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Turbotax Deluxe Federal E File State 2012

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Turbotax Deluxe Federal E File State 2012

Turbotax deluxe federal e file state 2012 8. Turbotax deluxe federal e file state 2012   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. Turbotax deluxe federal e file state 2012 Reporting tax withheld. Turbotax deluxe federal e file state 2012 Nominees. Turbotax deluxe federal e file state 2012 Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. Turbotax deluxe federal e file state 2012 Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. Turbotax deluxe federal e file state 2012 Alternative minimum tax treatment. Turbotax deluxe federal e file state 2012 How To Report Dividend IncomeInvestment interest deducted. Turbotax deluxe federal e file state 2012 Reminder Foreign-source income. Turbotax deluxe federal e file state 2012  If you are a U. Turbotax deluxe federal e file state 2012 S. Turbotax deluxe federal e file state 2012 citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. Turbotax deluxe federal e file state 2012 S. Turbotax deluxe federal e file state 2012 law. Turbotax deluxe federal e file state 2012 This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Turbotax deluxe federal e file state 2012 Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. Turbotax deluxe federal e file state 2012 This chapter also explains how to report dividend income on your tax return. Turbotax deluxe federal e file state 2012 Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. Turbotax deluxe federal e file state 2012 You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. Turbotax deluxe federal e file state 2012 However, some amounts you receive that are called dividends are actually interest income. Turbotax deluxe federal e file state 2012 (See Dividends that are actually interest under Taxable Interest in chapter 7. Turbotax deluxe federal e file state 2012 ) Most distributions are paid in cash (or check). Turbotax deluxe federal e file state 2012 However, distributions can consist of more stock, stock rights, other property, or services. Turbotax deluxe federal e file state 2012 Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. Turbotax deluxe federal e file state 2012 Tax on unearned income of certain children. Turbotax deluxe federal e file state 2012   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Turbotax deluxe federal e file state 2012 If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. Turbotax deluxe federal e file state 2012 If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Turbotax deluxe federal e file state 2012    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Turbotax deluxe federal e file state 2012 Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. Turbotax deluxe federal e file state 2012   For more information about the tax on unearned income of children and the parents' election, see chapter 31. Turbotax deluxe federal e file state 2012 Beneficiary of an estate or trust. Turbotax deluxe federal e file state 2012    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. Turbotax deluxe federal e file state 2012 You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Turbotax deluxe federal e file state 2012 , from the fiduciary. Turbotax deluxe federal e file state 2012 Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Turbotax deluxe federal e file state 2012 Social security number (SSN) or individual taxpayer identification number (ITIN). Turbotax deluxe federal e file state 2012    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. Turbotax deluxe federal e file state 2012 This includes payers of dividends. Turbotax deluxe federal e file state 2012 If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. Turbotax deluxe federal e file state 2012 For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. Turbotax deluxe federal e file state 2012 Backup withholding. Turbotax deluxe federal e file state 2012   Your dividend income is generally not subject to regular withholding. Turbotax deluxe federal e file state 2012 However, it may be subject to backup withholding to ensure that income tax is collected on the income. Turbotax deluxe federal e file state 2012 Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Turbotax deluxe federal e file state 2012   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. Turbotax deluxe federal e file state 2012 For more information, see Backup Withholding in chapter 4. Turbotax deluxe federal e file state 2012 Stock certificate in two or more names. Turbotax deluxe federal e file state 2012   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. Turbotax deluxe federal e file state 2012 Form 1099-DIV. Turbotax deluxe federal e file state 2012   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. Turbotax deluxe federal e file state 2012 Keep this form with your records. Turbotax deluxe federal e file state 2012 You do not have to attach it to your tax return. Turbotax deluxe federal e file state 2012 Dividends not reported on Form 1099-DIV. Turbotax deluxe federal e file state 2012   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. Turbotax deluxe federal e file state 2012 For example, you may receive distributive shares of dividends from partnerships or S corporations. Turbotax deluxe federal e file state 2012 These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Turbotax deluxe federal e file state 2012 , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Turbotax deluxe federal e file state 2012 Reporting tax withheld. Turbotax deluxe federal e file state 2012   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. Turbotax deluxe federal e file state 2012 Nominees. Turbotax deluxe federal e file state 2012   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. Turbotax deluxe federal e file state 2012 Form 1099-MISC. Turbotax deluxe federal e file state 2012   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. Turbotax deluxe federal e file state 2012 See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. Turbotax deluxe federal e file state 2012 Incorrect amount shown on a Form 1099. Turbotax deluxe federal e file state 2012   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Turbotax deluxe federal e file state 2012 The new Form 1099 you receive will be marked “Corrected. Turbotax deluxe federal e file state 2012 ” Dividends on stock sold. Turbotax deluxe federal e file state 2012   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. Turbotax deluxe federal e file state 2012 Dividends received in January. Turbotax deluxe federal e file state 2012   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. Turbotax deluxe federal e file state 2012 You report the dividend in the year it was declared. Turbotax deluxe federal e file state 2012 Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. Turbotax deluxe federal e file state 2012 They are paid out of earnings and profits and are ordinary income to you. Turbotax deluxe federal e file state 2012 This means they are not capital gains. Turbotax deluxe federal e file state 2012 You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Turbotax deluxe federal e file state 2012 Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Turbotax deluxe federal e file state 2012 Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. Turbotax deluxe federal e file state 2012 They should be shown in box 1b of the Form 1099-DIV you receive. Turbotax deluxe federal e file state 2012 The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. Turbotax deluxe federal e file state 2012 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. Turbotax deluxe federal e file state 2012 6%. Turbotax deluxe federal e file state 2012 20% on any amount that otherwise would be taxed at a 39. Turbotax deluxe federal e file state 2012 6% rate. Turbotax deluxe federal e file state 2012 To qualify for the maximum rate, all of the following requirements must be met. Turbotax deluxe federal e file state 2012 The dividends must have been paid by a U. Turbotax deluxe federal e file state 2012 S. Turbotax deluxe federal e file state 2012 corporation or a qualified foreign corporation. Turbotax deluxe federal e file state 2012 (See Qualified foreign corporation , later. Turbotax deluxe federal e file state 2012 ) The dividends are not of the type listed later under Dividends that are not qualified dividends . Turbotax deluxe federal e file state 2012 You meet the holding period (discussed next). Turbotax deluxe federal e file state 2012 Holding period. Turbotax deluxe federal e file state 2012   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Turbotax deluxe federal e file state 2012 The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. Turbotax deluxe federal e file state 2012 Instead, the seller will get the dividend. Turbotax deluxe federal e file state 2012   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. Turbotax deluxe federal e file state 2012 See the examples later. Turbotax deluxe federal e file state 2012 Exception for preferred stock. Turbotax deluxe federal e file state 2012   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. Turbotax deluxe federal e file state 2012 If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. Turbotax deluxe federal e file state 2012 Example 1. Turbotax deluxe federal e file state 2012 You bought 5,000 shares of XYZ Corp. Turbotax deluxe federal e file state 2012 common stock on July 9, 2013. Turbotax deluxe federal e file state 2012 XYZ Corp. Turbotax deluxe federal e file state 2012 paid a cash dividend of 10 cents per share. Turbotax deluxe federal e file state 2012 The ex-dividend date was July 16, 2013. Turbotax deluxe federal e file state 2012 Your Form 1099-DIV from XYZ Corp. Turbotax deluxe federal e file state 2012 shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). Turbotax deluxe federal e file state 2012 However, you sold the 5,000 shares on August 12, 2013. Turbotax deluxe federal e file state 2012 You held your shares of XYZ Corp. Turbotax deluxe federal e file state 2012 for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). Turbotax deluxe federal e file state 2012 The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. Turbotax deluxe federal e file state 2012 You have no qualified dividends from XYZ Corp. Turbotax deluxe federal e file state 2012 because you held the XYZ stock for less than 61 days. Turbotax deluxe federal e file state 2012 Example 2. Turbotax deluxe federal e file state 2012 Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. Turbotax deluxe federal e file state 2012 You held the stock for 63 days (from July 16, 2013, through September 16, 2013). Turbotax deluxe federal e file state 2012 The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). Turbotax deluxe federal e file state 2012 Example 3. Turbotax deluxe federal e file state 2012 You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. Turbotax deluxe federal e file state 2012 ABC Mutual Fund paid a cash dividend of 10 cents a share. Turbotax deluxe federal e file state 2012 The ex-dividend date was July 16, 2013. Turbotax deluxe federal e file state 2012 The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Turbotax deluxe federal e file state 2012 Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. Turbotax deluxe federal e file state 2012 However, you sold the 10,000 shares on August 12, 2013. Turbotax deluxe federal e file state 2012 You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. Turbotax deluxe federal e file state 2012 Holding period reduced where risk of loss is diminished. Turbotax deluxe federal e file state 2012   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. Turbotax deluxe federal e file state 2012 You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. Turbotax deluxe federal e file state 2012 You were grantor (writer) of an option to buy substantially identical stock or securities. Turbotax deluxe federal e file state 2012 Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. Turbotax deluxe federal e file state 2012   For information about how to apply condition (3), see Regulations section 1. Turbotax deluxe federal e file state 2012 246-5. Turbotax deluxe federal e file state 2012 Qualified foreign corporation. Turbotax deluxe federal e file state 2012   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. Turbotax deluxe federal e file state 2012 The corporation is incorporated in a U. Turbotax deluxe federal e file state 2012 S. Turbotax deluxe federal e file state 2012 possession. Turbotax deluxe federal e file state 2012 The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. Turbotax deluxe federal e file state 2012 For a list of those treaties, see Table 8-1. Turbotax deluxe federal e file state 2012 The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. Turbotax deluxe federal e file state 2012 See Readily tradable stock , later. Turbotax deluxe federal e file state 2012 Exception. Turbotax deluxe federal e file state 2012   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. Turbotax deluxe federal e file state 2012 Readily tradable stock. Turbotax deluxe federal e file state 2012   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. Turbotax deluxe federal e file state 2012 For a list of the exchanges that meet these requirements, see www. Turbotax deluxe federal e file state 2012 sec. Turbotax deluxe federal e file state 2012 gov/divisions/marketreg/mrexchanges. Turbotax deluxe federal e file state 2012 shtml. Turbotax deluxe federal e file state 2012 Dividends that are not qualified dividends. Turbotax deluxe federal e file state 2012   The following dividends are not qualified dividends. Turbotax deluxe federal e file state 2012 They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. Turbotax deluxe federal e file state 2012 Capital gain distributions. Turbotax deluxe federal e file state 2012 Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. Turbotax deluxe federal e file state 2012 S. Turbotax deluxe federal e file state 2012 building and loan associations, U. Turbotax deluxe federal e file state 2012 S. Turbotax deluxe federal e file state 2012 savings and loan associations, federal savings and loan associations, and similar financial institutions. Turbotax deluxe federal e file state 2012 (Report these amounts as interest income. Turbotax deluxe federal e file state 2012 ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. Turbotax deluxe federal e file state 2012 Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. Turbotax deluxe federal e file state 2012 Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Turbotax deluxe federal e file state 2012 Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Turbotax deluxe federal e file state 2012 Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Turbotax deluxe federal e file state 2012 Table 8-1. Turbotax deluxe federal e file state 2012 Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. Turbotax deluxe federal e file state 2012 Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. Turbotax deluxe federal e file state 2012 This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. Turbotax deluxe federal e file state 2012 Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. Turbotax deluxe federal e file state 2012 If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. Turbotax deluxe federal e file state 2012 If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. Turbotax deluxe federal e file state 2012 You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. Turbotax deluxe federal e file state 2012 But you may be able to deduct the service charge. Turbotax deluxe federal e file state 2012 See chapter 28 for more information about deducting expenses of producing income. Turbotax deluxe federal e file state 2012 In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. Turbotax deluxe federal e file state 2012 If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. Turbotax deluxe federal e file state 2012 When figuring this amount, use the fair market value of the stock on the dividend payment date. Turbotax deluxe federal e file state 2012 Money Market Funds Report amounts you receive from money market funds as dividend income. Turbotax deluxe federal e file state 2012 Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. Turbotax deluxe federal e file state 2012 Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). Turbotax deluxe federal e file state 2012 They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. Turbotax deluxe federal e file state 2012 Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. Turbotax deluxe federal e file state 2012 Undistributed capital gains of mutual funds and REITs. Turbotax deluxe federal e file state 2012    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. Turbotax deluxe federal e file state 2012 You must treat your share of these gains as distributions, even though you did not actually receive them. Turbotax deluxe federal e file state 2012 However, they are not included on Form 1099-DIV. Turbotax deluxe federal e file state 2012 Instead, they are reported to you in box 1a of Form 2439. Turbotax deluxe federal e file state 2012   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. Turbotax deluxe federal e file state 2012   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. Turbotax deluxe federal e file state 2012 You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. Turbotax deluxe federal e file state 2012 Attach Copy B of Form 2439 to your return, and keep Copy C for your records. Turbotax deluxe federal e file state 2012 Basis adjustment. Turbotax deluxe federal e file state 2012   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. Turbotax deluxe federal e file state 2012 Additional information. Turbotax deluxe federal e file state 2012   For more information on the treatment of distributions from mutual funds, see Publication 550. Turbotax deluxe federal e file state 2012 Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. Turbotax deluxe federal e file state 2012 You should receive a Form 1099-DIV or other statement showing the nondividend distribution. Turbotax deluxe federal e file state 2012 On Form 1099-DIV, a nondividend distribution will be shown in box 3. Turbotax deluxe federal e file state 2012 If you do not receive such a statement, you report the distribution as an ordinary dividend. Turbotax deluxe federal e file state 2012 Basis adjustment. Turbotax deluxe federal e file state 2012   A nondividend distribution reduces the basis of your stock. Turbotax deluxe federal e file state 2012 It is not taxed until your basis in the stock is fully recovered. Turbotax deluxe federal e file state 2012 This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. Turbotax deluxe federal e file state 2012 If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. Turbotax deluxe federal e file state 2012   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. Turbotax deluxe federal e file state 2012 Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. Turbotax deluxe federal e file state 2012 See Holding Period in chapter 14. Turbotax deluxe federal e file state 2012 Example. Turbotax deluxe federal e file state 2012 You bought stock in 2000 for $100. Turbotax deluxe federal e file state 2012 In 2003, you received a nondividend distribution of $80. Turbotax deluxe federal e file state 2012 You did not include this amount in your income, but you reduced the basis of your stock to $20. Turbotax deluxe federal e file state 2012 You received a nondividend distribution of $30 in 2013. Turbotax deluxe federal e file state 2012 The first $20 of this amount reduced your basis to zero. Turbotax deluxe federal e file state 2012 You report the other $10 as a long-term capital gain for 2013. Turbotax deluxe federal e file state 2012 You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. Turbotax deluxe federal e file state 2012 Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. Turbotax deluxe federal e file state 2012 These distributions are, at least in part, one form of a return of capital. Turbotax deluxe federal e file state 2012 They may be paid in one or more installments. Turbotax deluxe federal e file state 2012 You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. Turbotax deluxe federal e file state 2012 For more information on liquidating distributions, see chapter 1 of Publication 550. Turbotax deluxe federal e file state 2012 Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. Turbotax deluxe federal e file state 2012 Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. Turbotax deluxe federal e file state 2012 Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. Turbotax deluxe federal e file state 2012 Taxable stock dividends and stock rights. Turbotax deluxe federal e file state 2012   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. Turbotax deluxe federal e file state 2012 You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. Turbotax deluxe federal e file state 2012 The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. Turbotax deluxe federal e file state 2012 The distribution is in convertible preferred stock and has the same result as in (2). Turbotax deluxe federal e file state 2012 The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. Turbotax deluxe federal e file state 2012 The distribution is on preferred stock. Turbotax deluxe federal e file state 2012 (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. Turbotax deluxe federal e file state 2012 )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. Turbotax deluxe federal e file state 2012 If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. Turbotax deluxe federal e file state 2012 Preferred stock redeemable at a premium. Turbotax deluxe federal e file state 2012   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. Turbotax deluxe federal e file state 2012 For more information, see chapter 1 of Publication 550. Turbotax deluxe federal e file state 2012 Basis. Turbotax deluxe federal e file state 2012   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. Turbotax deluxe federal e file state 2012 If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. Turbotax deluxe federal e file state 2012 Fractional shares. Turbotax deluxe federal e file state 2012    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. Turbotax deluxe federal e file state 2012 However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Turbotax deluxe federal e file state 2012 Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Turbotax deluxe federal e file state 2012 Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. Turbotax deluxe federal e file state 2012 Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. Turbotax deluxe federal e file state 2012    Report these transactions on Form 8949 with the correct box checked. Turbotax deluxe federal e file state 2012   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. Turbotax deluxe federal e file state 2012 Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Turbotax deluxe federal e file state 2012 Example. Turbotax deluxe federal e file state 2012 You own one share of common stock that you bought on January 3, 2004, for $100. Turbotax deluxe federal e file state 2012 The corporation declared a common stock dividend of 5% on June 29, 2013. Turbotax deluxe federal e file state 2012 The fair market value of the stock at the time the stock dividend was declared was $200. Turbotax deluxe federal e file state 2012 You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. Turbotax deluxe federal e file state 2012 You figure your gain or loss as follows: Fair market value of old stock $200. Turbotax deluxe federal e file state 2012 00 Fair market value of stock dividend (cash received) +10. Turbotax deluxe federal e file state 2012 00 Fair market value of old stock and stock dividend $210. Turbotax deluxe federal e file state 2012 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. Turbotax deluxe federal e file state 2012 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. Turbotax deluxe federal e file state 2012 76 Total $100. Turbotax deluxe federal e file state 2012 00 Cash received $10. Turbotax deluxe federal e file state 2012 00 Basis (cost) of stock dividend − 4. Turbotax deluxe federal e file state 2012 76 Gain $5. Turbotax deluxe federal e file state 2012 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. Turbotax deluxe federal e file state 2012 Scrip dividends. Turbotax deluxe federal e file state 2012   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. Turbotax deluxe federal e file state 2012 The certificate is generally nontaxable when you receive it. Turbotax deluxe federal e file state 2012 If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. Turbotax deluxe federal e file state 2012   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. Turbotax deluxe federal e file state 2012 You must include its fair market value in income on the date you receive it. Turbotax deluxe federal e file state 2012 Other Distributions You may receive any of the following distributions during the year. Turbotax deluxe federal e file state 2012 Exempt-interest dividends. Turbotax deluxe federal e file state 2012   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Turbotax deluxe federal e file state 2012 Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Turbotax deluxe federal e file state 2012 Information reporting requirement. Turbotax deluxe federal e file state 2012   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. Turbotax deluxe federal e file state 2012 This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. Turbotax deluxe federal e file state 2012 Alternative minimum tax treatment. Turbotax deluxe federal e file state 2012   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Turbotax deluxe federal e file state 2012 See Alternative Minimum Tax (AMT) in chapter 30 for more information. Turbotax deluxe federal e file state 2012 Dividends on insurance policies. Turbotax deluxe federal e file state 2012    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. Turbotax deluxe federal e file state 2012 However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. Turbotax deluxe federal e file state 2012    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. Turbotax deluxe federal e file state 2012 Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. Turbotax deluxe federal e file state 2012 Report any taxable distributions on insurance policies on Form 1040, line 21. Turbotax deluxe federal e file state 2012 Dividends on veterans' insurance. Turbotax deluxe federal e file state 2012   Dividends you receive on veterans' insurance policies are not taxable. Turbotax deluxe federal e file state 2012 In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. Turbotax deluxe federal e file state 2012 Patronage dividends. Turbotax deluxe federal e file state 2012   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. Turbotax deluxe federal e file state 2012   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. Turbotax deluxe federal e file state 2012 But you must reduce the basis (cost) of the items bought. Turbotax deluxe federal e file state 2012 If the dividend is more than the adjusted basis of the assets, you must report the excess as income. Turbotax deluxe federal e file state 2012   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. Turbotax deluxe federal e file state 2012 Alaska Permanent Fund dividends. Turbotax deluxe federal e file state 2012    Do not report these amounts as dividends. Turbotax deluxe federal e file state 2012 Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. Turbotax deluxe federal e file state 2012 How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. Turbotax deluxe federal e file state 2012 Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. Turbotax deluxe federal e file state 2012 Report qualified dividends on line 9b of Form 1040 or Form 1040A. Turbotax deluxe federal e file state 2012 If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. Turbotax deluxe federal e file state 2012 See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. Turbotax deluxe federal e file state 2012 If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. Turbotax deluxe federal e file state 2012 You cannot use Form 1040EZ if you receive any dividend income. Turbotax deluxe federal e file state 2012 Form 1099-DIV. Turbotax deluxe federal e file state 2012   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Turbotax deluxe federal e file state 2012 Even if you do not receive Form 1099-DIV, you must report all your dividend income. Turbotax deluxe federal e file state 2012   See Form 1099-DIV for more information on how to report dividend income. Turbotax deluxe federal e file state 2012 Form 1040A or 1040. Turbotax deluxe federal e file state 2012    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. Turbotax deluxe federal e file state 2012 If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. Turbotax deluxe federal e file state 2012   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. Turbotax deluxe federal e file state 2012 If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. Turbotax deluxe federal e file state 2012 If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. Turbotax deluxe federal e file state 2012   Enter on line 6 the total of the amounts listed on line 5. Turbotax deluxe federal e file state 2012 Also enter this total on line 9a of Form 1040A or 1040. Turbotax deluxe federal e file state 2012 Qualified dividends. Turbotax deluxe federal e file state 2012   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. Turbotax deluxe federal e file state 2012 The amount in box 1b is already included in box 1a. Turbotax deluxe federal e file state 2012 Do not add the amount in box 1b to, or substract it from, the amount in box 1a. Turbotax deluxe federal e file state 2012   Do not include any of the following on line 9b. Turbotax deluxe federal e file state 2012 Qualified dividends you received as a nominee. Turbotax deluxe federal e file state 2012 See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. Turbotax deluxe federal e file state 2012 Dividends on stock for which you did not meet the holding period. Turbotax deluxe federal e file state 2012 See Holding period , earlier under Qualified Dividends. Turbotax deluxe federal e file state 2012 Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Turbotax deluxe federal e file state 2012 Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Turbotax deluxe federal e file state 2012 Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Turbotax deluxe federal e file state 2012   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. Turbotax deluxe federal e file state 2012 Enter qualified dividends on line 2 of the worksheet. Turbotax deluxe federal e file state 2012 Investment interest deducted. Turbotax deluxe federal e file state 2012   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Turbotax deluxe federal e file state 2012 Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. Turbotax deluxe federal e file state 2012 This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. Turbotax deluxe federal e file state 2012 For more information about the limit on investment interest, see Investment expenses in chapter 23. Turbotax deluxe federal e file state 2012 Expenses related to dividend income. Turbotax deluxe federal e file state 2012   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). Turbotax deluxe federal e file state 2012 See chapter 28 for general information about deducting expenses of producing income. Turbotax deluxe federal e file state 2012 More information. Turbotax deluxe federal e file state 2012    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. Turbotax deluxe federal e file state 2012 Prev  Up  Next   Home   More Online Publications
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IRS Tax Volunteers

Learn to Prepare Taxes and Make a Difference at the same time.  How can you make a difference? Simple.  Help your community in preparing taxes free of charge by becoming a volunteer with the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) Programs.

You will receive training to provide free tax help for low-to-moderate income families who need assistance preparing their tax returns. Nearly 92,000 people said yes to making a difference during the 2013 filing season and prepared over 3.3 million returns at thousands of tax sites nationwide.

How does this program work? As a committed Tax Volunteer you’ll be assigned to work with a sponsoring organization, first to receive training and then to begin volunteering at a location in your community. Training is offered both online and in the classroom. Tax sites are generally open nights and weekends and the hours are flexible. You will be sure to find a volunteer site close to you.

Interested? For more details, submit your contact information using the VITA/TCE Volunteer Sign Up - Form 14310. Also include the city and state where you want to become a volunteer. Your information will be forwarded to the sponsoring organizations in your area for further contact.

Submit your inquiry now to TaxVolunteer@irs.gov and become a VITA or TCE tax volunteer! It’s a rewarding way to give back to your community.

 

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Page Last Reviewed or Updated: 02-Dec-2013

The Turbotax Deluxe Federal E File State 2012

Turbotax deluxe federal e file state 2012 2. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Recognizing Losses on Investments Distributions After Owner's Death What's New for 2013 Roth IRA contribution limit. Turbotax deluxe federal e file state 2012  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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Turbotax deluxe federal e file state 2012 For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in this chapter. Turbotax deluxe federal e file state 2012 Modified AGI limit for Roth IRA contributions increased. Turbotax deluxe federal e file state 2012  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Turbotax deluxe federal e file state 2012 Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Turbotax deluxe federal e file state 2012 You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Turbotax deluxe federal e file state 2012 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-. Turbotax deluxe federal e file state 2012 You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Turbotax deluxe federal e file state 2012 See Can You Contribute to a Roth IRA? in this chapter. Turbotax deluxe federal e file state 2012 Net Investment Income Tax. Turbotax deluxe federal e file state 2012  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). Turbotax deluxe federal e file state 2012 However, these distributions are taken into account when determining the modified adjusted gross income threshold. Turbotax deluxe federal e file state 2012 Distributions from a nonqualified retirement plan are included in net investment income. Turbotax deluxe federal e file state 2012 See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Turbotax deluxe federal e file state 2012 What's New for 2014 Modified AGI limit for Roth IRA contributions increased. Turbotax deluxe federal e file state 2012  For 2014, your Roth IRA contribution limit is reduced (phased out) in the following situations. Turbotax deluxe federal e file state 2012 Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $181,000. Turbotax deluxe federal e file state 2012 You cannot make a Roth IRA contribution if your modified AGI is $191,000 or more. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 You cannot make a Roth IRA contribution if your modified AGI is $129,000 or more. Turbotax deluxe federal e file state 2012 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-. Turbotax deluxe federal e file state 2012 You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Turbotax deluxe federal e file state 2012 Reminders Deemed IRAs. Turbotax deluxe federal e file state 2012  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. Turbotax deluxe federal e file state 2012 If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. Turbotax deluxe federal e file state 2012 An employee's account can be treated as a traditional IRA or a Roth IRA. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Designated Roth accounts. Turbotax deluxe federal e file state 2012  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. Turbotax deluxe federal e file state 2012 These elective deferrals are included in your income, but qualified distributions from these accounts are not included in your income. Turbotax deluxe federal e file state 2012 Designated Roth accounts are not IRAs and should not be confused with Roth IRAs. Turbotax deluxe federal e file state 2012 Contributions, up to their respective limits, can be made to Roth IRAs and designated Roth accounts according to your eligibility to participate. Turbotax deluxe federal e file state 2012 A contribution to one does not impact your eligibility to contribute to the other. Turbotax deluxe federal e file state 2012 See Publication 575, for more information on designated Roth accounts. Turbotax deluxe federal e file state 2012 Introduction Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retirement plan called a Roth IRA. Turbotax deluxe federal e file state 2012 Contributions not reported. Turbotax deluxe federal e file state 2012   You do not report Roth IRA contributions on your return. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 It can be either an account or an annuity. Turbotax deluxe federal e file state 2012 Individual retirement accounts and annuities are described in chapter 1 under How Can a Traditional IRA Be Opened. Turbotax deluxe federal e file state 2012 To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is opened. Turbotax deluxe federal e file state 2012 A deemed IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA. Turbotax deluxe federal e file state 2012 Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. Turbotax deluxe federal e file state 2012 But, if you satisfy the requirements, qualified distributions (discussed later) are tax free. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Traditional IRA. Turbotax deluxe federal e file state 2012   A traditional IRA is any IRA that is not a Roth IRA or SIMPLE IRA. Turbotax deluxe federal e file state 2012 Traditional IRAs are discussed in chapter 1. Turbotax deluxe federal e file state 2012 When Can a Roth IRA Be Opened? You can open a Roth IRA at any time. Turbotax deluxe federal e file state 2012 However, the time for making contributions for any year is limited. Turbotax deluxe federal e file state 2012 See When Can You Make Contributions , later under Can You Contribute to a Roth IRA. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 You may be able to claim a credit for contributions to your Roth IRA. Turbotax deluxe federal e file state 2012 For more information, see chapter 4. Turbotax deluxe federal e file state 2012 Is there an age limit for contributions?   Contributions can be made to your Roth IRA regardless of your age. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Compensation. Turbotax deluxe federal e file state 2012   Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. Turbotax deluxe federal e file state 2012 It also includes commissions, self-employment income, nontaxable combat pay, military differential pay, and taxable alimony and separate maintenance payments. Turbotax deluxe federal e file state 2012 For more information, see What Is Compensation? under Who Can Open a Traditional IRA? in chapter 1. Turbotax deluxe federal e file state 2012 Modified AGI. Turbotax deluxe federal e file state 2012   Your modified AGI for Roth IRA purposes is your adjusted gross income (AGI) as shown on your return with some adjustments. Turbotax deluxe federal e file state 2012 Use Worksheet 2-1 , later, to determine your modified AGI. Turbotax deluxe federal e file state 2012    Do not subtract conversion income when figuring your other AGI-based phaseouts and taxable income, such as your deduction for medical and dental expenses. Turbotax deluxe federal e file state 2012 Subtract them from AGI only for the purpose of figuring your modified AGI for Roth IRA purposes. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Worksheet 2-1. Turbotax deluxe federal e file state 2012 Modified Adjusted Gross Income for Roth IRA Purposes Use this worksheet to figure your modified adjusted gross income for Roth IRA purposes. Turbotax deluxe federal e file state 2012 1. Turbotax deluxe federal e file state 2012 Enter your adjusted gross income from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37 1. Turbotax deluxe federal e file state 2012   2. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012   3. Turbotax deluxe federal e file state 2012 Subtract line 2 from line 1 3. Turbotax deluxe federal e file state 2012   4. Turbotax deluxe federal e file state 2012 Enter any traditional IRA deduction from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 4. Turbotax deluxe federal e file state 2012   5. Turbotax deluxe federal e file state 2012 Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 5. Turbotax deluxe federal e file state 2012   6. Turbotax deluxe federal e file state 2012 Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 6. Turbotax deluxe federal e file state 2012   7. Turbotax deluxe federal e file state 2012 Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 7. Turbotax deluxe federal e file state 2012   8. Turbotax deluxe federal e file state 2012 Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 8. Turbotax deluxe federal e file state 2012   9. Turbotax deluxe federal e file state 2012 Enter any foreign housing deduction from Form 2555, line 50 9. Turbotax deluxe federal e file state 2012   10. Turbotax deluxe federal e file state 2012 Enter any excludable qualified savings bond interest from Form 8815, line 14 10. Turbotax deluxe federal e file state 2012   11. Turbotax deluxe federal e file state 2012 Enter any excluded employer-provided adoption benefits from Form 8839, line 28 11. Turbotax deluxe federal e file state 2012   12. Turbotax deluxe federal e file state 2012 Add the amounts on lines 3 through 11 12. Turbotax deluxe federal e file state 2012   13. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012   Is the amount on line 12 more than the amount on line 13? If yes, see the note below. Turbotax deluxe federal e file state 2012  If no, the amount on line 12 is your modified adjusted gross income for Roth IRA purposes. Turbotax deluxe federal e file state 2012       Note. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 (If you receive social security benefits, use Worksheet 1 in Appendix B to refigure your AGI. Turbotax deluxe federal e file state 2012 ) Then go to line 3 above in this Worksheet 2-1 to refigure your modified AGI. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Roth IRAs only. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained later under Contribution limit reduced . Turbotax deluxe federal e file state 2012 Roth IRAs and traditional IRAs. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Employer contributions under a SEP or SIMPLE IRA plan do not affect this limit. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained below under Contribution limit reduced . Turbotax deluxe federal e file state 2012   Simplified employee pensions (SEPs) are discussed in Publication 560. Turbotax deluxe federal e file state 2012 Savings incentive match plans for employees (SIMPLEs) are discussed in chapter 3. Turbotax deluxe federal e file state 2012 Repayment of reservist distributions. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 However, the total repayments cannot be more than the amount of your distribution. Turbotax deluxe federal e file state 2012 Note. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1. Turbotax deluxe federal e file state 2012 Contribution limit reduced. Turbotax deluxe federal e file state 2012   If your modified AGI is above a certain amount, your contribution limit is gradually reduced. Turbotax deluxe federal e file state 2012 Use Table 2-1, later, to determine if this reduction applies to you. Turbotax deluxe federal e file state 2012 Table 2-1. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 IF you have taxable compensation and your filing status is . Turbotax deluxe federal e file state 2012 . Turbotax deluxe federal e file state 2012 . Turbotax deluxe federal e file state 2012 AND your modified AGI is . Turbotax deluxe federal e file state 2012 . Turbotax deluxe federal e file state 2012 . Turbotax deluxe federal e file state 2012 THEN . Turbotax deluxe federal e file state 2012 . Turbotax deluxe federal e file state 2012 . Turbotax deluxe federal e file state 2012 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 . Turbotax deluxe federal e file state 2012 at least $178,000 but less than $188,000 the amount you can contribute is reduced as explained under Contribution limit reduced . Turbotax deluxe federal e file state 2012 $188,000 or more you cannot contribute to a Roth IRA. Turbotax deluxe federal e file state 2012 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 . Turbotax deluxe federal e file state 2012 more than zero (-0-) but less than $10,000 the amount you can contribute is reduced as explained under Contribution limit reduced . Turbotax deluxe federal e file state 2012 $10,000 or more you cannot contribute to a Roth IRA. Turbotax deluxe federal e file state 2012 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 . Turbotax deluxe federal e file state 2012 at least $112,000 but less than $127,000 the amount you can contribute is reduced as explained under Contribution limit reduced . Turbotax deluxe federal e file state 2012 $127,000 or more you cannot contribute to a Roth IRA. Turbotax deluxe federal e file state 2012 Figuring the reduction. Turbotax deluxe federal e file state 2012   If the amount you can contribute must be reduced, use Worksheet 2-2, later, to figure your reduced contribution limit. Turbotax deluxe federal e file state 2012 Worksheet 2-2. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 If it is, use this worksheet to determine how much it is reduced. Turbotax deluxe federal e file state 2012 1. Turbotax deluxe federal e file state 2012 Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. Turbotax deluxe federal e file state 2012   2. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012   3. Turbotax deluxe federal e file state 2012 Subtract line 2 from line 1 3. Turbotax deluxe federal e file state 2012   4. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012   5. Turbotax deluxe federal e file state 2012 Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). Turbotax deluxe federal e file state 2012 If the result is 1. Turbotax deluxe federal e file state 2012 000 or more, enter 1. Turbotax deluxe federal e file state 2012 000 5. Turbotax deluxe federal e file state 2012   6. Turbotax deluxe federal e file state 2012 Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. Turbotax deluxe federal e file state 2012   7. Turbotax deluxe federal e file state 2012 Multiply line 5 by line 6 7. Turbotax deluxe federal e file state 2012   8. Turbotax deluxe federal e file state 2012 Subtract line 7 from line 6. Turbotax deluxe federal e file state 2012 Round the result up to the nearest $10. Turbotax deluxe federal e file state 2012 If the result is less than $200, enter $200 8. Turbotax deluxe federal e file state 2012   9. Turbotax deluxe federal e file state 2012 Enter contributions for the year to other IRAs 9. Turbotax deluxe federal e file state 2012   10. Turbotax deluxe federal e file state 2012 Subtract line 9 from line 6 10. Turbotax deluxe federal e file state 2012   11. Turbotax deluxe federal e file state 2012 Enter the lesser of line 8 or line 10. Turbotax deluxe federal e file state 2012 This is your reduced Roth IRA contribution limit 11. Turbotax deluxe federal e file state 2012      Round your reduced contribution limit up to the nearest $10. Turbotax deluxe federal e file state 2012 If your reduced contribution limit is more than $0, but less than $200, increase the limit to $200. Turbotax deluxe federal e file state 2012 Example. Turbotax deluxe federal e file state 2012 You are a 45-year-old, single individual with taxable compensation of $113,000. Turbotax deluxe federal e file state 2012 You want to make the maximum allowable contribution to your Roth IRA for 2013. Turbotax deluxe federal e file state 2012 Your modified AGI for 2013 is $113,000. Turbotax deluxe federal e file state 2012 You have not contributed to any traditional IRA, so the maximum contribution limit before the modified AGI reduction is $5,500. Turbotax deluxe federal e file state 2012 You figure your reduced Roth IRA contribution of $5,140 as shown on Worksheet 2-2. Turbotax deluxe federal e file state 2012 Example—Illustrated, later. Turbotax deluxe federal e file state 2012   Worksheet 2-2. Turbotax deluxe federal e file state 2012 Example—Illustrated Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. Turbotax deluxe federal e file state 2012 If it is, use this worksheet to determine how much it is reduced. Turbotax deluxe federal e file state 2012 1. Turbotax deluxe federal e file state 2012 Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. Turbotax deluxe federal e file state 2012 113,000 2. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 112,000 3. Turbotax deluxe federal e file state 2012 Subtract line 2 from line 1 3. Turbotax deluxe federal e file state 2012 1,000 4. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 15,000 5. Turbotax deluxe federal e file state 2012 Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). Turbotax deluxe federal e file state 2012 If the result is 1. Turbotax deluxe federal e file state 2012 000 or more, enter 1. Turbotax deluxe federal e file state 2012 000 5. Turbotax deluxe federal e file state 2012 . Turbotax deluxe federal e file state 2012 067 6. Turbotax deluxe federal e file state 2012 Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. Turbotax deluxe federal e file state 2012 5,500 7. Turbotax deluxe federal e file state 2012 Multiply line 5 by line 6 7. Turbotax deluxe federal e file state 2012 369 8. Turbotax deluxe federal e file state 2012 Subtract line 7 from line 6. Turbotax deluxe federal e file state 2012 Round the result up to the nearest $10. Turbotax deluxe federal e file state 2012 If the result is less than $200, enter $200 8. Turbotax deluxe federal e file state 2012 5,140 9. Turbotax deluxe federal e file state 2012 Enter contributions for the year to other IRAs 9. Turbotax deluxe federal e file state 2012 0 10. Turbotax deluxe federal e file state 2012 Subtract line 9 from line 6 10. Turbotax deluxe federal e file state 2012 5,500 11. Turbotax deluxe federal e file state 2012 Enter the lesser of line 8 or line 10. Turbotax deluxe federal e file state 2012 This is your reduced Roth IRA contribution limit 11. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 You can make contributions for 2013 by the due date (not including extensions) for filing your 2013 tax return. Turbotax deluxe federal e file state 2012 This means that most people can make contributions for 2013 by April 15, 2014. Turbotax deluxe federal e file state 2012 What if You Contribute Too Much? A 6% excise tax applies to any excess contribution to a Roth IRA. Turbotax deluxe federal e file state 2012 Excess contributions. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Withdrawal of excess contributions. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 This treatment only applies if any earnings on the contributions are also withdrawn. Turbotax deluxe federal e file state 2012 The earnings are considered earned and received in the year the excess contribution was made. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 If you do, file an amended return with “Filed pursuant to section 301. Turbotax deluxe federal e file state 2012 9100-2” written at the top. Turbotax deluxe federal e file state 2012 Report any related earnings on the amended return and include an explanation of the withdrawal. Turbotax deluxe federal e file state 2012 Make any other necessary changes on the amended return. Turbotax deluxe federal e file state 2012 Applying excess contributions. Turbotax deluxe federal e file state 2012    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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 You may be able to roll over amounts from a qualified retirement plan to a Roth IRA. Turbotax deluxe federal e file state 2012 You may be able to recharacterize contributions made to one IRA as having been made directly to a different IRA. Turbotax deluxe federal e file state 2012 You can roll amounts over from a designated Roth account or from one Roth IRA to another Roth IRA. Turbotax deluxe federal e file state 2012 Conversions You can convert a traditional IRA to a Roth IRA. Turbotax deluxe federal e file state 2012 The conversion is treated as a rollover, regardless of the conversion method used. Turbotax deluxe federal e file state 2012 Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. Turbotax deluxe federal e file state 2012 However, the 1-year waiting period does not apply. Turbotax deluxe federal e file state 2012 Conversion methods. Turbotax deluxe federal e file state 2012   You can convert amounts from a traditional IRA to a Roth IRA in any of the following three ways. Turbotax deluxe federal e file state 2012 Rollover. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Trustee-to-trustee transfer. Turbotax deluxe federal e file state 2012 You can direct the trustee of the traditional IRA to transfer an amount from the traditional IRA to the trustee of the Roth IRA. Turbotax deluxe federal e file state 2012 Same trustee transfer. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Same trustee. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Income. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Turbotax deluxe federal e file state 2012 See Publication 505, Tax Withholding and Estimated Tax. Turbotax deluxe federal e file state 2012 More information. Turbotax deluxe federal e file state 2012   For more information on conversions, see Converting From Any Traditional IRA Into a Roth IRA in chapter 1. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. Turbotax deluxe federal e file state 2012 See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. Turbotax deluxe federal e file state 2012 Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan. Turbotax deluxe federal e file state 2012 Rollover methods. Turbotax deluxe federal e file state 2012   You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways. Turbotax deluxe federal e file state 2012 Rollover. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Since the distribution is paid directly to you, the payer generally must withhold 20% of it. Turbotax deluxe federal e file state 2012 Direct rollover option. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Generally, no tax is withheld from any part of the designated distribution that is directly paid to the trustee of the Roth IRA. Turbotax deluxe federal e file state 2012 Rollover by nonspouse beneficiary. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 You must make the rollover by a direct trustee-to-trustee transfer into an inherited Roth IRA. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 For more information, see Distributions after the employee’s death under Tax on Excess Accumulation in Publication 575. Turbotax deluxe federal e file state 2012 Income. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Turbotax deluxe federal e file state 2012 See Publication 505, Tax Withholding and Estimated Tax. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 The contribution is treated as a qualified rollover contribution. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Any military death gratuity or SGLI payment contributed to a Roth IRA is disregarded for purposes of the 1-year waiting period between rollovers. Turbotax deluxe federal e file state 2012 The rollover must be completed before the end of the 1-year period beginning on the date you received the payment. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. Turbotax deluxe federal e file state 2012 However, rollovers from retirement plans other than Roth IRAs are disregarded for purposes of the 1-year waiting period between rollovers. Turbotax deluxe federal e file state 2012 A rollover from a Roth IRA to an employer retirement plan is not allowed. Turbotax deluxe federal e file state 2012 A rollover from a designated Roth account can only be made to another designated Roth account or to a Roth IRA. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 The 5-year period begins with the first taxable year for which the contribution was made to the initial Roth IRA. Turbotax deluxe federal e file state 2012 See What are Qualified Distributions , later. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 For more information, see Rollover of Exxon Valdez Settlement Income in chapter 1. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 The contribution must be made within 180 days from the date you received the payment. Turbotax deluxe federal e file state 2012 The contribution will be treated as a qualified rollover contribution. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Qualified airline employee. Turbotax deluxe federal e file state 2012    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. Turbotax deluxe federal e file state 2012 These provisions also apply to surviving spouses of qualified airline employees. Turbotax deluxe federal e file state 2012 Airline payment. Turbotax deluxe federal e file state 2012    An airline payment is any payment of money or other property that is paid to a qualified airline employee from a commercial airline carrier. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Also, an airline payment shall not include any amount payable on the basis of the airline carrier’s future earnings or profits. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 You also do not include distributions from your Roth IRA that you roll over tax free into another Roth IRA. Turbotax deluxe federal e file state 2012 You may have to include part of other distributions in your income. Turbotax deluxe federal e file state 2012 See Ordering Rules for Distributions , later. Turbotax deluxe federal e file state 2012 Basis of distributed property. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Withdrawals of contributions by due date. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 What Are Qualified Distributions? A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Distributions of conversion and certain rollover contributions within 5-year period. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 A separate 5-year period applies to each conversion and rollover. Turbotax deluxe federal e file state 2012 See Ordering Rules for Distributions , later, to determine the recapture amount, if any. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 See What Are Qualified Distributions , earlier. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 You also must pay the additional tax on any portion of the distribution attributable to earnings on contributions. Turbotax deluxe federal e file state 2012 Other early distributions. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Exceptions. Turbotax deluxe federal e file state 2012   You may not have to pay the 10% additional tax in the following situations. Turbotax deluxe federal e file state 2012 You have reached age 59½. Turbotax deluxe federal e file state 2012 You are totally and permanently disabled. Turbotax deluxe federal e file state 2012 You are the beneficiary of a deceased IRA owner. Turbotax deluxe federal e file state 2012 You use the distribution to buy, build, or rebuild a first home. Turbotax deluxe federal e file state 2012 The distributions are part of a series of substantially equal payments. Turbotax deluxe federal e file state 2012 You have unreimbursed medical expenses that are more than 10% (or 7. Turbotax deluxe federal e file state 2012 5% if you or your spouse was born before January 2, 1949) of your adjusted gross income (defined earlier) for the year. Turbotax deluxe federal e file state 2012 You are paying medical insurance premiums during a period of unemployment. Turbotax deluxe federal e file state 2012 The distributions are not more than your qualified higher education expenses. Turbotax deluxe federal e file state 2012 The distribution is due to an IRS levy of the qualified plan. Turbotax deluxe federal e file state 2012 The distribution is a qualified reservist distribution. Turbotax deluxe federal e file state 2012 Most of these exceptions are discussed earlier in chapter 1 under Early Distributions . Turbotax deluxe federal e file state 2012 Please click here for the text description of the image. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 For these purposes, disregard the withdrawal of excess contributions and the earnings on them (discussed earlier under What if You Contribute Too Much ). Turbotax deluxe federal e file state 2012 Order the distributions as follows. Turbotax deluxe federal e file state 2012 Regular contributions. Turbotax deluxe federal e file state 2012 Conversion and rollover contributions, on a first-in, first-out basis (generally, total conversions and rollovers from the earliest year first). Turbotax deluxe federal e file state 2012 See Aggregation (grouping and adding) rules, later. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Earnings on contributions. Turbotax deluxe federal e file state 2012 Disregard rollover contributions from other Roth IRAs for this purpose. Turbotax deluxe federal e file state 2012 Aggregation (grouping and adding) rules. Turbotax deluxe federal e file state 2012   Determine the taxable amounts distributed (withdrawn), distributions, and contributions by grouping and adding them together as follows. Turbotax deluxe federal e file state 2012 Add all distributions from all your Roth IRAs during the year together. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Add this total to the total undistributed regular contributions made in prior years. Turbotax deluxe federal e file state 2012 Add all conversion and rollover contributions made during the year together. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Also disregard any amount withdrawn to correct an excess contribution (including the earnings withdrawn) for this purpose. Turbotax deluxe federal e file state 2012 Example. Turbotax deluxe federal e file state 2012 On October 15, 2009, Justin converted all $80,000 in his traditional IRA to his Roth IRA. Turbotax deluxe federal e file state 2012 His Forms 8606 from prior years show that $20,000 of the amount converted is his basis. Turbotax deluxe federal e file state 2012 Justin included $60,000 ($80,000 − $20,000) in his gross income. Turbotax deluxe federal e file state 2012 On February 23, 2013, Justin made a regular contribution of $5,000 to a Roth IRA. Turbotax deluxe federal e file state 2012 On November 8, 2013, at age 60, Justin took a $7,000 distribution from his Roth IRA. Turbotax deluxe federal e file state 2012 The first $5,000 of the distribution is a return of Justin's regular contribution and is not includible in his income. Turbotax deluxe federal e file state 2012 The next $2,000 of the distribution is not includible in income because it was included previously. Turbotax deluxe federal e file state 2012 Figuring your recapture amount. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012   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). Turbotax deluxe federal e file state 2012 The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. Turbotax deluxe federal e file state 2012 Note. Turbotax deluxe federal e file state 2012 Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. Turbotax deluxe federal e file state 2012 See the Example , earlier. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. Turbotax deluxe federal e file state 2012 Amount to include on Form 5329, line 1. Turbotax deluxe federal e file state 2012   Include on line 1 of your 2013 Form 5329 the following four amounts from the Recapture Amount—Allocation Chart that you filled out. Turbotax deluxe federal e file state 2012 The amount you allocated to line 20 of your 2013 Form 8606. Turbotax deluxe federal e file state 2012 The amount(s) allocated to your 2009 through 2013 Forms 8606, line 18, and your 2010 Form 8606, line 23. Turbotax deluxe federal e file state 2012 The amount(s) allocated to your 2009, 2011, 2012, and 2013 Forms 1040, line 16b; Forms 1040A, line 12b; and Forms 1040NR, line 17b. Turbotax deluxe federal e file state 2012 The amount from your 2013 Form 8606, line 25. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Example. Turbotax deluxe federal e file state 2012 Ishmael, age 32, opened a Roth IRA in 2000. Turbotax deluxe federal e file state 2012 He made the maximum contributions to it every year. Turbotax deluxe federal e file state 2012 In addition, he made the following transactions into his Roth IRA. Turbotax deluxe federal e file state 2012 In 2005, he converted $10,000 from his traditional IRA into his Roth IRA. Turbotax deluxe federal e file state 2012 He filled out a 2005 Form 8606 and attached it with his 2005 Form 1040. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 He entered $10,000 on line 18 of Form 8606. Turbotax deluxe federal e file state 2012 In 2011, he rolled over the entire balance of his qualified retirement plan, $20,000, into a Roth IRA when he changed jobs. Turbotax deluxe federal e file state 2012 He used a 2011 Form 1040 to file his taxes. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Box 5 of his 2011 Form 1099-R reported $0 since he did not make any after-tax contributions to the qualified retirement plan. Turbotax deluxe federal e file state 2012 He entered $20,000 on line 16b of Form 1040 since that is the taxable amount that was rolled over in 2011. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 He has not taken any early distribution from his Roth IRA before 2013. Turbotax deluxe federal e file state 2012 In 2013, he made the maximum contribution of $5,500 to his Roth IRA. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 See his filled out Illustrated Recapture Amount—Allocation Chart, later, to see how he allocated the amounts from the above transactions. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012   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). Turbotax deluxe federal e file state 2012 The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. Turbotax deluxe federal e file state 2012 Note. Turbotax deluxe federal e file state 2012 Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. Turbotax deluxe federal e file state 2012 See the Example , earlier. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Must You Withdraw or Use Assets? You are not required to take distributions from your Roth IRA at any age. Turbotax deluxe federal e file state 2012 The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs while the owner is alive. Turbotax deluxe federal e file state 2012 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 . Turbotax deluxe federal e file state 2012 Minimum distributions. Turbotax deluxe federal e file state 2012   You cannot use your Roth IRA to satisfy minimum distribution requirements for your traditional IRA. Turbotax deluxe federal e file state 2012 Nor can you use distributions from traditional IRAs for required distributions from Roth IRAs. Turbotax deluxe federal e file state 2012 See Distributions to beneficiaries , later. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 Your basis is the total amount of contributions in your Roth IRAs. Turbotax deluxe federal e file state 2012 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). Turbotax deluxe federal e file state 2012 Any such losses are added back to taxable income for purposes of calculating the alternative minimum tax. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 See When Can You Withdraw or Use Assets? in chapter 1. Turbotax deluxe federal e file state 2012 Distributions to beneficiaries. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 (See When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1. Turbotax deluxe federal e file state 2012 )   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. Turbotax deluxe federal e file state 2012 Distributions from another Roth IRA cannot be substituted for these distributions unless the other Roth IRA was inherited from the same decedent. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Combining with other Roth IRAs. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 Distributions that are not qualified distributions. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012   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. Turbotax deluxe federal e file state 2012 See Ordering Rules for Distributions , earlier in this chapter under Are Distributions Taxable. Turbotax deluxe federal e file state 2012 Example. Turbotax deluxe federal e file state 2012 When Ms. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 No distributions had been made from her IRA. Turbotax deluxe federal e file state 2012 She had no basis in the conversion contribution in 2009. Turbotax deluxe federal e file state 2012 When she established this Roth IRA (her first) in 2009, she named each of her four children as equal beneficiaries. Turbotax deluxe federal e file state 2012 Each child will receive one-fourth of each type of contribution and one-fourth of the earnings. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 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. Turbotax deluxe federal e file state 2012 If this applies to you, substitute “Roth IRA” for “traditional IRA” in that discussion. Turbotax deluxe federal e file state 2012 Prev  Up  Next   Home   More Online Publications