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Can I File My 2011 Taxes

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Can I File My 2011 Taxes

Can i file my 2011 taxes 10. Can i file my 2011 taxes   Business Bad Debts Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Definition of Business Bad DebtAccrual method. Can i file my 2011 taxes Cash method. Can i file my 2011 taxes Debt acquired from a decedent. Can i file my 2011 taxes Liquidation. Can i file my 2011 taxes Types of Business Bad Debts When a Debt Becomes Worthless How To Claim a Business Bad DebtSpecific Charge-Off Method Nonaccrual-Experience Method Recovery of a Bad DebtNet operating loss (NOL) carryover. Can i file my 2011 taxes Introduction You have a bad debt if you cannot collect money owed to you. Can i file my 2011 taxes A bad debt is either a business bad debt or a nonbusiness bad debt. Can i file my 2011 taxes This chapter discusses only business bad debts. Can i file my 2011 taxes Generally, a business bad debt is one that comes from operating your trade or business. Can i file my 2011 taxes You can deduct business bad debts on Schedule C (Form 1040) or your applicable business income tax return. Can i file my 2011 taxes All other bad debts are nonbusiness bad debts and are deductible only as short-term capital losses. Can i file my 2011 taxes For more information on nonbusiness bad debts, see Publication 550. Can i file my 2011 taxes Topics - This chapter discusses: Definition of business bad debt When a debt becomes worthless How to claim a business bad debt Recovery of a bad debt Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 556 Examination of Returns, Appeal Rights, and Claims for Refund Form (and Instructions) Schedule C (Form 1040) Profit or Loss From Business 1040X Amended U. Can i file my 2011 taxes S. Can i file my 2011 taxes Individual Income Tax Return 1045 Application for Tentative Refund 1139 Corporation Application for Tentative Refund 3115 Application for Change in Accounting Method See chapter 12 for information about getting publications and forms. Can i file my 2011 taxes Definition of Business Bad Debt A business bad debt is a loss from the worthlessness of a debt that was either: Created or acquired in your trade or business, or Closely related to your trade or business when it became partly or totally worthless. Can i file my 2011 taxes A debt is closely related to your trade or business if your primary motive for incurring the debt is business related. Can i file my 2011 taxes Bad debts of a corporation (other than an S corporation) are always business bad debts. Can i file my 2011 taxes Credit sales. Can i file my 2011 taxes   Business bad debts are mainly the result of credit sales to customers. Can i file my 2011 taxes Goods that have been sold, but not yet paid for, and services that have been performed, but not yet paid for, are recorded in your books as either accounts receivable or notes receivable. Can i file my 2011 taxes After a reasonable period of time, if you have tried to collect the amount due, but are unable to do so, the uncollectible part becomes a business bad debt. Can i file my 2011 taxes   Accounts or notes receivable valued at fair market value (FMV) when received are deductible only at that value, even though the FMV may be less than the face value. Can i file my 2011 taxes If you purchased an account receivable for less than its face value, and the receivable subsequently becomes worthless, the most you are allowed to deduct is the amount you paid to acquire it. Can i file my 2011 taxes    You can claim a business bad debt deduction only if the amount owed to you was previously included in gross income. Can i file my 2011 taxes This applies to amounts owed to you from all sources of taxable income, including sales, services, rents, and interest. Can i file my 2011 taxes Accrual method. Can i file my 2011 taxes   If you use the accrual method of accounting, you generally report income as you earn it. Can i file my 2011 taxes You can only claim a bad debt deduction for an uncollectible receivable if you have previously included the uncollectible amount in income. Can i file my 2011 taxes   If you qualify, you can use the nonaccrual-experience method of accounting discussed later. Can i file my 2011 taxes Under this method, you do not have to accrue income that, based on your experience, you do not expect to collect. Can i file my 2011 taxes Cash method. Can i file my 2011 taxes   If you use the cash method of accounting, you generally report income when you receive payment. Can i file my 2011 taxes You cannot claim a bad debt deduction for amounts owed to you because you never included those amounts in income. Can i file my 2011 taxes For example, a cash basis architect cannot claim a bad debt deduction if a client fails to pay the bill because the architect's fee was never included in income. Can i file my 2011 taxes Debts from a former business. Can i file my 2011 taxes   If you sell your business but retain its receivables, these debts are business debts because they arose out of your trade or business. Can i file my 2011 taxes If any of these receivables subsequently become worthless, the loss is still a business bad debt. Can i file my 2011 taxes Debt acquired from a decedent. Can i file my 2011 taxes   The character of a loss from debts of a business acquired from a decedent is determined in the same way as debts acquired on the purchase of a business. Can i file my 2011 taxes The executor of the decedent's estate treats any loss from the debts as a business bad debt if the debts were closely related to the decedent's trade or business when they became worthless. Can i file my 2011 taxes Otherwise, a loss from these debts becomes a nonbusiness bad debt for the decedent's estate. Can i file my 2011 taxes Liquidation. Can i file my 2011 taxes   If you liquidate your business and some of the accounts receivable that you retain become worthless, they become business bad debts. Can i file my 2011 taxes Types of Business Bad Debts Business bad debts may result from the following. Can i file my 2011 taxes Loans to clients and suppliers. Can i file my 2011 taxes   If you loan money to a client, supplier, employee, or distributor for a business reason and you are unable to collect the loan after attempting to do so, you have a business bad debt. Can i file my 2011 taxes Debts owed by political parties. Can i file my 2011 taxes   If a political party (or other organization that accepts contributions or spends money to influence elections) owes you money and the debt becomes worthless, you can claim a bad debt deduction only if all of the following requirements are met. Can i file my 2011 taxes You use the accrual method of accounting. Can i file my 2011 taxes The debt arose from the sale of goods or services in the ordinary course of your trade or business. Can i file my 2011 taxes More than 30% of your receivables accrued in the year of the sale were from sales to political parties. Can i file my 2011 taxes You made substantial and continuing efforts to collect on the debt. Can i file my 2011 taxes Loan or capital contribution. Can i file my 2011 taxes   You cannot claim a bad debt deduction for a loan you made to a corporation if, based on the facts and circumstances, the loan is actually a contribution to capital. Can i file my 2011 taxes Debts of an insolvent partner. Can i file my 2011 taxes   If your business partnership breaks up and one of your former partners becomes insolvent, you may have to pay more than your pro rata share of the partnership's debts. Can i file my 2011 taxes If you pay any part of the insolvent partner's share of the debts, you can claim a bad debt deduction for the amount you paid that is attributable to the insolvent partner's share. Can i file my 2011 taxes Business loan guarantee. Can i file my 2011 taxes   If you guarantee a debt that subsequently becomes worthless, the debt can qualify as a business bad debt if all the following requirements are met. Can i file my 2011 taxes You made the guarantee in the course of your trade or business. Can i file my 2011 taxes You have a legal duty to pay the debt. Can i file my 2011 taxes You made the guarantee before the debt became worthless. Can i file my 2011 taxes You meet this requirement if you reasonably expected you would not have to pay the debt without full reimbursement from the borrower. Can i file my 2011 taxes You received reasonable consideration for making the guarantee. Can i file my 2011 taxes You meet this requirement if you made the guarantee in accord with normal business practice or for a good faith business purpose. Can i file my 2011 taxes Example. Can i file my 2011 taxes Jane Zayne owns the Zayne Dress Company. Can i file my 2011 taxes She guaranteed payment of a $20,000 note for Elegant Fashions, a dress outlet. Can i file my 2011 taxes Elegant Fashions is one of Zayne's largest clients. Can i file my 2011 taxes Elegant Fashions later defaulted on the loan. Can i file my 2011 taxes As a result, Ms. Can i file my 2011 taxes Zayne paid the remaining balance of the loan in full to the bank. Can i file my 2011 taxes She can claim a business bad debt deduction only for the amount she paid, since her guarantee was made in the course of her trade or business for a good faith business purpose. Can i file my 2011 taxes She was motivated by the desire to retain one of her better clients and keep a sales outlet. Can i file my 2011 taxes Deductible in the year paid. Can i file my 2011 taxes   If you make a payment on a loan you guaranteed, you can deduct it in the year paid, unless you have rights against the borrower. Can i file my 2011 taxes Rights against a borrower. Can i file my 2011 taxes   When you make payment on a loan you guaranteed, you may have the right to take the place of the lender. Can i file my 2011 taxes The debt is then owed to you. Can i file my 2011 taxes If you have this right, or some other right to demand payment from the borrower, you cannot claim a bad debt deduction until these rights become partly or totally worthless. Can i file my 2011 taxes Joint debtor. Can i file my 2011 taxes   If two or more debtors jointly owe you money, your inability to collect from one does not enable you to deduct a proportionate amount as a bad debt. Can i file my 2011 taxes Sale of mortgaged property. Can i file my 2011 taxes   If mortgaged or pledged property is sold for less than the debt, the unpaid, uncollectible balance of the debt is a bad debt. Can i file my 2011 taxes When a Debt Becomes Worthless A debt becomes worthless when there is no longer any chance the amount owed will be paid. Can i file my 2011 taxes This may occur when the debt is due or prior to that date. Can i file my 2011 taxes To demonstrate worthlessness, you must only show that you have taken reasonable steps to collect the debt but were unable to do so. Can i file my 2011 taxes It is not necessary to go to court if you can show that a judgment from the court would be uncollectible. Can i file my 2011 taxes Bankruptcy of your debtor is generally good evidence of the worthlessness of at least a part of an unsecured and unpreferred debt. Can i file my 2011 taxes Property received for debt. Can i file my 2011 taxes   If you receive property in partial settlement of a debt, reduce the debt by the property's FMV, which becomes the property's basis. Can i file my 2011 taxes You can deduct the remaining debt as a bad debt if and when it becomes worthless. Can i file my 2011 taxes   If you later sell the property for more than its basis, any gain on the sale is due to the appreciation of the property. Can i file my 2011 taxes It is not a recovery of a bad debt. Can i file my 2011 taxes For information on the sale of an asset, see Publication 544. Can i file my 2011 taxes How To Claim a Business Bad Debt There are two methods to claim a business bad debt. Can i file my 2011 taxes The specific charge-off method. Can i file my 2011 taxes The nonaccrual-experience method. Can i file my 2011 taxes Generally, you must use the specific charge-off method. Can i file my 2011 taxes However, you may use the nonaccrual-experience method if you meet the requirements discussed later under Nonaccrual-Experience Method . Can i file my 2011 taxes Specific Charge-Off Method If you use the specific charge-off method, you can deduct specific business bad debts that become either partly or totally worthless during the tax year. Can i file my 2011 taxes However, with respect to partly worthless bad debts, your deduction is limited to the amount you charged off on your books during the year. Can i file my 2011 taxes Partly worthless debts. Can i file my 2011 taxes   You can deduct specific bad debts that become partly uncollectible during the tax year. Can i file my 2011 taxes Your tax deduction is limited to the amount you charge off on your books during the year. Can i file my 2011 taxes You do not have to charge off and deduct your partly worthless debts annually. Can i file my 2011 taxes You can delay the charge off until a later year. Can i file my 2011 taxes However, you cannot deduct any part of a debt after the year it becomes totally worthless. Can i file my 2011 taxes Significantly modified debt. Can i file my 2011 taxes   An exception to the charge-off rule exists for debt which has been significantly modified and on which the holder recognized gain. Can i file my 2011 taxes For more information, see Regulations section 1. Can i file my 2011 taxes 166-3(a)(3). Can i file my 2011 taxes Deduction disallowed. Can i file my 2011 taxes   Generally, you can claim a partial bad debt deduction only in the year you make the charge-off on your books. Can i file my 2011 taxes If, under audit, the IRS does not allow your deduction and the debt becomes partly worthless in a later tax year, you can deduct the amount you charged off in that year plus the disallowed amount charged off in the earlier year. Can i file my 2011 taxes The charge-off in the earlier year, unless reversed on your books, fulfills the charge-off requirement for the later year. Can i file my 2011 taxes Totally worthless debts. Can i file my 2011 taxes   If a debt becomes totally worthless in the current tax year, you can deduct the entire amount, less any amount deducted in an earlier tax year when the debt was only partly worthless. Can i file my 2011 taxes   You do not have to make an actual charge-off on your books to claim a bad debt deduction for a totally worthless debt. Can i file my 2011 taxes However, you may want to do so. Can i file my 2011 taxes If you do not and the IRS later rules the debt is only partly worthless, you will not be allowed a deduction for the debt in that tax year because a deduction of a partly worthless bad debt is limited to the amount actually charged off. Can i file my 2011 taxes See Partly worthless debts, earlier. Can i file my 2011 taxes Filing a claim for refund. Can i file my 2011 taxes   If you did not deduct a bad debt on your original return for the year it became worthless, you can file a claim for a credit or refund. Can i file my 2011 taxes If the bad debt was totally worthless, you must file the claim by the later of the following dates. Can i file my 2011 taxes 7 years from the date your original return was due (not including extensions). Can i file my 2011 taxes 2 years from the date you paid the tax. Can i file my 2011 taxes   If the claim is for a partly worthless bad debt, you must file the claim by the later of the following dates. Can i file my 2011 taxes 3 years from the date you filed your original return. Can i file my 2011 taxes 2 years from the date you paid the tax. Can i file my 2011 taxes You may have longer to file the claim if you were unable to manage your financial affairs due to a physical or mental impairment. Can i file my 2011 taxes Such an impairment requires proof of existence. Can i file my 2011 taxes   For details and more information about filing a claim, see Publication 556. Can i file my 2011 taxes Use one of the following forms to file a claim. Can i file my 2011 taxes For more information, see the instructions for the applicable form. Can i file my 2011 taxes Table 10-1. Can i file my 2011 taxes Forms Used To File a Claim IF you filed as a. Can i file my 2011 taxes . Can i file my 2011 taxes . Can i file my 2011 taxes THEN file. Can i file my 2011 taxes . Can i file my 2011 taxes . Can i file my 2011 taxes Sole proprietor or farmer Form 1040X Corporation Form 1120X S corporation Form 1120S and check box H(4) Partnership Form 1065X if filing on paper or  Form 1065 and check box G(5) if filing electronically Nonaccrual-Experience Method If you use an accrual method of accounting and qualify under the rules explained in this section, you can use the nonaccrual-experience method for bad debts. Can i file my 2011 taxes Under this method, you do not accrue service related income you expect to be uncollectible. Can i file my 2011 taxes Because the expected uncollectible amounts are not included in income, these amounts are not later deducted from income. Can i file my 2011 taxes Generally, you can use the nonaccrual-experience method for accounts receivable for services you performed only if: The services are provided in the fields of accounting, actuarial science, architecture, consulting, engineering, health, law, or the performing arts, or You meet the $5 million gross receipts test for all prior years. Can i file my 2011 taxes Service related income. Can i file my 2011 taxes   You can use the nonaccrual-experience method only for amounts earned by performing services. Can i file my 2011 taxes You cannot use this method for amounts owed to you from activities such as lending money, selling goods, or acquiring receivables or other rights to receive payment. Can i file my 2011 taxes Gross receipts test. Can i file my 2011 taxes   To find out if you meet the $5 million gross receipts test for all prior years, you must figure the average annual gross receipts for each prior year. Can i file my 2011 taxes If your average annual gross receipts for any year exceeds $5 million, you cannot use the non-accural experience method. Can i file my 2011 taxes   The average annual gross receipts for any year is the average of gross receipts from the year in question and the 2 previous years. Can i file my 2011 taxes For example, if you were figuring the average annual gross receipts for 2013, you would average your gross receipts for 2011, 2012, and 2013. Can i file my 2011 taxes Interest or penalty charged. Can i file my 2011 taxes   Generally, you cannot use the nonaccrual-experience method for amounts due on which you charge interest or a late payment penalty. Can i file my 2011 taxes However, do not treat a discount offered for early payment as the charging of interest or a penalty if both the following apply. Can i file my 2011 taxes You otherwise accrue the full amount due as gross income at the time you provide the services. Can i file my 2011 taxes You treat the discount allowed for early payment as an adjustment to gross income in the year of payment. Can i file my 2011 taxes Change in accounting method. Can i file my 2011 taxes   Generally, you must obtain consent to change to a nonaccrual-experience method (other than one of the safe harbor methods) or to change from one method to another. Can i file my 2011 taxes See Form 3115 and the Instructions for Form 3115 for more information. Can i file my 2011 taxes Recovery of a Bad Debt If you claim a deduction for a bad debt on your income tax return and later recover (collect) all or part of it, you may have to include all or part of the recovery in gross income. Can i file my 2011 taxes The amount you include is limited to the amount you actually deducted. Can i file my 2011 taxes However, you can exclude the amount deducted that did not reduce your tax. Can i file my 2011 taxes Report the recovery as “Other income” on the appropriate business form or schedule. Can i file my 2011 taxes See Recoveries in Publication 525 for more information. Can i file my 2011 taxes Net operating loss (NOL) carryover. Can i file my 2011 taxes   If a bad debt deduction increases an NOL carryover that has not expired before the beginning of the tax year in which the recovery takes place, you treat the deduction as having reduced your tax. Can i file my 2011 taxes A bad debt deduction that contributes to a NOL helps lower taxes in the year to which you carry the NOL. Can i file my 2011 taxes For more information about NOLs, see Publication 536. Can i file my 2011 taxes Also, see the Instructions for Form 1045, and the Instructions for Form 1139. 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The Can I File My 2011 Taxes

Can i file my 2011 taxes 17. Can i file my 2011 taxes   Individual Retirement Arrangements (IRAs) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Traditional IRAsWho Can Open a Traditional IRA? When and How Can a Traditional IRA Be Opened? How Much Can Be Contributed? When Can Contributions Be Made? How Much Can You Deduct? Nondeductible Contributions Inherited IRAs Can You Move Retirement Plan Assets? When Can You Withdraw or Use IRA Assets? When Must You Withdraw IRA Assets? (Required Minimum Distributions) Are Distributions Taxable? What Acts Result in Penalties or Additional Taxes? Roth IRAsWhat Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA? Can You Move Amounts Into a Roth IRA? Are Distributions Taxable? What's New Traditional IRA contribution and deduction limit. Can i file my 2011 taxes  The contribution limit to your traditional IRA for 2013 will be increased to the smaller of the following amounts: $5,500, or Your taxable compensation for the year. Can i file my 2011 taxes If you were age 50 or older before 2014, the most that can be contributed to your traditional IRA for 2013 will be the smaller of the following amounts: $6,500, or Your taxable compensation for the year. Can i file my 2011 taxes For more information, see How Much Can Be Contributed? later. Can i file my 2011 taxes Roth IRA contribution limit. Can i file my 2011 taxes  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. Can i file my 2011 taxes 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. Can i file my 2011 taxes However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Can i file my 2011 taxes For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? later. Can i file my 2011 taxes Modified AGI limit for traditional IRA contributions increased. Can i file my 2011 taxes  For 2013, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $95,000 but less than $115,000 for a married couple filing a joint return or a qualifying widow(er), More than $59,000 but less than $69,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Can i file my 2011 taxes If you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $178,000 but less than $188,000. Can i file my 2011 taxes If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Can i file my 2011 taxes See How Much Can You Deduct , later. Can i file my 2011 taxes Modified AGI limit for Roth IRA contributions increased. Can i file my 2011 taxes  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Can i file my 2011 taxes Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Can i file my 2011 taxes You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Can i file my 2011 taxes 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. Can i file my 2011 taxes You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Can i file my 2011 taxes 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-. Can i file my 2011 taxes You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Can i file my 2011 taxes See Can You Contribute to a Roth IRA , later. Can i file my 2011 taxes Net Investment Income Tax. Can i file my 2011 taxes   For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan including IRAs (for example; 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Can i file my 2011 taxes However, these distributions are taken into account when determining the modified adjusted gross income threshold. Can i file my 2011 taxes Distributions from a nonqualified retirement plan are included in net investment income. Can i file my 2011 taxes See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Can i file my 2011 taxes Name change. Can i file my 2011 taxes  All spousal IRAs have been renamed Kay Bailey Hutchison Spousal IRAs. Can i file my 2011 taxes There are no changes to the rules regarding these IRAs. Can i file my 2011 taxes See Kay Bailey Hutchison Spousal IRA Limit , later, for more information. Can i file my 2011 taxes Reminders 2014 limits. Can i file my 2011 taxes   You can find information about the 2014 contribution and AGI limits in Publication 590. Can i file my 2011 taxes Contributions to both traditional and Roth IRAs. Can i file my 2011 taxes   For information on your combined contribution limit if you contribute to both traditional and Roth IRAs, see Roth IRAs and traditional IRAs under How Much Can Be Contributed? in Roth IRAs, later. Can i file my 2011 taxes Statement of required minimum distribution. Can i file my 2011 taxes  If a minimum distribution from your IRA is required, the trustee, custodian, or issuer that held the IRA at the end of the preceding year must either report the amount of the required minimum distribution to you, or offer to calculate it for you. Can i file my 2011 taxes The report or offer must include the date by which the amount must be distributed. Can i file my 2011 taxes The report is due January 31 of the year in which the minimum distribution is required. Can i file my 2011 taxes It can be provided with the year-end fair market value statement that you normally get each year. Can i file my 2011 taxes No report is required for IRAs of owners who have died. Can i file my 2011 taxes IRA interest. Can i file my 2011 taxes  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Can i file my 2011 taxes Tax on your traditional IRA is generally deferred until you take a distribution. Can i file my 2011 taxes Do not report this interest on your tax return as tax-exempt interest. Can i file my 2011 taxes Form 8606. Can i file my 2011 taxes   To designate contributions as nondeductible, you must file Form 8606, Nondeductible IRAs. Can i file my 2011 taxes The term “50 or older” is used several times in this chapter. Can i file my 2011 taxes It refers to an IRA owner who is age 50 or older by the end of the tax year. Can i file my 2011 taxes Introduction An individual retirement arrangement (IRA) is a personal savings plan that gives you tax advantages for setting aside money for your retirement. Can i file my 2011 taxes This chapter discusses the following topics. Can i file my 2011 taxes The rules for a traditional IRA (any IRA that is not a Roth or SIMPLE IRA). Can i file my 2011 taxes The Roth IRA, which features nondeductible contributions and tax-free distributions. Can i file my 2011 taxes Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs) are not discussed in this chapter. Can i file my 2011 taxes For more information on these plans and employees' SEP IRAs and SIMPLE IRAs that are part of these plans, see Publications 560 and 590. Can i file my 2011 taxes For information about contributions, deductions, withdrawals, transfers, rollovers, and other transactions, see Publication 590. Can i file my 2011 taxes Useful Items - You may want to see: Publication 560 Retirement Plans for Small Business 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 5329 Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts 8606 Nondeductible IRAs Traditional IRAs In this chapter, the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Can i file my 2011 taxes ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Can i file my 2011 taxes Two advantages of a traditional IRA are: You may be able to deduct some or all of your contributions to it, depending on your circumstances, and Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Can i file my 2011 taxes Who Can Open a Traditional IRA? You can open and make contributions to a traditional IRA if: You (or, if you file a joint return, your spouse) received taxable compensation during the year, and You were not age 70½ by the end of the year. Can i file my 2011 taxes What is compensation?   Generally, compensation is what you earn from working. Can i file my 2011 taxes Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. Can i file my 2011 taxes The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2, Wage and Tax Statement, provided that amount is reduced by any amount properly shown in box 11 (Nonqualified plans). Can i file my 2011 taxes   Scholarship and fellowship payments are compensation for this purpose only if shown in box 1 of Form W-2. Can i file my 2011 taxes   Compensation also includes commissions and taxable alimony and separate maintenance payments. Can i file my 2011 taxes Self-employment income. Can i file my 2011 taxes   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deductible part of your self-employment tax. Can i file my 2011 taxes   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Can i file my 2011 taxes Nontaxable combat pay. Can i file my 2011 taxes   For IRA purposes, if you were a member of the U. Can i file my 2011 taxes S. Can i file my 2011 taxes Armed Forces, your compensation includes any nontaxable combat pay you receive. Can i file my 2011 taxes What is not compensation?   Compensation does not include any of the following items. Can i file my 2011 taxes Earnings and profits from property, such as rental income, interest income, and dividend income. Can i file my 2011 taxes Pension or annuity income. Can i file my 2011 taxes Deferred compensation received (compensation payments postponed from a past year). Can i file my 2011 taxes Income from a partnership for which you do not provide services that are a material income-producing factor. Can i file my 2011 taxes Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Can i file my 2011 taxes Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Can i file my 2011 taxes When and How Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Can i file my 2011 taxes However, the time for making contributions for any year is limited. Can i file my 2011 taxes See When Can Contributions Be Made , later. Can i file my 2011 taxes You can open different kinds of IRAs with a variety of organizations. Can i file my 2011 taxes You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Can i file my 2011 taxes You can also open an IRA through your stockbroker. Can i file my 2011 taxes Any IRA must meet Internal Revenue Code requirements. Can i file my 2011 taxes Kinds of traditional IRAs. Can i file my 2011 taxes   Your traditional IRA can be an individual retirement account or annuity. Can i file my 2011 taxes It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Can i file my 2011 taxes How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Can i file my 2011 taxes These limits and other rules are explained below. Can i file my 2011 taxes Community property laws. Can i file my 2011 taxes   Except as discussed later under Kay Bailey Hutchison Spousal IRA limit , each spouse figures his or her limit separately, using his or her own compensation. Can i file my 2011 taxes This is the rule even in states with community property laws. Can i file my 2011 taxes Brokers' commissions. Can i file my 2011 taxes   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Can i file my 2011 taxes Trustees' fees. Can i file my 2011 taxes   Trustees' administrative fees are not subject to the contribution limit. Can i file my 2011 taxes Qualified reservist repayments. Can i file my 2011 taxes   If you are (or were) a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions you received. Can i file my 2011 taxes You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. Can i file my 2011 taxes To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or similar arrangement. Can i file my 2011 taxes   For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1 of Publication 590. Can i file my 2011 taxes Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Can i file my 2011 taxes (See Roth IRAs, later. Can i file my 2011 taxes ) General limit. Can i file my 2011 taxes   For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts. Can i file my 2011 taxes $5,500 ($6,500 if you are 50 or older). Can i file my 2011 taxes Your taxable compensation (defined earlier) for the year. Can i file my 2011 taxes This is the most that can be contributed regardless of whether the contributions are to one or more traditional IRAs or whether all or part of the contributions are nondeductible. Can i file my 2011 taxes (See Nondeductible Contributions , later. Can i file my 2011 taxes ) Qualified reservist repayments do not affect this limit. Can i file my 2011 taxes Example 1. Can i file my 2011 taxes Betty, who is 34 years old and single, earned $24,000 in 2013. Can i file my 2011 taxes Her IRA contributions for 2013 are limited to $5,500. Can i file my 2011 taxes Example 2. Can i file my 2011 taxes John, an unmarried college student working part time, earned $3,500 in 2013. Can i file my 2011 taxes His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Can i file my 2011 taxes Kay Bailey Hutchison Spousal IRA limit. Can i file my 2011 taxes   For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following amounts. Can i file my 2011 taxes $5,500 ($6,500 if you are 50 or older). Can i file my 2011 taxes The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Can i file my 2011 taxes Your spouse's IRA contribution for the year to a traditional IRA. Can i file my 2011 taxes Any contribution for the year to a Roth IRA on behalf of your spouse. Can i file my 2011 taxes This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is 50 or older, or $13,000 if both of you are 50 or older). Can i file my 2011 taxes When Can Contributions Be Made? As soon as you open your traditional IRA, contributions can be made to it through your chosen sponsor (trustee or other administrator). Can i file my 2011 taxes Contributions must be in the form of money (cash, check, or money order). Can i file my 2011 taxes Property cannot be contributed. Can i file my 2011 taxes Contributions must be made by due date. Can i file my 2011 taxes   Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. Can i file my 2011 taxes Age 70½ rule. Can i file my 2011 taxes   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Can i file my 2011 taxes   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Can i file my 2011 taxes If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Can i file my 2011 taxes Designating year for which contribution is made. Can i file my 2011 taxes   If an amount is contributed to your traditional IRA between January 1 and April 15, you should tell the sponsor which year (the current year or the previous year) the contribution is for. Can i file my 2011 taxes If you do not tell the sponsor which year it is for, the sponsor can assume, and report to the IRS, that the contribution is for the current year (the year the sponsor received it). Can i file my 2011 taxes Filing before a contribution is made. Can i file my 2011 taxes   You can file your return claiming a traditional IRA contribution before the contribution is actually made. Can i file my 2011 taxes Generally, the contribution must be made by the due date of your return, not including extensions. Can i file my 2011 taxes Contributions not required. Can i file my 2011 taxes   You do not have to contribute to your traditional IRA for every tax year, even if you can. Can i file my 2011 taxes How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if it applies). Can i file my 2011 taxes However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Can i file my 2011 taxes See Limit If Covered by Employer Plan , later. Can i file my 2011 taxes You may be able to claim a credit for contributions to your traditional IRA. Can i file my 2011 taxes For more information, see chapter 37. Can i file my 2011 taxes Trustees' fees. Can i file my 2011 taxes   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Can i file my 2011 taxes However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Can i file my 2011 taxes See chapter 28. Can i file my 2011 taxes Brokers' commissions. Can i file my 2011 taxes   Brokers' commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Can i file my 2011 taxes Full deduction. Can i file my 2011 taxes   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older in 2013). Can i file my 2011 taxes 100% of your compensation. Can i file my 2011 taxes This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Can i file my 2011 taxes Kay Bailey Hutchison Spousal IRA. Can i file my 2011 taxes   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of the following amounts. Can i file my 2011 taxes $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older in 2013). Can i file my 2011 taxes The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Can i file my 2011 taxes The IRA deduction for the year of the spouse with the greater compensation. Can i file my 2011 taxes Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Can i file my 2011 taxes Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Can i file my 2011 taxes This limit is reduced by any contributions to a 501(c)(18) plan on behalf of the spouse with the lesser compensation. Can i file my 2011 taxes Note. Can i file my 2011 taxes If you were divorced or legally separated (and did not remarry) before the end of the year, you cannot deduct any contributions to your spouse's IRA. Can i file my 2011 taxes After a divorce or legal separation, you can deduct only contributions to your own IRA. Can i file my 2011 taxes Your deductions are subject to the rules for single individuals. Can i file my 2011 taxes Covered by an employer retirement plan. Can i file my 2011 taxes   If you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, your deduction may be further limited. Can i file my 2011 taxes This is discussed later under Limit If Covered by Employer Plan . Can i file my 2011 taxes Limits on the amount you can deduct do not affect the amount that can be contributed. Can i file my 2011 taxes See Nondeductible Contributions , later. Can i file my 2011 taxes Are You Covered by an Employer Plan? The Form W-2 you receive from your employer has a box used to indicate whether you were covered for the year. Can i file my 2011 taxes The “Retirement plan” box should be checked if you were covered. Can i file my 2011 taxes Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered by an Employer Plan , later. Can i file my 2011 taxes If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Can i file my 2011 taxes Federal judges. Can i file my 2011 taxes   For purposes of the IRA deduction, federal judges are covered by an employer retirement plan. Can i file my 2011 taxes For Which Year(s) Are You Covered by an Employer Plan? Special rules apply to determine the tax years for which you are covered by an employer plan. Can i file my 2011 taxes These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Can i file my 2011 taxes Tax year. Can i file my 2011 taxes   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Can i file my 2011 taxes For almost all people, the tax year is the calendar year. Can i file my 2011 taxes Defined contribution plan. Can i file my 2011 taxes   Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year. Can i file my 2011 taxes   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Can i file my 2011 taxes Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Can i file my 2011 taxes Defined benefit plan. Can i file my 2011 taxes   If you are eligible to participate in your employer's defined benefit plan for the plan year that ends within your tax year, you are covered by the plan. Can i file my 2011 taxes This rule applies even if you: Declined to participate in the plan, Did not make a required contribution, or Did not perform the minimum service required to accrue a benefit for the year. Can i file my 2011 taxes   A defined benefit plan is any plan that is not a defined contribution plan. Can i file my 2011 taxes Defined benefit plans include pension plans and annuity plans. Can i file my 2011 taxes No vested interest. Can i file my 2011 taxes   If you accrue a benefit for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the accrual. Can i file my 2011 taxes Situations in Which You Are Not Covered by an Employer Plan Unless you are covered under another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Can i file my 2011 taxes Social security or railroad retirement. Can i file my 2011 taxes   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Can i file my 2011 taxes Benefits from a previous employer's plan. Can i file my 2011 taxes   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Can i file my 2011 taxes Reservists. Can i file my 2011 taxes   If the only reason you participate in a plan is because you are a member of a reserve unit of the armed forces, you may not be covered by the plan. Can i file my 2011 taxes You are not covered by the plan if both of the following conditions are met. Can i file my 2011 taxes The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. Can i file my 2011 taxes You did not serve more than 90 days on active duty during the year (not counting duty for training). Can i file my 2011 taxes Volunteer firefighters. Can i file my 2011 taxes   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Can i file my 2011 taxes You are not covered by the plan if both of the following conditions are met. Can i file my 2011 taxes The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. Can i file my 2011 taxes Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Can i file my 2011 taxes Limit If Covered by Employer Plan If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. Can i file my 2011 taxes Your deduction begins to decrease (phase out) when your income rises above a certain amount and is eliminated altogether when it reaches a higher amount. Can i file my 2011 taxes These amounts vary depending on your filing status. Can i file my 2011 taxes To determine if your deduction is subject to phaseout, you must determine your modified adjusted gross income (AGI) and your filing status. Can i file my 2011 taxes See Filing status and Modified adjusted gross income (AGI) , later. Can i file my 2011 taxes Then use Table 17-1 or 17-2 to determine if the phaseout applies. Can i file my 2011 taxes Social security recipients. Can i file my 2011 taxes   Instead of using Table 17-1 or Table 17-2, use the worksheets in Appendix B of Publication 590 if, for the year, all of the following apply. Can i file my 2011 taxes You received social security benefits. Can i file my 2011 taxes You received taxable compensation. Can i file my 2011 taxes Contributions were made to your traditional IRA. Can i file my 2011 taxes You or your spouse was covered by an employer retirement plan. Can i file my 2011 taxes Use those worksheets to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Can i file my 2011 taxes Deduction phaseout. Can i file my 2011 taxes   If you were covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI as shown in Table 17-1. Can i file my 2011 taxes Table 17-1. Can i file my 2011 taxes Effect of Modified AGI1 on Deduction if You Are Covered by Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Can i file my 2011 taxes IF your filing status is. Can i file my 2011 taxes . Can i file my 2011 taxes . Can i file my 2011 taxes   AND your modified AGI is. Can i file my 2011 taxes . Can i file my 2011 taxes . Can i file my 2011 taxes   THEN you can take. Can i file my 2011 taxes . Can i file my 2011 taxes . Can i file my 2011 taxes single   or  head of household   $59,000 or less   a full deduction. Can i file my 2011 taxes   more than $59,000 but less than $69,000   a partial deduction. Can i file my 2011 taxes   $69,000 or more   no deduction. Can i file my 2011 taxes married filing jointly   or  qualifying widow(er)   $95,000 or less   a full deduction. Can i file my 2011 taxes   more than $95,000 but less than $115,000   a partial deduction. Can i file my 2011 taxes   $115,000 or more   no deduction. Can i file my 2011 taxes married filing separately2   less than $10,000   a partial deduction. Can i file my 2011 taxes   $10,000 or more   no deduction. Can i file my 2011 taxes 1Modified AGI (adjusted gross income). Can i file my 2011 taxes See Modified adjusted gross income (AGI) . Can i file my 2011 taxes 2If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” column). Can i file my 2011 taxes If your spouse is covered. Can i file my 2011 taxes   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 17-2. Can i file my 2011 taxes Filing status. Can i file my 2011 taxes   Your filing status depends primarily on your marital status. Can i file my 2011 taxes For this purpose, you need to know if your filing status is single or head of household, married filing jointly or qualifying widow(er), or married filing separately. Can i file my 2011 taxes If you need more information on filing status, see chapter 2. Can i file my 2011 taxes Lived apart from spouse. Can i file my 2011 taxes   If you did not live with your spouse at any time during the year and you file a separate return, your filing status, for this purpose, is single. Can i file my 2011 taxes Table 17-2. Can i file my 2011 taxes Effect of Modified AGI1 on Deduction if You Are NOT Covered by Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Can i file my 2011 taxes IF your filing status is. Can i file my 2011 taxes . Can i file my 2011 taxes . Can i file my 2011 taxes   AND your modified AGI is. Can i file my 2011 taxes . Can i file my 2011 taxes . Can i file my 2011 taxes   THEN you can take. Can i file my 2011 taxes . Can i file my 2011 taxes . Can i file my 2011 taxes single, head of household, or qualifying widow(er)   any amount   a full deduction. Can i file my 2011 taxes married filing jointly or separately with a spouse who is not covered by a plan at work   any amount   a full deduction. Can i file my 2011 taxes married filing jointly with a spouse who is covered by a plan at work   $178,000 or less   a full deduction. Can i file my 2011 taxes   more than $178,000 but less than $188,000   a partial deduction. Can i file my 2011 taxes   $188,000 or more   no deduction. Can i file my 2011 taxes married filing separately with a spouse who is covered by a plan at work2   less than $10,000   a partial deduction. Can i file my 2011 taxes   $10,000 or more   no deduction. Can i file my 2011 taxes 1Modified AGI (adjusted gross income). Can i file my 2011 taxes See Modified adjusted gross income (AGI) . Can i file my 2011 taxes 2You are entitled to the full deduction if you did not live with your spouse at any time during the year. Can i file my 2011 taxes Modified adjusted gross income (AGI). Can i file my 2011 taxes   How you figure your modified AGI depends on whether you are filing Form 1040 or Form 1040A. Can i file my 2011 taxes If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Publication 590. Can i file my 2011 taxes You may be able to use Worksheet 17-1 to figure your modified AGI. Can i file my 2011 taxes    Do not assume that your modified AGI is the same as your compensation. Can i file my 2011 taxes Your modified AGI may include income in addition to your compensation (discussed earlier), such as interest, dividends, and income from IRA distributions. Can i file my 2011 taxes Form 1040. Can i file my 2011 taxes   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following eight amounts. Can i file my 2011 taxes IRA deduction. Can i file my 2011 taxes Student loan interest deduction. Can i file my 2011 taxes Tuition and fees deduction. Can i file my 2011 taxes Domestic production activities deduction. Can i file my 2011 taxes Foreign earned income exclusion. Can i file my 2011 taxes Foreign housing exclusion or deduction. Can i file my 2011 taxes Exclusion of qualified savings bond interest shown on Form 8815, Exclusion of Interest From Series EE and I U. Can i file my 2011 taxes S. Can i file my 2011 taxes Savings Bonds Issued After 1989. Can i file my 2011 taxes Exclusion of employer-provided adoption benefits shown on Form 8839, Qualified Adoption Expenses. Can i file my 2011 taxes This is your modified AGI. Can i file my 2011 taxes Form 1040A. Can i file my 2011 taxes   If you file Form 1040A, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Can i file my 2011 taxes IRA deduction. Can i file my 2011 taxes Student loan interest deduction. Can i file my 2011 taxes Tuition and fees deduction. Can i file my 2011 taxes Exclusion of qualified savings bond interest shown on Form 8815. Can i file my 2011 taxes This is your modified AGI. Can i file my 2011 taxes Both contributions for 2013 and distributions in 2013. Can i file my 2011 taxes   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Can i file my 2011 taxes You received distributions in 2013 from one or more traditional IRAs. Can i file my 2011 taxes You made contributions to a traditional IRA for 2013. Can i file my 2011 taxes Some of those contributions may be nondeductible contributions. Can i file my 2011 taxes If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Can i file my 2011 taxes To do this, you can use Worksheet 1-5, Figuring the Taxable Part of Your IRA Distribution, in Publication 590. Can i file my 2011 taxes   If at least one of the above does not apply, figure your modified AGI using Worksheet 17-1, later. Can i file my 2011 taxes    How to figure your reduced IRA deduction. Can i file my 2011 taxes   You can figure your reduced IRA deduction for either Form 1040 or Form 1040A by using the worksheets in chapter 1 of Publication 590. Can i file my 2011 taxes Also, the instructions for Form 1040 and Form 1040A include similar worksheets that you may be able to use instead. Can i file my 2011 taxes Worksheet 17-1. Can i file my 2011 taxes Figuring Your Modified AGI Use this worksheet to figure your modified adjusted gross income for traditional IRA purposes. Can i file my 2011 taxes 1. Can i file my 2011 taxes Enter your adjusted gross income (AGI) from Form 1040, line 38, or Form 1040A, line 22, figured without taking into account the amount from Form 1040, line 32, or Form 1040A, line 17 1. Can i file my 2011 taxes   2. Can i file my 2011 taxes Enter any student loan interest deduction from Form 1040, line 33, or Form 1040A, line 18 2. Can i file my 2011 taxes   3. Can i file my 2011 taxes Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Can i file my 2011 taxes   4. Can i file my 2011 taxes Enter any domestic production activities deduction from Form 1040, line 35 4. Can i file my 2011 taxes   5. Can i file my 2011 taxes Enter any foreign earned income and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Can i file my 2011 taxes   6. Can i file my 2011 taxes Enter any foreign housing deduction from Form 2555, line 50 6. Can i file my 2011 taxes   7. Can i file my 2011 taxes Enter any excludable savings bond interest from Form 8815, line 14 7. Can i file my 2011 taxes   8. Can i file my 2011 taxes Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Can i file my 2011 taxes   9. Can i file my 2011 taxes Add lines 1 through 8. Can i file my 2011 taxes This is your Modified AGI for traditional IRA purposes 9. Can i file my 2011 taxes   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Can i file my 2011 taxes If you file Form 1040A, enter your IRA deduction on line 17. Can i file my 2011 taxes You cannot deduct IRA contributions on Form 1040EZ. Can i file my 2011 taxes Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Can i file my 2011 taxes The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Can i file my 2011 taxes Example. Can i file my 2011 taxes Mike is 28 years old and single. Can i file my 2011 taxes In 2013, he was covered by a retirement plan at work. Can i file my 2011 taxes His salary was $57,312. Can i file my 2011 taxes His modified AGI was $70,000. Can i file my 2011 taxes Mike made a $5,500 IRA contribution for 2013. Can i file my 2011 taxes Because he was covered by a retirement plan and his modified AGI was over $69,000, he cannot deduct his $5,500 IRA contribution. Can i file my 2011 taxes He must designate this contribution as a nondeductible contribution by reporting it on Form 8606, as explained next. Can i file my 2011 taxes Form 8606. Can i file my 2011 taxes   To designate contributions as nondeductible, you must file Form 8606. Can i file my 2011 taxes   You do not have to designate a contribution as nondeductible until you file your tax return. Can i file my 2011 taxes When you file, you can even designate otherwise deductible contributions as nondeductible. Can i file my 2011 taxes   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Can i file my 2011 taxes A Form 8606 is not used for the year that you make a rollover from a qualified retirement plan to a traditional IRA and the rollover includes nontaxable amounts. Can i file my 2011 taxes In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Can i file my 2011 taxes See Form 8606 under Distributions Fully or Partly Taxable, later. Can i file my 2011 taxes Failure to report nondeductible contributions. Can i file my 2011 taxes   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated as deductible contributions when withdrawn. Can i file my 2011 taxes All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Can i file my 2011 taxes Penalty for overstatement. Can i file my 2011 taxes   If you overstate the amount of nondeductible contributions on your Form 8606 for any tax year, you must pay a penalty of $100 for each overstatement, unless it was due to reasonable cause. Can i file my 2011 taxes Penalty for failure to file Form 8606. Can i file my 2011 taxes   You will have to pay a $50 penalty if you do not file a required Form 8606, unless you can prove that the failure was due to reasonable cause. Can i file my 2011 taxes    Tax on earnings on nondeductible contributions. Can i file my 2011 taxes   As long as contributions are within the contribution limits, none of the earnings or gains on contributions (deductible or nondeductible) will be taxed until they are distributed. Can i file my 2011 taxes See When Can You Withdraw or Use IRA Assets , later. Can i file my 2011 taxes Cost basis. Can i file my 2011 taxes   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Can i file my 2011 taxes Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Can i file my 2011 taxes Inherited IRAs If you inherit a traditional IRA, you are called a beneficiary. Can i file my 2011 taxes A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Can i file my 2011 taxes Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Can i file my 2011 taxes Inherited from spouse. Can i file my 2011 taxes   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Can i file my 2011 taxes You can: Treat it as your own IRA by designating yourself as the account owner. Can i file my 2011 taxes Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (section 403(b) plan), or Deferred compensation plan of a state or local government (section 457 plan). Can i file my 2011 taxes Treat yourself as the beneficiary rather than treating the IRA as your own. Can i file my 2011 taxes Treating it as your own. Can i file my 2011 taxes   You will be considered to have chosen to treat the IRA as your own if: Contributions (including rollover contributions) are made to the inherited IRA, or You do not take the required minimum distribution for a year as a beneficiary of the IRA. Can i file my 2011 taxes You will only be considered to have chosen to treat the IRA as your own if: You are the sole beneficiary of the IRA, and You have an unlimited right to withdraw amounts from it. Can i file my 2011 taxes   However, if you receive a distribution from your deceased spouse's IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution is not a required distribution, even if you are not the sole beneficiary of your deceased spouse's IRA. Can i file my 2011 taxes Inherited from someone other than spouse. Can i file my 2011 taxes   If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. Can i file my 2011 taxes This means that you cannot make any contributions to the IRA. Can i file my 2011 taxes It also means you cannot roll over any amounts into or out of the inherited IRA. Can i file my 2011 taxes However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary. Can i file my 2011 taxes For more information, see the discussion of inherited IRAs under Rollover From One IRA Into Another, later. Can i file my 2011 taxes Can You Move Retirement Plan Assets? You can transfer, tax free, assets (money or property) from other retirement plans (including traditional IRAs) to a traditional IRA. Can i file my 2011 taxes You can make the following kinds of transfers. Can i file my 2011 taxes Transfers from one trustee to another. Can i file my 2011 taxes Rollovers. Can i file my 2011 taxes Transfers incident to a divorce. Can i file my 2011 taxes Transfers to Roth IRAs. Can i file my 2011 taxes   Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. Can i file my 2011 taxes You can also move assets from a qualified retirement plan to a Roth IRA. Can i file my 2011 taxes See Can You Move Amounts Into a Roth IRA? under Roth IRAs, later. Can i file my 2011 taxes Trustee-to-Trustee Transfer A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Can i file my 2011 taxes Because there is no distribution to you, the transfer is tax free. Can i file my 2011 taxes Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers, discussed later under Rollover From One IRA Into Another . Can i file my 2011 taxes For information about direct transfers to IRAs from retirement plans other than IRAs, see Can You Move Retirement Plan Assets? in chapter 1 and Can You Move Amounts Into a Roth IRA? in chapter 2 of Publication 590. Can i file my 2011 taxes Rollovers Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute (roll over) to another retirement plan. Can i file my 2011 taxes The contribution to the second retirement plan is called a “rollover contribution. Can i file my 2011 taxes ” Note. Can i file my 2011 taxes An amount rolled over tax free from one retirement plan to another is generally includible in income when it is distributed from the second plan. Can i file my 2011 taxes Kinds of rollovers to a traditional IRA. Can i file my 2011 taxes   You can roll over amounts from the following plans into a traditional IRA: A traditional IRA, An employer's qualified retirement plan for its employees, A deferred compensation plan of a state or local government (section 457 plan), or A tax-sheltered annuity plan (section 403(b) plan). Can i file my 2011 taxes Treatment of rollovers. Can i file my 2011 taxes   You cannot deduct a rollover contribution, but you must report the rollover distribution on your tax return as discussed later under Reporting rollovers from IRAs and under Reporting rollovers from employer plans . Can i file my 2011 taxes Kinds of rollovers from a traditional IRA. Can i file my 2011 taxes   You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. Can i file my 2011 taxes These plans include the federal Thrift Savings Fund (for federal employees), deferred compensation plans of state or local governments (section 457 plans), and tax-sheltered annuity plans (section 403(b) plans). Can i file my 2011 taxes The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). Can i file my 2011 taxes Qualified plans may, but are not required to, accept such rollovers. Can i file my 2011 taxes Time limit for making a rollover contribution. Can i file my 2011 taxes   You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan. Can i file my 2011 taxes The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. Can i file my 2011 taxes For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes Extension of rollover period. Can i file my 2011 taxes   If an amount distributed to you from a traditional IRA or a qualified employer retirement plan is a frozen deposit at any time during the 60-day period allowed for a rollover, special rules extend the rollover period. Can i file my 2011 taxes For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes More information. Can i file my 2011 taxes   For more information on rollovers, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Can i file my 2011 taxes Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. Can i file my 2011 taxes Waiting period between rollovers. Can i file my 2011 taxes   Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. Can i file my 2011 taxes You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the IRA into which you made the tax-free rollover. Can i file my 2011 taxes   The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA. Can i file my 2011 taxes Example. Can i file my 2011 taxes You have two traditional IRAs, IRA-1 and IRA-2. Can i file my 2011 taxes You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). Can i file my 2011 taxes You cannot, within 1 year of the distribution from IRA-1, make a tax-free rollover of any distribution from either IRA-1 or IRA-3 into another traditional IRA. Can i file my 2011 taxes However, the rollover from IRA-1 into IRA-3 does not prevent you from making a tax-free rollover from IRA-2 into any other traditional IRA. Can i file my 2011 taxes This is because you have not, within the last year, rolled over, tax free, any distribution from IRA-2 or made a tax-free rollover into IRA-2. Can i file my 2011 taxes Exception. Can i file my 2011 taxes   For an exception for distributions from failed financial institutions, see Rollover From One IRA Into Another under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes Partial rollovers. Can i file my 2011 taxes   If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. Can i file my 2011 taxes The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). Can i file my 2011 taxes The amount you keep may be subject to the 10% additional tax on early distributions, discussed later under What Acts Result in Penalties or Additional Taxes? . Can i file my 2011 taxes Required distributions. Can i file my 2011 taxes   Amounts that must be distributed during a particular year under the required distribution rules (discussed later) are not eligible for rollover treatment. Can i file my 2011 taxes Inherited IRAs. Can i file my 2011 taxes   If you inherit a traditional IRA from your spouse, you generally can roll it over, or you can choose to make the inherited IRA your own. Can i file my 2011 taxes See Treating it as your own , earlier. Can i file my 2011 taxes Not inherited from spouse. Can i file my 2011 taxes   If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. Can i file my 2011 taxes You must withdraw the IRA assets within a certain period. Can i file my 2011 taxes For more information, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes Reporting rollovers from IRAs. Can i file my 2011 taxes   Report any rollover from one traditional IRA to the same or another traditional IRA on lines 15a and 15b, Form 1040, or lines 11a and 11b, Form 1040A, as follows. Can i file my 2011 taxes   Enter the total amount of the distribution on Form 1040, line 15a, or Form 1040A, line 11a. Can i file my 2011 taxes If the total amount on Form 1040, line 15a, or Form 1040A, line 11a, was rolled over, enter zero on Form 1040, line 15b, or Form 1040A, line 11b. Can i file my 2011 taxes If the total distribution was not rolled over, enter the taxable portion of the part that was not rolled over on Form 1040, line 15b, or Form 1040A, line 11b. Can i file my 2011 taxes Put “Rollover” next to Form 1040, line 15b, or Form 1040A, line 11b. Can i file my 2011 taxes See your tax return instructions. Can i file my 2011 taxes   If you rolled over the distribution into a qualified plan (other than an IRA) or you make the rollover in 2014, attach a statement explaining what you did. Can i file my 2011 taxes Rollover From Employer's Plan Into an IRA You can roll over into a traditional 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; Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). Can i file my 2011 taxes A qualified plan is one that meets the requirements of the Internal Revenue Code. Can i file my 2011 taxes Eligible rollover distribution. Can i file my 2011 taxes   Generally, an eligible rollover distribution is any distribution of all or part of the balance to your credit in a qualified retirement plan except the following. Can i file my 2011 taxes A required minimum distribution (explained later under When Must You Withdraw IRA Assets? (Required Minimum Distributions) ). Can i file my 2011 taxes A hardship distribution. Can i file my 2011 taxes Any of a series of substantially equal periodic distributions paid at least once a year over: Your lifetime or life expectancy, The lifetimes or life expectancies of you and your beneficiary, or A period of 10 years or more. Can i file my 2011 taxes Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or of excess annual additions and any allocable gains. Can i file my 2011 taxes A loan treated as a distribution because it does not satisfy certain requirements either when made or later (such as upon default), unless the participant's accrued benefits are reduced (offset) to repay the loan. Can i file my 2011 taxes Dividends on employer securities. Can i file my 2011 taxes The cost of life insurance coverage. Can i file my 2011 taxes Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Can i file my 2011 taxes To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Can i file my 2011 taxes See Form 8606 under Distributions Fully or Partly Taxable, later. Can i file my 2011 taxes Rollover by nonspouse beneficiary. Can i file my 2011 taxes   A direct transfer from a deceased employee's qualified pension, profit-sharing, or stock bonus plan; annuity plan; tax-sheltered annuity (section 403(b)) plan; or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. Can i file my 2011 taxes The IRA is treated as an inherited IRA. Can i file my 2011 taxes For more information about inherited IRAs, see Inherited IRAs , earlier. Can i file my 2011 taxes Reporting rollovers from employer plans. Can i file my 2011 taxes    Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. Can i file my 2011 taxes This amount should be shown in box 1 of Form 1099-R. Can i file my 2011 taxes From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. Can i file my 2011 taxes From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Can i file my 2011 taxes Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. Can i file my 2011 taxes Also, enter "Rollover" next to Form 1040, line 16b, or Form 1040A, line 12b. Can i file my 2011 taxes Transfers Incident to Divorce If an interest in a traditional IRA is transferred from your spouse or former spouse to you by a divorce or separate maintenance decree or a written document related to such a decree, the interest in the IRA, starting from the date of the transfer, is treated as your IRA. Can i file my 2011 taxes The transfer is tax free. Can i file my 2011 taxes For detailed information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes Converting From Any Traditional IRA to a Roth IRA Allowable conversions. Can i file my 2011 taxes   You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. Can i file my 2011 taxes The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. Can i file my 2011 taxes If properly (and timely) rolled over, the 10% additional tax on early distributions will not apply. Can i file my 2011 taxes However, a part or all of the conversion contribution from your traditional IRA is included in your gross income. Can i file my 2011 taxes Required distributions. Can i file my 2011 taxes   You cannot convert amounts that must be distributed from your traditional IRA for a particular year (including the calendar year in which you reach age 70½) under the required distribution rules (discussed later). Can i file my 2011 taxes Income. Can i file my 2011 taxes   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. Can i file my 2011 taxes 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. Can i file my 2011 taxes   You do not include in gross income any part of a distribution from a traditional IRA that is a return of your basis, as discussed later. Can i file my 2011 taxes   You must file Form 8606 to report 2013 conversions from traditional, SEP, or SIMPLE IRAs to a Roth IRA in 2013 (unless you recharacterized the entire amount) and to figure the amount to include in income. Can i file my 2011 taxes   If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Can i file my 2011 taxes See chapter 4. Can i file my 2011 taxes Recharacterizations You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. Can i file my 2011 taxes This is called recharacterizing the contribution. Can i file my 2011 taxes See Can You Move Retirement Plan Assets? in chapter 1 of Publication 590 for more detailed information. Can i file my 2011 taxes How to recharacterize a contribution. Can i file my 2011 taxes   To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. Can i file my 2011 taxes If the transfer is made by the due date (including extensions) for your tax return for the year during which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. Can i file my 2011 taxes If you recharacterize your contribution, you must do all three of the following. Can i file my 2011 taxes Include in the transfer any net income allocable to the contribution. Can i file my 2011 taxes If there was a loss, the net income you must transfer may be a negative amount. Can i file my 2011 taxes Report the recharacterization on your tax return for the year during which the contribution was made. Can i file my 2011 taxes Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA. Can i file my 2011 taxes No deduction allowed. Can i file my 2011 taxes   You cannot deduct the contribution to the first IRA. Can i file my 2011 taxes Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. Can i file my 2011 taxes Required notifications. Can i file my 2011 taxes   To recharacterize a contribution, you must notify both the trustee of the first IRA (the one to which the contribution was actually made) and the trustee of the second IRA (the one to which the contribution is being moved) that you have elected to treat the contribution as having been made to the second IRA rather than the first. Can i file my 2011 taxes You must make the notifications by the date of the transfer. Can i file my 2011 taxes Only one notification is required if both IRAs are maintained by the same trustee. Can i file my 2011 taxes The notification(s) must include all of the following information. Can i file my 2011 taxes The type and amount of the contribution to the first IRA that is to be recharacterized. Can i file my 2011 taxes The date on which the contribution was made to the first IRA and the year for which it was made. Can i file my 2011 taxes A direction to the trustee of the first IRA to transfer in a trustee-to-trustee transfer the amount of the contribution and any net income (or loss) allocable to the contribution to the trustee of the second IRA. Can i file my 2011 taxes The name of the trustee of the first IRA and the name of the trustee of the second IRA. Can i file my 2011 taxes Any additional information needed to make the transfer. Can i file my 2011 taxes Reporting a recharacterization. Can i file my 2011 taxes   If you elect to recharacterize a contribution to one IRA as a contribution to another IRA, you must report the recharacterization on your tax return as directed by Form 8606 and its instructions. Can i file my 2011 taxes You must treat the contribution as having been made to the second IRA. Can i file my 2011 taxes When Can You Withdraw or Use IRA Assets? There are rules limiting use of your IRA assets and distributions from it. Can i file my 2011 taxes Violation of the rules generally results in additional taxes in the year of violation. Can i file my 2011 taxes See What Acts Result in Penalties or Additional Taxes , later. Can i file my 2011 taxes Contributions returned before the due date of return. Can i file my 2011 taxes   If you made IRA contributions in 2013, you can withdraw them tax free by the due date of your return. Can i file my 2011 taxes If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. Can i file my 2011 taxes You can do this if, for each contribution you withdraw, both of the following conditions apply. Can i file my 2011 taxes You did not take a deduction for the contribution. Can i file my 2011 taxes You withdraw any interest or other income earned on the contribution. Can i file my 2011 taxes You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Can i file my 2011 taxes If there was a loss, the net income earned on the contribution may be a negative amount. Can i file my 2011 taxes Note. Can i file my 2011 taxes To calculate the amount you must withdraw, see Worksheet 1-4 under When Can You Withdraw or Use Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes Earnings includible in income. Can i file my 2011 taxes   You must include in income any earnings on the contributions you withdraw. Can i file my 2011 taxes Include the earnings in income for the year in which you made the contributions, not in the year in which you withdraw them. Can i file my 2011 taxes Generally, except for any part of a withdrawal that is a return of nondeductible contributions (basis), any withdrawal of your contributions after the due date (or extended due date) of your return will be treated as a taxable distribution. Can i file my 2011 taxes Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes?, later. Can i file my 2011 taxes    Early distributions tax. Can i file my 2011 taxes   The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. Can i file my 2011 taxes However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax. Can i file my 2011 taxes When Must You Withdraw IRA Assets? (Required Minimum Distributions) You cannot keep funds in a traditional IRA indefinitely. Can i file my 2011 taxes Eventually they must be distributed. Can i file my 2011 taxes If there are no distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required. Can i file my 2011 taxes See Excess Accumulations (Insufficient Distributions) , later. Can i file my 2011 taxes The requirements for distributing IRA funds differ depending on whether you are the IRA owner or the beneficiary of a decedent's IRA. Can i file my 2011 taxes Required minimum distribution. Can i file my 2011 taxes   The amount that must be distributed each year is referred to as the required minimum distribution. Can i file my 2011 taxes Required distributions not eligible for rollover. Can i file my 2011 taxes   Amounts that must be distributed (required minimum distributions) during a particular year are not eligible for rollover treatment. Can i file my 2011 taxes IRA owners. Can i file my 2011 taxes   If you are the owner of a traditional IRA, you must generally start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Can i file my 2011 taxes April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date. Can i file my 2011 taxes Distributions by the required beginning date. Can i file my 2011 taxes   You must receive at least a minimum amount for each year starting with the year you reach age 70½ (your 70½ year). Can i file my 2011 taxes If you do not (or did not) receive that minimum amount in your 70½ year, then you must receive distributions for your 70½ year by April 1 of the next year. Can i file my 2011 taxes   If an IRA owner dies after reaching age 70½, but before April 1 of the next year, no minimum distribution is required because death occurred before the required beginning date. Can i file my 2011 taxes Even if you begin receiving distributions before you attain age 70½, you must begin calculating and receiving required minimum distributions by your required beginning date. Can i file my 2011 taxes Distributions after the required beginning date. Can i file my 2011 taxes   The required minimum distribution for any year after the year you turn 70½ must be made by December 31 of that later year. Can i file my 2011 taxes    Beneficiaries. Can i file my 2011 taxes   If you are the beneficiary of a decedent's traditional IRA, the requirements for distributions from that IRA generally depend on whether the IRA owner died before or after the required beginning date for distributions. Can i file my 2011 taxes More information. Can i file my 2011 taxes   For more information, including how to figure your minimum required distribution each year and how to figure your required distribution if you are a beneficiary of a decedent's IRA, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes Are Distributions Taxable? In general, distributions from a traditional IRA are taxable in the year you receive them. Can i file my 2011 taxes Exceptions. Can i file my 2011 taxes   Exceptions to distributions from traditional IRAs being taxable in the year you receive them are: Rollovers, Qualified charitable distributions (QCD), discussed later, Tax-free withdrawals of contributions, discussed earlier, and The return of nondeductible contributions, discussed later under Distributions Fully or Partly Taxable . Can i file my 2011 taxes    Although a conversion of a traditional IRA is considered a rollover for Roth IRA purposes, it is not an exception to the rule that distributions from a traditional IRA are taxable in the year you receive them. Can i file my 2011 taxes Conversion distributions are includible in your gross income subject to this rule and the special rules for conversions explained in Converting From Any Traditional IRA Into a Roth IRA under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Can i file my 2011 taxes Qualified charitable distributions (QCD). Can i file my 2011 taxes   A QCD is generally a nontaxable distribution made directly by the trustee of your IRA to an organization eligible to receive tax-deductible contributions. Can i file my 2011 taxes Special rules apply if you made a qualified charitable distribution in January 2013 that you elected to treat as made in 2012. Can i file my 2011 taxes See Qualified Charitable Distributions in Publication 590 for more information. Can i file my 2011 taxes Ordinary income. Can i file my 2011 taxes   Distributions from traditional IRAs that you include in income are taxed as ordinary income. Can i file my 2011 taxes No special treatment. Can i file my 2011 taxes   In figuring your tax, you cannot use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement plans. Can i file my 2011 taxes Distributions Fully or Partly Taxable Distributions from your traditional IRA may be fully or partly taxable, depending on whether your IRA includes any nondeductible contributions. Can i file my 2011 taxes Fully taxable. Can i file my 2011 taxes   If only deductible contributions were made to your traditional IRA (or IRAs, if you have more than one), you have no basis in your IRA. Can i file my 2011 taxes Because you have no basis in your IRA, any distributions are fully taxable when received. Can i file my 2011 taxes See Reporting taxable distributions on your return , later. Can i file my 2011 taxes Partly taxable. Can i file my 2011 taxes    If you made nondeductible contributions or rolled over any after-tax amounts to any of your traditional IRAs, you have a cost basis (investment in the contract) equal to the amount of those contributions. Can i file my 2011 taxes These nondeductible contributions are not taxed when they are distributed to you. Can i file my 2011 taxes They are a return of your investment in your IRA. Can i file my 2011 taxes   Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. Can i file my 2011 taxes If nondeductible contributions have been made or after-tax amounts have been rolled over to your IRA, distributions consist partly of nondeductible contributions (basis) and partly of deductible contributions, earnings, and gains (if there are any). Can i file my 2011 taxes Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable. Can i file my 2011 taxes Form 8606. Can i file my 2011 taxes   You must complete Form 8606 and attach it to your return if you receive a distribution from a traditional IRA and have ever made nondeductible contributions or rolled over after-tax amounts to any of your traditional IRAs. Can i file my 2011 taxes Using the form, you will figure the nontaxable distributions for 2013 and your total IRA basis for 2013 and earlier years. Can i file my 2011 taxes Note. Can i file my 2011 taxes If you are required to file Form 8606, but you are not required to file an income tax return, you still must file Form 8606. Can i file my 2011 taxes Send it to the IRS at the time and place you would otherwise file an income tax return. Can i file my 2011 taxes Distributions reported on Form 1099-R. Can i file my 2011 taxes   If you receive a distribution from your traditional IRA, you will receive Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Can i file my 2011 taxes , or a similar statement. Can i file my 2011 taxes IRA distributions are shown in boxes 1 and 2a of Form 1099-R. Can i file my 2011 taxes A number or letter code in box 7 tells you what type of distribution you received from your IRA. Can i file my 2011 taxes Withholding. Can i file my 2011 taxes   Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld. Can i file my 2011 taxes See chapter 4. Can i file my 2011 taxes IRA distributions delivered outside the United States. Can i file my 2011 taxes   In general, if you are a U. Can i file my 2011 taxes S. Can i file my 2011 taxes citizen or resident alien and your home address is outside the United States or its possessions, you cannot choose exemption from withholding on distributions from your traditional IRA. Can i file my 2011 taxes Reporting taxable distributions on your return. Can i file my 2011 taxes    Report fully taxable distributions, including early distributions on Form 1040, line 15b, or Form 1040A, line 11b (no entry is required on Form 1040, line 15a, or Form 1040A, line 11a). Can i file my 2011 taxes If only part of the distribution is taxable, enter the total amount on Form 1040, line 15a, or Form 1040A, line 11a, and the taxable part on Form 1040, line 15b, or Form 1040A, line 11b. Can i file my 2011 taxes You cannot report distributions on Form 1040EZ. Can i file my 2011 taxes What Acts Result in Penalties or Additional Taxes? The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. Can i file my 2011 taxes There are additions to the regular tax for using your IRA funds in prohibited transactions. Can i file my 2011 taxes There are also additional taxes for the following activities. Can i file my 2011 taxes Investing in collectibles. Can i file my 2011 taxes Making excess contributions. Can i file my 2011 taxes Taking early distributions. Can i file my 2011 taxes Allowing excess amounts to accumulate (failing to take required distributions). Can i file my 2011 taxes There are penalties for overstating the amount of nondeductible contributions and for failure to file a Form 8606, if required. Can i file my 2011 taxes Prohibited Transactions Generally, a prohibited transaction is any improper use of your traditional IRA by you, your beneficiary, or any disqualified person. Can i file my 2011 taxes Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendent, and any spouse of a lineal descendent). Can i file my 2011 taxes The following are examples of prohibited transactions with a traditional IRA. Can i file my 2011 taxes Borrowing money from it. Can i file my 2011 taxes Selling property to it. Can i file my 2011 taxes Receiving unreasonable compensation for managing it. Can i file my 2011 taxes Using it as security for a loan. Can i file my 2011 taxes Buying property for personal use (present or future) with IRA funds. Can i file my 2011 taxes Effect on an IRA account. Can i file my 2011 taxes   Generally, if you or your beneficiary engages in a prohibited transaction in connection with your traditional IRA account at any time during the year, the account stops being an IRA as of the first day of that year. Can i file my 2011 taxes Effect on you or your beneficiary. Can i file my 2011 taxes   If your account stops being an IRA because you or your beneficiary engaged in a prohibited transaction, the account is treated as distributing all its assets to you at their fair market values on the first day of the year. Can i file my 2011 taxes If the total of those values is more than your basis in the IRA, you will have a taxable gain that is includible in your income. Can i file my 2011 taxes For information on figuring your gain and reporting it in income, see Are Distributions Taxable , earlier. Can i file my 2011 taxes The distribution may be subject to additional taxes or penalties. Can i file my 2011 taxes Taxes on prohibited transactions. Can i file my 2011 taxes   If someone other than the owner or beneficiary of a traditional IRA engages in a prohibited transaction, that person may be liable for certain taxes. Can i file my 2011 taxes In general, there is a 15% tax on the amount of the prohibited transaction and a 100% additional tax if the transaction is not corrected. Can i file my 2011 taxes More information. Can i file my 2011 taxes   For more information on prohibited transactions, see What Acts Result in Penalties or Additional Taxes? in chapter 1 of Publication 590. Can i file my 2011 taxes Investment in Collectibles If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. Can i file my 2011 taxes You may have to pay the 10% additional tax on early distributions, discussed later. Can i file my 2011 taxes Collectibles. Can i file my 2011 taxes   These include: Artworks, Rugs, Antiques, Metals, Gems, Stamps, Coins, Alcoholic beverages, and Certain other tangible personal property. Can i file my 2011 taxes Exception. Can i file my 2011 taxes    Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U. Can i file my 2011 taxes S. Can i file my 2011 taxes gold coins, or one-ounce silver coins minted by the Treasury Department. Can i file my 2011 taxes It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. Can i file my 2011 taxes Excess Contributions Generally, an excess contribution is the amount contributed to your traditional IRA(s) for the year that is more than the smaller of: The maximum deductible amount for the year. Can i file my 2011 taxes For 2013, this is $5,500 ($6,500 if you are 50 or older), or Your taxable compensation for the year. Can i file my 2011 taxes Tax on excess contributions. Can i file my 2011 taxes   In general, if the excess contributions for a year are not withdrawn by the date your return for the year is due (including extensions), you are subject to a 6% tax. Can i file my 2011 taxes You must pay the 6% tax each year on excess amounts that remain in your traditional IRA at the end of your tax year. Can i file my 2011 taxes The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. Can i file my 2011 taxes Excess contributions withdrawn by due date of return. Can i file my 2011 taxes   You will not have to pay the 6% tax if you withdraw an excess contribution made during a tax year and you also withdraw interest or other income earned on the excess contribution. Can i file my 2011 taxes You must complete your withdrawal by the date your tax return for that year is due, including extensions. Can i file my 2011 taxes How to treat withdrawn contributions. Can i file my 2011 taxes   Do not include in your gross income an excess contribution that you withdraw from your traditional IRA before your tax return is due if both the following conditions are met. Can i file my 2011 taxes No deduction was allowed for the excess contribution. Can i file my 2011 taxes You withdraw the interest or other income earned on the excess contribution. Can i file my 2011 taxes You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Can i file my 2011 taxes If there was a loss, the net income you must withdraw may be a negative amount. Can i file my 2011 taxes How to treat withdrawn interest or other income. Can i file my 2011 taxes   You must include in your gross income the interest or other income that was earned on the excess contribution. Can i file my 2011 taxes Report it on your return for the year in which the excess contribution was made. Can i file my 2011 taxes Your withdrawal of interest or other income may be subject to an additional 10% tax on early distributions, discus