06 IRA_ Pensions_ Unemployment _

							IRA, Pensions, Unemployment &
           SS Income



    Lines 14 thru 20 on 1040




                                1
                            IRAs
   Ordinary IRA payouts
   IRA payouts with rollovers
   1099-R Form
       Box 7 IRA/SEP SIMPLE checked
       Fully taxable on Federal (less rolled over
        amount)
       Eligible part of NY State $20K exclusion if
        over 59 ½


                           Tax Year 2009              2
Form 1099-R




  Tax Year 2009   3
              1099-R Field Entries
   Box 7 codes
       1 – Distribution Prior to 59 ½ 10% penalty
        line 58 on 1040 pg 2
       2 – Early Distribution exception applies
       7 – Normal Distribution
       G – Direct rollover Trustee to Trustee (not
        taxable)
       Q – Qualified distribution from Roth IRA

                         Tax Year 2009                4
IRA Rollovers TaxWise




       Tax Year 2009    5
             Rollovers & Charitable
                 Contributions
   Rollover – Enter amount rolled over on
    line1
   Direct amount of directly transferred
    Charitable contribution entered on Line 2
   Enter rollover destination on scratch pad
    attached to Line 16 on 1040


                     Tax Year 2009              6
        Charitable Donation IRA
   Direct Transfer to Charity from Trustee
       Limited to those taking their over 70 &1/2
        minimum distributions

Amount Transferred not taxable reduces AGI
 Paper Return

       Line 15a Mark “QCD” on line, subtract amount
        directly transferred from box 16 b

                          Tax Year 2009              7
               Pension Forms
   Ordinary R-1099-R
       Page 2-10 & 11 in Reference Guide
   Railroad RRB-1090-B
       Page 2-12 Reference Guide
   CSA-1099-R Civil Service
       Page 2-12 in Reference Guide



                     Tax Year 2009          8
Form 1099-R




   Tax Year 2009   9
            Pensions 1099-R
   1040 Line 16 Box a Gross Amount



   1040 Line 16 Box b Taxable Amount




                   Tax Year 2009        10
                Form 1099-R Retired
                Disability Retirement
   Box 7 - Code 3
     Retiree younger than pension plans
      minimum retirement age
     Pension treated as wages and goes on

      Line 7 of the 1040
     TaxWise – check box below 8 (Other)

       Age greater than minimum age – regular
        tax treatment
                        Tax Year 2009            11
             Pension Exclusions 1099-R
   Pension plan pays retiree’s SS Medicare
    Premium (exempted by law)
       1009-R Exclusion Worksheet TaxWise
            Enter amount on Line 5
   Retired public service safety officers
       Qualified government plan to pay for health
        or long term care insurance
       Enter amount ($3K max) on line 4

                             Tax Year 2009            12
Pension Exclusions TaxWise




          Tax Year 2009      13
                  Pensions
        Taxable Amount not determined
   Box 1 Gross amount and Taxable amount
    not determined checked
   Box 2 Taxable amount zero or blank
   Box 9b – Total employee contributions
       Special Case – Pension started before 1984
        and retiree used the 3 year rule to recover
        their contribution – fully taxable


                         Tax Year 2009                14
          Pensions
Taxable Amount not determined




           Tax Year 2009    15
               Simplified Worksheet
                  Paper return
   Use worksheet on page 26 of 1040
    Instructions
       Include worksheet with taxpayers papers to
        track the amount of unrecovered pension
        contributions
       (TaxWise – print the screen copy of 1099-R
        form to obtain Simplified Worksheet entries)



                         Tax Year 2009                 16
               Use Simplified Rule
        Calculate taxable pension amount
   Date Pension Started
       Started before 11/16/1996
            Age of retiree at start of pension
       Started after 11/16/1996 but before 12/31/1997
            Age of retiree at start of pension
       Started after 12/21/1997
            Spouse did not waive joint survivor right
            Ages of both retiree and spouse at start of pension


                                 Tax Year 2009                 17
Paper Returns Tables for
  Simplified Worksheet




        Tax Year 2009      18
Simplified Rule TaxWise




        Tax Year 2009     19
           Taxable Amount
          Caution in TaxWise
   Do not enter the taxable amount
    determined by the application of the
    simplified rule in Box 2 of the TaxWise
    1099-R form.
   Do not alter the taxable amount in Box
    2 of the TaxWise 1099-R if an Exclusion
    applies

                  Tax Year 2009         20
      Form 1099-R
NY State Taxable amount




        Tax Year 2009     21
        NY State Box Definitions
   Box 1 – Ordinary Pensions or IRAs,
    Taxpayer over 59 & ½
   Box 2 – Taxpayer was a retiree in the
    State Pension Plan system (State,
    County, Town and Teachers)
   Railroad Retirement – RRB-R pension



                    Tax Year 2009           22
Form 1099-R & CSA 1099
      in TaxWise




        Tax Year 2009    23
         NY State Tax Designations
   Check Box 1 if retiree over 59 ½
   Check Box 2 if retiree covered by NY State
    Pension Plan
       State Employees, County & Town employees
       School District employees
   Check Railroad retirement if from Form
    RRB-1099-R

                       Tax Year 2009           24
     Unemployment compensation
   Line 19 1040 Form
   New tax year 2009 & 2010
       First $2,400 of Unemployment tax not
        taxable
   Paper Returns
       Subtract $2,400 of 1099 G amount on line 1
   TaxWise (automatic)
       Link to 1099-G form from Line 19
                         Tax Year 2009               25
1099-G Form




  Tax Year 2009   26
                     Social Security
                       Line 20 a
   Reported on SSA 1099 form
       Box 5 amount on Line 20a
   Medicare itemized deduction
       Box 3 Sum Medicare Part B & Medicare Part D
   Federal Withholding
       Box 6 amount
   Prior Year Payments included in Box 5
       Details by year in Box 3

                            Tax Year 2009             27
Tax Year 2009   28
              RRB-1099 Form (blue)
        Tier 1 payments equivalent to SS
   Box 7 reported on Line 20a of 1040
   Box 11 Medicare Itemized Deduction
   Box 10 Federal Income Tax Withheld
   Boxes 7, 8, & 9 - Prior Year payments
       If any OUT-OF-SCOPE
       REFER TO A TAX PROFESSIONAL



                       Tax Year 2009        29
Tax Year 2009   30
Reporting Social Security
       in TaxWise




         Tax Year 2009      31
             Determine Taxable
               Social Security
   Social Security Worksheet page 28 in
    1040 Instructions
   No taxable Social Security if
     Single - Taxpayer total taxable income
      + ½ of Social Security < $25,000
     MFJ - Taxpayers total taxable + ½ of

      Social Security < $32,000

                    Tax Year 2009          32
                 Determine Taxable
                Social Security Income
   Married Filing Separately
       Taxpayer lived with spouse anytime in 2009
       85% of Social Security Taxable
   Married Filing Separately
       Taxpayer did not live with spouse at any time
        in 2009
       Same taxable Social Security as Single person
       Enter “D” to the right of the word “benefits”
        on line 20A

                          Tax Year 2009              33
 Taxable Social Security
Paper returns worksheet




        Tax Year 2009      34
Publication 915




     Tax Year 2009   35
Publication 915




    Tax Year 2009   36