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Irs 2012 Tax Forms 1040ez Instructions

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Irs 2012 Tax Forms 1040ez Instructions

Irs 2012 tax forms 1040ez instructions 5. Irs 2012 tax forms 1040ez instructions   Table and Worksheets for the Self-Employed Table of Contents Community property laws. Irs 2012 tax forms 1040ez instructions As discussed in chapters 2 and 4, if you are self-employed, you must use the rate table or rate worksheet and deduction worksheet to figure your deduction for contributions you made for yourself to a SEP-IRA or qualified plan. Irs 2012 tax forms 1040ez instructions First, use either the rate table or rate worksheet to find your reduced contribution rate. Irs 2012 tax forms 1040ez instructions Then complete the deduction worksheet to figure your deduction for contributions. Irs 2012 tax forms 1040ez instructions The table and the worksheets in chapter 5 apply only to self-employed individuals who have only one defined contribution plan, such as a profit-sharing plan. Irs 2012 tax forms 1040ez instructions A SEP plan is treated as a profit-sharing plan. Irs 2012 tax forms 1040ez instructions However, do not use this worksheet for SARSEPs. Irs 2012 tax forms 1040ez instructions Rate table for self-employed. Irs 2012 tax forms 1040ez instructions   If your plan's contribution rate is a whole percentage (for example, 12% rather than 12½%), you can use the table on the next page to find your reduced contribution rate. Irs 2012 tax forms 1040ez instructions Otherwise, use the rate worksheet provided below. Irs 2012 tax forms 1040ez instructions   First, find your plan contribution rate (the contribution rate stated in your plan) in Column A of the table. Irs 2012 tax forms 1040ez instructions Then read across to the rate under Column B. Irs 2012 tax forms 1040ez instructions Enter the rate from Column B in step 4 of the Deduction Worksheet for Self-Employed on this page. Irs 2012 tax forms 1040ez instructions    Example. Irs 2012 tax forms 1040ez instructions You are a sole proprietor with no employees. Irs 2012 tax forms 1040ez instructions If your plan's contribution rate is 10% of a participant's compensation, your rate is 0. Irs 2012 tax forms 1040ez instructions 090909. Irs 2012 tax forms 1040ez instructions Enter this rate in step 4 of the Deduction Worksheet for Self-Employed on this page. Irs 2012 tax forms 1040ez instructions Deduction Worksheet for Self-Employed   Step 1           Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 34, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. Irs 2012 tax forms 1040ez instructions For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. Irs 2012 tax forms 1040ez instructions       *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. Irs 2012 tax forms 1040ez instructions       **General partners should reduce this amount by the same additional expenses subtracted from box 14, code A to determine the amount on line 1 or 2 of Schedule SE. Irs 2012 tax forms 1040ez instructions     Step 2           Enter your deduction for self-employment tax from Form 1040, line 27             Step 3           Net earnings from self-employment. Irs 2012 tax forms 1040ez instructions Subtract step 2 from step 1     Step 4           Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed     Step 5           Multiply step 3 by step 4     Step 6           Multiply $255,000 by your plan contribution rate (not the reduced rate)     Step 7           Enter the smaller of step 5 or step 6     Step 8           Contribution dollar limit $51,000     • If you made any elective deferrals to your self-employed plan, go to step 9. Irs 2012 tax forms 1040ez instructions         • Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. Irs 2012 tax forms 1040ez instructions       Step 9           Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2013. Irs 2012 tax forms 1040ez instructions Do not enter more than $17,500     Step 10           Subtract step 9 from step 8     Step 11           Subtract step 9 from step 3       Step 12           Enter one-half of step 11     Step 13           Enter the smallest of step 7, 10, or 12     Step 14           Subtract step 13 from step 3     Step 15           Enter the smaller of step 9 or step 14       • If you made catch-up contributions, go to step 16. Irs 2012 tax forms 1040ez instructions         • Otherwise, skip steps 16 through 18 and go to step 19. Irs 2012 tax forms 1040ez instructions       Step 16           Subtract step 15 from step 14     Step 17           Enter your catch-up contributions (including designated Roth contributions), if any. Irs 2012 tax forms 1040ez instructions Do not enter more than $5,500     Step 18           Enter the smaller of step 16 or step 17     Step 19           Add steps 13, 15, and 18. Irs 2012 tax forms 1040ez instructions     Step 20           Enter the amount of designated Roth contributions included on lines 9 and 17. Irs 2012 tax forms 1040ez instructions     Step 21           Subtract step 20 from step 19. Irs 2012 tax forms 1040ez instructions This is your maximum deductible contribution. Irs 2012 tax forms 1040ez instructions                 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28. Irs 2012 tax forms 1040ez instructions   Rate worksheet for self-employed. Irs 2012 tax forms 1040ez instructions   If your plan's contribution rate is not a whole percentage (for example, 10½%), you cannot use the Rate Table for Self-Employed. Irs 2012 tax forms 1040ez instructions Use the following worksheet instead. Irs 2012 tax forms 1040ez instructions Rate Worksheet for Self-Employed 1) Plan contribution rate as a decimal (for example, 10½% = 0. Irs 2012 tax forms 1040ez instructions 105)   2) Rate in line 1 plus 1 (for example, 0. Irs 2012 tax forms 1040ez instructions 105 + 1 = 1. Irs 2012 tax forms 1040ez instructions 105)   3) Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0. Irs 2012 tax forms 1040ez instructions 105 ÷ 1. Irs 2012 tax forms 1040ez instructions 105 = 0. Irs 2012 tax forms 1040ez instructions 095)   Figuring your deduction. Irs 2012 tax forms 1040ez instructions   Now that you have your self-employed rate from either the rate table or rate worksheet, you can figure your maximum deduction for contributions for yourself by completing the Deduction Worksheet for Self-Employed. Irs 2012 tax forms 1040ez instructions Community property laws. Irs 2012 tax forms 1040ez instructions   If you reside in a community property state and you are married and filing a separate return, disregard community property laws for step 1 of the Deduction Worksheet for Self-Employed. Irs 2012 tax forms 1040ez instructions Enter on step 1 the total net profit you actually earned. Irs 2012 tax forms 1040ez instructions Rate Table for Self-Employed Column A  If the plan contri- bution rate is: (shown as %) Column B  Your rate is: (shown as decimal) 1 . Irs 2012 tax forms 1040ez instructions 009901 2 . Irs 2012 tax forms 1040ez instructions 019608 3 . Irs 2012 tax forms 1040ez instructions 029126 4 . Irs 2012 tax forms 1040ez instructions 038462 5 . Irs 2012 tax forms 1040ez instructions 047619 6 . Irs 2012 tax forms 1040ez instructions 056604 7 . Irs 2012 tax forms 1040ez instructions 065421 8 . Irs 2012 tax forms 1040ez instructions 074074 9 . Irs 2012 tax forms 1040ez instructions 082569 10 . Irs 2012 tax forms 1040ez instructions 090909 11 . Irs 2012 tax forms 1040ez instructions 099099 12 . Irs 2012 tax forms 1040ez instructions 107143 13 . Irs 2012 tax forms 1040ez instructions 115044 14 . Irs 2012 tax forms 1040ez instructions 122807 15 . Irs 2012 tax forms 1040ez instructions 130435 16 . Irs 2012 tax forms 1040ez instructions 137931 17 . Irs 2012 tax forms 1040ez instructions 145299 18 . Irs 2012 tax forms 1040ez instructions 152542 19 . Irs 2012 tax forms 1040ez instructions 159664 20 . Irs 2012 tax forms 1040ez instructions 166667 21 . Irs 2012 tax forms 1040ez instructions 173554 22 . Irs 2012 tax forms 1040ez instructions 180328 23 . Irs 2012 tax forms 1040ez instructions 186992 24 . Irs 2012 tax forms 1040ez instructions 193548 25* . Irs 2012 tax forms 1040ez instructions 200000* *The deduction for annual employer contributions (other than elective deferrals) to a SEP plan, a profit-sharing plan, or a money purchase plan cannot be more than 20% of your net earnings (figured without deducting contributions for yourself) from the business that has the plan. Irs 2012 tax forms 1040ez instructions Example. Irs 2012 tax forms 1040ez instructions You are a sole proprietor with no employees. Irs 2012 tax forms 1040ez instructions The terms of your plan provide that you contribute 8½% (. Irs 2012 tax forms 1040ez instructions 085) of your compensation to your plan. Irs 2012 tax forms 1040ez instructions Your net profit from line 31, Schedule C (Form 1040) is $200,000. Irs 2012 tax forms 1040ez instructions You have no elective deferrals or catch-up contributions. Irs 2012 tax forms 1040ez instructions Your self-employment tax deduction on line 27 of Form 1040 is $9,728. Irs 2012 tax forms 1040ez instructions See the filled-in portions of both Schedule SE (Form 1040), Self-Employment Income, and Form 1040, later. Irs 2012 tax forms 1040ez instructions You figure your self-employed rate and maximum deduction for employer contributions you made for yourself as follows. Irs 2012 tax forms 1040ez instructions Deduction Worksheet for Self-Employed   Step 1           Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 34, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. Irs 2012 tax forms 1040ez instructions For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. Irs 2012 tax forms 1040ez instructions $200,000     *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. Irs 2012 tax forms 1040ez instructions       **General partners should reduce this amount by the same additional expenses subtracted from box 14, code A to determine the amount on line 1 or 2 of Schedule SE. Irs 2012 tax forms 1040ez instructions     Step 2           Enter your deduction for self-employment tax from Form 1040, line 27 9,728           Step 3           Net earnings from self-employment. Irs 2012 tax forms 1040ez instructions Subtract step 2 from step 1 190,272   Step 4           Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed 0. Irs 2012 tax forms 1040ez instructions 078   Step 5           Multiply step 3 by step 4 14,841   Step 6           Multiply $255,000 by your plan contribution rate (not the reduced rate) 21,675   Step 7           Enter the smaller of step 5 or step 6 14,841   Step 8           Contribution dollar limit $51,000     • If you made any elective deferrals to your self-employed plan, go to step 9. Irs 2012 tax forms 1040ez instructions         • Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. Irs 2012 tax forms 1040ez instructions       Step 9           Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2013. Irs 2012 tax forms 1040ez instructions Do not enter more than $17,500 N/A   Step 10           Subtract step 9 from step 8     Step 11           Subtract step 9 from step 3       Step 12           Enter one-half of step 11     Step 13           Enter the smallest of step 7, 10, or 12     Step 14           Subtract step 13 from step 3     Step 15           Enter the smaller of step 9 or step 14       • If you made catch-up contributions, go to step 16. Irs 2012 tax forms 1040ez instructions         • Otherwise, skip steps 16 through 18 and go to step 19. Irs 2012 tax forms 1040ez instructions       Step 16           Subtract step 15 from step 14     Step 17           Enter your catch-up contributions (including designated Roth contributions), if any. Irs 2012 tax forms 1040ez instructions Do not enter more than $5,500     Step 18           Enter the smaller of step 16 or step 17     Step 19           Add steps 13, 15, and 18. Irs 2012 tax forms 1040ez instructions     Step 20           Enter the amount of designated Roth contributions included on lines 9 and 17     Step 21           Subtract step 20 from step 19. Irs 2012 tax forms 1040ez instructions This is your maximum deductible contribution $14,841                 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28. Irs 2012 tax forms 1040ez instructions   See the filled-in Deduction Worksheet for Self-Employed on this page. Irs 2012 tax forms 1040ez instructions Rate Worksheet for Self-Employed 1) Plan contribution rate as a decimal (for example, 10½% = 0. Irs 2012 tax forms 1040ez instructions 105) 0. Irs 2012 tax forms 1040ez instructions 085 2) Rate in line 1 plus 1 (for example, 0. Irs 2012 tax forms 1040ez instructions 105 + 1 = 1. Irs 2012 tax forms 1040ez instructions 105) 1. Irs 2012 tax forms 1040ez instructions 085 3) Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0. Irs 2012 tax forms 1040ez instructions 105 ÷ 1. Irs 2012 tax forms 1040ez instructions 105 = 0. Irs 2012 tax forms 1040ez instructions 095) 0. Irs 2012 tax forms 1040ez instructions 078 This image is too large to be displayed in the current screen. Irs 2012 tax forms 1040ez instructions Please click the link to view the image. Irs 2012 tax forms 1040ez instructions Portion of Form 1040 and Portion of Schedule SE Prev  Up  Next   Home   More Online Publications
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The Irs 2012 Tax Forms 1040ez Instructions

Irs 2012 tax forms 1040ez instructions 2. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Recognizing Losses on Investments Distributions After Owner's Death What's New for 2013 Roth IRA contribution limit. Irs 2012 tax forms 1040ez instructions  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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Irs 2012 tax forms 1040ez instructions For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in this chapter. Irs 2012 tax forms 1040ez instructions Modified AGI limit for Roth IRA contributions increased. Irs 2012 tax forms 1040ez instructions  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Irs 2012 tax forms 1040ez instructions Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Irs 2012 tax forms 1040ez instructions You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Irs 2012 tax forms 1040ez instructions 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-. Irs 2012 tax forms 1040ez instructions You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Irs 2012 tax forms 1040ez instructions See Can You Contribute to a Roth IRA? in this chapter. Irs 2012 tax forms 1040ez instructions Net Investment Income Tax. Irs 2012 tax forms 1040ez instructions  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). Irs 2012 tax forms 1040ez instructions However, these distributions are taken into account when determining the modified adjusted gross income threshold. Irs 2012 tax forms 1040ez instructions Distributions from a nonqualified retirement plan are included in net investment income. Irs 2012 tax forms 1040ez instructions See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Irs 2012 tax forms 1040ez instructions What's New for 2014 Modified AGI limit for Roth IRA contributions increased. Irs 2012 tax forms 1040ez instructions  For 2014, your Roth IRA contribution limit is reduced (phased out) in the following situations. Irs 2012 tax forms 1040ez instructions Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $181,000. Irs 2012 tax forms 1040ez instructions You cannot make a Roth IRA contribution if your modified AGI is $191,000 or more. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions You cannot make a Roth IRA contribution if your modified AGI is $129,000 or more. Irs 2012 tax forms 1040ez instructions 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-. Irs 2012 tax forms 1040ez instructions You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Irs 2012 tax forms 1040ez instructions Reminders Deemed IRAs. Irs 2012 tax forms 1040ez instructions  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. Irs 2012 tax forms 1040ez instructions If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. Irs 2012 tax forms 1040ez instructions An employee's account can be treated as a traditional IRA or a Roth IRA. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Designated Roth accounts. Irs 2012 tax forms 1040ez instructions  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. Irs 2012 tax forms 1040ez instructions These elective deferrals are included in your income, but qualified distributions from these accounts are not included in your income. Irs 2012 tax forms 1040ez instructions Designated Roth accounts are not IRAs and should not be confused with Roth IRAs. Irs 2012 tax forms 1040ez instructions Contributions, up to their respective limits, can be made to Roth IRAs and designated Roth accounts according to your eligibility to participate. Irs 2012 tax forms 1040ez instructions A contribution to one does not impact your eligibility to contribute to the other. Irs 2012 tax forms 1040ez instructions See Publication 575, for more information on designated Roth accounts. Irs 2012 tax forms 1040ez instructions Introduction Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retirement plan called a Roth IRA. Irs 2012 tax forms 1040ez instructions Contributions not reported. Irs 2012 tax forms 1040ez instructions   You do not report Roth IRA contributions on your return. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions It can be either an account or an annuity. Irs 2012 tax forms 1040ez instructions Individual retirement accounts and annuities are described in chapter 1 under How Can a Traditional IRA Be Opened. Irs 2012 tax forms 1040ez instructions To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is opened. Irs 2012 tax forms 1040ez instructions A deemed IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA. Irs 2012 tax forms 1040ez instructions Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. Irs 2012 tax forms 1040ez instructions But, if you satisfy the requirements, qualified distributions (discussed later) are tax free. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Traditional IRA. Irs 2012 tax forms 1040ez instructions   A traditional IRA is any IRA that is not a Roth IRA or SIMPLE IRA. Irs 2012 tax forms 1040ez instructions Traditional IRAs are discussed in chapter 1. Irs 2012 tax forms 1040ez instructions When Can a Roth IRA Be Opened? You can open a Roth IRA at any time. Irs 2012 tax forms 1040ez instructions However, the time for making contributions for any year is limited. Irs 2012 tax forms 1040ez instructions See When Can You Make Contributions , later under Can You Contribute to a Roth IRA. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions You may be able to claim a credit for contributions to your Roth IRA. Irs 2012 tax forms 1040ez instructions For more information, see chapter 4. Irs 2012 tax forms 1040ez instructions Is there an age limit for contributions?   Contributions can be made to your Roth IRA regardless of your age. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Compensation. Irs 2012 tax forms 1040ez instructions   Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. Irs 2012 tax forms 1040ez instructions It also includes commissions, self-employment income, nontaxable combat pay, military differential pay, and taxable alimony and separate maintenance payments. Irs 2012 tax forms 1040ez instructions For more information, see What Is Compensation? under Who Can Open a Traditional IRA? in chapter 1. Irs 2012 tax forms 1040ez instructions Modified AGI. Irs 2012 tax forms 1040ez instructions   Your modified AGI for Roth IRA purposes is your adjusted gross income (AGI) as shown on your return with some adjustments. Irs 2012 tax forms 1040ez instructions Use Worksheet 2-1 , later, to determine your modified AGI. Irs 2012 tax forms 1040ez instructions    Do not subtract conversion income when figuring your other AGI-based phaseouts and taxable income, such as your deduction for medical and dental expenses. Irs 2012 tax forms 1040ez instructions Subtract them from AGI only for the purpose of figuring your modified AGI for Roth IRA purposes. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Worksheet 2-1. Irs 2012 tax forms 1040ez instructions Modified Adjusted Gross Income for Roth IRA Purposes Use this worksheet to figure your modified adjusted gross income for Roth IRA purposes. Irs 2012 tax forms 1040ez instructions 1. Irs 2012 tax forms 1040ez instructions Enter your adjusted gross income from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37 1. Irs 2012 tax forms 1040ez instructions   2. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions   3. Irs 2012 tax forms 1040ez instructions Subtract line 2 from line 1 3. Irs 2012 tax forms 1040ez instructions   4. Irs 2012 tax forms 1040ez instructions Enter any traditional IRA deduction from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 4. Irs 2012 tax forms 1040ez instructions   5. Irs 2012 tax forms 1040ez instructions Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 5. Irs 2012 tax forms 1040ez instructions   6. Irs 2012 tax forms 1040ez instructions Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 6. Irs 2012 tax forms 1040ez instructions   7. Irs 2012 tax forms 1040ez instructions Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 7. Irs 2012 tax forms 1040ez instructions   8. Irs 2012 tax forms 1040ez instructions Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 8. Irs 2012 tax forms 1040ez instructions   9. Irs 2012 tax forms 1040ez instructions Enter any foreign housing deduction from Form 2555, line 50 9. Irs 2012 tax forms 1040ez instructions   10. Irs 2012 tax forms 1040ez instructions Enter any excludable qualified savings bond interest from Form 8815, line 14 10. Irs 2012 tax forms 1040ez instructions   11. Irs 2012 tax forms 1040ez instructions Enter any excluded employer-provided adoption benefits from Form 8839, line 28 11. Irs 2012 tax forms 1040ez instructions   12. Irs 2012 tax forms 1040ez instructions Add the amounts on lines 3 through 11 12. Irs 2012 tax forms 1040ez instructions   13. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions   Is the amount on line 12 more than the amount on line 13? If yes, see the note below. Irs 2012 tax forms 1040ez instructions  If no, the amount on line 12 is your modified adjusted gross income for Roth IRA purposes. Irs 2012 tax forms 1040ez instructions       Note. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions (If you receive social security benefits, use Worksheet 1 in Appendix B to refigure your AGI. Irs 2012 tax forms 1040ez instructions ) Then go to line 3 above in this Worksheet 2-1 to refigure your modified AGI. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Roth IRAs only. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained later under Contribution limit reduced . Irs 2012 tax forms 1040ez instructions Roth IRAs and traditional IRAs. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Employer contributions under a SEP or SIMPLE IRA plan do not affect this limit. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained below under Contribution limit reduced . Irs 2012 tax forms 1040ez instructions   Simplified employee pensions (SEPs) are discussed in Publication 560. Irs 2012 tax forms 1040ez instructions Savings incentive match plans for employees (SIMPLEs) are discussed in chapter 3. Irs 2012 tax forms 1040ez instructions Repayment of reservist distributions. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions However, the total repayments cannot be more than the amount of your distribution. Irs 2012 tax forms 1040ez instructions Note. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1. Irs 2012 tax forms 1040ez instructions Contribution limit reduced. Irs 2012 tax forms 1040ez instructions   If your modified AGI is above a certain amount, your contribution limit is gradually reduced. Irs 2012 tax forms 1040ez instructions Use Table 2-1, later, to determine if this reduction applies to you. Irs 2012 tax forms 1040ez instructions Table 2-1. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions IF you have taxable compensation and your filing status is . Irs 2012 tax forms 1040ez instructions . Irs 2012 tax forms 1040ez instructions . Irs 2012 tax forms 1040ez instructions AND your modified AGI is . Irs 2012 tax forms 1040ez instructions . Irs 2012 tax forms 1040ez instructions . Irs 2012 tax forms 1040ez instructions THEN . Irs 2012 tax forms 1040ez instructions . Irs 2012 tax forms 1040ez instructions . Irs 2012 tax forms 1040ez instructions 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 . Irs 2012 tax forms 1040ez instructions at least $178,000 but less than $188,000 the amount you can contribute is reduced as explained under Contribution limit reduced . Irs 2012 tax forms 1040ez instructions $188,000 or more you cannot contribute to a Roth IRA. Irs 2012 tax forms 1040ez instructions 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 . Irs 2012 tax forms 1040ez instructions more than zero (-0-) but less than $10,000 the amount you can contribute is reduced as explained under Contribution limit reduced . Irs 2012 tax forms 1040ez instructions $10,000 or more you cannot contribute to a Roth IRA. Irs 2012 tax forms 1040ez instructions 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 . Irs 2012 tax forms 1040ez instructions at least $112,000 but less than $127,000 the amount you can contribute is reduced as explained under Contribution limit reduced . Irs 2012 tax forms 1040ez instructions $127,000 or more you cannot contribute to a Roth IRA. Irs 2012 tax forms 1040ez instructions Figuring the reduction. Irs 2012 tax forms 1040ez instructions   If the amount you can contribute must be reduced, use Worksheet 2-2, later, to figure your reduced contribution limit. Irs 2012 tax forms 1040ez instructions Worksheet 2-2. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions If it is, use this worksheet to determine how much it is reduced. Irs 2012 tax forms 1040ez instructions 1. Irs 2012 tax forms 1040ez instructions Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. Irs 2012 tax forms 1040ez instructions   2. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions   3. Irs 2012 tax forms 1040ez instructions Subtract line 2 from line 1 3. Irs 2012 tax forms 1040ez instructions   4. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions   5. Irs 2012 tax forms 1040ez instructions Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). Irs 2012 tax forms 1040ez instructions If the result is 1. Irs 2012 tax forms 1040ez instructions 000 or more, enter 1. Irs 2012 tax forms 1040ez instructions 000 5. Irs 2012 tax forms 1040ez instructions   6. Irs 2012 tax forms 1040ez instructions Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. Irs 2012 tax forms 1040ez instructions   7. Irs 2012 tax forms 1040ez instructions Multiply line 5 by line 6 7. Irs 2012 tax forms 1040ez instructions   8. Irs 2012 tax forms 1040ez instructions Subtract line 7 from line 6. Irs 2012 tax forms 1040ez instructions Round the result up to the nearest $10. Irs 2012 tax forms 1040ez instructions If the result is less than $200, enter $200 8. Irs 2012 tax forms 1040ez instructions   9. Irs 2012 tax forms 1040ez instructions Enter contributions for the year to other IRAs 9. Irs 2012 tax forms 1040ez instructions   10. Irs 2012 tax forms 1040ez instructions Subtract line 9 from line 6 10. Irs 2012 tax forms 1040ez instructions   11. Irs 2012 tax forms 1040ez instructions Enter the lesser of line 8 or line 10. Irs 2012 tax forms 1040ez instructions This is your reduced Roth IRA contribution limit 11. Irs 2012 tax forms 1040ez instructions      Round your reduced contribution limit up to the nearest $10. Irs 2012 tax forms 1040ez instructions If your reduced contribution limit is more than $0, but less than $200, increase the limit to $200. Irs 2012 tax forms 1040ez instructions Example. Irs 2012 tax forms 1040ez instructions You are a 45-year-old, single individual with taxable compensation of $113,000. Irs 2012 tax forms 1040ez instructions You want to make the maximum allowable contribution to your Roth IRA for 2013. Irs 2012 tax forms 1040ez instructions Your modified AGI for 2013 is $113,000. Irs 2012 tax forms 1040ez instructions You have not contributed to any traditional IRA, so the maximum contribution limit before the modified AGI reduction is $5,500. Irs 2012 tax forms 1040ez instructions You figure your reduced Roth IRA contribution of $5,140 as shown on Worksheet 2-2. Irs 2012 tax forms 1040ez instructions Example—Illustrated, later. Irs 2012 tax forms 1040ez instructions   Worksheet 2-2. Irs 2012 tax forms 1040ez instructions Example—Illustrated Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. Irs 2012 tax forms 1040ez instructions If it is, use this worksheet to determine how much it is reduced. Irs 2012 tax forms 1040ez instructions 1. Irs 2012 tax forms 1040ez instructions Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. Irs 2012 tax forms 1040ez instructions 113,000 2. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 112,000 3. Irs 2012 tax forms 1040ez instructions Subtract line 2 from line 1 3. Irs 2012 tax forms 1040ez instructions 1,000 4. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 15,000 5. Irs 2012 tax forms 1040ez instructions Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). Irs 2012 tax forms 1040ez instructions If the result is 1. Irs 2012 tax forms 1040ez instructions 000 or more, enter 1. Irs 2012 tax forms 1040ez instructions 000 5. Irs 2012 tax forms 1040ez instructions . Irs 2012 tax forms 1040ez instructions 067 6. Irs 2012 tax forms 1040ez instructions Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. Irs 2012 tax forms 1040ez instructions 5,500 7. Irs 2012 tax forms 1040ez instructions Multiply line 5 by line 6 7. Irs 2012 tax forms 1040ez instructions 369 8. Irs 2012 tax forms 1040ez instructions Subtract line 7 from line 6. Irs 2012 tax forms 1040ez instructions Round the result up to the nearest $10. Irs 2012 tax forms 1040ez instructions If the result is less than $200, enter $200 8. Irs 2012 tax forms 1040ez instructions 5,140 9. Irs 2012 tax forms 1040ez instructions Enter contributions for the year to other IRAs 9. Irs 2012 tax forms 1040ez instructions 0 10. Irs 2012 tax forms 1040ez instructions Subtract line 9 from line 6 10. Irs 2012 tax forms 1040ez instructions 5,500 11. Irs 2012 tax forms 1040ez instructions Enter the lesser of line 8 or line 10. Irs 2012 tax forms 1040ez instructions This is your reduced Roth IRA contribution limit 11. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions You can make contributions for 2013 by the due date (not including extensions) for filing your 2013 tax return. Irs 2012 tax forms 1040ez instructions This means that most people can make contributions for 2013 by April 15, 2014. Irs 2012 tax forms 1040ez instructions What if You Contribute Too Much? A 6% excise tax applies to any excess contribution to a Roth IRA. Irs 2012 tax forms 1040ez instructions Excess contributions. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Withdrawal of excess contributions. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions This treatment only applies if any earnings on the contributions are also withdrawn. Irs 2012 tax forms 1040ez instructions The earnings are considered earned and received in the year the excess contribution was made. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions If you do, file an amended return with “Filed pursuant to section 301. Irs 2012 tax forms 1040ez instructions 9100-2” written at the top. Irs 2012 tax forms 1040ez instructions Report any related earnings on the amended return and include an explanation of the withdrawal. Irs 2012 tax forms 1040ez instructions Make any other necessary changes on the amended return. Irs 2012 tax forms 1040ez instructions Applying excess contributions. Irs 2012 tax forms 1040ez instructions    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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions You may be able to roll over amounts from a qualified retirement plan to a Roth IRA. Irs 2012 tax forms 1040ez instructions You may be able to recharacterize contributions made to one IRA as having been made directly to a different IRA. Irs 2012 tax forms 1040ez instructions You can roll amounts over from a designated Roth account or from one Roth IRA to another Roth IRA. Irs 2012 tax forms 1040ez instructions Conversions You can convert a traditional IRA to a Roth IRA. Irs 2012 tax forms 1040ez instructions The conversion is treated as a rollover, regardless of the conversion method used. Irs 2012 tax forms 1040ez instructions Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. Irs 2012 tax forms 1040ez instructions However, the 1-year waiting period does not apply. Irs 2012 tax forms 1040ez instructions Conversion methods. Irs 2012 tax forms 1040ez instructions   You can convert amounts from a traditional IRA to a Roth IRA in any of the following three ways. Irs 2012 tax forms 1040ez instructions Rollover. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Trustee-to-trustee transfer. Irs 2012 tax forms 1040ez instructions You can direct the trustee of the traditional IRA to transfer an amount from the traditional IRA to the trustee of the Roth IRA. Irs 2012 tax forms 1040ez instructions Same trustee transfer. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Same trustee. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Income. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Irs 2012 tax forms 1040ez instructions See Publication 505, Tax Withholding and Estimated Tax. Irs 2012 tax forms 1040ez instructions More information. Irs 2012 tax forms 1040ez instructions   For more information on conversions, see Converting From Any Traditional IRA Into a Roth IRA in chapter 1. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. Irs 2012 tax forms 1040ez instructions See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. Irs 2012 tax forms 1040ez instructions Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan. Irs 2012 tax forms 1040ez instructions Rollover methods. Irs 2012 tax forms 1040ez instructions   You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways. Irs 2012 tax forms 1040ez instructions Rollover. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Since the distribution is paid directly to you, the payer generally must withhold 20% of it. Irs 2012 tax forms 1040ez instructions Direct rollover option. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Generally, no tax is withheld from any part of the designated distribution that is directly paid to the trustee of the Roth IRA. Irs 2012 tax forms 1040ez instructions Rollover by nonspouse beneficiary. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions You must make the rollover by a direct trustee-to-trustee transfer into an inherited Roth IRA. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions For more information, see Distributions after the employee’s death under Tax on Excess Accumulation in Publication 575. Irs 2012 tax forms 1040ez instructions Income. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Irs 2012 tax forms 1040ez instructions See Publication 505, Tax Withholding and Estimated Tax. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions The contribution is treated as a qualified rollover contribution. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Any military death gratuity or SGLI payment contributed to a Roth IRA is disregarded for purposes of the 1-year waiting period between rollovers. Irs 2012 tax forms 1040ez instructions The rollover must be completed before the end of the 1-year period beginning on the date you received the payment. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. Irs 2012 tax forms 1040ez instructions However, rollovers from retirement plans other than Roth IRAs are disregarded for purposes of the 1-year waiting period between rollovers. Irs 2012 tax forms 1040ez instructions A rollover from a Roth IRA to an employer retirement plan is not allowed. Irs 2012 tax forms 1040ez instructions A rollover from a designated Roth account can only be made to another designated Roth account or to a Roth IRA. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions The 5-year period begins with the first taxable year for which the contribution was made to the initial Roth IRA. Irs 2012 tax forms 1040ez instructions See What are Qualified Distributions , later. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions For more information, see Rollover of Exxon Valdez Settlement Income in chapter 1. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions The contribution must be made within 180 days from the date you received the payment. Irs 2012 tax forms 1040ez instructions The contribution will be treated as a qualified rollover contribution. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Qualified airline employee. Irs 2012 tax forms 1040ez instructions    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. Irs 2012 tax forms 1040ez instructions These provisions also apply to surviving spouses of qualified airline employees. Irs 2012 tax forms 1040ez instructions Airline payment. Irs 2012 tax forms 1040ez instructions    An airline payment is any payment of money or other property that is paid to a qualified airline employee from a commercial airline carrier. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Also, an airline payment shall not include any amount payable on the basis of the airline carrier’s future earnings or profits. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions You also do not include distributions from your Roth IRA that you roll over tax free into another Roth IRA. Irs 2012 tax forms 1040ez instructions You may have to include part of other distributions in your income. Irs 2012 tax forms 1040ez instructions See Ordering Rules for Distributions , later. Irs 2012 tax forms 1040ez instructions Basis of distributed property. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Withdrawals of contributions by due date. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions What Are Qualified Distributions? A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Distributions of conversion and certain rollover contributions within 5-year period. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions A separate 5-year period applies to each conversion and rollover. Irs 2012 tax forms 1040ez instructions See Ordering Rules for Distributions , later, to determine the recapture amount, if any. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions See What Are Qualified Distributions , earlier. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions You also must pay the additional tax on any portion of the distribution attributable to earnings on contributions. Irs 2012 tax forms 1040ez instructions Other early distributions. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Exceptions. Irs 2012 tax forms 1040ez instructions   You may not have to pay the 10% additional tax in the following situations. Irs 2012 tax forms 1040ez instructions You have reached age 59½. Irs 2012 tax forms 1040ez instructions You are totally and permanently disabled. Irs 2012 tax forms 1040ez instructions You are the beneficiary of a deceased IRA owner. Irs 2012 tax forms 1040ez instructions You use the distribution to buy, build, or rebuild a first home. Irs 2012 tax forms 1040ez instructions The distributions are part of a series of substantially equal payments. Irs 2012 tax forms 1040ez instructions You have unreimbursed medical expenses that are more than 10% (or 7. Irs 2012 tax forms 1040ez instructions 5% if you or your spouse was born before January 2, 1949) of your adjusted gross income (defined earlier) for the year. Irs 2012 tax forms 1040ez instructions You are paying medical insurance premiums during a period of unemployment. Irs 2012 tax forms 1040ez instructions The distributions are not more than your qualified higher education expenses. Irs 2012 tax forms 1040ez instructions The distribution is due to an IRS levy of the qualified plan. Irs 2012 tax forms 1040ez instructions The distribution is a qualified reservist distribution. Irs 2012 tax forms 1040ez instructions Most of these exceptions are discussed earlier in chapter 1 under Early Distributions . Irs 2012 tax forms 1040ez instructions Please click here for the text description of the image. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions For these purposes, disregard the withdrawal of excess contributions and the earnings on them (discussed earlier under What if You Contribute Too Much ). Irs 2012 tax forms 1040ez instructions Order the distributions as follows. Irs 2012 tax forms 1040ez instructions Regular contributions. Irs 2012 tax forms 1040ez instructions Conversion and rollover contributions, on a first-in, first-out basis (generally, total conversions and rollovers from the earliest year first). Irs 2012 tax forms 1040ez instructions See Aggregation (grouping and adding) rules, later. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Earnings on contributions. Irs 2012 tax forms 1040ez instructions Disregard rollover contributions from other Roth IRAs for this purpose. Irs 2012 tax forms 1040ez instructions Aggregation (grouping and adding) rules. Irs 2012 tax forms 1040ez instructions   Determine the taxable amounts distributed (withdrawn), distributions, and contributions by grouping and adding them together as follows. Irs 2012 tax forms 1040ez instructions Add all distributions from all your Roth IRAs during the year together. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Add this total to the total undistributed regular contributions made in prior years. Irs 2012 tax forms 1040ez instructions Add all conversion and rollover contributions made during the year together. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Also disregard any amount withdrawn to correct an excess contribution (including the earnings withdrawn) for this purpose. Irs 2012 tax forms 1040ez instructions Example. Irs 2012 tax forms 1040ez instructions On October 15, 2009, Justin converted all $80,000 in his traditional IRA to his Roth IRA. Irs 2012 tax forms 1040ez instructions His Forms 8606 from prior years show that $20,000 of the amount converted is his basis. Irs 2012 tax forms 1040ez instructions Justin included $60,000 ($80,000 − $20,000) in his gross income. Irs 2012 tax forms 1040ez instructions On February 23, 2013, Justin made a regular contribution of $5,000 to a Roth IRA. Irs 2012 tax forms 1040ez instructions On November 8, 2013, at age 60, Justin took a $7,000 distribution from his Roth IRA. Irs 2012 tax forms 1040ez instructions The first $5,000 of the distribution is a return of Justin's regular contribution and is not includible in his income. Irs 2012 tax forms 1040ez instructions The next $2,000 of the distribution is not includible in income because it was included previously. Irs 2012 tax forms 1040ez instructions Figuring your recapture amount. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions   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). Irs 2012 tax forms 1040ez instructions The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. Irs 2012 tax forms 1040ez instructions Note. Irs 2012 tax forms 1040ez instructions Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. Irs 2012 tax forms 1040ez instructions See the Example , earlier. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. Irs 2012 tax forms 1040ez instructions Amount to include on Form 5329, line 1. Irs 2012 tax forms 1040ez instructions   Include on line 1 of your 2013 Form 5329 the following four amounts from the Recapture Amount—Allocation Chart that you filled out. Irs 2012 tax forms 1040ez instructions The amount you allocated to line 20 of your 2013 Form 8606. Irs 2012 tax forms 1040ez instructions The amount(s) allocated to your 2009 through 2013 Forms 8606, line 18, and your 2010 Form 8606, line 23. Irs 2012 tax forms 1040ez instructions The amount(s) allocated to your 2009, 2011, 2012, and 2013 Forms 1040, line 16b; Forms 1040A, line 12b; and Forms 1040NR, line 17b. Irs 2012 tax forms 1040ez instructions The amount from your 2013 Form 8606, line 25. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Example. Irs 2012 tax forms 1040ez instructions Ishmael, age 32, opened a Roth IRA in 2000. Irs 2012 tax forms 1040ez instructions He made the maximum contributions to it every year. Irs 2012 tax forms 1040ez instructions In addition, he made the following transactions into his Roth IRA. Irs 2012 tax forms 1040ez instructions In 2005, he converted $10,000 from his traditional IRA into his Roth IRA. Irs 2012 tax forms 1040ez instructions He filled out a 2005 Form 8606 and attached it with his 2005 Form 1040. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions He entered $10,000 on line 18 of Form 8606. Irs 2012 tax forms 1040ez instructions In 2011, he rolled over the entire balance of his qualified retirement plan, $20,000, into a Roth IRA when he changed jobs. Irs 2012 tax forms 1040ez instructions He used a 2011 Form 1040 to file his taxes. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Box 5 of his 2011 Form 1099-R reported $0 since he did not make any after-tax contributions to the qualified retirement plan. Irs 2012 tax forms 1040ez instructions He entered $20,000 on line 16b of Form 1040 since that is the taxable amount that was rolled over in 2011. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions He has not taken any early distribution from his Roth IRA before 2013. Irs 2012 tax forms 1040ez instructions In 2013, he made the maximum contribution of $5,500 to his Roth IRA. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions See his filled out Illustrated Recapture Amount—Allocation Chart, later, to see how he allocated the amounts from the above transactions. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions   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). Irs 2012 tax forms 1040ez instructions The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. Irs 2012 tax forms 1040ez instructions Note. Irs 2012 tax forms 1040ez instructions Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. Irs 2012 tax forms 1040ez instructions See the Example , earlier. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Must You Withdraw or Use Assets? You are not required to take distributions from your Roth IRA at any age. Irs 2012 tax forms 1040ez instructions The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs while the owner is alive. Irs 2012 tax forms 1040ez instructions 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 . Irs 2012 tax forms 1040ez instructions Minimum distributions. Irs 2012 tax forms 1040ez instructions   You cannot use your Roth IRA to satisfy minimum distribution requirements for your traditional IRA. Irs 2012 tax forms 1040ez instructions Nor can you use distributions from traditional IRAs for required distributions from Roth IRAs. Irs 2012 tax forms 1040ez instructions See Distributions to beneficiaries , later. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions Your basis is the total amount of contributions in your Roth IRAs. Irs 2012 tax forms 1040ez instructions 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). Irs 2012 tax forms 1040ez instructions Any such losses are added back to taxable income for purposes of calculating the alternative minimum tax. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions See When Can You Withdraw or Use Assets? in chapter 1. Irs 2012 tax forms 1040ez instructions Distributions to beneficiaries. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions (See When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1. Irs 2012 tax forms 1040ez instructions )   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. Irs 2012 tax forms 1040ez instructions Distributions from another Roth IRA cannot be substituted for these distributions unless the other Roth IRA was inherited from the same decedent. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Combining with other Roth IRAs. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions Distributions that are not qualified distributions. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions   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. Irs 2012 tax forms 1040ez instructions See Ordering Rules for Distributions , earlier in this chapter under Are Distributions Taxable. Irs 2012 tax forms 1040ez instructions Example. Irs 2012 tax forms 1040ez instructions When Ms. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions No distributions had been made from her IRA. Irs 2012 tax forms 1040ez instructions She had no basis in the conversion contribution in 2009. Irs 2012 tax forms 1040ez instructions When she established this Roth IRA (her first) in 2009, she named each of her four children as equal beneficiaries. Irs 2012 tax forms 1040ez instructions Each child will receive one-fourth of each type of contribution and one-fourth of the earnings. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions 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. Irs 2012 tax forms 1040ez instructions If this applies to you, substitute “Roth IRA” for “traditional IRA” in that discussion. Irs 2012 tax forms 1040ez instructions Prev  Up  Next   Home   More Online Publications