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Form 1040—Line 7 filed a chapter 11 case and that explains W-2. They are not included as income in how income and withheld income tax re- box 1. See Pub. 531 for more details. Income ported to you on Forms W-2 and 1099 are You may owe social security allocated between you and the estate. For Foreign-Source Income and Medicare tax on unreported more details, including acceptable alloca- You must report unearned income, such as or allocated tips. See the in- tion methods, see Notice 2006-83, 2006-40 CAUTION ! interest, dividends, and pensions, from structions for line 57 on I.R.B. 596, available at sources outside the United States unless ex- page 45. www.irs.gov/irb/2006-40_IRB/ar12.html. empt by law or a tax treaty. You must also • Dependent care benefits, which report earned income, such as wages and Community Property States should be shown in box 10 of your Form(s) tips, from sources outside the United W-2. But first complete Form 2441 to see if States. Community property states are Arizona, you can exclude part or all of the benefits. California, Idaho, Louisiana, Nevada, New If you worked abroad, you may be able Mexico, Texas, Washington, and Wiscon- • Employer-provided adoption benefits, to exclude part or all of your foreign earned sin. If you and your spouse lived in a com- which should be shown in box 12 of your income. For details, see Pub. 54 and Form munity property state, you must usually Form(s) W-2 with code T. But see the In- 2555 or 2555-EZ. follow state law to determine what is com- structions for Form 8839 to find out if you Foreign retirement plans. If you were a munity income and what is separate in- can exclude part or all of the benefits. You beneficiary of a foreign retirement plan, come. For details, see Pub. 555. may also be able to exclude amounts if you you may have to report the undistributed adopted a child with special needs and the California domestic partners. A registered income earned in your plan. However, if adoption became final in 2009. domestic partner in California must report you were the beneficiary of a Canadian reg- • Scholarship and fellowship grants not all wages, salaries, and other compensation istered retirement plan, see Form 8891 to reported on Form W-2. Also, enter “SCH” received for his or her personal services on find out if you can elect to defer tax on the and the amount on the dotted line next to his or her own return. Therefore, a regis- undistributed income. line 7. However, if you were a degree can- tered domestic partner cannot report half didate, include on line 7 only the amounts Report distributions from foreign pen- the combined income earned by the indi- you used for expenses other than tuition sion plans on lines 16a and 16b. vidual and his or her domestic partner as a and course-related expenses. For example, Foreign accounts and trusts. You must married person filing separately does in amounts used for room, board, and travel complete Part III of Schedule B if you: California. must be reported on line 7. • Had a foreign account, or • Excess salary deferrals. The amount Rounding Off to Whole • Received a distribution from, or were deferred should be shown in box 12 of your Dollars a grantor of, or a transferor to, a foreign Form W-2, and the “Retirement plan” box trust. in box 13 should be checked. If the total You can round off cents to whole dollars on amount you (or your spouse if filing your return and schedules. If you do round Chapter 11 Bankruptcy jointly) deferred for 2009 under all plans to whole dollars, you must round all Cases was more than $16,500 (excluding amounts. To round, drop amounts under 50 catch-up contributions as explained be- cents and increase amounts from 50 to 99 If you are a debtor in a chapter 11 bank- low), include the excess on line 7. This cents to the next dollar. For example, $1.39 ruptcy case, income taxable to the bank- limit is (a) $11,500 if you only have becomes $1 and $2.50 becomes $3. ruptcy estate and reported on the estate’s SIMPLE plans, or (b) $19,500 for section income tax return includes: If you have to add two or more amounts 403(b) plans if you qualify for the 15-year • Earnings from services you performed to figure the amount to enter on a line, rule in Pub. 571. Although designated Roth after the beginning of the case (both wages include cents when adding the amounts and contributions are subject to this limit, do and self-employment income), and round off only the total. not include the excess attributable to such • Income from property described in contributions on line 7. They are already section 541 of title 11 of the U.S. Code that included as income in box 1 of your Form you either owned when the case began or W-2. Line 7 that you acquired after the case began and A higher limit may apply to participants before the case was closed, dismissed, or Wages, Salaries, Tips, etc. in section 457(b) deferred compensation converted to a case under a different chap- plans for the 3 years before retirement age. Enter the total of your wages, salaries, tips, ter. Contact your plan administrator for more etc. If a joint return, also include your Because this income is taxable to the information. spouse’s income. For most people, the estate, do not include this income on your amount to enter on this line should be If you were age 50 or older at the end of own individual income tax return. The only shown in box 1 of their Form(s) W-2. But 2009, your employer may have allowed an exception is for purposes of figuring your the following types of income must also be additional deferral (catch-up contributions) self-employment tax. For that purpose, you included in the total on line 7. of up to $5,500 ($2,500 for section must take into account all your self-em- 401(k)(11) and SIMPLE plans). This addi- • Wages received as a household em- ployment income for the year from services tional deferral amount is not subject to the ployee for which you did not receive a performed both before and after the begin- overall limit on elective deferrals. Form W-2 because your employer paid you ning of the case. Also, you (or the trustee, if less than $1,700 in 2009. Also, enter one is appointed) must allocate between You cannot deduct the amount ‘‘HSH’’ and the amount not reported on you and the bankruptcy estate the wages, deferred. It is not included as Form W-2 on the dotted line next to line 7. salary, or other compensation and withheld income in box 1 of your Form income tax reported to you on Form W-2. • Tip income you did not report to your CAUTION ! W-2. A similar allocation is required for income employer. Also include allocated tips and withheld income tax reported to you on shown on your Form(s) W-2 unless you can • Disability pensions shown on Form Forms 1099. You must also attach a state- prove that you received less. Allocated tips 1099-R if you have not reached the mini- ment to your tax return that indicates you should be shown in box 8 of your Form(s) mum retirement age set by your employer. - 21 - Need more information or forms? See page 96.