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1040ez on line Publication 1544 - Main Content Table of Contents Why Report These Payments? Who Must File Form 8300?What Payments Must Be Reported? What Is Cash? Taxpayer Identification Number (TIN) What Is a Related Transaction? What About Suspicious Transactions? When, Where, and What To File Examples Penalties How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). 1040ez on line Why Report These Payments? Drug dealers and smugglers often use large cash payments to “launder” money from illegal activities. 1040ez on line Laundering means converting “dirty” or illegally-gained money to “clean” money. 1040ez on line The government can often trace this laundered money through the payments you report. 1040ez on line Laws passed by Congress require you to report these payments. 1040ez on line Your compliance with these laws provides valuable information that can stop those who evade taxes and those who profit from the drug trade and other criminal activities. 1040ez on line The USA PATRIOT Act of 2001 increased the scope of these laws to help trace funds used for terrorism. 1040ez on line Who Must File Form 8300? Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300. 1040ez on line For example, you may have to file Form 8300 if you are a dealer in jewelry, furniture, boats, aircraft, or automobiles; a pawnbroker; an attorney; a real estate broker; an insurance company; or a travel agency. 1040ez on line Special rules for clerks of federal or state courts are discussed later under Bail received by court clerks. 1040ez on line However, you do not have to file Form 8300 if the transaction is not related to your trade or business. 1040ez on line For example, if you own a jewelry store and sell your personal automobile for more than $10,000 in cash, you would not submit a Form 8300 for that transaction. 1040ez on line Transaction defined. 1040ez on line    A “transaction” occurs when: Goods, services, or property are sold; Property is rented; Cash is exchanged for other cash; A contribution is made to a trust or escrow account; A loan is made or repaid; or Cash is converted to a negotiable instrument, such as a check or a bond. 1040ez on line Person defined. 1040ez on line   A “person” includes an individual, a company, a corporation, a partnership, an association, a trust, or an estate. 1040ez on line   Exempt organizations, including employee plans, are also “persons. 1040ez on line ” However, exempt organizations do not have to file Form 8300 for a more-than-$10,000 charitable cash contribution they receive since it is not received in the course of a trade or business. 1040ez on line Foreign transactions. 1040ez on line   You do not have to file Form 8300 if the entire transaction (including the receipt of cash) takes place outside of: The 50 states, The District of Columbia, Puerto Rico, or A possession or territory of the United States. 1040ez on line However, you must file Form 8300 if any part of the transaction (including the receipt of cash) occurs in Puerto Rico or a possession or territory of the United States and you are subject to the Internal Revenue Code. 1040ez on line Bail received by court clerks. 1040ez on line   Any clerk of a federal or state court who receives more than $10,000 in cash as bail for an individual charged with any of the following criminal offenses must file Form 8300: Any federal offense involving a controlled substance, Racketeering, Money laundering, and Any state offense substantially similar to (1), (2), or (3) above. 1040ez on line For more information about the rules that apply to court clerks, see Section 1. 1040ez on line 6050I-2 of the Income Tax Regulations. 1040ez on line What Payments Must Be Reported? You must file Form 8300 to report cash paid to you if it is: Over $10,000, Received as: One lump sum of over $10,000, Installment payments that cause the total cash received within 1 year of the initial payment to total more than $10,000, or Other previously unreportable payments that cause the total cash received within a 12-month period to total more than $10,000, Received in the course of your trade or business, Received from the same buyer (or agent), and Received in a single transaction or in related transactions (defined later). 1040ez on line What Is Cash? Cash is: The coins and currency of the United States (and any other country), and A cashier's check, bank draft, traveler's check, or money order you receive, if it has a face amount of $10,000 or less and you receive it in: A designated reporting transaction (defined later), or Any transaction in which you know the payer is trying to avoid the reporting of the transaction on Form 8300. 1040ez on line Cash may include a cashier's check even if it is called a “treasurer's check” or “bank check. 1040ez on line ” Cash does not include a check drawn on an individual's personal account. 1040ez on line A cashier's check, bank draft, traveler's check, or money order with a face amount of more than $10,000 is not treated as cash. 1040ez on line These items are not defined as cash and you do not have to file Form 8300 when you receive them because, if they were bought with currency, the bank or other financial institution that issued them must file a report on FinCEN Form 104. 1040ez on line Example 1. 1040ez on line You are a coin dealer. 1040ez on line Bob Green buys gold coins from you for $13,200. 1040ez on line He pays for them with $6,200 in U. 1040ez on line S. 1040ez on line currency and a cashier's check having a face amount of $7,000. 1040ez on line The cashier's check is treated as cash. 1040ez on line You have received more than $10,000 cash and must file Form 8300 for this transaction. 1040ez on line Example 2. 1040ez on line You are a retail jeweler. 1040ez on line Mary North buys an item of jewelry from you for $12,000. 1040ez on line She pays for it with a personal check payable to you in the amount of $9,600 and traveler's checks totaling $2,400. 1040ez on line Because the personal check is not treated as cash, you have not received more than $10,000 cash in the transaction. 1040ez on line You do not have to file Form 8300. 1040ez on line Example 3. 1040ez on line You are a boat dealer. 1040ez on line Emily Jones buys a boat from you for $16,500. 1040ez on line She pays for it with a cashier's check payable to you in the amount of $16,500. 1040ez on line The cashier's check is not treated as cash because its face amount is more than $10,000. 1040ez on line You do not have to file Form 8300 for this transaction. 1040ez on line Designated Reporting Transaction A designated reporting transaction is the retail sale of any of the following: A consumer durable, such as an automobile or boat. 1040ez on line A consumer durable is property, other than land or buildings, that: Is suitable for personal use, Can reasonably be expected to last at least 1 year under ordinary use, Has a sales price of more than $10,000, and Can be seen or touched (tangible property). 1040ez on line For example, a $20,000 car is a consumer durable, but a $20,000 dump truck or factory machine is not. 1040ez on line The car is a consumer durable even if you sell it to a buyer who will use it in a business. 1040ez on line A collectible (for example, a work of art, rug, antique, metal, gem, stamp, or coin). 1040ez on line Travel or entertainment, if the total sales price of all items sold for the same trip or entertainment event in one transaction (or related transactions) is more than $10,000. 1040ez on line To figure the total sales price of all items sold for a trip or entertainment event, you include the sales price of items such as airfare, hotel rooms, and admission tickets. 1040ez on line Example. 1040ez on line You are a travel agent. 1040ez on line Ed Johnson asks you to charter a passenger airplane to take a group to a sports event in another city. 1040ez on line He also asks you to book hotel rooms and admission tickets for the group. 1040ez on line In payment, he gives you two money orders, each for $6,000. 1040ez on line You have received more than $10,000 cash in this designated reporting transaction. 1040ez on line You must file Form 8300. 1040ez on line Retail sale. 1040ez on line   The term “retail sale” means any sale made in the course of a trade or business that consists mainly of making sales to ultimate consumers. 1040ez on line   Thus, if your business consists mainly of making sales to ultimate consumers, all sales you make in the course of that business are retail sales. 1040ez on line This includes any sales of items that will be resold. 1040ez on line Broker or intermediary. 1040ez on line   A designated reporting transaction includes the retail sale of items (1), (2), or (3) of the preceding list, even if the funds are received by a broker or other intermediary, rather than directly by the seller. 1040ez on line Exceptions to Definition of Cash A cashier's check, bank draft, traveler's check, or money order you received in a designated reporting transaction is not treated as cash if one of the following exceptions applies. 1040ez on line Exception for certain bank loans. 1040ez on line   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is the proceeds from a bank loan. 1040ez on line As proof that it is from a bank loan, you may rely on a copy of the loan document, a written statement or lien instruction from the bank, or similar proof. 1040ez on line Example. 1040ez on line You are a car dealer. 1040ez on line Mandy White buys a new car from you for $11,500. 1040ez on line She pays you with $2,000 of U. 1040ez on line S. 1040ez on line currency and a cashier's check for $9,500 payable to you and her. 1040ez on line You can tell that the cashier's check is the proceeds of a bank loan because it includes instructions to you to have a lien put on the car as security for the loan. 1040ez on line For this reason, the cashier's check is not treated as cash. 1040ez on line You do not have to file Form 8300 for the transaction. 1040ez on line Exception for certain installment sales. 1040ez on line   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is received in payment on a promissory note or an installment sales contract (including a lease that is considered a sale for federal tax purposes). 1040ez on line However, this exception applies only if: You use similar notes or contracts in other sales to ultimate consumers in the ordinary course of your trade or business, and The total payments for the sale that you receive on or before the 60th day after the sale are 50% or less of the purchase price. 1040ez on line Exception for certain down payment plans. 1040ez on line   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if you received it in payment for a consumer durable or collectible, and all three of the following statements are true. 1040ez on line You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the date of sale. 1040ez on line You receive it more than 60 days before the date of sale. 1040ez on line You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. 1040ez on line Exception for travel and entertainment. 1040ez on line   A cashier's check, bank draft, traveler's check, or money order received for travel or entertainment is not treated as cash if all three of the following statements are true. 1040ez on line You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the earliest date that any travel or entertainment item (such as airfare) is furnished for the trip or entertainment event. 1040ez on line You receive it more than 60 days before the date on which the final payment is due. 1040ez on line You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. 1040ez on line Taxpayer Identification Number (TIN) You must furnish the correct TIN of the person or persons from whom you receive the cash. 1040ez on line If the transaction is conducted on the behalf of another person or persons, you must furnish the TIN of that person or persons. 1040ez on line If you do not know a person's TIN, you have to ask for it. 1040ez on line You may be subject to penalties for an incorrect or missing TIN. 1040ez on line There are three types of TINs. 1040ez on line The TIN for an individual, including a sole proprietor, is the individual's social security number (SSN). 1040ez on line The TIN for a nonresident alien individual who needs a TIN but is not eligible to get an SSN is an IRS individual taxpayer identification number (ITIN). 1040ez on line An ITIN has nine digits, similar to an SSN. 1040ez on line The TIN for other persons, including corporations, partnerships, and estates, is the employer identification number (EIN). 1040ez on line Exception. 1040ez on line   You are not required to provide the TIN of a person who is a nonresident alien individual or a foreign organization if that person or foreign organization: Does not have income effectively connected with the conduct of a U. 1040ez on line S. 1040ez on line trade or business; Does not have an office or place of business, or a fiscal or paying agent in the United States; Does not file a federal tax return; Does not furnish a withholding certificate described in §1. 1040ez on line 1441-1(e)(2) or (3) or 1. 1040ez on line 1441-5(c)(2)(iv) or (3)(iii) to the extent required under 1. 1040ez on line 1441-1(e)(4)(vii); Does not have to furnish a TIN on any return, statement, or other document as required by the income tax regulations under section 897 or 1445; or In the case of a nonresident alien individual, the individual has not chosen to file a joint federal income tax return with a spouse who is a U. 1040ez on line S. 1040ez on line citizen or resident. 1040ez on line What Is a Related Transaction? Any transactions between a buyer (or an agent of the buyer) and a seller that occur within a 24-hour period are related transactions. 1040ez on line If you receive over $10,000 in cash during two or more transactions with one buyer in a 24-hour period, you must treat the transactions as one transaction and report the payments on Form 8300. 1040ez on line For example, if you sell two products for $6,000 each to the same customer in 1 day and the customer pays you in cash, these are related transactions. 1040ez on line Because they total $12,000 (more than $10,000), you must file Form 8300. 1040ez on line More than 24 hours between transactions. 1040ez on line   Transactions are related even if they are more than 24 hours apart if you know, or have reason to know, that each is one of a series of connected transactions. 1040ez on line   For example, you are a travel agent. 1040ez on line A client pays you $8,000 in cash for a trip. 1040ez on line Two days later, the same client pays you $3,000 more in cash to include another person on the trip. 1040ez on line These are related transactions, and you must file Form 8300 to report them. 1040ez on line What About Suspicious Transactions? If you receive $10,000 or less in cash, you may voluntarily file Form 8300 if the transaction appears to be suspicious. 1040ez on line A transaction is suspicious if it appears that a person is trying to cause you not to file Form 8300 or is trying to cause you to file a false or incomplete Form 8300, or if there is a sign of possible illegal activity. 1040ez on line If you are suspicious, you are encouraged to call the local IRS Criminal Investigation Division as soon as possible. 1040ez on line Or, you can call the FinCEN Financial Institution Hotline toll free at 1-866-556-3974. 1040ez on line When, Where, and What To File The amount you receive and when you receive it determine when you must file. 1040ez on line Generally, you must file Form 8300 within 15 days after receiving a payment. 1040ez on line If the Form 8300 due date (the 15th or last day you can timely file the form) falls on a Saturday, Sunday, or legal holiday, it is delayed until the next day that is not a Saturday, Sunday, or legal holiday. 1040ez on line More than one payment. 1040ez on line   In some transactions, the buyer may arrange to pay you in cash installment payments. 1040ez on line If the first payment is more than $10,000, you must file Form 8300 within 15 days. 1040ez on line If the first payment is not more than $10,000, you must add the first payment and any later payments made within 1 year of the first payment. 1040ez on line When the total cash payments are more than $10,000, you must file Form 8300 within 15 days. 1040ez on line   After you file Form 8300, you must start a new count of cash payments received from that buyer. 1040ez on line If you receive more than $10,000 in additional cash payments from that buyer within a 12-month period, you must file another Form 8300. 1040ez on line You must file the form within 15 days of the payment that causes the additional payments to total more than $10,000. 1040ez on line   If you are already required to file Form 8300 and you receive additional payments within the 15 days before you must file, you can report all the payments on one form. 1040ez on line Example. 1040ez on line On January 10, you receive a cash payment of $11,000. 1040ez on line You receive additional cash payments on the same transaction of $4,000 on February 15, $5,000 on March 20, and $6,000 on May 12. 1040ez on line By January 25, you must file a Form 8300 for the $11,000 payment. 1040ez on line By May 27, you must file an additional Form 8300 for the additional payments that total $15,000. 1040ez on line Amending a Report?   If you are amending a report, check box 1a at the top of Form 8300. 1040ez on line Complete the form in its entirety (Parts I-IV) and include the amended information. 1040ez on line Do not attach a copy of the original report. 1040ez on line Where to file. 1040ez on line   Mail the form to the address given in the Form 8300 instructions. 1040ez on line Required statement to buyer. 1040ez on line   You must give a written or electronic statement to each person named on any Form 8300 you must file. 1040ez on line You can give the statement electronically only if the recipient agrees to receive it in that format. 1040ez on line The statement must show the name and address of your business, the name and phone number of a contact person, and the total amount of reportable cash you received from the person during the year. 1040ez on line It must state that you are also reporting this information to the IRS. 1040ez on line   You must send this statement to the buyer by January 31 of the year after the year in which you received the cash that caused you to file the form. 1040ez on line    You must keep a copy of every Form 8300 you file for 5 years. 1040ez on line Examples Example 1. 1040ez on line Pat Brown is the sales manager for Small Town Cars. 1040ez on line On January 6, 2009, Jane Smith buys a new car from Pat and pays $18,000 in cash. 1040ez on line Pat asks for identification from Jane to get the necessary information to complete Form 8300. 1040ez on line A filled-in form is shown in this publication. 1040ez on line Pat must mail the form to the address shown in the form's instructions by January 21, 2009. 1040ez on line He must also send a statement to Jane by January 31, 2010. 1040ez on line Example 2. 1040ez on line Using the same facts given in Example 1, suppose Jane had arranged to make cash payments of $6,000 each on January 6, February 6, and March 6. 1040ez on line Pat would have to file a Form 8300 by February 26 (17 days after receiving total cash payments within 1 year over $10,000 because February 21, 2009, is a Saturday). 1040ez on line Pat would not have to report the remaining $6,000 cash payment because it is not more than $10,000. 1040ez on line However, he could report it if he felt it was a suspicious transaction. 1040ez on line Penalties There are civil penalties for failure to: File a correct Form 8300 by the date it is due, and Provide the required statement to those named in the Form 8300. 1040ez on line If you intentionally disregard the requirement to file a correct Form 8300 by the date it is due, the penalty is the greater of: $25,000, or The amount of cash you received and were required to report (up to $100,000). 1040ez on line There are criminal penalties for: Willful failure to file Form 8300, Willfully filing a false or fraudulent Form 8300, Stopping or trying to stop Form 8300 from being filed, and Setting up, helping to set up, or trying to set up a transaction in a way that would make it seem unnecessary to file Form 8300. 1040ez on line If you willfully fail to file Form 8300, you can be fined up to $250,000 for individuals ($500,000 for corporations) or sentenced to up to 5 years in prison, or both. 1040ez on line These dollar amounts are based on Section 3571 of Title 18 of the U. 1040ez on line S. 1040ez on line Code. 1040ez on line The penalties for failure to file may also apply to any person (including a payer) who attempts to interfere with or prevent the seller (or business) from filing a correct Form 8300. 1040ez on line This includes any attempt to structure the transaction in a way that would make it seem unnecessary to file Form 8300. 1040ez on line Structuring means breaking up a large cash transaction into small cash transactions. 1040ez on line How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. 1040ez on line By selecting the method that is best for you, you will have quick and easy access to tax help. 1040ez on line Free help with your return. 1040ez on line   Free help in preparing your return is available nationwide from IRS-certified volunteers. 1040ez on line The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. 1040ez on line Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1040ez on line To find the nearest VITA or TCE site, visit IRS. 1040ez on line gov or call 1-800-906-9887 or 1-800-829-1040. 1040ez on line   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040ez on line To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. 1040ez on line aarp. 1040ez on line org/money/taxaide. 1040ez on line   For more information on these programs, go to IRS. 1040ez on line gov and enter keyword “VITA” in the upper right-hand corner. 1040ez on line Internet. 1040ez on line You can access the IRS website at IRS. 1040ez on line gov 24 hours a day, 7 days a week to: Check the status of your 2011 refund. 1040ez on line Go to IRS. 1040ez on line gov and click on Where's My Refund. 1040ez on line Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. 1040ez on line If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). 1040ez on line Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 1040ez on line E-file your return. 1040ez on line Find out about commercial tax preparation and e-file services available free to eligible taxpayers. 1040ez on line Download forms, including talking tax forms, instructions, and publications. 1040ez on line Order IRS products online. 1040ez on line Research your tax questions online. 1040ez on line Search publications online by topic or keyword. 1040ez on line Use the online Internal Revenue Code, regulations, or other official guidance. 1040ez on line View Internal Revenue Bulletins (IRBs) published in the last few years. 1040ez on line Figure your withholding allowances using the withholding calculator online at  www. 1040ez on line irs. 1040ez on line gov/individuals. 1040ez on line Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at  www. 1040ez on line irs. 1040ez on line gov/individuals. 1040ez on line Sign up to receive local and national tax news by email. 1040ez on line Get information on starting and operating a small business. 1040ez on line Phone. 1040ez on line Many services are available by phone. 1040ez on line   Ordering forms, instructions, and publications. 1040ez on line Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. 1040ez on line You should receive your order within 10 days. 1040ez on line Asking tax questions. 1040ez on line Call the IRS with your tax questions at 1-800-829-1040. 1040ez on line Solving problems. 1040ez on line You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. 1040ez on line An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. 1040ez on line Call your local Taxpayer Assistance Center for an appointment. 1040ez on line To find the number, go to www. 1040ez on line irs. 1040ez on line gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. 1040ez on line TTY/TDD equipment. 1040ez on line If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. 1040ez on line TeleTax topics. 1040ez on line Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. 1040ez on line Refund information. 1040ez on line You can check the status of your refund on the new IRS phone app. 1040ez on line Download the free IRS2Go app by visiting the iTunes app store or the Android Marketplace. 1040ez on line IRS2Go is a new way to provide you with information and tools. 1040ez on line To check the status of your refund by phone, call 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). 1040ez on line Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. 1040ez on line If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). 1040ez on line Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 1040ez on line If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. 1040ez on line Other refund information. 1040ez on line To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. 1040ez on line Evaluating the quality of our telephone services. 1040ez on line To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. 1040ez on line One method is for a second IRS representative to listen in on or record random telephone calls. 1040ez on line Another is to ask some callers to complete a short survey at the end of the call. 1040ez on line Walk-in. 1040ez on line Many products and services are available on a walk-in basis. 1040ez on line   Products. 1040ez on line You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1040ez on line Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. 1040ez on line Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. 1040ez on line Services. 1040ez on line You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. 1040ez on line An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 1040ez on line If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. 1040ez on line No appointment is necessary—just walk in. 1040ez on line If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. 1040ez on line A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. 1040ez on line If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. 1040ez on line All other issues will be handled without an appointment. 1040ez on line To find the number of your local office, go to www. 1040ez on line irs. 1040ez on line gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. 1040ez on line Mail. 1040ez on line You can send your order for forms, instructions, and publications to the address below. 1040ez on line You should receive a response within 10 days after your request is received. 1040ez on line  Internal Revenue Service 1201 N. 1040ez on line Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. 1040ez on line   The Taxpayer Advocate Service (TAS) is your voice at the IRS. 1040ez on line Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. 1040ez on line We offer free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. 1040ez on line Remember, the worst thing you can do is nothing at all. 1040ez on line   TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. 1040ez on line You face (or your business is facing) an immediate threat of adverse action. 1040ez on line You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. 1040ez on line   If you qualify for our help, we’ll do everything we can to get your problem resolved. 1040ez on line You will be assigned to one advocate who will be with you at every turn. 1040ez on line We have offices in every state, the District of Columbia, and Puerto Rico. 1040ez on line Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. 1040ez on line And our services are always free. 1040ez on line   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. 1040ez on line Our tax toolkit at www. 1040ez on line TaxpayerAdvocate. 1040ez on line irs. 1040ez on line gov can help you understand these rights. 1040ez on line   If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. 1040ez on line irs. 1040ez on line gov/advocate. 1040ez on line You can also call our toll-free number at 1-877-777-4778. 1040ez on line   TAS also handles large-scale or systemic problems that affect many taxpayers. 1040ez on line If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 1040ez on line irs. 1040ez on line gov/advocate. 1040ez on line Low Income Taxpayer Clinics (LITCs). 1040ez on line   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. 1040ez on line Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. 1040ez on line These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. 1040ez on line Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. 1040ez on line For more information and to find a clinic near you, see the LITC page on www. 1040ez on line irs. 1040ez on line gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. 1040ez on line This publication is also available by calling 1-800-829-3676 or at your local IRS office. 1040ez on line Free tax services. 1040ez on line   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. 1040ez on line Learn about free tax information from the IRS, including publications, services, and education and assistance programs. 1040ez on line The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. 1040ez on line The majority of the information and services listed in this publication are available to you free of charge. 1040ez on line If there is a fee associated with a resource or service, it is listed in the publication. 1040ez on line   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. 1040ez on line DVD for tax products. 1040ez on line You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. 1040ez on line Prior-year forms, instructions, and publications. 1040ez on line Tax Map: an electronic research tool and finding aid. 1040ez on line Tax law frequently asked questions. 1040ez on line Tax Topics from the IRS telephone response system. 1040ez on line Internal Revenue Code—Title 26 of the U. 1040ez on line S. 1040ez on line Code. 1040ez on line Links to other Internet based Tax Research Materials. 1040ez on line Fill-in, print, and save features for most tax forms. 1040ez on line Internal Revenue Bulletins. 1040ez on line Toll-free and email technical support. 1040ez on line Two releases during the year. 1040ez on line  – The first release will ship the beginning of January. 1040ez on line  – The final release will ship the beginning of March. 1040ez on line Purchase the DVD from National Technical Information Service (NTIS) at www. 1040ez on line irs. 1040ez on line gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). 1040ez on line This image is too large to be displayed in the current screen. 1040ez on line Please click the link to view the image. 1040ez on line Fill-in Form 8300 Prev  Up  Next   Home   More Online Publications
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1040ez on line 2. 1040ez on line   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 on line Recognizing Losses on Investments Distributions After Owner's Death What's New for 2013 Roth IRA contribution limit. 1040ez on line  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 on line 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 on line However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. 1040ez on line For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in this chapter. 1040ez on line Modified AGI limit for Roth IRA contributions increased. 1040ez on line  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. 1040ez on line Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. 1040ez on line You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. 1040ez on line 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 on line You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. 1040ez on line 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 on line You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. 1040ez on line See Can You Contribute to a Roth IRA? in this chapter. 1040ez on line Net Investment Income Tax. 1040ez on line  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 on line However, these distributions are taken into account when determining the modified adjusted gross income threshold. 1040ez on line Distributions from a nonqualified retirement plan are included in net investment income. 1040ez on line See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. 1040ez on line What's New for 2014 Modified AGI limit for Roth IRA contributions increased. 1040ez on line  For 2014, your Roth IRA contribution limit is reduced (phased out) in the following situations. 1040ez on line Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $181,000. 1040ez on line You cannot make a Roth IRA contribution if your modified AGI is $191,000 or more. 1040ez on line 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 on line You cannot make a Roth IRA contribution if your modified AGI is $129,000 or more. 1040ez on line 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 on line You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. 1040ez on line Reminders Deemed IRAs. 1040ez on line  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 on line If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. 1040ez on line An employee's account can be treated as a traditional IRA or a Roth IRA. 1040ez on line 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 on line Designated Roth accounts. 1040ez on line  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 on line These elective deferrals are included in your income, but qualified distributions from these accounts are not included in your income. 1040ez on line Designated Roth accounts are not IRAs and should not be confused with Roth IRAs. 1040ez on line Contributions, up to their respective limits, can be made to Roth IRAs and designated Roth accounts according to your eligibility to participate. 1040ez on line A contribution to one does not impact your eligibility to contribute to the other. 1040ez on line See Publication 575, for more information on designated Roth accounts. 1040ez on line 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 on line Contributions not reported. 1040ez on line   You do not report Roth IRA contributions on your return. 1040ez on line 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 on line It can be either an account or an annuity. 1040ez on line Individual retirement accounts and annuities are described in chapter 1 under How Can a Traditional IRA Be Opened. 1040ez on line To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is opened. 1040ez on line 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 on line Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. 1040ez on line But, if you satisfy the requirements, qualified distributions (discussed later) are tax free. 1040ez on line 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 on line Traditional IRA. 1040ez on line   A traditional IRA is any IRA that is not a Roth IRA or SIMPLE IRA. 1040ez on line Traditional IRAs are discussed in chapter 1. 1040ez on line When Can a Roth IRA Be Opened? You can open a Roth IRA at any time. 1040ez on line However, the time for making contributions for any year is limited. 1040ez on line See When Can You Make Contributions , later under Can You Contribute to a Roth IRA. 1040ez on line 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 on line You may be able to claim a credit for contributions to your Roth IRA. 1040ez on line For more information, see chapter 4. 1040ez on line Is there an age limit for contributions?   Contributions can be made to your Roth IRA regardless of your age. 1040ez on line 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 on line Compensation. 1040ez on line   Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. 1040ez on line It also includes commissions, self-employment income, nontaxable combat pay, military differential pay, and taxable alimony and separate maintenance payments. 1040ez on line For more information, see What Is Compensation? under Who Can Open a Traditional IRA? in chapter 1. 1040ez on line Modified AGI. 1040ez on line   Your modified AGI for Roth IRA purposes is your adjusted gross income (AGI) as shown on your return with some adjustments. 1040ez on line Use Worksheet 2-1 , later, to determine your modified AGI. 1040ez on line    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 on line Subtract them from AGI only for the purpose of figuring your modified AGI for Roth IRA purposes. 1040ez on line 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 on line Worksheet 2-1. 1040ez on line Modified Adjusted Gross Income for Roth IRA Purposes Use this worksheet to figure your modified adjusted gross income for Roth IRA purposes. 1040ez on line 1. 1040ez on line Enter your adjusted gross income from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37 1. 1040ez on line   2. 1040ez on line 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 on line   3. 1040ez on line Subtract line 2 from line 1 3. 1040ez on line   4. 1040ez on line Enter any traditional IRA deduction from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 4. 1040ez on line   5. 1040ez on line Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 5. 1040ez on line   6. 1040ez on line Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 6. 1040ez on line   7. 1040ez on line Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 7. 1040ez on line   8. 1040ez on line Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 8. 1040ez on line   9. 1040ez on line Enter any foreign housing deduction from Form 2555, line 50 9. 1040ez on line   10. 1040ez on line Enter any excludable qualified savings bond interest from Form 8815, line 14 10. 1040ez on line   11. 1040ez on line Enter any excluded employer-provided adoption benefits from Form 8839, line 28 11. 1040ez on line   12. 1040ez on line Add the amounts on lines 3 through 11 12. 1040ez on line   13. 1040ez on line 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 on line   Is the amount on line 12 more than the amount on line 13? If yes, see the note below. 1040ez on line  If no, the amount on line 12 is your modified adjusted gross income for Roth IRA purposes. 1040ez on line       Note. 1040ez on line 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 on line (If you receive social security benefits, use Worksheet 1 in Appendix B to refigure your AGI. 1040ez on line ) Then go to line 3 above in this Worksheet 2-1 to refigure your modified AGI. 1040ez on line 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 on line Roth IRAs only. 1040ez on line   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 on line   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained later under Contribution limit reduced . 1040ez on line Roth IRAs and traditional IRAs. 1040ez on line   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 on line Employer contributions under a SEP or SIMPLE IRA plan do not affect this limit. 1040ez on line   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 on line   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained below under Contribution limit reduced . 1040ez on line   Simplified employee pensions (SEPs) are discussed in Publication 560. 1040ez on line Savings incentive match plans for employees (SIMPLEs) are discussed in chapter 3. 1040ez on line Repayment of reservist distributions. 1040ez on line   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 on line However, the total repayments cannot be more than the amount of your distribution. 1040ez on line Note. 1040ez on line 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 on line For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1. 1040ez on line Contribution limit reduced. 1040ez on line   If your modified AGI is above a certain amount, your contribution limit is gradually reduced. 1040ez on line Use Table 2-1, later, to determine if this reduction applies to you. 1040ez on line Table 2-1. 1040ez on line 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 on line IF you have taxable compensation and your filing status is . 1040ez on line . 1040ez on line . 1040ez on line AND your modified AGI is . 1040ez on line . 1040ez on line . 1040ez on line THEN . 1040ez on line . 1040ez on line . 1040ez on line 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 on line at least $178,000 but less than $188,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 1040ez on line $188,000 or more you cannot contribute to a Roth IRA. 1040ez on line 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 on line more than zero (-0-) but less than $10,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 1040ez on line $10,000 or more you cannot contribute to a Roth IRA. 1040ez on line 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 on line at least $112,000 but less than $127,000 the amount you can contribute is reduced as explained under Contribution limit reduced . 1040ez on line $127,000 or more you cannot contribute to a Roth IRA. 1040ez on line Figuring the reduction. 1040ez on line   If the amount you can contribute must be reduced, use Worksheet 2-2, later, to figure your reduced contribution limit. 1040ez on line Worksheet 2-2. 1040ez on line 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 on line If it is, use this worksheet to determine how much it is reduced. 1040ez on line 1. 1040ez on line Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. 1040ez on line   2. 1040ez on line 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 on line   3. 1040ez on line Subtract line 2 from line 1 3. 1040ez on line   4. 1040ez on line 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 on line   5. 1040ez on line Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). 1040ez on line If the result is 1. 1040ez on line 000 or more, enter 1. 1040ez on line 000 5. 1040ez on line   6. 1040ez on line Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. 1040ez on line   7. 1040ez on line Multiply line 5 by line 6 7. 1040ez on line   8. 1040ez on line Subtract line 7 from line 6. 1040ez on line Round the result up to the nearest $10. 1040ez on line If the result is less than $200, enter $200 8. 1040ez on line   9. 1040ez on line Enter contributions for the year to other IRAs 9. 1040ez on line   10. 1040ez on line Subtract line 9 from line 6 10. 1040ez on line   11. 1040ez on line Enter the lesser of line 8 or line 10. 1040ez on line This is your reduced Roth IRA contribution limit 11. 1040ez on line      Round your reduced contribution limit up to the nearest $10. 1040ez on line If your reduced contribution limit is more than $0, but less than $200, increase the limit to $200. 1040ez on line Example. 1040ez on line You are a 45-year-old, single individual with taxable compensation of $113,000. 1040ez on line You want to make the maximum allowable contribution to your Roth IRA for 2013. 1040ez on line Your modified AGI for 2013 is $113,000. 1040ez on line You have not contributed to any traditional IRA, so the maximum contribution limit before the modified AGI reduction is $5,500. 1040ez on line You figure your reduced Roth IRA contribution of $5,140 as shown on Worksheet 2-2. 1040ez on line Example—Illustrated, later. 1040ez on line   Worksheet 2-2. 1040ez on line Example—Illustrated Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. 1040ez on line If it is, use this worksheet to determine how much it is reduced. 1040ez on line 1. 1040ez on line Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. 1040ez on line 113,000 2. 1040ez on line 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 on line 112,000 3. 1040ez on line Subtract line 2 from line 1 3. 1040ez on line 1,000 4. 1040ez on line 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 on line 15,000 5. 1040ez on line Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). 1040ez on line If the result is 1. 1040ez on line 000 or more, enter 1. 1040ez on line 000 5. 1040ez on line . 1040ez on line 067 6. 1040ez on line Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. 1040ez on line 5,500 7. 1040ez on line Multiply line 5 by line 6 7. 1040ez on line 369 8. 1040ez on line Subtract line 7 from line 6. 1040ez on line Round the result up to the nearest $10. 1040ez on line If the result is less than $200, enter $200 8. 1040ez on line 5,140 9. 1040ez on line Enter contributions for the year to other IRAs 9. 1040ez on line 0 10. 1040ez on line Subtract line 9 from line 6 10. 1040ez on line 5,500 11. 1040ez on line Enter the lesser of line 8 or line 10. 1040ez on line This is your reduced Roth IRA contribution limit 11. 1040ez on line 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 on line You can make contributions for 2013 by the due date (not including extensions) for filing your 2013 tax return. 1040ez on line This means that most people can make contributions for 2013 by April 15, 2014. 1040ez on line What if You Contribute Too Much? A 6% excise tax applies to any excess contribution to a Roth IRA. 1040ez on line Excess contributions. 1040ez on line   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 on line Withdrawal of excess contributions. 1040ez on line   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 on line This treatment only applies if any earnings on the contributions are also withdrawn. 1040ez on line The earnings are considered earned and received in the year the excess contribution was made. 1040ez on line   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 on line If you do, file an amended return with “Filed pursuant to section 301. 1040ez on line 9100-2” written at the top. 1040ez on line Report any related earnings on the amended return and include an explanation of the withdrawal. 1040ez on line Make any other necessary changes on the amended return. 1040ez on line Applying excess contributions. 1040ez on line    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 on line 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 on line You may be able to roll over amounts from a qualified retirement plan to a Roth IRA. 1040ez on line You may be able to recharacterize contributions made to one IRA as having been made directly to a different IRA. 1040ez on line You can roll amounts over from a designated Roth account or from one Roth IRA to another Roth IRA. 1040ez on line Conversions You can convert a traditional IRA to a Roth IRA. 1040ez on line The conversion is treated as a rollover, regardless of the conversion method used. 1040ez on line Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. 1040ez on line However, the 1-year waiting period does not apply. 1040ez on line Conversion methods. 1040ez on line   You can convert amounts from a traditional IRA to a Roth IRA in any of the following three ways. 1040ez on line Rollover. 1040ez on line 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 on line Trustee-to-trustee transfer. 1040ez on line 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 on line Same trustee transfer. 1040ez on line 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 on line Same trustee. 1040ez on line   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 on line Income. 1040ez on line   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 on line 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 on line If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. 1040ez on line See Publication 505, Tax Withholding and Estimated Tax. 1040ez on line More information. 1040ez on line   For more information on conversions, see Converting From Any Traditional IRA Into a Roth IRA in chapter 1. 1040ez on line 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 on line Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. 1040ez on line See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. 1040ez on line Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan. 1040ez on line Rollover methods. 1040ez on line   You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways. 1040ez on line Rollover. 1040ez on line 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 on line Since the distribution is paid directly to you, the payer generally must withhold 20% of it. 1040ez on line Direct rollover option. 1040ez on line 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 on line Generally, no tax is withheld from any part of the designated distribution that is directly paid to the trustee of the Roth IRA. 1040ez on line Rollover by nonspouse beneficiary. 1040ez on line   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 on line You must make the rollover by a direct trustee-to-trustee transfer into an inherited Roth IRA. 1040ez on line   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 on line For more information, see Distributions after the employee’s death under Tax on Excess Accumulation in Publication 575. 1040ez on line Income. 1040ez on line   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 on line 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 on line 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 on line If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. 1040ez on line See Publication 505, Tax Withholding and Estimated Tax. 1040ez on line 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 on line 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 on line The contribution is treated as a qualified rollover contribution. 1040ez on line 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 on line 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 on line The rollover must be completed before the end of the 1-year period beginning on the date you received the payment. 1040ez on line 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 on line 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 on line Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. 1040ez on line However, rollovers from retirement plans other than Roth IRAs are disregarded for purposes of the 1-year waiting period between rollovers. 1040ez on line A rollover from a Roth IRA to an employer retirement plan is not allowed. 1040ez on line A rollover from a designated Roth account can only be made to another designated Roth account or to a Roth IRA. 1040ez on line 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 on line The 5-year period begins with the first taxable year for which the contribution was made to the initial Roth IRA. 1040ez on line See What are Qualified Distributions , later. 1040ez on line 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 on line 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 on line 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 on line For more information, see Rollover of Exxon Valdez Settlement Income in chapter 1. 1040ez on line 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 on line The contribution must be made within 180 days from the date you received the payment. 1040ez on line The contribution will be treated as a qualified rollover contribution. 1040ez on line 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 on line 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 on line Qualified airline employee. 1040ez on line    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 on line These provisions also apply to surviving spouses of qualified airline employees. 1040ez on line Airline payment. 1040ez on line    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 on line 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 on line 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 on line Also, an airline payment shall not include any amount payable on the basis of the airline carrier’s future earnings or profits. 1040ez on line 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 on line You also do not include distributions from your Roth IRA that you roll over tax free into another Roth IRA. 1040ez on line You may have to include part of other distributions in your income. 1040ez on line See Ordering Rules for Distributions , later. 1040ez on line Basis of distributed property. 1040ez on line   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 on line Withdrawals of contributions by due date. 1040ez on line   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 on line If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. 1040ez on line 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 on line What Are Qualified Distributions? A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements. 1040ez on line 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 on line 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 on line Distributions of conversion and certain rollover contributions within 5-year period. 1040ez on line   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 on line 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 on line A separate 5-year period applies to each conversion and rollover. 1040ez on line See Ordering Rules for Distributions , later, to determine the recapture amount, if any. 1040ez on line   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 on line See What Are Qualified Distributions , earlier. 1040ez on line   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 on line   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 on line   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 on line You also must pay the additional tax on any portion of the distribution attributable to earnings on contributions. 1040ez on line Other early distributions. 1040ez on line   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 on line Exceptions. 1040ez on line   You may not have to pay the 10% additional tax in the following situations. 1040ez on line You have reached age 59½. 1040ez on line You are totally and permanently disabled. 1040ez on line You are the beneficiary of a deceased IRA owner. 1040ez on line You use the distribution to buy, build, or rebuild a first home. 1040ez on line The distributions are part of a series of substantially equal payments. 1040ez on line You have unreimbursed medical expenses that are more than 10% (or 7. 1040ez on line 5% if you or your spouse was born before January 2, 1949) of your adjusted gross income (defined earlier) for the year. 1040ez on line You are paying medical insurance premiums during a period of unemployment. 1040ez on line The distributions are not more than your qualified higher education expenses. 1040ez on line The distribution is due to an IRS levy of the qualified plan. 1040ez on line The distribution is a qualified reservist distribution. 1040ez on line Most of these exceptions are discussed earlier in chapter 1 under Early Distributions . 1040ez on line Please click here for the text description of the image. 1040ez on line 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 on line 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 on line For these purposes, disregard the withdrawal of excess contributions and the earnings on them (discussed earlier under What if You Contribute Too Much ). 1040ez on line Order the distributions as follows. 1040ez on line Regular contributions. 1040ez on line Conversion and rollover contributions, on a first-in, first-out basis (generally, total conversions and rollovers from the earliest year first). 1040ez on line See Aggregation (grouping and adding) rules, later. 1040ez on line 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 on line Earnings on contributions. 1040ez on line Disregard rollover contributions from other Roth IRAs for this purpose. 1040ez on line Aggregation (grouping and adding) rules. 1040ez on line   Determine the taxable amounts distributed (withdrawn), distributions, and contributions by grouping and adding them together as follows. 1040ez on line Add all distributions from all your Roth IRAs during the year together. 1040ez on line 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 on line Add this total to the total undistributed regular contributions made in prior years. 1040ez on line Add all conversion and rollover contributions made during the year together. 1040ez on line 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 on line 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 on line   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 on line Also disregard any amount withdrawn to correct an excess contribution (including the earnings withdrawn) for this purpose. 1040ez on line Example. 1040ez on line On October 15, 2009, Justin converted all $80,000 in his traditional IRA to his Roth IRA. 1040ez on line His Forms 8606 from prior years show that $20,000 of the amount converted is his basis. 1040ez on line Justin included $60,000 ($80,000 − $20,000) in his gross income. 1040ez on line On February 23, 2013, Justin made a regular contribution of $5,000 to a Roth IRA. 1040ez on line On November 8, 2013, at age 60, Justin took a $7,000 distribution from his Roth IRA. 1040ez on line The first $5,000 of the distribution is a return of Justin's regular contribution and is not includible in his income. 1040ez on line The next $2,000 of the distribution is not includible in income because it was included previously. 1040ez on line Figuring your recapture amount. 1040ez on line   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 on line 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 on line   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 on line 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 on line Note. 1040ez on line Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. 1040ez on line See the Example , earlier. 1040ez on line 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 on line  **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 on line Amount to include on Form 5329, line 1. 1040ez on line   Include on line 1 of your 2013 Form 5329 the following four amounts from the Recapture Amount—Allocation Chart that you filled out. 1040ez on line The amount you allocated to line 20 of your 2013 Form 8606. 1040ez on line The amount(s) allocated to your 2009 through 2013 Forms 8606, line 18, and your 2010 Form 8606, line 23. 1040ez on line 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 on line The amount from your 2013 Form 8606, line 25. 1040ez on line   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 on line Example. 1040ez on line Ishmael, age 32, opened a Roth IRA in 2000. 1040ez on line He made the maximum contributions to it every year. 1040ez on line In addition, he made the following transactions into his Roth IRA. 1040ez on line In 2005, he converted $10,000 from his traditional IRA into his Roth IRA. 1040ez on line He filled out a 2005 Form 8606 and attached it with his 2005 Form 1040. 1040ez on line 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 on line He entered $10,000 on line 18 of Form 8606. 1040ez on line In 2011, he rolled over the entire balance of his qualified retirement plan, $20,000, into a Roth IRA when he changed jobs. 1040ez on line He used a 2011 Form 1040 to file his taxes. 1040ez on line 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 on line 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 on line He entered $20,000 on line 16b of Form 1040 since that is the taxable amount that was rolled over in 2011. 1040ez on line 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 on line He has not taken any early distribution from his Roth IRA before 2013. 1040ez on line In 2013, he made the maximum contribution of $5,500 to his Roth IRA. 1040ez on line 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 on line See his filled out Illustrated Recapture Amount—Allocation Chart, later, to see how he allocated the amounts from the above transactions. 1040ez on line 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 on line 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 on line 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 on line   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 on line 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 on line Note. 1040ez on line Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. 1040ez on line See the Example , earlier. 1040ez on line 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 on line  **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 on line 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 on line Must You Withdraw or Use Assets? You are not required to take distributions from your Roth IRA at any age. 1040ez on line The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs while the owner is alive. 1040ez on line 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 on line Minimum distributions. 1040ez on line   You cannot use your Roth IRA to satisfy minimum distribution requirements for your traditional IRA. 1040ez on line Nor can you use distributions from traditional IRAs for required distributions from Roth IRAs. 1040ez on line See Distributions to beneficiaries , later. 1040ez on line 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 on line Your basis is the total amount of contributions in your Roth IRAs. 1040ez on line 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 on line Any such losses are added back to taxable income for purposes of calculating the alternative minimum tax. 1040ez on line 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 on line See When Can You Withdraw or Use Assets? in chapter 1. 1040ez on line Distributions to beneficiaries. 1040ez on line   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 on line (See When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1. 1040ez on line )   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 on line Distributions from another Roth IRA cannot be substituted for these distributions unless the other Roth IRA was inherited from the same decedent. 1040ez on line   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 on line Combining with other Roth IRAs. 1040ez on line   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 on line Distributions that are not qualified distributions. 1040ez on line   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 on line   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 on line See Ordering Rules for Distributions , earlier in this chapter under Are Distributions Taxable. 1040ez on line Example. 1040ez on line When Ms. 1040ez on line 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 on line No distributions had been made from her IRA. 1040ez on line She had no basis in the conversion contribution in 2009. 1040ez on line When she established this Roth IRA (her first) in 2009, she named each of her four children as equal beneficiaries. 1040ez on line Each child will receive one-fourth of each type of contribution and one-fourth of the earnings. 1040ez on line 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 on line 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 on line 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 on line 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 on line 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 on line If this applies to you, substitute “Roth IRA” for “traditional IRA” in that discussion. 1040ez on line Prev  Up  Next   Home   More Online Publications