EKS Advanced Training Pilot1 IRA and PENSION INCOME Pub 4491Lesson 11 Pub 4012Tab 2 Form 1040Lines Pub 17Chapters 10, 17

EKS Advanced Training Pilot2 IRA DISTRIBUTIONS Pub 17 Ch 17 Reported on Form 1099-R SIMPLE IRAs and SEPs p122 : out-of-scope Traditional IRAs p123 –See Intro and Who –Must take required minimum distribution - see Excess Accumulations p130 Roth IRAs p131

EKS Advanced Training Pilot3 PENSIONS & ANNUITIES Tab 2 –Box 7 codes (i.e. 7, 3, 4, 1, G) –Early Distributions (Code 1) –Disability Pensions (Code 3) – line ? –Exclusion Worksheet (i.e. rollover, PSO health insur, simplified method) –“Simplified Method” – Box 9b (ee contrib) –1099-RMost common –RRB-1099R (green)Railroad Benefits –CSA-1099RCivil Service

EKS Advanced Training Pilot4 Disability Retirements Disability payments are taxed as wages until the taxpayer reaches the minimum retirement age (age is set by the employer) - report on line 7 Form 1040 After the taxpayer reaches the minimum retirement age, disability payments are treated as pension income to determine taxability – report on line 16 Form 1040

EKS Advanced Training Pilot5 Taxable Distributions Payer will compute the taxable portion of the distribution and report it (box 2a Form R) Retirement plans are funded by either before-tax or after-tax contributions –Before-tax - entire distribution will be fully taxable –After-tax – distributions partially taxable (box 9b Form 1099-R) Two methods used to figure taxable portion the General Rule and the Simplified Method

EKS Advanced Training Pilot6 Simplified Method Volunteer Resource Guide (Tab 2), 1099-R Exclusion Worksheet - calculating the taxable portion using the Simplified Method To calculate you will need: C ost in the plan (box 9b Form 1099-R) Age - taxpayer’s age on the date the annuity began (and spouse’s age if joint/survivor annuity is selected); note if the annuity starting date is before or after the taxpayer’s birthday for that year Total of tax-free amounts from previous years - available from the taxpayer’s prior year worksheet

EKS Advanced Training Pilot7 Exclusion Worksheet (page 2-18 Pub 4012)

EKS Advanced Training Pilot8 RRB-1099R (Green)

EKS Advanced Training Pilot9 Pension Income Questions?