IRS Publication 939

AAA

DEFINITION of 'IRS Publication 939'

A document published by the Internal Revenue Service (IRS) that provides guidance on how taxpayers are to treat income from pensions and annuities using the General Rule. The IRS breaks monthly income from pensions and annuities into two parts: a tax-free part made up of the money that was contributed by the individual, and a taxable part that represents the positive return on the investment.

INVESTOPEDIA EXPLAINS 'IRS Publication 939'

The General Rule is one of two methods used to calculate the tax-free part of a pension or annuity (the other being the Simplified Method, which is covered in IRS Publication 575). Individuals must use the General Rule if they receive income from a non-qualified plan, or plan that does not meet Internal Revenue Code requirements to receive the tax benefits of a qualified plan.


IRS Publication 939 does not cover income from life insurance or individual retirement accounts (IRAs), and does not provide specific information on how to use the Simplified Method.

RELATED TERMS
  1. IRS Publication 575

    A document published by the Internal Revenue Service (IRS) that ...
  2. Annuity

    A financial product sold by financial institutions that is designed ...
  3. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  4. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  5. Pension Fund

    A fund established by an employer to facilitate and organize ...
  6. Non-Qualified Plan

    Any type of tax-deferred, employer-sponsored retirement plan ...
Related Articles
  1. Are qualified pension plans taxable?
    Retirement

    Are qualified pension plans taxable?

  2. Keeping Track Of Retirement Plan Assets
    Retirement

    Keeping Track Of Retirement Plan Assets

  3. 5 Tax(ing) Retirement Mistakes
    Retirement

    5 Tax(ing) Retirement Mistakes

  4. 10 Money-Saving Year-End Tax Tips
    Taxes

    10 Money-Saving Year-End Tax Tips

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center