Question

Howard (71), a retired single taxpayer, received a monthly pension of $2,500 ($30,000 annually). He did not contribute any after-tax dollars to the plan while he was working; his employer paid all the costs. Howard's only other income for the year consisted of $17,256 in social security benefits. In early 2022, howard received the following 2021 form 1099-r reporting the distribution from his pension plan. When howard files his tax return, how much should he report as taxable income from pensions and annuities?.

Answer 1

The amount that Howard should report as taxable income from pensions and annuities when he files his tax return is $30, 000.

How to find the taxable income?

The Taxable income that Howard would report would depend on the contributions he made towards his retirement when he was still working. If these contributions were after - tax, then it would mean that he would not need to pay taxes.

However, as mentioned in the question, Howard did not contribute any after-tax dollars to the plan. This means that his entire income will be taxable.

Howard's taxable income would therefore be the entire $ 30, 000 annually.

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