2016 irs form 4972-2025

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Form 4972 is used to calculate the tax on lump-sum distributions from qualified retirement plans for participants born before January 2, 1936. It allows taxpayers to apply special tax options, such as the 20% capital gain election and the 10-year tax option, which may result in a lower tax liability compared to reporting the distribution as ordinary income. The form includes instructions for determining eligibility, reporting requirements, and specific calculations related to capital gains and taxable amounts.

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Click 'Get Form' to open IRS Form 4972 (2016) in the editor.
Begin by entering your name and identifying number at the top of the form. This identifies you as the recipient of the distribution.
In Part I, answer the eligibility questions regarding your distribution. If you can use this form, proceed to Part II.
For Part II, enter the capital gain amount from Form 1099-R, box 3 on line 6. If applicable, calculate and include any net unrealized appreciation (NUA).
Complete Part III if you choose to use the 10-year tax option. Follow instructions for calculating taxable amounts based on your specific situation.
Once all sections are filled out, review your entries for accuracy. You can then print, download, or share your completed form directly from our platform.

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We have answers to the most popular questions from our customers. If you can't find an answer to your question, please contact us.

Who is eligible for income averaging?

Who can use Income Averaging? You must be engaged in farming, ranching, or commercial fishing. The IRS states that income from your trade or business of farming or fishing. There are some additional limitations so please refer to the below link.

What qualifies as eligible pension income?

If youre 65 years of age or older, pension income thats eligible for this tax credit include: Income from a deferred pension savings plan (DPSP) (T4A slip box 24) Regular annuities and income averaging annuity contracts (IAAC) (T4A slip box 24)

What is the deadline for filing form 4972?

The important dates for Form 4972 in 2024 and 2025 include the tax filing deadlines, typically April 15th of each year. Additional deadlines may apply for amended returns and specific submission requirements.

Who needs to file form 4972?

IRS Form 4972 Eligibility You were older than 59-1/2 before you received a lump sum from a qualified employee retirement plan. The form can be used to take advantage of special grandfathered taxation options for individuals born on or before January 1, 1936.

What income qualifies for form 4972?

Form 4972, Tax on Lump-Sum Distributions, is used to calculate and report taxes on a lump-sum distribution from a qualified retirement plan. This could include distributions from a pension, 401(k), or IRA.

irs 4972

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Who qualifies for lump-sum distribution?

A lump-sum distribution is an option for individuals who want to take out all of their funds at once, but this could lead to taxes on both pre-tax contributions and earnings in the account. Individuals born before January 2, 1936, may be able to use Form 4972 to reduce taxes based on various options.

How do I file IRS form 4972?

If you can use Form 4972, attach it to Form 1040 or 1040-SR (individuals), Form 1040-NR (nonresident aliens), or Form 1041 (estates or trusts). The payer should have given you a Form 1099-R or other statement that shows the amounts needed to complete Form 4972.

How to avoid US tax on pension lump-sum?

You may be able to defer tax on all or part of a lump-sum distribution by requesting the payer to directly roll over the taxable portion into an individual retirement arrangement (IRA) or to an eligible retirement plan.