Table of Contents
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,
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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.
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.
-
$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. 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.) | A. | |
Note. If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. | |||
B. | Enter one-half of the amount on line A | B. | |
C. | Enter your taxable pensions, wages, interest, dividends, and other taxable income | C. | |
D. | Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) | D. | |
E. | Add lines B, C, and D | E. | |
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. | |||
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.) | A. | $11,000 |
Note. If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. | |||
B. | Enter one-half of the amount on line A | B. | 5,500 |
C. | Enter your taxable pensions, wages, interest, dividends, and other taxable income | C. | 20,500 |
D. | Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) | D. | -0- |
E. | Add lines B, C, and D | 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. | |||
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).
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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. (You must also be a citizen of Italy for the exemption to apply.)
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Romania.
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United Kingdom.
-
A copy of the Form SSA-1042S, Social Security Benefit Statement,
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A copy of the “green card,” and
-
A signed declaration that includes the following statements:
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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.
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Romania.
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United Kingdom.
If part of your benefits are taxable, you must use Form 1040 or Form 1040A. You cannot use Form 1040EZ.
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.
-
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).
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You are married filing separately and lived with your spouse at any time during 2007.
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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. |
Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records
Before you begin:
|
||||||||||
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. | $5,980 | |||||||
2. | Enter one-half of line 1 | 2. | 2,990 | |||||||
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. | 28,990 | |||||||
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:
|
5. | -0- | |||||||
6. | Add lines 2, 3, 4, and 5 | 6. | 31,980 | |||||||
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. | 31,980 | |||||||
9. |
If you are:
|
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. | 6,980 | |||||||
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. | 6,980 | |||||||
14. | Enter one-half of line 13 | 14. | 3,490 | |||||||
15. | Enter the smaller of line 2 or line 14 | 15. | 2,990 | |||||||
16. | Multiply line 12 by 85% (.85). If line 12 is zero, enter -0- | 16. | -0- | |||||||
17. | Add lines 15 and 16 | 17. | 2,990 | |||||||
18. | Multiply line 1 by 85% (.85) | 18. | 5,083 | |||||||
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. | $2,990 | |||||||
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 2. | |
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. |
Filled-in Worksheet 1. Figuring Your Taxable BenefitsKeep for your records
Before you begin:
|
||||||||||
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. | $5,600 | |||||||
2. | Enter one-half of line 1 | 2. | 2,800 | |||||||
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. | 29,750 | |||||||
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:
|
5. | -0- | |||||||
6. | Add lines 2, 3, 4, and 5 | 6. | 32,550 | |||||||
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. | 1,000 | |||||||
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. | 31,550 | |||||||
9. |
If you are:
|
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. | ||||||||
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. |
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:
|
||||||||||
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:
|
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:
|
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:
|
||||||||||
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:
|
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:
|
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.
-
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.
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:
|
||||||||||
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:
|
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:
|
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:
|
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: | |||||||||
|
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: |
||||||||||||
|
You may be entitled to deduct certain amounts related to the benefits you receive.
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.
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.
-
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).
-
Worksheet 1. | Figuring Your Taxable Benefits |
Before you begin:
|
||||||||||
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:
|
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:
|
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:
|
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: | |||||||||
|
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:
|
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: |
||||||||||||
|
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.
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.
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.
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.
The figure shown in this box is the total amount of benefits you repaid to SSA in 2007.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.)
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.
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.
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.
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.
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.
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.
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.
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).
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.
www.improveirs.org.
Internet. You can access the IRS website at www.irs.gov 24 hours a day, 7 days a week to:
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E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
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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.
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Download forms, instructions, and publications.
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Order IRS products online.
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Research your tax questions online.
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Search publications online by topic or keyword.
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View Internal Revenue Bulletins (IRBs) published in the last few years.
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Figure your withholding allowances using the withholding calculator online at www.irs.gov/individuals.
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Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant.
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Sign up to receive local and national tax news by email.
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Get information on starting and operating a small business.
Phone. Many services are available by phone.
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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.
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Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
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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.
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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.
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TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
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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.
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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.
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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:
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Current-year forms, instructions, and publications.
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Prior-year forms, instructions, and publications.
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Bonus: Historical Tax Products DVD - Ships with the final release.
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Tax Map: an electronic research tool and finding aid.
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Tax law frequently asked questions.
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Tax Topics from the IRS telephone response system.
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Fill-in, print, and save features for most tax forms.
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Internal Revenue Bulletins.
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Toll-free and email technical support.
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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:
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Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
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All the business tax forms, instructions, and publications needed to successfully manage a business.
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Tax law changes for 2007.
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Tax Map: an electronic research tool and finding aid.
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Web links to various government agencies, business associations, and IRS organizations.
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“Rate the Product” survey—your opportunity to suggest changes for future editions.
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A site map of the CD to help you navigate the pages of the CD with ease.
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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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