RETIREMENT INCOME PUB 4012 Pages D-17 – d-28

RETIREMENT INCOME Types of Retirement Income Social Security Railroad Retirement IRA Pension If taxpayer has a Retirement Income then start as follows In TaxSlayer, select “Income” on top, then select “IRA/Pension Distributions (1099-R, RRB 1099-R, SSA-1099)”

RETIREMENT INCOME Select this

SOCIAL SECURITY Select “Social Security Benefits/RRB-1099” Always enter Box 5 amount from SSA-1099 on the appropriate line Enter any Federal withholding from Box 6 Add Medicare A,B,C and D together and enter on Medicare line If MFJ return, enter spouse’s SS benefits also

SOCIAL SECURITY Select this

SSA-1099

SOCIAL SECURITY Taxpayer section Box 5 Box 6 Medicare Spouse section

LUMP SUM SOCIAL SECURITY Benefits may include lump sum payments from prior years Option to include all benefits in the current return or amend prior years for the payments Amended returns not necessary Will include tax liability in this year’s return Taxpayer needs to have prior year tax returns for all years included in the lump sum payment

LUMP SUM SOCIAL SECURITY Taxslayer included ability to calculate the tax liability using both options and will select the best method – Select “Begin Worksheet” May need multiple worksheets if lump sum is for more than one year Need “Modified Adjusted Gross Income” from the prior year(s) AGI plus Tax Exempt Interest

LUMP SUM SOCIAL SECURITY Select this

LUMP SUM SOCIAL SECURITY

RAILROAD RETIREMENT TIER 1 Top Form of RR Retirement statement Labeled RRB-1099 and is Blue Called Tier 1 Social Security equivalent Enter on “Social Security Benefits/RRB-1099” page Check box 5 for benefit, box 10 for Fed Income tax, and box 11 for Medicare

RRB-1099

RAILROAD RETIREMENT TIER 1 ** Taxpayer section Box 5 Box 10 Box 11 Spouse section ** This screen also used to input Tier 1 RR retirement (blue form)

RAILROAD RETIREMENT TIER 2 2nd Section of RR Retirement statement Usually 3 copies Labeled RRB-1099-R and is GREEN form Called Tier 2 Select “RRB-1099-R” on the “IRA/Pension Distribution” screen

RAILROAD RETIREMENT TIER 2 Select this

RAILROAD RETIREMENT TIER 2 2nd Section of RR Retirement statement Usually 3 copies Labeled RRB-1099 R and is GREEN form Called Tier 2 Select “RRB-1099-R” on the “IRA/Pension Distribution” screen Enter data from Boxes 3, 7, and 9

RRB-1099-R 6

RAILROAD RETIREMENT TIER 2 Enter here Enter here Need to Calculate Enter here

SIMPLIFIED METHOD RRB-1099-R does not have a taxable box -- must be calculated If client is a returning client, the simplified method was done the prior year, and the numbers should be the same every year Otherwise, Click on “Worksheet” under box 7a to use the Simplified Method to determine taxable amount. Information needed Plan cost Start date Joint/Survivor ? Age

SIMPLIFIED METHOD Click here

SIMPLIFIED METHOD Once all information is entered, the taxable amount will be entered on line 7a and carried over to the Federal 1040 Federal taxable amount of RR Retirement is not taxable in New Jersey Taxslayer automatically adjusts on NJ return No preparer action needed

IRA DISTRIBUTIONS Reported on 1099-R with check in box 7. SEP and SIMPLE IRAs are Out of scope Distributions from traditional IRAs are fully taxable unless nondeductible contributions have been made Taxpayer will have to know this information OOS for TCE Taxpayers who made early withdrawals from a Roth IRA should be referred to a professional tax preparer To enter in Taxslayer, click “Add or Edit a 1099-R”

IRA 1099-R

IRA DISTRIBUTIONS Select this

IRA DISTRIBUTIONS Top part of input form

Middle part of input form IRA DISTRIBUTIONS Middle part of input form

Bottom part of input form IRA DISTRIBUTIONS Bottom part of input form

IRA DISTRIBUTIONS If box 7 has a code 1 or 7 but a rollover is claimed IRA Rollover ---Institution to Institution Box 7 will contain a code G to indicate a non-taxable rollover If box 7 has a code 1 or 7 but a rollover is claimed Taxpayer must show that a full amount was deposited in an appropriate account within 60 days Check top box under “Rollover or Disability” in the middle portion of the input screen Then enter the rollover amount

IRA DISTRIBUTIONS Check here Enter rollover here

PENSIONS AND ANNUITIES Determining the taxable amount Box 7 codes Disability pensions Using the Exclusion worksheet Same as IRA Using the simplified method Same as RRB-1099-R Access under box 2 Use only if 1099-R Box 2a does not have an amount and box 9b does

PENSIONS AND ANNUITIES Special considerations OPMs---box 5 ---Always Insurance Premiums

OFFICE OF PERSONNEL MANAGEMENT 123-45-6789 CS A123456 25000.00 23000.00 Tom T Jones 123 Main Street Joppa, MD 21085 2964.00 3750.00 Always insurance premiums MD 2000.00 99999.00 NONE

PENSIONS AND ANNUITIES Special considerations OPMs---box 5 ---Always Insurance Premiums NJ Pensions---box 5 ---Never Insurance Premiums

Never insurance premiums NEW JERSEY PENSION Never insurance premiums

PENSIONS AND ANNUITIES Special considerations OPMs---box 5 ---Always Insurance Premiums NJ Pensions---box 5 ---Never Insurance Premiums Military Pension---Must modify in State Section for NJ Not taxable in NJ Usually from London, KY -- DFAS Go to the “State Section”, on the State Return page select “Continue”, select “Input Myself”, then “Income Subject to Tax”, then enter the military pension in the appropriate box as a negative number

MILITARY PENSION Select here

Enter in correct one as a negative number MILITARY PENSION Enter in correct one as a negative number

PENSIONS AND ANNUITIES Special considerations OPMs---box 5 ---Always Insurance Premiums NJ Pensions---box 5 ---Never Insurance Premiums Military Pension---Must modify in State Section for NJ Usually from London, KY -- DFAS Not taxable in NJ Retired public safety officer Eligible to reduce taxable pension by up to $3000 if part of the distribution was used to pay premiums for accident or health insurance, or for Long Term Care insurance

RETIRED PUBLIC SAFETY OFFICER Check here and manually adjust box 2a on 1099-R

RETIRED PUBLIC SAFETY OFFICER If retired public service officer (PSO) has both health insurance deduction and simplified method, complete the simplified method first, then delete the simplified method worksheet and manually subtract insurance premiums (up to $3,000) from calculated taxable income in Box 2. Deduct excess premiums on Itemized Deductions screen. (Source: 4012 D-19)

PENSIONS AND ANNUITIES Special considerations OPMs---box 5 ---Always Insurance Premiums NJ Pensions---box 5 ---Never Insurance Premiums Military Pension---Must modify in State Section for NJ Not taxable in NJ Retired public safety officer Pension Rule---”…if annuity starting date for any pension is before 1987, you can continue to take monthly exclusion as long as you receive the annuity. Total exclusion can be more than the cost.” (page 12, Pub 575)

Questions ??