 Here we are in our example, Form 1040, populating it with LASERC tax software. You don't need tax software to follow along, but if you have access to it, it's a great tool to run scenarios with. You can also get access to the Form 1040 related forms and schedules at the IRS website, irs.gov, irs.gov. Starting point, the standard starting point, single filer, Mr. Anderson. We've got no dependence up top, 100,000 in the W2 income. We've got the 12,900 standard deduction getting us to the 87,050 of the taxable income, mirroring that over here on our tax worksheet. So we have the mirror in our tax formula page two then, giving us the tax calculation, the 14774, which we're gonna plug in here. And then we had a 15,000 withholding we are imagining getting us to the tax refund of the 226 mirrored in our formula. Okay, so now let's imagine that there's gonna be income from the pension and annuity, which was gonna be down here on line 5A. So typically the form that would be received would be a form from a financial institution, which might not look exactly like this, but it will have the relevant boxes for it. And it should say somewhere 1099R distributions from pension annuities and so on and so forth. We're typically focused on box one and two, gross distributions, and then the taxable amount of them. And then oftentimes we're focused on box seven, of course, which will tell us if it's a normal distribution or if there's some other code related to it, if you don't know what that code means, then you can check your software will often help, or you can go to the instructions that are actually on the form if you don't have it in your documentation that you're looking at. You can go on the IRS website and look up this form and look at the number of codings on the right. So typically we would expect if someone is in the area of retirement, a normal distribution, and if meaning they're old enough to be able to pull out the distribution without like a penalty, or if they are not in that timeframe, then you might have an early distribution and then another common code would be the rollover type of code because it's going into, because you're rolling over from one pension to another. So that would be the ones we want to kind of test out here. So let's bring it on back on over. Let's, I'm going to imagine now that Mr. Anderson is in the retirement years. That's when we would most expect to be receiving money from these 1099 Rs. If you're dealing with someone that is past their working years and then we'll run some scenarios where they are before the working years and have some penalties applied. Okay, so just note that I'm in the same data input screen as we were with the IRA. So the only difference really here is going to be from an IRA to a pension and annuity. It's going to have this box checked off or not. So I'm not going to check it off this time. And then we're going to say that the distribution code, let's start off with a normal distribution, which would be a seven in our code here. And that would be represented right there in the distribution codes. And then I'm going to say that the gross distribution was a thousand, let's say, a thousand and the taxable amount is a thousand. Meaning we had a thousand in box one and generally box two. And that would be what we would typically expect because it is going to be taxable. The fact that it's a normal distribution should mean that we don't get hit with the penalty on top of the tax. We're going to be paying. All right, jumping back on over. Now I'm in the tax form. 1040 SR because they're in the retirement years, but I like to still kind of look at the 1040 sometimes just so we can see the same format. So I'm going to look at the 1040, it says we're single. Now we've got Mr. Anderson. And here it says born before January 2nd, 1958. And then I still got the 100,000 that I kept in the W-2 income for now. And then I put a 10,000 down here. I'm going to put 1,000. Let's change that to 1,000. 1,000 and pulling that on over. So now it's all going to be a taxable. So it's in line 5B. That increases the taxable, the total income. And so then we have the standard deduction has been increased because their past retirement aged at the 147. Let's mirror that over here. So I'm going to say, all right, we've got the 100,000. And then on the second page, we have the IRA distributions. Let's add some more rows here. I'm going to say insert and say this is, now sometimes you could put the IRA distributions and the pension in the same data input area if you want to, or you might want to break it out. If you break it out, it's kind of nice because you can see it in the two separate lines on the form 1040. But sometimes if you put them together, that's how it's showing on the data input field. So sometimes that makes it easier that way as well. But I'm going to break them out here. And I'm going to say this is going to be then the pension and annuities. Let's say pension and annuities. There's no way I spelled that right. There's no way. I did maybe. I don't know. It's not giving me a whatever. Font, I'm going to say this is going to be black and white. Now we could have a few of these 1099. So I'm going to just leave some space, make some blue areas down below, dropping it down blue. I'm going to go, if you don't have that color, you can go to the more colors standard and hit that's the blue I'm going for here. You don't have to use that blue. You can use other colors. You can use green if you're comfortable with the standard spreadsheet green. And then the total pension and annuities is on down below. So this is going to be 1099, 1099, R1, right? The first form, R10, R10, R2, D2. This is going to be then 1000. The total I'm going to sum up down below equals the sum of these. And that should then be included in my total down here. So I'm just going to drag that on down, boom. And there's the 101 pulling into line, one of the 1040s. So that matches out. My 12,009 has to be increased now by the fact that it's going to be another 1,750 because they're over 65, I believe. And then we're going to say we've got the 86,386,3 matching right there. So that looks movie B to the N, movie BN. My BN. Page two, 14609, 14609. Let's put that here, 14609. And then we still have the 15,000 on the withholding, bringing us down to the 391. OK, so there is that one. That's the first scenario. Let's change it up and imagine that all of their income is coming from a pension and or annuity. Instead of having the 100,000 up top. And I'll also break it out so we can see the distributions from an IRA versus a pension now this time. So if I go to the first tab, I'm going to say no more W2 income past the working years. So they don't have W2 income anymore. That's what we would expect from older taxpayers, right? And then I'm going to say new tab. Let's make this one just 100,000, 100,000, 100,000, 15,000 on the withholdings now. So remember, if someone's in their retirement years, then you have to deal with their withholdings because some of their items might be taxable because they're coming out of retirement plans, which they got a tax benefit when they put the money in. So then we have to try to get the withholdings correct for the money that they take out and or make estimated tax payments so they don't get hit with penalties and interest.