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Tax Form 2010

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Tax Form 2010

Tax form 2010 17. Tax form 2010   Individual Retirement Arrangements (IRAs) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Traditional IRAsWho Can Open a Traditional IRA? When and How Can a Traditional IRA Be Opened? How Much Can Be Contributed? When Can Contributions Be Made? How Much Can You Deduct? Nondeductible Contributions Inherited IRAs Can You Move Retirement Plan Assets? When Can You Withdraw or Use IRA Assets? When Must You Withdraw IRA Assets? (Required Minimum Distributions) Are Distributions Taxable? What Acts Result in Penalties or Additional Taxes? Roth IRAsWhat Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA? Can You Move Amounts Into a Roth IRA? Are Distributions Taxable? What's New Traditional IRA contribution and deduction limit. Tax form 2010  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. Tax form 2010 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. Tax form 2010 For more information, see How Much Can Be Contributed? later. Tax form 2010 Roth IRA contribution limit. Tax form 2010  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. Tax form 2010 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. Tax form 2010 However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Tax form 2010 For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? later. Tax form 2010 Modified AGI limit for traditional IRA contributions increased. Tax form 2010  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. Tax form 2010 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. Tax form 2010 If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Tax form 2010 See How Much Can You Deduct , later. Tax form 2010 Modified AGI limit for Roth IRA contributions increased. Tax form 2010  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Tax form 2010 Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Tax form 2010 You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Tax form 2010 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. Tax form 2010 You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Tax form 2010 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-. Tax form 2010 You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Tax form 2010 See Can You Contribute to a Roth IRA , later. Tax form 2010 Net Investment Income Tax. Tax form 2010   For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan including IRAs (for example; 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Tax form 2010 However, these distributions are taken into account when determining the modified adjusted gross income threshold. Tax form 2010 Distributions from a nonqualified retirement plan are included in net investment income. Tax form 2010 See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Tax form 2010 Name change. Tax form 2010  All spousal IRAs have been renamed Kay Bailey Hutchison Spousal IRAs. Tax form 2010 There are no changes to the rules regarding these IRAs. Tax form 2010 See Kay Bailey Hutchison Spousal IRA Limit , later, for more information. Tax form 2010 Reminders 2014 limits. Tax form 2010   You can find information about the 2014 contribution and AGI limits in Publication 590. Tax form 2010 Contributions to both traditional and Roth IRAs. Tax form 2010   For information on your combined contribution limit if you contribute to both traditional and Roth IRAs, see Roth IRAs and traditional IRAs under How Much Can Be Contributed? in Roth IRAs, later. Tax form 2010 Statement of required minimum distribution. Tax form 2010  If a minimum distribution from your IRA is required, the trustee, custodian, or issuer that held the IRA at the end of the preceding year must either report the amount of the required minimum distribution to you, or offer to calculate it for you. Tax form 2010 The report or offer must include the date by which the amount must be distributed. Tax form 2010 The report is due January 31 of the year in which the minimum distribution is required. Tax form 2010 It can be provided with the year-end fair market value statement that you normally get each year. Tax form 2010 No report is required for IRAs of owners who have died. Tax form 2010 IRA interest. Tax form 2010  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Tax form 2010 Tax on your traditional IRA is generally deferred until you take a distribution. Tax form 2010 Do not report this interest on your tax return as tax-exempt interest. Tax form 2010 Form 8606. Tax form 2010   To designate contributions as nondeductible, you must file Form 8606, Nondeductible IRAs. Tax form 2010 The term “50 or older” is used several times in this chapter. Tax form 2010 It refers to an IRA owner who is age 50 or older by the end of the tax year. Tax form 2010 Introduction An individual retirement arrangement (IRA) is a personal savings plan that gives you tax advantages for setting aside money for your retirement. Tax form 2010 This chapter discusses the following topics. Tax form 2010 The rules for a traditional IRA (any IRA that is not a Roth or SIMPLE IRA). Tax form 2010 The Roth IRA, which features nondeductible contributions and tax-free distributions. Tax form 2010 Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs) are not discussed in this chapter. Tax form 2010 For more information on these plans and employees' SEP IRAs and SIMPLE IRAs that are part of these plans, see Publications 560 and 590. Tax form 2010 For information about contributions, deductions, withdrawals, transfers, rollovers, and other transactions, see Publication 590. Tax form 2010 Useful Items - You may want to see: Publication 560 Retirement Plans for Small Business 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 5329 Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts 8606 Nondeductible IRAs Traditional IRAs In this chapter, the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Tax form 2010 ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Tax form 2010 Two advantages of a traditional IRA are: You may be able to deduct some or all of your contributions to it, depending on your circumstances, and Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Tax form 2010 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. Tax form 2010 What is compensation?   Generally, compensation is what you earn from working. Tax form 2010 Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. Tax form 2010 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). Tax form 2010   Scholarship and fellowship payments are compensation for this purpose only if shown in box 1 of Form W-2. Tax form 2010   Compensation also includes commissions and taxable alimony and separate maintenance payments. Tax form 2010 Self-employment income. Tax form 2010   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 deductible part of your self-employment tax. Tax form 2010   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Tax form 2010 Nontaxable combat pay. Tax form 2010   For IRA purposes, if you were a member of the U. Tax form 2010 S. Tax form 2010 Armed Forces, your compensation includes any nontaxable combat pay you receive. Tax form 2010 What is not compensation?   Compensation does not include any of the following items. Tax form 2010 Earnings and profits from property, such as rental income, interest income, and dividend income. Tax form 2010 Pension or annuity income. Tax form 2010 Deferred compensation received (compensation payments postponed from a past year). Tax form 2010 Income from a partnership for which you do not provide services that are a material income-producing factor. Tax form 2010 Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Tax form 2010 Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Tax form 2010 When and How Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Tax form 2010 However, the time for making contributions for any year is limited. Tax form 2010 See When Can Contributions Be Made , later. Tax form 2010 You can open different kinds of IRAs with a variety of organizations. Tax form 2010 You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Tax form 2010 You can also open an IRA through your stockbroker. Tax form 2010 Any IRA must meet Internal Revenue Code requirements. Tax form 2010 Kinds of traditional IRAs. Tax form 2010   Your traditional IRA can be an individual retirement account or annuity. Tax form 2010 It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Tax form 2010 How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Tax form 2010 These limits and other rules are explained below. Tax form 2010 Community property laws. Tax form 2010   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. Tax form 2010 This is the rule even in states with community property laws. Tax form 2010 Brokers' commissions. Tax form 2010   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Tax form 2010 Trustees' fees. Tax form 2010   Trustees' administrative fees are not subject to the contribution limit. Tax form 2010 Qualified reservist repayments. Tax form 2010   If you are (or 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 you received. Tax form 2010 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. Tax form 2010 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 similar arrangement. Tax form 2010   For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1 of Publication 590. Tax form 2010 Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Tax form 2010 (See Roth IRAs, later. Tax form 2010 ) General limit. Tax form 2010   For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts. Tax form 2010 $5,500 ($6,500 if you are 50 or older). Tax form 2010 Your taxable compensation (defined earlier) for the year. Tax form 2010 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. Tax form 2010 (See Nondeductible Contributions , later. Tax form 2010 ) Qualified reservist repayments do not affect this limit. Tax form 2010 Example 1. Tax form 2010 Betty, who is 34 years old and single, earned $24,000 in 2013. Tax form 2010 Her IRA contributions for 2013 are limited to $5,500. Tax form 2010 Example 2. Tax form 2010 John, an unmarried college student working part time, earned $3,500 in 2013. Tax form 2010 His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Tax form 2010 Kay Bailey Hutchison Spousal IRA limit. Tax form 2010   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 amounts. Tax form 2010 $5,500 ($6,500 if you are 50 or older). Tax form 2010 The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Tax form 2010 Your spouse's IRA contribution for the year to a traditional IRA. Tax form 2010 Any contribution for the year to a Roth IRA on behalf of your spouse. Tax form 2010 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 50 or older, or $13,000 if both of you are 50 or older). Tax form 2010 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). Tax form 2010 Contributions must be in the form of money (cash, check, or money order). Tax form 2010 Property cannot be contributed. Tax form 2010 Contributions must be made by due date. Tax form 2010   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. Tax form 2010 Age 70½ rule. Tax form 2010   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Tax form 2010   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Tax form 2010 If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Tax form 2010 Designating year for which contribution is made. Tax form 2010   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. Tax form 2010 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). Tax form 2010 Filing before a contribution is made. Tax form 2010   You can file your return claiming a traditional IRA contribution before the contribution is actually made. Tax form 2010 Generally, the contribution must be made by the due date of your return, not including extensions. Tax form 2010 Contributions not required. Tax form 2010   You do not have to contribute to your traditional IRA for every tax year, even if you can. Tax form 2010 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 it applies). Tax form 2010 However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Tax form 2010 See Limit If Covered by Employer Plan , later. Tax form 2010 You may be able to claim a credit for contributions to your traditional IRA. Tax form 2010 For more information, see chapter 37. Tax form 2010 Trustees' fees. Tax form 2010   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Tax form 2010 However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Tax form 2010 See chapter 28. Tax form 2010 Brokers' commissions. Tax form 2010   Brokers' commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Tax form 2010 Full deduction. Tax form 2010   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 traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older in 2013). Tax form 2010 100% of your compensation. Tax form 2010 This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Tax form 2010 Kay Bailey Hutchison Spousal IRA. Tax form 2010   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 the following amounts. Tax form 2010 $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older in 2013). Tax form 2010 The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Tax form 2010 The IRA deduction for the year of the spouse with the greater compensation. Tax form 2010 Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Tax form 2010 Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Tax form 2010 This limit is reduced by any contributions to a 501(c)(18) plan on behalf of the spouse with the lesser compensation. Tax form 2010 Note. Tax form 2010 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. Tax form 2010 After a divorce or legal separation, you can deduct only contributions to your own IRA. Tax form 2010 Your deductions are subject to the rules for single individuals. Tax form 2010 Covered by an employer retirement plan. Tax form 2010   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. Tax form 2010 This is discussed later under Limit If Covered by Employer Plan . Tax form 2010 Limits on the amount you can deduct do not affect the amount that can be contributed. Tax form 2010 See Nondeductible Contributions , later. Tax form 2010 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. Tax form 2010 The “Retirement plan” box should be checked if you were covered. Tax form 2010 Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered by an Employer Plan , later. Tax form 2010 If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Tax form 2010 Federal judges. Tax form 2010   For purposes of the IRA deduction, federal judges are covered by an employer retirement plan. Tax form 2010 For Which Year(s) Are You Covered by an Employer Plan? Special rules apply to determine the tax years for which you are covered by an employer plan. Tax form 2010 These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Tax form 2010 Tax year. Tax form 2010   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Tax form 2010 For almost all people, the tax year is the calendar year. Tax form 2010 Defined contribution plan. Tax form 2010   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. Tax form 2010   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Tax form 2010 Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Tax form 2010 Defined benefit plan. Tax form 2010   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. Tax form 2010 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. Tax form 2010   A defined benefit plan is any plan that is not a defined contribution plan. Tax form 2010 Defined benefit plans include pension plans and annuity plans. Tax form 2010 No vested interest. Tax form 2010   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. Tax form 2010 Situations in Which You Are Not Covered by an Employer Plan Unless you are covered under another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Tax form 2010 Social security or railroad retirement. Tax form 2010   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Tax form 2010 Benefits from a previous employer's plan. Tax form 2010   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Tax form 2010 Reservists. Tax form 2010   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. Tax form 2010 You are not covered by the plan if both of the following conditions are met. Tax form 2010 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. Tax form 2010 You did not serve more than 90 days on active duty during the year (not counting duty for training). Tax form 2010 Volunteer firefighters. Tax form 2010   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Tax form 2010 You are not covered by the plan if both of the following conditions are met. Tax form 2010 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. Tax form 2010 Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Tax form 2010 Limit If Covered by Employer Plan 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. Tax form 2010 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. Tax form 2010 These amounts vary depending on your filing status. Tax form 2010 To determine if your deduction is subject to phaseout, you must determine your modified adjusted gross income (AGI) and your filing status. Tax form 2010 See Filing status and Modified adjusted gross income (AGI) , later. Tax form 2010 Then use Table 17-1 or 17-2 to determine if the phaseout applies. Tax form 2010 Social security recipients. Tax form 2010   Instead of using Table 17-1 or Table 17-2, use the worksheets in Appendix B of Publication 590 if, for the year, all of the following apply. Tax form 2010 You received social security benefits. Tax form 2010 You received taxable compensation. Tax form 2010 Contributions were made to your traditional IRA. Tax form 2010 You or your spouse was covered by an employer retirement plan. Tax form 2010 Use those worksheets to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Tax form 2010 Deduction phaseout. Tax form 2010   If you were 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 17-1. Tax form 2010 Table 17-1. Tax form 2010 Effect of Modified AGI1 on Deduction if You Are Covered by 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. Tax form 2010 IF your filing status is. Tax form 2010 . Tax form 2010 . Tax form 2010   AND your modified AGI is. Tax form 2010 . Tax form 2010 . Tax form 2010   THEN you can take. Tax form 2010 . Tax form 2010 . Tax form 2010 single   or  head of household   $59,000 or less   a full deduction. Tax form 2010   more than $59,000 but less than $69,000   a partial deduction. Tax form 2010   $69,000 or more   no deduction. Tax form 2010 married filing jointly   or  qualifying widow(er)   $95,000 or less   a full deduction. Tax form 2010   more than $95,000 but less than $115,000   a partial deduction. Tax form 2010   $115,000 or more   no deduction. Tax form 2010 married filing separately2   less than $10,000   a partial deduction. Tax form 2010   $10,000 or more   no deduction. Tax form 2010 1Modified AGI (adjusted gross income). Tax form 2010 See Modified adjusted gross income (AGI) . Tax form 2010 2If 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” column). Tax form 2010 If your spouse is covered. Tax form 2010   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 17-2. Tax form 2010 Filing status. Tax form 2010   Your filing status depends primarily on your marital status. Tax form 2010 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. Tax form 2010 If you need more information on filing status, see chapter 2. Tax form 2010 Lived apart from spouse. Tax form 2010   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. Tax form 2010 Table 17-2. Tax form 2010 Effect of Modified AGI1 on Deduction if You Are NOT Covered by 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. Tax form 2010 IF your filing status is. Tax form 2010 . Tax form 2010 . Tax form 2010   AND your modified AGI is. Tax form 2010 . Tax form 2010 . Tax form 2010   THEN you can take. Tax form 2010 . Tax form 2010 . Tax form 2010 single, head of household, or qualifying widow(er)   any amount   a full deduction. Tax form 2010 married filing jointly or separately with a spouse who is not covered by a plan at work   any amount   a full deduction. Tax form 2010 married filing jointly with a spouse who is covered by a plan at work   $178,000 or less   a full deduction. Tax form 2010   more than $178,000 but less than $188,000   a partial deduction. Tax form 2010   $188,000 or more   no deduction. Tax form 2010 married filing separately with a spouse who is covered by a plan at work2   less than $10,000   a partial deduction. Tax form 2010   $10,000 or more   no deduction. Tax form 2010 1Modified AGI (adjusted gross income). Tax form 2010 See Modified adjusted gross income (AGI) . Tax form 2010 2You are entitled to the full deduction if you did not live with your spouse at any time during the year. Tax form 2010 Modified adjusted gross income (AGI). Tax form 2010   How you figure your modified AGI depends on whether you are filing Form 1040 or Form 1040A. Tax form 2010 If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Publication 590. Tax form 2010 You may be able to use Worksheet 17-1 to figure your modified AGI. Tax form 2010    Do not assume that your modified AGI is the same as your compensation. Tax form 2010 Your modified AGI may include income in addition to your compensation (discussed earlier), such as interest, dividends, and income from IRA distributions. Tax form 2010 Form 1040. Tax form 2010   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following eight amounts. Tax form 2010 IRA deduction. Tax form 2010 Student loan interest deduction. Tax form 2010 Tuition and fees deduction. Tax form 2010 Domestic production activities deduction. Tax form 2010 Foreign earned income exclusion. Tax form 2010 Foreign housing exclusion or deduction. Tax form 2010 Exclusion of qualified savings bond interest shown on Form 8815, Exclusion of Interest From Series EE and I U. Tax form 2010 S. Tax form 2010 Savings Bonds Issued After 1989. Tax form 2010 Exclusion of employer-provided adoption benefits shown on Form 8839, Qualified Adoption Expenses. Tax form 2010 This is your modified AGI. Tax form 2010 Form 1040A. Tax form 2010   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. Tax form 2010 IRA deduction. Tax form 2010 Student loan interest deduction. Tax form 2010 Tuition and fees deduction. Tax form 2010 Exclusion of qualified savings bond interest shown on Form 8815. Tax form 2010 This is your modified AGI. Tax form 2010 Both contributions for 2013 and distributions in 2013. Tax form 2010   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Tax form 2010 You received distributions in 2013 from one or more traditional IRAs. Tax form 2010 You made contributions to a traditional IRA for 2013. Tax form 2010 Some of those contributions may be nondeductible contributions. Tax form 2010 If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Tax form 2010 To do this, you can use Worksheet 1-5, Figuring the Taxable Part of Your IRA Distribution, in Publication 590. Tax form 2010   If at least one of the above does not apply, figure your modified AGI using Worksheet 17-1, later. Tax form 2010    How to figure your reduced IRA deduction. Tax form 2010   You can figure your reduced IRA deduction for either Form 1040 or Form 1040A by using the worksheets in chapter 1 of Publication 590. Tax form 2010 Also, the instructions for Form 1040 and Form 1040A include similar worksheets that you may be able to use instead. Tax form 2010 Worksheet 17-1. Tax form 2010 Figuring Your Modified AGI Use this worksheet to figure your modified adjusted gross income for traditional IRA purposes. Tax form 2010 1. Tax form 2010 Enter your adjusted gross income (AGI) from Form 1040, line 38, or Form 1040A, line 22, figured without taking into account the amount from Form 1040, line 32, or Form 1040A, line 17 1. Tax form 2010   2. Tax form 2010 Enter any student loan interest deduction from Form 1040, line 33, or Form 1040A, line 18 2. Tax form 2010   3. Tax form 2010 Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Tax form 2010   4. Tax form 2010 Enter any domestic production activities deduction from Form 1040, line 35 4. Tax form 2010   5. Tax form 2010 Enter any foreign earned income and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Tax form 2010   6. Tax form 2010 Enter any foreign housing deduction from Form 2555, line 50 6. Tax form 2010   7. Tax form 2010 Enter any excludable savings bond interest from Form 8815, line 14 7. Tax form 2010   8. Tax form 2010 Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Tax form 2010   9. Tax form 2010 Add lines 1 through 8. Tax form 2010 This is your Modified AGI for traditional IRA purposes 9. Tax form 2010   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Tax form 2010 If you file Form 1040A, enter your IRA deduction on line 17. Tax form 2010 You cannot deduct IRA contributions on Form 1040EZ. Tax form 2010 Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Tax form 2010 The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Tax form 2010 Example. Tax form 2010 Mike is 28 years old and single. Tax form 2010 In 2013, he was covered by a retirement plan at work. Tax form 2010 His salary was $57,312. Tax form 2010 His modified AGI was $70,000. Tax form 2010 Mike made a $5,500 IRA contribution for 2013. Tax form 2010 Because he was covered by a retirement plan and his modified AGI was over $69,000, he cannot deduct his $5,500 IRA contribution. Tax form 2010 He must designate this contribution as a nondeductible contribution by reporting it on Form 8606, as explained next. Tax form 2010 Form 8606. Tax form 2010   To designate contributions as nondeductible, you must file Form 8606. Tax form 2010   You do not have to designate a contribution as nondeductible until you file your tax return. Tax form 2010 When you file, you can even designate otherwise deductible contributions as nondeductible. Tax form 2010   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Tax form 2010 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. Tax form 2010 In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Tax form 2010 See Form 8606 under Distributions Fully or Partly Taxable, later. Tax form 2010 Failure to report nondeductible contributions. Tax form 2010   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated as deductible contributions when withdrawn. Tax form 2010 All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Tax form 2010 Penalty for overstatement. Tax form 2010   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. Tax form 2010 Penalty for failure to file Form 8606. Tax form 2010   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. Tax form 2010    Tax on earnings on nondeductible contributions. Tax form 2010   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. Tax form 2010 See When Can You Withdraw or Use IRA Assets , later. Tax form 2010 Cost basis. Tax form 2010   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Tax form 2010 Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Tax form 2010 Inherited IRAs If you inherit a traditional IRA, you are called a beneficiary. Tax form 2010 A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Tax form 2010 Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Tax form 2010 Inherited from spouse. Tax form 2010   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Tax form 2010 You can: Treat it as your own IRA by designating yourself as the account owner. Tax form 2010 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 (section 403(b) plan), or Deferred compensation plan of a state or local government (section 457 plan). Tax form 2010 Treat yourself as the beneficiary rather than treating the IRA as your own. Tax form 2010 Treating it as your own. Tax form 2010   You will be considered to have chosen to treat the IRA as your own if: Contributions (including rollover contributions) are made to the inherited IRA, or You do not take the required minimum distribution for a year as a beneficiary of the IRA. Tax form 2010 You will only be considered to have chosen to treat the IRA as your own if: You are the sole beneficiary of the IRA, and You have an unlimited right to withdraw amounts from it. Tax form 2010   However, if you receive a distribution from your deceased spouse's IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution is not a required distribution, even if you are not the sole beneficiary of your deceased spouse's IRA. Tax form 2010 Inherited from someone other than spouse. Tax form 2010   If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. Tax form 2010 This means that you cannot make any contributions to the IRA. Tax form 2010 It also means you cannot roll over any amounts into or out of the inherited IRA. Tax form 2010 However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary. Tax form 2010 For more information, see the discussion of inherited IRAs under Rollover From One IRA Into Another, later. Tax form 2010 Can You Move Retirement Plan Assets? You can transfer, tax free, assets (money or property) from other retirement plans (including traditional IRAs) to a traditional IRA. Tax form 2010 You can make the following kinds of transfers. Tax form 2010 Transfers from one trustee to another. Tax form 2010 Rollovers. Tax form 2010 Transfers incident to a divorce. Tax form 2010 Transfers to Roth IRAs. Tax form 2010   Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. Tax form 2010 You can also move assets from a qualified retirement plan to a Roth IRA. Tax form 2010 See Can You Move Amounts Into a Roth IRA? under Roth IRAs, later. Tax form 2010 Trustee-to-Trustee Transfer A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Tax form 2010 Because there is no distribution to you, the transfer is tax free. Tax form 2010 Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers, discussed later under Rollover From One IRA Into Another . Tax form 2010 For information about direct transfers to IRAs from retirement plans other than IRAs, see Can You Move Retirement Plan Assets? in chapter 1 and Can You Move Amounts Into a Roth IRA? in chapter 2 of Publication 590. Tax form 2010 Rollovers Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute (roll over) to another retirement plan. Tax form 2010 The contribution to the second retirement plan is called a “rollover contribution. Tax form 2010 ” Note. Tax form 2010 An amount rolled over tax free from one retirement plan to another is generally includible in income when it is distributed from the second plan. Tax form 2010 Kinds of rollovers to a traditional IRA. Tax form 2010   You can roll over amounts from the following plans into a traditional IRA: A traditional IRA, An employer's qualified retirement plan for its employees, A deferred compensation plan of a state or local government (section 457 plan), or A tax-sheltered annuity plan (section 403(b) plan). Tax form 2010 Treatment of rollovers. Tax form 2010   You cannot deduct a rollover contribution, but you must report the rollover distribution on your tax return as discussed later under Reporting rollovers from IRAs and under Reporting rollovers from employer plans . Tax form 2010 Kinds of rollovers from a traditional IRA. Tax form 2010   You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. Tax form 2010 These plans include the federal Thrift Savings Fund (for federal employees), deferred compensation plans of state or local governments (section 457 plans), and tax-sheltered annuity plans (section 403(b) plans). Tax form 2010 The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). Tax form 2010 Qualified plans may, but are not required to, accept such rollovers. Tax form 2010 Time limit for making a rollover contribution. Tax form 2010   You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan. Tax form 2010 The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. Tax form 2010 For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax form 2010 Extension of rollover period. Tax form 2010   If an amount distributed to you from a traditional IRA or a qualified employer retirement plan is a frozen deposit at any time during the 60-day period allowed for a rollover, special rules extend the rollover period. Tax form 2010 For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax form 2010 More information. Tax form 2010   For more information on rollovers, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax form 2010 Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Tax form 2010 Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. Tax form 2010 Waiting period between rollovers. Tax form 2010   Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. Tax form 2010 You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the IRA into which you made the tax-free rollover. Tax form 2010   The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA. Tax form 2010 Example. Tax form 2010 You have two traditional IRAs, IRA-1 and IRA-2. Tax form 2010 You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). Tax form 2010 You cannot, within 1 year of the distribution from IRA-1, make a tax-free rollover of any distribution from either IRA-1 or IRA-3 into another traditional IRA. Tax form 2010 However, the rollover from IRA-1 into IRA-3 does not prevent you from making a tax-free rollover from IRA-2 into any other traditional IRA. Tax form 2010 This is because you have not, within the last year, rolled over, tax free, any distribution from IRA-2 or made a tax-free rollover into IRA-2. Tax form 2010 Exception. Tax form 2010   For an exception for distributions from failed financial institutions, see Rollover From One IRA Into Another under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax form 2010 Partial rollovers. Tax form 2010   If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. Tax form 2010 The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). Tax form 2010 The amount you keep may be subject to the 10% additional tax on early distributions, discussed later under What Acts Result in Penalties or Additional Taxes? . Tax form 2010 Required distributions. Tax form 2010   Amounts that must be distributed during a particular year under the required distribution rules (discussed later) are not eligible for rollover treatment. Tax form 2010 Inherited IRAs. Tax form 2010   If you inherit a traditional IRA from your spouse, you generally can roll it over, or you can choose to make the inherited IRA your own. Tax form 2010 See Treating it as your own , earlier. Tax form 2010 Not inherited from spouse. Tax form 2010   If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. Tax form 2010 You must withdraw the IRA assets within a certain period. Tax form 2010 For more information, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Tax form 2010 Reporting rollovers from IRAs. Tax form 2010   Report any rollover from one traditional IRA to the same or another traditional IRA on lines 15a and 15b, Form 1040, or lines 11a and 11b, Form 1040A, as follows. Tax form 2010   Enter the total amount of the distribution on Form 1040, line 15a, or Form 1040A, line 11a. Tax form 2010 If the total amount on Form 1040, line 15a, or Form 1040A, line 11a, was rolled over, enter zero on Form 1040, line 15b, or Form 1040A, line 11b. Tax form 2010 If the total distribution was not rolled over, enter the taxable portion of the part that was not rolled over on Form 1040, line 15b, or Form 1040A, line 11b. Tax form 2010 Put “Rollover” next to Form 1040, line 15b, or Form 1040A, line 11b. Tax form 2010 See your tax return instructions. Tax form 2010   If you rolled over the distribution into a qualified plan (other than an IRA) or you make the rollover in 2014, attach a statement explaining what you did. Tax form 2010 Rollover From Employer's Plan Into an IRA You can roll over into a traditional 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; Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). Tax form 2010 A qualified plan is one that meets the requirements of the Internal Revenue Code. Tax form 2010 Eligible rollover distribution. Tax form 2010   Generally, an eligible rollover distribution is any distribution of all or part of the balance to your credit in a qualified retirement plan except the following. Tax form 2010 A required minimum distribution (explained later under When Must You Withdraw IRA Assets? (Required Minimum Distributions) ). Tax form 2010 A hardship distribution. Tax form 2010 Any of a series of substantially equal periodic distributions paid at least once a year over: Your lifetime or life expectancy, The lifetimes or life expectancies of you and your beneficiary, or A period of 10 years or more. Tax form 2010 Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or of excess annual additions and any allocable gains. Tax form 2010 A loan treated as a distribution because it does not satisfy certain requirements either when made or later (such as upon default), unless the participant's accrued benefits are reduced (offset) to repay the loan. Tax form 2010 Dividends on employer securities. Tax form 2010 The cost of life insurance coverage. Tax form 2010 Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Tax form 2010 To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Tax form 2010 See Form 8606 under Distributions Fully or Partly Taxable, later. Tax form 2010 Rollover by nonspouse beneficiary. Tax form 2010   A direct transfer from a deceased employee's qualified pension, profit-sharing, or stock bonus plan; annuity plan; tax-sheltered annuity (section 403(b)) plan; or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. Tax form 2010 The IRA is treated as an inherited IRA. Tax form 2010 For more information about inherited IRAs, see Inherited IRAs , earlier. Tax form 2010 Reporting rollovers from employer plans. Tax form 2010    Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. Tax form 2010 This amount should be shown in box 1 of Form 1099-R. Tax form 2010 From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. Tax form 2010 From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Tax form 2010 Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. Tax form 2010 Also, enter "Rollover" next to Form 1040, line 16b, or Form 1040A, line 12b. Tax form 2010 Transfers Incident to Divorce If an interest in a traditional IRA is transferred from your spouse or former spouse to you by a divorce or separate maintenance decree or a written document related to such a decree, the interest in the IRA, starting from the date of the transfer, is treated as your IRA. Tax form 2010 The transfer is tax free. Tax form 2010 For detailed information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax form 2010 Converting From Any Traditional IRA to a Roth IRA Allowable conversions. Tax form 2010   You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. Tax form 2010 The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. Tax form 2010 If properly (and timely) rolled over, the 10% additional tax on early distributions will not apply. Tax form 2010 However, a part or all of the conversion contribution from your traditional IRA is included in your gross income. Tax form 2010 Required distributions. Tax form 2010   You cannot convert amounts that must be distributed from your traditional IRA for a particular year (including the calendar year in which you reach age 70½) under the required distribution rules (discussed later). Tax form 2010 Income. Tax form 2010   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. Tax form 2010 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. Tax form 2010   You do not include in gross income any part of a distribution from a traditional IRA that is a return of your basis, as discussed later. Tax form 2010   You must file Form 8606 to report 2013 conversions from traditional, SEP, or SIMPLE IRAs to a Roth IRA in 2013 (unless you recharacterized the entire amount) and to figure the amount to include in income. Tax form 2010   If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Tax form 2010 See chapter 4. Tax form 2010 Recharacterizations You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. Tax form 2010 This is called recharacterizing the contribution. Tax form 2010 See Can You Move Retirement Plan Assets? in chapter 1 of Publication 590 for more detailed information. Tax form 2010 How to recharacterize a contribution. Tax form 2010   To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. Tax form 2010 If the transfer is made by the due date (including extensions) for your tax return for the year during which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. Tax form 2010 If you recharacterize your contribution, you must do all three of the following. Tax form 2010 Include in the transfer any net income allocable to the contribution. Tax form 2010 If there was a loss, the net income you must transfer may be a negative amount. Tax form 2010 Report the recharacterization on your tax return for the year during which the contribution was made. Tax form 2010 Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA. Tax form 2010 No deduction allowed. Tax form 2010   You cannot deduct the contribution to the first IRA. Tax form 2010 Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. Tax form 2010 Required notifications. Tax form 2010   To recharacterize a contribution, you must notify both the trustee of the first IRA (the one to which the contribution was actually made) and the trustee of the second IRA (the one to which the contribution is being moved) that you have elected to treat the contribution as having been made to the second IRA rather than the first. Tax form 2010 You must make the notifications by the date of the transfer. Tax form 2010 Only one notification is required if both IRAs are maintained by the same trustee. Tax form 2010 The notification(s) must include all of the following information. Tax form 2010 The type and amount of the contribution to the first IRA that is to be recharacterized. Tax form 2010 The date on which the contribution was made to the first IRA and the year for which it was made. Tax form 2010 A direction to the trustee of the first IRA to transfer in a trustee-to-trustee transfer the amount of the contribution and any net income (or loss) allocable to the contribution to the trustee of the second IRA. Tax form 2010 The name of the trustee of the first IRA and the name of the trustee of the second IRA. Tax form 2010 Any additional information needed to make the transfer. Tax form 2010 Reporting a recharacterization. Tax form 2010   If you elect to recharacterize a contribution to one IRA as a contribution to another IRA, you must report the recharacterization on your tax return as directed by Form 8606 and its instructions. Tax form 2010 You must treat the contribution as having been made to the second IRA. Tax form 2010 When Can You Withdraw or Use IRA Assets? There are rules limiting use of your IRA assets and distributions from it. Tax form 2010 Violation of the rules generally results in additional taxes in the year of violation. Tax form 2010 See What Acts Result in Penalties or Additional Taxes , later. Tax form 2010 Contributions returned before the due date of return. Tax form 2010   If you made IRA contributions in 2013, you can withdraw them tax free by the due date of your return. Tax form 2010 If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. Tax form 2010 You can do this if, for each contribution you withdraw, both of the following conditions apply. Tax form 2010 You did not take a deduction for the contribution. Tax form 2010 You withdraw any interest or other income earned on the contribution. Tax form 2010 You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Tax form 2010 If there was a loss, the net income earned on the contribution may be a negative amount. Tax form 2010 Note. Tax form 2010 To calculate the amount you must withdraw, see Worksheet 1-4 under When Can You Withdraw or Use Assets? in chapter 1 of Publication 590. Tax form 2010 Earnings includible in income. Tax form 2010   You must include in income any earnings on the contributions you withdraw. Tax form 2010 Include the earnings in income for the year in which you made the contributions, not in the year in which you withdraw them. Tax form 2010 Generally, except for any part of a withdrawal that is a return of nondeductible contributions (basis), any withdrawal of your contributions after the due date (or extended due date) of your return will be treated as a taxable distribution. Tax form 2010 Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes?, later. Tax form 2010    Early distributions tax. Tax form 2010   The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. Tax form 2010 However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax. Tax form 2010 When Must You Withdraw IRA Assets? (Required Minimum Distributions) You cannot keep funds in a traditional IRA indefinitely. Tax form 2010 Eventually they must be distributed. Tax form 2010 If there are no distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required. Tax form 2010 See Excess Accumulations (Insufficient Distributions) , later. Tax form 2010 The requirements for distributing IRA funds differ depending on whether you are the IRA owner or the beneficiary of a decedent's IRA. Tax form 2010 Required minimum distribution. Tax form 2010   The amount that must be distributed each year is referred to as the required minimum distribution. Tax form 2010 Required distributions not eligible for rollover. Tax form 2010   Amounts that must be distributed (required minimum distributions) during a particular year are not eligible for rollover treatment. Tax form 2010 IRA owners. Tax form 2010   If you are the owner of a traditional IRA, you must generally start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Tax form 2010 April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date. Tax form 2010 Distributions by the required beginning date. Tax form 2010   You must receive at least a minimum amount for each year starting with the year you reach age 70½ (your 70½ year). Tax form 2010 If you do not (or did not) receive that minimum amount in your 70½ year, then you must receive distributions for your 70½ year by April 1 of the next year. Tax form 2010   If an IRA owner dies after reaching age 70½, but before April 1 of the next year, no minimum distribution is required because death occurred before the required beginning date. Tax form 2010 Even if you begin receiving distributions before you attain age 70½, you must begin calculating and receiving required minimum distributions by your required beginning date. Tax form 2010 Distributions after the required beginning date. Tax form 2010   The required minimum distribution for any year after the year you turn 70½ must be made by December 31 of that later year. Tax form 2010    Beneficiaries. Tax form 2010   If you are the beneficiary of a decedent's traditional IRA, the requirements for distributions from that IRA generally depend on whether the IRA owner died before or after the required beginning date for distributions. Tax form 2010 More information. Tax form 2010   For more information, including how to figure your minimum required distribution each year and how to figure your required distribution if you are a beneficiary of a decedent's IRA, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Tax form 2010 Are Distributions Taxable? In general, distributions from a traditional IRA are taxable in the year you receive them. Tax form 2010 Exceptions. Tax form 2010   Exceptions to distributions from traditional IRAs being taxable in the year you receive them are: Rollovers, Qualified charitable distributions (QCD), discussed later, Tax-free withdrawals of contributions, discussed earlier, and The return of nondeductible contributions, discussed later under Distributions Fully or Partly Taxable . Tax form 2010    Although a conversion of a traditional IRA is considered a rollover for Roth IRA purposes, it is not an exception to the rule that distributions from a traditional IRA are taxable in the year you receive them. Tax form 2010 Conversion distributions are includible in your gross income subject to this rule and the special rules for conversions explained in Converting From Any Traditional IRA Into a Roth IRA under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax form 2010 Qualified charitable distributions (QCD). Tax form 2010   A QCD is generally a nontaxable distribution made directly by the trustee of your IRA to an organization eligible to receive tax-deductible contributions. Tax form 2010 Special rules apply if you made a qualified charitable distribution in January 2013 that you elected to treat as made in 2012. Tax form 2010 See Qualified Charitable Distributions in Publication 590 for more information. Tax form 2010 Ordinary income. Tax form 2010   Distributions from traditional IRAs that you include in income are taxed as ordinary income. Tax form 2010 No special treatment. Tax form 2010   In figuring your tax, you cannot use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement plans. Tax form 2010 Distributions Fully or Partly Taxable Distributions from your traditional IRA may be fully or partly taxable, depending on whether your IRA includes any nondeductible contributions. Tax form 2010 Fully taxable. Tax form 2010   If only deductible contributions were made to your traditional IRA (or IRAs, if you have more than one), you have no basis in your IRA. Tax form 2010 Because you have no basis in your IRA, any distributions are fully taxable when received. Tax form 2010 See Reporting taxable distributions on your return , later. Tax form 2010 Partly taxable. Tax form 2010    If you made nondeductible contributions or rolled over any after-tax amounts to any of your traditional IRAs, you have a cost basis (investment in the contract) equal to the amount of those contributions. Tax form 2010 These nondeductible contributions are not taxed when they are distributed to you. Tax form 2010 They are a return of your investment in your IRA. Tax form 2010   Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. Tax form 2010 If nondeductible contributions have been made or after-tax amounts have been rolled over to your IRA, distributions consist partly of nondeductible contributions (basis) and partly of deductible contributions, earnings, and gains (if there are any). Tax form 2010 Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable. Tax form 2010 Form 8606. Tax form 2010   You must complete Form 8606 and attach it to your return if you receive a distribution from a traditional IRA and have ever made nondeductible contributions or rolled over after-tax amounts to any of your traditional IRAs. Tax form 2010 Using the form, you will figure the nontaxable distributions for 2013 and your total IRA basis for 2013 and earlier years. Tax form 2010 Note. Tax form 2010 If you are required to file Form 8606, but you are not required to file an income tax return, you still must file Form 8606. Tax form 2010 Send it to the IRS at the time and place you would otherwise file an income tax return. Tax form 2010 Distributions reported on Form 1099-R. Tax form 2010   If you receive a distribution from your traditional IRA, you will receive Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Tax form 2010 , or a similar statement. Tax form 2010 IRA distributions are shown in boxes 1 and 2a of Form 1099-R. Tax form 2010 A number or letter code in box 7 tells you what type of distribution you received from your IRA. Tax form 2010 Withholding. Tax form 2010   Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld. Tax form 2010 See chapter 4. Tax form 2010 IRA distributions delivered outside the United States. Tax form 2010   In general, if you are a U. Tax form 2010 S. Tax form 2010 citizen or resident alien and your home address is outside the United States or its possessions, you cannot choose exemption from withholding on distributions from your traditional IRA. Tax form 2010 Reporting taxable distributions on your return. Tax form 2010    Report fully taxable distributions, including early distributions on Form 1040, line 15b, or Form 1040A, line 11b (no entry is required on Form 1040, line 15a, or Form 1040A, line 11a). Tax form 2010 If only part of the distribution is taxable, enter the total amount on Form 1040, line 15a, or Form 1040A, line 11a, and the taxable part on Form 1040, line 15b, or Form 1040A, line 11b. Tax form 2010 You cannot report distributions on Form 1040EZ. Tax form 2010 What Acts Result in Penalties or Additional Taxes? The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. Tax form 2010 There are additions to the regular tax for using your IRA funds in prohibited transactions. Tax form 2010 There are also additional taxes for the following activities. Tax form 2010 Investing in collectibles. Tax form 2010 Making excess contributions. Tax form 2010 Taking early distributions. Tax form 2010 Allowing excess amounts to accumulate (failing to take required distributions). Tax form 2010 There are penalties for overstating the amount of nondeductible contributions and for failure to file a Form 8606, if required. Tax form 2010 Prohibited Transactions Generally, a prohibited transaction is any improper use of your traditional IRA by you, your beneficiary, or any disqualified person. Tax form 2010 Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendent, and any spouse of a lineal descendent). Tax form 2010 The following are examples of prohibited transactions with a traditional IRA. Tax form 2010 Borrowing money from it. Tax form 2010 Selling property to it. Tax form 2010 Receiving unreasonable compensation for managing it. Tax form 2010 Using it as security for a loan. Tax form 2010 Buying property for personal use (present or future) with IRA funds. Tax form 2010 Effect on an IRA account. Tax form 2010   Generally, if you or your beneficiary engages in a prohibited transaction in connection with your traditional IRA account at any time during the year, the account stops being an IRA as of the first day of that year. Tax form 2010 Effect on you or your beneficiary. Tax form 2010   If your account stops being an IRA because you or your beneficiary engaged in a prohibited transaction, the account is treated as distributing all its assets to you at their fair market values on the first day of the year. Tax form 2010 If the total of those values is more than your basis in the IRA, you will have a taxable gain that is includible in your income. Tax form 2010 For information on figuring your gain and reporting it in income, see Are Distributions Taxable , earlier. Tax form 2010 The distribution may be subject to additional taxes or penalties. Tax form 2010 Taxes on prohibited transactions. Tax form 2010   If someone other than the owner or beneficiary of a traditional IRA engages in a prohibited transaction, that person may be liable for certain taxes. Tax form 2010 In general, there is a 15% tax on the amount of the prohibited transaction and a 100% additional tax if the transaction is not corrected. Tax form 2010 More information. Tax form 2010   For more information on prohibited transactions, see What Acts Result in Penalties or Additional Taxes? in chapter 1 of Publication 590. Tax form 2010 Investment in Collectibles If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. Tax form 2010 You may have to pay the 10% additional tax on early distributions, discussed later. Tax form 2010 Collectibles. Tax form 2010   These include: Artworks, Rugs, Antiques, Metals, Gems, Stamps, Coins, Alcoholic beverages, and Certain other tangible personal property. Tax form 2010 Exception. Tax form 2010    Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U. Tax form 2010 S. Tax form 2010 gold coins, or one-ounce silver coins minted by the Treasury Department. Tax form 2010 It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. Tax form 2010 Excess Contributions Generally, an excess contribution is the amount contributed to your traditional IRA(s) for the year that is more than the smaller of: The maximum deductible amount for the year. Tax form 2010 For 2013, this is $5,500 ($6,500 if you are 50 or older), or Your taxable compensation for the year. Tax form 2010 Tax on excess contributions. Tax form 2010   In general, if the excess contributions for a year are not withdrawn by the date your return for the year is due (including extensions), you are subject to a 6% tax. Tax form 2010 You must pay the 6% tax each year on excess amounts that remain in your traditional IRA at the end of your tax year. Tax form 2010 The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. Tax form 2010 Excess contributions withdrawn by due date of return. Tax form 2010   You will not have to pay the 6% tax if you withdraw an excess contribution made during a tax year and you also withdraw interest or other income earned on the excess contribution. Tax form 2010 You must complete your withdrawal by the date your tax return for that year is due, including extensions. Tax form 2010 How to treat withdrawn contributions. Tax form 2010   Do not include in your gross income an excess contribution that you withdraw from your traditional IRA before your tax return is due if both the following conditions are met. Tax form 2010 No deduction was allowed for the excess contribution. Tax form 2010 You withdraw the interest or other income earned on the excess contribution. Tax form 2010 You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Tax form 2010 If there was a loss, the net income you must withdraw may be a negative amount. Tax form 2010 How to treat withdrawn interest or other income. Tax form 2010   You must include in your gross income the interest or other income that was earned on the excess contribution. Tax form 2010 Report it on your return for the year in which the excess contribution was made. Tax form 2010 Your withdrawal of interest or other income may be subject to an additional 10% tax on early distributions, discus
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Tax Relief for Victims of Severe Storms, Tornadoes, Straight-line Winds and Flooding in Tennessee

AL/TN-2012-14TN, March 19, 2012

NASHVILLE — Victims of the severe storms, tornadoes, straight-line winds, and flooding that began on Feb. 29, 2012 in parts of Tennessee may qualify for tax relief from the Internal Revenue Service.

The President has declared Bradley, Claiborne, Cumberland, DeKalb, Hamilton, Jackson, McMinn, Monroe, Overton and Polk counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Feb. 29, and on or before May 31, have been postponed to May 31, 2012. This includes the April 17 deadline for filing 2011 individual income tax returns, making income tax payments and making 2011 contributions to an individual retirement account (IRA).  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Feb. 29, and on or before March 15, as long as the deposits are made by March 15, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until May 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Feb. 29 and on or before May 31.

The IRS also gives affected taxpayers until May 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Feb. 29 and on or before May 31.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Feb. 29 and on or before March 15 provided the taxpayer makes these deposits by March 15.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Tennessee/Severe Storms, Tornadoes, Straight-line Winds, and Flooding” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

Related Information

Page Last Reviewed or Updated: 03-Feb-2014

The Tax Form 2010

Tax form 2010 Publication 3920 - Main Contents Table of Contents Tax ForgivenessYears Eligible for Tax Forgiveness Amount of Tax Forgiven Refund of Taxes Paid How To Claim Tax Forgiveness Payments to SurvivorsSeptember 11th Victim Compensation Fund of 2001 Qualified Disaster Relief Payments Disability Payments Death Benefits Canceled Debt Payments to Survivors of Public Safety Officers Postponed Tax DeadlinesCovered area. Tax form 2010 Disaster Area Losses Estate Tax Reduction Structured Settlement Factoring Transactions Illustrated Worksheets B and C Additional Worksheets How To Get Tax Help Tax Forgiveness The IRS will forgive the federal income tax liabilities of decedents who died as a result of the Oklahoma City attack, September 11 attacks, and anthrax attacks. Tax form 2010 Income tax is forgiven for these decedents whether they were killed in an attack or in rescue or recovery operations. Tax form 2010 Any forgiven tax liability owed to the IRS will not have to be paid. Tax form 2010 Any forgiven tax liability that has already been paid will be refunded. Tax form 2010 (See Refund of Taxes Paid, later. Tax form 2010 ) To determine the amount of tax to be forgiven, read Years Eligible for Tax Forgiveness first. Tax form 2010 Then read Amount of Tax Forgiven. Tax form 2010 Decedents whose total forgiven tax liability for all eligible years is less than $10,000 are entitled to $10,000 minimum relief. Tax form 2010 Even decedents who were not required to file tax returns for the eligible tax years are entitled to $10,000 minimum relief. Tax form 2010 See Minimum Amount of Relief later under Amount of Tax Forgiven. Tax form 2010 Years Eligible for Tax Forgiveness The following paragraphs explain which years are eligible for tax forgiveness. Tax form 2010 Oklahoma City attack. Tax form 2010   For those who died from this attack, income tax is forgiven for 1994 and all later years up to and including the year of death. Tax form 2010 Example 1. Tax form 2010 A man was killed in the bombing of the federal building in Oklahoma City on April 19, 1995. Tax form 2010 His income tax is forgiven for 1994 and 1995. Tax form 2010 Example 2. Tax form 2010 A woman was wounded while walking outside the federal building in Oklahoma City on April 19, 1995. Tax form 2010 She subsequently died of her wounds in 1996. Tax form 2010 Her income tax is forgiven for 1994, 1995, and 1996. Tax form 2010 September 11 attacks and anthrax attacks. Tax form 2010   For those who die from these attacks, income tax is forgiven for 2000 and all later years up to and including the year of death. Tax form 2010 Example 1. Tax form 2010 A Pentagon employee died in the September 11 attack. Tax form 2010 Her income tax is forgiven for 2000 and 2001. Tax form 2010 Example 2. Tax form 2010 A visitor to the World Trade Center died in 2002 of wounds he sustained in the September 11 attack. Tax form 2010 His income tax liability is forgiven for 2000, 2001, and 2002. Tax form 2010 Amount of Tax Forgiven The IRS will forgive the decedent's income tax liability for all years eligible for tax forgiveness. Tax form 2010 On a joint return, only the decedent's part of the joint income tax liability is eligible for forgiveness. Tax form 2010 To figure the tax to be forgiven, use the following worksheets. Tax form 2010 Use Worksheet A for any eligible year the decedent filed a return as single, married filing separately, head of household, or qualifying widow(er). Tax form 2010 Use Worksheet B for any eligible year the decedent filed a joint return. Tax form 2010 See the illustrated Worksheet B near the end of this publication. Tax form 2010 Do not complete Worksheet A or B if the decedent was not required to file tax returns for the eligible tax years. Tax form 2010 Instead, complete Worksheet C and file a return for the decedent's last tax year. Tax form 2010 See Minimum Amount of Relief, later. Tax form 2010 If you need assistance, call the IRS at 1–866–562–5227 Monday through Friday during the following times. Tax form 2010 In English–7 a. Tax form 2010 m. Tax form 2010 to 10 p. Tax form 2010 m. Tax form 2010 local time. Tax form 2010 In Spanish–8 a. Tax form 2010 m. Tax form 2010 to 9:30 p. Tax form 2010 m. Tax form 2010 local time. Tax form 2010 Both spouses died. Tax form 2010   If both spouses died as a result of a terrorist attack and they filed a joint return for an eligible tax year, fill out Worksheet B for each spouse for that year. Tax form 2010 Do this to determine if each spouse qualifies for the minimum relief of $10,000 (discussed later under Minimum Amount of Relief). Tax form 2010 If you are certain that neither spouse's total forgiven tax liability for all eligible years is less than $10,000, skip Worksheet B. Tax form 2010 However, attach a computation of the forgiven tax liability to the final income tax return or amended tax return for each eligible year. Tax form 2010 The forgiven tax liability is the total tax shown on the joint return minus the taxes listed in the instructions for line 4 of Worksheet B. Tax form 2010 Residents of community property states. Tax form 2010   If the decedent was domiciled in a community property state and the spouse reported half the community income on a separate return, the surviving spouse can get a refund of taxes paid on his or her share of the decedent's income for the eligible years. Tax form 2010 Also, all of the decedent's income taxes paid for the eligible years will be refunded to either the executor or administrator of the estate, or to the surviving spouse if there is no legal representative. Tax form 2010 Worksheet B. Tax form 2010 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Tax form 2010 1       2 Enter the decedent's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 2       3 Enter the decedent's total tax. Tax form 2010 See the instructions. Tax form 2010 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Tax form 2010 See the instructions. Tax form 2010 4       5 Subtract line 4 from line 3. Tax form 2010 5       6 Enter the surviving spouse's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 6       7 Enter the surviving spouse's total tax. Tax form 2010 See the instructions. Tax form 2010 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Tax form 2010 8       9 Subtract line 8 from line 7. Tax form 2010 9       10 Add lines 5 and 9. Tax form 2010 10       11 Enter the total tax from the joint return. Tax form 2010 See Table 1 on page 5 for the line number for years before 2002. Tax form 2010 11       12 Add lines 4 and 8. Tax form 2010 12       13 Subtract line 12 from line 11. Tax form 2010 13       14 Divide line 5 by line 10. Tax form 2010 Enter the result as a decimal. Tax form 2010 14       15 Tax to be forgiven. Tax form 2010 Multiply line 13 by line 14 and enter the result. Tax form 2010 15       Note. Tax form 2010 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Tax form 2010 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Tax form 2010 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Tax form 2010 The IRS will determine the amount to be refunded. Tax form 2010 Worksheet B. Tax form 2010 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Tax form 2010 1       2 Enter the decedent's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 2       3 Enter the decedent's total tax. Tax form 2010 See the instructions. Tax form 2010 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Tax form 2010 See the instructions. Tax form 2010 4       5 Subtract line 4 from line 3. Tax form 2010 5       6 Enter the surviving spouse's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 6       7 Enter the surviving spouse's total tax. Tax form 2010 See the instructions. Tax form 2010 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Tax form 2010 8       9 Subtract line 8 from line 7. Tax form 2010 9       10 Add lines 5 and 9. Tax form 2010 10       11 Enter the total tax from the joint return. Tax form 2010 See Table 1 on page 5 for the line number for years before 2002. Tax form 2010 11       12 Add lines 4 and 8. Tax form 2010 12       13 Subtract line 12 from line 11. Tax form 2010 13       14 Divide line 5 by line 10. Tax form 2010 Enter the result as a decimal. Tax form 2010 14       15 Tax to be forgiven. Tax form 2010 Multiply line 13 by line 14 and enter the result. Tax form 2010 15       Note. Tax form 2010 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Tax form 2010 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Tax form 2010 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Tax form 2010 The IRS will determine the amount to be refunded. Tax form 2010 Instructions for Worksheet B Table 1. Tax form 2010 Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Tax form 2010 * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Tax form 2010 ** File Form 4506 to get a transcript of the decedent's account. Tax form 2010 Table 1. Tax form 2010 Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Tax form 2010 * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Tax form 2010 ** File Form 4506 to get a transcript of the decedent's account. Tax form 2010 Lines 2 and 6. Tax form 2010   Allocate income and deductions in the same manner they would have been allocated if the spouses had filed separate returns. Tax form 2010   Allocate wages and salaries to the spouse who performed the services and received the Form W-2. Tax form 2010 Business and investment income (including capital gains) are generally allocated to the spouse who owned the business or investment that produced the income. Tax form 2010 Income from a jointly owned business or investment should be allocated equally between the spouses unless there is evidence that shows a different allocation is appropriate. Tax form 2010   Allocate business deductions to the owner of the business. Tax form 2010 Allocate personal deductions (such as itemized deductions for mortgage interest and taxes) equally between the spouses unless there is evidence that shows a different allocation is appropriate. Tax form 2010 Lines 3 and 7. Tax form 2010   Figure the total tax as if a separate return had been filed. Tax form 2010 The total tax is the tax that would have been entered on the tax return line shown in Table 1 if a separate return had been filed. Tax form 2010 When figuring the tax using the Tax Table or Tax Rate Schedule, use the “Married filing separately” column in the Tax Table or Tax Rate Schedule Y-2. Tax form 2010   When figuring the total tax, allocate credits and other taxes, if any, in the same manner as they would have been allocated if the spouses had filed separate returns. Tax form 2010 If a credit would not have been allowed on a separate return, allocate the credit shown on the joint return between the spouses. Tax form 2010 Examples of credits generally not allowed on a separate return are the child and dependent care credit, credit for the elderly, adoption credit, education credits, and earned income credit. Tax form 2010 Line 4. Tax form 2010   Enter the total, if any, of the following taxes. Tax form 2010 Self-employment tax. Tax form 2010 Social security and Medicare tax on tip income not reported to employer. Tax form 2010 Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Tax form 2010 Tax on excess accumulation in qualified retirement plans. Tax form 2010 Household employment taxes. Tax form 2010 Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Tax form 2010 Tax on golden parachute payments. Tax form 2010 Minimum Amount of Relief The minimum amount of relief is $10,000. Tax form 2010 If the decedent's total forgiven tax liability for all eligible years is less than $10,000, the difference between $10,000 and the total forgiven tax liability for those years will be treated as a tax payment for the decedent's last tax year. Tax form 2010 The IRS will refund the difference as explained under Refund of Taxes Paid. Tax form 2010 Use Worksheet C to figure the additional tax payment. Tax form 2010 But first complete Worksheet A or B, unless the decedent was not required to file tax returns for the eligible tax years. Tax form 2010 Example 1. Tax form 2010 An individual who died in the September 11 attacks had an income tax liability of $-0- for 2000 and $6,400 for 2001. Tax form 2010 The $6,400 is eligible for forgiveness. Tax form 2010 The IRS will forgive $6,400 and treat the difference between $10,000 and $6,400 ($3,600) as a tax payment for 2001. Tax form 2010 Example 2. Tax form 2010 A child who died in the September 11 attacks had no (-0-) income tax liability for 2000 or 2001. Tax form 2010 The IRS will treat $10,000 as a tax payment for 2001. Tax form 2010 Income received after date of death. Tax form 2010   Generally, income of the decedent received after the date of death must be reported on Form 1041 if the estate has gross income for the tax year of $600 or more. Tax form 2010 Examples are the final paycheck or dividends on stock owned by the decedent. Tax form 2010 However, this income is exempt from income tax and is not included on Form 1041 if it is received: After the date of the decedent's death, and Before the end of the decedent's tax year (determined without regard to death). Tax form 2010 Nonqualifying income. Tax form 2010   The following income is not exempt from tax. Tax form 2010 The tax on it is not eligible for forgiveness. Tax form 2010 Deferred compensation that would have been payable if the death had occurred because of an event other than these attacks. Tax form 2010 Amounts that would not have been payable but for an action taken after September 11, 2001. Tax form 2010 The following are examples of nonqualifying income. Tax form 2010 Amounts payable from a qualified retirement plan or IRA to the beneficiary or estate of the decedent. Tax form 2010 Amounts payable only as death or survivor's benefits from pre-existing arrangements that would have been paid if the death had occurred for another reason. Tax form 2010 Income received as a result of adjustments made by the decedent's employer to a plan or arrangement to accelerate the vesting of restricted property or the payment of nonqualified deferred compensation after the date of the attack. Tax form 2010 Interest on savings bonds cashed by the beneficiary of the decedent. Tax form 2010 If you are responsible for the estate of a decedent, see Publication 559. Tax form 2010 Publication 559 discusses how to complete and file federal income tax returns and explains your responsibility to pay any taxes due. Tax form 2010 Instructions for lines 2–9 of Worksheet C. Tax form 2010   The tax that would have been payable on the exempt income (discussed earlier) must be considered when determining whether a decedent is entitled to the $10,000 minimum relief. Tax form 2010 To figure the tax that would have been payable, you can use lines 2 through 9 of Worksheet C. Tax form 2010 Or, if special requirements are met, you can use the alternative computation instead. Tax form 2010 See Alternative computation, later. Tax form 2010   You have to use lines 2–9 (or the alternative computation) to figure the tax that would have been payable even if Form 1041 was not required to be filed. Tax form 2010 Use Form 1041 to figure what the taxable income would be without including the exempt income. Tax form 2010 Then enter that taxable income (even if a negative number) on line 2 of Worksheet C (or line 1 of Worksheet D, Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)). Tax form 2010 Alternative computation. Tax form 2010   Instead of using lines 2–8 of Worksheet C to figure the tax on exempt income (line 9 of Worksheet C), you may be able to use Worksheet D. Tax form 2010 You can use Worksheet D to figure the tax on the exempt income payable by the estate and its beneficiaries only if both of the following requirements are met. Tax form 2010 The estate claimed an income distribution deduction on line 18 (Form 1041). Tax form 2010 Each beneficiary submits the information necessary to refigure the income tax payable on the exempt income received from the decedent's estate. Tax form 2010 If requirement (2) is met but requirement (1) is not, you can still use Worksheet D if: Form 1041 was not required because exempt income was received, and The estate would have claimed an income distribution deduction if the exempt income were taxable. Tax form 2010 If you use this alternative computation, skip lines 2–8 of Worksheet C and enter the amount from line 8 of Worksheet D on line 9 of Worksheet C. Tax form 2010 Complete the rest of Worksheet C to determine the additional payment allowed. Tax form 2010 Worksheet C. Tax form 2010 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Tax form 2010 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Tax form 2010 1 Minimum relief amount. Tax form 2010 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Tax form 2010 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Tax form 2010 3       4 Add lines 2 and 3. Tax form 2010 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Tax form 2010 (See Income received after date of death on page 5. Tax form 2010 ) 5       6 Add lines 4 and 5. Tax form 2010 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Tax form 2010 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Tax form 2010 8       9 Tax on exempt income. Tax form 2010 Subtract line 8 from line 7. Tax form 2010 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Tax form 2010 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Tax form 2010 10       11 Add lines 9 and 10. Tax form 2010 11   12 Additional payment allowed. Tax form 2010 If line 11 is $10,000 or more, enter -0- and stop here. Tax form 2010 No additional amount is allowed as a tax payment. Tax form 2010 Otherwise, subtract line 11 from line 1 and enter the result. Tax form 2010 12   Note. Tax form 2010 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Tax form 2010 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Tax form 2010 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Tax form 2010 Write "Sec. Tax form 2010 692(d)(2) Payment" and the amount to the right of the entry space. Tax form 2010 Also indicate whether a Form 1041 is being filed for the decedent's estate. Tax form 2010 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Tax form 2010 Write “Sec. Tax form 2010 692(d)(2) Payment” on the dotted line to the left of the entry space. Tax form 2010 Worksheet C. Tax form 2010 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Tax form 2010 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Tax form 2010 1 Minimum relief amount. Tax form 2010 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Tax form 2010 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Tax form 2010 3       4 Add lines 2 and 3. Tax form 2010 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Tax form 2010 (See Income received after date of death on page 5. Tax form 2010 ) 5       6 Add lines 4 and 5. Tax form 2010 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Tax form 2010 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Tax form 2010 8       9 Tax on exempt income. Tax form 2010 Subtract line 8 from line 7. Tax form 2010 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Tax form 2010 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Tax form 2010 10       11 Add lines 9 and 10. Tax form 2010 11   12 Additional payment allowed. Tax form 2010 If line 11 is $10,000 or more, enter -0- and stop here. Tax form 2010 No additional amount is allowed as a tax payment. Tax form 2010 Otherwise, subtract line 11 from line 1 and enter the result. Tax form 2010 12   Note. Tax form 2010 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Tax form 2010 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Tax form 2010 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Tax form 2010 Write "Sec. Tax form 2010 692(d)(2) Payment" and the amount to the right of the entry space. Tax form 2010 Also indicate whether a Form 1041 is being filed for the decedent's estate. Tax form 2010 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Tax form 2010 Write “Sec. Tax form 2010 692(d)(2) Payment” on the dotted line to the left of the entry space. Tax form 2010 Worksheet D. Tax form 2010 Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Tax form 2010 (See Income received after date of death on page 5. Tax form 2010 ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Tax form 2010 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Tax form 2010 5   6 Estate's tax on exempt income. Tax form 2010 Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Tax form 2010 Figure the total tax that would have been payable by all beneficiaries. Tax form 2010 Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Tax form 2010 Add the amounts by which each beneficiary's income tax is increased. Tax form 2010 7   8 Add lines 6 and 7. Tax form 2010 Enter this amount on line 9 of Worksheet C. Tax form 2010 8   Worksheet D. Tax form 2010 Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Tax form 2010 (See Income received after date of death on page 5. Tax form 2010 ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Tax form 2010 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Tax form 2010 5   6 Estate's tax on exempt income. Tax form 2010 Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Tax form 2010 Figure the total tax that would have been payable by all beneficiaries. Tax form 2010 Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Tax form 2010 Add the amounts by which each beneficiary's income tax is increased. Tax form 2010 7   8 Add lines 6 and 7. Tax form 2010 Enter this amount on line 9 of Worksheet C. Tax form 2010 8   Refund of Taxes Paid The IRS will refund the following forgiven income tax liabilities. Tax form 2010 Income tax liabilities that have been paid. Tax form 2010 Income tax liabilities treated as paid because the total tax liability for all years eligible for tax forgiveness is less than $10,000. Tax form 2010 See Minimum Amount of Relief, earlier. Tax form 2010 Example 1. Tax form 2010 A man who died in the September 11 attacks had an income tax liability of $7,500 for 2000 and $6,500 for 2001. Tax form 2010 The total, $14,000, is eligible for tax forgiveness. Tax form 2010 However, he paid only $13,000 of that amount. Tax form 2010 The IRS will refund the $13,000 paid. Tax form 2010 Example 2. Tax form 2010 A child who died in the September 11 attacks had no income tax liability for 2000 or 2001. Tax form 2010 The child qualifies for the minimum relief of $10,000. Tax form 2010 The $10,000 is treated as a tax payment for 2001 and will be refunded. Tax form 2010 Period for filing a claim for credit or refund. Tax form 2010   To obtain a tax refund on a previously filed income tax return, file an amended return (Form 1040X or an amended Form 1041) within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. Tax form 2010 For example, you have until April 15, 2004, to file an amended return on a 2000 Form 1040, 1040A, or 1040EZ that was filed by April 16, 2001, and for which the tax was paid when due. Tax form 2010 To obtain a refund on a return that has not been filed, file the return within 3 years of the original due date of the return. Tax form 2010 Extension of time for victims of Oklahoma City attack. Tax form 2010   The period described above has been extended for victims of the Oklahoma City attack. Tax form 2010 Survivors and personal representatives of these victims have until January 22, 2003, to file an original or amended return. Tax form 2010 How To Claim Tax Forgiveness Use the following procedures to claim income tax forgiveness. Tax form 2010 Which Form To Use The form you use depends on whether an income tax return for the eligible year was already filed for the decedent. Tax form 2010 Return required but not yet filed. Tax form 2010   File Form 1040 if the decedent was a U. Tax form 2010 S. Tax form 2010 citizen or resident. Tax form 2010 File Form 1040NR if the decedent was a nonresident alien. Tax form 2010 A nonresident alien is someone who is not a U. Tax form 2010 S. Tax form 2010 citizen or resident. Tax form 2010 Return required and already filed. Tax form 2010   File a separate Form 1040X for each year you are claiming tax relief. Tax form 2010 Return not required and not filed. Tax form 2010   File Form 1040 only for the year of death if the decedent was a U. Tax form 2010 S. Tax form 2010 citizen or resident. Tax form 2010 File Form 1040NR if the decedent was a nonresident alien. Tax form 2010 Return not required but already filed. Tax form 2010   File Form 1040X only for the year of death. Tax form 2010 How to complete the returns. Tax form 2010   Fill out Form 1040 or 1040NR according to its instructions but do not reduce the decedent's tax liability by any taxes that will be forgiven. Tax form 2010 Attach to each return a computation of the income tax to be forgiven or a copy of Worksheet A or B. Tax form 2010 If filing Form 1040 or Form 1040NR, also attach any Forms W–2. Tax form 2010 If the total forgiven tax liability for all eligible years is less than $10,000, attach to the decedent's final return a computation of the additional tax payment allowed or a copy of Worksheet C. Tax form 2010 Also, please write one of the following across the top of page 1 of each return. Tax form 2010 KITA—Oklahoma City KITA—9/11 KITA—Anthrax “KITA” means “killed in terrorist attack. Tax form 2010 ” Need a copy of a previously filed return?   You will find it easier to prepare Form 1040X if you have a copy of the decedent's previously filed tax return. Tax form 2010 If you need a copy, use Form 4506. Tax form 2010 The IRS will provide a free copy of the tax return if you write “DISASTER” in the top margin of Form 4506. Tax form 2010 Attach Letters Testamentary or other evidence to establish that you are authorized to act for the decedent's estate. Tax form 2010 Send Form 4506 to the address shown in the form instructions. Tax form 2010 Taxpayer identification number. Tax form 2010   A taxpayer identification number must be furnished on the decedent's returns. Tax form 2010 This is usually the decedent's social security number (SSN). Tax form 2010 However, a nonresident alien who is not eligible to get an SSN should have an individual taxpayer identification number (ITIN). Tax form 2010 If the decedent was a nonresident alien, had neither an SSN nor an ITIN, and was not required to file a U. Tax form 2010 S. Tax form 2010 income tax return for any tax year, do not apply for an ITIN. Tax form 2010 You may claim a refund by filing Form 1040NR without an SSN or ITIN. Tax form 2010 Necessary Documents Please attach the following documents to the return or amended return. Tax form 2010 Proof of death. Tax form 2010   Attach a copy of the death certificate. Tax form 2010 If the Department of Defense issued DD Form 1300, Report of Casualty, you can attach that form instead of the death certificate. Tax form 2010 Form 1310. Tax form 2010   You must send Form 1310 with all returns and claims for refund, unless either of the following applies. Tax form 2010 You are a surviving spouse filing an original or amended joint return with the decedent. Tax form 2010 You are a personal representative filing an original Form 1040 or Form 1040NR for the decedent and a court certificate showing your appointment is attached to the return. Tax form 2010 A personal representative is an executor or administrator of a decedent's estate, as certified or appointed by the court. Tax form 2010 A copy of the decedent's will cannot be accepted as evidence that you are the personal representative. Tax form 2010      If you have proof of death but do not have enough tax information to file a timely claim for a refund, file Form 1040X with Form 1310. Tax form 2010 Include a statement saying an amended return will be filed as soon as the necessary tax information is available. Tax form 2010 Where To File The IRS has set up a special office for processing returns and claims for tax forgiveness. Tax form 2010 Use one of the addresses shown below. Tax form 2010 Where you file the returns or claims depends on whether you use the U. Tax form 2010 S. Tax form 2010 Postal Service or a private delivery service. Tax form 2010 Please do not send these returns or claims to any of the addresses shown in the tax form instructions. Tax form 2010 U. Tax form 2010 S. Tax form 2010 Postal Service. Tax form 2010   If you use the U. Tax form 2010 S. Tax form 2010 Postal Service, file these returns and claims at the following address. Tax form 2010 Internal Revenue Service P. Tax form 2010 O. Tax form 2010 Box 4053 Woburn, MA 01888 Private delivery service. Tax form 2010   Private delivery services cannot deliver items to P. Tax form 2010 O. Tax form 2010 boxes. Tax form 2010 If you use a private delivery service, file these returns and claims at the following address. Tax form 2010 Internal Revenue Service Stop 661 310 Lowell St. Tax form 2010 Andover, MA 01810 Designated private delivery services. Tax form 2010   You can use the following private delivery services to file these returns and claims. Tax form 2010 Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service. Tax form 2010 DHL Worldwide Express (DHL): DHL “Same Day” Service, and DHL USA Overnight. Tax form 2010 Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2Day. Tax form 2010 United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Tax form 2010 M. Tax form 2010 , UPS Worldwide Express Plus, and UPS Worldwide Express. Tax form 2010 The private delivery service can tell you how to get written proof of the mailing date. Tax form 2010 Payments to Survivors The following section discusses the tax treatment of certain amounts received by survivors. Tax form 2010 September 11th Victim Compensation Fund of 2001 Payments from the September 11th Victim Compensation Fund of 2001 are not included in income. Tax form 2010 Qualified Disaster Relief Payments Qualified disaster relief payments are not included in income. Tax form 2010 These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). Tax form 2010 No withholding applies to these payments. Tax form 2010 Qualified disaster relief payments include payments you receive (regardless of the source) after September 10, 2001, for the following expenses. Tax form 2010 Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a terrorist attack. Tax form 2010 Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a terrorist attack. Tax form 2010 (A personal residence can be a rented residence or one you own. Tax form 2010 ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a terrorist attack. Tax form 2010 Qualified disaster relief payments also include the following. Tax form 2010 Payments made by common carriers (for example, American Airlines and United Airlines regarding the September 11 attacks) because of death or physical injury incurred as a result of a terrorist attack. Tax form 2010 Amounts paid by a federal, state, or local government in connection with a terrorist attack to those affected by the attack. Tax form 2010 Qualified disaster relief payments do not include: Insurance or other reimbursements for expenses, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. Tax form 2010 Disability Payments For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, are not included in income. Tax form 2010 Death Benefits Payments received by an individual or the estate of a decedent from the employer of an employee who died as a result of the Oklahoma City or September 11 terrorist attacks, or as a result of the anthrax attacks, are not included in income. Tax form 2010 Only the amount that exceeds the benefits that would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack is excludable. Tax form 2010 However, the exclusion does apply to incidental death benefits paid under a qualified retirement plan even if these amounts would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack. Tax form 2010 If you included death benefits in income on a previously filed return and they are now excludable under the above rule, file Form 1040X to amend that return. Tax form 2010 For information on the period for filing Form 1040X, see Period for filing claim for credit or refund earlier under Refund of Taxes Paid. Tax form 2010 If that period has expired, you are granted an extension. Tax form 2010 You have until January 22, 2003, to file Form 1040X to exclude the death benefits. Tax form 2010 On top of page 1 of Form 1040X, write “Extension of Limitations Under PL 107–134, sec. Tax form 2010 102(b)(2). Tax form 2010 ” Canceled Debt Canceled debt is not included in your income (or the income of the estate) if: You (or the estate) were liable, or became liable, for the debt of a decedent, and The debt was canceled after September 10, 2001, and before January 1, 2002, because the decedent died as a result of the September 11 attacks or anthrax attacks. Tax form 2010 The lender is not required to report the canceled debt on Form 1099–C, Cancellation of Debt. Tax form 2010 Payments to Survivors of Public Safety Officers If you are a survivor of a public safety officer who died in the line of duty, certain amounts you receive are not included in income. Tax form 2010 Bureau of Justice Assistance payments. Tax form 2010   If you are a surviving dependent of a public safety officer (law enforcement officer or firefighter) who died in the line of duty, do not include in your income the death benefit paid to you by the Bureau of Justice Assistance. Tax form 2010 Government plan annuity. Tax form 2010   If you receive a survivor annuity as the child or spouse (or former spouse) of a public safety officer who was killed in the line of duty, you generally do not have to include it in income. Tax form 2010 This exclusion applies to the amount of the annuity based on the officer's service as a public safety officer. Tax form 2010 For this purpose, the term public safety officer includes police and law enforcement officers, firefighters, and rescue squad and ambulance crews. Tax form 2010 More information. Tax form 2010   For more information, see Publication 559. Tax form 2010 Postponed Tax Deadlines The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a terrorist attack. Tax form 2010 The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Tax form 2010 If any tax deadline is postponed, the IRS will publicize the postponement in the affected area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Tax form 2010 Affected taxpayers. Tax form 2010   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Tax form 2010 Any individual whose main home is located in a covered area (defined later). Tax form 2010 Any business entity or sole proprietor whose principal place of business is located in a covered area. Tax form 2010 Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained in a covered area. Tax form 2010 The main home or principal place of business does not have to be located in the covered area. Tax form 2010 Any estate or trust whose tax records necessary to meet a postponed tax deadline are maintained in a covered area. Tax form 2010 Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered area. Tax form 2010 The spouse on a joint return with a taxpayer who is eligible for postponements. Tax form 2010 Any other person determined by the IRS to be affected by a terrorist attack. Tax form 2010 Covered area. Tax form 2010   This is an area in which a terrorist attack took place and in which the IRS has decided to postpone tax deadlines for up to 1 year. Tax form 2010 Abatement of interest. Tax form 2010   The IRS may abate (forgive) the interest on any underpaid income tax for the length of any postponement. Tax form 2010 Disaster Area Losses If your property was damaged or destroyed as a result of the September 11 attacks, you can choose to deduct your disaster loss on your 2000 return (or amended return) rather than on your 2001 return. Tax form 2010 You must make this choice to deduct your loss on your 2000 return by the later of the following dates. Tax form 2010 The due date (without extensions) for filing your 2001 income tax return (April 15, 2002, if you are a calendar year taxpayer). Tax form 2010 The due date (with extensions) for the 2000 return. Tax form 2010 For more information about disaster area losses, see Publication 547. Tax form 2010 Estate Tax Reduction The federal estate tax is reduced for taxable estates of individuals who died as a result of the Oklahoma City attack, the September 11 attacks, and the anthrax attacks. Tax form 2010 The estate tax is computed using a new rate schedule on page 25 of the November 2001 revision of the instructions for Form 706. Tax form 2010 The estate tax is reduced by credits against the estate tax, including the unified credit and the state death tax credit. Tax form 2010 These credits may reduce or eliminate the estate tax due. Tax form 2010 A special rule extends until January 22, 2003, the period of time allowed to file a claim for a refund of estate taxes that have been paid. Tax form 2010 Recovery from the September 11th Victim Compensation Fund. Tax form 2010   The value of claims for a decedent's pain and suffering is normally included in the gross estate. Tax form 2010 However, if the estate chooses to seek recovery from this fund, the IRS has determined that, in view of the unique circumstances of this situation and the high likelihood that such claims will be valued at a nominal or zero amount, the claims will be valued at zero for estate tax purposes. Tax form 2010 Thus, there are no federal estate tax consequences if an estate or beneficiary receives a recovery from this fund. Tax form 2010 Which estates must file a return. Tax form 2010   For decedents dying in 2001, Form 706 must be filed by the executor for the estate of every U. Tax form 2010 S. Tax form 2010 citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $675,000. Tax form 2010 Form 706 must be filed within 9 months after the date of decedent's death unless you receive an extension of time to file. Tax form 2010 Use Form 4768, Application for Extension of Time To File a Return and/or Pay U. Tax form 2010 S. Tax form 2010 Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension. Tax form 2010 Where to file. Tax form 2010   Returns on which the new rate schedule is used should be sent to the following address, which was not available when Form 706 went to print. Tax form 2010 Internal Revenue Service E & G Department/Stop 824T 201 W. Tax form 2010 Rivercenter Blvd. Tax form 2010 Covington, KY 41011 More information. Tax form 2010   For more information on the federal estate tax, see the instructions for Form 706. Tax form 2010 Structured Settlement Factoring Transactions A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. Tax form 2010 The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. Tax form 2010 However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. Tax form 2010 For information about these requirements, see Internal Revenue Code section 5891. Tax form 2010 Worksheet B Illustrated. Tax form 2010 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Tax form 2010 1 2000 2001   2 Enter the decedent's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 2 $17,259 $14,295   3 Enter the decedent's total tax. Tax form 2010 See the instructions. Tax form 2010 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Tax form 2010 See the instructions. Tax form 2010 4 3,532 3,109   5 Subtract line 4 from line 3. Tax form 2010 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions for line 2. Tax form 2010 6 29,025 29,850   7 Enter the surviving spouse's total tax. Tax form 2010 See the instructions. Tax form 2010 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Tax form 2010 8 0 0   9 Subtract line 8 from line 7. Tax form 2010 9 5,277 5,391   10 Add lines 5 and 9. Tax form 2010 10 7,868 7,532   11 Enter the total tax from the joint return. Tax form 2010 See Table 1 on page 5 for the line number for years before 2002. Tax form 2010 11 10,789 9,728   12 Add lines 4 and 8. Tax form 2010 12 3,532 3,109   13 Subtract line 12 from line 11. Tax form 2010 13 7,257 6,619   14 Divide line 5 by line 10. Tax form 2010 Enter the result as a decimal. Tax form 2010 14 . Tax form 2010 329 . Tax form 2010 284   15 Tax to be forgiven. Tax form 2010 Multiply line 13 by line 14 and enter the result. Tax form 2010 15 $2,388 $1,880   Note. Tax form 2010 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Tax form 2010 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Tax form 2010 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Tax form 2010 The IRS will determine the amount to be refunded. Tax form 2010 Worksheet B Illustrated. Tax form 2010 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Tax form 2010 1 2000 2001   2 Enter the decedent's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 2 $17,259 $14,295   3 Enter the decedent's total tax. Tax form 2010 See the instructions. Tax form 2010 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Tax form 2010 See the instructions. Tax form 2010 4 3,532 3,109   5 Subtract line 4 from line 3. Tax form 2010 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions for line 2. Tax form 2010 6 29,025 29,850   7 Enter the surviving spouse's total tax. Tax form 2010 See the instructions. Tax form 2010 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Tax form 2010 8 0 0   9 Subtract line 8 from line 7. Tax form 2010 9 5,277 5,391   10 Add lines 5 and 9. Tax form 2010 10 7,868 7,532   11 Enter the total tax from the joint return. Tax form 2010 See Table 1 on page 5 for the line number for years before 2002. Tax form 2010 11 10,789 9,728   12 Add lines 4 and 8. Tax form 2010 12 3,532 3,109   13 Subtract line 12 from line 11. Tax form 2010 13 7,257 6,619   14 Divide line 5 by line 10. Tax form 2010 Enter the result as a decimal. Tax form 2010 14 . Tax form 2010 329 . Tax form 2010 284   15 Tax to be forgiven. Tax form 2010 Multiply line 13 by line 14 and enter the result. Tax form 2010 15 $2,388 $1,880   Note. Tax form 2010 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Tax form 2010 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Tax form 2010 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Tax form 2010 The IRS will determine the amount to be refunded. Tax form 2010 Illustrated Worksheets B and C A wife lost her husband in the September 11 attack on the World Trade Center. Tax form 2010 They filed a joint return for 2000 and the wife chose to file a joint return as a surviving spouse for 2001. Tax form 2010 The returns for 2000 and 2001 showed the following income, deductions, and tax liabilities. Tax form 2010 After the husband died, his estate received income of $4,000. Tax form 2010 Of that amount, $1,000 is net profit from Schedule C received before the end of 2001. Tax form 2010 This net profit is exempt from income tax as explained earlier under Income received after date of death. Tax form 2010 The wife files Form 1041 because the gross income of the estate for the tax year ($3,000) is $600 or more. Tax form 2010 To determine how much of the husband's tax liability for 2000 and 2001 is to be forgiven, the wife completes Worksheet B. Tax form 2010 She also completes Worksheet C because the forgiven tax liabilities for 2000 and 2001 (line 15 of Worksheet B) total less than $10,000. Tax form 2010 To claim tax relief for 2000, the wife files Form 1040X and attaches a copy of Worksheet B. Tax form 2010 To claim tax relief for 2001, she files Form 1040 and attaches copies of Worksheets B and C. Tax form 2010   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728 Worksheet C Illustrated. Tax form 2010 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Tax form 2010 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Tax form 2010 1 Minimum relief amount. Tax form 2010 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Tax form 2010 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Tax form 2010 3 0     4 Add lines 2 and 3. Tax form 2010 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Tax form 2010 (See Income received after date of death on page 5. Tax form 2010 ) 5 1,000     6 Add lines 4 and 5. Tax form 2010 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Tax form 2010 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Tax form 2010 8 435     9 Tax on exempt income. Tax form 2010 Subtract line 8 from line 7. Tax form 2010 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Tax form 2010 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Tax form 2010 10 4,268     11 Add lines 9 and 10. Tax form 2010 11 $4,543 12 Additional payment allowed. Tax form 2010 If line 11 is $10,000 or more, enter -0- and stop here. Tax form 2010 No additional amount is allowed as a tax payment. Tax form 2010 Otherwise, subtract line 11 from line 1 and enter the result. Tax form 2010 12 $5,457 Note. Tax form 2010 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Tax form 2010 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Tax form 2010 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Tax form 2010 Write "Sec. Tax form 2010 692(d)(2) Payment" and the amount to the right of the entry space. Tax form 2010 Also indicate whether a Form 1041 is being filed for the decedent's estate. Tax form 2010 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Tax form 2010 Write “Sec. Tax form 2010 692(d)(2) Payment” on the dotted line to the left of the entry space. Tax form 2010 Worksheet C Illustrated. Tax form 2010 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Tax form 2010 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Tax form 2010 1 Minimum relief amount. Tax form 2010 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Tax form 2010 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Tax form 2010 3 0     4 Add lines 2 and 3. Tax form 2010 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Tax form 2010 (See Income received after date of death on page 5. Tax form 2010 ) 5 1,000     6 Add lines 4 and 5. Tax form 2010 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Tax form 2010 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Tax form 2010 8 435     9 Tax on exempt income. Tax form 2010 Subtract line 8 from line 7. Tax form 2010 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Tax form 2010 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Tax form 2010 10 4,268     11 Add lines 9 and 10. Tax form 2010 11 $4,543 12 Additional payment allowed. Tax form 2010 If line 11 is $10,000 or more, enter -0- and stop here. Tax form 2010 No additional amount is allowed as a tax payment. Tax form 2010 Otherwise, subtract line 11 from line 1 and enter the result. Tax form 2010 12 $5,457 Note. Tax form 2010 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Tax form 2010 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Tax form 2010 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Tax form 2010 Write "Sec. Tax form 2010 692(d)(2) Payment" and the amount to the right of the entry space. Tax form 2010 Also indicate whether a Form 1041 is being filed for the decedent's estate. Tax form 2010 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Tax form 2010 Write “Sec. Tax form 2010 692(d)(2) Payment” on the dotted line to the left of the entry space. Tax form 2010 Additional Worksheets The following additional worksheets are provided for your convenience. Tax form 2010 Worksheet A. Tax form 2010 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Tax form 2010 1       2 Enter the total tax from the decedent's income tax return. Tax form 2010 See Table 1 on page 5 for the line number for years before 2002. Tax form 2010 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Tax form 2010 (These taxes are not eligible for forgiveness. Tax form 2010 )           a Self-employment tax. Tax form 2010 3a         b Social security and Medicare tax on tip income not reported to employer. Tax form 2010 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Tax form 2010 3c         d Tax on excess accumulation in qualified retirement plans. Tax form 2010 3d         e Household employment taxes. Tax form 2010 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Tax form 2010 3f         g Tax on golden parachute payments. Tax form 2010 3g       4 Add lines 3a through 3g. Tax form 2010 4       5 Tax to be forgiven. Tax form 2010 Subtract line 4 from line 2. Tax form 2010 5       Note. Tax form 2010 If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Tax form 2010 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Tax form 2010 If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Tax form 2010 The IRS will determine the amount to be refunded. Tax form 2010 Worksheet A. Tax form 2010 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Tax form 2010 1       2 Enter the total tax from the decedent's income tax return. Tax form 2010 See Table 1 on page 5 for the line number for years before 2002. Tax form 2010 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Tax form 2010 (These taxes are not eligible for forgiveness. Tax form 2010 )           a Self-employment tax. Tax form 2010 3a         b Social security and Medicare tax on tip income not reported to employer. Tax form 2010 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Tax form 2010 3c         d Tax on excess accumulation in qualified retirement plans. Tax form 2010 3d         e Household employment taxes. Tax form 2010 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Tax form 2010 3f         g Tax on golden parachute payments. Tax form 2010 3g       4 Add lines 3a through 3g. Tax form 2010 4       5 Tax to be forgiven. Tax form 2010 Subtract line 4 from line 2. Tax form 2010 5       Note. Tax form 2010 If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Tax form 2010 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Tax form 2010 If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Tax form 2010 The IRS will determine the amount to be refunded. Tax form 2010 Worksheet B. Tax form 2010 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Tax form 2010 1       2 Enter the decedent's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 2       3 Enter the decedent's total tax. Tax form 2010 See the instructions. Tax form 2010 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Tax form 2010 See the instructions. Tax form 2010 4       5 Subtract line 4 from line 3. Tax form 2010 5       6 Enter the surviving spouse's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 6       7 Enter the surviving spouse's total tax. Tax form 2010 See the instructions. Tax form 2010 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Tax form 2010 8       9 Subtract line 8 from line 7. Tax form 2010 9       10 Add lines 5 and 9. Tax form 2010 10       11 Enter the total tax from the joint return. Tax form 2010 See Table 1 on page 5 for the line number for years before 2002. Tax form 2010 11       12 Add lines 4 and 8. Tax form 2010 12       13 Subtract line 12 from line 11. Tax form 2010 13       14 Divide line 5 by line 10. Tax form 2010 Enter the result as a decimal. Tax form 2010 14       15 Tax to be forgiven. Tax form 2010 Multiply line 13 by line 14 and enter the result. Tax form 2010 15       Note. Tax form 2010 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Tax form 2010 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Tax form 2010 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Tax form 2010 The IRS will determine the amount to be refunded. Tax form 2010 Worksheet B. Tax form 2010 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Tax form 2010 1       2 Enter the decedent's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 2       3 Enter the decedent's total tax. Tax form 2010 See the instructions. Tax form 2010 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Tax form 2010 See the instructions. Tax form 2010 4       5 Subtract line 4 from line 3. Tax form 2010 5       6 Enter the surviving spouse's taxable income. Tax form 2010 Figure taxable income as if a separate return had been filed. Tax form 2010 See the instructions. Tax form 2010 6       7 Enter the surviving spouse's total tax. Tax form 2010 See the instructions. Tax form 2010 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Tax form 2010 8       9 Subtract line 8 from line 7. Tax form 2010 9       10 Add lines 5 and 9. Tax form 2010 10       11 Enter the total tax from the joint return. Tax form 2010 See Table 1 on page 5 for the line number for years before 2002. Tax form 2010 11       12 Add lines 4 and 8. Tax form 2010 12       13 Subtract line 12 from line 11. Tax form 2010 13       14 Divide line 5 by line 10. Tax form 2010 Enter the result as a decimal. Tax form 2010 14       15 Tax to be forgiven. Tax form 2010 Multiply line 13 by line 14 and enter the result. Tax form 2010 15       Note. Tax form 2010 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Tax form 2010 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Tax form 2010 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Tax form 2010 The IRS will determine the amount to be refunded. Tax form 2010 Worksheet C. Tax form 2010 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Tax form 2010 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Tax form 2010 1 Minimum tax forgiveness. Tax form 2010 Note. Tax form 2010 Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Tax form 2010 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Tax form 2010 3       4 Add lines 2 and 3. Tax form 2010 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Tax form 2010 (See Income received after date of death on page 5. Tax form 2010 ) 5       6 Add lines 4 and 5. Tax form 2010 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Tax form 2010 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Tax form 2010 8       9 Tax on exempt income. Tax form 2010 Subtract line 8 from line 7. Tax form 2010 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Tax form 2010 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Tax form 2010 10       11 Add lines 9 and 10. Tax form 2010 11   12 Additional payment allowed. Tax form 2010 If line 11 is $10,000 or more, enter -0- and stop here. Tax form 2010 No additional amount is allowed as a tax payment. Tax form 2010 Otherwise, subtract line 11 from line 1 and enter the result. Tax form 2010 12   Note. Tax form 2010 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Tax form 2010 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Tax form 2010 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Tax form 2010 Write "Sec. Tax form 2010 692(d)(2) Payment" and the amount to the right of the entry space. Tax form 2010 Also indicate whether a Form 1041 is being filed for the decedent's estate. Tax form 2010 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Tax form 2010 Write “Sec. Tax form 2010 692(d)(2) Payment” on the dotted line to the left of the entry space. Tax form 2010 Worksheet C. Tax form 2010 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Tax form 2010 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Tax form 2010 1 Minimum tax forgiveness. Tax form 2010 Note. Tax form 2010 Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Tax form 2010 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Tax form 2010 3       4 Add lines 2 and 3. Tax form 2010 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Tax form 2010 (See Income received after date of death on page 5. Tax form 2010 ) 5       6 Add lines 4 and 5. Tax form 2010 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Tax form 2010 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Tax form 2010 8       9 Tax on exempt income. Tax form 2010 Subtract line 8 from line 7. Tax form 2010 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Tax form 2010 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Tax form 2010 10       11 Add lines 9 and 10. Tax form 2010 11   12 Additional payment allowed. Tax form 2010 If line 11 is $10,000 or more, enter -0- and stop here. Tax form 2010 No additional amount is allowed as a tax payment. Tax form 2010 Otherwise, subtract line 11 from line 1 and enter the result. Tax form 2010 12   Note. Tax form 2010 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Tax form 2010 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Tax form 2010 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Tax form 2010 Write "Sec. Tax form 2010 692(d)(2) Payment" and the amount to the right of the entry space. Tax form 2010 Also indicate whether a Form 1041 is being filed for the decedent's estate. Tax form 2010 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Tax form 2010 Write “Sec. Tax form 2010 692(d)(2) Payment” on the dotted line to the left of the entry space. Tax form 2010 How To Get Tax Help Special IRS assistance. Tax form 2010   The IRS is providing special help for those affected by the terrorist attacks, as well as survivors and personal representatives of the victims. Tax form 2010 We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by the terrorist attacks, or who have other tax issues related to the attacks. Tax form 2010 Call 1–866–562–5227 Monday through Friday In English–7 a. Tax form 2010 m. Tax form 2010 to 10 p. Tax form 2010 m. Tax form 2010 local time In Spanish–8 a. Tax form 2010 m. Tax form 2010 to 9:30 p. Tax form 2010 m. Tax form 2010 local time   The IRS web site at www. Tax form 2010 irs. Tax form 2010 gov has notices and other tax relief information. Tax form 2010 Check it periodically for any new guidance or to see if Congress has enacted new legislation. Tax form 2010   Business taxpayers affected by the attacks can e-mail their questions to corp. Tax form 2010 disaster. Tax form 2010 relief@irs. Tax form 2010 gov. Tax form 2010   For current information on Presidentially declared disaster areas, check the Federal Emergency Management Agency Web site at www. Tax form 2010 fema. Tax form 2010 gov. Tax form 2010 Other help from the IRS. Tax form 2010   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Tax form 2010 By selecting the method that is best for you, you will have quick and easy access to tax help. Tax form 2010 Contacting your Taxpayer Advocate. Tax form 2010   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. Tax form 2010   The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. Tax form 2010 While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. Tax form 2010   To contact your Taxpayer Advocate: Call the Taxpayer Advocate at 1–877–777–4778. Tax form 2010 Call the IRS at 1–800–829–1040. Tax form 2010 Call, write, or fax the Taxpayer Advocate office in your area. Tax form 2010 Call 1–800–829–4059 if you are a TTY/TDD user. Tax form 2010   For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS. Tax form 2010 Free tax services. Tax form 2010   To find out what services are available, get Publication 910, Guide to Free Tax Services. Tax form 2010 It contains a list of free tax publications and an index of tax topics. Tax form 2010 It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. Tax form 2010 Personal computer. Tax form 2010 With your personal computer and modem, you can access the IRS on the Internet at www. Tax form 2010 irs. Tax form 2010 gov. Tax form 2010 While visiting our web site, you can: Find answers to questions you may have. Tax form 2010 Download forms and publications or search for forms and pub