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Taxes H&r Block

Taxes h&r block Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. Taxes h&r block Gross monthly rate. Taxes h&r block Your cost. Taxes h&r block Choosing a survivor annuity after retirement. Taxes h&r block Canceling a survivor annuity after retirement. Taxes h&r block Annuity starting date after 1986. Taxes h&r block Annuity starting date before 1987. Taxes h&r block Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. Taxes h&r block Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. Taxes h&r block The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. Taxes h&r block If the refund includes only your contributions, none of the refund is taxable. Taxes h&r block If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). Taxes h&r block If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Taxes h&r block See Rollover Rules in Part II for information on how to make a rollover. Taxes h&r block Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. Taxes h&r block Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. Taxes h&r block If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Taxes h&r block If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. Taxes h&r block For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Taxes h&r block A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. Taxes h&r block Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. Taxes h&r block OPM will tell you how to make the choice. Taxes h&r block The choice for no withholding remains in effect until you change it. Taxes h&r block These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. Taxes h&r block 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. Taxes h&r block You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. Taxes h&r block Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. Taxes h&r block For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. Taxes h&r block Form CSA 1099R. Taxes h&r block   Form CSA 1099R is mailed to you by OPM each year. Taxes h&r block It will show any tax you had withheld. Taxes h&r block File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. Taxes h&r block    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. Taxes h&r block servicesonline. Taxes h&r block opm. Taxes h&r block gov. Taxes h&r block To log in, you will need your retirement CSA claim number and your personal identification number. Taxes h&r block Choosing no withholding on payments outside the United States. Taxes h&r block   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. Taxes h&r block   To choose no withholding if you are a U. Taxes h&r block S. Taxes h&r block citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. Taxes h&r block Otherwise, OPM has to withhold tax. Taxes h&r block For example, OPM must withhold if you provide a U. Taxes h&r block S. Taxes h&r block address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. Taxes h&r block S. Taxes h&r block home address. Taxes h&r block   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. Taxes h&r block S. Taxes h&r block citizen, a U. Taxes h&r block S. Taxes h&r block resident alien, or someone who left the United States to avoid tax. Taxes h&r block But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. Taxes h&r block For details, see Publication 519, U. Taxes h&r block S. Taxes h&r block Tax Guide for Aliens. Taxes h&r block Withholding certificate. Taxes h&r block   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. Taxes h&r block The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. Taxes h&r block If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. Taxes h&r block To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Taxes h&r block C. Taxes h&r block calling area must call 202-606-0500). Taxes h&r block No special form is needed. Taxes h&r block You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. Taxes h&r block If you have TTY/TDD equipment, call 1-855–887–4957. Taxes h&r block If you need a PIN, call OPM's Retirement Information Office. Taxes h&r block You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. Taxes h&r block servicesonline. Taxes h&r block opm. Taxes h&r block gov. Taxes h&r block You will need your retirement CSA or CSF claim number and your PIN. Taxes h&r block Withholding from certain lump-sum payments. Taxes h&r block   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. Taxes h&r block Tax will be withheld at a 20% rate on the interest distributed. Taxes h&r block However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. Taxes h&r block If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. Taxes h&r block Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. Taxes h&r block See Rollover Rules in Part II. Taxes h&r block If you receive only your contributions, no tax will be withheld. Taxes h&r block Withholding from Thrift Savings Plan payments. Taxes h&r block   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. Taxes h&r block The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. Taxes h&r block  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. Taxes h&r block By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. Taxes h&r block   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. Taxes h&r block The above document is also available in the “Forms & Publications” section of the TSP website at www. Taxes h&r block tsp. Taxes h&r block gov. Taxes h&r block Estimated tax. Taxes h&r block   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). Taxes h&r block The return must cover all 12 months. Taxes h&r block   You do not have to pay estimated tax for 2014 if you were a U. Taxes h&r block S. Taxes h&r block citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. Taxes h&r block   Publication 505 contains information that you can use to help you figure your estimated tax payments. Taxes h&r block Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. Taxes h&r block The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. Taxes h&r block Children. Taxes h&r block   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. Taxes h&r block   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. Taxes h&r block Form CSF 1099R. Taxes h&r block   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. Taxes h&r block It will show the total amount of the annuity you received in the past year. Taxes h&r block It also should show, separately, the survivor annuity for a child or children. Taxes h&r block Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. Taxes h&r block   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. Taxes h&r block    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. Taxes h&r block servicesonline. Taxes h&r block opm. Taxes h&r block gov. Taxes h&r block To log in you will need your retirement CSF claim number and personal identification number. Taxes h&r block    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Taxes h&r block C. Taxes h&r block calling area must call 202-606-0500). Taxes h&r block You will need your CSF claim number and your social security number when you call. Taxes h&r block Taxable part of annuity. Taxes h&r block   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. Taxes h&r block To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. Taxes h&r block Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. Taxes h&r block If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. Taxes h&r block However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. Taxes h&r block Annuity statement. Taxes h&r block   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). Taxes h&r block You will use this information to figure the tax-free recovery of your cost. Taxes h&r block Annuity starting date. Taxes h&r block   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. Taxes h&r block If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. Taxes h&r block Gross monthly rate. Taxes h&r block   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. Taxes h&r block Your cost. Taxes h&r block   Your monthly annuity payment contains an amount on which you have previously paid income tax. Taxes h&r block This amount represents part of your contributions to the retirement plan. Taxes h&r block Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. Taxes h&r block   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. Taxes h&r block If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. Taxes h&r block (See Lump-sum credit under Alternative Annuity Option, later. Taxes h&r block )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. Taxes h&r block You cannot claim an interest deduction for any interest payments. Taxes h&r block You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. Taxes h&r block Recovering your cost tax free. Taxes h&r block   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. Taxes h&r block If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. Taxes h&r block If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). Taxes h&r block If your annuity starting date is after November 18, 1996, you must use the Simplified Method. Taxes h&r block   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). Taxes h&r block The tax-free part is a fixed dollar amount. Taxes h&r block It remains the same, even if your annuity is increased. Taxes h&r block Generally, this rule applies as long as you receive your annuity. Taxes h&r block However, see Exclusion limit , later. Taxes h&r block Choosing a survivor annuity after retirement. Taxes h&r block    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. Taxes h&r block   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. Taxes h&r block To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. Taxes h&r block Figure the expected return as of the date the reduced annuity begins. Taxes h&r block For details on the General Rule, see Publication 939. Taxes h&r block Canceling a survivor annuity after retirement. Taxes h&r block   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. Taxes h&r block The increased annuity does not change the cost recovery you figured at the annuity starting date. Taxes h&r block The tax-free part of each annuity payment remains the same. Taxes h&r block    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Taxes h&r block C. Taxes h&r block calling area must call 202-606-0500). Taxes h&r block Exclusion limit. Taxes h&r block   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. Taxes h&r block Annuity starting date after 1986. Taxes h&r block   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. Taxes h&r block Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. Taxes h&r block Example. Taxes h&r block Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. Taxes h&r block If your cost is $12,000, the exclusion ends after 10 years (120 months). Taxes h&r block Thereafter, your entire annuity is generally fully taxable. Taxes h&r block Annuity starting date before 1987. Taxes h&r block   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. Taxes h&r block If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. Taxes h&r block The total exclusion may be more than your cost. Taxes h&r block Deduction of unrecovered cost. Taxes h&r block   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. Taxes h&r block The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). Taxes h&r block If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. Taxes h&r block Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. Taxes h&r block (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. Taxes h&r block ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. Taxes h&r block The Simplified Method does not apply if your annuity starting date is before July 2, 1986. Taxes h&r block Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. Taxes h&r block This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Taxes h&r block If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. Taxes h&r block Worksheet A. Taxes h&r block   Use Worksheet A. Taxes h&r block Simplified Method (near the end of this publication), to figure your taxable annuity. Taxes h&r block Be sure to keep the completed worksheet. Taxes h&r block It will help you figure your taxable amounts for later years. Taxes h&r block Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. Taxes h&r block However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. Taxes h&r block Line 2. Taxes h&r block   See Your cost , earlier, for an explanation of your cost in the plan. Taxes h&r block If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. Taxes h&r block Line 3. Taxes h&r block   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. Taxes h&r block If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. Taxes h&r block If your annuity starting date is before 1998, use Table 1. Taxes h&r block Line 6. Taxes h&r block   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. Taxes h&r block If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. Taxes h&r block Example. Taxes h&r block Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. Taxes h&r block His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. Taxes h&r block He must use the Simplified Method to figure the tax-free part of his annuity benefits. Taxes h&r block Bill's monthly annuity benefit is $1,000. Taxes h&r block He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. Taxes h&r block At his annuity starting date, he was 65 and Kathy was 57. Taxes h&r block Bill's completed Worksheet A is shown later. Taxes h&r block To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). Taxes h&r block Bill keeps a copy of the completed worksheet for his records. Taxes h&r block It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. Taxes h&r block Bill's tax-free monthly amount is $100. Taxes h&r block (See line 4 of the worksheet. Taxes h&r block ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. Taxes h&r block If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. Taxes h&r block If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. Taxes h&r block General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. Taxes h&r block If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. Taxes h&r block If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. Taxes h&r block Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. Taxes h&r block Figuring this percentage is complex and requires the use of actuarial tables. Taxes h&r block For these tables and other information about using the General Rule, see Publication 939. Taxes h&r block Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. Taxes h&r block Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. Taxes h&r block After your cost was recovered, all payments became fully taxable. Taxes h&r block You cannot use another rule to again exclude amounts from income. Taxes h&r block The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. Taxes h&r block Worksheet A. Taxes h&r block Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. Taxes h&r block 1. Taxes h&r block Enter the total pension or annuity payments received this year. Taxes h&r block Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Taxes h&r block $ 8,000 2. Taxes h&r block Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Taxes h&r block See Your cost in Part II, Rules for Retirees, earlier 2. Taxes h&r block 31,000 Note: 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). Taxes h&r block Otherwise, go to line 3. Taxes h&r block   3. Taxes h&r block Enter the appropriate number from Table 1 below. Taxes h&r block 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. Taxes h&r block 3. Taxes h&r block 310 4. Taxes h&r block Divide line 2 by the number on line 3 4. Taxes h&r block 100 5. Taxes h&r block Multiply line 4 by the number of months for which this year's payments were made. Taxes h&r block If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Taxes h&r block Otherwise, go to line 6 5. Taxes h&r block 800 6. Taxes h&r block Enter any amounts previously recovered tax free in years after 1986. Taxes h&r block This is the amount shown on line 10 of your worksheet for last year 6. Taxes h&r block 0 7. Taxes h&r block Subtract line 6 from line 2 7. Taxes h&r block 31,000 8. Taxes h&r block Enter the smaller of line 5 or line 7 8. Taxes h&r block 800 9. Taxes h&r block Taxable amount for year. Taxes h&r block Subtract line 8 from line 1. Taxes h&r block Enter the result, but not less than zero. Taxes h&r block Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Taxes h&r block If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Taxes h&r block If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Taxes h&r block If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Taxes h&r block $7,200 10. Taxes h&r block Was your annuity starting date before 1987?   Yes. Taxes h&r block Do not complete the rest of this worksheet. Taxes h&r block    No. Taxes h&r block Add lines 6 and 8. Taxes h&r block This is the amount you have recovered tax free through 2013. Taxes h&r block You will need this number if you need to fill out this worksheet next year 10. Taxes h&r block 800 11. Taxes h&r block Balance of cost to be recovered. Taxes h&r block Subtract line 10 from line 2. Taxes h&r block If zero, you will not have to complete this worksheet next year. Taxes h&r block The payments you receive next year will generally be fully taxable 11. Taxes h&r block $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Taxes h&r block Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. Taxes h&r block If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. Taxes h&r block You are eligible to make this choice if you meet all of the following requirements. Taxes h&r block You are retiring, but not on disability. Taxes h&r block You have a life-threatening illness or other critical medical condition. Taxes h&r block You do not have a former spouse entitled to court ordered benefits based on your service. Taxes h&r block If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. Taxes h&r block Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. Taxes h&r block The tax-free part represents part of your cost. Taxes h&r block The taxable part represents part of the earnings on your annuity contract. Taxes h&r block Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. Taxes h&r block Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. Taxes h&r block Your taxable amount may therefore be more than the lump-sum payment you receive. Taxes h&r block You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. Taxes h&r block If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Taxes h&r block See Rollover Rules , later, for information on how to make a rollover. Taxes h&r block OPM can make a direct rollover only up to the amount of the lump-sum payment. Taxes h&r block Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. Taxes h&r block The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Taxes h&r block It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. Taxes h&r block For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Taxes h&r block Worksheet B. Taxes h&r block   Use Worksheet B. Taxes h&r block Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. Taxes h&r block Be sure to keep the completed worksheet for your records. Taxes h&r block   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. Taxes h&r block Lump-sum credit. Taxes h&r block   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). Taxes h&r block However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. Taxes h&r block Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. Taxes h&r block Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. Taxes h&r block You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. Taxes h&r block Present value of your annuity contract. Taxes h&r block   The present value of your annuity contract is figured using actuarial tables provided by the IRS. Taxes h&r block If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. Taxes h&r block Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. Taxes h&r block , NW Washington, DC 20224-0002 Example. Taxes h&r block David Brown retired from the federal government in 2013, one month after his 55th birthday. Taxes h&r block He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. Taxes h&r block The present value of his annuity contract was $155,000. Taxes h&r block The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. Taxes h&r block The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. Taxes h&r block See Reduced Annuity , later. Taxes h&r block Worksheet B. Taxes h&r block Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . Taxes h&r block  1. Taxes h&r block Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. Taxes h&r block $ 31,000 2. Taxes h&r block Enter the present value of your annuity contract 2. Taxes h&r block 155,000 3. Taxes h&r block Divide line 1 by line 2 3. Taxes h&r block . Taxes h&r block 20 4. Taxes h&r block Tax-free amount. Taxes h&r block Multiply line 1 by line 3. Taxes h&r block (Caution: Do not include this amount on line 6 of Worksheet A in this publication. Taxes h&r block ) 4. Taxes h&r block $6,200 5. Taxes h&r block Taxable amount (net cost in the plan). Taxes h&r block Subtract line 4 from line 1. Taxes h&r block Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Taxes h&r block Also, enter this amount on line 2 of Worksheet A in this publication. Taxes h&r block 5. Taxes h&r block $24,800   Lump-sum payment in installments. Taxes h&r block   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. Taxes h&r block You will receive the first installment after you make the choice upon retirement. Taxes h&r block The second installment will be paid to you, with interest, in the next calendar year. Taxes h&r block (Exceptions to the installment rule are provided for cases of critical medical need. Taxes h&r block )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. Taxes h&r block If the payment has a tax-free part, you must treat the taxable part as received first. Taxes h&r block How to report. Taxes h&r block   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Taxes h&r block Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. Taxes h&r block    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. Taxes h&r block Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. Taxes h&r block These annuity payments each will have a tax-free and a taxable part. Taxes h&r block To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). Taxes h&r block For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. Taxes h&r block To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. Taxes h&r block Enter as your net cost on line 2 the amount from Worksheet B, line 5. Taxes h&r block Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Taxes h&r block Example. Taxes h&r block The facts are the same as in the example for David Brown in the preceding discussion. Taxes h&r block In addition, David received 10 annuity payments in 2013 of $1,200 each. Taxes h&r block Using Worksheet A, he figures the taxable part of his annuity payments. Taxes h&r block He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. Taxes h&r block His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). Taxes h&r block He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. Taxes h&r block David's filled-in Worksheet A is shown on the next page. Taxes h&r block Worksheet A. Taxes h&r block Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . Taxes h&r block 1. Taxes h&r block Enter the total pension or annuity payments received this year. Taxes h&r block Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Taxes h&r block $ 12,000 2. Taxes h&r block Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Taxes h&r block See Your cost in Part II, Rules for Retirees, earlier 2. Taxes h&r block 24,800 Note: 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). Taxes h&r block Otherwise, go to line 3. Taxes h&r block   3. Taxes h&r block Enter the appropriate number from Table 1 below. Taxes h&r block 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. Taxes h&r block 3. Taxes h&r block 360 4. Taxes h&r block Divide line 2 by the number on line 3 4. Taxes h&r block 68. Taxes h&r block 89 5. Taxes h&r block Multiply line 4 by the number of months for which this year's payments were made. Taxes h&r block If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Taxes h&r block Otherwise, go to line 6 5. Taxes h&r block 688. Taxes h&r block 90 6. Taxes h&r block Enter any amounts previously recovered tax free in years after 1986. Taxes h&r block This is the amount shown on line 10 of your worksheet for last year 6. Taxes h&r block 0 7. Taxes h&r block Subtract line 6 from line 2 7. Taxes h&r block 24,800 8. Taxes h&r block Enter the smaller of line 5 or line 7 8. Taxes h&r block 688. Taxes h&r block 90 9. Taxes h&r block Taxable amount for year. Taxes h&r block Subtract line 8 from line 1. Taxes h&r block Enter the result, but not less than zero. Taxes h&r block Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Taxes h&r block If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Taxes h&r block If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Taxes h&r block If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Taxes h&r block $11,311. Taxes h&r block 10 10. Taxes h&r block Was your annuity starting date before 1987?   Yes. Taxes h&r block Do not complete the rest of this worksheet. Taxes h&r block    No. Taxes h&r block Add lines 6 and 8. Taxes h&r block This is the amount you have recovered tax free through 2013. Taxes h&r block You will need this number if you need to fill out this worksheet next year 10. Taxes h&r block 688. Taxes h&r block 90 11. Taxes h&r block Balance of cost to be recovered. Taxes h&r block Subtract line 10 from line 2. Taxes h&r block If zero, you will not have to complete this worksheet next year. Taxes h&r block The payments you receive next year will generally be fully taxable 11. Taxes h&r block $24,111. Taxes h&r block 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Taxes h&r block Reemployment after choosing the alternative annuity option. Taxes h&r block If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. Taxes h&r block If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. Taxes h&r block Annuity starting date before November 19, 1996. Taxes h&r block   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. Taxes h&r block Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. Taxes h&r block However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Taxes h&r block Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. Taxes h&r block The gift may be taxable for gift tax purposes. Taxes h&r block The value of the gift is equal to the value of the annuity. Taxes h&r block Joint and survivor annuity. Taxes h&r block   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. Taxes h&r block This will eliminate any gift tax liability with regard to that gift. Taxes h&r block   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. Taxes h&r block This may result in a taxable gift. Taxes h&r block More information. Taxes h&r block   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. Taxes h&r block Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. Taxes h&r block Annual leave. Taxes h&r block   A payment for accrued annual leave received on retirement is a salary payment. Taxes h&r block It is taxable as wages in the tax year you receive it. Taxes h&r block Voluntary contributions. Taxes h&r block   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. Taxes h&r block They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. Taxes h&r block Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. Taxes h&r block See Thrift Savings Plan , later. Taxes h&r block Additional annuity benefit. Taxes h&r block   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. Taxes h&r block This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. Taxes h&r block It does not matter that you receive only one monthly check covering both benefits. Taxes h&r block Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. Taxes h&r block   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. Taxes h&r block Refund of voluntary contributions. Taxes h&r block   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. Taxes h&r block If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. Taxes h&r block See Rollover Rules , later. Taxes h&r block The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Taxes h&r block It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. Taxes h&r block For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Taxes h&r block Community property laws. Taxes h&r block   State community property laws apply to your annuity. Taxes h&r block These laws will affect your income tax only if you file a return separately from your spouse. Taxes h&r block   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. Taxes h&r block Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. Taxes h&r block   At any time, you have only one domicile even though you may have more than one home. Taxes h&r block Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. Taxes h&r block The question of your domicile is mainly a matter of your intentions as indicated by your actions. Taxes h&r block   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. Taxes h&r block The division is based on your periods of service and domicile in community and noncommunity property states while you were married. Taxes h&r block   For more information, see Publication 555, Community Property. Taxes h&r block Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. Taxes h&r block The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. Taxes h&r block This amount is taxable as wages. Taxes h&r block Your annuity will continue to be taxed just as it was before. Taxes h&r block If you are still recovering your cost, you continue to do so. Taxes h&r block If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. Taxes h&r block Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. Taxes h&r block A nonresident alien is an individual who is not a citizen or a resident alien of the United States. Taxes h&r block Special rule for figuring your total contributions. Taxes h&r block   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. Taxes h&r block You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. Taxes h&r block For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. Taxes h&r block Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. Taxes h&r block   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. Taxes h&r block Limit on taxable amount. Taxes h&r block   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. Taxes h&r block Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. Taxes h&r block The numerator of the fraction is the retiree's total U. Taxes h&r block S. Taxes h&r block Government basic pay, other than tax-exempt pay for services performed outside the United States. Taxes h&r block The denominator is the retiree's total U. Taxes h&r block S. Taxes h&r block Government basic pay for all services. Taxes h&r block    Basic pay includes regular pay plus any standby differential. Taxes h&r block It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. Taxes h&r block   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. Taxes h&r block (For an annuity, first complete Worksheet A in this publication. Taxes h&r block ) Worksheet C. Taxes h&r block Limited Taxable Amount for Nonresident Alien 1. Taxes h&r block Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Taxes h&r block   2. Taxes h&r block Enter the total U. Taxes h&r block S. Taxes h&r block Government basic pay other than tax-exempt pay for services performed outside the United States 2. Taxes h&r block   3. Taxes h&r block Enter the total U. Taxes h&r block S. Taxes h&r block Government basic pay for all services 3. Taxes h&r block   4. Taxes h&r block Divide line 2 by line 3 4. Taxes h&r block   5. Taxes h&r block Limited taxable amount. Taxes h&r block Multiply line 1 by line 4. Taxes h&r block Enter this amount on Form 1040NR, line 17b 5. Taxes h&r block   Example 1. Taxes h&r block You are a nonresident alien who performed all services for the U. Taxes h&r block S. Taxes h&r block Government abroad as a nonresident alien. Taxes h&r block You retired and began to receive a monthly annuity of $200. Taxes h&r block Your total basic pay for all services for the U. Taxes h&r block S. Taxes h&r block Government was $100,000. Taxes h&r block All of your basic pay was tax exempt because it was not U. Taxes h&r block S. Taxes h&r block source income. Taxes h&r block The taxable amount of your annuity using Worksheet A in this publication is $720. Taxes h&r block You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Taxes h&r block Worksheet C. Taxes h&r block Limited Taxable Amount for Nonresident Alien — Example 1 1. Taxes h&r block Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Taxes h&r block $ 720 2. Taxes h&r block Enter the total U. Taxes h&r block S. Taxes h&r block Government basic pay other than tax-exempt pay for services performed outside the United States 2. Taxes h&r block 0 3. Taxes h&r block Enter the total U. Taxes h&r block S. Taxes h&r block Government basic pay for all services 3. Taxes h&r block 100,000 4. Taxes h&r block Divide line 2 by line 3 4. Taxes h&r block 0 5. Taxes h&r block Limited taxable amount. Taxes h&r block Multiply line 1 by line 4. Taxes h&r block Enter this amount on Form 1040NR, line 17b 5. Taxes h&r block 0 Example 2. Taxes h&r block You are a nonresident alien who performed services for the U. Taxes h&r block S. Taxes h&r block Government as a nonresident alien both within the United States and abroad. Taxes h&r block You retired and began to receive a monthly annuity of $240. Taxes h&r block Your total basic pay for your services for the U. Taxes h&r block S. Taxes h&r block Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. Taxes h&r block The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. Taxes h&r block S. Taxes h&r block source income. Taxes h&r block The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. Taxes h&r block You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Taxes h&r block Worksheet C. Taxes h&r block Limited Taxable Amount for Nonresident Alien — Example 2 1. Taxes h&r block Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Taxes h&r block $ 1,980 2. Taxes h&r block Enter the total U. Taxes h&r block S. Taxes h&r block Government basic pay other than tax-exempt pay for services performed outside the United States 2. Taxes h&r block 40,000 3. Taxes h&r block Enter the total U. Taxes h&r block S. Taxes h&r block Government basic pay for all services 3. Taxes h&r block 120,000 4. Taxes h&r block Divide line 2 by line 3 4. Taxes h&r block . Taxes h&r block 333 5. Taxes h&r block Limited taxable amount. Taxes h&r block Multiply line 1 by line 4. Taxes h&r block Enter this amount on Form 1040NR, line 17b 5. Taxes h&r block 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. Taxes h&r block (However, see Roth TSP balance and Uniformed services TSP accounts, next. Taxes h&r block ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. Taxes h&r block The way that you withdraw your account balance determines when you must pay the tax. Taxes h&r block Roth TSP balance. Taxes h&r block   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. Taxes h&r block This means Roth TSP contributions are included in your income. Taxes h&r block The contribution limits are the same as the traditional TSP. Taxes h&r block You can elect to have part or all of your TSP contributions designated as a Roth TSP. Taxes h&r block Agency contributions will be part of your traditional TSP balance. Taxes h&r block Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. Taxes h&r block   Qualified distributions from your Roth TSP are not included in income. Taxes h&r block This applies to both your cost in the account and income earned on that account. Taxes h&r block 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. Taxes h&r block   For more information, go to the TSP website, www. Taxes h&r block tsp. Taxes h&r block gov, or the TSP Service Office. Taxes h&r block See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. Taxes h&r block Uniformed services TSP accounts. Taxes h&r block   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. Taxes h&r block However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. Taxes h&r block See Roth TSP balance discussed previously to get more information about Roth contributions. Taxes h&r block The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. Taxes h&r block You can get more information from the TSP website, www. Taxes h&r block tsp. Taxes h&r block gov, or the TSP Service Office. Taxes h&r block Direct rollover by the TSP. Taxes h&r block   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. Taxes h&r block However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Taxes h&r block Also, see Rollover Rules , later. Taxes h&r block Direct rollover by the TSP to a Roth IRA. Taxes h&r block   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. Taxes h&r block However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Taxes h&r block Also, see Rollovers to Roth IRAs for more information, later. Taxes h&r block Note. Taxes h&r block A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. Taxes h&r block This is because you already paid tax on those contributions. Taxes h&r block You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. Taxes h&r block TSP annuity. Taxes h&r block   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. Taxes h&r block The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. Taxes h&r block However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. Taxes h&r block See Roth TSP balance , earlier. Taxes h&r block This is because you already paid tax on those contributions. Taxes h&r block Cash withdrawals. Taxes h&r block   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. Taxes h&r block (See Rollover Rules , later. Taxes h&r block ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. Taxes h&r block See Lump-Sum Distributions in Publication 575 for details. Taxes h&r block However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. Taxes h&r block See Roth TSP balance , earlier. Taxes h&r block    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. Taxes h&r block   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. Taxes h&r block If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. Taxes h&r block See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. Taxes h&r block However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. Taxes h&r block See Roth TSP balance , earlier, for a discussion of those conditions. Taxes h&r block Tax on early distributions. Taxes h&r block   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. Taxes h&r block However, this additional tax does not apply in certain situations, including any of the following. Taxes h&r block You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. Taxes h&r block You choose to receive your account balance in monthly payments based on your life expectancy. Taxes h&r block You are totally and permanently disabled. Taxes h&r block You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). Taxes h&r block The earnings may be subject to the 10% tax depending on whether you met certain conditions. Taxes h&r block See Roth TSP balance , earlier. Taxes h&r block   For more information, see Tax on Early Distributions in Publication 575. Taxes h&r block Outstanding loan. Taxes h&r block   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. Taxes h&r block The distribution also may be subject to the additional 10% tax on early distributions. Taxes h&r block However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. Taxes h&r block See Rollover Rules , later. Taxes h&r block   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. Taxes h&r block However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. Taxes h&r block See Roth TSP balance , earlier. Taxes h&r block More information. Taxes h&r block   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. Taxes h&r block Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). Taxes h&r block    The above documents are also available on the TSP website at www. Taxes h&r block tsp. Taxes h&r block gov. Taxes h&r block Select “Forms & Publications. Taxes h&r block ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. Taxes h&r block You do not include the amount rolled over in your income, and you cannot take a deduction for it. Taxes h&r block The amount rolled over is taxed later as the new program pays that amount to you. Taxes h&r block If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. Taxes h&r block However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. Taxes h&r block To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. Taxes h&r block You can also roll over a distribution from a qualified retirement plan into a Roth IRA. Taxes h&r block Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. Taxes h&r block See Rollovers to Roth IRAs , later, for more information. Taxes h&r block Qualified retirement plan. Taxes h&r block   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. Taxes h&r block The CSRS, FERS, and TSP are considered qualified retirement plans. Taxes h&r block Distributions eligible for rollover treatment. Taxes h&r block   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. Taxes h&r block You cannot roll over any part of your CSRS or FERS annuity payments. Taxes h&r block   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. Taxes h&r block   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. Taxes h&r block However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. Taxes h&r block Direct rollover option. Taxes h&r block   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. Taxes h&r block   There is an automatic rollover requirement for mandatory distributions. Taxes h&r block A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. Taxes h&r block The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. Taxes h&r block You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. Taxes h&r block If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. Taxes h&r block No tax withheld. Taxes h&r block   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. Taxes h&r block However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. Taxes h&r block Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. Taxes h&r block Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. Taxes h&r block Payment to you option. Taxes h&r block   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. Taxes h&r block However, the full amount is treated as distributed to you even though you actually receive only 80%. Taxes h&r block You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. Taxes h&r block Rollovers to Roth IRAs are generally included in income. Taxes h&r block Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. Taxes h&r block If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. Taxes h&r block However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). Taxes h&r block Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. Taxes h&r block See Roth TSP balance , earlier. Taxes h&r block Also, see Tax on Early Distributions in Publication 575. Taxes h&r block Exception to withholding. Taxes h&r block   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. Taxes h&r block Partial rollovers. Taxes h&r block   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. Taxes h&r block See Lump-Sum Distributions in Publication 575. Taxes h&r block However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. Taxes h&r block Rolling over more than amount received. Taxes h&r block   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). Taxes h&r block Example. Taxes h&r block You left government service at age 53. Taxes h&r block On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you
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Alternative Payment Plans & Hardship Information

Payment Plans, Installment Agreements
Make monthly payments through an installment agreement if you're not financially able to pay your tax debt immediately.

Offer in Compromise
An offer in compromise allows you to settle your tax debt for less than the full amount you owe.

The “What Ifs” for Struggling Taxpayers
Here are some “what if” scenarios and the possible tax impact.

Page Last Reviewed or Updated: 04-Feb-2014

The Taxes H&r Block

Taxes h&r block 30. Taxes h&r block   How To Figure Your Tax Table of Contents Introduction Figuring Your Tax Alternative Minimum Tax (AMT) Tax Figured by IRSFiling the Return Introduction After you have figured your income and deductions as explained in Parts One through Five, your next step is to figure your tax. Taxes h&r block This chapter discusses: The general steps you take to figure your tax, An additional tax you may have to pay called the alternative minimum tax (AMT), and The conditions you must meet if you want the IRS to figure your tax. Taxes h&r block Figuring Your Tax Your income tax is based on your taxable income. Taxes h&r block After you figure your income tax and AMT, if any, subtract your tax credits and add any other taxes you may owe. Taxes h&r block The result is your total tax. Taxes h&r block Compare your total tax with your total payments to determine whether you are entitled to a refund or if you must make a payment. Taxes h&r block This section provides a general outline of how to figure your tax. Taxes h&r block You can find step-by-step directions in the Instructions for Forms 1040EZ, 1040A, and 1040. Taxes h&r block If you are unsure of which tax form you should file, see Which Form Should I Use? in chapter 1. Taxes h&r block Tax. Taxes h&r block   Most taxpayers use either the Tax Table or the Tax Computation Worksheet to figure their income tax. Taxes h&r block However, there are special methods if your income includes any of the following items. Taxes h&r block A net capital gain. Taxes h&r block (See chapter 16. Taxes h&r block ) Qualified dividends taxed at the same rates as a net capital gain. Taxes h&r block (See chapters 8 and 16. Taxes h&r block ) Lump-sum distributions. Taxes h&r block (See chapter 10. Taxes h&r block ) Farming or fishing income. Taxes h&r block (See Schedule J (Form 1040), Income Averaging for Farmers and Fishermen. Taxes h&r block ) Unearned income over $2,000 for certain children. Taxes h&r block (See chapter 31. Taxes h&r block ) Parents' election to report child's interest and dividends. Taxes h&r block (See chapter 31. Taxes h&r block ) Foreign earned income exclusion or the housing exclusion. Taxes h&r block (See Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion, and the Foreign Earned Income Tax Worksheet in the Form 1040 instructions. Taxes h&r block ) Credits. Taxes h&r block   After you figure your income tax and any AMT (discussed later), determine if you are eligible for any tax credits. Taxes h&r block Eligibility information for these tax credits is discussed in chapters 32 through 37 and your form instructions. Taxes h&r block The following table lists the credits you may be able to subtract from your tax and shows where you can find more information on each credit. Taxes h&r block CREDITS For information on: See  chapter: Adoption 37 Alternative motor vehicle 37 Alternative fuel vehicle refueling  property 37 Child and dependent care 32 Child tax 34 Credit to holders of tax credit  bonds 37 Education 35 Elderly or disabled 33 Electric vehicle 37 Foreign tax 37 Mortgage interest 37 Prior year minimum tax 37 Residential energy 37 Retirement savings contributions 37   Some credits (such as the earned income credit) are not listed because they are treated as payments. Taxes h&r block See Payments , later. Taxes h&r block   There are other credits that are not discussed in this publication. Taxes h&r block These include the following credits. Taxes h&r block General business credit, which is made up of several separate business-related credits. Taxes h&r block These generally are reported on Form 3800, General Business Credit, and are discussed in chapter 4 of Publication 334, Tax Guide for Small Business. Taxes h&r block Renewable electricity, refined coal, and Indian coal production credit for electricity and refined coal produced at facilities placed in service after October 22, 2004 (after October 2, 2008, for electricity produced from marine and hydrokinetic renewables), and Indian coal produced at facilities placed in service after August 8, 2005. Taxes h&r block See Form 8835, Part II. Taxes h&r block Work opportunity credit. Taxes h&r block See Form 5884. Taxes h&r block Credit for employer social security and Medicare taxes paid on certain employee tips. Taxes h&r block See Form 8846. Taxes h&r block Other taxes. Taxes h&r block   After you subtract your tax credits, determine whether there are any other taxes you must pay. Taxes h&r block This chapter does not explain these other taxes. Taxes h&r block You can find that information in other chapters of this publication and your form instructions. Taxes h&r block See the following table for other taxes you may need to add to your income tax. Taxes h&r block OTHER TAXES For information on: See  chapter: Additional taxes on qualified retirement plans and IRAs 10, 17 Household employment taxes 32 Recapture of an education credit 35 Social security and Medicare tax on wages 5 Social security and Medicare tax on tips 6 Uncollected social security and Medicare tax on tips 6   You also may have to pay AMT (discussed later in this chapter). Taxes h&r block   There are other taxes that are not discussed in this publication. Taxes h&r block These include the following items. Taxes h&r block Self-employment tax. Taxes h&r block You must figure this tax if either of the following applies to you (or your spouse if you file a joint return). Taxes h&r block Your net earnings from self-employment from other than church employee income were $400 or more. Taxes h&r block The term “net earnings from self-employment” may include certain nonemployee compensation and other amounts reported to you on Form 1099-MISC, Miscellaneous Income. Taxes h&r block If you received a Form 1099-MISC, see the Instructions for Recipient on the back. Taxes h&r block Also see the Instructions for Schedule SE (Form 1040), Self-Employment Tax; and Publication 334, Tax Guide for Small Business. Taxes h&r block You had church employee income of $108. Taxes h&r block 28 or more. Taxes h&r block Additional Medicare Tax. Taxes h&r block Beginning in 2013, you may be subject to a 0. Taxes h&r block 9% Additional Medicare Tax that applies to Medicare wages, Railroad Retirement Act compensation, and self-employment income over a threshold based on your filing status. Taxes h&r block For more information, see the Instructions for Form 1040, line 60 and Form 8959. Taxes h&r block Net Investment Income Tax (NIIT). Taxes h&r block Beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). Taxes h&r block NIIT is a 3. Taxes h&r block 8% tax on the lesser of net investment income or the excess of your modified adjusted gross income over a threshold amount. Taxes h&r block For more information, see the Instructions for Form 1040, line 60 and Form 8960. Taxes h&r block Recapture taxes. Taxes h&r block You may have to pay these taxes if you previously claimed an investment credit, a low-income housing credit, a new markets credit, a qualified plug-in electric drive motor vehicle credit, an alternative motor vehicle credit, a credit for employer-provided child care facilities, an Indian employment credit, or other credits listed in the instructions for Form 1040, line 60. Taxes h&r block For more information, see the instructions for Form 1040, line 60. Taxes h&r block Section 72(m)(5) excess benefits tax. Taxes h&r block If you are (or were) a 5% owner of a business and you received a distribution that exceeds the benefits provided for you under the qualified pension or annuity plan formula, you may have to pay this additional tax. Taxes h&r block See Tax on Excess Benefits in chapter 4 of Publication 560, Retirement Plans for Small Business. Taxes h&r block Uncollected social security and Medicare tax on group-term life insurance. Taxes h&r block If your former employer provides you with more than $50,000 of group-term life insurance coverage, you must pay the employee part of social security and Medicare taxes on those premiums. Taxes h&r block The amount should be shown in box 12 of your Form W-2 with codes M and N. Taxes h&r block Tax on golden parachute payments. Taxes h&r block This tax applies if you received an “excess parachute payment” (EPP) due to a change in a corporation's ownership or control. Taxes h&r block The amount should be shown in box 12 of your Form W-2 with code K. Taxes h&r block See the instructions for Form 1040, line 60. Taxes h&r block Tax on accumulation distribution of trusts. Taxes h&r block This applies if you are the beneficiary of a trust that accumulated its income instead of distributing it currently. Taxes h&r block See Form 4970 and its instructions. Taxes h&r block Additional tax on HSAs or MSAs. Taxes h&r block If amounts contributed to, or distributed from, your health savings account or medical savings account do not meet the rules for these accounts, you may have to pay additional taxes. Taxes h&r block See Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans; Form 8853, Archer MSAs and Long-Term Care Insurance Contracts; Form 8889, Health Savings Accounts (HSAs); and Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. Taxes h&r block Additional tax on Coverdell ESAs. Taxes h&r block This applies if amounts contributed to, or distributed from, your Coverdell ESA do not meet the rules for these accounts. Taxes h&r block See Publication 970, Tax Benefits for Education, and Form 5329. Taxes h&r block Additional tax on qualified tuition programs. Taxes h&r block This applies to amounts distributed from qualified tuition programs that do not meet the rules for these accounts. Taxes h&r block See Publication 970 and Form 5329. Taxes h&r block Excise tax on insider stock compensation from an expatriated corporation. Taxes h&r block You may owe a 15% excise tax on the value of nonstatutory stock options and certain other stock-based compensation held by you or a member of your family from an expatriated corporation or its expanded affiliated group in which you were an officer, director, or more-than-10% owner. Taxes h&r block For more information, see the instructions for Form 1040, line 60. Taxes h&r block Additional tax on income you received from a nonqualified deferred compensation plan that fails to meet certain requirements. Taxes h&r block This income should be shown in Form W-2, box 12, with code Z, or in Form 1099-MISC, box 15b. Taxes h&r block For more information, see the instructions for Form 1040, line 60. Taxes h&r block Interest on the tax due on installment income from the sale of certain residential lots and timeshares. Taxes h&r block For more information, see the instructions for Form 1040, line 60. Taxes h&r block Interest on the deferred tax on gain from certain installment sales with a sales price over $150,000. Taxes h&r block For more information, see the instructions for Form 1040, line 60. Taxes h&r block Repayment of first-time homebuyer credit. Taxes h&r block For more information, see Form 5405, Repayment of the First-Time Homebuyer Credit, and its instructions. Taxes h&r block Also see the instructions for Form 1040, line 59b. Taxes h&r block Payments. Taxes h&r block   After you determine your total tax, figure the total payments you have already made for the year. Taxes h&r block Include credits that are treated as payments. Taxes h&r block This chapter does not explain these payments and credits. Taxes h&r block You can find that information in other chapters of this publication and your form instructions. Taxes h&r block See the following table for amounts you can include in your total payments. Taxes h&r block PAYMENTS For information on: See  chapter: Child tax credit (additional) 34 Earned income credit 36 Estimated tax paid 4 Excess social security   and RRTA tax withheld 37 Federal income tax withheld 4 Health coverage tax credit 37 Credit for tax on   undistributed capital gain 37 Tax paid with extension 1   Another credit that is treated as a payment is the credit for federal excise tax paid on fuels. Taxes h&r block This credit is for persons who have a nontaxable use of certain fuels, such as diesel fuel and kerosene. Taxes h&r block It is claimed on Form 1040, line 70. Taxes h&r block See Form 4136, Credit for Federal Tax Paid on Fuels. Taxes h&r block Refund or balance due. Taxes h&r block   To determine whether you are entitled to a refund or whether you must make a payment, compare your total payments with your total tax. Taxes h&r block If you are entitled to a refund, see your form instructions for information on having it directly deposited into one or more of your accounts, or to purchase U. Taxes h&r block S. Taxes h&r block savings bonds instead of receiving a paper check. Taxes h&r block Alternative Minimum Tax (AMT) This section briefly discusses an additional tax you may have to pay. Taxes h&r block The tax law gives special treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. Taxes h&r block Taxpayers who benefit from this special treatment may have to pay at least a minimum amount of tax through an additional tax called AMT. Taxes h&r block You may have to pay the AMT if your taxable income for regular tax purposes, combined with certain adjustments and tax preference items, is more than a certain amount. Taxes h&r block See Form 6251, Alternative Minimum Tax — Individuals. Taxes h&r block Adjustments and tax preference items. Taxes h&r block   The more common adjustments and tax preference items include: Addition of personal exemptions, Addition of the standard deduction (if claimed), Addition of itemized deductions claimed for state and local taxes, certain interest, most miscellaneous deductions, and part of medical expenses, Subtraction of any refund of state and local taxes included in gross income, Changes to accelerated depreciation of certain property, Difference between gain or loss on the sale of property reported for regular tax purposes and AMT purposes, Addition of certain income from incentive stock options, Change in certain passive activity loss deductions, Addition of certain depletion that is more than the adjusted basis of the property, Addition of part of the deduction for certain intangible drilling costs, and Addition of tax-exempt interest on certain private activity bonds. Taxes h&r block More information. Taxes h&r block   For more information about the AMT, see the instructions for Form 6251. Taxes h&r block Tax Figured by IRS If you file by April 15, 2014, you can have the IRS figure your tax for you on Form 1040EZ, Form 1040A, or Form 1040. Taxes h&r block If the IRS figures your tax and you paid too much, you will receive a refund. Taxes h&r block If you did not pay enough, you will receive a bill for the balance. Taxes h&r block To avoid interest or the penalty for late payment, you must pay the bill within 30 days of the date of the bill or by the due date for your return, whichever is later. Taxes h&r block The IRS can also figure the credit for the elderly or the disabled and the earned income credit for you. Taxes h&r block When the IRS cannot figure your tax. Taxes h&r block   The IRS cannot figure your tax for you if any of the following apply. Taxes h&r block You want your refund directly deposited into your accounts. Taxes h&r block You want any part of your refund applied to your 2014 estimated tax. Taxes h&r block You had income for the year from sources other than wages, salaries, tips, interest, dividends, taxable social security benefits, unemployment compensation, IRA distributions, pensions, and annuities. Taxes h&r block Your taxable income is $100,000 or more. Taxes h&r block You itemize deductions. Taxes h&r block You file any of the following forms. Taxes h&r block Form 2555, Foreign Earned Income. Taxes h&r block Form 2555-EZ, Foreign Earned Income Exclusion. Taxes h&r block Form 4137, Social Security and Medicare Tax on Unreported Tip Income. Taxes h&r block Form 4970, Tax on Accumulation Distribution of Trusts. Taxes h&r block Form 4972, Tax on Lump-Sum Distributions. Taxes h&r block Form 6198, At-Risk Limitations. Taxes h&r block Form 6251, Alternative Minimum Tax—Individuals. Taxes h&r block Form 8606, Nondeductible IRAs. Taxes h&r block Form 8615, Tax for Certain Children Who Have Unearned Income. Taxes h&r block Form 8814, Parents' Election To Report Child's Interest and Dividends. Taxes h&r block Form 8839, Qualified Adoption Expenses. Taxes h&r block Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Taxes h&r block Form 8889, Health Savings Accounts (HSAs). Taxes h&r block Form 8919, Uncollected Social Security and Medicare Tax on Wages. Taxes h&r block Filing the Return After you complete the line entries for the tax form you are filing, fill in your name and address. Taxes h&r block Enter your social security number in the space provided. Taxes h&r block If you are married, enter the social security numbers of you and your spouse even if you file separately. Taxes h&r block Sign and date your return and enter your occupation(s). Taxes h&r block If you are filing a joint return, both you and your spouse must sign it. Taxes h&r block Enter your daytime phone number in the space provided. Taxes h&r block This may help speed the processing of your return if we have a question that can be answered over the phone. Taxes h&r block If you are filing a joint return, you may enter either your or your spouse's daytime phone number. Taxes h&r block If you want to allow a friend, family member, or any other person you choose to discuss your 2013 tax return with the IRS, check the “Yes” box in the “Third party designee” area on your return. Taxes h&r block Also enter the designee's name, phone number, and any five digits the designee chooses as his or her personal identification number (PIN). Taxes h&r block If you check the “Yes” box, you, and your spouse if filing a joint return, are authorizing the IRS to call the designee to answer any questions that may arise during the processing of your return. Taxes h&r block Fill in and attach any schedules and forms asked for on the lines you completed to your paper return. Taxes h&r block Attach a copy of each of your Forms W-2 to your paper return. Taxes h&r block Also attach to your paper return any Form 1099-R you received that has withholding tax in box 4. Taxes h&r block Mail your return to the Internal Revenue Service Center for the area where you live. Taxes h&r block A list of Service Center addresses is in the instructions for your tax return. Taxes h&r block Form 1040EZ Line Entries Read lines 1 through 8b and fill in the lines that apply to you. Taxes h&r block Do not complete lines 9 through 12. Taxes h&r block If you are filing a joint return, use the space to the left of line 6 to separately show your taxable income and your spouse's taxable income. Taxes h&r block Payments. Taxes h&r block   Enter any federal income tax withheld on line 7. Taxes h&r block Federal income tax withheld is shown on Form W-2, box 2, or Form 1099, box 4. Taxes h&r block Earned income credit. Taxes h&r block   If you can take this credit, as discussed in chapter 36, the IRS can figure it for you. Taxes h&r block Enter “EIC” in the space to the left of line 8a. Taxes h&r block Enter the nontaxable combat pay you elect to include in earned income on line 8b. Taxes h&r block   If your credit for any year after 1996 was reduced or disallowed by the IRS, you may also have to file Form 8862, Information To Claim Earned Income Credit After Disallowance, with your return. Taxes h&r block For details, see the Form 1040EZ Instructions. Taxes h&r block Form 1040A Line Entries Read lines 1 through 27 and fill in the lines that apply to you. Taxes h&r block If you are filing a joint return, use the space to the left of the entry space for line 27 to separately show your taxable income and your spouse's taxable income. Taxes h&r block Do not complete line 28. Taxes h&r block Complete lines 29 through 33 and 36 through 40 if they apply to you. Taxes h&r block However, do not fill in lines 30 and 38a if you want the IRS to figure the credits shown on those lines. Taxes h&r block Also, enter any write-in information that applies to you in the space to the left of line 41. Taxes h&r block Do not complete lines 34, 35, and 42 through 46. Taxes h&r block Payments. Taxes h&r block   Enter any federal income tax withheld that is shown on Form W-2, box 2, or Form 1099, box 4, on line 36. Taxes h&r block Enter any estimated tax payments you made on line 37. Taxes h&r block Credit for child and dependent care expenses. Taxes h&r block   If you can take this credit, as discussed in chapter 32, complete Form 2441, Child and Dependent Care Expenses, and attach it to your return. Taxes h&r block Enter the amount of the credit on line 29. Taxes h&r block The IRS will not figure this credit. Taxes h&r block Credit for the elderly or the disabled. Taxes h&r block   If you can take this credit, as discussed in chapter 33, the IRS can figure it for you. Taxes h&r block Enter “CFE” in the space to the left of line 30 and attach Schedule R (Form 1040A or 1040), Credit for the Elderly or the Disabled, to your paper return. Taxes h&r block On Schedule R (Form 1040A or 1040), check the box in Part I for your filing status and age. Taxes h&r block Complete Part II and Part III, lines 11 and 13, if they apply. Taxes h&r block Earned income credit. Taxes h&r block   If you can take this credit, as discussed in chapter 36, the IRS can figure it for you. Taxes h&r block Enter “EIC” to the left of the entry space for line 38a. Taxes h&r block Enter the nontaxable combat pay you elect to include in earned income on line 38b. Taxes h&r block    If you have a qualifying child, you must fill in Schedule EIC (Form 1040A or 1040), Earned Income Credit, and attach it to your paper return. Taxes h&r block If you do not provide the child's social security number on Schedule EIC, line 2, the credit will be reduced or disallowed unless the child was born and died in 2013. Taxes h&r block   If your credit for any year after 1996 was reduced or disallowed by the IRS, you may also have to file Form 8862 with your return. Taxes h&r block For details, see the Form 1040A Instructions. Taxes h&r block Form 1040 Line Entries Read lines 1 through 43 and fill in the lines that apply to you. Taxes h&r block Do not complete line 44. Taxes h&r block If you are filing a joint return, use the space under the words “Adjusted Gross Income” on the front of your return to separately show your taxable income and your spouse's taxable income. Taxes h&r block Read lines 45 through 71. Taxes h&r block Fill in the lines that apply to you, but do not fill in lines 54, 61, and 72. Taxes h&r block Also, do not complete line 55 and lines 73 through 77. Taxes h&r block Do not fill in line 53, box “c,” if you are completing Schedule R (Form 1040A or 1040), or line 64a if you want the IRS to figure the credits shown on those lines. Taxes h&r block Payments. Taxes h&r block   Enter any federal income tax withheld that is shown on Form W-2, box 2, or Form 1099, box 4, on line 62. Taxes h&r block Enter any estimated tax payments you made on line 63. Taxes h&r block Credit for child and dependent care expenses. Taxes h&r block   If you can take this credit, as discussed in chapter 32, complete Form 2441 and attach it to your paper return. Taxes h&r block Enter the amount of the credit on line 48. Taxes h&r block The IRS will not figure this credit. Taxes h&r block Credit for the elderly or the disabled. Taxes h&r block   If you can take this credit, as discussed in chapter 33, the IRS can figure it for you. Taxes h&r block Enter “CFE” on the line next to line 53, check box “c,” and attach Schedule R (Form 1040A or 1040) to your paper return. Taxes h&r block On Schedule R (Form 1040A or 1040), check the box in Part I for your filing status and age. Taxes h&r block Complete Part II and Part III, lines 11 and 13, if they apply. Taxes h&r block Earned income credit. Taxes h&r block   If you can take this credit, as discussed in chapter 36, the IRS can figure it for you. Taxes h&r block Enter “EIC” on the dotted line next to Form 1040, line 64a. Taxes h&r block Enter the nontaxable combat pay you elect to include in earned income on line 64b. Taxes h&r block   If you have a qualifying child, you must fill in Schedule EIC (Form 1040A or 1040), Earned Income Credit, and attach it to your paper return. Taxes h&r block If you do not provide the child's social security number on Schedule EIC, line 2, the credit will be reduced or disallowed unless the child was born and died in 2013. Taxes h&r block   If your credit for any year after 1996 was reduced or disallowed by the IRS, you may also have to file Form 8862 with your return. Taxes h&r block For details, see the Form 1040 Instructions. Taxes h&r block Prev  Up  Next   Home   More Online Publications