5.1 Pensions and Annuities: General
Will the IRS figure how much of my pension is taxable under the
General Rule?
If you cannot use the Simplified Method, you can ask the IRS to figure
the tax-free part of your pension under the General Rule. There is a $90 fee
for this service. Publication 939, General Rule for Pensions and Annuities,
contains a detailed explanation of the information required to be furnished
with your request. Also, refer to Tax Topic 411, Pensions - The General
Rule and the Simplified Method, for additional information. If your annuity
starting date is after November 18, 1996, you generally cannot use the General
Rule for annuity payments from a qualified plan.
References:
My 1099-R forms do not show any FICA or Medicare deductions. Do
we pay FICA on retirement?
No, you do not pay social security and Medicare taxes on retirement income.
References:
I can't get my employer to pay me my pension money. Whom do I contact?
If you cannot get your employer to pay you your pension money, you should
contact the Employee
Benefits Security Administration (EBSA) of the Department of Labor. To
find out which office you are serviced by, contact (866) 275-7922. Alternatively,
you may write them at:
U.S. Department of Labor
EBSA
Division of Technical Assistance and Inquiries
Room N-5619
200
Constitution Avenue N. W.
Washington, D.C. 20210
References:
This is the first year that I received retirement benefits. Are
any of my benefits taxable?
If you receive retirement benefits in the form of pension or annuity payments,
the amounts you receive may be fully taxable, or partly taxable in the year
received. Refer to Tax Topic 410, Pensions and Annuities, for
detailed information, or Publication 575, Pension and Annuity Income.
For social security and equivalent railroad retirement benefits, refer to Tax Topic 423 or Publication 915, Social Security and Equivalent Railroad
Retirement Benefits.
References:
9.4 Estimated Tax: Large Gains, Lump-sum Distributions, etc.
I will be taking a Required Minimum Distribution (RMD) at the end
of the year on my IRA. Is estimated tax due when the distribution is made
or is 1/4th due with each estimated tax submission?
The tax on the distribution is not due until you actually receive the income.
Thus, your last fourth quarter estimated tax payment should reflect the increase
in your tax liability. You could still increase your quarterly estimated tax
payments or increase your Federal income tax withholding during the earlier
part of the year to cover the tax liability.
If you have the proper amount withheld, you may not be required to make
estimated tax payments nor have to file Form 2210 (PDF), Underpayment
of Estimated Tax by Individuals, Estates and Trusts, with your tax return
(as you would if you just increased the last estimated tax payment). If you
wait and make an increased estimated tax payment for the fourth quarter, you
would have to file Form 2210 with your tax return because we do not know when
you receive the income. Since you did not receive the income evenly throughout
the year, you have to tell us when the income was received by filing Form
2210.
References:
- Publication 505, Tax Withholding and Estimated Tax
- Form 2210 (PDF), Underpayment
of Estimated Tax by Individuals, Estates and Trusts
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