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Amended Tax Returns

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Amended Tax Returns

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

Amended tax returns Publication 901 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. Amended tax returns Tax questions. Amended tax returns Obtaining copies of treaties. Amended tax returns Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 901, such as treaties effective after it was published, go to www. Amended tax returns irs. Amended tax returns gov/pub901. Amended tax returns Reminders Disclosure of a treaty-based position that reduces your tax. Amended tax returns  If you take the position that any U. Amended tax returns S. Amended tax returns tax is overruled or otherwise reduced by a U. Amended tax returns S. Amended tax returns treaty (a treaty-based position), you generally must disclose that position on your affected return. Amended tax returns See Application of Treaties, later. Amended tax returns U. Amended tax returns S. Amended tax returns –U. Amended tax returns S. Amended tax returns S. Amended tax returns R. Amended tax returns income tax treaty. Amended tax returns  The U. Amended tax returns S. Amended tax returns –U. Amended tax returns S. Amended tax returns S. Amended tax returns R. Amended tax returns income tax treaty remains in effect for the following members of the Commonwealth of Independent States: Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. Amended tax returns That treaty will remain in effect until new treaties with these individual countries are negotiated and ratified. Amended tax returns Provisions of the U. Amended tax returns S. Amended tax returns –U. Amended tax returns S. Amended tax returns S. Amended tax returns R. Amended tax returns income tax treaty are discussed in this publication under Commonwealth of Independent States. Amended tax returns U. Amended tax returns S. Amended tax returns –China income tax treaty. Amended tax returns  The U. Amended tax returns S. Amended tax returns –China income tax treaty does not apply to Hong Kong. Amended tax returns Introduction This publication will tell you whether a tax treaty between the United States and a particular country offers a reduced rate of, or possibly a complete exemption from, U. Amended tax returns S. Amended tax returns income tax for residents of that particular country. Amended tax returns Tables in the back of this publication show the countries that have income tax treaties with the United States, the tax rates on different kinds of income, and the kinds of income that are exempt from tax. Amended tax returns You should use this publication only for quick reference. Amended tax returns It is not a complete guide to all provisions of every income tax treaty. Amended tax returns Comments and suggestions. Amended tax returns   We welcome your comments about this publication and your suggestions for future editions. Amended tax returns   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. Amended tax returns NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Amended tax returns Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Amended tax returns   You can email us at taxforms@irs. Amended tax returns gov. Amended tax returns Please put “Publications Comment” on the subject line. Amended tax returns You can also send us comments from www. Amended tax returns irs. Amended tax returns gov/formspubs. Amended tax returns Select “Comment on Tax Forms and Publications” under “Information About. Amended tax returns ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Amended tax returns Ordering forms and publications. Amended tax returns   Visit www. Amended tax returns irs. Amended tax returns gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received. Amended tax returns Internal Revenue Service 1201 N. Amended tax returns Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Amended tax returns   If you have a tax question, check the information available on IRS. Amended tax returns gov or call 1-800-829-1040. Amended tax returns We cannot answer tax questions sent to either of the above addresses. Amended tax returns Obtaining copies of treaties. Amended tax returns   You can get complete information about treaty provisions from the taxing authority in the country from which you receive income or from the treaty itself. Amended tax returns   You can obtain the text of most of the treaties at www. Amended tax returns irs. Amended tax returns gov/businesses/international. Amended tax returns You can also obtain the text of most of the treaties at the following address: Department of the Treasury Office of Public Correspondence 1500 Pennsylvania Ave. Amended tax returns NW — Rm. Amended tax returns 3419 Washington, D. Amended tax returns C. Amended tax returns 20220 If you have specific questions about a treaty, you can get this information from most Internal Revenue Service offices or from: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Useful Items - You may want to see: Publication 519 U. Amended tax returns S. Amended tax returns Tax Guide for Aliens 597 Information on the United States–Canada Income Tax Treaty Form (and Instructions) 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) See How To Get Tax Help near the end of this publication for information about getting these publications and forms. 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