Income — Retirement Income

Time Requirement: 15 minutes

Purpose

Students will learn how to determine the taxable portion of retirement income and how to report the amounts on Form 1040. The lesson also explains how to determine when to make an adjustment to withholding.

Objectives

• Identify how retirement income is reported to the taxpayer using the Form 1099-R series
• Calculate the taxable portion of different types of retirement income
• Determine how to report retirement income on the tax return
• Determine when an adjustment to withholding should be made

Teaching the Lesson

Refer to the Lesson Plan for helpful instructor notes, visual aids, TaxSlayer® demos, and Internet links. Emphasize that it's important to address all retirement income received by taxpayers because some income may be fully or partially taxable. Point out the key differences among:

• Traditional IRAs and Roth IRAs
• Pensions and annuities

Refer students who may want to work independently to Publication 4491, Retirement Income.

Key References

This lesson will refer to the following publications and forms:

• Form 13614-C, Page 2, Part III
• Pub 4012, Income tab
• Pub 17, Part Two, Income

All references to materials can be found by clicking the Job Aids and Media button. There are also links to helpful tools that can be found on the irs.gov public portal. For this lesson, the student can link to the following sites for additional help:

• Interactive Tax Assistant
• Tax Topics – Pensions and Annuities
• Tax Topics - Rollovers from Retirement Plans
• IRS Withholding Estimator

TaxSlayer® Demos and Tutorials

It is recommended to go to the Practice Lab and access the latest TaxSlayer tutorial for this lesson. The TaxSlayer tutorials can be found by going to the Practice Lab and clicking on the link for TaxSlayer IRS training.

Publication 4012, Income tab, will include instructions and tips on how to report retirement income in TaxSlayer.