1040A (2008)

IRS Resources

1040A - Introductory Material

Table of Contents

A Message From the Commissioner

Dear Taxpayer,

U.S. Supreme Court Justice Oliver Wendell Holmes, Jr. notably said “Taxes are what we pay for civilized society.” We should be proud that the vast majority of American citizens pay their taxes honestly and of their own free will. In an ever more complex and global world, we cannot take for granted this cornerstone principle of our democracy.

For the IRS's part, we owe it to all taxpayers to make the process of paying taxes as easy as possible. IRS employees are dedicated to helping taxpayers to quickly get their questions answered, complete their forms, pay their taxes, and get back to their lives. From the telephone representative who answers tax law questions, to the walk-in site employees who help low-income taxpayers, to the technicians that design and build our website – www.irs.gov – we are committed to providing top quality service.

Unfortunately, there will always be some that cheat their fellow citizens by avoiding the payment of their fair share of taxes. The IRS owes it to the millions of you who promptly pay your taxes in full to pursue these people through strong enforcement programs. I believe this is a basic matter of fairness.

If you need more information about taxes, I hope you'll visit us online at www.irs.gov, or call us toll free at 1-800-829-1040. Your government works for you, so please do not hesitate to contact us if you need help.

Sincerely,

Douglas H. Shulman

The IRS Mission

Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.

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"IRS Customer Service Standards"

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Electronic Filing (e-file)

What's New

What's New for 2008

Economic stimulus payment. Any economic stimulus payment you received is not taxable for federal income tax purposes but reduces your recovery rebate credit.

Recovery rebate credit. This credit is figured like last year's economic stimulus payment, except that the amounts are based on tax year 2008 instead of tax year 2007. The maximum credit is $600 ($1,200 if married filing jointly) plus $300 for each qualifying child. See the instructions for line 42 on page 53.

Withdrawal of economic stimulus payment. If your economic stimulus payment was directly deposited to a tax-favored account, and you withdraw the payment by the due date of your return (including extensions), the amount withdrawn will not be taxed and no additional tax or penalty will apply. For a Coverdell education savings account, the withdrawal can be made by the later of the above date or June 1, 2009. See the instructions for lines 11a and 11b that begin on page 24.

Alternative minimum tax (AMT) exemption amount increased. The AMT exemption amount is increased to $46,200 ($69,950 if married filing jointly or a qualifying widow(er); $34,975 if married filing separately).

IRA deduction expanded. You and your spouse, if filing jointly, each may be able to deduct up to $5,000 ($6,000 if age 50 or older at the end of the year). You may be able to take an IRA deduction if you were covered by a retirement plan and your 2008 modified adjusted gross income (AGI) is less than $63,000 ($105,000 if married filing jointly or qualifying widow(er)). If your spouse was covered by a retirement plan, but you were not, you may be able to take an IRA deduction if your 2008 modified AGI is less than $169,000. See the instructions for line 17 that begin on page 29 for details and exceptions.

Standard deduction increased by real estate taxes. Your standard deduction is increased by certain state or local real estate taxes you paid. See the instructions for line 23c on page 32.

Rollovers to Roth IRAs. You can rollover distributions from an eligible retirement plan to a Roth IRA. The rollover is not tax-free. See the instructions for lines 11a and 11b that begin on page 24 for details.

Earned income credit (EIC). You may be able to take the EIC if:

A child lived with you and you earned less than $38,646 ($41,646 if married filing jointly), or
A child did not live with you and you earned less than $12,880 ($15,880 if married filing jointly).

The maximum AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you. The maximum investment income you can have and still get the credit has increased to $2,950. See the instructions for lines 40a and 40b that begin on page 40.

Mailing your return. You may be mailing your return to a different address this year because the IRS has changed the filing location for several areas. If you received an envelope with your tax package, please use it. Otherwise, see Where Do You File? on the back cover.

Personal exemption phaseout reduced. Taxpayers with adjusted gross income above a certain amount may lose part of their deduction for personal exemptions. The amount by which this deduction is reduced in 2008 is only ½ of the amount of the reduction that otherwise would have applied in 2007.

Tax rate on qualified dividends and capital gain distributions reduced. The 5% tax rate on qualified dividends and capital gain distributions is reduced to zero.

Tax on child's investment income. Form 8615 is required to figure the tax for a child with investment income of more than $1,800 if the child:

Was under age 18 at the end of 2008,
Was age 18 at the end of 2008 and did not have earned income that was more than half of the child's support, or
Was a full-time student over age 18 and under age 24 at the end of 2008 and did not have earned income that was more than half of the child's support.

The election to report a child's investment income on a parent's return and the special rule for when a child must file Form 6251 also now apply to the children listed above.

Tax relief for Kansas disaster area. Temporary tax relief was enacted as a result of May 4, 2007, storms and tornadoes affecting the Kansas disaster area. The tax benefits provided by this relief include special rules for withdrawals and loans from IRAs and other qualified retirement plans. For more details on these and other tax benefits related to the Kansas disaster area, see Pub. 4492-A.

Tax relief for Midwestern disaster areas. Temporary tax relief was enacted as a result of severe storms, tornadoes, or flooding affecting Midwestern disaster areas after May 19, 2008, and before August 1, 2008. The tax benefits provided by this relief include the following.

An additional exemption amount if you provided housing for a person displaced by the Midwestern storms, tornadoes, or flooding.
An election to use your 2007 earned income to figure your 2008 EIC and additional child tax credit.
Special rules for time and support tests for people who were temporarily relocated because of the Midwestern storms, tornadoes, or flooding.
Special rules for withdrawals and loans from IRAs and other qualified retirement plans.

For more details on these and other tax benefits related to the Midwestern disaster areas, see Pub. 4492-B.

What's New for 2009

Earned income credit (EIC). You may be able to take the EIC if:

A child lived with you and you earned less than $40,295 ($43,415 if married filing jointly), or
A child did not live with you and you earned less than $13,440 ($16,560 if married filing jointly).

IRA deduction expanded. You may be able to take an IRA deduction if you were covered by a retirement plan and your 2009 modified AGI is less than $65,000 ($109,000 if married filing jointly or qualifying widow(er)). If your spouse was covered by a retirement plan, but you were not, you may be able to take an IRA deduction if your 2009 modified AGI is less than $176,000.

Divorced or separated parents. A noncustodial parent claiming an exemption for a child can no longer attach certain pages from a divorce decree or separation agreement instead of Form 8332 if the decree or agreement was executed after 2008. The noncustodial parent will have to attach Form 8332 or a similar statement signed by the custodial parent and whose only purpose is to release a claim to an exemption.

Qualifying child definition revised. The following changes to the definition of a qualifying child apply to years after 2008.

Your qualifying child must be younger than you.
A child cannot be your qualifying child if he or she files a joint return, unless the return was filed only as a claim for refund.
If the parents of a child can claim the child as a qualifying child but no parent so claims the child, no one else can claim the child as a qualifying child unless that person's AGI is higher than the highest AGI of any parent of the child.
Your child is a qualifying child for purposes of the child tax credit only if you can and do claim an exemption for him or her.

Alternative minimum tax (AMT) exemption amount decreased. The AMT exemption amount is decreased to $33,750 ($45,000 if married filing jointly or a qualifying widow(er); $22,500 if married filing separately).

Allowance of certain personal credits against the AMT. The allowance of the following personal credits against the AMT has expired.

Credit for child and dependent care expenses.
Credit for the elderly or the disabled.
Education credits.

Filing Requirements

Introduction

These rules apply to all U.S. citizens, regardless of where they live, and resident aliens.

Have you tried IRS e-file? It's the fastest way to get your refund and it's free if you are eligible. Visit www.irs.gov for details.

Do You Have To File?

Use Chart A, B, or C to see if you must file a return.

Even if you do not otherwise have to file a return, you should file one to get a refund of any federal income tax withheld. You should also file if you are eligible for the earned income credit, additional child tax credit, health coverage tax credit, refundable credit for prior year minimum tax, first-time homebuyer credit, or recovery rebate credit.

Exception for certain children under age 19 or full-time students. If certain conditions apply, you can elect to include on your return the income of a child who was under age 19 at the end of 2008 or was a full-time student under age 24 at the end of 2008. To do so, use Form 1040 and Form 8814. If you make this election, your child does not have to file a return. For details, use TeleTax topic 553 (see page 74) or see Form 8814.

A child born on January 1, 1985, is considered to be age 24 at the end of 2008. Do not use Form 8814 for such a child.

Resident aliens. These rules also apply if you were a resident alien. Also, you may qualify for certain tax treaty benefits. See Pub. 519 for details.

Nonresident aliens and dual-status aliens. These rules also apply if you were a nonresident alien or dual-status alien and both of the following apply.

You were married to a U.S. citizen or resident alien at the end of 2008.
You elected to be taxed as a resident alien.

See Pub. 519 for details.

When Should You File?

File Form 1040A by April 15, 2009. If you file after this date, you may have to pay interest and penalties. See page 73.

If you were serving in, or in support of, the U.S. Armed Forces in a designated combat zone, qualified hazardous duty area, or a contingency operation, you can file later. See Pub. 3 for details.

What If You Cannot File on Time?

You can get an automatic 6-month extension if, no later than the date your return is due, you file Form 4868. For details, see Form 4868.

If you make a payment with your extension request, see the instructions for line 43 on page 53.

An automatic 6-month extension to file does not extend the time to pay your tax. See Form 4868.

If you are a U.S. citizen or resident alien, you may qualify for an automatic extension of time to file without filing Form 4868. You qualify if, on the due date of your return, you meet one of the following conditions.

You live outside the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico.
You are in military or naval service on duty outside the United States and Puerto Rico.

This extension gives you an extra 2 months to file and pay the tax, but interest will be charged from the original due date of the return on any unpaid tax. You must attach a statement to your return showing that you meet the requirements. If you are still unable to file your return by the end of the 2-month period, you can get an additional 4 months if, no later than June 15, 2009, you file Form 4868. This 4-month extension of time to file does not extend the time to pay your tax. See Form 4868.

Where Do You File?

See the back cover for filing instructions and addresses.

Private delivery services. You can use certain private delivery services designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns and payments. These private delivery services include only the following:

DHL Express (DHL): DHL Same Day Service, DHL Next Day 10:30 am, DHL Next Day 12:00 pm, DHL Next Day 3:00 pm, and DHL 2nd Day Service.
Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First.
United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

The private delivery service can tell you how to get written proof of the mailing date.

Private delivery services cannot deliver items to P.O. boxes. You must use the U.S. Postal Service to mail any item to an IRS P.O. box address.

Chart A—For Most People

IF your filing status is . . .	AND at the end of 2008 you were* . . .
Single	under 65 65 or older	$8,950 10,300
Married filing jointly***	under 65 (both spouses) 65 or older (one spouse) 65 or older (both spouses)	$17,900 18,950 20,000
Married filing separately (see page 18)	any age	$3,500
Head of household (see page 18)	under 65 65 or older	$11,500 12,850
Qualifying widow(er) with dependent child (see page 19)	under 65 65 or older	$14,400 15,450
* If you were born on January 1, 1944, you are considered to be age 65 at the end of 2008. Gross incomemeans all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you can exclude part or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2008 or (b) one-half of your social security benefits plus your other gross income is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for lines 14a and 14b that begin on page 27 to figure the taxable part of social security benefits you must include in gross income. * If you did not live with your spouse at the end of 2008 (or on the date your spouse died) and your gross income was at least $3,500, you must file a return regardless of your age.

Chart B—For Children and Other Dependents

See the instructions for line 6c that begin on page 20 to find out if someone can claim you as a dependent.

If your parent (or someone else) can claim you as a dependent, use this chart to see if you must file a return.
In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust. Earned income includes wages, tips, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income.
Single dependents. Were you either age 65 or older or blind?
	No. You must file a return if any of the following apply.
	Your unearned income was over $900. Your earned income was over $5,450. Your gross income was more than the larger of—
		$900, or Your earned income (up to $5,150) plus $300.
	Yes. You must file a return if any of the following apply.
	Your unearned income was over $2,250 ($3,600 if 65 or older and blind). Your earned income was over $6,800 ($8,150 if 65 or older and blind). Your gross income was more than the larger of—
		$2,250 ($3,600 if 65 or older and blind), or Your earned income (up to $5,150) plus $1,650 ($3,000 if 65 or older and blind).
Married dependents. Were you either age 65 or older or blind?
	No. You must file a return if any of the following apply.
	Your unearned income was over $900. Your earned income was over $5,450. Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Your gross income was more than the larger of—
		$900, or Your earned income (up to $5,150) plus $300.
	Yes. You must file a return if any of the following apply.
	Your unearned income was over $1,950 ($3,000 if 65 or older and blind). Your earned income was over $6,500 ($7,550 if 65 or older and blind). Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Your gross income was more than the larger of—
		$1,950 ($3,000 if 65 or older and blind), or Your earned income (up to $5,150) plus $1,350 ($2,400 if 65 or older and blind).

Chart C—Other Situations When You Must File

You must file a return if either of the following applies for 2008.

You received any advance earned income credit (EIC) payments from your employer. These payments are shown in Form W-2, box 9.
You owe tax from the recapture of an education credit or the alternative minimum tax. See the instructions for line 28 that begin on
page 33.

You must file a return using Form 1040 if any of the following apply for 2008.

You owe any special taxes, such as social security and Medicare tax on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes.
You owe write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on your group-term life insurance, or additional tax on a health savings account.
You had net earnings from self-employment of at least $400.
You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.
You owe additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.
You owe household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H (Form 1040) by itself.

Would It Help You To Itemize Deductions on Form 1040?


	You may be able to reduce your tax by itemizing deductions on Schedule A (Form 1040). Itemized deductions include amounts you paid for state and local income or sales taxes, real estate taxes, personal property taxes, and mortgage interest. You may also include gifts to charity and part of the amount you paid for medical and dental expenses. You would usually benefit by itemizing if—
	Your filing status is:	AND	Your itemized deductions are more than:*
	Single
Under 65 65 or older or blind 65 or older and blind				$5,450 6,800 8,150
	Married filing jointly
Under 65 (both spouses) 65 or older or blind (one spouse) 65 or older or blind (both spouses) 65 or older and blind (one spouse) 65 or older or blind (one spouse) and 65 or older and blind (other spouse) 65 or older and blind (both spouses)				$10,900 11,950 13,000 13,000 14,050 15,100
	Married filing separately**
Your spouse itemizes deductions Under 65 65 or older or blind 65 or older and blind				$0 5,450 6,500 7,550
	Head of household
Under 65 65 or older or blind 65 or older and blind				$8,000 9,350 10,700
	Qualifying widow(er) with dependent child
Under 65 65 or older or blind 65 or older and blind				$10,900 11,950 13,000
* If you paid real estate taxes in 2008, increase the amount in this column by the lesser of: the amount of state or local real estate taxes you paid that would be deductible on Schedule A (Form 1040), line 6, if you were itemizing deductions, or $500 ($1,000 if married filing jointly). ** If you can take an exemption for your spouse, complete the Standard Deduction Worksheet on page 33 for the amount that applies to you.
If someone can claim you as a dependent, it would benefit you to itemize if your itemized deductions total more than your standard deduction figured on the Standard Deduction Worksheet on page 33.

Where To Report Certain Items From 2008 Forms W-2, 1098, and 1099

IRS e-file takes the guesswork out of preparing your return. You may also be eligible to use Free File to file your federal income tax return. Visit www.irs.gov/efile for details.

If any federal income tax withheld is shown on these forms, include the tax withheld on Form 1040A, line 38.

Form	Item and Box in Which It Should Appear	Where To Report
W-2	Wages, tips, other compensation (box 1)	Form 1040A, line 7
	Allocated tips (box 8)	See Tip income on page 23
	Advance EIC payment (box 9)	Form 1040A, line 36
	Dependent care benefits (box 10)	Schedule 2, Part III
	Adoption benefits (box 12, code T)	Must file Form 1040
	Employer contributions to a health savings account (box 12, code W)	Must file Form 1040 if required to file Form 8889 (see the instructions for Form 8889)
	Amount reported in box 12, code R or Z	Must file Form 1040
W-2G	Gambling winnings (box 1)	Must file Form 1040
1098	Mortgage interest (box 1) Points (box 2)	Must file Form 1040 to deduct
	Refund of overpaid interest (box 3)	See the instructions on Form 1098
	Mortgage insurance premiums (box 4)	Must file Form 1040 to deduct
1098-C	Contributions of motor vehicles, boats, and airplanes	Must file Form 1040 to deduct
1098-E	Student loan interest (box 1)	See the instructions for Form 1040A, line 18, that begin on page 31
1098-T	Qualified tuition and related expenses (box 1)	See the instructions for Form 1040A, line 19 on page 32, or line 31, on page 37, but first see the instructions on Form 1098-T
1099-A	Acquisition or abandonment of secured property	See Pub. 4681
1099-B	Broker and barter exchange transactions	Must file Form 1040
1099-C	Canceled debt (box 2)	Must file Form 1040 if taxable (see Pub. 4681)
1099-DIV	Total ordinary dividends (box 1a)	Form 1040A, line 9a
	Qualified dividends (box 1b)	See the instructions for Form 1040A, line 9b, on page 24
	Total capital gain distributions (box 2a)	See the instructions for Form 1040A, line 10, on page 24
	Amount reported in box 2b, 2c, or 2d	Must file Form 1040
	Nondividend distributions (box 3)	Must file Form 1040 if required to report as capital gains (see the instructions on Form 1099-DIV)
	Investment expenses (box 5)	Must file Form 1040 to deduct
	Foreign tax paid (box 6)	Must file Form 1040 to deduct or take a credit for the tax
1099-G	Unemployment compensation (box 1)	Form 1040A, line 13. But if you repaid any unemployment compensation in 2008, see the instructions for line 13 on page 27
	State or local income tax refund (box 2)	See the instructions on page 23
	Amount reported in box 5, 6, or 7	Must file Form 1040
1099-INT	Interest income (box 1)	See the instructions for Form 1040A, line 8a, on page 23
	Early withdrawal penalty (box 2)	Must file Form 1040 to deduct
	Interest on U.S. savings bonds and Treasury obligations (box 3)	See the instructions for Form 1040A, line 8a, on page 23
	Investment expenses (box 5)	Must file Form 1040 to deduct
	Foreign tax paid (box 6)	Must file Form 1040 to deduct or take a credit for the tax
	Tax-exempt interest (box 8)	Form 1040A, line 8b
	Specified private activity bond interest (box 9)	Must file Form 1040
1099-LTC	Long-term care and accelerated death benefits	Must file Form 1040 if required to file Form 8853 (see the instructions for Form 8853)
1099-MISC	Miscellaneous income	Must file Form 1040
1099-OID	Original issue discount (box 1) Other periodic interest (box 2)	See the instructions on Form 1099-OID
	Early withdrawal penalty (box 3)	Must file Form 1040 to deduct
	Original issue discount on U.S. Treasury obligations (box 6)	See the instructions on Form 1099-OID
	Investment expenses (box 7)	Must file Form 1040 to deduct
1099-PATR	Patronage dividends and other distributions from a cooperative (boxes 1, 2, 3, and 5)	Must file Form 1040 if taxable (see the instructions on Form 1099-PATR)
	Domestic production activities deduction (box 6)	Must file Form 1040 to deduct
	Amount reported in box 7, 8, 9, or 10	Must file Form 1040
1099-Q	Qualified education program payments	Must file Form 1040
1099-R	Distributions from IRAs*	See the instructions for Form 1040A, lines 11a and 11b, that begin on page 24
	Distributions from pensions, annuities, etc.	See the instructions for Form 1040A, lines 12a and 12b, that begin on page 25
	Capital gain (box 3)	See the instructions on Form 1099-R
1099-S	Gross proceeds from real estate transactions (box 2)	Must file Form 1040 if required to report the sale (see Pub. 523)
	Buyer's part of real estate tax (box 5)	See the instructions for Form 1040A, line 23c, on page 32. But if you are itemizing deductions, you must file Form 1040
1099-SA	Distributions from HSAs and MSAs**	Must file Form 1040
*This includes distributions from Roth, SEP, and SIMPLE IRAs.
**This includes distributions from Archer and Medicare Advantage MSAs.

Who Can Use Form 1040A?

Introduction

You can use Form 1040A if all six of the following apply.

You only had income from the following sources:
1. Wages, salaries, tips.
2. Interest and ordinary dividends.
3. Capital gain distributions.
4. Taxable scholarship and fellowship grants.
5. Pensions, annuities, and IRAs.
6. Unemployment compensation.
7. Taxable social security and railroad retirement benefits.
8. Alaska Permanent Fund dividends.
The only adjustments to income you can claim are:
1. Educator expenses.
2. IRA deduction.
3. Student loan interest deduction.
4. Tuition and fees deduction.
You do not itemize deductions.
Your taxable income (line 27) is less than $100,000.
The only tax credits you can claim are:
1. Child tax credit.
2. Additional child tax credit.
3. Education credits.
4. Earned income credit.
5. Credit for child and dependent care expenses.
6. Credit for the elderly or the disabled.
7. Retirement savings contributions credit.
8. Recovery rebate credit.
You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option (see Pub. 525).

You can also use Form 1040A if you received advance earned income credit (EIC) payments, dependent care benefits, or if you owe tax from the recapture of an education credit or the alternative minimum tax.

When Must You Use Form 1040?

Introduction

Check Where To Report Certain Items From 2008 Forms W-2, 1098, and 1099 beginning on page 12 to see if you must use Form 1040. You must also use Form 1040 if any of the following apply.

You received any of the following types of income:
1. Income from self-employment (business or farm income).
2. Certain tips you did not report to your employer. See the instructions for Form 1040A, line 7, on page 23.
3. Income received as a partner in a partnership, shareholder in an S corporation, or a beneficiary of an estate or trust.
4. Dividends on insurance policies if they exceed the total of all net premiums you paid for the contract.
You received or paid interest on securities transferred between interest payment dates.
You can exclude any of the following types of income:
1. Foreign earned income you received as a U.S. citizen or resident alien.
2. Certain income received from sources in Puerto Rico if you were a bona fide resident of Puerto Rico.
3. Certain income received from sources in American Samoa if you were a bona fide resident of American Samoa for all of 2008.
You have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option (see Pub. 525).
You had a financial account in a foreign country, such as a bank account or securities account. Exception. If the combined value of the accounts was $10,000 or less during all of 2008 or if the accounts were with a U.S. military banking facility operated by a U.S. financial institution, you may file Form 1040A.
You received a distribution from a foreign trust.
You owe the excise tax on insider stock compensation from an expatriated corporation.
You are reporting original issue discount (OID) in an amount more or less than the amount shown on Form 1099-OID.
You owe household employment taxes. See Schedule H (Form 1040) and its instructions to find out if you owe these taxes.
You are eligible for the health coverage tax credit. See Form 8885 for details.
You are claiming the adoption credit or received employer-provided adoption benefits. See Form 8839 for details.
You are an employee and your employer did not withhold social security and Medicare tax. See Form 8919 for details.
You had a qualified health savings account funding distribution from your IRA.
You are a debtor in a bankruptcy case filed after October 16, 2005.
You have a net disaster loss attributable to a federally declared disaster. See Form 4684 for details. You must file Form 1040 even if you are claiming the standard deduction.
You are eligible for the first-time homebuyer credit. See Form 5405 for details.

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Page 1 of illustrated Form 1040A

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Page 2 of illustrated Form 1040A

Line Instructions for Form 1040A

Introduction

IRS e-file takes the guesswork out of preparing your return. You may also be eligible to use Free File to file your federal income tax return. Visit www.irs.gov/efile for details.

Name and Address

Use the Peel-Off Label

Using your peel-off name and address label on the back cover of this booklet will speed the processing of your return. It also prevents common errors that can delay refunds or result in unnecessary notices. Put the label on your return after you have finished it. Cross out any incorrect information and print the correct information. Add any missing items, such as your apartment number.

Address change. If the address on your peel-off label is not your current address, cross out the old address and print your new address. If you plan to move after filing your return, use Form 8822 to notify the IRS of your new address.

Name change. If you changed your name because of marriage, divorce, etc., be sure to report the change to your local Social Security Administration office before you file your return. This prevents delays in processing your return and issuing refunds. It also safeguards your future social security benefits. See page 68 for more details. If you received a peel-off label, cross out your former name and print your new name.

What if you do not have a label? Print or type the information in the spaces provided. If you are married filing a separate return, enter your husband's or wife's name on line 3 instead of below your name.

If you filed a joint return for 2007 and you are filing a joint return for 2008 with the same spouse, be sure to enter your names and SSNs in the same order as on your 2007 return.

P.O. box. Enter your box number only if your post office does not deliver mail to your home.

Foreign address. Enter the information in the following order: City, province or state, and country. Follow the country's practice for entering the postal code. Do not abbreviate the country name.

What if a taxpayer died? See Death of a taxpayer on page 72.

Social Security Number (SSN)

An incorrect or missing SSN can increase your tax or reduce your refund. To apply for an SSN, fill in Form SS-5 and return it, along with the appropriate evidence documents, to the Social Security Administration (SSA). You can get Form SS-5 online at www.socialsecurity.gov, from your local SSA office, or by calling the SSA at 1-800-772-1213. It usually takes about 2 weeks to get an SSN once the SSA has all the evidence and information it needs.

Check that your SSN on your Forms W-2 and 1099 agrees with your social security card. If not, see page 71 for more details.

IRS individual taxpayer identification numbers (ITINs) for aliens. If you are a nonresident or resident alien and you do not have and are not eligible to get an SSN, you must apply for an ITIN. For details on how to do so, see Form W-7 and its instructions. It usually takes about 4–6 weeks to get an ITIN.

If you already have an ITIN, enter it wherever your SSN is requested on your tax return.

An ITIN is for tax use only. It does not entitle you to social security benefits or change your employment or immigration status under U.S. law.

Nonresident alien spouse. If your spouse is a nonresident alien, he or she must have either an SSN or an ITIN if:

You file a joint return,
You file a separate return and claim an exemption for your spouse, or
Your spouse is filing a separate return.

Presidential Election Campaign Fund

This fund helps pay for Presidential election campaigns. The fund reduces candidates' dependence on large contributions from individuals and groups and places candidates on an equal financial footing in the general election. If you want $3 to go to this fund, check the box. If you are filing a joint return, your spouse can also have $3 go to the fund. If you check a box, your tax or refund will not change.

Filing Status

Check only the filing status that applies to you. The ones that will usually give you the lowest tax are listed last.

Married filing separately.
Single.
Head of household.
Married filing jointly or qualifying widow(er) with dependent child.

More than one filing status can apply to you. Choose the one that will give you the lowest tax.

Line 1

Single

You can check the box on line 1 if any of the following was true on December 31, 2008.

You were never married.
You were legally separated, according to your state law, under a decree of divorce or separate maintenance.
You were widowed before January 1, 2008, and did not remarry before the end of 2008. But, if you have a dependent child, you may be able to use the qualifying widow(er) filing status. See the instructions for line 5 on page 19.

Line 2

Married Filing Jointly

You can check the box on line 2 if any of the following apply.

You were married at the end of 2008, even if you did not live with your spouse at the end of 2008.
Your spouse died in 2008 and you did not remarry in 2008.
You were married at the end of 2008, and your spouse died in 2009 before filing a 2008 return.

For federal tax purposes, a marriage means only a legal union between a man and a woman as husband and wife. A husband and wife filing jointly report their combined income and deduct their combined allowable expenses on one return. They can file a joint return even if only one had income or if they did not live together all year. However, both persons must sign the return. Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return.

Joint and several tax liability. If you file a joint return, both you and your spouse are generally responsible for the tax and any interest or penalties due on the return. This means that if one spouse does not pay the tax due, the other may have to. However, see Innocent spouse relief on page 71.

Nonresident aliens and dual-status aliens. Generally, a husband and wife cannot file a joint return if either spouse is a nonresident alien at any time during the year. However, if you were a nonresident alien or a dual-status alien and were married to a U.S. citizen or resident alien at the end of 2008, you may elect to be treated as a resident alien and file a joint return. See Pub. 519 for details.

Line 3

Married Filing Separately

If you are married and file a separate return, you will usually pay more tax than if you use another filing status for which you qualify. Also, if you file a separate return, you cannot take the student loan interest deduction, the tuition and fees deduction, the education credits, or the earned income credit. You also cannot take the standard deduction if your spouse itemizes deductions.

Generally, you report only your own income, exemptions, deductions, and credits. Different rules apply to people in community property states. See page 23.

Be sure to enter you spouse's SSN or ITIN on Form 1040A unless your spouse does not have and is not required to have an SSN or ITIN.

You may be able to file as head of household if you had a child living with you and you lived apart from your spouse during the last 6 months of 2008. See on this page.

Line 4

Head of Household

Special rules may apply for people who had to relocate because of Midwestern storms, tornadoes, or flooding. For details, see Pub. 4492-B.

This filing status is for unmarried individuals who provide a home for certain other persons. (Some married persons who live apart are considered unmarried. See Married persons who live apart on this page. If you are married to a nonresident alien, you may also be considered unmarried. See Nonresident alien spouse on page 19.) You can check the box on line 4 only if you were unmarried or legally separated (according to your state law) under a decree of divorce or separate maintenance at the end of 2008 and either Test 1 or Test 2 next applies.

Test 1. You paid over half the cost of keeping up a home that was the main home for all of 2008 of your parent whom you can claim as a dependent, except under a multiple support agreement (see page 22). Your parent did not have to live with you.

Test 2. You paid over half the cost of keeping up a home in which you lived and in which one of the following also lived for more than half of the year (if half or less, see Exception to time lived with you on this page).

Any person whom you can claim as a dependent. But do not include:
1. Your qualifying child (as defined in Step 1 on page 20) whom you claim as your dependent based on the rule for Children of divorced or separated parents that begins on page 21,
2. Any person who is your dependent only because he or she lived with you for all of 2008, or
3. Any person you claimed as a dependent under a multiple support agreement. See page 22.
Your unmarried qualifying child who is not your dependent.
Your married qualifying child who is not your dependent only because you can be claimed as a dependent on someone else's 2008 return.
Your child who is neither your dependent nor your qualifying child because of the rule for Children of divorced or separated parents that begins on page 21.

If the child is not your dependent, enter the child's name on line 4. If you do not enter the name, it will take us longer to process your return.

Dependent. To find out if someone is your dependent, see the instructions for line 6c that begin on page 20.

Exception to time lived with you. Temporary absences by you or the other person for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time lived in the home. Also see Kidnapped child on page 22, if applicable.

If the person for whom you kept up a home was born or died in 2008, you can still file as head of household as long as the home was that person's main home for the part of the year he or she was alive.

Keeping up a home. To find out what is included in the cost of keeping up a home, see Pub. 501.

If you used payments you received under Temporary Assistance for Needy Families (TANF) or other public assistance programs to pay part of the cost of keeping up your home, you cannot count them as money you paid. However, you must include them in the total cost of keeping up your home to figure if you paid over half the cost.

Married persons who live apart. Even if you were not divorced or legally separated at the end of 2008, you are considered unmarried if all of the following apply.

You lived apart from your spouse for the last 6 months of 2008. Temporary absences for special circumstances, such as for business, medical care, school, or military service, count as time lived in the home.
You file a separate return from your spouse.
You paid over half the cost of keeping up your home for 2008.
Your home was the main home of your child, stepchild, or foster child for more than half of 2008 (if half or less, see Exception to time lived with you above).
You can claim this child as your dependent or could claim the child except that the child's other parent can claim him or her under the rule for Children of divorced or separated parents that begins on page 21.

Adopted child.

An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

Foster child.

A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

Nonresident alien spouse. You are considered unmarried for head of household filing status if your spouse was a nonresident alien at any time during the year and you do not choose to treat him or her as a resident alien. To claim head of household filing status, you must also meet Test 1 or Test 2 on page 18.

Line 5

Qualifying Widow(er) With Dependent Child

Special rules may apply for people who had to relocate because of Midwestern storms, tornadoes, or flooding. For details, see Pub. 4492-B.

You can check the box on line 5 and use joint return tax rates for 2008 if all of the following apply.

Your spouse died in 2006 or 2007 and you did not remarry before the end of 2008.
You have a child or stepchild whom you claim as a dependent. This does not include a foster child.
This child lived in your home for all of 2008. If the child did not live with you for the required time, see Exception to time lived with you below.
You paid over half the cost of keeping up your home.
You could have filed a joint return with your spouse the year he or she died, even if you did not actually do so.

If your spouse died in 2008, you cannot file as qualifying widow(er) with dependent child. Instead, see the instructions for line 2 that begin on page 17.

Adopted child. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

Dependent. To find out if someone is your dependent, see the instructions for line 6c that begin on page 20.

Exception to time lived with you. Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time lived in the home. Also see Kidnapped child on page 22, if applicable.

A child is considered to have lived with you for all of 2008 if the child was born or died in 2008 and your home was the child's home for the entire time he or she was alive.

Keeping up a home. To find out what is included in the cost of keeping up a home, see Pub. 501.

Exemptions

You usually can deduct $3,500 on line 26 for each exemption you can take. You may also be able to take an additional exemption amount on line 26 if you provided housing to a person displaced by the Midwestern storms, tornadoes, or flooding.

Line 6b

Spouse

Check the box on line 6b if either of the following applies.

Your filing status is married filing jointly and your spouse cannot be claimed as a dependent on another person's return.
You were married at the end of 2008, your filing status is married filing separately or head of household, and both of the following apply.
1. Your spouse had no income and is not filing a return.
2. Your spouse cannot be claimed as a dependent on another person's return.

If your filing status is head of household and you check the box on line 6b, enter the name of your spouse on the line next to line 6b. Also, enter your spouse's social security number in the space provided at the top of your return. If you were divorced or legally separated at the end of 2008, you cannot take an exemption for your former spouse. If, at the end of 2008, your divorce was not final (an interlocutory decree), you are considered married for the whole year.

Death of your spouse. If your spouse died in 2008 and you did not remarry by the end of 2008, check the box on line 6b if you could have taken an exemption for your spouse on the date of death. For other filing instructions, see Death of a taxpayer on page 72.

Line 6c—Dependents

Dependents and Qualifying Child for Child Tax Credit

Follow the steps below to find out if a person qualifies as your dependent, qualifies you to take the child tax credit, or both. If you have more than six dependents, attach a statement to your return with the information required in columns (1) through (4).

Special rules may apply for people who had to relocate because of Midwestern storms, tornadoes, or flooding. For details, see Pub. 4492-B.

Step 1. Do You Have a Qualifying Child?

A qualifying child is a child who is your...
Son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew)

was ...
Under age 19 at the end of 2008
or
Under age 24 at the end of 2008 and a student (see page 22)
or
Any age and permanently and totally disabled (see page 22)

who...
Did not provide over half of his or her own support for 2008 (see Pub. 501)

who...
Lived with you for more than half of 2008. If the child did not live with you for the required time, see Exception to time lived with you on page 22.
		If the child meets the conditions to be a qualifying child of any other person (other than your spouse if filing jointly) for 2008, see on page 22.

1. Do you have a child who meets the conditions to be your qualifying child?

Yes.

Go to Step 2.

No.

Go to Step 4 on
page 21.

Step 1. Is Your Qualifying Child YourDependent?

1. Was the child a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico? If the child was adopted, see Exception to citizen test on page 22.

Yes.

No.

You cannot claim this child as a dependent. Go to Form 1040A, line 7.

1. Was the child married?

Yes.

See Married person on page 22.

No.

1. Could you, or your spouse if filing jointly, be claimed as a dependent on someone else's 2008 tax return? See Steps 1, 2, and 4.

Yes.

You cannot claim any dependents. Go to Step 3.

No.

You can claim this child as a dependent. Complete Form 1040A, line 6c, columns (1) through (3) for this child. Then, go to
Step 3.

Step 1. Does Your Qualifying ChildQualify You for the Child Tax Credit?

1. Was the child under age 17 at the end of 2008?

Yes.

No.

This child is not a qualifying child for the child tax credit. Go to Form 1040A, line 7.

1. Was the child a U.S. citizen, U.S. national, or U.S. resident alien? If the child was adopted, see Exception to citizen test on page 22.

Yes.

This child is a qualifying child for the child tax credit. If this child is your dependent, check the box on Form 1040A, line 6c, column (4), even if you cannot take the child tax credit. Otherwise, you must complete and attach Form 8901.

No.

This child is not a qualifying child for the child tax credit. Go to Form 1040A, line 7.

Step 1. Is Your Qualifying Relative Your Dependent?

A qualifying relative is a person who is your...
Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild)
or
Brother, sister, or a son or daughter of either of them (for example, your niece or nephew)
or
Father, mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle)
or
Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law
or
Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law. If the person did not live with you for the required time, see Exception to time lived with you on page 22

who was not...
A qualifying child (see Step 1) of any taxpayer for 2008. For this purpose, a person is not a taxpayer if he or she is not required to file a U.S. income tax return and either does not file such return or files only to get a refund of withheld income tax.

who...
Had gross income of less than $3,500 in 2008. If the person was permanently and totally disabled, see Exception to gross income test on page 22

For whom you provided...
Over half of his or her support in 2008. But see the special rule for Children of divorced or separated parents that begins on this page, Multiple support agreements on page 22, and Kidnapped child on page 22.

1. Does any person meet the conditions to be your qualifying relative?

Yes.

No.

Go to Form 1040A, line 7.

1. Was your qualifying relative a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico? If your qualifying relative was adopted, see Exception to citizen test on page 22.

Yes.

No.

You cannot claim this person as a dependent. Go to Form 1040A, line 7.

1. Was your qualifying relative married?

Yes.

See Married person on page 22.

No.

1. Could you, or your spouse if filing jointly, be claimed as a dependent on someone else's 2008 tax return? See Steps 1, 2, and 4.

Yes.

You cannot claim any dependents. Go to Form 1040A, line 7.

No.

You can claim this person as a dependent. Complete Form 1040A, line 6c, columns (1) through (3). Do not check the box on Form 1040A, line 6c, column (4).

Definitions and Special Rules

Adopted child. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

Adoption taxpayer identification numbers (ATINs). If you have a dependent who was placed with you for legal adoption and you do not know his or her SSN, you must get an ATIN for the dependent from the IRS. See Form W-7A for details. (If the dependant is not a U.S. citizen or resident alien, apply for an ITIN instead, using Form W-7. See page 17.)

Children of divorced or separated parents. A child will be treated as being the qualifying child or qualifying relative of his or her noncustodial parent (the parent with whom the child lived for the lesser part of 2008) if all of the following conditions apply.

The parents are divorced, legally separated, separated under a written separation agreement, or lived apart at all times during the last 6 months of 2008.
The child received over half of his or her support for 2008 from the parents (without regard to the rules on Multiple support agreements on page 22). Support of a child received from a parent's spouse is treated as provided by the parent.
The child is in custody of one or both of the parents for more than half of 2008.
Either of the following applies.
1. The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for 2008, and the noncustodial parent attaches the form or statement to his or her return. If the divorce decree or separation agreement went into effect after 1984, the noncustodial parent can attach certain pages from the decree or agreement instead of Form 8332. See Post-1984 decree or agreement on page 22.
2. A pre-1985 decree of divorce or separate maintenance or written separation agreement between the parents provides that the noncustodial parent can claim the child as a dependent, and the noncustodial parent provides at least $600 for support of the child during 2008.

If conditions (1) through (4) apply, only the noncustodial parent can claim the child for purposes of the dependency exemption (line 6c) and the child tax credits (lines 33 and 41). However, this special rule does not apply to head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the earned income credit. See Pub. 501 for details.

Post-1984 decree or agreement.

The decree or agreement must state all three of the following.

The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
The other parent will not claim the child as a dependent.
The years for which the claim is released.

The noncustodial parent must attach all of the following pages from the decree or agreement.

Cover page (include the other parent's SSN on that page).
The pages that include all the information identified in (1) through (3) above.
Signature page with the other parent's signature and date of agreement.

You must attach the required information even if you filed it with your return in an earlier year.

Exception to citizen test. If you are a U.S. citizen or U.S. national and your adopted child lived with you all year as a member of your household, that child meets the citizen test.

Exception to gross income test. If your relative (including a person who lived with you all year as a member of your household) is permanently and totally disabled (defined on this page), certain income for services performed at a sheltered workshop may be excluded for this test. For details, see Pub. 501.

Exception to time lived with you. Temporary absences by you or the other person for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the person lived with you. Also see Children of divorced or separated parents that begins on page 21 or Kidnapped child below.

A person is considered to have lived with you for all of 2008 if the person was born or died in 2008 and your home was this person's home for the entire time he or she was alive.

Foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

Kidnapped child. If your child is presumed by law enforcement authorities to have been kidnapped by someone who is not a family member, you may be able to take the child into account in determining your eligibility for head of household or qualifying widow(er) filing status, the deduction for dependents, child tax credit, and the earned income credit (EIC). For details, see Pub. 501 (Pub. 596 for the EIC).

Married person. If the person is married, you cannot claim that person as your dependent if he or she files a joint return. But this rule does not apply if the return is filed only as a claim for refund and no tax liability would exist for either spouse if they had filed separate returns. If the person meets this exception, go to Step 2, question 3, on page 20 (for a qualifying child) or Step 4, question 4, on page 21 (for a qualifying relative). If the person does not meet this exception, go to Step 3 on page 20 (for a qualifying child) or Form 1040A, line 7 (for a qualifying relative).

Multiple support agreements. If no one person contributed over half of the support of your relative (including a person who lived with you all year as a member of your household) but you and another person(s) provided more than half of your relative's support, special rules may apply that would treat you as having provided over half of the support. For details, see Pub. 501.

Permanently and totally disabled. A person is permanently and totally disabled if, at any time in 2008, the person cannot engage in any substantial gainful activity because of a physical or mental condition and a doctor has determined that this condition has lasted or can be expected to last continuously for at least a year or can be expected to lead to death.

Qualifying child of more than one person. If the child is the qualifying child of more than one person, only one person can claim the child as a qualifying child for all of the following tax benefits, unless the special rule for Children of divorced or separated parents beginning on page 21 applies.

Dependency exemption (line 6c).
Child tax credits (lines 33 and 41).
Head of household filing status (line 4).
Credit for child and dependent care expenses (line 29).
Exclusion for dependent care benefits (Schedule 2, Part III).
Earned income credit (lines 40a and 40b).

No other person can take any of the six tax benefits listed above unless he or she has a different qualifying child. If you and any other person claim the child as a qualifying child, the IRS will apply the following rules.

If only one of the persons is the child's parent, the child will be treated as the qualifying child of the parent.
If two of the persons are the child's parents, the child will be treated as the qualifying child of the parent with whom the child lived for the longer period of time in 2008. If the child lived with each parent for the same amount of time, the child will be treated as the qualifying child of the parent who had the higher adjusted gross income (AGI) for 2008.
If none of the persons are the child's parent, the child will be treated as the qualifying child of the person who had the highest AGI for 2008.

Example.

Your daughter meets the conditions to be a qualifying child for both you and your mother. If you and your mother both claim tax benefits based on the child, the rules above apply. Under these rules, you are entitled to treat your daughter as a qualifying child for all of the six tax benefits listed above for which you otherwise qualify. Your mother would not be entitled to take any of the six tax benefits listed above unless she has a different qualifying child.

If you will be claiming the child as a qualifying child, go to Step 2 on page 20. Otherwise, stop; you cannot claim any benefits based on this child. Go to Form 1040A, line 7.

Social security number. You must enter each dependent's social security number (SSN). Be sure the name and SSN entered agree with the dependent's social security card. Otherwise, at the time we process your return, we may disallow the exemption claimed for the dependent and reduce or disallow any other tax benefits (such as the child tax credit) based on that dependent. If the name or SSN on the dependent's social security card is not correct, call the Social Security Administration at 1-800-772-1213. For details on how your dependent can get an SSN, see page 17. If your dependent will not have a number by the date your return is due, see What If You Cannot File on Time? on page 7.

If your dependent child was born and died in 2008 and you do not have an SSN for the child, enter “Died” in column (2) and attach a copy of the child's birth certificate, death certificate, or hospital records. The document must show the child was born alive.

Student. A student is a child who during any part of 5 calendar months of 2008 was enrolled as a full-time student at a school, or took a full-time, on-farm training course given by a school or a state, county, or local government agency. A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet.

Income

Rounding Off to Whole Dollars

You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.

If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.

Example. You received two Forms W-2, one showing wages of $5,009.55 and one showing wages of $8,760.73. On Form 1040A, line 7, you would enter $13,770 ($5,009.55 + $8,760.73 = $13,770.28).

Refunds of State or Local Income Taxes

If you received a refund, credit, or offset of state or local income taxes in 2008, you may receive a Form 1099-G.

For the year the tax was paid to the state or other taxing authority, did you itemize deductions?

No.		None of your refund is taxable.
Yes.		You may have to report part or all of the refund as income on Form 1040 for 2008. See Pub. 525 for details.

Community Property States

Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If you and your spouse lived in a community property state, you must usually follow state law to determine what is community income and what is separate income. For details, see Pub. 555.

California domestic partners. A registered domestic partner in California must report all wages, salaries, and other compensation received for his or her personal services on his or her own return. Therefore, a registered domestic partner cannot report half the combined income earned by the individual and his or her domestic partner as a married person filing separately does in California.

Foreign Retirement Plans

If you were a beneficiary of a foreign retirement plan, you may have to report the undistributed income earned in your plan. However, if you were the beneficiary of a Canadian registered retirement plan, see Form 8891 to find out if you can elect to defer tax on the undistributed income. If you elect to defer tax, you must use Form 1040.

Report distributions from foreign pension plans on lines 12a
and 12b.

Line 7

Wages, Salaries, Tips, etc.

Enter the total of your wages, salaries, tips, etc. If a joint return, also include your spouse's income. For most people, the amount to enter on this line should be shown in box 1 of their Form(s) W-2.

Wages received as a household employee. Wages received as a household employee for which you did not receive a Form W-2 because your employer paid you less than $1,600 in 2008 must be included in the total on line 7. Also, enter “HSH” and the amount not reported on a Form W-2 in the space to the left of line 7.

Tip income. Tip income you did not report to your employer must be included in the total on line 7. But you must use Form 1040 and Form 4137 if you received tips of $20 or more in any month and did not report the full amount to your employer, or your Form(s) W-2 shows allocated tips that you must report as income. You must report the allocated tips shown on your Form(s) W-2 unless you can prove that you received less. Allocated tips should be shown in box 8 of your Form(s) W-2. They are not included as income in box 1. See Pub. 531 for more details.

Dependent care benefits. Dependent care benefits, which should be shown in box 10 of your Form(s) W-2, must be included in the total on line 7. But first complete Schedule 2 to see if you can exclude part or all of the benefits.

Scholarship and fellowship grants. Scholarship and fellowship grants not reported on Form W-2 must be included in the total on line 7. Also, enter “SCH” and the amount in the space to the left of line 7. However, if you were a degree candidate, include on line 7 only the amounts you used for expenses other than tuition and course-related expenses. For example, amounts used for room, board, and travel must be reported on line 7.

Disability pensions. Disability pensions shown on Form 1099-R if you have not reached the minimum retirement age set by your employer must be included in the total on line 7. Disability pensions received after you reach that age and other payments shown on Form 1099-R (other than payments from an IRA*) are reported on lines 12a and 12b of Form 1040A. Payments from an IRA are reported on lines 11a and 11b.

* This includes a Roth, SEP, or SIMPLE IRA.

Missing or incorrect Form W-2? Your employer is required to provide or send Form W-2 to you no later than February 2, 2009. If you do not receive it by early February, use TeleTax topic 154 (see page 74) to find out what to do. Even if you do not get a Form W-2, you must still report your earnings on line 7. If you lose your Form W-2 or it is incorrect, ask your employer for a new one.

Line 8a

Taxable Interest

Each payer should send you a Form 1099-INT or Form 1099-OID. Enter your total taxable interest income on line 8a. But you must fill in and attach Schedule 1, Part I, if the total is over $1,500 or any of the other conditions listed at the beginning of the Schedule 1 instructions apply to you.

Interest credited in 2008 on deposits that you could not withdraw because of the bankruptcy or insolvency of the financial institution may not have to be included in your 2008 income. For details, see Pub. 550.

If you get a 2008 Form 1099-INT for U.S. savings bond interest that includes amounts you reported before 2008, see Pub. 550.

Line 8b

Tax-Exempt Interest

If you received any tax-exempt interest, such as from municipal bonds, each payer should send you a Form 1099-INT. Your tax-exempt interest, plus any exempt-interest dividends from a mutual fund or other regulated investment company, should be included in box 8 of Form 1099-INT. Enter the total on line 8b. Do not include interest earned on your IRA, health savings account, Archer or Medicare Advantage MSA, or Coverdell education savings account.

If you received tax-exempt interest from private activity bonds issued after August 7, 1986, you must use Form 1040.

Line 9a

Ordinary Dividends

Each payer should send you a Form 1099-DIV. Enter your total ordinary dividends on line 9a. This amount should be shown in box 1a of Form(s) 1099-DIV.

You must fill in and attach Schedule 1, Part II, if the total is over $1,500 or you received, as a nominee, ordinary dividends that actually belong to someone else.

You must use Form 1040 if you received nondividend distributions (box 3 of Form 1099-DIV) required to be reported as capital gains.

For more details, see Pub. 550.

Line 9b

Qualified Dividends

Enter your total qualified dividends on line 9b. Qualified dividends are eligible for a lower tax rate than other ordinary income. Generally, these dividends are shown in box 1b of Form(s) 1099-DIV. See Pub. 550 for the definition of qualified dividends if you received dividends not reported on Form 1099-DIV.

Exception. Some dividends may be reported as qualified dividends in box 1b of Form 1099-DIV but are not qualified dividends. These include:

Dividends you received as a nominee. See the instructions for Schedule 1.
Dividends you received on any share of stock that you held for less than 61 days during the 121-day period that began 60 days before the ex-dividend date. The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. When counting the number of days you held the stock, include the day you disposed of the stock but not the day you acquired it. See the examples on this page. Also, when counting the number of days you held the stock, you cannot count certain days during which your risk of loss was diminished. See Pub. 550 for more details.
Dividends attributable to periods totaling more than 366 days that you received on any share of preferred stock held for less than 91 days during the 181-day period that began 90 days before the ex-dividend date. When counting the number of days you held the stock, you cannot count certain days during which your risk of loss was diminished. See Pub. 550 for more details. Preferred dividends attributable to periods totaling less than 367 days are subject to the 61-day holding period rule above.
Dividends on any share of stock to the extent that you are under an obligation (including a short sale) to make related payments with respect to positions in substantially similar or related property.
Payments in lieu of dividends, but only if you know or have reason to know that the payments are not qualified dividends.

Example 1.

You bought 5,000 shares of XYZ Corp. common stock on November 28, 2008. XYZ Corp. paid a cash dividend of 10 cents per share. The ex-dividend date was December 5, 2008. Your Form 1099-DIV from XYZ Corp. shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). However, you sold the 5,000 shares on January 5, 2009. You held your shares of XYZ Corp. for only 38 days (from November 29, 2008, through January 5, 2009) of the 121-day period. The 121-day period began on October 6, 2008 (60 days before the ex-dividend date) and ended on February 3, 2009. You have no qualified dividends from XYZ Corp. because you held the XYZ stock for less than 61 days.

Example 2.

Assume the same facts as in Example 1 except that you bought the stock on December 4, 2008 (the day before the ex-dividend date), and you sold the stock on February 5, 2009. You held the stock for 63 days (from December 5, 2008, through February 5, 2009). The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from October 6, 2008, through February 3, 2009).

Example 3.

You bought 10,000 shares of ABC Mutual Fund common stock on November 28, 2008. ABC Mutual Fund paid a cash dividend of 10 cents a share. The ex-dividend date was December 5, 2008. The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000, and qualified dividends of $200. However, you sold the 10,000 shares on January 5, 2009. You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days.

Be sure you use the Qualified Dividends and Capital Gain Tax Worksheet on page 36 to figure your tax. Your tax may be less if you use this worksheet.

Line 10

Capital Gain Distributions

Each payer should send you a Form 1099-DIV. Do any of the Forms 1099-DIV or substitute statements you, or your spouse if filing a joint return, received have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain)?

Yes.	You must use Form 1040.
No.	You may use Form 1040A. Enter your capital gain distributions on line 10. Also, be sure you use the Qualified Dividends and Capital Gain Tax Worksheet on page 36 to figure your tax. Your tax may be less if you use this worksheet.

If you received capital gain distributions as a nominee (that is, they were paid to you but actually belong to someone else), report on line 10 only the amount that belongs to you. Attach a statement showing the full amount you received and the amount you received as a nominee. See the Schedule 1 instructions for filing requirements for Forms 1099-DIV and 1096.

Lines 11a and 11b

IRA Distributions

Special rules may apply to your IRA distributions if your main home was in the Kansas disaster area or a Midwestern disaster area. Special rules may also apply if you received a distribution to buy or construct a main home in a Midwestern disaster area, but that home was not bought or constructed because of the Midwestern storms, tornadoes, or flooding. For details, see Pub. 4492-A (Kansas) or Pub. 4492-B (Midwestern disaster areas).

You should receive a Form 1099-R showing the amount of any distribution from your IRA. Unless otherwise noted in the line 11a and 11b instructions, an IRA includes a traditional IRA, Roth IRA, simplified employee pension (SEP) IRA, and a savings incentive match plan for employees (SIMPLE) IRA. Except as provided below, leave line 11a blank and enter the total distribution on
line 11b.

Exception 1. Enter the total distribution on line 11a if you rolled over part or all of the distribution from one:

IRA to another IRA of the same type (for example, from one traditional IRA to another traditional IRA), or
SEP or SIMPLE IRA to a traditional IRA.

Also, enter “Rollover” next to line 11b. If the total distribution was rolled over in a qualified rollover, enter -0- on line 11b. If the total distribution was not rolled over in a qualified rollover, enter the part not rolled over on line 11b unless Exception 2 or Exception 5 applies to the part not rolled over. Generally, a qualified rollover must be made within 60 days after the day you received the distribution. For more details on rollovers, see Pub. 590.

If you rolled over the distribution into a qualified plan other than an IRA or you made the rollover in 2009, attach a statement explaining what you did.

Exception 2. If any of the following apply, enter the total distribution on line 11a and see Form 8606 and its instructions to figure the amount to enter on line 11b.

You received a distribution from an IRA (other than a Roth IRA) and you made nondeductible contributions to any of your traditional or SEP IRAs for 2008 or an earlier year. If you made nondeductible contributions to these IRAs for 2008, also see
Pub. 590.
You received a distribution from a Roth IRA. But if either (a) or (b) below applies, enter -0- on line 11b; you do not have to see Form 8606 or its instructions.
1. Distribution code T is shown in box 7 of Form 1099-R, and you made a contribution (including a conversion) to a Roth IRA for 2003 or an earlier year.
2. Distribution code Q is shown in box 7 of Form 1099-R.
You converted part or all of a traditional, SEP, or SIMPLE IRA to a Roth IRA in 2008.
You had a 2007 or 2008 IRA contribution returned to you, with the related earnings or less any loss, by the due date (including extensions) of your tax return for that year.
You made excess contributions to your IRA for an earlier year and had them returned to you in 2008.
You recharacterized part or all of a contribution to a Roth IRA as a traditional IRA contribution, or vice versa.

Exception 3. If the distribution is a qualified charitable distribution (QCD), enter the total distribution on line 11a. If the total amount distributed is a QCD, enter -0- on line 11b. If only part of the distribution is a QCD, enter the part that is not a QCD on line 11b unless Exception 2 or Exception 5 applies to that part. Enter “QCD” next to line 11b.

A QCD is a distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax-deductible contributions (with certain exceptions). You must have been at least age 70½ when the distribution was made. Your total QCDs for the year cannot be more than $100,000. (On a joint return, your spouse can also have a QCD of up to $100,000.) The amount of the QCD is limited to the amount that would otherwise be included in your income. If your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable income. See Pub. 590 for details.

You cannot claim a charitable contribution deduction for any QCD not included in your income.

Exception 4. If the distribution is a qualified health savings account (HSA) funding distribution (HFD), you must file Form 1040. See Exception 4 in the instructions for Form 1040, lines 15a and 15b. An HFD is a distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to your HSA. See Pub. 590 for details.

Exception 5. If the distribution is the withdrawal of an economic stimulus payment that was directly deposited to your IRA, enter the total distribution on line 11a. If you made the withdrawal by the due date of your return (including extensions):

Enter “ESP” next to line 11b, and
If the total distribution was less than or equal to the economic stimulus payment, enter -0- on line 11b. Otherwise, enter the amount by which the distribution was more than the economic stimulus payment on line 11b unless another exception applies to that part.

See Pub. 590 for details.

More than one exception applies. If more than one exception applies, attach a statement showing the amount of each exception, instead of making an entry next to line 11b. For example: “Line 11b – $1,000 Rollover and $500 HFD.”

More than one distribution. If you (or your spouse if filing jointly) received more than one distribution, figure the taxable amount of each distribution and enter the total of the taxable amounts on line 11b. Enter the total amount of those distributions on line 11a.

You may have to pay an additional tax if (a) you received an early distribution from your IRA and the total was not rolled over, or (b) you were born before July 1, 1937, and received less than the minimum required distribution from your traditional, SEP, and SIMPLE IRAs. To find out if you owe this tax, see Pub. 590. If you do owe this tax, you must use Form 1040.

Lines 12a and 12b

Pensions and Annuities

Special rules may apply if you received a distribution from a profit-sharing or retirement plan and your main home was in the Kansas disaster area or a Midwestern disaster area. Special rules may also apply if you received a distribution to buy or construct a main home in a Midwestern disaster area, but that home was not bought or constructed because of the Midwestern storms, tornadoes, or flooding. For details, see Pub. 4492-A (Kansas) or Pub. 4492-B (Midwestern disaster areas).

You should receive a Form 1099-R showing the amount of your pension and annuity payments, including distributions from 401(k) and 403(b) plans. See page 27 for details on rollovers and lump-sum distributions.

Do not report on lines 12a and 12b disability pensions received before you reach the minimum retirement age set by your employer. Instead, report them on line 7.

Attach Form(s) 1099-R to Form 1040A if any federal income tax was withheld.

Fully taxable pensions and annuities. If your pension or annuity is fully taxable, enter it on line 12b; do not make an entry on line 12a. Your payments are fully taxable if (a) you did not contribute to the cost (see page 27) of your pension or annuity, or (b) you got back your entire cost tax free before 2008. But see Insurance premiums for retired public safety officers later.

Fully taxable pensions and annuities also include military retirement pay shown on Form 1099-R. For details on military disability pensions, see Pub. 525. If you received a Form RRB-1099-R, see Pub. 575 to find out how to report your benefits.

Partially taxable pensions and annuities. Enter the total pension or annuity payments you received in 2008 on line 12a. If your Form 1099-R does not show the taxable amount, you must use the General Rule explained in Pub. 939 to figure the taxable part to enter on line 12b. But if your annuity starting date (defined on page 27) was after July 1, 1986, see Simplified Method on page 27 to find out if you must use that method to figure the taxable part.

You can ask the IRS to figure the taxable part for you for a $500 fee. For details, see Pub. 939.

If your Form 1099-R shows a taxable amount, you can report that amount on line 12b. But you may be able to report a lower taxable amount by using the General Rule or the Simplified Method or if the exclusion for retired public safety officers, discussed next, applies.

Insurance premiums for retired public safety officers. If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. You can do this only if you retired because of disability or because you reached normal retirement age. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be made directly from the plan to the insurance provider. You can exclude from income the smaller of the amount of the insurance premiums or $3,000. You can only make this election for amounts that would otherwise be included in your income.

Simplified Method Worksheet—Lines 12a and 12b

Before you begin:

If you are the beneficiary of a deceased employee or former employee who died before August 21, 1996, include any death benefit exclusion that you are entitled to (up to $5,000) in the amount entered on line 2 below.

Note. If you had more than one partially taxable pension or annuity, figure the taxable part of each separately. Enter the total of the taxable parts on Form 1040A, line 12b. Enter the total pension or annuity payments received in 2008 on Form 1040A, line 12a.

1.	Enter the total pension or annuity payments received in 2008. Also, enter this amount on Form 1040A, line 12a						1.
2.	Enter your cost in the plan at the annuity starting date				2.
	Note. 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 below (even if the amount of your pension or annuity has changed). Otherwise, go to line 3.
3.	Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below				3.
4.	Divide line 2 by the number on line 3				4.
5.	Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date was before 1987, skip lines 6 and 7 and enter this amount on line 8. Otherwise, go to line 6				5.
6.	Enter the amount, if any, recovered tax free in years after 1986. If you completed this worksheet last year, enter the amount from line 10 of last year's worksheet				6.
7.	Subtract line 6 from line 2				7.
8.	Enter the smaller of line 5 or line 7						8.
9.	Taxable amount. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, enter this amount on Form 1040A, line 12b. If your Form 1099-R shows a larger amount, use the amount on this line instead of the amount from Form 1099-R. If you are a retired public safety officer, see Insurance premiums for retired public safety officers beginning on this page before entering an amount on line 12b						9.
10.	Was your annuity starting date before 1987?
	Yes.	Leave line 10 blank.
	No.	Add lines 6 and 8. This is the amount you have recovered tax free through 2008. You will need this number when you fill out this worksheet next year.					10.

Table 1 for Line 3 Above
			AND your annuity starting date was—
	IF the age at annuity starting date (see page 27) was . . .		before November 19, 1996, enter on line 3 . . .			after November 18, 1996, enter on line 3 . . .
	55 or under		300			360
	56–60		260			310
	61–65		240			260
	66–70		170			210
	71 or older		120			160
Table 2 for Line 3 Above
	IF the combined ages at annuity starting date (see page 27) were . . .			THEN enter on line 3 . . .
	110 or under			410
	111–120			360
	121–130			310
	131–140			260
	141 or older			210

An eligible retirement plan is a governmental plan that is:

a qualified trust,
a section 403(a) plan,
a section 403(b) annuity, or
a section 457(b) plan.

If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. The amount shown in box 2a of Form 1099-R does not reflect the exclusion. Report your total distributions on line 12a and the taxable amount on line 12b. Enter “PSO” next to line 12b.

If you are retired on disability and reporting your disability pension on line 7, include only the taxable amount on that line and enter “PSO” and the amount excluded in the space to the left of line 7.

Annuity starting date. Your annuity starting date is the later of the first day of the first period for which you received a payment or the date the plan's obligations became fixed.

Simplified Method. You must use the Simplified Method if either of the following applies.

Your annuity starting date (defined earlier) was after July 1, 1986, and you used this method last year to figure the taxable part.
Your annuity starting date was after November 18, 1996, and both of the following apply.
1. The payments are from a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity.
2. On your annuity starting date, either you were under age 75 or the number of years of guaranteed payments was fewer than 5. See Pub. 575 for the definition of guaranteed payments.

If you must use the Simplified Method, complete the worksheet on page 26 to figure the taxable part of your pension or annuity. For more details on the Simplified Method, see Pub. 575 or Pub. 721 for U.S. Civil Service retirement benefits.

If you received U.S. Civil Service retirement benefits and you chose the alternative annuity option, see Pub. 721 to figure the taxable part of your annuity. Do not use the worksheet on page 26.

Age (or combined ages) at annuity starting date. If you are the retiree, use your age on the annuity starting date. If you are the survivor of a retiree, use the retiree's age on his or her annuity starting date. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, use your combined ages on the annuity starting date.

If you are the beneficiary of an employee who died, see Pub. 575. If there is more than one beneficiary, see Pub. 575 or Pub. 721 to figure each beneficiary's taxable amount.

Cost. Your cost is generally your net investment in the plan as of the annuity starting date. It does not include pre-tax contributions. Your net investment should be shown in box 9b of Form 1099-R for the first year you received payments from the plan.

Rollovers. Generally, a qualified rollover is a tax-free distribution of cash or other assets from one retirement plan that is contributed to another plan within 60 days of receiving the distribution. However, a qualified rollover to a Roth IRA is not a tax-free distribution. Use lines 12a and 12b to report a qualified rollover, including a direct rollover, from one qualified employer's plan to another or to an IRA or SEP.

For more details on rollovers, including distributions under qualified domestic relations orders, see Pub. 575.

Rollover to a plan other than a Roth IRA.

Enter on line 12a the total distribution before income tax or other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. From the total on line 12a, subtract any contributions (usually shown in box 5) that were taxable to you when made. From that result, subtract the amount of the qualified rollover. Enter the remaining amount, even if zero, on line 12b. Also, enter “Rollover” next to line 12b.

Special rules apply to partial rollovers of property. See Pub. 575.

Rollover to Roth IRA.

Enter on line 12a the total distribution before income tax or other deductions were withheld. This amount should be shown in box 1 of Form 1099-R. From the total on line 12a, subtract any contributions (usually shown in box 5) that were taxable to you when made. Enter the remaining amount, even if zero, on line 12b.

Lump-sum distributions. If you received a lump-sum distribution from a profit-sharing or retirement plan, your Form 1099-R should have the “Total distribution” box in box 2b checked. You must use Form 1040 if you owe additional tax because you received an early distribution from a qualified retirement plan and the total amount was not rolled over in a qualified rollover. See Pub. 575 to find out if you owe this tax.

Enter the total distribution on line 12a and the taxable part on line 12b. For details, see Pub. 575.

You may be able to pay less tax on the distribution if you were born before January 2, 1936, or you are the beneficiary of a deceased employee who was born before January 2, 1936. But you must use Form 1040 to do so. For details, see Form 4972.

Line 13

Unemployment Compensation and Alaska Permanent Fund Dividends

Unemployment compensation. You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you in 2008. Report the amount in box 1 on line 13. However, if you made contributions to a governmental unemployment compensation program, reduce the amount you report on line 13 by those contributions.

If you received an overpayment of unemployment compensation in 2008 and you repaid any of it in 2008, subtract the amount you repaid from the total amount you received. Include the result in the total on line 13. Also, enter “Repaid” and the amount you repaid in the space to the left of line 13. If you repaid unemployment compensation in 2008 that you included in gross income in an earlier year, you can deduct the amount repaid. But you must use Form 1040 to do so. See Pub. 525 for details.

Alaska Permanent Fund dividends. Include the dividends in the total on line 13.

Lines 14a and 14b

Social Security Benefits

You should receive a Form SSA-1099 showing in box 3 the total social security benefits paid to you. Box 4 will show the amount of any benefits you repaid in 2008. If you received railroad retirement benefits treated as social security, you should receive a Form RRB-1099.

Use the worksheet on page 28 to see if any of your benefits are taxable.

Exception. Do not use the worksheet on page 28 if any of the following apply.

You made contributions to a traditional IRA for 2008 and you or your spouse were covered by a retirement plan at work. Instead, use the worksheets in Pub. 590 to see if any of your social security benefits are taxable and to figure your IRA deduction.
You repaid any benefits in 2008 and your total repayments (box 4) were more than your total benefits for 2008 (box 3). None of your benefits are taxable for 2008. Also, you may be able to take an itemized deduction or a credit for part of the excess repayments if they were for benefits you included in gross income in an earlier year. But you must use Form 1040 to do so. See Pub. 915.
You file Form 8815. Instead, use the worksheet in Pub. 915.

Social Security Benefits Worksheet—Lines 14a and 14b

Before you begin:

Complete Form 1040A, lines 16 and 17, if they apply to you.
If you are married filing separately and you lived apart from your spouse for all of 2008, enter “D” to the right of the word “benefits” on line 14a. If you do not, you may get a math error notice from the IRS.
Be sure you have read the Exception on page 27 to see if you can use this worksheet instead of a publication to find out if any of your benefits are taxable.

1.	Enter the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099. Also, enter this amount on Form 1040A, line 14a			1.
2.	Enter one-half of line 1				2.
3.	Enter the total of the amounts from Form 1040A, lines 7, 8a, 9a, 10, 11b, 12b, and 13				3.
4.	Enter the amount, if any, from Form 1040A, line 8b				4.
5.	Add lines 2, 3, and 4				5.
6.	Enter the total of the amounts from Form 1040A, lines 16 and 17				6.
7.	Is the amount on line 6 less than the amount on line 5?
		No.	None of your social security benefits are taxable. Enter -0- on Form 1040A, line 14b.
		Yes. Subtract line 6 from line 5			7.
8.	If you are: Married filing jointly, enter $32,000. Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2008, enter $25,000.				8.
	Married filing separately and you lived with your spouse at any time in 2008, skip lines 8 through 15; multiply line 7 by 85% (.85) and enter the result on line 16. Then go to line 17.
9.	Is the amount on line 8 less than the amount on line 7?
		No.	None of your social security benefits are taxable. Enter -0- on Form 1040A, line 14b. If you are married filing separately and you lived apart from your spouse for all of 2008, be sure you entered “D” to the right of the word “benefits” on line 14a.
		Yes. Subtract line 8 from line 7			9.
10.	Enter: $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2008				10.
11.	Subtract line 10 from line 9. If zero or less, enter -0-				11.
12.	Enter the smaller of line 9 or line 10				12.
13.	Enter one-half of line 12				13.
14.	Enter the smaller of line 2 or line 13				14.
15.	Multiply line 11 by 85% (.85). If line 11 is zero, enter -0-				15.
16.	Add lines 14 and 15				16.
17.	Multiply line 1 by 85% (.85)				17.
18.	Taxable social security benefits. Enter the smaller of line 16 or line 17. Also enter this amount on Form 1040A, line 14b.				18.
		If any of your benefits are taxable for 2008 and they include a lump-sum benefit payment that was for an earlier year, you may be able to reduce the taxable amount. See Pub. 915 for details.

Adjusted Gross Income

Line 16

Educator Expenses

If you were an eligible educator in 2008, you can deduct on line 16 up to $250 of qualified expenses you paid in 2008. If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. However, neither spouse can deduct more than $250 of his or her qualified expenses on line 16. You may be able to deduct expenses that are more than the $250 (or $500) limit on Schedule A, line 21, but you must use Form 1040. An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during a school year.

Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. An ordinary expense is one that is common and accepted in your educational field. A necessary expense is one that is helpful and appropriate for your profession as an educator. An expense does not have to be required to be considered necessary.

Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education.

You must reduce your qualified expenses by the following amounts.

Excludable U.S. series EE and I savings bond interest from Form 8815.
Nontaxable qualified tuition program earnings or distributions.
Any nontaxable distribution of Coverdell education savings account earnings.
Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2.

For more details, use TeleTax topic 458 (see page 74) or see Pub. 529.

IRA Deduction Worksheet—Line 17

If you were age 70½ or older at the end of 2008, you cannot deduct any contributions made to your traditional IRA or treat them as nondeductible contributions. Do not complete this worksheet for anyone age 70½ or older at the end of 2008. If you are married filing jointly and only one spouse was under age 70½ at the end of 2008, complete this worksheet only for that spouse.

Before you begin:

Be sure you have read the list for line 17 that begins above. You may not be eligible to use this worksheet.
If you are married filing separately and you lived apart from your spouse for all of 2008, enter “D” in the space to the left of line 17. If you do not, you may get a math error notice from the IRS.

Your IRA

Spouse's IRA

1a.

Were you covered by a retirement plan (see page 31)?

1a.

Yes

If married filing jointly, was your spouse covered by a retirement plan?

1b.

Yes

Next. If you checked “No” on line 1a (and “No” on line 1b if married filing jointly), skip lines 2 through 6, enter the applicable amount below on line 7a (and line 7b if applicable), and go to line 8.

$5,000, if under age 50 at the end of 2008.
$6,000, if age 50 or older but under age 70½ at the end of 2008.

Otherwise, go to line 2.

Line 17

IRA Deduction

If you made any nondeductible contributions to a traditional individual retirement arrangement (IRA) for 2008, you must report them on Form 8606.

If you made contributions to a traditional IRA for 2008, you may be able to take an IRA deduction. But you, or your spouse if filing a joint return, must have had earned income to do so. If you were a member of the U.S. Armed Forces, earned income includes any nontaxable combat pay you received. A statement should be sent to you by June 1, 2009, that shows all contributions to your traditional IRA for 2008.

Use the worksheet that begins on this page to figure the amount, if any, of your IRA deduction. But read the following list before you fill in the worksheet.

If you were age 70½ or older at the end of 2008, you cannot deduct any contributions made to your traditional IRA for 2008 or treat them as nondeductible contributions.
You cannot deduct contributions to a Roth IRA. But you may be able to take the retirement savings contributions credit (saver's credit). See the instructions for line 32 on page 37.

If you are filing a joint return and you or your spouse made contributions to both a traditional IRA and a Roth IRA for 2008, do not use the worksheet that begins on this page. Instead, see Pub. 590 to figure the amount, if any, of your IRA deduction.

You cannot deduct elective deferrals to a 401(k) plan, section 457 plan, SIMPLE plan, or the federal Thrift Savings Plan. These amounts are not included as income in box 1 of your Form W-2. But you may be able to take the retirement savings contributions credit. See the instructions for line 32 on page 37.
If you made contributions to your IRA in 2008 that you deducted for 2007, do not include them in the worksheet.
If you received a distribution from a nonqualified deferred compensation plan or nongovernmental section 457 plan that is included in box 1 of your Form W-2, do not include that distribution on line 8 of the worksheet. The distribution should be shown in box 11 of your Form W-2. If it is not, contact your employer for the amount of the distribution.
You must file a joint return to deduct contributions to your spouse's IRA. Enter the total IRA deduction for you and your spouse on line 17.
Do not include qualified rollover contributions in figuring your deduction. Instead, see the instructions for lines 11a and 11b that begin on page 24.
Do not include trustees' fees that were billed separately and paid by you for your IRA. You may be able to deduct those fees as an itemized deduction. But you must use Form 1040 to do so.
Do not include any repayments of qualified reservist distributions. You cannot deduct them. For information on how to report these repayments, see Qualified reservist repayments in Pub. 590.
If the total of your IRA deduction on line 17 plus any nondeductible contribution to your traditional IRAs shown on Form 8606 is less than your total traditional IRA contributions for 2008, see Pub. 590 for special rules.
You may be able to deduct up to an additional $3,000 if all the following conditions are met.
1. You must have been a participant in a 401(k) plan under which the employer matched at least 50% of your contributions to the plan with stock of the company.
2. You must have been a participant in the 401(k) plan 6 months before the employer filed for bankruptcy.
3. The employer (or a controlling corporation) must have been a debtor in a bankruptcy case in an earlier year.
4. The employer (or any other person) must have been subject to indictment or conviction based on business transactions related to the bankruptcy.

If this applies to you, do not use the worksheet that begins on page 29. Instead, use the worksheet in Pub. 590.

By April 1 of the year after the year in which you reach age 70½, you must start taking minimum required distributions from your traditional IRA. If you do not, you may have to pay a 50% additional tax on the amount that should have been distributed. For details, including how to figure the minimum required distribution, see Pub. 590.

You must use Form 1040 if you owe tax on any excess contributions made to an IRA or any excess accumulations in an IRA. For details, see Pub. 590.

Were you covered by a retirement plan? If you were covered by a retirement plan (401(k), SIMPLE, etc.) at work, your IRA deduction may be reduced or eliminated. But you can still make contributions to an IRA even if you cannot deduct them. In any case, the income earned on your IRA contributions is not taxed until it is paid to you. The “Retirement plan” box in box 13 of your Form W-2 should be checked if you were covered by a plan at work even if you were not vested in the plan.

If you were covered by a retirement plan and you file Form 8815, see Pub. 590 to figure the amount, if any, of your IRA deduction.

Married persons filing separately. If you were not covered by a retirement plan but your spouse was, you are considered covered by a plan unless you lived apart from your spouse for all of 2008.

You may be able to take the retirement savings contributions credit. See the instructions for line 32 on page 37.

IRA Deduction Worksheet—Line 17 (continued)

Your IRA

Spouse's IRA

Enter the amount shown below that applies to you.

Single, head of household, or married filing separately and you lived
apart from your spouse for all of 2008, enter $63,000

Qualifying widow(er), enter $105,000

2a.

2b.

Married filing jointly, enter $105,000 in both columns. But if you
checked “No” on either line 1a or 1b, enter $169,000 for the person
who was not covered by a plan
Married filing separately and you lived with your spouse at any time
in 2008, enter $10,000

Enter the amount from Form 1040A, line 15

Enter the amount, if any, from Form 1040A, line 16

Subtract line 4 from line 3. If married filing jointly, enter the result in both columns

5a.

5b.

Is the amount on line 5 less than the amount on line 2?

No.

None of your IRA contributions are deductible. For details on nondeductible IRA contributions, see Form 8606.

Yes.

Subtract line 5 from line 2 in each column. Follow the instruction below that applies to you.

If single, head of household, or married filing separately, and the
result is $10,000 or more, enter the applicable amount below
on line 7 for that column and go to line 8.
i. $5,000, if under age 50 at the end of 2008.
ii. $6,000, if age 50 or older but under age 70½ at the end
of 2008.
Otherwise, go to line 7.

6a.

6b.

If married filing jointly or qualifying widow(er), and the result is
$20,000 or more ($10,000 or more in the column for the IRA of
a person who was not covered by a retirement plan), enter the
applicable amount below on line 7 for that column and go to line 8.
i. $5,000, if under age 50 at the end of 2008.
ii. $6,000 if age 50 or older but under age 70½ at the end
of 2008.
Otherwise, go to line 7.

Multiply lines 6a and 6b by the percentage below that applies to you. If the result is not a multiple of $10, increase it to the next multiple of $10 (for example, increase $490.30 to $500). If the result is $200 or more, enter the result. But if it is less than $200, enter $200.

Single, head of household, or married filing separately, multiply by 50% (.50)
(or by 60% (.60) in the column for the IRA of a person who is age 50 or older
at the end of 2008)

7a.

7b.

Married filing jointly or qualifying widow(er), multiply by 25% (.25)
(or by 30% (.30) in the column for the IRA of a person who is age 50 or older
at the end of 2008). But if you checked “No” on either 1a or 1b,
then in the column for the IRA of the person who was not covered by a
retirement plan, multiply by 50% (.50) (or by 60% (.60) if age 50 or older
at the end of 2008)

Enter the amount from Form 1040A, line 7. Include any nontaxable combat pay. This amount should be reported in box 12 of Form W-2 with code Q

If married filing jointly and line 8 is less than $10,000 ($11,000 if one spouse is age 50 or older at the end of 2008; $12,000 if both spouses are age 50 or older at the end of 2008), stop here and see Pub. 590 to figure your IRA deduction.

Enter traditional IRA contributions made, or that will be made by April 15, 2009, for 2008 to your IRA on line 9a and to your spouse's IRA on line 9b

9a.

9b.

10.

On line 10a, enter the smallest of line 7a, 8, or 9a. On line 10b, enter the smallest of line 7b, 8, or 9b. This is the most you can deduct. Add the amounts on lines 10a and 10b and enter the total on Form 1040A, line 17. Or, if you want, you can deduct a smaller amount and treat the rest as a nondeductible contribution (see Form 8606)

10a.

10b.

Line 18

Student Loan Interest Deduction

You can take this deduction only if all of the following apply.

You paid interest in 2008 on a qualified student loan (defined later).
Your filing status is any status except married filing separately.
Your modified adjusted gross income (AGI) is less than: $70,000 if single, head of household, or qualifying widow(er); $145,000 if married filing jointly. Use lines 2 through 4 of the worksheet below to figure your modified AGI.
You, or your spouse if filing jointly, are not claimed as a dependent on someone's (such as your parent's) 2008 tax return.

Use the worksheet below to figure your student loan interest deduction.

Qualified student loan. A qualified student loan is any loan you took out to pay the qualified higher education expenses for any of the following individuals.

Yourself or your spouse.
Any person who was your dependent when the loan was taken out.
Any person you could have claimed as a dependent for the year the loan was taken out except that:
1. The person filed a joint return,
2. The person had gross income that was equal to or more than the exemption amount for that year ($3,500 for 2008), or
3. You, or your spouse if filing jointly, could be claimed as a dependent on someone else's return.

The person for whom the expenses were paid must have been an eligible student (defined below). However, a loan is not a qualified student loan if (a) any of the proceeds were used for other purposes, or (b) the loan was from either a related person or a person who borrowed the proceeds under a qualified employer plan or a contract purchased under such a plan. To find out who is a related person, see Pub. 970.

Qualified higher education expenses. Qualified higher education expenses generally include tuition, fees, room and board, and related expenses such as books and supplies. The expenses must be for education in a degree, certificate, or similar program at an eligible educational institution. An eligible educational institution includes most colleges, universities, and certain vocational schools. You must reduce the expenses by the following benefits.

Employer-provided educational assistance benefits that are not included in box 1 of Form(s) W-2.
Excludable U.S. series EE and I savings bond interest from Form 8815.
Any nontaxable distribution of qualified tuition program earnings.
Any nontaxable distribution of Coverdell education savings account earnings.
Any scholarship, educational assistance allowance, or other payment (but not gifts, inheritances, etc.) excluded from income.

For more details on these expenses, see Pub. 970.

Eligible student. An eligible student is a person who:

Was enrolled in a degree, certificate, or other program (including a program of study abroad that was approved for credit by the institution at which the student was enrolled) leading to a recognized educational credential at an eligible educational institution, and
Carried at least half the normal full-time workload for the course of study he or she was pursuing.

Student Loan Interest Deduction Worksheet—Line 18

Before you begin:

See the instructions for line 18 above.

1.		Enter the total interest you paid in 2008 on qualified student loans (see above). Do not enter more than $2,500			1.
2.		Enter the amount from Form 1040A, line 15		2.
3.		Enter the total of the amounts from Form 1040A, lines 16 and 17		3.
4.		Subtract line 3 from line 2		4.
5.		Enter the amount shown below for your filing status.
	Single, head of household, or qualifying widow(er)—$55,000 Married filing jointly—$115,000			5.
6.		Is the amount on line 4 more than the amount on line 5?
		No.	Skip lines 6 and 7, enter -0- on line 8, and go to line 9.
		Yes.	Subtract line 5 from line 4	6.
7.		Divide line 6 by $15,000 ($30,000 if married filing jointly). Enter the result as a decimal (rounded to at least three places). If the result is 1.000 or more, enter 1.000			7.	.
8.		Multiply line 1 by line 7			8.
9.		Student loan interest deduction. Subtract line 8 from line 1. Enter the result here and on Form 1040A, line 18			9.

Line 19

Tuition and Fees Deduction

If you paid qualified tuition and fees for yourself, your spouse, or your dependent(s), you may be able to take this deduction. See Form 8917.

You may be able to take a credit for your educational expenses instead of a deduction. See the instructions for line 31 on page 37 for details.

Tax, Credits, and Payments

Line 23a

If you were born before January 2, 1944, or were blind at the end of 2008, check the appropriate boxes on line 23a. If you were married and checked the box on Form 1040A, line 6b, and your spouse was born before January 2, 1944, or was blind at the end of 2008, also check the appropriate boxes for your spouse. Be sure to enter the total number of boxes checked in the box provided on line 23a.

Blindness. If you were partially blind as of December 31, 2008, you must get a statement certified by your eye doctor or registered optometrist that:

You cannot see better than 20/200 in your better eye with glasses or contact lenses, or
Your field of vision is 20 degrees or less.

If your eye condition is not likely to improve beyond the conditions listed above, you can get a statement certified by your eye doctor or registered optometrist to this effect instead.

You must keep the statement for your records.

Line 23b

If you are married filing a separate return and your spouse itemizes deductions on Form 1040, check the box on line 23b. You cannot take the standard deduction even if you were born before January 2, 1944, were blind, or paid real estate taxes. Enter -0- on line 24 and go to line 25.

In most cases, your federal income tax will be less if you take any itemized deductions that you may have, such as state and local income taxes, but you must use Form 1040 to do so.

Line 23c

Your standard deduction is increased by the state and local real estate taxes you paid, up to $500 ($1,000 if married filing jointly). The real estate taxes must be taxes that would have been deductible on Schedule A (Form 1040) if you had itemized your deductions. Taxes deductible in arriving at adjusted gross income (such as taxes on business real estate) and taxes on foreign real estate cannot be used to increase your standard deduction.

Standard deduction amount. Check the box on line 23c if the amount of your standard deduction includes real estate taxes. Then see the instructions for line 24, next.

Line 24

Standard Deduction

Most people can find their standard deduction by looking at the amounts listed under “All others” to the left of Form 1040A, line 24. But use the worksheet on page 33 to figure your standard deduction if:

You, or your spouse if filing jointly, can be claimed as a dependent on someone's 2008 return,
You checked any box on line 23a, or
You paid state or local real estate taxes in 2008.

Also, if you checked the box on line 23b, your standard deduction is zero, even if you were born before January 2, 1944, were blind, or paid real estate taxes.

Standard Deduction Worksheet—Line 24

Do not complete this worksheet if you checked the box on line 23b; your standard deduction is zero.

1.		Enter the amount shown below for your filing status.
	Single or married filing separately—$5,450 Married filing jointly or Qualifying widow(er)—$10,900				1.
	Head of household—$8,000
2.		Can you (or your spouse if filing jointly) be claimed as a dependent?
		No.	Skip line 3; enter the amount from line 1 on line 4.
		Yes.	Go to line 3.
3.		Is your earned income* more than $600?
		Yes.	Add $300 to your earned income. Enter the total	.	3.
		No.	Enter $900
4.		Enter the smaller of line 1 or line 3. If born after January 1, 1944, and not blind, enter this amount on line 6. Otherwise, go to line 5			4.
5.		If born before January 2, 1944, or blind, multiply the number on Form 1040A, line 23a, by $1,050 ($1,350 if single or head of household)			5.
6.