Simplified method worksheet 2025

1. Click ‘Get Form’ to open the simplified method worksheet in the editor.
2. Begin by entering the total pension or annuity payments from Form 1099-R, box 1, on line 1. This amount will also be entered on Form 1040, line 16a.
3. For line 2, input your cost in the plan at the annuity starting date. If you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year’s worksheet on line 4.
4. Refer to Table 1 or Table 2 to find the appropriate number for line 3 based on your annuity starting date and age. Enter this number on line 3.
5. Divide the amount from line 2 by the number you entered on line 3 and write this result on line 4.
6. Multiply the result from line 4 by the number of months for which payments were made this year. If your annuity started before 1987, enter this amount directly on line 8.
7. If applicable, enter any tax-free recovery amounts from previous years on line 6. Subtract this from your cost in plan (line 2) and write it down on line 7.
8. Finally, enter the smaller value between lines 5 and 7 on line 8. This is crucial for determining your taxable amounts.

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