Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Federal Tax Forms 2012

1040 Ez Tax Form1040ez 2011What Forms Do I Need To Amend My Taxes1040x SoftwareTax StudentHow To Fill Out An Amended Tax ReturnAmended Tax Returns2011 10402010 Irs Form 1040Mypay Dfas Mil MypayFile 1040x Online2012 Income Tax ReturnsAmend State TaxesE File 2010 Taxes For FreeTurbo Tax FilingTax Form 1040x InstructionsFree Tax Filing 2011E File State Taxes OnlyFile 1040nr Online FreeFile Late TaxesHow Can I Amend My Tax ReturnVita TaxesFree Income TaxAmended 1040ezForm 1040 2010How To File 2012 Federal TaxesIncome Tax Forms 2012Tax 2011Irs Forms 2010 Form 1040Hr Block Free TaxesAmend 2011 Federal ReturnIrs Free FileFiling 2012 Tax ReturnsAmmend Tax Return2013 State Tax FormFree Tax Filing 20111040 FormTax Software 20122011 Irs 1040ez FormHow Do You Fill Out A 1040x

Federal Tax Forms 2012

Federal tax forms 2012 Publication 542 - Additional Material Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Understanding Your CP232A Notice

We approved your request for an extension to file your Form 5330.


What you need to do

  • Keep this notice for your records.
  • File your required form by your new due date shown on the notice.

You may want to


Answers to Common Questions

Q. Where can I go for more information about Employee Benefit Plans?

A. For more information on Employee Benefit Plans, see Retirement Plans Community.

Q. Can I get help over the phone?

A. If you have questions and/or need help, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

 


Tips for next year

Be sure to mail your Form 5558 on or before the due date of your return.

Page Last Reviewed or Updated: 27-Jan-2014

How to get help

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

The Federal Tax Forms 2012

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