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Income Tax Ez Form

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Income Tax Ez Form

Income tax ez form 6. Income tax ez form   How To Figure Cost of Goods Sold Table of Contents Introduction Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42Line 35 Inventory at Beginning of Year Line 36 Purchases Less Cost of Items Withdrawn for Personal Use Line 37 Cost of Labor Line 38 Materials and Supplies Line 39 Other Costs Line 40 Add Lines 35 through 39 Line 41 Inventory at End of Year Line 42 Cost of Goods Sold Introduction If you make or buy goods to sell, you can deduct the cost of goods sold from your gross receipts on Schedule C. Income tax ez form However, to determine these costs, you must value your inventory at the beginning and end of each tax year. Income tax ez form This chapter applies to you if you are a manufacturer, wholesaler, or retailer or if you are engaged in any business that makes, buys, or sells goods to produce income. Income tax ez form This chapter does not apply to a personal service business, such as the business of a doctor, lawyer, carpenter, or painter. Income tax ez form However, if you work in a personal service business and also sell or charge for the materials and supplies normally used in your business, this chapter applies to you. Income tax ez form If you must account for an inventory in your business, you must generally use an accrual method of accounting for your purchases and sales. Income tax ez form For more information, see chapter 2. Income tax ez form Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42 Figure your cost of goods sold by filling out lines 35 through 42 of Schedule C. Income tax ez form These lines are reproduced below and are explained in the discussion that follows. Income tax ez form 35 Inventory at beginning of year. Income tax ez form If different from last year's closing inventory, attach explanation   36 Purchases less cost of items withdrawn for personal use   37 Cost of labor. Income tax ez form Do not include any amounts paid to yourself   38 Materials and supplies   39 Other costs   40 Add lines 35 through 39   41 Inventory at end of year   42 Cost of goods sold. Income tax ez form Subtract line 41 from line 40. Income tax ez form  Enter the result here and on line 4   Line 35 Inventory at Beginning of Year If you are a merchant, beginning inventory is the cost of merchandise on hand at the beginning of the year that you will sell to customers. Income tax ez form If you are a manufacturer or producer, it includes the total cost of raw materials, work in process, finished goods, and materials and supplies used in manufacturing the goods (see Inventories in chapter 2). Income tax ez form Opening inventory usually will be identical to the closing inventory of the year before. Income tax ez form You must explain any difference in a schedule attached to your return. Income tax ez form Donation of inventory. Income tax ez form   If you contribute inventory (property that you sell in the course of your business), the amount you can claim as a contribution deduction is the smaller of its fair market value on the day you contributed it or its basis. Income tax ez form The basis of donated inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. Income tax ez form You must remove the amount of your contribution deduction from your opening inventory. Income tax ez form It is not part of the cost of goods sold. Income tax ez form   If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. Income tax ez form Treat the inventory's cost as you would ordinarily treat it under your method of accounting. Income tax ez form For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. Income tax ez form   A special rule may apply to certain donations of food inventory. Income tax ez form See Publication 526, Charitable Contributions. Income tax ez form Example 1. Income tax ez form You are a calendar year taxpayer who uses an accrual method of accounting. Income tax ez form In 2013, you contributed property from inventory to a church. Income tax ez form It had a fair market value of $600. Income tax ez form The closing inventory at the end of 2012 properly included $400 of costs due to the acquisition of the property, and in 2012, you properly deducted $50 of administrative and other expenses attributable to the property as business expenses. Income tax ez form The charitable contribution allowed for 2013 is $400 ($600 − $200). Income tax ez form The $200 is the amount that would be ordinary income if you had sold the contributed inventory at fair market value on the date of the gift. Income tax ez form The cost of goods sold you use in determining gross income for 2013 must not include the $400. Income tax ez form You remove that amount from opening inventory for 2013. Income tax ez form Example 2. Income tax ez form If, in Example 1, you acquired the contributed property in 2013 at a cost of $400, you would include the $400 cost of the property in figuring the cost of goods sold for 2013 and deduct the $50 of administrative and other expenses attributable to the property for that year. Income tax ez form You would not be allowed any charitable contribution deduction for the contributed property. Income tax ez form Line 36 Purchases Less Cost of Items Withdrawn for Personal Use If you are a merchant, use the cost of all merchandise you bought for sale. Income tax ez form If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into a finished product. Income tax ez form Trade discounts. Income tax ez form   The differences between the stated prices of articles and the actual prices you pay for them are called trade discounts. Income tax ez form You must use the prices you pay (not the stated prices) in figuring your cost of purchases. Income tax ez form Do not show the discount amount separately as an item in gross income. Income tax ez form   An automobile dealer must record the cost of a car in inventory reduced by any manufacturer's rebate that represents a trade discount. Income tax ez form Cash discounts. Income tax ez form   Cash discounts are amounts your suppliers let you deduct from your purchase invoices for prompt payments. Income tax ez form There are two methods of accounting for cash discounts. Income tax ez form You can either credit them to a separate discount account or deduct them from total purchases for the year. Income tax ez form Whichever method you use, you must be consistent. Income tax ez form If you want to change your method of figuring inventory cost, you must file Form 3115, Application for Change in Accounting Method. Income tax ez form For more information, see Change in Accounting Method in chapter 2. Income tax ez form   If you credit cash discounts to a separate account, you must include this credit balance in your business income at the end of the tax year. Income tax ez form If you use this method, do not reduce your cost of goods sold by the cash discounts. Income tax ez form Purchase returns and allowances. Income tax ez form   You must deduct all returns and allowances from your total purchases during the year. Income tax ez form Merchandise withdrawn from sale. Income tax ez form   If you withdraw merchandise for your personal or family use, you must exclude this cost from the total amount of merchandise you bought for sale. Income tax ez form Do this by crediting the purchases or sales account with the cost of merchandise you withdraw for personal use. Income tax ez form You must also charge the amount to your drawing account. Income tax ez form   A drawing account is a separate account you should keep to record the business income you withdraw to pay for personal and family expenses. Income tax ez form As stated above, you also use it to record withdrawals of merchandise for personal or family use. Income tax ez form This account is also known as a “withdrawals account” or “personal account. Income tax ez form ” Line 37 Cost of Labor Labor costs are usually an element of cost of goods sold only in a manufacturing or mining business. Income tax ez form Small merchandisers (wholesalers, retailers, etc. Income tax ez form ) usually do not have labor costs that can properly be charged to cost of goods sold. Income tax ez form In a manufacturing business, labor costs properly allocable to the cost of goods sold include both the direct and indirect labor used in fabricating the raw material into a finished, saleable product. Income tax ez form Direct labor. Income tax ez form   Direct labor costs are the wages you pay to those employees who spend all their time working directly on the product being manufactured. Income tax ez form They also include a part of the wages you pay to employees who work directly on the product part time if you can determine that part of their wages. Income tax ez form Indirect labor. Income tax ez form   Indirect labor costs are the wages you pay to employees who perform a general factory function that does not have any immediate or direct connection with making the saleable product, but that is a necessary part of the manufacturing process. Income tax ez form Other labor. Income tax ez form   Other labor costs not properly chargeable to the cost of goods sold can be deducted as selling or administrative expenses. Income tax ez form Generally, the only kinds of labor costs properly chargeable to your cost of goods sold are the direct or indirect labor costs and certain other costs treated as overhead expenses properly charged to the manufacturing process, as discussed later under Line 39 Other Costs. Income tax ez form Line 38 Materials and Supplies Materials and supplies, such as hardware and chemicals, used in manufacturing goods are charged to cost of goods sold. Income tax ez form Those that are not used in the manufacturing process are treated as deferred charges. Income tax ez form You deduct them as a business expense when you use them. Income tax ez form Business expenses are discussed in chapter 8. Income tax ez form Line 39 Other Costs Examples of other costs incurred in a manufacturing or mining process that you charge to your cost of goods sold are as follows. Income tax ez form Containers. Income tax ez form   Containers and packages that are an integral part of the product manufactured are a part of your cost of goods sold. Income tax ez form If they are not an integral part of the manufactured product, their costs are shipping or selling expenses. Income tax ez form Freight-in. Income tax ez form   Freight-in, express-in, and cartage-in on raw materials, supplies you use in production, and merchandise you purchase for sale are all part of cost of goods sold. Income tax ez form Overhead expenses. Income tax ez form   Overhead expenses include expenses such as rent, heat, light, power, insurance, depreciation, taxes, maintenance, labor, and supervision. Income tax ez form The overhead expenses you have as direct and necessary expenses of the manufacturing operation are included in your cost of goods sold. Income tax ez form Line 40 Add Lines 35 through 39 The total of lines 35 through 39 equals the cost of the goods available for sale during the year. Income tax ez form Line 41 Inventory at End of Year Subtract the value of your closing inventory (including, as appropriate, the allocable parts of the cost of raw materials and supplies, direct labor, and overhead expenses) from line 40. Income tax ez form Inventory at the end of the year is also known as closing or ending inventory. Income tax ez form Your ending inventory will usually become the beginning inventory of your next tax year. Income tax ez form Line 42 Cost of Goods Sold When you subtract your closing inventory (inventory at the end of the year) from the cost of goods available for sale, the remainder is your cost of goods sold during the tax year. Income tax ez form Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Ohio Attorney Generals Office

Website: Ohio Attorney Generals Office (Ohio attorney general website)

Address: Ohio Attorney Generals Office
Consumer Protection Section
30 E. Broad St., 14th Floor
Columbus, OH 43215-3400

Phone Number: 614-466-4986

Toll-free: 1-800-282-0515

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County Consumer Protection Offices

Summit County Office of Consumer Affairs

Website: Summit County Office of Consumer Affairs

Address: Summit County Office of Consumer Affairs
175 S. Main St., Suite 209
Akron, OH 44308

Phone Number: 330-643-2879

Cuyahoga County Department of Consumer Affairs

Website: Cuyahoga County Department of Consumer Affairs

Address: Cuyahoga County Department of Consumer Affairs
5398 1/2 Northfield Rd.
Maple Heights, OH 44137

Phone Number: 216-443-7035

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Commerce

Website: Department of Commerce

Address: Department of Commerce
Division of Financial Institutions
Consumer Complaints

77 S. High St., 21st Floor
Columbus, OH 43215-6120

Phone Number: 614-728-8400

Toll-free: 1-866-278-0003

TTY: 1-800-750-0750

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Insurance

Website: Department of Insurance

Address: Department of Insurance
Office of Consumer Affairs
50 W. Town St., 3rd Floor
Suite 300
Columbus, OH 43215

Phone Number: 614-644-2673

Toll-free: 1-800-686-1526
1-800-686-1527 (Fraud Hotline) 1-800-686-1527 (Fraud Hotline)

TTY: 614-644-3745

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Department of Commerce

Website: Department of Commerce

Address: Department of Commerce
Division of Securities
77 S. High St.
22nd Floor
Columbus, OH 43215-6131

Phone Number: 614-644-7381

Toll-free: 1-800-788-1194 (Investor Protection Hotline)

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Consumers' Counsel

Website: Consumers' Counsel

Address: Consumers' Counsel
10 W. Broad St., Suite 1800
Columbus, OH 43215-3485

Phone Number: 614-466-8574

Toll-free: 1-877-742-5622 (OH)

Public Utilities Commission

Website: Public Utilities Commission

Address: Public Utilities Commission
180 E. Broad St.
Columbus, OH 43215

Phone Number: 614-466-3292

Toll-free: 1-800-686-7826 (OH)

TTY: 1-800-686-1570 (OH)

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The Income Tax Ez Form

Income tax ez form 17. Income tax ez form   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. Income tax ez form  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. Income tax ez form 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. Income tax ez form For more information, see How Much Can Be Contributed? later. Income tax ez form Roth IRA contribution limit. Income tax ez form  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. Income tax ez form 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. Income tax ez form However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Income tax ez form For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? later. Income tax ez form Modified AGI limit for traditional IRA contributions increased. Income tax ez form  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. Income tax ez form 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. Income tax ez form If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Income tax ez form See How Much Can You Deduct , later. Income tax ez form Modified AGI limit for Roth IRA contributions increased. Income tax ez form  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Income tax ez form Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Income tax ez form You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Income tax ez form 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. Income tax ez form You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Income tax ez form 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-. Income tax ez form You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Income tax ez form See Can You Contribute to a Roth IRA , later. Income tax ez form Net Investment Income Tax. Income tax ez form   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). Income tax ez form However, these distributions are taken into account when determining the modified adjusted gross income threshold. Income tax ez form Distributions from a nonqualified retirement plan are included in net investment income. Income tax ez form See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Income tax ez form Name change. Income tax ez form  All spousal IRAs have been renamed Kay Bailey Hutchison Spousal IRAs. Income tax ez form There are no changes to the rules regarding these IRAs. Income tax ez form See Kay Bailey Hutchison Spousal IRA Limit , later, for more information. Income tax ez form Reminders 2014 limits. Income tax ez form   You can find information about the 2014 contribution and AGI limits in Publication 590. Income tax ez form Contributions to both traditional and Roth IRAs. Income tax ez form   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. Income tax ez form Statement of required minimum distribution. Income tax ez form  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. Income tax ez form The report or offer must include the date by which the amount must be distributed. Income tax ez form The report is due January 31 of the year in which the minimum distribution is required. Income tax ez form It can be provided with the year-end fair market value statement that you normally get each year. Income tax ez form No report is required for IRAs of owners who have died. Income tax ez form IRA interest. Income tax ez form  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Income tax ez form Tax on your traditional IRA is generally deferred until you take a distribution. Income tax ez form Do not report this interest on your tax return as tax-exempt interest. Income tax ez form Form 8606. Income tax ez form   To designate contributions as nondeductible, you must file Form 8606, Nondeductible IRAs. Income tax ez form The term “50 or older” is used several times in this chapter. Income tax ez form It refers to an IRA owner who is age 50 or older by the end of the tax year. Income tax ez form Introduction An individual retirement arrangement (IRA) is a personal savings plan that gives you tax advantages for setting aside money for your retirement. Income tax ez form This chapter discusses the following topics. Income tax ez form The rules for a traditional IRA (any IRA that is not a Roth or SIMPLE IRA). Income tax ez form The Roth IRA, which features nondeductible contributions and tax-free distributions. Income tax ez form Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs) are not discussed in this chapter. Income tax ez form For more information on these plans and employees' SEP IRAs and SIMPLE IRAs that are part of these plans, see Publications 560 and 590. Income tax ez form For information about contributions, deductions, withdrawals, transfers, rollovers, and other transactions, see Publication 590. Income tax ez form 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. Income tax ez form ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Income tax ez form 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. Income tax ez form 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. Income tax ez form What is compensation?   Generally, compensation is what you earn from working. Income tax ez form Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. Income tax ez form 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). Income tax ez form   Scholarship and fellowship payments are compensation for this purpose only if shown in box 1 of Form W-2. Income tax ez form   Compensation also includes commissions and taxable alimony and separate maintenance payments. Income tax ez form Self-employment income. Income tax ez form   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. Income tax ez form   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Income tax ez form Nontaxable combat pay. Income tax ez form   For IRA purposes, if you were a member of the U. Income tax ez form S. Income tax ez form Armed Forces, your compensation includes any nontaxable combat pay you receive. Income tax ez form What is not compensation?   Compensation does not include any of the following items. Income tax ez form Earnings and profits from property, such as rental income, interest income, and dividend income. Income tax ez form Pension or annuity income. Income tax ez form Deferred compensation received (compensation payments postponed from a past year). Income tax ez form Income from a partnership for which you do not provide services that are a material income-producing factor. Income tax ez form Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Income tax ez form Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Income tax ez form When and How Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Income tax ez form However, the time for making contributions for any year is limited. Income tax ez form See When Can Contributions Be Made , later. Income tax ez form You can open different kinds of IRAs with a variety of organizations. Income tax ez form You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Income tax ez form You can also open an IRA through your stockbroker. Income tax ez form Any IRA must meet Internal Revenue Code requirements. Income tax ez form Kinds of traditional IRAs. Income tax ez form   Your traditional IRA can be an individual retirement account or annuity. Income tax ez form It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Income tax ez form How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Income tax ez form These limits and other rules are explained below. Income tax ez form Community property laws. Income tax ez form   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. Income tax ez form This is the rule even in states with community property laws. Income tax ez form Brokers' commissions. Income tax ez form   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Income tax ez form Trustees' fees. Income tax ez form   Trustees' administrative fees are not subject to the contribution limit. Income tax ez form Qualified reservist repayments. Income tax ez form   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. Income tax ez form 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. Income tax ez form 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. Income tax ez form   For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1 of Publication 590. Income tax ez form Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Income tax ez form (See Roth IRAs, later. Income tax ez form ) General limit. Income tax ez form   For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts. Income tax ez form $5,500 ($6,500 if you are 50 or older). Income tax ez form Your taxable compensation (defined earlier) for the year. Income tax ez form 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. Income tax ez form (See Nondeductible Contributions , later. Income tax ez form ) Qualified reservist repayments do not affect this limit. Income tax ez form Example 1. Income tax ez form Betty, who is 34 years old and single, earned $24,000 in 2013. Income tax ez form Her IRA contributions for 2013 are limited to $5,500. Income tax ez form Example 2. Income tax ez form John, an unmarried college student working part time, earned $3,500 in 2013. Income tax ez form His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Income tax ez form Kay Bailey Hutchison Spousal IRA limit. Income tax ez form   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. Income tax ez form $5,500 ($6,500 if you are 50 or older). Income tax ez form The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Income tax ez form Your spouse's IRA contribution for the year to a traditional IRA. Income tax ez form Any contribution for the year to a Roth IRA on behalf of your spouse. Income tax ez form 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). Income tax ez form 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). Income tax ez form Contributions must be in the form of money (cash, check, or money order). Income tax ez form Property cannot be contributed. Income tax ez form Contributions must be made by due date. Income tax ez form   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. Income tax ez form Age 70½ rule. Income tax ez form   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Income tax ez form   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Income tax ez form If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Income tax ez form Designating year for which contribution is made. Income tax ez form   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. Income tax ez form 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). Income tax ez form Filing before a contribution is made. Income tax ez form   You can file your return claiming a traditional IRA contribution before the contribution is actually made. Income tax ez form Generally, the contribution must be made by the due date of your return, not including extensions. Income tax ez form Contributions not required. Income tax ez form   You do not have to contribute to your traditional IRA for every tax year, even if you can. Income tax ez form 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). Income tax ez form However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Income tax ez form See Limit If Covered by Employer Plan , later. Income tax ez form You may be able to claim a credit for contributions to your traditional IRA. Income tax ez form For more information, see chapter 37. Income tax ez form Trustees' fees. Income tax ez form   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Income tax ez form However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Income tax ez form See chapter 28. Income tax ez form Brokers' commissions. Income tax ez form   Brokers' commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Income tax ez form Full deduction. Income tax ez form   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). Income tax ez form 100% of your compensation. Income tax ez form This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Income tax ez form Kay Bailey Hutchison Spousal IRA. Income tax ez form   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. Income tax ez form $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older in 2013). Income tax ez form The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Income tax ez form The IRA deduction for the year of the spouse with the greater compensation. Income tax ez form Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Income tax ez form Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Income tax ez form This limit is reduced by any contributions to a 501(c)(18) plan on behalf of the spouse with the lesser compensation. Income tax ez form Note. Income tax ez form 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. Income tax ez form After a divorce or legal separation, you can deduct only contributions to your own IRA. Income tax ez form Your deductions are subject to the rules for single individuals. Income tax ez form Covered by an employer retirement plan. Income tax ez form   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. Income tax ez form This is discussed later under Limit If Covered by Employer Plan . Income tax ez form Limits on the amount you can deduct do not affect the amount that can be contributed. Income tax ez form See Nondeductible Contributions , later. Income tax ez form 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. Income tax ez form The “Retirement plan” box should be checked if you were covered. Income tax ez form Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered by an Employer Plan , later. Income tax ez form If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Income tax ez form Federal judges. Income tax ez form   For purposes of the IRA deduction, federal judges are covered by an employer retirement plan. Income tax ez form 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. Income tax ez form These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Income tax ez form Tax year. Income tax ez form   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Income tax ez form For almost all people, the tax year is the calendar year. Income tax ez form Defined contribution plan. Income tax ez form   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. Income tax ez form   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Income tax ez form Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Income tax ez form Defined benefit plan. Income tax ez form   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. Income tax ez form 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. Income tax ez form   A defined benefit plan is any plan that is not a defined contribution plan. Income tax ez form Defined benefit plans include pension plans and annuity plans. Income tax ez form No vested interest. Income tax ez form   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. Income tax ez form 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. Income tax ez form Social security or railroad retirement. Income tax ez form   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Income tax ez form Benefits from a previous employer's plan. Income tax ez form   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Income tax ez form Reservists. Income tax ez form   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. Income tax ez form You are not covered by the plan if both of the following conditions are met. Income tax ez form 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. Income tax ez form You did not serve more than 90 days on active duty during the year (not counting duty for training). Income tax ez form Volunteer firefighters. Income tax ez form   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Income tax ez form You are not covered by the plan if both of the following conditions are met. Income tax ez form 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. Income tax ez form Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Income tax ez form 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. Income tax ez form 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. Income tax ez form These amounts vary depending on your filing status. Income tax ez form To determine if your deduction is subject to phaseout, you must determine your modified adjusted gross income (AGI) and your filing status. Income tax ez form See Filing status and Modified adjusted gross income (AGI) , later. Income tax ez form Then use Table 17-1 or 17-2 to determine if the phaseout applies. Income tax ez form Social security recipients. Income tax ez form   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. Income tax ez form You received social security benefits. Income tax ez form You received taxable compensation. Income tax ez form Contributions were made to your traditional IRA. Income tax ez form You or your spouse was covered by an employer retirement plan. Income tax ez form Use those worksheets to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Income tax ez form Deduction phaseout. Income tax ez form   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. Income tax ez form Table 17-1. Income tax ez form 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. Income tax ez form IF your filing status is. Income tax ez form . Income tax ez form . Income tax ez form   AND your modified AGI is. Income tax ez form . Income tax ez form . Income tax ez form   THEN you can take. Income tax ez form . Income tax ez form . Income tax ez form single   or  head of household   $59,000 or less   a full deduction. Income tax ez form   more than $59,000 but less than $69,000   a partial deduction. Income tax ez form   $69,000 or more   no deduction. Income tax ez form married filing jointly   or  qualifying widow(er)   $95,000 or less   a full deduction. Income tax ez form   more than $95,000 but less than $115,000   a partial deduction. Income tax ez form   $115,000 or more   no deduction. Income tax ez form married filing separately2   less than $10,000   a partial deduction. Income tax ez form   $10,000 or more   no deduction. Income tax ez form 1Modified AGI (adjusted gross income). Income tax ez form See Modified adjusted gross income (AGI) . Income tax ez form 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). Income tax ez form If your spouse is covered. Income tax ez form   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. Income tax ez form Filing status. Income tax ez form   Your filing status depends primarily on your marital status. Income tax ez form 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. Income tax ez form If you need more information on filing status, see chapter 2. Income tax ez form Lived apart from spouse. Income tax ez form   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. Income tax ez form Table 17-2. Income tax ez form 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. Income tax ez form IF your filing status is. Income tax ez form . Income tax ez form . Income tax ez form   AND your modified AGI is. Income tax ez form . Income tax ez form . Income tax ez form   THEN you can take. Income tax ez form . Income tax ez form . Income tax ez form single, head of household, or qualifying widow(er)   any amount   a full deduction. Income tax ez form married filing jointly or separately with a spouse who is not covered by a plan at work   any amount   a full deduction. Income tax ez form married filing jointly with a spouse who is covered by a plan at work   $178,000 or less   a full deduction. Income tax ez form   more than $178,000 but less than $188,000   a partial deduction. Income tax ez form   $188,000 or more   no deduction. Income tax ez form married filing separately with a spouse who is covered by a plan at work2   less than $10,000   a partial deduction. Income tax ez form   $10,000 or more   no deduction. Income tax ez form 1Modified AGI (adjusted gross income). Income tax ez form See Modified adjusted gross income (AGI) . Income tax ez form 2You are entitled to the full deduction if you did not live with your spouse at any time during the year. Income tax ez form Modified adjusted gross income (AGI). Income tax ez form   How you figure your modified AGI depends on whether you are filing Form 1040 or Form 1040A. Income tax ez form If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Publication 590. Income tax ez form You may be able to use Worksheet 17-1 to figure your modified AGI. Income tax ez form    Do not assume that your modified AGI is the same as your compensation. Income tax ez form Your modified AGI may include income in addition to your compensation (discussed earlier), such as interest, dividends, and income from IRA distributions. Income tax ez form Form 1040. Income tax ez form   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. Income tax ez form IRA deduction. Income tax ez form Student loan interest deduction. Income tax ez form Tuition and fees deduction. Income tax ez form Domestic production activities deduction. Income tax ez form Foreign earned income exclusion. Income tax ez form Foreign housing exclusion or deduction. Income tax ez form Exclusion of qualified savings bond interest shown on Form 8815, Exclusion of Interest From Series EE and I U. Income tax ez form S. Income tax ez form Savings Bonds Issued After 1989. Income tax ez form Exclusion of employer-provided adoption benefits shown on Form 8839, Qualified Adoption Expenses. Income tax ez form This is your modified AGI. Income tax ez form Form 1040A. Income tax ez form   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. Income tax ez form IRA deduction. Income tax ez form Student loan interest deduction. Income tax ez form Tuition and fees deduction. Income tax ez form Exclusion of qualified savings bond interest shown on Form 8815. Income tax ez form This is your modified AGI. Income tax ez form Both contributions for 2013 and distributions in 2013. Income tax ez form   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Income tax ez form You received distributions in 2013 from one or more traditional IRAs. Income tax ez form You made contributions to a traditional IRA for 2013. Income tax ez form Some of those contributions may be nondeductible contributions. Income tax ez form If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Income tax ez form To do this, you can use Worksheet 1-5, Figuring the Taxable Part of Your IRA Distribution, in Publication 590. Income tax ez form   If at least one of the above does not apply, figure your modified AGI using Worksheet 17-1, later. Income tax ez form    How to figure your reduced IRA deduction. Income tax ez form   You can figure your reduced IRA deduction for either Form 1040 or Form 1040A by using the worksheets in chapter 1 of Publication 590. Income tax ez form Also, the instructions for Form 1040 and Form 1040A include similar worksheets that you may be able to use instead. Income tax ez form Worksheet 17-1. Income tax ez form Figuring Your Modified AGI Use this worksheet to figure your modified adjusted gross income for traditional IRA purposes. Income tax ez form 1. Income tax ez form 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. Income tax ez form   2. Income tax ez form Enter any student loan interest deduction from Form 1040, line 33, or Form 1040A, line 18 2. Income tax ez form   3. Income tax ez form Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Income tax ez form   4. Income tax ez form Enter any domestic production activities deduction from Form 1040, line 35 4. Income tax ez form   5. Income tax ez form Enter any foreign earned income and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Income tax ez form   6. Income tax ez form Enter any foreign housing deduction from Form 2555, line 50 6. Income tax ez form   7. Income tax ez form Enter any excludable savings bond interest from Form 8815, line 14 7. Income tax ez form   8. Income tax ez form Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Income tax ez form   9. Income tax ez form Add lines 1 through 8. Income tax ez form This is your Modified AGI for traditional IRA purposes 9. Income tax ez form   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Income tax ez form If you file Form 1040A, enter your IRA deduction on line 17. Income tax ez form You cannot deduct IRA contributions on Form 1040EZ. Income tax ez form 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. Income tax ez form The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Income tax ez form Example. Income tax ez form Mike is 28 years old and single. Income tax ez form In 2013, he was covered by a retirement plan at work. Income tax ez form His salary was $57,312. Income tax ez form His modified AGI was $70,000. Income tax ez form Mike made a $5,500 IRA contribution for 2013. Income tax ez form Because he was covered by a retirement plan and his modified AGI was over $69,000, he cannot deduct his $5,500 IRA contribution. Income tax ez form He must designate this contribution as a nondeductible contribution by reporting it on Form 8606, as explained next. Income tax ez form Form 8606. Income tax ez form   To designate contributions as nondeductible, you must file Form 8606. Income tax ez form   You do not have to designate a contribution as nondeductible until you file your tax return. Income tax ez form When you file, you can even designate otherwise deductible contributions as nondeductible. Income tax ez form   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Income tax ez form 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. Income tax ez form In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Income tax ez form See Form 8606 under Distributions Fully or Partly Taxable, later. Income tax ez form Failure to report nondeductible contributions. Income tax ez form   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated as deductible contributions when withdrawn. Income tax ez form All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Income tax ez form Penalty for overstatement. Income tax ez form   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. Income tax ez form Penalty for failure to file Form 8606. Income tax ez form   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. Income tax ez form    Tax on earnings on nondeductible contributions. Income tax ez form   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. Income tax ez form See When Can You Withdraw or Use IRA Assets , later. Income tax ez form Cost basis. Income tax ez form   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Income tax ez form Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Income tax ez form Inherited IRAs If you inherit a traditional IRA, you are called a beneficiary. Income tax ez form A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Income tax ez form Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Income tax ez form Inherited from spouse. Income tax ez form   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Income tax ez form You can: Treat it as your own IRA by designating yourself as the account owner. Income tax ez form 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). Income tax ez form Treat yourself as the beneficiary rather than treating the IRA as your own. Income tax ez form Treating it as your own. Income tax ez form   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. Income tax ez form 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. Income tax ez form   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. Income tax ez form Inherited from someone other than spouse. Income tax ez form   If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. Income tax ez form This means that you cannot make any contributions to the IRA. Income tax ez form It also means you cannot roll over any amounts into or out of the inherited IRA. Income tax ez form 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. Income tax ez form For more information, see the discussion of inherited IRAs under Rollover From One IRA Into Another, later. Income tax ez form 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. Income tax ez form You can make the following kinds of transfers. Income tax ez form Transfers from one trustee to another. Income tax ez form Rollovers. Income tax ez form Transfers incident to a divorce. Income tax ez form Transfers to Roth IRAs. Income tax ez form   Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. Income tax ez form You can also move assets from a qualified retirement plan to a Roth IRA. Income tax ez form See Can You Move Amounts Into a Roth IRA? under Roth IRAs, later. Income tax ez form 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. Income tax ez form Because there is no distribution to you, the transfer is tax free. Income tax ez form 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 . Income tax ez form 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. Income tax ez form 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. Income tax ez form The contribution to the second retirement plan is called a “rollover contribution. Income tax ez form ” Note. Income tax ez form 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. Income tax ez form Kinds of rollovers to a traditional IRA. Income tax ez form   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). Income tax ez form Treatment of rollovers. Income tax ez form   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 . Income tax ez form Kinds of rollovers from a traditional IRA. Income tax ez form   You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. Income tax ez form 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). Income tax ez form The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). Income tax ez form Qualified plans may, but are not required to, accept such rollovers. Income tax ez form Time limit for making a rollover contribution. Income tax ez form   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. Income tax ez form 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. Income tax ez form For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Income tax ez form Extension of rollover period. Income tax ez form   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. Income tax ez form For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Income tax ez form More information. Income tax ez form   For more information on rollovers, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Income tax ez form 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. Income tax ez form Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. Income tax ez form Waiting period between rollovers. Income tax ez form   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. Income tax ez form 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. Income tax ez form   The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA. Income tax ez form Example. Income tax ez form You have two traditional IRAs, IRA-1 and IRA-2. Income tax ez form You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). Income tax ez form 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. Income tax ez form 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. Income tax ez form 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. Income tax ez form Exception. Income tax ez form   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. Income tax ez form Partial rollovers. Income tax ez form   If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. Income tax ez form The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). Income tax ez form 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? . Income tax ez form Required distributions. Income tax ez form   Amounts that must be distributed during a particular year under the required distribution rules (discussed later) are not eligible for rollover treatment. Income tax ez form Inherited IRAs. Income tax ez form   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. Income tax ez form See Treating it as your own , earlier. Income tax ez form Not inherited from spouse. Income tax ez form   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. Income tax ez form You must withdraw the IRA assets within a certain period. Income tax ez form For more information, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Income tax ez form Reporting rollovers from IRAs. Income tax ez form   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. Income tax ez form   Enter the total amount of the distribution on Form 1040, line 15a, or Form 1040A, line 11a. Income tax ez form 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. Income tax ez form 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. Income tax ez form Put “Rollover” next to Form 1040, line 15b, or Form 1040A, line 11b. Income tax ez form See your tax return instructions. Income tax ez form   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. Income tax ez form 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). Income tax ez form A qualified plan is one that meets the requirements of the Internal Revenue Code. Income tax ez form Eligible rollover distribution. Income tax ez form   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. Income tax ez form A required minimum distribution (explained later under When Must You Withdraw IRA Assets? (Required Minimum Distributions) ). Income tax ez form A hardship distribution. Income tax ez form 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. Income tax ez form Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or of excess annual additions and any allocable gains. Income tax ez form 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. Income tax ez form Dividends on employer securities. Income tax ez form The cost of life insurance coverage. Income tax ez form Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Income tax ez form To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Income tax ez form See Form 8606 under Distributions Fully or Partly Taxable, later. Income tax ez form Rollover by nonspouse beneficiary. Income tax ez form   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. Income tax ez form The IRA is treated as an inherited IRA. Income tax ez form For more information about inherited IRAs, see Inherited IRAs , earlier. Income tax ez form Reporting rollovers from employer plans. Income tax ez form    Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. Income tax ez form This amount should be shown in box 1 of Form 1099-R. Income tax ez form From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. Income tax ez form From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Income tax ez form Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. Income tax ez form Also, enter "Rollover" next to Form 1040, line 16b, or Form 1040A, line 12b. Income tax ez form 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. Income tax ez form The transfer is tax free. Income tax ez form For detailed information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Income tax ez form Converting From Any Traditional IRA to a Roth IRA Allowable conversions. Income tax ez form   You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. Income tax ez form The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. Income tax ez form If properly (and timely) rolled over, the 10% additional tax on early distributions will not apply. Income tax ez form However, a part or all of the conversion contribution from your traditional IRA is included in your gross income. Income tax ez form Required distributions. Income tax ez form   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). Income tax ez form Income. Income tax ez form   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. Income tax ez form 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. Income tax ez form   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. Income tax ez form   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. Income tax ez form   If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Income tax ez form See chapter 4. Income tax ez form 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. Income tax ez form This is called recharacterizing the contribution. Income tax ez form See Can You Move Retirement Plan Assets? in chapter 1 of Publication 590 for more detailed information. Income tax ez form How to recharacterize a contribution. Income tax ez form   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. Income tax ez form 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. Income tax ez form If you recharacterize your contribution, you must do all three of the following. Income tax ez form Include in the transfer any net income allocable to the contribution. Income tax ez form If there was a loss, the net income you must transfer may be a negative amount. Income tax ez form Report the recharacterization on your tax return for the year during which the contribution was made. Income tax ez form Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA. Income tax ez form No deduction allowed. Income tax ez form   You cannot deduct the contribution to the first IRA. Income tax ez form Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. Income tax ez form Required notifications. Income tax ez form   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. Income tax ez form You must make the notifications by the date of the transfer. Income tax ez form Only one notification is required if both IRAs are maintained by the same trustee. Income tax ez form The notification(s) must include all of the following information. Income tax ez form The type and amount of the contribution to the first IRA that is to be recharacterized. Income tax ez form The date on which the contribution was made to the first IRA and the year for which it was made. Income tax ez form 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. Income tax ez form The name of the trustee of the first IRA and the name of the trustee of the second IRA. Income tax ez form Any additional information needed to make the transfer. Income tax ez form Reporting a recharacterization. Income tax ez form   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. Income tax ez form You must treat the contribution as having been made to the second IRA. Income tax ez form When Can You Withdraw or Use IRA Assets? There are rules limiting use of your IRA assets and distributions from it. Income tax ez form Violation of the rules generally results in additional taxes in the year of violation. Income tax ez form See What Acts Result in Penalties or Additional Taxes , later. Income tax ez form Contributions returned before the due date of return. Income tax ez form   If you made IRA contributions in 2013, you can withdraw them tax free by the due date of your return. Income tax ez form If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. Income tax ez form You can do this if, for each contribution you withdraw, both of the following conditions apply. Income tax ez form You did not take a deduction for the contribution. Income tax ez form You withdraw any interest or other income earned on the contribution. Income tax ez form You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Income tax ez form If there was a loss, the net income earned on the contribution may be a negative amount. Income tax ez form Note. Income tax ez form 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. Income tax ez form Earnings includible in income. Income tax ez form   You must include in income any earnings on the contributions you withdraw. Income tax ez form Include the earnings in income for the year in which you made the contributions, not in the year in which you withdraw them. Income tax ez form 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. Income tax ez form Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes?, later. Income tax ez form    Early distributions tax. Income tax ez form   The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. Income tax ez form 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. Income tax ez form When Must You Withdraw IRA Assets? (Required Minimum Distributions) You cannot keep funds in a traditional IRA indefinitely. Income tax ez form Eventually they must be distributed. Income tax ez form 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. Income tax ez form See Excess Accumulations (Insufficient Distributions) , later. Income tax ez form The requirements for distributing IRA funds differ depending on whether you are the IRA owner or the beneficiary of a decedent's IRA. Income tax ez form Required minimum distribution. Income tax ez form   The amount that must be distributed each year is referred to as the required minimum distribution. Income tax ez form Required distributions not eligible for rollover. Income tax ez form   Amounts that must be distributed (required minimum distributions) during a particular year are not eligible for rollover treatment. Income tax ez form IRA owners. Income tax ez form   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. Income tax ez form April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date. Income tax ez form Distributions by the required beginning date. Income tax ez form   You must receive at least a minimum amount for each year starting with the year you reach age 70½ (your 70½ year). Income tax ez form 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. Income tax ez form   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. Income tax ez form 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. Income tax ez form Distributions after the required beginning date. Income tax ez form   The required minimum distribution for any year after the year you turn 70½ must be made by December 31 of that later year. Income tax ez form    Beneficiaries. Income tax ez form   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. Income tax ez form More information. Income tax ez form   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. Income tax ez form Are Distributions Taxable? In general, distributions from a traditional IRA are taxable in the year you receive them. Income tax ez form Exceptions. Income tax ez form   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 . Income tax ez form    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. Income tax ez form 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. Income tax ez form Qualified charitable distributions (QCD). Income tax ez form   A QCD is generally a nontaxable distribution made directly by the trustee of your IRA to an organization eligible to receive tax-deductible contributions. Income tax ez form Special rules apply if you made a qualified charitable distribution in January 2013 that you elected to treat as made in 2012. Income tax ez form See Qualified Charitable Distributions in Publication 590 for more information. Income tax ez form Ordinary income. Income tax ez form   Distributions from traditional IRAs that you include in income are taxed as ordinary income. Income tax ez form No special treatment. Income tax ez form   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. Income tax ez form 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. Income tax ez form Fully taxable. Income tax ez form   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. Income tax ez form Because you have no basis in your IRA, any distributions are fully taxable when received. Income tax ez form See Reporting taxable distributions on your return , later. Income tax ez form Partly taxable. Income tax ez form    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. Income tax ez form These nondeductible contributions are not taxed when they are distributed to you. Income tax ez form They are a return of your investment in your IRA. Income tax ez form   Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. Income tax ez form 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). Income tax ez form Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable. Income tax ez form Form 8606. Income tax ez form   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. Income tax ez form Using the form, you will figure the nontaxable distributions for 2013 and your total IRA basis for 2013 and earlier years. Income tax ez form Note. Income tax ez form 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. Income tax ez form Send it to the IRS at the time and place you would otherwise file an income tax return. Income tax ez form Distributions reported on Form 1099-R. Income tax ez form   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. Income tax ez form , or a similar statement. Income tax ez form IRA distributions are shown in boxes 1 and 2a of Form 1099-R. Income tax ez form A number or letter code in box 7 tells you what type of distribution you received from your IRA. Income tax ez form Withholding. Income tax ez form   Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld. Income tax ez form See chapter 4. Income tax ez form IRA distributions delivered outside the United States. Income tax ez form   In general, if you are a U. Income tax ez form S. Income tax ez form 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. Income tax ez form Reporting taxable distributions on your return. Income tax ez form    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). Income tax ez form 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. Income tax ez form You cannot report distributions on Form 1040EZ. Income tax ez form 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. Income tax ez form There are additions to the regular tax for using your IRA funds in prohibited transactions. Income tax ez form There are also additional taxes for the following activities. Income tax ez form Investing in collectibles. Income tax ez form Making excess contributions. Income tax ez form Taking early distributions. Income tax ez form Allowing excess amounts to accumulate (failing to take required distributions). Income tax ez form There are penalties for overstating the amount of nondeductible contributions and for failure to file a Form 8606, if required. Income tax ez form Prohibited Transactions Generally, a prohibited transaction is any improper use of your traditional IRA by you, your beneficiary, or any disqualified person. Income tax ez form Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendent, and any spouse of a lineal descendent). Income tax ez form The following are examples of prohibited transactions with a traditional IRA. Income tax ez form Borrowing money from it. Income tax ez form Selling property to it. Income tax ez form Receiving unreasonable compensation for managing it. Income tax ez form Using it as security for a loan. Income tax ez form Buying property for personal use (present or future) with IRA funds. Income tax ez form Effect on an IRA account. Income tax ez form   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. Income tax ez form Effect on you or your beneficiary. Income tax ez form   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. Income tax ez form 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. Income tax ez form For information on figuring your gain and reporting it in income, see Are Distributions Taxable , earlier. Income tax ez form The distribution may be subject to additional taxes or penalties. Income tax ez form Taxes on prohibited transactions. Income tax ez form   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. Income tax ez form 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. Income tax ez form More information. Income tax ez form   For more information on prohibited transactions, see What Acts Result in Penalties or Additional Taxes? in chapter 1 of Publication 590. Income tax ez form Investment in Collectibles If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. Income tax ez form You may have to pay the 10% additional tax on early distributions, discussed later. Income tax ez form Collectibles. Income tax ez form   These include: Artworks, Rugs, Antiques, Metals, Gems, Stamps, Coins, Alcoholic beverages, and Certain other tangible personal property. Income tax ez form Exception. Income tax ez form    Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U. Income tax ez form S. Income tax ez form gold coins, or one-ounce silver coins minted by the Treasury Department. Income tax ez form It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. Income tax ez form 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. Income tax ez form For 2013, this is $5,500 ($6,500 if you are 50 or older), or Your taxable compensation for the year. Income tax ez form Tax on excess contributions. Income tax ez form   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. Income tax ez form You must pay the 6% tax each year on excess amounts that remain in your traditional IRA at the end of your tax year. Income tax ez form The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. Income tax ez form Excess contributions withdrawn by due date of return. Income tax ez form   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. Income tax ez form You must complete your withdrawal by the date your tax return for that year is due, including extensions. Income tax ez form How to treat withdrawn contributions. Income tax ez form   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. Income tax ez form No deduction was allowed for the excess contribution. Income tax ez form You withdraw the interest or other income earned on the excess contribution. Income tax ez form You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Income tax ez form If there was a loss, the net income you must withdraw may be a negative amount. Income tax ez form How to treat withdrawn interest or other income. Income tax ez form   You must include in your gross income the interest or other income that was earned on the excess contribution. Income tax ez form Report it on your return for the year in which the excess contribution was made. Income tax ez form Your withdrawal of interest or other income may be subject to an additional 10% tax on early distributions, discus