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2010 Tax Forms Irs

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2010 Tax Forms Irs

2010 tax forms irs Tax Changes for Businesses Table of Contents 2001 ChangesNew 5-Year Carryback Rule for Net Operating Losses (NOLs) Electronic Form 1099 Tax Incentives for New York Liberty Zone Other 2001 Changes 2002 ChangesNonaccrual-Experience Method Issuance of Qualified Zone Academy Bonds Depletion Work Opportunity Credit Expanded in New York Liberty Zone Credit For Pension Plan Startup Costs Welfare-to-Work Credit Extended Work Opportunity Credit Extended Electric and Clean-Fuel Vehicles Renewable Electricity Production Credit Later ChangesSpecial Depreciation Allowance Extension of Placed in Service Date Special Liberty Zone Depreciation Allowance for New and Used Property Depreciation of Property Used on Indian Reservations Indian Employment Credit Extended 2001 Changes New 5-Year Carryback Rule for Net Operating Losses (NOLs) If you have an NOL from a tax year ending during 2001 or 2002, you must generally carry back the entire amount of the NOL to the 5 tax years before the NOL year (the carryback period). 2010 tax forms irs However, you can still choose to use the previous carryback period. 2010 tax forms irs You also can choose not to carry back an NOL and only carry it forward. 2010 tax forms irs Individuals, estates, and trusts can file Form 1045, Application for Tentative Refund. 2010 tax forms irs Corporations can file Form 1139, Corporation Application for Tentative Refund. 2010 tax forms irs The instructions for these forms will be revised to reflect the new law. 2010 tax forms irs Electronic Form 1099 For tax years ending after March 9, 2002, most Forms 1099 can be furnished electronically if the recipient consents, according to IRS regulations, to receive it that way. 2010 tax forms irs Tax Incentives for New York Liberty Zone New tax benefits are provided for the parts of New York City damaged in the terrorist attacks on September 11, 2001. 2010 tax forms irs These benefits apply to the newly created New York Liberty Zone, which is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway), in the Borough of Manhattan. 2010 tax forms irs Tax benefits for the New York Liberty Zone include the following. 2010 tax forms irs A special depreciation allowance equal to 30% of the adjusted basis of qualified Liberty Zone property. 2010 tax forms irs It is allowed for the year the property is placed in service. 2010 tax forms irs No alternative minimum tax depreciation adjustment for qualified Liberty Zone property. 2010 tax forms irs Classification of Liberty Zone leasehold improvement property as 5-year property. 2010 tax forms irs Authorization of the issuance of tax-exempt New York Liberty bonds to finance the acquisition, construction, reconstruction, and renovation of nonresidential real property, residential rental property, and public utility property in the Liberty Zone. 2010 tax forms irs An increased section 179 deduction for certain Liberty Zone property. 2010 tax forms irs Extension of the replacement period from 2 years to 5 years for certain property involuntarily converted as a result of the terrorist attacks on September 11, 2001, but only if substantially all of the use of the replacement property is in New York City. 2010 tax forms irs For more information about involuntary conversions, see Postponement of Gain in Publication 547, Casualties, Disasters, and Thefts. 2010 tax forms irs In addition, for 2002 and 2003, the work opportunity credit is expanded by creating a new targeted group, consisting generally of employees who work in the Liberty Zone or, in certain cases, in New York City outside the Liberty Zone. 2010 tax forms irs For more information, see Work Opportunity Credit Expanded in New York Liberty Zone under 2002 Changes, later. 2010 tax forms irs For more information about the 30% special depreciation allowance, Liberty Zone leasehold improvement property, or increased section 179 deduction, see New York Liberty Zone Benefits, in chapter 5. 2010 tax forms irs In addition, the tax benefits for the Liberty Zone will be covered in a new edition of Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities, available later in 2002. 2010 tax forms irs Other 2001 Changes Other changes are discussed in the following chapters. 2010 tax forms irs Chapter 4 Car Expenses Chapter 5 Depreciation 2002 Changes Nonaccrual-Experience Method Under current law, if you perform services and use an accrual method of accounting, you do not accrue income which, based on experience, you expect to be uncollectible. 2010 tax forms irs Beginning in 2002, this rule only applies if you perform services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, and consulting, or your average annual gross receipts for the 3 prior tax years does not exceed $5,000,000. 2010 tax forms irs As under current law, the nonaccrual-experience method will not apply to amounts on which you charge interest or a late payment penalty. 2010 tax forms irs For more information, see Nonaccrual-Experience Method in chapter 11 of Publication 535, Business Expenses. 2010 tax forms irs Issuance of Qualified Zone Academy Bonds State and local governments issue qualified zone academy bonds to raise funds for the use of qualified zone academies. 2010 tax forms irs The amount of bonds that may be issued was limited to $400 million each year for 1998, 1999, 2000, and 2001. 2010 tax forms irs This provision has been extended to provide for an additional $400 million of bonds to be issued each year for 2002 and 2003. 2010 tax forms irs For more information about qualified zone academy bonds, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 tax forms irs Depletion The suspension of the taxable income limit on percentage depletion from the marginal production of oil and natural gas that was scheduled to expire for tax years beginning after 2001 has been extended to tax years beginning before 2004. 2010 tax forms irs For more information on marginal production, see section 613A(c) of the Internal Revenue Code. 2010 tax forms irs Work Opportunity Credit Expanded in New York Liberty Zone The work opportunity credit is expanded to include a new targeted group consisting generally of employees who perform substantially all their services: In the New York Liberty Zone (defined earlier under Tax Incentives for New York Liberty Zone, under 2001 Changes), or Elsewhere in New York City for a business that relocated from the Liberty Zone due to the destruction or damage of its place of business by the September 11, 2001, terrorist attack. 2010 tax forms irs The credit is available to employers for wages paid to new employees and existing employees for work performed during 2002 or 2003. 2010 tax forms irs Certain limits apply. 2010 tax forms irs For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 tax forms irs Credit For Pension Plan Startup Costs The credit for pension plan startup costs is now allowed for plans that become effective after December 31, 2001. 2010 tax forms irs Previously, the credit was only allowed for plans established after December 31, 2001. 2010 tax forms irs For more information on the credit, see Important Changes for 2002 in Publication 560, Retirement Plans for Small Business. 2010 tax forms irs Welfare-to-Work Credit Extended The welfare-to-work credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. 2010 tax forms irs For more information on the welfare-to-work credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 tax forms irs Work Opportunity Credit Extended The work opportunity credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. 2010 tax forms irs For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 tax forms irs Electric and Clean-Fuel Vehicles The maximum clean-fuel vehicle deduction and qualified electric vehicle credit were scheduled to be 25% lower for 2002 and both were scheduled to be phased out completely by 2005. 2010 tax forms irs The full deduction and credit are now allowed for qualified property placed in service in 2002 and 2003. 2010 tax forms irs The phaseout of the deduction and the credit will begin in 2004, and no deduction or credit will be allowed for property placed in service after 2006. 2010 tax forms irs For more information about electric and clean-fuel vehicles, see chapter 12 in Publication 535, Business Expenses. 2010 tax forms irs Renewable Electricity Production Credit The renewable electricity production credit is extended to include electricity produced by facilities placed in service after 2001 and before 2004. 2010 tax forms irs Later Changes Special Depreciation Allowance You can claim the special depreciation allowance (an additional 30% depreciation deduction) for new property that you acquire before September 11, 2004, and place in service for your business generally before January 1, 2005, if you meet the other requirements for qualified property covered in chapter 5. 2010 tax forms irs Accordingly, you will generally no longer be able to claim the special depreciation allowance for the qualified property if you acquire it after September 10, 2004, or place it in service for your business after December 31, 2004. 2010 tax forms irs However, you will be able to claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for most qualified property if you place it in service in the Liberty Zone after December 31, 2004, and generally before January 1, 2007, provided you meet the other requirements for qualified Liberty Zone property covered in chapter 5. 2010 tax forms irs Extension of Placed in Service Date To qualify for the special depreciation allowance, your property must meet certain tests, including the placed in service date test, as well as the other requirements covered in chapter 5 of this publication. 2010 tax forms irs To meet the placed in service date test, your property must generally be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. 2010 tax forms irs However, certain property placed in service before January 1, 2006, may meet this test. 2010 tax forms irs Transportation property and property with a recovery period of 10 years or longer meet the test if one of the following applies. 2010 tax forms irs The property has an estimated production period of more than 2 years. 2010 tax forms irs The property has an estimated production period of more than 1 year and it costs more than $1 million. 2010 tax forms irs Transportation property is any tangible personal property used in the trade or business of transporting persons or property. 2010 tax forms irs For property that qualifies for the special depreciation allowance solely because of the one-year extension of the placed in service date, only the part of the basis attributable to manufacture, construction, or production before September 11, 2004, is eligible for the special depreciation allowance. 2010 tax forms irs Special Liberty Zone Depreciation Allowance for New and Used Property You can claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for used property that you acquire after September 10, 2001, if the property meets the requirements listed under Qualified Liberty Zone Property in chapter 5 of this publication. 2010 tax forms irs You will be able to claim the allowance for both new and used property that you acquire after September 10, 2004, provided the property meets the other requirements for qualified Liberty Zone property. 2010 tax forms irs Depreciation of Property Used on Indian Reservations The special depreciation rules that apply to qualified property used on an Indian reservation were scheduled to expire for property placed in service after 2003. 2010 tax forms irs These special rules have been extended to include property placed in service in 2004. 2010 tax forms irs For more information about these rules, see Publication 946, How To Depreciate Property. 2010 tax forms irs Indian Employment Credit Extended The Indian employment credit that was scheduled to expire for tax years beginning after 2003 has been extended to include a tax year beginning in 2004. 2010 tax forms irs For more information about this credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. 2010 tax forms irs Prev  Up  Next   Home   More Online Publications
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Procurement Small Business Program Office

Our Purpose:

The Internal Revenue Service (IRS) Small Business Program Office was established to (1) assist small, HUBZone small, small disadvantaged, women-owned small, veteran-owned small, and service disabled veteran-owned small businesses, to develop, grow, and ensure their long-term success; (2) continually foster an environment where small, HUBZone small, small disadvantaged, women-owned small, veteran-owned small, and service disabled veteran-owned small businesses can compete successfully for a fair share of IRS's procurements on their own merits; and (3) assist large businesses to increase subcontracting opportunities for small, HUBZone small, small disadvantaged, women-owned small, veteran-owned small, and service disabled veteran-owned small businesses.

The IRS small business goals for FY 2014 are as follows:

 

IRS FY 2014 SMALL BUSINESS GOALS

Small Business (SB)

35.07%

Small Disadvantaged Business (SDB)

5.0%

Woman-Owned Small Business (WOSB)

5.0%

HUBZone Small Business (HUBZone)

3.0%

Service-Disabled Veteran-Owned Small Business (SDVOSB)

3.0%

Veteran-Owned Small Business (VOSB)

No Goal



 

IRS FY 2014 SUB-CONTRACTING GOALS

Small Business (SB)

35%

Small Disadvantaged Business (SDB)

5.0%

Woman-Owned Small Business (WOSB)

5.0%

HUBZone Small Business (HUBZone)

3.0%

Service-Disabled Veteran-Owned Small Business (SDVOSB)

3.0%


 

Points of Contact:

Please Note: This office does not have the expertise to answer tax questions. Please search the website under the Search Function for answers to tax questions or call the toll-free tax assistance line at 1-800-829-1040 for individual tax questions and 1-800-829-4933 for business tax questions. The IRS has no loan program. The IRS does have a small E-Grants Program for Low Income Taxpayer Clinics and Tax Counseling for Elderly (TCE) services. For further information on financing your business, please visit the Small Business Administrations (SBA's) web site.

 

For Small Business Concerns: Prior to contacting the Small Business Program Office, please review the information contained in this section as well as the Treasury Forecast of Procurement Opportunities to determine if the IRS actually purchases the products/services you are interested in selling to the IRS. Upon completion of the review, please feel free to contact the Small Business Program Office for further assistance in doing business with the IRS.

LaTonya Richardson - Small Business Specialist
Mary McKinzie - Procurement Analyst
Phone: 240-613-8600
Fax:  240-613-8552
Email: IRS Small Business Program

 


Office of Procurement - The Office of Procurement organization is located in Oxon Hill, Maryland, and handles nationwide IRS procurements, requirements for the Martinsburg, WV and Detroit, MI Computing Centers, and all local requirements for the IRS headquarters offices in the Washington, DC metropolitan area. In addition, there are four area procurement offices located in New York, NY, Atlanta, GA, Dallas, TX and Oakland, CA.

Purchase Card Program (Micropurchases) - The Internal Revenue Service currently spends approximately $4 million per month through individual purchase card transactions. Approximately 4,300 IRS field employees use the purchase cards to make purchases up to $3,000. These purchases, made throughout all IRS offices within the United States, cover a myriad of services, supplies, and equipment.

8(a) At-a-Glance Listing - The IRS' 8(a) At-A-Glance Listing contains information on the approximately 500 8(a) firms who are actively marketing the IRS at any given time. The listing contains each 8(a) firm's company name, address, phone number, graduation date, and a brief description of the products and/or services offered. The listing was developed to assist procurement and program personnel in selecting 8(a) firms for IRS contract opportunities. The listing is updated periodically to add new 8(a) firms and to delete graduated 8(a) firms.

HUBZone At-a-Glance Listing- The IRS’ HUBZone At-a-Glance Listing contains information on the HUBZone firms who are actively marketing the IRS. The listing contains each HUBZone firm’s company name, address, phone number, and a brief description of the products and/or services offered. The listing was developed to assist procurement and program personnel in selecting HUBZone firms for IRS contract opportunities. The listing is updated periodically to add new HUBZone firms.

Service Disabled Veteran-Owned Small Business (SDVOSB) At-a-Glance Listing- The IRS’ SDVOSB At-a-Glance Listing contains information on the SDVOSB firms who are actively marketing the IRS. The listing contains each SDVOSB firm’s company name, address, phone number, and a brief description of the products and/or services offered. The listing was developed to assist procurement and program personnel in selecting SDVOSB firms for IRS contract opportunities. The listing is updated periodically to add new SDVOSB firms.

Women Owned Small Business At-a-Glance Listing- The IRS' Women Owned Small Business At-a-Glance Listing contains information on the Women Owned Small Business (WOSB) firms who are actively marketing the IRS.  The listing contains each WOSB firm's company name, address, phone number, and a brief description of the products and/or services offered.  The listing was developed to assist procurement and program personnel in selecting WOSB firms for IRS contract opportunities.  The listing is updated periodically to add new WOSB firms.  

Freedom of Information Act (FOIA)- provides public access to agency records unless protected from disclosure by one of the FOIA’s nine exemptions or three exclusions.

Outreach Information - The Small Business Program Office is available to meet with small, (8a), HUBZone small, small disadvantaged, women-owned small, veteran-owned small, and service disabled veteran-owned small businesses to discuss a company's capabilities provide information on future procurement opportunities, and give advice on procurement questions. Individual appointments are available by phone or in person by calling 240-613-8600 or by sending an e-mail to AWSS.SBRO@IRS.GOV  .

The Small Business Program Office periodically hosts small business outreach events to target 8(a), HUBZone, Service Disabled Veteran Owned and Women Owned Small Businesses. Notice of the events are posted on Federal Business Opportunities when scheduled and are posted on our Internet page under Outreach Events.

Forecast of Procurement Opportunities - The IRS Forecast of Procurement Opportunities is available under the Treasury Web Site. There are two sections to the IRS Forecast: existing contracts, and new opportunities. The existing contracts section contains a list of active IRS contracts including NAICS code, contract description, dollar value, final year of contract, procurement contact and phone number, contract number, and contractor name. The new opportunities section contains a list of future contract opportunities including NAICS code, project description, dollar value (estimated), quarter and fiscal year of release date of the RFP, set-aside information, procurement contact and phone number.

Bidders List Information - In order to receive an award from any Treasury bureau, it is now required that your company register in the System for Award Management (SAM) database. The SAM serves as the primary Government repository for contractor information required for the conduct of business with the Government. 

Links to Other Small Business Sites

Success Stories - In Fiscal Year 2012, the IRS awarded approximately $656 Million Dollars in contracts to small business concerns. There are many success stories regarding small business concerns who provide much needed products and services to the IRS.

 


Questions about the Procurement information on this site, please contact the webmaster.
Contact the Office of Procurement for other Procurement related questions.

Page Last Reviewed or Updated: 04-Feb-2014

The 2010 Tax Forms Irs

2010 tax forms irs 1. 2010 tax forms irs   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. 2010 tax forms irs When repayment contributions can be made. 2010 tax forms irs No deduction. 2010 tax forms irs Reserve component. 2010 tax forms irs Figuring your IRA deduction. 2010 tax forms irs Reporting the repayment. 2010 tax forms irs Example. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs Can You Move Retirement Plan Assets?Transfers to Roth IRAs from other retirement plans. 2010 tax forms irs 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. 2010 tax forms irs 2013 Reporting. 2010 tax forms irs Additional reporting requirements if you made the election to treat a January 2013 QCD as made in 2012. 2010 tax forms irs One-time transfer. 2010 tax forms irs Testing period rules apply. 2010 tax forms irs More information. 2010 tax forms irs 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. 2010 tax forms irs  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. 2010 tax forms irs 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. 2010 tax forms irs For more information, see How Much Can Be Contributed? in this chapter. 2010 tax forms irs Modified AGI limit for traditional IRA contributions increased. 2010 tax forms irs  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. 2010 tax forms irs 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. 2010 tax forms irs If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. 2010 tax forms irs See How Much Can You Deduct? in this chapter. 2010 tax forms irs Net Investment Income Tax. 2010 tax forms irs  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). 2010 tax forms irs However, these distributions are taken into account when determining the modified adjusted gross income threshold. 2010 tax forms irs Distributions from a nonqualified retirement plan are included in net investment income. 2010 tax forms irs See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. 2010 tax forms irs What's New for 2014 Modified AGI limit for traditional IRA contributions increased. 2010 tax forms irs  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. 2010 tax forms irs 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. 2010 tax forms irs If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. 2010 tax forms irs Introduction This chapter discusses the original IRA. 2010 tax forms irs In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. 2010 tax forms irs ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. 2010 tax forms irs 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. 2010 tax forms irs Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. 2010 tax forms irs 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. 2010 tax forms irs You can have a traditional IRA whether or not you are covered by any other retirement plan. 2010 tax forms irs However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan. 2010 tax forms irs See How Much Can You Deduct , later. 2010 tax forms irs Both spouses have compensation. 2010 tax forms irs   If both you and your spouse have compensation and are under age 70½, each of you can open an IRA. 2010 tax forms irs You cannot both participate in the same IRA. 2010 tax forms irs If you file a joint return, only one of you needs to have compensation. 2010 tax forms irs What Is Compensation? Generally, compensation is what you earn from working. 2010 tax forms irs For a summary of what compensation does and does not include, see Table 1-1. 2010 tax forms irs Compensation includes all of the items discussed next (even if you have more than one type). 2010 tax forms irs Wages, salaries, etc. 2010 tax forms irs   Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. 2010 tax forms irs 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). 2010 tax forms irs Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2. 2010 tax forms irs Commissions. 2010 tax forms irs   An amount you receive that is a percentage of profits or sales price is compensation. 2010 tax forms irs Self-employment income. 2010 tax forms irs   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. 2010 tax forms irs   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. 2010 tax forms irs Self-employment loss. 2010 tax forms irs   If you have a net loss from self-employment, do not subtract the loss from your salaries or wages when figuring your total compensation. 2010 tax forms irs Alimony and separate maintenance. 2010 tax forms irs   For IRA purposes, compensation includes any taxable alimony and separate maintenance payments you receive under a decree of divorce or separate maintenance. 2010 tax forms irs Nontaxable combat pay. 2010 tax forms irs   If you were a member of the U. 2010 tax forms irs S. 2010 tax forms irs Armed Forces, compensation includes any nontaxable combat pay you received. 2010 tax forms irs This amount should be reported in box 12 of your 2013 Form W-2 with code Q. 2010 tax forms irs Table 1-1. 2010 tax forms irs Compensation for Purposes of an IRA Includes . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs Does not include . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs   earnings and profits from property. 2010 tax forms irs wages, salaries, etc. 2010 tax forms irs     interest and dividend income. 2010 tax forms irs commissions. 2010 tax forms irs     pension or annuity income. 2010 tax forms irs self-employment income. 2010 tax forms irs     deferred compensation. 2010 tax forms irs alimony and separate maintenance. 2010 tax forms irs     income from certain  partnerships. 2010 tax forms irs nontaxable combat pay. 2010 tax forms irs     any amounts you exclude from income. 2010 tax forms irs     What Is Not Compensation? Compensation does not include any of the following items. 2010 tax forms irs Earnings and profits from property, such as rental income, interest income, and dividend income. 2010 tax forms irs Pension or annuity income. 2010 tax forms irs Deferred compensation received (compensation payments postponed from a past year). 2010 tax forms irs Income from a partnership for which you do not provide services that are a material income-producing factor. 2010 tax forms irs Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. 2010 tax forms irs Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. 2010 tax forms irs When Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. 2010 tax forms irs However, the time for making contributions for any year is limited. 2010 tax forms irs See When Can Contributions Be Made , later. 2010 tax forms irs How Can a Traditional IRA Be Opened? You can open different kinds of IRAs with a variety of organizations. 2010 tax forms irs You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. 2010 tax forms irs You can also open an IRA through your stockbroker. 2010 tax forms irs Any IRA must meet Internal Revenue Code requirements. 2010 tax forms irs The requirements for the various arrangements are discussed below. 2010 tax forms irs Kinds of traditional IRAs. 2010 tax forms irs   Your traditional IRA can be an individual retirement account or annuity. 2010 tax forms irs It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. 2010 tax forms irs 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. 2010 tax forms irs The account is created by a written document. 2010 tax forms irs The document must show that the account meets all of the following requirements. 2010 tax forms irs 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. 2010 tax forms irs The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. 2010 tax forms irs However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount. 2010 tax forms irs Contributions, except for rollover contributions, must be in cash. 2010 tax forms irs See Rollovers , later. 2010 tax forms irs You must have a nonforfeitable right to the amount at all times. 2010 tax forms irs Money in your account cannot be used to buy a life insurance policy. 2010 tax forms irs Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund. 2010 tax forms irs You must start receiving distributions by April 1 of the year following the year in which you reach age 70½. 2010 tax forms irs See When Must You Withdraw Assets? (Required Minimum Distributions) , later. 2010 tax forms irs Individual Retirement Annuity You can open an individual retirement annuity by purchasing an annuity contract or an endowment contract from a life insurance company. 2010 tax forms irs 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. 2010 tax forms irs An individual retirement annuity must meet all the following requirements. 2010 tax forms irs Your entire interest in the contract must be nonforfeitable. 2010 tax forms irs The contract must provide that you cannot transfer any portion of it to any person other than the issuer. 2010 tax forms irs There must be flexible premiums so that if your compensation changes, your payment can also change. 2010 tax forms irs This provision applies to contracts issued after November 6, 1978. 2010 tax forms irs 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. 2010 tax forms irs Distributions must begin by April 1 of the year following the year in which you reach age 70½. 2010 tax forms irs See When Must You Withdraw Assets? (Required Minimum Distributions) , later. 2010 tax forms irs Individual Retirement Bonds The sale of individual retirement bonds issued by the federal government was suspended after April 30, 1982. 2010 tax forms irs The bonds have the following features. 2010 tax forms irs They stop earning interest when you reach age 70½. 2010 tax forms irs If you die, interest will stop 5 years after your death, or on the date you would have reached age 70½, whichever is earlier. 2010 tax forms irs You cannot transfer the bonds. 2010 tax forms irs If you cash (redeem) the bonds before the year in which you reach age 59½, you may be subject to a 10% additional tax. 2010 tax forms irs See Age 59½ Rule under Early Distributions, later. 2010 tax forms irs You can roll over redemption proceeds into IRAs. 2010 tax forms irs 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. 2010 tax forms irs Generally, distributions from SEP IRAs are subject to the withdrawal and tax rules that apply to traditional IRAs. 2010 tax forms irs See Publication 560 for more information about SEPs. 2010 tax forms irs 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. 2010 tax forms irs The requirements for individual retirement accounts apply to these traditional IRAs. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs The disclosure statement must explain certain items in plain language. 2010 tax forms irs 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. 2010 tax forms irs This explanation must appear at the beginning of the disclosure statement. 2010 tax forms irs If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. 2010 tax forms irs 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. 2010 tax forms irs These requirements apply to all sponsors. 2010 tax forms irs How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. 2010 tax forms irs These limits and rules are explained below. 2010 tax forms irs Community property laws. 2010 tax forms irs   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. 2010 tax forms irs This is the rule even in states with community property laws. 2010 tax forms irs Brokers' commissions. 2010 tax forms irs   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. 2010 tax forms irs For information about whether you can deduct brokers' commissions, see Brokers' commissions , later, under How Much Can You Deduct. 2010 tax forms irs Trustees' fees. 2010 tax forms irs   Trustees' administrative fees are not subject to the contribution limit. 2010 tax forms irs For information about whether you can deduct trustees' fees, see Trustees' fees , later, under How Much Can You Deduct. 2010 tax forms irs Qualified reservist repayments. 2010 tax forms irs   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. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs Limit. 2010 tax forms irs   Your qualified reservist repayments cannot be more than your qualified reservist distributions, explained under Early Distributions , later. 2010 tax forms irs When repayment contributions can be made. 2010 tax forms irs   You cannot make these repayment contributions later than the date that is 2 years after your active duty period ends. 2010 tax forms irs No deduction. 2010 tax forms irs   You cannot deduct qualified reservist repayments. 2010 tax forms irs Reserve component. 2010 tax forms irs   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. 2010 tax forms irs Figuring your IRA deduction. 2010 tax forms irs   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. 2010 tax forms irs Reporting the repayment. 2010 tax forms irs   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. 2010 tax forms irs Example. 2010 tax forms irs   In 2013, your IRA contribution limit is $5,500. 2010 tax forms irs However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. 2010 tax forms irs You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). 2010 tax forms irs In an earlier year you received a $3,000 qualified reservist distribution, which you would like to repay this year. 2010 tax forms irs   For 2013, you can contribute a total of $8,500 to your IRA. 2010 tax forms irs 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. 2010 tax forms irs You contribute the maximum allowable for the year. 2010 tax forms irs 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. 2010 tax forms irs The qualified reservist repayment is not deductible. 2010 tax forms irs Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. 2010 tax forms irs See chapter 2 for information about Roth IRAs. 2010 tax forms irs 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. 2010 tax forms irs Note. 2010 tax forms irs 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). 2010 tax forms irs 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. 2010 tax forms irs (See Nondeductible Contributions , later. 2010 tax forms irs ) Qualified reservist repayments do not affect this limit. 2010 tax forms irs Examples. 2010 tax forms irs George, who is 34 years old and single, earns $24,000 in 2013. 2010 tax forms irs His IRA contributions for 2013 are limited to $5,500. 2010 tax forms irs Danny, an unmarried college student working part time, earns $3,500 in 2013. 2010 tax forms irs His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. 2010 tax forms irs More than one IRA. 2010 tax forms irs   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. 2010 tax forms irs Annuity or endowment contracts. 2010 tax forms irs   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. 2010 tax forms irs If more than this amount is contributed, the annuity or endowment contract is disqualified. 2010 tax forms irs 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. 2010 tax forms irs Your spouse's IRA contribution for the year to a traditional IRA. 2010 tax forms irs Any contributions for the year to a Roth IRA on behalf of your spouse. 2010 tax forms irs 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). 2010 tax forms irs Note. 2010 tax forms irs 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). 2010 tax forms irs Example. 2010 tax forms irs Kristin, a full-time student with no taxable compensation, marries Carl during the year. 2010 tax forms irs Neither of them was age 50 by the end of 2013. 2010 tax forms irs For the year, Carl has taxable compensation of $30,000. 2010 tax forms irs He plans to contribute (and deduct) $5,500 to a traditional IRA. 2010 tax forms irs If he and Kristin file a joint return, each can contribute $5,500 to a traditional IRA. 2010 tax forms irs 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. 2010 tax forms irs 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). 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs See How Much Can You Deduct , later. 2010 tax forms irs Example. 2010 tax forms irs Tom and Darcy are married and both are 53. 2010 tax forms irs They both work and each has a traditional IRA. 2010 tax forms irs Tom earned $3,800 and Darcy earned $48,000 in 2013. 2010 tax forms irs 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. 2010 tax forms irs They can contribute up to $6,500 to Darcy's IRA. 2010 tax forms irs If they file separate returns, the amount that can be contributed to Tom's IRA is limited by his earned income, $3,800. 2010 tax forms irs 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. 2010 tax forms irs Example. 2010 tax forms irs Rafael, who is 40, earns $30,000 in 2013. 2010 tax forms irs Although he can contribute up to $5,500 for 2013, he contributes only $3,000. 2010 tax forms irs After April 15, 2014, Rafael cannot make up the difference between his actual contributions for 2013 ($3,000) and his 2013 limit ($5,500). 2010 tax forms irs He cannot contribute $2,500 more than the limit for any later year. 2010 tax forms irs 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. 2010 tax forms irs However, a penalty or additional tax may apply. 2010 tax forms irs See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes. 2010 tax forms irs 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). 2010 tax forms irs Contributions must be in the form of money (cash, check, or money order). 2010 tax forms irs Property cannot be contributed. 2010 tax forms irs Although property cannot be contributed, your IRA may invest in certain property. 2010 tax forms irs For example, your IRA may purchase shares of stock. 2010 tax forms irs For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. 2010 tax forms irs You may be able to transfer or roll over certain property from one retirement plan to another. 2010 tax forms irs See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets . 2010 tax forms irs 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. 2010 tax forms irs For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases). 2010 tax forms irs Contributions can be made to your traditional IRA for each year that you receive compensation and have not reached age 70½. 2010 tax forms irs 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. 2010 tax forms irs See Who Can Open a Traditional IRA , earlier. 2010 tax forms irs 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. 2010 tax forms irs Contributions can resume for any years that you qualify. 2010 tax forms irs Contributions must be made by due date. 2010 tax forms irs   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. 2010 tax forms irs 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. 2010 tax forms irs Age 70½ rule. 2010 tax forms irs   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. 2010 tax forms irs   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. 2010 tax forms irs If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. 2010 tax forms irs Designating year for which contribution is made. 2010 tax forms irs   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. 2010 tax forms irs 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). 2010 tax forms irs Filing before a contribution is made. 2010 tax forms irs    You can file your return claiming a traditional IRA contribution before the contribution is actually made. 2010 tax forms irs Generally, the contribution must be made by the due date of your return, not including extensions. 2010 tax forms irs Contributions not required. 2010 tax forms irs   You do not have to contribute to your traditional IRA for every tax year, even if you can. 2010 tax forms irs 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 . 2010 tax forms irs However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. 2010 tax forms irs See Limit if Covered by Employer Plan , later. 2010 tax forms irs You may be able to claim a credit for contributions to your traditional IRA. 2010 tax forms irs For more information, see chapter 4. 2010 tax forms irs Trustees' fees. 2010 tax forms irs   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. 2010 tax forms irs However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). 2010 tax forms irs For information about miscellaneous itemized deductions, see Publication 529, Miscellaneous Deductions. 2010 tax forms irs Brokers' commissions. 2010 tax forms irs   These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. 2010 tax forms irs Full deduction. 2010 tax forms irs   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. 2010 tax forms irs   This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. 2010 tax forms irs Kay Bailey Hutchison Spousal IRA. 2010 tax forms irs   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. 2010 tax forms irs The IRA deduction for the year of the spouse with the greater compensation. 2010 tax forms irs Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. 2010 tax forms irs Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. 2010 tax forms irs   This limit is reduced by any contributions to a section 501(c)(18) plan on behalf of the spouse with the lesser compensation. 2010 tax forms irs Note. 2010 tax forms irs 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. 2010 tax forms irs After a divorce or legal separation, you can deduct only the contributions to your own IRA. 2010 tax forms irs Your deductions are subject to the rules for single individuals. 2010 tax forms irs Covered by an employer retirement plan. 2010 tax forms irs   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. 2010 tax forms irs This is discussed later under Limit if Covered by Employer Plan . 2010 tax forms irs Limits on the amount you can deduct do not affect the amount that can be contributed. 2010 tax forms irs 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. 2010 tax forms irs The “Retirement Plan” box should be checked if you were covered. 2010 tax forms irs Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered , later. 2010 tax forms irs If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. 2010 tax forms irs Federal judges. 2010 tax forms irs   For purposes of the IRA deduction, federal judges are covered by an employer plan. 2010 tax forms irs For Which Year(s) Are You Covered? Special rules apply to determine the tax years for which you are covered by an employer plan. 2010 tax forms irs These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. 2010 tax forms irs Tax year. 2010 tax forms irs   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. 2010 tax forms irs For almost all people, the tax year is the calendar year. 2010 tax forms irs Defined contribution plan. 2010 tax forms irs   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. 2010 tax forms irs However, also see Situations in Which You Are Not Covered , later. 2010 tax forms irs   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. 2010 tax forms irs In a defined contribution plan, the amount to be contributed to each participant's account is spelled out in the plan. 2010 tax forms irs 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. 2010 tax forms irs Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. 2010 tax forms irs Example. 2010 tax forms irs Company A has a money purchase pension plan. 2010 tax forms irs Its plan year is from July 1 to June 30. 2010 tax forms irs The plan provides that contributions must be allocated as of June 30. 2010 tax forms irs Bob, an employee, leaves Company A on December 31, 2012. 2010 tax forms irs The contribution for the plan year ending on June 30, 2013, is made February 15, 2014. 2010 tax forms irs Because an amount is contributed to Bob's account for the plan year, Bob is covered by the plan for his 2013 tax year. 2010 tax forms irs   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. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs Example. 2010 tax forms irs Mickey was covered by a profit-sharing plan and left the company on December 31, 2012. 2010 tax forms irs The plan year runs from July 1 to June 30. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs On December 31, 2013, the company decided to contribute to the plan for the plan year ending June 30, 2013. 2010 tax forms irs That contribution was made on February 15, 2014. 2010 tax forms irs Mickey is an active participant in the plan for his 2014 tax year but not for his 2013 tax year. 2010 tax forms irs No vested interest. 2010 tax forms irs   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. 2010 tax forms irs Defined benefit plan. 2010 tax forms irs   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. 2010 tax forms irs 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. 2010 tax forms irs   A defined benefit plan is any plan that is not a defined contribution plan. 2010 tax forms irs In a defined benefit plan, the level of benefits to be provided to each participant is spelled out in the plan. 2010 tax forms irs The plan administrator figures the amount needed to provide those benefits and those amounts are contributed to the plan. 2010 tax forms irs Defined benefit plans include pension plans and annuity plans. 2010 tax forms irs Example. 2010 tax forms irs 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. 2010 tax forms irs Nick leaves Company B on December 31, 2012. 2010 tax forms irs 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. 2010 tax forms irs No vested interest. 2010 tax forms irs   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. 2010 tax forms irs 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. 2010 tax forms irs Social security or railroad retirement. 2010 tax forms irs   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. 2010 tax forms irs Benefits from previous employer's plan. 2010 tax forms irs   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. 2010 tax forms irs Reservists. 2010 tax forms irs   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. 2010 tax forms irs You are not covered by the plan if both of the following conditions are met. 2010 tax forms irs 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. 2010 tax forms irs You did not serve more than 90 days on active duty during the year (not counting duty for training). 2010 tax forms irs Volunteer firefighters. 2010 tax forms irs   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. 2010 tax forms irs You are not covered by the plan if both of the following conditions are met. 2010 tax forms irs 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. 2010 tax forms irs Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. 2010 tax forms irs 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. 2010 tax forms irs Your deduction is also affected by how much income you had and by your filing status. 2010 tax forms irs Your deduction may also be affected by social security benefits you received. 2010 tax forms irs Reduced or no deduction. 2010 tax forms irs   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. 2010 tax forms irs   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. 2010 tax forms irs These amounts vary depending on your filing status. 2010 tax forms irs   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 . 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs You received social security benefits. 2010 tax forms irs You received taxable compensation. 2010 tax forms irs Contributions were made to your traditional IRA. 2010 tax forms irs You or your spouse was covered by an employer retirement plan. 2010 tax forms irs 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. 2010 tax forms irs Appendix B includes an example with filled-in worksheets to assist you. 2010 tax forms irs Table 1-2. 2010 tax forms irs 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. 2010 tax forms irs IF your filing status is . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs AND your modified adjusted gross income (modified AGI) is . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs THEN you can take . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs single or head of household $59,000 or less a full deduction. 2010 tax forms irs more than $59,000 but less than $69,000 a partial deduction. 2010 tax forms irs $69,000 or more no deduction. 2010 tax forms irs married filing jointly or  qualifying widow(er) $95,000 or less a full deduction. 2010 tax forms irs more than $95,000 but less than $115,000 a partial deduction. 2010 tax forms irs $115,000 or more no deduction. 2010 tax forms irs married filing separately2 less than $10,000 a partial deduction. 2010 tax forms irs $10,000 or more no deduction. 2010 tax forms irs 1 Modified AGI (adjusted gross income). 2010 tax forms irs See Modified adjusted gross income (AGI) , later. 2010 tax forms irs  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). 2010 tax forms irs Table 1-3. 2010 tax forms irs 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. 2010 tax forms irs IF your filing status is . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs AND your modified adjusted gross income (modified AGI) is . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs THEN you can take . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs single, head of household, or qualifying widow(er) any amount a full deduction. 2010 tax forms irs married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction. 2010 tax forms irs married filing jointly with a spouse who is covered by a plan at work $178,000 or less a full deduction. 2010 tax forms irs more than $178,000 but less than $188,000 a partial deduction. 2010 tax forms irs $188,000 or more no deduction. 2010 tax forms irs married filing separately with a spouse who is covered by a plan at work2 less than $10,000 a partial deduction. 2010 tax forms irs $10,000 or more no deduction. 2010 tax forms irs 1 Modified AGI (adjusted gross income). 2010 tax forms irs See Modified adjusted gross income (AGI) , later. 2010 tax forms irs  2 You are entitled to the full deduction if you did not live with your spouse at any time during the year. 2010 tax forms irs 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. 2010 tax forms irs If your AGI is $191,000 or more, you cannot take a deduction for a contribution to a traditional IRA. 2010 tax forms irs 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. 2010 tax forms irs Covered by a retirement plan. 2010 tax forms irs   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. 2010 tax forms irs 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. 2010 tax forms irs If your spouse is covered. 2010 tax forms irs   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. 2010 tax forms irs Filing status. 2010 tax forms irs   Your filing status depends primarily on your marital status. 2010 tax forms irs 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. 2010 tax forms irs If you need more information on filing status, see Publication 501, Exemptions, Standard Deduction, and Filing Information. 2010 tax forms irs Lived apart from spouse. 2010 tax forms irs   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. 2010 tax forms irs Modified adjusted gross income (AGI). 2010 tax forms irs   You can use Worksheet 1-1 to figure your modified AGI. 2010 tax forms irs 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. 2010 tax forms irs    Do not assume that your modified AGI is the same as your compensation. 2010 tax forms irs Your modified AGI may include income in addition to your compensation (discussed earlier) such as interest, dividends, and income from IRA distributions. 2010 tax forms irs Form 1040. 2010 tax forms irs   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. 2010 tax forms irs IRA deduction. 2010 tax forms irs Student loan interest deduction. 2010 tax forms irs Tuition and fees deduction. 2010 tax forms irs Domestic production activities deduction. 2010 tax forms irs Foreign earned income exclusion. 2010 tax forms irs Foreign housing exclusion or deduction. 2010 tax forms irs Exclusion of qualified savings bond interest shown on Form 8815. 2010 tax forms irs Exclusion of employer-provided adoption benefits shown on Form 8839. 2010 tax forms irs This is your modified AGI. 2010 tax forms irs Form 1040A. 2010 tax forms irs   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. 2010 tax forms irs IRA deduction. 2010 tax forms irs Student loan interest deduction. 2010 tax forms irs Tuition and fees deduction. 2010 tax forms irs Exclusion of qualified savings bond interest shown on Form 8815. 2010 tax forms irs This is your modified AGI. 2010 tax forms irs Form 1040NR. 2010 tax forms irs   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. 2010 tax forms irs IRA deduction. 2010 tax forms irs Student loan interest deduction. 2010 tax forms irs Domestic production activities deduction. 2010 tax forms irs Exclusion of qualified savings bond interest shown on Form 8815. 2010 tax forms irs Exclusion of employer-provided adoption benefits shown on Form 8839. 2010 tax forms irs This is your modified AGI. 2010 tax forms irs Income from IRA distributions. 2010 tax forms irs   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. 2010 tax forms irs Both contributions for 2013 and distributions in 2013. 2010 tax forms irs   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. 2010 tax forms irs 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. 2010 tax forms irs (See Nondeductible Contributions and Worksheet 1-2, later. 2010 tax forms irs ) If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. 2010 tax forms irs To do this, you can use Worksheet 1-5, later. 2010 tax forms irs   If at least one of the above does not apply, figure your modified AGI using Worksheet 1-1, later. 2010 tax forms irs 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. 2010 tax forms irs Figuring Your Reduced IRA Deduction for 2013. 2010 tax forms irs The Instructions for Form 1040, Form 1040A, and Form 1040NR include similar worksheets that you can use instead of the worksheet in this publication. 2010 tax forms irs If you or your spouse is covered by an employer retirement plan, and you received any social security benefits, see Social Security Recipients , earlier. 2010 tax forms irs Note. 2010 tax forms irs If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. 2010 tax forms irs Worksheet 1-1. 2010 tax forms irs Figuring Your Modified AGI Use this worksheet to figure your modified AGI for traditional IRA purposes. 2010 tax forms irs 1. 2010 tax forms irs 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. 2010 tax forms irs   2. 2010 tax forms irs Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 2. 2010 tax forms irs   3. 2010 tax forms irs Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. 2010 tax forms irs   4. 2010 tax forms irs Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 4. 2010 tax forms irs   5. 2010 tax forms irs Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. 2010 tax forms irs   6. 2010 tax forms irs Enter any foreign housing deduction from Form 2555, line 50 6. 2010 tax forms irs   7. 2010 tax forms irs Enter any excludable savings bond interest from Form 8815, line 14 7. 2010 tax forms irs   8. 2010 tax forms irs Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. 2010 tax forms irs   9. 2010 tax forms irs Add lines 1 through 8. 2010 tax forms irs This is your Modified AGI for traditional IRA purposes 9. 2010 tax forms irs   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. 2010 tax forms irs If you file Form 1040A, enter your IRA deduction on line 17 of that form. 2010 tax forms irs If you file Form 1040NR, enter your IRA deduction on line 32 of that form. 2010 tax forms irs You cannot deduct IRA contributions on Form 1040EZ or Form 1040NR-EZ. 2010 tax forms irs Self-employed. 2010 tax forms irs   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. 2010 tax forms irs If you file Form 1040NR, enter your deduction on line 28 of that form. 2010 tax forms irs 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. 2010 tax forms irs The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. 2010 tax forms irs Example. 2010 tax forms irs Tony is 29 years old and single. 2010 tax forms irs In 2013, he was covered by a retirement plan at work. 2010 tax forms irs His salary is $62,000. 2010 tax forms irs His modified AGI is $70,000. 2010 tax forms irs Tony makes a $5,500 IRA contribution for 2013. 2010 tax forms irs Because he was covered by a retirement plan and his modified AGI is above $69,000, he cannot deduct his $5,500 IRA contribution. 2010 tax forms irs He must designate this contribution as a nondeductible contribution by reporting it on Form 8606. 2010 tax forms irs Repayment of reservist distributions. 2010 tax forms irs   Nondeductible contributions may include repayments of qualified reservist distributions. 2010 tax forms irs For more information, see Qualified reservist repayments under How Much Can Be Contributed, earlier. 2010 tax forms irs Form 8606. 2010 tax forms irs   To designate contributions as nondeductible, you must file Form 8606. 2010 tax forms irs (See the filled-in Forms 8606 in this chapter. 2010 tax forms irs )   You do not have to designate a contribution as nondeductible until you file your tax return. 2010 tax forms irs When you file, you can even designate otherwise deductible contributions as nondeductible contributions. 2010 tax forms irs   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. 2010 tax forms irs    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. 2010 tax forms irs In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. 2010 tax forms irs See Form 8606 under Distributions Fully or Partly Taxable, later. 2010 tax forms irs Failure to report nondeductible contributions. 2010 tax forms irs   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated like deductible contributions when withdrawn. 2010 tax forms irs All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. 2010 tax forms irs Penalty for overstatement. 2010 tax forms irs   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. 2010 tax forms irs Penalty for failure to file Form 8606. 2010 tax forms irs   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. 2010 tax forms irs Tax on earnings on nondeductible contributions. 2010 tax forms irs   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. 2010 tax forms irs Cost basis. 2010 tax forms irs   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. 2010 tax forms irs Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. 2010 tax forms irs    Commonly, distributions from your traditional IRAs will include both taxable and nontaxable (cost basis) amounts. 2010 tax forms irs See Are Distributions Taxable, later, for more information. 2010 tax forms irs Recordkeeping. 2010 tax forms irs There is a recordkeeping worksheet, Appendix A. 2010 tax forms irs Summary Record of Traditional IRA(s) for 2013 , that you can use to keep a record of deductible and nondeductible IRA contributions. 2010 tax forms irs 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. 2010 tax forms irs Example 1. 2010 tax forms irs For 2013, Tom and Betty file a joint return on Form 1040. 2010 tax forms irs They are both 39 years old. 2010 tax forms irs They are both employed and Tom is covered by his employer's retirement plan. 2010 tax forms irs Tom's salary is $59,000 and Betty's is $32,555. 2010 tax forms irs They each have a traditional IRA and their combined modified AGI, which includes $5,000 interest and dividend income, is $96,555. 2010 tax forms irs 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 . 2010 tax forms irs For 2013, Tom contributed $5,500 to his IRA and Betty contributed $5,500 to hers. 2010 tax forms irs Even though they file a joint return, they must use separate worksheets to figure the IRA deduction for each of them. 2010 tax forms irs Tom can take a deduction of only $5,080. 2010 tax forms irs He can choose to treat the $5,080 as either deductible or nondeductible contributions. 2010 tax forms irs He can either leave the $420 ($5,500 − $5,080) of nondeductible contributions in his IRA or withdraw them by April 15, 2014. 2010 tax forms irs He decides to treat the $5,080 as deductible contributions and leave the $420 of nondeductible contributions in his IRA. 2010 tax forms irs Using Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, Tom figures his deductible and nondeductible amounts as shown on Worksheet 1-2. 2010 tax forms irs Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated. 2010 tax forms irs Betty figures her IRA deduction as follows. 2010 tax forms irs Betty can treat all or part of her contributions as either deductible or nondeductible. 2010 tax forms irs 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 . 2010 tax forms irs 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. 2010 tax forms irs Betty decides to treat her $5,500 IRA contributions as deductible. 2010 tax forms irs The IRA deductions of $5,080 and $5,500 on the joint return for Tom and Betty total $10,580. 2010 tax forms irs Example 2. 2010 tax forms irs For 2013, Ed and Sue file a joint return on Form 1040. 2010 tax forms irs They are both 39 years old. 2010 tax forms irs Ed is covered by his employer's retirement plan. 2010 tax forms irs Ed's salary is $45,000. 2010 tax forms irs Sue had no compensation for the year and did not contribute to an IRA. 2010 tax forms irs Sue is not covered by an employer plan. 2010 tax forms irs Ed contributed $5,500 to his traditional IRA and $5,500 to a traditional IRA for Sue (a Kay Bailey Hutchison Spousal IRA). 2010 tax forms irs 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. 2010 tax forms irs Because the combined modified AGI is $115,000 or more, Ed cannot deduct any of the contribution to his traditional IRA. 2010 tax forms irs He can either leave the $5,500 of nondeductible contributions in his IRA or withdraw them by April 15, 2014. 2010 tax forms irs Sue figures her IRA deduction as shown on Worksheet 1-2. 2010 tax forms irs Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated. 2010 tax forms irs Worksheet 1-2. 2010 tax forms irs 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. 2010 tax forms irs ) Note. 2010 tax forms irs If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. 2010 tax forms irs IF you . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs AND your  filing status is . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs AND your modified AGI is over . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs THEN enter on  line 1 below . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs       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. 2010 tax forms irs Enter applicable amount from table above 1. 2010 tax forms irs   2. 2010 tax forms irs Enter your modified AGI (that of both spouses, if married filing jointly) 2. 2010 tax forms irs     Note. 2010 tax forms irs If line 2 is equal to or more than the amount on line 1, stop here. 2010 tax forms irs  Your IRA contributions are not deductible. 2010 tax forms irs See Nondeductible Contributions , earlier. 2010 tax forms irs     3. 2010 tax forms irs Subtract line 2 from line 1. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs   4. 2010 tax forms irs Multiply line 3 by the percentage below that applies to you. 2010 tax forms irs If the result is not a multiple of $10, round it to the next highest multiple of $10. 2010 tax forms irs (For example, $611. 2010 tax forms irs 40 is rounded to $620. 2010 tax forms irs ) However, if the result is less than $200, enter $200. 2010 tax forms irs         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. 2010 tax forms irs 5% (. 2010 tax forms irs 275) (by 32. 2010 tax forms irs 5% (. 2010 tax forms irs 325) if you are age 50 or older). 2010 tax forms irs All others, multiply line 3 by 55% (. 2010 tax forms irs 55) (by 65% (. 2010 tax forms irs 65) if you are age 50 or older). 2010 tax forms irs 4. 2010 tax forms irs   5. 2010 tax forms irs 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). 2010 tax forms irs 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. 2010 tax forms irs If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. 2010 tax forms irs   6. 2010 tax forms irs 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). 2010 tax forms irs If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. 2010 tax forms irs 6. 2010 tax forms irs   7. 2010 tax forms irs IRA deduction. 2010 tax forms irs Compare lines 4, 5, and 6. 2010 tax forms irs 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. 2010 tax forms irs If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. 2010 tax forms irs   8. 2010 tax forms irs Nondeductible contribution. 2010 tax forms irs Subtract line 7 from line 5 or 6, whichever is smaller. 2010 tax forms irs  Enter the result here and on line 1 of your Form 8606 8. 2010 tax forms irs   Worksheet 1-2. 2010 tax forms irs 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. 2010 tax forms irs ) Note. 2010 tax forms irs If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. 2010 tax forms irs IF you . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs AND your  filing status is . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs AND your modified AGI is over . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs THEN enter on  line 1 below . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs       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. 2010 tax forms irs Enter applicable amount from table above 1. 2010 tax forms irs 115,000 2. 2010 tax forms irs Enter your modified AGI (that of both spouses, if married filing jointly) 2. 2010 tax forms irs 96,555   Note. 2010 tax forms irs If line 2 is equal to or more than the amount on line 1, stop here. 2010 tax forms irs  Your IRA contributions are not deductible. 2010 tax forms irs See Nondeductible Contributions , earlier. 2010 tax forms irs     3. 2010 tax forms irs Subtract line 2 from line 1. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs 18,445 4. 2010 tax forms irs Multiply line 3 by the percentage below that applies to you. 2010 tax forms irs If the result is not a multiple of $10, round it to the next highest multiple of $10. 2010 tax forms irs (For example, $611. 2010 tax forms irs 40 is rounded to $620. 2010 tax forms irs ) However, if the result is less than $200, enter $200. 2010 tax forms irs         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. 2010 tax forms irs 5% (. 2010 tax forms irs 275) (by 32. 2010 tax forms irs 5% (. 2010 tax forms irs 325) if you are age 50 or older). 2010 tax forms irs All others, multiply line 3 by 55% (. 2010 tax forms irs 55) (by 65% (. 2010 tax forms irs 65) if you are age 50 or older). 2010 tax forms irs 4. 2010 tax forms irs 5,080 5. 2010 tax forms irs 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). 2010 tax forms irs 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. 2010 tax forms irs If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. 2010 tax forms irs 59,000 6. 2010 tax forms irs 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). 2010 tax forms irs If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. 2010 tax forms irs 6. 2010 tax forms irs 5,500 7. 2010 tax forms irs IRA deduction. 2010 tax forms irs Compare lines 4, 5, and 6. 2010 tax forms irs 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. 2010 tax forms irs If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. 2010 tax forms irs 5,080 8. 2010 tax forms irs Nondeductible contribution. 2010 tax forms irs Subtract line 7 from line 5 or 6, whichever is smaller. 2010 tax forms irs  Enter the result here and on line 1 of your Form 8606 8. 2010 tax forms irs 420 Worksheet 1-2. 2010 tax forms irs 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. 2010 tax forms irs ) Note. 2010 tax forms irs If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. 2010 tax forms irs IF you . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs AND your  filing status is . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs AND your modified AGI is over . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs THEN enter on  line 1 below . 2010 tax forms irs . 2010 tax forms irs . 2010 tax forms irs       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. 2010 tax forms irs Enter applicable amount from table above 1. 2010 tax forms irs 188,000 2. 2010 tax forms irs Enter your modified AGI (that of both spouses, if married filing jointly) 2. 2010 tax forms irs 180,555   Note. 2010 tax forms irs If line 2 is equal to or more than the amount on line 1, stop here. 2010 tax forms irs  Your IRA contributions are not deductible. 2010 tax forms irs See Nondeductible Contributions , earlier. 2010 tax forms irs     3. 2010 tax forms irs Subtract line 2 from line 1. 2010 tax forms irs 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. 2010 tax forms irs 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. 2010 tax forms irs 7,445 4. 2010 tax forms irs Multiply line 3 by the percentage below that applies to you. 2010 tax forms irs If the result is not a multiple of $10, round it to the next highest multiple of $10. 2010 tax forms irs (For example, $611. 2010 tax forms irs 40 is rounded to $620. 2010 tax forms irs ) However, if the result is less than $200, enter $200. 2010 tax forms irs         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. 2010 tax forms irs 5% (. 2010 tax forms irs 275) (by 32. 2010 tax forms irs 5% (. 2010 tax forms irs 325) if you are age 50 or older). 2010 tax forms irs All others, multiply line 3 by 55% (. 2010 tax forms irs 55) (by 65% (. 2010 tax forms irs 65) if you are age 50 or older). 2010 tax forms irs 4. 2010 tax forms irs 4,100 5. 2010 tax forms irs 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). 2010 tax forms irs 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. 2010 tax forms irs If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. 2010 tax forms irs 39,500 6. 2010 tax forms irs 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). 2010 tax forms irs If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. 2010 tax forms irs 6. 2010 tax forms irs 5,500 7. 2010 tax forms irs IRA deduction. 2010 tax forms irs Compare lines 4, 5, and 6. 2010 tax forms irs 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. 2010 tax forms irs If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. 2010 tax forms irs 4,100 8. 2010 tax forms irs Nondeductible contribution. 2010 tax forms irs Subtract line 7 from line 5 or 6, whichever is smaller. 2010 tax forms irs  Enter the result here and on line 1 of your Form 8606 8. 2010 tax forms irs 1,400 What if You Inherit an IRA? If you inherit a traditional IRA, you are called a beneficiary. 2010 tax forms irs A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. 2010 tax forms irs Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. 2010 tax forms irs Inherited from spouse. 2010 tax forms irs   If you inherit a traditional IRA from your spouse, you generally have the following three choices. 2010 tax forms irs You can: Treat it as your own IRA by designating yourself as the account owner. 2010 tax forms irs 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