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Turbotax 2006

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Turbotax 2006

Turbotax 2006 Publication 509 - Main Content Table of Contents General Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter Fiscal-Year Taxpayers Employer's Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter Excise Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter How To Get Tax Help General Tax Calendar This tax calendar has the due dates for 2014 that most taxpayers will need. Turbotax 2006 Employers and persons who pay excise taxes also should use the Employer's Tax Calendar and the Excise Tax Calendar . Turbotax 2006 Fiscal-year taxpayers. Turbotax 2006   If you file your income tax return for a fiscal year rather than the calendar year, you must change some of the dates in this calendar. Turbotax 2006 These changes are described under Fiscal-Year Taxpayers at the end of this calendar. Turbotax 2006 First Quarter The first quarter of a calendar year is made up of January, February, and March. Turbotax 2006 Second Quarter The second quarter of a calendar year is made up of April, May, and June. Turbotax 2006 Third Quarter The third quarter of a calendar year is made up of July, August, and September. Turbotax 2006 Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. Turbotax 2006 Fiscal-Year Taxpayers If you use a fiscal year (rather than the calendar year) as your tax year, you should change some of the dates in this calendar. Turbotax 2006 Use the following general guidelines to make these changes. Turbotax 2006 The 3 months that make up each quarter of a fiscal year may be different from those of each calendar quarter, depending on when the fiscal year begins. Turbotax 2006 Also see Saturday, Sunday, or legal holiday, earlier. Turbotax 2006 Individuals Form 1040. Turbotax 2006    This form is due on the 15th day of the 4th month after the end of your tax year. Turbotax 2006 Form 4868 is used to request an extension of time to file Form 1040. Turbotax 2006 Estimated tax payments (Form 1040-ES). Turbotax 2006   Payments are due on the 15th day of the 4th, 6th, and 9th months of your tax year and on the 15th day of the 1st month after your tax year ends. Turbotax 2006 Partnerships Form 1065. Turbotax 2006   This form is due on the 15th day of the 4th month after the end of the partnership's tax year. Turbotax 2006 Provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1. Turbotax 2006 Form 1065-B (electing large partnerships). Turbotax 2006   This form is due on the 15th day of the 4th month after the end of the partnership's tax year. Turbotax 2006 Provide each partner with a copy of Schedule K-1 (Form 1065-B) or a substitute Schedule K-1 by the first March 15 following the close of the partnership's tax year. Turbotax 2006 Corporations and S Corporations Form 1120 and Form 1120S (or Form 7004). Turbotax 2006   These forms are due on the 15th day of the 3rd month after the end of the corporation's tax year. Turbotax 2006 S corporations must provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1. Turbotax 2006 Form 7004 is used to request an extension of time to file Form 1120 or Form 1120S. Turbotax 2006 Estimated tax payments. Turbotax 2006   Payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the corporation's tax year. Turbotax 2006 Form 2553. Turbotax 2006   This form is used to choose S corporation treatment. Turbotax 2006 It is due no more than two months and 15 days after the beginning of the tax year the election is to take effect or at any time during the preceding tax year. Turbotax 2006 Employer's Tax Calendar This tax calendar covers various due dates of interest to employers. Turbotax 2006 Principally, it covers the following federal taxes. Turbotax 2006 Income tax you withhold from your employees' wages or from nonpayroll amounts you pay out. Turbotax 2006 Social security and Medicare taxes (FICA taxes) you withhold from your employees' wages and the social security and Medicare taxes you must pay as an employer. Turbotax 2006 Federal unemployment (FUTA) tax you must pay as an employer. Turbotax 2006 The calendar lists due dates for filing returns and for making deposits of these three taxes throughout the year. Turbotax 2006 Use this calendar with Publication 15 (Circular E), which gives the deposit rules. Turbotax 2006 Forms you may need. Turbotax 2006   The following is a list and description of the primary employment tax forms you may need. Turbotax 2006 Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Turbotax 2006 This form is due the last day of the first calendar month after the calendar year ends. Turbotax 2006 Use it to report the FUTA tax on wages you paid. Turbotax 2006 Form 941, Employer's QUARTERLY Federal Tax Return. Turbotax 2006 This form is due the last day of the first calendar month after the calendar quarter ends. Turbotax 2006 Use it to report social security and Medicare taxes and withheld income taxes on wages if your employees are not farm workers or household employees. Turbotax 2006 Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. Turbotax 2006 This form is due the last day of the first calendar month after the calendar year ends. Turbotax 2006 Use it to report social security and Medicare taxes and withheld income taxes on wages if your employees are farm workers. Turbotax 2006 Form 944, Employer's ANNUAL Federal Tax Return. Turbotax 2006 This form is due the last day of the first calendar month after the calendar year ends. Turbotax 2006 Certain small employers use it instead of Form 941 to report social security and Medicare taxes and withheld income tax. Turbotax 2006 Form 945, Annual Return of Withheld Federal Income Tax. Turbotax 2006 This form is due the last day of the first calendar month after the calendar year ends. Turbotax 2006 Use it to report income tax withheld on all nonpayroll items. Turbotax 2006 Nonpayroll items include the following. Turbotax 2006 Backup withholding. Turbotax 2006 Withholding on pensions, annuities, IRAs, and gambling winnings. Turbotax 2006 Payments of Indian gaming profits to tribal members. Turbotax 2006 Fiscal-year taxpayers. Turbotax 2006   The dates in this calendar apply whether you use a fiscal year or the calendar year as your tax year. Turbotax 2006 The only exception is the date for filing Forms 5500, Annual Return/Report of Employee Benefit Plan, and 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan. Turbotax 2006 These employee benefit plan forms are due by the last day of the seventh month after the plan year ends. Turbotax 2006 See July 31 , later. Turbotax 2006 Extended due dates. Turbotax 2006   If you timely deposit in full the tax you are required to report on Form 940, 941, 943, 944, or 945, you have an additional 10 calendar days to file that form. Turbotax 2006 If you are subject to the semiweekly deposit rule, use Table 2 near the end of this publication for your deposit due dates. Turbotax 2006 However, if you accumulate $100,000 or more of taxes on any day during a deposit period, you must deposit the tax by the next business day instead of the date shown in Table 2. Turbotax 2006 First Quarter The first quarter of a calendar year is made up of January, February, and March. Turbotax 2006 Second Quarter The second quarter of a calendar year is made up of April, May, and June. Turbotax 2006 Third Quarter The third quarter of a calendar year is made up of July, August, and September. Turbotax 2006 Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. Turbotax 2006 Excise Tax Calendar This tax calendar gives the due dates for filing returns and making deposits of excise taxes. Turbotax 2006 Use this calendar with Publication 510. Turbotax 2006 Also see the instructions for Forms 11-C, 720, 730, and 2290 for more information. Turbotax 2006 References to Form 2290 also apply to Form 2290(SP). Turbotax 2006 Forms you may need. Turbotax 2006   The following is a list and description of the excise tax forms you may need. Turbotax 2006 Form 11-C, Occupational Tax and Registration Return for Wagering. Turbotax 2006 Use this form to register any wagering activity and to pay an occupational tax on wagering. Turbotax 2006 File Form 11-C if you are in the business of accepting wagers, including conducting a wagering pool or lottery, or are an agent of someone who accepts wagers. Turbotax 2006 You must file the form before you begin accepting wagers. Turbotax 2006 After that, file the form by July 1 of each year. Turbotax 2006 Also, see Form 730, later. Turbotax 2006 Form 720, Quarterly Federal Excise Tax Return. Turbotax 2006 File this form by the last day of the month following the calendar quarter. Turbotax 2006 Use this form to report a wide variety of excise taxes, including: Communications and air transportation taxes, Fuel taxes, Retail tax, Ship passenger tax, and Manufacturers taxes. Turbotax 2006 Form 730, Monthly Tax Return for Wagers. Turbotax 2006 Use this form to pay an excise tax on wagers you accept. Turbotax 2006 File this form for each month by the last day of the following month. Turbotax 2006 Also, see Form 11-C, earlier. Turbotax 2006 Form 2290, Heavy Highway Vehicle Use Tax Return. Turbotax 2006 Use this form to pay the federal use tax on heavy highway vehicles registered in your name. Turbotax 2006 File this form by the last day of the month following the month of the vehicle's first taxable use in the tax period. Turbotax 2006 The tax period begins on July 1 and ends the following June 30. Turbotax 2006 You must pay the full year's tax on all vehicles you have in use during the month of July. Turbotax 2006 You must also pay a partial-year tax on taxable vehicles that you put into use in a month after July. Turbotax 2006 For more information, see the Instructions for Form 2290. Turbotax 2006 Fiscal-year taxpayers. Turbotax 2006   The dates in this calendar apply whether you use a fiscal year or the calendar year as your tax year. Turbotax 2006 Adjustments for Saturday, Sunday, or legal holidays. Turbotax 2006   Generally, if a due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next day that is not a Saturday, Sunday, or legal holiday. Turbotax 2006 For excise taxes, there are two exceptions to this rule. Turbotax 2006 For deposits of regular method taxes, if the due date is a Saturday, Sunday, or legal holiday, the due date is the immediately preceding day that is not a Saturday, Sunday, or legal holiday. Turbotax 2006 Under the special September deposit rules, if the due date falls on a Saturday, the deposit is due on the preceding Friday. Turbotax 2006 If the due date falls on a Sunday, the deposit is due on the following Monday. Turbotax 2006 For more information, see the Instructions for Form 720. Turbotax 2006 The Excise Tax Calendar has been adjusted for all of these provisions. Turbotax 2006 Regular method taxes. Turbotax 2006   These are taxes, other than alternative method taxes used for communication and air transportation taxes, reported on Form 720 for which deposits are required. Turbotax 2006 First Quarter The first quarter of a calendar year is made up of January, February, and March. Turbotax 2006 Second Quarter The second quarter of a calendar year is made up of April, May, and June. Turbotax 2006 Third Quarter The third quarter of a calendar year is made up of July, August, and September. Turbotax 2006 Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. Turbotax 2006 How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. Turbotax 2006 Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. Turbotax 2006 Free help with your tax return. Turbotax 2006   Free help in preparing your return is available nationwide from IRS-certified volunteers. Turbotax 2006 The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. Turbotax 2006 The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Turbotax 2006 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Turbotax 2006 Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Turbotax 2006 To find the nearest VITA or TCE site, visit IRS. Turbotax 2006 gov or call 1-800-906-9887. Turbotax 2006   As part of the TCE program, AARP offers the Tax-Aide counseling program. Turbotax 2006 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Turbotax 2006 aarp. Turbotax 2006 org/money/taxaide or call 1-888-227-7669. Turbotax 2006   For more information on these programs, go to IRS. Turbotax 2006 gov and enter “VITA” in the search box. Turbotax 2006 Internet. Turbotax 2006 IRS. Turbotax 2006 gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. Turbotax 2006 Apply for an Employer Identification Number (EIN). Turbotax 2006 Go to IRS. Turbotax 2006 gov and enter Apply for an EIN in the search box. Turbotax 2006 Request an Electronic Filing PIN by going to IRS. Turbotax 2006 gov and entering Electronic Filing PIN in the search box. Turbotax 2006 Check the status of your 2013 refund with Where's My Refund? Go to IRS. Turbotax 2006 gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. Turbotax 2006 If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Turbotax 2006 Checking the status of your amended return. Turbotax 2006 Go to IRS. Turbotax 2006 gov and enter Where's My Amended Return in the search box. Turbotax 2006 Download forms, instructions, and publications, including some accessible versions. Turbotax 2006 Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. Turbotax 2006 gov or IRS2Go. Turbotax 2006 Tax return and tax account transcripts are generally available for the current year and past three years. Turbotax 2006 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Turbotax 2006 gov. Turbotax 2006 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Turbotax 2006 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Turbotax 2006 gov. Turbotax 2006 Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. Turbotax 2006 gov or IRS2Go. Turbotax 2006 Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. Turbotax 2006 An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. Turbotax 2006 Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. Turbotax 2006 If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. Turbotax 2006 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Turbotax 2006 Locate the nearest volunteer help site with the VITA Locator Tool on IRS. Turbotax 2006 gov. Turbotax 2006 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Turbotax 2006 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Turbotax 2006 Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. Turbotax 2006 AARP offers the Tax-Aide counseling program as part of the TCE program. Turbotax 2006 Visit AARP's website to find the nearest Tax-Aide location. Turbotax 2006 Research your tax questions. Turbotax 2006 Search publications and instructions by topic or keyword. Turbotax 2006 Read the Internal Revenue Code, regulations, or other official guidance. Turbotax 2006 Read Internal Revenue Bulletins. Turbotax 2006 Sign up to receive local and national tax news by email. Turbotax 2006 Phone. Turbotax 2006 You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Turbotax 2006 Download the free IRS2Go mobile app from the iTunes app store or from Google Play. Turbotax 2006 Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Turbotax 2006 Call to locate the nearest volunteer help site, 1-800-906-9887. Turbotax 2006 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Turbotax 2006 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Turbotax 2006 Most VITA and TCE sites offer free electronic filing. Turbotax 2006 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Turbotax 2006 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Turbotax 2006 Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. Turbotax 2006 The automated Where's My Refund? information is available 24 hours a day, 7 days a week. Turbotax 2006 If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Turbotax 2006 Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Turbotax 2006 Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Turbotax 2006 Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Turbotax 2006 Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Turbotax 2006 Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). Turbotax 2006 You should receive your order within 10 business days. Turbotax 2006 Call to order transcripts of your tax returns or tax account, 1-800-908-9946. Turbotax 2006 Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. Turbotax 2006 Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. Turbotax 2006 Call to ask tax questions, 1-800-829-1040. Turbotax 2006 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Turbotax 2006 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Turbotax 2006 These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. Turbotax 2006 gsa. Turbotax 2006 gov/fedrelay. Turbotax 2006 Walk-in. Turbotax 2006 You can find a selection of forms, publications and services — in-person, face-to-face. Turbotax 2006 Products. Turbotax 2006 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Turbotax 2006 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Turbotax 2006 Services. Turbotax 2006 You can walk in to your local TAC most business days for personal, face-to-face tax help. Turbotax 2006 An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Turbotax 2006 If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Turbotax 2006 No appointment is necessary—just walk in. Turbotax 2006 Before visiting, check www. Turbotax 2006 irs. Turbotax 2006 gov/localcontacts for hours of operation and services provided. Turbotax 2006 Mail. Turbotax 2006 You can send your order for forms, instructions, and publications to the address below. Turbotax 2006 You should receive a response within 10 business days after your request is received. Turbotax 2006  Internal Revenue Service 1201 N. Turbotax 2006 Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. Turbotax 2006   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Turbotax 2006 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Turbotax 2006 What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. Turbotax 2006 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Turbotax 2006 You face (or your business is facing) an immediate threat of adverse action. Turbotax 2006 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Turbotax 2006   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Turbotax 2006 Here's why we can help: TAS is an independent organization within the IRS. Turbotax 2006 Our advocates know how to work with the IRS. Turbotax 2006 Our services are free and tailored to meet your needs. Turbotax 2006 We have offices in every state, the District of Columbia, and Puerto Rico. Turbotax 2006 How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Turbotax 2006 irs. Turbotax 2006 gov/advocate, or call us toll-free at 1-877-777-4778. Turbotax 2006 How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Turbotax 2006 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Turbotax 2006 irs. Turbotax 2006 gov/sams. Turbotax 2006 Low Income Taxpayer Clinics. Turbotax 2006   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Turbotax 2006 Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Turbotax 2006 Visit www. Turbotax 2006 TaxpayerAdvocate. Turbotax 2006 irs. Turbotax 2006 gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. Turbotax 2006 gnewbus01 Prev  Up  Next   Home   More Online Publications
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Understanding Your CP124 Notice

We made changes to your excise tax return because we believe there was a miscalculation. As a result of these changes, there is a balance due of less than $1.


What you need to do

  • Read your notice carefully — it explains the changes to your tax account. Compare the figures on the notice with your excise tax return.
  • If you disagree with our change(s), contact us within 30 days of the date of your notice.
  • If you agree with our change(s), correct the copy of your excise tax return that you kept for your records.
  • You don’t have to pay if you owe less than $1.

You may want to

  • Download copies of the following materials (if they weren’t included with your notice).

 


Answers to Common Questions

Q. How can I find out what caused my tax return to change?

A. Please contact us at the toll free number listed on the top right corner of your notice for specific information about your tax return.

Q. What should I do if I disagree with the changes you made?

A. If you disagree, contact us at the toll free number listed on the top right corner of your notice or respond in writing within 30 days of the date of the notice. If your response provides us with additional information that justifies a reversal of the change, we’ll reverse the change we made to your account. If you agree with the change, please correct your records and no further action is required.

 


Tips for next year

Consider filing your excise taxes electronically. Filing online can help you to avoid mistakes and to find credits and deductions for which you may qualify. Learn more about e-file.

Page Last Reviewed or Updated: 24-Jan-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Turbotax 2006

Turbotax 2006 1. Turbotax 2006   Traditional IRAs Table of Contents What's New for 2013 What's New for 2014 Introduction Who Can Open a Traditional IRA?What Is Compensation? When Can a Traditional IRA Be Opened? How Can a Traditional IRA Be Opened?Individual Retirement Account Individual Retirement Annuity Individual Retirement Bonds Simplified Employee Pension (SEP) Employer and Employee Association Trust Accounts Required Disclosures How Much Can Be Contributed?Limit. Turbotax 2006 When repayment contributions can be made. Turbotax 2006 No deduction. Turbotax 2006 Reserve component. Turbotax 2006 Figuring your IRA deduction. Turbotax 2006 Reporting the repayment. Turbotax 2006 Example. Turbotax 2006 General Limit Kay Bailey Hutchison Spousal IRA Limit Filing Status Less Than Maximum Contributions More Than Maximum Contributions When Can Contributions Be Made? How Much Can You Deduct?Kay Bailey Hutchison Spousal IRA. Turbotax 2006 Are You Covered by an Employer Plan? Limit if Covered by Employer Plan Reporting Deductible Contributions Nondeductible Contributions Examples — Worksheet for Reduced IRA Deduction for 2013 What if You Inherit an IRA?Treating it as your own. Turbotax 2006 Can You Move Retirement Plan Assets?Transfers to Roth IRAs from other retirement plans. Turbotax 2006 Trustee-to-Trustee Transfer Rollovers Transfers Incident To Divorce Converting From Any Traditional IRA Into a Roth IRA Recharacterizations When Can You Withdraw or Use Assets?Contributions Returned Before Due Date of Return When Must You Withdraw Assets? (Required Minimum Distributions)IRA Owners IRA Beneficiaries Which Table Do You Use To Determine Your Required Minimum Distribution? What Age(s) Do You Use With the Table(s)? Miscellaneous Rules for Required Minimum Distributions Are Distributions Taxable?January 2013 QCDs treated as made in 2012. Turbotax 2006 2013 Reporting. Turbotax 2006 Additional reporting requirements if you made the election to treat a January 2013 QCD as made in 2012. Turbotax 2006 One-time transfer. Turbotax 2006 Testing period rules apply. Turbotax 2006 More information. Turbotax 2006 Distributions Fully or Partly Taxable Figuring the Nontaxable and Taxable Amounts Recognizing Losses on Traditional IRA Investments Other Special IRA Distribution Situations Reporting and Withholding Requirements for Taxable Amounts What Acts Result in Penalties or Additional Taxes?Prohibited Transactions Investment in Collectibles Excess Contributions Early Distributions Excess Accumulations (Insufficient Distributions) Reporting Additional Taxes What's New for 2013 Traditional IRA contribution and deduction limit. Turbotax 2006  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. Turbotax 2006 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. Turbotax 2006 For more information, see How Much Can Be Contributed? in this chapter. Turbotax 2006 Modified AGI limit for traditional IRA contributions increased. Turbotax 2006  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. Turbotax 2006 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. Turbotax 2006 If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Turbotax 2006 See How Much Can You Deduct? in this chapter. Turbotax 2006 Net Investment Income Tax. Turbotax 2006  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). Turbotax 2006 However, these distributions are taken into account when determining the modified adjusted gross income threshold. Turbotax 2006 Distributions from a nonqualified retirement plan are included in net investment income. Turbotax 2006 See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Turbotax 2006 What's New for 2014 Modified AGI limit for traditional IRA contributions increased. Turbotax 2006  For 2014, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $96,000 but less than $116,000 for a married couple filing a joint return or a qualifying widow(er), More than $60,000 but less than $70,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Turbotax 2006 If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Turbotax 2006 If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. Turbotax 2006 Introduction This chapter discusses the original IRA. Turbotax 2006 In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Turbotax 2006 ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Turbotax 2006 The following are two advantages of a traditional IRA: You may be able to deduct some or all of your contributions to it, depending on your circumstances. Turbotax 2006 Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Turbotax 2006 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. Turbotax 2006 You can have a traditional IRA whether or not you are covered by any other retirement plan. Turbotax 2006 However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan. Turbotax 2006 See How Much Can You Deduct , later. Turbotax 2006 Both spouses have compensation. Turbotax 2006   If both you and your spouse have compensation and are under age 70½, each of you can open an IRA. Turbotax 2006 You cannot both participate in the same IRA. Turbotax 2006 If you file a joint return, only one of you needs to have compensation. Turbotax 2006 What Is Compensation? Generally, compensation is what you earn from working. Turbotax 2006 For a summary of what compensation does and does not include, see Table 1-1. Turbotax 2006 Compensation includes all of the items discussed next (even if you have more than one type). Turbotax 2006 Wages, salaries, etc. Turbotax 2006   Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. Turbotax 2006 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). Turbotax 2006 Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2. Turbotax 2006 Commissions. Turbotax 2006   An amount you receive that is a percentage of profits or sales price is compensation. Turbotax 2006 Self-employment income. Turbotax 2006   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deduction allowed for the deductible part of your self-employment taxes. Turbotax 2006   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Turbotax 2006 Self-employment loss. Turbotax 2006   If you have a net loss from self-employment, do not subtract the loss from your salaries or wages when figuring your total compensation. Turbotax 2006 Alimony and separate maintenance. Turbotax 2006   For IRA purposes, compensation includes any taxable alimony and separate maintenance payments you receive under a decree of divorce or separate maintenance. Turbotax 2006 Nontaxable combat pay. Turbotax 2006   If you were a member of the U. Turbotax 2006 S. Turbotax 2006 Armed Forces, compensation includes any nontaxable combat pay you received. Turbotax 2006 This amount should be reported in box 12 of your 2013 Form W-2 with code Q. Turbotax 2006 Table 1-1. Turbotax 2006 Compensation for Purposes of an IRA Includes . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 Does not include . Turbotax 2006 . Turbotax 2006 . Turbotax 2006   earnings and profits from property. Turbotax 2006 wages, salaries, etc. Turbotax 2006     interest and dividend income. Turbotax 2006 commissions. Turbotax 2006     pension or annuity income. Turbotax 2006 self-employment income. Turbotax 2006     deferred compensation. Turbotax 2006 alimony and separate maintenance. Turbotax 2006     income from certain  partnerships. Turbotax 2006 nontaxable combat pay. Turbotax 2006     any amounts you exclude from income. Turbotax 2006     What Is Not Compensation? Compensation does not include any of the following items. Turbotax 2006 Earnings and profits from property, such as rental income, interest income, and dividend income. Turbotax 2006 Pension or annuity income. Turbotax 2006 Deferred compensation received (compensation payments postponed from a past year). Turbotax 2006 Income from a partnership for which you do not provide services that are a material income-producing factor. Turbotax 2006 Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Turbotax 2006 Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Turbotax 2006 When Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Turbotax 2006 However, the time for making contributions for any year is limited. Turbotax 2006 See When Can Contributions Be Made , later. Turbotax 2006 How Can a Traditional IRA Be Opened? You can open different kinds of IRAs with a variety of organizations. Turbotax 2006 You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Turbotax 2006 You can also open an IRA through your stockbroker. Turbotax 2006 Any IRA must meet Internal Revenue Code requirements. Turbotax 2006 The requirements for the various arrangements are discussed below. Turbotax 2006 Kinds of traditional IRAs. Turbotax 2006   Your traditional IRA can be an individual retirement account or annuity. Turbotax 2006 It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Turbotax 2006 Individual Retirement Account An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of you or your beneficiaries. Turbotax 2006 The account is created by a written document. Turbotax 2006 The document must show that the account meets all of the following requirements. Turbotax 2006 The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian. Turbotax 2006 The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. Turbotax 2006 However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount. Turbotax 2006 Contributions, except for rollover contributions, must be in cash. Turbotax 2006 See Rollovers , later. Turbotax 2006 You must have a nonforfeitable right to the amount at all times. Turbotax 2006 Money in your account cannot be used to buy a life insurance policy. Turbotax 2006 Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund. Turbotax 2006 You must start receiving distributions by April 1 of the year following the year in which you reach age 70½. Turbotax 2006 See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Turbotax 2006 Individual Retirement Annuity You can open an individual retirement annuity by purchasing an annuity contract or an endowment contract from a life insurance company. Turbotax 2006 An individual retirement annuity must be issued in your name as the owner, and either you or your beneficiaries who survive you are the only ones who can receive the benefits or payments. Turbotax 2006 An individual retirement annuity must meet all the following requirements. Turbotax 2006 Your entire interest in the contract must be nonforfeitable. Turbotax 2006 The contract must provide that you cannot transfer any portion of it to any person other than the issuer. Turbotax 2006 There must be flexible premiums so that if your compensation changes, your payment can also change. Turbotax 2006 This provision applies to contracts issued after November 6, 1978. Turbotax 2006 The contract must provide that contributions cannot be more than the deductible amount for an IRA for the year, and that you must use any refunded premiums to pay for future premiums or to buy more benefits before the end of the calendar year after the year in which you receive the refund. Turbotax 2006 Distributions must begin by April 1 of the year following the year in which you reach age 70½. Turbotax 2006 See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Turbotax 2006 Individual Retirement Bonds The sale of individual retirement bonds issued by the federal government was suspended after April 30, 1982. Turbotax 2006 The bonds have the following features. Turbotax 2006 They stop earning interest when you reach age 70½. Turbotax 2006 If you die, interest will stop 5 years after your death, or on the date you would have reached age 70½, whichever is earlier. Turbotax 2006 You cannot transfer the bonds. Turbotax 2006 If you cash (redeem) the bonds before the year in which you reach age 59½, you may be subject to a 10% additional tax. Turbotax 2006 See Age 59½ Rule under Early Distributions, later. Turbotax 2006 You can roll over redemption proceeds into IRAs. Turbotax 2006 Simplified Employee Pension (SEP) A simplified employee pension (SEP) is a written arrangement that allows your employer to make deductible contributions to a traditional IRA (a SEP IRA) set up for you to receive such contributions. Turbotax 2006 Generally, distributions from SEP IRAs are subject to the withdrawal and tax rules that apply to traditional IRAs. Turbotax 2006 See Publication 560 for more information about SEPs. Turbotax 2006 Employer and Employee Association Trust Accounts Your employer or your labor union or other employee association can set up a trust to provide individual retirement accounts for employees or members. Turbotax 2006 The requirements for individual retirement accounts apply to these traditional IRAs. Turbotax 2006 Required Disclosures The trustee or issuer (sometimes called the sponsor) of your traditional IRA generally must give you a disclosure statement at least 7 days before you open your IRA. Turbotax 2006 However, the sponsor does not have to give you the statement until the date you open (or purchase, if earlier) your IRA, provided you are given at least 7 days from that date to revoke the IRA. Turbotax 2006 The disclosure statement must explain certain items in plain language. Turbotax 2006 For example, the statement should explain when and how you can revoke the IRA, and include the name, address, and telephone number of the person to receive the notice of cancellation. Turbotax 2006 This explanation must appear at the beginning of the disclosure statement. Turbotax 2006 If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. Turbotax 2006 The sponsor must report on the appropriate IRS forms both your contribution to the IRA (unless it was made by a trustee-to-trustee transfer) and the amount returned to you. Turbotax 2006 These requirements apply to all sponsors. Turbotax 2006 How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Turbotax 2006 These limits and rules are explained below. Turbotax 2006 Community property laws. Turbotax 2006   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. Turbotax 2006 This is the rule even in states with community property laws. Turbotax 2006 Brokers' commissions. Turbotax 2006   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Turbotax 2006 For information about whether you can deduct brokers' commissions, see Brokers' commissions , later, under How Much Can You Deduct. Turbotax 2006 Trustees' fees. Turbotax 2006   Trustees' administrative fees are not subject to the contribution limit. Turbotax 2006 For information about whether you can deduct trustees' fees, see Trustees' fees , later, under How Much Can You Deduct. Turbotax 2006 Qualified reservist repayments. Turbotax 2006   If you were a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined later under Early Distributions) you received. Turbotax 2006 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. Turbotax 2006 To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or a similar arrangement. Turbotax 2006 Limit. Turbotax 2006   Your qualified reservist repayments cannot be more than your qualified reservist distributions, explained under Early Distributions , later. Turbotax 2006 When repayment contributions can be made. Turbotax 2006   You cannot make these repayment contributions later than the date that is 2 years after your active duty period ends. Turbotax 2006 No deduction. Turbotax 2006   You cannot deduct qualified reservist repayments. Turbotax 2006 Reserve component. Turbotax 2006   The term “reserve component” means the: Army National Guard of the United States, Army Reserve, Naval Reserve, Marine Corps Reserve, Air National Guard of the United States, Air Force Reserve, Coast Guard Reserve, or Reserve Corps of the Public Health Service. Turbotax 2006 Figuring your IRA deduction. Turbotax 2006   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. Turbotax 2006 Reporting the repayment. Turbotax 2006   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. Turbotax 2006 Example. Turbotax 2006   In 2013, your IRA contribution limit is $5,500. Turbotax 2006 However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. Turbotax 2006 You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). Turbotax 2006 In an earlier year you received a $3,000 qualified reservist distribution, which you would like to repay this year. Turbotax 2006   For 2013, you can contribute a total of $8,500 to your IRA. Turbotax 2006 This is made up of the maximum deductible contribution of $3,500; a nondeductible contribution of $2,000; and a $3,000 qualified reservist repayment. Turbotax 2006 You contribute the maximum allowable for the year. Turbotax 2006 Since you are making a nondeductible contribution ($2,000) and a qualified reservist repayment ($3,000), you must file Form 8606 with your return and include $5,000 ($2,000 + $3,000) on line 1 of Form 8606. Turbotax 2006 The qualified reservist repayment is not deductible. Turbotax 2006 Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Turbotax 2006 See chapter 2 for information about Roth IRAs. Turbotax 2006 General Limit For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year. Turbotax 2006 Note. Turbotax 2006 This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Turbotax 2006 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. Turbotax 2006 (See Nondeductible Contributions , later. Turbotax 2006 ) Qualified reservist repayments do not affect this limit. Turbotax 2006 Examples. Turbotax 2006 George, who is 34 years old and single, earns $24,000 in 2013. Turbotax 2006 His IRA contributions for 2013 are limited to $5,500. Turbotax 2006 Danny, an unmarried college student working part time, earns $3,500 in 2013. Turbotax 2006 His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Turbotax 2006 More than one IRA. Turbotax 2006   If you have more than one IRA, the limit applies to the total contributions made on your behalf to all your traditional IRAs for the year. Turbotax 2006 Annuity or endowment contracts. Turbotax 2006   If you invest in an annuity or endowment contract under an individual retirement annuity, no more than $5,500 ($6,500 if you are age 50 or older) can be contributed toward its cost for the tax year, including the cost of life insurance coverage. Turbotax 2006 If more than this amount is contributed, the annuity or endowment contract is disqualified. Turbotax 2006 Kay Bailey Hutchison Spousal IRA Limit For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts: $5,500 ($6,500 if you are age 50 or older), or The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Turbotax 2006 Your spouse's IRA contribution for the year to a traditional IRA. Turbotax 2006 Any contributions for the year to a Roth IRA on behalf of your spouse. Turbotax 2006 This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is age 50 or older or $13,000 if both of you are age 50 or older). Turbotax 2006 Note. Turbotax 2006 This traditional IRA limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Turbotax 2006 Example. Turbotax 2006 Kristin, a full-time student with no taxable compensation, marries Carl during the year. Turbotax 2006 Neither of them was age 50 by the end of 2013. Turbotax 2006 For the year, Carl has taxable compensation of $30,000. Turbotax 2006 He plans to contribute (and deduct) $5,500 to a traditional IRA. Turbotax 2006 If he and Kristin file a joint return, each can contribute $5,500 to a traditional IRA. Turbotax 2006 This is because Kristin, who has no compensation, can add Carl's compensation, reduced by the amount of his IRA contribution ($30,000 − $5,500 = $24,500), to her own compensation (-0-) to figure her maximum contribution to a traditional IRA. Turbotax 2006 In her case, $5,500 is her contribution limit, because $5,500 is less than $24,500 (her compensation for purposes of figuring her contribution limit). Turbotax 2006 Filing Status Generally, except as discussed earlier under Kay Bailey Hutchison Spousal IRA Limit , your filing status has no effect on the amount of allowable contributions to your traditional IRA. Turbotax 2006 However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. Turbotax 2006 See How Much Can You Deduct , later. Turbotax 2006 Example. Turbotax 2006 Tom and Darcy are married and both are 53. Turbotax 2006 They both work and each has a traditional IRA. Turbotax 2006 Tom earned $3,800 and Darcy earned $48,000 in 2013. Turbotax 2006 Because of the Kay Bailey Hutchison Spousal IRA limit rule, even though Tom earned less than $6,500, they can contribute up to $6,500 to his IRA for 2013 if they file a joint return. Turbotax 2006 They can contribute up to $6,500 to Darcy's IRA. Turbotax 2006 If they file separate returns, the amount that can be contributed to Tom's IRA is limited by his earned income, $3,800. Turbotax 2006 Less Than Maximum Contributions If contributions to your traditional IRA for a year were less than the limit, you cannot contribute more after the due date of your return for that year to make up the difference. Turbotax 2006 Example. Turbotax 2006 Rafael, who is 40, earns $30,000 in 2013. Turbotax 2006 Although he can contribute up to $5,500 for 2013, he contributes only $3,000. Turbotax 2006 After April 15, 2014, Rafael cannot make up the difference between his actual contributions for 2013 ($3,000) and his 2013 limit ($5,500). Turbotax 2006 He cannot contribute $2,500 more than the limit for any later year. Turbotax 2006 More Than Maximum Contributions If contributions to your IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. Turbotax 2006 However, a penalty or additional tax may apply. Turbotax 2006 See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes. Turbotax 2006 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). Turbotax 2006 Contributions must be in the form of money (cash, check, or money order). Turbotax 2006 Property cannot be contributed. Turbotax 2006 Although property cannot be contributed, your IRA may invest in certain property. Turbotax 2006 For example, your IRA may purchase shares of stock. Turbotax 2006 For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. Turbotax 2006 You may be able to transfer or roll over certain property from one retirement plan to another. Turbotax 2006 See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets . Turbotax 2006 You can make a contribution to your IRA by having your income tax refund (or a portion of your refund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. Turbotax 2006 For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases). Turbotax 2006 Contributions can be made to your traditional IRA for each year that you receive compensation and have not reached age 70½. Turbotax 2006 For any year in which you do not work, contributions cannot be made to your IRA unless you receive alimony, nontaxable combat pay, military differential pay, or file a joint return with a spouse who has compensation. Turbotax 2006 See Who Can Open a Traditional IRA , earlier. Turbotax 2006 Even if contributions cannot be made for the current year, the amounts contributed for years in which you did qualify can remain in your IRA. Turbotax 2006 Contributions can resume for any years that you qualify. Turbotax 2006 Contributions must be made by due date. Turbotax 2006   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. Turbotax 2006 For most people, this means that contributions for 2013 must be made by April 15, 2014, and contributions for 2014 must be made by April 15, 2015. Turbotax 2006 Age 70½ rule. Turbotax 2006   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Turbotax 2006   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Turbotax 2006 If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Turbotax 2006 Designating year for which contribution is made. Turbotax 2006   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. Turbotax 2006 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). Turbotax 2006 Filing before a contribution is made. Turbotax 2006    You can file your return claiming a traditional IRA contribution before the contribution is actually made. Turbotax 2006 Generally, the contribution must be made by the due date of your return, not including extensions. Turbotax 2006 Contributions not required. Turbotax 2006   You do not have to contribute to your traditional IRA for every tax year, even if you can. Turbotax 2006 How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if applicable) explained earlier under How Much Can Be Contributed . Turbotax 2006 However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Turbotax 2006 See Limit if Covered by Employer Plan , later. Turbotax 2006 You may be able to claim a credit for contributions to your traditional IRA. Turbotax 2006 For more information, see chapter 4. Turbotax 2006 Trustees' fees. Turbotax 2006   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Turbotax 2006 However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Turbotax 2006 For information about miscellaneous itemized deductions, see Publication 529, Miscellaneous Deductions. Turbotax 2006 Brokers' commissions. Turbotax 2006   These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Turbotax 2006 Full deduction. Turbotax 2006   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more of your traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older), or 100% of your compensation. Turbotax 2006   This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Turbotax 2006 Kay Bailey Hutchison Spousal IRA. Turbotax 2006   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of: $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older), or The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Turbotax 2006 The IRA deduction for the year of the spouse with the greater compensation. Turbotax 2006 Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Turbotax 2006 Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Turbotax 2006   This limit is reduced by any contributions to a section 501(c)(18) plan on behalf of the spouse with the lesser compensation. Turbotax 2006 Note. Turbotax 2006 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. Turbotax 2006 After a divorce or legal separation, you can deduct only the contributions to your own IRA. Turbotax 2006 Your deductions are subject to the rules for single individuals. Turbotax 2006 Covered by an employer retirement plan. Turbotax 2006   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. Turbotax 2006 This is discussed later under Limit if Covered by Employer Plan . Turbotax 2006 Limits on the amount you can deduct do not affect the amount that can be contributed. Turbotax 2006 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. Turbotax 2006 The “Retirement Plan” box should be checked if you were covered. Turbotax 2006 Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered , later. Turbotax 2006 If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Turbotax 2006 Federal judges. Turbotax 2006   For purposes of the IRA deduction, federal judges are covered by an employer plan. Turbotax 2006 For Which Year(s) Are You Covered? Special rules apply to determine the tax years for which you are covered by an employer plan. Turbotax 2006 These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Turbotax 2006 Tax year. Turbotax 2006   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Turbotax 2006 For almost all people, the tax year is the calendar year. Turbotax 2006 Defined contribution plan. Turbotax 2006   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. Turbotax 2006 However, also see Situations in Which You Are Not Covered , later. Turbotax 2006   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Turbotax 2006 In a defined contribution plan, the amount to be contributed to each participant's account is spelled out in the plan. Turbotax 2006 The level of benefits actually provided to a participant depends on the total amount contributed to that participant's account and any earnings and losses on those contributions. Turbotax 2006 Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Turbotax 2006 Example. Turbotax 2006 Company A has a money purchase pension plan. Turbotax 2006 Its plan year is from July 1 to June 30. Turbotax 2006 The plan provides that contributions must be allocated as of June 30. Turbotax 2006 Bob, an employee, leaves Company A on December 31, 2012. Turbotax 2006 The contribution for the plan year ending on June 30, 2013, is made February 15, 2014. Turbotax 2006 Because an amount is contributed to Bob's account for the plan year, Bob is covered by the plan for his 2013 tax year. Turbotax 2006   A special rule applies to certain plans in which it is not possible to determine if an amount will be contributed to your account for a given plan year. Turbotax 2006 If, for a plan year, no amounts have been allocated to your account that are attributable to employer contributions, employee contributions, or forfeitures, by the last day of the plan year, and contributions are discretionary for the plan year, you are not covered for the tax year in which the plan year ends. Turbotax 2006 If, after the plan year ends, the employer makes a contribution for that plan year, you are covered for the tax year in which the contribution is made. Turbotax 2006 Example. Turbotax 2006 Mickey was covered by a profit-sharing plan and left the company on December 31, 2012. Turbotax 2006 The plan year runs from July 1 to June 30. Turbotax 2006 Under the terms of the plan, employer contributions do not have to be made, but if they are made, they are contributed to the plan before the due date for filing the company's tax return. Turbotax 2006 Such contributions are allocated as of the last day of the plan year, and allocations are made to the accounts of individuals who have any service during the plan year. Turbotax 2006 As of June 30, 2013, no contributions were made that were allocated to the June 30, 2013, plan year, and no forfeitures had been allocated within the plan year. Turbotax 2006 In addition, as of that date, the company was not obligated to make a contribution for such plan year and it was impossible to determine whether or not a contribution would be made for the plan year. Turbotax 2006 On December 31, 2013, the company decided to contribute to the plan for the plan year ending June 30, 2013. Turbotax 2006 That contribution was made on February 15, 2014. Turbotax 2006 Mickey is an active participant in the plan for his 2014 tax year but not for his 2013 tax year. Turbotax 2006 No vested interest. Turbotax 2006   If an amount is allocated to your account for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the account. Turbotax 2006 Defined benefit plan. Turbotax 2006   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. Turbotax 2006 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. Turbotax 2006   A defined benefit plan is any plan that is not a defined contribution plan. Turbotax 2006 In a defined benefit plan, the level of benefits to be provided to each participant is spelled out in the plan. Turbotax 2006 The plan administrator figures the amount needed to provide those benefits and those amounts are contributed to the plan. Turbotax 2006 Defined benefit plans include pension plans and annuity plans. Turbotax 2006 Example. Turbotax 2006 Nick, an employee of Company B, is eligible to participate in Company B's defined benefit plan, which has a July 1 to June 30 plan year. Turbotax 2006 Nick leaves Company B on December 31, 2012. Turbotax 2006 Because Nick is eligible to participate in the plan for its year ending June 30, 2013, he is covered by the plan for his 2013 tax year. Turbotax 2006 No vested interest. Turbotax 2006   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. Turbotax 2006 Situations in Which You Are Not Covered Unless you are covered by another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Turbotax 2006 Social security or railroad retirement. Turbotax 2006   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Turbotax 2006 Benefits from previous employer's plan. Turbotax 2006   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Turbotax 2006 Reservists. Turbotax 2006   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. Turbotax 2006 You are not covered by the plan if both of the following conditions are met. Turbotax 2006 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. Turbotax 2006 You did not serve more than 90 days on active duty during the year (not counting duty for training). Turbotax 2006 Volunteer firefighters. Turbotax 2006   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Turbotax 2006 You are not covered by the plan if both of the following conditions are met. Turbotax 2006 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. Turbotax 2006 Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Turbotax 2006 Limit if Covered by Employer Plan As discussed earlier, the deduction you can take for contributions made to your traditional IRA depends on whether you or your spouse was covered for any part of the year by an employer retirement plan. Turbotax 2006 Your deduction is also affected by how much income you had and by your filing status. Turbotax 2006 Your deduction may also be affected by social security benefits you received. Turbotax 2006 Reduced or no deduction. Turbotax 2006   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. Turbotax 2006   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. Turbotax 2006 These amounts vary depending on your filing status. Turbotax 2006   To determine if your deduction is subject to the phaseout, you must determine your modified adjusted gross income (AGI) and your filing status, as explained later under Deduction Phaseout . Turbotax 2006 Once you have determined your modified AGI and your filing status, you can use Table 1-2 or Table 1-3 to determine if the phaseout applies. Turbotax 2006 Social Security Recipients Instead of using Table 1-2 or Table 1-3 and Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, later, complete the worksheets in Appendix B of this publication if, for the year, all of the following apply. Turbotax 2006 You received social security benefits. Turbotax 2006 You received taxable compensation. Turbotax 2006 Contributions were made to your traditional IRA. Turbotax 2006 You or your spouse was covered by an employer retirement plan. Turbotax 2006 Use the worksheets in Appendix B to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Turbotax 2006 Appendix B includes an example with filled-in worksheets to assist you. Turbotax 2006 Table 1-2. Turbotax 2006 Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Turbotax 2006 IF your filing status is . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 AND your modified adjusted gross income (modified AGI) is . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 THEN you can take . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 single or head of household $59,000 or less a full deduction. Turbotax 2006 more than $59,000 but less than $69,000 a partial deduction. Turbotax 2006 $69,000 or more no deduction. Turbotax 2006 married filing jointly or  qualifying widow(er) $95,000 or less a full deduction. Turbotax 2006 more than $95,000 but less than $115,000 a partial deduction. Turbotax 2006 $115,000 or more no deduction. Turbotax 2006 married filing separately2 less than $10,000 a partial deduction. Turbotax 2006 $10,000 or more no deduction. Turbotax 2006 1 Modified AGI (adjusted gross income). Turbotax 2006 See Modified adjusted gross income (AGI) , later. Turbotax 2006  2 If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” filing status). Turbotax 2006 Table 1-3. Turbotax 2006 Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Turbotax 2006 IF your filing status is . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 AND your modified adjusted gross income (modified AGI) is . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 THEN you can take . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 single, head of household, or qualifying widow(er) any amount a full deduction. Turbotax 2006 married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction. Turbotax 2006 married filing jointly with a spouse who is covered by a plan at work $178,000 or less a full deduction. Turbotax 2006 more than $178,000 but less than $188,000 a partial deduction. Turbotax 2006 $188,000 or more no deduction. Turbotax 2006 married filing separately with a spouse who is covered by a plan at work2 less than $10,000 a partial deduction. Turbotax 2006 $10,000 or more no deduction. Turbotax 2006 1 Modified AGI (adjusted gross income). Turbotax 2006 See Modified adjusted gross income (AGI) , later. Turbotax 2006  2 You are entitled to the full deduction if you did not live with your spouse at any time during the year. Turbotax 2006 For 2014, if you are not covered by a retirement plan at work and you are married filing jointly with a spouse who is covered by a plan at work, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Turbotax 2006 If your AGI is $191,000 or more, you cannot take a deduction for a contribution to a traditional IRA. Turbotax 2006 Deduction Phaseout The amount of any reduction in the limit on your IRA deduction (phaseout) depends on whether you or your spouse was covered by an employer retirement plan. Turbotax 2006 Covered by a retirement plan. Turbotax 2006   If you are covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI, as shown in Table 1-2. Turbotax 2006 For 2014, if you are covered by a retirement plan at work, your IRA deduction will not be reduced (phased out) unless your modified AGI is: More than $60,000 but less than $70,000 for a single individual (or head of household), More than $96,000 but less than $116,000 for a married couple filing a joint return (or a qualifying widow(er)), or Less than $10,000 for a married individual filing a separate return. Turbotax 2006 If your spouse is covered. Turbotax 2006   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 1-3. Turbotax 2006 Filing status. Turbotax 2006   Your filing status depends primarily on your marital status. Turbotax 2006 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. Turbotax 2006 If you need more information on filing status, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Turbotax 2006 Lived apart from spouse. Turbotax 2006   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. Turbotax 2006 Modified adjusted gross income (AGI). Turbotax 2006   You can use Worksheet 1-1 to figure your modified AGI. Turbotax 2006 If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Both contributions for 2013 and distributions in 2013 , later. Turbotax 2006    Do not assume that your modified AGI is the same as your compensation. Turbotax 2006 Your modified AGI may include income in addition to your compensation (discussed earlier) such as interest, dividends, and income from IRA distributions. Turbotax 2006 Form 1040. Turbotax 2006   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Turbotax 2006 IRA deduction. Turbotax 2006 Student loan interest deduction. Turbotax 2006 Tuition and fees deduction. Turbotax 2006 Domestic production activities deduction. Turbotax 2006 Foreign earned income exclusion. Turbotax 2006 Foreign housing exclusion or deduction. Turbotax 2006 Exclusion of qualified savings bond interest shown on Form 8815. Turbotax 2006 Exclusion of employer-provided adoption benefits shown on Form 8839. Turbotax 2006 This is your modified AGI. Turbotax 2006 Form 1040A. Turbotax 2006   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. Turbotax 2006 IRA deduction. Turbotax 2006 Student loan interest deduction. Turbotax 2006 Tuition and fees deduction. Turbotax 2006 Exclusion of qualified savings bond interest shown on Form 8815. Turbotax 2006 This is your modified AGI. Turbotax 2006 Form 1040NR. Turbotax 2006   If you file Form 1040NR, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Turbotax 2006 IRA deduction. Turbotax 2006 Student loan interest deduction. Turbotax 2006 Domestic production activities deduction. Turbotax 2006 Exclusion of qualified savings bond interest shown on Form 8815. Turbotax 2006 Exclusion of employer-provided adoption benefits shown on Form 8839. Turbotax 2006 This is your modified AGI. Turbotax 2006 Income from IRA distributions. Turbotax 2006   If you received distributions in 2013 from one or more traditional IRAs and your traditional IRAs include only deductible contributions, the distributions are fully taxable and are included in your modified AGI. Turbotax 2006 Both contributions for 2013 and distributions in 2013. Turbotax 2006   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Turbotax 2006 You received distributions in 2013 from one or more traditional IRAs, You made contributions to a traditional IRA for 2013, and Some of those contributions may be nondeductible contributions. Turbotax 2006 (See Nondeductible Contributions and Worksheet 1-2, later. Turbotax 2006 ) If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Turbotax 2006 To do this, you can use Worksheet 1-5, later. Turbotax 2006   If at least one of the above does not apply, figure your modified AGI using Worksheet 1-1, later. Turbotax 2006 How To Figure Your Reduced IRA Deduction If you or your spouse is covered by an employer retirement plan and you did not receive any social security benefits, you can figure your reduced IRA deduction by using Worksheet 1-2. Turbotax 2006 Figuring Your Reduced IRA Deduction for 2013. Turbotax 2006 The Instructions for Form 1040, Form 1040A, and Form 1040NR include similar worksheets that you can use instead of the worksheet in this publication. Turbotax 2006 If you or your spouse is covered by an employer retirement plan, and you received any social security benefits, see Social Security Recipients , earlier. Turbotax 2006 Note. Turbotax 2006 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Turbotax 2006 Worksheet 1-1. Turbotax 2006 Figuring Your Modified AGI Use this worksheet to figure your modified AGI for traditional IRA purposes. Turbotax 2006 1. Turbotax 2006 Enter your adjusted gross income (AGI) from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37, figured without taking into account the amount from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 1. Turbotax 2006   2. Turbotax 2006 Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 2. Turbotax 2006   3. Turbotax 2006 Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Turbotax 2006   4. Turbotax 2006 Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 4. Turbotax 2006   5. Turbotax 2006 Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Turbotax 2006   6. Turbotax 2006 Enter any foreign housing deduction from Form 2555, line 50 6. Turbotax 2006   7. Turbotax 2006 Enter any excludable savings bond interest from Form 8815, line 14 7. Turbotax 2006   8. Turbotax 2006 Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Turbotax 2006   9. Turbotax 2006 Add lines 1 through 8. Turbotax 2006 This is your Modified AGI for traditional IRA purposes 9. Turbotax 2006   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Turbotax 2006 If you file Form 1040A, enter your IRA deduction on line 17 of that form. Turbotax 2006 If you file Form 1040NR, enter your IRA deduction on line 32 of that form. Turbotax 2006 You cannot deduct IRA contributions on Form 1040EZ or Form 1040NR-EZ. Turbotax 2006 Self-employed. Turbotax 2006   If you are self-employed (a sole proprietor or partner) and have a SIMPLE IRA, enter your deduction for allowable plan contributions on Form 1040, line 28. Turbotax 2006 If you file Form 1040NR, enter your deduction on line 28 of that form. Turbotax 2006 Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA of up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Turbotax 2006 The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Turbotax 2006 Example. Turbotax 2006 Tony is 29 years old and single. Turbotax 2006 In 2013, he was covered by a retirement plan at work. Turbotax 2006 His salary is $62,000. Turbotax 2006 His modified AGI is $70,000. Turbotax 2006 Tony makes a $5,500 IRA contribution for 2013. Turbotax 2006 Because he was covered by a retirement plan and his modified AGI is above $69,000, he cannot deduct his $5,500 IRA contribution. Turbotax 2006 He must designate this contribution as a nondeductible contribution by reporting it on Form 8606. Turbotax 2006 Repayment of reservist distributions. Turbotax 2006   Nondeductible contributions may include repayments of qualified reservist distributions. Turbotax 2006 For more information, see Qualified reservist repayments under How Much Can Be Contributed, earlier. Turbotax 2006 Form 8606. Turbotax 2006   To designate contributions as nondeductible, you must file Form 8606. Turbotax 2006 (See the filled-in Forms 8606 in this chapter. Turbotax 2006 )   You do not have to designate a contribution as nondeductible until you file your tax return. Turbotax 2006 When you file, you can even designate otherwise deductible contributions as nondeductible contributions. Turbotax 2006   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Turbotax 2006    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. Turbotax 2006 In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Turbotax 2006 See Form 8606 under Distributions Fully or Partly Taxable, later. Turbotax 2006 Failure to report nondeductible contributions. Turbotax 2006   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated like deductible contributions when withdrawn. Turbotax 2006 All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Turbotax 2006 Penalty for overstatement. Turbotax 2006   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. Turbotax 2006 Penalty for failure to file Form 8606. Turbotax 2006   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. Turbotax 2006 Tax on earnings on nondeductible contributions. Turbotax 2006   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. Turbotax 2006 Cost basis. Turbotax 2006   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Turbotax 2006 Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Turbotax 2006    Commonly, distributions from your traditional IRAs will include both taxable and nontaxable (cost basis) amounts. Turbotax 2006 See Are Distributions Taxable, later, for more information. Turbotax 2006 Recordkeeping. Turbotax 2006 There is a recordkeeping worksheet, Appendix A. Turbotax 2006 Summary Record of Traditional IRA(s) for 2013 , that you can use to keep a record of deductible and nondeductible IRA contributions. Turbotax 2006 Examples — Worksheet for Reduced IRA Deduction for 2013 The following examples illustrate the use of Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013. Turbotax 2006 Example 1. Turbotax 2006 For 2013, Tom and Betty file a joint return on Form 1040. Turbotax 2006 They are both 39 years old. Turbotax 2006 They are both employed and Tom is covered by his employer's retirement plan. Turbotax 2006 Tom's salary is $59,000 and Betty's is $32,555. Turbotax 2006 They each have a traditional IRA and their combined modified AGI, which includes $5,000 interest and dividend income, is $96,555. Turbotax 2006 Because their modified AGI is between $95,000 and $115,000 and Tom is covered by an employer plan, Tom is subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Turbotax 2006 For 2013, Tom contributed $5,500 to his IRA and Betty contributed $5,500 to hers. Turbotax 2006 Even though they file a joint return, they must use separate worksheets to figure the IRA deduction for each of them. Turbotax 2006 Tom can take a deduction of only $5,080. Turbotax 2006 He can choose to treat the $5,080 as either deductible or nondeductible contributions. Turbotax 2006 He can either leave the $420 ($5,500 − $5,080) of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Turbotax 2006 He decides to treat the $5,080 as deductible contributions and leave the $420 of nondeductible contributions in his IRA. Turbotax 2006 Using Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, Tom figures his deductible and nondeductible amounts as shown on Worksheet 1-2. Turbotax 2006 Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated. Turbotax 2006 Betty figures her IRA deduction as follows. Turbotax 2006 Betty can treat all or part of her contributions as either deductible or nondeductible. Turbotax 2006 This is because her $5,500 contribution for 2013 is not subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Turbotax 2006 She does not need to use Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, because their modified AGI is not within the phaseout range that applies. Turbotax 2006 Betty decides to treat her $5,500 IRA contributions as deductible. Turbotax 2006 The IRA deductions of $5,080 and $5,500 on the joint return for Tom and Betty total $10,580. Turbotax 2006 Example 2. Turbotax 2006 For 2013, Ed and Sue file a joint return on Form 1040. Turbotax 2006 They are both 39 years old. Turbotax 2006 Ed is covered by his employer's retirement plan. Turbotax 2006 Ed's salary is $45,000. Turbotax 2006 Sue had no compensation for the year and did not contribute to an IRA. Turbotax 2006 Sue is not covered by an employer plan. Turbotax 2006 Ed contributed $5,500 to his traditional IRA and $5,500 to a traditional IRA for Sue (a Kay Bailey Hutchison Spousal IRA). Turbotax 2006 Their combined modified AGI, which includes $2,000 interest and dividend income and a large capital gain from the sale of stock, is $180,555. Turbotax 2006 Because the combined modified AGI is $115,000 or more, Ed cannot deduct any of the contribution to his traditional IRA. Turbotax 2006 He can either leave the $5,500 of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Turbotax 2006 Sue figures her IRA deduction as shown on Worksheet 1-2. Turbotax 2006 Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated. Turbotax 2006 Worksheet 1-2. Turbotax 2006 Figuring Your Reduced IRA Deduction for 2013 (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Turbotax 2006 ) Note. Turbotax 2006 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Turbotax 2006 IF you . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 AND your  filing status is . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 AND your modified AGI is over . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 THEN enter on  line 1 below . Turbotax 2006 . Turbotax 2006 . Turbotax 2006       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Turbotax 2006 Enter applicable amount from table above 1. Turbotax 2006   2. Turbotax 2006 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Turbotax 2006     Note. Turbotax 2006 If line 2 is equal to or more than the amount on line 1, stop here. Turbotax 2006  Your IRA contributions are not deductible. Turbotax 2006 See Nondeductible Contributions , earlier. Turbotax 2006     3. Turbotax 2006 Subtract line 2 from line 1. Turbotax 2006 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Turbotax 2006 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Turbotax 2006   4. Turbotax 2006 Multiply line 3 by the percentage below that applies to you. Turbotax 2006 If the result is not a multiple of $10, round it to the next highest multiple of $10. Turbotax 2006 (For example, $611. Turbotax 2006 40 is rounded to $620. Turbotax 2006 ) However, if the result is less than $200, enter $200. Turbotax 2006         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Turbotax 2006 5% (. Turbotax 2006 275) (by 32. Turbotax 2006 5% (. Turbotax 2006 325) if you are age 50 or older). Turbotax 2006 All others, multiply line 3 by 55% (. Turbotax 2006 55) (by 65% (. Turbotax 2006 65) if you are age 50 or older). Turbotax 2006 4. Turbotax 2006   5. Turbotax 2006 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Turbotax 2006 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Turbotax 2006 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Turbotax 2006   6. Turbotax 2006 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Turbotax 2006 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Turbotax 2006 6. Turbotax 2006   7. Turbotax 2006 IRA deduction. Turbotax 2006 Compare lines 4, 5, and 6. Turbotax 2006 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Turbotax 2006 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Turbotax 2006   8. Turbotax 2006 Nondeductible contribution. Turbotax 2006 Subtract line 7 from line 5 or 6, whichever is smaller. Turbotax 2006  Enter the result here and on line 1 of your Form 8606 8. Turbotax 2006   Worksheet 1-2. Turbotax 2006 Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Turbotax 2006 ) Note. Turbotax 2006 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Turbotax 2006 IF you . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 AND your  filing status is . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 AND your modified AGI is over . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 THEN enter on  line 1 below . Turbotax 2006 . Turbotax 2006 . Turbotax 2006       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Turbotax 2006 Enter applicable amount from table above 1. Turbotax 2006 115,000 2. Turbotax 2006 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Turbotax 2006 96,555   Note. Turbotax 2006 If line 2 is equal to or more than the amount on line 1, stop here. Turbotax 2006  Your IRA contributions are not deductible. Turbotax 2006 See Nondeductible Contributions , earlier. Turbotax 2006     3. Turbotax 2006 Subtract line 2 from line 1. Turbotax 2006 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Turbotax 2006 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Turbotax 2006 18,445 4. Turbotax 2006 Multiply line 3 by the percentage below that applies to you. Turbotax 2006 If the result is not a multiple of $10, round it to the next highest multiple of $10. Turbotax 2006 (For example, $611. Turbotax 2006 40 is rounded to $620. Turbotax 2006 ) However, if the result is less than $200, enter $200. Turbotax 2006         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Turbotax 2006 5% (. Turbotax 2006 275) (by 32. Turbotax 2006 5% (. Turbotax 2006 325) if you are age 50 or older). Turbotax 2006 All others, multiply line 3 by 55% (. Turbotax 2006 55) (by 65% (. Turbotax 2006 65) if you are age 50 or older). Turbotax 2006 4. Turbotax 2006 5,080 5. Turbotax 2006 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Turbotax 2006 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Turbotax 2006 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Turbotax 2006 59,000 6. Turbotax 2006 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Turbotax 2006 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Turbotax 2006 6. Turbotax 2006 5,500 7. Turbotax 2006 IRA deduction. Turbotax 2006 Compare lines 4, 5, and 6. Turbotax 2006 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Turbotax 2006 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Turbotax 2006 5,080 8. Turbotax 2006 Nondeductible contribution. Turbotax 2006 Subtract line 7 from line 5 or 6, whichever is smaller. Turbotax 2006  Enter the result here and on line 1 of your Form 8606 8. Turbotax 2006 420 Worksheet 1-2. Turbotax 2006 Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Turbotax 2006 ) Note. Turbotax 2006 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Turbotax 2006 IF you . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 AND your  filing status is . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 AND your modified AGI is over . Turbotax 2006 . Turbotax 2006 . Turbotax 2006 THEN enter on  line 1 below . Turbotax 2006 . Turbotax 2006 . Turbotax 2006       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Turbotax 2006 Enter applicable amount from table above 1. Turbotax 2006 188,000 2. Turbotax 2006 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Turbotax 2006 180,555   Note. Turbotax 2006 If line 2 is equal to or more than the amount on line 1, stop here. Turbotax 2006  Your IRA contributions are not deductible. Turbotax 2006 See Nondeductible Contributions , earlier. Turbotax 2006     3. Turbotax 2006 Subtract line 2 from line 1. Turbotax 2006 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Turbotax 2006 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Turbotax 2006 7,445 4. Turbotax 2006 Multiply line 3 by the percentage below that applies to you. Turbotax 2006 If the result is not a multiple of $10, round it to the next highest multiple of $10. Turbotax 2006 (For example, $611. Turbotax 2006 40 is rounded to $620. Turbotax 2006 ) However, if the result is less than $200, enter $200. Turbotax 2006         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Turbotax 2006 5% (. Turbotax 2006 275) (by 32. Turbotax 2006 5% (. Turbotax 2006 325) if you are age 50 or older). Turbotax 2006 All others, multiply line 3 by 55% (. Turbotax 2006 55) (by 65% (. Turbotax 2006 65) if you are age 50 or older). Turbotax 2006 4. Turbotax 2006 4,100 5. Turbotax 2006 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Turbotax 2006 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Turbotax 2006 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Turbotax 2006 39,500 6. Turbotax 2006 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Turbotax 2006 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Turbotax 2006 6. Turbotax 2006 5,500 7. Turbotax 2006 IRA deduction. Turbotax 2006 Compare lines 4, 5, and 6. Turbotax 2006 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Turbotax 2006 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Turbotax 2006 4,100 8. Turbotax 2006 Nondeductible contribution. Turbotax 2006 Subtract line 7 from line 5 or 6, whichever is smaller. Turbotax 2006  Enter the result here and on line 1 of your Form 8606 8. Turbotax 2006 1,400 What if You Inherit an IRA? If you inherit a traditional IRA, you are called a beneficiary. Turbotax 2006 A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Turbotax 2006 Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Turbotax 2006 Inherited from spouse. Turbotax 2006   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Turbotax 2006 You can: Treat it as your own IRA by designating yourself as the account owner. Turbotax 2006 Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (s