on the net unrealized appreciation (NUA) in the securities. Turbotax military discount The NUA is the net increase in the securities' value while they were in the trust. Turbotax military discount This tax deferral applies to distributions of the employer corporation's stocks, bonds, registered debentures, and debentures with interest coupons attached. Turbotax military discount   If the distribution is a lump-sum distribution, tax is deferred on all of the NUA unless you choose to include it in your income for the year of the distribution. Turbotax military discount    A lump-sum distribution for this purpose is the distribution or payment of a plan participant's entire balance (within a single tax year) from all of the employer's qualified plans of one kind (pension, profit-sharing, or stock bonus plans), but only if paid: Because of the plan participant's death, After the participant reaches age 59½, Because the participant, if an employee, separates from service, or After the participant, if a self-employed individual, becomes totally and permanently disabled. Turbotax military discount    If you choose to include NUA in your income for the year of the distribution and the participant was born before January 2, 1936, you may be able to figure the tax on the NUA using the optional methods described und
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The Turbotax Military Discount

Turbotax military discount 12. Turbotax military discount   Business Deduction for Work-Related Education Table of Contents What's New Introduction Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. Turbotax military discount Transportation Expenses Travel Expenses No Double Benefit Allowed How To Treat ReimbursementsAccountable Plans Nonaccountable Plans Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping Illustrated Example What's New Standard mileage rate. Turbotax military discount  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013, is 56. Turbotax military discount 5 cents per mile. Turbotax military discount For more information, see Transportation Expenses under What Expenses Can Be Deducted, later. Turbotax military discount Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. Turbotax military discount To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040 or 1040NR) if you are an employee, File Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education , later. Turbotax military discount What is the tax benefit of taking a business deduction for work-related education. Turbotax military discount   If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. Turbotax military discount Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. Turbotax military discount An itemized deduction reduces the amount of your income subject to tax. Turbotax military discount   If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. Turbotax military discount This reduces the amount of your income subject to both income tax and self-employment tax. Turbotax military discount   Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits. Turbotax military discount You may qualify for these other benefits even if you do not meet the requirements listed above. Turbotax military discount   Also, your work-related education expenses may qualify you to claim more than one tax benefit. Turbotax military discount Generally, you may claim any number of benefits as long as you use different expenses to figure each one. Turbotax military discount Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. Turbotax military discount This is education that meets at least one of the following two tests. Turbotax military discount The education is required by your employer or the law to keep your present salary, status, or job. Turbotax military discount The required education must serve a bona fide business purpose of your employer. Turbotax military discount The education maintains or improves skills needed in your present work. Turbotax military discount However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. Turbotax military discount You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. Turbotax military discount Use Figure 12-1, Does Your Work-Related Education Qualify as a quick check to see if your education qualifies. Turbotax military discount Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. Turbotax military discount This additional education is qualifying work-related education if all three of the following requirements are met. Turbotax military discount It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. Turbotax military discount When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. Turbotax military discount See Education To Maintain or Improve Skills , later. Turbotax military discount Example. Turbotax military discount You are a teacher who has satisfied the minimum requirements for teaching. Turbotax military discount Your employer requires you to take an additional college course each year to keep your teaching job. Turbotax military discount If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. Turbotax military discount This image is too large to be displayed in the current screen. Turbotax military discount Please click the link to view the image. Turbotax military discount Figure 12-1 Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. Turbotax military discount This could include refresher courses, courses on current developments, and academic or vocational courses. Turbotax military discount Example. Turbotax military discount You repair televisions, radios, and stereo systems for XYZ Store. Turbotax military discount To keep up with the latest changes, you take special courses in radio and stereo service. Turbotax military discount These courses maintain and improve skills required in your work. Turbotax military discount Maintaining skills vs. Turbotax military discount qualifying for new job. Turbotax military discount   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. Turbotax military discount Education during temporary absence. Turbotax military discount   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Turbotax military discount Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Turbotax military discount Example. Turbotax military discount You quit your biology research job to become a full-time biology graduate student for 1 year. Turbotax military discount If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. Turbotax military discount Education during indefinite absence. Turbotax military discount   If you stop work for more than a year, your absence from your job is considered indefinite. Turbotax military discount Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. Turbotax military discount Therefore, it is not qualifying work-related education. Turbotax military discount Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. Turbotax military discount The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. Turbotax military discount Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. Turbotax military discount This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. Turbotax military discount You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. Turbotax military discount Example 1. Turbotax military discount You are a full-time engineering student. Turbotax military discount Although you have not received your degree or certification, you work part time as an engineer for a firm that will employ you as a full-time engineer after you finish college. Turbotax military discount Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. Turbotax military discount The education is not qualifying work-related education. Turbotax military discount Example 2. Turbotax military discount You are an accountant and you have met the minimum educational requirements of your employer. Turbotax military discount Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. Turbotax military discount These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. Turbotax military discount Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. Turbotax military discount The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. Turbotax military discount If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. Turbotax military discount The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. Turbotax military discount You generally will be considered a faculty member when one or more of the following occurs. Turbotax military discount You have tenure. Turbotax military discount Your years of service count toward obtaining tenure. Turbotax military discount You have a vote in faculty decisions. Turbotax military discount Your school makes contributions for you to a retirement plan other than social security or a similar program. Turbotax military discount Example 1. Turbotax military discount The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. Turbotax military discount In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. Turbotax military discount If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. Turbotax military discount However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. Turbotax military discount Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. Turbotax military discount If you have all the required education except the fifth year, you have met the minimum educational requirements. Turbotax military discount The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. Turbotax military discount Example 2. Turbotax military discount Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. Turbotax military discount The additional four education courses can be qualifying work-related education. Turbotax military discount Although you do not have all the required courses, you have already met the minimum educational requirements. Turbotax military discount Example 3. Turbotax military discount Assume the same facts as in Example 1 except that you are hired with only 3 years of college. Turbotax military discount The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. Turbotax military discount They are needed to meet the minimum educational requirements for employment as a teacher. Turbotax military discount Example 4. Turbotax military discount You have a bachelor's degree and you work as a temporary instructor at a university. Turbotax military discount At the same time, you take graduate courses toward an advanced degree. Turbotax military discount The rules of the university state that you can become a faculty member only if you get a graduate degree. Turbotax military discount Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. Turbotax military discount You have not met the minimum educational requirements to qualify you as a faculty member. Turbotax military discount The graduate courses are not qualifying work-related education. Turbotax military discount Certification in a new state. Turbotax military discount   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. Turbotax military discount This is true even if you must get additional education to be certified in another state. Turbotax military discount Any additional education you need is qualifying work-related education. Turbotax military discount You have already met the minimum requirements for teaching. Turbotax military discount Teaching in another state is not a new trade or business. Turbotax military discount Example. Turbotax military discount You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. Turbotax military discount You move to State B and are promptly hired as a teacher. Turbotax military discount You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. Turbotax military discount These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. Turbotax military discount Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. Turbotax military discount This is true even if you do not plan to enter that trade or business. Turbotax military discount If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. Turbotax military discount Example 1. Turbotax military discount You are an accountant. Turbotax military discount Your employer requires you to get a law degree at your own expense. Turbotax military discount You register at a law school for the regular curriculum that leads to a law degree. Turbotax military discount Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. Turbotax military discount Example 2. Turbotax military discount You are a general practitioner of medicine. Turbotax military discount You take a 2-week course to review developments in several specialized fields of medicine. Turbotax military discount The course does not qualify you for a new profession. Turbotax military discount It is qualifying work- related education because it maintains or improves skills required in your present profession. Turbotax military discount Example 3. Turbotax military discount While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. Turbotax military discount The program will lead to qualifying you to practice psychoanalysis. Turbotax military discount The psychoanalytic training does not qualify you for a new profession. Turbotax military discount It is qualifying work-related education because it maintains or improves skills required in your present profession. Turbotax military discount Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. Turbotax military discount They are part of a program of study that can qualify you for a new profession. Turbotax military discount Teaching and Related Duties All teaching and related duties are considered the same general kind of work. Turbotax military discount A change in duties in any of the following ways is not considered a change to a new business. Turbotax military discount Elementary school teacher to secondary school teacher. Turbotax military discount Teacher of one subject, such as biology, to teacher of another subject, such as art. Turbotax military discount Classroom teacher to guidance counselor. Turbotax military discount Classroom teacher to school administrator. Turbotax military discount What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education you can generally deduct your education expenses as business expenses. Turbotax military discount If you are not self-employed, you can deduct business expenses only if you itemize your deductions. Turbotax military discount You cannot deduct expenses related to tax-exempt and excluded income. Turbotax military discount Deductible expenses. Turbotax military discount   The following education expenses can be deducted. Turbotax military discount Tuition, books, supplies, lab fees, and similar items. Turbotax military discount Certain transportation and travel costs. Turbotax military discount Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. Turbotax military discount Nondeductible expenses. Turbotax military discount   You cannot deduct personal or capital expenses. Turbotax military discount For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. Turbotax military discount This amount is a personal expense. Turbotax military discount Unclaimed reimbursement. Turbotax military discount   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. Turbotax military discount Example. Turbotax military discount Your employer agrees to pay your education expenses if you file a voucher showing your expenses. Turbotax military discount You do not file a voucher and you do not get reimbursed. Turbotax military discount Because you did not file a voucher, you cannot deduct the expenses on your tax return. Turbotax military discount Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. Turbotax military discount If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. Turbotax military discount Temporary basis. Turbotax military discount   You go to school on a temporary basis if either of the following situations applies to you. Turbotax military discount Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. Turbotax military discount Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Turbotax military discount Your attendance is temporary up to the date you determine it will last more than 1 year. Turbotax military discount If you are in either situation (1) or (2) above, your attendance is not temporary if facts and circumstances indicate otherwise. Turbotax military discount Attendance not on a temporary basis. Turbotax military discount   You do not go to school on a temporary basis if either of the following situations apply to you. Turbotax military discount Your attendance at school is realistically expected to last more than 1 year. Turbotax military discount It does not matter how long you actually attend. Turbotax military discount Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Turbotax military discount Your attendance is not temporary after the date you determine it will last more than 1 year. Turbotax military discount Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. Turbotax military discount This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. Turbotax military discount Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Turbotax military discount Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. Turbotax military discount Example 1. Turbotax military discount You regularly work in a nearby town, and go directly from work to home. Turbotax military discount You also attend school every work night for 3 months to take a course that improves your job skills. Turbotax military discount Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. Turbotax military discount This is true regardless of the distance traveled. Turbotax military discount Example 2. Turbotax military discount Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. Turbotax military discount You can deduct your transportation expenses from your regular work site to school and then home. Turbotax military discount Example 3. Turbotax military discount Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. Turbotax military discount Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. Turbotax military discount Example 4. Turbotax military discount Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. Turbotax military discount Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. Turbotax military discount If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. Turbotax military discount If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. Turbotax military discount Using your car. Turbotax military discount    If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. Turbotax military discount The standard mileage rate for miles driven from January 1, 2013 through December 31, 2013, is 56. Turbotax military discount 5 cents per mile. Turbotax military discount Whichever method you use, you can also deduct parking fees and tolls. Turbotax military discount See Publication 463, chapter 4, for information on deducting your actual expenses of using a car. Turbotax military discount Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. Turbotax military discount Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. Turbotax military discount For more information, see chapter 1 of Publication 463. Turbotax military discount You cannot deduct expenses for personal activities such as sightseeing, visiting, or entertaining. Turbotax military discount Mainly personal travel. Turbotax military discount   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. Turbotax military discount You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. Turbotax military discount   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. Turbotax military discount An important factor is the comparison of time spent on personal activities with time spent on educational activities. Turbotax military discount If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. Turbotax military discount Example 1. Turbotax military discount John works in Newark, New Jersey. Turbotax military discount He traveled to Chicago to take a deductible 1-week course at the request of his employer. Turbotax military discount His main reason for going to Chicago was to take the course. Turbotax military discount While there, he took a sightseeing trip, entertained some friends, and took a side trip to Pleasantville for a day. Turbotax military discount Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. Turbotax military discount He cannot deduct his transportation expenses of going to Pleasantville. Turbotax military discount He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. Turbotax military discount Example 2. Turbotax military discount Sue works in Boston. Turbotax military discount She went to a university in Michigan to take a course for work. Turbotax military discount The course is qualifying work-related education. Turbotax military discount She took one course, which is one-fourth of a full course load of study. Turbotax military discount She spent the rest of the time on personal activities. Turbotax military discount Her reasons for taking the course in Michigan were all personal. Turbotax military discount Sue's trip is mainly personal because three-fourths of her time is considered personal time. Turbotax military discount She cannot deduct the cost of her round-trip train ticket to Michigan. Turbotax military discount She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. Turbotax military discount Example 3. Turbotax military discount Dave works in Nashville and recently traveled to California to take a 2-week seminar. Turbotax military discount The seminar is qualifying work-related education. Turbotax military discount While there, he spent an extra 8 weeks on personal activities. Turbotax military discount The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. Turbotax military discount Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. Turbotax military discount He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. Turbotax military discount Cruises and conventions. Turbotax military discount   Certain cruises and conventions offer seminars or courses as part of their itinerary. Turbotax military discount Even if the seminars or courses are work related, your deduction for travel may be limited. Turbotax military discount This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. Turbotax military discount   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. Turbotax military discount 50% limit on meals. Turbotax military discount   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. Turbotax military discount If you were reimbursed for the meals, see How To Treat Reimbursements , later. Turbotax military discount   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. Turbotax military discount Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. Turbotax military discount Example. Turbotax military discount You are a French language teacher. Turbotax military discount While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. Turbotax military discount You chose your itinerary and most of your activities to improve your French language skills. Turbotax military discount You cannot deduct your travel expenses as education expenses. Turbotax military discount This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. Turbotax military discount No Double Benefit Allowed You cannot do either of the following. Turbotax military discount Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, as a tuition and fees deduction. Turbotax military discount Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. Turbotax military discount See Adjustments to Qualifying Work-Related Education Expenses, next. Turbotax military discount Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. Turbotax military discount You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. Turbotax military discount Tax-free educational assistance. Turbotax military discount   This includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). Turbotax military discount Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Turbotax military discount Amounts that do not reduce qualifying work-related education expenses. Turbotax military discount   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Turbotax military discount Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. Turbotax military discount How To Treat Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. Turbotax military discount There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. Turbotax military discount You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. Turbotax military discount Note. Turbotax military discount The following rules about reimbursement arrangements also apply to expense allowances received from your employer. Turbotax military discount Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. Turbotax military discount Your expenses must have a business connection. Turbotax military discount This means your expenses must be deductible under the rules for qualifying work-related education explained earlier. Turbotax military discount You must adequately account to your employer for your expenses within a reasonable period of time. Turbotax military discount You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time. Turbotax military discount If you are reimbursed under an accountable plan, your employer should not include any reimbursement in your income in box 1 of your Form W-2. Turbotax military discount If your employer included reimbursements in box 1 of your Form W-2 and you meet all three rules for accountable plans, ask your employer for a corrected Form W-2. Turbotax military discount Accountable plan rules not met. Turbotax military discount   Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules for accountable plans. Turbotax military discount Those expenses that fail to meet the three rules are treated as having been reimbursed under a Nonaccountable Plan (discussed later). Turbotax military discount Expenses equal reimbursement. Turbotax military discount   Under an accountable plan, if your expenses equal your reimbursement, you do not complete Form 2106 or 2106-EZ. Turbotax military discount Because your expenses and reimbursements are equal, you do not have a deduction. Turbotax military discount Excess expenses. Turbotax military discount   If your expenses are more than your reimbursement, you can deduct your excess expenses. Turbotax military discount This is discussed later, under Deducting Business Expenses . Turbotax military discount Allocating your reimbursements for meals. Turbotax military discount   Because your excess meal expenses are subject to the 50% limit, you must figure them separately from your other expenses. Turbotax military discount If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. Turbotax military discount Make the allocation as follows. Turbotax military discount Divide your meal expenses by your total expenses. Turbotax military discount Multiply your total reimbursement by the result from (1). Turbotax military discount This is the allocated reimbursement for your meal expenses. Turbotax military discount Subtract the amount figured in (2) from your total reimbursement. Turbotax military discount The difference is the allocated reimbursement for your other expenses of qualifying work-related education. Turbotax military discount Example. Turbotax military discount Your employer paid you an expense allowance of $2,000 under an accountable plan. Turbotax military discount The allowance was to cover all of your expenses of traveling away from home to take a 2-week training course for work. Turbotax military discount There was no indication of how much of the reimbursement was for each type of expense. Turbotax military discount Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation expenses + $1,225 for books and tuition). Turbotax military discount Using the steps listed above, allocate the reimbursement between the $425 meal expenses and the $2,075 other expenses. Turbotax military discount   1. Turbotax military discount $425 meal expenses  $2,500 total expenses = . Turbotax military discount 17   2. Turbotax military discount $2,000 (reimbursement)×. Turbotax military discount 17     =$340 (allocated reimbursement for meal expenses)   3. Turbotax military discount $2,000 (reimbursement)−$340 (meals)     = $1,660 (allocated reimbursement for other qualifying work-related education expenses) Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). Turbotax military discount After you apply the 50% limit to your meals, you have a deduction for work-related education expenses of $458 (($85 × 50%) + $415). Turbotax military discount Nonaccountable Plans Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total in box 1 of your Form W-2. Turbotax military discount You can deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. Turbotax military discount This is discussed later under Deducting Business Expenses . Turbotax military discount An illustrated example of a nonaccountable plan, using Form 2106-EZ, is shown at the end of this chapter. Turbotax military discount Reimbursements for nondeductible expenses. Turbotax military discount   Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. Turbotax military discount You must include them in your income. Turbotax military discount For example, you must include in your income reimbursements your employer gave you for expenses of education that: You need to meet the minimum educational requirements for your job, or Is part of a program of study that can qualify you for a new trade or business. Turbotax military discount   For more information on accountable and nonaccountable plans, see chapter 6 of Publication 463. Turbotax military discount Deducting Business Expenses Self-employed persons and employees report their business expenses differently. Turbotax military discount The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. Turbotax military discount Self-Employed Persons If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040)). Turbotax military discount If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. Turbotax military discount See the instructions for the form you file for information on how to complete it. Turbotax military discount Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. Turbotax military discount If either (1) or (2) applies, you can deduct the total qualifying cost. Turbotax military discount If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. Turbotax military discount In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Turbotax military discount (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. Turbotax military discount ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. Turbotax military discount Form 2106 or 2106-EZ. Turbotax military discount   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or 2106-EZ. Turbotax military discount Form not required. Turbotax military discount   Do not complete either Form 2106 or 2106-EZ if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are not claiming travel, transportation, meal, or entertainment expenses. Turbotax military discount   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Turbotax military discount (Special rules for expenses of certain Performing Artists and Fee-Basis Officials and for Impairment-Related Work Expenses are explained later. Turbotax military discount ) Using Form 2106-EZ. Turbotax military discount   This form is shorter and easier to use than Form 2106. Turbotax military discount Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. Turbotax military discount   If you do not meet both of these requirements, use Form 2106. Turbotax military discount Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. Turbotax military discount Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24, or Form 1040NR, line 35. Turbotax military discount You do not have to itemize your deductions on Schedule A (Form 1040 or 1040NR), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. Turbotax military discount You must complete Form 2106 or 2106-EZ to figure your deduction even if you meet the requirements described earlier under Form not required . Turbotax military discount For more information on qualified performing artists, see chapter 6 of Publication 463. Turbotax military discount Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Turbotax military discount They are not subject to the 2%-of-adjusted-gross-income limit. Turbotax military discount To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . Turbotax military discount For more information on impairment-related work expenses, see chapter 6 of Publication 463. Turbotax military discount Recordkeeping You must keep records as proof of any deduction claimed on your tax return. Turbotax military discount Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. Turbotax military discount If you are an employee who is reimbursed for expenses and you give your records and documentation to your employer, you do not have to keep duplicate copies of this information. Turbotax military discount However, you should keep your records for a 3-year period if: You claim deductions for expenses that are more than your reimbursement, Your employer does not use adequate accounting procedures to verify expense accounts, You are related to your employer, or Your expenses are reimbursed under a nonaccountable plan. Turbotax military discount Examples of records to keep. Turbotax military discount   If any of the above cases apply to you, you must be able to prove that your expenses are deductible. Turbotax military discount You should keep adequate records or have sufficient evidence that will support your expenses. Turbotax military discount Estimates or approximations do not qualify as proof of an expense. Turbotax military discount Some examples of what can be used to help prove your expenses are: Documents, such as transcripts, course descriptions, catalogs, etc. Turbotax military discount , showing periods of enrollment in educational institutions, principal subjects studied, and descriptions of educational activity. Turbotax military discount Canceled checks and receipts to verify amounts you spent for: Tuition and books, Meals and lodging while away from home overnight for educational purposes, Travel and transportation, and Other education expenses. Turbotax military discount Statements from your employer explaining whether the education was necessary for you to keep your job, salary, or status; how the education helped maintain or improve skills needed in your job; how much reimbursement you received; and, if you are a teacher, the type of certificate and subjects taught. Turbotax military discount Complete information about any scholarship or fellowship grants, including amounts you received during the year. Turbotax military discount Illustrated Example Victor Jones teaches math at a private high school in North Carolina. Turbotax military discount He was selected to attend a 3-week math seminar at a university in California. Turbotax military discount The seminar will improve his skills in his current job and is qualifying work-related education. Turbotax military discount He was reimbursed for his expenses under his employer's nonaccountable plan, so his reimbursement of $2,100 is included in the wages shown in box 1 of his Form W-2. Turbotax military discount Victor will file Form 1040. Turbotax military discount His actual expenses for the seminar are as follows:   Lodging   $1,050     Meals   526     Airfare   550     Taxi fares   50     Tuition and books   400     Total Expenses   $2,576   Victor files Form 2106-EZ with his tax return. Turbotax military discount He shows his expenses for the seminar in Part I of the form. Turbotax military discount He enters $1,650 ($1,050 + $550 + $50) on line 3 to account for his lodging, airfare, and taxi fares. Turbotax military discount He enters $400 on line 4 for his tuition and books. Turbotax military discount On the line provided for total meals and entertainment expenses, Victor enters $526 for meal expenses. Turbotax military discount He multiplies that amount by 50% and enters the result, $263, on line 5. Turbotax military discount On line 6, Victor totals the amounts from lines 3 through 5. Turbotax military discount He carries the total, $2,313, to Schedule A (Form 1040), line 21. Turbotax military discount Since he does not claim any vehicle expenses, Victor leaves Part II blank. Turbotax military discount His filled-in form is shown on the next page. Turbotax military discount This image is too large to be displayed in the current screen. Turbotax military discount Please click the link to view the image. Turbotax military discount Form 2106-EZ for V. Turbotax military discount Jones Prev  Up  Next   Home   More Online Publications