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Scenario 3

Scenario 3

Leigh

  • Born January 31, 1957
  • Filing single
  • She is receiving:
    • public retirement and pension benefits of $8,000 from SSA exempt employment
    • $10,000 military retirement benefits, and
    • private retirement and pension benefits of $12,000.
  • She retired in 2014.
 
Step 1 - Complete "Which Section of Form 4884 Should I Complete"

She answers the questionnaire in Form 4884 instructions as follows:

  • Question 1 – Yes
  • Question 2 – No
  • Question 3 – Single and identifies herself as the key person.
  • Question 4 – 1957, as she is the key person.
  • Question 5 – No
  • Question 6 – No
  • Question 7 – No
  • Question 8 – Yes
  • Question 9 – No, as she was not retired as of January 1, 2013.
  • Question 10 – Yes and she is instructed to complete and compare Worksheet 3.2 and Worksheet 3.3.
Step 2 - Complete Worksheet 3.2

Leigh completes Worksheet 3.2 and determines that she is eligible for a retirement and pension subtraction of $15,000 under Section C of Form 4884.

Step 3 - Complete Worksheet 3.3

Leigh then completes Worksheet 3.3 and determines that she is eligible for a retirement and pension benefits subtraction of $12,880 under Section D of Form 4884.

Step 4 - Choose the Better Subtraction

Leigh elects to claim the retirement and pension benefit subtraction allowed under Section C ($15,000) instead of under Section D ($12,880) because it provides a greater benefit.

She carries the amount calculated by Worksheet 3.2 to Form 4884, line 18.

Step 5 - Carry to Schedule 1
Leigh carries the amount from Form 4884, line 18 to Schedule 1, line 27.