Part A
Phil retired in January 2017 at age 63. His pension is $1,500 per month from a retirement plan to which Phil contributed $42,500. Phil's life expectancy is 21 years, and this year he received eleven payments for a total pension income of $16,500. Calculate Phil's taxable income from the annuity in the current year, using the general rule.
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Part B
Calculate Phil's taxable income using the following Simplified Method Worksheet.
Simplied Method Worksheet
1	Enter total amount received this year.							1
2	Enter cost in the plan of the annuity starting date.							2
3	Age at annuity starting date.
				Enter
	55 and under			360				3
	56-60			310
	61-65			260
	66-70			210
	71 and older			160
4	Divide line 2 by line 3.							4
5	Multiply line 4 by the number of monthly payments this year. If the annuity starting date was before 1987, also enter this amount on line 8, and skip lines 6 and 7. Otherwise, go to line 6.							5
6	Enter the amount, if any, recovered tax free in prior years.							6
7	Subtract line 6 from line 2.							7
8	Enter the smaller of line 5 or 7.							8
9	Taxable amount this year: Subtract line 8 from line 1. Do not enter less than zero.							9