File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Unemployment Tax

Irs Ez Form 20111040 XFile 1040 Ez Online FreeHow Do I Amend A Tax ReturnNeed Amend My 2009 TaxesHow Do I File An Amended Tax ReturnTaxslayer ComHow To Complete A 1040x1040ez 2012 FormIrs Form 1040ez 2012Free 1040ezFile Extension For FreeIncome Tax Form 1040xDo Students Have To File Taxes1040ez Forms Download FreeForm 1040Prior Year TaxesTaxes For UnemployedCan 1040x Filed ElectronicallyTaxes 2006Where Can I File My 2009 Taxes Online For FreeIrs Forms 1040Turbotax Business Fed E File 2012Free H&r Block Tax SoftwareAmend 2009 Tax ReturnVita Income Tax Bakersfield Ca1040ez 2013 Tax FormPrint Tax Form 1040xTurbo Tax For MilitaryHr Block Online Taxes1040x HelpFree State Income Tax PreparationExpress 1040Irs Forms For 2011Students Filing Taxes1040ez Form 2013 Pdf2011 Federal Income Tax 1040ez2010 1040 Form1040 Form FreeAmending Your Taxes

Unemployment Tax

Unemployment tax Index A Accountable plan, Accountable plans. Unemployment tax Additional Medicare Tax, What's New, Introduction, Additional Medicare Tax. Unemployment tax Administrators, Teachers or administrators. Unemployment tax American Samoa, Residents of Puerto Rico, the U. Unemployment tax S. Unemployment tax Virgin Islands, Guam, the CNMI, and American Samoa. Unemployment tax , Specified U. Unemployment tax S. Unemployment tax possessions. Unemployment tax Assistance (see Tax help) C Cantors, Cantors. Unemployment tax Christian Science Practitioners, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Christian Science Practitioners and Readers, Practitioners. Unemployment tax , Christian Science Practitioners and Readers, Members of the Clergy Readers, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Christian Science Practitioners and Readers, Readers. Unemployment tax , Christian Science Practitioners and Readers Common-law employee, Common-law employee. Unemployment tax Commonwealth of the Northern Mariana Islands (CNMI), Residents of Puerto Rico, the U. Unemployment tax S. Unemployment tax Virgin Islands, Guam, the CNMI, and American Samoa. Unemployment tax , Specified U. Unemployment tax S. Unemployment tax possessions. Unemployment tax Comprehensive example, Comprehensive Example, Attachment 2—John E. Unemployment tax White011-00-2222 Worksheet 4. Unemployment tax Figuring Net Self-Employment Income for Schedule SE (Form 1040) Credit Earned income, Earned Income Credit Retirement savings contributions, Retirement savings contributions credit. Unemployment tax D Deduction for self-employment tax, Deduction for SE Tax E Earned income credit, Earned Income Credit Effective date Exemption from FICA taxes, Effective date. Unemployment tax Exemption from self-employment (SE) tax, Effective date of exemption. Unemployment tax , Effective date of exemption. Unemployment tax Employment status, Employment status for other tax purposes. Unemployment tax Estimated tax, Income Tax Withholding and Estimated Tax Exclusion, foreign earned income, Foreign Earned Income Exemption Form 4029, Table 2. Unemployment tax The Self-Employment Tax Exemption Application and Approval Process, Requesting Exemption—Form 4029 Form 4361, Table 2. Unemployment tax The Self-Employment Tax Exemption Application and Approval Process, Requesting Exemption—Form 4361 From FICA taxes, Exemption From FICA Taxes From self-employment (SE) tax, Exemption From Self-Employment (SE) Tax, Refunds of SE tax paid. Unemployment tax F Federal Insurance Contributions Act (see FICA) FICA Earnings covered, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA? Effective date of exemption, Effective date. Unemployment tax Election to exclude church employees, Election by Church To Exclude Its Employees From FICA Coverage Filing requirements for most taxpayers, Filing Your Return Foreign earned income, Foreign Earned Income Form 1040, Excess rental allowance. Unemployment tax , Health Insurance Costs of Self-Employed Ministers, Deduction for SE Tax, Exemption from SE tax. Unemployment tax , Form 1040, , 1040-ES, Income Tax Withholding and Estimated Tax 1040X, Refunds of SE tax. Unemployment tax , Refunds of SE tax paid. Unemployment tax 2106-EZ, 4029, Table 2. Unemployment tax The Self-Employment Tax Exemption Application and Approval Process, Requesting Exemption—Form 4029, Exemption from SE tax. Unemployment tax 4361, Table 2. Unemployment tax The Self-Employment Tax Exemption Application and Approval Process, Requesting Exemption—Form 4361, Exemption from SE tax. Unemployment tax 8959, What's New, Introduction, Additional Medicare Tax. Unemployment tax 941, Forms 941, 943, and 944. Unemployment tax 943, Forms 941, 943, and 944. Unemployment tax 944, Forms 941, 943, and 944. Unemployment tax Schedule A (Form 1040), Schedule C-EZ (Form 1040), Schedule SE (Form 1040), SS-8, Form SS-8. Unemployment tax Free tax services, Free help with your tax return. Unemployment tax G Gross income Amounts included in, Amounts included in gross income. Unemployment tax Amounts not included in, Amounts not included in gross income. Unemployment tax Guam, Residents of Puerto Rico, the U. Unemployment tax S. Unemployment tax Virgin Islands, Guam, the CNMI, and American Samoa. Unemployment tax , Specified U. Unemployment tax S. Unemployment tax possessions. Unemployment tax H Health insurance costs, deductibility, Health Insurance Costs of Self-Employed Ministers Help (see Tax help) Home ownership, exclusion of allowance, Home ownership. Unemployment tax , Cantors. Unemployment tax House or parsonage, fair rental value, Fair rental value of parsonage. Unemployment tax I Income tax Estimated tax, Income Tax Withholding and Estimated Tax Income and expenses, Income Tax: Income and Expenses, Income Tax Withholding and Estimated Tax Withholding, Income Tax Withholding and Estimated Tax Individual retirement arrangements (IRAs), Individual retirement arrangements (IRAs). Unemployment tax K Keogh (H. Unemployment tax R. Unemployment tax 10) plans, Retirement plans for the self-employed. Unemployment tax L Lay employees (see Religious workers) Living abroad, Overseas duty. Unemployment tax , Foreign Earned Income M Members of recognized religious sects, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Members of Recognized Religious Sects Members of religious orders, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Members of Religious Orders, Members of Religious Orders, Members of the Clergy, Refunds of SE tax. Unemployment tax , Earnings—Members of Religious Orders Ministerial services, exemption for Christian Science practitioners and readers, Christian Science Practitioners and Readers Members of religious orders, Members of Religious Orders Ministers, Ministers Ministers, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Ministers, Ministers defined. Unemployment tax , Form SS-8. Unemployment tax , Ministers, Members of the Clergy, Refunds of SE tax. Unemployment tax , Income Tax: Income and Expenses, Income Tax Withholding and Estimated Tax Retired, Retired ministers. Unemployment tax Missionary team, married couple, Married Couple Missionary Team N Nonaccountable plan, Nonaccountable plan. Unemployment tax Nonfarm optional method, Nonfarm Optional Method Nonresident aliens, U. Unemployment tax S. Unemployment tax Citizens and Resident and Nonresident Aliens O Offerings and fees, Amounts included in gross income. Unemployment tax , Offerings and Fees Overseas duty, Overseas duty. Unemployment tax , Foreign Earned Income P Parsonage allowance, Amounts included in gross income. Unemployment tax , Exclusion of Rental Allowance and Fair Rental Value of a Parsonage, Cantors. Unemployment tax Publications (see Tax help) Puerto Rico, Residents of Puerto Rico, the U. Unemployment tax S. Unemployment tax Virgin Islands, Guam, the CNMI, and American Samoa. Unemployment tax , Specified U. Unemployment tax S. Unemployment tax possessions. Unemployment tax Q Qualified retirement plan, Retirement plans for the self-employed. Unemployment tax R Refunds, self-employment tax, Refunds of SE tax. Unemployment tax , Refunds of SE tax paid. Unemployment tax Reimbursements, Employee reimbursement arrangements. Unemployment tax Religious orders, members of, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Members of Religious Orders, Members of Religious Orders, Members of the Clergy, Refunds of SE tax. Unemployment tax , Earnings—Members of Religious Orders Religious workers, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Coverage of Religious Workers (Church Employees) Rental allowance, Amounts included in gross income. Unemployment tax , Exclusion of Rental Allowance and Fair Rental Value of a Parsonage, Rental allowances. Unemployment tax , Cantors. Unemployment tax Resident aliens, U. Unemployment tax S. Unemployment tax Citizens and Resident and Nonresident Aliens Retired ministers, Retired ministers. Unemployment tax Retirement savings arrangements, Retirement Savings Arrangements Retirement savings contributions credit, Retirement savings contributions credit. Unemployment tax Royalty income from books, Books or articles. Unemployment tax S SECA, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Social Security Coverage Sects, members of recognized religious, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Members of Recognized Religious Sects Self-Employment Contributions Act (see SECA) Self-employment tax Deduction, Deduction for SE Tax Exemption, Exemption From Self-Employment (SE) Tax, Refunds of SE tax paid. Unemployment tax , Exemption from SE tax. Unemployment tax Maximum earnings, Earnings Subject to SE Tax Nonfarm optional method, Nonfarm Optional Method Refunds of, Refunds of SE tax. Unemployment tax , Refunds of SE tax paid. Unemployment tax Regular method, Regular Method Self-employment, net earnings from, Self-Employment Tax: Figuring Net Earnings, More information. Unemployment tax SIMPLE plan, Retirement plans for the self-employed. Unemployment tax Simplified employee pension (SEP) plan, Retirement plans for the self-employed. Unemployment tax Social security coverage, Social Security Coverage T Tax help, How To Get Tax Help Tax-free income, deductibility of expenses, Expenses Allocable to Tax-Free Income Tax-sheltered annuity plans, Tax-sheltered annuity plans. Unemployment tax Teachers, Teachers or administrators. Unemployment tax Theological students, Theological students. Unemployment tax Traveling evangelists, Traveling evangelists. Unemployment tax U U. Unemployment tax S. Unemployment tax citizens, U. Unemployment tax S. Unemployment tax Citizens and Resident and Nonresident Aliens U. Unemployment tax S. Unemployment tax Virgin Islands, Residents of Puerto Rico, the U. Unemployment tax S. Unemployment tax Virgin Islands, Guam, the CNMI, and American Samoa. Unemployment tax , Specified U. Unemployment tax S. Unemployment tax possessions. Unemployment tax V Vow of poverty, Table 1. Unemployment tax Are Your Ministerial Earnings* Covered Under FICA or SECA?, Vow of poverty. Unemployment tax , Services performed outside the order. Unemployment tax , Effect of employee status. Unemployment tax , Exemption From Self-Employment (SE) Tax, Earnings—Members of Religious Orders Prev  Up     Home   More Online Publications
Español

The Unemployment Tax

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