Simplified method worksheet 2026

1. Click ‘Get Form’ to open the simplified method worksheet in the editor.
2. Begin by entering the total pension or annuity payments from your Form 1099-R, box 1. This amount should also be entered on line 16a of Form 1040.
3. Next, subtract any tax-free amounts recovered in previous years from your total payments. Enter this taxable amount on line 16b of Form 1040.
4. For line 2, input your cost in the plan at the annuity starting date. If you completed this worksheet last year, skip to line 4 and enter the amount from last year's worksheet.
5. Refer to Table 1 or Table 2 based on your annuity starting date and enter the appropriate number on line 3.
6. Divide the amount from line 2 by the number you entered on line 3 and multiply that result by the number of months for which payments were made this year.
7. Finally, add lines as instructed to determine your tax-free recovery amount for future reference.

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