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2012 Tax Form 1040ez

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2012 Tax Form 1040ez

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

2012 tax form 1040ez 18. 2012 tax form 1040ez   Alimony Table of Contents IntroductionSpouse or former spouse. 2012 tax form 1040ez Divorce or separation instrument. 2012 tax form 1040ez Useful Items - You may want to see: General RulesMortgage payments. 2012 tax form 1040ez Taxes and insurance. 2012 tax form 1040ez Other payments to a third party. 2012 tax form 1040ez Instruments Executed After 1984Payments to a third party. 2012 tax form 1040ez Exception. 2012 tax form 1040ez Substitute payments. 2012 tax form 1040ez Specifically designated as child support. 2012 tax form 1040ez Contingency relating to your child. 2012 tax form 1040ez Clearly associated with a contingency. 2012 tax form 1040ez How To Deduct Alimony Paid How To Report Alimony Received Recapture Rule Introduction This chapter discusses the rules that apply if you pay or receive alimony. 2012 tax form 1040ez It covers the following topics. 2012 tax form 1040ez What payments are alimony. 2012 tax form 1040ez What payments are not alimony, such as child support. 2012 tax form 1040ez How to deduct alimony you paid. 2012 tax form 1040ez How to report alimony you received as income. 2012 tax form 1040ez Whether you must recapture the tax benefits of alimony. 2012 tax form 1040ez Recapture means adding back in your income all or part of a deduction you took in a prior year. 2012 tax form 1040ez Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. 2012 tax form 1040ez It does not include voluntary payments that are not made under a divorce or separation instrument. 2012 tax form 1040ez Alimony is deductible by the payer and must be included in the spouse's or former spouse's income. 2012 tax form 1040ez Although this chapter is generally written for the payer of the alimony, the recipient can use the information to determine whether an amount received is alimony. 2012 tax form 1040ez To be alimony, a payment must meet certain requirements. 2012 tax form 1040ez Different requirements generally apply to payments under instruments executed after 1984 and to payments under instruments executed before 1985. 2012 tax form 1040ez This chapter discusses the rules for payments under instruments executed after 1984. 2012 tax form 1040ez If you need the rules for payments under pre-1985 instruments, get and keep a copy of the 2004 version of Publication 504. 2012 tax form 1040ez That was the last year the information on pre-1985 instruments was included in Publication 504. 2012 tax form 1040ez Use Table 18-1 in this chapter as a guide to determine whether certain payments are considered alimony. 2012 tax form 1040ez Definitions. 2012 tax form 1040ez   The following definitions apply throughout this chapter. 2012 tax form 1040ez Spouse or former spouse. 2012 tax form 1040ez   Unless otherwise stated, the term “spouse” includes former spouse. 2012 tax form 1040ez Divorce or separation instrument. 2012 tax form 1040ez   The term “divorce or separation instrument” means: A decree of divorce or separate maintenance or a written instrument incident to that decree, A written separation agreement, or A decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. 2012 tax form 1040ez This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement). 2012 tax form 1040ez Useful Items - You may want to see: Publication 504 Divorced or Separated Individuals General Rules The following rules apply to alimony regardless of when the divorce or separation instrument was executed. 2012 tax form 1040ez Payments not alimony. 2012 tax form 1040ez   Not all payments under a divorce or separation instrument are alimony. 2012 tax form 1040ez Alimony does not include: Child support, Noncash property settlements, Payments that are your spouse's part of community income, as explained under Community Property in Publication 504, Payments to keep up the payer's property, or Use of the payer's property. 2012 tax form 1040ez Payments to a third party. 2012 tax form 1040ez   Cash payments, checks, or money orders to a third party on behalf of your spouse under the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. 2012 tax form 1040ez These include payments for your spouse's medical expenses, housing costs (rent, utilities, etc. 2012 tax form 1040ez ), taxes, tuition, etc. 2012 tax form 1040ez The payments are treated as received by your spouse and then paid to the third party. 2012 tax form 1040ez Life insurance premiums. 2012 tax form 1040ez   Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy. 2012 tax form 1040ez Payments for jointly-owned home. 2012 tax form 1040ez   If your divorce or separation instrument states that you must pay expenses for a home owned by you and your spouse, some of your payments may be alimony. 2012 tax form 1040ez Mortgage payments. 2012 tax form 1040ez   If you must pay all the mortgage payments (principal and interest) on a jointly-owned home, and they otherwise qualify as alimony, you can deduct one-half of the total payments as alimony. 2012 tax form 1040ez If you itemize deductions and the home is a qualified home, you can claim one-half of the interest in figuring your deductible interest. 2012 tax form 1040ez Your spouse must report one-half of the payments as alimony received. 2012 tax form 1040ez If your spouse itemizes deductions and the home is a qualified home, he or she can claim one-half of the interest on the mortgage in figuring deductible interest. 2012 tax form 1040ez Taxes and insurance. 2012 tax form 1040ez   If you must pay all the real estate taxes or insurance on a home held as tenants in common, you can deduct one-half of these payments as alimony. 2012 tax form 1040ez Your spouse must report one-half of these payments as alimony received. 2012 tax form 1040ez If you and your spouse itemize deductions, you can each claim one-half of the real estate taxes and none of the home insurance. 2012 tax form 1040ez    If your home is held as tenants by the entirety or joint tenants, none of your payments for taxes or insurance are alimony. 2012 tax form 1040ez But if you itemize deductions, you can claim all of the real estate taxes and none of the home insurance. 2012 tax form 1040ez Other payments to a third party. 2012 tax form 1040ez   If you made other third-party payments, see Publication 504 to see whether any part of the payments qualifies as alimony. 2012 tax form 1040ez Instruments Executed After 1984 The following rules for alimony apply to payments under divorce or separation instruments executed after 1984. 2012 tax form 1040ez Exception for instruments executed before 1985. 2012 tax form 1040ez   There are two situations where the rules for instruments executed after 1984 apply to instruments executed before 1985. 2012 tax form 1040ez A divorce or separation instrument executed before 1985 and then modified after 1984 to specify that the after-1984 rules will apply. 2012 tax form 1040ez A temporary divorce or separation instrument executed before 1985 and incorporated into, or adopted by, a final decree executed after 1984 that: Changes the amount or period of payment, or Adds or deletes any contingency or condition. 2012 tax form 1040ez   For the rules for alimony payments under pre-1985 instruments not meeting these exceptions, get the 2004 version of Publication 504 at www. 2012 tax form 1040ez irs. 2012 tax form 1040ez gov/pub504. 2012 tax form 1040ez Example 1. 2012 tax form 1040ez In November 1984, you and your former spouse executed a written separation agreement. 2012 tax form 1040ez In February 1985, a decree of divorce was substituted for the written separation agreement. 2012 tax form 1040ez The decree of divorce did not change the terms for the alimony you pay your former spouse. 2012 tax form 1040ez The decree of divorce is treated as executed before 1985. 2012 tax form 1040ez Alimony payments under this decree are not subject to the rules for payments under instruments executed after 1984. 2012 tax form 1040ez Example 2. 2012 tax form 1040ez Assume the same facts as in Example 1 except that the decree of divorce changed the amount of the alimony. 2012 tax form 1040ez In this example, the decree of divorce is not treated as executed before 1985. 2012 tax form 1040ez The alimony payments are subject to the rules for payments under instruments executed after 1984. 2012 tax form 1040ez Alimony requirements. 2012 tax form 1040ez   A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met. 2012 tax form 1040ez The payment is in cash. 2012 tax form 1040ez The instrument does not designate the payment as not alimony. 2012 tax form 1040ez Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. 2012 tax form 1040ez There is no liability to make any payment (in cash or property) after the death of the recipient spouse. 2012 tax form 1040ez The payment is not treated as child support. 2012 tax form 1040ez Each of these requirements is discussed below. 2012 tax form 1040ez Cash payment requirement. 2012 tax form 1040ez   Only cash payments, including checks and money orders, qualify as alimony. 2012 tax form 1040ez The following do not qualify as alimony. 2012 tax form 1040ez Transfers of services or property (including a debt instrument of a third party or an annuity contract). 2012 tax form 1040ez Execution of a debt instrument by the payer. 2012 tax form 1040ez The use of the payer's property. 2012 tax form 1040ez Payments to a third party. 2012 tax form 1040ez   Cash payments to a third party under the terms of your divorce or separation instrument can qualify as cash payments to your spouse. 2012 tax form 1040ez See Payments to a third party under General Rules, earlier. 2012 tax form 1040ez   Also, cash payments made to a third party at the written request of your spouse may qualify as alimony if all the following requirements are met. 2012 tax form 1040ez The payments are in lieu of payments of alimony directly to your spouse. 2012 tax form 1040ez The written request states that both spouses intend the payments to be treated as alimony. 2012 tax form 1040ez You receive the written request from your spouse before you file your return for the year you made the payments. 2012 tax form 1040ez Payments designated as not alimony. 2012 tax form 1040ez   You and your spouse can designate that otherwise qualifying payments are not alimony. 2012 tax form 1040ez You do this by including a provision in your divorce or separation instrument that states the payments are not deductible as alimony by you and are excludable from your spouse's income. 2012 tax form 1040ez For this purpose, any instrument (written statement) signed by both of you that makes this designation and that refers to a previous written separation agreement is treated as a written separation agreement (and therefore a divorce or separation instrument). 2012 tax form 1040ez If you are subject to temporary support orders, the designation must be made in the original or a later temporary support order. 2012 tax form 1040ez   Your spouse can exclude the payments from income only if he or she attaches a copy of the instrument designating them as not alimony to his or her return. 2012 tax form 1040ez The copy must be attached each year the designation applies. 2012 tax form 1040ez Spouses cannot be members of the same household. 2012 tax form 1040ez    Payments to your spouse while you are members of the same household are not alimony if you are legally separated under a decree of divorce or separate maintenance. 2012 tax form 1040ez A home you formerly shared is considered one household, even if you physically separate yourselves in the home. 2012 tax form 1040ez   You are not treated as members of the same household if one of you is preparing to leave the household and does leave no later than 1 month after the date of the payment. 2012 tax form 1040ez Exception. 2012 tax form 1040ez   If you are not legally separated under a decree of divorce or separate maintenance, a payment under a written separation agreement, support decree, or other court order may qualify as alimony even if you are members of the same household when the payment is made. 2012 tax form 1040ez Table 18-1. 2012 tax form 1040ez Alimony Requirements (Instruments Executed After 1984) Payments ARE alimony if all of the following are true: Payments are NOT alimony if any of the following are true: Payments are required by a divorce or separation instrument. 2012 tax form 1040ez Payments are not required by a divorce or separation instrument. 2012 tax form 1040ez Payer and recipient spouse do not file a joint return with each other. 2012 tax form 1040ez Payer and recipient spouse file a joint return with each other. 2012 tax form 1040ez Payment is in cash (including checks or money orders). 2012 tax form 1040ez Payment is: Not in cash, A noncash property settlement, Spouse's part of community income, or To keep up the payer's property. 2012 tax form 1040ez Payment is not designated in the instrument as not alimony. 2012 tax form 1040ez Payment is designated in the instrument as not alimony. 2012 tax form 1040ez Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. 2012 tax form 1040ez Spouses legally separated under a decree of divorce or separate maintenance are members of the same household. 2012 tax form 1040ez Payments are not required after death of the recipient spouse. 2012 tax form 1040ez Payments are required after death of the recipient spouse. 2012 tax form 1040ez Payment is not treated as child support. 2012 tax form 1040ez Payment is treated as child support. 2012 tax form 1040ez These payments are deductible by the payer and includible in income by the recipient. 2012 tax form 1040ez These payments are neither deductible by the payer nor includible in income by the recipient. 2012 tax form 1040ez Liability for payments after death of recipient spouse. 2012 tax form 1040ez   If any part of payments you make must continue to be made for any period after your spouse's death, that part of your payments is not alimony, whether made before or after the death. 2012 tax form 1040ez If all of the payments would continue, then none of the payments made before or after the death are alimony. 2012 tax form 1040ez   The divorce or separation instrument does not have to expressly state that the payments cease upon the death of your spouse if, for example, the liability for continued payments would end under state law. 2012 tax form 1040ez Example. 2012 tax form 1040ez You must pay your former spouse $10,000 in cash each year for 10 years. 2012 tax form 1040ez Your divorce decree states that the payments will end upon your former spouse's death. 2012 tax form 1040ez You must also pay your former spouse or your former spouse's estate $20,000 in cash each year for 10 years. 2012 tax form 1040ez The death of your spouse would not terminate these payments under state law. 2012 tax form 1040ez The $10,000 annual payments may qualify as alimony. 2012 tax form 1040ez The $20,000 annual payments that do not end upon your former spouse's death are not alimony. 2012 tax form 1040ez Substitute payments. 2012 tax form 1040ez   If you must make any payments in cash or property after your spouse's death as a substitute for continuing otherwise qualifying payments before the death, the otherwise qualifying payments are not alimony. 2012 tax form 1040ez To the extent that your payments begin, accelerate, or increase because of the death of your spouse, otherwise qualifying payments you made may be treated as payments that were not alimony. 2012 tax form 1040ez Whether or not such payments will be treated as not alimony depends on all the facts and circumstances. 2012 tax form 1040ez Example 1. 2012 tax form 1040ez Under your divorce decree, you must pay your former spouse $30,000 annually. 2012 tax form 1040ez The payments will stop at the end of 6 years or upon your former spouse's death, if earlier. 2012 tax form 1040ez Your former spouse has custody of your minor children. 2012 tax form 1040ez The decree provides that if any child is still a minor at your spouse's death, you must pay $10,000 annually to a trust until the youngest child reaches the age of majority. 2012 tax form 1040ez The trust income and corpus (principal) are to be used for your children's benefit. 2012 tax form 1040ez These facts indicate that the payments to be made after your former spouse's death are a substitute for $10,000 of the $30,000 annual payments. 2012 tax form 1040ez Of each of the $30,000 annual payments, $10,000 is not alimony. 2012 tax form 1040ez Example 2. 2012 tax form 1040ez Under your divorce decree, you must pay your former spouse $30,000 annually. 2012 tax form 1040ez The payments will stop at the end of 15 years or upon your former spouse's death, if earlier. 2012 tax form 1040ez The decree provides that if your former spouse dies before the end of the 15-year period, you must pay the estate the difference between $450,000 ($30,000 × 15) and the total amount paid up to that time. 2012 tax form 1040ez For example, if your spouse dies at the end of the tenth year, you must pay the estate $150,000 ($450,000 − $300,000). 2012 tax form 1040ez These facts indicate that the lump-sum payment to be made after your former spouse's death is a substitute for the full amount of the $30,000 annual payments. 2012 tax form 1040ez None of the annual payments are alimony. 2012 tax form 1040ez The result would be the same if the payment required at death were to be discounted by an appropriate interest factor to account for the prepayment. 2012 tax form 1040ez Child support. 2012 tax form 1040ez   A payment that is specifically designated as child support or treated as specifically designated as child support under your divorce or separation instrument is not alimony. 2012 tax form 1040ez The amount of child support may vary over time. 2012 tax form 1040ez Child support payments are not deductible by the payer and are not taxable to the recipient. 2012 tax form 1040ez Specifically designated as child support. 2012 tax form 1040ez   A payment will be treated as specifically designated as child support to the extent that the payment is reduced either: On the happening of a contingency relating to your child, or At a time that can be clearly associated with the contingency. 2012 tax form 1040ez A payment may be treated as specifically designated as child support even if other separate payments are specifically designated as child support. 2012 tax form 1040ez Contingency relating to your child. 2012 tax form 1040ez   A contingency relates to your child if it depends on any event relating to that child. 2012 tax form 1040ez It does not matter whether the event is certain or likely to occur. 2012 tax form 1040ez Events relating to your child include the child's: Becoming employed, Dying, Leaving the household, Leaving school, Marrying, or Reaching a specified age or income level. 2012 tax form 1040ez Clearly associated with a contingency. 2012 tax form 1040ez   Payments that would otherwise qualify as alimony are presumed to be reduced at a time clearly associated with the happening of a contingency relating to your child only in the following situations. 2012 tax form 1040ez The payments are to be reduced not more than 6 months before or after the date the child will reach 18, 21, or local age of majority. 2012 tax form 1040ez The payments are to be reduced on two or more occasions that occur not more than 1 year before or after a different one of your children reaches a certain age from 18 to 24. 2012 tax form 1040ez This certain age must be the same for each child, but need not be a whole number of years. 2012 tax form 1040ez In all other situations, reductions in payments are not treated as clearly associated with the happening of a contingency relating to your child. 2012 tax form 1040ez   Either you or the IRS can overcome the presumption in the two situations above. 2012 tax form 1040ez This is done by showing that the time at which the payments are to be reduced was determined independently of any contingencies relating to your children. 2012 tax form 1040ez For example, if you can show that the period of alimony payments is customary in the local jurisdiction, such as a period equal to one-half of the duration of the marriage, you can overcome the presumption and may be able to treat the amount as alimony. 2012 tax form 1040ez How To Deduct Alimony Paid You can deduct alimony you paid, whether or not you itemize deductions on your return. 2012 tax form 1040ez You must file Form 1040. 2012 tax form 1040ez You cannot use Form 1040A or Form 1040EZ. 2012 tax form 1040ez Enter the amount of alimony you paid on Form 1040, line 31a. 2012 tax form 1040ez In the space provided on line 31b, enter your spouse's social security number (SSN) or individual taxpayer identification number (ITIN). 2012 tax form 1040ez If you paid alimony to more than one person, enter the SSN or ITIN of one of the recipients. 2012 tax form 1040ez Show the SSN or ITIN and amount paid to each other recipient on an attached statement. 2012 tax form 1040ez Enter your total payments on line 31a. 2012 tax form 1040ez You must provide your spouse's SSN or ITIN. 2012 tax form 1040ez If you do not, you may have to pay a $50 penalty and your deduction may be disallowed. 2012 tax form 1040ez For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. 2012 tax form 1040ez How To Report Alimony Received Report alimony you received as income on Form 1040, line 11. 2012 tax form 1040ez You cannot use Form 1040A or Form 1040EZ. 2012 tax form 1040ez You must give the person who paid the alimony your SSN or ITIN. 2012 tax form 1040ez If you do not, you may have to pay a $50 penalty. 2012 tax form 1040ez Recapture Rule If your alimony payments decrease or end during the first 3 calendar years, you may be subject to the recapture rule. 2012 tax form 1040ez If you are subject to this rule, you have to include in income in the third year part of the alimony payments you previously deducted. 2012 tax form 1040ez Your spouse can deduct in the third year part of the alimony payments he or she previously included in income. 2012 tax form 1040ez The 3-year period starts with the first calendar year you make a payment qualifying as alimony under a decree of divorce or separate maintenance or a written separation agreement. 2012 tax form 1040ez Do not include any time in which payments were being made under temporary support orders. 2012 tax form 1040ez The second and third years are the next 2 calendar years, whether or not payments are made during those years. 2012 tax form 1040ez The reasons for a reduction or end of alimony payments that can require a recapture include: A change in your divorce or separation instrument, A failure to make timely payments, A reduction in your ability to provide support, or A reduction in your spouse's support needs. 2012 tax form 1040ez When to apply the recapture rule. 2012 tax form 1040ez   You are subject to the recapture rule in the third year if the alimony you pay in the third year decreases by more than $15,000 from the second year or the alimony you pay in the second and third years decreases significantly from the alimony you pay in the first year. 2012 tax form 1040ez   When you figure a decrease in alimony, do not include the following amounts. 2012 tax form 1040ez Payments made under a temporary support order. 2012 tax form 1040ez Payments required over a period of at least 3 calendar years that vary because they are a fixed part of your income from a business or property, or from compensation for employment or self-employment. 2012 tax form 1040ez Payments that decrease because of the death of either spouse or the remarriage of the spouse receiving the payments before the end of the third year. 2012 tax form 1040ez Figuring the recapture. 2012 tax form 1040ez   You can use Worksheet 1 in Publication 504 to figure recaptured alimony. 2012 tax form 1040ez Including the recapture in income. 2012 tax form 1040ez   If you must include a recapture amount in income, show it on Form 1040, line 11 (“Alimony received”). 2012 tax form 1040ez Cross out “received” and enter “recapture. 2012 tax form 1040ez ” On the dotted line next to the amount, enter your spouse's last name and SSN or ITIN. 2012 tax form 1040ez Deducting the recapture. 2012 tax form 1040ez   If you can deduct a recapture amount, show it on Form 1040, line 31a (“Alimony paid”). 2012 tax form 1040ez Cross out “paid” and enter “recapture. 2012 tax form 1040ez ” In the space provided, enter your spouse's SSN or ITIN. 2012 tax form 1040ez Prev  Up  Next   Home   More Online Publications