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Irs Amended Form

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Irs Amended Form

Irs amended form 1. Irs amended form   Traditional IRAs Table of Contents What's New for 2013 What's New for 2014 Introduction Who Can Open a Traditional IRA?What Is Compensation? When Can a Traditional IRA Be Opened? How Can a Traditional IRA Be Opened?Individual Retirement Account Individual Retirement Annuity Individual Retirement Bonds Simplified Employee Pension (SEP) Employer and Employee Association Trust Accounts Required Disclosures How Much Can Be Contributed?Limit. Irs amended form When repayment contributions can be made. Irs amended form No deduction. Irs amended form Reserve component. Irs amended form Figuring your IRA deduction. Irs amended form Reporting the repayment. Irs amended form Example. Irs amended form General Limit Kay Bailey Hutchison Spousal IRA Limit Filing Status Less Than Maximum Contributions More Than Maximum Contributions When Can Contributions Be Made? How Much Can You Deduct?Kay Bailey Hutchison Spousal IRA. Irs amended form Are You Covered by an Employer Plan? Limit if Covered by Employer Plan Reporting Deductible Contributions Nondeductible Contributions Examples — Worksheet for Reduced IRA Deduction for 2013 What if You Inherit an IRA?Treating it as your own. Irs amended form Can You Move Retirement Plan Assets?Transfers to Roth IRAs from other retirement plans. Irs amended form Trustee-to-Trustee Transfer Rollovers Transfers Incident To Divorce Converting From Any Traditional IRA Into a Roth IRA Recharacterizations When Can You Withdraw or Use Assets?Contributions Returned Before Due Date of Return When Must You Withdraw Assets? (Required Minimum Distributions)IRA Owners IRA Beneficiaries Which Table Do You Use To Determine Your Required Minimum Distribution? What Age(s) Do You Use With the Table(s)? Miscellaneous Rules for Required Minimum Distributions Are Distributions Taxable?January 2013 QCDs treated as made in 2012. Irs amended form 2013 Reporting. Irs amended form Additional reporting requirements if you made the election to treat a January 2013 QCD as made in 2012. Irs amended form One-time transfer. Irs amended form Testing period rules apply. Irs amended form More information. Irs amended form Distributions Fully or Partly Taxable Figuring the Nontaxable and Taxable Amounts Recognizing Losses on Traditional IRA Investments Other Special IRA Distribution Situations Reporting and Withholding Requirements for Taxable Amounts What Acts Result in Penalties or Additional Taxes?Prohibited Transactions Investment in Collectibles Excess Contributions Early Distributions Excess Accumulations (Insufficient Distributions) Reporting Additional Taxes What's New for 2013 Traditional IRA contribution and deduction limit. Irs amended 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. Irs amended 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. Irs amended form For more information, see How Much Can Be Contributed? in this chapter. Irs amended form Modified AGI limit for traditional IRA contributions increased. Irs amended 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. Irs amended 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. Irs amended form If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Irs amended form See How Much Can You Deduct? in this chapter. Irs amended form Net Investment Income Tax. Irs amended 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). Irs amended form However, these distributions are taken into account when determining the modified adjusted gross income threshold. Irs amended form Distributions from a nonqualified retirement plan are included in net investment income. Irs amended form See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Irs amended form What's New for 2014 Modified AGI limit for traditional IRA contributions increased. Irs amended form  For 2014, if you are 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 $96,000 but less than $116,000 for a married couple filing a joint return or a qualifying widow(er), More than $60,000 but less than $70,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Irs amended form If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Irs amended form If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. Irs amended form Introduction This chapter discusses the original IRA. Irs amended form In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Irs amended form ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Irs amended form The following are two advantages of a traditional IRA: You may be able to deduct some or all of your contributions to it, depending on your circumstances. Irs amended form Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Irs amended 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. Irs amended form You can have a traditional IRA whether or not you are covered by any other retirement plan. Irs amended form However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan. Irs amended form See How Much Can You Deduct , later. Irs amended form Both spouses have compensation. Irs amended form   If both you and your spouse have compensation and are under age 70½, each of you can open an IRA. Irs amended form You cannot both participate in the same IRA. Irs amended form If you file a joint return, only one of you needs to have compensation. Irs amended form What Is Compensation? Generally, compensation is what you earn from working. Irs amended form For a summary of what compensation does and does not include, see Table 1-1. Irs amended form Compensation includes all of the items discussed next (even if you have more than one type). Irs amended form Wages, salaries, etc. Irs amended form   Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. Irs amended 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). Irs amended form Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2. Irs amended form Commissions. Irs amended form   An amount you receive that is a percentage of profits or sales price is compensation. Irs amended form Self-employment income. Irs amended 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 deduction allowed for the deductible part of your self-employment taxes. Irs amended form   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Irs amended form Self-employment loss. Irs amended form   If you have a net loss from self-employment, do not subtract the loss from your salaries or wages when figuring your total compensation. Irs amended form Alimony and separate maintenance. Irs amended form   For IRA purposes, compensation includes any taxable alimony and separate maintenance payments you receive under a decree of divorce or separate maintenance. Irs amended form Nontaxable combat pay. Irs amended form   If you were a member of the U. Irs amended form S. Irs amended form Armed Forces, compensation includes any nontaxable combat pay you received. Irs amended form This amount should be reported in box 12 of your 2013 Form W-2 with code Q. Irs amended form Table 1-1. Irs amended form Compensation for Purposes of an IRA Includes . Irs amended form . Irs amended form . Irs amended form Does not include . Irs amended form . Irs amended form . Irs amended form   earnings and profits from property. Irs amended form wages, salaries, etc. Irs amended form     interest and dividend income. Irs amended form commissions. Irs amended form     pension or annuity income. Irs amended form self-employment income. Irs amended form     deferred compensation. Irs amended form alimony and separate maintenance. Irs amended form     income from certain  partnerships. Irs amended form nontaxable combat pay. Irs amended form     any amounts you exclude from income. Irs amended form     What Is Not Compensation? Compensation does not include any of the following items. Irs amended form Earnings and profits from property, such as rental income, interest income, and dividend income. Irs amended form Pension or annuity income. Irs amended form Deferred compensation received (compensation payments postponed from a past year). Irs amended form Income from a partnership for which you do not provide services that are a material income-producing factor. Irs amended form Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Irs amended form Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Irs amended form When Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Irs amended form However, the time for making contributions for any year is limited. Irs amended form See When Can Contributions Be Made , later. Irs amended form How Can a Traditional IRA Be Opened? You can open different kinds of IRAs with a variety of organizations. Irs amended form You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Irs amended form You can also open an IRA through your stockbroker. Irs amended form Any IRA must meet Internal Revenue Code requirements. Irs amended form The requirements for the various arrangements are discussed below. Irs amended form Kinds of traditional IRAs. Irs amended form   Your traditional IRA can be an individual retirement account or annuity. Irs amended form It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Irs amended form Individual Retirement Account An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of you or your beneficiaries. Irs amended form The account is created by a written document. Irs amended form The document must show that the account meets all of the following requirements. Irs amended form The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian. Irs amended form The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. Irs amended form However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount. Irs amended form Contributions, except for rollover contributions, must be in cash. Irs amended form See Rollovers , later. Irs amended form You must have a nonforfeitable right to the amount at all times. Irs amended form Money in your account cannot be used to buy a life insurance policy. Irs amended form Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund. Irs amended form You must start receiving distributions by April 1 of the year following the year in which you reach age 70½. Irs amended form See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Irs amended form Individual Retirement Annuity You can open an individual retirement annuity by purchasing an annuity contract or an endowment contract from a life insurance company. Irs amended form An individual retirement annuity must be issued in your name as the owner, and either you or your beneficiaries who survive you are the only ones who can receive the benefits or payments. Irs amended form An individual retirement annuity must meet all the following requirements. Irs amended form Your entire interest in the contract must be nonforfeitable. Irs amended form The contract must provide that you cannot transfer any portion of it to any person other than the issuer. Irs amended form There must be flexible premiums so that if your compensation changes, your payment can also change. Irs amended form This provision applies to contracts issued after November 6, 1978. Irs amended form The contract must provide that contributions cannot be more than the deductible amount for an IRA for the year, and that you must use any refunded premiums to pay for future premiums or to buy more benefits before the end of the calendar year after the year in which you receive the refund. Irs amended form Distributions must begin by April 1 of the year following the year in which you reach age 70½. Irs amended form See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Irs amended form Individual Retirement Bonds The sale of individual retirement bonds issued by the federal government was suspended after April 30, 1982. Irs amended form The bonds have the following features. Irs amended form They stop earning interest when you reach age 70½. Irs amended form If you die, interest will stop 5 years after your death, or on the date you would have reached age 70½, whichever is earlier. Irs amended form You cannot transfer the bonds. Irs amended form If you cash (redeem) the bonds before the year in which you reach age 59½, you may be subject to a 10% additional tax. Irs amended form See Age 59½ Rule under Early Distributions, later. Irs amended form You can roll over redemption proceeds into IRAs. Irs amended form Simplified Employee Pension (SEP) A simplified employee pension (SEP) is a written arrangement that allows your employer to make deductible contributions to a traditional IRA (a SEP IRA) set up for you to receive such contributions. Irs amended form Generally, distributions from SEP IRAs are subject to the withdrawal and tax rules that apply to traditional IRAs. Irs amended form See Publication 560 for more information about SEPs. Irs amended form Employer and Employee Association Trust Accounts Your employer or your labor union or other employee association can set up a trust to provide individual retirement accounts for employees or members. Irs amended form The requirements for individual retirement accounts apply to these traditional IRAs. Irs amended form Required Disclosures The trustee or issuer (sometimes called the sponsor) of your traditional IRA generally must give you a disclosure statement at least 7 days before you open your IRA. Irs amended form However, the sponsor does not have to give you the statement until the date you open (or purchase, if earlier) your IRA, provided you are given at least 7 days from that date to revoke the IRA. Irs amended form The disclosure statement must explain certain items in plain language. Irs amended form For example, the statement should explain when and how you can revoke the IRA, and include the name, address, and telephone number of the person to receive the notice of cancellation. Irs amended form This explanation must appear at the beginning of the disclosure statement. Irs amended form If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. Irs amended form The sponsor must report on the appropriate IRS forms both your contribution to the IRA (unless it was made by a trustee-to-trustee transfer) and the amount returned to you. Irs amended form These requirements apply to all sponsors. Irs amended form How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Irs amended form These limits and rules are explained below. Irs amended form Community property laws. Irs amended 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. Irs amended form This is the rule even in states with community property laws. Irs amended form Brokers' commissions. Irs amended form   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Irs amended form For information about whether you can deduct brokers' commissions, see Brokers' commissions , later, under How Much Can You Deduct. Irs amended form Trustees' fees. Irs amended form   Trustees' administrative fees are not subject to the contribution limit. Irs amended form For information about whether you can deduct trustees' fees, see Trustees' fees , later, under How Much Can You Deduct. Irs amended form Qualified reservist repayments. Irs amended form   If you 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 (defined later under Early Distributions) you received. Irs amended 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. Irs amended 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 a similar arrangement. Irs amended form Limit. Irs amended form   Your qualified reservist repayments cannot be more than your qualified reservist distributions, explained under Early Distributions , later. Irs amended form When repayment contributions can be made. Irs amended form   You cannot make these repayment contributions later than the date that is 2 years after your active duty period ends. Irs amended form No deduction. Irs amended form   You cannot deduct qualified reservist repayments. Irs amended form Reserve component. Irs amended form   The term “reserve component” means the: Army National Guard of the United States, Army Reserve, Naval Reserve, Marine Corps Reserve, Air National Guard of the United States, Air Force Reserve, Coast Guard Reserve, or Reserve Corps of the Public Health Service. Irs amended form Figuring your IRA deduction. Irs amended form   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. Irs amended form Reporting the repayment. Irs amended form   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. Irs amended form Example. Irs amended form   In 2013, your IRA contribution limit is $5,500. Irs amended form However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. Irs amended form You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). Irs amended form In an earlier year you received a $3,000 qualified reservist distribution, which you would like to repay this year. Irs amended form   For 2013, you can contribute a total of $8,500 to your IRA. Irs amended form This is made up of the maximum deductible contribution of $3,500; a nondeductible contribution of $2,000; and a $3,000 qualified reservist repayment. Irs amended form You contribute the maximum allowable for the year. Irs amended form Since you are making a nondeductible contribution ($2,000) and a qualified reservist repayment ($3,000), you must file Form 8606 with your return and include $5,000 ($2,000 + $3,000) on line 1 of Form 8606. Irs amended form The qualified reservist repayment is not deductible. Irs amended form Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Irs amended form See chapter 2 for information about Roth IRAs. Irs amended form General Limit For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year. Irs amended form Note. Irs amended form This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Irs amended 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. Irs amended form (See Nondeductible Contributions , later. Irs amended form ) Qualified reservist repayments do not affect this limit. Irs amended form Examples. Irs amended form George, who is 34 years old and single, earns $24,000 in 2013. Irs amended form His IRA contributions for 2013 are limited to $5,500. Irs amended form Danny, an unmarried college student working part time, earns $3,500 in 2013. Irs amended form His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Irs amended form More than one IRA. Irs amended form   If you have more than one IRA, the limit applies to the total contributions made on your behalf to all your traditional IRAs for the year. Irs amended form Annuity or endowment contracts. Irs amended form   If you invest in an annuity or endowment contract under an individual retirement annuity, no more than $5,500 ($6,500 if you are age 50 or older) can be contributed toward its cost for the tax year, including the cost of life insurance coverage. Irs amended form If more than this amount is contributed, the annuity or endowment contract is disqualified. Irs amended form Kay Bailey Hutchison Spousal IRA Limit 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 two amounts: $5,500 ($6,500 if you are age 50 or older), or The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Irs amended form Your spouse's IRA contribution for the year to a traditional IRA. Irs amended form Any contributions for the year to a Roth IRA on behalf of your spouse. Irs amended 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 age 50 or older or $13,000 if both of you are age 50 or older). Irs amended form Note. Irs amended form This traditional IRA limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Irs amended form Example. Irs amended form Kristin, a full-time student with no taxable compensation, marries Carl during the year. Irs amended form Neither of them was age 50 by the end of 2013. Irs amended form For the year, Carl has taxable compensation of $30,000. Irs amended form He plans to contribute (and deduct) $5,500 to a traditional IRA. Irs amended form If he and Kristin file a joint return, each can contribute $5,500 to a traditional IRA. Irs amended form This is because Kristin, who has no compensation, can add Carl's compensation, reduced by the amount of his IRA contribution ($30,000 − $5,500 = $24,500), to her own compensation (-0-) to figure her maximum contribution to a traditional IRA. Irs amended form In her case, $5,500 is her contribution limit, because $5,500 is less than $24,500 (her compensation for purposes of figuring her contribution limit). Irs amended form Filing Status Generally, except as discussed earlier under Kay Bailey Hutchison Spousal IRA Limit , your filing status has no effect on the amount of allowable contributions to your traditional IRA. Irs amended form However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. Irs amended form See How Much Can You Deduct , later. Irs amended form Example. Irs amended form Tom and Darcy are married and both are 53. Irs amended form They both work and each has a traditional IRA. Irs amended form Tom earned $3,800 and Darcy earned $48,000 in 2013. Irs amended form Because of the Kay Bailey Hutchison Spousal IRA limit rule, even though Tom earned less than $6,500, they can contribute up to $6,500 to his IRA for 2013 if they file a joint return. Irs amended form They can contribute up to $6,500 to Darcy's IRA. Irs amended form If they file separate returns, the amount that can be contributed to Tom's IRA is limited by his earned income, $3,800. Irs amended form Less Than Maximum Contributions If contributions to your traditional IRA for a year were less than the limit, you cannot contribute more after the due date of your return for that year to make up the difference. Irs amended form Example. Irs amended form Rafael, who is 40, earns $30,000 in 2013. Irs amended form Although he can contribute up to $5,500 for 2013, he contributes only $3,000. Irs amended form After April 15, 2014, Rafael cannot make up the difference between his actual contributions for 2013 ($3,000) and his 2013 limit ($5,500). Irs amended form He cannot contribute $2,500 more than the limit for any later year. Irs amended form More Than Maximum Contributions If contributions to your 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. Irs amended form However, a penalty or additional tax may apply. Irs amended form See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes. Irs amended 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). Irs amended form Contributions must be in the form of money (cash, check, or money order). Irs amended form Property cannot be contributed. Irs amended form Although property cannot be contributed, your IRA may invest in certain property. Irs amended form For example, your IRA may purchase shares of stock. Irs amended form For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. Irs amended form You may be able to transfer or roll over certain property from one retirement plan to another. Irs amended form See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets . Irs amended form You can make a contribution to your IRA by having your income tax refund (or a portion of your refund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. Irs amended form For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases). Irs amended form Contributions can be made to your traditional IRA for each year that you receive compensation and have not reached age 70½. Irs amended form For any year in which you do not work, contributions cannot be made to your IRA unless you receive alimony, nontaxable combat pay, military differential pay, or file a joint return with a spouse who has compensation. Irs amended form See Who Can Open a Traditional IRA , earlier. Irs amended form Even if contributions cannot be made for the current year, the amounts contributed for years in which you did qualify can remain in your IRA. Irs amended form Contributions can resume for any years that you qualify. Irs amended form Contributions must be made by due date. Irs amended 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. Irs amended form For most people, this means that contributions for 2013 must be made by April 15, 2014, and contributions for 2014 must be made by April 15, 2015. Irs amended form Age 70½ rule. Irs amended form   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Irs amended form   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Irs amended form If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Irs amended form Designating year for which contribution is made. Irs amended 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. Irs amended 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). Irs amended form Filing before a contribution is made. Irs amended form    You can file your return claiming a traditional IRA contribution before the contribution is actually made. Irs amended form Generally, the contribution must be made by the due date of your return, not including extensions. Irs amended form Contributions not required. Irs amended form   You do not have to contribute to your traditional IRA for every tax year, even if you can. Irs amended 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 applicable) explained earlier under How Much Can Be Contributed . Irs amended form However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Irs amended form See Limit if Covered by Employer Plan , later. Irs amended form You may be able to claim a credit for contributions to your traditional IRA. Irs amended form For more information, see chapter 4. Irs amended form Trustees' fees. Irs amended form   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Irs amended form However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Irs amended form For information about miscellaneous itemized deductions, see Publication 529, Miscellaneous Deductions. Irs amended form Brokers' commissions. Irs amended form   These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Irs amended form Full deduction. Irs amended 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 of your traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older), or 100% of your compensation. Irs amended form   This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Irs amended form Kay Bailey Hutchison Spousal IRA. Irs amended 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: $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older), or The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Irs amended form The IRA deduction for the year of the spouse with the greater compensation. Irs amended form Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Irs amended form Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Irs amended form   This limit is reduced by any contributions to a section 501(c)(18) plan on behalf of the spouse with the lesser compensation. Irs amended form Note. Irs amended 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. Irs amended form After a divorce or legal separation, you can deduct only the contributions to your own IRA. Irs amended form Your deductions are subject to the rules for single individuals. Irs amended form Covered by an employer retirement plan. Irs amended 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. Irs amended form This is discussed later under Limit if Covered by Employer Plan . Irs amended form Limits on the amount you can deduct do not affect the amount that can be contributed. Irs amended 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. Irs amended form The “Retirement Plan” box should be checked if you were covered. Irs amended form Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered , later. Irs amended form If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Irs amended form Federal judges. Irs amended form   For purposes of the IRA deduction, federal judges are covered by an employer plan. Irs amended form For Which Year(s) Are You Covered? Special rules apply to determine the tax years for which you are covered by an employer plan. Irs amended form These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Irs amended form Tax year. Irs amended form   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Irs amended form For almost all people, the tax year is the calendar year. Irs amended form Defined contribution plan. Irs amended 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. Irs amended form However, also see Situations in Which You Are Not Covered , later. Irs amended form   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Irs amended form In a defined contribution plan, the amount to be contributed to each participant's account is spelled out in the plan. Irs amended form The level of benefits actually provided to a participant depends on the total amount contributed to that participant's account and any earnings and losses on those contributions. Irs amended form Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Irs amended form Example. Irs amended form Company A has a money purchase pension plan. Irs amended form Its plan year is from July 1 to June 30. Irs amended form The plan provides that contributions must be allocated as of June 30. Irs amended form Bob, an employee, leaves Company A on December 31, 2012. Irs amended form The contribution for the plan year ending on June 30, 2013, is made February 15, 2014. Irs amended form Because an amount is contributed to Bob's account for the plan year, Bob is covered by the plan for his 2013 tax year. Irs amended form   A special rule applies to certain plans in which it is not possible to determine if an amount will be contributed to your account for a given plan year. Irs amended form If, for a plan year, no amounts have been allocated to your account that are attributable to employer contributions, employee contributions, or forfeitures, by the last day of the plan year, and contributions are discretionary for the plan year, you are not covered for the tax year in which the plan year ends. Irs amended form If, after the plan year ends, the employer makes a contribution for that plan year, you are covered for the tax year in which the contribution is made. Irs amended form Example. Irs amended form Mickey was covered by a profit-sharing plan and left the company on December 31, 2012. Irs amended form The plan year runs from July 1 to June 30. Irs amended form Under the terms of the plan, employer contributions do not have to be made, but if they are made, they are contributed to the plan before the due date for filing the company's tax return. Irs amended form Such contributions are allocated as of the last day of the plan year, and allocations are made to the accounts of individuals who have any service during the plan year. Irs amended form As of June 30, 2013, no contributions were made that were allocated to the June 30, 2013, plan year, and no forfeitures had been allocated within the plan year. Irs amended form In addition, as of that date, the company was not obligated to make a contribution for such plan year and it was impossible to determine whether or not a contribution would be made for the plan year. Irs amended form On December 31, 2013, the company decided to contribute to the plan for the plan year ending June 30, 2013. Irs amended form That contribution was made on February 15, 2014. Irs amended form Mickey is an active participant in the plan for his 2014 tax year but not for his 2013 tax year. Irs amended form No vested interest. Irs amended form   If an amount is allocated to your account for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the account. Irs amended form Defined benefit plan. Irs amended 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. Irs amended 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. Irs amended form   A defined benefit plan is any plan that is not a defined contribution plan. Irs amended form In a defined benefit plan, the level of benefits to be provided to each participant is spelled out in the plan. Irs amended form The plan administrator figures the amount needed to provide those benefits and those amounts are contributed to the plan. Irs amended form Defined benefit plans include pension plans and annuity plans. Irs amended form Example. Irs amended form Nick, an employee of Company B, is eligible to participate in Company B's defined benefit plan, which has a July 1 to June 30 plan year. Irs amended form Nick leaves Company B on December 31, 2012. Irs amended form Because Nick is eligible to participate in the plan for its year ending June 30, 2013, he is covered by the plan for his 2013 tax year. Irs amended form No vested interest. Irs amended 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. Irs amended form Situations in Which You Are Not Covered Unless you are covered by another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Irs amended form Social security or railroad retirement. Irs amended form   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Irs amended form Benefits from previous employer's plan. Irs amended form   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Irs amended form Reservists. Irs amended 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. Irs amended form You are not covered by the plan if both of the following conditions are met. Irs amended 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. Irs amended form You did not serve more than 90 days on active duty during the year (not counting duty for training). Irs amended form Volunteer firefighters. Irs amended 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. Irs amended form You are not covered by the plan if both of the following conditions are met. Irs amended 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. Irs amended form Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Irs amended form Limit if Covered by Employer Plan As discussed earlier, the deduction you can take for contributions made to your traditional IRA depends on whether you or your spouse was covered for any part of the year by an employer retirement plan. Irs amended form Your deduction is also affected by how much income you had and by your filing status. Irs amended form Your deduction may also be affected by social security benefits you received. Irs amended form Reduced or no deduction. Irs amended form   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. Irs amended 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. Irs amended form These amounts vary depending on your filing status. Irs amended form   To determine if your deduction is subject to the phaseout, you must determine your modified adjusted gross income (AGI) and your filing status, as explained later under Deduction Phaseout . Irs amended form Once you have determined your modified AGI and your filing status, you can use Table 1-2 or Table 1-3 to determine if the phaseout applies. Irs amended form Social Security Recipients Instead of using Table 1-2 or Table 1-3 and Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, later, complete the worksheets in Appendix B of this publication if, for the year, all of the following apply. Irs amended form You received social security benefits. Irs amended form You received taxable compensation. Irs amended form Contributions were made to your traditional IRA. Irs amended form You or your spouse was covered by an employer retirement plan. Irs amended form Use the worksheets in Appendix B to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Irs amended form Appendix B includes an example with filled-in worksheets to assist you. Irs amended form Table 1-2. Irs amended form Effect of Modified AGI1 on Deduction if You Are Covered by a 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. Irs amended form IF your filing status is . Irs amended form . Irs amended form . Irs amended form AND your modified adjusted gross income (modified AGI) is . Irs amended form . Irs amended form . Irs amended form THEN you can take . Irs amended form . Irs amended form . Irs amended form single or head of household $59,000 or less a full deduction. Irs amended form more than $59,000 but less than $69,000 a partial deduction. Irs amended form $69,000 or more no deduction. Irs amended form married filing jointly or  qualifying widow(er) $95,000 or less a full deduction. Irs amended form more than $95,000 but less than $115,000 a partial deduction. Irs amended form $115,000 or more no deduction. Irs amended form married filing separately2 less than $10,000 a partial deduction. Irs amended form $10,000 or more no deduction. Irs amended form 1 Modified AGI (adjusted gross income). Irs amended form See Modified adjusted gross income (AGI) , later. Irs amended form  2 If 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” filing status). Irs amended form Table 1-3. Irs amended form Effect of Modified AGI1 on Deduction if You Are NOT Covered by a 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. Irs amended form IF your filing status is . Irs amended form . Irs amended form . Irs amended form AND your modified adjusted gross income (modified AGI) is . Irs amended form . Irs amended form . Irs amended form THEN you can take . Irs amended form . Irs amended form . Irs amended form single, head of household, or qualifying widow(er) any amount a full deduction. Irs amended form married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction. Irs amended form married filing jointly with a spouse who is covered by a plan at work $178,000 or less a full deduction. Irs amended form more than $178,000 but less than $188,000 a partial deduction. Irs amended form $188,000 or more no deduction. Irs amended form married filing separately with a spouse who is covered by a plan at work2 less than $10,000 a partial deduction. Irs amended form $10,000 or more no deduction. Irs amended form 1 Modified AGI (adjusted gross income). Irs amended form See Modified adjusted gross income (AGI) , later. Irs amended form  2 You are entitled to the full deduction if you did not live with your spouse at any time during the year. Irs amended form For 2014, if you are not covered by a retirement plan at work and you are married filing jointly with a spouse who is covered by a plan at work, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Irs amended form If your AGI is $191,000 or more, you cannot take a deduction for a contribution to a traditional IRA. Irs amended form Deduction Phaseout The amount of any reduction in the limit on your IRA deduction (phaseout) depends on whether you or your spouse was covered by an employer retirement plan. Irs amended form Covered by a retirement plan. Irs amended form   If you are 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 1-2. Irs amended form For 2014, if you are covered by a retirement plan at work, your IRA deduction will not be reduced (phased out) unless your modified AGI is: More than $60,000 but less than $70,000 for a single individual (or head of household), More than $96,000 but less than $116,000 for a married couple filing a joint return (or a qualifying widow(er)), or Less than $10,000 for a married individual filing a separate return. Irs amended form If your spouse is covered. Irs amended 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 1-3. Irs amended form Filing status. Irs amended form   Your filing status depends primarily on your marital status. Irs amended 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. Irs amended form If you need more information on filing status, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Irs amended form Lived apart from spouse. Irs amended 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. Irs amended form Modified adjusted gross income (AGI). Irs amended form   You can use Worksheet 1-1 to figure your modified AGI. Irs amended form If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Both contributions for 2013 and distributions in 2013 , later. Irs amended form    Do not assume that your modified AGI is the same as your compensation. Irs amended form Your modified AGI may include income in addition to your compensation (discussed earlier) such as interest, dividends, and income from IRA distributions. Irs amended form Form 1040. Irs amended 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 amounts. Irs amended form IRA deduction. Irs amended form Student loan interest deduction. Irs amended form Tuition and fees deduction. Irs amended form Domestic production activities deduction. Irs amended form Foreign earned income exclusion. Irs amended form Foreign housing exclusion or deduction. Irs amended form Exclusion of qualified savings bond interest shown on Form 8815. Irs amended form Exclusion of employer-provided adoption benefits shown on Form 8839. Irs amended form This is your modified AGI. Irs amended form Form 1040A. Irs amended 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. Irs amended form IRA deduction. Irs amended form Student loan interest deduction. Irs amended form Tuition and fees deduction. Irs amended form Exclusion of qualified savings bond interest shown on Form 8815. Irs amended form This is your modified AGI. Irs amended form Form 1040NR. Irs amended form   If you file Form 1040NR, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Irs amended form IRA deduction. Irs amended form Student loan interest deduction. Irs amended form Domestic production activities deduction. Irs amended form Exclusion of qualified savings bond interest shown on Form 8815. Irs amended form Exclusion of employer-provided adoption benefits shown on Form 8839. Irs amended form This is your modified AGI. Irs amended form Income from IRA distributions. Irs amended form   If you received distributions in 2013 from one or more traditional IRAs and your traditional IRAs include only deductible contributions, the distributions are fully taxable and are included in your modified AGI. Irs amended form Both contributions for 2013 and distributions in 2013. Irs amended form   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Irs amended form You received distributions in 2013 from one or more traditional IRAs, You made contributions to a traditional IRA for 2013, and Some of those contributions may be nondeductible contributions. Irs amended form (See Nondeductible Contributions and Worksheet 1-2, later. Irs amended form ) If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Irs amended form To do this, you can use Worksheet 1-5, later. Irs amended form   If at least one of the above does not apply, figure your modified AGI using Worksheet 1-1, later. Irs amended form How To Figure Your Reduced IRA Deduction If you or your spouse is covered by an employer retirement plan and you did not receive any social security benefits, you can figure your reduced IRA deduction by using Worksheet 1-2. Irs amended form Figuring Your Reduced IRA Deduction for 2013. Irs amended form The Instructions for Form 1040, Form 1040A, and Form 1040NR include similar worksheets that you can use instead of the worksheet in this publication. Irs amended form If you or your spouse is covered by an employer retirement plan, and you received any social security benefits, see Social Security Recipients , earlier. Irs amended form Note. Irs amended form If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Irs amended form Worksheet 1-1. Irs amended form Figuring Your Modified AGI Use this worksheet to figure your modified AGI for traditional IRA purposes. Irs amended form 1. Irs amended form Enter your adjusted gross income (AGI) from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37, figured without taking into account the amount from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 1. Irs amended form   2. Irs amended form Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 2. Irs amended form   3. Irs amended form Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Irs amended form   4. Irs amended form Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 4. Irs amended form   5. Irs amended form Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Irs amended form   6. Irs amended form Enter any foreign housing deduction from Form 2555, line 50 6. Irs amended form   7. Irs amended form Enter any excludable savings bond interest from Form 8815, line 14 7. Irs amended form   8. Irs amended form Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Irs amended form   9. Irs amended form Add lines 1 through 8. Irs amended form This is your Modified AGI for traditional IRA purposes 9. Irs amended form   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Irs amended form If you file Form 1040A, enter your IRA deduction on line 17 of that form. Irs amended form If you file Form 1040NR, enter your IRA deduction on line 32 of that form. Irs amended form You cannot deduct IRA contributions on Form 1040EZ or Form 1040NR-EZ. Irs amended form Self-employed. Irs amended form   If you are self-employed (a sole proprietor or partner) and have a SIMPLE IRA, enter your deduction for allowable plan contributions on Form 1040, line 28. Irs amended form If you file Form 1040NR, enter your deduction on line 28 of that form. Irs amended form Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA of up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Irs amended form The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Irs amended form Example. Irs amended form Tony is 29 years old and single. Irs amended form In 2013, he was covered by a retirement plan at work. Irs amended form His salary is $62,000. Irs amended form His modified AGI is $70,000. Irs amended form Tony makes a $5,500 IRA contribution for 2013. Irs amended form Because he was covered by a retirement plan and his modified AGI is above $69,000, he cannot deduct his $5,500 IRA contribution. Irs amended form He must designate this contribution as a nondeductible contribution by reporting it on Form 8606. Irs amended form Repayment of reservist distributions. Irs amended form   Nondeductible contributions may include repayments of qualified reservist distributions. Irs amended form For more information, see Qualified reservist repayments under How Much Can Be Contributed, earlier. Irs amended form Form 8606. Irs amended form   To designate contributions as nondeductible, you must file Form 8606. Irs amended form (See the filled-in Forms 8606 in this chapter. Irs amended form )   You do not have to designate a contribution as nondeductible until you file your tax return. Irs amended form When you file, you can even designate otherwise deductible contributions as nondeductible contributions. Irs amended form   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Irs amended 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. Irs amended form In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Irs amended form See Form 8606 under Distributions Fully or Partly Taxable, later. Irs amended form Failure to report nondeductible contributions. Irs amended form   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated like deductible contributions when withdrawn. Irs amended form All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Irs amended form Penalty for overstatement. Irs amended 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. Irs amended form Penalty for failure to file Form 8606. Irs amended 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. Irs amended form Tax on earnings on nondeductible contributions. Irs amended 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. Irs amended form Cost basis. Irs amended form   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Irs amended form Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Irs amended form    Commonly, distributions from your traditional IRAs will include both taxable and nontaxable (cost basis) amounts. Irs amended form See Are Distributions Taxable, later, for more information. Irs amended form Recordkeeping. Irs amended form There is a recordkeeping worksheet, Appendix A. Irs amended form Summary Record of Traditional IRA(s) for 2013 , that you can use to keep a record of deductible and nondeductible IRA contributions. Irs amended form Examples — Worksheet for Reduced IRA Deduction for 2013 The following examples illustrate the use of Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013. Irs amended form Example 1. Irs amended form For 2013, Tom and Betty file a joint return on Form 1040. Irs amended form They are both 39 years old. Irs amended form They are both employed and Tom is covered by his employer's retirement plan. Irs amended form Tom's salary is $59,000 and Betty's is $32,555. Irs amended form They each have a traditional IRA and their combined modified AGI, which includes $5,000 interest and dividend income, is $96,555. Irs amended form Because their modified AGI is between $95,000 and $115,000 and Tom is covered by an employer plan, Tom is subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Irs amended form For 2013, Tom contributed $5,500 to his IRA and Betty contributed $5,500 to hers. Irs amended form Even though they file a joint return, they must use separate worksheets to figure the IRA deduction for each of them. Irs amended form Tom can take a deduction of only $5,080. Irs amended form He can choose to treat the $5,080 as either deductible or nondeductible contributions. Irs amended form He can either leave the $420 ($5,500 − $5,080) of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Irs amended form He decides to treat the $5,080 as deductible contributions and leave the $420 of nondeductible contributions in his IRA. Irs amended form Using Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, Tom figures his deductible and nondeductible amounts as shown on Worksheet 1-2. Irs amended form Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated. Irs amended form Betty figures her IRA deduction as follows. Irs amended form Betty can treat all or part of her contributions as either deductible or nondeductible. Irs amended form This is because her $5,500 contribution for 2013 is not subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Irs amended form She does not need to use Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, because their modified AGI is not within the phaseout range that applies. Irs amended form Betty decides to treat her $5,500 IRA contributions as deductible. Irs amended form The IRA deductions of $5,080 and $5,500 on the joint return for Tom and Betty total $10,580. Irs amended form Example 2. Irs amended form For 2013, Ed and Sue file a joint return on Form 1040. Irs amended form They are both 39 years old. Irs amended form Ed is covered by his employer's retirement plan. Irs amended form Ed's salary is $45,000. Irs amended form Sue had no compensation for the year and did not contribute to an IRA. Irs amended form Sue is not covered by an employer plan. Irs amended form Ed contributed $5,500 to his traditional IRA and $5,500 to a traditional IRA for Sue (a Kay Bailey Hutchison Spousal IRA). Irs amended form Their combined modified AGI, which includes $2,000 interest and dividend income and a large capital gain from the sale of stock, is $180,555. Irs amended form Because the combined modified AGI is $115,000 or more, Ed cannot deduct any of the contribution to his traditional IRA. Irs amended form He can either leave the $5,500 of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Irs amended form Sue figures her IRA deduction as shown on Worksheet 1-2. Irs amended form Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated. Irs amended form Worksheet 1-2. Irs amended form Figuring Your Reduced IRA Deduction for 2013 (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Irs amended form ) Note. Irs amended form If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Irs amended form IF you . Irs amended form . Irs amended form . Irs amended form AND your  filing status is . Irs amended form . Irs amended form . Irs amended form AND your modified AGI is over . Irs amended form . Irs amended form . Irs amended form THEN enter on  line 1 below . Irs amended form . Irs amended form . Irs amended form       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Irs amended form Enter applicable amount from table above 1. Irs amended form   2. Irs amended form Enter your modified AGI (that of both spouses, if married filing jointly) 2. Irs amended form     Note. Irs amended form If line 2 is equal to or more than the amount on line 1, stop here. Irs amended form  Your IRA contributions are not deductible. Irs amended form See Nondeductible Contributions , earlier. Irs amended form     3. Irs amended form Subtract line 2 from line 1. Irs amended form If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Irs amended form You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Irs amended form   4. Irs amended form Multiply line 3 by the percentage below that applies to you. Irs amended form If the result is not a multiple of $10, round it to the next highest multiple of $10. Irs amended form (For example, $611. Irs amended form 40 is rounded to $620. Irs amended form ) However, if the result is less than $200, enter $200. Irs amended form         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Irs amended form 5% (. Irs amended form 275) (by 32. Irs amended form 5% (. Irs amended form 325) if you are age 50 or older). Irs amended form All others, multiply line 3 by 55% (. Irs amended form 55) (by 65% (. Irs amended form 65) if you are age 50 or older). Irs amended form 4. Irs amended form   5. Irs amended form Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Irs amended form If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Irs amended form If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Irs amended form   6. Irs amended form Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Irs amended form If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Irs amended form 6. Irs amended form   7. Irs amended form IRA deduction. Irs amended form Compare lines 4, 5, and 6. Irs amended form Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Irs amended form If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Irs amended form   8. Irs amended form Nondeductible contribution. Irs amended form Subtract line 7 from line 5 or 6, whichever is smaller. Irs amended form  Enter the result here and on line 1 of your Form 8606 8. Irs amended form   Worksheet 1-2. Irs amended form Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Irs amended form ) Note. Irs amended form If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Irs amended form IF you . Irs amended form . Irs amended form . Irs amended form AND your  filing status is . Irs amended form . Irs amended form . Irs amended form AND your modified AGI is over . Irs amended form . Irs amended form . Irs amended form THEN enter on  line 1 below . Irs amended form . Irs amended form . Irs amended form       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Irs amended form Enter applicable amount from table above 1. Irs amended form 115,000 2. Irs amended form Enter your modified AGI (that of both spouses, if married filing jointly) 2. Irs amended form 96,555   Note. Irs amended form If line 2 is equal to or more than the amount on line 1, stop here. Irs amended form  Your IRA contributions are not deductible. Irs amended form See Nondeductible Contributions , earlier. Irs amended form     3. Irs amended form Subtract line 2 from line 1. Irs amended form If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Irs amended form You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Irs amended form 18,445 4. Irs amended form Multiply line 3 by the percentage below that applies to you. Irs amended form If the result is not a multiple of $10, round it to the next highest multiple of $10. Irs amended form (For example, $611. Irs amended form 40 is rounded to $620. Irs amended form ) However, if the result is less than $200, enter $200. Irs amended form         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Irs amended form 5% (. Irs amended form 275) (by 32. Irs amended form 5% (. Irs amended form 325) if you are age 50 or older). Irs amended form All others, multiply line 3 by 55% (. Irs amended form 55) (by 65% (. Irs amended form 65) if you are age 50 or older). Irs amended form 4. Irs amended form 5,080 5. Irs amended form Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Irs amended form If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Irs amended form If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Irs amended form 59,000 6. Irs amended form Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Irs amended form If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Irs amended form 6. Irs amended form 5,500 7. Irs amended form IRA deduction. Irs amended form Compare lines 4, 5, and 6. Irs amended form Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Irs amended form If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Irs amended form 5,080 8. Irs amended form Nondeductible contribution. Irs amended form Subtract line 7 from line 5 or 6, whichever is smaller. Irs amended form  Enter the result here and on line 1 of your Form 8606 8. Irs amended form 420 Worksheet 1-2. Irs amended form Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Irs amended form ) Note. Irs amended form If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Irs amended form IF you . Irs amended form . Irs amended form . Irs amended form AND your  filing status is . Irs amended form . Irs amended form . Irs amended form AND your modified AGI is over . Irs amended form . Irs amended form . Irs amended form THEN enter on  line 1 below . Irs amended form . Irs amended form . Irs amended form       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Irs amended form Enter applicable amount from table above 1. Irs amended form 188,000 2. Irs amended form Enter your modified AGI (that of both spouses, if married filing jointly) 2. Irs amended form 180,555   Note. Irs amended form If line 2 is equal to or more than the amount on line 1, stop here. Irs amended form  Your IRA contributions are not deductible. Irs amended form See Nondeductible Contributions , earlier. Irs amended form     3. Irs amended form Subtract line 2 from line 1. Irs amended form If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Irs amended form You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Irs amended form 7,445 4. Irs amended form Multiply line 3 by the percentage below that applies to you. Irs amended form If the result is not a multiple of $10, round it to the next highest multiple of $10. Irs amended form (For example, $611. Irs amended form 40 is rounded to $620. Irs amended form ) However, if the result is less than $200, enter $200. Irs amended form         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Irs amended form 5% (. Irs amended form 275) (by 32. Irs amended form 5% (. Irs amended form 325) if you are age 50 or older). Irs amended form All others, multiply line 3 by 55% (. Irs amended form 55) (by 65% (. Irs amended form 65) if you are age 50 or older). Irs amended form 4. Irs amended form 4,100 5. Irs amended form Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Irs amended form If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Irs amended form If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Irs amended form 39,500 6. Irs amended form Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Irs amended form If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Irs amended form 6. Irs amended form 5,500 7. Irs amended form IRA deduction. Irs amended form Compare lines 4, 5, and 6. Irs amended form Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Irs amended form If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Irs amended form 4,100 8. Irs amended form Nondeductible contribution. Irs amended form Subtract line 7 from line 5 or 6, whichever is smaller. Irs amended form  Enter the result here and on line 1 of your Form 8606 8. Irs amended form 1,400 What if You Inherit an IRA? If you inherit a traditional IRA, you are called a beneficiary. Irs amended form A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Irs amended form Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Irs amended form Inherited from spouse. Irs amended form   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Irs amended form You can: Treat it as your own IRA by designating yourself as the account owner. Irs amended 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 (s
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The Irs Amended Form

Irs amended form Publication 504 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. Irs amended form Tax questions. Irs amended form Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 504, such as legislation enacted after this publication was published, go to www. Irs amended form irs. Irs amended form gov/pub504. Irs amended form Reminders Relief from joint liability. Irs amended form  In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint tax return. Irs amended form For more information, see Relief from joint liability under Married Filing Jointly. Irs amended form Social security numbers for dependents. Irs amended form  You must include on your tax return the taxpayer identification number (generally the social security number) of every person for whom you claim an exemption. Irs amended form See Exemptions for Dependents under Exemptions, later. Irs amended form Individual taxpayer identification number (ITIN). Irs amended form  The IRS will issue an ITIN to a nonresident or resident alien who does not have and is not eligible to get a social security number (SSN). Irs amended form To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. Irs amended form It takes about 6 to 10 weeks to get an ITIN. Irs amended form The ITIN is entered wherever an SSN is requested on a tax return. Irs amended form If you are required to include another person's SSN on your return and that person does not have and cannot get an SSN, enter that person's ITIN. Irs amended form Change of address. Irs amended form  If you change your mailing address, be sure to notify the Internal Revenue Service. Irs amended form You can use Form 8822, Change of Address. Irs amended form Mail it to the Internal Revenue Service Center for your old address. Irs amended form (Addresses for the Service Centers are on the back of the form. Irs amended form ) Change of name. Irs amended form  If you change your name, be sure to notify the Social Security Administration using Form SS-5, Application for a Social Security Card. Irs amended form Change of withholding. Irs amended form  If you have been claiming a withholding exemption for your spouse, and you divorce or legally separate, you must give your employer a new Form W-4, Employee's Withholding Allowance Certificate, within 10 days after the divorce or separation showing the correct number of exemptions. Irs amended form Photographs of missing children. Irs amended form  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Irs amended form Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Irs amended form You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Irs amended form Introduction This publication explains tax rules that apply if you are divorced or separated from your spouse. Irs amended form It covers general filing information and can help you choose your filing status. Irs amended form It also can help you decide which exemptions you are entitled to claim, including exemptions for dependents. Irs amended form The publication also discusses payments and transfers of property that often occur as a result of divorce and how you must treat them on your tax return. Irs amended form Examples include alimony, child support, other court-ordered payments, property settlements, and transfers of individual retirement arrangements. Irs amended form In addition, this publication also explains deductions allowed for some of the costs of obtaining a divorce and how to handle tax withholding and estimated tax payments. Irs amended form The last part of the publication explains special rules that may apply to persons who live in community property states. Irs amended form Comments and suggestions. Irs amended form   We welcome your comments about this publication and your suggestions for future editions. Irs amended form   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Irs amended form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Irs amended form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Irs amended form   You can send your comments from www. Irs amended form irs. Irs amended form gov/formspubs/. Irs amended form Click on “More Information. Irs amended form ”and then on “Comment on Tax Forms and Publications”. Irs amended form   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Irs amended form Ordering forms and publications. Irs amended form   Visit www. Irs amended form irs. Irs amended form gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Irs amended form Internal Revenue Service 1201 N. Irs amended form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Irs amended form   If you have a tax question, check the information available on IRS. Irs amended form gov or call 1-800-829-1040. Irs amended form We cannot answer tax questions sent to either of the above addresses. Irs amended form Useful Items - You may want to see: Publications 501 Exemptions, Standard Deduction, and Filing Information 544 Sales and Other Dispositions of Assets 555 Community Property 590 Individual Retirement Arrangements (IRAs) 971 Innocent Spouse Relief Form (and Instructions) 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent 8379 Injured Spouse Allocation 8857 Request for Innocent Spouse Relief See How To Get Tax Help near the end of this publication for information about getting publications and forms. Irs amended form Prev  Up  Next   Home   More Online Publications