Pensions, and how much is taxable (payments, deduction, IRS, investments)

[Mikala43]

Pension 1: no federal or state tax
Pension 2: pay federal, no state

We live in a state with no income taxes

[robertpasa]

OK I'm doing taxes for my mom. She is very old and has poor memory. I have no way of knowing if she ever paid into her pension while working. Nothing is on paper. I'm not even sure when the pension started. That's why I have problems with that worksheet in the 1040.

Basically, if FreeTax says it is 100% taxable, should I just assume that is right?

[Mikala43]

Originally Posted by robertpasa

OK I'm doing taxes for my mom. She is very old and has poor memory. I have no way of knowing if she ever paid into her pension while working. Nothing is on paper. I'm not even sure when the pension started. That's why I have problems with that worksheet in the 1040.

Basically, if FreeTax says it is 100% taxable, should I just assume that is right?

Do you have the 1099 R?

[robertpasa]

Yes, it says "Unknown" in the box for how much is taxable.

In other 1099R's I've seen, the taxable amount is just 100% of the gross amount.

[evening sun]

Go back for a few years & compare the numbers.

[Mikala43]

Originally Posted by robertpasa

Yes, it says "Unknown" in the box for how much is taxable.

In other 1099R's I've seen, the taxable amount is just 100% of the gross amount.

https://www.opm.gov/frequently-asked...your%20annuity.

?

I googled "what if box 2a is blank" try that and see if any applies.

[Lowexpectations]

Originally Posted by robertpasa

Yes, it says "Unknown" in the box for how much is taxable.

In other 1099R's I've seen, the taxable amount is just 100% of the gross amount.

Is it possible that paying someone else to handle this would be better ?

[robertpasa]

IRS Publication 721 explains it - and it's only 30 pages.

[Parnassia]

Originally Posted by robertpasa

If you're retired and getting payments from your former employer, why would you pay money to them?

Is this a serious question? Unless the retired person happened to be a government employee, those income taxes being paid aren't going back to a former employer. They're being paid to local/state/federal government in exchange for public services!

[Parnassia]

Originally Posted by Mikala43

https://www.opm.gov/frequently-asked...your%20annuity.

?

I googled "what if box 2a is blank" try that and see if any applies.

This. Some of my multiple 1099Rs (pension, federal TSP, IRA RMDs, investments) have an entry under "taxable amount", others don't. It has to do with how much of that income source qualifies as tax free, taxed at a lower rate, or possibly tax deferred. There are other codes embedded in the 1099 that come into play. If I understand this correctly, the "taxable amount" computation ends up being based on the tax rate you compute using your 1040 worksheets. In other words, your 1040 worksheet computations eventually generate the number, not the 1099 payer. They don't necessarily know what tax bracket any of their payees will fall into.

IMHO based on your questions OP, you should get help preparing your mom's tax return. Maybe yours too. If you mess up your own taxes the only one who suffers is you. If you mess up someone else's, the repercussions for that person could be very different.