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Vita irs org 33. Vita irs org   Credit for the Elderly or the Disabled Table of Contents Introduction Useful Items - You may want to see: Are You Eligible for the Credit?Qualified Individual Income Limits How to Claim the CreditCredit Figured for You Credit Figured by You Introduction If you qualify, you may be able to reduce the tax you owe by taking the credit for the elderly or the disabled which is figured on Schedule R (Form 1040A or 1040). Vita irs org This chapter explains the following. Vita irs org Who qualifies for the credit for the elderly or the disabled. Vita irs org How to claim the credit. Vita irs org You may be able to take the credit for the elderly or the disabled if: You are age 65 or older at the end of 2013, or You retired on permanent and total disability and have taxable disability income. Vita irs org Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 554 Tax Guide for Seniors Form (and Instruction) Schedule R (Form 1040A or 1040) Credit for the Elderly or the Disabled Are You Eligible for the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. Vita irs org You are a qualified individual. Vita irs org Your income is not more than certain limits. Vita irs org You can use Figure 33-A and Table 33-1 as guides to see if you are eligible for the credit. Vita irs org Use Figure 33-A first to see if you are a qualified individual. Vita irs org If you are, go to Table 33-1 to make sure your income is not too high to take the credit. Vita irs org You can take the credit only if you file Form 1040 or Form 1040A. Vita irs org You cannot take the credit if you file Form 1040EZ. Vita irs org Qualified Individual You are a qualified individual for this credit if you are a U. Vita irs org S. Vita irs org citizen or resident alien, and either of the following applies. Vita irs org You were age 65 or older at the end of 2013. Vita irs org You were under age 65 at the end of 2013 and all three of the following statements are true. Vita irs org You retired on permanent and total disability (explained later). Vita irs org You received taxable disability income for 2013. Vita irs org On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). Vita irs org Age 65. Vita irs org   You are considered to be age 65 on the day before your 65th birthday. Vita irs org Therefore, if you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Vita irs org U. Vita irs org S. Vita irs org Citizen or Resident Alien You must be a U. Vita irs org S. Vita irs org citizen or resident alien (or be treated as a resident alien) to take the credit. Vita irs org Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. Vita irs org Exceptions. Vita irs org   You may be able to take the credit if you are a nonresident alien who is married to a U. Vita irs org S. Vita irs org citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. Vita irs org S. Vita irs org resident alien. Vita irs org If you make that choice, both you and your spouse are taxed on your worldwide incomes. Vita irs org If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. Vita irs org S. Vita irs org citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. Vita irs org S. Vita irs org resident alien for the entire year. Vita irs org In that case, you may be allowed to take the credit. Vita irs org For information on these choices, see chapter 1 of Publication 519, U. Vita irs org S. Vita irs org Tax Guide for Aliens. Vita irs org Married Persons Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. Vita irs org However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. Vita irs org Head of household. Vita irs org   You can file as head of household and qualify to take the credit, even if your spouse lived with you during the first 6 months of the year, if you meet certain tests. Vita irs org See Head of Household in chapter 2 for the tests you must meet. Vita irs org Under Age 65 If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability (discussed next) and have taxable disability income (discussed later under Disability income ). Vita irs org You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the close of the tax year. Vita irs org Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. Vita irs org If you retired on disability before 1977, and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. Vita irs org Permanent and total disability. Vita irs org    You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. Vita irs org A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. Vita irs org See Physician's statement , later. Vita irs org Substantial gainful activity. Vita irs org   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Vita irs org Full-time work (or part-time work done at your employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. Vita irs org   Substantial gainful activity is not work you do to take care of yourself or your home. Vita irs org It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. Vita irs org However, doing this kind of work may show that you are able to engage in substantial gainful activity. Vita irs org    The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. Vita irs org Sheltered employment. Vita irs org   Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. Vita irs org These qualified locations are in sheltered workshops, hospitals, and similar institutions, homebound programs, and Department of Veterans Affairs (VA) sponsored homes. Vita irs org   Compared to commercial employment, pay is lower for sheltered employment. Vita irs org Therefore, one usually does not look for sheltered employment if he or she can get other employment. Vita irs org The fact that one has accepted sheltered employment is not proof of the person's ability to engage in substantial gainful activity. Vita irs org Physician's statement. Vita irs org   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. Vita irs org You can use the statement in the Instructions for Schedule R. Vita irs org    Figure 33-A. Vita irs org Are You a Qualified Individual? This image is too large to be displayed in the current screen. Vita irs org Please click the link to view the image. Vita irs org Figure 33-A Are You a Qualified Individual?   You do not have to file this statement with your Form 1040 or Form 1040A, but you must keep it for your records. Vita irs org Veterans. Vita irs org   If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. Vita irs org VA Form 21-0172 must be signed by a person authorized by the VA to do so. Vita irs org You can get this form from your local VA regional office. Vita irs org Physician's statement obtained in earlier year. Vita irs org   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. Vita irs org For a detailed explanation of the conditions you must meet, see the instructions for Schedule R, Part II. Vita irs org If you meet the required conditions, check the box on your Schedule R, Part II, line 2. Vita irs org   If you checked box 4, 5, or 6 in Part I of Schedule R, enter in the space above the box on line 2 in Part II the first name(s) of the spouse(s) for whom the box is checked. Vita irs org Table 33-1. Vita irs org Income Limits IF your filing status is . Vita irs org . Vita irs org . Vita irs org THEN, even if you qualify (see Figure 33-A ), you CANNOT take the credit if. Vita irs org . Vita irs org . Vita irs org   Your adjusted gross income (AGI)* is equal to or more than. Vita irs org . Vita irs org . Vita irs org     OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. Vita irs org . Vita irs org . Vita irs org   single, head of household, or qualifying widow(er) with dependent child   $17,500     $5,000   married filing jointly and only one spouse qualifies in Figure 33-A   $20,000     $5,000   married filing jointly and both spouses qualify in Figure 33-A   $25,000     $7,500   married filing separately and you lived apart from your spouse for all of 2013   $12,500     $3,750   * AGI is the amount on Form 1040A, line 22, or Form 1040, line 38. Vita irs org Disability income. Vita irs org   If you are under age 65, you must also have taxable disability income to qualify for the credit. Vita irs org Disability income must meet both of the following requirements. Vita irs org It must be paid under your employer's accident or health plan or pension plan. Vita irs org It must be included in your income as wages (or payments instead of wages) for the time you are absent from work because of permanent and total disability. Vita irs org Payments that are not disability income. Vita irs org   Any payment you receive from a plan that does not provide for disability retirement is not disability income. Vita irs org Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. Vita irs org   For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. Vita irs org Mandatory retirement age is the age set by your employer at which you would have had to retire, had you not become disabled. Vita irs org Income Limits To determine if you can claim the credit, you must consider two income limits. Vita irs org The first limit is the amount of your adjusted gross income (AGI). Vita irs org The second limit is the amount of nontaxable social security and other nontaxable pensions, annuities, or disability income you received. Vita irs org The limits are shown in Table 33-1. Vita irs org If your AGI and nontaxable pensions, annuities, or disability income are less than the income limits, you may be able to claim the credit. Vita irs org See How to Claim the Credit , later. Vita irs org If either your AGI or your nontaxable pensions, annuities, or disability income are equal to or more than the income limits, you cannot take the credit. Vita irs org How to Claim the Credit You can figure the credit yourself or the Internal Revenue Service will figure it for you. Vita irs org Credit Figured for You If you choose to have the IRS figure the credit for you, read the following discussion for the form you will file (Form 1040 or 1040A). Vita irs org If you want the IRS to figure your tax, see chapter 30. Vita irs org Form 1040. Vita irs org   If you want the IRS to figure your credit, see Form 1040 Line Entries under Tax Figured by IRS in chapter 30. Vita irs org Form 1040A. Vita irs org   If you want the IRS to figure your credit, see Form 1040A Line Entries under Tax Figured by IRS in chapter 30. Vita irs org Credit Figured by You If you choose to figure the credit yourself, fill out the front of Schedule R. Vita irs org Next, fill out Schedule R, Part III. Vita irs org If you file Form 1040A, enter the amount from Schedule R, line 22, on Form 1040A, line 30. Vita irs org If you file Form 1040, include the amount from Schedule R, line 22, on line 53; check box c, and enter “Sch R” on the line next to that box. Vita irs org For a step-by-step discussion about filling out Part III of Schedule R, see Figuring the Credit Yourself in Publication 524. Vita irs org Limit on credit. Vita irs org   The amount of the credit you can claim is generally limited to the amount of your tax. Vita irs org Use the Credit Limit Worksheet in the Instructions for Schedule R to determine if your credit is limited. Vita irs org Prev  Up  Next   Home   More Online Publications
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Law Enforcement Assistance Pilot Program on Identity Theft Activity Involving the IRS

As part of its comprehensive identity theft strategy, the IRS is expanding the law enforcement assistance pilot program designed to help law enforcement obtain tax return data vital to their local efforts in investigating and prosecuting specific cases of identity theft. In addition to the initial State of Florida, this pilot program is expanding to work with law enforcement in eight additional states: Alabama, California, Georgia, New Jersey, New York, Oklahoma, Pennsylvania and Texas.

The IRS launched the initial pilot in Florida in April of 2012.  Over 750 waiver requests have been received through October from roughly 50 state and local law enforcement agencies in Florida participating in the pilot. 

Under the pilot program, state and local law enforcement officials with evidence of identity theft involving fraudulently filed federal tax returns will be able to have identity theft victims complete a special IRS disclosure form. Taxpayers must give their permission for the IRS to provide law enforcement with the returns submitted using their Social Security number. Law enforcement officials will need to contact the identity theft victims in order to request and secure the victims' consent for disclosure of the records. In certain instances, the IRS will assist law enforcement in locating taxpayers and soliciting their consent.

Law enforcement would then submit a disclosure authorization form, which the IRS created solely for use by victims of identity theft for this pilot program, to the Criminal Investigation (CI) Division of the IRS, along with a copy of the police report and the IRS Identity Theft Affidavit if available. It is important that identity theft victims still submit the original copy of the IRS Identity Theft Affidavit to the IRS according to the instructions on the back of the form that fit their specific circumstances.

Federal law imposes restrictions on sharing of taxpayer information, including information that can be shared with state and local law enforcement.  This program allows taxpayers the option to permit information to be shared with state and local law enforcement specifically to assist law enforcement officials with their efforts in pursuing identity theft perpetrators.  During this expanded pilot program, the IRS will process the disclosure forms received and forward the documentation to the law enforcement officer who requested the documents. The documents will not be sent directly to the taxpayer. However, the IRS will continue to work directly with taxpayers to resolve their tax accounts as quickly as possible.

Law enforcement in the nine states in this pilot program who are interested in working with the IRS should contact their local IRS Criminal Investigation field office.

Following the pilot, the IRS will carefully assess the results and performance before deciding on how to proceed with the program.

The IRS comprehensive identity theft strategy comprises a dual effort, focusing both on fraud prevention and victim assistance. On the prevention side, this includes implementing new processes for handling returns, new filters to detect fraud, new initiatives to partner with stakeholders and a continued commitment to investigate the criminals who perpetrate these crimes. As for victim assistance, the IRS is working to accelerate case resolution, provide more training for our employees who assist victims of identity theft, and increase outreach to and education of taxpayers so they can prevent and resolve tax-related identity theft issues quickly.

Taxpayers looking for additional information can consult the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS website.

Page Last Reviewed or Updated: 06-Dec-2013

The Vita Irs Org

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