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Instructions For 1040ez Federal Tax Form

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Instructions For 1040ez Federal Tax Form

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

Instructions for 1040ez federal tax form 10. Instructions for 1040ez federal tax form   Education Savings Bond Program Table of Contents Introduction Who Can Cash In Bonds Tax FreeAdjusted qualified education expenses. Instructions for 1040ez federal tax form Eligible educational institution. Instructions for 1040ez federal tax form Dependent for whom you claim an exemption. Instructions for 1040ez federal tax form MAGI when using Form 1040A. Instructions for 1040ez federal tax form MAGI when using Form 1040. Instructions for 1040ez federal tax form Figuring the Tax-Free AmountEffect of the Amount of Your Income on the Amount of Your Exclusion Claiming the Exclusion Introduction Generally, you must pay tax on the interest earned on U. Instructions for 1040ez federal tax form S. Instructions for 1040ez federal tax form savings bonds. Instructions for 1040ez federal tax form If you do not include the interest in income in the years it is earned, you must include it in your income in the year in which you cash in the bonds. Instructions for 1040ez federal tax form However, when you cash in certain savings bonds under an education savings bond program, you may be able to exclude the interest from income. Instructions for 1040ez federal tax form Who Can Cash In Bonds Tax Free You may be able to cash in qualified U. Instructions for 1040ez federal tax form S. Instructions for 1040ez federal tax form savings bonds without having to include in your income some or all of the interest earned on the bonds if you meet the following conditions. Instructions for 1040ez federal tax form You pay qualified education expenses for yourself, your spouse, or a dependent for whom you claim an exemption on your return. Instructions for 1040ez federal tax form Your modified adjusted gross income (MAGI) is less than the amount specified for your filing status. Instructions for 1040ez federal tax form Your filing status is not married filing separately. Instructions for 1040ez federal tax form Qualified U. Instructions for 1040ez federal tax form S. Instructions for 1040ez federal tax form savings bonds. Instructions for 1040ez federal tax form   A qualified U. Instructions for 1040ez federal tax form S. Instructions for 1040ez federal tax form savings bond is a series EE bond issued after 1989 or a series I bond. Instructions for 1040ez federal tax form The bond must be issued either in your name (as the sole owner) or in the name of both you and your spouse (as co-owners). Instructions for 1040ez federal tax form   The owner must be at least 24 years old before the bond's issue date. Instructions for 1040ez federal tax form The issue date is printed on the front of the savings bond. Instructions for 1040ez federal tax form    The issue date is not necessarily the date of purchase—it will be the first day of the month in which the bond is purchased (or posted, if bought electronically). Instructions for 1040ez federal tax form Qualified education expenses. Instructions for 1040ez federal tax form   These include the following items you pay for either yourself, your spouse, or a dependent for whom you claim an exemption. Instructions for 1040ez federal tax form Tuition and fees required to enroll at or attend an eligible educational institution. Instructions for 1040ez federal tax form Qualified education expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. Instructions for 1040ez federal tax form Contributions to a qualified tuition program (QTP) (see How Much Can You Contribute in chapter 8, Qualified Tuition Program). Instructions for 1040ez federal tax form Contributions to a Coverdell education savings account (ESA) (see Contributions in chapter 7, Coverdell Education Savings Account). Instructions for 1040ez federal tax form Adjusted qualified education expenses. Instructions for 1040ez federal tax form   You must reduce your qualified education expenses by all of the following tax-free benefits. Instructions for 1040ez federal tax form Tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). Instructions for 1040ez federal tax form Expenses used to figure the tax-free portion of distributions from a Coverdell ESA (see Qualified Education Expenses in chapter 7, Coverdell Education Savings Account). Instructions for 1040ez federal tax form Expenses used to figure the tax-free portion of distributions from a QTP (see Qualified education expenses in chapter 8, Qualified Tuition Program). Instructions for 1040ez federal tax form Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as: Veterans' educational assistance benefits (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Qualified tuition reductions (see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), or Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ). Instructions for 1040ez federal tax form Any expenses used in figuring the American opportunity and lifetime learning credits. Instructions for 1040ez federal tax form See What Expenses Qualify in chapter 2, American Opportunity Credit, and What Expenses Qualify in chapter 3, Lifetime Learning Credit, for more information. Instructions for 1040ez federal tax form Eligible educational institution. Instructions for 1040ez federal tax form   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Instructions for 1040ez federal tax form S. Instructions for 1040ez federal tax form Department of Education. Instructions for 1040ez federal tax form It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Instructions for 1040ez federal tax form The educational institution should be able to tell you if it is an eligible educational institution. Instructions for 1040ez federal tax form   Certain educational institutions located outside the United States also participate in the U. Instructions for 1040ez federal tax form S. Instructions for 1040ez federal tax form Department of Education's Federal Student Aid (FSA) programs. Instructions for 1040ez federal tax form Dependent for whom you claim an exemption. Instructions for 1040ez federal tax form   You claim an exemption for a person if you list his or her name and other required information on Form 1040 (or Form 1040A), line 6c. Instructions for 1040ez federal tax form Modified adjusted gross income (MAGI). Instructions for 1040ez federal tax form   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return without taking into account this interest exclusion. Instructions for 1040ez federal tax form However, as discussed below, there may be other modifications. Instructions for 1040ez federal tax form MAGI when using Form 1040A. Instructions for 1040ez federal tax form   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any savings bond interest exclusion and modified by adding back any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). Instructions for 1040ez federal tax form MAGI when using Form 1040. Instructions for 1040ez federal tax form   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any savings bond interest exclusion and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, Exclusion of income by bona fide residents of Puerto Rico, Exclusion for adoption benefits received under an employer's adoption assistance program, Deduction for student loan interest, Deduction for tuition and fees, and Deduction for domestic production activities. Instructions for 1040ez federal tax form    Use the worksheet in the instructions for line 9 of Form 8815 to figure your MAGI. Instructions for 1040ez federal tax form If you claim any of the exclusion or deduction items (1)–(6) listed above, add the amount of the exclusion or deduction to the amount on line 5 of the worksheet. Instructions for 1040ez federal tax form Do not add in the deduction for (7) student loan interest, and (8) tuition and fees, or (9) domestic production activities because line 4 of the worksheet already includes these amounts. Instructions for 1040ez federal tax form Enter the total on Form 8815, line 9, as your modified adjusted gross income (MAGI). Instructions for 1040ez federal tax form    Because the deduction for interest expenses attributable to royalties and other investments is limited to your net investment income, you cannot figure the deduction until you have figured this interest exclusion. Instructions for 1040ez federal tax form Therefore, if you had interest expenses attributable to royalties and deductible on Schedule E (Form 1040), Supplemental Income and Loss, you must make a special computation of your deductible interest without regard to this exclusion to figure the net royalty income included in your MAGI. Instructions for 1040ez federal tax form See Royalties included in MAGI under Education Savings Bond Program in Publication 550, chapter 1. Instructions for 1040ez federal tax form Figuring the Tax-Free Amount If the total you receive when you cash in the bonds is not more than the adjusted qualified education expenses for the year, all of the interest on the bonds may be tax free. Instructions for 1040ez federal tax form However, if the total you receive when you cash in the bonds is more than the adjusted expenses, only part of the interest may be tax free. Instructions for 1040ez federal tax form To determine the tax-free amount, multiply the interest part of the proceeds by a fraction. Instructions for 1040ez federal tax form The numerator (top part) of the fraction is the adjusted qualified education expenses (AQEE) you paid during the year. Instructions for 1040ez federal tax form The denominator (bottom part) of the fraction is the total proceeds you received during the year. Instructions for 1040ez federal tax form Example. Instructions for 1040ez federal tax form In February 2013, Mark and Joan Washington, a married couple, cashed a qualified series EE U. Instructions for 1040ez federal tax form S. Instructions for 1040ez federal tax form savings bond. Instructions for 1040ez federal tax form They received proceeds of $9,000, representing principal of $6,000 and interest of $3,000. Instructions for 1040ez federal tax form In 2013, they paid $7,650 of their daughter's college tuition. Instructions for 1040ez federal tax form They are not claiming an American opportunity or lifetime learning credit for those expenses, and their daughter does not have any tax-free educational assistance. Instructions for 1040ez federal tax form Their MAGI for 2013 was $80,000. Instructions for 1040ez federal tax form   $3,000 interest × $7,650 AQEE  $9,000 proceeds = $2,550 tax-free interest   They can exclude $2,550 of interest in 2013. Instructions for 1040ez federal tax form They must pay tax on the remaining $450 ($3,000 − $2,550) interest. Instructions for 1040ez federal tax form Effect of the Amount of Your Income on the Amount of Your Exclusion The amount of your interest exclusion is gradually reduced (phased out) based on your MAGI and filing status. Instructions for 1040ez federal tax form Claiming the Exclusion Use Form 8815 to figure your education savings bond interest exclusion. Instructions for 1040ez federal tax form Enter your exclusion on line 3 of Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends. Instructions for 1040ez federal tax form Attach Form 8815 to your tax return. Instructions for 1040ez federal tax form Prev  Up  Next   Home   More Online Publications