If you must use the Simplified Method to figure the taxable amount in Box 2a of the 1099-R form, use this guide to assist you with your entries. Based on these entries, the program will figure your taxable amount and enter it on line 2a of the 1099-R form. Once completed, return to the 1099-R and finish making your entries.
Choosing the Simplified Method Worksheet
Within the 1099-R entry screen (Federal Section > Income > 1099-R, RRB, SSA > Add or Edit a 1099-R), enter your payer information and Box 1 distribution. Under box 2a, when asked Do you need to calculate your taxable income? select 'Click Here for options.'. Choose the Simplified Method Worksheet followed by Continue.
Plan cost at annuity start date
The plan cost at annuity start date is your total after tax contributions in the plan (may be shown in box 9b of the 1099-R). If you did not make any after tax contributions, leave the entry blank.
Starting Date of annuity
Your annuity starting date is the later of the first day of the first period for which you received a payment, or the date the plan's obligations became fixed. This field is required.
Joint or Survivor Annuity?
A Joint or Survivor Annuity is an annuity that guarantees payments for as long as the annuity owner or the beneficiary are alive.
Death Benefit Exclusion
If you are the beneficiary of a deceased employee or former employee who died before August 21, 1996, include any death benefit exclusion that you are entitled to (up to $5,000). This amount is added to plan cost at annuity start date automatically by the program.
Age of recipient at start date
Enter the age of the taxpayer on the date the pension started – this may be different than the taxpayer’s age at the end of that year.
For a joint or survivor annuity, add the ages of both spouses on the start date. For a joint and survivor annuity that starts:
- After the death of the employee, use only the survivor’s age.
- Before the death of either beneficiary, continue with the same exclusion amount after the first death.
Number of months paid
Enter the number of months you received payments during the current tax year.
Amounts previously recovered
Enter the amount that could have been recovered tax free in prior years even if not claimed. Look at last year’s tax return to find this amount.