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1040ez File Online Free

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1040ez File Online Free

1040ez file online free 2. 1040ez file online free   Taxable and Nontaxable Income Table of Contents Compensation for Services Retirement Plan DistributionsIndividual Retirement Arrangements (IRAs) Pensions and Annuities Social Security and Equivalent Railroad Retirement BenefitsAre Any of Your Benefits Taxable? How Much Is Taxable? How To Report Your Benefits Lump-Sum Election Repayments More Than Gross Benefits Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Life Insurance ProceedsInstallments for life. 1040ez file online free Surviving spouse. 1040ez file online free Endowment Contract Proceeds Accelerated Death Benefits Sale of HomeMaximum Amount of Exclusion Ownership and Use Tests Married Persons Business Use or Rental of Home Reporting the Sale Reverse Mortgages Other ItemsWelfare benefits. 1040ez file online free Payments from a state fund for victims of crime. 1040ez file online free Home Affordable Modification Program (HAMP). 1040ez file online free Mortgage assistance payments. 1040ez file online free Payments to reduce cost of winter energy use. 1040ez file online free Nutrition Program for the Elderly. 1040ez file online free Reemployment Trade Adjustment Assistance (RTAA). 1040ez file online free Generally, income is taxable unless it is specifically exempt (not taxed) by law. 1040ez file online free Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. 1040ez file online free Under special provisions of the law, certain items are partially or fully exempt from tax. 1040ez file online free Provisions that are of special interest to older taxpayers are discussed in this chapter. 1040ez file online free Compensation for Services Generally, you must include in gross income everything you receive in payment for personal services. 1040ez file online free In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. 1040ez file online free You need not receive the compensation in cash for it to be taxable. 1040ez file online free Payments you receive in the form of goods or services generally must be included in gross income at their fair market value. 1040ez file online free Volunteer work. 1040ez file online free   Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs. 1040ez file online free Retired Senior Volunteer Program (RSVP). 1040ez file online free Foster Grandparent Program. 1040ez file online free Senior Companion Program. 1040ez file online free Service Corps of Retired Executives (SCORE). 1040ez file online free Unemployment compensation. 1040ez file online free   You must include in income all unemployment compensation you or your spouse (if married filing jointly) received. 1040ez file online free More information. 1040ez file online free   See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income. 1040ez file online free Retirement Plan Distributions This section summarizes the tax treatment of amounts you receive from traditional individual retirement arrangements (IRA), employee pensions or annuities, and disability pensions or annuities. 1040ez file online free A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. 1040ez file online free A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and tax-free distributions. 1040ez file online free A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. 1040ez file online free More detailed information can be found in Publication 590, Individual Retirement Arrangements (IRAs), and Publication 575, Pension and Annuity Income. 1040ez file online free Individual Retirement Arrangements (IRAs) In general, distributions from a traditional IRA are taxable in the year you receive them. 1040ez file online free Exceptions to the general rule are rollovers, tax-free withdrawals of contributions, and the return of nondeductible contributions. 1040ez file online free These are discussed in Publication 590. 1040ez file online free If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. 1040ez file online free If you do not file Form 8606 with your return, you may have to pay a $50 penalty. 1040ez file online free Also, when you receive distributions from your traditional IRA, the amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. 1040ez file online free Early distributions. 1040ez file online free   Generally, early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age  59½. 1040ez file online free You must include early distributions of taxable amounts in your gross income. 1040ez file online free These taxable amounts are also subject to an additional 10% tax unless the distribution qualifies for an exception. 1040ez file online free For purposes of the additional 10% tax, an IRA is a qualified retirement plan. 1040ez file online free For more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later. 1040ez file online free After age 59½ and before age 70½. 1040ez file online free   After you reach age 59½, you can receive distributions from your traditional IRA without having to pay the 10% additional tax. 1040ez file online free Even though you can receive distributions after you reach age 59½, distributions are not required until you reach  age 70½. 1040ez file online free Required distributions. 1040ez file online free   If you are the owner of a traditional IRA, you generally must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 70½. 1040ez file online free See When Must You Withdraw Assets? (Required Minimum Distributions) in Publication 590. 1040ez file online free If distributions from your traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. 1040ez file online free For purposes of the 50% excise tax, an IRA is a qualified retirement plan. 1040ez file online free For more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. 1040ez file online free See also Excess Accumulations (Insufficient Distributions) in Publication 590. 1040ez file online free Pensions and Annuities Generally, if you did not pay any part of the cost of your employee pension or annuity, and your employer did not withhold part of the cost of the contract from your pay while you worked, the amounts you receive each year are fully taxable. 1040ez file online free However, see Insurance Premiums for Retired Public Safety Officers , later. 1040ez file online free If you paid part of the cost of your pension or annuity plan (see Cost , later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). 1040ez file online free This tax-free part of the payment is figured when your annuity starts and remains the same each year, even if the amount of the payment changes. 1040ez file online free The rest of each payment is taxable. 1040ez file online free However, see Insurance Premiums for Retired Public Safety Officers , later. 1040ez file online free You figure the tax-free part of the payment using one of the following methods. 1040ez file online free Simplified Method. 1040ez file online free You generally must use this method if your annuity is paid under a qualified plan (a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan or contract). 1040ez file online free You cannot use this method if your annuity is paid under a nonqualified plan. 1040ez file online free General Rule. 1040ez file online free You must use this method if your annuity is paid under a nonqualified plan. 1040ez file online free You generally cannot use this method if your annuity is paid under a qualified plan. 1040ez file online free Contact your employer or plan administrator to find out if your pension or annuity is paid under a qualified or nonqualified plan. 1040ez file online free You determine which method to use when you first begin receiving your annuity, and you continue using it each year that you recover part of your cost. 1040ez file online free Exclusion limit. 1040ez file online free   If your annuity starting date is after 1986, the total amount of annuity income you can exclude over the years as a recovery of the cost cannot exceed your total cost. 1040ez file online free Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. 1040ez file online free This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. 1040ez file online free   If you contributed to your pension or annuity and your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. 1040ez file online free If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. 1040ez file online free The total exclusion may be more than your cost. 1040ez file online free Cost. 1040ez file online free   Before you can figure how much, if any, of your pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). 1040ez file online free Your total cost in the plan includes everything that you paid. 1040ez file online free It also includes amounts your employer contributed that were taxable to you when paid. 1040ez file online free However, see Foreign employment contributions , later. 1040ez file online free   From this total cost, subtract any refunded premiums, rebates, dividends, unrepaid loans, or other tax-free amounts you received by the later of the annuity starting date or the date on which you received your first payment. 1040ez file online free   The annuity starting date is the later of the first day of the first period for which you received a payment from the plan or the date on which the plan's obligations became fixed. 1040ez file online free    The amount of your contributions to the plan may be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040ez file online free , that you receive. 1040ez file online free Foreign employment contributions. 1040ez file online free   If you worked abroad, certain amounts your employer paid into your retirement plan that were not includible in your gross income may be considered part of your cost. 1040ez file online free For details, see Foreign employment contributions in Publication 575. 1040ez file online free Withholding. 1040ez file online free   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable part of amounts paid to you. 1040ez file online free However, you can choose not to have tax withheld on the payments you receive, unless they are eligible rollover distributions. 1040ez file online free (These are distributions that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. 1040ez file online free ) See Withholding Tax and Estimated Tax and Rollovers in Publication 575 for more information. 1040ez file online free   For payments other than eligible rollover distributions, you can tell the payer how much to withhold by filing a Form W-4P, Withholding Certificate for Pension or Annuity Payments. 1040ez file online free Simplified Method. 1040ez file online free   Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. 1040ez file online free For an annuity that is payable over the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. 1040ez file online free For any other annuity, this number is the number of monthly annuity payments under the contract. 1040ez file online free Who must use the Simplified Method. 1040ez file online free   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you receive your pension or annuity payments from a qualified plan or annuity, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments (defined next). 1040ez file online free   In addition, if your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use the Simplified Method for payments from a qualified plan, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments. 1040ez file online free If you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. 1040ez file online free Guaranteed payments. 1040ez file online free   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. 1040ez file online free If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. 1040ez file online free Who cannot use the Simplified Method. 1040ez file online free   You cannot use the Simplified Method and must use the General Rule if you receive pension or annuity payments from: A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan, or A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 years of guaranteed payments (defined above). 1040ez file online free   In addition, you had to use the General Rule for either circumstance described above if your annuity starting date is after July 1, 1986, and before November 19, 1996. 1040ez file online free If you did not have to use the General Rule, you could have chosen to use it. 1040ez file online free You also had to use the General Rule for payments from a qualified plan if your annuity starting date is before July 2, 1986, and you did not qualify to use the Three-Year Rule. 1040ez file online free   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. 1040ez file online free   Unless your annuity starting date was before 1987, once you have recovered all of your non-taxable investment, all of each remaining payment you receive is fully taxable. 1040ez file online free Once your remaining payments are fully taxable, there is no longer a concern with the General Rule or Simplified Method. 1040ez file online free   Complete information on the General Rule, including the actuarial tables you need, is contained in Publication 939, General Rule for Pensions and Annuities. 1040ez file online free How to use the Simplified Method. 1040ez file online free   Complete the Simplified Method Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions or in Publication 575 to figure your taxable annuity for 2013. 1040ez file online free Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. 1040ez file online free   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. 1040ez file online free How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. 1040ez file online free For this purpose, treat an annuity that is payable over the life of an annuitant as payable for that annuitant's life even if the annuity has a fixed-period feature or also provides a temporary annuity payable to the annuitant's child under age 25. 1040ez file online free    You do not need to complete line 3 of the worksheet or make the computation on line 4 if you received annuity payments last year and used last year's worksheet to figure your taxable annuity. 1040ez file online free Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. 1040ez file online free Single-life annuity. 1040ez file online free   If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. 1040ez file online free Enter on line 3 the number shown for your age on your annuity starting date. 1040ez file online free This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. 1040ez file online free Multiple-lives annuity. 1040ez file online free   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. 1040ez file online free Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. 1040ez file online free For an annuity payable to you as the primary annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. 1040ez file online free For an annuity that has no primary annuitant and is payable to you and others as survivor annuitants, combine the ages of the oldest and youngest annuitants. 1040ez file online free Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. 1040ez file online free   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. 1040ez file online free Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. 1040ez file online free This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. 1040ez file online free Fixed-period annuities. 1040ez file online free   If your annuity does not depend in whole or in part on anyone's life expectancy, the total number of expected monthly payments to enter on line 3 of the worksheet is the number of monthly annuity payments under the contract. 1040ez file online free Line 6. 1040ez file online free   The amount on line 6 should include all amounts that could have been recovered in prior years. 1040ez file online free If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. 1040ez file online free    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in later years. 1040ez file online free Example. 1040ez file online free Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. 1040ez file online free Bill's annuity starting date is January 1, 2013. 1040ez file online free The benefits are to be paid over the joint lives of Bill and his wife, Kathy, age 65. 1040ez file online free Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. 1040ez file online free Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. 1040ez file online free Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. 1040ez file online free See the illustrated Worksheet 2-A, Simplified Method Worksheet, later. 1040ez file online free You can find a blank version of this worksheet in Publication 575. 1040ez file online free (The references in the illustrated worksheet are to sections in Publication 575). 1040ez file online free His annuity is payable over the lives of more than one annuitant, so Bill uses his and Kathy's combined ages, 130 (65 + 65), and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet and finds the line 3 amount to be 310. 1040ez file online free Bill's tax-free monthly amount is $100 ($31,000 ÷ 310 as shown on line 4 of the worksheet). 1040ez file online free Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. 1040ez file online free The full amount of any annuity payments received after 310 payments are paid must generally be included in gross income. 1040ez file online free If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. 1040ez file online free This deduction is not subject to the 2%-of-adjusted-gross-income limit. 1040ez file online free Worksheet 2-A. 1040ez file online free Simplified Method Worksheet—Illustrated 1. 1040ez file online free Enter the total pension or annuity payments received this year. 1040ez file online free Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040ez file online free $ 14,400 2. 1040ez file online free Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion* See Cost (Investment in the Contract), earlier 2. 1040ez file online free 31,000   Note. 1040ez file online free If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040ez file online free Otherwise, go to line 3. 1040ez file online free     3. 1040ez file online free Enter the appropriate number from Table 1 below. 1040ez file online free But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. 1040ez file online free 310 4. 1040ez file online free Divide line 2 by the number on line 3 4. 1040ez file online free 100 5. 1040ez file online free Multiply line 4 by the number of months for which this year's payments were made. 1040ez file online free If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040ez file online free Otherwise, go to line 6 5. 1040ez file online free 1,200 6. 1040ez file online free Enter any amount previously recovered tax free in years after 1986. 1040ez file online free This is the amount shown on line 10 of your worksheet for last year 6. 1040ez file online free 0 7. 1040ez file online free Subtract line 6 from line 2 7. 1040ez file online free 31,000 8. 1040ez file online free Enter the smaller of line 5 or line 7 8. 1040ez file online free 1,200 9. 1040ez file online free Taxable amount for year. 1040ez file online free Subtract line 8 from line 1. 1040ez file online free Enter the result, but not less than zero. 1040ez file online free Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. 1040ez file online free Note. 1040ez file online free If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. 1040ez file online free If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers, earlier, before entering an amount on your tax return. 1040ez file online free 9. 1040ez file online free $ 13,200 10. 1040ez file online free Was your annuity starting date before 1987? □ Yes. 1040ez file online free STOP. 1040ez file online free Do not complete the rest of this worksheet. 1040ez file online free  ☑ No. 1040ez file online free Add lines 6 and 8. 1040ez file online free This is the amount you have recovered tax free through 2013. 1040ez file online free You will need this number if you need to fill out this worksheet next year. 1040ez file online free 10. 1040ez file online free 1,200 11. 1040ez file online free Balance of cost to be recovered. 1040ez file online free Subtract line 10 from line 2. 1040ez file online free If zero, you will not have to complete this worksheet next year. 1040ez file online free The payments you receive next year will generally be fully taxable 11. 1040ez file online free $ 29,800 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. 1040ez file online free   Table 1 for Line 3 Above       AND your annuity starting date was—   IF your age on your annuity starting date was . 1040ez file online free . 1040ez file online free . 1040ez file online free   BEFORE November 19, 1996, enter on line 3 . 1040ez file online free . 1040ez file online free . 1040ez file online free AFTER November 18, 1996, enter on line 3 . 1040ez file online free . 1040ez file online free . 1040ez file online free   55 or under 300 360   56-60 260 310   61-65 240 260   66-70 170 210   71 or over 120 160 Table 2 for Line 3 Above   IF the annuitants' combined ages on your annuity starting date were . 1040ez file online free . 1040ez file online free . 1040ez file online free   THEN enter on line 3 . 1040ez file online free . 1040ez file online free . 1040ez file online free         110 or under   410         111-120   360         121-130   310         131-140   260         141 or over   210       Survivors of retirees. 1040ez file online free   Benefits paid to you as a survivor under a joint and survivor annuity must be included in your gross income in the same way the retiree would have included them in gross income. 1040ez file online free   If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule, include the total received in your income. 1040ez file online free The retiree's cost has already been recovered tax free. 1040ez file online free   If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for in the contract. 1040ez file online free The resulting tax-free amount will then remain fixed. 1040ez file online free Any increases in the survivor annuity are fully taxable. 1040ez file online free   If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. 1040ez file online free See Simplified Method , earlier. 1040ez file online free How to report. 1040ez file online free   If you file Form 1040, report your total annuity on line 16a, and the taxable part on line 16b. 1040ez file online free If your pension or annuity is fully taxable, enter it on line 16b. 1040ez file online free Do not make an entry on line 16a. 1040ez file online free   If you file Form 1040A, report your total annuity on line 12a, and the taxable part on line 12b. 1040ez file online free If your pension or annuity is fully taxable, enter it on line 12b. 1040ez file online free Do not make an entry on line 12a. 1040ez file online free   If you file Form 1040NR, report your total annuity on line 17a, and the taxable part on line 17b. 1040ez file online free If your pension or annuity is fully taxable, enter it on line 17b. 1040ez file online free Do not make an entry on line 17a. 1040ez file online free Example. 1040ez file online free You are a Form 1040 filer and you received monthly payments totaling $1,200 (12 months x $100) during 2013 from a pension plan that was completely financed by your employer. 1040ez file online free You had paid no tax on the payments that your employer made to the plan, and the payments were not used to pay for accident, health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public Safety Officers ). 1040ez file online free The entire $1,200 is taxable. 1040ez file online free You include $1,200 only on Form 1040, line 16b. 1040ez file online free Joint return. 1040ez file online free   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on line 16a of Form 1040, line 12a of Form 1040A, or line 17a of Form 1040NR. 1040ez file online free Report the total of the taxable parts on line 16b of Form 1040, line 12b of Form 1040A, or line 17b of Form 1040NR. 1040ez file online free Form 1099-R. 1040ez file online free   You should receive a Form 1099-R for your pension or annuity. 1040ez file online free Form 1099-R shows your pension or annuity for the year and any income tax withheld. 1040ez file online free You should receive a Form W-2 if you receive distributions from certain nonqualified plans. 1040ez file online free You must attach Forms 1099-R or Forms W-2 to your 2013 tax return if federal income tax was withheld. 1040ez file online free Generally, you should be sent these forms by January 31, 2014. 1040ez file online free Nonperiodic Distributions If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from your income as a recovery of your cost. 1040ez file online free Nonperiodic distributions include cash withdrawals, distributions of current earnings (dividends) on your investment, and certain loans. 1040ez file online free For information on how to figure the taxable amount of a nonperiodic distribution, see Taxation of Nonperiodic Payments in Publication 575. 1040ez file online free The taxable part of a nonperiodic distribution may be subject to an additional 10% tax. 1040ez file online free See Tax on Early Distributions, later. 1040ez file online free Lump-sum distributions. 1040ez file online free   If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. 1040ez file online free The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. 1040ez file online free The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. 1040ez file online free You may be able to use the 10-year tax option to figure tax on the ordinary income part. 1040ez file online free Form 1099-R. 1040ez file online free   If you receive a total distribution from a plan, you should receive a Form 1099-R. 1040ez file online free If the distribution qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. 1040ez file online free The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is the ordinary income part. 1040ez file online free More information. 1040ez file online free   For more detailed information on lump-sum distributions, see Publication 575 or Form 4972, Tax on Lump-Sum Distributions. 1040ez file online free Tax on Early Distributions Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you reach age 59½ are subject to an additional tax of 10%. 1040ez file online free The tax applies to the taxable part of the distribution. 1040ez file online free For this purpose, a qualified retirement plan is: A qualified employee plan (including a qualified cash or deferred arrangement (CODA) under Internal Revenue Code section 401(k)), A qualified employee annuity plan, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). 1040ez file online free  An IRA is also a qualified retirement plan for purposes of this tax. 1040ez file online free General exceptions to tax. 1040ez file online free   The early distribution tax does not apply to any distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. 1040ez file online free Additional exceptions. 1040ez file online free   There are additional exceptions to the early distribution tax for certain distributions from qualified retirement plans and nonqualified annuity contracts. 1040ez file online free See Publication 575 for details. 1040ez file online free Reporting tax. 1040ez file online free   If you owe only the tax on early distributions and distribution code 1 (early distribution, no known exception) is correctly shown in Form 1099-R, box 7, multiply the taxable part of the early distribution by 10% (. 1040ez file online free 10) and enter the result on Form 1040, line 58, or Form 1040NR, line 56. 1040ez file online free See the instructions for line 58 of Form 1040 or line 56 of Form 1040NR for more information about reporting the early distribution tax. 1040ez file online free Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date. 1040ez file online free Unless the rule for 5% owners applies, this is generally April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. 1040ez file online free However, your plan may require you to begin to receive payments by April 1 of the year that follows the year in which you reach 70½, even if you have not retired. 1040ez file online free For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan) (for benefits accruing after 1986). 1040ez file online free  An IRA is also a qualified retirement plan for purposes of this tax. 1040ez file online free An excess accumulation is the undistributed remainder of the required minimum distribution that was left in your qualified retirement plan. 1040ez file online free 5% owners. 1040ez file online free   If you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the company maintaining your qualified retirement plan, you must begin to receive distributions from the plan by April 1 of the year after the calendar year in which you reach age 70½. 1040ez file online free See Publication 575 for more information. 1040ez file online free Amount of tax. 1040ez file online free   If you do not receive the required minimum distribution, you are subject to an additional tax. 1040ez file online free The tax equals 50% of the difference between the amount that must be distributed and the amount that was distributed during the tax year. 1040ez file online free You can get this excise tax excused if you establish that the shortfall in distributions was due to reasonable error and that you are taking reasonable steps to remedy the shortfall. 1040ez file online free Form 5329. 1040ez file online free   You must file a Form 5329 if you owe a tax because you did not receive a minimum required distribution from your qualified retirement plan. 1040ez file online free Additional information. 1040ez file online free   For more detailed information on the tax on excess accumulation, see Publication 575. 1040ez file online free Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. 1040ez file online free The premiums can be for coverage for you, your spouse, or dependent(s). 1040ez file online free The distribution must be made directly from the plan to the insurance provider. 1040ez file online free You can exclude from income the smaller of the amount of the insurance premiums or $3,000. 1040ez file online free You can only make this election for amounts that would otherwise be included in your income. 1040ez file online free The amount excluded from your income cannot be used to claim a medical expense deduction. 1040ez file online free An eligible retirement plan is a governmental plan that is a: Qualified trust, Section 403(a) plan, Section 403(b) annuity, or Section 457(b) plan. 1040ez file online free If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. 1040ez file online free The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. 1040ez file online free Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. 1040ez file online free Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. 1040ez file online free Enter “PSO” next to the appropriate line on which you report the taxable amount. 1040ez file online free Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. 1040ez file online free These categories are treated differently for income tax purposes. 1040ez file online free Social security equivalent benefits. 1040ez file online free   The first category is the amount of tier 1 railroad retirement benefits that equals the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. 1040ez file online free This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. 1040ez file online free (See Social Security and Equivalent Railroad Retirement Benefits , later. 1040ez file online free ) Non-social security equivalent benefits. 1040ez file online free   The second category contains the rest of the tier 1 benefits, called the non-social security equivalent benefit (NSSEB). 1040ez file online free It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. 1040ez file online free This category of benefits is treated as an amount received from a qualified employee plan. 1040ez file online free This allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits. 1040ez file online free Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. 1040ez file online free More information. 1040ez file online free   For more information about railroad retirement benefits, see Publication 575. 1040ez file online free Military Retirement Pay Military retirement pay based on age or length of service is taxable and must be included in income as a pension on Form 1040, lines 16a and 16b; on Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. 1040ez file online free But, certain military and government disability pensions that are based on a percentage of disability from active service in the Armed Forces of any country generally are not taxable. 1040ez file online free For more information, including information about veterans' benefits and insurance, see Publication 525. 1040ez file online free Social Security and Equivalent Railroad Retirement Benefits This discussion explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. 1040ez file online free Social security benefits include monthly retirement, survivor, and disability benefits. 1040ez file online free They do not include supplemental security income (SSI) payments, which are not taxable. 1040ez file online free Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. 1040ez file online free They commonly are called the social security equivalent benefit (SSEB) portion of tier 1 benefits. 1040ez file online free If you received these benefits during 2013, you should have received a Form SSA-1099 or Form RRB-1099 (Form SSA-1042S or Form RRB-1042S if you are a nonresident alien), showing the amount of the benefits. 1040ez file online free Are Any of Your Benefits Taxable? Note. 1040ez file online free When the term “benefits” is used in this section, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. 1040ez file online free  To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. 1040ez file online free When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. 1040ez file online free S. 1040ez file online free savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned in American Samoa or Puerto Rico by bona fide residents. 1040ez file online free Figuring total income. 1040ez file online free   To figure the total of one-half of your benefits plus your other income, use Worksheet 2-B. 1040ez file online free If that total amount is more than your base amount, part of your benefits may be taxable. 1040ez file online free If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. 1040ez file online free Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. 1040ez file online free If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. 1040ez file online free If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. 1040ez file online free Worksheet 2-B. 1040ez file online free A Quick Way To Check if Your Benefits May Be Taxable A. 1040ez file online free Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. 1040ez file online free Include  the full amount of any lump-sum benefit payments received in 2013, for 2013 and  earlier years. 1040ez file online free (If you received more than one form, combine the amounts from box 5  and enter the total. 1040ez file online free ) A. 1040ez file online free     Note. 1040ez file online free If the amount on line A is zero or less, stop here; none of your benefits are  taxable this year. 1040ez file online free     B. 1040ez file online free Enter one-half of the amount on line A B. 1040ez file online free   C. 1040ez file online free Enter your taxable pensions, wages, interest, dividends, and other taxable income C. 1040ez file online free   D. 1040ez file online free Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income for: •Interest from qualified U. 1040ez file online free S. 1040ez file online free savings bonds, •Employer-provided adoption benefits, •Foreign earned income or foreign housing, or •Income earned in American Samoa or Puerto Rico by bona fide residents D. 1040ez file online free   E. 1040ez file online free Add lines B, C, and D and enter the total E. 1040ez file online free   F. 1040ez file online free If you are: •Married filing jointly, enter $32,000 •Single, head of household, qualifying widow(er), or married filing separately and you  lived apart from your spouse for all of 2013, enter $25,000 •Married filing separately and you lived with your spouse at any time during 2013,  enter -0- F. 1040ez file online free   G. 1040ez file online free Is the amount on line F less than or equal to the amount on line E? □ No. 1040ez file online free None of your benefits are taxable this year. 1040ez file online free  □ Yes. 1040ez file online free Some of your benefits may be taxable. 1040ez file online free To figure how much of your benefits  are taxable, see Which worksheet to use under How Much Is Taxable. 1040ez file online free     Base Amount Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er) with dependent child, $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $0 if you are married filing separately and lived with your spouse at any time during 2013. 1040ez file online free Repayment of Benefits Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. 1040ez file online free It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. 1040ez file online free If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. 1040ez file online free Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. 1040ez file online free Your repayments are shown in box 4. 1040ez file online free The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). 1040ez file online free Use the amount in box 5 to figure whether any of your benefits are taxable. 1040ez file online free Tax Withholding and Estimated Tax You can choose to have federal income tax withheld from your social security and/or the SSEB portion of your tier 1 railroad retirement benefits. 1040ez file online free If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Request. 1040ez file online free If you do not choose to have income tax withheld, you may have to request additional withholding from other income, or pay estimated tax during the year. 1040ez file online free For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. 1040ez file online free How Much Is Taxable? If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. 1040ez file online free Generally, the higher that total amount, the greater the taxable part of your benefits. 1040ez file online free Maximum taxable part. 1040ez file online free   The taxable part of your benefits usually cannot be more than 50%. 1040ez file online free However, up to 85% of your benefits can be taxable if either of the following situations applies to you. 1040ez file online free The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). 1040ez file online free You are married filing separately and lived with your spouse at any time during 2013. 1040ez file online free   If you are a nonresident alien, 85% of your benefits are taxable. 1040ez file online free However, this income is exempt under some tax treaties. 1040ez file online free Which worksheet to use. 1040ez file online free   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. 1040ez file online free However, you will need to use a different worksheet(s) if any of the following situations applies to you. 1040ez file online free You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse were covered by a retirement plan at work. 1040ez file online free In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. 1040ez file online free Situation (1) does not apply and you take one or more of the following exclusions. 1040ez file online free Interest from qualified U. 1040ez file online free S. 1040ez file online free savings bonds (Form 8815). 1040ez file online free Employer-provided adoption benefits (Form 8839). 1040ez file online free Foreign earned income or housing (Form 2555 or Form 2555-EZ). 1040ez file online free Income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. 1040ez file online free In these situations, you must use Worksheet 1 in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits. 1040ez file online free You received a lump-sum payment for an earlier year. 1040ez file online free In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. 1040ez file online free See Lump-Sum Election , later. 1040ez file online free How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040, Form 1040A, or Form 1040NR. 1040ez file online free You cannot use Form 1040EZ. 1040ez file online free Reporting on Form 1040. 1040ez file online free   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. 1040ez file online free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. 1040ez file online free Reporting on Form 1040A. 1040ez file online free   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. 1040ez file online free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. 1040ez file online free Reporting on Form 1040NR. 1040ez file online free   Report 85% of the total amount of your benefits (box 5 of your Form SSA-1042S or Form RRB-1042S) in the appropriate column of Form 1040NR, Schedule NEC, line 8. 1040ez file online free Benefits not taxable. 1040ez file online free   If you are filing Form 1040EZ, do not report any benefits on your tax return. 1040ez file online free If you are filing Form 1040 or Form 1040A, report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. 1040ez file online free Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. 1040ez file online free If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. 1040ez file online free Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. 1040ez file online free This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. 1040ez file online free No part of the lump-sum death benefit is subject to tax. 1040ez file online free For more information about the lump-sum death benefit, visit the Social Security Administration website at www. 1040ez file online free SSA. 1040ez file online free gov, and use keyword: death benefit. 1040ez file online free Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. 1040ez file online free However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. 1040ez file online free You can elect this method if it lowers your taxable benefits. 1040ez file online free See Publication 915 for more information. 1040ez file online free Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. 1040ez file online free If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. 1040ez file online free If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. 1040ez file online free If you have any questions about this negative figure, contact your local Social Security Administration office or your local U. 1040ez file online free S. 1040ez file online free Railroad Retirement Board field office. 1040ez file online free Joint return. 1040ez file online free   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5 but your spouse's does not, subtract the box 5 amount on your form from the box 5 amount on your spouse's form. 1040ez file online free You do this to get your net benefits when figuring if your combined benefits are taxable. 1040ez file online free Repayment of benefits received in an earlier year. 1040ez file online free   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. 1040ez file online free   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. 1040ez file online free Claim it on Schedule A (Form 1040), line 23. 1040ez file online free   If this deduction is more than $3,000, you have to follow some special instructions. 1040ez file online free See Publication 915 for those instructions. 1040ez file online free Sickness and Injury Benefits Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. 1040ez file online free If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. 1040ez file online free However, certain payments may not be taxable to you. 1040ez file online free Some of these payments are discussed later in this section. 1040ez file online free Also, see Military and Government Disability Pensions and Other Sickness and Injury Benefits in Publication 525. 1040ez file online free Cost paid by you. 1040ez file online free   If you pay the entire cost of an accident or health plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. 1040ez file online free If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. 1040ez file online free Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. 1040ez file online free You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A or on line 8 of Form 1040NR until you reach minimum retirement age. 1040ez file online free Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. 1040ez file online free If you were 65 or older by the end of 2013 or you were retired on permanent and total disability and received taxable disability income, you may be able to claim the credit for the elderly or the disabled. 1040ez file online free See Credit for the Elderly or the Disabled, later. 1040ez file online free For more information on this credit, see Publication 524, Credit for the Elderly or the Disabled. 1040ez file online free Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. 1040ez file online free Report the payments on lines 16a and 16b of Form 1040, on lines 12a and 12b of Form 1040A, or on lines 17a and 17b of Form 1040NR. 1040ez file online free For more information on pensions and annuities, see Publication 575. 1040ez file online free Retirement and profit-sharing plans. 1040ez file online free   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. 1040ez file online free The payments must be reported as a pension or annuity. 1040ez file online free Accrued leave payment. 1040ez file online free   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. 1040ez file online free The payment is not a disability payment. 1040ez file online free Include it in your income in the tax year you receive it. 1040ez file online free Long-Term Care Insurance Contracts In most cases, long-term care insurance contracts generally are treated as accident and health insurance contracts. 1040ez file online free Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. 1040ez file online free However, the amount you can exclude may be limited. 1040ez file online free Long-term care insurance contracts are discussed in more detail in Publication 525. 1040ez file online free Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. 1040ez file online free The exemption also applies to your survivors. 1040ez file online free The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. 1040ez file online free If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. 1040ez file online free For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. 1040ez file online free Return to work. 1040ez file online free   If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. 1040ez file online free Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. 1040ez file online free Federal Employees' Compensation Act (FECA). 1040ez file online free   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. 1040ez file online free However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. 1040ez file online free Report this income on Form 1040, line 7; Form 1040A, line 7; on Form 1040EZ, line 1; or Form 1040NR, line 8. 1040ez file online free Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. 1040ez file online free    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. 1040ez file online free For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. 1040ez file online free Other compensation. 1040ez file online free   Many other amounts you receive as compensation for sickness or injury are not taxable. 1040ez file online free These include the following amounts. 1040ez file online free Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. 1040ez file online free Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. 1040ez file online free Compensation you receive for permanent loss or loss of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). 1040ez file online free This compensation must be based only on the injury and not on the period of your absence from work. 1040ez file online free These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. 1040ez file online free Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. 1040ez file online free This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. 1040ez file online free Proceeds not received in installments. 1040ez file online free   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. 1040ez file online free If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. 1040ez file online free Proceeds received in installments. 1040ez file online free   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. 1040ez file online free   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. 1040ez file online free Include anything over this excluded part in your income as interest. 1040ez file online free Installments for life. 1040ez file online free   If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds in installments for the rest of your life without a refund or period-certain guarantee, you figure the excluded part of each installment by dividing the amount held by the insurance company by your life expectancy. 1040ez file online free If there is a refund or period-certain guarantee, the amount held by the insurance company for this purpose is reduced by the actuarial value of the guarantee. 1040ez file online free Surviving spouse. 1040ez file online free   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the interest included in the installments. 1040ez file online free If you remarry, you can continue to take the exclusion. 1040ez file online free Surrender of policy for cash. 1040ez file online free   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. 1040ez file online free In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. 1040ez file online free You should receive a Form 1099-R showing the total proceeds and the taxable part. 1040ez file online free Report these amounts on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b. 1040ez file online free Endowment Contract Proceeds An endowment contract is a policy that pays over to you a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. 1040ez file online free Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. 1040ez file online free To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. 1040ez file online free Include in your income the part of the lump-sum payment that is more than your cost. 1040ez file online free Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity of the policy are taxed as an annuity. 1040ez file online free The tax treatment of an annuity is explained in Publication 575. 1040ez file online free For this treatment to apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. 1040ez file online free This election must be made within 60 days after the lump-sum payment first becomes payable to you. 1040ez file online free Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are generally excluded from income if the insured is terminally or chronically ill. 1040ez file online free However, see Exception , later. 1040ez file online free For a chronically ill individual, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. 1040ez file online free Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to a limit. 1040ez file online free In addition, if any portion of a death benefit under a life insurance contract on the life of a terminally or chronically ill individual is sold or assigned to a viatical settlement provider, the amount received also is excluded from income. 1040ez file online free Generally, a viatical settlement provider is one who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill. 1040ez file online free To report taxable accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. 1040ez file online free Terminally or chronically ill defined. 1040ez file online free   A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. 1040ez file online free A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions. 1040ez file online free The person is unable to perform (without substantial help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more because of a loss of functional capacity. 1040ez file online free The person requires substantial supervision to protect himself or herself from threats to health and safety due to severe cognitive impairment. 1040ez file online free Exception. 1040ez file online free   The exclusion does not apply to any amount paid to a person other than the insured if that other person has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the other person, or Has a financial interest in the business of the other person. 1040ez file online free Sale of Home You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return in most cases) on the sale of your main home. 1040ez file online free Generally, if you can exclude all of the gain, you do not need to report the sale on your tax return. 1040ez file online free You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. 1040ez file online free Main home. 1040ez file online free   Usually, your main home is the home you live in most of the time and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. 1040ez file online free Repaying the first-time homebuyer credit because you sold your home. 1040ez file online free   If you claimed a first-time homebuyer credit for your main home and you sell it, you may have to repay the credit. 1040ez file online free For a home purchased in 2008 and used as your main home until sold in 2013, you must file Form 5405 and repay the balance of the unpaid credit on your 2013 tax return. 1040ez file online free   For a home purchased after 2008, you generally must repay the entire credit if the home was sold (or otherwise ceased to be your main home) within 36 months of the purchase date. 1040ez file online free If you purchased your home in 2009 and used it as your main home until sold in 2013, you do not have to repay the credit or file Form 5405. 1040ez file online free If you purchased your home in 2010 and used it as your main home until sold in 2013, you may have to file Form 5405 and repay the entire credit on your 2013 tax return. 1040ez file online free   See the Instructions for Form 5405 for more information about repaying the credit and exceptions to repayment that may apply to you. 1040ez file online free Maximum Amount of Exclusion You can generally exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. 1040ez file online free You meet the ownership test. 1040ez file online free You meet the use test. 1040ez file online free During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. 1040ez file online free You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . 1040ez file online free Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. 1040ez file online free This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). 1040ez file online free Exception to ownership and use tests. 1040ez file online free   If you owned and lived in the property as your main home for less than 2 years, you still can claim an exclusion in some cases. 1040ez file online free Generally, you must have sold the home due to a change in place of employment, health, or unforeseen circumstances. 1040ez file online free The maximum amount you can exclude will be reduced. 1040ez file online free See Publication 523, Selling Your Home, for more information. 1040ez file online free Exception to use test for individuals with a disability. 1040ez file online free   There is an exception to the use test if, during the 5-year period before the sale of your home: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year. 1040ez file online free Under this exception, you are considered to live in your home during any time that you own the home and live in a facility (including a nursing home) that is licensed by a state or political subdivision to care for persons in your condition. 1040ez file online free   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. 1040ez file online free Exception to ownership test for property acquired in a like-kind exchange. 1040ez file online free   You must have owned your main home for at least 5 years to qualify for the exclusion if you acquired your main home in a like-kind exchange. 1040ez file online free This special 5-year ownership rule continues to apply to a home you acquired in a like-kind exchange and gave to another person. 1040ez file online free A like-kind exchange is an exchange of property held for productive use in a trade or business or for investment. 1040ez file online free See Publication 523 for more information. 1040ez file online free Period of nonqualified use. 1040ez file online free   Generally, the gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gain is allocated to periods of nonqualified use. 1040ez file online free Nonqualified use is any period after December 31, 2008, during which the property is not used as the main home. 1040ez file online free See Publication 523 for more information. 1040ez file online free Married Persons In the special situations discussed below, if you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use test, you can exclude up to $250,000 of gain. 1040ez file online free However, see Special rules for joint returns , next. 1040ez file online free Special rules for joint returns. 1040ez file online free   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. 1040ez file online free You are married and file a joint return for the year. 1040ez file online free Either you or your spouse meets the ownership test. 1040ez file online free Both you and your spouse meet the use test. 1040ez file online free During the 2-year period ending on the date of the sale, neither you nor your spouse exclude gain from the sale of another home. 1040ez file online free Sale of home by surviving spouse. 1040ez file online free   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. 1040ez file online free   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2013. 1040ez file online free The sale or exchange took place no more than 2 years after the date of death of your spouse. 1040ez file online free You have not remarried. 1040ez file online free You and your spouse met the use test at the time of your spouse's death. 1040ez file online free You or your spouse met the ownership test at the time of your spouse's death. 1040ez file online free Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. 1040ez file online free Home transferred from spouse. 1040ez file online free   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. 1040ez file online free Use of home after divorce. 1040ez file online free   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. 1040ez file online free Business Use or Rental of Home You may be able to exclude gain from the sale of a home that you have used for business or to produce rental income. 1040ez file online free However, you must meet the ownership and use tests. 1040ez file online free See Publication 523 for more information. 1040ez file online free Depreciation after May 6, 1997. 1040ez file online free   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. 1040ez file online free See Publication 523 for more information. 1040ez file online free Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and you do not qualify to exclude all of it, You have a gain and you choose not to exclude it, or You received Form 1099-S. 1040ez file online free If you have a gain that you cannot or choose not to exclude, if you received a Form 1099-S, or if you have a deductible loss, report the sale on your tax return. 1040ez file online free Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. 1040ez file online free If you used your home for business or to produce rental income, you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. 1040ez file online free See Publication 523 for more information. 1040ez file online free Reverse Mortgages A revers
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The 1040ez File Online Free

1040ez file online free 2. 1040ez file online free   Roth IRAs Table of Contents What's New for 2013 What's New for 2014 Reminders Introduction What Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA?How Much Can Be Contributed? When Can You Make Contributions? What if You Contribute Too Much? Can You Move Amounts Into a Roth IRA?Conversions Rollover From Employer's Plan Into a Roth IRA Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments Rollover From a Roth IRA Rollover of Exxon Valdez Settlement Income Rollover of Airline Payments Are Distributions Taxable?What Are Qualified Distributions? Additional Tax on Early Distributions Ordering Rules for Distributions How Do You Figure the Taxable Part? Must You Withdraw or Use Assets?Minimum distributions. 1040ez file online free Recognizing Losses on Investments Distributions After Owner's Death What's New for 2013 Roth IRA contribution limit. 1040ez file online free  If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $5,500, or Your taxable compensation for the year. 1040ez file online free If you were age 50 or older before 2014 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $6,500, or Your taxable compensation for the year. 1040ez file online free However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. 1040ez file online free For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in this chapter. 1040ez file online free Modified AGI limit for Roth IRA contributions increased. 1040ez file online free  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. 1040ez file online free Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. 1040ez file online free You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. 1040ez file online free Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2013 and your modified AGI is at least $112,000. 1040ez file online free You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. 1040ez file online free Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. 1040ez file online free You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. 1040ez file online free See Can You Contribute to a Roth IRA? in this chapter. 1040ez file online free Net Investment Income Tax. 1040ez file online free  For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 457(b) plans, and IRAs). 1040ez file online free However, these distributions are taken into account when determining the modified adjusted gross income threshold. 1040ez file online free Distributions from a nonqualified retirement plan are included in net investment income. 1040ez file online free See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. 1040ez file online free What's New for 2014 Modified AGI limit for Roth IRA contributions increased. 1040ez file online free  For 2014, your Roth IRA contribution limit is reduced (phased out) in the following situations. 1040ez file online free Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $181,000. 1040ez file online free You cannot make a Roth IRA contribution if your modified AGI is $191,000 or more. 1040ez file online free Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2014 and your modified AGI is at least $114,000. 1040ez file online free You cannot make a Roth IRA contribution if your modified AGI is $129,000 or more. 1040ez file online free Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. 1040ez file online free You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. 1040ez file online free Reminders Deemed IRAs. 1040ez file online free  For plan years beginning after 2002, a qualified employer plan (retirement plan) can maintain a separate account or annuity under the plan (a deemed IRA) to receive voluntary employee contributions. 1040ez file online free If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. 1040ez file online free An employee's account can be treated as a traditional IRA or a Roth IRA. 1040ez file online free For this purpose, a “qualified employer plan” includes: A qualified pension, profit-sharing, or stock bonus plan (section 401(a) plan), A qualified employee annuity plan (section 403(a) plan), A tax-sheltered annuity plan (section 403(b) plan), and A deferred compensation plan (section 457 plan) maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state. 1040ez file online free Designated Roth accounts. 1040ez file online free  Designated Roth accounts are separate accounts under 401(k), 403(b), or 457(b) plans that accept elective deferrals that are referred to as Roth contributions. 1040ez file online free These elective deferrals are included in your income, but qualified distributions from these accounts are not included in your income. 1040ez file online free Designated Roth accounts are not IRAs and should not be confused with Roth IRAs. 1040ez file online free Contributions, up to their respective limits, can be made to Roth IRAs and designated Roth accounts according to your eligibility to participate. 1040ez file online free A contribution to one does not impact your eligibility to contribute to the other. 1040ez file online free See Publication 575, for more information on designated Roth accounts. 1040ez file online free Introduction Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retirement plan called a Roth IRA. 1040ez file online free Contributions not reported. 1040ez file online free   You do not report Roth IRA contributions on your return. 1040ez file online free What Is a Roth IRA? A Roth IRA is an individual retirement plan that, except as explained in this chapter, is subject to the rules that apply to a traditional IRA (defined next). 1040ez file online free It can be either an account or an annuity. 1040ez file online free Individual retirement accounts and annuities are described in chapter 1 under How Can a Traditional IRA Be Opened. 1040ez file online free To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is opened. 1040ez file online free A deemed IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA. 1040ez file online free Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. 1040ez file online free But, if you satisfy the requirements, qualified distributions (discussed later) are tax free. 1040ez file online free Contributions can be made to your Roth IRA after you reach age 70½ and you can leave amounts in your Roth IRA as long as you live. 1040ez file online free Traditional IRA. 1040ez file online free   A traditional IRA is any IRA that is not a Roth IRA or SIMPLE IRA. 1040ez file online free Traditional IRAs are discussed in chapter 1. 1040ez file online free When Can a Roth IRA Be Opened? You can open a Roth IRA at any time. 1040ez file online free However, the time for making contributions for any year is limited. 1040ez file online free See When Can You Make Contributions , later under Can You Contribute to a Roth IRA. 1040ez file online free Can You Contribute to a Roth IRA? Generally, you can contribute to a Roth IRA if you have taxable compensation (defined later) and your modified AGI (defined later) is less than: $188,000 for married filing jointly or qualifying widow(er), $127,000 for single, head of household, or married filing separately and you did not live with your spouse at any time during the year, and $10,000 for married filing separately and you lived with your spouse at any time during the year. 1040ez file online free You may be able to claim a credit for contributions to your Roth IRA. 1040ez file online free For more information, see chapter 4. 1040ez file online free Is there an age limit for contributions?   Contributions can be made to your Roth IRA regardless of your age. 1040ez file online free Can you contribute to a Roth IRA for your spouse?   You can contribute to a Roth IRA for your spouse provided the contributions satisfy the Kay Bailey Hutchison Spousal IRA limit discussed in chapter 1 under How Much Can Be Contributed, you file jointly, and your modified AGI is less than $188,000. 1040ez file online free Compensation. 1040ez file online free   Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. 1040ez file online free It also includes commissions, self-employment income, nontaxable combat pay, military differential pay, and taxable alimony and separate maintenance payments. 1040ez file online free For more information, see What Is Compensation? under Who Can Open a Traditional IRA? in chapter 1. 1040ez file online free Modified AGI. 1040ez file online free   Your modified AGI for Roth IRA purposes is your adjusted gross income (AGI) as shown on your return with some adjustments. 1040ez file online free Use Worksheet 2-1 , later, to determine your modified AGI. 1040ez file online free    Do not subtract conversion income when figuring your other AGI-based phaseouts and taxable income, such as your deduction for medical and dental expenses. 1040ez file online free Subtract them from AGI only for the purpose of figuring your modified AGI for Roth IRA purposes. 1040ez file online free How Much Can Be Contributed? The contribution limit for Roth IRAs generally depends on whether contributions are made only to Roth IRAs or to both traditional IRAs and Roth IRAs. 1040ez file online free Worksheet 2-1. 1040ez file online free Modified Adjusted Gross Income for Roth IRA Purposes Use this worksheet to figure your modified adjusted gross income for Roth IRA purposes. 1040ez file online free 1. 1040ez file online free Enter your adjusted gross income from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37 1. 1040ez file online free   2. 1040ez file online free Enter any income resulting from the conversion of an IRA (other than a Roth IRA) to a Roth IRA (included on Form 1040, line 15b, Form 1040A, line 11b, or Form 1040NR, line 16b) and a rollover from a qualified retirement plan to a Roth IRA (included on Form 1040, line 16b, Form 1040A, line 12b, or Form 1040NR, line 17b) 2. 1040ez file online free   3. 1040ez file online free Subtract line 2 from line 1 3. 1040ez file online free   4. 1040ez file online free Enter any traditional IRA deduction from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 4. 1040ez file online free   5. 1040ez file online free Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 5. 1040ez file online free   6. 1040ez file online free Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 6. 1040ez file online free   7. 1040ez file online free Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 7. 1040ez file online free   8. 1040ez file online free Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 8. 1040ez file online free   9. 1040ez file online free Enter any foreign housing deduction from Form 2555, line 50 9. 1040ez file online free   10. 1040ez file online free Enter any excludable qualified savings bond interest from Form 8815, line 14 10. 1040ez file online free   11. 1040ez file online free Enter any excluded employer-provided adoption benefits from Form 8839, line 28 11. 1040ez file online free   12. 1040ez file online free Add the amounts on lines 3 through 11 12. 1040ez file online free   13. 1040ez file online free Enter: $188,000 if married filing jointly or qualifying widow(er), $10,000 if married filing separately and you lived with your spouse at any time during the year, or $127,000 for all others 13. 1040ez file online free   Is the amount on line 12 more than the amount on line 13? If yes, see the note below. 1040ez file online free  If no, the amount on line 12 is your modified adjusted gross income for Roth IRA purposes. 1040ez file online free       Note. 1040ez file online free If the amount on line 12 is more than the amount on line 13 and you have other income or loss items, such as social security income or passive activity losses, that are subject to AGI-based phaseouts, you can refigure your AGI solely for the purpose of figuring your modified AGI for Roth IRA purposes. 1040ez file online free (If you receive social security benefits, use Worksheet 1 in Appendix B to refigure your AGI. 1040ez file online free ) Then go to line 3 above in this Worksheet 2-1 to refigure your modified AGI. 1040ez file online free If you do not have other income or loss items subject to AGI-based phaseouts, your modified adjusted gross income for Roth IRA purposes is the amount on line 12 above. 1040ez file online free Roth IRAs only. 1040ez file online free   If contributions are made only to Roth IRAs, your contribution limit generally is the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation. 1040ez file online free   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained later under Contribution limit reduced . 1040ez file online free Roth IRAs and traditional IRAs. 1040ez file online free   If contributions are made to both Roth IRAs and traditional IRAs established for your benefit, your contribution limit for Roth IRAs generally is the same as your limit would be if contributions were made only to Roth IRAs, but then reduced by all contributions for the year to all IRAs other than Roth IRAs. 1040ez file online free Employer contributions under a SEP or SIMPLE IRA plan do not affect this limit. 1040ez file online free   This means that your contribution limit is the lesser of: $5,500 ($6,500 if you are age 50 or older) minus all contributions (other than employer contributions under a SEP or SIMPLE IRA plan) for the year to all IRAs other than Roth IRAs, or Your taxable compensation minus all contributions (other than employer contributions under a SEP or SIMPLE IRA plan) for the year to all IRAs other than Roth IRAs. 1040ez file online free   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained below under Contribution limit reduced . 1040ez file online free   Simplified employee pensions (SEPs) are discussed in Publication 560. 1040ez file online free Savings incentive match plans for employees (SIMPLEs) are discussed in chapter 3. 1040ez file online free Repayment of reservist distributions. 1040ez file online free   You can repay qualified reservist distributions even if the repayments would cause your total contributions to the Roth IRA to be more than the general limit on contributions. 1040ez file online free However, the total repayments cannot be more than the amount of your distribution. 1040ez file online free Note. 1040ez file online free If you make repayments of qualified reservist distributions to a Roth IRA, increase your basis in the Roth IRA by the amount of the repayment. 1040ez file online free For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1. 1040ez file online free Contribution limit reduced. 1040ez file online free   If your modified AGI is above a certain amount, your contribution limit is gradually reduced. 1040ez file online free Use Table 2-1, later, to determine if this reduction applies to you. 1040ez file online free Table 2-1. 1040ez file online free Effect of Modified AGI on Roth IRA Contribution This table shows whether your contribution to a Roth IRA is affected by the amount of your modified adjusted gross income (modified AGI). 1040ez file online free IF you have taxable compensation and your filing status is . 1040ez file online free . 1040ez file online free . 1040ez file online free AND your modified AGI is . 1040ez file online free . 1040ez file online free . 1040ez file online free THEN . 1040ez file online free . 1040ez file online free . 1040ez file online free married filing jointly or  qualifying widow(er) less than $178,000 you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . 1040ez file online free at least $178,000 but less than $188,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 1040ez file online free $188,000 or more you cannot contribute to a Roth IRA. 1040ez file online free married filing separately and you lived with your spouse at any time during the year zero (-0-) you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . 1040ez file online free more than zero (-0-) but less than $10,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 1040ez file online free $10,000 or more you cannot contribute to a Roth IRA. 1040ez file online free single, head of household,  or married filing separately and you did not live with your spouse at any time during the year less than $112,000 you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . 1040ez file online free at least $112,000 but less than $127,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 1040ez file online free $127,000 or more you cannot contribute to a Roth IRA. 1040ez file online free Figuring the reduction. 1040ez file online free   If the amount you can contribute must be reduced, use Worksheet 2-2, later, to figure your reduced contribution limit. 1040ez file online free Worksheet 2-2. 1040ez file online free Determining Your Reduced Roth IRA Contribution Limit Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. 1040ez file online free If it is, use this worksheet to determine how much it is reduced. 1040ez file online free 1. 1040ez file online free Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. 1040ez file online free   2. 1040ez file online free Enter: $178,000 if filing a joint return or qualifying widow(er), $-0- if married filing a separate return and you lived with your spouse at any time in 2013, or $112,000 for all others 2. 1040ez file online free   3. 1040ez file online free Subtract line 2 from line 1 3. 1040ez file online free   4. 1040ez file online free Enter: $10,000 if filing a joint return or qualifying widow(er) or married filing a separate return and you lived with your spouse at any time during the year, or $15,000 for all others 4. 1040ez file online free   5. 1040ez file online free Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). 1040ez file online free If the result is 1. 1040ez file online free 000 or more, enter 1. 1040ez file online free 000 5. 1040ez file online free   6. 1040ez file online free Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. 1040ez file online free   7. 1040ez file online free Multiply line 5 by line 6 7. 1040ez file online free   8. 1040ez file online free Subtract line 7 from line 6. 1040ez file online free Round the result up to the nearest $10. 1040ez file online free If the result is less than $200, enter $200 8. 1040ez file online free   9. 1040ez file online free Enter contributions for the year to other IRAs 9. 1040ez file online free   10. 1040ez file online free Subtract line 9 from line 6 10. 1040ez file online free   11. 1040ez file online free Enter the lesser of line 8 or line 10. 1040ez file online free This is your reduced Roth IRA contribution limit 11. 1040ez file online free      Round your reduced contribution limit up to the nearest $10. 1040ez file online free If your reduced contribution limit is more than $0, but less than $200, increase the limit to $200. 1040ez file online free Example. 1040ez file online free You are a 45-year-old, single individual with taxable compensation of $113,000. 1040ez file online free You want to make the maximum allowable contribution to your Roth IRA for 2013. 1040ez file online free Your modified AGI for 2013 is $113,000. 1040ez file online free You have not contributed to any traditional IRA, so the maximum contribution limit before the modified AGI reduction is $5,500. 1040ez file online free You figure your reduced Roth IRA contribution of $5,140 as shown on Worksheet 2-2. 1040ez file online free Example—Illustrated, later. 1040ez file online free   Worksheet 2-2. 1040ez file online free Example—Illustrated Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. 1040ez file online free If it is, use this worksheet to determine how much it is reduced. 1040ez file online free 1. 1040ez file online free Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. 1040ez file online free 113,000 2. 1040ez file online free Enter: $178,000 if filing a joint return or qualifying widow(er), $-0- if married filing a separate return and you lived with your spouse at any time in 2013, or $112,000 for all others 2. 1040ez file online free 112,000 3. 1040ez file online free Subtract line 2 from line 1 3. 1040ez file online free 1,000 4. 1040ez file online free Enter: $10,000 if filing a joint return or qualifying widow(er) or married filing a separate return and you lived with your spouse at any time during the year, or $15,000 for all others 4. 1040ez file online free 15,000 5. 1040ez file online free Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). 1040ez file online free If the result is 1. 1040ez file online free 000 or more, enter 1. 1040ez file online free 000 5. 1040ez file online free . 1040ez file online free 067 6. 1040ez file online free Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. 1040ez file online free 5,500 7. 1040ez file online free Multiply line 5 by line 6 7. 1040ez file online free 369 8. 1040ez file online free Subtract line 7 from line 6. 1040ez file online free Round the result up to the nearest $10. 1040ez file online free If the result is less than $200, enter $200 8. 1040ez file online free 5,140 9. 1040ez file online free Enter contributions for the year to other IRAs 9. 1040ez file online free 0 10. 1040ez file online free Subtract line 9 from line 6 10. 1040ez file online free 5,500 11. 1040ez file online free Enter the lesser of line 8 or line 10. 1040ez file online free This is your reduced Roth IRA contribution limit 11. 1040ez file online free 5,140 When Can You Make Contributions? You can make contributions to a Roth IRA for a year at any time during the year or by the due date of your return for that year (not including extensions). 1040ez file online free You can make contributions for 2013 by the due date (not including extensions) for filing your 2013 tax return. 1040ez file online free This means that most people can make contributions for 2013 by April 15, 2014. 1040ez file online free What if You Contribute Too Much? A 6% excise tax applies to any excess contribution to a Roth IRA. 1040ez file online free Excess contributions. 1040ez file online free   These are the contributions to your Roth IRAs for a year that equal the total of: Amounts contributed for the tax year to your Roth IRAs (other than amounts properly and timely rolled over from a Roth IRA or properly converted from a traditional IRA or rolled over from a qualified retirement plan, as described later) that are more than your contribution limit for the year (explained earlier under How Much Can Be Contributed? ), plus Any excess contributions for the preceding year, reduced by the total of: Any distributions out of your Roth IRAs for the year, plus Your contribution limit for the year minus your contributions to all your IRAs for the year. 1040ez file online free Withdrawal of excess contributions. 1040ez file online free   For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. 1040ez file online free This treatment only applies if any earnings on the contributions are also withdrawn. 1040ez file online free The earnings are considered earned and received in the year the excess contribution was made. 1040ez file online free   If you timely filed your 2013 tax return without withdrawing a contribution that you made in 2013, you can still have the contribution returned to you within 6 months of the due date of your 2013 tax return, excluding extensions. 1040ez file online free If you do, file an amended return with “Filed pursuant to section 301. 1040ez file online free 9100-2” written at the top. 1040ez file online free Report any related earnings on the amended return and include an explanation of the withdrawal. 1040ez file online free Make any other necessary changes on the amended return. 1040ez file online free Applying excess contributions. 1040ez file online free    If contributions to your Roth IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. 1040ez file online free Can You Move Amounts Into a Roth IRA? You may be able to convert amounts from either a traditional, SEP, or SIMPLE IRA into a Roth IRA. 1040ez file online free You may be able to roll over amounts from a qualified retirement plan to a Roth IRA. 1040ez file online free You may be able to recharacterize contributions made to one IRA as having been made directly to a different IRA. 1040ez file online free You can roll amounts over from a designated Roth account or from one Roth IRA to another Roth IRA. 1040ez file online free Conversions You can convert a traditional IRA to a Roth IRA. 1040ez file online free The conversion is treated as a rollover, regardless of the conversion method used. 1040ez file online free Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. 1040ez file online free However, the 1-year waiting period does not apply. 1040ez file online free Conversion methods. 1040ez file online free   You can convert amounts from a traditional IRA to a Roth IRA in any of the following three ways. 1040ez file online free Rollover. 1040ez file online free You can receive a distribution from a traditional IRA and roll it over (contribute it) to a Roth IRA within 60 days after the distribution. 1040ez file online free Trustee-to-trustee transfer. 1040ez file online free You can direct the trustee of the traditional IRA to transfer an amount from the traditional IRA to the trustee of the Roth IRA. 1040ez file online free Same trustee transfer. 1040ez file online free If the trustee of the traditional IRA also maintains the Roth IRA, you can direct the trustee to transfer an amount from the traditional IRA to the Roth IRA. 1040ez file online free Same trustee. 1040ez file online free   Conversions made with the same trustee can be made by redesignating the traditional IRA as a Roth IRA, rather than opening a new account or issuing a new contract. 1040ez file online free Income. 1040ez file online free   You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you had not converted them into a Roth IRA. 1040ez file online free These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA. 1040ez file online free If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. 1040ez file online free See Publication 505, Tax Withholding and Estimated Tax. 1040ez file online free More information. 1040ez file online free   For more information on conversions, see Converting From Any Traditional IRA Into a Roth IRA in chapter 1. 1040ez file online free Rollover From Employer's Plan Into a Roth IRA You can roll over into a Roth IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's): Employer's qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan); Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). 1040ez file online free Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. 1040ez file online free See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. 1040ez file online free Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan. 1040ez file online free Rollover methods. 1040ez file online free   You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways. 1040ez file online free Rollover. 1040ez file online free You can receive a distribution from a qualified retirement plan and roll it over (contribute) to a Roth IRA within 60 days after the distribution. 1040ez file online free Since the distribution is paid directly to you, the payer generally must withhold 20% of it. 1040ez file online free Direct rollover option. 1040ez file online free Your employer's qualified plan must give you the option to have any part of an eligible rollover distribution paid directly to a Roth IRA. 1040ez file online free Generally, no tax is withheld from any part of the designated distribution that is directly paid to the trustee of the Roth IRA. 1040ez file online free Rollover by nonspouse beneficiary. 1040ez file online free   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you can roll over all or part of an eligible rollover distribution from one of the types of plans listed above into a Roth IRA. 1040ez file online free You must make the rollover by a direct trustee-to-trustee transfer into an inherited Roth IRA. 1040ez file online free   You will determine your required minimum distributions in years after you make the rollover based on whether the employee died before his or her required beginning date for taking distributions from the plan. 1040ez file online free For more information, see Distributions after the employee’s death under Tax on Excess Accumulation in Publication 575. 1040ez file online free Income. 1040ez file online free   You must include in your gross income distributions from a qualified retirement plan that you would have had to include in income if you had not rolled them over into a Roth IRA. 1040ez file online free You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions (after-tax contributions) to the plan that were taxable to you when paid. 1040ez file online free These amounts are normally included in income on your return for the year of the rollover from the qualified employer plan to a Roth IRA. 1040ez file online free If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. 1040ez file online free See Publication 505, Tax Withholding and Estimated Tax. 1040ez file online free For more information on eligible rollover distributions from qualified retirement plans and withholding, see Rollover From Employer's Plan Into an IRA in chapter 1. 1040ez file online free Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments If you received a military death gratuity or SGLI payment with respect to a death from injury that occurred after October 6, 2001, you can contribute (roll over) all or part of the amount received to your Roth IRA. 1040ez file online free The contribution is treated as a qualified rollover contribution. 1040ez file online free The amount you can roll over to your Roth IRA cannot exceed the total amount that you received reduced by any part of that amount that was contributed to a Coverdell ESA or another Roth IRA. 1040ez file online free Any military death gratuity or SGLI payment contributed to a Roth IRA is disregarded for purposes of the 1-year waiting period between rollovers. 1040ez file online free The rollover must be completed before the end of the 1-year period beginning on the date you received the payment. 1040ez file online free The amount contributed to your Roth IRA is treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed. 1040ez file online free Rollover From a Roth IRA You can withdraw, tax free, all or part of the assets from one Roth IRA if you contribute them within 60 days to another Roth IRA. 1040ez file online free Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. 1040ez file online free However, rollovers from retirement plans other than Roth IRAs are disregarded for purposes of the 1-year waiting period between rollovers. 1040ez file online free A rollover from a Roth IRA to an employer retirement plan is not allowed. 1040ez file online free A rollover from a designated Roth account can only be made to another designated Roth account or to a Roth IRA. 1040ez file online free If you roll over an amount from one Roth IRA to another Roth IRA, the 5-year period used to determine qualified distributions does not change. 1040ez file online free The 5-year period begins with the first taxable year for which the contribution was made to the initial Roth IRA. 1040ez file online free See What are Qualified Distributions , later. 1040ez file online free Rollover of Exxon Valdez Settlement Income If you are a qualified taxpayer (defined in chapter 1, earlier) and you received qualified settlement income (defined in chapter 1, earlier), you can contribute all or part of the amount received to an eligible retirement plan which includes a Roth IRA. 1040ez file online free The rules for contributing qualified settlement income to a Roth IRA are the same as the rules for contributing qualified settlement income to a traditional IRA with the following exception. 1040ez file online free Qualified settlement income that is contributed to a Roth IRA, or to a designated Roth account, will be: Included in your taxable income for the year the qualified settlement income was received, and Treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed. 1040ez file online free For more information, see Rollover of Exxon Valdez Settlement Income in chapter 1. 1040ez file online free Rollover of Airline Payments If you are a qualified airline employee (defined next), you may contribute any portion of an airline payment (defined below) you receive to a Roth IRA. 1040ez file online free The contribution must be made within 180 days from the date you received the payment. 1040ez file online free The contribution will be treated as a qualified rollover contribution. 1040ez file online free The rollover contribution is included in income to the extent it would be included in income if it were not part of the rollover contribution. 1040ez file online free Also, any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can contribute to your Roth IRA. 1040ez file online free Qualified airline employee. 1040ez file online free    A current or former employee of a commercial airline carrier who was a participant in a qualified defined benefit plan maintained by the carrier which was terminated or became subject to restrictions under Section 402(b) of the Pension Protection Act of 2006. 1040ez file online free These provisions also apply to surviving spouses of qualified airline employees. 1040ez file online free Airline payment. 1040ez file online free    An airline payment is any payment of money or other property that is paid to a qualified airline employee from a commercial airline carrier. 1040ez file online free The payment also must be made both: Under the approval of an order of federal bankruptcy court in a case filed after September 11, 2001, and before January 1, 2007, and In respect of the qualified airline employee’s interest in a bankruptcy claim against the airline carrier, any note of the carrier (or amount paid in lieu of a note being issued), or any other fixed obligation of the carrier to pay a lump sum amount. 1040ez file online free Any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can roll over to your traditional IRA. 1040ez file online free Also, an airline payment shall not include any amount payable on the basis of the airline carrier’s future earnings or profits. 1040ez file online free Are Distributions Taxable? You do not include in your gross income qualified distributions or distributions that are a return of your regular contributions from your Roth IRA(s). 1040ez file online free You also do not include distributions from your Roth IRA that you roll over tax free into another Roth IRA. 1040ez file online free You may have to include part of other distributions in your income. 1040ez file online free See Ordering Rules for Distributions , later. 1040ez file online free Basis of distributed property. 1040ez file online free   The basis of property distributed from a Roth IRA is its fair market value (FMV) on the date of distribution, whether or not the distribution is a qualified distribution. 1040ez file online free Withdrawals of contributions by due date. 1040ez file online free   If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them. 1040ez file online free If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. 1040ez file online free The withdrawal of contributions is tax free, but you must include the earnings on the contributions in income for the year in which you made the contributions. 1040ez file online free What Are Qualified Distributions? A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements. 1040ez file online free It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and The payment or distribution is: Made on or after the date you reach age 59½, Made because you are disabled (defined earlier), Made to a beneficiary or to your estate after your death, or One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit). 1040ez file online free Additional Tax on Early Distributions If you receive a distribution that is not a qualified distribution, you may have to pay the 10% additional tax on early distributions as explained in the following paragraphs. 1040ez file online free Distributions of conversion and certain rollover contributions within 5-year period. 1040ez file online free   If, within the 5-year period starting with the first day of your tax year in which you convert an amount from a traditional IRA or rollover an amount from a qualified retirement plan to a Roth IRA, you take a distribution from a Roth IRA, you may have to pay the 10% additional tax on early distributions. 1040ez file online free You generally must pay the 10% additional tax on any amount attributable to the part of the amount converted or rolled over (the conversion or rollover contribution) that you had to include in income (recapture amount). 1040ez file online free A separate 5-year period applies to each conversion and rollover. 1040ez file online free See Ordering Rules for Distributions , later, to determine the recapture amount, if any. 1040ez file online free   The 5-year period used for determining whether the 10% early distribution tax applies to a distribution from a conversion or rollover contribution is separately determined for each conversion and rollover, and is not necessarily the same as the 5-year period used for determining whether a distribution is a qualified distribution. 1040ez file online free See What Are Qualified Distributions , earlier. 1040ez file online free   For example, if a calendar-year taxpayer makes a conversion contribution on February 25, 2013, and makes a regular contribution for 2012 on the same date, the 5-year period for the conversion begins January 1, 2013, while the 5-year period for the regular contribution begins on January 1, 2012. 1040ez file online free   Unless one of the exceptions listed later applies, you must pay the additional tax on the portion of the distribution attributable to the part of the conversion or rollover contribution that you had to include in income because of the conversion or rollover. 1040ez file online free   You must pay the 10% additional tax in the year of the distribution, even if you had included the conversion or rollover contribution in an earlier year. 1040ez file online free You also must pay the additional tax on any portion of the distribution attributable to earnings on contributions. 1040ez file online free Other early distributions. 1040ez file online free   Unless one of the exceptions listed below applies, you must pay the 10% additional tax on the taxable part of any distributions that are not qualified distributions. 1040ez file online free Exceptions. 1040ez file online free   You may not have to pay the 10% additional tax in the following situations. 1040ez file online free You have reached age 59½. 1040ez file online free You are totally and permanently disabled. 1040ez file online free You are the beneficiary of a deceased IRA owner. 1040ez file online free You use the distribution to buy, build, or rebuild a first home. 1040ez file online free The distributions are part of a series of substantially equal payments. 1040ez file online free You have unreimbursed medical expenses that are more than 10% (or 7. 1040ez file online free 5% if you or your spouse was born before January 2, 1949) of your adjusted gross income (defined earlier) for the year. 1040ez file online free You are paying medical insurance premiums during a period of unemployment. 1040ez file online free The distributions are not more than your qualified higher education expenses. 1040ez file online free The distribution is due to an IRS levy of the qualified plan. 1040ez file online free The distribution is a qualified reservist distribution. 1040ez file online free Most of these exceptions are discussed earlier in chapter 1 under Early Distributions . 1040ez file online free Please click here for the text description of the image. 1040ez file online free Is Roth Distributions a Qualified Distribution? Ordering Rules for Distributions If you receive a distribution from your Roth IRA that is not a qualified distribution, part of it may be taxable. 1040ez file online free There is a set order in which contributions (including conversion contributions and rollover contributions from qualified retirement plans) and earnings are considered to be distributed from your Roth IRA. 1040ez file online free For these purposes, disregard the withdrawal of excess contributions and the earnings on them (discussed earlier under What if You Contribute Too Much ). 1040ez file online free Order the distributions as follows. 1040ez file online free Regular contributions. 1040ez file online free Conversion and rollover contributions, on a first-in, first-out basis (generally, total conversions and rollovers from the earliest year first). 1040ez file online free See Aggregation (grouping and adding) rules, later. 1040ez file online free Take these conversion and rollover contributions into account as follows: Taxable portion (the amount required to be included in gross income because of the conversion or rollover) first, and then the Nontaxable portion. 1040ez file online free Earnings on contributions. 1040ez file online free Disregard rollover contributions from other Roth IRAs for this purpose. 1040ez file online free Aggregation (grouping and adding) rules. 1040ez file online free   Determine the taxable amounts distributed (withdrawn), distributions, and contributions by grouping and adding them together as follows. 1040ez file online free Add all distributions from all your Roth IRAs during the year together. 1040ez file online free Add all regular contributions made for the year (including contributions made after the close of the year, but before the due date of your return) together. 1040ez file online free Add this total to the total undistributed regular contributions made in prior years. 1040ez file online free Add all conversion and rollover contributions made during the year together. 1040ez file online free For purposes of the ordering rules, in the case of any conversion or rollover in which the conversion or rollover distribution is made in 2013 and the conversion or rollover contribution is made in 2014, treat the conversion or rollover contribution as contributed before any other conversion or rollover contributions made in 2014. 1040ez file online free Add any recharacterized contributions that end up in a Roth IRA to the appropriate contribution group for the year that the original contribution would have been taken into account if it had been made directly to the Roth IRA. 1040ez file online free   Disregard any recharacterized contribution that ends up in an IRA other than a Roth IRA for the purpose of grouping (aggregating) both contributions and distributions. 1040ez file online free Also disregard any amount withdrawn to correct an excess contribution (including the earnings withdrawn) for this purpose. 1040ez file online free Example. 1040ez file online free On October 15, 2009, Justin converted all $80,000 in his traditional IRA to his Roth IRA. 1040ez file online free His Forms 8606 from prior years show that $20,000 of the amount converted is his basis. 1040ez file online free Justin included $60,000 ($80,000 − $20,000) in his gross income. 1040ez file online free On February 23, 2013, Justin made a regular contribution of $5,000 to a Roth IRA. 1040ez file online free On November 8, 2013, at age 60, Justin took a $7,000 distribution from his Roth IRA. 1040ez file online free The first $5,000 of the distribution is a return of Justin's regular contribution and is not includible in his income. 1040ez file online free The next $2,000 of the distribution is not includible in income because it was included previously. 1040ez file online free Figuring your recapture amount. 1040ez file online free   If you had an early distribution from your Roth IRAs in 2013, you must allocate the early distribution by using the Recapture Amount—Allocation Chart, later. 1040ez file online free Recapture Amount—Allocation Chart Enter the amount from your 2013 Form 8606, line 19   Before you begin: You will need your prior year Form(s) 8606 and income tax return(s) if you entered an amount on any line(s) as indicated below. 1040ez file online free   You will now allocate the amount you entered above (2013 Form 8606, line 19) in the order shown, to the amounts on the lines listed below (to the extent a prior year distribution was not allocable to the amount). 1040ez file online free The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. 1040ez file online free Note. 1040ez file online free Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. 1040ez file online free See the Example , earlier. 1040ez file online free Tax Year Your Form 2013 Form 8606, line 20   Form 8606, line 22   1998 Form 8606, line 16   Form 8606, line 15   1999 Form 8606, line 16   Form 8606, line 15   2000 Form 8606, line 16   Form 8606, line 15   2001 Form 8606, line 18   Form 8606, line 17   2002 Form 8606, line 18   Form 8606, line 17   2003 Form 8606, line 18   Form 8606, line 17   2004 Form 8606, line 18   Form 8606, line 17   2005 Form 8606, line 18   Form 8606, line 17   2006 Form 8606, line 18   Form 8606, line 17   2007 Form 8606, line 18   Form 8606, line 17   2008 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2009 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2010 Form 8606, lines 18 and 23   Form 8606, lines 17 and 22   2011 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2012 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 25       *Only include those amounts rolled over to a Roth IRA. 1040ez file online free  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. 1040ez file online free Amount to include on Form 5329, line 1. 1040ez file online free   Include on line 1 of your 2013 Form 5329 the following four amounts from the Recapture Amount—Allocation Chart that you filled out. 1040ez file online free The amount you allocated to line 20 of your 2013 Form 8606. 1040ez file online free The amount(s) allocated to your 2009 through 2013 Forms 8606, line 18, and your 2010 Form 8606, line 23. 1040ez file online free The amount(s) allocated to your 2009, 2011, 2012, and 2013 Forms 1040, line 16b; Forms 1040A, line 12b; and Forms 1040NR, line 17b. 1040ez file online free The amount from your 2013 Form 8606, line 25. 1040ez file online free   Also, include any amount you allocated to line 20 of your 2013 Form 8606 on your 2013 Form 5329, line 2, and enter exception number 09. 1040ez file online free Example. 1040ez file online free Ishmael, age 32, opened a Roth IRA in 2000. 1040ez file online free He made the maximum contributions to it every year. 1040ez file online free In addition, he made the following transactions into his Roth IRA. 1040ez file online free In 2005, he converted $10,000 from his traditional IRA into his Roth IRA. 1040ez file online free He filled out a 2005 Form 8606 and attached it with his 2005 Form 1040. 1040ez file online free He entered $0 on line 17 of Form 8606 because he took a deduction for all the contributions to the traditional IRA, therefore he has no basis. 1040ez file online free He entered $10,000 on line 18 of Form 8606. 1040ez file online free In 2011, he rolled over the entire balance of his qualified retirement plan, $20,000, into a Roth IRA when he changed jobs. 1040ez file online free He used a 2011 Form 1040 to file his taxes. 1040ez file online free He entered $20,000 on line 16a of Form 1040 because that was the amount reported in box 1 of his 2011 Form 1099-R. 1040ez file online free Box 5 of his 2011 Form 1099-R reported $0 since he did not make any after-tax contributions to the qualified retirement plan. 1040ez file online free He entered $20,000 on line 16b of Form 1040 since that is the taxable amount that was rolled over in 2011. 1040ez file online free The total balance in his Roth IRA as of January 1, 2013 was $105,000 ($50,000 in contributions from 2000 through 2012 + $10,000 from the 2005 conversion + $20,000 from the 2011 rollover + $25,000 from earnings). 1040ez file online free He has not taken any early distribution from his Roth IRA before 2013. 1040ez file online free In 2013, he made the maximum contribution of $5,500 to his Roth IRA. 1040ez file online free In August of 2013, he took a $85,500 early distribution from his Roth IRA to use as a down payment on the purchase of his first home. 1040ez file online free See his filled out Illustrated Recapture Amount—Allocation Chart, later, to see how he allocated the amounts from the above transactions. 1040ez file online free Based on his allocation, he would enter $20,000 on his 2013 Form 5329, line 1 (see Amount to include on Form 5329, line 1 , above). 1040ez file online free He should also report $10,000 on his 2013 Form 5329, line 2, and enter exception 09 since that amount is not subject to the 10% additional tax on early distributions. 1040ez file online free Illustrated Recapture Amount—Allocation Chart Enter the amount from your 2013 Form 8606, line 19 $85,500 Before you begin: You will need your prior year Form(s) 8606 and income tax return(s) if you entered an amount on any line(s) as indicated below. 1040ez file online free   You will now allocate the amount you entered above (2013 Form 8606, line 19) in the order shown, to the amounts on the lines listed below (to the extent a prior year distribution was not allocable to the amount). 1040ez file online free The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. 1040ez file online free Note. 1040ez file online free Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. 1040ez file online free See the Example , earlier. 1040ez file online free Tax Year Your Form 2013 Form 8606, line 20 $10,000 Form 8606, line 22 $55,500 1998 Form 8606, line 16   Form 8606, line 15   1999 Form 8606, line 16   Form 8606, line 15   2000 Form 8606, line 16   Form 8606, line 15   2001 Form 8606, line 18   Form 8606, line 17   2002 Form 8606, line 18   Form 8606, line 17   2003 Form 8606, line 18   Form 8606, line 17   2004 Form 8606, line 18   Form 8606, line 17   2005 Form 8606, line 18 $10,000 Form 8606, line 17 $-0- 2006 Form 8606, line 18   Form 8606, line 17   2007 Form 8606, line 18   Form 8606, line 17   2008 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2009 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2010 Form 8606, lines 18 and 23   Form 8606, lines 17 and 22   2011 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b* $10,000 Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2012 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 25       *Only include those amounts rolled over to a Roth IRA. 1040ez file online free  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. 1040ez file online free How Do You Figure the Taxable Part? To figure the taxable part of a distribution that is not a qualified distribution, complete Form 8606, Part III. 1040ez file online free Must You Withdraw or Use Assets? You are not required to take distributions from your Roth IRA at any age. 1040ez file online free The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs while the owner is alive. 1040ez file online free However, after the death of a Roth IRA owner, certain of the minimum distribution rules that apply to traditional IRAs also apply to Roth IRAs as explained later under Distributions After Owner's Death . 1040ez file online free Minimum distributions. 1040ez file online free   You cannot use your Roth IRA to satisfy minimum distribution requirements for your traditional IRA. 1040ez file online free Nor can you use distributions from traditional IRAs for required distributions from Roth IRAs. 1040ez file online free See Distributions to beneficiaries , later. 1040ez file online free Recognizing Losses on Investments If you have a loss on your Roth IRA investment, you can recognize the loss on your income tax return, but only when all the amounts in all of your Roth IRA accounts have been distributed to you and the total distributions are less than your unrecovered basis. 1040ez file online free Your basis is the total amount of contributions in your Roth IRAs. 1040ez file online free You claim the loss as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions on Schedule A (Form 1040). 1040ez file online free Any such losses are added back to taxable income for purposes of calculating the alternative minimum tax. 1040ez file online free Distributions After Owner's Death If a Roth IRA owner dies, the minimum distribution rules that apply to traditional IRAs apply to Roth IRAs as though the Roth IRA owner died before his or her required beginning date. 1040ez file online free See When Can You Withdraw or Use Assets? in chapter 1. 1040ez file online free Distributions to beneficiaries. 1040ez file online free   Generally, the entire interest in the Roth IRA must be distributed by the end of the fifth calendar year after the year of the owner's death unless the interest is payable to a designated beneficiary over the life or life expectancy of the designated beneficiary. 1040ez file online free (See When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1. 1040ez file online free )   If paid as an annuity, the entire interest must be payable over a period not greater than the designated beneficiary's life expectancy and distributions must begin before the end of the calendar year following the year of death. 1040ez file online free Distributions from another Roth IRA cannot be substituted for these distributions unless the other Roth IRA was inherited from the same decedent. 1040ez file online free   If the sole beneficiary is the spouse, he or she can either delay distributions until the decedent would have reached age 70½ or treat the Roth IRA as his or her own. 1040ez file online free Combining with other Roth IRAs. 1040ez file online free   A beneficiary can combine an inherited Roth IRA with another Roth IRA maintained by the beneficiary only if the beneficiary either: Inherited the other Roth IRA from the same decedent, or Was the spouse of the decedent and the sole beneficiary of the Roth IRA and elects to treat it as his or her own IRA. 1040ez file online free Distributions that are not qualified distributions. 1040ez file online free   If a distribution to a beneficiary is not a qualified distribution, it is generally includible in the beneficiary's gross income in the same manner as it would have been included in the owner's income had it been distributed to the IRA owner when he or she was alive. 1040ez file online free   If the owner of a Roth IRA dies before the end of: The 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for the owner's benefit, or The 5-year period starting with the year of a conversion contribution from a traditional IRA or a rollover from a qualified retirement plan to a Roth IRA, each type of contribution is divided among multiple beneficiaries according to the pro-rata share of each. 1040ez file online free See Ordering Rules for Distributions , earlier in this chapter under Are Distributions Taxable. 1040ez file online free Example. 1040ez file online free When Ms. 1040ez file online free Hibbard died in 2013, her Roth IRA contained regular contributions of $4,000, a conversion contribution of $10,000 that was made in 2009, and earnings of $2,000. 1040ez file online free No distributions had been made from her IRA. 1040ez file online free She had no basis in the conversion contribution in 2009. 1040ez file online free When she established this Roth IRA (her first) in 2009, she named each of her four children as equal beneficiaries. 1040ez file online free Each child will receive one-fourth of each type of contribution and one-fourth of the earnings. 1040ez file online free An immediate distribution of $4,000 to each child will be treated as $1,000 from regular contributions, $2,500 from conversion contributions, and $500 from earnings. 1040ez file online free In this case, because the distributions are made before the end of the applicable 5-year period for a qualified distribution, each beneficiary includes $500 in income for 2013. 1040ez file online free The 10% additional tax on early distributions does not apply because the distribution was made to the beneficiaries as a result of the death of the IRA owner. 1040ez file online free If distributions from an inherited Roth IRA are less than the required minimum distribution for the year, discussed in chapter 1 under When Must You Withdraw Assets? (Required Minimum Distributions), you may have to pay a 50% excise tax for that year on the amount not distributed as required. 1040ez file online free For the tax on excess accumulations (insufficient distributions), see Excess Accumulations (Insufficient Distributions) under What Acts Result in Penalties or Additional Taxes? in chapter 1. 1040ez file online free If this applies to you, substitute “Roth IRA” for “traditional IRA” in that discussion. 1040ez file online free Prev  Up  Next   Home   More Online Publications