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Scenario 3
Scenario 3
Leigh
- Born January 31, 1961
- Filing single
- She is receiving:
- public retirement and pension benefits of $8,000 from SSA exempt employment with a governmental agency
- $40,000 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 – 1961, as she is the key person.
- Question 5 – No
- Question 6 – No, and she is directed to Question 8.
- 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 $19,423 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 D ($19,423) instead of under Section C ($15,000) because it provides a greater benefit.
She carries the amount calculated by Worksheet 3.3 to Form 4884, line 19.
Step 5 - Carry to Schedule 1
Leigh carries the amount from Form 4884, line 19 to Schedule 1, line 27.