1 liberty tax service online basic income tax course. lesson 9

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Liberty Tax Service Liberty Tax Service Online Basic Income Tax Online Basic Income Tax

Course.Course.

Lesson 9Lesson 9

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HOMEWORK CHAPTER 8HOMEWORK CHAPTER 8HOMEWORK 1: Circle the following items that can be deducted HOMEWORK 1: Circle the following items that can be deducted

on Schedule A.on Schedule A.

VaccinationsVaccinations BracesBracesMaternity clothesMaternity clothes Bottled waterBottled waterCountry club donationCountry club donation Republican party donationRepublican party donationSplintsSplints CremationCremationVasectomyVasectomy Slim FastSlim FastSpeeding fineSpeeding fine Passport feePassport feeDiaper serviceDiaper service Hearing aidHearing aidPsychiatristPsychiatrist Life insurance premiumsLife insurance premiumsAthletic club membershipAthletic club membership Prescription vitaminsPrescription vitaminsOrthopedic shoesOrthopedic shoes Special mattress needed for back Special mattress needed for back

injuryinjuryPrenatal carPrenatal car Purely cosmetic surgeryPurely cosmetic surgeryAcupunctureAcupuncture ChiropractorChiropractorOrgan donor expensesOrgan donor expenses Labor union donationLabor union donationColombian relief donationColombian relief donation YMCA donationYMCA donation

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HOMEWORK CHAPTER 8HOMEWORK CHAPTER 8

Homework 1 – AnswerHomework 1 – Answer

The following items are deductible on The following items are deductible on Schedule A:Schedule A:

Vaccinations, Splints, Vasectomy, Vaccinations, Splints, Vasectomy, Psychiatrist, Orthopedic Shoes, Prenatal Psychiatrist, Orthopedic Shoes, Prenatal Care, Acupuncture, Organ Donor Expenses, Care, Acupuncture, Organ Donor Expenses, Braces, Hearing Aid, Prescription Vitamins, Braces, Hearing Aid, Prescription Vitamins, Special Mattress for back injury, Special Mattress for back injury, Chiropractor, and YMCA Donation.Chiropractor, and YMCA Donation.

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HOMEWORK CHAPTER 8HOMEWORK CHAPTER 8HOMEWORK 2:HOMEWORK 2:

Dominic D. (SSN 074-66-2343, born 11/4/1971) Dominic D. (SSN 074-66-2343, born 11/4/1971) and Lucille L. D’Andrio (SSN 021-90-8723, and Lucille L. D’Andrio (SSN 021-90-8723, born 10/11/1976) are married and live at 42 born 10/11/1976) are married and live at 42 County Line Rd., Branson, MO 65616. County Line Rd., Branson, MO 65616. Dominic is a computer technician and Lucille Dominic is a computer technician and Lucille is a department clerk. They have one child, is a department clerk. They have one child, Bryan (SSN 432-44-9857, born 4/28/1995). Bryan (SSN 432-44-9857, born 4/28/1995). They provide all of the support for Bryan. They provide all of the support for Bryan. They will file jointly and plan to itemize their They will file jointly and plan to itemize their deductions. Their itemized deductions in deductions. Their itemized deductions in 2007 were $11,996 and they filed a joint 2007 were $11,996 and they filed a joint return. Their 2007 state income tax return. Their 2007 state income tax deduction was $1,798 and the sales tax deduction was $1,798 and the sales tax deduction they could have taken was $844. deduction they could have taken was $844. Their W-2 forms and other tax information Their W-2 forms and other tax information are attached. are attached.

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Family health insuranceFamily health insurance $1,800$1,800

Contact lens (Lucille) Contact lens (Lucille) 220220

Car loan interest Car loan interest 550550

Salvation Army donation (cash)Salvation Army donation (cash) 275275

Tolls for medical visits Tolls for medical visits 48 48

Real estate tax Real estate tax 1,800 1,800

Stop-smoking programStop-smoking program

(doctor recommended for Dominic) (doctor recommended for Dominic) 320320

Nonprescription drugsNonprescription drugs 440 440

Braces for Bryan (total bill $4,000) Braces for Bryan (total bill $4,000) 800 800

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Tuition (private school) Tuition (private school) $3,000$3,000Gas and oil for medical purposes Gas and oil for medical purposes 110110Mileage for medical purposesMileage for medical purposes 1,000 miles 1,000 miles (all from 7/1/08 to 12/31/08(all from 7/1/08 to 12/31/08Prescription drugs Prescription drugs 310310Goodwill clothing donation Goodwill clothing donation 330 FMV330 FMV

(original cost $3,200) (original cost $3,200) Political campaign contribution Political campaign contribution 50 50

Prepare a return for the D’Andrios.Prepare a return for the D’Andrios.

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HOMEWORK CHAPTER 8HOMEWORK CHAPTER 8Homework 2 – AnswerHomework 2 – Answer

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Chapter 9: Retirement BenefitsChapter 9: Retirement BenefitsChapter ContentChapter Content Types of Retirement Plans Pensions, Annuities and Designated Roth Accounts Simplified Method Lump-Sum Distributions Minimum Distributions Rollovers Early Distributions Disability and Retirement Commercial Annuities IRAs

Traditional IRAsRoth IRAsSIMPLE and SEP IRAs

Retirement Savings Contribution Credit Key Ideas

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Chapter 9: Retirement BenefitsChapter 9: Retirement Benefits

ObjectivesObjectives Learn About the Different Types of Retirement

PlansDetermine the Taxable and Nontaxable Parts of

Pensions and AnnuitiesUse the Simplified Method Learn About Lump-Sum Distributions and

Rollovers Learn How Disability Affects Your Retirement PlanDistinguish Between the Different Types of IRAs

and Understand Their Benefits Learn about the Retirement Savings Contributions

Credit

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Chapter 9: Retirement BenefitsChapter 9: Retirement BenefitsThe tax law encourages employers to

contribute to the RETIREMENT PLANS of their employees.

Employers claim a current deduction for their contributions into these retirement funds.

Employees benefit by having the money added to the retirement account tax-deferred.

Interest, dividends, and appreciation added to the value of the account is not taxed you start withdrawing the money.

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Retirement BenefitsRetirement BenefitsCommon types of retirement plans include

pensions, annuities, and IRAs.

Reporting retirement benefits.1.Most are reported to on Form 1099-R.2.Appendix B defines the boxes used on Form

1099-R3.You report total pension and annuity income

on line 16a of Form 1040.4.Taxable portion is entered on line 16b of Form

1040 (if fully taxable report only on line 16b).5.If more than one plan, figure taxable part of

each separately; only enter totals on Form 1040.

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Retirement BenefitsRetirement Benefits

6. Report IRA distributions on lines 15a and 15b of Form 1040 (if fully taxable report only on line). Among other items, box 7 of Form 1099-R gives the distribution code.

7. Report IRA distributions on lines 15a and 15b of Form 1040 (if fully taxable report only on line 15b).

8. Additional tax on IRAs and other retirement plans is reported on line 59 of Form 1040.

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Form 1040, Page 1

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Retirement BenefitsRetirement BenefitsGenerally, pensions and annuities provide

cash payments to you after retirement.

The term of the payments may be for life or for a fixed time period.

A withdrawal (distribution) generally cannot be taken before the normal retirement age as specified in your plan without a penalty being charged.

Some plans allow for early retirement.

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A pension provides specific payments to an employee or survivor (the beneficiary) after retirement from work. The payments are made regularly and are for past services with an employer.

An annuity provides payments under a contract from an employer or an insurance company, trust company, or an individual. Payments are made at regular intervals over a period of more than one full year.

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Your cost in a retirement plan is everything that you paid into the plan that was not deducted or excluded from income. For example, your 401(k) contributions which reduced your wages for income tax are not considered part of your cost in the plan.

Cost also includes amounts your employer paid that were taxable to you when paid.

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EMPLOYEE PENSIONS AND EMPLOYEE PENSIONS AND ANNUITIESANNUITIES

Pension is fully taxable if you did NOT pay any Pension is fully taxable if you did NOT pay any part of the cost of your employee pension or part of the cost of your employee pension or annuity and or you deferred part of your pay annuity and or you deferred part of your pay while you worked.while you worked.

Pension is partially taxable if you did contribute Pension is partially taxable if you did contribute to the cost of the plan.to the cost of the plan.

Generally figure tax-free and taxable parts of Generally figure tax-free and taxable parts of annuity payments using the Simplified Method. annuity payments using the Simplified Method. You MUST use the Simplified Method if your You MUST use the Simplified Method if your annuity starting date is annuity starting date is afterafter November 18, November 18, 1996 and payments are from a qualified plan.1996 and payments are from a qualified plan.

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THE SIMPLIFIED METHODTHE SIMPLIFIED METHOD

Using the Simplified Method, you figure the tax-free part of each monthly annuity payment by dividing your cost by the total number of expected monthly payments..

This is either defined in the contract or figured on the annuitants’ ages on the

starting date and determined from a table.

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Simplified Method must be used if:1. Annuity starting date is after

November 18, 1996 and,2. Payments are from qualified

employment plan or tax-sheltered annuity and,

3. At time pension or annuity payments began, you were under age 75 or were entitled to fewer than 5 years of guaranteed payments.

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If pension starts after December 31, 1986, exclude nontaxable pension amount until pension cost is recovered; when

recovered, entire pension income is taxable.

Use Simplified Method Worksheet to figure tax-free portion of payments from qualified plan.

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THE SIMPLIFIED METHODTHE SIMPLIFIED METHODFor annuity starting dates beginning in 1998,

you use Table 9-2 of the Simplified Method Worksheet to figure the tax-free portion of joint and survivor annuity payments from a qualified plan.

Under this recovery method, the total number of monthly annuity payments is based on the combined ages of the annuitants at the birthdays preceding the annuity starting date.

If your annuity starting date began before 1998, the total number of payments is based on your age at that date.

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Civil Service and Railroad Retirement Board use forms different from Form 1099-R.

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ELECTIVE DEFERRALS TO A QUALIFIED ELECTIVE DEFERRALS TO A QUALIFIED RETIREMENT PLANRETIREMENT PLAN

1. You can choose to have part of your compensation contributed by your employer to a retirement fund.

2. Contribution not included in wages subject to income tax.

3. Annual limits apply depending on plan.

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Elective deferrals include elective contributions to retirement plans such as:

1. Cash or deferred arrangements (section 401(k) plans).

2. The Thrift Savings Plan for federal employees.

3. Salary reduction simplified employee pension plans (SARSEP).

4. Savings incentive match plans for employees (SIMPLE plans).

5. Tax-sheltered annuity plans (403(b) plans).6. Section 457 plans.

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A tax law for years after 2005 allows your 401(k) and 403(b) accounts to include a separate designated Roth account.

Designated Roth contributions are treated as elective deferrals (subject to the same limits) except that the contributions are still included in income for the year earned and are considered your cost, as discussed earlier.

A qualified distribution from a Roth account (five years after year of contribution) is not includable in income, neither the cost nor the earnings.

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LUMP-SUM DISTRIBUTIONSLUMP-SUM DISTRIBUTIONS

A. Taxable in year received.

B. Reported on Form 1099-R.

C. Some qualify for special tax treatment under Form 4972.

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LUMP-SUM DISTRIBUTIONSLUMP-SUM DISTRIBUTIONS

Special tax treatments:

Code A in box 7 of Form 1099-R indicates Code A in box 7 of Form 1099-R indicates that it is a lump-sum distribution and it that it is a lump-sum distribution and it qualifies for special tax treatments such as qualifies for special tax treatments such as the 10-year tax option. the 10-year tax option.

Code G indicates a direct tax-free rollover Code G indicates a direct tax-free rollover into a traditional IRA.into a traditional IRA.

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MINIMUM DISTRIBUTIONSMINIMUM DISTRIBUTIONS

If required to receive a minimum distribution, must begin by April 1 of calendar year that follows calendar year in which you reach age 70 1/2 or retire.

If you do not receive the minimum

distribution, an excise tax may be imposed

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ROLLOVERSROLLOVERS1. Transfer of assets from one qualified

retirement plan to another.

2. You must complete rollover by 60th day following day you receive it.

3. A direct rollover is more advantageous because plan administrator will not withhold tax from your distribution.

4. If you have the distribution paid to you, plan administrator must withhold income tax of 20% from taxable distribution.

5. You do not pay tax on the amount you rollover.

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EARLY DISTRIBUTIONSEARLY DISTRIBUTIONS

If receiving distribution prior to reaching age 59 ½ it is usually subject to additional tax of 10%.

1. Applies to taxable part of distribution.

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EARLY DISTRIBUTIONSEARLY DISTRIBUTIONSIf distribution code 1 is shown in box 7 of Form

1099-R:

1. Multiply taxable part by 10%2. Enter result on line 60 of Form 10403. Write “no” on dotted line if no Form 5329 is required

If distribution code 2, 3, or 4 is shown in box 7 of Form 1099-R, and you qualify for an exception to the 10% tax, you do not have to file Form 5329.

File Form 5329 if you owe the tax and also owe any other additional tax on distribution.

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EARLY DISTRIBUTIONSEARLY DISTRIBUTIONSExceptions in which 10% tax does not apply include

distributions:a. After date on which you reach age 59 1/2b. To beneficiary or to estate on or after death of

plan participantc. Made because you are totally and permanently

disabledd. Made as part of series of substantially equal

periodic payments over life expectancy or joint life expectancy of you and beneficiary

e. Paid to the extent of deductible medical expenses over 7.5% of AGI

f. Made to you after you separated from service after reaching 55 years of age (employer plans only)

g. Made from an IRA to pay qualified higher education expenses

h. Made from an IRA for first-time home buyer

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DISABILITY INCOMEDISABILITY INCOME

Taxed as wages until you reach minimum retirement age.

Employer reports it on Form W-2 or Form 1099-R.

1. If on Form 1099-R, box 2a shows taxable amount.

2. Box 7 shows code number 3.

Report all taxable disability income on line 7 of Form 1040 until reaching minimum retirement age. After reaching minimum retirement age, report as taxable pension . .

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INDIVIDUAL RETIREMENT INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAs)ARRANGEMENTS (IRAs)

An Individual Retirement Arrangement (IRA) is a personal savings plan that offers you tax advantages to set aside money for your retirement.

You may be able to deduct your IRA contribution in part or fully and amounts in IRA are not taxed until distributed, or, in some cases, not taxed at all if distributed by the rules.

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Traditional IRAs1. Earnings on contributions not taxed until

withdrawn.

In 2006 Rick contributed $2,000 to his traditional IRA at his bank. His IRA statement showed $45 interest earned in 2008 and added to his traditional IRA. He does not pay tax on the interest until he withdraws it.

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2. Reported on Form 1099-R, with distribution code shown in box 7, IRA box checked.

3. Report IRA distributions on lines 15a and 15b of Form 1040 (fully taxable only on line 15b).

4. Deductions are reported on line 32 of Form 1040.

5. Can deduct contributions on 2008 return if made April 15, 2009.

6. To contribute to traditional IRA, you must be under age 70 1/2 and have taxable compensation.

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7. Contributions to traditional IRA cannot exceed the smaller of your total taxable compensation or $5,000 ($6,000 if 50 or older) in 2008.

8. If you have earned income, you may establish traditional IRA for spouse but must file MFJ.

9. When two separate IRAs, no more than $5,000 ($6,000 if 50 or older) contributed to either one.a. Total combined contribution to both IRAs cannot

exceed smaller of your and your spouse’s total taxable compensation or $10,000 ($11,000 if one 50 or older, $12,000 if both 50 or older)b. Contribute to spousal IRA until reaching age

70 1/2

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INDIVIDUAL RETIREMENT INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAs) – Problem 1ARRANGEMENTS (IRAs) – Problem 1

David and Robyn are filing a joint return. David is 52 and Robyn is 48. David earned $56,000 during the year. Robyn does not work outside the home. David can contribute $6,000 to a traditional IRA for himself. How much can he contribute to an IRA for Robyn?

a. $6,000b. $5,000c. $4,000

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David and Robyn are filing a joint return. David is 52 and Robyn is 48. David earned $56,000 during the year. Robyn does not work outside the home. David can contribute $6,000 to a traditional IRA for himself. How much can he contribute to an IRA for Robyn?

b. $5,000

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Richard is 73 and earned $12,000 during the year. His wife, Geraldine, is 68. Can Richard make an IRA contribution for himself?

Yes or No?

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Richard is 73 and earned $12,000 during the year. His wife, Geraldine, is 68. Can Richard make an IRA contribution for himself?

No

Because he is over age 70 ½.

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Richard is 73 and earned $12,000 during the year. His wife, Geraldine, is 68. Richard cannot make an IRA contribution for himself because he is over age 70 ½ but he can make an IRA contribution for his wife. How much of a contribution can be made for Geraldine?

a. $5,000b. $6,000c. $9,000

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Richard is 73 and earned $12,000 during the year. His wife, Geraldine, is 68. Richard cannot make an IRA contribution for himself because he is over age 70 ½ but he can make an IRA contribution for his wife. How much of a contribution can be made for Geraldine?

b. $6,000

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If you are covered by a pension plan at work, your If you are covered by a pension plan at work, your traditional IRA contributions may or may not be traditional IRA contributions may or may not be deductible depending on filing status and AGI. See deductible depending on filing status and AGI. See Table 9-3.Table 9-3.

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If you are not covered by a retirement plan at work, your deductible traditional IRA contributions may still be limited if your spouse is covered by a retirement plan. See Table 9-4.

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Deductibility of IRA contributions is covered in Chapter 16.

Excess contributions, early withdrawals, and excess accumulations may be subject to additional taxes and penalties (see Chapter 17).

Distributions must begin by April 1 of year following calendar year in which you reach age 70 1/2.

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Roth IRAsA Roth IRA is an individual retirement plan that

generally is subject to the rules that apply to a traditional IRA.

1. Distributions reported on Form 1099-R with “J”, “Q” or “T” in box 7.

2. Differences between Roth IRA and traditional IRA are:a. Can contribute to Roth IRA regardless of age .b. Can leave amounts in Roth IRA as long as you live.c. Cannot deduct contributions to Roth IRA.

3. Qualified distributions are tax-free if meet requirements.

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4. Use Table 9-5 to determine if you can contribute to a Roth IRA.

5. If contributing only to Roth IRA, maximum limit is lesser of $5,000 ($6,000 if age 50 or over) or taxable compensation.

6. Use Table 9-5 and Publication 590 to determine if contribution limit is reduced.

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7. If contributing to both Roth IRA and traditional IRA, your contribution limit for Roth IRAs must be reduced by all contributions for year to all IRAs other than Roth IRAs.

8. If exceed allowable limit of contributions to Roth IRA, subject to 6% excise tax.

9. Can convert traditional IRA to Roth IRA; will be taxed as if distributed and not subject to 10% additional tax (typically code 2 is shown in box 2 of Form 1099-R).

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INDIVIDUAL RETIREMENT INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAs) ARRANGEMENTS (IRAs)

10. Can convert traditional IRA to Roth IRA when both of following are met:a. Modified AGI is not more than $100,000b. You do not file MFS

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Qualified distributions from a Roth IRA are not taxable and, therefore, you will not include them in the gross income on your return.

A qualified distribution is any payment or distribution that meets the following requirements:

It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and

The payment or distribution is made:- On or after the date you reach age 59 ½,

- Because you are disabled,- To a beneficiary or to your estate after your

death, or- To pay up to $10,000 of certain qualified

first- time homebuyer amounts.

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INDIVIDUAL RETIREMENT INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAs) ARRANGEMENTS (IRAs)

A distribution is not a qualified one if you receive it within the 5-taxable-year period or you withdraw excess contributions or earnings on it before the due date of your return.

A 10% additional tax is imposed on premature taxable distributions.

Each conversion will have a separate 5-taxable-year period before it is qualified.

It is important to remember that, with Roth IRAs, you can always have your original contributions distributed tax-free even if the distribution is not qualified.

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Example:

Fred contributed $3,000 to his Roth IRA in both 2006 and 2007. In 2008, he took a distribution of $6,200. The amount taxable (and potentially subject to the 10% additional tax) is $200 ($6,200 - $6,000). Had he withdrawn only $6,000, then none of the distribution would have been taxable

nor subject to the 10% additional tax.

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RETIREMENT SAVINGS RETIREMENT SAVINGS CONTRIBUTION CREDITCONTRIBUTION CREDIT

1. Tax credit of up to $1,000 ($2,000 if married filing jointly).

2. For making contributions to an employer-sponsored plan or an IRA.

3. Cannot claim if AGI more than $26,500 ($39,750 if H of H, $53,000 if MFJ).

4. Cannot claim if under age 18 at the end of 2008, dependent on another return or full-time student.

5. Complete Form 8880 and enter credit on Form 1040, line 51.

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KEY IDEAS

Pensions or annuities may have a tax-free portion if you make after-tax contributions to the plan.

To determine the taxable portion of the annuity payments, use the Simplified Method if your annuity starting date is after November 18, 1996 and your annuity payments are from a qualified plan. For annuity starting dates beginning in 1998, there are special table amounts for joint and survivor annuities.

Taxable pension or annuity income is entered on line 16b of Form 1040.

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Key Ideas

Federal income tax on pension or annuity income can be withheld, or you may choose to pay estimated tax.

If you are age 70 ½ years or older by the end of the tax year, you cannot make traditional IRA contributions for that year

Traditional IRA contributions generally cannot be more than your taxable compensation or $5,000 ($6,000 if age 50 or older), whichever amount is smaller.

Elective deferrals to a qualified employer retirement plan are not included in wages subject to income tax.

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Key Ideas If you have earned income, you can contribute to a

traditional IRA for a spouse who has little or no earned income, but the total amount contributed to both traditional IRAs cannot exceed your taxable compensation or $10,000 ($11,000 if one of you is age 50 or older, $12,000 if both of you are age 50 or older) whichever amount is smaller.

You may be subject to additional tax for contributing more to a traditional IRA than allowed, making traditional IRA withdrawals before age 59 ½, or for not withdrawing enough traditional IRA funds after age 70 ½.

Taxable IRA distributions are entered on line 15b of Form 1040.

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Retirement BenefitsRetirement BenefitsCLASSWORK 1: True or False.

(1) The taxable portion of pension income is entered on line 15b of Form 1040.

(2) You report IRA distributions on line 32 of Form 1040.

(3) A pension is fully taxable if you did not contribute to the plan.

(4) If you retire on disability and have reached the minimum retirement age, you report your pension distributions on line 16b of Form 1040 if they are fully taxable.

(5) You cannot contribute to a Roth IRA if you are over age 70 ½.

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(6) An early distribution is generally one taken prior to reaching age 59 ½.

(7) The Simplified Method is used to figure the tax-free portion of each monthly annuity payment by dividing the cost by the total number of expected monthly payments.

(8) The maximum retirement savings contribution credit that can be claimed for a single taxpayer is $1,000.

(9) Qualified distributions from a Roth IRA are not taxable.

(10) You must begin taking minimum distributions from a Roth IRA when you turn age 59 ½ .

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(11) A lump-sum distribution is a payment you are required to receive after you reach age 70 ½.

(12) To avoid a required 20% federal withholding, you must make a rollover of a retirement plan within 60 days after you receive the distribution.

(13) Contributions you make to a traditional IRA are always deductible.

(14) A contribution to an IRA for a taxpayer age 43 cannot exceed $5,000.

(15) Taxable compensation for a traditional IRA includes alimony payments received.

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(1) The taxable portion of pension income is entered on line 15b of Form 1040. F

(2) You report IRA distributions on line 32 of Form 1040. F

(3) A pension is fully taxable if you did not contribute to the plan. T

(4) If you retire on disability and have reached the minimum retirement age, you report your pension distributions on line 16b of Form 1040 if they are fully taxable. T

(5) You cannot contribute to a Roth IRA if you are over age 70 ½. F

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(6) An early distribution is generally one taken prior to reaching age 59 ½. T

(7) The Simplified Method is used to figure the tax-free portion of each monthly annuity payment by dividing the cost by the total number of expected monthly payments. T

(8) The maximum retirement savings contribution credit that can be claimed for a single taxpayer is $1,000. T

(9) Qualified distributions from a Roth IRA are not taxable. T

(10) You must begin taking minimum distributions from a Roth IRA when you turn age 59 ½ . F

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(11) A lump-sum distribution is a payment you are required to receive after you reach age 70 ½. F

(12) To avoid a required 20% federal withholding, you must make a rollover of a retirement plan within 60 days after you receive the distribution. F

(13) Contributions you make to a traditional IRA are always deductible. F

(14) A contribution to an IRA for a taxpayer age 43 cannot exceed $5,000. T

(15) Taxable compensation for a traditional IRA includes alimony payments received. T

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Retirement BenefitsRetirement BenefitsCLASSWORK 2: In which box of Form 1099-R

would you find the following? Also give the code number or letter, if applicable.

1. federal income tax withheld

2. taxable amount of the distribution

3. early distribution to which a 10% penalty tax applies

4. direct rollover to traditional IRA

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Retirement BenefitsRetirement BenefitsCLASSWORK 2: In which box of Form 1099-R would you

find the following? Also give the code number or letter, if applicable.

5. distribution from Roth IRA in first 5 years

6. disability distribution

7. amount of your contributions to the retirement plan

8. total amount of distribution

NOTE: For questions 2, 3, 4, 5, and 6, the amount would appear in box 1.

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CLASSWORK 2: In which box of Form 1099-R would you find the following? Also give the code number or letter, if applicable.

1. federal income tax withheld Box 4

2. taxable amount of the distribution Box 2a

3. early distribution to which a 10% penalty tax applies Box 7, Code 1

4. direct rollover to traditional IRA Box 7, Code G

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Retirement BenefitsRetirement BenefitsCLASSWORK 2: In which box of Form 1099-R would you

find the following? Also give the code number or letter, if applicable.

5. distribution from Roth IRA in first 5 years Box 7, Code J

6. disability distribution Box 7, Code 3

7. amount of your contributions to the retirement plan Box 5

8. total amount of distribution Box 1

NOTE: For questions 2, 3, 4, 5, and 6, the amount would appear in box 1.

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