Villages Tax-Aide Question
 

In todays Daily Sun on page A9 there is a list of what you are to bring when you have your taxes done by the Tax-Aide preparers. The last item on the list is to 'Bring the date the taxpayer began receiving a pension or annuity'. I don't remember needing this last year. Is this something new this year? I hope they don't need actual proof and only a date will do......

That info should be easily available in writing from your company's benefit department. It might be worth your while to get a copy now, just to have it handy.

Does anyone have an idea why they are asking for this? To do your tax return you need a 1099R from the pension or annuity payer and that should be all you need.

It might have to do with when you started receiving the pension, such as, before age 59-1/2. There are rules that apply to pensions, similar to the early distribution rules that apply to IRA's.

Just an educated guess, since something similar happened to me. MUCH better to get the info that is asked for ahead of time.

It has to do with the Simplified Method vs. the General Rule for figuring the taxable portion of a pension. Generally, the General Rule affect pensions started before Nov 18, 1996.
If you have an investment in your annuity or pension (that is, you've contributed after-tax money), not all of your pension that you receive each year would be taxable. By knowing when you started receiving the pension, the tax preparer can ascertain how much of your after tax contribution can be excluded each year, and can amend up to 3 previous years if the taxability of the pension has been reported on your tax return incorrectly.
Please see Pub 575 and Pub 939 on the IRS website for more information.

mary ann kelly
Enrolled Agent
Master Tax Advisor
H&R Block, Palm Ridge Plaza

Glad I withdrew tax free and no penalty all my after tax contributions I made to my 401K. Think it was in the late 80s. Used the $ to buy a new car...
Now all my withdrawals will be taxable. :ohdear:

Made after-tax contributions to my IRA and wish I hadn't !! Benefit was miniscule, and filling out Form 8606 is relative PITA. All in all, after-tax contributions were not worth the trouble.