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Amend Tax Form

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Amend Tax Form

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

Amend tax form 4. Amend tax form   Filing U. Amend tax form S. Amend tax form Tax Returns Table of Contents Who Must FileFiling Requirement if Possession Income Is Excluded When To FileExtension of Time To File Where To File Special Rules for Completing Your U. Amend tax form S. Amend tax form Tax ReturnU. Amend tax form S. Amend tax form Armed Forces. Amend tax form Deductions if Possession Income Is Excluded Foreign Tax Credit if Possession Income Is Excluded Self-Employment Tax Additional Medicare Tax Net Investment Income Tax Paying Your TaxesEstimated Tax Double TaxationCompetent Authority Assistance The information in chapter 3 will tell you if a U. Amend tax form S. Amend tax form income tax return is required for your situation. Amend tax form If a U. Amend tax form S. Amend tax form return is required, your next step is to see if you meet the filing requirements. Amend tax form If you do meet the filing requirements, the information presented in this chapter will help you understand the special procedures involved. Amend tax form This chapter discusses: Filing requirements, When to file your return, Where to send your return, How to adjust your deductions and credits if you are excluding income from American Samoa or Puerto Rico, How to make estimated tax payments and pay self-employment tax, and How to request assistance in resolving instances of double taxation. Amend tax form Who Must File If you are not required to file a possession tax return that includes your worldwide income, you must generally file a U. Amend tax form S. Amend tax form income tax return if your gross income is at least the amount shown in Table 4-1, later, for your filing status and age. Amend tax form If you were a bona fide resident of American Samoa or Puerto Rico and are able to exclude your possession income from your U. Amend tax form S. Amend tax form tax return, your filing requirement may be less than the amount in Table 4-1. Amend tax form For details, see the information under Filing Requirement if Possession Income Is Excluded , later. Amend tax form Some individuals (such as those who can be claimed as a dependent on another person's return or who owe certain taxes, such as self-employment tax) must file a tax return even though the gross income is less than the amount shown in Table 4-1 for their filing status and age. Amend tax form For more information, see the Form 1040 instructions. Amend tax form Filing Requirement if Possession Income Is Excluded If you were a bona fide resident of American Samoa or Puerto Rico and qualify to exclude possession income on your U. Amend tax form S. Amend tax form tax return, you must determine your adjusted filing requirement. Amend tax form Generally, your filing requirement is based on the total of your (and your spouse's if filing a joint return) personal exemption(s) plus your standard deduction. Amend tax form Personal exemption. Amend tax form   When figuring your filing requirement, your personal exemption is allowed in full. Amend tax form Do not reduce it for this purpose. Amend tax form Do not include exemptions for your dependents. Amend tax form Allowable standard deduction. Amend tax form   Unless your filing status is married filing separately, the minimum income level at which you must file a return is based, in part, on the standard deduction for your filing status and age. Amend tax form Because the standard deduction applies to all types of income, it must be divided between your excluded income and income from other sources. Amend tax form Multiply the regular standard deduction for your filing status and age (this is zero if you are married filing a separate return; all others, see Form 1040 instructions) by the following fraction:      Gross income subject to U. Amend tax form S. Amend tax form income tax     Gross income from all sources (including excluded possession income)   Example. Amend tax form Barbara Spruce, a U. Amend tax form S. Amend tax form citizen, is single, under 65, and a bona fide resident of American Samoa. Amend tax form During 2013, she received $20,000 of income from American Samoa sources (qualifies for exclusion) and $8,000 of income from sources outside the possession (subject to U. Amend tax form S. Amend tax form income tax). Amend tax form Her allowable standard deduction for 2013 is figured as follows:   $8,000 $28,000 × $6,100 (regular standard deduction) = $1,743   Adjusted filing requirement. Amend tax form   Figure your adjusted filing requirement by adding the amount of your allowable standard deduction to the amount of your personal exemption. Amend tax form You must file a U. Amend tax form S. Amend tax form income tax return if your gross income is at least the amount shown on line 3 of the following worksheet. Amend tax form    1. Amend tax form Enter the allowable standard deduction you figured earlier under Allowable standard deduction . Amend tax form If your filing status is married filing separately, enter -0-   2. Amend tax form Personal exemption. Amend tax form If your filing status is married filing jointly, enter $7,800; if someone can claim you as a dependent, enter -0-; otherwise, enter $3,900   3. Amend tax form Add lines 1 and 2. Amend tax form You must file a U. Amend tax form S. Amend tax form income tax return if your gross income from sources outside the relevant possession is at least this amount   Table 4-1. Amend tax form 2013 Filing Requirements Chart for Most Taxpayers IF your filing status is. Amend tax form . Amend tax form . Amend tax form AND at the end of 2013 you were*. Amend tax form . Amend tax form . Amend tax form THEN file a return if your gross income** was at least. Amend tax form . Amend tax form . Amend tax form single under 65 $10,000 65 or older $11,500 married filing jointly*** under 65 (both spouses) $20,000 65 or older (one spouse) $21,200 65 or older (both spouses) $22,400 married filing separately any age $3,900 head of household under 65 $12,850 65 or older $14,350 qualifying widow(er)  with dependent child under 65 $16,100 65 or older $17,300 * If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Amend tax form ** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you can exclude part or all of it). Amend tax form Do not include social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2013, or (b) one-half of your social security benefits plus your other gross income is more than $25,000 ($32,000 if married filing jointly). Amend tax form If (a) or (b) applies, see the instructions for Form 1040 or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the taxable part of social security benefits you must include in gross income. Amend tax form *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900 you must file a return regardless of your age. Amend tax form Example 1. Amend tax form James and Joan Thompson, one over 65, are U. Amend tax form S. Amend tax form citizens and bona fide residents of Puerto Rico during the entire tax year. Amend tax form They file a joint income tax return. Amend tax form During 2013, they received $35,000 of income from Puerto Rico sources (qualifies for exclusion) and $6,000 of income from sources outside Puerto Rico (subject to U. Amend tax form S. Amend tax form income tax). Amend tax form Their allowable standard deduction for 2013 is figured as follows:   $6,000 $41,000 × $13,400 ( standard deduction for 65 or older (one spouse) ) = $1,961   The Thompsons do not have to file a U. Amend tax form S. Amend tax form income tax return because their gross income subject to U. Amend tax form S. Amend tax form tax ($6,000) is less than their allowable standard deduction plus their personal exemptions ($1,961+ $7,800= $9,761). Amend tax form Example 2. Amend tax form Barbara Spruce (see Example under Allowable standard deduction, earlier), however, must file a U. Amend tax form S. Amend tax form income tax return because her gross income subject to U. Amend tax form S. Amend tax form tax ($8,000) is more than her allowable standard deduction plus her personal exemption ($1,743 + $3,900 = $5,643). Amend tax form If you must file a U. Amend tax form S. Amend tax form income tax return, you may be able to file a paperless return using IRS e-file. Amend tax form See your form instructions or visit our website at IRS. Amend tax form gov. Amend tax form When To File If you file on a calendar year basis, the due date for filing your U. Amend tax form S. Amend tax form income tax return is April 15 following the end of your tax year. Amend tax form If you use a fiscal year (a year ending on the last day of a month other than December), the due date is the 15th day of the 4th month after the end of your fiscal year. Amend tax form If any due date falls on a Saturday, Sunday, or legal holiday, your tax return is due on the next business day. Amend tax form For your 2013 tax return, the due date is April 15, 2014. Amend tax form If you mail your federal tax return, it is considered timely if it bears an official postmark dated on or before the due date, including any extensions. Amend tax form If you use a private delivery service designated by the IRS, generally the postmark date is the date the private delivery service records in its database or marks on the mailing label. Amend tax form See your form instructions for a list of designated private delivery services. Amend tax form Extension of Time To File You can get an extension of time to file your U. Amend tax form S. Amend tax form income tax return. Amend tax form Special rules apply for those living outside the United States. Amend tax form Automatic 6-Month Extension If you cannot file your 2013 return by the due date, you can get an automatic 6-month extension of time to file. Amend tax form Example. Amend tax form If your return must be filed by April 15, 2014, you will have until October 15, 2014, to file. Amend tax form Although you are not required to make a payment of the tax you estimate as due, Form 4868 does not extend the time to pay taxes. Amend tax form If you do not pay the amount due by the regular due date (generally April 15), you will owe interest on any unpaid tax from the original due date to the date you pay the tax. Amend tax form You may also be charged penalties (see the Instructions for Form 4868). Amend tax form How to get the automatic extension. Amend tax form   You can get the automatic 6-month extension if you do one of the following by the due date for filing your return. Amend tax form E-file Form 4868 using your personal computer or a tax professional. Amend tax form E-file and pay by credit or debit card. Amend tax form Your payment must be at least $1. Amend tax form You may pay by phone or over the Internet. Amend tax form Do not file Form 4868. Amend tax form File a paper Form 4868. Amend tax form If you are a fiscal year taxpayer, you must file a paper Form 4868. Amend tax form See Form 4868 for information on getting an extension using these options. Amend tax form When to file. Amend tax form   You must request the automatic extension by the due date for your return. Amend tax form You can file your return any time before the 6-month extension period ends. Amend tax form When you file your return. Amend tax form   Enter any payment you made related to the extension of time to file on Form 1040, line 68. Amend tax form If you file Form 1040A, U. Amend tax form S. Amend tax form Individual Income Tax Return, or Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, include that payment in your total payments on Form 1040A, line 41, or Form 1040EZ, line 9. Amend tax form Also enter “Form 4868” and the amount paid in the space to the left of the entry space for line 41 or line 9. Amend tax form You cannot ask the Internal Revenue Service to figure your tax if you use the extension of time to file. Amend tax form Individuals Outside the United States and Puerto Rico You are allowed an automatic 2-month extension (until June 16, 2014, if you use the calendar year) to file your 2013 return and pay any federal income tax due if: You are a U. Amend tax form S. Amend tax form citizen or resident, and On the due date of your return: You are living outside of the United States and Puerto Rico, and your main place of business or post of duty is outside the United States and Puerto Rico, or You are in military or naval service on duty outside the United States and Puerto Rico. Amend tax form However, if you pay the tax due after the regular due date (generally April 15), interest will be charged from April 15 until the date the tax is paid. Amend tax form If you serve in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. Amend tax form For more information, see Publication 3, Armed Forces' Tax Guide. Amend tax form Married taxpayers. Amend tax form   If you file a joint return, only one spouse has to qualify for this automatic extension. Amend tax form However, if you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies. Amend tax form How to get the extension. Amend tax form   To use this special automatic extension, you must attach a statement to your return explaining what situation qualified you for the extension. Amend tax form (See the situations listed under (2), earlier. Amend tax form ) Extension beyond 2 months. Amend tax form   If you cannot file your 2013 return within the automatic 2-month extension period, you can get an additional 4-month extension, for a total of 6 months. Amend tax form File Form 4868 by the end of the automatic extension period (June 16, 2014 for calendar year taxpayers). Amend tax form Be sure to check the box on Form 4868, line 8, if appropriate. Amend tax form   In addition to this 6-month extension, taxpayers who are out of the country (as defined under (2) earlier) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Amend tax form   To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Amend tax form Send the letter by the extended due date (October 15 for calendar year taxpayers) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   You will not receive any notification from the IRS unless your request is denied for being untimely. Amend tax form Where To File Use the addresses listed below if you have to file Form 1040 with the United States and you are excluding possession income from American Samoa or Puerto Rico. Amend tax form If you are not including a check or a money order, send your U. Amend tax form S. Amend tax form tax return and all attachments to:   Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Amend tax form S. Amend tax form tax return and all attachments to:  Internal Revenue Service P. Amend tax form O. Amend tax form Box 1303 Charlotte, NC 28201-1303 USA Also send your U. Amend tax form S. Amend tax form return to these addresses if you are attaching Form 5074 or Form 8689. Amend tax form If you are not in either of the above categories, send your return to the address shown in the Form 1040 instructions for the possession or state in which you reside. Amend tax form Special Rules for Completing Your U. Amend tax form S. Amend tax form Tax Return If you are not excluding possession income from your U. Amend tax form S. Amend tax form tax return, follow the instructions for the specific forms you file. Amend tax form However, you may not qualify to claim the earned income credit (EIC). Amend tax form Earned income credit. Amend tax form   Even if you maintain a household in one of the possessions discussed in this publication that is your main home and the home of your qualifying child, you cannot claim the earned income credit on your U. Amend tax form S. Amend tax form tax return. Amend tax form This credit is available only if you maintain the household in the United States or you are serving on extended active duty in the U. Amend tax form S. Amend tax form Armed Forces. Amend tax form U. Amend tax form S. Amend tax form Armed Forces. Amend tax form   U. Amend tax form S. Amend tax form military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Amend tax form Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Amend tax form Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Amend tax form Income from American Samoa or Puerto Rico excluded. Amend tax form   You will not be allowed to take deductions and credits that apply to the excluded income. Amend tax form The additional information you need follows. Amend tax form Deductions if Possession Income Is Excluded Deductions that specifically apply to your excluded possession income, such as employee business expenses, are not allowable on your U. Amend tax form S. Amend tax form income tax return. Amend tax form Deductions that do not specifically apply to any particular type of income must be divided between your excluded income from sources in the relevant possession and income from all other sources to find the part that you can deduct on your U. Amend tax form S. Amend tax form tax return. Amend tax form Examples of such deductions are alimony payments, the standard deduction, and certain itemized deductions (such as medical expenses, charitable contributions, real estate taxes, and mortgage interest on your home). Amend tax form Figuring the deduction. Amend tax form   To find the part of a deduction that is allowable, multiply the deduction by the following fraction. Amend tax form   Gross income subject to U. Amend tax form S. Amend tax form income tax     Gross income from all sources (including excluded possession income)   Adjustments to Income Your adjusted gross income equals your gross income minus certain deductions (adjustments). Amend tax form Moving expense deduction. Amend tax form   Generally, expenses of a move to a possession are directly attributable to wages, salaries, and other earned income from that possession. Amend tax form Likewise, the expenses of a move back to the United States are generally attributable to U. Amend tax form S. Amend tax form earned income. Amend tax form   If you are claiming expenses for a move to a relevant possession, how and where you will deduct the expenses depends on your status as a bona fide resident and if any of your possession income is excluded on your U. Amend tax form S. Amend tax form tax return. Amend tax form For more information, see Moving expense deduction in chapter 3 under the name of the relevant possession. Amend tax form   If you are claiming expenses for a move from a U. Amend tax form S. Amend tax form possession to the United States, use Form 3903 to figure your deductible expenses and enter the amount on Form 1040, line 26. Amend tax form For purposes of deducting moving expenses, the possessions are considered part of the United States. Amend tax form See Publication 521, Moving Expenses, for information about what expenses are deductible. Amend tax form Self-employment tax deduction. Amend tax form   Generally, if you are reporting self-employment income on your U. Amend tax form S. Amend tax form return, you can include the deductible part of your self-employment tax on Form 1040, line 27. Amend tax form This is an income tax deduction only; it is not a deduction in figuring net earnings from self-employment (for self-employment tax). Amend tax form   However, if you are a bona fide resident of American Samoa or Puerto Rico and you exclude all of your self-employment income from gross income, you cannot take the deduction on Form 1040, line 27, because the deduction is related to excluded income. Amend tax form   If only part of your self-employment income is excluded, the part of the deduction that is based on the nonexcluded income is allowed. Amend tax form This would happen if, for instance, you have two businesses and only the income from one of them is excludable. Amend tax form   For purposes of the deduction only, figure the self-employment tax on the nonexcluded income by multiplying your total self-employment tax (from Schedule SE (Form 1040)), Self-Employment Tax) by the following fraction. Amend tax form   Self-employment income subject to U. Amend tax form S. Amend tax form income tax     Total self-employment income (including excluded possession income)   The result is your self-employment tax on nonexcluded income. Amend tax form Include the deductible part of this amount on Form 1040, line 27. Amend tax form Individual retirement arrangement (IRA) deduction. Amend tax form   Do not take excluded income into account when figuring your deductible IRA contribution. Amend tax form Standard Deduction The standard deduction is composed of the regular standard deduction amount and the additional standard deduction for taxpayers who are blind or age 65 or over. Amend tax form To find the amount you can claim on Form 1040, line 40, first figure your full standard deduction according to the Instructions for Form 1040. Amend tax form Then multiply your full standard deduction by the following fraction. Amend tax form   Gross income subject to U. Amend tax form S. Amend tax form income tax     Gross income from all sources (including excluded possession income)   In the space above line 40, enter “Standard deduction modified due to income excluded under section 931 (if American Samoa) or section 933 (if Puerto Rico). Amend tax form ” This calculation may not be the same as the one you used to determine if you need to file a U. Amend tax form S. Amend tax form tax return. Amend tax form Itemized Deductions Most itemized deductions do not apply to a particular type of income. Amend tax form However, itemized deductions can be divided into three categories. Amend tax form Those that apply specifically to excluded income, such as employee business expenses, are not deductible. Amend tax form Those that apply specifically to income subject to U. Amend tax form S. Amend tax form income tax, which might also be employee business expenses, are fully allowable under the Instructions for Schedule A (Form 1040), Itemized Deductions. Amend tax form Those that do not apply to specific income must be allocated between your gross income subject to U. Amend tax form S. Amend tax form income tax and your total gross income from all sources. Amend tax form The example given later shows how to figure the deductible part of each type of expense that is not related to specific income. Amend tax form Example. Amend tax form In 2013, you and your spouse are both under 65 and U. Amend tax form S. Amend tax form citizens who are bona fide residents of Puerto Rico during the entire tax year. Amend tax form You file a joint income tax return. Amend tax form During 2013, you earned $20,000 from Puerto Rican sources (excluded from U. Amend tax form S. Amend tax form gross income) and your spouse earned $60,000 from the U. Amend tax form S. Amend tax form Government. Amend tax form You have $16,000 of itemized deductions that do not apply to any specific type of income. Amend tax form These are medical expenses of $4,000, real estate taxes of $5,000, home mortgage interest of $6,000, and charitable contributions of $1,000 (cash contributions). Amend tax form You determine the amount of each deduction that you can claim on your Schedule A (Form 1040), Itemized Deductions, by multiplying the deduction by the fraction shown under Figuring the deduction , earlier under Deductions if Possession Income is Excluded. Amend tax form   Medical Expenses   $60,000$80,000 × $4,000 = $3,000  (enter on line 1  of Schedule A)     Real Estate Taxes   $60,000$80,000 × $5,000 = $3,750  (enter on line 6  of Schedule A)     Home Mortgage Interest   $60,000$80,000 × $6,000 = $4,500  (enter on line 10 or 11 of  Schedule A)     Charitable Contributions (cash contributions)   $60,000$80,000 × $1,000 = $750  (enter on line 16 of Schedule A)   Enter on Schedule A (Form 1040) only the allowable portion of each deduction. Amend tax form Overall limitation on itemized deductions. Amend tax form   If your adjusted gross income (discussed earlier) is over $300,000 if married filing jointly or qualifying widow(er); $275,000 if head of household; $250,000 if single; or $150,000 if married filing separately; see the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040), to figure your itemized deductions. Amend tax form Personal Exemptions Personal exemptions are allowed in full even if excluding possession income. Amend tax form However, depending upon your adjusted gross income and filing status, the amount you can deduct may be reduced. Amend tax form See the Deduction for Exemptions Worksheet—Line 42 in the instructions for Form 1040. Amend tax form Foreign Tax Credit if Possession Income Is Excluded If you must report American Samoa or Puerto Rico source income on your U. Amend tax form S. Amend tax form tax return, you can claim a foreign tax credit for income taxes paid to the possession on that income. Amend tax form However, you cannot claim a foreign tax credit for taxes paid on possession income that is excluded on your U. Amend tax form S. Amend tax form tax return. Amend tax form The foreign tax credit is generally figured on Form 1116. Amend tax form If you have income, such as U. Amend tax form S. Amend tax form Government wages, that is not excludable, and you also have possession source income that is excludable, you must figure the credit by reducing your foreign taxes paid or accrued by the taxes based on the excluded income. Amend tax form You make this reduction for each separate income category. Amend tax form To find the amount of this reduction, use the following formula for each income category. Amend tax form Excluded income from possession sources less deductible expenses based on that income x Tax paid or accrued to the possession = Reduction in foreign taxes Total income subject to possession tax less deductible expenses based on that income Enter the amount of the reduction on Form 1116, line 12. Amend tax form For more information on the foreign tax credit, see Publication 514. Amend tax form Example. Amend tax form Jason and Lynn Reddy are U. Amend tax form S. Amend tax form citizens who were bona fide residents of Puerto Rico during all of 2013. Amend tax form They file a joint tax return. Amend tax form The following table shows their excludable and taxable income for U. Amend tax form S. Amend tax form federal income tax purposes. Amend tax form   Taxable   Excludable Jason's wages from  U. Amend tax form S. Amend tax form Government $25,000     Lynn's wages from Puerto Rico  corp. Amend tax form     $15,000 Dividend from Puerto Rico corp. Amend tax form doing business in Puerto Rico     200 Dividend from U. Amend tax form S. Amend tax form  corp. Amend tax form doing business  in U. Amend tax form S. Amend tax form * 1,000     Totals $26,000   $15,200 * Income from sources outside Puerto Rico is taxable. Amend tax form   Jason and Lynn must file 2013 income tax returns with both Puerto Rico and the United States. Amend tax form They have gross income of $26,000 for U. Amend tax form S. Amend tax form tax purposes. Amend tax form They paid taxes to Puerto Rico of $4,000 ($3,980 on their wages and $20 on the dividend from the Puerto Rico corporation). Amend tax form They figure their foreign tax credit on two Forms 1116, which they must attach to their U. Amend tax form S. Amend tax form return. Amend tax form They fill out one Form 1116 for wages and one Form 1116 for the dividend. Amend tax form Jason and Lynn figure the Puerto Rico taxes on excluded income as follows. Amend tax form   Wages: ($15,000 ÷ $40,000) × $3,980 = $1,493   Dividend: ($200 ÷ $200) × $20 = $20 They enter $1,493 on Form 1116, line 12, for wages and $20 on the second Form 1116, line 12, for the dividend. Amend tax form Self-Employment Tax Self-employment tax includes both social security and Medicare taxes for individuals who are self-employed. Amend tax form A U. Amend tax form S. Amend tax form citizen or resident alien who is self-employed must pay self-employment tax on net self-employment earnings of $400 or more. Amend tax form This rule applies whether or not the earnings are excludable from gross income (or whether or not a U. Amend tax form S. Amend tax form income tax return must otherwise be filed). Amend tax form Bona fide residents of the possessions discussed in this publication are considered U. Amend tax form S. Amend tax form residents for this purpose and are subject to the self-employment tax. Amend tax form Forms to file. Amend tax form   If you have net self-employment income and are subject to self-employment tax, file one of the following with the United States. Amend tax form If you are required to file Form 1040 with the United States, complete Schedule SE (Form 1040) and attach it to your Form 1040. Amend tax form If you are not required to file Form 1040 with the United States and you are a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, file Form 1040-SS. Amend tax form If you are a resident of Puerto Rico, you can file the Spanish-language Form 1040-PR instead. Amend tax form Do not file forms 1040-SS or 1040-PR with Form 1040. Amend tax form If you are required to pay Additional Medicare Tax (discussed later) on your self-employment income, attach Form 8959, Additional Medicare Tax to Form 1040, Form 1040-SS, or Form 1040-PR, as applicable. Amend tax form Chapter 11 Bankruptcy cases. Amend tax form   While you are a debtor in a chapter 11 bankruptcy case, your net profit or loss from self-employment will be included on the income tax return (Form 1041, U. Amend tax form S. Amend tax form Income Tax Return for Estates and Trusts) of the bankruptcy estate. Amend tax form However, you—not the bankruptcy estate—are responsible for paying self-employment tax on your net earnings from self-employment. Amend tax form   Use Schedule SE (Form 1040), Form 1040-SS, or Form 1040-PR, as determined above, to figure your correct amount of self-employment tax. Amend tax form   For other reporting requirements, see Chapter 11 Bankruptcy Cases in the Instructions for Form 1040. Amend tax form Additional Medicare Tax Beginning in 2013, a 0. Amend tax form 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er). Amend tax form Medicare wages and self-employment income are combined to determine if income exceeds the threshold. Amend tax form A self-employment loss should not be considered for purposes of this tax. Amend tax form RRTA compensation should be separately compared to the threshold. Amend tax form Your employer is responsible for withholding the 0. Amend tax form 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. Amend tax form You should consider this withholding, if applicable, in determining whether you need to make estimated tax payments. Amend tax form There are no special rules for U. Amend tax form S. Amend tax form citizens and nonresident aliens living abroad for purposes of this provision. Amend tax form Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. Amend tax form For more information, see Form 8959, Additional Medicare Tax, and its instructions or visit www. Amend tax form irs. Amend tax form gov and enter the following words in the search box: Additional Medicare Tax. Amend tax form You cannot include the Additional Medicare Tax as a deductible part of your self-employment tax. Amend tax form Net Investment Income Tax Beginning in 2013, the Net Investment Income Tax (NIIT) imposes a 3. Amend tax form 8% tax on the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Amend tax form Bona fide residents of Puerto Rico and American Samoa who may have a federal income tax return filing obligation may be liable for the NIIT if the taxpayer’s modified adjusted gross income from non-territory sources exceeds a specified threshold amount. Amend tax form The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Amend tax form Bona fide residents must take into account any additional tax liability associated with the NIIT when calculating your estimated tax payments. Amend tax form Forms to file. Amend tax form   If you are a bona fide resident of American Samoa and Puerto Rico and you are required to pay the NIIT, you must file Form 1040 with the United States and attach Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts. Amend tax form For more information, see Form 8960 and its instructions. Amend tax form Paying Your Taxes You may find that not all of your income tax has been paid through withholding by either the United States or the possession. Amend tax form This is often true if you have income that is not subject to withholding, such as self-employment, interest, or rental income. Amend tax form In this situation, you may need to make estimated tax payments. Amend tax form Estimated Tax If your estimated income tax obligation is to the United States, use the worksheet in the Form 1040-ES package to figure your estimated tax, including self-employment tax. Amend tax form Include the Additional Medicare Tax and Net Investment Income Tax if applicable. Amend tax form If you are paying by check or money order, use the payment vouchers in the Form 1040-ES package. Amend tax form Or, you can make your payments electronically and not have to file any paper forms. Amend tax form See the Form 1040-ES instructions for information on making payments. Amend tax form Double Taxation Mutual agreement procedures exist to settle issues where there is inconsistent tax treatment between the IRS and the taxing authorities of the following possessions. Amend tax form American Samoa. Amend tax form The Commonwealth of Puerto Rico. Amend tax form The Commonwealth of the Northern Mariana Islands. Amend tax form Guam. Amend tax form The U. Amend tax form S. Amend tax form Virgin Islands. Amend tax form These issues usually involve allocations of income, deductions, credits, or allowances between related persons; determinations of residency; and determinations of the source of income and related expenses. Amend tax form Competent Authority Assistance The tax coordination agreements between the United States and the possession tax departments contain provisions allowing the competent authorities of the United States and the relevant possession to resolve, by mutual agreement, inconsistent tax treatment by the two jurisdictions. Amend tax form How to make your request. Amend tax form   Your request for competent authority assistance must include all the information listed in Revenue Procedure 2006-23, 2006-20 I. Amend tax form R. Amend tax form B. Amend tax form 900 available at www. Amend tax form irs. Amend tax form gov/pub/irs-irbs/irb06-49. Amend tax form pdf. Amend tax form    Also, see Notice 2013-78, which provides proposed updates to the procedures for requesting U. Amend tax form S. Amend tax form competent authority assistance under tax treaties. Amend tax form As noted, an update to Revenue Procedure 2006-23 will be published in the future. Amend tax form   Your request must be in the form of a letter addressed to the Deputy Commissioner (International) LB&I. Amend tax form It must contain a statement that competent authority assistance is requested under the mutual agreement procedure with the possession. Amend tax form You (or a person having authority to sign your federal return) must sign and date the request. Amend tax form    Send your written request for U. Amend tax form S. Amend tax form assistance under this procedure to:   Deputy Commissioner (International) Large Business and International Division Internal Revenue Service 1111 Constitution Avenue, N. Amend tax form W. Amend tax form  Routing: M4-365 Washington, DC 20224 (Attention: TAIT) Nonresident aliens generally must present their initial request for assistance to the relevant possession tax agency. Amend tax form Credit or Refund In addition to the tax assistance request, if you seek a credit or refund of any overpayment of U. Amend tax form S. Amend tax form tax paid on the income in question, you should file a claim on Form 1040X, Amended U. Amend tax form S. Amend tax form Individual Income Tax Return. Amend tax form Indicate on the form that a request for assistance under the mutual agreement procedure with the possession has been filed. Amend tax form Attach a copy of the request to the form. Amend tax form Also, you should take whatever steps must be taken under the possession tax code to prevent the expiration of the statutory period for filing a claim for credit or refund of a possession tax. Amend tax form See Revenue Procedure 2006-54 (or its successor), section 9, for complete information. Amend tax form Prev  Up  Next   Home   More Online Publications