Publication 915 |
2008 Tax Year |
Publication 915 - Main Contents
Are Any of Your Benefits Taxable?
To find out whether any of your benefits may be taxable, compare the base amount (explained later) for your filing status
with the total of:
-
One-half of your benefits, plus
-
All your other income, including tax-exempt interest.
When making this comparison, do not reduce your other income by any exclusions for:
-
Interest from qualified U.S. savings bonds,
-
Employer-provided adoption benefits,
-
Foreign earned income or foreign housing, or
-
Income earned by bona fide residents of American Samoa or Puerto Rico.
The SSA issues Form SSA-1099 and Form SSA-1042S. The RRB issues Form RRB-1099 and Form RRB-1042S. These forms (tax statements)
report the amounts
paid and repaid, and taxes withheld for a tax year. You may receive more than one of these forms for the same tax year. You
should add the amounts
shown on all forms you receive from the SSA and/or RRB for the same tax year to determine the “total” amounts paid and repaid, and taxes withheld
for that tax year. See Appendix, at the end of this publication for more information.
Each original Form RRB-1099 is valid unless it has been corrected. The RRB will issue a corrected Form RRB-1099 if there is
an error in the
original. A corrected Form RRB-1099 is indicated as “CORRECTED” and replaces the corresponding original Form RRB-1099. You must use the latest
corrected Form RRB-1099 you received and any original Form RRB-1099 that the RRB has not corrected when you determine what
amounts to report on your
tax return.
Figuring total income.
To figure the total of one-half of your benefits plus your other income, use Worksheet A, discussed later. If the
total is more than your base
amount, part of your benefits may be taxable.
If you are married and file a joint return for 2007, you and your spouse must combine your incomes and your benefits
to figure whether any of your
combined benefits are taxable. Even if your spouse did not receive any benefits, you must add your spouse's income to yours
to figure whether any of
your benefits are taxable.
If the only income you received during 2007 was your social security or the SSEB portion of tier 1 railroad retirement benefits,
your benefits
generally are not taxable and you probably do not have to file a return. If you have income in addition to your benefits,
you may have to file a
return even if none of your benefits are taxable.
Base amount.
Your base amount is:
-
$25,000 if you are single, head of household, or qualifying widow(er),
-
$25,000 if you are married filing separately and lived apart from your spouse for all of 2007,
-
$32,000 if you are married filing jointly, or
-
$-0- if you are married filing separately and lived with your spouse at any time during 2007.
Worksheet A.
You can use Worksheet A to figure the amount of income to compare with your base amount. This is a quick way to check
whether some of your benefits
may be taxable.
Worksheet A. A Quick Way To Check if Your Benefits May be Taxable
A.
|
Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include the full amount of
any lump-sum benefit payments received in 2007, for 2007 and earlier years. (If you received more than one form, combine the
amounts from box 5 and
enter the total.)
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A.
|
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Note. If the amount on line A is zero or less, stop here; none of your benefits are
taxable this year.
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B.
|
Enter one-half of the amount on line A
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B.
|
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C.
|
Enter your taxable pensions, wages, interest, dividends, and other taxable income
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C.
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D.
|
Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income
(listed earlier)
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D.
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E.
|
Add lines B, C, and D
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E.
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Note. Compare the amount on line E to your base amount
for your filing status. If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are
taxable this year. If the amount on line E is more than your base amount, some of your benefits may be taxable. You need to complete
Worksheet 1, shown later.
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Example.
You and your spouse (both over 65) are filing a joint return for 2007 and you both received social security benefits during
the year. In January
2008, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Your spouse received a Form SSA-1099 showing net
benefits of $3,500 in box
5. You also received a taxable pension of $20,000 and interest income of $500. You did not have any tax-exempt interest income.
Your benefits are not
taxable for 2007 because your income, as figured in Worksheet A on the next page, is not more than your base amount ($32,000)
for married filing
jointly.
Even though none of your benefits are taxable, you must file a return for 2007 because your taxable gross income ($20,500)
exceeds the minimum
filing requirement amount for your filing status.
Filled-in Worksheet A. A Quick Way To Check if Your Benefits May be Taxable
A.
|
Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Include the full amount of
any lump-sum benefit payments received in 2007, for 2007 and earlier years. (If you received more than one form, combine the
amounts from box 5 and
enter the total.)
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A.
|
$11,000
|
Note. If the amount on line A is zero or less, stop here; none of your benefits are
taxable this year.
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B.
|
Enter one-half of the amount on line A
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B.
|
5,500
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C.
|
Enter your taxable pensions, wages, interest, dividends, and other taxable income
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C.
|
20,500
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D.
|
Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income
(listed earlier)
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D.
|
-0-
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E.
|
Add lines B, C, and D
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E.
|
$26,000
|
Note. Compare the amount on line E to your base amount
for your filing status. If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are
taxable this year. If the amount on line E is more than your base amount, some of your benefits may be taxable. You need to complete
Worksheet 1, shown later.
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Who is taxed.
The person who has the legal right to receive the benefits must determine whether the benefits are taxable. For example,
if you and your child
receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see
whether any benefits are
taxable to you. One-half of the part that belongs to your child must be added to your child's other income to see whether
any of those benefits are
taxable to your child.
Repayment of benefits.
Any repayment of benefits you made during 2007 must be subtracted from the gross benefits you received in 2007. It
does not matter whether the
repayment was for a benefit you received in 2007 or in an earlier year. If you repaid more than the gross benefits you received
in 2007, see
Repayments More Than Gross Benefits, later.
Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Your repayments are shown in box 4. The
amount in box 5 shows your net
benefits for 2007 (box 3 minus box 4). Use the amount in box 5 to figure whether any of your benefits are taxable.
Example.
In 2006, you received $3,000 in social security benefits, and in 2007 you received $2,700. In March 2007, SSA notified you
that you should have
received only $2,500 in benefits in 2006. During 2007, you repaid $500 to SSA. The Form SSA-1099 you received for 2007 shows
$2,700 in box 3 (gross
amount) and $500 in box 4 (repayment). The amount in box 5 shows your net benefits of $2,200 ($2,700 minus $500).
Tax withholding and estimated tax.
You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your
tier 1 railroad retirement
benefits. If you choose to do this, you must complete a Form W-4V. You can choose withholding at 7%, 10%, 15%, or 25% of your
total benefit payment.
If you do not choose to have income tax withheld, you may have to request additional withholding from other income
or pay estimated tax during the
year. For details, get Publication 505 or the instructions for Form 1040-ES.
U.S. citizens residing abroad.
U.S. citizens who reside in the following countries are exempt from U.S. tax on their benefits.
The SSA will not withhold U.S. tax from your benefits if you are a U.S. citizen.
The RRB will withhold U.S. tax from your benefits unless you file Form RRB-1001, Nonresident Questionnaire, with the
RRB to provide citizenship and
residency information. If you do not file Form RRB-1001, the RRB will consider you a nonresident alien and withhold tax from
your railroad retirement
benefits at a 30% rate. Contact the RRB to get this form.
Lawful permanent residents.
For U.S. income tax purposes, lawful permanent residents (green card holders) are considered resident aliens until
their lawful permanent resident
status under the immigration laws is either taken away or is administratively or judicially determined to have been abandoned.
Social security
benefits paid to a green card holder are not subject to 30% withholding. If you are a green card holder and tax was withheld
in error on your social
security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration
(SSA) or the IRS. SSA
will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld.
If SSA cannot
refund the taxes withheld, you must file a Form 1040 or 1040A with the Internal Revenue Service Center, Austin, TX 73301 to
determine if you are
entitled to a refund. You must also attach the following information to your Form 1040 or 1040A:
-
A copy of the Form SSA-1042S, Social Security Benefit Statement,
-
A copy of the “green card,” and
-
A signed declaration that includes the following statements:
“ The SSA should not have withheld federal income tax from my social security benefits because I am a U.S. lawful permanent
resident and my green
card has been neither revoked nor administratively or judicially determined to have been abandoned. I am filing a U.S. income
tax return for the tax
year as a resident alien reporting all of my worldwide income. I have not claimed benefits for the tax year under an income
tax treaty as a
nonresident alien.”
Nonresident aliens.
A nonresident alien is an individual who is not a citizen or resident of the United States. If you are a nonresident
alien, the rules discussed in
this publication do not apply to you. Instead, 85% of your benefits are taxed at a 30% rate, unless exempt (or subject to
a lower rate) by treaty. You
will receive a Form SSA-1042S or Form RRB-1042S showing the amount of your benefits. These forms will also show the tax rate
and the amount of tax
withheld from your benefits.
Under tax treaties with the following countries, residents of these countries are exempt from U.S. tax on their benefits.
-
Canada.
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Egypt.
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Germany.
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Ireland.
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Israel.
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Italy.
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Japan.
-
Romania.
-
United Kingdom.
Under a treaty with India, benefits paid to individuals who are both residents and nationals of India are exempt from
U.S. tax if the benefits are
for services performed for the United States, its subdivisions, or local government authorities.
If you are a resident of Switzerland, your total benefit amount will be taxed at a 15% rate.
For more information on whether you are a nonresident alien, get Publication 519, U.S. Tax Guide for Aliens.
Exemption from withholding.
If your social security benefits are exempt from tax because you are a resident of one of the treaty countries listed,
the SSA will not withhold
U.S. tax from your benefits.
If your railroad retirement benefits are exempt from tax because you are a resident of one of the treaty countries
listed, you can claim an
exemption from withholding by filing Form RRB-1001 with the RRB. Contact the RRB to get this form.
Canadian or German social security benefits paid to U.S. residents.
Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U.S. residents
are treated for U.S. income
tax purposes as if they were paid under the social security legislation of the United States. If you receive social security
benefits from Canada or
Germany, include them on line 1 of Worksheet 1, shown later.
How To Report Your Benefits
If part of your benefits are taxable, you must use Form 1040 or Form 1040A. You cannot use Form 1040EZ.
Reporting on Form 1040.
Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable
part on line 20b. If you are
married filing separately and you lived apart from your spouse for all of 2007, also enter “ D” to the right of the word “ benefits” on line
20a.
Reporting on Form 1040A.
Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable
part on line 14b. If you are
married filing separately and you lived apart from your spouse for all of 2007, also enter “ D” to the right of the word “ benefits” on line
14a.
Benefits not taxable.
If you are filing Form 1040EZ, do not report any benefits on your tax return. If you are filing Form 1040 or Form
1040A, report your net benefits
(the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Enter -0- on
Form 1040, line 20b, or
Form 1040A, line 14b. If you are married filing separately and you lived apart from your spouse for all of 2007, also enter
“ D” to the right of
the word “ benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Generally,
the higher that
total amount, the greater the taxable part of your benefits.
Maximum taxable part.
Generally, up to 50% of your benefits will be taxable. However, up to 85% of your benefits can be taxable if either
of the following situations
applies to you.
-
The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing
jointly).
-
You are married filing separately and lived with your spouse at any time during 2007.
Which worksheet to use.
A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. You can use either
that worksheet or Worksheet 1 in
this publication, unless any of the following situations applies to you.
-
You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement
plan at work. In
this situation you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable
benefits.
-
Situation (1) does not apply and you take an exclusion for interest from qualified U.S. savings bonds (Form 8815), for adoption
benefits
(Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form
4563) or Puerto Rico by
bona fide residents. In this situation, you must use Worksheet 1 in this publication to figure your taxable benefits.
-
You received a lump-sum payment for an earlier year. In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in
this publication.
See Lump-Sum Election, later.
The following pages contain a few examples you can use as a guide to figure the taxable part of your benefits.
Example 1. |
|
George White is single and files Form 1040 for 2007. In addition to receiving social security payments, he received a fully
taxable pension of
$18,600, wages from a part-time job of $9,400, and taxable interest income of $990, for a total of $28,990. He received a
Form SSA-1099 in January
2008 that shows his net social security benefits of $5,980 in box 5.
To figure his taxable benefits, George completes Worksheet 1, shown below. On line 20a of his Form 1040, George
enters his net benefits of $5,980. On line 20b, he enters his taxable benefits of $2,990.
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Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records
Before you begin:
-
If you are married filing separately and you lived apart from your spouse for all of 2007, enter “D” to the right of the word
“benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
-
Do not use this worksheet if you repaid benefits in 2007 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099)
were more than
your gross benefits for 2007 (box 3 of Forms SSA-1099 and RRB-1099). None of your benefits are taxable for 2007. For more
information, see
Repayments More Than Gross Benefits.
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1.
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Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on
Form 1040, line 20a, or Form 1040A, line 14a
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1.
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$5,980
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2.
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Enter one-half of line 1
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2.
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2,990
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3.
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Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13
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3.
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28,990
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4.
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Enter the amount, if any, from Form 1040 or 1040A, line 8b
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4.
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-0-
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5.
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Form 1040 filers: Enter the total of any exclusions/adjustments for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
-
Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and
-
Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico
Form 1040A filers: Enter the total of any exclusions for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
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5.
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-0-
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6.
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Add lines 2, 3, 4, and 5
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6.
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31,980
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7.
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Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any
write-in adjustments you entered on the dotted line next to line 36. Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and
17
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7.
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-0-
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8.
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Is the amount on line 7 less than the amount on line 6?
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No. |
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None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A,
line 14b.
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Yes. |
Subtract line 7 from line 6
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8.
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31,980
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9.
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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
2007, enter $25,000
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9.
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25,000
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Note. If you are married filing separately and you lived with your spouse at any time
in 2007, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.
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10.
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Is the amount on line 9 less than the amount on line 8?
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No. |
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None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on Form 1040A, line
14b. If you are married filing separately and you lived apart from your spouse for all of 2007, be sure you entered “D” to the right
of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a.
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Yes. |
Subtract line 9 from line 8
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10.
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6,980
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11.
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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 2007
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11.
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9,000
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12.
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Subtract line 11 from line 10. If zero or less, enter -0-.
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12.
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-0-
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13.
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Enter the smaller of line 10 or line 11
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13.
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6,980
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14.
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Enter one-half of line 13
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14.
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3,490
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15.
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Enter the smaller of line 2 or line 14
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15.
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2,990
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16.
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Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
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16.
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-0-
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17.
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Add lines 15 and 16
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17.
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2,990
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18.
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Multiply line 1 by 85% (.85)
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18.
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5,083
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19.
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Taxable benefits. Enter the smaller of line 17 or line 18. Also
enter this amount on Form 1040, line 20b, or Form 1040A, line 14b
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19.
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$2,990
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If you received a lump-sum payment in 2007 that was for an earlier year, also complete Worksheet 2 or 3
and Worksheet 4 to see if you can report a lower taxable benefit. |
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Example 2. |
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Ray and Alice Hopkins file a joint return on Form 1040A for 2007. Ray is retired and received a fully taxable pension of $15,500.
He also
received social security benefits and his Form SSA-1099 for 2007 shows net benefits of $5,600 in box 5. Alice worked during
the year and had wages of
$14,000. She made a deductible payment to her IRA account of $1,000. Ray and Alice have two savings accounts with a total
of $250 in taxable interest
income. They complete Worksheet 1 (below) and find that none of Ray's benefits are taxable. On line 3 of the worksheet, they
enter $29,750 ($15,500 +
$14,000 + $250). On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b.
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Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records
Before you begin:
-
If you are married filing separately and you lived apart from your spouse for all of 2007, enter “D” to the right of the word
“benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
-
Do not use this worksheet if you repaid benefits in 2007 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099)
were more than
your gross benefits for 2007 (box 3 of Forms SSA-1099 and RRB-1099). None of your benefits are taxable for 2007. For more
information, see
Repayments More Than Gross Benefits.
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1.
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Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on
Form 1040, line 20a, or Form 1040A, line 14a
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1.
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$5,600
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2.
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Enter one-half of line 1
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2.
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2,800
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3.
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Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13
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3.
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29,750
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4.
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Enter the amount, if any, from Form 1040 or 1040A, line 8b
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4.
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-0-
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5.
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Form 1040 filers: Enter the total of any exclusions/adjustments for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
-
Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and
-
Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico
Form 1040A filers: Enter the total of any exclusions for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
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5.
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-0-
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6.
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Add lines 2, 3, 4, and 5
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6.
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32,550
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7.
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Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any
write-in adjustments you entered on the dotted line next to line 36. Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and
17
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7.
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1,000
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8.
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Is the amount on line 7 less than the amount on line 6?
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No. |
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None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A,
line 14b.
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Yes. |
Subtract line 7 from line 6
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8.
|
31,550
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9.
|
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
2007, enter $25,000
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9.
|
32,000
|
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Note. If you are married filing separately and you lived with your spouse at any time
in 2007, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.
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10.
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Is the amount on line 9 less than the amount on line 8?
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No. |
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None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on Form 1040A, line
14b. If you are married filing separately and you lived apart from your spouse for all of 2007, be sure you entered “D” to the right
of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a.
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Yes. |
Subtract line 9 from line 8
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10.
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11.
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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 2007
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11.
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12.
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Subtract line 11 from line 10. If zero or less, enter -0-.
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12.
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13.
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Enter the smaller of line 10 or line 11
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13.
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14.
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Enter one-half of line 13
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14.
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15.
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Enter the smaller of line 2 or line 14
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15.
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16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
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16.
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17.
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Add lines 15 and 16
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17.
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18.
|
Multiply line 1 by 85% (.85)
|
18.
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19.
|
Taxable benefits. Enter the smaller of line 17 or line 18. Also
enter this amount on Form 1040, line 20b, or Form 1040A, line 14b
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19.
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|
|
If you received a lump-sum payment in 2007 that was for an earlier year, also complete Worksheet 2 or 3
and Worksheet 4 to see if you can report a lower taxable benefit. |
|
|
|
|
Example 3. |
|
Joe and Betty Johnson file a joint return on Form 1040 for 2007. Joe is a retired railroad worker and in 2007 received the
social security
equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Joe's Form RRB-1099 shows $10,000 in box 5. Betty
is a retired government
worker and received a fully taxable pension of $38,000. They had $2,300 in taxable interest income plus interest of $200 on
a qualified U.S. savings
bond. The savings bond interest qualified for the exclusion. They figure their taxable benefits by completing Worksheet 1
below. On line 3 of the
worksheet, they enter $40,300 ($38,000 + $2,300). More than 50% of Joe's net benefits are taxable because the income on line
8 of the worksheet
($45,500) is more than $44,000. (See Maximum taxable part under How Much Is Taxable earlier.) Joe and Betty enter $10,000 on
Form 1040, line 20a, and $6,275 on Form 1040, line 20b.
|
Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records
Before you begin:
-
If you are married filing separately and you lived apart from your spouse for all of 2007, enter “D” to the right of the word
“benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
-
Do not use this worksheet if you repaid benefits in 2007 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099)
were more than
your gross benefits for 2007 (box 3 of Forms SSA-1099 and RRB-1099). None of your benefits are taxable for 2007. For more
information, see
Repayments More Than Gross Benefits.
|
|
|
|
|
|
|
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on
Form 1040, line 20a, or Form 1040A, line 14a
|
1.
|
$10,000
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
5,000
|
|
3.
|
Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13
|
3.
|
40,300
|
|
4.
|
Enter the amount, if any, from Form 1040 or 1040A, line 8b
|
4.
|
-0-
|
|
5.
|
Form 1040 filers: Enter the total of any exclusions/adjustments for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
-
Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and
-
Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico
Form 1040A filers: Enter the total of any exclusions for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
|
5.
|
200
|
|
6.
|
Add lines 2, 3, 4, and 5
|
6.
|
45,500
|
|
7.
|
Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any
write-in adjustments you entered on the dotted line next to line 36. Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and
17
|
7.
|
-0-
|
|
8.
|
Is the amount on line 7 less than the amount on line 6?
|
|
|
|
|
|
|
No. |
|
None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A,
line 14b.
|
|
|
|
|
|
|
Yes. |
Subtract line 7 from line 6
|
8.
|
45,500
|
|
9.
|
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
2007, enter $25,000
|
9.
|
32,000
|
|
|
Note. If you are married filing separately and you lived with your spouse at any time
in 2007, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.
|
|
|
|
|
10.
|
Is the amount on line 9 less than the amount on line 8?
|
|
|
|
|
|
|
No. |
|
None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on Form 1040A, line
14b. If you are married filing separately and you lived apart from your spouse for all of 2007, be sure you entered “D” to the right
of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a.
|
|
|
|
|
|
|
Yes. |
Subtract line 9 from line 8
|
10.
|
13,500
|
|
11.
|
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 2007
|
11.
|
12,000
|
|
12.
|
Subtract line 11 from line 10. If zero or less, enter -0-.
|
12.
|
1,500
|
|
13.
|
Enter the smaller of line 10 or line 11
|
13.
|
12,000
|
|
14.
|
Enter one-half of line 13
|
14.
|
6,000
|
|
15.
|
Enter the smaller of line 2 or line 14
|
15.
|
5,000
|
|
16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
|
16.
|
1,275
|
|
17.
|
Add lines 15 and 16
|
17.
|
6,275
|
|
18.
|
Multiply line 1 by 85% (.85)
|
18.
|
8,500
|
|
19.
|
Taxable benefits. Enter the smaller of line 17 or line 18. Also
enter this amount on Form 1040, line 20b, or Form 1040A, line 14b
|
19.
|
$6,275
|
|
|
|
If you received a lump-sum payment in 2007 that was for an earlier year, also complete Worksheet 2 or 3
and Worksheet 4 to see if you can report a lower taxable benefit. |
|
|
|
|
Example 4. |
|
Bill and Eileen Jones are married and live together, but file separate Form 1040 returns for 2007. Bill earned $8,000 during
2007. The only
other income he had for the year was $4,000 net social security benefits (box 5 of his Form SSA-1099). Bill figures his taxable
benefits by completing
Worksheet 1 below. He must include 85% of his social security benefits in his taxable income because he is married filing
separately and lived with
his spouse during 2007. See How Much Is Taxable earlier. Bill enters $4,000 on his Form 1040, line 20a, and $3,400 on Form 1040, line
20b.
|
Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records
Before you begin:
-
If you are married filing separately and you lived apart from your spouse for all of 2007, enter “D” to the right of the word
“benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
-
Do not use this worksheet if you repaid benefits in 2007 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099)
were more than
your gross benefits for 2007 (box 3 of Forms SSA-1099 and RRB-1099). None of your benefits are taxable for 2007. For more
information, see
Repayments More Than Gross Benefits.
|
|
|
|
|
|
|
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on
Form 1040, line 20a, or Form 1040A, line 14a
|
1.
|
$4,000
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
2,000
|
|
3.
|
Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13
|
3.
|
8,000
|
|
4.
|
Enter the amount, if any, from Form 1040 or 1040A, line 8b
|
4.
|
-0-
|
|
5.
|
Form 1040 filers: Enter the total of any exclusions/adjustments for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
-
Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and
-
Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico
Form 1040A filers: Enter the total of any exclusions for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
|
5.
|
-0-
|
|
6.
|
Add lines 2, 3, 4, and 5
|
6.
|
10,000
|
|
7.
|
Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any
write-in adjustments you entered on the dotted line next to line 36. Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and
17
|
7.
|
-0-
|
|
8.
|
Is the amount on line 7 less than the amount on line 6?
|
|
|
|
|
|
|
No. |
|
None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A,
line 14b.
|
|
|
|
|
|
|
Yes. |
Subtract line 7 from line 6
|
8.
|
10,000
|
|
9.
|
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
2007, enter $25,000
|
9.
|
|
|
|
|
Note. If you are married filing separately and you lived with your spouse at any time
in 2007, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.
|
|
|
|
|
10.
|
Is the amount on line 9 less than the amount on line 8?
|
|
|
|
|
|
|
No. |
|
None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on Form 1040A, line
14b. If you are married filing separately and you lived apart from your spouse for all of 2007, be sure you entered “D” to the right
of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a.
|
|
|
|
|
|
|
Yes. |
Subtract line 9 from line 8
|
10.
|
|
|
|
11.
|
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 2007
|
11.
|
|
|
|
12.
|
Subtract line 11 from line 10. If zero or less, enter -0-.
|
12.
|
|
|
|
13.
|
Enter the smaller of line 10 or line 11
|
13.
|
|
|
|
14.
|
Enter one-half of line 13
|
14.
|
|
|
|
15.
|
Enter the smaller of line 2 or line 14
|
15.
|
|
|
|
16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
|
16.
|
|
|
|
17.
|
Add lines 15 and 16
|
17.
|
8,500
|
|
18.
|
Multiply line 1 by 85% (.85)
|
18.
|
3,400
|
|
19.
|
Taxable benefits. Enter the smaller of line 17 or line 18. Also
enter this amount on Form 1040, line 20b, or Form 1040A, line 14b
|
19.
|
$3,400
|
|
|
|
If you received a lump-sum payment in 2007 that was for an earlier year, also complete Worksheet 2 or 3
and Worksheet 4 to see if you can report a lower taxable benefit. |
|
|
|
|
You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2007 in your 2007 income, even
if the payment
includes benefits for an earlier year.
This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay
to many of their
beneficiaries. No part of the lump-sum death benefit is subject to tax.
Generally, you use your 2007 income to figure the taxable part of the total benefits received in 2007. However, you may be
able to figure the
taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. You can elect this
method if it lowers your
taxable benefits.
Under the lump-sum election method, you refigure the taxable part of all your benefits for the earlier year (including the
lump-sum payment) using
that year's income. Then you subtract any taxable benefits for that year that you previously reported. The remainder is the
taxable part of the
lump-sum payment. Add it to the taxable part of your benefits for 2007 (figured without the lump-sum payment for the earlier
year).
Because the earlier year's taxable benefits are included in your 2007 income, no adjustment is made to the earlier year's
return. Do not file an
amended return for the earlier year.
Will the lump-sum election method lower your taxable benefits?
To find out, take the following steps.
-
Complete Worksheet 1 in this publication.
-
Complete Worksheet 2 and Worksheet 3 as appropriate. Use Worksheet 2 if your lump-sum payment was for a year after 1993. Use
Worksheet 3 if
it was for 1993 or an earlier year. Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received
the lump-sum
payment.
-
Complete Worksheet 4.
-
Compare the taxable benefits on line 19 of Worksheet 1 with the taxable benefits on line 21 of Worksheet 4.
If the taxable benefits on Worksheet 4 are lower than the taxable benefits on Worksheet 1, you can elect to report the lower
amount on your
return.
Making the election.
If you elect to report your taxable benefits under the lump-sum election method, follow the instructions at the bottom
of Worksheet 4. Do not
attach the completed worksheets to your return. Keep them with your records.
Once you elect this method of figuring the taxable part of a lump-sum payment, you can revoke your election only with the
consent of the IRS.
Lump-sum payment reported on Form SSA-1099 or RRB-1099.
If you received a lump-sum payment in 2007 that includes benefits for one or more earlier years after 1983, it will
be included in box 3 of either
Form SSA-1099 or Form RRB-1099. That part of any lump-sum payment for years before 1984 is not taxed and will not be shown
on the form. The form will
also show the year (or years) the payment is for. However, Form RRB-1099 will not show a breakdown by year (or years) of any
lump-sum payment for
years before 2005. You must contact the RRB for a breakdown by year for any amount shown in box 9.
Jane Jackson is single. In 2006 she applied for social security disability benefits but was told she was ineligible. She appealed
the decision and
won. In 2007, she received a lump-sum payment of $6,000, of which $2,000 was for 2006 and $4,000 was for 2007. Jane also received
$5,000 in social
security benefits in 2007, so her total benefits in 2007 were $11,000. Jane's other income for 2006 and 2007 is as follows.
|
Income |
2006 |
2007 |
|
|
Wages
|
$20,000
|
$ 3,500
|
|
|
Interest income
|
2,000
|
2,500
|
|
|
Dividend income
|
1,000
|
1,500
|
|
|
Fully taxable pension
|
|
18,000
|
|
|
Total
|
$23,000
|
$25,500
|
|
To see if the lump-sum election method results in lower taxable benefits, she completes Worksheets 1, 2, and 4 from this publication.
She does not
need to complete Worksheet 3 because her lump-sum payment was for years after 1993.
Jane completes Worksheet 1 to find the amount of her taxable benefits for 2007 under the regular method. She completes Worksheet
2 to find the
taxable part of the lump-sum payment for 2006 under the lump-sum election method. She completes Worksheet 4 to decide if the
lump-sum election method
will lower her taxable benefits.
After completing the worksheets, Jane compares the amounts from Worksheet 4, line 21, and Worksheet 1, line 19. Because the
amount on Worksheet 4
is smaller, she chooses to use the lump-sum election method. To do this, she prints “LSE” to the left of Form 1040, line 20a. She then enters
$11,000 on Form 1040, line 20a, and her taxable benefits of $2,500 on line 20b.
Jane's filled-in worksheets (1, 2, and 4) follow.
Filled-in Worksheet 1. Figuring Your Taxable Benefits
Before you begin:
-
If you are married filing separately and you lived apart from your spouse for all of 2007, enter “D” to the right of the word
“benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
-
Do not use this worksheet if you repaid benefits in 2007 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099)
were more than
your gross benefits for 2007 (box 3 of Forms SSA-1099 and RRB-1099). None of your benefits are taxable for 2007. For more
information, see
Repayments More Than Gross Benefits.
|
|
|
|
|
|
|
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on
Form 1040, line 20a, or Form 1040A, line 14a
|
1.
|
$11,000
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
5,500
|
|
3.
|
Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13
|
3.
|
25,500
|
|
4.
|
Enter the amount, if any, from Form 1040 or 1040A, line 8b
|
4.
|
-0-
|
|
5.
|
Form 1040 filers: Enter the total of any exclusions/adjustments for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
-
Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and
-
Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico
Form 1040A filers: Enter the total of any exclusions for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
|
5.
|
-0-
|
|
6.
|
Add lines 2, 3, 4, and 5
|
6.
|
31,000
|
|
7.
|
Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any
write-in amounts you entered on the dotted line next to line 36. Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and
17
|
7.
|
-0-
|
|
8.
|
Is the amount on line 7 less than the amount on line 6?
|
|
|
|
|
|
|
No. |
|
None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A,
line 14b.
|
|
|
|
|
|
|
Yes. |
Subtract line 7 from line 6
|
8.
|
31,000
|
|
9.
|
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
2007, enter $25,000
|
9.
|
25,000
|
|
|
Note. If you are married filing separately and you lived with your spouse at any time
in 2007, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.
|
|
|
|
|
10.
|
Is the amount on line 9 less than the amount on line 8?
|
|
|
|
|
|
|
No. |
|
None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on
Form 1040A, line 14b. If you are married filing separately and you lived apart from your spouse for all of 2007, be sure you entered
“D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a.
|
|
|
|
|
|
|
Yes. |
Subtract line 9 from line 8
|
10.
|
6,000
|
|
11.
|
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 2007
|
11.
|
9,000
|
|
12.
|
Subtract line 11 from line 10. If zero or less, enter -0-.
|
12.
|
-0-
|
|
13.
|
Enter the smaller of line 10 or line 11
|
13.
|
6,000
|
|
14.
|
Enter one-half of line 13
|
14.
|
3,000
|
|
15.
|
Enter the smaller of line 2 or line 14
|
15.
|
3,000
|
|
16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
|
16.
|
-0-
|
|
17.
|
Add lines 15 and 16
|
17.
|
3,000
|
|
18.
|
Multiply line 1 by 85% (.85)
|
18.
|
9,350
|
|
19.
|
Taxable benefits. Enter the smaller of line 17 or line 18. Also
enter this amount on Form 1040, line 20b, or Form 1040A, line 14b
|
19.
|
$3,000
|
|
|
|
If you received a lump-sum payment in 2007 that was for an earlier year, also complete Worksheet 2 or 3
and Worksheet 4 to see if you can report a lower taxable benefit. |
|
|
|
|
Example.Jane Jackson |
Filled-in Worksheet 2.
|
Figure Your Additional Taxable Benefits
(From a Lump-Sum Payment for a Year After 1993) |
Enter earlier year
2006 |
|
|
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus
the lump-sum payment for the earlier year received after that year
|
1.
|
$2,000
|
|
|
|
|
|
Note. If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21.
Otherwise, go on to line 2.
|
|
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
1,000
|
|
3.
|
Enter your adjusted gross income for the earlier year
|
3.
|
23,000
|
|
4.
|
Enter the total of any exclusions/adjustments you claimed in the earlier year for:
-
Adoption benefits (Form 8839)
-
Qualified U.S. savings bond interest (Form 8815)
-
Student loan interest (Form 1040, page 1, or Form 1040A, page 1)
-
Tuition and fees (Form 1040, page 1, or Form 1040A, page 1)
-
Domestic production activities (for 2005 and 2006) (Form 1040, page 1)
-
Foreign earned income or housing (Form 2555 or Form 2555-EZ)
-
Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico
|
4.
|
-0-
|
|
5.
|
Enter any tax-exempt interest received in the earlier year
|
5.
|
-0-
|
|
6.
|
Add lines 2 through 5
|
6.
|
24,000
|
|
7.
|
Enter your taxable benefits for the earlier year
|
7.
|
-0-
|
|
8.
|
Subtract line 7 from line 6
|
8.
|
24,000
|
|
9.
|
If, for the earlier year, you were:
|
|
|
-
Married filing jointly, enter $32,000
-
Single, head of household, qualifying widow(er), married filing separately and lived apart from your spouse for all of the
earlier year,
enter $25,000
|
9.
|
25,000
|
|
|
Note. If you were married filing separately and you lived with your spouse at any time during
the earlier year, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.
|
|
|
|
|
10.
|
Is the amount on line 8 more than the amount on line 9?
|
|
|
|
No.Skip lines 10 through 20 and enter -0- on line 21.
|
|
|
|
Yes.Subtract line 9 from line 8
|
10.
|
|
|
|
11.
|
Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household,
or married filing separately and you lived apart from your spouse for all of the earlier year
|
11.
|
|
|
|
12.
|
Subtract line 11 from line 10. If zero or less, enter -0-.
|
12.
|
|
|
|
13.
|
Enter the smaller of line 10 or line 11
|
13.
|
|
|
|
14.
|
Enter one-half of line 13
|
14.
|
|
|
|
15.
|
Enter the smaller of line 2 or line 14
|
15.
|
|
|
|
16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
|
16.
|
|
|
|
17.
|
Add lines 15 and 16
|
17.
|
|
|
|
18.
|
Multiply line 1 by 85% (.85)
|
18.
|
|
|
|
19.
|
Refigured taxable benefits. Enter the smaller of line 17 or line 18
|
19.
|
|
|
|
20.
|
Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum
payment for the year)
|
20.
|
|
|
|
21.
|
Additional taxable benefits. Subtract line 20 from line 19. Also enter this
amount on Worksheet 4, line 20
|
21.
|
-0-
|
|
|
|
Do not file an amended return for this earlier year. Complete a separate Worksheet 2 or Worksheet 3 for each
earlier year for which you received a lump-sum payment in 2007. |
|
Example.Jane Jackson |
Filled-in Worksheet 4.
|
Figure Your Taxable Benefits Under the Lump-Sum Election Method
(Use With Worksheet 2 or 3)
|
|
|
|
|
|
|
Complete Worksheet 1 and Worksheets 2 and 3 as appropriate before completing this
worksheet. |
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for 2007, minus the lump-sum
payment for years before 2007
|
1.
|
$9,000
|
|
|
|
|
Note. If line 1 is zero or less, skip lines 2 through 18, enter zero on line 19,
and go to line 20. Otherwise, go on to line 2.
|
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
4,500
|
|
3.
|
Enter the amount from Worksheet 1, line 3
|
3.
|
25,500
|
|
4.
|
Enter the amount from Worksheet 1, line 4
|
4.
|
-0-
|
|
5.
|
Enter the amount from Worksheet 1, line 5
|
5.
|
-0-
|
|
6.
|
Add lines 2, 3, 4, and 5
|
6.
|
30,000
|
|
7.
|
Enter the amount from Worksheet 1, line 7
|
7.
|
-0-
|
|
8.
|
Subtract line 7 from line 6
|
8.
|
30,000
|
|
9.
|
Enter the amount from Worksheet 1, line 9. But if you are married filing separately and lived with
your spouse at any time during 2007, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17.
Then go to line 18
|
9.
|
25,000
|
|
10.
|
Is the amount on line 8 more than the amount on line 9?
No.Skip lines 10 through 18, enter -0- on line 19, and go to line 20.
Yes.Subtract line 9 from line 8
|
10.
|
5,000
|
|
11.
|
Enter the amount from Worksheet 1, line 11
|
11.
|
9,000
|
|
12.
|
Subtract line 11 from line 10. If zero or less, enter -0-
|
12.
|
-0-
|
|
13.
|
Enter the smaller of line 10 or line 11
|
13.
|
5,000
|
|
14.
|
Enter one-half of line 13
|
14.
|
2,500
|
|
15.
|
Enter the smaller of line 2 or line 14
|
15.
|
2,500
|
|
16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
|
16.
|
-0-
|
|
17.
|
Add lines 15 and 16
|
17.
|
2,500
|
|
18.
|
Multiply line 1 by 85% (.85)
|
18.
|
7,650
|
|
19.
|
Enter the smaller of line 17 or line 18
|
19.
|
2,500
|
|
20.
|
Enter the total of the amounts from Worksheet 2, line 21 and Worksheet 3, line 14, for all earlier
years for which the lump-sum payment was received
|
20.
|
-0-
|
|
21.
|
Taxable benefits under lump-sum election method. Add lines 19 and 20
|
21.
|
$2,500
|
|
Next. Is line 21 above smaller than Worksheet 1, line 19?
No.Do not use this method to figure your taxable benefits. Follow the instructions on Worksheet 1 to report your
benefits.
Yes.You can elect to report your taxable benefits under this method. To elect this method: |
|
|
-
Enter “LSE” to the left of Form 1040, line 20a, or Form 1040A, line 14a.
-
If line 21 above is zero, follow the instructions in line 10 for “No” on Worksheet 1. Otherwise:
-
Enter the amount from Worksheet 1, line 1 on Form 1040, line 20a, or on Form 1040A, line 14a.
-
Enter the amount from line 21 above on Form 1040, line 20b, or on 1040A, line 14b.
-
If you are married filing separately and you lived apart from your spouse for all of 2007, enter “D” to the right of the
word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
|
|
Deductions Related to Your Benefits
You may be entitled to deduct certain amounts related to the benefits you receive.
Disability payments.
You may have received disability payments from your employer or an insurance company that you included as income on
your tax return in an earlier
year. If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability
payments, you can
take an itemized deduction for the part of the payments you included in gross income in the earlier year. If the amount you
repay is more than $3,000,
you may be able to claim a tax credit instead. Claim the deduction or credit in the same way explained under Repayment of benefits received in an
earlier year in the section Repayments More Than Gross Benefits, later.
Legal expenses.
You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection
with the determination,
collection, or refund of any tax.
Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction
on Schedule A (Form 1040),
line 23.
Repayments More Than Gross Benefits
In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than
the gross benefits (box
3) you received. If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none
of your benefits will be
taxable. Do not use Worksheet 1 in this case. If you receive more than one form, a negative figure in box 5 of one form is
used to offset a positive
figure in box 5 of another form for that same year.
If you have any questions about this negative figure, contact your local SSA office or your local RRB field office.
Joint return.
If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but
your spouse's does not, subtract
the amount in box 5 of your form from the amount in box 5 of your spouse's form. You do this to get your net benefits when
figuring if your combined
benefits are taxable.
Example.
John and Mary file a joint return for 2007. John received Form SSA-1099 showing $3,000 in box 5. Mary also received Form SSA-1099
and the amount in
box 5 was ($500). John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any
of their combined
benefits are taxable.
Repayment of benefits received in an earlier year.
If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an
itemized deduction for the part
of this negative figure that represents benefits you included in gross income in an earlier year.
Deduction $3,000 or less.
If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain
miscellaneous itemized
deductions. Claim it on Schedule A (Form 1040), line 23.
Deduction more than $3,000.
If this deduction is more than $3,000, you should figure your tax two ways:
-
Figure your tax for 2007 with the itemized deduction included on Schedule A, line 28.
-
Figure your tax for 2007 in the following steps:
-
Figure the tax without the itemized deduction included on Schedule A, line 28.
-
For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits
as if your
total benefits for the year were reduced by that part of the negative figure. Then refigure the tax for that year.
-
Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts.
-
Subtract the result in (c) from the result in (a).
Compare the tax figured in methods (1) and (2). Your tax for 2007 is the smaller of the two amounts. If method (1)
results in less tax, take the
itemized deduction on Schedule A (Form 1040), line 28. If method (2) results in less tax, claim a credit for the amount from
step 2(c) above on Form
1040, line 70, and write “ I.R.C. 1341” in the margin to the left of line 70. If both methods produce the same tax, deduct the repayment on
Schedule A (Form 1040), line 28.
Worksheet 1.
|
Figuring Your Taxable Benefits |
|
|
Before you begin:
-
If you are married filing separately and you lived apart from your spouse for all of 2007, enter “D” to the right of the word
“benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
-
Do not use this worksheet if you repaid benefits in 2007 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099)
were more than
your gross benefits for 2007 (box 3 of Forms SSA-1099 and RRB-1099). None of your benefits are taxable for 2007. For more
information, see
Repayments More Than Gross Benefits.
|
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Also enter this amount on
Form 1040, line 20a, or Form 1040A, line 14a
|
1.
|
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
|
|
|
3.
|
Enter the total of the amounts from:
Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21
Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13
|
3.
|
|
|
|
4.
|
Enter the amount, if any, from Form 1040 or 1040A, line 8b
|
4.
|
|
|
|
5.
|
Form 1040 filers: Enter the total of any exclusions/adjustments for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
-
Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and
-
Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico
Form 1040A filers: Enter the total of any exclusions for:
-
Qualified U.S. savings bond interest (Form 8815, line 14)
-
Adoption benefits (Form 8839, line 30)
|
5.
|
|
|
|
6.
|
Add lines 2, 3, 4, and 5
|
6.
|
|
|
|
7.
|
Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any
write-in adjustments you entered on the dotted line next to line 36. Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and
17
|
7.
|
|
|
|
8.
|
Is the amount on line 7 less than the amount on line 6?
|
|
|
|
|
|
|
No. |
|
None of your social security benefits are taxable. Enter -0- on Form 1040, line 20b, or Form 1040A,
line 14b.
|
|
|
|
|
|
|
Yes. |
Subtract line 7 from line 6
|
8.
|
|
|
|
9.
|
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
2007, enter $25,000
|
9.
|
|
|
|
|
Note. If you are married filing separately and you lived with your spouse at any time
in 2007, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.
|
|
|
|
|
10.
|
Is the amount on line 9 less than the amount on line 8?
|
|
|
|
|
|
|
No. |
|
None of your benefits are taxable. Enter -0- on Form 1040, line 20b, or on Form 1040A, line
14b. If you are married filing separately and you lived apart from your spouse for all of 2007, be sure you entered “D” to the right
of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a.
|
|
|
|
|
|
|
Yes. |
Subtract line 9 from line 8
|
10.
|
|
|
|
11.
|
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 2007
|
11.
|
|
|
|
12.
|
Subtract line 11 from line 10. If zero or less, enter -0-
|
12.
|
|
|
|
13.
|
Enter the smaller of line 10 or line 11
|
13.
|
|
|
|
14.
|
Enter one-half of line 13
|
14.
|
|
|
|
15.
|
Enter the smaller of line 2 or line 14
|
15.
|
|
|
|
16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
|
16.
|
|
|
|
17.
|
Add lines 15 and 16
|
17.
|
|
|
|
18.
|
Multiply line 1 by 85% (.85)
|
18.
|
|
|
|
19.
|
Taxable benefits. Enter the smaller of line 17 or line 18. Also
enter this amount on Form 1040, line 20b, or Form 1040A, line 14b
|
19.
|
|
|
|
|
|
If you received a lump-sum payment in 2007 that was for an earlier year, also complete Worksheet 2 or 3
and Worksheet 4 to see if you can report a lower taxable benefit. |
|
|
|
|
Worksheet 2.
|
Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993) |
Enter earlier year
|
|
|
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus
the lump-sum payment for the earlier year received after that year
|
1.
|
|
|
|
|
|
|
Note. If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21.
Otherwise, go on to line 2.
|
|
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
|
|
|
3.
|
Enter your adjusted gross income for the earlier year
|
3.
|
|
|
|
4.
|
Enter the total of any exclusions/adjustments you claimed in the earlier year for:
-
Adoption benefits (Form 8839)
-
Qualified U.S. savings bond interest (Form 8815)
-
Student loan interest (Form 1040, page 1, or Form 1040A, page 1)
-
Tuition and fees (Form 1040, page 1, or Form 1040A, page 1)
-
Domestic production activities (for 2005 and 2006 only) (Form 1040, page 1)
-
Foreign earned income or housing (Form 2555 or Form 2555-EZ)
-
Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico
|
4.
|
|
|
|
5.
|
Enter any tax-exempt interest received in the earlier year
|
5.
|
|
|
|
6.
|
Add lines 2 through 5
|
6.
|
|
|
|
7.
|
Enter your taxable benefits for the earlier year
|
7.
|
|
|
|
8.
|
Subtract line 7 from line 6
|
8.
|
|
|
|
9.
|
If, for the earlier year, you were:
|
|
|
-
Married filing jointly, enter $32,000
-
Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of
the earlier year,
enter $25,000
|
9.
|
|
|
|
|
Note. If you were married filing separately and you lived with your spouse at any time during
the earlier year, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17. Then go to line 18.
|
|
|
|
|
10.
|
Is the amount on line 8 more than the amount on line 9?
|
|
|
|
No.Skip lines 10 through 20 and enter -0- on line 21.
|
|
|
|
Yes.Subtract line 9 from line 8
|
10.
|
|
|
|
11.
|
Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household,
qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year
|
11.
|
|
|
|
12.
|
Subtract line 11 from line 10. If zero or less, enter -0-
|
12.
|
|
|
|
13.
|
Enter the smaller of line 10 or line 11
|
13.
|
|
|
|
14.
|
Enter one-half of line 13
|
14.
|
|
|
|
15.
|
Enter the smaller of line 2 or line 14
|
15.
|
|
|
|
16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
|
16.
|
|
|
|
17.
|
Add lines 15 and 16
|
17.
|
|
|
|
18.
|
Multiply line 1 by 85% (.85)
|
18.
|
|
|
|
19.
|
Refigured taxable benefits. Enter the smaller of line 17 or line 18
|
19.
|
|
|
|
20.
|
Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum
payment for the year)
|
20.
|
|
|
|
21.
|
Additional taxable benefits. Subtract line 20 from line 19. Also enter this
amount on Worksheet 4, line 20
|
21.
|
|
|
|
|
|
Do not file an amended return for this earlier year. Complete a separate Worksheet 2 or Worksheet 3 for each
earlier year for which you received a lump-sum payment in 2007. |
|
Worksheet 3.
|
Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994) |
Enter earlier year
|
|
|
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus
the lump-sum payment for the earlier year received after that year
|
1.
|
|
|
|
|
|
Note. If line 1 is zero or less, skip lines 2 through 13 and enter -0- on line 14.
Otherwise, go on to line 2.
|
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
|
|
3.
|
Enter your adjusted gross income for the earlier year
|
3.
|
|
|
4.
|
Enter the total of any exclusions/adjustments you claimed in the earlier year for:
-
Qualified U.S. savings bond interest (Form 8815)
-
Foreign earned income or housing (Form 2555 or Form 2555-EZ)
-
Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico
|
4.
|
|
|
5.
|
Enter any tax-exempt interest received in the earlier year
|
5.
|
|
|
6.
|
Add lines 2 through 5
|
6.
|
|
|
7.
|
Enter your taxable benefits for the earlier year
|
7.
|
|
|
8.
|
Subtract line 7 from line 6
|
8.
|
|
|
9.
|
Enter $25,000 ($32,000 if married filing jointly for the earlier year; $0 if married filing
separately for the earlier year and you lived with your spouse at any time during the earlier year)
|
9.
|
|
|
10.
|
Is the amount on line 8 more than the amount on line 9?
No.Skip lines 10 through 13 and enter -0- on line 14.
Yes.Subtract line 9 from line 8.
|
10.
|
|
|
11.
|
Enter one-half of line 10
|
11.
|
|
|
12.
|
Refigured taxable benefits. Enter the smaller of line 2 or line 11
|
12.
|
|
|
13.
|
Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum
payment for the year)
|
13.
|
|
|
14.
|
Additional taxable benefits. Subtract line 13 from line 12. Also enter this
amount on Worksheet 4, line 20
|
14.
|
|
|
|
|
Do not file an amended return for this earlier year. Complete a separate Worksheet 2 or Worksheet 3 for each
earlier year for which you received a lump-sum payment in 2007. |
|
Worksheet 4.
|
Figure Your Taxable Benefits Under the Lump-Sum Election Method
(Use With Worksheet 2 or 3)
|
|
|
|
|
|
|
Complete Worksheet 1 and Worksheets 2 and 3 as appropriate before completing this
worksheet. |
1.
|
Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for 2007, minus the lump-sum
payment for years before 2007
|
1.
|
|
|
|
|
|
Note. If line 1 is zero or less, skip lines 2 through 18, enter -0- on line 19 and
go to line 20. Otherwise, go on to line 2.
|
|
|
|
|
|
2.
|
Enter one-half of line 1
|
2.
|
|
|
3.
|
Enter the amount from Worksheet 1, line 3
|
3.
|
|
|
4.
|
Enter the amount from Worksheet 1, line 4
|
4.
|
|
|
5.
|
Enter the amount from Worksheet 1, line 5
|
5.
|
|
|
6.
|
Add lines 2, 3, 4, and 5
|
6.
|
|
|
7.
|
Enter the amount from Worksheet 1, line 7
|
7.
|
|
|
8.
|
Subtract line 7 from line 6
|
8.
|
|
|
9.
|
Enter the amount from Worksheet 1, line 9. But if you are married filing separately and lived with
your spouse at any time during 2007, skip lines 9 through 16; multiply line 8 by 85% (.85) and enter the result on line 17.
Then, go to line
18
|
9.
|
|
|
10.
|
Is the amount on line 8 more than the amount on line 9?
No.Skip lines 10 through 18, enter -0- on line 19, and go to line 20.
Yes.Subtract line 9 from line 8
|
10.
|
|
|
11.
|
Enter the amount from Worksheet 1, line 11
|
11.
|
|
|
12.
|
Subtract line 11 from line 10. If zero or less, enter -0-
|
12.
|
|
|
13.
|
Enter the smaller of line 10 or line 11
|
13.
|
|
|
14.
|
Enter one-half of line 13
|
14.
|
|
|
15.
|
Enter the smaller of line 2 or line 14
|
15.
|
|
|
16.
|
Multiply line 12 by 85% (.85). If line 12 is zero, enter -0-
|
16.
|
|
|
17.
|
Add lines 15 and 16
|
17.
|
|
|
18.
|
Multiply line 1 by 85% (.85)
|
18.
|
|
|
19.
|
Enter the smaller of line 17 or line 18
|
19.
|
|
|
20.
|
Enter the total of the amounts from Worksheet 2, line 21, and Worksheet 3, line 14, for all
earlier years for which the lump-sum payment was received
|
20.
|
|
|
21.
|
Taxable benefits under lump-sum election method. Add lines 19 and 20
|
21.
|
|
|
Next. Is line 21 above smaller than Worksheet 1, line 19?
No.Do not use this method to figure your taxable benefits. Follow the instructions on Worksheet 1 to report your
benefits.
Yes.You can elect to report your taxable benefits under this method. To elect this method: |
|
|
-
Enter “LSE” to the left of Form 1040, line 20a, or Form 1040A, line 14a.
-
If line 21 above is zero, follow the instructions in line 10 for “No” on Worksheet 1. Otherwise:
-
Enter the amount from Worksheet 1, line 1 on Form 1040, line 20a, or on Form 1040A, line 14a.
-
Enter the amount from line 21 above on Form 1040, line 20b, or on 1040A, line 14b.
-
If you are married filing separately and you lived apart from your spouse for all of 2007, enter “D” to the right of the
word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a.
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This appendix explains items shown on Form SSA-1099 and Form RRB-1099. Forms SSA-1042S and RRB-1042S, for nonresident aliens,
contain the same
items plus a few additional ones. These are also explained.
The illustrated versions of Forms SSA-1099, SSA-1042S, RRB-1099, and RRB-1042S in this appendix are proof copies of the forms
as they appeared when
this publication went to print. The information on the illustrated forms should be essentially the same as the information
on the form you received
from either the SSA or the RRB. You should, however, compare the form you received with the one shown in this publication
to note any differences.
Every person who received social security benefits will receive a Form SSA-1099. If you receive benefits on more than one
social security record,
you may get more than one Form SSA-1099. IRS Notice 703 will be enclosed with this form. It contains a worksheet to help you
figure if any of your
benefits are taxable. Do not mail Notice 703 to either the IRS or the SSA.
The name shown in this box refers to the person for whom the social security benefits shown on the statement were paid. If
you received benefits
for yourself, your name will be shown.
Box 2—Beneficiary's Social Security Number
This is the U.S. social security number, if known, of the person named in box 1.
In all your correspondence with the SSA, be sure to use the claim number shown in box 8.
Box 3—Benefits Paid in 2007
The figure shown in this box is the total benefits paid in 2007 to you (the person named in box 1). This figure may not agree
with the amounts you
actually received because adjustments may have been made to your benefits before you received them. An asterisk (*) after
the figure shown in this box
means that it includes benefits received in 2007 for one or more earlier years.
Description of Amount in Box 3
This part of the form describes the items included in the amount shown in box 3. It lists the benefits paid and any adjustments
made. Only the
adjustments that apply to you will be shown. If no adjustments were made to the benefits paid, the word “none” will be shown.
Paid by check or direct deposit.
This is the amount you actually received or that was deposited directly into your account in a financial institution
in 2007.
Additions.
The following adjustment items may have been deducted from your benefits in 2007. If amounts appear on your Form SSA-1099
next to these items, they
will be added to the amount shown in “ Paid by check or direct deposit.”
Do not reduce the amount of net social security benefits (box 5) by any of the items listed below. Use the amount in box 5
to figure taxable social
security.
Medicare premiums deducted from your benefit.
If you have Medicare premiums deducted from your benefits, this is the amount withheld during 2007. The basic monthly
premium in 2007 was $93.50,
but it could be higher if you enrolled after you were first eligible, you had a break in coverage, or the modified adjusted
gross income shown on your
2005 federal income tax return is greater than $80,000.
Medicare Part C, Medicare Advantage Premium, and Medicare Part D, Prescription Drug Premium, are other Medicare deductions
you may have. These
premiums may vary.
Workers' compensation offset.
If you are disabled and receive workers' compensation or Part C Black Lung payments, your benefits are subject to
a payment limit. An entry will be
shown here if your benefits were reduced to stay within this limit. An entry will also be shown here if your benefits were
reduced because the person
on whose social security record you were paid is disabled and also received workers' compensation or Part C Black Lung payments.
Paid to another family member.
This entry shows total payments withheld from your benefits if you are required to pay child support or alimony.
Deductions for work or other adjustments.
Amounts withheld from your benefits because of work or to recover an overpayment of any type of benefit are benefits
paid to you and will be shown
here. They also may be treated as benefits repaid to SSA and included in the amount in box 4.
Attorney fees.
If you had an attorney handle your social security claim, the figure shown here is the fee withheld from your benefits
and paid directly to your
attorney.
Voluntary federal income tax withheld.
This shows the total amount of federal income tax withheld from your benefits. Include this amount on your income
tax return as tax withheld.
Benefit payment offset—Treasury.
Part of your Title II Social Security benefit may be withheld on behalf of the Treasury Department to recover debts
you owe to other federal
agencies.
Total additions.
The figure shown here is the sum of the amounts paid by check or direct deposit plus all the additions described previously.
Subtractions.
The following adjustment items may have been included in the payments you received in 2007. If amounts appear on your
Form SSA-1099 next to these
items, they will be subtracted from the figure in Total Additions.
Payments for months before December 1983.
The figure shown here is the amount of benefits you received in 2007 that was for months before December 1983. These
benefits are not taxable no
matter when they are paid.
Lump-sum death payment.
The lump-sum death payment is not subject to tax. An entry here means you received this kind of payment in 2007.
Amounts refunded to you.
The amount shown here may include Medicare premiums you paid in excess of the amount actually due. It also may include
amounts withheld in 2007 to
pay your attorney in excess of the fee actually paid.
Nontaxable payments.
This entry shows nontaxable payments such as lump-sum death payments.
Amounts paid to you for other family members.
This entry shows benefit payments paid to you on behalf of a minor child or disabled adult.
Total subtractions.
The figure shown here is the sum of all the subtractions described previously.
Benefits for 2007.
The amount shown here is the result of subtracting the figure in Total subtractions from the figure in Total additions. This
amount is the same as that shown in box 3.
*Box 3 includes $ paid in 2007 for 2006, 2005, and other tax years.
The figure shown here is the amount of any lump-sum benefit payment received in 2007 that is for an earlier year after
1983. See Lump-Sum
Election, earlier, for a full discussion on how these payments are handled.
Box 4—Benefits Repaid to SSA in 2007
The figure shown in this box is the total amount of benefits you repaid to SSA in 2007.
Description of Amount in Box 4
This part of the form describes the items included in the amount shown in box 4. It lists the amount of benefit checks you
returned to SSA and any
adjustments for other types of repayments. The amounts listed include all amounts repaid in 2007, no matter when the benefits
were received. Only the
repayments that apply to you will be shown. If you did not make any repayments, the word “none” will be shown.
Checks returned to SSA.
If any of your benefit checks were returned to SSA, the total is shown here.
Deductions for work or other adjustments.
If any amounts were withheld from your benefits because of work or to recover an overpayment of retirement, survivors,
or disability benefits, the
total will be shown here. This may also be shown as Deductions for work or other adjustments under Description of Amount in Box 3.
Other repayments.
This is the amount you repaid to SSA by direct remittance.
Benefits repaid to SSA in 2007.
The amount shown here is the sum of all your repayments. This total is the same as that shown in box 4.
Box 5—Net Benefits for 2007 (Box 3 minus Box 4)
The figure in this box is the net benefits paid to you for the year. It is the result of subtracting the figure in box 4 from
the figure in box 3.
Enter this amount on line A of IRS Notice 703, or on line 1 of Worksheet 1, shown earlier, or on the worksheet in either the
Form 1040 or 1040A
instruction package.
If parentheses are around the figure in box 5, it means that the figure in box 4 is larger than the figure in box 3. This
is a negative figure and
means you repaid more money than you received in 2007. If you have any questions about this negative figure, contact your
local SSA office. For more
information, see Repayments More Than Gross Benefits, earlier.
Box 6—Voluntary Federal Income Tax Withheld
This shows the total amount of federal income tax withheld from your benefits. Include this amount on your income tax return
as tax withheld.
Form SSA-1042S (Nonresident Aliens)
This form is for nonresident aliens. It contains the following four additional items that do not appear on Form SSA-1099.
This is the rate at which tax was withheld from 85% of your benefits. If tax was withheld at more than one rate during the
year, the percentage
shown will be the tax rate in December 2007. The tax rate for most nonresident aliens is 30%. If you are a resident of Switzerland,
your total benefit
amount will be taxed at a 15% rate. The figure “0” will appear in this box if you were not taxed in December or if you were exempt under a tax
treaty. Benefits received by residents of Canada, Egypt, Germany, Ireland, Israel, Italy, Japan, Romania, and the United Kingdom
are exempt from U.S.
tax.
Under a treaty with India, benefits paid to individuals who are both residents and nationals of India are exempt from U.S.
tax if the benefits are
for services performed for the United States, its subdivisions, or local government authorities. See Publication 519 for more
information on
nonresident aliens.
Box 7—Amount of Tax Withheld
This is the amount of tax taken out of your social security checks. Tax is withheld for any month in which you were a nonresident
alien (unless you
were exempt under a tax treaty).
Box 8—Amount of Tax Refunded
An amount in this block shows any tax SSA refunded to you. When SSA withholds tax from your checks by mistake, they try to
return it to you during
the same calendar year. If SSA is unable to send the refund to you before the year ends, you must file a federal income tax
return to get a refund of
this tax.
Box 9—Net Tax Withheld During 2007
The figure in this box is the result of subtracting the figure in box 8 from the figure in box 7. This is the net amount of
tax withheld from your
benefits.
This section explains the items shown on Form RRB-1099. Form RRB-1099 is issued to citizens and residents of the United States.
If you received,
repaid, or had tax withheld from the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits
or special guaranty
benefits during 2007, you will receive Form RRB-1099.
If you received, repaid, or had tax withheld from any non-social security equivalent benefit (NSSEB) portion of tier 1, tier
2, vested dual
benefits or supplemental annuity benefits during 2007, you will receive Form RRB-1099-R, Annuities or Pensions by the Railroad
Retirement Board. For
more information concerning Form RRB-1099-R, see Publication 575.
Each beneficiary will receive his or her own Form RRB-1099. If you receive benefits on more than one railroad retirement record,
you may get more
than one Form RRB-1099. To help insure that you get your form timely, make sure the RRB always has your current mailing address.
Box 1—Claim Number and Payee Code
Your RRB claim number is a six- or nine-digit number preceded by an alphabetical prefix and is the number under which the
SSEB portion of tier 1
benefits was paid. Your payee code is the number following your claim number and is used by the RRB to identify you under
your claim number. In all
your contacts with the RRB, be sure to use the claim number and payee code shown in this box.
Box 2—Recipient's Identification Number
This is the U.S. social security number (SSN), individual taxpayer identification number (ITIN), or employer identification
number (EIN), if known,
for the person or estate listed as the recipient.
Box 3—Gross Social Security Equivalent Benefit Portion of Tier 1 Paid in 2007
The figure shown in this box is the gross SSEB portion of tier 1 benefits or special guaranty benefits paid to you in 2007.
It is the amount before
any deductions were made for:
-
Federal income tax withholding,
-
Medicare premiums,
-
Legal Process Garnishment payments,
-
Overall minimum assignment payments,
-
Recovery of an overpayment, including recovery of Railroad Unemployment Insurance Act benefits received while awaiting payment
of your
railroad retirement annuity, and
-
Workers' compensation offset (explained in the description of box 6, later).
The figure in box 3 is the amount after any deductions were made for:
-
Social security benefits,
-
Age reduction,
-
Public service pensions or public disability benefits,
-
Dual railroad retirement entitlement under another RRB claim number,
-
Work deductions,
-
Actuarial adjustment,
-
Annuity waiver, and
-
Legal Process Partition payments.
Social security benefits paid through the RRB are not reported on Form RRB-1099 or RRB-1042S. They are reported on Form SSA-1099
or Form SSA-1042S
issued by the SSA.
Example 1.
For the period January through March 2007, you received $300 ($100 x 3 months) Railroad Unemployment Insurance. You were eligible
for the SSEB
portion of tier 1 benefits of $509 a month beginning January 1, 2007, but you did not receive your first payment until April
2007. The payment you
received in April was for the first three months of 2007. However, because you received unemployment benefits during the same
period, $300 was
deducted from your initial benefit payment. Instead of receiving $1,527 ($509 x 3 months), you received $1,227 ($1,527- $300).
For the months of
April through November, you were paid your regular monthly SSEB portion of tier 1 benefits of $509. Box 3 of your Form RRB-1099
will show $5,599 ($509
× 11 months) as the gross SSEB portion of tier 1 benefits paid to you in 2007, even though you did not actually receive that
amount. This is
because box 3 shows the gross amount of your benefits before any reductions were made for the unemployment benefits paid to
you.
Example 2.
You received tier 1 benefits of $600 a month for the months of December 2006 through May 2007. Your $600 monthly tier 1 benefits
consist of an SSEB
portion of $250 and a non-social security equivalent benefit (NSSEB) portion of $350. Beginning in June 2007, you became entitled
to Medicare, and
$93.50 a month was deducted from your benefit checks for Medicare premiums. Therefore, the tier 1 payments you received for
the rest of the year were
$506.50 ($600 - $93.50) a month. Box 3 of your Form RRB-1099 will show the gross SSEB portion of tier 1 benefits of $3,000
($250 × 12
months), because it is the gross SSEB amount before deductions for your Medicare premiums. Box 11 of your Form RRB-1099 will
show your Medicare
premiums of $561 ($93.50 × 6 months) deducted from June through November 2007. The remainder of your tier 1 payments, the
NSSEB portion of
$4,200 ($350 × 12 months), will be shown on the Form RRB-1099-R that you will receive along with your Form RRB-1099. The $4,200
is the gross
NSSEB amount before deductions for your Medicare premiums. (The Medicare Premium Total box shown on your Form RRB-1099-R will be blank
because the Medicare total will be shown in box 11 of your Form RRB-1099.) For more information on Form RRB-1099-R, see Publication
575.
Benefits paid for earlier years.
The figure in box 3 includes any lump-sum benefit payment you received in 2007 that is for an earlier year after 1983.
If you received a payment
for an earlier year, it will be shown in box 7, 8, or 9 (described later). See Lump-Sum Election, earlier, for information on how to treat
the payment.
Box 4—Social Security Equivalent Benefit Portion of Tier 1 Repaid to RRB in 2007
The figure shown in this box is the total SSEB portion of tier 1 benefits you repaid to the RRB in 2007. You may have repaid
a benefit by returning
a payment, making a cash refund, or having an amount withheld from your payments. In addition, an amount may have been withheld
from your benefits to
recover the SSEB overpayment incurred by someone else who is also receiving benefits under your claim number. Also, an amount
may have been withheld
from another benefit, such as a social security benefit, to recover an SSEB overpayment you received.
The amount in box 4 also includes any SSEB benefits you repaid in 2007 that were for 2007 or for one or more years before
2007. All tier 1
repayments for years before 1986 are treated entirely as SSEB benefits.
Example 1.
You returned to work for your last railroad employer for the months of June through August 2007. The SSEB portion of your
tier 1 benefits was $450
for each of those months. Since you are not allowed to receive benefits for any month you returned to railroad service, you
have to make a repayment
to the RRB. You returned the benefit payment for June through August 2007. Box 4 of your Form RRB-1099 will show $1,350 ($450
x 3 months) as the SSEB
portion of tier 1 benefits you repaid to the RRB.
Example 2.
From January through April 2007 you were overpaid $800 in the SSEB portion of tier 1 benefits. From May through August 2007,
$200 a month was
withheld from your benefit payment to fully recover the $800 overpayment. Box 4 of your Form RRB-1099 will show $800 ($200
x 4 months) as the SSEB
portion of tier 1 benefits you repaid to the RRB.
Example 3.
As a retired railroad employee, you have been receiving a railroad retirement annuity, including an SSEB portion of tier 1
benefits, since 2006.
You also became entitled to, and received from the SSA, a social security benefit of $300 a month beginning May 1, 2007. SSA
later authorized the RRB
to pay that benefit. In August 2007, the RRB began paying your social security benefit to you and reduced the SSEB portion
of your monthly tier 1
benefit by $300. Social security benefits of $900 ($300 × 3 months) covering the period May through July 2007 were kept by
the RRB to offset
your $900 SSEB overpayment for that same period. Box 4 of your Form RRB-1099 will show $900 as the SSEB portion of tier 1
benefits you repaid to the
RRB. (Note. SSA will send you Form SSA-1099, which will include the $900 in benefits paid by them for the months of May through July
2007.)
Box 5—Net Social Security Equivalent Benefit Portion of Tier 1 Paid in 2007
The figure shown in this box is the net amount of the SSEB portion of tier 1 benefits paid to you in 2007. It is the result
of subtracting the
amount in box 4 from the amount in box 3. If you received more than one Form RRB-1099 for 2007, you should add the amounts
in box 5 of all Forms
RRB-1099 to determine your net amount of SSEB payments for 2007. Use this amount to determine if any of your benefits are
taxable. See Are Any of
Your Benefits Taxable, earlier.
If parentheses are around the figure in box 5, it means that the figure in box 4 is larger than the figure in box 3. This
is a negative figure and
means you repaid more money than you received in 2007. For more information, see Repayments More Than Gross Benefits, earlier.
Box 6—Workers' Compensation Offset in 2007
The figure shown in this box is the amount you received in workers' compensation benefits during the year that was used to
offset the full amount
of your tier 1 payments. The SSEB portions of your tier 1 benefits shown in boxes 3 and 5 include amounts by which your SSEB
payments were reduced for
workers' compensation benefits. Your workers' compensation amount is shown in this box separately only for your information.
If you did not receive
workers' compensation benefits, box 6 is blank.
Example.
For 2007, your tier 1 benefit of $450 a month is reduced to $400 because of a $50-a-month workers' compensation offset. Boxes
3 and 5 of your Form
RRB-1099 will show $5,400 ($450 × 12 months) as the SSEB portion of tier 1 benefits paid to you by the RRB. The $5,400 is
the amount before any
deductions were made for the workers' compensation offset. Box 4 will show zero because you did not make any repayments during
the year. Box 6 of your
form will show $600 ($50 workers' compensation × 12 months). In figuring if any of your benefits are taxable, you must use
$5,400 (box 5) as the
amount of the SSEB portion of tier 1 benefits paid to you.
Boxes 7 and 8—Social Security Equivalent Benefit Portion of Tier 1 Paid for 2006 or 2005
The figure shown in each applicable box is the amount of SSEB benefits paid to you in 2007 that was for 2006 or 2005. This
amount is included in
the amount shown in box 3.
Box 9—Social Security Equivalent Benefit Portion of Tier 1 Paid for Years Prior to 2005
The figure shown in this box is the amount of SSEB benefits paid to you in 2007 that was for 2004 and earlier years after
1983. This amount is
included in the amount shown in box 3. Any tier 1 benefit paid for a period before 1986 is treated as SSEB.
Box 10—Federal Income Tax Withheld
The figure shown in this box is the total amount of U.S. federal income tax withheld on your tier 1 SSEB payments. This total
is based on the
amount of SSEB tax withholding requested on IRS Form W-4V, Voluntary Withholding Request. Include this amount on your income
tax return as tax
withheld.
In some cases, a tax withholding amount may be shown in this box even though you did not request SSEB tax withholding. This
can happen if you
previously had taxes withheld from your pension payments (NSSEB, tier 2, and/or vested dual benefit), but the taxability of
those payments has since
changed. In these cases, the tax withholding amount is applied to the SSEB since that is your only taxable component.
Box 11—Medicare Premium Total
This is for information purposes only. This is the total amount of Part B Medicare premiums deducted from your railroad retirement
annuity payments
shown on your Form RRB-1099 for 2007. Medicare premium refunds are not included in this total. The Medicare total is normally
shown on Form RRB-1099.
However, if Form RRB-1099 is not required for your 2007 taxes, then this total will be shown on Form RRB-1099-R. Medicare
premiums deducted from your
social security benefits, paid by a third party, or paid by direct billing will not be shown in this box.
Form RRB-1042S (Nonresident Aliens)
This form is for nonresident aliens. It contains the following four additional items that do not appear on Form RRB-1099.
Note.
If your country of legal residence changed or your tax withholding rate changed during the year, you may receive more than
one Form RRB-1042S. To
determine your total amounts for the year, you should add the amounts shown on all Forms RRB-1042S you received for that year.
The country where you maintain your legal residence is shown in this box. If you maintained legal residence in more than one
country during the
year, you will receive a separate Form RRB-1042S for each country of legal residence during the year.
The figure in this box is the rate at which tax was withheld from 85% of the SSEB portion of tier 1 payments you received.
If tax was withheld at
more than one rate during the year, you will receive a separate Form RRB-1042S for each rate change during the year. The tax
rate for most nonresident
aliens is 30%. The figure “0%” or “15%” may appear in this box if you claimed a tax treaty exemption by filing Form RRB-1001 with the RRB.
For more information, see Nonresident aliens earlier under Are Any of Your Benefits Taxable.
Box 12—Federal Tax Withheld
The figure in this box is the total amount of U.S. federal income tax withheld from the SSEB portion of your tier 1 payments
while you were a legal
resident of the country in box 10 in 2007. If you received more than one Form RRB-1042S for 2007, add the amounts in box 12
of all Forms RRB-1042S to
determine your total amount of U.S. federal income tax withheld from SSEB payments for 2007. Tax is withheld for any month
in which you were a
nonresident alien (unless you claimed exemption under a tax treaty).
Box 13—Medicare Premium Total
This is for information purposes. This is the total amount of Part B Medicare premiums deducted from your railroad retirement
annuity payments
shown on your Form RRB-1042S for 2007. Medicare premium refunds are not included in this total. The Medicare total is normally
shown on Form
RRB-1042S. However, if Form RRB-1042S is not required for your 2007 taxes, then this total will be shown on Form RRB-1099-R.
Medicare premiums
deducted from your social security benefits, paid by a third party, or paid by direct billing will not be shown in this box.
You should contact your nearest RRB field office (if you reside in the United States) or U.S. consulate/embassy (if you reside
outside of the
United States) for assistance with your RRB tax statement inquiries. If you are in the United States or Canada, you can call
the RRB toll free at
1-800-808-0772. You can also visit the RRB on the Internet at www.rrb.gov. If you have any questions about how to figure your taxable
payments or what amounts to show on your income tax returns, contact the IRS.
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from
the IRS in several
ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
Contacting your Taxpayer Advocate.
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers
who are experiencing economic
harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that
an IRS system or
procedure is not working as it should.
You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059
to see if you are eligible for
assistance. You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your
local telephone directory
and in Publication 1546, Taxpayer Advocate Service - Your Voice at the IRS. You can file Form 911, Request for Taxpayer Advocate
Service
Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. For more
information, go to
www.irs.gov/advocate.
Taxpayer Advocacy Panel (TAP).
The TAP listens to taxpayers, identifies taxpayer issues, and makes suggestions for improving IRS services and customer
satisfaction. If you have
suggestions for improvements, contact the TAP, toll free at 1-888-912-1227 or go to
www.improveirs.org.
Low Income Taxpayer Clinics (LITCs).
LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies
with the IRS for free or for
a nominal charge. The clinics also provide tax education and outreach for taxpayers with limited English proficiency or who
speak English as a second
language. Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area. It is available
at
www.irs.gov or at your local IRS office.
Free tax services.
To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. It contains a list of
free tax publications and
describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics.
Accessible versions of IRS published products are available on request in a variety of alternative formats for people
with disabilities.
Internet. You can access the IRS website at
www.irs.gov 24 hours a day, 7 days a week to:
-
E-file your return. Find out about commercial tax preparation and e-file services available free to eligible
taxpayers.
-
Check the status of your 2007 refund. Click on Where's My Refund. Wait at least 6 weeks from the date you filed your return (3
weeks if you filed electronically). Have your 2007 tax return available because you will need to know your social security
number, your filing status,
and the exact whole dollar amount of your refund.
-
Download forms, instructions, and publications.
-
Order IRS products online.
-
Research your tax questions online.
-
Search publications online by topic or keyword.
-
View Internal Revenue Bulletins (IRBs) published in the last few years.
-
Figure your withholding allowances using the withholding calculator online at
www.irs.gov/individuals.
-
Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant.
-
Sign up to receive local and national tax news by email.
-
Get information on starting and operating a small business.
Phone. Many services are available by phone.
-
Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications,
and prior-year forms and instructions. You should receive your order within 10 days.
-
Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
-
Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An
employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local
Taxpayer Assistance Center
for an appointment. To find the number, go to
www.irs.gov/localcontacts or
look in the phone book under United States Government, Internal Revenue Service.
-
TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and
publications.
-
TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
-
Refund information. To check the status of your 2007 refund, call 1-800-829-4477 and press 1 for automated refund information or
call 1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically).
Have your 2007 tax
return available because you will need to know your social security number, your filing status, and the exact whole dollar
amount of your refund.
Evaluating the quality of our telephone services. To ensure IRS representatives give accurate, courteous, and professional answers, we
use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to listen
in on or record random
telephone calls. Another is to ask some callers to complete a short survey at the end of the call.
Walk-in. Many products and services are available on a walk-in basis.
-
Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and
publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions,
and office supply stores
have a collection of products available to print from a CD or photocopy from reproducible proofs. Also, some IRS offices and
libraries have the
Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
-
Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An
employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need
to resolve a tax problem,
have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone
in person, visit your
local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No
appointment is necessary,
but if you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue.
A representative will
call you back within 2 business days to schedule an in-person appointment at your convenience. To find the number, go to
www.irs.gov/localcontacts or
look in the phone book under United States Government, Internal Revenue Service.
Mail. You can send your order for forms, instructions, and publications to the address below. You should receive a response within
10
days after your request is received.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
CD/DVD for tax products. You can order Publication 1796, IRS Tax Products CD/DVD, and obtain:
-
Current-year forms, instructions, and publications.
-
Prior-year forms, instructions, and publications.
-
Bonus: Historical Tax Products DVD - Ships with the final release.
-
Tax Map: an electronic research tool and finding aid.
-
Tax law frequently asked questions.
-
Tax Topics from the IRS telephone response system.
-
Fill-in, print, and save features for most tax forms.
-
Internal Revenue Bulletins.
-
Toll-free and email technical support.
-
The CD which is released twice during the year.
- The first release will ship the beginning of January 2008.
- The final release will ship the beginning of March 2008.
Purchase the CD/DVD from National Technical Information Service (NTIS) at
www.irs.gov/cdorders for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5
handling fee). Price is subject to change.
CD for small businesses. Publication 3207, The Small Business Resource Guide CD for 2007, is a must for every small business owner or
any taxpayer about to start a business. This year's CD includes:
-
Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
-
All the business tax forms, instructions, and publications needed to successfully manage a business.
-
Tax law changes for 2007.
-
Tax Map: an electronic research tool and finding aid.
-
Web links to various government agencies, business associations, and IRS organizations.
-
“Rate the Product” survey—your opportunity to suggest changes for future editions.
-
A site map of the CD to help you navigate the pages of the CD with ease.
-
An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan,
and filing taxes.
An updated version of this CD is available each year in early April. You can get a free copy by calling 1-800-829-3676 or
by visiting
www.irs.gov/smallbiz.
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