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Irs Free Tax Filing

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Irs Free Tax Filing

Irs free tax filing Index A Abandonments, Abandonments Annuities, Insurance Policies and Annuities Asset classification Capital, Capital Assets Noncapital, Noncapital Assets Assistance (see Tax help) Assumption of liabilities, Assumption of liabilities. Irs free tax filing , Liabilities. Irs free tax filing B Basis Adjusted, Adjusted basis. Irs free tax filing Original, Basis. Irs free tax filing Bonds, U. Irs free tax filing S. Irs free tax filing Treasury, U. Irs free tax filing S. Irs free tax filing Treasury Notes or Bonds Business, sold, Sale of a Business C Canceled Debt, Cancellation of debt. Irs free tax filing Lease, Cancellation of a lease. Irs free tax filing Real property sale, Canceling a sale of real property. Irs free tax filing Capital assets defined, Capital Assets Capital gains and losses Figuring, Long and Short Term Holding period, Holding period. Irs free tax filing Long term, Long and Short Term Short term, Long and Short Term Treatment of capital losses, Treatment of Capital Losses Casualties, Section 1231 transactions. Irs free tax filing Charitable organization Bargain sale to, Bargain sales to charity. Irs free tax filing , Bargain sale to charity. Irs free tax filing Gift to, Gift to charitable organization. Irs free tax filing Classes of assets, Classes of assets. Irs free tax filing Coal, Coal and Iron Ore Coins, Precious Metals and Stones, Stamps, and Coins Comments, Comments and suggestions. Irs free tax filing Commodities derivative financial instruments, Commodities derivative financial instrument. Irs free tax filing Condemnations, Condemnations, Section 1231 transactions. Irs free tax filing Conversion transactions, Conversion Transactions Copyrights, Copyright. Irs free tax filing , Copyrights. Irs free tax filing Covenant not to compete, Covenant not to compete. Irs free tax filing D Debt cancellation, Cancellation of debt. Irs free tax filing , Cancellation of debt. Irs free tax filing Deferred exchange, Deferred Exchange Depreciable property Real, Depreciable real property. Irs free tax filing Records, Depreciation Recapture Section 1245, Section 1245 property defined. Irs free tax filing , Like-Kind Exchanges and Involuntary Conversions Section 1250, Section 1250 property defined. Irs free tax filing Depreciation recapture Personal property, Section 1245 Property Real property, Section 1250 property defined. Irs free tax filing E Easement, Easement. Irs free tax filing Exchanges Deferred, Deferred Exchange Involuntary, Involuntary Conversions Like-kind, Like-Kind Exchanges, Like-Kind Exchanges and Involuntary Conversions Nontaxable, Nontaxable Exchanges Related persons, Related persons. Irs free tax filing U. Irs free tax filing S. Irs free tax filing Treasury notes or bonds, U. Irs free tax filing S. Irs free tax filing Treasury Notes or Bonds F Fair market value, Fair market value. Irs free tax filing Foreclosure, Foreclosures and Repossessions Form 1040 (Sch. Irs free tax filing D), Schedule D and Form 8949 1099-A, Forms 1099-A and 1099-C. Irs free tax filing , Forms 1099-A and 1099-C. Irs free tax filing 1099-B, Form 1099-B. Irs free tax filing 1099-C, Forms 1099-A and 1099-C. Irs free tax filing , Forms 1099-A and 1099-C. Irs free tax filing 1099-S, Form 1099-S. Irs free tax filing 4797, Business property. Irs free tax filing , Reporting the exchange. Irs free tax filing , Form 4797 8594, Reporting requirement. Irs free tax filing 8824, Reporting the exchange. Irs free tax filing 8949, Forms to file. Irs free tax filing , Personal-use property. Irs free tax filing , Reporting the exchange. Irs free tax filing , More information. Irs free tax filing , Timber, Introduction, Form 1099-B. Irs free tax filing , Personal-use property. Irs free tax filing , Mark-to-market election. Irs free tax filing Franchise, Franchise, Trademark, or Trade Name Free tax services, Free help with your tax return. Irs free tax filing G Gains and losses Bargain sale, Bargain Sale Business property, Ordinary or Capital Gain or Loss for Business Property Defined, Gain or Loss From Sales and Exchanges Form 4797, Form 4797 Ordinary or capital, Ordinary or Capital Gain or Loss Property changed to business or rental use, Property Changed to Business or Rental Use Property used partly for rental, Property Used Partly for Business or Rental Reporting, Reporting Gains and Losses Gifts of property, Gifts, Gift. Irs free tax filing Gold, Precious Metals and Stones, Stamps, and Coins H Hedging transactions, Hedging transaction. Irs free tax filing Help (see Tax help) Holding period, Holding period. Irs free tax filing Housing, low income, Low-income housing. Irs free tax filing , Low-Income Housing With Two or More Elements I Indirect ownership of stock, Ownership of stock or partnership interests. Irs free tax filing Information returns, Information Returns Inherited property, Inherited property. Irs free tax filing Installment sales, Installment Sales, Installment sale. Irs free tax filing Insurance policies, Insurance Policies and Annuities Intangible property, Dispositions of Intangible Property Involuntary conversion Defined, Involuntary Conversions Depreciable property, Like-Kind Exchanges and Involuntary Conversions Iron ore, Coal and Iron Ore L Land Release of restriction, Release of restriction on land. Irs free tax filing Subdivision, Subdivision of Land Lease, cancellation of, Cancellation of a lease. Irs free tax filing Liabilities, assumption, Liabilities. Irs free tax filing Like-kind exchanges Deferred, Deferred Exchange Liabilities, assumed, Assumption of liabilities. Irs free tax filing Like-class property, Like-Kind Property Like-kind property, Like-Kind Property Multiple parties, Multiple-party transactions. Irs free tax filing Multiple property, Multiple Property Exchanges Partnership interests, Partnership Interests Qualifying property, Qualifying Property Related persons, Like-Kind Exchanges Between Related Persons Low-income housing, Low-income housing. Irs free tax filing M Multiple property exchanges, Multiple Property Exchanges N Noncapital assets defined, Noncapital Assets Nontaxable exchanges Like-kind, Like-Kind Exchanges Other nontaxable exchanges, Other Nontaxable Exchanges Partially, Partially Nontaxable Exchanges Property exchanged for stock, Property Exchanged for Stock Notes, U. Irs free tax filing S. Irs free tax filing Treasury, U. Irs free tax filing S. Irs free tax filing Treasury Notes or Bonds O Ordinary or capital gain, Ordinary or Capital Gain or Loss P Partially nontaxable exchanges, Partially Nontaxable Exchanges Partnership Controlled, Controlled partnership transaction. Irs free tax filing Related persons, Related persons. Irs free tax filing , Controlled entity. Irs free tax filing Sale or exchange of interest, Partnership Interests, Partnership interests. Irs free tax filing , Partnership interests. Irs free tax filing Patents, Patents Personal property Depreciable, Like-Kind Exchanges and Involuntary Conversions Gains and losses, Personal-use property. Irs free tax filing Transfer at death, Transfers at Death Precious metals and stones, Precious Metals and Stones, Stamps, and Coins Property used partly for business or rental, Property Used Partly for Business or Rental, Part business or rental. Irs free tax filing Publications (see Tax help) Publicly traded securities, rollover of gain from, Rollover of Gain From Publicly Traded Securities R Real property Depreciable, Depreciable real property. Irs free tax filing Transfer at death, Transfers at Death Related persons, Sales and Exchanges Between Related Persons Condemned property replacement, bought from, Buying replacement property from a related person. Irs free tax filing Gain on sale of property, Sales and Exchanges Between Related Persons Like-kind exchanges between, Like-Kind Exchanges Between Related Persons List, Related persons. Irs free tax filing Loss on sale of property, Nondeductible Loss Patent transferred to, Related persons. Irs free tax filing Replacement property, Replacement property. Irs free tax filing , Replacement property to be produced. Irs free tax filing Repossession, Foreclosures and Repossessions, Repossession. Irs free tax filing Residual method, sale of business, Residual method. Irs free tax filing Rollover of gain, Rollover of Gain From Publicly Traded Securities S Sale of a business, Sale of a Business Sales Bargain, charitable organization, Bargain sales to charity. Irs free tax filing , Bargain sale to charity. Irs free tax filing Installment, Installment Sales, Installment sale. Irs free tax filing Property changed to business or rental use, Property Changed to Business or Rental Use Related persons, Sales and Exchanges Between Related Persons, Related persons. Irs free tax filing Section 1231 gains and losses, Section 1231 Gains and Losses Section 1245 property Defined, Section 1245 Property Gain, ordinary income, Gain Treated as Ordinary Income Multiple asset accounts, Multiple asset accounts. Irs free tax filing Section 1250 property Additional depreciation, Additional Depreciation Defined, Section 1250 property defined. Irs free tax filing Foreclosure, Foreclosure. Irs free tax filing Gain, ordinary income, Gain Treated as Ordinary Income Nonresidential, Nonresidential real property. Irs free tax filing Residential, Residential rental property. Irs free tax filing Section 197 intangibles, Section 197 Intangibles Severance damages, Severance damages. Irs free tax filing Silver, Precious Metals and Stones, Stamps, and Coins Small business stock, Gains on Sales of Qualified Small Business Stock Specialized small business investment company (SSBIC), rollover of gain into, Rollover of Gain From Publicly Traded Securities Stamps, Precious Metals and Stones, Stamps, and Coins Stock Capital asset, Capital Assets Controlling interest, corporation, Controlling interest in a corporation. Irs free tax filing Indirect ownership, Ownership of stock or partnership interests. Irs free tax filing Property exchanged for, Property Exchanged for Stock Publicly traded securities, Rollover of Gain From Publicly Traded Securities Small business, Gains on Sales of Qualified Small Business Stock Suggestions, Comments and suggestions. Irs free tax filing T Tax help, How To Get Tax Help Tax rates, capital gain, Capital Gains Tax Rates Thefts, Section 1231 transactions. Irs free tax filing Timber, Timber, Section 1231 transactions. Irs free tax filing Trade name, Franchise, Trademark, or Trade Name Trademark, Franchise, Trademark, or Trade Name Transfers to spouse, Transfers to Spouse U U. Irs free tax filing S. Irs free tax filing Treasury bonds, U. Irs free tax filing S. Irs free tax filing Treasury Notes or Bonds Unharvested crops, Section 1231 transactions. Irs free tax filing Prev  Up     Home   More Online Publications
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The Irs Free Tax Filing

Irs free tax filing 17. Irs free tax filing   Individual Retirement Arrangements (IRAs) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Traditional IRAsWho Can Open a Traditional IRA? When and How Can a Traditional IRA Be Opened? How Much Can Be Contributed? When Can Contributions Be Made? How Much Can You Deduct? Nondeductible Contributions Inherited IRAs Can You Move Retirement Plan Assets? When Can You Withdraw or Use IRA Assets? When Must You Withdraw IRA Assets? (Required Minimum Distributions) Are Distributions Taxable? What Acts Result in Penalties or Additional Taxes? Roth IRAsWhat Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA? Can You Move Amounts Into a Roth IRA? Are Distributions Taxable? What's New Traditional IRA contribution and deduction limit. Irs free tax filing  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. Irs free tax filing 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. Irs free tax filing For more information, see How Much Can Be Contributed? later. Irs free tax filing Roth IRA contribution limit. Irs free tax filing  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 free tax filing 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 free tax filing However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Irs free tax filing For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? later. Irs free tax filing Modified AGI limit for traditional IRA contributions increased. Irs free tax filing  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. Irs free tax filing 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. Irs free tax filing If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Irs free tax filing See How Much Can You Deduct , later. Irs free tax filing Modified AGI limit for Roth IRA contributions increased. Irs free tax filing  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Irs free tax filing Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Irs free tax filing You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Irs free tax filing 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 free tax filing You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Irs free tax filing 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 free tax filing You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Irs free tax filing See Can You Contribute to a Roth IRA , later. Irs free tax filing Net Investment Income Tax. Irs free tax filing   For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan including IRAs (for example; 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Irs free tax filing However, these distributions are taken into account when determining the modified adjusted gross income threshold. Irs free tax filing Distributions from a nonqualified retirement plan are included in net investment income. Irs free tax filing See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Irs free tax filing Name change. Irs free tax filing  All spousal IRAs have been renamed Kay Bailey Hutchison Spousal IRAs. Irs free tax filing There are no changes to the rules regarding these IRAs. Irs free tax filing See Kay Bailey Hutchison Spousal IRA Limit , later, for more information. Irs free tax filing Reminders 2014 limits. Irs free tax filing   You can find information about the 2014 contribution and AGI limits in Publication 590. Irs free tax filing Contributions to both traditional and Roth IRAs. Irs free tax filing   For information on your combined contribution limit if you contribute to both traditional and Roth IRAs, see Roth IRAs and traditional IRAs under How Much Can Be Contributed? in Roth IRAs, later. Irs free tax filing Statement of required minimum distribution. Irs free tax filing  If a minimum distribution from your IRA is required, the trustee, custodian, or issuer that held the IRA at the end of the preceding year must either report the amount of the required minimum distribution to you, or offer to calculate it for you. Irs free tax filing The report or offer must include the date by which the amount must be distributed. Irs free tax filing The report is due January 31 of the year in which the minimum distribution is required. Irs free tax filing It can be provided with the year-end fair market value statement that you normally get each year. Irs free tax filing No report is required for IRAs of owners who have died. Irs free tax filing IRA interest. Irs free tax filing  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Irs free tax filing Tax on your traditional IRA is generally deferred until you take a distribution. Irs free tax filing Do not report this interest on your tax return as tax-exempt interest. Irs free tax filing Form 8606. Irs free tax filing   To designate contributions as nondeductible, you must file Form 8606, Nondeductible IRAs. Irs free tax filing The term “50 or older” is used several times in this chapter. Irs free tax filing It refers to an IRA owner who is age 50 or older by the end of the tax year. Irs free tax filing Introduction An individual retirement arrangement (IRA) is a personal savings plan that gives you tax advantages for setting aside money for your retirement. Irs free tax filing This chapter discusses the following topics. Irs free tax filing The rules for a traditional IRA (any IRA that is not a Roth or SIMPLE IRA). Irs free tax filing The Roth IRA, which features nondeductible contributions and tax-free distributions. Irs free tax filing Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs) are not discussed in this chapter. Irs free tax filing For more information on these plans and employees' SEP IRAs and SIMPLE IRAs that are part of these plans, see Publications 560 and 590. Irs free tax filing For information about contributions, deductions, withdrawals, transfers, rollovers, and other transactions, see Publication 590. Irs free tax filing Useful Items - You may want to see: Publication 560 Retirement Plans for Small Business 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 5329 Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts 8606 Nondeductible IRAs Traditional IRAs In this chapter, the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Irs free tax filing ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Irs free tax filing Two advantages of a traditional IRA are: You may be able to deduct some or all of your contributions to it, depending on your circumstances, and Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Irs free tax filing 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. Irs free tax filing What is compensation?   Generally, compensation is what you earn from working. Irs free tax filing Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. Irs free tax filing 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). Irs free tax filing   Scholarship and fellowship payments are compensation for this purpose only if shown in box 1 of Form W-2. Irs free tax filing   Compensation also includes commissions and taxable alimony and separate maintenance payments. Irs free tax filing Self-employment income. Irs free tax filing   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deductible part of your self-employment tax. Irs free tax filing   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Irs free tax filing Nontaxable combat pay. Irs free tax filing   For IRA purposes, if you were a member of the U. Irs free tax filing S. Irs free tax filing Armed Forces, your compensation includes any nontaxable combat pay you receive. Irs free tax filing What is not compensation?   Compensation does not include any of the following items. Irs free tax filing Earnings and profits from property, such as rental income, interest income, and dividend income. Irs free tax filing Pension or annuity income. Irs free tax filing Deferred compensation received (compensation payments postponed from a past year). Irs free tax filing Income from a partnership for which you do not provide services that are a material income-producing factor. Irs free tax filing Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Irs free tax filing Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Irs free tax filing When and How Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Irs free tax filing However, the time for making contributions for any year is limited. Irs free tax filing See When Can Contributions Be Made , later. Irs free tax filing You can open different kinds of IRAs with a variety of organizations. Irs free tax filing You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Irs free tax filing You can also open an IRA through your stockbroker. Irs free tax filing Any IRA must meet Internal Revenue Code requirements. Irs free tax filing Kinds of traditional IRAs. Irs free tax filing   Your traditional IRA can be an individual retirement account or annuity. Irs free tax filing It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Irs free tax filing How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Irs free tax filing These limits and other rules are explained below. Irs free tax filing Community property laws. Irs free tax filing   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. Irs free tax filing This is the rule even in states with community property laws. Irs free tax filing Brokers' commissions. Irs free tax filing   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Irs free tax filing Trustees' fees. Irs free tax filing   Trustees' administrative fees are not subject to the contribution limit. Irs free tax filing Qualified reservist repayments. Irs free tax filing   If you are (or were) a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions you received. Irs free tax filing 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. Irs free tax filing To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or similar arrangement. Irs free tax filing   For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1 of Publication 590. Irs free tax filing Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Irs free tax filing (See Roth IRAs, later. Irs free tax filing ) General limit. Irs free tax filing   For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts. Irs free tax filing $5,500 ($6,500 if you are 50 or older). Irs free tax filing Your taxable compensation (defined earlier) for the year. Irs free tax filing 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. Irs free tax filing (See Nondeductible Contributions , later. Irs free tax filing ) Qualified reservist repayments do not affect this limit. Irs free tax filing Example 1. Irs free tax filing Betty, who is 34 years old and single, earned $24,000 in 2013. Irs free tax filing Her IRA contributions for 2013 are limited to $5,500. Irs free tax filing Example 2. Irs free tax filing John, an unmarried college student working part time, earned $3,500 in 2013. Irs free tax filing His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Irs free tax filing Kay Bailey Hutchison Spousal IRA limit. Irs free tax filing   For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following amounts. Irs free tax filing $5,500 ($6,500 if you are 50 or older). Irs free tax filing The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Irs free tax filing Your spouse's IRA contribution for the year to a traditional IRA. Irs free tax filing Any contribution for the year to a Roth IRA on behalf of your spouse. Irs free tax filing This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is 50 or older, or $13,000 if both of you are 50 or older). Irs free tax filing 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). Irs free tax filing Contributions must be in the form of money (cash, check, or money order). Irs free tax filing Property cannot be contributed. Irs free tax filing Contributions must be made by due date. Irs free tax filing   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. Irs free tax filing Age 70½ rule. Irs free tax filing   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Irs free tax filing   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Irs free tax filing If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Irs free tax filing Designating year for which contribution is made. Irs free tax filing   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. Irs free tax filing 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). Irs free tax filing Filing before a contribution is made. Irs free tax filing   You can file your return claiming a traditional IRA contribution before the contribution is actually made. Irs free tax filing Generally, the contribution must be made by the due date of your return, not including extensions. Irs free tax filing Contributions not required. Irs free tax filing   You do not have to contribute to your traditional IRA for every tax year, even if you can. Irs free tax filing How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if it applies). Irs free tax filing However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Irs free tax filing See Limit If Covered by Employer Plan , later. Irs free tax filing You may be able to claim a credit for contributions to your traditional IRA. Irs free tax filing For more information, see chapter 37. Irs free tax filing Trustees' fees. Irs free tax filing   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Irs free tax filing However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Irs free tax filing See chapter 28. Irs free tax filing Brokers' commissions. Irs free tax filing   Brokers' commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Irs free tax filing Full deduction. Irs free tax filing   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older in 2013). Irs free tax filing 100% of your compensation. Irs free tax filing This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Irs free tax filing Kay Bailey Hutchison Spousal IRA. Irs free tax filing   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of the following amounts. Irs free tax filing $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older in 2013). Irs free tax filing The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Irs free tax filing The IRA deduction for the year of the spouse with the greater compensation. Irs free tax filing Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Irs free tax filing Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Irs free tax filing This limit is reduced by any contributions to a 501(c)(18) plan on behalf of the spouse with the lesser compensation. Irs free tax filing Note. Irs free tax filing 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. Irs free tax filing After a divorce or legal separation, you can deduct only contributions to your own IRA. Irs free tax filing Your deductions are subject to the rules for single individuals. Irs free tax filing Covered by an employer retirement plan. Irs free tax filing   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. Irs free tax filing This is discussed later under Limit If Covered by Employer Plan . Irs free tax filing Limits on the amount you can deduct do not affect the amount that can be contributed. Irs free tax filing See Nondeductible Contributions , later. Irs free tax filing 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. Irs free tax filing The “Retirement plan” box should be checked if you were covered. Irs free tax filing Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered by an Employer Plan , later. Irs free tax filing If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Irs free tax filing Federal judges. Irs free tax filing   For purposes of the IRA deduction, federal judges are covered by an employer retirement plan. Irs free tax filing For Which Year(s) Are You Covered by an Employer Plan? Special rules apply to determine the tax years for which you are covered by an employer plan. Irs free tax filing These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Irs free tax filing Tax year. Irs free tax filing   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Irs free tax filing For almost all people, the tax year is the calendar year. Irs free tax filing Defined contribution plan. Irs free tax filing   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. Irs free tax filing   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Irs free tax filing Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Irs free tax filing Defined benefit plan. Irs free tax filing   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. Irs free tax filing 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. Irs free tax filing   A defined benefit plan is any plan that is not a defined contribution plan. Irs free tax filing Defined benefit plans include pension plans and annuity plans. Irs free tax filing No vested interest. Irs free tax filing   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. Irs free tax filing Situations in Which You Are Not Covered by an Employer Plan Unless you are covered under another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Irs free tax filing Social security or railroad retirement. Irs free tax filing   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Irs free tax filing Benefits from a previous employer's plan. Irs free tax filing   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Irs free tax filing Reservists. Irs free tax filing   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. Irs free tax filing You are not covered by the plan if both of the following conditions are met. Irs free tax filing 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. Irs free tax filing You did not serve more than 90 days on active duty during the year (not counting duty for training). Irs free tax filing Volunteer firefighters. Irs free tax filing   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Irs free tax filing You are not covered by the plan if both of the following conditions are met. Irs free tax filing 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. Irs free tax filing Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Irs free tax filing Limit If Covered by Employer Plan If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. Irs free tax filing 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. Irs free tax filing These amounts vary depending on your filing status. Irs free tax filing To determine if your deduction is subject to phaseout, you must determine your modified adjusted gross income (AGI) and your filing status. Irs free tax filing See Filing status and Modified adjusted gross income (AGI) , later. Irs free tax filing Then use Table 17-1 or 17-2 to determine if the phaseout applies. Irs free tax filing Social security recipients. Irs free tax filing   Instead of using Table 17-1 or Table 17-2, use the worksheets in Appendix B of Publication 590 if, for the year, all of the following apply. Irs free tax filing You received social security benefits. Irs free tax filing You received taxable compensation. Irs free tax filing Contributions were made to your traditional IRA. Irs free tax filing You or your spouse was covered by an employer retirement plan. Irs free tax filing Use those worksheets to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Irs free tax filing Deduction phaseout. Irs free tax filing   If you were covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI as shown in Table 17-1. Irs free tax filing Table 17-1. Irs free tax filing Effect of Modified AGI1 on Deduction if You Are Covered by Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Irs free tax filing IF your filing status is. Irs free tax filing . Irs free tax filing . Irs free tax filing   AND your modified AGI is. Irs free tax filing . Irs free tax filing . Irs free tax filing   THEN you can take. Irs free tax filing . Irs free tax filing . Irs free tax filing single   or  head of household   $59,000 or less   a full deduction. Irs free tax filing   more than $59,000 but less than $69,000   a partial deduction. Irs free tax filing   $69,000 or more   no deduction. Irs free tax filing married filing jointly   or  qualifying widow(er)   $95,000 or less   a full deduction. Irs free tax filing   more than $95,000 but less than $115,000   a partial deduction. Irs free tax filing   $115,000 or more   no deduction. Irs free tax filing married filing separately2   less than $10,000   a partial deduction. Irs free tax filing   $10,000 or more   no deduction. Irs free tax filing 1Modified AGI (adjusted gross income). Irs free tax filing See Modified adjusted gross income (AGI) . Irs free tax filing 2If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” column). Irs free tax filing If your spouse is covered. Irs free tax filing   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 17-2. Irs free tax filing Filing status. Irs free tax filing   Your filing status depends primarily on your marital status. Irs free tax filing 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. Irs free tax filing If you need more information on filing status, see chapter 2. Irs free tax filing Lived apart from spouse. Irs free tax filing   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. Irs free tax filing Table 17-2. Irs free tax filing Effect of Modified AGI1 on Deduction if You Are NOT Covered by Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Irs free tax filing IF your filing status is. Irs free tax filing . Irs free tax filing . Irs free tax filing   AND your modified AGI is. Irs free tax filing . Irs free tax filing . Irs free tax filing   THEN you can take. Irs free tax filing . Irs free tax filing . Irs free tax filing single, head of household, or qualifying widow(er)   any amount   a full deduction. Irs free tax filing married filing jointly or separately with a spouse who is not covered by a plan at work   any amount   a full deduction. Irs free tax filing married filing jointly with a spouse who is covered by a plan at work   $178,000 or less   a full deduction. Irs free tax filing   more than $178,000 but less than $188,000   a partial deduction. Irs free tax filing   $188,000 or more   no deduction. Irs free tax filing married filing separately with a spouse who is covered by a plan at work2   less than $10,000   a partial deduction. Irs free tax filing   $10,000 or more   no deduction. Irs free tax filing 1Modified AGI (adjusted gross income). Irs free tax filing See Modified adjusted gross income (AGI) . Irs free tax filing 2You are entitled to the full deduction if you did not live with your spouse at any time during the year. Irs free tax filing Modified adjusted gross income (AGI). Irs free tax filing   How you figure your modified AGI depends on whether you are filing Form 1040 or Form 1040A. Irs free tax filing If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Publication 590. Irs free tax filing You may be able to use Worksheet 17-1 to figure your modified AGI. Irs free tax filing    Do not assume that your modified AGI is the same as your compensation. Irs free tax filing Your modified AGI may include income in addition to your compensation (discussed earlier), such as interest, dividends, and income from IRA distributions. Irs free tax filing Form 1040. Irs free tax filing   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following eight amounts. Irs free tax filing IRA deduction. Irs free tax filing Student loan interest deduction. Irs free tax filing Tuition and fees deduction. Irs free tax filing Domestic production activities deduction. Irs free tax filing Foreign earned income exclusion. Irs free tax filing Foreign housing exclusion or deduction. Irs free tax filing Exclusion of qualified savings bond interest shown on Form 8815, Exclusion of Interest From Series EE and I U. Irs free tax filing S. Irs free tax filing Savings Bonds Issued After 1989. Irs free tax filing Exclusion of employer-provided adoption benefits shown on Form 8839, Qualified Adoption Expenses. Irs free tax filing This is your modified AGI. Irs free tax filing Form 1040A. Irs free tax filing   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. Irs free tax filing IRA deduction. Irs free tax filing Student loan interest deduction. Irs free tax filing Tuition and fees deduction. Irs free tax filing Exclusion of qualified savings bond interest shown on Form 8815. Irs free tax filing This is your modified AGI. Irs free tax filing Both contributions for 2013 and distributions in 2013. Irs free tax filing   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Irs free tax filing You received distributions in 2013 from one or more traditional IRAs. Irs free tax filing You made contributions to a traditional IRA for 2013. Irs free tax filing Some of those contributions may be nondeductible contributions. Irs free tax filing If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Irs free tax filing To do this, you can use Worksheet 1-5, Figuring the Taxable Part of Your IRA Distribution, in Publication 590. Irs free tax filing   If at least one of the above does not apply, figure your modified AGI using Worksheet 17-1, later. Irs free tax filing    How to figure your reduced IRA deduction. Irs free tax filing   You can figure your reduced IRA deduction for either Form 1040 or Form 1040A by using the worksheets in chapter 1 of Publication 590. Irs free tax filing Also, the instructions for Form 1040 and Form 1040A include similar worksheets that you may be able to use instead. Irs free tax filing Worksheet 17-1. Irs free tax filing Figuring Your Modified AGI Use this worksheet to figure your modified adjusted gross income for traditional IRA purposes. Irs free tax filing 1. Irs free tax filing Enter your adjusted gross income (AGI) from Form 1040, line 38, or Form 1040A, line 22, figured without taking into account the amount from Form 1040, line 32, or Form 1040A, line 17 1. Irs free tax filing   2. Irs free tax filing Enter any student loan interest deduction from Form 1040, line 33, or Form 1040A, line 18 2. Irs free tax filing   3. Irs free tax filing Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Irs free tax filing   4. Irs free tax filing Enter any domestic production activities deduction from Form 1040, line 35 4. Irs free tax filing   5. Irs free tax filing Enter any foreign earned income and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Irs free tax filing   6. Irs free tax filing Enter any foreign housing deduction from Form 2555, line 50 6. Irs free tax filing   7. Irs free tax filing Enter any excludable savings bond interest from Form 8815, line 14 7. Irs free tax filing   8. Irs free tax filing Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Irs free tax filing   9. Irs free tax filing Add lines 1 through 8. Irs free tax filing This is your Modified AGI for traditional IRA purposes 9. Irs free tax filing   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Irs free tax filing If you file Form 1040A, enter your IRA deduction on line 17. Irs free tax filing You cannot deduct IRA contributions on Form 1040EZ. Irs free tax filing Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Irs free tax filing The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Irs free tax filing Example. Irs free tax filing Mike is 28 years old and single. Irs free tax filing In 2013, he was covered by a retirement plan at work. Irs free tax filing His salary was $57,312. Irs free tax filing His modified AGI was $70,000. Irs free tax filing Mike made a $5,500 IRA contribution for 2013. Irs free tax filing Because he was covered by a retirement plan and his modified AGI was over $69,000, he cannot deduct his $5,500 IRA contribution. Irs free tax filing He must designate this contribution as a nondeductible contribution by reporting it on Form 8606, as explained next. Irs free tax filing Form 8606. Irs free tax filing   To designate contributions as nondeductible, you must file Form 8606. Irs free tax filing   You do not have to designate a contribution as nondeductible until you file your tax return. Irs free tax filing When you file, you can even designate otherwise deductible contributions as nondeductible. Irs free tax filing   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Irs free tax filing 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. Irs free tax filing In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Irs free tax filing See Form 8606 under Distributions Fully or Partly Taxable, later. Irs free tax filing Failure to report nondeductible contributions. Irs free tax filing   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated as deductible contributions when withdrawn. Irs free tax filing All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Irs free tax filing Penalty for overstatement. Irs free tax filing   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. Irs free tax filing Penalty for failure to file Form 8606. Irs free tax filing   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. Irs free tax filing    Tax on earnings on nondeductible contributions. Irs free tax filing   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. Irs free tax filing See When Can You Withdraw or Use IRA Assets , later. Irs free tax filing Cost basis. Irs free tax filing   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Irs free tax filing Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Irs free tax filing Inherited IRAs If you inherit a traditional IRA, you are called a beneficiary. Irs free tax filing A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Irs free tax filing Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Irs free tax filing Inherited from spouse. Irs free tax filing   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Irs free tax filing You can: Treat it as your own IRA by designating yourself as the account owner. Irs free tax filing Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (section 403(b) plan), or Deferred compensation plan of a state or local government (section 457 plan). Irs free tax filing Treat yourself as the beneficiary rather than treating the IRA as your own. Irs free tax filing Treating it as your own. Irs free tax filing   You will be considered to have chosen to treat the IRA as your own if: Contributions (including rollover contributions) are made to the inherited IRA, or You do not take the required minimum distribution for a year as a beneficiary of the IRA. Irs free tax filing You will only be considered to have chosen to treat the IRA as your own if: You are the sole beneficiary of the IRA, and You have an unlimited right to withdraw amounts from it. Irs free tax filing   However, if you receive a distribution from your deceased spouse's IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution is not a required distribution, even if you are not the sole beneficiary of your deceased spouse's IRA. Irs free tax filing Inherited from someone other than spouse. Irs free tax filing   If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. Irs free tax filing This means that you cannot make any contributions to the IRA. Irs free tax filing It also means you cannot roll over any amounts into or out of the inherited IRA. Irs free tax filing However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary. Irs free tax filing For more information, see the discussion of inherited IRAs under Rollover From One IRA Into Another, later. Irs free tax filing Can You Move Retirement Plan Assets? You can transfer, tax free, assets (money or property) from other retirement plans (including traditional IRAs) to a traditional IRA. Irs free tax filing You can make the following kinds of transfers. Irs free tax filing Transfers from one trustee to another. Irs free tax filing Rollovers. Irs free tax filing Transfers incident to a divorce. Irs free tax filing Transfers to Roth IRAs. Irs free tax filing   Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. Irs free tax filing You can also move assets from a qualified retirement plan to a Roth IRA. Irs free tax filing See Can You Move Amounts Into a Roth IRA? under Roth IRAs, later. Irs free tax filing Trustee-to-Trustee Transfer A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Irs free tax filing Because there is no distribution to you, the transfer is tax free. Irs free tax filing Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers, discussed later under Rollover From One IRA Into Another . Irs free tax filing For information about direct transfers to IRAs from retirement plans other than IRAs, see Can You Move Retirement Plan Assets? in chapter 1 and Can You Move Amounts Into a Roth IRA? in chapter 2 of Publication 590. Irs free tax filing Rollovers Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute (roll over) to another retirement plan. Irs free tax filing The contribution to the second retirement plan is called a “rollover contribution. Irs free tax filing ” Note. Irs free tax filing An amount rolled over tax free from one retirement plan to another is generally includible in income when it is distributed from the second plan. Irs free tax filing Kinds of rollovers to a traditional IRA. Irs free tax filing   You can roll over amounts from the following plans into a traditional IRA: A traditional IRA, An employer's qualified retirement plan for its employees, A deferred compensation plan of a state or local government (section 457 plan), or A tax-sheltered annuity plan (section 403(b) plan). Irs free tax filing Treatment of rollovers. Irs free tax filing   You cannot deduct a rollover contribution, but you must report the rollover distribution on your tax return as discussed later under Reporting rollovers from IRAs and under Reporting rollovers from employer plans . Irs free tax filing Kinds of rollovers from a traditional IRA. Irs free tax filing   You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. Irs free tax filing These plans include the federal Thrift Savings Fund (for federal employees), deferred compensation plans of state or local governments (section 457 plans), and tax-sheltered annuity plans (section 403(b) plans). Irs free tax filing The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). Irs free tax filing Qualified plans may, but are not required to, accept such rollovers. Irs free tax filing Time limit for making a rollover contribution. Irs free tax filing   You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan. Irs free tax filing The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. Irs free tax filing For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Irs free tax filing Extension of rollover period. Irs free tax filing   If an amount distributed to you from a traditional IRA or a qualified employer retirement plan is a frozen deposit at any time during the 60-day period allowed for a rollover, special rules extend the rollover period. Irs free tax filing For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Irs free tax filing More information. Irs free tax filing   For more information on rollovers, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Irs free tax filing Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Irs free tax filing Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. Irs free tax filing Waiting period between rollovers. Irs free tax filing   Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. Irs free tax filing You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the IRA into which you made the tax-free rollover. Irs free tax filing   The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA. Irs free tax filing Example. Irs free tax filing You have two traditional IRAs, IRA-1 and IRA-2. Irs free tax filing You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). Irs free tax filing You cannot, within 1 year of the distribution from IRA-1, make a tax-free rollover of any distribution from either IRA-1 or IRA-3 into another traditional IRA. Irs free tax filing However, the rollover from IRA-1 into IRA-3 does not prevent you from making a tax-free rollover from IRA-2 into any other traditional IRA. Irs free tax filing This is because you have not, within the last year, rolled over, tax free, any distribution from IRA-2 or made a tax-free rollover into IRA-2. Irs free tax filing Exception. Irs free tax filing   For an exception for distributions from failed financial institutions, see Rollover From One IRA Into Another under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Irs free tax filing Partial rollovers. Irs free tax filing   If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. Irs free tax filing The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). Irs free tax filing The amount you keep may be subject to the 10% additional tax on early distributions, discussed later under What Acts Result in Penalties or Additional Taxes? . Irs free tax filing Required distributions. Irs free tax filing   Amounts that must be distributed during a particular year under the required distribution rules (discussed later) are not eligible for rollover treatment. Irs free tax filing Inherited IRAs. Irs free tax filing   If you inherit a traditional IRA from your spouse, you generally can roll it over, or you can choose to make the inherited IRA your own. Irs free tax filing See Treating it as your own , earlier. Irs free tax filing Not inherited from spouse. Irs free tax filing   If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. Irs free tax filing You must withdraw the IRA assets within a certain period. Irs free tax filing For more information, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Irs free tax filing Reporting rollovers from IRAs. Irs free tax filing   Report any rollover from one traditional IRA to the same or another traditional IRA on lines 15a and 15b, Form 1040, or lines 11a and 11b, Form 1040A, as follows. Irs free tax filing   Enter the total amount of the distribution on Form 1040, line 15a, or Form 1040A, line 11a. Irs free tax filing If the total amount on Form 1040, line 15a, or Form 1040A, line 11a, was rolled over, enter zero on Form 1040, line 15b, or Form 1040A, line 11b. Irs free tax filing If the total distribution was not rolled over, enter the taxable portion of the part that was not rolled over on Form 1040, line 15b, or Form 1040A, line 11b. Irs free tax filing Put “Rollover” next to Form 1040, line 15b, or Form 1040A, line 11b. Irs free tax filing See your tax return instructions. Irs free tax filing   If you rolled over the distribution into a qualified plan (other than an IRA) or you make the rollover in 2014, attach a statement explaining what you did. Irs free tax filing Rollover From Employer's Plan Into an IRA You can roll over into a traditional IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's): Employer's qualified pension, profit-sharing, or stock bonus plan; Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). Irs free tax filing A qualified plan is one that meets the requirements of the Internal Revenue Code. Irs free tax filing Eligible rollover distribution. Irs free tax filing   Generally, an eligible rollover distribution is any distribution of all or part of the balance to your credit in a qualified retirement plan except the following. Irs free tax filing A required minimum distribution (explained later under When Must You Withdraw IRA Assets? (Required Minimum Distributions) ). Irs free tax filing A hardship distribution. Irs free tax filing Any of a series of substantially equal periodic distributions paid at least once a year over: Your lifetime or life expectancy, The lifetimes or life expectancies of you and your beneficiary, or A period of 10 years or more. Irs free tax filing Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or of excess annual additions and any allocable gains. Irs free tax filing A loan treated as a distribution because it does not satisfy certain requirements either when made or later (such as upon default), unless the participant's accrued benefits are reduced (offset) to repay the loan. Irs free tax filing Dividends on employer securities. Irs free tax filing The cost of life insurance coverage. Irs free tax filing Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Irs free tax filing To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Irs free tax filing See Form 8606 under Distributions Fully or Partly Taxable, later. Irs free tax filing Rollover by nonspouse beneficiary. Irs free tax filing   A direct transfer from a deceased employee's qualified pension, profit-sharing, or stock bonus plan; annuity plan; tax-sheltered annuity (section 403(b)) plan; or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. Irs free tax filing The IRA is treated as an inherited IRA. Irs free tax filing For more information about inherited IRAs, see Inherited IRAs , earlier. Irs free tax filing Reporting rollovers from employer plans. Irs free tax filing    Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. Irs free tax filing This amount should be shown in box 1 of Form 1099-R. Irs free tax filing From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. Irs free tax filing From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Irs free tax filing Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. Irs free tax filing Also, enter "Rollover" next to Form 1040, line 16b, or Form 1040A, line 12b. Irs free tax filing Transfers Incident to Divorce If an interest in a traditional IRA is transferred from your spouse or former spouse to you by a divorce or separate maintenance decree or a written document related to such a decree, the interest in the IRA, starting from the date of the transfer, is treated as your IRA. Irs free tax filing The transfer is tax free. Irs free tax filing For detailed information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Irs free tax filing Converting From Any Traditional IRA to a Roth IRA Allowable conversions. Irs free tax filing   You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. Irs free tax filing The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. Irs free tax filing If properly (and timely) rolled over, the 10% additional tax on early distributions will not apply. Irs free tax filing However, a part or all of the conversion contribution from your traditional IRA is included in your gross income. Irs free tax filing Required distributions. Irs free tax filing   You cannot convert amounts that must be distributed from your traditional IRA for a particular year (including the calendar year in which you reach age 70½) under the required distribution rules (discussed later). Irs free tax filing Income. Irs free tax filing   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 free tax filing 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 free tax filing   You do not include in gross income any part of a distribution from a traditional IRA that is a return of your basis, as discussed later. Irs free tax filing   You must file Form 8606 to report 2013 conversions from traditional, SEP, or SIMPLE IRAs to a Roth IRA in 2013 (unless you recharacterized the entire amount) and to figure the amount to include in income. Irs free tax filing   If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Irs free tax filing See chapter 4. Irs free tax filing Recharacterizations You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. Irs free tax filing This is called recharacterizing the contribution. Irs free tax filing See Can You Move Retirement Plan Assets? in chapter 1 of Publication 590 for more detailed information. Irs free tax filing How to recharacterize a contribution. Irs free tax filing   To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. Irs free tax filing If the transfer is made by the due date (including extensions) for your tax return for the year during which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. Irs free tax filing If you recharacterize your contribution, you must do all three of the following. Irs free tax filing Include in the transfer any net income allocable to the contribution. Irs free tax filing If there was a loss, the net income you must transfer may be a negative amount. Irs free tax filing Report the recharacterization on your tax return for the year during which the contribution was made. Irs free tax filing Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA. Irs free tax filing No deduction allowed. Irs free tax filing   You cannot deduct the contribution to the first IRA. Irs free tax filing Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. Irs free tax filing Required notifications. Irs free tax filing   To recharacterize a contribution, you must notify both the trustee of the first IRA (the one to which the contribution was actually made) and the trustee of the second IRA (the one to which the contribution is being moved) that you have elected to treat the contribution as having been made to the second IRA rather than the first. Irs free tax filing You must make the notifications by the date of the transfer. Irs free tax filing Only one notification is required if both IRAs are maintained by the same trustee. Irs free tax filing The notification(s) must include all of the following information. Irs free tax filing The type and amount of the contribution to the first IRA that is to be recharacterized. Irs free tax filing The date on which the contribution was made to the first IRA and the year for which it was made. Irs free tax filing A direction to the trustee of the first IRA to transfer in a trustee-to-trustee transfer the amount of the contribution and any net income (or loss) allocable to the contribution to the trustee of the second IRA. Irs free tax filing The name of the trustee of the first IRA and the name of the trustee of the second IRA. Irs free tax filing Any additional information needed to make the transfer. Irs free tax filing Reporting a recharacterization. Irs free tax filing   If you elect to recharacterize a contribution to one IRA as a contribution to another IRA, you must report the recharacterization on your tax return as directed by Form 8606 and its instructions. Irs free tax filing You must treat the contribution as having been made to the second IRA. Irs free tax filing When Can You Withdraw or Use IRA Assets? There are rules limiting use of your IRA assets and distributions from it. Irs free tax filing Violation of the rules generally results in additional taxes in the year of violation. Irs free tax filing See What Acts Result in Penalties or Additional Taxes , later. Irs free tax filing Contributions returned before the due date of return. Irs free tax filing   If you made IRA contributions in 2013, you can withdraw them tax free by the due date of your return. Irs free tax filing If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. Irs free tax filing You can do this if, for each contribution you withdraw, both of the following conditions apply. Irs free tax filing You did not take a deduction for the contribution. Irs free tax filing You withdraw any interest or other income earned on the contribution. Irs free tax filing You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Irs free tax filing If there was a loss, the net income earned on the contribution may be a negative amount. Irs free tax filing Note. Irs free tax filing To calculate the amount you must withdraw, see Worksheet 1-4 under When Can You Withdraw or Use Assets? in chapter 1 of Publication 590. Irs free tax filing Earnings includible in income. Irs free tax filing   You must include in income any earnings on the contributions you withdraw. Irs free tax filing Include the earnings in income for the year in which you made the contributions, not in the year in which you withdraw them. Irs free tax filing Generally, except for any part of a withdrawal that is a return of nondeductible contributions (basis), any withdrawal of your contributions after the due date (or extended due date) of your return will be treated as a taxable distribution. Irs free tax filing Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes?, later. Irs free tax filing    Early distributions tax. Irs free tax filing   The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. Irs free tax filing However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax. Irs free tax filing When Must You Withdraw IRA Assets? (Required Minimum Distributions) You cannot keep funds in a traditional IRA indefinitely. Irs free tax filing Eventually they must be distributed. Irs free tax filing If there are no distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required. Irs free tax filing See Excess Accumulations (Insufficient Distributions) , later. Irs free tax filing The requirements for distributing IRA funds differ depending on whether you are the IRA owner or the beneficiary of a decedent's IRA. Irs free tax filing Required minimum distribution. Irs free tax filing   The amount that must be distributed each year is referred to as the required minimum distribution. Irs free tax filing Required distributions not eligible for rollover. Irs free tax filing   Amounts that must be distributed (required minimum distributions) during a particular year are not eligible for rollover treatment. Irs free tax filing IRA owners. Irs free tax filing   If you are the owner of a traditional IRA, you must generally start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Irs free tax filing April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date. Irs free tax filing Distributions by the required beginning date. Irs free tax filing   You must receive at least a minimum amount for each year starting with the year you reach age 70½ (your 70½ year). Irs free tax filing If you do not (or did not) receive that minimum amount in your 70½ year, then you must receive distributions for your 70½ year by April 1 of the next year. Irs free tax filing   If an IRA owner dies after reaching age 70½, but before April 1 of the next year, no minimum distribution is required because death occurred before the required beginning date. Irs free tax filing Even if you begin receiving distributions before you attain age 70½, you must begin calculating and receiving required minimum distributions by your required beginning date. Irs free tax filing Distributions after the required beginning date. Irs free tax filing   The required minimum distribution for any year after the year you turn 70½ must be made by December 31 of that later year. Irs free tax filing    Beneficiaries. Irs free tax filing   If you are the beneficiary of a decedent's traditional IRA, the requirements for distributions from that IRA generally depend on whether the IRA owner died before or after the required beginning date for distributions. Irs free tax filing More information. Irs free tax filing   For more information, including how to figure your minimum required distribution each year and how to figure your required distribution if you are a beneficiary of a decedent's IRA, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Irs free tax filing Are Distributions Taxable? In general, distributions from a traditional IRA are taxable in the year you receive them. Irs free tax filing Exceptions. Irs free tax filing   Exceptions to distributions from traditional IRAs being taxable in the year you receive them are: Rollovers, Qualified charitable distributions (QCD), discussed later, Tax-free withdrawals of contributions, discussed earlier, and The return of nondeductible contributions, discussed later under Distributions Fully or Partly Taxable . Irs free tax filing    Although a conversion of a traditional IRA is considered a rollover for Roth IRA purposes, it is not an exception to the rule that distributions from a traditional IRA are taxable in the year you receive them. Irs free tax filing Conversion distributions are includible in your gross income subject to this rule and the special rules for conversions explained in Converting From Any Traditional IRA Into a Roth IRA under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Irs free tax filing Qualified charitable distributions (QCD). Irs free tax filing   A QCD is generally a nontaxable distribution made directly by the trustee of your IRA to an organization eligible to receive tax-deductible contributions. Irs free tax filing Special rules apply if you made a qualified charitable distribution in January 2013 that you elected to treat as made in 2012. Irs free tax filing See Qualified Charitable Distributions in Publication 590 for more information. Irs free tax filing Ordinary income. Irs free tax filing   Distributions from traditional IRAs that you include in income are taxed as ordinary income. Irs free tax filing No special treatment. Irs free tax filing   In figuring your tax, you cannot use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement plans. Irs free tax filing Distributions Fully or Partly Taxable Distributions from your traditional IRA may be fully or partly taxable, depending on whether your IRA includes any nondeductible contributions. Irs free tax filing Fully taxable. Irs free tax filing   If only deductible contributions were made to your traditional IRA (or IRAs, if you have more than one), you have no basis in your IRA. Irs free tax filing Because you have no basis in your IRA, any distributions are fully taxable when received. Irs free tax filing See Reporting taxable distributions on your return , later. Irs free tax filing Partly taxable. Irs free tax filing    If you made nondeductible contributions or rolled over any after-tax amounts to any of your traditional IRAs, you have a cost basis (investment in the contract) equal to the amount of those contributions. Irs free tax filing These nondeductible contributions are not taxed when they are distributed to you. Irs free tax filing They are a return of your investment in your IRA. Irs free tax filing   Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. Irs free tax filing If nondeductible contributions have been made or after-tax amounts have been rolled over to your IRA, distributions consist partly of nondeductible contributions (basis) and partly of deductible contributions, earnings, and gains (if there are any). Irs free tax filing Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable. Irs free tax filing Form 8606. Irs free tax filing   You must complete Form 8606 and attach it to your return if you receive a distribution from a traditional IRA and have ever made nondeductible contributions or rolled over after-tax amounts to any of your traditional IRAs. Irs free tax filing Using the form, you will figure the nontaxable distributions for 2013 and your total IRA basis for 2013 and earlier years. Irs free tax filing Note. Irs free tax filing If you are required to file Form 8606, but you are not required to file an income tax return, you still must file Form 8606. Irs free tax filing Send it to the IRS at the time and place you would otherwise file an income tax return. Irs free tax filing Distributions reported on Form 1099-R. Irs free tax filing   If you receive a distribution from your traditional IRA, you will receive Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Irs free tax filing , or a similar statement. Irs free tax filing IRA distributions are shown in boxes 1 and 2a of Form 1099-R. Irs free tax filing A number or letter code in box 7 tells you what type of distribution you received from your IRA. Irs free tax filing Withholding. Irs free tax filing   Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld. Irs free tax filing See chapter 4. Irs free tax filing IRA distributions delivered outside the United States. Irs free tax filing   In general, if you are a U. Irs free tax filing S. Irs free tax filing citizen or resident alien and your home address is outside the United States or its possessions, you cannot choose exemption from withholding on distributions from your traditional IRA. Irs free tax filing Reporting taxable distributions on your return. Irs free tax filing    Report fully taxable distributions, including early distributions on Form 1040, line 15b, or Form 1040A, line 11b (no entry is required on Form 1040, line 15a, or Form 1040A, line 11a). Irs free tax filing If only part of the distribution is taxable, enter the total amount on Form 1040, line 15a, or Form 1040A, line 11a, and the taxable part on Form 1040, line 15b, or Form 1040A, line 11b. Irs free tax filing You cannot report distributions on Form 1040EZ. Irs free tax filing What Acts Result in Penalties or Additional Taxes? The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. Irs free tax filing There are additions to the regular tax for using your IRA funds in prohibited transactions. Irs free tax filing There are also additional taxes for the following activities. Irs free tax filing Investing in collectibles. Irs free tax filing Making excess contributions. Irs free tax filing Taking early distributions. Irs free tax filing Allowing excess amounts to accumulate (failing to take required distributions). Irs free tax filing There are penalties for overstating the amount of nondeductible contributions and for failure to file a Form 8606, if required. Irs free tax filing Prohibited Transactions Generally, a prohibited transaction is any improper use of your traditional IRA by you, your beneficiary, or any disqualified person. Irs free tax filing Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendent, and any spouse of a lineal descendent). Irs free tax filing The following are examples of prohibited transactions with a traditional IRA. Irs free tax filing Borrowing money from it. Irs free tax filing Selling property to it. Irs free tax filing Receiving unreasonable compensation for managing it. Irs free tax filing Using it as security for a loan. Irs free tax filing Buying property for personal use (present or future) with IRA funds. Irs free tax filing Effect on an IRA account. Irs free tax filing   Generally, if you or your beneficiary engages in a prohibited transaction in connection with your traditional IRA account at any time during the year, the account stops being an IRA as of the first day of that year. Irs free tax filing Effect on you or your beneficiary. Irs free tax filing   If your account stops being an IRA because you or your beneficiary engaged in a prohibited transaction, the account is treated as distributing all its assets to you at their fair market values on the first day of the year. Irs free tax filing If the total of those values is more than your basis in the IRA, you will have a taxable gain that is includible in your income. Irs free tax filing For information on figuring your gain and reporting it in income, see Are Distributions Taxable , earlier. Irs free tax filing The distribution may be subject to additional taxes or penalties. Irs free tax filing Taxes on prohibited transactions. Irs free tax filing   If someone other than the owner or beneficiary of a traditional IRA engages in a prohibited transaction, that person may be liable for certain taxes. Irs free tax filing In general, there is a 15% tax on the amount of the prohibited transaction and a 100% additional tax if the transaction is not corrected. Irs free tax filing More information. Irs free tax filing   For more information on prohibited transactions, see What Acts Result in Penalties or Additional Taxes? in chapter 1 of Publication 590. Irs free tax filing Investment in Collectibles If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. Irs free tax filing You may have to pay the 10% additional tax on early distributions, discussed later. Irs free tax filing Collectibles. Irs free tax filing   These include: Artworks, Rugs, Antiques, Metals, Gems, Stamps, Coins, Alcoholic beverages, and Certain other tangible personal property. Irs free tax filing Exception. Irs free tax filing    Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U. Irs free tax filing S. Irs free tax filing gold coins, or one-ounce silver coins minted by the Treasury Department. Irs free tax filing It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. Irs free tax filing Excess Contributions Generally, an excess contribution is the amount contributed to your traditional IRA(s) for the year that is more than the smaller of: The maximum deductible amount for the year. Irs free tax filing For 2013, this is $5,500 ($6,500 if you are 50 or older), or Your taxable compensation for the year. Irs free tax filing Tax on excess contributions. Irs free tax filing   In general, if the excess contributions for a year are not withdrawn by the date your return for the year is due (including extensions), you are subject to a 6% tax. Irs free tax filing You must pay the 6% tax each year on excess amounts that remain in your traditional IRA at the end of your tax year. Irs free tax filing The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. Irs free tax filing Excess contributions withdrawn by due date of return. Irs free tax filing   You will not have to pay the 6% tax if you withdraw an excess contribution made during a tax year and you also withdraw interest or other income earned on the excess contribution. Irs free tax filing You must complete your withdrawal by the date your tax return for that year is due, including extensions. Irs free tax filing How to treat withdrawn contributions. Irs free tax filing   Do not include in your gross income an excess contribution that you withdraw from your traditional IRA before your tax return is due if both the following conditions are met. Irs free tax filing No deduction was allowed for the excess contribution. Irs free tax filing You withdraw the interest or other income earned on the excess contribution. Irs free tax filing You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Irs free tax filing If there was a loss, the net income you must withdraw may be a negative amount. Irs free tax filing How to treat withdrawn interest or other income. Irs free tax filing   You must include in your gross income the interest or other income that was earned on the excess contribution. Irs free tax filing Report it on your return for the year in which the excess contribution was made. Irs free tax filing Your withdrawal of interest or other income may be subject to an additional 10% tax on early distributions, discus