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H&r Block 2010 Tax Software

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H&r Block 2010 Tax Software

H&r block 2010 tax software 1. H&r block 2010 tax software   Bona Fide Residence Table of Contents Presence TestDays of Presence in the United States or Relevant Possession Significant Connection Tax HomeExceptions Closer ConnectionException for Year of Move Special Rules in the Year of a MoveYear of Moving to a Possession Year of Moving From a Possession Reporting a Change in Bona Fide ResidenceWho Must File Penalty for Not Filing Form 8898 In order to qualify for certain tax benefits (see chapter 3), you must be a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI for the entire tax year. H&r block 2010 tax software Generally, you are a bona fide resident of one of these possessions (the relevant possession) if, during the tax year, you: Meet the presence test, Do not have a tax home outside the relevant possession, and Do not have a closer connection to the United States or to a foreign country than to the relevant possession. H&r block 2010 tax software Special rule for members of the U. H&r block 2010 tax software S. H&r block 2010 tax software Armed Forces. H&r block 2010 tax software   If you are a member of the U. H&r block 2010 tax software S. H&r block 2010 tax software Armed Forces who qualified as a bona fide resident of the relevant possession in an earlier tax year, your absence from that possession during the current tax year in compliance with military orders will not affect your status as a bona fide resident. H&r block 2010 tax software Likewise, being in a possession solely in compliance with military orders will not qualify you for bona fide residency. H&r block 2010 tax software Also see the special income source rule for members of the U. H&r block 2010 tax software S. H&r block 2010 tax software Armed Forces in chapter 2, under Compensation for Labor or Personal Services . H&r block 2010 tax software Special rule for civilian spouse of active duty member of the U. H&r block 2010 tax software S. H&r block 2010 tax software Armed Forces. H&r block 2010 tax software   If you are the civilian spouse of an active duty servicemember, under Military Spouses Residency Relief Act (MSRRA) you can choose to keep your prior residence or domicile for tax purposes (tax residence) when accompanying the servicemember spouse, who is relocating under military orders, to a new military duty station in one of the 50 states, the District of Columbia, or a U. H&r block 2010 tax software S. H&r block 2010 tax software possession. H&r block 2010 tax software Before relocating, you and your spouse must have the same tax residence. H&r block 2010 tax software If you are a civilian spouse and choose to keep your prior tax residence after such relocation, the source of income for services performed (for example, wages, salaries, tips, or self-employment) by you is considered to be (the jurisdiction of) the prior tax residence. H&r block 2010 tax software As a result, the amount of income tax withholding (from Form(s) W-2, Wage and Tax Statement) that you are able to claim on your federal return, as well as the need to file a state or U. H&r block 2010 tax software S. H&r block 2010 tax software possession return, may be affected. H&r block 2010 tax software For more information, consult with state, local, or U. H&r block 2010 tax software S. H&r block 2010 tax software possession tax authorities regarding your tax obligations under MSRRA. H&r block 2010 tax software Presence Test If you are a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen or resident alien, you will satisfy the presence test for the entire tax year if you meet one of the following conditions. H&r block 2010 tax software You were present in the relevant possession for at least 183 days during the tax year. H&r block 2010 tax software You were present in the relevant possession for at least 549 days during the 3-year period that includes the current tax year and the 2 immediately preceding tax years. H&r block 2010 tax software During each year of the 3-year period, you must be present in the relevant possession for at least 60 days. H&r block 2010 tax software You were present in the United States for no more than 90 days during the tax year. H&r block 2010 tax software You had earned income in the United States of no more than a total of $3,000 and were present for more days in the relevant possession than in the United States during the tax year. H&r block 2010 tax software Earned income is pay for personal services performed, such as wages, salaries, or professional fees. H&r block 2010 tax software You had no significant connection to the United States during the tax year. H&r block 2010 tax software Special rule for nonresident aliens. H&r block 2010 tax software   Conditions (1) through (5) above do not apply to nonresident aliens of the United States. H&r block 2010 tax software Instead, nonresident aliens must meet the substantial presence test discussed in chapter 1 of Publication 519. H&r block 2010 tax software In that discussion, substitute the name of the possession for “United States” and “U. H&r block 2010 tax software S. H&r block 2010 tax software ” wherever they appear. H&r block 2010 tax software Disregard the discussion in that chapter about a Closer Connection to a Foreign Country. H&r block 2010 tax software Days of Presence in the United States or Relevant Possession Generally, you are treated as being present in the United States or in the relevant possession on any day that you are physically present in that location at any time during the day. H&r block 2010 tax software Days of presence in a possession. H&r block 2010 tax software   You are considered to be present in the relevant possession on any of the following days. H&r block 2010 tax software Any day you are physically present in that possession at any time during the day. H&r block 2010 tax software Any day you are outside of the relevant possession in order to receive, or to accompany any of the following family members to receive, qualifying medical treatment (see Qualifying Medical Treatment , later). H&r block 2010 tax software Your parent. H&r block 2010 tax software Your spouse. H&r block 2010 tax software Your child, who is your son, daughter, stepson, or stepdaughter. H&r block 2010 tax software This includes an adopted child or child lawfully placed with you for legal adoption. H&r block 2010 tax software This also includes a foster child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. H&r block 2010 tax software Any day you are outside the relevant possession because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. H&r block 2010 tax software   If, during a single day, you are physically present: In the United States and in the relevant possession, that day is considered a day of presence in the relevant possession; or In two possessions, that day is considered a day of presence in the possession where your tax home is located (see Tax Home , later). H&r block 2010 tax software Days of presence in the United States. H&r block 2010 tax software   You are considered to be present in the United States on any day that you are physically present in the United States at any time during the day. H&r block 2010 tax software However, do not count the following days as days of presence in the United States. H&r block 2010 tax software Any day you are temporarily present in the United States in order to receive, or to accompany a parent, spouse, or child who is receiving, qualifying medical treatment. H&r block 2010 tax software “Child” is defined under item 2c earlier. H&r block 2010 tax software “Qualifying medical treatment” is defined later. H&r block 2010 tax software Any day you are temporarily present in the United States because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. H&r block 2010 tax software Any day you are in the United States for less than 24 hours when you are traveling between two places outside the United States. H&r block 2010 tax software Any day you are temporarily present in the United States as a professional athlete to compete in a charitable sports event (defined later). H&r block 2010 tax software Any day you are temporarily in the United States as a student (defined later). H&r block 2010 tax software Any day you are in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). H&r block 2010 tax software Qualifying Medical Treatment Such treatment is generally provided by (or under the supervision of) a physician for an illness, injury, impairment, or physical or mental condition. H&r block 2010 tax software The treatment generally involves: Any period of inpatient care that requires an overnight stay in a hospital or hospice, and any period immediately before or after that inpatient care to the extent it is medically necessary, or Any temporary period of inpatient care in a residential medical care facility for medically necessary rehabilitation services. H&r block 2010 tax software With respect to each qualifying medical treatment, you must prepare (or obtain) and maintain documentation supporting your claim that such treatment meets the criteria to be considered days of presence in the relevant possession. H&r block 2010 tax software You must be able to produce this documentation within 30 days if requested by the IRS or tax administrator for the relevant possession. H&r block 2010 tax software You must keep the following documentation. H&r block 2010 tax software Records that provide: The patient's name and relationship to you (if the medical treatment is provided to a person you accompany); The name and address of the hospital, hospice, or residential medical care facility where the medical treatment was provided; The name, address, and telephone number of the physician who provided the medical treatment; The date(s) on which the medical treatment was provided; and Receipt(s) of payment for the medical treatment. H&r block 2010 tax software Signed certification by the providing or supervising physician that the medical treatment met the requirements for being qualified medical treatment, and setting forth: The patient's name, A reasonably detailed description of the medical treatment provided by (or under the supervision of) the physician, The dates on which the medical treatment was provided, and The medical facts that support the physician's certification and determination that the treatment was medically necessary. H&r block 2010 tax software Charitable Sports Event A charitable sports event is one that meets all of the following conditions. H&r block 2010 tax software The main purpose is to benefit a qualified charitable organization. H&r block 2010 tax software The entire net proceeds go to charity. H&r block 2010 tax software Volunteers perform substantially all the work. H&r block 2010 tax software In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in the charitable sports event. H&r block 2010 tax software You cannot exclude the days on which you were in the United States to practice for the event, to perform promotional or other activities related to the event, or to travel between events. H&r block 2010 tax software Student To qualify as a student, you must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by a school described in (1) above or by a state, county, or local government agency. H&r block 2010 tax software The 5 calendar months do not have to be consecutive. H&r block 2010 tax software Full-time student. H&r block 2010 tax software   A full-time student is a person who is enrolled for the number of hours or courses the school considers to be full-time attendance. H&r block 2010 tax software However, school attendance exclusively at night is not considered full-time attendance. H&r block 2010 tax software School. H&r block 2010 tax software   The term “school” includes elementary schools, middle schools, junior and senior high schools, colleges, universities, and technical, trade, and mechanical schools. H&r block 2010 tax software It does not include on-the-job training courses, correspondence schools, and schools offering courses only through the Internet. H&r block 2010 tax software Significant Connection One way in which you can meet the presence test is to have no significant connection to the United States during the tax year. H&r block 2010 tax software This section looks at the factors that determine if a significant connection exists. H&r block 2010 tax software You are treated as having a significant connection to the United States if you: Have a permanent home in the United States, Are currently registered to vote in any political subdivision of the United States, or Have a spouse or child (see item 2c under Days of presence in a possession , earlier) who is under age 18 whose main home is in the United States, other than: A child who is in the United States because he or she is the child of divorced or legally separated parents and is living with a custodial parent under a custodial decree or multiple support agreement, or A child who is in the United States as a student. H&r block 2010 tax software For the purpose of determining if you have a significant connection to the United States, the term “spouse” does not include a spouse from whom you are legally separated under a decree of divorce or separate maintenance. H&r block 2010 tax software Permanent home. H&r block 2010 tax software   A permanent home generally includes an accommodation such as a house, an apartment, or a furnished room that is either owned or rented by you or your spouse. H&r block 2010 tax software The dwelling unit must be available at all times, continuously, not only for short stays. H&r block 2010 tax software Exception for rental property. H&r block 2010 tax software   If you or your spouse own the dwelling unit and at any time during the tax year it is rented to someone else at fair rental value, it will be considered your permanent home only if you or your spouse use that property for personal purposes for more than the greater of: 14 days, or 10% of the number of days during that tax year that the property is rented to others at a fair rental value. H&r block 2010 tax software   You are treated as using rental property for personal purposes on any day the property is not being rented to someone else at fair rental value for the entire day. H&r block 2010 tax software   A day of personal use of a dwelling unit is also any day that the unit is used by any of the following persons. H&r block 2010 tax software You or any other person who has an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement. H&r block 2010 tax software A member of your family or a member of the family of any other person who has an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. H&r block 2010 tax software Family includes only brothers and sisters, half-brothers and half-sisters, spouses, ancestors (parents, grandparents, etc. H&r block 2010 tax software ), and lineal descendants (children, grandchildren, etc. H&r block 2010 tax software ). H&r block 2010 tax software Anyone under an arrangement that lets you use some other dwelling unit. H&r block 2010 tax software Anyone at less than a fair rental price. H&r block 2010 tax software   However, any day you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. H&r block 2010 tax software Whether your property is used mainly for this purpose is determined in light of all the facts and circumstances, such as: The amount of time you devote to repair and maintenance work, How often during the tax year you perform repair and maintenance work on this property, and The presence and activities of companions. H&r block 2010 tax software   See Publication 527, Residential Rental Property, for more information about personal use of a dwelling unit. H&r block 2010 tax software Example—significant connection. H&r block 2010 tax software Ann Green, a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen, is a sales representative for a company based in Guam. H&r block 2010 tax software Ann lives with her spouse and young children in their house in Guam, where she is also registered to vote. H&r block 2010 tax software Her business travel requires her to spend 120 days in the United States and another 120 days in foreign countries. H&r block 2010 tax software When traveling on business, Ann generally stays at hotels but sometimes stays with her brother, who lives in the United States. H&r block 2010 tax software Ann's stays are always of short duration and she asks her brother's permission to stay with him. H&r block 2010 tax software Her brother's house is not her permanent home, nor does she have any other accommodations in the United States that would be considered her permanent home. H&r block 2010 tax software Ann satisfies the presence test because she has no significant connection to the United States. H&r block 2010 tax software Example—presence test. H&r block 2010 tax software Eric and Wanda Brown live for part of the year in a condominium, which they own, in the CNMI. H&r block 2010 tax software They also own a house in Maine where they live for 120 days every year to be near their grown children and grandchildren. H&r block 2010 tax software The Browns are retired and their only income is from pension payments, dividends, interest, and social security benefits. H&r block 2010 tax software In 2013, they spent only 175 days in the CNMI because of a 70-day vacation to Europe and Asia. H&r block 2010 tax software Thus, in 2013, the Browns were not present in the CNMI for at least 183 days, were present in the United States for more than 90 days, and had a significant connection to the United States because of their permanent home. H&r block 2010 tax software However, the Browns still satisfied the presence test with respect to the CNMI because they had no earned income in the United States and were physically present for more days in the CNMI than in the United States. H&r block 2010 tax software Tax Home You will have met the tax home test if you did not have a tax home outside the relevant possession during any part of the tax year. H&r block 2010 tax software Your tax home is your regular or main place of business, employment, or post of duty regardless of where you maintain your family home. H&r block 2010 tax software If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. H&r block 2010 tax software If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. H&r block 2010 tax software Exceptions There are some special rules regarding tax home that provide exceptions to the general rule stated above. H&r block 2010 tax software Students and Government Officials Disregard the following days when determining whether you have a tax home outside the relevant possession. H&r block 2010 tax software Days you were temporarily in the United States as a student (see Student under Days of Presence in the United States or Relevant Possession, earlier). H&r block 2010 tax software Days you were in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). H&r block 2010 tax software Seafarers You will not be considered to have a tax home outside the relevant possession solely because you are employed on a ship or other seafaring vessel that is predominantly used in local and international waters. H&r block 2010 tax software For this purpose, a vessel is considered to be predominantly used in local and international waters if, during the tax year, the total amount of time it is used in international waters and in the waters within 3 miles of the relevant possession exceeds the total amount of time it is used in the territorial waters of the United States, another possession, or any foreign country. H&r block 2010 tax software Example. H&r block 2010 tax software In 2013, Sean Silverman, a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen, was employed by a fishery and spent 250 days at sea on a fishing vessel. H&r block 2010 tax software When not at sea, Sean lived with his spouse at a house they own in American Samoa. H&r block 2010 tax software The fishing vessel on which Sean works departs and arrives at various ports in American Samoa, other possessions, and foreign countries, but was in international or American Samoa's local waters for 225 days. H&r block 2010 tax software For purposes of determining bona fide residency of American Samoa, Sean will not be considered to have a tax home outside that possession solely because of his employment on board the fishing vessel. H&r block 2010 tax software Year of Move If you are moving to or from a possession during the year, you may still be able to meet the tax home test for that year. H&r block 2010 tax software See Special Rules in the Year of a Move , later in this chapter. H&r block 2010 tax software Closer Connection You will have met the closer connection test if, during any part of the tax year, you do not have a closer connection to the United States or a foreign country than to the relevant U. H&r block 2010 tax software S. H&r block 2010 tax software possession. H&r block 2010 tax software You will be considered to have a closer connection to a possession than to the United States or to a foreign country if you have maintained more significant contacts with the possession(s) than with the United States or foreign country. H&r block 2010 tax software In determining if you have maintained more significant contacts with the relevant possession, the facts and circumstances to be considered include, but are not limited to, the following. H&r block 2010 tax software The location of your permanent home. H&r block 2010 tax software The location of your family. H&r block 2010 tax software The location of personal belongings, such as automobiles, furniture, clothing, and jewelry owned by you and your family. H&r block 2010 tax software The location of social, political, cultural, professional, or religious organizations with which you have a current relationship. H&r block 2010 tax software The location where you conduct your routine personal banking activities. H&r block 2010 tax software The location where you conduct business activities (other than those that go into determining your tax home). H&r block 2010 tax software The location of the jurisdiction in which you hold a driver's license. H&r block 2010 tax software The location of the jurisdiction in which you vote. H&r block 2010 tax software The location of charitable organizations to which you contribute. H&r block 2010 tax software The country of residence you designate on forms and documents. H&r block 2010 tax software The types of official forms and documents you file, such as Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or Form W-9, Request for Taxpayer Identification Number and Certification. H&r block 2010 tax software Your connections to the relevant possession will be compared to the total of your connections with the United States and foreign countries. H&r block 2010 tax software Your answers to the questions on Form 8898, Part III, will help establish the jurisdiction to which you have a closer connection. H&r block 2010 tax software Example—closer connection to the United States. H&r block 2010 tax software Marcos Reyes, a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen, moved to Puerto Rico in 2013 to start an investment consulting and venture capital business. H&r block 2010 tax software His spouse and two teenage children remained in California to allow the children to complete high school. H&r block 2010 tax software He traveled back to the United States regularly to see his spouse and children, to engage in business activities, and to take vacations. H&r block 2010 tax software Marcos had an apartment available for his full-time use in Puerto Rico, but remained a joint owner of the residence in California where his spouse and children lived. H&r block 2010 tax software Marcos and his family had automobiles and personal belongings such as furniture, clothing, and jewelry located at both residences. H&r block 2010 tax software Although Marcos was a member of the Puerto Rico Chamber of Commerce, he also belonged to and had current relationships with social, political, cultural, and religious organizations in California. H&r block 2010 tax software Marcos received mail in California, including bank and brokerage statements and credit card bills. H&r block 2010 tax software He conducted his personal banking activities in California. H&r block 2010 tax software He held a California driver's license and was also registered to vote there. H&r block 2010 tax software Based on all of the particular facts and circumstances pertaining to Marcos, he was not a bona fide resident of Puerto Rico in 2013 because he had a closer connection to the United States than to Puerto Rico. H&r block 2010 tax software Closer connection to another possession. H&r block 2010 tax software   Generally, possessions are not treated as foreign countries. H&r block 2010 tax software Therefore, a closer connection to a possession other than the relevant possession will not be treated as a closer connection to a foreign country. H&r block 2010 tax software Example—tax home and closer connection to possession. H&r block 2010 tax software Pearl Blackmon, a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen, is a permanent employee of a hotel in Guam, but works only during the tourist season. H&r block 2010 tax software For the remainder of each year, Pearl lives with her spouse and children in the CNMI, where she has no outside employment. H&r block 2010 tax software Most of Pearl's personal belongings, including her automobile, are located in the CNMI. H&r block 2010 tax software She is registered to vote in, and has a driver's license issued by, the CNMI. H&r block 2010 tax software She does her personal banking in the CNMI and routinely lists her CNMI address as her permanent address on forms and documents. H&r block 2010 tax software Pearl satisfies the presence test with respect to both Guam and the CNMI. H&r block 2010 tax software She satisfies the tax home test with respect to Guam, because her regular place of business is in Guam. H&r block 2010 tax software Pearl satisfies the closer connection test with respect to both Guam and the CNMI, because she does not have a closer connection to the United States or to any foreign country. H&r block 2010 tax software Pearl is considered a bona fide resident of Guam, the location of her tax home. H&r block 2010 tax software Exception for Year of Move If you are moving to or from a possession during the year, you may still be able to meet the closer connection test for that year. H&r block 2010 tax software See Special Rules in the Year of a Move , next. H&r block 2010 tax software Special Rules in the Year of a Move If you are moving to or from a possession during the year, you may still be able to meet the tax home and closer connection tests for that year. H&r block 2010 tax software Year of Moving to a Possession You will satisfy the tax home and closer connection tests in the tax year of changing your residence to the relevant possession if you meet all of the following. H&r block 2010 tax software You have not been a bona fide resident of the relevant possession in any of the 3 tax years immediately preceding your move. H&r block 2010 tax software In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the last 183 days of the tax year. H&r block 2010 tax software You are a bona fide resident of the relevant possession for each of the 3 tax years immediately following your move. H&r block 2010 tax software Example. H&r block 2010 tax software Dwight Wood, a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen, files returns on a calendar year basis. H&r block 2010 tax software He lived in the United States from January 2007 through May 2013. H&r block 2010 tax software In June 2013 he moved to the USVI, purchased a house, and accepted a permanent job with a local employer. H&r block 2010 tax software From July 1 through December 31, 2013 (more than 183 days), Dwight's principal place of business was in the USVI and, during that time, he did not have a closer connection to the United States or a foreign country than to the USVI. H&r block 2010 tax software If he is a bona fide resident of the USVI during all of 2014 through 2016, he will satisfy the tax home and closer connection tests for 2013. H&r block 2010 tax software If Dwight also satisfies the presence test in 2013, he will be considered a bona fide resident of the USVI for the entire 2013 tax year. H&r block 2010 tax software Year of Moving From a Possession In the year you cease to be a bona fide resident of American Samoa, the CNMI, Guam, or the USVI, you will satisfy the tax home and closer connection tests with respect to the relevant possession if you meet all of the following. H&r block 2010 tax software You have been a bona fide resident of the relevant possession for each of the 3 tax years immediately preceding your change of residence. H&r block 2010 tax software In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the first 183 days of the tax year. H&r block 2010 tax software You are not a bona fide resident of the relevant possession for any of the 3 tax years immediately following your move. H&r block 2010 tax software Example. H&r block 2010 tax software Jean Aspen, a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen, files returns on a calendar year basis. H&r block 2010 tax software From January 2010 through December 2012, Jean was a bona fide resident of American Samoa. H&r block 2010 tax software Jean continued to live there until September 6, 2013, when she accepted new employment and moved to Hawaii. H&r block 2010 tax software Jean's principal place of business from January 1 through September 5, 2013 (more than 183 days), was in American Samoa, and during that period Jean did not have a closer connection to the United States or a foreign country than to American Samoa. H&r block 2010 tax software If Jean continues to live and work in Hawaii for the rest of 2013 and throughout years 2014 through 2016, she will satisfy the tax home and closer connection tests for 2013 with respect to American Samoa. H&r block 2010 tax software If Jean also satisfies the presence test in 2013, she will be considered a bona fide resident for the entire 2013 tax year. H&r block 2010 tax software Puerto Rico You will be considered a bona fide resident of Puerto Rico for the part of the tax year preceding the date on which you move if you: Are a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen, Are a bona fide resident of Puerto Rico for at least 2 tax years immediately preceding the tax year of the move, Cease to be a bona fide resident of Puerto Rico during the tax year, Cease to have a tax home in Puerto Rico during the tax year, and Have a closer connection to Puerto Rico than to the United States or a foreign country throughout the part of the tax year preceding the date on which you cease to have a tax home in Puerto Rico. H&r block 2010 tax software Example. H&r block 2010 tax software Randy White, a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen, files returns on a calendar year basis. H&r block 2010 tax software For all of 2011 and 2012, Randy was a bona fide resident of Puerto Rico. H&r block 2010 tax software From January through April 2013, Randy continued to reside and maintain his principal place of business in and closer connection to Puerto Rico. H&r block 2010 tax software On May 5, 2013, Randy moved and changed his tax home to Nevada. H&r block 2010 tax software Later that year he established a closer connection to the United States than to Puerto Rico. H&r block 2010 tax software Randy did not satisfy the presence test for 2013 with respect to Puerto Rico, nor the tax home or closer connection tests. H&r block 2010 tax software However, because Randy was a bona fide resident of Puerto Rico for at least 2 tax years before he moved to Nevada in 2013, he was a bona fide resident of Puerto Rico from January 1 through May 4, 2013. H&r block 2010 tax software Reporting a Change in Bona Fide Residence If you became or ceased to be a bona fide resident of a U. H&r block 2010 tax software S. H&r block 2010 tax software possession, you may need to file Form 8898. H&r block 2010 tax software This applies to the U. H&r block 2010 tax software S. H&r block 2010 tax software possessions of American Samoa, the CNMI, Guam, Puerto Rico, and the USVI. H&r block 2010 tax software Who Must File You must file Form 8898 for the tax year in which you meet both of the following conditions. H&r block 2010 tax software Your worldwide gross income (defined below) in that tax year is more than $75,000. H&r block 2010 tax software You meet one of the following. H&r block 2010 tax software You take a position for U. H&r block 2010 tax software S. H&r block 2010 tax software tax purposes that you became a bona fide resident of a U. H&r block 2010 tax software S. H&r block 2010 tax software possession after a tax year for which you filed a U. H&r block 2010 tax software S. H&r block 2010 tax software income tax return as a citizen or resident alien of the United States but not as a bona fide resident of the possession. H&r block 2010 tax software You are a citizen or resident alien of the United States who takes the position for U. H&r block 2010 tax software S. H&r block 2010 tax software tax purposes that you ceased to be a bona fide resident of a U. H&r block 2010 tax software S. H&r block 2010 tax software possession after a tax year for which you filed an income tax return (with the IRS, the possession tax authority, or both) as a bona fide resident of the possession. H&r block 2010 tax software You take the position for U. H&r block 2010 tax software S. H&r block 2010 tax software tax purposes that you became a bona fide resident of Puerto Rico or American Samoa after a tax year for which you were required to file an income tax return as a bona fide resident of the CNMI, Guam, or the USVI. H&r block 2010 tax software Worldwide gross income. H&r block 2010 tax software   Worldwide gross income means all income you received in the form of money, goods, property, and services, including any income from sources outside the United States (even if you can exclude part or all of it) and before any deductions, credits, or rebates. H&r block 2010 tax software Example. H&r block 2010 tax software You are a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen who moved to the CNMI in December 2012, but did not become a bona fide resident of that possession until the 2013 tax year. H&r block 2010 tax software You must file Form 8898 for the 2013 tax year if your worldwide gross income for that year was more than $75,000. H&r block 2010 tax software Penalty for Not Filing Form 8898 If you are required to file Form 8898 for any tax year and you fail to file it, you may owe a penalty of $1,000. H&r block 2010 tax software You may also owe this penalty if you do not include all the information required by the form or the form includes incorrect information. H&r block 2010 tax software In either case, you will not owe this penalty if you can show that such failure is due to reasonable cause and not willful neglect. H&r block 2010 tax software This is in addition to any criminal penalty that may be imposed. H&r block 2010 tax software Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in Wisconsin

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Appleton  1901B East Capitol Dr.
Appleton, WI 54911 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

Services Provided

(920) 996-4860 
Eau Claire  2403 Folsom St.
Eau Claire, WI  54703

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

**This office will open at 1:00 p.m. on 3/31**

 

**This office will close at 12:00 noon on 4/4**

 

Services Provided

(715) 836-8750 
Green Bay  440 Security  Boulevard
Green Bay, WI 54313 

Tuesday and Thursday-8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

Services Provided

(920) 662-5999 
LaCrosse  425 State St.
LaCrosse, WI 54601 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

**This office will be closed on 3/31**

 

    Services Provided

(608) 785-0246 
Madison  1242 Fourier Drive  
Suite 200
Madison, WI 53717 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

Services Provided

(608) 829-5827 
Milwaukee  211 W. Wisconsin Ave.
Milwaukee, WI 53203 

Monday-Friday 8:30 a.m.- 4:30 p.m.

 

Services Provided

(414) 231-2100 
Rothschild  10208 Park Plaza
Rothschild, WI 54474 

Monday-Friday 8:30 a.m.- 3:30 p.m.

 

Services Provided

(715) 355-4447 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (414) 231-2390 in Milwaukee or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS.

For further information, see  Tax Topic 104

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
211 W. Wisconsin Ave.
Stop 4312 
Milwaukee, WI  53203

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 31-Mar-2014

The H&r Block 2010 Tax Software

H&r block 2010 tax software Publication 575 - Main Content Table of Contents General InformationPension. H&r block 2010 tax software Annuity. H&r block 2010 tax software Qualified employee plan. H&r block 2010 tax software Qualified employee annuity. H&r block 2010 tax software Designated Roth account. H&r block 2010 tax software Tax-sheltered annuity plan. H&r block 2010 tax software Fixed-period annuities. H&r block 2010 tax software Annuities for a single life. H&r block 2010 tax software Joint and survivor annuities. H&r block 2010 tax software Variable annuities. H&r block 2010 tax software Disability pensions. H&r block 2010 tax software 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. H&r block 2010 tax software Taxation of Periodic PaymentsPeriod of participation. H&r block 2010 tax software 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. H&r block 2010 tax software No tax withheld. H&r block 2010 tax software Partial rollovers. H&r block 2010 tax software Frozen deposits. H&r block 2010 tax software Reasonable period of time. H&r block 2010 tax software 20% Mandatory withholding. H&r block 2010 tax software How to report. H&r block 2010 tax software How to report. H&r block 2010 tax software Special rule for Roth IRAs and designated Roth accounts. H&r block 2010 tax software Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and BeneficiariesGuaranteed payments. H&r block 2010 tax software How To Get Tax HelpLow Income Taxpayer Clinics General Information Definitions. H&r block 2010 tax software   Some of the terms used in this publication are defined in the following paragraphs. H&r block 2010 tax software Pension. H&r block 2010 tax software   A pension is generally a series of definitely determinable payments made to you after you retire from work. H&r block 2010 tax software Pension payments are made regularly and are based on such factors as years of service and prior compensation. H&r block 2010 tax software Annuity. H&r block 2010 tax software   An annuity is a series of payments under a contract made at regular intervals over a period of more than one full year. H&r block 2010 tax software They can be either fixed (under which you receive a definite amount) or variable (not fixed). H&r block 2010 tax software You can buy the contract alone or with the help of your employer. H&r block 2010 tax software Qualified employee plan. H&r block 2010 tax software   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. H&r block 2010 tax software 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). H&r block 2010 tax software To determine whether your plan is a qualified plan, check with your employer or the plan administrator. H&r block 2010 tax software Qualified employee annuity. H&r block 2010 tax software   A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. H&r block 2010 tax software Designated Roth account. H&r block 2010 tax software   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. H&r block 2010 tax software Elective deferrals that are designated as Roth contributions are included in your income. H&r block 2010 tax software However, qualified distributions (explained later) are not included in your income. H&r block 2010 tax software You should check with your plan administrator to determine if your plan will accept designated Roth contributions. H&r block 2010 tax software Tax-sheltered annuity plan. H&r block 2010 tax software   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. H&r block 2010 tax software Generally, a tax-sheltered annuity plan provides retirement benefits by purchasing annuity contracts for its participants. H&r block 2010 tax software Types of pensions and annuities. H&r block 2010 tax software   Pensions and annuities include the following types. H&r block 2010 tax software Fixed-period annuities. H&r block 2010 tax software   You receive definite amounts at regular intervals for a specified length of time. H&r block 2010 tax software Annuities for a single life. H&r block 2010 tax software   You receive definite amounts at regular intervals for life. H&r block 2010 tax software The payments end at death. H&r block 2010 tax software Joint and survivor annuities. H&r block 2010 tax software   The first annuitant receives a definite amount at regular intervals for life. H&r block 2010 tax software After he or she dies, a second annuitant receives a definite amount at regular intervals for life. H&r block 2010 tax software The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. H&r block 2010 tax software Variable annuities. H&r block 2010 tax software   You receive payments that may vary in amount for a specified length of time or for life. H&r block 2010 tax software 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. H&r block 2010 tax software Disability pensions. H&r block 2010 tax software   You receive disability payments because you retired on disability and have not reached minimum retirement age. H&r block 2010 tax software More than one program. H&r block 2010 tax software   You may receive employee plan benefits from more than one program under a single trust or plan of your employer. H&r block 2010 tax software 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. H&r block 2010 tax software Also, you may be considered to have received more than one pension or annuity. H&r block 2010 tax software Your former employer or the plan administrator should be able to tell you if you have more than one contract. H&r block 2010 tax software Example. H&r block 2010 tax software Your employer set up a noncontributory profit-sharing plan for its employees. H&r block 2010 tax software The plan provides that the amount held in the account of each participant will be paid when that participant retires. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software Under the pension plan, however, a formula determines the amount of the pension benefits. H&r block 2010 tax software The amount of contributions is the amount necessary to provide that pension. H&r block 2010 tax software Each plan is a separate program and a separate contract. H&r block 2010 tax software 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. H&r block 2010 tax software Distributions from a designated Roth account are treated separately from other distributions from the plan. H&r block 2010 tax software Qualified domestic relations order (QDRO). H&r block 2010 tax software   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. H&r block 2010 tax software 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. H&r block 2010 tax software A QDRO may not award an amount or form of benefit that is not available under the plan. H&r block 2010 tax software   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. H&r block 2010 tax software 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. H&r block 2010 tax software The numerator of the fraction is the present value of the benefits payable to the spouse or former spouse. H&r block 2010 tax software The denominator is the present value of all benefits payable to the participant. H&r block 2010 tax software   A distribution that is paid to a child or other dependent under a QDRO is taxed to the plan participant. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software The earnings are not taxed until distributed either in a withdrawal or in annuity payments. H&r block 2010 tax software The taxable part of a distribution is treated as ordinary income. H&r block 2010 tax software Net investment income tax. H&r block 2010 tax software   Beginning in 2013, annuities under a nonqualified plan are included in calculating your net investment income for the net investment income tax (NIIT). H&r block 2010 tax software For information see the Instructions for Form 8960, Net Investment Income Tax — Individuals, Estates and Trusts. H&r block 2010 tax software 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. H&r block 2010 tax software Withdrawals. H&r block 2010 tax software   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. H&r block 2010 tax software The tax-free part is based on the ratio of your cost (investment in the contract) to your account balance under the plan. H&r block 2010 tax software   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). H&r block 2010 tax software 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. H&r block 2010 tax software 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). H&r block 2010 tax software   If you withdraw funds (other than as an annuity) on or after your annuity starting date, the entire amount withdrawn is generally taxable. H&r block 2010 tax software   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. H&r block 2010 tax software The rest is taxable. H&r block 2010 tax software   For more information on the tax treatment of withdrawals, see Taxation of Nonperiodic Payments , later. H&r block 2010 tax software If you withdraw funds from your annuity before you reach age 59½, also see Tax on Early Distributions under Special Additional Taxes, later. H&r block 2010 tax software Annuity payments. H&r block 2010 tax software   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. H&r block 2010 tax software For a variable annuity paid under a qualified plan, you generally must use the Simplified Method. H&r block 2010 tax software 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. H&r block 2010 tax software For more information, see Variable annuities in Publication 939 under Computation Under the General Rule. H&r block 2010 tax software Death benefits. H&r block 2010 tax software    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. H&r block 2010 tax software If you choose to receive an annuity, the payments are subject to tax as described above. H&r block 2010 tax software 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. H&r block 2010 tax software See Survivors and Beneficiaries , later. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software You are generally taxed on amounts deferred in an eligible state or local government plan only when they are distributed from the plan. H&r block 2010 tax software You are taxed on amounts deferred in an eligible tax-exempt organization plan when they are distributed or otherwise made available to you. H&r block 2010 tax software Your 457(b) plan may have a designated Roth account option. H&r block 2010 tax software If so, you may be able to roll over amounts to the designated Roth account or make contributions. H&r block 2010 tax software Elective deferrals to a designated Roth account are included in your income. H&r block 2010 tax software Qualified distributions (explained later) are not included in your income. H&r block 2010 tax software See the Designated Roth accounts discussion under Taxation of Periodic Payments, later. H&r block 2010 tax software This publication covers the tax treatment of benefits under eligible section 457 plans, but it does not cover the treatment of deferrals. H&r block 2010 tax software For information on deferrals under section 457 plans, see Retirement Plan Contributions under Employee Compensation in Publication 525. H&r block 2010 tax software Is your plan eligible?   To find out if your plan is an eligible plan, check with your employer. H&r block 2010 tax software 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. H&r block 2010 tax software Nonelective deferred compensation plans for nonemployees (independent contractors). H&r block 2010 tax software Deferred compensation plans maintained by churches. H&r block 2010 tax software Length of service award plans for bona fide volunteer firefighters and emergency medical personnel. H&r block 2010 tax software An exception applies if the total amount paid to a volunteer exceeds $3,000 for any year of service. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. H&r block 2010 tax software You may be entitled to a tax credit if you were permanently and totally disabled when you retired. H&r block 2010 tax software For information on this credit, see Publication 524. H&r block 2010 tax software Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. H&r block 2010 tax software Report the payments on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. H&r block 2010 tax software 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. H&r block 2010 tax software For more information about payments to survivors of terrorist attacks, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. H&r block 2010 tax software 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. H&r block 2010 tax software The premiums can be for coverage for you, your spouse, or dependents. H&r block 2010 tax software The distribution must be made directly from the plan to the insurance provider. H&r block 2010 tax software You can exclude from income the smaller of the amount of the insurance premiums or $3,000. H&r block 2010 tax software You can only make this election for amounts that would otherwise be included in your income. H&r block 2010 tax software The amount excluded from your income cannot be used to claim a medical expense deduction. H&r block 2010 tax software 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. H&r block 2010 tax software If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. H&r block 2010 tax software The amount shown in box 2a of Form 1099-R does not reflect this exclusion. H&r block 2010 tax software Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. H&r block 2010 tax software Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. H&r block 2010 tax software Enter “PSO” next to the appropriate line on which you report the taxable amount. H&r block 2010 tax software 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. H&r block 2010 tax software Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. H&r block 2010 tax software These categories are treated differently for income tax purposes. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software S. H&r block 2010 tax software Railroad Retirement Board (RRB). H&r block 2010 tax software 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. H&r block 2010 tax software The second category contains the rest of the tier 1 railroad retirement benefits, called the non-social security equivalent benefit (NSSEB). H&r block 2010 tax software It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. H&r block 2010 tax software Treat this category of benefits, shown on Form RRB-1099-R, as an amount received from a qualified employee plan. H&r block 2010 tax software 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. H&r block 2010 tax software (The NSSEB and tier 2 benefits, less certain repayments, are combined into one amount called the Contributory Amount Paid on Form RRB-1099-R. H&r block 2010 tax software ) Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. H&r block 2010 tax software See Taxation of Periodic Payments , later, for information on how to report your benefits and how to recover the employee contributions tax free. H&r block 2010 tax software Form RRB-1099-R is used for U. H&r block 2010 tax software S. H&r block 2010 tax software citizens, resident aliens, and nonresident aliens. H&r block 2010 tax software Nonresident aliens. H&r block 2010 tax software   A nonresident alien is an individual who is not a citizen or a resident alien of the United States. H&r block 2010 tax software Nonresident aliens are subject to mandatory U. H&r block 2010 tax software S. H&r block 2010 tax software tax withholding unless exempt under a tax treaty between the United States and their country of legal residency. H&r block 2010 tax software A tax treaty exemption may reduce or eliminate tax withholding from railroad retirement benefits. H&r block 2010 tax software See Tax withholding next for more information. H&r block 2010 tax software   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. H&r block 2010 tax software 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. H&r block 2010 tax software For information on filing requirements for aliens, see Publication 519, U. H&r block 2010 tax software S. H&r block 2010 tax software Tax Guide for Aliens. H&r block 2010 tax software For information on tax treaties between the United States and other countries that may reduce or eliminate U. H&r block 2010 tax software S. H&r block 2010 tax software tax on your benefits, see Publication 901, U. H&r block 2010 tax software S. H&r block 2010 tax software Tax Treaties. H&r block 2010 tax software Tax withholding. H&r block 2010 tax software   To request or change your income tax withholding from SSEB payments, U. H&r block 2010 tax software S. H&r block 2010 tax software citizens should contact the IRS for Form W-4V, Voluntary Withholding Request, and file it with the RRB. H&r block 2010 tax software 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. H&r block 2010 tax software If you are a nonresident alien or a U. H&r block 2010 tax software S. H&r block 2010 tax software 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. H&r block 2010 tax software S. H&r block 2010 tax software tax withholding. H&r block 2010 tax software Nonresident U. H&r block 2010 tax software S. H&r block 2010 tax software citizens cannot elect to be exempt from withholding on payments delivered outside of the U. H&r block 2010 tax software S. H&r block 2010 tax software Help from the RRB. H&r block 2010 tax software   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. H&r block 2010 tax software S. H&r block 2010 tax software consulate/Embassy if you reside outside the United States. H&r block 2010 tax software You can visit the RRB on the Internet at www. H&r block 2010 tax software rrb. H&r block 2010 tax software gov. H&r block 2010 tax software Form RRB-1099-R. H&r block 2010 tax software   The following discussion explains the items shown on Form RRB-1099-R. H&r block 2010 tax software 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. H&r block 2010 tax software   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. H&r block 2010 tax software   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. H&r block 2010 tax software To determine if any of these rules apply to your benefits, see the discussions about them later. H&r block 2010 tax software   Generally, amounts shown on your Form RRB-1099-R are considered a normal distribution. H&r block 2010 tax software Use distribution code “7” if you are asked for a distribution code. H&r block 2010 tax software Distribution codes are not shown on Form RRB-1099-R. H&r block 2010 tax software   There are three copies of this form. H&r block 2010 tax software Copy B is to be included with your income tax return if federal income tax is withheld. H&r block 2010 tax software Copy C is for your own records. H&r block 2010 tax software Copy 2 is filed with your state, city, or local income tax return, when required. H&r block 2010 tax software See the illustrated Copy B (Form RRB-1099-R) above. H&r block 2010 tax software       Each beneficiary will receive his or her own Form RRB-1099-R. H&r block 2010 tax software If you receive benefits on more than one railroad retirement record, you may get more than one Form RRB-1099-R. H&r block 2010 tax software So that you get your form timely, make sure the RRB always has your current mailing address. H&r block 2010 tax software Please click here for the text description of the image. H&r block 2010 tax software Form RRB-1099-R Box 1—Claim Number and Payee Code. H&r block 2010 tax software   Your claim number is a six- or nine-digit number preceded by an alphabetical prefix. H&r block 2010 tax software This is the number under which the RRB paid your benefits. H&r block 2010 tax software Your payee code follows your claim number and is the last number in this box. H&r block 2010 tax software It is used by the RRB to identify you under your claim number. H&r block 2010 tax software In all your correspondence with the RRB, be sure to use the claim number and payee code shown in this box. H&r block 2010 tax software Box 2—Recipient's Identification Number. H&r block 2010 tax software   This is the recipient's U. H&r block 2010 tax software S. H&r block 2010 tax software taxpayer identification number. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software The Instructions for Form W-7 explain how and when to apply. H&r block 2010 tax software Box 3—Employee Contributions. H&r block 2010 tax software   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. H&r block 2010 tax software 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). H&r block 2010 tax software (For information on how to figure the tax-free part, see Partly Taxable Payments under Taxation of Periodic Payments, later. H&r block 2010 tax software ) The amount shown is the total employee contribution amount, not reduced by any amounts that the RRB calculated as previously recovered. H&r block 2010 tax software It is the latest amount reported for 2013 and may have increased or decreased from a previous Form RRB-1099-R. H&r block 2010 tax software If this amount has changed, the change is retroactive. H&r block 2010 tax software You may need to refigure the tax-free part of your NSSEB/tier 2 benefit for 2013 and prior tax years. H&r block 2010 tax software If this box is blank, it means that the amount of your NSSEB and tier 2 payments shown in box 4 is fully taxable. H&r block 2010 tax software    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. H&r block 2010 tax software Box 4—Contributory Amount Paid. H&r block 2010 tax software   This is the gross amount of the NSSEB and tier 2 benefit you received in 2013, less any 2013 benefits you repaid in 2013. H&r block 2010 tax software (Any benefits you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. H&r block 2010 tax software ) This amount is the total contributory pension paid in 2013. H&r block 2010 tax software It may be partly taxable and partly tax free or fully taxable. H&r block 2010 tax software 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. H&r block 2010 tax software Box 5—Vested Dual Benefit. H&r block 2010 tax software   This is the gross amount of vested dual benefit (VDB) payments paid in 2013, less any 2013 VDB payments you repaid in 2013. H&r block 2010 tax software It is fully taxable. H&r block 2010 tax software VDB payments you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. H&r block 2010 tax software Note. H&r block 2010 tax software The amounts shown in boxes 4 and 5 may represent payments for 2013 and/or other years after 1983. H&r block 2010 tax software Box 6—Supplemental Annuity. H&r block 2010 tax software   This is the gross amount of supplemental annuity benefits paid in 2013, less any 2013 supplemental annuity benefits you repaid in 2013. H&r block 2010 tax software It is fully taxable. H&r block 2010 tax software Supplemental annuity benefits you repaid in 2013 for an earlier year or for an unknown year are shown in box 8. H&r block 2010 tax software Box 7—Total Gross Paid. H&r block 2010 tax software   This is the sum of boxes 4, 5, and 6. H&r block 2010 tax software The amount represents the total pension paid in 2013. H&r block 2010 tax software Include this amount on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. H&r block 2010 tax software Box 8—Repayments. H&r block 2010 tax software   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. H&r block 2010 tax software The amount shown in this box has not been deducted from the amounts shown in boxes 4, 5, and 6. H&r block 2010 tax software It only includes repayments of benefits that were taxable to you. H&r block 2010 tax software 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. H&r block 2010 tax software If you included the benefits in your income in the year you received them, you may be able to deduct the repaid amount. H&r block 2010 tax software For more information about repayments, see Repayment of benefits received in an earlier year , later. H&r block 2010 tax software    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. H&r block 2010 tax software Box 9—Federal Income Tax Withheld. H&r block 2010 tax software   This is the total federal income tax withheld from your NSSEB, tier 2 benefit, VDB, and supplemental annuity benefit. H&r block 2010 tax software Include this on your income tax return as tax withheld. H&r block 2010 tax software 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. H&r block 2010 tax software Determine the total amount of U. H&r block 2010 tax software S. H&r block 2010 tax software 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. H&r block 2010 tax software Box 10—Rate of Tax. H&r block 2010 tax software   If you are taxed as a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen or resident alien, this box does not apply to you. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software Box 11—Country. H&r block 2010 tax software   If you are taxed as a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen or resident alien, this box does not apply to you. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software Box 12—Medicare Premium Total. H&r block 2010 tax software   This is for information purposes only. H&r block 2010 tax software The amount shown in this box represents the total amount of Part B Medicare premiums deducted from your railroad retirement annuity payments in 2013. H&r block 2010 tax software Medicare premium refunds are not included in the Medicare total. H&r block 2010 tax software 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). H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software Repayment of benefits received in an earlier year. H&r block 2010 tax software   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. H&r block 2010 tax software   If you repaid $3,000 or less in 2013, deduct it on Schedule A (Form 1040), line 23. H&r block 2010 tax software The 2%-of-adjusted-gross-income limit applies to this deduction. H&r block 2010 tax software You cannot take this deduction if you file Form 1040A. H&r block 2010 tax software    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. H&r block 2010 tax software For more information, see Repayments in Publication 525. H&r block 2010 tax software Withholding Tax and Estimated Tax Your retirement plan distributions are subject to federal income tax withholding. H&r block 2010 tax software However, you can choose not to have tax withheld on payments you receive unless they are eligible rollover distributions. H&r block 2010 tax software (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. H&r block 2010 tax software ) 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. H&r block 2010 tax software See Estimated tax , later. H&r block 2010 tax software 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. H&r block 2010 tax software For this purpose, a commercial annuity means an annuity, endowment, or life insurance contract issued by an insurance company. H&r block 2010 tax software 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. H&r block 2010 tax software Choosing no withholding. H&r block 2010 tax software   You can choose not to have income tax withheld from retirement plan payments unless they are eligible rollover distributions. H&r block 2010 tax software You can make this choice on Form W-4P for periodic and nonperiodic payments. H&r block 2010 tax software This choice generally remains in effect until you revoke it. H&r block 2010 tax software   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. H&r block 2010 tax software   To choose not to have tax withheld, a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen or resident alien must give the payer a home address in the United States or its possessions. H&r block 2010 tax software Without that address, the payer must withhold tax. H&r block 2010 tax software For example, the payer has to withhold tax if the recipient has provided a U. H&r block 2010 tax software S. H&r block 2010 tax software address for a nominee, trustee, or agent to whom the benefits are delivered, but has not provided his or her own U. H&r block 2010 tax software S. H&r block 2010 tax software home address. H&r block 2010 tax software   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. H&r block 2010 tax software S. H&r block 2010 tax software citizen, a U. H&r block 2010 tax software S. H&r block 2010 tax software resident alien, or someone who left the country to avoid tax. H&r block 2010 tax software But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. H&r block 2010 tax software This 30% rate will not apply if you are exempt or subject to a reduced rate by treaty. H&r block 2010 tax software For details, get Publication 519. H&r block 2010 tax software Periodic payments. H&r block 2010 tax software   Unless you choose no withholding, your annuity or similar periodic payments (other than eligible rollover distributions) will be treated like wages for withholding purposes. H&r block 2010 tax software 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). H&r block 2010 tax software You should give the payer a completed withholding certificate (Form W-4P or a similar form provided by the payer). H&r block 2010 tax software If you do not, tax will be withheld as if you were married and claiming three withholding allowances. H&r block 2010 tax software   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. H&r block 2010 tax software   You must file a new withholding certificate to change the amount of withholding. H&r block 2010 tax software Nonperiodic distributions. H&r block 2010 tax software    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. H&r block 2010 tax software You can also ask the payer to withhold an additional amount using Form W-4P. H&r block 2010 tax software 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. H&r block 2010 tax software Eligible rollover distribution. H&r block 2010 tax software    If you receive an eligible rollover distribution, 20% of it generally will be withheld for income tax. H&r block 2010 tax software You cannot choose not to have tax withheld from an eligible rollover distribution. H&r block 2010 tax software 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. H&r block 2010 tax software For more information about eligible rollover distributions, see Rollovers , later. H&r block 2010 tax software Estimated tax. H&r block 2010 tax software   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. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software For more information, get Publication 505, Tax Withholding and Estimated Tax. H&r block 2010 tax software 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. H&r block 2010 tax software See Publication 915. H&r block 2010 tax software You can choose to have income tax withheld from those benefits. H&r block 2010 tax software Use Form W-4V to make this choice. H&r block 2010 tax software 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). H&r block 2010 tax software 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. H&r block 2010 tax software Therefore, the first step in figuring how much of a distribution is taxable is to determine the cost of your pension or annuity. H&r block 2010 tax software 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). H&r block 2010 tax software To find this amount, you must first figure the total premiums, contributions, or other amounts you paid. H&r block 2010 tax software This includes the amounts your employer contributed that were taxable to you when paid. H&r block 2010 tax software (However, see Foreign employment contributions , later. H&r block 2010 tax software ) 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). H&r block 2010 tax software It also does not include amounts you contributed for health and accident benefits (including any additional premiums paid for double indemnity or disability benefits). H&r block 2010 tax software From this total cost you must subtract the following amounts. H&r block 2010 tax software 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. H&r block 2010 tax software Any other tax-free amounts you received under the contract or plan by the later of the dates in (1). H&r block 2010 tax software 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. H&r block 2010 tax software (See Simplified Method , later, for information on its required use. H&r block 2010 tax software ) If you use the General Rule for your annuity payments, the value of the refund feature in your annuity contract. H&r block 2010 tax software (See General Rule , later, for information on its use. H&r block 2010 tax software ) 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. H&r block 2010 tax software For more information, see Publication 939. H&r block 2010 tax software The tax treatment of the items described in (1) through (3) is discussed later under Taxation of Nonperiodic Payments . H&r block 2010 tax software Form 1099-R. H&r block 2010 tax software 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. H&r block 2010 tax software Annuity starting date defined. H&r block 2010 tax software   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. H&r block 2010 tax software Example. H&r block 2010 tax software 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. H&r block 2010 tax software The annuity starting date is July 1. H&r block 2010 tax software 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. H&r block 2010 tax software Designated Roth accounts. H&r block 2010 tax software   Your cost in these accounts is your designated Roth contributions that were included in your income as wages subject to applicable withholding requirements. H&r block 2010 tax software Your cost will also include any in-plan Roth rollovers you included in income. H&r block 2010 tax software Foreign employment contributions. H&r block 2010 tax software   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. H&r block 2010 tax software 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. H&r block 2010 tax software Foreign employment contributions while a nonresident alien. H&r block 2010 tax software   In determining your cost, special rules apply if you are a U. H&r block 2010 tax software S. H&r block 2010 tax software citizen or resident alien who received distributions in 2013 from a plan to which contributions were made while you were a nonresident alien. H&r block 2010 tax software 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. H&r block 2010 tax software Taxation of Periodic Payments This section explains how the periodic payments you receive from a pension or annuity plan are taxed. H&r block 2010 tax software 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). H&r block 2010 tax software These payments are also known as amounts received as an annuity. H&r block 2010 tax software If you receive an amount from your plan that is not a periodic payment, see Taxation of Nonperiodic Payments , later. H&r block 2010 tax software In general, you can recover the cost of your pension or annuity tax free over the period you are to receive the payments. H&r block 2010 tax software 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). H&r block 2010 tax software Designated Roth accounts. H&r block 2010 tax software   If you receive a qualified distribution from a designated Roth account, the distribution is not included in your gross income. H&r block 2010 tax software This applies to both your cost in the account and income earned on that account. H&r block 2010 tax software 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. H&r block 2010 tax software   If the distribution is not a qualified distribution, the rules discussed in this section apply. H&r block 2010 tax software The designated Roth account is treated as a separate contract. H&r block 2010 tax software Period of participation. H&r block 2010 tax software   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. H&r block 2010 tax software Therefore, for designated Roth contributions made for 2013, the first year for which a qualified distribution can be made is 2018. H&r block 2010 tax software   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. H&r block 2010 tax software   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. H&r block 2010 tax software This is known as an in-plan Roth rollover. H&r block 2010 tax software For more details, see In-plan Roth rollovers , later. H&r block 2010 tax software 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). H&r block 2010 tax software You did not pay anything or are not considered to have paid anything for your pension or annuity. H&r block 2010 tax software Amounts withheld from your pay on a tax-deferred basis are not considered part of the cost of the pension or annuity payment. H&r block 2010 tax software Your employer did not withhold contributions from your salary. H&r block 2010 tax software You got back all of your contributions tax free in prior years (however, see Exclusion not limited to cost under Partly Taxable Payments, later). H&r block 2010 tax software Report the total amount you got on Form 1040, line 16b; Form 1040A, line 12b; or on Form 1040NR, line 17b. H&r block 2010 tax software You should make no entry on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. H&r block 2010 tax software Deductible voluntary employee contributions. H&r block 2010 tax software   Distributions you receive that are based on your accumulated deductible voluntary employee contributions are generally fully taxable in the year distributed to you. H&r block 2010 tax software Accumulated deductible voluntary employee contributions include net earnings on the contributions. H&r block 2010 tax software If distributed as part of a lump sum, they do not qualify for the 10-year tax option or capital gain treatment, explained later. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software The rest of each payment is taxable (however, see Insurance Premiums for Retired Public Safety Officers , earlier). H&r block 2010 tax software You figure the tax-free part of the payment using one of the following methods. H&r block 2010 tax software Simplified Method. H&r block 2010 tax software 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). H&r block 2010 tax software You cannot use this method if your annuity is paid under a nonqualified plan. H&r block 2010 tax software General Rule. H&r block 2010 tax software You must use this method if your annuity is paid under a nonqualified plan. H&r block 2010 tax software You generally cannot use this method if your annuity is paid under a qualified plan. H&r block 2010 tax software 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. H&r block 2010 tax software If you had more than one partly taxable pension or annuity, figure the tax-free part and the taxable part of each separately. H&r block 2010 tax software Qualified plan annuity starting before November 19, 1996. H&r block 2010 tax software   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. H&r block 2010 tax software If your annuity starting date is before July 2, 1986, you use the General Rule unless your annuity qualified for the Three-Year Rule. H&r block 2010 tax software 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. H&r block 2010 tax software Exclusion limit. H&r block 2010 tax software   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. H&r block 2010 tax software Once your annuity starting date is determined, it does not change. H&r block 2010 tax software 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. H&r block 2010 tax software That recovery period begins on your annuity starting date and is not affected by the date you first complete the worksheet. H&r block 2010 tax software Exclusion limited to cost. H&r block 2010 tax software   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. H&r block 2010 tax software 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. H&r block 2010 tax software This deduction is not subject to the 2%-of-adjusted-gross-income limit. H&r block 2010 tax software Example 1. H&r block 2010 tax software Your annuity starting date is after 1986, and you exclude $100 a month ($1,200 a year) under the Simplified Method. H&r block 2010 tax software The total cost of your annuity is $12,000. H&r block 2010 tax software Your exclusion ends when you have recovered your cost tax free, that is, after 10 years (120 months). H&r block 2010 tax software After that, your annuity payments are generally fully taxable. H&r block 2010 tax software Example 2. H&r block 2010 tax software The facts are the same as in Example 1, except you die (with no surviving annuitant) after the eighth year of retirement. H&r block 2010 tax software You have recovered tax free only $9,600 (8 × $1,200) of your cost. H&r block 2010 tax software An itemized deduction for your unrecovered cost of $2,400 ($12,000 – $9,600) can be taken on your final return. H&r block 2010 tax software Exclusion not limited to cost. H&r block 2010 tax software   If your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. H&r block 2010 tax software 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. H&r block 2010 tax software The total exclusion may be more than your cost. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software For any other annuity, this number is the number of monthly annuity payments under the contract. H&r block 2010 tax software Who must use the Simplified Method. H&r block 2010 tax software   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you meet both of the following conditions. H&r block 2010 tax software You receive your pension or annuity payments from any of the following plans. H&r block 2010 tax software A qualified employee plan. H&r block 2010 tax software A qualified employee annuity. H&r block 2010 tax software A tax-sheltered annuity plan (403(b) plan). H&r block 2010 tax software On your annuity starting date, at least one of the following conditions applies to you. H&r block 2010 tax software You are under age 75. H&r block 2010 tax software You are entitled to less than 5 years of guaranteed payments. H&r block 2010 tax software Guaranteed payments. H&r block 2010 tax software   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. H&r block 2010 tax software 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. H&r block 2010 tax software Annuity starting before November 19, 1996. H&r block 2010 tax software   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. H&r block 2010 tax software 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 . H&r block 2010 tax software Who cannot use the Simplified Method. H&r block 2010 tax software   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. H&r block 2010 tax software See General Rule , later. H&r block 2010 tax software How to use the Simplified Method. H&r block 2010 tax software    Complete Worksheet A in the back of this publication to figure your taxable annuity for 2013. H&r block 2010 tax software Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. H&r block 2010 tax software   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. H&r block 2010 tax software How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. H&r block 2010 tax software 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. H&r block 2010 tax software    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. H&r block 2010 tax software Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. H&r block 2010 tax software Single-life annuity. H&r block 2010 tax software   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. H&r block 2010 tax software Enter on line 3 the number shown for your age on your annuity starting date. H&r block 2010 tax software This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. H&r block 2010 tax software Multiple-lives annuity. H&r block 2010 tax software   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. H&r block 2010 tax software Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. H&r block 2010 tax software   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. H&r block 2010 tax software 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. H&r block 2010 tax software This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. H&r block 2010 tax software Fixed-period annuity. H&r block 2010 tax software   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. H&r block 2010 tax software Line 6. H&r block 2010 tax software   The amount on line 6 should include all amounts that could have been recovered in prior years. H&r block 2010 tax software If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. H&r block 2010 tax software Example. H&r block 2010 tax software Bill Smith, age 65, began receiving retirement benefits in 2013 under a joint and survivor annuity. H&r block 2010 tax software Bill's annuity starting date is January 1, 2013. H&r block 2010 tax software The benefits are to be paid for the joint lives of Bill and his wife, Kathy, age 65. H&r block 2010 tax software Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software His completed worksheet is shown later. H&r block 2010 tax software Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) as shown on line 4 of the worksheet. H&r block 2010 tax software Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. H&r block 2010 tax software The full amount of any annuity payments received after 310 payments are paid must be included in gross income. H&r block 2010 tax software 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. H&r block 2010 tax software This deduction is not subject to the 2%-of-adjusted-gross-income limit. H&r block 2010 tax software Worksheet A. H&r block 2010 tax software Simplified Method Worksheet for Bill Smith 1. H&r block 2010 tax software Enter the total pension or annuity payments received this year. H&r block 2010 tax software Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. H&r block 2010 tax software $14,400 2. H&r block 2010 tax software Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion. H&r block 2010 tax software * See Cost (Investment in the Contract) , earlier 2. H&r block 2010 tax software 31,000   Note. H&r block 2010 tax software 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). H&r block 2010 tax software Otherwise, go to line 3. H&r block 2010 tax software     3. H&r block 2010 tax software Enter the appropriate number from Table 1 below. H&r block 2010 tax software 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. H&r block 2010 tax software 310 4. H&r block 2010 tax software Divide line 2 by the number on line 3 4. H&r block 2010 tax software 100 5. H&r block 2010 tax software Multiply line 4 by the number of months for which this year's payments were made. H&r block 2010 tax software If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. H&r block 2010 tax software Otherwise, go to line 6 5. H&r block 2010 tax software 1,200 6. H&r block 2010 tax software Enter any amount previously recovered tax free in years after 1986. H&r block 2010 tax software This is the amount shown on line 10 of your worksheet for last year 6. H&r block 2010 tax software -0- 7. H&r block 2010 tax software Subtract line 6 from line 2 7. H&r block 2010 tax software 31,000 8. H&r block 2010 tax software Enter the smaller of line 5 or line 7 8. H&r block 2010 tax software 1,200 9. H&r block 2010 tax software Taxable amount for year. H&r block 2010 tax software Subtract line 8 from line 1. H&r block 2010 tax software Enter the result, but not less than zero. H&r block 2010 tax software Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. H&r block 2010 tax software Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. H&r block 2010 tax software 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. H&r block 2010 tax software $13,200 10. H&r block 2010 tax software Was your annuity starting date before 1987? □ Yes. H&r block 2010 tax software STOP. H&r block 2010 tax software Do not complete the rest of this worksheet. H&r block 2010 tax software  ☑ No. H&r block 2010 tax software Add lines 6 and 8. H&r block 2010 tax software This is the amount you have recovered tax free through 2013. H&r block 2010 tax software You will need this number if you need to fill out this worksheet next year 10. H&r block 2010 tax software 1,200 11. H&r block 2010 tax software Balance of cost to be recovered. H&r block 2010 tax software Subtract line 10 from line 2. H&r block 2010 tax software If zero, you will not have to complete this worksheet next year. H&r block 2010 tax software The payments you receive next year will generally be fully taxable 11. H&r block 2010 tax software $29,800         * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. H&r block 2010 tax software           Table 1 for Line 3 Above       AND your annuity starting date was—     IF the age at annuity starting date was. H&r block 2010 tax software . H&r block 2010 tax software . H&r block 2010 tax software BEFORE November 19, 1996, enter on line 3. H&r block 2010 tax software . H&r block 2010 tax software . H&r block 2010 tax software AFTER November 18, 1996, enter on line 3. H&r block 2010 tax software . H&r block 2010 tax software . H&r block 2010 tax software     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. H&r block 2010 tax software . H&r block 2010 tax software . H&r block 2010 tax software THEN enter on line 3. H&r block 2010 tax software . H&r block 2010 tax software . H&r block 2010 tax software     110 or under   410     111-120   360     121-130   310     131-140   260     141 or older   210   Multiple annuitants. H&r block 2010 tax software   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. H&r block 2010 tax software Figure your share by taking the following steps. H&r block 2010 tax software Complete your worksheet through line 4 to figure the monthly tax-free amount. H&r block 2010 tax software Divide the amount of your monthly payment by the total amount of the monthly payments to all annuitants. H&r block 2010 tax software Multiply the amount on line 4 of your worksheet by the amount figured in (2) above. H&r block 2010 tax software The result is your share of the monthly tax-free amount. H&r block 2010 tax software   Replace the amount on line 4 of the worksheet with the result in (3) above. H&r block 2010 tax software Enter that amount on line 4 of your worksheet each year. H&r block 2010 tax software 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. H&r block 2010 tax software Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. H&r block 2010 tax software To figure it, you must use life expectancy (actuarial) tables prescribed by the IRS. H&r block 2010 tax software Who must use the General Rule. H&r block 2010 tax software   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. H&r block 2010 tax software Annuity starting before November 19, 1996. H&r block 2010 tax software   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. H&r block 2010 tax software You also had to use it for any fixed-period annuity. H&r block 2010 tax software If you did not have to use the General Rule, you could have chosen to use it. H&r block 2010 tax software 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. H&r block 2010 tax software   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. H&r block 2010 tax software Who cannot use the General Rule. H&r block 2010 tax software   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. H&r block 2010 tax software See Simplified Method , earlier. H&r block 2010 tax software More information. H&r block 2010 tax software   For complete information on using the General Rule, including the actuarial tables you need, see Publication 939. H&r block 2010 tax software Taxation of Nonperiodic Payments This section of the publication explains how any nonperiodic distributions you receive under a pension or annuity plan are taxed. H&r block 2010 tax software Nonperiodic distributions are also known as amounts not received as an annuity. H&r block 2010 tax software They include all payments other than periodic payments and corrective distributions. H&r block 2010 tax software For example, the following items are treated as nonperiodic distributions. H&r block 2010 tax software Cash withdrawals. H&r block 2010 tax software Distributions of current earnings (dividends) on your investment. H&r block 2010 tax software 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. H&r block 2010 tax software Certain loans. H&r block 2010 tax software See Loans Treated as Distributions , later. H&r block 2010 tax software The value of annuity contracts transferred without full and adequate consideration. H&r block 2010 tax software See Transfers of Annuity Contracts , later. H&r block 2010 tax software Corrective distributions of excess plan contributions. H&r block 2010 tax software   Generally, if the contributions made for you during the year to certain retirement plans exceed certain limits, the excess is taxable to you. H&r block 2010 tax software To correct an excess, your plan may distribute it to you (along with any income earned on the excess). H&r block 2010 tax software Although the plan reports the corrective distributions on Form 1099-R, the distribution is not treated as a nonperiodic distribution from the plan. H&r block 2010 tax software 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. H&r block 2010 tax software    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. H&r block 2010 tax software   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. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software 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. H&r block 2010 tax software See Rollovers, later. H&r block 2010 tax software 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. H&r block 2010 tax software See Lump-Sum Distributions, later. H&r block 2010 tax software Annuity starting date. H&r block 2010 tax software   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. H&r block 2010 tax software Distributions of employer securities. H&r block 2010 tax software    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. H&r block 2010 tax software The NUA is the net increase in the securities' value while they were in the trust. H&r block 2010 tax software This tax deferral applies to distributions of the employer corporation's stocks, bonds, registered debentures, and debentures with interest coupons attached. H&r block 2010 tax software   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. H&r block 2010 tax software    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. H&r block 2010 tax software    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