Railroad RRB1099&RRB1099R Questions

[photoman]

This is my first Railroad and I am using Drake Software. The numbers just don't add up. Is there anyone that can offer any help. Exactly what numbers out of what boxes on the two forms must we use. Do we need the numbers on the blue rrb1099 for anything.

[BOB W]

This is my first Railroad and I am using Drake Software. The numbers just don't add up. Is there anyone that can offer any help. Exactly what numbers out of what boxes on the two forms must we use. Do we need the numbers on the blue rrb1099 for anything.

I also have one client that is a RR retiree. Every year I struggle with his 1099R. One is retirement income and the other is the same as SS. Read each carefully to realize which is which. Other than that I can't help you, it has been a year since I have done his return and that is all I remember.

[photoman]

Thanks

I will post what I find out once I am clear on this.

[gkaiseril]

There is a "Social Security" equivalent portion of the pension, Tier I, and then the balance is the straight pension. There are instructions on the reverse of the form. Also carefully look at the form numbers on each section of the RRB 1099.

More information is available in IRS Pub 915, http://www.irs.gov/pub/irs-pdf/p915.pdf and each box of the RRB 1099 is described in the appendix.

How did you handle the wages form the railroad employer?

The pay check has "Tier I" or "Social Security" equivalent wages and tax and then there is the "Tier II" or Medicare tax equivalent.

This situation has been in existence from the inception of the Social Security program.

[photoman]

Response

I do not show any wages for the client. Both he and wife received both rrb1099r and rrb1099. I entered the rrb1099r information from both on that screen in Drake. I then entered the Tier 1 SocSec from the blue rrb1099 on line 20a. The wife blue has nothing on it so I only entered the husbands. I am having a problem in Drake as unless I suppress the fed screen on both husband and wife on the rrb1099r forms that gets added to their income. This may just be something I am doing incorrectly.

[Earl]

Railroad Retirement

The amount on RRB1099 is equivalent to social security and is entered on line 20a. Taxablity would be determined by other income amount.

The amount on RRB 1099r is equivalent to a defined benefit pension. You have to use simplified method to determine taxable amount. Should show on form amount of contributions made to pension plan. This amount is then entered on 16a & 16b.

[joanmcq]

Handle the blue form just like social security. The RRB 1099-R (green form) is a pension. The Vested Dual Benefit and Supplemental Annutiy (if any) are always fully taxable. The treatment of the amount in box 4 depends on when the client first started drawing benefits. If they started before July 2, 1986, they fall under the 3 year rule, and all the contributions would have been recouped a long time ago. Annuities beginning after 1/1/87 are computed under the simplified rule. The 6 months in between have their own wierd rule and if that is the case, contact me and I'll go through it with you.

[Burke]

I do lots of these. Joanmcq is correct. The top section (Blue) says in Box 3, Social Security Equivalent Benefit, and that goes on 20a. Check Box 11 for Medicare premium deduction. ATX software has a box you can check for RRRB benefits and an addl input form pops up to enter each box's numbers for the green part. Simplified pension rules apply. Use figure in Box 3 (bottom part - Green) for employee contributions amount, if any. Also, don't forget to check state rules. Many do not tax RRRB benefits as well as the Social Security benefit. But you might have to manually do the subtraction depending on the software. ATX now does this automatically if you use the pop-up box to input. Sometimes you will have two forms, as spouses can draw benefits too, even if widow or widower.

[photoman]

Thanks for the advice

Thanks for all the comments. I have completed this return and many thanks to all that have helped me with my first one.

[mjryan]

1099 RRB's

ProSeries also does an excellent job with RR benefits finally, including our state of Nebraska.