A taxpayer's annuity comes from a non-qualified retirement plan. Does Drake Tax calculate the taxable amount?
Generally, for a non-qualified plan, you will have to calculate the taxable amount yourself using the General Rule rather than the Simplified Method.
The General Rule is described in Publication 939, General Rule for Pensions and Annuities. Drake Tax does not perform calculations for the General Rule. You must determine and enter the total and taxable portion of the taxpayer's pension or annuity on Form 1040:
- lines 5a and 5b in Drake20 and future
- lines 4a and 4b in Drake19 and Drake18
- lines 16a and 16b in Drake17 and prior
The Simplified Method, used for most qualified plans, is available in Drake on the Special Tax Treatments tab of screen 1099 - 1099-R Retirement, which produces the worksheet Wks SGR (WK_SGR in Drake15 and prior). Publication 575, Pension and Annuity Income describes the Simplified Method and includes the worksheet at the end of the publication. Drake performs Simplified Method calculations, however, you should review Publication 575 to ensure that you have made applicable entries.
A brief description of General Rule and the Simplified Method appears in Topic 411 - Pensions – the General Rule and the Simplified Method. See Publication 939 and Publication 575 for details.