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Tax Return Form 1040ez

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Tax Return Form 1040ez

Tax return form 1040ez 10. Tax return form 1040ez   Employees of Foreign Governments and International Organizations Table of Contents Exemption Under Tax Treaty Exemption Under U. Tax return form 1040ez S. Tax return form 1040ez Tax LawCertification. Tax return form 1040ez Employees of foreign governments (including foreign municipalities) have two ways to get exemption of their governmental wages from U. Tax return form 1040ez S. Tax return form 1040ez income tax: By a provision in a tax treaty or consular convention between the United States and their country, or By meeting the requirements of U. Tax return form 1040ez S. Tax return form 1040ez tax law. Tax return form 1040ez Employees of international organizations can exempt their wages either by a provision, if one exists, in the international agreement creating the international organization, or by meeting the requirements of U. Tax return form 1040ez S. Tax return form 1040ez tax law. Tax return form 1040ez The exemption discussed in this chapter applies only to pay received for services performed for a foreign government or international organization. Tax return form 1040ez Other U. Tax return form 1040ez S. Tax return form 1040ez income received by persons who qualify for this exemption may be fully taxable or given favorable treatment under an applicable tax treaty provision. Tax return form 1040ez The proper treatment of this kind of income (interest, dividends, etc. Tax return form 1040ez ) is discussed earlier in this publication. Tax return form 1040ez Exemption Under Tax Treaty If you are from a country that has a tax treaty with the United States, you should first look at the treaty to see if there is a provision that exempts your income. Tax return form 1040ez The income of U. Tax return form 1040ez S. Tax return form 1040ez citizens and resident aliens working for foreign governments usually is not exempt. Tax return form 1040ez However, in a few instances, the income of a U. Tax return form 1040ez S. Tax return form 1040ez citizen with dual citizenship may qualify. Tax return form 1040ez Often the exemption is limited to the income of persons who also are nationals of the foreign country involved. Tax return form 1040ez Exemption Under U. Tax return form 1040ez S. Tax return form 1040ez Tax Law Employees of foreign governments who do not qualify under a tax treaty provision and employees of international organizations may qualify for exemption by meeting the following requirements of U. Tax return form 1040ez S. Tax return form 1040ez tax law. Tax return form 1040ez The exemption under U. Tax return form 1040ez S. Tax return form 1040ez tax law applies only to current employees and not to former employees. Tax return form 1040ez Pensions received by former employees living in the United States do not qualify for the exemption discussed here. Tax return form 1040ez Employees of foreign governments. Tax return form 1040ez   If you are not a U. Tax return form 1040ez S. Tax return form 1040ez citizen, or if you are a U. Tax return form 1040ez S. Tax return form 1040ez citizen but also a citizen of the Philippines, and you work for a foreign government in the United States, your foreign government salary is exempt from U. Tax return form 1040ez S. Tax return form 1040ez tax if you perform services similar to those performed by U. Tax return form 1040ez S. Tax return form 1040ez government employees in that foreign country and that foreign government grants an equivalent exemption to U. Tax return form 1040ez S. Tax return form 1040ez government employees. Tax return form 1040ez Certification. Tax return form 1040ez   To qualify for the exemption under U. Tax return form 1040ez S. Tax return form 1040ez tax law, either the Department of State must certify that you perform services similar to those performed by employees of the government of the United States in foreign countries and that your foreign government employer grants an equivalent exemption to U. Tax return form 1040ez S. Tax return form 1040ez government employees performing similar services in its country or you must establish those facts. Tax return form 1040ez However, see Aliens who keep immigrant status , later, for a special rule that may affect your qualifying for this exemption. Tax return form 1040ez Employees of international organizations. Tax return form 1040ez   If you work for an international organization in the United States and you are not a U. Tax return form 1040ez S. Tax return form 1040ez citizen (or you are a U. Tax return form 1040ez S. Tax return form 1040ez citizen but are also a citizen of the Philippines), your salary from that organization is exempt from U. Tax return form 1040ez S. Tax return form 1040ez tax. Tax return form 1040ez However, see Aliens who keep immigrant status , later, for a special rule that may affect your qualifying for this exemption. Tax return form 1040ez   An international organization is an organization designated by the President of the United States through Executive Order to qualify for the privileges, exemptions, and immunities provided in the International Organizations Immunities Act. Tax return form 1040ez   You should find out if you have been made known to, and have been accepted by, the Secretary of State as an officer or an employee of that organization, or if you have been designated by the Secretary of State, before formal notification and acceptance, as a prospective officer or employee. Tax return form 1040ez   If you are claiming exemption, you should know the number of the Executive Order covering the international organization and should have some written evidence of your acceptance or designation by the Secretary of State. Tax return form 1040ez   The exemption is denied when, because the Secretary of State determines your presence in the United States is no longer desirable, you leave the United States (or after a reasonable time allowed for leaving the United States). Tax return form 1040ez The exemption is also denied when a foreign country does not allow similar exemptions to U. Tax return form 1040ez S. Tax return form 1040ez citizens. Tax return form 1040ez Then the Secretary of State can withdraw the privileges, exemptions, and immunities from the nationals of that foreign country. Tax return form 1040ez Aliens who keep immigrant status. Tax return form 1040ez   If you file the waiver provided by section 247(b) of the Immigration and Nationality Act (USCIS Form I-508) to keep your immigrant status (green card), you no longer qualify for the exemption from U. Tax return form 1040ez S. Tax return form 1040ez tax under U. Tax return form 1040ez S. Tax return form 1040ez tax law from the date of filing the waiver with the Attorney General. Tax return form 1040ez   However, you do not lose the exemption if you file the waiver, and meet either of the following conditions. Tax return form 1040ez You are exempt from U. Tax return form 1040ez S. Tax return form 1040ez tax under an income tax treaty, consular agreement, or international agreement between the United States and your foreign government employer. Tax return form 1040ez You work for an international organization and the international organization agreement creating the international organization provides that alien employees are exempt from U. Tax return form 1040ez S. Tax return form 1040ez income tax. Tax return form 1040ez Two international organizations that have such a provision are the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank). Tax return form 1040ez . Tax return form 1040ez   For more information about a specific foreign country or international organization, send an email to embassy@irs. Tax return form 1040ez gov. Tax return form 1040ez Prev  Up  Next   Home   More Online Publications
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The Tax Return Form 1040ez

Tax return form 1040ez 17. Tax return form 1040ez   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 return form 1040ez  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 return form 1040ez 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 return form 1040ez For more information, see How Much Can Be Contributed? later. Tax return form 1040ez Roth IRA contribution limit. Tax return form 1040ez  If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $5,500, or Your taxable compensation for the year. Tax return form 1040ez If you were age 50 or older before 2014 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $6,500, or Your taxable compensation for the year. Tax return form 1040ez However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Tax return form 1040ez For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? later. Tax return form 1040ez Modified AGI limit for traditional IRA contributions increased. Tax return form 1040ez  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 return form 1040ez 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 return form 1040ez If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Tax return form 1040ez See How Much Can You Deduct , later. Tax return form 1040ez Modified AGI limit for Roth IRA contributions increased. Tax return form 1040ez  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Tax return form 1040ez Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Tax return form 1040ez You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Tax return form 1040ez Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2013 and your modified AGI is at least $112,000. Tax return form 1040ez You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Tax return form 1040ez Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. Tax return form 1040ez You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Tax return form 1040ez See Can You Contribute to a Roth IRA , later. Tax return form 1040ez Net Investment Income Tax. Tax return form 1040ez   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 return form 1040ez However, these distributions are taken into account when determining the modified adjusted gross income threshold. Tax return form 1040ez Distributions from a nonqualified retirement plan are included in net investment income. Tax return form 1040ez See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Tax return form 1040ez Name change. Tax return form 1040ez  All spousal IRAs have been renamed Kay Bailey Hutchison Spousal IRAs. Tax return form 1040ez There are no changes to the rules regarding these IRAs. Tax return form 1040ez See Kay Bailey Hutchison Spousal IRA Limit , later, for more information. Tax return form 1040ez Reminders 2014 limits. Tax return form 1040ez   You can find information about the 2014 contribution and AGI limits in Publication 590. Tax return form 1040ez Contributions to both traditional and Roth IRAs. Tax return form 1040ez   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 return form 1040ez Statement of required minimum distribution. Tax return form 1040ez  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 return form 1040ez The report or offer must include the date by which the amount must be distributed. Tax return form 1040ez The report is due January 31 of the year in which the minimum distribution is required. Tax return form 1040ez It can be provided with the year-end fair market value statement that you normally get each year. Tax return form 1040ez No report is required for IRAs of owners who have died. Tax return form 1040ez IRA interest. Tax return form 1040ez  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Tax return form 1040ez Tax on your traditional IRA is generally deferred until you take a distribution. Tax return form 1040ez Do not report this interest on your tax return as tax-exempt interest. Tax return form 1040ez Form 8606. Tax return form 1040ez   To designate contributions as nondeductible, you must file Form 8606, Nondeductible IRAs. Tax return form 1040ez The term “50 or older” is used several times in this chapter. Tax return form 1040ez It refers to an IRA owner who is age 50 or older by the end of the tax year. Tax return form 1040ez Introduction An individual retirement arrangement (IRA) is a personal savings plan that gives you tax advantages for setting aside money for your retirement. Tax return form 1040ez This chapter discusses the following topics. Tax return form 1040ez The rules for a traditional IRA (any IRA that is not a Roth or SIMPLE IRA). Tax return form 1040ez The Roth IRA, which features nondeductible contributions and tax-free distributions. Tax return form 1040ez Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs) are not discussed in this chapter. Tax return form 1040ez 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 return form 1040ez For information about contributions, deductions, withdrawals, transfers, rollovers, and other transactions, see Publication 590. Tax return form 1040ez 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 return form 1040ez ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Tax return form 1040ez 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 return form 1040ez 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 return form 1040ez What is compensation?   Generally, compensation is what you earn from working. Tax return form 1040ez Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. Tax return form 1040ez 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 return form 1040ez   Scholarship and fellowship payments are compensation for this purpose only if shown in box 1 of Form W-2. Tax return form 1040ez   Compensation also includes commissions and taxable alimony and separate maintenance payments. Tax return form 1040ez Self-employment income. Tax return form 1040ez   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 return form 1040ez   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Tax return form 1040ez Nontaxable combat pay. Tax return form 1040ez   For IRA purposes, if you were a member of the U. Tax return form 1040ez S. Tax return form 1040ez Armed Forces, your compensation includes any nontaxable combat pay you receive. Tax return form 1040ez What is not compensation?   Compensation does not include any of the following items. Tax return form 1040ez Earnings and profits from property, such as rental income, interest income, and dividend income. Tax return form 1040ez Pension or annuity income. Tax return form 1040ez Deferred compensation received (compensation payments postponed from a past year). Tax return form 1040ez Income from a partnership for which you do not provide services that are a material income-producing factor. Tax return form 1040ez Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Tax return form 1040ez Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Tax return form 1040ez When and How Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Tax return form 1040ez However, the time for making contributions for any year is limited. Tax return form 1040ez See When Can Contributions Be Made , later. Tax return form 1040ez You can open different kinds of IRAs with a variety of organizations. Tax return form 1040ez You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Tax return form 1040ez You can also open an IRA through your stockbroker. Tax return form 1040ez Any IRA must meet Internal Revenue Code requirements. Tax return form 1040ez Kinds of traditional IRAs. Tax return form 1040ez   Your traditional IRA can be an individual retirement account or annuity. Tax return form 1040ez It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Tax return form 1040ez How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Tax return form 1040ez These limits and other rules are explained below. Tax return form 1040ez Community property laws. Tax return form 1040ez   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 return form 1040ez This is the rule even in states with community property laws. Tax return form 1040ez Brokers' commissions. Tax return form 1040ez   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Tax return form 1040ez Trustees' fees. Tax return form 1040ez   Trustees' administrative fees are not subject to the contribution limit. Tax return form 1040ez Qualified reservist repayments. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez 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 return form 1040ez   For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1 of Publication 590. Tax return form 1040ez Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Tax return form 1040ez (See Roth IRAs, later. Tax return form 1040ez ) General limit. Tax return form 1040ez   For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts. Tax return form 1040ez $5,500 ($6,500 if you are 50 or older). Tax return form 1040ez Your taxable compensation (defined earlier) for the year. Tax return form 1040ez 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 return form 1040ez (See Nondeductible Contributions , later. Tax return form 1040ez ) Qualified reservist repayments do not affect this limit. Tax return form 1040ez Example 1. Tax return form 1040ez Betty, who is 34 years old and single, earned $24,000 in 2013. Tax return form 1040ez Her IRA contributions for 2013 are limited to $5,500. Tax return form 1040ez Example 2. Tax return form 1040ez John, an unmarried college student working part time, earned $3,500 in 2013. Tax return form 1040ez His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Tax return form 1040ez Kay Bailey Hutchison Spousal IRA limit. Tax return form 1040ez   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 return form 1040ez $5,500 ($6,500 if you are 50 or older). Tax return form 1040ez The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Tax return form 1040ez Your spouse's IRA contribution for the year to a traditional IRA. Tax return form 1040ez Any contribution for the year to a Roth IRA on behalf of your spouse. Tax return form 1040ez 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 return form 1040ez 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 return form 1040ez Contributions must be in the form of money (cash, check, or money order). Tax return form 1040ez Property cannot be contributed. Tax return form 1040ez Contributions must be made by due date. Tax return form 1040ez   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 return form 1040ez Age 70½ rule. Tax return form 1040ez   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Tax return form 1040ez   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Tax return form 1040ez If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Tax return form 1040ez Designating year for which contribution is made. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez Filing before a contribution is made. Tax return form 1040ez   You can file your return claiming a traditional IRA contribution before the contribution is actually made. Tax return form 1040ez Generally, the contribution must be made by the due date of your return, not including extensions. Tax return form 1040ez Contributions not required. Tax return form 1040ez   You do not have to contribute to your traditional IRA for every tax year, even if you can. Tax return form 1040ez 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 return form 1040ez However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Tax return form 1040ez See Limit If Covered by Employer Plan , later. Tax return form 1040ez You may be able to claim a credit for contributions to your traditional IRA. Tax return form 1040ez For more information, see chapter 37. Tax return form 1040ez Trustees' fees. Tax return form 1040ez   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Tax return form 1040ez However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Tax return form 1040ez See chapter 28. Tax return form 1040ez Brokers' commissions. Tax return form 1040ez   Brokers' commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Tax return form 1040ez Full deduction. Tax return form 1040ez   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 return form 1040ez 100% of your compensation. Tax return form 1040ez This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Tax return form 1040ez Kay Bailey Hutchison Spousal IRA. Tax return form 1040ez   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 return form 1040ez $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older in 2013). Tax return form 1040ez The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Tax return form 1040ez The IRA deduction for the year of the spouse with the greater compensation. Tax return form 1040ez Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Tax return form 1040ez Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Tax return form 1040ez This limit is reduced by any contributions to a 501(c)(18) plan on behalf of the spouse with the lesser compensation. Tax return form 1040ez Note. Tax return form 1040ez 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 return form 1040ez After a divorce or legal separation, you can deduct only contributions to your own IRA. Tax return form 1040ez Your deductions are subject to the rules for single individuals. Tax return form 1040ez Covered by an employer retirement plan. Tax return form 1040ez   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 return form 1040ez This is discussed later under Limit If Covered by Employer Plan . Tax return form 1040ez Limits on the amount you can deduct do not affect the amount that can be contributed. Tax return form 1040ez See Nondeductible Contributions , later. Tax return form 1040ez 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 return form 1040ez The “Retirement plan” box should be checked if you were covered. Tax return form 1040ez Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered by an Employer Plan , later. Tax return form 1040ez If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Tax return form 1040ez Federal judges. Tax return form 1040ez   For purposes of the IRA deduction, federal judges are covered by an employer retirement plan. Tax return form 1040ez 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 return form 1040ez These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Tax return form 1040ez Tax year. Tax return form 1040ez   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Tax return form 1040ez For almost all people, the tax year is the calendar year. Tax return form 1040ez Defined contribution plan. Tax return form 1040ez   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 return form 1040ez   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Tax return form 1040ez Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Tax return form 1040ez Defined benefit plan. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez   A defined benefit plan is any plan that is not a defined contribution plan. Tax return form 1040ez Defined benefit plans include pension plans and annuity plans. Tax return form 1040ez No vested interest. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez Social security or railroad retirement. Tax return form 1040ez   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Tax return form 1040ez Benefits from a previous employer's plan. Tax return form 1040ez   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Tax return form 1040ez Reservists. Tax return form 1040ez   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 return form 1040ez You are not covered by the plan if both of the following conditions are met. Tax return form 1040ez 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 return form 1040ez You did not serve more than 90 days on active duty during the year (not counting duty for training). Tax return form 1040ez Volunteer firefighters. Tax return form 1040ez   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 return form 1040ez You are not covered by the plan if both of the following conditions are met. Tax return form 1040ez 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 return form 1040ez Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Tax return form 1040ez 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 return form 1040ez 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 return form 1040ez These amounts vary depending on your filing status. Tax return form 1040ez To determine if your deduction is subject to phaseout, you must determine your modified adjusted gross income (AGI) and your filing status. Tax return form 1040ez See Filing status and Modified adjusted gross income (AGI) , later. Tax return form 1040ez Then use Table 17-1 or 17-2 to determine if the phaseout applies. Tax return form 1040ez Social security recipients. Tax return form 1040ez   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 return form 1040ez You received social security benefits. Tax return form 1040ez You received taxable compensation. Tax return form 1040ez Contributions were made to your traditional IRA. Tax return form 1040ez You or your spouse was covered by an employer retirement plan. Tax return form 1040ez Use those worksheets to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Tax return form 1040ez Deduction phaseout. Tax return form 1040ez   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 return form 1040ez Table 17-1. Tax return form 1040ez 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 return form 1040ez IF your filing status is. Tax return form 1040ez . Tax return form 1040ez . Tax return form 1040ez   AND your modified AGI is. Tax return form 1040ez . Tax return form 1040ez . Tax return form 1040ez   THEN you can take. Tax return form 1040ez . Tax return form 1040ez . Tax return form 1040ez single   or  head of household   $59,000 or less   a full deduction. Tax return form 1040ez   more than $59,000 but less than $69,000   a partial deduction. Tax return form 1040ez   $69,000 or more   no deduction. Tax return form 1040ez married filing jointly   or  qualifying widow(er)   $95,000 or less   a full deduction. Tax return form 1040ez   more than $95,000 but less than $115,000   a partial deduction. Tax return form 1040ez   $115,000 or more   no deduction. Tax return form 1040ez married filing separately2   less than $10,000   a partial deduction. Tax return form 1040ez   $10,000 or more   no deduction. Tax return form 1040ez 1Modified AGI (adjusted gross income). Tax return form 1040ez See Modified adjusted gross income (AGI) . Tax return form 1040ez 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 return form 1040ez If your spouse is covered. Tax return form 1040ez   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 return form 1040ez Filing status. Tax return form 1040ez   Your filing status depends primarily on your marital status. Tax return form 1040ez 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 return form 1040ez If you need more information on filing status, see chapter 2. Tax return form 1040ez Lived apart from spouse. Tax return form 1040ez   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 return form 1040ez Table 17-2. Tax return form 1040ez 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 return form 1040ez IF your filing status is. Tax return form 1040ez . Tax return form 1040ez . Tax return form 1040ez   AND your modified AGI is. Tax return form 1040ez . Tax return form 1040ez . Tax return form 1040ez   THEN you can take. Tax return form 1040ez . Tax return form 1040ez . Tax return form 1040ez single, head of household, or qualifying widow(er)   any amount   a full deduction. Tax return form 1040ez married filing jointly or separately with a spouse who is not covered by a plan at work   any amount   a full deduction. Tax return form 1040ez married filing jointly with a spouse who is covered by a plan at work   $178,000 or less   a full deduction. Tax return form 1040ez   more than $178,000 but less than $188,000   a partial deduction. Tax return form 1040ez   $188,000 or more   no deduction. Tax return form 1040ez married filing separately with a spouse who is covered by a plan at work2   less than $10,000   a partial deduction. Tax return form 1040ez   $10,000 or more   no deduction. Tax return form 1040ez 1Modified AGI (adjusted gross income). Tax return form 1040ez See Modified adjusted gross income (AGI) . Tax return form 1040ez 2You are entitled to the full deduction if you did not live with your spouse at any time during the year. Tax return form 1040ez Modified adjusted gross income (AGI). Tax return form 1040ez   How you figure your modified AGI depends on whether you are filing Form 1040 or Form 1040A. Tax return form 1040ez If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Publication 590. Tax return form 1040ez You may be able to use Worksheet 17-1 to figure your modified AGI. Tax return form 1040ez    Do not assume that your modified AGI is the same as your compensation. Tax return form 1040ez Your modified AGI may include income in addition to your compensation (discussed earlier), such as interest, dividends, and income from IRA distributions. Tax return form 1040ez Form 1040. Tax return form 1040ez   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 return form 1040ez IRA deduction. Tax return form 1040ez Student loan interest deduction. Tax return form 1040ez Tuition and fees deduction. Tax return form 1040ez Domestic production activities deduction. Tax return form 1040ez Foreign earned income exclusion. Tax return form 1040ez Foreign housing exclusion or deduction. Tax return form 1040ez Exclusion of qualified savings bond interest shown on Form 8815, Exclusion of Interest From Series EE and I U. Tax return form 1040ez S. Tax return form 1040ez Savings Bonds Issued After 1989. Tax return form 1040ez Exclusion of employer-provided adoption benefits shown on Form 8839, Qualified Adoption Expenses. Tax return form 1040ez This is your modified AGI. Tax return form 1040ez Form 1040A. Tax return form 1040ez   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 return form 1040ez IRA deduction. Tax return form 1040ez Student loan interest deduction. Tax return form 1040ez Tuition and fees deduction. Tax return form 1040ez Exclusion of qualified savings bond interest shown on Form 8815. Tax return form 1040ez This is your modified AGI. Tax return form 1040ez Both contributions for 2013 and distributions in 2013. Tax return form 1040ez   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Tax return form 1040ez You received distributions in 2013 from one or more traditional IRAs. Tax return form 1040ez You made contributions to a traditional IRA for 2013. Tax return form 1040ez Some of those contributions may be nondeductible contributions. Tax return form 1040ez If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Tax return form 1040ez To do this, you can use Worksheet 1-5, Figuring the Taxable Part of Your IRA Distribution, in Publication 590. Tax return form 1040ez   If at least one of the above does not apply, figure your modified AGI using Worksheet 17-1, later. Tax return form 1040ez    How to figure your reduced IRA deduction. Tax return form 1040ez   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 return form 1040ez Also, the instructions for Form 1040 and Form 1040A include similar worksheets that you may be able to use instead. Tax return form 1040ez Worksheet 17-1. Tax return form 1040ez Figuring Your Modified AGI Use this worksheet to figure your modified adjusted gross income for traditional IRA purposes. Tax return form 1040ez 1. Tax return form 1040ez 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 return form 1040ez   2. Tax return form 1040ez Enter any student loan interest deduction from Form 1040, line 33, or Form 1040A, line 18 2. Tax return form 1040ez   3. Tax return form 1040ez Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Tax return form 1040ez   4. Tax return form 1040ez Enter any domestic production activities deduction from Form 1040, line 35 4. Tax return form 1040ez   5. Tax return form 1040ez Enter any foreign earned income and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Tax return form 1040ez   6. Tax return form 1040ez Enter any foreign housing deduction from Form 2555, line 50 6. Tax return form 1040ez   7. Tax return form 1040ez Enter any excludable savings bond interest from Form 8815, line 14 7. Tax return form 1040ez   8. Tax return form 1040ez Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Tax return form 1040ez   9. Tax return form 1040ez Add lines 1 through 8. Tax return form 1040ez This is your Modified AGI for traditional IRA purposes 9. Tax return form 1040ez   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Tax return form 1040ez If you file Form 1040A, enter your IRA deduction on line 17. Tax return form 1040ez You cannot deduct IRA contributions on Form 1040EZ. Tax return form 1040ez 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 return form 1040ez The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Tax return form 1040ez Example. Tax return form 1040ez Mike is 28 years old and single. Tax return form 1040ez In 2013, he was covered by a retirement plan at work. Tax return form 1040ez His salary was $57,312. Tax return form 1040ez His modified AGI was $70,000. Tax return form 1040ez Mike made a $5,500 IRA contribution for 2013. Tax return form 1040ez 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 return form 1040ez He must designate this contribution as a nondeductible contribution by reporting it on Form 8606, as explained next. Tax return form 1040ez Form 8606. Tax return form 1040ez   To designate contributions as nondeductible, you must file Form 8606. Tax return form 1040ez   You do not have to designate a contribution as nondeductible until you file your tax return. Tax return form 1040ez When you file, you can even designate otherwise deductible contributions as nondeductible. Tax return form 1040ez   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Tax return form 1040ez 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 return form 1040ez In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Tax return form 1040ez See Form 8606 under Distributions Fully or Partly Taxable, later. Tax return form 1040ez Failure to report nondeductible contributions. Tax return form 1040ez   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated as deductible contributions when withdrawn. Tax return form 1040ez All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Tax return form 1040ez Penalty for overstatement. Tax return form 1040ez   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 return form 1040ez Penalty for failure to file Form 8606. Tax return form 1040ez   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 return form 1040ez    Tax on earnings on nondeductible contributions. Tax return form 1040ez   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 return form 1040ez See When Can You Withdraw or Use IRA Assets , later. Tax return form 1040ez Cost basis. Tax return form 1040ez   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Tax return form 1040ez Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Tax return form 1040ez Inherited IRAs If you inherit a traditional IRA, you are called a beneficiary. Tax return form 1040ez A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Tax return form 1040ez Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Tax return form 1040ez Inherited from spouse. Tax return form 1040ez   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Tax return form 1040ez You can: Treat it as your own IRA by designating yourself as the account owner. Tax return form 1040ez 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 return form 1040ez Treat yourself as the beneficiary rather than treating the IRA as your own. Tax return form 1040ez Treating it as your own. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez   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 return form 1040ez Inherited from someone other than spouse. Tax return form 1040ez   If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. Tax return form 1040ez This means that you cannot make any contributions to the IRA. Tax return form 1040ez It also means you cannot roll over any amounts into or out of the inherited IRA. Tax return form 1040ez 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 return form 1040ez For more information, see the discussion of inherited IRAs under Rollover From One IRA Into Another, later. Tax return form 1040ez 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 return form 1040ez You can make the following kinds of transfers. Tax return form 1040ez Transfers from one trustee to another. Tax return form 1040ez Rollovers. Tax return form 1040ez Transfers incident to a divorce. Tax return form 1040ez Transfers to Roth IRAs. Tax return form 1040ez   Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. Tax return form 1040ez You can also move assets from a qualified retirement plan to a Roth IRA. Tax return form 1040ez See Can You Move Amounts Into a Roth IRA? under Roth IRAs, later. Tax return form 1040ez 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 return form 1040ez Because there is no distribution to you, the transfer is tax free. Tax return form 1040ez 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 return form 1040ez 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 return form 1040ez 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 return form 1040ez The contribution to the second retirement plan is called a “rollover contribution. Tax return form 1040ez ” Note. Tax return form 1040ez 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 return form 1040ez Kinds of rollovers to a traditional IRA. Tax return form 1040ez   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 return form 1040ez Treatment of rollovers. Tax return form 1040ez   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 return form 1040ez Kinds of rollovers from a traditional IRA. Tax return form 1040ez   You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. Tax return form 1040ez 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 return form 1040ez The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). Tax return form 1040ez Qualified plans may, but are not required to, accept such rollovers. Tax return form 1040ez Time limit for making a rollover contribution. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax return form 1040ez Extension of rollover period. Tax return form 1040ez   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 return form 1040ez For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax return form 1040ez More information. Tax return form 1040ez   For more information on rollovers, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax return form 1040ez 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 return form 1040ez Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. Tax return form 1040ez Waiting period between rollovers. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez   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 return form 1040ez Example. Tax return form 1040ez You have two traditional IRAs, IRA-1 and IRA-2. Tax return form 1040ez You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). Tax return form 1040ez 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 return form 1040ez 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 return form 1040ez 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 return form 1040ez Exception. Tax return form 1040ez   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 return form 1040ez Partial rollovers. Tax return form 1040ez   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 return form 1040ez The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). Tax return form 1040ez 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 return form 1040ez Required distributions. Tax return form 1040ez   Amounts that must be distributed during a particular year under the required distribution rules (discussed later) are not eligible for rollover treatment. Tax return form 1040ez Inherited IRAs. Tax return form 1040ez   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 return form 1040ez See Treating it as your own , earlier. Tax return form 1040ez Not inherited from spouse. Tax return form 1040ez   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 return form 1040ez You must withdraw the IRA assets within a certain period. Tax return form 1040ez For more information, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Tax return form 1040ez Reporting rollovers from IRAs. Tax return form 1040ez   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 return form 1040ez   Enter the total amount of the distribution on Form 1040, line 15a, or Form 1040A, line 11a. Tax return form 1040ez 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 return form 1040ez 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 return form 1040ez Put “Rollover” next to Form 1040, line 15b, or Form 1040A, line 11b. Tax return form 1040ez See your tax return instructions. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez A qualified plan is one that meets the requirements of the Internal Revenue Code. Tax return form 1040ez Eligible rollover distribution. Tax return form 1040ez   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 return form 1040ez A required minimum distribution (explained later under When Must You Withdraw IRA Assets? (Required Minimum Distributions) ). Tax return form 1040ez A hardship distribution. Tax return form 1040ez 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 return form 1040ez 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 return form 1040ez 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 return form 1040ez Dividends on employer securities. Tax return form 1040ez The cost of life insurance coverage. Tax return form 1040ez Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Tax return form 1040ez To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Tax return form 1040ez See Form 8606 under Distributions Fully or Partly Taxable, later. Tax return form 1040ez Rollover by nonspouse beneficiary. Tax return form 1040ez   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 return form 1040ez The IRA is treated as an inherited IRA. Tax return form 1040ez For more information about inherited IRAs, see Inherited IRAs , earlier. Tax return form 1040ez Reporting rollovers from employer plans. Tax return form 1040ez    Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. Tax return form 1040ez This amount should be shown in box 1 of Form 1099-R. Tax return form 1040ez From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. Tax return form 1040ez From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Tax return form 1040ez Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. Tax return form 1040ez Also, enter "Rollover" next to Form 1040, line 16b, or Form 1040A, line 12b. Tax return form 1040ez 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 return form 1040ez The transfer is tax free. Tax return form 1040ez For detailed information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Tax return form 1040ez Converting From Any Traditional IRA to a Roth IRA Allowable conversions. Tax return form 1040ez   You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. Tax return form 1040ez The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. Tax return form 1040ez If properly (and timely) rolled over, the 10% additional tax on early distributions will not apply. Tax return form 1040ez However, a part or all of the conversion contribution from your traditional IRA is included in your gross income. Tax return form 1040ez Required distributions. Tax return form 1040ez   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 return form 1040ez Income. Tax return form 1040ez   You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you had not converted them into a Roth IRA. Tax return form 1040ez These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA. Tax return form 1040ez   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 return form 1040ez   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 return form 1040ez   If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Tax return form 1040ez See chapter 4. Tax return form 1040ez 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 return form 1040ez This is called recharacterizing the contribution. Tax return form 1040ez See Can You Move Retirement Plan Assets? in chapter 1 of Publication 590 for more detailed information. Tax return form 1040ez How to recharacterize a contribution. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez If you recharacterize your contribution, you must do all three of the following. Tax return form 1040ez Include in the transfer any net income allocable to the contribution. Tax return form 1040ez If there was a loss, the net income you must transfer may be a negative amount. Tax return form 1040ez Report the recharacterization on your tax return for the year during which the contribution was made. Tax return form 1040ez Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA. Tax return form 1040ez No deduction allowed. Tax return form 1040ez   You cannot deduct the contribution to the first IRA. Tax return form 1040ez Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. Tax return form 1040ez Required notifications. Tax return form 1040ez   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 return form 1040ez You must make the notifications by the date of the transfer. Tax return form 1040ez Only one notification is required if both IRAs are maintained by the same trustee. Tax return form 1040ez The notification(s) must include all of the following information. Tax return form 1040ez The type and amount of the contribution to the first IRA that is to be recharacterized. Tax return form 1040ez The date on which the contribution was made to the first IRA and the year for which it was made. Tax return form 1040ez 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 return form 1040ez The name of the trustee of the first IRA and the name of the trustee of the second IRA. Tax return form 1040ez Any additional information needed to make the transfer. Tax return form 1040ez Reporting a recharacterization. Tax return form 1040ez   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 return form 1040ez You must treat the contribution as having been made to the second IRA. Tax return form 1040ez When Can You Withdraw or Use IRA Assets? There are rules limiting use of your IRA assets and distributions from it. Tax return form 1040ez Violation of the rules generally results in additional taxes in the year of violation. Tax return form 1040ez See What Acts Result in Penalties or Additional Taxes , later. Tax return form 1040ez Contributions returned before the due date of return. Tax return form 1040ez   If you made IRA contributions in 2013, you can withdraw them tax free by the due date of your return. Tax return form 1040ez If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. Tax return form 1040ez You can do this if, for each contribution you withdraw, both of the following conditions apply. Tax return form 1040ez You did not take a deduction for the contribution. Tax return form 1040ez You withdraw any interest or other income earned on the contribution. Tax return form 1040ez 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 return form 1040ez If there was a loss, the net income earned on the contribution may be a negative amount. Tax return form 1040ez Note. Tax return form 1040ez 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 return form 1040ez Earnings includible in income. Tax return form 1040ez   You must include in income any earnings on the contributions you withdraw. Tax return form 1040ez Include the earnings in income for the year in which you made the contributions, not in the year in which you withdraw them. Tax return form 1040ez 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 return form 1040ez Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes?, later. Tax return form 1040ez    Early distributions tax. Tax return form 1040ez   The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. Tax return form 1040ez 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 return form 1040ez When Must You Withdraw IRA Assets? (Required Minimum Distributions) You cannot keep funds in a traditional IRA indefinitely. Tax return form 1040ez Eventually they must be distributed. Tax return form 1040ez 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 return form 1040ez See Excess Accumulations (Insufficient Distributions) , later. Tax return form 1040ez The requirements for distributing IRA funds differ depending on whether you are the IRA owner or the beneficiary of a decedent's IRA. Tax return form 1040ez Required minimum distribution. Tax return form 1040ez   The amount that must be distributed each year is referred to as the required minimum distribution. Tax return form 1040ez Required distributions not eligible for rollover. Tax return form 1040ez   Amounts that must be distributed (required minimum distributions) during a particular year are not eligible for rollover treatment. Tax return form 1040ez IRA owners. Tax return form 1040ez   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 return form 1040ez April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date. Tax return form 1040ez Distributions by the required beginning date. Tax return form 1040ez   You must receive at least a minimum amount for each year starting with the year you reach age 70½ (your 70½ year). Tax return form 1040ez 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 return form 1040ez   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 return form 1040ez 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 return form 1040ez Distributions after the required beginning date. Tax return form 1040ez   The required minimum distribution for any year after the year you turn 70½ must be made by December 31 of that later year. Tax return form 1040ez    Beneficiaries. Tax return form 1040ez   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 return form 1040ez More information. Tax return form 1040ez   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 return form 1040ez Are Distributions Taxable? In general, distributions from a traditional IRA are taxable in the year you receive them. Tax return form 1040ez Exceptions. Tax return form 1040ez   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 return form 1040ez    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 return form 1040ez 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 return form 1040ez Qualified charitable distributions (QCD). Tax return form 1040ez   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 return form 1040ez Special rules apply if you made a qualified charitable distribution in January 2013 that you elected to treat as made in 2012. Tax return form 1040ez See Qualified Charitable Distributions in Publication 590 for more information. Tax return form 1040ez Ordinary income. Tax return form 1040ez   Distributions from traditional IRAs that you include in income are taxed as ordinary income. Tax return form 1040ez No special treatment. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez Fully taxable. Tax return form 1040ez   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 return form 1040ez Because you have no basis in your IRA, any distributions are fully taxable when received. Tax return form 1040ez See Reporting taxable distributions on your return , later. Tax return form 1040ez Partly taxable. Tax return form 1040ez    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 return form 1040ez These nondeductible contributions are not taxed when they are distributed to you. Tax return form 1040ez They are a return of your investment in your IRA. Tax return form 1040ez   Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. Tax return form 1040ez 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 return form 1040ez Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable. Tax return form 1040ez Form 8606. Tax return form 1040ez   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 return form 1040ez Using the form, you will figure the nontaxable distributions for 2013 and your total IRA basis for 2013 and earlier years. Tax return form 1040ez Note. Tax return form 1040ez 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 return form 1040ez Send it to the IRS at the time and place you would otherwise file an income tax return. Tax return form 1040ez Distributions reported on Form 1099-R. Tax return form 1040ez   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 return form 1040ez , or a similar statement. Tax return form 1040ez IRA distributions are shown in boxes 1 and 2a of Form 1099-R. Tax return form 1040ez A number or letter code in box 7 tells you what type of distribution you received from your IRA. Tax return form 1040ez Withholding. Tax return form 1040ez   Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld. Tax return form 1040ez See chapter 4. Tax return form 1040ez IRA distributions delivered outside the United States. Tax return form 1040ez   In general, if you are a U. Tax return form 1040ez S. Tax return form 1040ez 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 return form 1040ez Reporting taxable distributions on your return. Tax return form 1040ez    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 return form 1040ez 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 return form 1040ez You cannot report distributions on Form 1040EZ. Tax return form 1040ez 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 return form 1040ez There are additions to the regular tax for using your IRA funds in prohibited transactions. Tax return form 1040ez There are also additional taxes for the following activities. Tax return form 1040ez Investing in collectibles. Tax return form 1040ez Making excess contributions. Tax return form 1040ez Taking early distributions. Tax return form 1040ez Allowing excess amounts to accumulate (failing to take required distributions). Tax return form 1040ez There are penalties for overstating the amount of nondeductible contributions and for failure to file a Form 8606, if required. Tax return form 1040ez Prohibited Transactions Generally, a prohibited transaction is any improper use of your traditional IRA by you, your beneficiary, or any disqualified person. Tax return form 1040ez Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendent, and any spouse of a lineal descendent). Tax return form 1040ez The following are examples of prohibited transactions with a traditional IRA. Tax return form 1040ez Borrowing money from it. Tax return form 1040ez Selling property to it. Tax return form 1040ez Receiving unreasonable compensation for managing it. Tax return form 1040ez Using it as security for a loan. Tax return form 1040ez Buying property for personal use (present or future) with IRA funds. Tax return form 1040ez Effect on an IRA account. Tax return form 1040ez   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 return form 1040ez Effect on you or your beneficiary. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez For information on figuring your gain and reporting it in income, see Are Distributions Taxable , earlier. Tax return form 1040ez The distribution may be subject to additional taxes or penalties. Tax return form 1040ez Taxes on prohibited transactions. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez More information. Tax return form 1040ez   For more information on prohibited transactions, see What Acts Result in Penalties or Additional Taxes? in chapter 1 of Publication 590. Tax return form 1040ez Investment in Collectibles If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. Tax return form 1040ez You may have to pay the 10% additional tax on early distributions, discussed later. Tax return form 1040ez Collectibles. Tax return form 1040ez   These include: Artworks, Rugs, Antiques, Metals, Gems, Stamps, Coins, Alcoholic beverages, and Certain other tangible personal property. Tax return form 1040ez Exception. Tax return form 1040ez    Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U. Tax return form 1040ez S. Tax return form 1040ez gold coins, or one-ounce silver coins minted by the Treasury Department. Tax return form 1040ez It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. Tax return form 1040ez 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 return form 1040ez For 2013, this is $5,500 ($6,500 if you are 50 or older), or Your taxable compensation for the year. Tax return form 1040ez Tax on excess contributions. Tax return form 1040ez   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 return form 1040ez 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 return form 1040ez The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. Tax return form 1040ez Excess contributions withdrawn by due date of return. Tax return form 1040ez   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 return form 1040ez You must complete your withdrawal by the date your tax return for that year is due, including extensions. Tax return form 1040ez How to treat withdrawn contributions. Tax return form 1040ez   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 return form 1040ez No deduction was allowed for the excess contribution. Tax return form 1040ez You withdraw the interest or other income earned on the excess contribution. Tax return form 1040ez 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 return form 1040ez If there was a loss, the net income you must withdraw may be a negative amount. Tax return form 1040ez How to treat withdrawn interest or other income. Tax return form 1040ez   You must include in your gross income the interest or other income that was earned on the excess contribution. Tax return form 1040ez Report it on your return for the year in which the excess contribution was made. Tax return form 1040ez Your withdrawal of interest or other income may be subject to an additional 10% tax on early distributions, discus