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Vita Irs Org

Vita irs org 17. Vita irs org   Individual Retirement Arrangements (IRAs) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Traditional IRAsWho Can Open a Traditional IRA? When and How Can a Traditional IRA Be Opened? How Much Can Be Contributed? When Can Contributions Be Made? How Much Can You Deduct? Nondeductible Contributions Inherited IRAs Can You Move Retirement Plan Assets? When Can You Withdraw or Use IRA Assets? When Must You Withdraw IRA Assets? (Required Minimum Distributions) Are Distributions Taxable? What Acts Result in Penalties or Additional Taxes? Roth IRAsWhat Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA? Can You Move Amounts Into a Roth IRA? Are Distributions Taxable? What's New Traditional IRA contribution and deduction limit. Vita irs org  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. Vita irs org 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. Vita irs org For more information, see How Much Can Be Contributed? later. Vita irs org Roth IRA contribution limit. Vita irs org  If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $5,500, or Your taxable compensation for the year. Vita irs org If you were age 50 or older before 2014 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $6,500, or Your taxable compensation for the year. Vita irs org However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Vita irs org For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? later. Vita irs org Modified AGI limit for traditional IRA contributions increased. Vita irs org  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. Vita irs org 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. Vita irs org If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Vita irs org See How Much Can You Deduct , later. Vita irs org Modified AGI limit for Roth IRA contributions increased. Vita irs org  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Vita irs org Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Vita irs org You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Vita irs org Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2013 and your modified AGI is at least $112,000. Vita irs org You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Vita irs org Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. Vita irs org You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Vita irs org See Can You Contribute to a Roth IRA , later. Vita irs org Net Investment Income Tax. Vita irs org   For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan including IRAs (for example; 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Vita irs org However, these distributions are taken into account when determining the modified adjusted gross income threshold. Vita irs org Distributions from a nonqualified retirement plan are included in net investment income. Vita irs org See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Vita irs org Name change. Vita irs org  All spousal IRAs have been renamed Kay Bailey Hutchison Spousal IRAs. Vita irs org There are no changes to the rules regarding these IRAs. Vita irs org See Kay Bailey Hutchison Spousal IRA Limit , later, for more information. Vita irs org Reminders 2014 limits. Vita irs org   You can find information about the 2014 contribution and AGI limits in Publication 590. Vita irs org Contributions to both traditional and Roth IRAs. Vita irs org   For information on your combined contribution limit if you contribute to both traditional and Roth IRAs, see Roth IRAs and traditional IRAs under How Much Can Be Contributed? in Roth IRAs, later. Vita irs org Statement of required minimum distribution. Vita irs org  If a minimum distribution from your IRA is required, the trustee, custodian, or issuer that held the IRA at the end of the preceding year must either report the amount of the required minimum distribution to you, or offer to calculate it for you. Vita irs org The report or offer must include the date by which the amount must be distributed. Vita irs org The report is due January 31 of the year in which the minimum distribution is required. Vita irs org It can be provided with the year-end fair market value statement that you normally get each year. Vita irs org No report is required for IRAs of owners who have died. Vita irs org IRA interest. Vita irs org  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Vita irs org Tax on your traditional IRA is generally deferred until you take a distribution. Vita irs org Do not report this interest on your tax return as tax-exempt interest. Vita irs org Form 8606. Vita irs org   To designate contributions as nondeductible, you must file Form 8606, Nondeductible IRAs. Vita irs org The term “50 or older” is used several times in this chapter. Vita irs org It refers to an IRA owner who is age 50 or older by the end of the tax year. Vita irs org Introduction An individual retirement arrangement (IRA) is a personal savings plan that gives you tax advantages for setting aside money for your retirement. Vita irs org This chapter discusses the following topics. Vita irs org The rules for a traditional IRA (any IRA that is not a Roth or SIMPLE IRA). Vita irs org The Roth IRA, which features nondeductible contributions and tax-free distributions. Vita irs org Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs) are not discussed in this chapter. Vita irs org For more information on these plans and employees' SEP IRAs and SIMPLE IRAs that are part of these plans, see Publications 560 and 590. Vita irs org For information about contributions, deductions, withdrawals, transfers, rollovers, and other transactions, see Publication 590. Vita irs org Useful Items - You may want to see: Publication 560 Retirement Plans for Small Business 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 5329 Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts 8606 Nondeductible IRAs Traditional IRAs In this chapter, the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Vita irs org ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Vita irs org Two advantages of a traditional IRA are: You may be able to deduct some or all of your contributions to it, depending on your circumstances, and Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Vita irs org 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. Vita irs org What is compensation?   Generally, compensation is what you earn from working. Vita irs org Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. Vita irs org 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). Vita irs org   Scholarship and fellowship payments are compensation for this purpose only if shown in box 1 of Form W-2. Vita irs org   Compensation also includes commissions and taxable alimony and separate maintenance payments. Vita irs org Self-employment income. Vita irs org   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deductible part of your self-employment tax. Vita irs org   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Vita irs org Nontaxable combat pay. Vita irs org   For IRA purposes, if you were a member of the U. Vita irs org S. Vita irs org Armed Forces, your compensation includes any nontaxable combat pay you receive. Vita irs org What is not compensation?   Compensation does not include any of the following items. Vita irs org Earnings and profits from property, such as rental income, interest income, and dividend income. Vita irs org Pension or annuity income. Vita irs org Deferred compensation received (compensation payments postponed from a past year). Vita irs org Income from a partnership for which you do not provide services that are a material income-producing factor. Vita irs org Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Vita irs org Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Vita irs org When and How Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Vita irs org However, the time for making contributions for any year is limited. Vita irs org See When Can Contributions Be Made , later. Vita irs org You can open different kinds of IRAs with a variety of organizations. Vita irs org You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Vita irs org You can also open an IRA through your stockbroker. Vita irs org Any IRA must meet Internal Revenue Code requirements. Vita irs org Kinds of traditional IRAs. Vita irs org   Your traditional IRA can be an individual retirement account or annuity. Vita irs org It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Vita irs org How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Vita irs org These limits and other rules are explained below. Vita irs org Community property laws. Vita irs org   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. Vita irs org This is the rule even in states with community property laws. Vita irs org Brokers' commissions. Vita irs org   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Vita irs org Trustees' fees. Vita irs org   Trustees' administrative fees are not subject to the contribution limit. Vita irs org Qualified reservist repayments. Vita irs org   If you are (or were) a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions you received. Vita irs org 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. Vita irs org To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or similar arrangement. Vita irs org   For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1 of Publication 590. Vita irs org Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Vita irs org (See Roth IRAs, later. Vita irs org ) General limit. Vita irs org   For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts. Vita irs org $5,500 ($6,500 if you are 50 or older). Vita irs org Your taxable compensation (defined earlier) for the year. Vita irs org 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. Vita irs org (See Nondeductible Contributions , later. Vita irs org ) Qualified reservist repayments do not affect this limit. Vita irs org Example 1. Vita irs org Betty, who is 34 years old and single, earned $24,000 in 2013. Vita irs org Her IRA contributions for 2013 are limited to $5,500. Vita irs org Example 2. Vita irs org John, an unmarried college student working part time, earned $3,500 in 2013. Vita irs org His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Vita irs org Kay Bailey Hutchison Spousal IRA limit. Vita irs org   For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following amounts. Vita irs org $5,500 ($6,500 if you are 50 or older). Vita irs org The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Vita irs org Your spouse's IRA contribution for the year to a traditional IRA. Vita irs org Any contribution for the year to a Roth IRA on behalf of your spouse. Vita irs org This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is 50 or older, or $13,000 if both of you are 50 or older). Vita irs org 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). Vita irs org Contributions must be in the form of money (cash, check, or money order). Vita irs org Property cannot be contributed. Vita irs org Contributions must be made by due date. Vita irs org   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. Vita irs org Age 70½ rule. Vita irs org   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Vita irs org   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Vita irs org If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Vita irs org Designating year for which contribution is made. Vita irs org   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. Vita irs org 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). Vita irs org Filing before a contribution is made. Vita irs org   You can file your return claiming a traditional IRA contribution before the contribution is actually made. Vita irs org Generally, the contribution must be made by the due date of your return, not including extensions. Vita irs org Contributions not required. Vita irs org   You do not have to contribute to your traditional IRA for every tax year, even if you can. Vita irs org How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if it applies). Vita irs org However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Vita irs org See Limit If Covered by Employer Plan , later. Vita irs org You may be able to claim a credit for contributions to your traditional IRA. Vita irs org For more information, see chapter 37. Vita irs org Trustees' fees. Vita irs org   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Vita irs org However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Vita irs org See chapter 28. Vita irs org Brokers' commissions. Vita irs org   Brokers' commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Vita irs org Full deduction. Vita irs org   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older in 2013). Vita irs org 100% of your compensation. Vita irs org This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Vita irs org Kay Bailey Hutchison Spousal IRA. Vita irs org   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of the following amounts. Vita irs org $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older in 2013). Vita irs org The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Vita irs org The IRA deduction for the year of the spouse with the greater compensation. Vita irs org Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Vita irs org Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Vita irs org This limit is reduced by any contributions to a 501(c)(18) plan on behalf of the spouse with the lesser compensation. Vita irs org Note. Vita irs org 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. Vita irs org After a divorce or legal separation, you can deduct only contributions to your own IRA. Vita irs org Your deductions are subject to the rules for single individuals. Vita irs org Covered by an employer retirement plan. Vita irs org   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. Vita irs org This is discussed later under Limit If Covered by Employer Plan . Vita irs org Limits on the amount you can deduct do not affect the amount that can be contributed. Vita irs org See Nondeductible Contributions , later. Vita irs org 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. Vita irs org The “Retirement plan” box should be checked if you were covered. Vita irs org Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered by an Employer Plan , later. Vita irs org If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Vita irs org Federal judges. Vita irs org   For purposes of the IRA deduction, federal judges are covered by an employer retirement plan. Vita irs org For Which Year(s) Are You Covered by an Employer Plan? Special rules apply to determine the tax years for which you are covered by an employer plan. Vita irs org These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Vita irs org Tax year. Vita irs org   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Vita irs org For almost all people, the tax year is the calendar year. Vita irs org Defined contribution plan. Vita irs org   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. Vita irs org   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Vita irs org Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Vita irs org Defined benefit plan. Vita irs org   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. Vita irs org 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. Vita irs org   A defined benefit plan is any plan that is not a defined contribution plan. Vita irs org Defined benefit plans include pension plans and annuity plans. Vita irs org No vested interest. Vita irs org   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. Vita irs org Situations in Which You Are Not Covered by an Employer Plan Unless you are covered under another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Vita irs org Social security or railroad retirement. Vita irs org   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Vita irs org Benefits from a previous employer's plan. Vita irs org   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Vita irs org Reservists. Vita irs org   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. Vita irs org You are not covered by the plan if both of the following conditions are met. Vita irs org 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. Vita irs org You did not serve more than 90 days on active duty during the year (not counting duty for training). Vita irs org Volunteer firefighters. Vita irs org   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Vita irs org You are not covered by the plan if both of the following conditions are met. Vita irs org 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. Vita irs org Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Vita irs org Limit If Covered by Employer Plan If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. Vita irs org 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. Vita irs org These amounts vary depending on your filing status. Vita irs org To determine if your deduction is subject to phaseout, you must determine your modified adjusted gross income (AGI) and your filing status. Vita irs org See Filing status and Modified adjusted gross income (AGI) , later. Vita irs org Then use Table 17-1 or 17-2 to determine if the phaseout applies. Vita irs org Social security recipients. Vita irs org   Instead of using Table 17-1 or Table 17-2, use the worksheets in Appendix B of Publication 590 if, for the year, all of the following apply. Vita irs org You received social security benefits. Vita irs org You received taxable compensation. Vita irs org Contributions were made to your traditional IRA. Vita irs org You or your spouse was covered by an employer retirement plan. Vita irs org Use those worksheets to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Vita irs org Deduction phaseout. Vita irs org   If you were covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI as shown in Table 17-1. Vita irs org Table 17-1. Vita irs org Effect of Modified AGI1 on Deduction if You Are Covered by Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Vita irs org IF your filing status is. Vita irs org . Vita irs org . Vita irs org   AND your modified AGI is. Vita irs org . Vita irs org . Vita irs org   THEN you can take. Vita irs org . Vita irs org . Vita irs org single   or  head of household   $59,000 or less   a full deduction. Vita irs org   more than $59,000 but less than $69,000   a partial deduction. Vita irs org   $69,000 or more   no deduction. Vita irs org married filing jointly   or  qualifying widow(er)   $95,000 or less   a full deduction. Vita irs org   more than $95,000 but less than $115,000   a partial deduction. Vita irs org   $115,000 or more   no deduction. Vita irs org married filing separately2   less than $10,000   a partial deduction. Vita irs org   $10,000 or more   no deduction. Vita irs org 1Modified AGI (adjusted gross income). Vita irs org See Modified adjusted gross income (AGI) . Vita irs org 2If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” column). Vita irs org If your spouse is covered. Vita irs org   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 17-2. Vita irs org Filing status. Vita irs org   Your filing status depends primarily on your marital status. Vita irs org 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. Vita irs org If you need more information on filing status, see chapter 2. Vita irs org Lived apart from spouse. Vita irs org   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. Vita irs org Table 17-2. Vita irs org Effect of Modified AGI1 on Deduction if You Are NOT Covered by Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Vita irs org IF your filing status is. Vita irs org . Vita irs org . Vita irs org   AND your modified AGI is. Vita irs org . Vita irs org . Vita irs org   THEN you can take. Vita irs org . Vita irs org . Vita irs org single, head of household, or qualifying widow(er)   any amount   a full deduction. Vita irs org married filing jointly or separately with a spouse who is not covered by a plan at work   any amount   a full deduction. Vita irs org married filing jointly with a spouse who is covered by a plan at work   $178,000 or less   a full deduction. Vita irs org   more than $178,000 but less than $188,000   a partial deduction. Vita irs org   $188,000 or more   no deduction. Vita irs org married filing separately with a spouse who is covered by a plan at work2   less than $10,000   a partial deduction. Vita irs org   $10,000 or more   no deduction. Vita irs org 1Modified AGI (adjusted gross income). Vita irs org See Modified adjusted gross income (AGI) . Vita irs org 2You are entitled to the full deduction if you did not live with your spouse at any time during the year. Vita irs org Modified adjusted gross income (AGI). Vita irs org   How you figure your modified AGI depends on whether you are filing Form 1040 or Form 1040A. Vita irs org If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Publication 590. Vita irs org You may be able to use Worksheet 17-1 to figure your modified AGI. Vita irs org    Do not assume that your modified AGI is the same as your compensation. Vita irs org Your modified AGI may include income in addition to your compensation (discussed earlier), such as interest, dividends, and income from IRA distributions. Vita irs org Form 1040. Vita irs org   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following eight amounts. Vita irs org IRA deduction. Vita irs org Student loan interest deduction. Vita irs org Tuition and fees deduction. Vita irs org Domestic production activities deduction. Vita irs org Foreign earned income exclusion. Vita irs org Foreign housing exclusion or deduction. Vita irs org Exclusion of qualified savings bond interest shown on Form 8815, Exclusion of Interest From Series EE and I U. Vita irs org S. Vita irs org Savings Bonds Issued After 1989. Vita irs org Exclusion of employer-provided adoption benefits shown on Form 8839, Qualified Adoption Expenses. Vita irs org This is your modified AGI. Vita irs org Form 1040A. Vita irs org   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. Vita irs org IRA deduction. Vita irs org Student loan interest deduction. Vita irs org Tuition and fees deduction. Vita irs org Exclusion of qualified savings bond interest shown on Form 8815. Vita irs org This is your modified AGI. Vita irs org Both contributions for 2013 and distributions in 2013. Vita irs org   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Vita irs org You received distributions in 2013 from one or more traditional IRAs. Vita irs org You made contributions to a traditional IRA for 2013. Vita irs org Some of those contributions may be nondeductible contributions. Vita irs org If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Vita irs org To do this, you can use Worksheet 1-5, Figuring the Taxable Part of Your IRA Distribution, in Publication 590. Vita irs org   If at least one of the above does not apply, figure your modified AGI using Worksheet 17-1, later. Vita irs org    How to figure your reduced IRA deduction. Vita irs org   You can figure your reduced IRA deduction for either Form 1040 or Form 1040A by using the worksheets in chapter 1 of Publication 590. Vita irs org Also, the instructions for Form 1040 and Form 1040A include similar worksheets that you may be able to use instead. Vita irs org Worksheet 17-1. Vita irs org Figuring Your Modified AGI Use this worksheet to figure your modified adjusted gross income for traditional IRA purposes. Vita irs org 1. Vita irs org Enter your adjusted gross income (AGI) from Form 1040, line 38, or Form 1040A, line 22, figured without taking into account the amount from Form 1040, line 32, or Form 1040A, line 17 1. Vita irs org   2. Vita irs org Enter any student loan interest deduction from Form 1040, line 33, or Form 1040A, line 18 2. Vita irs org   3. Vita irs org Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Vita irs org   4. Vita irs org Enter any domestic production activities deduction from Form 1040, line 35 4. Vita irs org   5. Vita irs org Enter any foreign earned income and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Vita irs org   6. Vita irs org Enter any foreign housing deduction from Form 2555, line 50 6. Vita irs org   7. Vita irs org Enter any excludable savings bond interest from Form 8815, line 14 7. Vita irs org   8. Vita irs org Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Vita irs org   9. Vita irs org Add lines 1 through 8. Vita irs org This is your Modified AGI for traditional IRA purposes 9. Vita irs org   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Vita irs org If you file Form 1040A, enter your IRA deduction on line 17. Vita irs org You cannot deduct IRA contributions on Form 1040EZ. Vita irs org Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Vita irs org The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Vita irs org Example. Vita irs org Mike is 28 years old and single. Vita irs org In 2013, he was covered by a retirement plan at work. Vita irs org His salary was $57,312. Vita irs org His modified AGI was $70,000. Vita irs org Mike made a $5,500 IRA contribution for 2013. Vita irs org Because he was covered by a retirement plan and his modified AGI was over $69,000, he cannot deduct his $5,500 IRA contribution. Vita irs org He must designate this contribution as a nondeductible contribution by reporting it on Form 8606, as explained next. Vita irs org Form 8606. Vita irs org   To designate contributions as nondeductible, you must file Form 8606. Vita irs org   You do not have to designate a contribution as nondeductible until you file your tax return. Vita irs org When you file, you can even designate otherwise deductible contributions as nondeductible. Vita irs org   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Vita irs org 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. Vita irs org In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Vita irs org See Form 8606 under Distributions Fully or Partly Taxable, later. Vita irs org Failure to report nondeductible contributions. Vita irs org   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated as deductible contributions when withdrawn. Vita irs org All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Vita irs org Penalty for overstatement. Vita irs org   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. Vita irs org Penalty for failure to file Form 8606. Vita irs org   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. Vita irs org    Tax on earnings on nondeductible contributions. Vita irs org   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. Vita irs org See When Can You Withdraw or Use IRA Assets , later. Vita irs org Cost basis. Vita irs org   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Vita irs org Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Vita irs org Inherited IRAs If you inherit a traditional IRA, you are called a beneficiary. Vita irs org A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Vita irs org Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Vita irs org Inherited from spouse. Vita irs org   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Vita irs org You can: Treat it as your own IRA by designating yourself as the account owner. Vita irs org Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (section 403(b) plan), or Deferred compensation plan of a state or local government (section 457 plan). Vita irs org Treat yourself as the beneficiary rather than treating the IRA as your own. Vita irs org Treating it as your own. Vita irs org   You will be considered to have chosen to treat the IRA as your own if: Contributions (including rollover contributions) are made to the inherited IRA, or You do not take the required minimum distribution for a year as a beneficiary of the IRA. Vita irs org You will only be considered to have chosen to treat the IRA as your own if: You are the sole beneficiary of the IRA, and You have an unlimited right to withdraw amounts from it. Vita irs org   However, if you receive a distribution from your deceased spouse's IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution is not a required distribution, even if you are not the sole beneficiary of your deceased spouse's IRA. Vita irs org Inherited from someone other than spouse. Vita irs org   If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. Vita irs org This means that you cannot make any contributions to the IRA. Vita irs org It also means you cannot roll over any amounts into or out of the inherited IRA. Vita irs org However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary. Vita irs org For more information, see the discussion of inherited IRAs under Rollover From One IRA Into Another, later. Vita irs org Can You Move Retirement Plan Assets? You can transfer, tax free, assets (money or property) from other retirement plans (including traditional IRAs) to a traditional IRA. Vita irs org You can make the following kinds of transfers. Vita irs org Transfers from one trustee to another. Vita irs org Rollovers. Vita irs org Transfers incident to a divorce. Vita irs org Transfers to Roth IRAs. Vita irs org   Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. Vita irs org You can also move assets from a qualified retirement plan to a Roth IRA. Vita irs org See Can You Move Amounts Into a Roth IRA? under Roth IRAs, later. Vita irs org Trustee-to-Trustee Transfer A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Vita irs org Because there is no distribution to you, the transfer is tax free. Vita irs org Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers, discussed later under Rollover From One IRA Into Another . Vita irs org For information about direct transfers to IRAs from retirement plans other than IRAs, see Can You Move Retirement Plan Assets? in chapter 1 and Can You Move Amounts Into a Roth IRA? in chapter 2 of Publication 590. Vita irs org Rollovers Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute (roll over) to another retirement plan. Vita irs org The contribution to the second retirement plan is called a “rollover contribution. Vita irs org ” Note. Vita irs org An amount rolled over tax free from one retirement plan to another is generally includible in income when it is distributed from the second plan. Vita irs org Kinds of rollovers to a traditional IRA. Vita irs org   You can roll over amounts from the following plans into a traditional IRA: A traditional IRA, An employer's qualified retirement plan for its employees, A deferred compensation plan of a state or local government (section 457 plan), or A tax-sheltered annuity plan (section 403(b) plan). Vita irs org Treatment of rollovers. Vita irs org   You cannot deduct a rollover contribution, but you must report the rollover distribution on your tax return as discussed later under Reporting rollovers from IRAs and under Reporting rollovers from employer plans . Vita irs org Kinds of rollovers from a traditional IRA. Vita irs org   You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. Vita irs org These plans include the federal Thrift Savings Fund (for federal employees), deferred compensation plans of state or local governments (section 457 plans), and tax-sheltered annuity plans (section 403(b) plans). Vita irs org The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). Vita irs org Qualified plans may, but are not required to, accept such rollovers. Vita irs org Time limit for making a rollover contribution. Vita irs org   You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan. Vita irs org The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. Vita irs org For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Vita irs org Extension of rollover period. Vita irs org   If an amount distributed to you from a traditional IRA or a qualified employer retirement plan is a frozen deposit at any time during the 60-day period allowed for a rollover, special rules extend the rollover period. Vita irs org For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Vita irs org More information. Vita irs org   For more information on rollovers, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Vita irs org Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Vita irs org Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. Vita irs org Waiting period between rollovers. Vita irs org   Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. Vita irs org You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the IRA into which you made the tax-free rollover. Vita irs org   The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA. Vita irs org Example. Vita irs org You have two traditional IRAs, IRA-1 and IRA-2. Vita irs org You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). Vita irs org You cannot, within 1 year of the distribution from IRA-1, make a tax-free rollover of any distribution from either IRA-1 or IRA-3 into another traditional IRA. Vita irs org However, the rollover from IRA-1 into IRA-3 does not prevent you from making a tax-free rollover from IRA-2 into any other traditional IRA. Vita irs org This is because you have not, within the last year, rolled over, tax free, any distribution from IRA-2 or made a tax-free rollover into IRA-2. Vita irs org Exception. Vita irs org   For an exception for distributions from failed financial institutions, see Rollover From One IRA Into Another under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Vita irs org Partial rollovers. Vita irs org   If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. Vita irs org The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). Vita irs org The amount you keep may be subject to the 10% additional tax on early distributions, discussed later under What Acts Result in Penalties or Additional Taxes? . Vita irs org Required distributions. Vita irs org   Amounts that must be distributed during a particular year under the required distribution rules (discussed later) are not eligible for rollover treatment. Vita irs org Inherited IRAs. Vita irs org   If you inherit a traditional IRA from your spouse, you generally can roll it over, or you can choose to make the inherited IRA your own. Vita irs org See Treating it as your own , earlier. Vita irs org Not inherited from spouse. Vita irs org   If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. Vita irs org You must withdraw the IRA assets within a certain period. Vita irs org For more information, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Vita irs org Reporting rollovers from IRAs. Vita irs org   Report any rollover from one traditional IRA to the same or another traditional IRA on lines 15a and 15b, Form 1040, or lines 11a and 11b, Form 1040A, as follows. Vita irs org   Enter the total amount of the distribution on Form 1040, line 15a, or Form 1040A, line 11a. Vita irs org If the total amount on Form 1040, line 15a, or Form 1040A, line 11a, was rolled over, enter zero on Form 1040, line 15b, or Form 1040A, line 11b. Vita irs org If the total distribution was not rolled over, enter the taxable portion of the part that was not rolled over on Form 1040, line 15b, or Form 1040A, line 11b. Vita irs org Put “Rollover” next to Form 1040, line 15b, or Form 1040A, line 11b. Vita irs org See your tax return instructions. Vita irs org   If you rolled over the distribution into a qualified plan (other than an IRA) or you make the rollover in 2014, attach a statement explaining what you did. Vita irs org Rollover From Employer's Plan Into an IRA You can roll over into a traditional IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's): Employer's qualified pension, profit-sharing, or stock bonus plan; Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). Vita irs org A qualified plan is one that meets the requirements of the Internal Revenue Code. Vita irs org Eligible rollover distribution. Vita irs org   Generally, an eligible rollover distribution is any distribution of all or part of the balance to your credit in a qualified retirement plan except the following. Vita irs org A required minimum distribution (explained later under When Must You Withdraw IRA Assets? (Required Minimum Distributions) ). Vita irs org A hardship distribution. Vita irs org Any of a series of substantially equal periodic distributions paid at least once a year over: Your lifetime or life expectancy, The lifetimes or life expectancies of you and your beneficiary, or A period of 10 years or more. Vita irs org Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or of excess annual additions and any allocable gains. Vita irs org A loan treated as a distribution because it does not satisfy certain requirements either when made or later (such as upon default), unless the participant's accrued benefits are reduced (offset) to repay the loan. Vita irs org Dividends on employer securities. Vita irs org The cost of life insurance coverage. Vita irs org Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Vita irs org To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Vita irs org See Form 8606 under Distributions Fully or Partly Taxable, later. Vita irs org Rollover by nonspouse beneficiary. Vita irs org   A direct transfer from a deceased employee's qualified pension, profit-sharing, or stock bonus plan; annuity plan; tax-sheltered annuity (section 403(b)) plan; or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. Vita irs org The IRA is treated as an inherited IRA. Vita irs org For more information about inherited IRAs, see Inherited IRAs , earlier. Vita irs org Reporting rollovers from employer plans. Vita irs org    Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. Vita irs org This amount should be shown in box 1 of Form 1099-R. Vita irs org From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. Vita irs org From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Vita irs org Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. Vita irs org Also, enter "Rollover" next to Form 1040, line 16b, or Form 1040A, line 12b. Vita irs org Transfers Incident to Divorce If an interest in a traditional IRA is transferred from your spouse or former spouse to you by a divorce or separate maintenance decree or a written document related to such a decree, the interest in the IRA, starting from the date of the transfer, is treated as your IRA. Vita irs org The transfer is tax free. Vita irs org For detailed information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Vita irs org Converting From Any Traditional IRA to a Roth IRA Allowable conversions. Vita irs org   You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. Vita irs org The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. Vita irs org If properly (and timely) rolled over, the 10% additional tax on early distributions will not apply. Vita irs org However, a part or all of the conversion contribution from your traditional IRA is included in your gross income. Vita irs org Required distributions. Vita irs org   You cannot convert amounts that must be distributed from your traditional IRA for a particular year (including the calendar year in which you reach age 70½) under the required distribution rules (discussed later). Vita irs org Income. Vita irs org   You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you had not converted them into a Roth IRA. Vita irs org These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA. Vita irs org   You do not include in gross income any part of a distribution from a traditional IRA that is a return of your basis, as discussed later. Vita irs org   You must file Form 8606 to report 2013 conversions from traditional, SEP, or SIMPLE IRAs to a Roth IRA in 2013 (unless you recharacterized the entire amount) and to figure the amount to include in income. Vita irs org   If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Vita irs org See chapter 4. Vita irs org Recharacterizations You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. Vita irs org This is called recharacterizing the contribution. Vita irs org See Can You Move Retirement Plan Assets? in chapter 1 of Publication 590 for more detailed information. Vita irs org How to recharacterize a contribution. Vita irs org   To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. Vita irs org If the transfer is made by the due date (including extensions) for your tax return for the year during which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. Vita irs org If you recharacterize your contribution, you must do all three of the following. Vita irs org Include in the transfer any net income allocable to the contribution. Vita irs org If there was a loss, the net income you must transfer may be a negative amount. Vita irs org Report the recharacterization on your tax return for the year during which the contribution was made. Vita irs org Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA. Vita irs org No deduction allowed. Vita irs org   You cannot deduct the contribution to the first IRA. Vita irs org Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. Vita irs org Required notifications. Vita irs org   To recharacterize a contribution, you must notify both the trustee of the first IRA (the one to which the contribution was actually made) and the trustee of the second IRA (the one to which the contribution is being moved) that you have elected to treat the contribution as having been made to the second IRA rather than the first. Vita irs org You must make the notifications by the date of the transfer. Vita irs org Only one notification is required if both IRAs are maintained by the same trustee. Vita irs org The notification(s) must include all of the following information. Vita irs org The type and amount of the contribution to the first IRA that is to be recharacterized. Vita irs org The date on which the contribution was made to the first IRA and the year for which it was made. Vita irs org A direction to the trustee of the first IRA to transfer in a trustee-to-trustee transfer the amount of the contribution and any net income (or loss) allocable to the contribution to the trustee of the second IRA. Vita irs org The name of the trustee of the first IRA and the name of the trustee of the second IRA. Vita irs org Any additional information needed to make the transfer. Vita irs org Reporting a recharacterization. Vita irs org   If you elect to recharacterize a contribution to one IRA as a contribution to another IRA, you must report the recharacterization on your tax return as directed by Form 8606 and its instructions. Vita irs org You must treat the contribution as having been made to the second IRA. Vita irs org When Can You Withdraw or Use IRA Assets? There are rules limiting use of your IRA assets and distributions from it. Vita irs org Violation of the rules generally results in additional taxes in the year of violation. Vita irs org See What Acts Result in Penalties or Additional Taxes , later. Vita irs org Contributions returned before the due date of return. Vita irs org   If you made IRA contributions in 2013, you can withdraw them tax free by the due date of your return. Vita irs org If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. Vita irs org You can do this if, for each contribution you withdraw, both of the following conditions apply. Vita irs org You did not take a deduction for the contribution. Vita irs org You withdraw any interest or other income earned on the contribution. Vita irs org You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Vita irs org If there was a loss, the net income earned on the contribution may be a negative amount. Vita irs org Note. Vita irs org To calculate the amount you must withdraw, see Worksheet 1-4 under When Can You Withdraw or Use Assets? in chapter 1 of Publication 590. Vita irs org Earnings includible in income. Vita irs org   You must include in income any earnings on the contributions you withdraw. Vita irs org Include the earnings in income for the year in which you made the contributions, not in the year in which you withdraw them. Vita irs org Generally, except for any part of a withdrawal that is a return of nondeductible contributions (basis), any withdrawal of your contributions after the due date (or extended due date) of your return will be treated as a taxable distribution. Vita irs org Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes?, later. Vita irs org    Early distributions tax. Vita irs org   The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. Vita irs org However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax. Vita irs org When Must You Withdraw IRA Assets? (Required Minimum Distributions) You cannot keep funds in a traditional IRA indefinitely. Vita irs org Eventually they must be distributed. Vita irs org If there are no distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required. Vita irs org See Excess Accumulations (Insufficient Distributions) , later. Vita irs org The requirements for distributing IRA funds differ depending on whether you are the IRA owner or the beneficiary of a decedent's IRA. Vita irs org Required minimum distribution. Vita irs org   The amount that must be distributed each year is referred to as the required minimum distribution. Vita irs org Required distributions not eligible for rollover. Vita irs org   Amounts that must be distributed (required minimum distributions) during a particular year are not eligible for rollover treatment. Vita irs org IRA owners. Vita irs org   If you are the owner of a traditional IRA, you must generally start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Vita irs org April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date. Vita irs org Distributions by the required beginning date. Vita irs org   You must receive at least a minimum amount for each year starting with the year you reach age 70½ (your 70½ year). Vita irs org If you do not (or did not) receive that minimum amount in your 70½ year, then you must receive distributions for your 70½ year by April 1 of the next year. Vita irs org   If an IRA owner dies after reaching age 70½, but before April 1 of the next year, no minimum distribution is required because death occurred before the required beginning date. Vita irs org Even if you begin receiving distributions before you attain age 70½, you must begin calculating and receiving required minimum distributions by your required beginning date. Vita irs org Distributions after the required beginning date. Vita irs org   The required minimum distribution for any year after the year you turn 70½ must be made by December 31 of that later year. Vita irs org    Beneficiaries. Vita irs org   If you are the beneficiary of a decedent's traditional IRA, the requirements for distributions from that IRA generally depend on whether the IRA owner died before or after the required beginning date for distributions. Vita irs org More information. Vita irs org   For more information, including how to figure your minimum required distribution each year and how to figure your required distribution if you are a beneficiary of a decedent's IRA, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Vita irs org Are Distributions Taxable? In general, distributions from a traditional IRA are taxable in the year you receive them. Vita irs org Exceptions. Vita irs org   Exceptions to distributions from traditional IRAs being taxable in the year you receive them are: Rollovers, Qualified charitable distributions (QCD), discussed later, Tax-free withdrawals of contributions, discussed earlier, and The return of nondeductible contributions, discussed later under Distributions Fully or Partly Taxable . Vita irs org    Although a conversion of a traditional IRA is considered a rollover for Roth IRA purposes, it is not an exception to the rule that distributions from a traditional IRA are taxable in the year you receive them. Vita irs org Conversion distributions are includible in your gross income subject to this rule and the special rules for conversions explained in Converting From Any Traditional IRA Into a Roth IRA under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Vita irs org Qualified charitable distributions (QCD). Vita irs org   A QCD is generally a nontaxable distribution made directly by the trustee of your IRA to an organization eligible to receive tax-deductible contributions. Vita irs org Special rules apply if you made a qualified charitable distribution in January 2013 that you elected to treat as made in 2012. Vita irs org See Qualified Charitable Distributions in Publication 590 for more information. Vita irs org Ordinary income. Vita irs org   Distributions from traditional IRAs that you include in income are taxed as ordinary income. Vita irs org No special treatment. Vita irs org   In figuring your tax, you cannot use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement plans. Vita irs org Distributions Fully or Partly Taxable Distributions from your traditional IRA may be fully or partly taxable, depending on whether your IRA includes any nondeductible contributions. Vita irs org Fully taxable. Vita irs org   If only deductible contributions were made to your traditional IRA (or IRAs, if you have more than one), you have no basis in your IRA. Vita irs org Because you have no basis in your IRA, any distributions are fully taxable when received. Vita irs org See Reporting taxable distributions on your return , later. Vita irs org Partly taxable. Vita irs org    If you made nondeductible contributions or rolled over any after-tax amounts to any of your traditional IRAs, you have a cost basis (investment in the contract) equal to the amount of those contributions. Vita irs org These nondeductible contributions are not taxed when they are distributed to you. Vita irs org They are a return of your investment in your IRA. Vita irs org   Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. Vita irs org If nondeductible contributions have been made or after-tax amounts have been rolled over to your IRA, distributions consist partly of nondeductible contributions (basis) and partly of deductible contributions, earnings, and gains (if there are any). Vita irs org Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable. Vita irs org Form 8606. Vita irs org   You must complete Form 8606 and attach it to your return if you receive a distribution from a traditional IRA and have ever made nondeductible contributions or rolled over after-tax amounts to any of your traditional IRAs. Vita irs org Using the form, you will figure the nontaxable distributions for 2013 and your total IRA basis for 2013 and earlier years. Vita irs org Note. Vita irs org If you are required to file Form 8606, but you are not required to file an income tax return, you still must file Form 8606. Vita irs org Send it to the IRS at the time and place you would otherwise file an income tax return. Vita irs org Distributions reported on Form 1099-R. Vita irs org   If you receive a distribution from your traditional IRA, you will receive Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Vita irs org , or a similar statement. Vita irs org IRA distributions are shown in boxes 1 and 2a of Form 1099-R. Vita irs org A number or letter code in box 7 tells you what type of distribution you received from your IRA. Vita irs org Withholding. Vita irs org   Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld. Vita irs org See chapter 4. Vita irs org IRA distributions delivered outside the United States. Vita irs org   In general, if you are a U. Vita irs org S. Vita irs org citizen or resident alien and your home address is outside the United States or its possessions, you cannot choose exemption from withholding on distributions from your traditional IRA. Vita irs org Reporting taxable distributions on your return. Vita irs org    Report fully taxable distributions, including early distributions on Form 1040, line 15b, or Form 1040A, line 11b (no entry is required on Form 1040, line 15a, or Form 1040A, line 11a). Vita irs org If only part of the distribution is taxable, enter the total amount on Form 1040, line 15a, or Form 1040A, line 11a, and the taxable part on Form 1040, line 15b, or Form 1040A, line 11b. Vita irs org You cannot report distributions on Form 1040EZ. Vita irs org What Acts Result in Penalties or Additional Taxes? The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. Vita irs org There are additions to the regular tax for using your IRA funds in prohibited transactions. Vita irs org There are also additional taxes for the following activities. Vita irs org Investing in collectibles. Vita irs org Making excess contributions. Vita irs org Taking early distributions. Vita irs org Allowing excess amounts to accumulate (failing to take required distributions). Vita irs org There are penalties for overstating the amount of nondeductible contributions and for failure to file a Form 8606, if required. Vita irs org Prohibited Transactions Generally, a prohibited transaction is any improper use of your traditional IRA by you, your beneficiary, or any disqualified person. Vita irs org Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendent, and any spouse of a lineal descendent). Vita irs org The following are examples of prohibited transactions with a traditional IRA. Vita irs org Borrowing money from it. Vita irs org Selling property to it. Vita irs org Receiving unreasonable compensation for managing it. Vita irs org Using it as security for a loan. Vita irs org Buying property for personal use (present or future) with IRA funds. Vita irs org Effect on an IRA account. Vita irs org   Generally, if you or your beneficiary engages in a prohibited transaction in connection with your traditional IRA account at any time during the year, the account stops being an IRA as of the first day of that year. Vita irs org Effect on you or your beneficiary. Vita irs org   If your account stops being an IRA because you or your beneficiary engaged in a prohibited transaction, the account is treated as distributing all its assets to you at their fair market values on the first day of the year. Vita irs org If the total of those values is more than your basis in the IRA, you will have a taxable gain that is includible in your income. Vita irs org For information on figuring your gain and reporting it in income, see Are Distributions Taxable , earlier. Vita irs org The distribution may be subject to additional taxes or penalties. Vita irs org Taxes on prohibited transactions. Vita irs org   If someone other than the owner or beneficiary of a traditional IRA engages in a prohibited transaction, that person may be liable for certain taxes. Vita irs org In general, there is a 15% tax on the amount of the prohibited transaction and a 100% additional tax if the transaction is not corrected. Vita irs org More information. Vita irs org   For more information on prohibited transactions, see What Acts Result in Penalties or Additional Taxes? in chapter 1 of Publication 590. Vita irs org Investment in Collectibles If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. Vita irs org You may have to pay the 10% additional tax on early distributions, discussed later. Vita irs org Collectibles. Vita irs org   These include: Artworks, Rugs, Antiques, Metals, Gems, Stamps, Coins, Alcoholic beverages, and Certain other tangible personal property. Vita irs org Exception. Vita irs org    Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U. Vita irs org S. Vita irs org gold coins, or one-ounce silver coins minted by the Treasury Department. Vita irs org It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. Vita irs org Excess Contributions Generally, an excess contribution is the amount contributed to your traditional IRA(s) for the year that is more than the smaller of: The maximum deductible amount for the year. Vita irs org For 2013, this is $5,500 ($6,500 if you are 50 or older), or Your taxable compensation for the year. Vita irs org Tax on excess contributions. Vita irs org   In general, if the excess contributions for a year are not withdrawn by the date your return for the year is due (including extensions), you are subject to a 6% tax. Vita irs org You must pay the 6% tax each year on excess amounts that remain in your traditional IRA at the end of your tax year. Vita irs org The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. Vita irs org Excess contributions withdrawn by due date of return. Vita irs org   You will not have to pay the 6% tax if you withdraw an excess contribution made during a tax year and you also withdraw interest or other income earned on the excess contribution. Vita irs org You must complete your withdrawal by the date your tax return for that year is due, including extensions. Vita irs org How to treat withdrawn contributions. Vita irs org   Do not include in your gross income an excess contribution that you withdraw from your traditional IRA before your tax return is due if both the following conditions are met. Vita irs org No deduction was allowed for the excess contribution. Vita irs org You withdraw the interest or other income earned on the excess contribution. Vita irs org You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Vita irs org If there was a loss, the net income you must withdraw may be a negative amount. Vita irs org How to treat withdrawn interest or other income. Vita irs org   You must include in your gross income the interest or other income that was earned on the excess contribution. Vita irs org Report it on your return for the year in which the excess contribution was made. Vita irs org Your withdrawal of interest or other income may be subject to an additional 10% tax on early distributions, discus
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Contact My Local Office in Colorado

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

 City Street Address  Days/Hours of Service  Telephone* 
Colorado Springs  2864 S. Circle Dr.
Colorado Springs, CO 80906 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(719) 579-5227 
Denver  1999 Broadway
Denver, CO 80202 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(303) 446-1675 
Ft. Collins  301 S. Howes St.
Ft. Collins, CO 80521 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(970) 221-0688 
Grand Junction  400 Rood Ave.
Grand Junction, CO 81505 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. -1:30 p.m.)

 

Services Provided

(970) 241-6265 


* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call 303-603-4600 in the Denver area or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
1999 Broadway, MS 6610DEN
Denver, CO 80202-2490

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Vita Irs Org

Vita irs org Part Two -   Excise Taxes Other Than Fuel Taxes Table of Contents 3. Vita irs org   Environmental TaxesOil Spill Liability Tax ODCs Imported Taxable Products Floor Stocks Tax 4. Vita irs org   Communications and Air Transportation TaxesUncollected Tax Report Communications TaxLocal-only service. Vita irs org Private communication service. Vita irs org Exemptions Credits or Refunds Air Transportation TaxesTransportation of Persons by Air International Air Travel Facilities Transportation of Property by Air Special Rules on Transportation Taxes 5. Vita irs org   Manufacturers TaxesImporter. Vita irs org Use considered sale. Vita irs org Lease considered sale. Vita irs org Bonus goods. Vita irs org Taxable Event ExemptionsRequirements for Exempt Sales Credits or Refunds Sport Fishing EquipmentRelated person. Vita irs org Bows, Quivers, Broadheads, and Points Arrow ShaftsExemption for certain wooden arrows. Vita irs org CoalExported. Vita irs org Taxable TiresQualifying intercity or local bus. Vita irs org Qualifying school bus. Vita irs org Gas Guzzler TaxVehicles not subject to tax. Vita irs org Imported automobiles. Vita irs org VaccinesConditions to allowance. Vita irs org Taxable Medical Devices 6. Vita irs org   Retail Tax on Heavy Trucks, Trailers, and TractorsHighway vehicle. Vita irs org Vehicles not considered highway vehicles. Vita irs org Idling reduction device. Vita irs org Separate purchase. Vita irs org Leases. Vita irs org Exported vehicle. Vita irs org Tax on resale of tax-paid trailers and semitrailers. Vita irs org Use treated as sale. Vita irs org Sale. Vita irs org Long-term lease. Vita irs org Short-term lease. Vita irs org Related person. Vita irs org Exclusions from tax base. Vita irs org Sales not at arm's length. Vita irs org Installment sales. Vita irs org Repairs and modifications. Vita irs org Further manufacture. Vita irs org Rail trailers and rail vans. Vita irs org Parts and accessories. Vita irs org Trash containers. Vita irs org House trailers. Vita irs org Camper coaches or bodies for self-propelled mobile homes. Vita irs org Farm feed, seed, and fertilizer equipment. Vita irs org Ambulances and hearses. Vita irs org Truck-tractors. Vita irs org Concrete mixers. Vita irs org Registration requirement. Vita irs org Further manufacture. Vita irs org 7. Vita irs org   Ship Passenger Tax 8. Vita irs org   Foreign Insurance TaxesPremium. Vita irs org 9. Vita irs org   Obligations Not in Registered Form 10. Vita irs org   Indoor Tanning Services Tax 11. Vita irs org   Patient-Centered Outcomes Research Fee Prev  Up  Next   Home   More Online Publications