Publication 575 (2006), Pension and Annuity Income

Publication 575 - Additional Material

This is archived information that pertains only to the 2006 Tax Year. If you
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Table of Contents

Worksheet A. Simplified Method

1.	Enter the total pension or annuity payments received this year. Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a			1.
2.	Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion*			2.
	Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below. Otherwise, go to line 3.
3.	Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below.			3.
4.	Divide line 2 by line 3			4.
5.	Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Otherwise, go to line 6			5.
6.	Enter any amounts previously recovered tax free in years after 1986. This is the amount shown on line 10 of your worksheet for last year			6.
7.	Subtract line 6 from line 2			7.
8.	Enter the smaller of line 5 or line 7			8.
9.	Taxable amount for year. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Note: If your Form 1099-R shows a larger taxable amount, use the amount on this line instead			9.
10.	Was your annuity starting date before 1987? □ Yes. STOP. Do not complete the rest of this worksheet. □ No. Add lines 6 and 8. This is the amount you have recovered tax free through 2006. You will need this number if you need to fill out this worksheet next year			10.
11.	Balance of cost to be recovered. Subtract line 10 from line 2. If zero, you will not have to complete this worksheet next year. The payments you receive next year will be fully taxable			11.

Table 1 for Line 3 Above
	if the age at annuity starting date was	and your annuity starting date was—

		before November 19, 1996, enter on line 3	after November 18, 1996, enter on line 3
	55 or under	300	360
	56-60	260	310
	61-65	240	260
	66-70	170	210
	71 or over	120	160
Table 2 for Line 3 Above
	if the combined ages at annuity starting date were	then enter on line 3
	110 or under	410
	111-120	360
	121-130	310
	131-140	260
	141 or over	210

* A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996.