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IRS.gov Website
Instructions for Form 1040
taxmap/instr/i1040gi-009.htm#TXMP1086b7be

Income(p19)

rule
Generally, you must report all income except income that is exempt from tax by law. For details, see the following instructions, especially the instructions for lines 7 through 21. Also see Pub. 525.
taxmap/instr/i1040gi-009.htm#TXMP2c6b2db8

Foreign-Source Income(p19)

rule
You must report unearned income, such as interest, dividends, and pensions, from sources outside the United States unless exempt by law or a tax treaty. You must also report earned income, such as wages and tips, from sources outside the United States.
If you worked abroad, you may be able to exclude part or all of your foreign earned income. For details, see Pub. 54 and Form 2555 or 2555-EZ.
taxmap/instr/i1040gi-009.htm#TXMP5f86ecc5
Foreign retirement plans.(p19)
rule
If you were a beneficiary of a foreign retirement plan, you may have to report the undistributed income earned in your plan. However, if you were the beneficiary of a Canadian registered retirement plan, see Form 8891 to find out if you can elect to defer tax on the undistributed income.
Report distributions from foreign pension plans on lines 16a and 16b.
taxmap/instr/i1040gi-009.htm#TXMP5c91fe00
Foreign accounts and trusts.(p19)
rule
You must complete Part III of Schedule B if you:
If you had foreign financial assets in 2011, you may have to file new Form 8938. Check www.irs.gov/form8938 for details.
taxmap/instr/i1040gi-009.htm#TXMP1f09d93a

Chapter 11 Bankruptcy Cases(p19)

rule
If you are a debtor in a chapter 11 bankruptcy case, income taxable to the bankruptcy estate and reported on the estate's income tax return includes:
Because this income is taxable to the estate, do not include this income on your own individual income tax return. The only exception is for purposes of figuring your self-employment tax. For that purpose, you must take into account all your self-employment income for the year from services performed both before and after the beginning of the case. Also, you (or the trustee, if one is appointed) must allocate between you and the bankruptcy estate the wages, salary, or other compensation and withheld income tax reported to you on Form W-2. A similar allocation is required for income and withheld income tax reported to you on Forms 1099. You must also include a statement that indicates you filed a chapter 11 case and that explains how income and withheld income tax reported to you on Forms W-2 and 1099 are allocated between you and the estate. For more details, including acceptable allocation methods, see Notice 2006-83, 2006-40 I.R.B. 596, available at
www.irs.gov/irb/2006-40_IRB/ar12.html.
taxmap/instr/i1040gi-009.htm#TXMP35c41dcb

Community Property States(p19)

rule
Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If you and your spouse lived in a community property state, you must usually follow state law to determine what is community income and what is separate income. For details, see Pub. 555.
taxmap/instr/i1040gi-009.htm#TXMP1de4c246
Nevada, Washington, and California domestic partners.(p19)
rule
A registered domestic partner in Nevada, Washington, or California (or a person in California who is married to a person of the same sex) generally must report half the combined community income of the individual and his or her domestic partner (or California same-sex spouse). See Pub. 555 and the recent developments at www.irs.gov/pub555.
taxmap/instr/i1040gi-009.htm#TXMP266d1b16

Rounding Off to Whole Dollars(p19)

rule
You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.
If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.
taxmap/instr/i1040gi-009.htm#TXMP58986a67

Line 7(p19)

rule
taxmap/instr/i1040gi-009.htm#TXMP165ecda9

Wages, Salaries, Tips, etc.(p19)

rule
Enter the total of your wages, salaries, tips, etc. If a joint return, also include your spouse's income. For most people, the amount to enter on this line should be shown in box 1 of their Form(s) W-2. But the following types of income must also be included in the total on line 7.
caution
You may owe social security and Medicare or railroad retirement (RRTA) tax on unreported tips. See the instructions for line 57.
A higher limit may apply to participants in section 457(b) deferred compensation plans for the 3 years before retirement age. Contact your plan administrator for more information.
If you were age 50 or older at the end of 2011, your employer may have allowed an additional deferral (catch-up contributions) of up to $5,500 ($2,500 for section 401(k)(11) and SIMPLE plans). This additional deferral amount is not subject to the overall limit on elective deferrals.
caution
You cannot deduct the amount deferred. It is not included as income in box 1 of your Form W-2.
*This includes a Roth, SEP, or SIMPLE IRA.
taxmap/instr/i1040gi-009.htm#TXMP65e27da4

Were You a Statutory Employee?(p20)

rule
If you were, the Statutory employee box in box 13 of your Form W-2 should be checked. Statutory employees include full-time life insurance salespeople, certain agent or commission drivers and traveling salespeople, and certain homeworkers. If you have related business expenses to deduct, report the amount shown in box 1 of your Form W-2 on Schedule C or C-EZ along with your expenses.
taxmap/instr/i1040gi-009.htm#TXMP0cdca613

Missing or Incorrect Form W-2?(p20)

rule
Your employer is required to provide or send Form W-2 to you no later than
January 31, 2012. If you do not receive it by early February, use TeleTax topic 154 to find out what to do. Even if you do not get a Form W-2, you must still report your earnings on line 7. If you lose your Form W-2 or it is incorrect, ask your employer for a new one.
taxmap/instr/i1040gi-009.htm#TXMP548a4947

Line 8a(p20)

rule
taxmap/instr/i1040gi-009.htm#TXMP2a012ae5

Taxable Interest(p20)

rule
Each payer should send you a Form 1099-INT or Form 1099-OID. Enter your total taxable interest income on line 8a. But you must fill in and attach Schedule B if the total is over $1,500 or any of the other conditions listed at the beginning of the Schedule B instructions apply to you.
Interest credited in 2011 on deposits that you could not withdraw because of the bankruptcy or insolvency of the financial institution may not have to be included in your 2011 income. For details, see
Pub. 550.
taxtip
If you get a 2011 Form 1099-INT for U.S. savings bond interest that includes amounts you reported before 2011, see Pub. 550.
taxmap/instr/i1040gi-009.htm#TXMP2dbcd4c7

Line 8b(p20)

rule
taxmap/instr/i1040gi-009.htm#TXMP6b900a0f

Tax-Exempt Interest(p20)

rule
If you received any tax-exempt interest, such as from municipal bonds, each payer should send you a Form 1099-INT. Your tax-exempt interest, including any exempt-interest dividends from a mutual fund or other regulated investment company, should be included in box 8 of Form 1099-INT. Enter the total on line 8b. Do not include interest earned on your IRA, health savings account, Archer or Medicare Advantage MSA, or Coverdell education savings account.
taxmap/instr/i1040gi-009.htm#TXMP6b2210d0

Line 9a(p20)

rule
taxmap/instr/i1040gi-009.htm#TXMP09300552

Ordinary Dividends(p20)

rule
Each payer should send you a Form 1099-DIV. Enter your total ordinary dividends on line 9a. This amount should be shown in box 1a of Form(s) 1099-DIV.
You must fill in and attach Schedule B if the total is over $1,500 or you received, as a nominee, ordinary dividends that actually belong to someone else.
taxmap/instr/i1040gi-009.htm#TXMP5f19f655

Nondividend Distributions(p20)

rule
Some distributions are a return of your cost (or other basis). They will not be taxed until you recover your cost (or other basis). You must reduce your cost (or other basis) by these distributions. After you get back all of your cost (or other basis), you must report these distributions as capital gains on Schedule D. For details, see Pub. 550.
taxtip
Dividends on insurance policies are a partial return of the premiums you paid. Do not report them as dividends. Include them in income on line 21 only if they exceed the total of all net premiums you paid for the contract.
taxmap/instr/i1040gi-009.htm#TXMP03fceef5

Line 9b(p20)

rule
taxmap/instr/i1040gi-009.htm#TXMP0f2292a7

Qualified Dividends(p20)

rule
Enter your total qualified dividends on
line 9b. Qualified dividends are also included in the ordinary dividend total required to be shown on line 9a. Qualified dividends are eligible for a lower tax rate than other ordinary income. Generally, these dividends are shown in box 1b of Form(s) 1099-DIV. See Pub. 550 for the definition of qualified dividends if you received dividends not reported on Form 1099-DIV.
taxmap/instr/i1040gi-009.htm#TXMP047c78d0
Exception.(p20)
rule
Some dividends may be reported as qualified dividends in box 1b of Form 1099-DIV but are not qualified dividends. These include:

Example 1.(p20)

You bought 5,000 shares of XYZ Corp. common stock on July 8, 2011. XYZ Corp. paid a cash dividend of 10 cents per share. The ex-dividend date was July 15, 2011. Your Form 1099-DIV from XYZ Corp. shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). However, you sold the 5,000 shares on August 11, 2011. You held your shares of XYZ Corp. for only 34 days of the 121-day period (from July 9, 2011, through August 11, 2011). The 121-day period began on May 16, 2011 (60 days before the ex-dividend date), and ended on September 13, 2011. You have no qualified dividends from XYZ Corp. because you held the XYZ stock for less than 61 days.

Example 2.(p21)

Assume the same facts as in Example 1 except that you bought the stock on July 14, 2011 (the day before the ex-dividend date), and you sold the stock on September 15, 2011. You held the stock for 63 days (from July 15, 2011, through September 15, 2011). The $500 of qualified dividends shown in box 1b of Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 15, 2011, through September 13, 2011).

Example 3.(p21)

You bought 10,000 shares of ABC Mutual Fund common stock on July 8, 2011. ABC Mutual Fund paid a cash dividend of 10 cents a share. The ex-dividend date was July 15, 2011. The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. However, you sold the 10,000 shares on August 11, 2011. You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days.
taxtip
Use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, whichever applies, to figure your tax. See the instructions for line 44 for details.
taxmap/instr/i1040gi-009.htm#TXMP2baa6c70

Line 10(p21)

rule
taxmap/instr/i1040gi-009.htm#TXMP72333869

Taxable Refunds, Credits, or Offsets of State and Local Income Taxes(p21)

rule
taxtip
None of your refund is taxable if, in the year you paid the tax, you either (a) did not itemize deductions, or (b) elected to deduct state and local general sales taxes instead of state and local income taxes.
If you received a refund, credit, or offset of state or local income taxes in 2011, you may receive a Form 1099-G. If you chose to apply part or all of the refund to your 2011 estimated state or local income tax, the amount applied is treated as received in 2011. If the refund was for a tax you paid in 2010 and you deducted state and local income taxes on line 5 of your 2010 Schedule A, use the worksheet below to see if any of your refund is taxable.
taxmap/instr/i1040gi-009.htm#TXMP7fd59f24
Exception.(p21)
rule
See Itemized Deduction Recoveries in Pub. 525 instead of using the worksheet below if any of the following applies.
  1. You received a refund in 2011 that is for a tax year other than 2010.
  2. You received a refund other than an income tax refund, such as a general sales tax or real property tax refund, in 2011 of an amount deducted or credit claimed in an earlier year.
  3. The amount on your 2010 Form 1040, line 42, was more than the amount on your 2010 Form 1040, line 41.
  4. You had taxable income on your 2010 Form 1040, line 43, but no tax on your Form 1040, line 44, because of the 0% tax rate on net capital gain and qualified dividends in certain situations.
  5. Your 2010 state and local income tax refund is more than your 2010 state and local income tax deduction minus the amount you could have deducted as your 2010 state and local general sales taxes.
  6. You made your last payment of 2010 estimated state or local income tax in 2011.
  7. You owed alternative minimum tax in 2010.
  8. You could not use the full amount of credits you were entitled to in 2010 because the total credits were more than the amount shown on your 2010 Form 1040, line 46.
  9. You could be claimed as a dependent by someone else in 2010.
  10. You received a refund because of a jointly filed state or local income tax return, but you are not filing a joint 2011 Form 1040 with the same person.
taxmap/instr/i1040gi-009.htm#TXMP4ac4ad14

Line 11(p22)

rule
taxmap/instr/i1040gi-009.htm#TXMP18918e86

Alimony Received(p22)

rule
Enter amounts received as alimony or separate maintenance. You must let the person who made the payments know your social security number. If you do not, you may have to pay a penalty. For more details, see Pub. 504.
taxmap/instr/i1040gi-009.htm#w24811v06
pencil

State and Local Income Tax Refund Worksheet—Line 10

  • Be sure you have read the Exception in the instructions for this line to see if you can use this worksheet instead of Pub. 525 to figure if any of your refund is taxable.
1.  Enter the income tax refund from Form(s) 1099-G (or similar statement). But do not enter more than the amount of your state and local income taxes shown on your 2010 Schedule A, line 5 1. 
2.  Enter your total itemized deductions from your 2010 Schedule A, line 292.  
   
 Note. If the filing status on your 2010 Form 1040 was married filing separately and your spouse itemized deductions in 2010, skip lines 3 through 7, enter the amount from line 2 on line 8, and go to line 9.   
3.  Enter the amount shown below for the filing status claimed on your
2010 Form 1040.
  
  
  • Single or married filing separately—$5,700
  • Married filing jointly or qualifying widow(er)—$11,400
  • Head of household—$8,400
Right brace 3.  
4.  Did you fill in line 39a on your 2010 Form 1040?  
  box No.Enter -0-.  Right brace 4.  
  box Yes.Multiply the number in the box on line 39a of your 2010 Form 1040 by $1,100 ($1,400 if your 2010 filing status was single or head of household).    
5.  Enter any net disaster loss from your 2010 Form 4684, line 175.     
6.  Enter any new motor vehicle taxes shown on your 2010 Schedule A,
line 7
6.     
7.  Add lines 3, 4, 5, and 67.  
8.  Is the amount on line 7 less than the amount on line 2?  
  box No. stop None of your refund is taxable.      
  box Yes. Subtract line 7 from line 28. 
9.  Taxable part of your refund. Enter the smaller of line 1 or line 8 here and on Form 1040, line 10 9. 
 
taxmap/instr/i1040gi-009.htm#TXMP1b3902f7

Line 12(p22)

rule
taxmap/instr/i1040gi-009.htm#TXMP0e27accf

Business Income or (Loss)(p22)

rule
If you operated a business or practiced your profession as a sole proprietor, report your income and expenses on Schedule C or C-EZ.
taxmap/instr/i1040gi-009.htm#TXMP5408f683

Line 13(p22)

rule
taxmap/instr/i1040gi-009.htm#TXMP0c2e7ac9

Capital Gain or (Loss)(p22)

rule
If you had a capital gain or loss, you must complete and attach Form 8949 and Schedule D.
taxmap/instr/i1040gi-009.htm#TXMP242229ba
Exception 1.(p22)
rule
You do not have to file Form 8949 or Schedule D if both of the following apply.
  1. You have no capital losses, and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements).
  2. None of the Form(s) 1099-DIV (or substitute statements) have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain).
taxmap/instr/i1040gi-009.htm#TXMP76d9d624
Exception 2.(p22)
rule
You must file Schedule D, but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are:
If Exception 1 applies, enter your total capital gain distributions (from box 2a of Form(s) 1099-DIV) on line 13 and check the box on that line. If you received capital gain distributions as a nominee (that is, they were paid to you but actually belong to someone else), report on line 13 only the amount that belongs to you. Include a statement showing the full amount you received and the amount you received as a nominee. See the Schedule B instructions for filing requirements for Forms 1099-DIV and 1096.
taxtip
If you do not have to file Schedule D, use the Qualified Dividends and Capital Gain Tax Worksheet in the line 44 instructions to figure your tax.
taxmap/instr/i1040gi-009.htm#TXMP2519b14a

Line 14(p22)

rule
taxmap/instr/i1040gi-009.htm#TXMP520bbb84

Other Gains or (Losses)(p22)

rule
If you sold or exchanged assets used in a trade or business, see the Instructions for Form 4797.
taxmap/instr/i1040gi-009.htm#TXMP49667b32

Lines 15a and 15b(p22)

rule
taxmap/instr/i1040gi-009.htm#TXMP44c91819

IRA Distributions(p22)

rule
You should receive a Form 1099-R showing the total amount of any distribution from your IRA before income tax or other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. Unless otherwise noted in the line 15a and 15b instructions, an IRA includes a traditional IRA, Roth IRA, simplified employee pension (SEP) IRA, and a savings incentive match plan for employees (SIMPLE) IRA. Except as provided below, leave line 15a blank and enter the total distribution (from Form 1099-R, box 1) on line 15b.
If you converted part or all of an IRA to a Roth IRA in 2010 and did not elect to report the taxable amount on your 2010 return, you generally must report half of it on your 2011 return and the rest on your 2012 return. See 2010 Roth IRA conversions, later.
taxmap/instr/i1040gi-009.htm#TXMP2591a42a
Exception 1.(p22)
rule
Enter the total distribution on line 15a if you rolled over part or all of the distribution from one:
Also, enter Rollover next to line 15b. If the total distribution was rolled over in a qualified rollover, enter -0- on line 15b. If the total distribution was not rolled over in a qualified rollover, enter the part not rolled over on line 15b unless Exception 2 applies to the part not rolled over. Generally, a qualified rollover must be made within 60 days after the day you received the distribution. For more details on rollovers, see Pub. 590.
If you rolled over the distribution into a qualified plan other than an IRA or you made the rollover in 2012, include a statement explaining what you did.
taxmap/instr/i1040gi-009.htm#TXMP319455f5
Exception 2.(p22)
rule
If any of the following apply, enter the total distribution on line 15a and see Form 8606 and its instructions to figure the amount to enter on line 15b.
  1. You received a distribution from an IRA (other than a Roth IRA) and you made nondeductible contributions to any of your traditional or SEP IRAs for 2011 or an earlier year. If you made nondeductible contributions to these IRAs for 2011, also see Pub. 590.
  2. You received a distribution from a Roth IRA. But if either (a) or (b) below applies, enter -0- on line 15b; you do not have to see Form 8606 or its instructions.
    1. Distribution code T is shown in box 7 of Form 1099-R and you made a contribution (including a conversion) to a Roth IRA for 2006 or an earlier year.
    2. Distribution code Q is shown in box 7 of Form 1099-R.
  3. You converted part or all of a traditional, SEP, or SIMPLE IRA to a Roth IRA in 2011.
  4. You had a 2010 or 2011 IRA contribution returned to you, with the related earnings or less any loss, by the due date (including extensions) of your tax return for that year.
  5. You made excess contributions to your IRA for an earlier year and had them returned to you in 2011.
  6. You recharacterized part or all of a contribution to a Roth IRA as a traditional IRA contribution, or vice versa.
taxmap/instr/i1040gi-009.htm#TXMP044dbe71
Exception 3.(p22)
rule
If the distribution is a qualified charitable distribution (QCD), enter the total distribution on line 15a. If the total amount distributed is a QCD, enter -0- on line 15b. If only part of the distribution is a QCD, enter the part that is not a QCD on line 15b unless Exception 2 applies to that part. Enter QCD next to line 15b.
A QCD is a distribution made directly by the trustee of your IRA (other than an ongoing SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions (with certain exceptions). You must have been at least age 701/2 when the distribution was made.
Generally, your total QCDs for the year cannot be more than $100,000. (On a joint return, your spouse can also have a QCD of up to $100,000.) If you elected to treat a January 2011 QCD as made in 2010, report it on your 2011 return like any other 2011 QCD, as just described. However, if you also made another 2011 QCD and the total was more than $100,000 per spouse, attach a brief explanation. For example: Line 15b – Spouse One's 2010 QCD $75,000; Spouse One's 2011 QCD $70,000.
The amount of the QCD is limited to the amount that would otherwise be included in your income. If your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income.
caution
You cannot claim a charitable contribution deduction for any QCD not included in your income.
taxmap/instr/i1040gi-009.htm#TXMP65e0585a
Exception 4.(p23)
rule
If the distribution is a health savings account (HSA) funding distribution (HFD), enter the total distribution on line 15a. If the total amount distributed is an HFD and you elect to exclude it from income, enter -0- on line 15b. If only part of the distribution is an HFD and you elect to exclude that part from income, enter the part that is not an HFD on line 15b unless Exception 2 applies to that part. Enter HFD next to line 15b.
An HFD is a distribution made directly by the trustee of your IRA (other than an ongoing SEP or SIMPLE IRA) to your HSA. If eligible, you generally can elect to exclude an HFD from your income once in your lifetime. You cannot exclude more than the limit on HSA contributions or more than the amount that would otherwise be included in your income. If your IRA includes nondeductible contributions, the HFD is first considered to be paid out of otherwise taxable income. See Pub. 969 for details.
caution
The amount of an HFD reduces the amount you can contribute to your HSA for the year. If you fail to maintain eligibility for an HSA for the 12 months following the month of the HFD, you may have to report the HFD as income and pay an additional tax. See Form 8889, Part III.
taxmap/instr/i1040gi-009.htm#TXMP2e440f02
More than one exception applies.(p23)
rule
If more than one exception applies, include a statement showing the amount of each exception, instead of making an entry next to line 15b. For example: Line 15b – $1,000 Rollover and $500 HFD. But you do not need to attach a statement if only Exception 2 and one other exception apply.
taxmap/instr/i1040gi-009.htm#TXMP711b6136
2010 Roth IRA conversions.(p23)
rule
If you converted part or all of an IRA to a Roth IRA in 2010 and did not elect to report the taxable amount on your 2010 return, include on line 15b the amount from your 2010 Form 8606, line 20a. However, you may have to include a different amount on line 15b if either of the following applies.
taxmap/instr/i1040gi-009.htm#TXMP22f2c3e6
More than one distribution.(p23)
rule
If you (or your spouse if filing jointly) received more than one distribution, figure the taxable amount of each distribution and enter the total of the taxable amounts on line 15b. Enter the total amount of those distributions on line 15a.
caution
You may have to pay an additional tax if (a) you received an early distribution from your IRA and the total was not rolled over, or (b) you were born before July 1, 1940, and received less than the minimum required distribution from your traditional, SEP, and SIMPLE IRAs. See the instructions for line 58 for details.
taxmap/instr/i1040gi-009.htm#TXMP4f1df2e0
More information.(p23)
rule
For more information about IRAs, see Pub. 590.
taxmap/instr/i1040gi-009.htm#TXMP678468aa

Lines 16a and 16b(p23)

rule
taxmap/instr/i1040gi-009.htm#TXMP1dc5f231

Pensions and Annuities(p23)

rule
You should receive a Form 1099-R showing the total amount of your pension and annuity payments before income tax or other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. Pension and annuity payments include distributions from 401(k), 403(b), and governmental 457(b) plans. Rollovers and lump-sum distributions are explained later. Do not include the following payments on lines 16a and 16b. Instead, report them on line 7.
taxtip
Attach Form(s) 1099-R to
Form 1040 if any federal
income tax was withheld.
If you rolled over part or all of a qualified retirement plan (other than a designated Roth account) to a Roth IRA in 2010 (or you rolled over part or all of a 401(k) or 403(b) plan to a designated Roth account in 2010) and did not elect to report the taxable amount on your 2010 return, you generally must report half of it on your 2011 return and the rest on your 2012 return. See 2010 Roth IRA rollovers, or 2010 in-plan rollovers, whichever applies, later.
taxmap/instr/i1040gi-009.htm#TXMP2989ff01

Fully Taxable Pensions and Annuities(p23)

rule
Your payments are fully taxable if (a) you did not contribute to the cost (see Cost, later) of your pension or annuity, or (b) you got your entire cost back tax free before 2011. But see Insurance Premiums for Retired Public Safety Officers, later. If your pension or annuity is fully taxable, enter the total pension or annuity payments (from Form(s) 1099-R, box 1) on line 16b; do not make an entry on line 16a.
Fully taxable pensions and annuities also include military retirement pay shown on Form 1099-R. For details on military disability pensions, see Pub. 525. If you received a Form RRB-1099-R, see
Pub. 575 to find out how to report your benefits.
taxmap/instr/i1040gi-009.htm#TXMP20e1847c

Partially Taxable Pensions and Annuities(p23)

rule
Enter the total pension or annuity payments (from Form 1099-R, box 1) on line 16a. If your Form 1099-R does not show the taxable amount, you must use the General Rule explained in Pub. 939 to figure the taxable part to enter on line 16b. But if your annuity starting date (defined later) was after July 1, 1986, see Simplified Method, later, to find out if you must use that method to figure the taxable part.
You can ask the IRS to figure the taxable part for you for a $1,000 fee. For details, see Pub. 939.
If your Form 1099-R shows a taxable amount, you can report that amount on
line 16b. But you may be able to report a lower taxable amount by using the General Rule or the Simplified Method or if the exclusion for retired public safety officers, discussed next, applies.
taxmap/instr/i1040gi-009.htm#TXMP077ebe17

Insurance Premiums for Retired Public Safety Officers(p23)

rule
If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for coverage by an accident or health plan or a long-term care insurance contract. You can do this only if you retired because of disability or because you reached normal retirement age. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be from a plan maintained by the employer from which you retired as a public safety officer. Also, the distribution must be made directly from the plan to the provider of the accident or health plan or long-term care insurance contract. You can exclude from income the smaller of the amount of the premiums or $3,000. You can only make this election for amounts that would otherwise be included in your income.
An eligible retirement plan is a governmental plan that is:
If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. The amount shown in box 2a of Form 1099-R does not reflect the exclusion. Report your total distributions on line 16a and the taxable amount on line 16b. Enter PSO next to line 16b.
taxmap/instr/i1040gi-009.htm#w24811vwa
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Simplified Method Worksheet—Lines 16a and 16b

taxmap/instr/i1040gi-009.htm#TXMP6f41113a
taxmap/instr/i1040gi-009.htm#TXMP73870cad
Simplified Method Worksheet-Lines 16a and 16b Text DescriptionSimplified Method Worksheet-Lines 16a and 16b   
If you are retired on disability and reporting your disability pension on line 7, include only the taxable amount on that line and enter PSO and the amount excluded on the dotted line next to line 7.
taxmap/instr/i1040gi-009.htm#TXMP213a204c

Simplified Method(p25)

rule
You must use the Simplified Method if either of the following applies.
  1. Your annuity starting date was after July 1, 1986, and you used this method last year to figure the taxable part.
  2. Your annuity starting date was after November 18, 1996, and both of the following apply.
    1. The payments are from a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity.
    2. On your annuity starting date, either you were under age 75 or the number of years of guaranteed payments was fewer than five. See Pub. 575 for the definition of guaranteed payments.
If you must use the Simplified Method, complete the Simplified Method Worksheet in these instructions to figure the taxable part of your pension or annuity. For more details on the Simplified Method, see Pub. 575 or Pub. 721 for U.S. Civil Service retirement benefits.
caution
If you received U.S. Civil Service retirement benefits and you chose the alternative annuity option, see Pub. 721 to figure the taxable part of your annuity. Do not use the Simplified Method Worksheet in these instructions.
taxmap/instr/i1040gi-009.htm#TXMP74702a92

Annuity Starting Date(p25)

rule
Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed.
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Age (or Combined Ages) at Annuity Starting Date(p25)

rule
If you are the retiree, use your age on the annuity starting date. If you are the survivor of a retiree, use the retiree's age on his or her annuity starting date. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, use your combined ages on the annuity starting date.
If you are the beneficiary of an employee who died, see Pub. 575. If there is more than one beneficiary, see Pub. 575 or Pub. 721 to figure each beneficiary's taxable amount.
taxmap/instr/i1040gi-009.htm#TXMP3ebbae2f

Cost(p25)

rule
Your cost is generally your net investment in the plan as of the annuity starting date. It does not include pre-tax contributions. Your net investment should be shown in box 9b of Form 1099-R for the first year you received payments from the plan.
taxmap/instr/i1040gi-009.htm#TXMP279e9aeb

Rollovers(p25)

rule
Generally, a qualified rollover is a tax-free distribution of cash or other assets from one retirement plan that is contributed to another plan within 60 days of receiving the distribution. However, a qualified rollover to a Roth IRA or a designated Roth account is generally not a tax-free distribution. Use lines 16a and 16b to report a qualified rollover, including a direct rollover, from one qualified employer's plan to another or to an IRA or SEP.
Enter on line 16a the distribution from Form 1099-R, box 1. From this amount, subtract any contributions (usually shown in box 5) that were taxable to you when made. From that result, subtract the amount of the qualified rollover. Enter the remaining amount on line 16b. If the remaining amount is zero and you have no other distribution to report on line 16b, enter zero on line 16b. Also, enter "Rollover" next to line 16b.
See Pub. 575 for more details on rollovers, including special rules that apply to rollovers from designated Roth accounts, partial rollovers of property, and distributions under qualified domestic relations orders.
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2010 Roth IRA rollovers.(p25)
rule
If you rolled over part or all of a qualified retirement plan (other than a designated Roth account) to a Roth IRA in 2010 and did not elect to report the taxable amount on your 2010 return, include on line 16b the amount from your 2010 Form 8606, line 25a. However, you may have to include a different amount on line 16b (or include an amount on line 15b instead of line 16b) if either of the following applies.
taxmap/instr/i1040gi-009.htm#TXMP7cc84715
2010 in-plan Roth rollovers.(p25)
rule
If you rolled over part or all of a qualified retirement plan to a designated Roth account in 2010 and did not elect to report the taxable amount on your 2010 return, include on line 16b the amount from your 2010 Form 8606, line 25a. However, you may have to include a different amount on line 16b if either of the following applies.
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Lump-Sum Distributions(p25)

rule
If you received a lump-sum distribution from a profit-sharing or retirement plan, your Form 1099-R should have the "Total distribution" box in box 2b checked. You may owe an additional tax if you received an early distribution from a qualified retirement plan and the total amount was not rolled over in a qualified rollover. For details, see the instructions for line 58.
Enter the total distribution on line 16a and the taxable part on line 16b. For details, see Pub. 575.
taxtip
You may be able to pay less tax on the distribution if you were born before January 2, 1936, or you are the beneficiary of a deceased employee who was born before January 2, 1936. For details, see Form 4972.
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Line 19(p25)

rule
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Unemployment Compensation(p25)

rule
You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you in 2011. Report this amount on line 19. However, if you made contributions to a governmental unemployment compensation program and you are not itemizing deductions, reduce the amount you report on line 19 by those contributions.
If you received an overpayment of unemployment compensation in 2011 and you repaid any of it in 2011, subtract the amount you repaid from the total amount you received. Enter the result on line 19. Also, enter Repaid and the amount you repaid on the dotted line next to line 19. If, in 2011, you repaid unemployment compensation that you included in gross income in an earlier year, you can deduct the amount repaid on Schedule A, line 23. But if you repaid more than $3,000, see Repayments in Pub. 525 for details on how to report the repayment.
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Lines 20a and 20b(p25)

rule
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Social Security Benefits(p25)

rule
You should receive a Form SSA-1099 showing in box 3 the total social security benefits paid to you. Box 4 will show the amount of any benefits you repaid in 2011. If you received railroad retirement benefits treated as social security, you should receive a Form RRB-1099.
Use the Social Security Benefits Worksheet in these instructions to see if any of your benefits are taxable.
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Exception.(p27)
rule
Do not use the Social Security Benefits Worksheet in these instructions if any of the following applies.
taxmap/instr/i1040gi-009.htm#w24811v03
pencil

Social Security Benefits Worksheet—Lines 20a and 20b

  • Complete Form 1040, lines 21 and 23 through 32, if they apply to you.
  • Figure any write-in adjustments to be entered on the dotted line next to line 36 (see the instructions for line 36).
  • If you are married filing separately and you lived apart from your spouse for all of 2011, enter "D" to the right of the word "benefits" on line 20a. If you do not, you may get a math error notice from the IRS.
  • Be sure you have read the Exception in the line 20a and 20b instructions to see if you can use this worksheet instead of a publication to find out if any of your benefits are taxable.
  
1. Enter the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099. Also, enter this amount on Form 1040, line 20a 1.   
2. Enter one-half of line 12.  
3. Combine the amounts from Form 1040, lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 213.  
4. Enter the amount, if any, from Form 1040, line 8b4.  
5. Combine lines 2, 3, and 45.  
6. Enter the total of the amounts from Form 1040, lines 23 through 32, plus any write-in adjustments you entered on the dotted line next to line 36 6.  
7. Is the amount on line 6 less than the amount on line 5?  
   box No. stop None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b.    
   box Yes. Subtract line 6 from line 5 7.  
8. If you are:
  • Married filing jointly, enter $32,000
  • Single, head of household, qualifying widow(er), or married filing
      separately and you lived apart from your spouse for all of 2011,
      enter $25,000
Right brace8.  
  
  • Married filing separately and you lived with your spouse at any time
      in 2011, skip lines 8 through 15; multiply line 7 by 85% (.85) and
      enter the result on line 16. Then go to line 17
  
9. Is the amount on line 8 less than the amount on line 7?  
   box No. stop None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b. If you are married filing separately and you lived apart from your spouse for all of 2011, be sure you entered "D" to the right of the word "benefits" on line 20a.   
   box Yes. Subtract line 8 from line 7 9.  
10. Enter: $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2011 10.  
11. Subtract line 10 from line 9. If zero or less, enter -0-11.  
12. Enter the smaller of line 9 or line 10 12.  
13. Enter one-half of line 1213.  
14. Enter the smaller of line 2 or line 13 14.  
15. Multiply line 11 by 85% (.85). If line 11 is zero, enter -0-15.  
16. Add lines 14 and 1516.  
17. Multiply line 1 by 85% (.85)17.  
18. Taxable social security benefits. Enter the smaller of line 16 or line 17. Also enter this amount on Form 1040, line 20b 18.  
taxtip If any of your benefits are taxable for 2011 and they include a lump-sum benefit payment that was for an earlier year, you may be able to reduce the taxable amount. See Pub. 915 for details. 
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Line 21(p27)

rule
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Other Income(p27)

rule
caution
Do not report on this line any income from self-employment or fees received as a notary public. Instead, you must use Schedule C, C-EZ, or F, even if you do not have any business expenses. Also, do not report on line 21 any nonemployee compensation shown on Form 1099-MISC (unless it is not self-employment income, such as income from a hobby or a sporadic activity). Instead, see the instructions on Form 1099-MISC to find out where to report that income.
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Taxable income.(p27)
rule
Use line 21 to report any taxable income not reported elsewhere on your return or other schedules. List the type and amount of income. If necessary, include a statement showing the required information. For more details, see Miscellaneous Income in Pub. 525.
Examples of income to report on line 21 include the following.
caution
You may have to pay an additional tax if you received a taxable distribution from a Coverdell ESA or a QTP. See the Instructions for Form 5329.
taxmap/instr/i1040gi-009.htm#TXMP58520a28
Nontaxable income.(p27)
rule
Do not report any nontaxable income on line 21. Examples of nontaxable income include the following.
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Net operating loss (NOL) deduction.(p27)
rule
Include on line 21 any NOL deduction from an earlier year. Subtract it from any income on line 21 and enter the result. If the result is less than zero, enter it in parentheses. On the dotted line next to line 21, enter NOL and show the amount of the deduction in parentheses. See Pub. 536 for details.