Phil retired in January 2019 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.

a. Calculate Phil's taxable income from the annuity in the current year, using the general rule.

In your computations round any division to five decimal places. Round your final answer to the nearest dollar. $

b. Calculate Phil's taxable income using the following Simplified Method Worksheet.

If an amount box does not require an entry or an amount is zero, enter "0". In your computations, round your answers to two decimal places and use rounded amounts in subsequent calculations and final answers.

Simplified Method Worksheet

1.

Enter total amount received this year.

1. $16,500

2.

Enter cost in the plan at the annuity starting date.

2. $42,500

3.

Age at annuity starting date

	Enter
55 or under	360
5660	310
6165	260
6670	210
71 or older	160

3. 260

4.

Divide line 2 by line 3.

4. $163.46

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. $1,798.06

6.

Enter the amount, if any, recovered tax free in prior years.

6. $0

7.

Subtract line 6 from line 2.

7. $42,500

8.

Enter the smaller of line 5 or 7.

8. $1,798.06

9.

Taxable amount this year: Subtract line 8 from line 1. Do not enter less than zero.

9. $14,701.94

Just want to make sure i did this correctly.