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Volunteer Income Tax Assistance Program

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Volunteer Income Tax Assistance Program

Volunteer income tax assistance program Index Symbols "Hours of service" limits, Individuals subject to hours of service limits. Volunteer income tax assistance program Form 2106, Hours of service limits. Volunteer income tax assistance program 50% limit on meals, 50% limit on meals. Volunteer income tax assistance program A Accountable plans, Accountable Plans, Per diem allowance more than federal rate. Volunteer income tax assistance program Accounting to employer, Accountable Plans Adequate accounting, Adequate Accounting Independent contractors, Adequate accounting. Volunteer income tax assistance program Adequate records, What Are Adequate Records? Advertising Car display, Advertising display on car. Volunteer income tax assistance program Expenses, 3 - Advertising expenses. Volunteer income tax assistance program Signs, display racks, or other promotional material to be used on recipient's business premises, Exceptions. Volunteer income tax assistance program Airline clubs, Club dues and membership fees. Volunteer income tax assistance program Allocating costs, Separating costs. Volunteer income tax assistance program , Separating costs. Volunteer income tax assistance program , Allocating between business and nonbusiness. Volunteer income tax assistance program , Allocating total cost. Volunteer income tax assistance program Allowance (see Reimbursements) Armed forces Assigned overseas, Members of the Armed Forces. Volunteer income tax assistance program Assistance (see Tax help) Associated entertainment, Associated Test Athletic clubs, Club dues and membership fees. Volunteer income tax assistance program B Basis of car, Basis. Volunteer income tax assistance program (see also Depreciation of car) Bona fide business purpose, Bona fide business purpose. Volunteer income tax assistance program Box seats at entertainment events, Skyboxes and other private luxury boxes. Volunteer income tax assistance program Business travel, Trip Primarily for Business Outside U. Volunteer income tax assistance program S. Volunteer income tax assistance program , Travel Entirely for Business or Considered Entirely for Business Business use of car, Business and personal use. Volunteer income tax assistance program More-than-50%-use test. Volunteer income tax assistance program , More-than-50%-use test. Volunteer income tax assistance program Qualified business use, Qualified business use. Volunteer income tax assistance program C Canceled checks As evidence of business expenses, Canceled check. Volunteer income tax assistance program Car expenses, Car Expenses, Reporting inclusion amounts. Volunteer income tax assistance program Actual expenses, Actual Car Expenses Allowances for, Per Diem and Car Allowances, Allowance more than the federal rate. Volunteer income tax assistance program Business and personal use, Business and personal use. Volunteer income tax assistance program Combining expenses, Car expenses. Volunteer income tax assistance program Disposition of car, Disposition of a Car Fixed and variable rate (FAVR) allowance, Fixed and variable rate (FAVR). Volunteer income tax assistance program Form 2106, Car expenses. Volunteer income tax assistance program Leasing a car, truck, or van, Leasing a Car, Reporting inclusion amounts. Volunteer income tax assistance program Mileage rate (see Standard mileage rate) Taxes paid on car, Taxes paid on your car. Volunteer income tax assistance program Traffic tickets, Fines and collateral. Volunteer income tax assistance program Car pools, Car pools. Volunteer income tax assistance program Car rentals, Reporting inclusion amounts. Volunteer income tax assistance program Form 2106, Car rentals. Volunteer income tax assistance program Car, defined, Car defined. Volunteer income tax assistance program Car, truck, or van rentals, Leasing a Car, Reporting inclusion amounts. Volunteer income tax assistance program Casualty and theft losses Cars, Casualty and theft losses. Volunteer income tax assistance program Depreciation, Casualty or theft. Volunteer income tax assistance program Charitable organizations Benefit events for, Exception for events that benefit charitable organizations. Volunteer income tax assistance program Sports events to benefit, 5 - Charitable sports event. Volunteer income tax assistance program Club dues, Club dues and membership fees. Volunteer income tax assistance program Commuting expenses, Commuting expenses. Volunteer income tax assistance program Conventions, Conventions, Meetings at conventions. Volunteer income tax assistance program Country clubs, Club dues and membership fees. Volunteer income tax assistance program Cruise ships, Cruise Ships D Daily business mileage and expense log (Table 6-2), Table 5-2. Volunteer income tax assistance program Daily Business Mileage and Expense Log Name: Depreciation of car, Depreciation and section 179 deductions. Volunteer income tax assistance program (see also Section 179 deductions) Adjustment for using standard mileage rate, Depreciation adjustment when you used the standard mileage rate. Volunteer income tax assistance program Basis, Basis. Volunteer income tax assistance program Sales taxes, Sales taxes. Volunteer income tax assistance program Unrecovered basis, How to treat unrecovered basis. Volunteer income tax assistance program Casualty or theft, effect, Casualty or theft. Volunteer income tax assistance program Deduction, Depreciation and section 179 deductions. Volunteer income tax assistance program , Depreciation deduction for the year of disposition. Volunteer income tax assistance program Excess depreciation, Excess depreciation. Volunteer income tax assistance program Modified Accelerated Cost Recovery System (MACRS), Modified Accelerated Cost Recovery System (MACRS). Volunteer income tax assistance program Trade-in, effect, Car trade-in. Volunteer income tax assistance program , Trade-in. Volunteer income tax assistance program Trucks and vans, Trucks and vans. Volunteer income tax assistance program Depreciation of Car Section 179 deduction, Section 179 deduction. Volunteer income tax assistance program Directly-related entertainment, Directly-Related Test Disabled employees Impairment-related work expenses, Impairment-Related Work Expenses of Disabled Employees Documentary evidence, Documentary evidence. Volunteer income tax assistance program E Employer-provided vehicles, Employer-provided vehicle. Volunteer income tax assistance program Reporting requirements, Vehicle Provided by Your Employer Entertainment expenses, Entertainment, Individuals subject to hours of service limits. Volunteer income tax assistance program , Gift or entertainment. Volunteer income tax assistance program 50% limit, Directly before or after business discussion. Volunteer income tax assistance program Determination of applicability (Figure A), 50% Limit Associated test, Associated Test Deductible, What Entertainment Expenses Are Deductible?, Expenses for spouses. Volunteer income tax assistance program Summary (Table 2-1), Exception for events that benefit charitable organizations. Volunteer income tax assistance program Directly-related test, Directly-Related Test Entertainment, defined, Entertainment. Volunteer income tax assistance program Form 2106, Meal and entertainment expenses. Volunteer income tax assistance program Tickets (see Tickets) Entertainment facilities Expenses for use of, Entertainment facilities. Volunteer income tax assistance program Estimates of expenses, How To Prove Expenses Exceptions to the 50% Limit, Exceptions to the 50% Limit Excess reimbursements (see Reimbursements) Extravagant expenses, Lavish or extravagant. Volunteer income tax assistance program , Lavish or extravagant expenses. Volunteer income tax assistance program F Fair market value of car, Fair market value. Volunteer income tax assistance program Farmers Form 1040, Schedule F, Self-employed. Volunteer income tax assistance program Federal crime investigations or prosecutions Federal employees engaged in, Exception for federal crime investigations or prosecutions. Volunteer income tax assistance program Federal rate for per diem, Standard Meal Allowance, The federal rate. Volunteer income tax assistance program Fee-basis officials, Officials Paid on a Fee Basis Fees you pay, Parking fees. Volunteer income tax assistance program Fixed and variable rate (FAVR) allowance, Fixed and variable rate (FAVR). Volunteer income tax assistance program Form 1040, Schedule C, Self-employed. Volunteer income tax assistance program Form 1040, Schedule F, Self-employed. Volunteer income tax assistance program Form 2106, How to choose. Volunteer income tax assistance program , Employees. Volunteer income tax assistance program , Full value included in your income. Volunteer income tax assistance program , Reporting your expenses under a nonaccountable plan. Volunteer income tax assistance program , Completing Forms 2106 and 2106-EZ Form 2106-EZ, Form 2106-EZ. Volunteer income tax assistance program Form 4562, Self-employed. Volunteer income tax assistance program Form 4797, Excess depreciation. Volunteer income tax assistance program Form W-2 Employer-provided vehicles, Value reported on Form W-2. Volunteer income tax assistance program Reimbursement of personal expenses, Reimbursement for personal expenses. Volunteer income tax assistance program Statutory employees, Statutory employees. Volunteer income tax assistance program Free tax services, Free help with your tax return. Volunteer income tax assistance program G Gifts, Gift or entertainment. Volunteer income tax assistance program , Gifts $25 limit, $25 limit. Volunteer income tax assistance program Combining for recordkeeping purposes, Gift expenses. Volunteer income tax assistance program Reporting requirements, Gifts. Volunteer income tax assistance program Golf clubs, Club dues and membership fees. Volunteer income tax assistance program H Hauling tools, Hauling tools or instruments. Volunteer income tax assistance program Help (see Tax help) High-low method Introduction, High-low method. Volunteer income tax assistance program Transition rules, High-low method. Volunteer income tax assistance program High-low rate method, High-low rate. Volunteer income tax assistance program Home office, Office in the home. Volunteer income tax assistance program Hotel clubs, Club dues and membership fees. Volunteer income tax assistance program I Impairment-related work expenses, Impairment-Related Work Expenses of Disabled Employees Incidental expenses Defined, Incidental expenses. Volunteer income tax assistance program Gifts, Incidental costs. Volunteer income tax assistance program No meals, incidentals only, Incidental-expenses-only method. Volunteer income tax assistance program Income-producing property, Income-producing property. Volunteer income tax assistance program Incomplete records, What If I Have Incomplete Records? Indefinite job assignment, Temporary assignment vs. Volunteer income tax assistance program indefinite assignment. Volunteer income tax assistance program Independent contractors, Rules for Independent Contractors and Clients Interest on car loans, Interest on car loans. Volunteer income tax assistance program Itinerants, Tax Home L Lavish or extravagant expenses, Lavish or extravagant. Volunteer income tax assistance program , Lavish or extravagant expenses. Volunteer income tax assistance program Leasing a car, truck, or van, Leasing a Car, Reporting inclusion amounts. Volunteer income tax assistance program Luxury private boxes at entertainment events, Skyboxes and other private luxury boxes. Volunteer income tax assistance program Luxury water travel, Luxury Water Travel M MACRS (Modified Accelerated Cost Recovery System), Modified Accelerated Cost Recovery System (MACRS). Volunteer income tax assistance program 2011 chart (Table 4-1), Table 4-1. Volunteer income tax assistance program 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. Volunteer income tax assistance program ) Main place of business or work, Main place of business or work. Volunteer income tax assistance program Married taxpayers Performing artists, Special rules for married persons. Volunteer income tax assistance program Meal expenses, Meals 50% limit, 50% Limit Determination of applicability (Figure A), 50% Limit Exceptions, Exceptions to the 50% Limit Actual cost method, Actual Cost Form 2106, Meal and entertainment expenses. Volunteer income tax assistance program Major cities with higher allowances, Amount of standard meal allowance. Volunteer income tax assistance program Standard meal allowance, Standard Meal Allowance, Who can use the standard meal allowance. Volunteer income tax assistance program , The standard meal allowance. Volunteer income tax assistance program Meals, entertainment-related, A meal as a form of entertainment. Volunteer income tax assistance program Mileage rate (see Standard mileage rate) Military (see Armed forces) Missing children, photographs of, Reminder Modified Accelerated Cost Recovery System (MACRS), Modified Accelerated Cost Recovery System (MACRS). Volunteer income tax assistance program 2011 chart (Table 4-1), Table 4-1. Volunteer income tax assistance program 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. Volunteer income tax assistance program ) N Nonaccountable plans, Nonaccountable Plans O Office in the home, Office in the home. Volunteer income tax assistance program Officials paid on fee basis, Officials Paid on a Fee Basis Overseas travel Conventions, Conventions Held Outside the North American Area Meal allowance, Standard meal allowance for areas outside the continental United States. Volunteer income tax assistance program Part of trip outside U. Volunteer income tax assistance program S. Volunteer income tax assistance program , Part of Trip Outside the United States P Parking fees, Parking fees. Volunteer income tax assistance program , Parking fees and tolls. Volunteer income tax assistance program Per diem allowances, Per Diem and Car Allowances, Allowance more than the federal rate. Volunteer income tax assistance program Defined, Reimbursement, allowance, or advance. Volunteer income tax assistance program Federal rate for, The federal rate. Volunteer income tax assistance program Per diem rates High-cost localities, High-low method. Volunteer income tax assistance program High-low method, High-low method. Volunteer income tax assistance program Regular federal method, Regular federal per diem rate method. Volunteer income tax assistance program Standard rate for unlisted localities, High-low method. Volunteer income tax assistance program , Regular federal per diem rate method. Volunteer income tax assistance program Transition rules, High-low method. Volunteer income tax assistance program , Federal per diem rate method. Volunteer income tax assistance program Performing artists, Expenses of Certain Performing Artists Personal property taxes, Personal property taxes. Volunteer income tax assistance program , Taxes paid on your car. Volunteer income tax assistance program Personal trips, Trip Primarily for Personal Reasons Outside U. Volunteer income tax assistance program S. Volunteer income tax assistance program , Travel Primarily for Personal Reasons Placed in service, cars, Placed in service. Volunteer income tax assistance program Probationary work period, Probationary work period. Volunteer income tax assistance program Proving business purpose, Proving business purpose. Volunteer income tax assistance program Public transportation Outside of U. Volunteer income tax assistance program S. Volunteer income tax assistance program travel, Public transportation. Volunteer income tax assistance program Publications (see Tax help) R Recordkeeping requirements, Recordkeeping, Examples of Records Adequate records, What Are Adequate Records? Daily business mileage and expense log (Table 6-2), Table 5-2. Volunteer income tax assistance program Daily Business Mileage and Expense Log Name: Destroyed records, Destroyed records. Volunteer income tax assistance program How to prove expenses (Table 5-1), Table 5-1. Volunteer income tax assistance program How To Prove Certain Business Expenses Incomplete records, What If I Have Incomplete Records? Reimbursed expenses, Reimbursed for expenses. Volunteer income tax assistance program Sampling to prove expenses, Sampling. Volunteer income tax assistance program Separating and combining expenses, Separating and Combining Expenses, If your return is examined. Volunteer income tax assistance program Three-year period of retention, How Long To Keep Records and Receipts Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Regular federal method Introduction, Regular federal per diem rate method. Volunteer income tax assistance program Transition rules, Federal per diem rate method. Volunteer income tax assistance program Reimbursements, Less than full value included in your income. Volunteer income tax assistance program , Contractor does not adequately account. Volunteer income tax assistance program Accountable plans, Accountable Plans Excess, Returning Excess Reimbursements, Nonaccountable Plans Form 2106, Reimbursements. Volunteer income tax assistance program Nonaccountable plans, Nonaccountable Plans Nondeductible expenses, Reimbursement of nondeductible expenses. Volunteer income tax assistance program Personal expenses, Reimbursement for personal expenses. Volunteer income tax assistance program Recordkeeping, Reimbursed for expenses. Volunteer income tax assistance program Reporting (Table 6-1), Table 6-1. Volunteer income tax assistance program Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements Unclaimed, Where To Report Reporting requirements, How To Report Per diem or car allowance, Reporting your expenses with a per diem or car allowance. Volunteer income tax assistance program Reimbursements, Reimbursements, Contractor does not adequately account. Volunteer income tax assistance program Reservists Transportation expenses, Armed Forces reservists. Volunteer income tax assistance program Traveling more than 100 miles from home, Armed Forces Reservists Traveling More Than 100 Miles From Home Returning excess reimbursements, Returning Excess Reimbursements Rural mail carriers, Rural mail carriers. Volunteer income tax assistance program S Section 179 deduction Amended return, How to choose. Volunteer income tax assistance program Deduction, Section 179 Deduction Limits, Limits. Volunteer income tax assistance program Self-employed persons, 2 - Self-employed. Volunteer income tax assistance program Reporting requirements, Self-employed. Volunteer income tax assistance program Skyboxes, Skyboxes and other private luxury boxes. Volunteer income tax assistance program Spouse, expenses for, Travel expenses for another individual. Volunteer income tax assistance program , Expenses for spouses. Volunteer income tax assistance program Standard meal allowance, Standard Meal Allowance, Who can use the standard meal allowance. Volunteer income tax assistance program , The standard meal allowance. Volunteer income tax assistance program Standard mileage rate, What's New, Standard Mileage Rate, The standard mileage rate. Volunteer income tax assistance program Depreciation adjustment for using, Depreciation adjustment when you used the standard mileage rate. Volunteer income tax assistance program Form 2106, Standard mileage rate. Volunteer income tax assistance program Statutory employees, Statutory employees. Volunteer income tax assistance program T Tables and figures 50% limit determination (Figure A), 50% Limit Daily business mileage and expense log (Table 6-2), Table 5-2. Volunteer income tax assistance program Daily Business Mileage and Expense Log Name: Entertainment expenses, determination of deductibility (Table 2-1), Table 2-1. Volunteer income tax assistance program When Are Entertainment Expenses Deductible? Maximum depreciation deduction for cars table, Maximum Depreciation Deduction for Cars Modified Accelerated Cost Recovery System (MACRS) 2011 chart (Table 4-1), Table 4-1. Volunteer income tax assistance program 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. Volunteer income tax assistance program ) Proving expenses (Table 5-1), Table 5-1. Volunteer income tax assistance program How To Prove Certain Business Expenses Reporting reimbursements (Table 6-1), Table 6-1. Volunteer income tax assistance program Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements Transportation expenses, determination of deductibility (Figure B), Gift or entertainment. Volunteer income tax assistance program , Illustration of transportation expenses. Volunteer income tax assistance program Travel expenses, determination of deductibility (Table 1-1), Table 1-1. Volunteer income tax assistance program Travel Expenses You Can Deduct Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Tax help, How To Get Tax Help Tax home, determination of, Tax Home Temporary job assignments, Temporary Assignment or Job Temporary work location, Temporary work location. Volunteer income tax assistance program Tickets, Entertainment tickets. Volunteer income tax assistance program , Gift or entertainment. Volunteer income tax assistance program Season or series tickets, Season or series tickets. Volunteer income tax assistance program Traffic violations, Fines and collateral. Volunteer income tax assistance program Tools Hauling tools, Hauling tools or instruments. Volunteer income tax assistance program Trade association meetings, Trade association meetings. Volunteer income tax assistance program Trade-in of car, Car trade-in. Volunteer income tax assistance program , Trade-in. Volunteer income tax assistance program Traffic tickets, Fines and collateral. Volunteer income tax assistance program Transients, Tax Home Transition rules, Transition Rules Example High-low method, High-low method. Volunteer income tax assistance program High-low method, High-low method. Volunteer income tax assistance program Regular federal method, Federal per diem rate method. Volunteer income tax assistance program Transportation expenses, Transportation, Depreciation deduction for the year of disposition. Volunteer income tax assistance program Car expenses, Car Expenses, Reporting inclusion amounts. Volunteer income tax assistance program Deductible (Figure B), Gift or entertainment. Volunteer income tax assistance program , Illustration of transportation expenses. Volunteer income tax assistance program five or more cars, Five or more cars. Volunteer income tax assistance program Form 2106, Transportation expenses. Volunteer income tax assistance program Transportation workers, Special rate for transportation workers. Volunteer income tax assistance program , Individuals subject to hours of service limits. Volunteer income tax assistance program Travel advance, Reimbursement, allowance, or advance. Volunteer income tax assistance program , Travel advance. Volunteer income tax assistance program (see also Reimbursements) Travel expenses, Travel, Cruise Ships Another individual accompanying taxpayer, Travel expenses for another individual. Volunteer income tax assistance program Away from home, Traveling Away From Home, Tax Home Deductible, What Travel Expenses Are Deductible?, Cruise Ships Summary of (Table 1-1), Table 1-1. Volunteer income tax assistance program Travel Expenses You Can Deduct Defined, Travel expenses defined. Volunteer income tax assistance program Going home on days off, Going home on days off. Volunteer income tax assistance program In U. Volunteer income tax assistance program S. Volunteer income tax assistance program , Travel in the United States Lodging, Standard Meal Allowance Luxury water travel, Luxury Water Travel Outside U. Volunteer income tax assistance program S. Volunteer income tax assistance program , Travel Outside the United States Travel to family home, Tax Home Different From Family Home Trucks and vans Depreciation, Trucks and vans. Volunteer income tax assistance program Transportation workers, Individuals subject to hours of service limits. Volunteer income tax assistance program Transportation workers' expenses, Special rate for transportation workers. Volunteer income tax assistance program Two places of work, Two places of work. Volunteer income tax assistance program U Unclaimed reimbursements, Where To Report Unions Trips from union hall to place of work, Union members' trips from a union hall. Volunteer income tax assistance program Unrecovered basis of car, How to treat unrecovered basis. Volunteer income tax assistance program V Volunteers, Volunteers. Volunteer income tax assistance program W Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Prev  Up     Home   More Online Publications
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IRS Seeks Volunteers for Taxpayer Advocacy Panel

IR-2014-26, March 10, 2014

WASHINGTON — The Internal Revenue Service seeks civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns, and makes recommendations for improving IRS services.

The TAP provides a forum for taxpayers to raise concerns about IRS service and offer suggestions for improvement. The TAP reports annually to the Secretary of the Treasury, the IRS Commissioner and the National Taxpayer Advocate. The Office of the Taxpayer Advocate is an independent organization within the IRS and provides oversight of the TAP.

“In trying to comply with an increasingly complex tax system, taxpayers may find they need different services than the IRS is currently providing,” said Nina E. Olson, National Taxpayer Advocate. “The TAP is vital because it provides the IRS with the taxpayers’ perspective as well as recommendations for improvement. This helps the IRS deliver the best possible service to assist taxpayers in meeting their tax obligations.”  

The TAP includes members from all 50 states, the District of Columbia and Puerto Rico. Each member is appointed to represent the interests of taxpayers in his or her geographic location as well as taxpayers as a whole.

The TAP is also seeking to include at least one additional member to represent international taxpayers. For these purposes, “international taxpayers” are broadly defined to include U.S. citizens working, living, or doing business abroad or in a U.S. territory. The new international member will not be required to attend any face-to-face meetings.

To be a member of the TAP you must be a U.S. citizen, be current with your federal tax obligations, be able to commit 200 to 300 hours during the year and pass an FBI criminal background check. New TAP members will serve a three-year term starting in December 2014. Applicants chosen as alternate members will be considered to fill any vacancies that open in their areas during the next three years.

The TAP is seeking members in the following locations: Alaska, Arizona, California, Delaware, Idaho, Indiana, Kansas, Kentucky, Massachusetts, Minnesota, Montana, Nevada, New Jersey, New York, Oregon, Pennsylvania, Utah, Vermont, Virginia and International.

The panel needs alternates for the District of Columbia, Florida, Georgia, Illinois, Louisiana, Maryland, North Dakota, Puerto Rico, Rhode Island, South Carolina and West Virginia.

Federal advisory committees are required to have a fairly balanced membership in terms of the points of view represented. As such, candidates from underrepresented groups, including but not limited to U.S. taxpayers living abroad, Native Americans, and non-tax practitioners, are encouraged to apply.

Applications for the TAP will be accepted through April 11, 2014. Applications are available online at www.improveirs.org. For additional information about the TAP or the application process, please call 888-912-1227 (a toll-free call) and select prompt number five. Callers who are outside of the U.S. and U.S. territories should call 954-423-7973 (not a toll-free call). You may also contact the TAP staff at taxpayeradvocacypanel@irs.gov for assistance.

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Page Last Reviewed or Updated: 10-Mar-2014

The Volunteer Income Tax Assistance Program

Volunteer income tax assistance program 1. Volunteer income tax assistance program   Traditional IRAs Table of Contents What's New for 2013 What's New for 2014 Introduction Who Can Open a Traditional IRA?What Is Compensation? When Can a Traditional IRA Be Opened? How Can a Traditional IRA Be Opened?Individual Retirement Account Individual Retirement Annuity Individual Retirement Bonds Simplified Employee Pension (SEP) Employer and Employee Association Trust Accounts Required Disclosures How Much Can Be Contributed?Limit. Volunteer income tax assistance program When repayment contributions can be made. Volunteer income tax assistance program No deduction. Volunteer income tax assistance program Reserve component. Volunteer income tax assistance program Figuring your IRA deduction. Volunteer income tax assistance program Reporting the repayment. Volunteer income tax assistance program Example. Volunteer income tax assistance program General Limit Kay Bailey Hutchison Spousal IRA Limit Filing Status Less Than Maximum Contributions More Than Maximum Contributions When Can Contributions Be Made? How Much Can You Deduct?Kay Bailey Hutchison Spousal IRA. Volunteer income tax assistance program Are You Covered by an Employer Plan? Limit if Covered by Employer Plan Reporting Deductible Contributions Nondeductible Contributions Examples — Worksheet for Reduced IRA Deduction for 2013 What if You Inherit an IRA?Treating it as your own. Volunteer income tax assistance program Can You Move Retirement Plan Assets?Transfers to Roth IRAs from other retirement plans. Volunteer income tax assistance program Trustee-to-Trustee Transfer Rollovers Transfers Incident To Divorce Converting From Any Traditional IRA Into a Roth IRA Recharacterizations When Can You Withdraw or Use Assets?Contributions Returned Before Due Date of Return When Must You Withdraw Assets? (Required Minimum Distributions)IRA Owners IRA Beneficiaries Which Table Do You Use To Determine Your Required Minimum Distribution? What Age(s) Do You Use With the Table(s)? Miscellaneous Rules for Required Minimum Distributions Are Distributions Taxable?January 2013 QCDs treated as made in 2012. Volunteer income tax assistance program 2013 Reporting. Volunteer income tax assistance program Additional reporting requirements if you made the election to treat a January 2013 QCD as made in 2012. Volunteer income tax assistance program One-time transfer. Volunteer income tax assistance program Testing period rules apply. Volunteer income tax assistance program More information. Volunteer income tax assistance program Distributions Fully or Partly Taxable Figuring the Nontaxable and Taxable Amounts Recognizing Losses on Traditional IRA Investments Other Special IRA Distribution Situations Reporting and Withholding Requirements for Taxable Amounts What Acts Result in Penalties or Additional Taxes?Prohibited Transactions Investment in Collectibles Excess Contributions Early Distributions Excess Accumulations (Insufficient Distributions) Reporting Additional Taxes What's New for 2013 Traditional IRA contribution and deduction limit. Volunteer income tax assistance program  The contribution limit to your traditional IRA for 2013 will be increased to the smaller of the following amounts: $5,500, or Your taxable compensation for the year. Volunteer income tax assistance program If you were age 50 or older before 2014, the most that can be contributed to your traditional IRA for 2013 will be the smaller of the following amounts: $6,500, or Your taxable compensation for the year. Volunteer income tax assistance program For more information, see How Much Can Be Contributed? in this chapter. Volunteer income tax assistance program Modified AGI limit for traditional IRA contributions increased. Volunteer income tax assistance program  For 2013, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $95,000 but less than $115,000 for a married couple filing a joint return or a qualifying widow(er), More than $59,000 but less than $69,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Volunteer income tax assistance program If you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $178,000 but less than $188,000. Volunteer income tax assistance program If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Volunteer income tax assistance program See How Much Can You Deduct? in this chapter. Volunteer income tax assistance program Net Investment Income Tax. Volunteer income tax assistance program  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). Volunteer income tax assistance program However, these distributions are taken into account when determining the modified adjusted gross income threshold. Volunteer income tax assistance program Distributions from a nonqualified retirement plan are included in net investment income. Volunteer income tax assistance program See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Volunteer income tax assistance program What's New for 2014 Modified AGI limit for traditional IRA contributions increased. Volunteer income tax assistance program  For 2014, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $96,000 but less than $116,000 for a married couple filing a joint return or a qualifying widow(er), More than $60,000 but less than $70,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Volunteer income tax assistance program If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Volunteer income tax assistance program If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. Volunteer income tax assistance program Introduction This chapter discusses the original IRA. Volunteer income tax assistance program In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Volunteer income tax assistance program ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Volunteer income tax assistance program The following are two advantages of a traditional IRA: You may be able to deduct some or all of your contributions to it, depending on your circumstances. Volunteer income tax assistance program Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Volunteer income tax assistance program Who Can Open a Traditional IRA? You can open and make contributions to a traditional IRA if: You (or, if you file a joint return, your spouse) received taxable compensation during the year, and You were not age 70½ by the end of the year. Volunteer income tax assistance program You can have a traditional IRA whether or not you are covered by any other retirement plan. Volunteer income tax assistance program However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan. Volunteer income tax assistance program See How Much Can You Deduct , later. Volunteer income tax assistance program Both spouses have compensation. Volunteer income tax assistance program   If both you and your spouse have compensation and are under age 70½, each of you can open an IRA. Volunteer income tax assistance program You cannot both participate in the same IRA. Volunteer income tax assistance program If you file a joint return, only one of you needs to have compensation. Volunteer income tax assistance program What Is Compensation? Generally, compensation is what you earn from working. Volunteer income tax assistance program For a summary of what compensation does and does not include, see Table 1-1. Volunteer income tax assistance program Compensation includes all of the items discussed next (even if you have more than one type). Volunteer income tax assistance program Wages, salaries, etc. Volunteer income tax assistance program   Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. Volunteer income tax assistance program The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2, Wage and Tax Statement, provided that amount is reduced by any amount properly shown in box 11 (Nonqualified plans). Volunteer income tax assistance program Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2. Volunteer income tax assistance program Commissions. Volunteer income tax assistance program   An amount you receive that is a percentage of profits or sales price is compensation. Volunteer income tax assistance program Self-employment income. Volunteer income tax assistance program   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deduction allowed for the deductible part of your self-employment taxes. Volunteer income tax assistance program   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Volunteer income tax assistance program Self-employment loss. Volunteer income tax assistance program   If you have a net loss from self-employment, do not subtract the loss from your salaries or wages when figuring your total compensation. Volunteer income tax assistance program Alimony and separate maintenance. Volunteer income tax assistance program   For IRA purposes, compensation includes any taxable alimony and separate maintenance payments you receive under a decree of divorce or separate maintenance. Volunteer income tax assistance program Nontaxable combat pay. Volunteer income tax assistance program   If you were a member of the U. Volunteer income tax assistance program S. Volunteer income tax assistance program Armed Forces, compensation includes any nontaxable combat pay you received. Volunteer income tax assistance program This amount should be reported in box 12 of your 2013 Form W-2 with code Q. Volunteer income tax assistance program Table 1-1. Volunteer income tax assistance program Compensation for Purposes of an IRA Includes . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program Does not include . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program   earnings and profits from property. Volunteer income tax assistance program wages, salaries, etc. Volunteer income tax assistance program     interest and dividend income. Volunteer income tax assistance program commissions. Volunteer income tax assistance program     pension or annuity income. Volunteer income tax assistance program self-employment income. Volunteer income tax assistance program     deferred compensation. Volunteer income tax assistance program alimony and separate maintenance. Volunteer income tax assistance program     income from certain  partnerships. Volunteer income tax assistance program nontaxable combat pay. Volunteer income tax assistance program     any amounts you exclude from income. Volunteer income tax assistance program     What Is Not Compensation? Compensation does not include any of the following items. Volunteer income tax assistance program Earnings and profits from property, such as rental income, interest income, and dividend income. Volunteer income tax assistance program Pension or annuity income. Volunteer income tax assistance program Deferred compensation received (compensation payments postponed from a past year). Volunteer income tax assistance program Income from a partnership for which you do not provide services that are a material income-producing factor. Volunteer income tax assistance program Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Volunteer income tax assistance program Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Volunteer income tax assistance program When Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Volunteer income tax assistance program However, the time for making contributions for any year is limited. Volunteer income tax assistance program See When Can Contributions Be Made , later. Volunteer income tax assistance program How Can a Traditional IRA Be Opened? You can open different kinds of IRAs with a variety of organizations. Volunteer income tax assistance program You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Volunteer income tax assistance program You can also open an IRA through your stockbroker. Volunteer income tax assistance program Any IRA must meet Internal Revenue Code requirements. Volunteer income tax assistance program The requirements for the various arrangements are discussed below. Volunteer income tax assistance program Kinds of traditional IRAs. Volunteer income tax assistance program   Your traditional IRA can be an individual retirement account or annuity. Volunteer income tax assistance program It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Volunteer income tax assistance program Individual Retirement Account An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of you or your beneficiaries. Volunteer income tax assistance program The account is created by a written document. Volunteer income tax assistance program The document must show that the account meets all of the following requirements. Volunteer income tax assistance program The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian. Volunteer income tax assistance program The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. Volunteer income tax assistance program However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount. Volunteer income tax assistance program Contributions, except for rollover contributions, must be in cash. Volunteer income tax assistance program See Rollovers , later. Volunteer income tax assistance program You must have a nonforfeitable right to the amount at all times. Volunteer income tax assistance program Money in your account cannot be used to buy a life insurance policy. Volunteer income tax assistance program Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund. Volunteer income tax assistance program You must start receiving distributions by April 1 of the year following the year in which you reach age 70½. Volunteer income tax assistance program See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Volunteer income tax assistance program Individual Retirement Annuity You can open an individual retirement annuity by purchasing an annuity contract or an endowment contract from a life insurance company. Volunteer income tax assistance program An individual retirement annuity must be issued in your name as the owner, and either you or your beneficiaries who survive you are the only ones who can receive the benefits or payments. Volunteer income tax assistance program An individual retirement annuity must meet all the following requirements. Volunteer income tax assistance program Your entire interest in the contract must be nonforfeitable. Volunteer income tax assistance program The contract must provide that you cannot transfer any portion of it to any person other than the issuer. Volunteer income tax assistance program There must be flexible premiums so that if your compensation changes, your payment can also change. Volunteer income tax assistance program This provision applies to contracts issued after November 6, 1978. Volunteer income tax assistance program The contract must provide that contributions cannot be more than the deductible amount for an IRA for the year, and that you must use any refunded premiums to pay for future premiums or to buy more benefits before the end of the calendar year after the year in which you receive the refund. Volunteer income tax assistance program Distributions must begin by April 1 of the year following the year in which you reach age 70½. Volunteer income tax assistance program See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Volunteer income tax assistance program Individual Retirement Bonds The sale of individual retirement bonds issued by the federal government was suspended after April 30, 1982. Volunteer income tax assistance program The bonds have the following features. Volunteer income tax assistance program They stop earning interest when you reach age 70½. Volunteer income tax assistance program If you die, interest will stop 5 years after your death, or on the date you would have reached age 70½, whichever is earlier. Volunteer income tax assistance program You cannot transfer the bonds. Volunteer income tax assistance program If you cash (redeem) the bonds before the year in which you reach age 59½, you may be subject to a 10% additional tax. Volunteer income tax assistance program See Age 59½ Rule under Early Distributions, later. Volunteer income tax assistance program You can roll over redemption proceeds into IRAs. Volunteer income tax assistance program Simplified Employee Pension (SEP) A simplified employee pension (SEP) is a written arrangement that allows your employer to make deductible contributions to a traditional IRA (a SEP IRA) set up for you to receive such contributions. Volunteer income tax assistance program Generally, distributions from SEP IRAs are subject to the withdrawal and tax rules that apply to traditional IRAs. Volunteer income tax assistance program See Publication 560 for more information about SEPs. Volunteer income tax assistance program Employer and Employee Association Trust Accounts Your employer or your labor union or other employee association can set up a trust to provide individual retirement accounts for employees or members. Volunteer income tax assistance program The requirements for individual retirement accounts apply to these traditional IRAs. Volunteer income tax assistance program Required Disclosures The trustee or issuer (sometimes called the sponsor) of your traditional IRA generally must give you a disclosure statement at least 7 days before you open your IRA. Volunteer income tax assistance program However, the sponsor does not have to give you the statement until the date you open (or purchase, if earlier) your IRA, provided you are given at least 7 days from that date to revoke the IRA. Volunteer income tax assistance program The disclosure statement must explain certain items in plain language. Volunteer income tax assistance program For example, the statement should explain when and how you can revoke the IRA, and include the name, address, and telephone number of the person to receive the notice of cancellation. Volunteer income tax assistance program This explanation must appear at the beginning of the disclosure statement. Volunteer income tax assistance program If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. Volunteer income tax assistance program The sponsor must report on the appropriate IRS forms both your contribution to the IRA (unless it was made by a trustee-to-trustee transfer) and the amount returned to you. Volunteer income tax assistance program These requirements apply to all sponsors. Volunteer income tax assistance program How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Volunteer income tax assistance program These limits and rules are explained below. Volunteer income tax assistance program Community property laws. Volunteer income tax assistance program   Except as discussed later under Kay Bailey Hutchison Spousal IRA Limit , each spouse figures his or her limit separately, using his or her own compensation. Volunteer income tax assistance program This is the rule even in states with community property laws. Volunteer income tax assistance program Brokers' commissions. Volunteer income tax assistance program   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Volunteer income tax assistance program For information about whether you can deduct brokers' commissions, see Brokers' commissions , later, under How Much Can You Deduct. Volunteer income tax assistance program Trustees' fees. Volunteer income tax assistance program   Trustees' administrative fees are not subject to the contribution limit. Volunteer income tax assistance program For information about whether you can deduct trustees' fees, see Trustees' fees , later, under How Much Can You Deduct. Volunteer income tax assistance program Qualified reservist repayments. Volunteer income tax assistance program   If you were a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined later under Early Distributions) you received. Volunteer income tax assistance program You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. Volunteer income tax assistance program To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or a similar arrangement. Volunteer income tax assistance program Limit. Volunteer income tax assistance program   Your qualified reservist repayments cannot be more than your qualified reservist distributions, explained under Early Distributions , later. Volunteer income tax assistance program When repayment contributions can be made. Volunteer income tax assistance program   You cannot make these repayment contributions later than the date that is 2 years after your active duty period ends. Volunteer income tax assistance program No deduction. Volunteer income tax assistance program   You cannot deduct qualified reservist repayments. Volunteer income tax assistance program Reserve component. Volunteer income tax assistance program   The term “reserve component” means the: Army National Guard of the United States, Army Reserve, Naval Reserve, Marine Corps Reserve, Air National Guard of the United States, Air Force Reserve, Coast Guard Reserve, or Reserve Corps of the Public Health Service. Volunteer income tax assistance program Figuring your IRA deduction. Volunteer income tax assistance program   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. Volunteer income tax assistance program Reporting the repayment. Volunteer income tax assistance program   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. Volunteer income tax assistance program Example. Volunteer income tax assistance program   In 2013, your IRA contribution limit is $5,500. Volunteer income tax assistance program However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. Volunteer income tax assistance program You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). Volunteer income tax assistance program In an earlier year you received a $3,000 qualified reservist distribution, which you would like to repay this year. Volunteer income tax assistance program   For 2013, you can contribute a total of $8,500 to your IRA. Volunteer income tax assistance program This is made up of the maximum deductible contribution of $3,500; a nondeductible contribution of $2,000; and a $3,000 qualified reservist repayment. Volunteer income tax assistance program You contribute the maximum allowable for the year. Volunteer income tax assistance program Since you are making a nondeductible contribution ($2,000) and a qualified reservist repayment ($3,000), you must file Form 8606 with your return and include $5,000 ($2,000 + $3,000) on line 1 of Form 8606. Volunteer income tax assistance program The qualified reservist repayment is not deductible. Volunteer income tax assistance program Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Volunteer income tax assistance program See chapter 2 for information about Roth IRAs. Volunteer income tax assistance program General Limit For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year. Volunteer income tax assistance program Note. Volunteer income tax assistance program This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Volunteer income tax assistance program This is the most that can be contributed regardless of whether the contributions are to one or more traditional IRAs or whether all or part of the contributions are nondeductible. Volunteer income tax assistance program (See Nondeductible Contributions , later. Volunteer income tax assistance program ) Qualified reservist repayments do not affect this limit. Volunteer income tax assistance program Examples. Volunteer income tax assistance program George, who is 34 years old and single, earns $24,000 in 2013. Volunteer income tax assistance program His IRA contributions for 2013 are limited to $5,500. Volunteer income tax assistance program Danny, an unmarried college student working part time, earns $3,500 in 2013. Volunteer income tax assistance program His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Volunteer income tax assistance program More than one IRA. Volunteer income tax assistance program   If you have more than one IRA, the limit applies to the total contributions made on your behalf to all your traditional IRAs for the year. Volunteer income tax assistance program Annuity or endowment contracts. Volunteer income tax assistance program   If you invest in an annuity or endowment contract under an individual retirement annuity, no more than $5,500 ($6,500 if you are age 50 or older) can be contributed toward its cost for the tax year, including the cost of life insurance coverage. Volunteer income tax assistance program If more than this amount is contributed, the annuity or endowment contract is disqualified. Volunteer income tax assistance program Kay Bailey Hutchison Spousal IRA Limit For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts: $5,500 ($6,500 if you are age 50 or older), or The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Volunteer income tax assistance program Your spouse's IRA contribution for the year to a traditional IRA. Volunteer income tax assistance program Any contributions for the year to a Roth IRA on behalf of your spouse. Volunteer income tax assistance program This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is age 50 or older or $13,000 if both of you are age 50 or older). Volunteer income tax assistance program Note. Volunteer income tax assistance program This traditional IRA limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Volunteer income tax assistance program Example. Volunteer income tax assistance program Kristin, a full-time student with no taxable compensation, marries Carl during the year. Volunteer income tax assistance program Neither of them was age 50 by the end of 2013. Volunteer income tax assistance program For the year, Carl has taxable compensation of $30,000. Volunteer income tax assistance program He plans to contribute (and deduct) $5,500 to a traditional IRA. Volunteer income tax assistance program If he and Kristin file a joint return, each can contribute $5,500 to a traditional IRA. Volunteer income tax assistance program This is because Kristin, who has no compensation, can add Carl's compensation, reduced by the amount of his IRA contribution ($30,000 − $5,500 = $24,500), to her own compensation (-0-) to figure her maximum contribution to a traditional IRA. Volunteer income tax assistance program In her case, $5,500 is her contribution limit, because $5,500 is less than $24,500 (her compensation for purposes of figuring her contribution limit). Volunteer income tax assistance program Filing Status Generally, except as discussed earlier under Kay Bailey Hutchison Spousal IRA Limit , your filing status has no effect on the amount of allowable contributions to your traditional IRA. Volunteer income tax assistance program However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. Volunteer income tax assistance program See How Much Can You Deduct , later. Volunteer income tax assistance program Example. Volunteer income tax assistance program Tom and Darcy are married and both are 53. Volunteer income tax assistance program They both work and each has a traditional IRA. Volunteer income tax assistance program Tom earned $3,800 and Darcy earned $48,000 in 2013. Volunteer income tax assistance program Because of the Kay Bailey Hutchison Spousal IRA limit rule, even though Tom earned less than $6,500, they can contribute up to $6,500 to his IRA for 2013 if they file a joint return. Volunteer income tax assistance program They can contribute up to $6,500 to Darcy's IRA. Volunteer income tax assistance program If they file separate returns, the amount that can be contributed to Tom's IRA is limited by his earned income, $3,800. Volunteer income tax assistance program Less Than Maximum Contributions If contributions to your traditional IRA for a year were less than the limit, you cannot contribute more after the due date of your return for that year to make up the difference. Volunteer income tax assistance program Example. Volunteer income tax assistance program Rafael, who is 40, earns $30,000 in 2013. Volunteer income tax assistance program Although he can contribute up to $5,500 for 2013, he contributes only $3,000. Volunteer income tax assistance program After April 15, 2014, Rafael cannot make up the difference between his actual contributions for 2013 ($3,000) and his 2013 limit ($5,500). Volunteer income tax assistance program He cannot contribute $2,500 more than the limit for any later year. Volunteer income tax assistance program More Than Maximum Contributions If contributions to your IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. Volunteer income tax assistance program However, a penalty or additional tax may apply. Volunteer income tax assistance program See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes. Volunteer income tax assistance program When Can Contributions Be Made? As soon as you open your traditional IRA, contributions can be made to it through your chosen sponsor (trustee or other administrator). Volunteer income tax assistance program Contributions must be in the form of money (cash, check, or money order). Volunteer income tax assistance program Property cannot be contributed. Volunteer income tax assistance program Although property cannot be contributed, your IRA may invest in certain property. Volunteer income tax assistance program For example, your IRA may purchase shares of stock. Volunteer income tax assistance program For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. Volunteer income tax assistance program You may be able to transfer or roll over certain property from one retirement plan to another. Volunteer income tax assistance program See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets . Volunteer income tax assistance program You can make a contribution to your IRA by having your income tax refund (or a portion of your refund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. Volunteer income tax assistance program For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases). Volunteer income tax assistance program Contributions can be made to your traditional IRA for each year that you receive compensation and have not reached age 70½. Volunteer income tax assistance program For any year in which you do not work, contributions cannot be made to your IRA unless you receive alimony, nontaxable combat pay, military differential pay, or file a joint return with a spouse who has compensation. Volunteer income tax assistance program See Who Can Open a Traditional IRA , earlier. Volunteer income tax assistance program Even if contributions cannot be made for the current year, the amounts contributed for years in which you did qualify can remain in your IRA. Volunteer income tax assistance program Contributions can resume for any years that you qualify. Volunteer income tax assistance program Contributions must be made by due date. Volunteer income tax assistance program   Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. Volunteer income tax assistance program For most people, this means that contributions for 2013 must be made by April 15, 2014, and contributions for 2014 must be made by April 15, 2015. Volunteer income tax assistance program Age 70½ rule. Volunteer income tax assistance program   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Volunteer income tax assistance program   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Volunteer income tax assistance program If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Volunteer income tax assistance program Designating year for which contribution is made. Volunteer income tax assistance program   If an amount is contributed to your traditional IRA between January 1 and April 15, you should tell the sponsor which year (the current year or the previous year) the contribution is for. Volunteer income tax assistance program If you do not tell the sponsor which year it is for, the sponsor can assume, and report to the IRS, that the contribution is for the current year (the year the sponsor received it). Volunteer income tax assistance program Filing before a contribution is made. Volunteer income tax assistance program    You can file your return claiming a traditional IRA contribution before the contribution is actually made. Volunteer income tax assistance program Generally, the contribution must be made by the due date of your return, not including extensions. Volunteer income tax assistance program Contributions not required. Volunteer income tax assistance program   You do not have to contribute to your traditional IRA for every tax year, even if you can. Volunteer income tax assistance program How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if applicable) explained earlier under How Much Can Be Contributed . Volunteer income tax assistance program However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Volunteer income tax assistance program See Limit if Covered by Employer Plan , later. Volunteer income tax assistance program You may be able to claim a credit for contributions to your traditional IRA. Volunteer income tax assistance program For more information, see chapter 4. Volunteer income tax assistance program Trustees' fees. Volunteer income tax assistance program   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Volunteer income tax assistance program However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Volunteer income tax assistance program For information about miscellaneous itemized deductions, see Publication 529, Miscellaneous Deductions. Volunteer income tax assistance program Brokers' commissions. Volunteer income tax assistance program   These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Volunteer income tax assistance program Full deduction. Volunteer income tax assistance program   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more of your traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older), or 100% of your compensation. Volunteer income tax assistance program   This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Volunteer income tax assistance program Kay Bailey Hutchison Spousal IRA. Volunteer income tax assistance program   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of: $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older), or The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Volunteer income tax assistance program The IRA deduction for the year of the spouse with the greater compensation. Volunteer income tax assistance program Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Volunteer income tax assistance program Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Volunteer income tax assistance program   This limit is reduced by any contributions to a section 501(c)(18) plan on behalf of the spouse with the lesser compensation. Volunteer income tax assistance program Note. Volunteer income tax assistance program If you were divorced or legally separated (and did not remarry) before the end of the year, you cannot deduct any contributions to your spouse's IRA. Volunteer income tax assistance program After a divorce or legal separation, you can deduct only the contributions to your own IRA. Volunteer income tax assistance program Your deductions are subject to the rules for single individuals. Volunteer income tax assistance program Covered by an employer retirement plan. Volunteer income tax assistance program   If you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, your deduction may be further limited. Volunteer income tax assistance program This is discussed later under Limit if Covered by Employer Plan . Volunteer income tax assistance program Limits on the amount you can deduct do not affect the amount that can be contributed. Volunteer income tax assistance program Are You Covered by an Employer Plan? The Form W-2 you receive from your employer has a box used to indicate whether you were covered for the year. Volunteer income tax assistance program The “Retirement Plan” box should be checked if you were covered. Volunteer income tax assistance program Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered , later. Volunteer income tax assistance program If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Volunteer income tax assistance program Federal judges. Volunteer income tax assistance program   For purposes of the IRA deduction, federal judges are covered by an employer plan. Volunteer income tax assistance program For Which Year(s) Are You Covered? Special rules apply to determine the tax years for which you are covered by an employer plan. Volunteer income tax assistance program These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Volunteer income tax assistance program Tax year. Volunteer income tax assistance program   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Volunteer income tax assistance program For almost all people, the tax year is the calendar year. Volunteer income tax assistance program Defined contribution plan. Volunteer income tax assistance program   Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year. Volunteer income tax assistance program However, also see Situations in Which You Are Not Covered , later. Volunteer income tax assistance program   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Volunteer income tax assistance program In a defined contribution plan, the amount to be contributed to each participant's account is spelled out in the plan. Volunteer income tax assistance program The level of benefits actually provided to a participant depends on the total amount contributed to that participant's account and any earnings and losses on those contributions. Volunteer income tax assistance program Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Volunteer income tax assistance program Example. Volunteer income tax assistance program Company A has a money purchase pension plan. Volunteer income tax assistance program Its plan year is from July 1 to June 30. Volunteer income tax assistance program The plan provides that contributions must be allocated as of June 30. Volunteer income tax assistance program Bob, an employee, leaves Company A on December 31, 2012. Volunteer income tax assistance program The contribution for the plan year ending on June 30, 2013, is made February 15, 2014. Volunteer income tax assistance program Because an amount is contributed to Bob's account for the plan year, Bob is covered by the plan for his 2013 tax year. Volunteer income tax assistance program   A special rule applies to certain plans in which it is not possible to determine if an amount will be contributed to your account for a given plan year. Volunteer income tax assistance program If, for a plan year, no amounts have been allocated to your account that are attributable to employer contributions, employee contributions, or forfeitures, by the last day of the plan year, and contributions are discretionary for the plan year, you are not covered for the tax year in which the plan year ends. Volunteer income tax assistance program If, after the plan year ends, the employer makes a contribution for that plan year, you are covered for the tax year in which the contribution is made. Volunteer income tax assistance program Example. Volunteer income tax assistance program Mickey was covered by a profit-sharing plan and left the company on December 31, 2012. Volunteer income tax assistance program The plan year runs from July 1 to June 30. Volunteer income tax assistance program Under the terms of the plan, employer contributions do not have to be made, but if they are made, they are contributed to the plan before the due date for filing the company's tax return. Volunteer income tax assistance program Such contributions are allocated as of the last day of the plan year, and allocations are made to the accounts of individuals who have any service during the plan year. Volunteer income tax assistance program As of June 30, 2013, no contributions were made that were allocated to the June 30, 2013, plan year, and no forfeitures had been allocated within the plan year. Volunteer income tax assistance program In addition, as of that date, the company was not obligated to make a contribution for such plan year and it was impossible to determine whether or not a contribution would be made for the plan year. Volunteer income tax assistance program On December 31, 2013, the company decided to contribute to the plan for the plan year ending June 30, 2013. Volunteer income tax assistance program That contribution was made on February 15, 2014. Volunteer income tax assistance program Mickey is an active participant in the plan for his 2014 tax year but not for his 2013 tax year. Volunteer income tax assistance program No vested interest. Volunteer income tax assistance program   If an amount is allocated to your account for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the account. Volunteer income tax assistance program Defined benefit plan. Volunteer income tax assistance program   If you are eligible to participate in your employer's defined benefit plan for the plan year that ends within your tax year, you are covered by the plan. Volunteer income tax assistance program This rule applies even if you: Declined to participate in the plan, Did not make a required contribution, or Did not perform the minimum service required to accrue a benefit for the year. Volunteer income tax assistance program   A defined benefit plan is any plan that is not a defined contribution plan. Volunteer income tax assistance program In a defined benefit plan, the level of benefits to be provided to each participant is spelled out in the plan. Volunteer income tax assistance program The plan administrator figures the amount needed to provide those benefits and those amounts are contributed to the plan. Volunteer income tax assistance program Defined benefit plans include pension plans and annuity plans. Volunteer income tax assistance program Example. Volunteer income tax assistance program Nick, an employee of Company B, is eligible to participate in Company B's defined benefit plan, which has a July 1 to June 30 plan year. Volunteer income tax assistance program Nick leaves Company B on December 31, 2012. Volunteer income tax assistance program Because Nick is eligible to participate in the plan for its year ending June 30, 2013, he is covered by the plan for his 2013 tax year. Volunteer income tax assistance program No vested interest. Volunteer income tax assistance program   If you accrue a benefit for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the accrual. Volunteer income tax assistance program Situations in Which You Are Not Covered Unless you are covered by another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Volunteer income tax assistance program Social security or railroad retirement. Volunteer income tax assistance program   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Volunteer income tax assistance program Benefits from previous employer's plan. Volunteer income tax assistance program   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Volunteer income tax assistance program Reservists. Volunteer income tax assistance program   If the only reason you participate in a plan is because you are a member of a reserve unit of the Armed Forces, you may not be covered by the plan. Volunteer income tax assistance program You are not covered by the plan if both of the following conditions are met. Volunteer income tax assistance program The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. Volunteer income tax assistance program You did not serve more than 90 days on active duty during the year (not counting duty for training). Volunteer income tax assistance program Volunteer firefighters. Volunteer income tax assistance program   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Volunteer income tax assistance program You are not covered by the plan if both of the following conditions are met. Volunteer income tax assistance program The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. Volunteer income tax assistance program Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Volunteer income tax assistance program Limit if Covered by Employer Plan As discussed earlier, the deduction you can take for contributions made to your traditional IRA depends on whether you or your spouse was covered for any part of the year by an employer retirement plan. Volunteer income tax assistance program Your deduction is also affected by how much income you had and by your filing status. Volunteer income tax assistance program Your deduction may also be affected by social security benefits you received. Volunteer income tax assistance program Reduced or no deduction. Volunteer income tax assistance program   If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. Volunteer income tax assistance program   Your deduction begins to decrease (phase out) when your income rises above a certain amount and is eliminated altogether when it reaches a higher amount. Volunteer income tax assistance program These amounts vary depending on your filing status. Volunteer income tax assistance program   To determine if your deduction is subject to the phaseout, you must determine your modified adjusted gross income (AGI) and your filing status, as explained later under Deduction Phaseout . Volunteer income tax assistance program Once you have determined your modified AGI and your filing status, you can use Table 1-2 or Table 1-3 to determine if the phaseout applies. Volunteer income tax assistance program Social Security Recipients Instead of using Table 1-2 or Table 1-3 and Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, later, complete the worksheets in Appendix B of this publication if, for the year, all of the following apply. Volunteer income tax assistance program You received social security benefits. Volunteer income tax assistance program You received taxable compensation. Volunteer income tax assistance program Contributions were made to your traditional IRA. Volunteer income tax assistance program You or your spouse was covered by an employer retirement plan. Volunteer income tax assistance program Use the worksheets in Appendix B to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Volunteer income tax assistance program Appendix B includes an example with filled-in worksheets to assist you. Volunteer income tax assistance program Table 1-2. Volunteer income tax assistance program Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Volunteer income tax assistance program IF your filing status is . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program AND your modified adjusted gross income (modified AGI) is . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program THEN you can take . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program single or head of household $59,000 or less a full deduction. Volunteer income tax assistance program more than $59,000 but less than $69,000 a partial deduction. Volunteer income tax assistance program $69,000 or more no deduction. Volunteer income tax assistance program married filing jointly or  qualifying widow(er) $95,000 or less a full deduction. Volunteer income tax assistance program more than $95,000 but less than $115,000 a partial deduction. Volunteer income tax assistance program $115,000 or more no deduction. Volunteer income tax assistance program married filing separately2 less than $10,000 a partial deduction. Volunteer income tax assistance program $10,000 or more no deduction. Volunteer income tax assistance program 1 Modified AGI (adjusted gross income). Volunteer income tax assistance program See Modified adjusted gross income (AGI) , later. Volunteer income tax assistance program  2 If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” filing status). Volunteer income tax assistance program Table 1-3. Volunteer income tax assistance program Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Volunteer income tax assistance program IF your filing status is . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program AND your modified adjusted gross income (modified AGI) is . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program THEN you can take . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program single, head of household, or qualifying widow(er) any amount a full deduction. Volunteer income tax assistance program married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction. Volunteer income tax assistance program married filing jointly with a spouse who is covered by a plan at work $178,000 or less a full deduction. Volunteer income tax assistance program more than $178,000 but less than $188,000 a partial deduction. Volunteer income tax assistance program $188,000 or more no deduction. Volunteer income tax assistance program married filing separately with a spouse who is covered by a plan at work2 less than $10,000 a partial deduction. Volunteer income tax assistance program $10,000 or more no deduction. Volunteer income tax assistance program 1 Modified AGI (adjusted gross income). Volunteer income tax assistance program See Modified adjusted gross income (AGI) , later. Volunteer income tax assistance program  2 You are entitled to the full deduction if you did not live with your spouse at any time during the year. Volunteer income tax assistance program For 2014, if you are not covered by a retirement plan at work and you are married filing jointly with a spouse who is covered by a plan at work, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Volunteer income tax assistance program If your AGI is $191,000 or more, you cannot take a deduction for a contribution to a traditional IRA. Volunteer income tax assistance program Deduction Phaseout The amount of any reduction in the limit on your IRA deduction (phaseout) depends on whether you or your spouse was covered by an employer retirement plan. Volunteer income tax assistance program Covered by a retirement plan. Volunteer income tax assistance program   If you are covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI, as shown in Table 1-2. Volunteer income tax assistance program For 2014, if you are covered by a retirement plan at work, your IRA deduction will not be reduced (phased out) unless your modified AGI is: More than $60,000 but less than $70,000 for a single individual (or head of household), More than $96,000 but less than $116,000 for a married couple filing a joint return (or a qualifying widow(er)), or Less than $10,000 for a married individual filing a separate return. Volunteer income tax assistance program If your spouse is covered. Volunteer income tax assistance program   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 1-3. Volunteer income tax assistance program Filing status. Volunteer income tax assistance program   Your filing status depends primarily on your marital status. Volunteer income tax assistance program For this purpose, you need to know if your filing status is single or head of household, married filing jointly or qualifying widow(er), or married filing separately. Volunteer income tax assistance program If you need more information on filing status, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Volunteer income tax assistance program Lived apart from spouse. Volunteer income tax assistance program   If you did not live with your spouse at any time during the year and you file a separate return, your filing status, for this purpose, is single. Volunteer income tax assistance program Modified adjusted gross income (AGI). Volunteer income tax assistance program   You can use Worksheet 1-1 to figure your modified AGI. Volunteer income tax assistance program If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Both contributions for 2013 and distributions in 2013 , later. Volunteer income tax assistance program    Do not assume that your modified AGI is the same as your compensation. Volunteer income tax assistance program Your modified AGI may include income in addition to your compensation (discussed earlier) such as interest, dividends, and income from IRA distributions. Volunteer income tax assistance program Form 1040. Volunteer income tax assistance program   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Volunteer income tax assistance program IRA deduction. Volunteer income tax assistance program Student loan interest deduction. Volunteer income tax assistance program Tuition and fees deduction. Volunteer income tax assistance program Domestic production activities deduction. Volunteer income tax assistance program Foreign earned income exclusion. Volunteer income tax assistance program Foreign housing exclusion or deduction. Volunteer income tax assistance program Exclusion of qualified savings bond interest shown on Form 8815. Volunteer income tax assistance program Exclusion of employer-provided adoption benefits shown on Form 8839. Volunteer income tax assistance program This is your modified AGI. Volunteer income tax assistance program Form 1040A. Volunteer income tax assistance program   If you file Form 1040A, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Volunteer income tax assistance program IRA deduction. Volunteer income tax assistance program Student loan interest deduction. Volunteer income tax assistance program Tuition and fees deduction. Volunteer income tax assistance program Exclusion of qualified savings bond interest shown on Form 8815. Volunteer income tax assistance program This is your modified AGI. Volunteer income tax assistance program Form 1040NR. Volunteer income tax assistance program   If you file Form 1040NR, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Volunteer income tax assistance program IRA deduction. Volunteer income tax assistance program Student loan interest deduction. Volunteer income tax assistance program Domestic production activities deduction. Volunteer income tax assistance program Exclusion of qualified savings bond interest shown on Form 8815. Volunteer income tax assistance program Exclusion of employer-provided adoption benefits shown on Form 8839. Volunteer income tax assistance program This is your modified AGI. Volunteer income tax assistance program Income from IRA distributions. Volunteer income tax assistance program   If you received distributions in 2013 from one or more traditional IRAs and your traditional IRAs include only deductible contributions, the distributions are fully taxable and are included in your modified AGI. Volunteer income tax assistance program Both contributions for 2013 and distributions in 2013. Volunteer income tax assistance program   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Volunteer income tax assistance program You received distributions in 2013 from one or more traditional IRAs, You made contributions to a traditional IRA for 2013, and Some of those contributions may be nondeductible contributions. Volunteer income tax assistance program (See Nondeductible Contributions and Worksheet 1-2, later. Volunteer income tax assistance program ) If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Volunteer income tax assistance program To do this, you can use Worksheet 1-5, later. Volunteer income tax assistance program   If at least one of the above does not apply, figure your modified AGI using Worksheet 1-1, later. Volunteer income tax assistance program How To Figure Your Reduced IRA Deduction If you or your spouse is covered by an employer retirement plan and you did not receive any social security benefits, you can figure your reduced IRA deduction by using Worksheet 1-2. Volunteer income tax assistance program Figuring Your Reduced IRA Deduction for 2013. Volunteer income tax assistance program The Instructions for Form 1040, Form 1040A, and Form 1040NR include similar worksheets that you can use instead of the worksheet in this publication. Volunteer income tax assistance program If you or your spouse is covered by an employer retirement plan, and you received any social security benefits, see Social Security Recipients , earlier. Volunteer income tax assistance program Note. Volunteer income tax assistance program If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Volunteer income tax assistance program Worksheet 1-1. Volunteer income tax assistance program Figuring Your Modified AGI Use this worksheet to figure your modified AGI for traditional IRA purposes. Volunteer income tax assistance program 1. Volunteer income tax assistance program Enter your adjusted gross income (AGI) from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37, figured without taking into account the amount from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 1. Volunteer income tax assistance program   2. Volunteer income tax assistance program Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 2. Volunteer income tax assistance program   3. Volunteer income tax assistance program Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Volunteer income tax assistance program   4. Volunteer income tax assistance program Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 4. Volunteer income tax assistance program   5. Volunteer income tax assistance program Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Volunteer income tax assistance program   6. Volunteer income tax assistance program Enter any foreign housing deduction from Form 2555, line 50 6. Volunteer income tax assistance program   7. Volunteer income tax assistance program Enter any excludable savings bond interest from Form 8815, line 14 7. Volunteer income tax assistance program   8. Volunteer income tax assistance program Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Volunteer income tax assistance program   9. Volunteer income tax assistance program Add lines 1 through 8. Volunteer income tax assistance program This is your Modified AGI for traditional IRA purposes 9. Volunteer income tax assistance program   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Volunteer income tax assistance program If you file Form 1040A, enter your IRA deduction on line 17 of that form. Volunteer income tax assistance program If you file Form 1040NR, enter your IRA deduction on line 32 of that form. Volunteer income tax assistance program You cannot deduct IRA contributions on Form 1040EZ or Form 1040NR-EZ. Volunteer income tax assistance program Self-employed. Volunteer income tax assistance program   If you are self-employed (a sole proprietor or partner) and have a SIMPLE IRA, enter your deduction for allowable plan contributions on Form 1040, line 28. Volunteer income tax assistance program If you file Form 1040NR, enter your deduction on line 28 of that form. Volunteer income tax assistance program Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA of up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Volunteer income tax assistance program The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Volunteer income tax assistance program Example. Volunteer income tax assistance program Tony is 29 years old and single. Volunteer income tax assistance program In 2013, he was covered by a retirement plan at work. Volunteer income tax assistance program His salary is $62,000. Volunteer income tax assistance program His modified AGI is $70,000. Volunteer income tax assistance program Tony makes a $5,500 IRA contribution for 2013. Volunteer income tax assistance program Because he was covered by a retirement plan and his modified AGI is above $69,000, he cannot deduct his $5,500 IRA contribution. Volunteer income tax assistance program He must designate this contribution as a nondeductible contribution by reporting it on Form 8606. Volunteer income tax assistance program Repayment of reservist distributions. Volunteer income tax assistance program   Nondeductible contributions may include repayments of qualified reservist distributions. Volunteer income tax assistance program For more information, see Qualified reservist repayments under How Much Can Be Contributed, earlier. Volunteer income tax assistance program Form 8606. Volunteer income tax assistance program   To designate contributions as nondeductible, you must file Form 8606. Volunteer income tax assistance program (See the filled-in Forms 8606 in this chapter. Volunteer income tax assistance program )   You do not have to designate a contribution as nondeductible until you file your tax return. Volunteer income tax assistance program When you file, you can even designate otherwise deductible contributions as nondeductible contributions. Volunteer income tax assistance program   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Volunteer income tax assistance program    A Form 8606 is not used for the year that you make a rollover from a qualified retirement plan to a traditional IRA and the rollover includes nontaxable amounts. Volunteer income tax assistance program In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Volunteer income tax assistance program See Form 8606 under Distributions Fully or Partly Taxable, later. Volunteer income tax assistance program Failure to report nondeductible contributions. Volunteer income tax assistance program   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated like deductible contributions when withdrawn. Volunteer income tax assistance program All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Volunteer income tax assistance program Penalty for overstatement. Volunteer income tax assistance program   If you overstate the amount of nondeductible contributions on your Form 8606 for any tax year, you must pay a penalty of $100 for each overstatement, unless it was due to reasonable cause. Volunteer income tax assistance program Penalty for failure to file Form 8606. Volunteer income tax assistance program   You will have to pay a $50 penalty if you do not file a required Form 8606, unless you can prove that the failure was due to reasonable cause. Volunteer income tax assistance program Tax on earnings on nondeductible contributions. Volunteer income tax assistance program   As long as contributions are within the contribution limits, none of the earnings or gains on contributions (deductible or nondeductible) will be taxed until they are distributed. Volunteer income tax assistance program Cost basis. Volunteer income tax assistance program   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Volunteer income tax assistance program Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Volunteer income tax assistance program    Commonly, distributions from your traditional IRAs will include both taxable and nontaxable (cost basis) amounts. Volunteer income tax assistance program See Are Distributions Taxable, later, for more information. Volunteer income tax assistance program Recordkeeping. Volunteer income tax assistance program There is a recordkeeping worksheet, Appendix A. Volunteer income tax assistance program Summary Record of Traditional IRA(s) for 2013 , that you can use to keep a record of deductible and nondeductible IRA contributions. Volunteer income tax assistance program Examples — Worksheet for Reduced IRA Deduction for 2013 The following examples illustrate the use of Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013. Volunteer income tax assistance program Example 1. Volunteer income tax assistance program For 2013, Tom and Betty file a joint return on Form 1040. Volunteer income tax assistance program They are both 39 years old. Volunteer income tax assistance program They are both employed and Tom is covered by his employer's retirement plan. Volunteer income tax assistance program Tom's salary is $59,000 and Betty's is $32,555. Volunteer income tax assistance program They each have a traditional IRA and their combined modified AGI, which includes $5,000 interest and dividend income, is $96,555. Volunteer income tax assistance program Because their modified AGI is between $95,000 and $115,000 and Tom is covered by an employer plan, Tom is subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Volunteer income tax assistance program For 2013, Tom contributed $5,500 to his IRA and Betty contributed $5,500 to hers. Volunteer income tax assistance program Even though they file a joint return, they must use separate worksheets to figure the IRA deduction for each of them. Volunteer income tax assistance program Tom can take a deduction of only $5,080. Volunteer income tax assistance program He can choose to treat the $5,080 as either deductible or nondeductible contributions. Volunteer income tax assistance program He can either leave the $420 ($5,500 − $5,080) of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Volunteer income tax assistance program He decides to treat the $5,080 as deductible contributions and leave the $420 of nondeductible contributions in his IRA. Volunteer income tax assistance program Using Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, Tom figures his deductible and nondeductible amounts as shown on Worksheet 1-2. Volunteer income tax assistance program Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated. Volunteer income tax assistance program Betty figures her IRA deduction as follows. Volunteer income tax assistance program Betty can treat all or part of her contributions as either deductible or nondeductible. Volunteer income tax assistance program This is because her $5,500 contribution for 2013 is not subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Volunteer income tax assistance program She does not need to use Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, because their modified AGI is not within the phaseout range that applies. Volunteer income tax assistance program Betty decides to treat her $5,500 IRA contributions as deductible. Volunteer income tax assistance program The IRA deductions of $5,080 and $5,500 on the joint return for Tom and Betty total $10,580. Volunteer income tax assistance program Example 2. Volunteer income tax assistance program For 2013, Ed and Sue file a joint return on Form 1040. Volunteer income tax assistance program They are both 39 years old. Volunteer income tax assistance program Ed is covered by his employer's retirement plan. Volunteer income tax assistance program Ed's salary is $45,000. Volunteer income tax assistance program Sue had no compensation for the year and did not contribute to an IRA. Volunteer income tax assistance program Sue is not covered by an employer plan. Volunteer income tax assistance program Ed contributed $5,500 to his traditional IRA and $5,500 to a traditional IRA for Sue (a Kay Bailey Hutchison Spousal IRA). Volunteer income tax assistance program Their combined modified AGI, which includes $2,000 interest and dividend income and a large capital gain from the sale of stock, is $180,555. Volunteer income tax assistance program Because the combined modified AGI is $115,000 or more, Ed cannot deduct any of the contribution to his traditional IRA. Volunteer income tax assistance program He can either leave the $5,500 of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Volunteer income tax assistance program Sue figures her IRA deduction as shown on Worksheet 1-2. Volunteer income tax assistance program Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated. Volunteer income tax assistance program Worksheet 1-2. Volunteer income tax assistance program Figuring Your Reduced IRA Deduction for 2013 (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Volunteer income tax assistance program ) Note. Volunteer income tax assistance program If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Volunteer income tax assistance program IF you . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program AND your  filing status is . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program AND your modified AGI is over . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program THEN enter on  line 1 below . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Volunteer income tax assistance program Enter applicable amount from table above 1. Volunteer income tax assistance program   2. Volunteer income tax assistance program Enter your modified AGI (that of both spouses, if married filing jointly) 2. Volunteer income tax assistance program     Note. Volunteer income tax assistance program If line 2 is equal to or more than the amount on line 1, stop here. Volunteer income tax assistance program  Your IRA contributions are not deductible. Volunteer income tax assistance program See Nondeductible Contributions , earlier. Volunteer income tax assistance program     3. Volunteer income tax assistance program Subtract line 2 from line 1. Volunteer income tax assistance program If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Volunteer income tax assistance program You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Volunteer income tax assistance program   4. Volunteer income tax assistance program Multiply line 3 by the percentage below that applies to you. Volunteer income tax assistance program If the result is not a multiple of $10, round it to the next highest multiple of $10. Volunteer income tax assistance program (For example, $611. Volunteer income tax assistance program 40 is rounded to $620. Volunteer income tax assistance program ) However, if the result is less than $200, enter $200. Volunteer income tax assistance program         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Volunteer income tax assistance program 5% (. Volunteer income tax assistance program 275) (by 32. Volunteer income tax assistance program 5% (. Volunteer income tax assistance program 325) if you are age 50 or older). Volunteer income tax assistance program All others, multiply line 3 by 55% (. Volunteer income tax assistance program 55) (by 65% (. Volunteer income tax assistance program 65) if you are age 50 or older). Volunteer income tax assistance program 4. Volunteer income tax assistance program   5. Volunteer income tax assistance program Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Volunteer income tax assistance program If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Volunteer income tax assistance program If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Volunteer income tax assistance program   6. Volunteer income tax assistance program Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Volunteer income tax assistance program If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Volunteer income tax assistance program 6. Volunteer income tax assistance program   7. Volunteer income tax assistance program IRA deduction. Volunteer income tax assistance program Compare lines 4, 5, and 6. Volunteer income tax assistance program Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Volunteer income tax assistance program If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Volunteer income tax assistance program   8. Volunteer income tax assistance program Nondeductible contribution. Volunteer income tax assistance program Subtract line 7 from line 5 or 6, whichever is smaller. Volunteer income tax assistance program  Enter the result here and on line 1 of your Form 8606 8. Volunteer income tax assistance program   Worksheet 1-2. Volunteer income tax assistance program Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Volunteer income tax assistance program ) Note. Volunteer income tax assistance program If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Volunteer income tax assistance program IF you . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program AND your  filing status is . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program AND your modified AGI is over . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program THEN enter on  line 1 below . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Volunteer income tax assistance program Enter applicable amount from table above 1. Volunteer income tax assistance program 115,000 2. Volunteer income tax assistance program Enter your modified AGI (that of both spouses, if married filing jointly) 2. Volunteer income tax assistance program 96,555   Note. Volunteer income tax assistance program If line 2 is equal to or more than the amount on line 1, stop here. Volunteer income tax assistance program  Your IRA contributions are not deductible. Volunteer income tax assistance program See Nondeductible Contributions , earlier. Volunteer income tax assistance program     3. Volunteer income tax assistance program Subtract line 2 from line 1. Volunteer income tax assistance program If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Volunteer income tax assistance program You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Volunteer income tax assistance program 18,445 4. Volunteer income tax assistance program Multiply line 3 by the percentage below that applies to you. Volunteer income tax assistance program If the result is not a multiple of $10, round it to the next highest multiple of $10. Volunteer income tax assistance program (For example, $611. Volunteer income tax assistance program 40 is rounded to $620. Volunteer income tax assistance program ) However, if the result is less than $200, enter $200. Volunteer income tax assistance program         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Volunteer income tax assistance program 5% (. Volunteer income tax assistance program 275) (by 32. Volunteer income tax assistance program 5% (. Volunteer income tax assistance program 325) if you are age 50 or older). Volunteer income tax assistance program All others, multiply line 3 by 55% (. Volunteer income tax assistance program 55) (by 65% (. Volunteer income tax assistance program 65) if you are age 50 or older). Volunteer income tax assistance program 4. Volunteer income tax assistance program 5,080 5. Volunteer income tax assistance program Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Volunteer income tax assistance program If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Volunteer income tax assistance program If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Volunteer income tax assistance program 59,000 6. Volunteer income tax assistance program Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Volunteer income tax assistance program If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Volunteer income tax assistance program 6. Volunteer income tax assistance program 5,500 7. Volunteer income tax assistance program IRA deduction. Volunteer income tax assistance program Compare lines 4, 5, and 6. Volunteer income tax assistance program Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Volunteer income tax assistance program If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Volunteer income tax assistance program 5,080 8. Volunteer income tax assistance program Nondeductible contribution. Volunteer income tax assistance program Subtract line 7 from line 5 or 6, whichever is smaller. Volunteer income tax assistance program  Enter the result here and on line 1 of your Form 8606 8. Volunteer income tax assistance program 420 Worksheet 1-2. Volunteer income tax assistance program Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Volunteer income tax assistance program ) Note. Volunteer income tax assistance program If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Volunteer income tax assistance program IF you . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program AND your  filing status is . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program AND your modified AGI is over . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program THEN enter on  line 1 below . Volunteer income tax assistance program . Volunteer income tax assistance program . Volunteer income tax assistance program       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Volunteer income tax assistance program Enter applicable amount from table above 1. Volunteer income tax assistance program 188,000 2. Volunteer income tax assistance program Enter your modified AGI (that of both spouses, if married filing jointly) 2. Volunteer income tax assistance program 180,555   Note. Volunteer income tax assistance program If line 2 is equal to or more than the amount on line 1, stop here. Volunteer income tax assistance program  Your IRA contributions are not deductible. Volunteer income tax assistance program See Nondeductible Contributions , earlier. Volunteer income tax assistance program     3. Volunteer income tax assistance program Subtract line 2 from line 1. Volunteer income tax assistance program If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Volunteer income tax assistance program You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Volunteer income tax assistance program 7,445 4. Volunteer income tax assistance program Multiply line 3 by the percentage below that applies to you. Volunteer income tax assistance program If the result is not a multiple of $10, round it to the next highest multiple of $10. Volunteer income tax assistance program (For example, $611. Volunteer income tax assistance program 40 is rounded to $620. Volunteer income tax assistance program ) However, if the result is less than $200, enter $200. Volunteer income tax assistance program         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Volunteer income tax assistance program 5% (. Volunteer income tax assistance program 275) (by 32. Volunteer income tax assistance program 5% (. Volunteer income tax assistance program 325) if you are age 50 or older). Volunteer income tax assistance program All others, multiply line 3 by 55% (. Volunteer income tax assistance program 55) (by 65% (. Volunteer income tax assistance program 65) if you are age 50 or older). Volunteer income tax assistance program 4. Volunteer income tax assistance program 4,100 5. Volunteer income tax assistance program Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Volunteer income tax assistance program If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Volunteer income tax assistance program If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Volunteer income tax assistance program 39,500 6. Volunteer income tax assistance program Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Volunteer income tax assistance program If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Volunteer income tax assistance program 6. Volunteer income tax assistance program 5,500 7. Volunteer income tax assistance program IRA deduction. Volunteer income tax assistance program Compare lines 4, 5, and 6. Volunteer income tax assistance program Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Volunteer income tax assistance program If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Volunteer income tax assistance program 4,100 8. Volunteer income tax assistance program Nondeductible contribution. Volunteer income tax assistance program Subtract line 7 from line 5 or 6, whichever is smaller. Volunteer income tax assistance program  Enter the result here and on line 1 of your Form 8606 8. Volunteer income tax assistance program 1,400 What if You Inherit an IRA? If you inherit a traditional IRA, you are called a beneficiary. Volunteer income tax assistance program A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Volunteer income tax assistance program Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Volunteer income tax assistance program Inherited from spouse. Volunteer income tax assistance program   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Volunteer income tax assistance program You can: Treat it as your own IRA by designating yourself as the account owner. Volunteer income tax assistance program Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (s