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Individual Income Tax Guide

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Page 2: Form 1040, Line 7 (cont.) To Line 8b

Chapter 2 –  Income

Other income reported on Line 7(cont.)

The deferral limit is different for other types of plans. The limit is (a) $12,500 if you only have SIMPLE plans, or (b) $21,000 for Code Section 403(b) plans if you qualify for the 15-year rule (See Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) for Employees of Public Schools and Certain Tax-Exempt Organizations). Although designated Roth contributions are subject to the limit, you should not include the excess attributable to them on line 7 because they are already included as income in box 1 of your Form W-2. A higher limit may apply if you are a participant in a Code Section 457(b) deferred compensation plan during the 3 years before retirement age. Contact your plan administrator for more information.

If you were age 50 or older at the end of the year, your employer may have allowed an additional deferral (catch-up contribution) of up to $6,000 ($3,000 for Code Section 401(k)(11) and SIMPLE plans). This additional deferral amount is not subject to the overall limit on elective deferrals.

NOTE: You cannot deduct the amount deferred. It is not included as income in box 1 of your Form W-2.

Line 8a – Taxable interest:  Report your total taxable interest income on this line, including interest you received in the form of original issue discount (OID). Payers should report interest to you on Form 1099-INT, Interest Income. OID should be reported to you on Form 1099-OID, Original Issue Discount. If you own an interest in a partnership or S corporation, the entity may report taxable interest to you on a Schedule K-1 that is includible on this line. If your total taxable interest income from all sources is over $1,500, you must also complete Schedule B, Interest Income and Ordinary Dividends and include it with your return. You must also complete Schedule B if:

For more on interest income and its reporting, see the Interest Income page.

Line 8b – Tax-Exempt Interest: Your total tax-exempt interest is included on this line. Tax-exempt interest should be reported in box 8 on Form 1099-INT, Interest Income. If you own an interest in a partnership or S corporation, the entity may report tax-exempt interest to you on a Schedule K-1 that is includible on this line. Tax-exempt interest includes tax-exempt interest dividends paid to you by a mutual fund.

For more information about tax-exempt income and its reporting, see the Interest Income page.