Just because Box 2 does not have an amount, it does not mean that is non-taxable. On occasion, the issuer does not know the exact amount, possibly because it was transferred from one broker to another. If you had employee contributions (Box 5) , you could potentially calculate a smaller taxable amount.
The Simplified Method Worksheet is generated
automatically, once you have entered 1099-R information into Turbo Tax and
answered follow up questions.
Please enter the form into the program exactly as it
appears on the form and continue through the interview. You will be asked
questions about your contributions and Simplified Method calculations.
The "plan cost at annuity start
date" refers
to your total
after-tax contributions in the
plan, if you made
any. If you did not make any
after-tax contributions into these accounts, enter "0" (zero) in the
plan cost entry.
If you did make after-tax
contributions and have a 1099-R, it may be listed in box 9b. If
the information is not listed there, you must find it in your records or
contact your annuity administrator. It will be beneficial to find this
information, as it may reduce your taxable income
Please do not ignore the questions, as the
answers will provide additional prompts about annuity cost and start date,
which will then determine the correct taxable amount.
If you made any after-tax contributions to your
pension/annuity plan, you can exclude part of your pension/annuity from taxable
income. Generally, you must figure the tax-free part when the first
payments begin.
To determine how much of your pension is taxable and how much
is tax free, you must use:
a. Simplified
Method
*you must use it if your annuity/pension starting date
was after July1, 1986, or
* 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, and 2. On your annuity
starting date, either you were under age 75 or the number of years of
guaranteed payments was fewer than 5.
b. General Rule – used if you don’t qualify for Simplified Method
Note: Your contributions are reflected in box 5, Form 1099-R. You may
contact your plan administrator, if you are unsure of your pension/ annuity
start date
