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March 03, 2021 at 09:55 AM
What You Need to Know
- Publication 575 shows how officials think pension and annuity taxes work.
- This year, there’s plenty about coronavirus quarantines.
- The guide discusses hypothetical taxpayers John and Maria and their COVID-related distributions.
The Internal Revenue Service has released a draft version of an important financial services tool: an update of Publication 575: Pension and Annuity Income.
The new update is supposed to help taxpayers prepare their personal federal income tax returns for 2020.
The publication serves as a kind of retirement arrangement tax encyclopedia. It provides sections on disability pensions, insurance premiums for retired public safety officers and railroad retirement benefits, as well as sections on variable annuities, Section 457 deferred compensation plans and retirement plan distribution rollovers.
Publication 575 complements other IRS publications and instruction sets, such as the instructions on the back of some copies of the Form 1099-R, “Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.,” and the publication “Instructions for Forms 1040 or Form 1040-SR.”
The IRS offers an online collection of Publication 575 guides going back to 1994.
Like the 2019 version of the publication, the 2020 draft version includes an extensive section on the tax rules for disaster relief provisions.
Unlike the 2019 version, the 2020 draft version has a page of information about tax rules related to the COVID-19 pandemic. The IRS refers to the disease by the name of the virus that causes the disease, SARS-CoV-2.
