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Filing 2012 Taxes

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Filing 2012 Taxes

Filing 2012 taxes 17. Filing 2012 taxes   Individual Retirement Arrangements (IRAs) Table of Contents What's New Reminders Introduction Useful Items - You may want to see: Traditional IRAsWho Can Open a Traditional IRA? When and How Can a Traditional IRA Be Opened? How Much Can Be Contributed? When Can Contributions Be Made? How Much Can You Deduct? Nondeductible Contributions Inherited IRAs Can You Move Retirement Plan Assets? When Can You Withdraw or Use IRA Assets? When Must You Withdraw IRA Assets? (Required Minimum Distributions) Are Distributions Taxable? What Acts Result in Penalties or Additional Taxes? Roth IRAsWhat Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA? Can You Move Amounts Into a Roth IRA? Are Distributions Taxable? What's New Traditional IRA contribution and deduction limit. Filing 2012 taxes  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. Filing 2012 taxes 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. Filing 2012 taxes For more information, see How Much Can Be Contributed? later. Filing 2012 taxes Roth IRA contribution limit. Filing 2012 taxes  If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $5,500, or Your taxable compensation for the year. Filing 2012 taxes If you were age 50 or older before 2014 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $6,500, or Your taxable compensation for the year. Filing 2012 taxes However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Filing 2012 taxes For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? later. Filing 2012 taxes Modified AGI limit for traditional IRA contributions increased. Filing 2012 taxes  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. Filing 2012 taxes 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. Filing 2012 taxes If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Filing 2012 taxes See How Much Can You Deduct , later. Filing 2012 taxes Modified AGI limit for Roth IRA contributions increased. Filing 2012 taxes  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Filing 2012 taxes Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Filing 2012 taxes You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Filing 2012 taxes Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2013 and your modified AGI is at least $112,000. Filing 2012 taxes You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Filing 2012 taxes Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. Filing 2012 taxes You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Filing 2012 taxes See Can You Contribute to a Roth IRA , later. Filing 2012 taxes Net Investment Income Tax. Filing 2012 taxes   For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan including IRAs (for example; 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Filing 2012 taxes However, these distributions are taken into account when determining the modified adjusted gross income threshold. Filing 2012 taxes Distributions from a nonqualified retirement plan are included in net investment income. Filing 2012 taxes See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Filing 2012 taxes Name change. Filing 2012 taxes  All spousal IRAs have been renamed Kay Bailey Hutchison Spousal IRAs. Filing 2012 taxes There are no changes to the rules regarding these IRAs. Filing 2012 taxes See Kay Bailey Hutchison Spousal IRA Limit , later, for more information. Filing 2012 taxes Reminders 2014 limits. Filing 2012 taxes   You can find information about the 2014 contribution and AGI limits in Publication 590. Filing 2012 taxes Contributions to both traditional and Roth IRAs. Filing 2012 taxes   For information on your combined contribution limit if you contribute to both traditional and Roth IRAs, see Roth IRAs and traditional IRAs under How Much Can Be Contributed? in Roth IRAs, later. Filing 2012 taxes Statement of required minimum distribution. Filing 2012 taxes  If a minimum distribution from your IRA is required, the trustee, custodian, or issuer that held the IRA at the end of the preceding year must either report the amount of the required minimum distribution to you, or offer to calculate it for you. Filing 2012 taxes The report or offer must include the date by which the amount must be distributed. Filing 2012 taxes The report is due January 31 of the year in which the minimum distribution is required. Filing 2012 taxes It can be provided with the year-end fair market value statement that you normally get each year. Filing 2012 taxes No report is required for IRAs of owners who have died. Filing 2012 taxes IRA interest. Filing 2012 taxes  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Filing 2012 taxes Tax on your traditional IRA is generally deferred until you take a distribution. Filing 2012 taxes Do not report this interest on your tax return as tax-exempt interest. Filing 2012 taxes Form 8606. Filing 2012 taxes   To designate contributions as nondeductible, you must file Form 8606, Nondeductible IRAs. Filing 2012 taxes The term “50 or older” is used several times in this chapter. Filing 2012 taxes It refers to an IRA owner who is age 50 or older by the end of the tax year. Filing 2012 taxes Introduction An individual retirement arrangement (IRA) is a personal savings plan that gives you tax advantages for setting aside money for your retirement. Filing 2012 taxes This chapter discusses the following topics. Filing 2012 taxes The rules for a traditional IRA (any IRA that is not a Roth or SIMPLE IRA). Filing 2012 taxes The Roth IRA, which features nondeductible contributions and tax-free distributions. Filing 2012 taxes Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLEs) are not discussed in this chapter. Filing 2012 taxes For more information on these plans and employees' SEP IRAs and SIMPLE IRAs that are part of these plans, see Publications 560 and 590. Filing 2012 taxes For information about contributions, deductions, withdrawals, transfers, rollovers, and other transactions, see Publication 590. Filing 2012 taxes Useful Items - You may want to see: Publication 560 Retirement Plans for Small Business 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 5329 Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts 8606 Nondeductible IRAs Traditional IRAs In this chapter, the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Filing 2012 taxes ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Filing 2012 taxes Two advantages of a traditional IRA are: You may be able to deduct some or all of your contributions to it, depending on your circumstances, and Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Filing 2012 taxes 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. Filing 2012 taxes What is compensation?   Generally, compensation is what you earn from working. Filing 2012 taxes Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. Filing 2012 taxes 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). Filing 2012 taxes   Scholarship and fellowship payments are compensation for this purpose only if shown in box 1 of Form W-2. Filing 2012 taxes   Compensation also includes commissions and taxable alimony and separate maintenance payments. Filing 2012 taxes Self-employment income. Filing 2012 taxes   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deductible part of your self-employment tax. Filing 2012 taxes   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Filing 2012 taxes Nontaxable combat pay. Filing 2012 taxes   For IRA purposes, if you were a member of the U. Filing 2012 taxes S. Filing 2012 taxes Armed Forces, your compensation includes any nontaxable combat pay you receive. Filing 2012 taxes What is not compensation?   Compensation does not include any of the following items. Filing 2012 taxes Earnings and profits from property, such as rental income, interest income, and dividend income. Filing 2012 taxes Pension or annuity income. Filing 2012 taxes Deferred compensation received (compensation payments postponed from a past year). Filing 2012 taxes Income from a partnership for which you do not provide services that are a material income-producing factor. Filing 2012 taxes Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Filing 2012 taxes Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Filing 2012 taxes When and How Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Filing 2012 taxes However, the time for making contributions for any year is limited. Filing 2012 taxes See When Can Contributions Be Made , later. Filing 2012 taxes You can open different kinds of IRAs with a variety of organizations. Filing 2012 taxes You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Filing 2012 taxes You can also open an IRA through your stockbroker. Filing 2012 taxes Any IRA must meet Internal Revenue Code requirements. Filing 2012 taxes Kinds of traditional IRAs. Filing 2012 taxes   Your traditional IRA can be an individual retirement account or annuity. Filing 2012 taxes It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Filing 2012 taxes How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Filing 2012 taxes These limits and other rules are explained below. Filing 2012 taxes Community property laws. Filing 2012 taxes   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. Filing 2012 taxes This is the rule even in states with community property laws. Filing 2012 taxes Brokers' commissions. Filing 2012 taxes   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Filing 2012 taxes Trustees' fees. Filing 2012 taxes   Trustees' administrative fees are not subject to the contribution limit. Filing 2012 taxes Qualified reservist repayments. Filing 2012 taxes   If you are (or were) a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions you received. Filing 2012 taxes 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. Filing 2012 taxes To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or similar arrangement. Filing 2012 taxes   For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1 of Publication 590. Filing 2012 taxes Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Filing 2012 taxes (See Roth IRAs, later. Filing 2012 taxes ) General limit. Filing 2012 taxes   For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts. Filing 2012 taxes $5,500 ($6,500 if you are 50 or older). Filing 2012 taxes Your taxable compensation (defined earlier) for the year. Filing 2012 taxes 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. Filing 2012 taxes (See Nondeductible Contributions , later. Filing 2012 taxes ) Qualified reservist repayments do not affect this limit. Filing 2012 taxes Example 1. Filing 2012 taxes Betty, who is 34 years old and single, earned $24,000 in 2013. Filing 2012 taxes Her IRA contributions for 2013 are limited to $5,500. Filing 2012 taxes Example 2. Filing 2012 taxes John, an unmarried college student working part time, earned $3,500 in 2013. Filing 2012 taxes His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Filing 2012 taxes Kay Bailey Hutchison Spousal IRA limit. Filing 2012 taxes   For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following amounts. Filing 2012 taxes $5,500 ($6,500 if you are 50 or older). Filing 2012 taxes The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Filing 2012 taxes Your spouse's IRA contribution for the year to a traditional IRA. Filing 2012 taxes Any contribution for the year to a Roth IRA on behalf of your spouse. Filing 2012 taxes This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is 50 or older, or $13,000 if both of you are 50 or older). Filing 2012 taxes 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). Filing 2012 taxes Contributions must be in the form of money (cash, check, or money order). Filing 2012 taxes Property cannot be contributed. Filing 2012 taxes Contributions must be made by due date. Filing 2012 taxes   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. Filing 2012 taxes Age 70½ rule. Filing 2012 taxes   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Filing 2012 taxes   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Filing 2012 taxes If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Filing 2012 taxes Designating year for which contribution is made. Filing 2012 taxes   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. Filing 2012 taxes 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). Filing 2012 taxes Filing before a contribution is made. Filing 2012 taxes   You can file your return claiming a traditional IRA contribution before the contribution is actually made. Filing 2012 taxes Generally, the contribution must be made by the due date of your return, not including extensions. Filing 2012 taxes Contributions not required. Filing 2012 taxes   You do not have to contribute to your traditional IRA for every tax year, even if you can. Filing 2012 taxes How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if it applies). Filing 2012 taxes However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Filing 2012 taxes See Limit If Covered by Employer Plan , later. Filing 2012 taxes You may be able to claim a credit for contributions to your traditional IRA. Filing 2012 taxes For more information, see chapter 37. Filing 2012 taxes Trustees' fees. Filing 2012 taxes   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Filing 2012 taxes However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Filing 2012 taxes See chapter 28. Filing 2012 taxes Brokers' commissions. Filing 2012 taxes   Brokers' commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Filing 2012 taxes Full deduction. Filing 2012 taxes   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older in 2013). Filing 2012 taxes 100% of your compensation. Filing 2012 taxes This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Filing 2012 taxes Kay Bailey Hutchison Spousal IRA. Filing 2012 taxes   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of the following amounts. Filing 2012 taxes $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older in 2013). Filing 2012 taxes The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Filing 2012 taxes The IRA deduction for the year of the spouse with the greater compensation. Filing 2012 taxes Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Filing 2012 taxes Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Filing 2012 taxes This limit is reduced by any contributions to a 501(c)(18) plan on behalf of the spouse with the lesser compensation. Filing 2012 taxes Note. Filing 2012 taxes 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. Filing 2012 taxes After a divorce or legal separation, you can deduct only contributions to your own IRA. Filing 2012 taxes Your deductions are subject to the rules for single individuals. Filing 2012 taxes Covered by an employer retirement plan. Filing 2012 taxes   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. Filing 2012 taxes This is discussed later under Limit If Covered by Employer Plan . Filing 2012 taxes Limits on the amount you can deduct do not affect the amount that can be contributed. Filing 2012 taxes See Nondeductible Contributions , later. Filing 2012 taxes 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. Filing 2012 taxes The “Retirement plan” box should be checked if you were covered. Filing 2012 taxes Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered by an Employer Plan , later. Filing 2012 taxes If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Filing 2012 taxes Federal judges. Filing 2012 taxes   For purposes of the IRA deduction, federal judges are covered by an employer retirement plan. Filing 2012 taxes For Which Year(s) Are You Covered by an Employer Plan? Special rules apply to determine the tax years for which you are covered by an employer plan. Filing 2012 taxes These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Filing 2012 taxes Tax year. Filing 2012 taxes   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Filing 2012 taxes For almost all people, the tax year is the calendar year. Filing 2012 taxes Defined contribution plan. Filing 2012 taxes   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. Filing 2012 taxes   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Filing 2012 taxes Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Filing 2012 taxes Defined benefit plan. Filing 2012 taxes   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. Filing 2012 taxes 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. Filing 2012 taxes   A defined benefit plan is any plan that is not a defined contribution plan. Filing 2012 taxes Defined benefit plans include pension plans and annuity plans. Filing 2012 taxes No vested interest. Filing 2012 taxes   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. Filing 2012 taxes Situations in Which You Are Not Covered by an Employer Plan Unless you are covered under another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Filing 2012 taxes Social security or railroad retirement. Filing 2012 taxes   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Filing 2012 taxes Benefits from a previous employer's plan. Filing 2012 taxes   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Filing 2012 taxes Reservists. Filing 2012 taxes   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. Filing 2012 taxes You are not covered by the plan if both of the following conditions are met. Filing 2012 taxes 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. Filing 2012 taxes You did not serve more than 90 days on active duty during the year (not counting duty for training). Filing 2012 taxes Volunteer firefighters. Filing 2012 taxes   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Filing 2012 taxes You are not covered by the plan if both of the following conditions are met. Filing 2012 taxes 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. Filing 2012 taxes Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Filing 2012 taxes Limit If Covered by Employer Plan If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. Filing 2012 taxes 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. Filing 2012 taxes These amounts vary depending on your filing status. Filing 2012 taxes To determine if your deduction is subject to phaseout, you must determine your modified adjusted gross income (AGI) and your filing status. Filing 2012 taxes See Filing status and Modified adjusted gross income (AGI) , later. Filing 2012 taxes Then use Table 17-1 or 17-2 to determine if the phaseout applies. Filing 2012 taxes Social security recipients. Filing 2012 taxes   Instead of using Table 17-1 or Table 17-2, use the worksheets in Appendix B of Publication 590 if, for the year, all of the following apply. Filing 2012 taxes You received social security benefits. Filing 2012 taxes You received taxable compensation. Filing 2012 taxes Contributions were made to your traditional IRA. Filing 2012 taxes You or your spouse was covered by an employer retirement plan. Filing 2012 taxes Use those worksheets to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Filing 2012 taxes Deduction phaseout. Filing 2012 taxes   If you were covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI as shown in Table 17-1. Filing 2012 taxes Table 17-1. Filing 2012 taxes Effect of Modified AGI1 on Deduction if You Are Covered by Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Filing 2012 taxes IF your filing status is. Filing 2012 taxes . Filing 2012 taxes . Filing 2012 taxes   AND your modified AGI is. Filing 2012 taxes . Filing 2012 taxes . Filing 2012 taxes   THEN you can take. Filing 2012 taxes . Filing 2012 taxes . Filing 2012 taxes single   or  head of household   $59,000 or less   a full deduction. Filing 2012 taxes   more than $59,000 but less than $69,000   a partial deduction. Filing 2012 taxes   $69,000 or more   no deduction. Filing 2012 taxes married filing jointly   or  qualifying widow(er)   $95,000 or less   a full deduction. Filing 2012 taxes   more than $95,000 but less than $115,000   a partial deduction. Filing 2012 taxes   $115,000 or more   no deduction. Filing 2012 taxes married filing separately2   less than $10,000   a partial deduction. Filing 2012 taxes   $10,000 or more   no deduction. Filing 2012 taxes 1Modified AGI (adjusted gross income). Filing 2012 taxes See Modified adjusted gross income (AGI) . Filing 2012 taxes 2If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” column). Filing 2012 taxes If your spouse is covered. Filing 2012 taxes   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 17-2. Filing 2012 taxes Filing status. Filing 2012 taxes   Your filing status depends primarily on your marital status. Filing 2012 taxes 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. Filing 2012 taxes If you need more information on filing status, see chapter 2. Filing 2012 taxes Lived apart from spouse. Filing 2012 taxes   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. Filing 2012 taxes Table 17-2. Filing 2012 taxes Effect of Modified AGI1 on Deduction if You Are NOT Covered by Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Filing 2012 taxes IF your filing status is. Filing 2012 taxes . Filing 2012 taxes . Filing 2012 taxes   AND your modified AGI is. Filing 2012 taxes . Filing 2012 taxes . Filing 2012 taxes   THEN you can take. Filing 2012 taxes . Filing 2012 taxes . Filing 2012 taxes single, head of household, or qualifying widow(er)   any amount   a full deduction. Filing 2012 taxes married filing jointly or separately with a spouse who is not covered by a plan at work   any amount   a full deduction. Filing 2012 taxes married filing jointly with a spouse who is covered by a plan at work   $178,000 or less   a full deduction. Filing 2012 taxes   more than $178,000 but less than $188,000   a partial deduction. Filing 2012 taxes   $188,000 or more   no deduction. Filing 2012 taxes married filing separately with a spouse who is covered by a plan at work2   less than $10,000   a partial deduction. Filing 2012 taxes   $10,000 or more   no deduction. Filing 2012 taxes 1Modified AGI (adjusted gross income). Filing 2012 taxes See Modified adjusted gross income (AGI) . Filing 2012 taxes 2You are entitled to the full deduction if you did not live with your spouse at any time during the year. Filing 2012 taxes Modified adjusted gross income (AGI). Filing 2012 taxes   How you figure your modified AGI depends on whether you are filing Form 1040 or Form 1040A. Filing 2012 taxes If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Publication 590. Filing 2012 taxes You may be able to use Worksheet 17-1 to figure your modified AGI. Filing 2012 taxes    Do not assume that your modified AGI is the same as your compensation. Filing 2012 taxes Your modified AGI may include income in addition to your compensation (discussed earlier), such as interest, dividends, and income from IRA distributions. Filing 2012 taxes Form 1040. Filing 2012 taxes   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following eight amounts. Filing 2012 taxes IRA deduction. Filing 2012 taxes Student loan interest deduction. Filing 2012 taxes Tuition and fees deduction. Filing 2012 taxes Domestic production activities deduction. Filing 2012 taxes Foreign earned income exclusion. Filing 2012 taxes Foreign housing exclusion or deduction. Filing 2012 taxes Exclusion of qualified savings bond interest shown on Form 8815, Exclusion of Interest From Series EE and I U. Filing 2012 taxes S. Filing 2012 taxes Savings Bonds Issued After 1989. Filing 2012 taxes Exclusion of employer-provided adoption benefits shown on Form 8839, Qualified Adoption Expenses. Filing 2012 taxes This is your modified AGI. Filing 2012 taxes Form 1040A. Filing 2012 taxes   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. Filing 2012 taxes IRA deduction. Filing 2012 taxes Student loan interest deduction. Filing 2012 taxes Tuition and fees deduction. Filing 2012 taxes Exclusion of qualified savings bond interest shown on Form 8815. Filing 2012 taxes This is your modified AGI. Filing 2012 taxes Both contributions for 2013 and distributions in 2013. Filing 2012 taxes   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Filing 2012 taxes You received distributions in 2013 from one or more traditional IRAs. Filing 2012 taxes You made contributions to a traditional IRA for 2013. Filing 2012 taxes Some of those contributions may be nondeductible contributions. Filing 2012 taxes If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Filing 2012 taxes To do this, you can use Worksheet 1-5, Figuring the Taxable Part of Your IRA Distribution, in Publication 590. Filing 2012 taxes   If at least one of the above does not apply, figure your modified AGI using Worksheet 17-1, later. Filing 2012 taxes    How to figure your reduced IRA deduction. Filing 2012 taxes   You can figure your reduced IRA deduction for either Form 1040 or Form 1040A by using the worksheets in chapter 1 of Publication 590. Filing 2012 taxes Also, the instructions for Form 1040 and Form 1040A include similar worksheets that you may be able to use instead. Filing 2012 taxes Worksheet 17-1. Filing 2012 taxes Figuring Your Modified AGI Use this worksheet to figure your modified adjusted gross income for traditional IRA purposes. Filing 2012 taxes 1. Filing 2012 taxes Enter your adjusted gross income (AGI) from Form 1040, line 38, or Form 1040A, line 22, figured without taking into account the amount from Form 1040, line 32, or Form 1040A, line 17 1. Filing 2012 taxes   2. Filing 2012 taxes Enter any student loan interest deduction from Form 1040, line 33, or Form 1040A, line 18 2. Filing 2012 taxes   3. Filing 2012 taxes Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Filing 2012 taxes   4. Filing 2012 taxes Enter any domestic production activities deduction from Form 1040, line 35 4. Filing 2012 taxes   5. Filing 2012 taxes Enter any foreign earned income and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Filing 2012 taxes   6. Filing 2012 taxes Enter any foreign housing deduction from Form 2555, line 50 6. Filing 2012 taxes   7. Filing 2012 taxes Enter any excludable savings bond interest from Form 8815, line 14 7. Filing 2012 taxes   8. Filing 2012 taxes Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Filing 2012 taxes   9. Filing 2012 taxes Add lines 1 through 8. Filing 2012 taxes This is your Modified AGI for traditional IRA purposes 9. Filing 2012 taxes   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Filing 2012 taxes If you file Form 1040A, enter your IRA deduction on line 17. Filing 2012 taxes You cannot deduct IRA contributions on Form 1040EZ. Filing 2012 taxes Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Filing 2012 taxes The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Filing 2012 taxes Example. Filing 2012 taxes Mike is 28 years old and single. Filing 2012 taxes In 2013, he was covered by a retirement plan at work. Filing 2012 taxes His salary was $57,312. Filing 2012 taxes His modified AGI was $70,000. Filing 2012 taxes Mike made a $5,500 IRA contribution for 2013. Filing 2012 taxes Because he was covered by a retirement plan and his modified AGI was over $69,000, he cannot deduct his $5,500 IRA contribution. Filing 2012 taxes He must designate this contribution as a nondeductible contribution by reporting it on Form 8606, as explained next. Filing 2012 taxes Form 8606. Filing 2012 taxes   To designate contributions as nondeductible, you must file Form 8606. Filing 2012 taxes   You do not have to designate a contribution as nondeductible until you file your tax return. Filing 2012 taxes When you file, you can even designate otherwise deductible contributions as nondeductible. Filing 2012 taxes   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Filing 2012 taxes 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. Filing 2012 taxes In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Filing 2012 taxes See Form 8606 under Distributions Fully or Partly Taxable, later. Filing 2012 taxes Failure to report nondeductible contributions. Filing 2012 taxes   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated as deductible contributions when withdrawn. Filing 2012 taxes All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Filing 2012 taxes Penalty for overstatement. Filing 2012 taxes   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. Filing 2012 taxes Penalty for failure to file Form 8606. Filing 2012 taxes   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. Filing 2012 taxes    Tax on earnings on nondeductible contributions. Filing 2012 taxes   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. Filing 2012 taxes See When Can You Withdraw or Use IRA Assets , later. Filing 2012 taxes Cost basis. Filing 2012 taxes   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Filing 2012 taxes Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Filing 2012 taxes Inherited IRAs If you inherit a traditional IRA, you are called a beneficiary. Filing 2012 taxes A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Filing 2012 taxes Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Filing 2012 taxes Inherited from spouse. Filing 2012 taxes   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Filing 2012 taxes You can: Treat it as your own IRA by designating yourself as the account owner. Filing 2012 taxes Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (section 403(b) plan), or Deferred compensation plan of a state or local government (section 457 plan). Filing 2012 taxes Treat yourself as the beneficiary rather than treating the IRA as your own. Filing 2012 taxes Treating it as your own. Filing 2012 taxes   You will be considered to have chosen to treat the IRA as your own if: Contributions (including rollover contributions) are made to the inherited IRA, or You do not take the required minimum distribution for a year as a beneficiary of the IRA. Filing 2012 taxes You will only be considered to have chosen to treat the IRA as your own if: You are the sole beneficiary of the IRA, and You have an unlimited right to withdraw amounts from it. Filing 2012 taxes   However, if you receive a distribution from your deceased spouse's IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution is not a required distribution, even if you are not the sole beneficiary of your deceased spouse's IRA. Filing 2012 taxes Inherited from someone other than spouse. Filing 2012 taxes   If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. Filing 2012 taxes This means that you cannot make any contributions to the IRA. Filing 2012 taxes It also means you cannot roll over any amounts into or out of the inherited IRA. Filing 2012 taxes However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary. Filing 2012 taxes For more information, see the discussion of inherited IRAs under Rollover From One IRA Into Another, later. Filing 2012 taxes Can You Move Retirement Plan Assets? You can transfer, tax free, assets (money or property) from other retirement plans (including traditional IRAs) to a traditional IRA. Filing 2012 taxes You can make the following kinds of transfers. Filing 2012 taxes Transfers from one trustee to another. Filing 2012 taxes Rollovers. Filing 2012 taxes Transfers incident to a divorce. Filing 2012 taxes Transfers to Roth IRAs. Filing 2012 taxes   Under certain conditions, you can move assets from a traditional IRA or from a designated Roth account to a Roth IRA. Filing 2012 taxes You can also move assets from a qualified retirement plan to a Roth IRA. Filing 2012 taxes See Can You Move Amounts Into a Roth IRA? under Roth IRAs, later. Filing 2012 taxes Trustee-to-Trustee Transfer A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Filing 2012 taxes Because there is no distribution to you, the transfer is tax free. Filing 2012 taxes Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers, discussed later under Rollover From One IRA Into Another . Filing 2012 taxes For information about direct transfers to IRAs from retirement plans other than IRAs, see Can You Move Retirement Plan Assets? in chapter 1 and Can You Move Amounts Into a Roth IRA? in chapter 2 of Publication 590. Filing 2012 taxes Rollovers Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute (roll over) to another retirement plan. Filing 2012 taxes The contribution to the second retirement plan is called a “rollover contribution. Filing 2012 taxes ” Note. Filing 2012 taxes An amount rolled over tax free from one retirement plan to another is generally includible in income when it is distributed from the second plan. Filing 2012 taxes Kinds of rollovers to a traditional IRA. Filing 2012 taxes   You can roll over amounts from the following plans into a traditional IRA: A traditional IRA, An employer's qualified retirement plan for its employees, A deferred compensation plan of a state or local government (section 457 plan), or A tax-sheltered annuity plan (section 403(b) plan). Filing 2012 taxes Treatment of rollovers. Filing 2012 taxes   You cannot deduct a rollover contribution, but you must report the rollover distribution on your tax return as discussed later under Reporting rollovers from IRAs and under Reporting rollovers from employer plans . Filing 2012 taxes Kinds of rollovers from a traditional IRA. Filing 2012 taxes   You may be able to roll over, tax free, a distribution from your traditional IRA into a qualified plan. Filing 2012 taxes These plans include the federal Thrift Savings Fund (for federal employees), deferred compensation plans of state or local governments (section 457 plans), and tax-sheltered annuity plans (section 403(b) plans). Filing 2012 taxes The part of the distribution that you can roll over is the part that would otherwise be taxable (includible in your income). Filing 2012 taxes Qualified plans may, but are not required to, accept such rollovers. Filing 2012 taxes Time limit for making a rollover contribution. Filing 2012 taxes   You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan. Filing 2012 taxes The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control. Filing 2012 taxes For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Filing 2012 taxes Extension of rollover period. Filing 2012 taxes   If an amount distributed to you from a traditional IRA or a qualified employer retirement plan is a frozen deposit at any time during the 60-day period allowed for a rollover, special rules extend the rollover period. Filing 2012 taxes For more information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Filing 2012 taxes More information. Filing 2012 taxes   For more information on rollovers, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Filing 2012 taxes Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Filing 2012 taxes Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. Filing 2012 taxes Waiting period between rollovers. Filing 2012 taxes   Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. Filing 2012 taxes You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the IRA into which you made the tax-free rollover. Filing 2012 taxes   The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA. Filing 2012 taxes Example. Filing 2012 taxes You have two traditional IRAs, IRA-1 and IRA-2. Filing 2012 taxes You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). Filing 2012 taxes You cannot, within 1 year of the distribution from IRA-1, make a tax-free rollover of any distribution from either IRA-1 or IRA-3 into another traditional IRA. Filing 2012 taxes However, the rollover from IRA-1 into IRA-3 does not prevent you from making a tax-free rollover from IRA-2 into any other traditional IRA. Filing 2012 taxes This is because you have not, within the last year, rolled over, tax free, any distribution from IRA-2 or made a tax-free rollover into IRA-2. Filing 2012 taxes Exception. Filing 2012 taxes   For an exception for distributions from failed financial institutions, see Rollover From One IRA Into Another under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Filing 2012 taxes Partial rollovers. Filing 2012 taxes   If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. Filing 2012 taxes The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). Filing 2012 taxes The amount you keep may be subject to the 10% additional tax on early distributions, discussed later under What Acts Result in Penalties or Additional Taxes? . Filing 2012 taxes Required distributions. Filing 2012 taxes   Amounts that must be distributed during a particular year under the required distribution rules (discussed later) are not eligible for rollover treatment. Filing 2012 taxes Inherited IRAs. Filing 2012 taxes   If you inherit a traditional IRA from your spouse, you generally can roll it over, or you can choose to make the inherited IRA your own. Filing 2012 taxes See Treating it as your own , earlier. Filing 2012 taxes Not inherited from spouse. Filing 2012 taxes   If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. Filing 2012 taxes You must withdraw the IRA assets within a certain period. Filing 2012 taxes For more information, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Filing 2012 taxes Reporting rollovers from IRAs. Filing 2012 taxes   Report any rollover from one traditional IRA to the same or another traditional IRA on lines 15a and 15b, Form 1040, or lines 11a and 11b, Form 1040A, as follows. Filing 2012 taxes   Enter the total amount of the distribution on Form 1040, line 15a, or Form 1040A, line 11a. Filing 2012 taxes If the total amount on Form 1040, line 15a, or Form 1040A, line 11a, was rolled over, enter zero on Form 1040, line 15b, or Form 1040A, line 11b. Filing 2012 taxes If the total distribution was not rolled over, enter the taxable portion of the part that was not rolled over on Form 1040, line 15b, or Form 1040A, line 11b. Filing 2012 taxes Put “Rollover” next to Form 1040, line 15b, or Form 1040A, line 11b. Filing 2012 taxes See your tax return instructions. Filing 2012 taxes   If you rolled over the distribution into a qualified plan (other than an IRA) or you make the rollover in 2014, attach a statement explaining what you did. Filing 2012 taxes Rollover From Employer's Plan Into an IRA You can roll over into a traditional IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's): Employer's qualified pension, profit-sharing, or stock bonus plan; Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). Filing 2012 taxes A qualified plan is one that meets the requirements of the Internal Revenue Code. Filing 2012 taxes Eligible rollover distribution. Filing 2012 taxes   Generally, an eligible rollover distribution is any distribution of all or part of the balance to your credit in a qualified retirement plan except the following. Filing 2012 taxes A required minimum distribution (explained later under When Must You Withdraw IRA Assets? (Required Minimum Distributions) ). Filing 2012 taxes A hardship distribution. Filing 2012 taxes Any of a series of substantially equal periodic distributions paid at least once a year over: Your lifetime or life expectancy, The lifetimes or life expectancies of you and your beneficiary, or A period of 10 years or more. Filing 2012 taxes Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or of excess annual additions and any allocable gains. Filing 2012 taxes A loan treated as a distribution because it does not satisfy certain requirements either when made or later (such as upon default), unless the participant's accrued benefits are reduced (offset) to repay the loan. Filing 2012 taxes Dividends on employer securities. Filing 2012 taxes The cost of life insurance coverage. Filing 2012 taxes Any nontaxable amounts that you roll over into your traditional IRA become part of your basis (cost) in your IRAs. Filing 2012 taxes To recover your basis when you take distributions from your IRA, you must complete Form 8606 for the year of the distribution. Filing 2012 taxes See Form 8606 under Distributions Fully or Partly Taxable, later. Filing 2012 taxes Rollover by nonspouse beneficiary. Filing 2012 taxes   A direct transfer from a deceased employee's qualified pension, profit-sharing, or stock bonus plan; annuity plan; tax-sheltered annuity (section 403(b)) plan; or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. Filing 2012 taxes The IRA is treated as an inherited IRA. Filing 2012 taxes For more information about inherited IRAs, see Inherited IRAs , earlier. Filing 2012 taxes Reporting rollovers from employer plans. Filing 2012 taxes    Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 16a, or Form 1040A, line 12a. Filing 2012 taxes This amount should be shown in box 1 of Form 1099-R. Filing 2012 taxes From this amount, subtract any contributions (usually shown in box 5 of Form 1099-R) that were taxable to you when made. Filing 2012 taxes From that result, subtract the amount that was rolled over either directly or within 60 days of receiving the distribution. Filing 2012 taxes Enter the remaining amount, even if zero, on Form 1040, line 16b, or Form 1040A, line 12b. Filing 2012 taxes Also, enter "Rollover" next to Form 1040, line 16b, or Form 1040A, line 12b. Filing 2012 taxes Transfers Incident to Divorce If an interest in a traditional IRA is transferred from your spouse or former spouse to you by a divorce or separate maintenance decree or a written document related to such a decree, the interest in the IRA, starting from the date of the transfer, is treated as your IRA. Filing 2012 taxes The transfer is tax free. Filing 2012 taxes For detailed information, see Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Filing 2012 taxes Converting From Any Traditional IRA to a Roth IRA Allowable conversions. Filing 2012 taxes   You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. Filing 2012 taxes The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. Filing 2012 taxes If properly (and timely) rolled over, the 10% additional tax on early distributions will not apply. Filing 2012 taxes However, a part or all of the conversion contribution from your traditional IRA is included in your gross income. Filing 2012 taxes Required distributions. Filing 2012 taxes   You cannot convert amounts that must be distributed from your traditional IRA for a particular year (including the calendar year in which you reach age 70½) under the required distribution rules (discussed later). Filing 2012 taxes Income. Filing 2012 taxes   You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you had not converted them into a Roth IRA. Filing 2012 taxes These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA. Filing 2012 taxes   You do not include in gross income any part of a distribution from a traditional IRA that is a return of your basis, as discussed later. Filing 2012 taxes   You must file Form 8606 to report 2013 conversions from traditional, SEP, or SIMPLE IRAs to a Roth IRA in 2013 (unless you recharacterized the entire amount) and to figure the amount to include in income. Filing 2012 taxes   If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. Filing 2012 taxes See chapter 4. Filing 2012 taxes Recharacterizations You may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. Filing 2012 taxes This is called recharacterizing the contribution. Filing 2012 taxes See Can You Move Retirement Plan Assets? in chapter 1 of Publication 590 for more detailed information. Filing 2012 taxes How to recharacterize a contribution. Filing 2012 taxes   To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. Filing 2012 taxes If the transfer is made by the due date (including extensions) for your tax return for the year during which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. Filing 2012 taxes If you recharacterize your contribution, you must do all three of the following. Filing 2012 taxes Include in the transfer any net income allocable to the contribution. Filing 2012 taxes If there was a loss, the net income you must transfer may be a negative amount. Filing 2012 taxes Report the recharacterization on your tax return for the year during which the contribution was made. Filing 2012 taxes Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA. Filing 2012 taxes No deduction allowed. Filing 2012 taxes   You cannot deduct the contribution to the first IRA. Filing 2012 taxes Any net income you transfer with the recharacterized contribution is treated as earned in the second IRA. Filing 2012 taxes Required notifications. Filing 2012 taxes   To recharacterize a contribution, you must notify both the trustee of the first IRA (the one to which the contribution was actually made) and the trustee of the second IRA (the one to which the contribution is being moved) that you have elected to treat the contribution as having been made to the second IRA rather than the first. Filing 2012 taxes You must make the notifications by the date of the transfer. Filing 2012 taxes Only one notification is required if both IRAs are maintained by the same trustee. Filing 2012 taxes The notification(s) must include all of the following information. Filing 2012 taxes The type and amount of the contribution to the first IRA that is to be recharacterized. Filing 2012 taxes The date on which the contribution was made to the first IRA and the year for which it was made. Filing 2012 taxes A direction to the trustee of the first IRA to transfer in a trustee-to-trustee transfer the amount of the contribution and any net income (or loss) allocable to the contribution to the trustee of the second IRA. Filing 2012 taxes The name of the trustee of the first IRA and the name of the trustee of the second IRA. Filing 2012 taxes Any additional information needed to make the transfer. Filing 2012 taxes Reporting a recharacterization. Filing 2012 taxes   If you elect to recharacterize a contribution to one IRA as a contribution to another IRA, you must report the recharacterization on your tax return as directed by Form 8606 and its instructions. Filing 2012 taxes You must treat the contribution as having been made to the second IRA. Filing 2012 taxes When Can You Withdraw or Use IRA Assets? There are rules limiting use of your IRA assets and distributions from it. Filing 2012 taxes Violation of the rules generally results in additional taxes in the year of violation. Filing 2012 taxes See What Acts Result in Penalties or Additional Taxes , later. Filing 2012 taxes Contributions returned before the due date of return. Filing 2012 taxes   If you made IRA contributions in 2013, you can withdraw them tax free by the due date of your return. Filing 2012 taxes If you have an extension of time to file your return, you can withdraw them tax free by the extended due date. Filing 2012 taxes You can do this if, for each contribution you withdraw, both of the following conditions apply. Filing 2012 taxes You did not take a deduction for the contribution. Filing 2012 taxes You withdraw any interest or other income earned on the contribution. Filing 2012 taxes You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Filing 2012 taxes If there was a loss, the net income earned on the contribution may be a negative amount. Filing 2012 taxes Note. Filing 2012 taxes To calculate the amount you must withdraw, see Worksheet 1-4 under When Can You Withdraw or Use Assets? in chapter 1 of Publication 590. Filing 2012 taxes Earnings includible in income. Filing 2012 taxes   You must include in income any earnings on the contributions you withdraw. Filing 2012 taxes Include the earnings in income for the year in which you made the contributions, not in the year in which you withdraw them. Filing 2012 taxes Generally, except for any part of a withdrawal that is a return of nondeductible contributions (basis), any withdrawal of your contributions after the due date (or extended due date) of your return will be treated as a taxable distribution. Filing 2012 taxes Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes?, later. Filing 2012 taxes    Early distributions tax. Filing 2012 taxes   The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. Filing 2012 taxes However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax. Filing 2012 taxes When Must You Withdraw IRA Assets? (Required Minimum Distributions) You cannot keep funds in a traditional IRA indefinitely. Filing 2012 taxes Eventually they must be distributed. Filing 2012 taxes If there are no distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required. Filing 2012 taxes See Excess Accumulations (Insufficient Distributions) , later. Filing 2012 taxes The requirements for distributing IRA funds differ depending on whether you are the IRA owner or the beneficiary of a decedent's IRA. Filing 2012 taxes Required minimum distribution. Filing 2012 taxes   The amount that must be distributed each year is referred to as the required minimum distribution. Filing 2012 taxes Required distributions not eligible for rollover. Filing 2012 taxes   Amounts that must be distributed (required minimum distributions) during a particular year are not eligible for rollover treatment. Filing 2012 taxes IRA owners. Filing 2012 taxes   If you are the owner of a traditional IRA, you must generally start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Filing 2012 taxes April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date. Filing 2012 taxes Distributions by the required beginning date. Filing 2012 taxes   You must receive at least a minimum amount for each year starting with the year you reach age 70½ (your 70½ year). Filing 2012 taxes If you do not (or did not) receive that minimum amount in your 70½ year, then you must receive distributions for your 70½ year by April 1 of the next year. Filing 2012 taxes   If an IRA owner dies after reaching age 70½, but before April 1 of the next year, no minimum distribution is required because death occurred before the required beginning date. Filing 2012 taxes Even if you begin receiving distributions before you attain age 70½, you must begin calculating and receiving required minimum distributions by your required beginning date. Filing 2012 taxes Distributions after the required beginning date. Filing 2012 taxes   The required minimum distribution for any year after the year you turn 70½ must be made by December 31 of that later year. Filing 2012 taxes    Beneficiaries. Filing 2012 taxes   If you are the beneficiary of a decedent's traditional IRA, the requirements for distributions from that IRA generally depend on whether the IRA owner died before or after the required beginning date for distributions. Filing 2012 taxes More information. Filing 2012 taxes   For more information, including how to figure your minimum required distribution each year and how to figure your required distribution if you are a beneficiary of a decedent's IRA, see When Must You Withdraw Assets? in chapter 1 of Publication 590. Filing 2012 taxes Are Distributions Taxable? In general, distributions from a traditional IRA are taxable in the year you receive them. Filing 2012 taxes Exceptions. Filing 2012 taxes   Exceptions to distributions from traditional IRAs being taxable in the year you receive them are: Rollovers, Qualified charitable distributions (QCD), discussed later, Tax-free withdrawals of contributions, discussed earlier, and The return of nondeductible contributions, discussed later under Distributions Fully or Partly Taxable . Filing 2012 taxes    Although a conversion of a traditional IRA is considered a rollover for Roth IRA purposes, it is not an exception to the rule that distributions from a traditional IRA are taxable in the year you receive them. Filing 2012 taxes Conversion distributions are includible in your gross income subject to this rule and the special rules for conversions explained in Converting From Any Traditional IRA Into a Roth IRA under Can You Move Retirement Plan Assets? in chapter 1 of Publication 590. Filing 2012 taxes Qualified charitable distributions (QCD). Filing 2012 taxes   A QCD is generally a nontaxable distribution made directly by the trustee of your IRA to an organization eligible to receive tax-deductible contributions. Filing 2012 taxes Special rules apply if you made a qualified charitable distribution in January 2013 that you elected to treat as made in 2012. Filing 2012 taxes See Qualified Charitable Distributions in Publication 590 for more information. Filing 2012 taxes Ordinary income. Filing 2012 taxes   Distributions from traditional IRAs that you include in income are taxed as ordinary income. Filing 2012 taxes No special treatment. Filing 2012 taxes   In figuring your tax, you cannot use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement plans. Filing 2012 taxes Distributions Fully or Partly Taxable Distributions from your traditional IRA may be fully or partly taxable, depending on whether your IRA includes any nondeductible contributions. Filing 2012 taxes Fully taxable. Filing 2012 taxes   If only deductible contributions were made to your traditional IRA (or IRAs, if you have more than one), you have no basis in your IRA. Filing 2012 taxes Because you have no basis in your IRA, any distributions are fully taxable when received. Filing 2012 taxes See Reporting taxable distributions on your return , later. Filing 2012 taxes Partly taxable. Filing 2012 taxes    If you made nondeductible contributions or rolled over any after-tax amounts to any of your traditional IRAs, you have a cost basis (investment in the contract) equal to the amount of those contributions. Filing 2012 taxes These nondeductible contributions are not taxed when they are distributed to you. Filing 2012 taxes They are a return of your investment in your IRA. Filing 2012 taxes   Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. Filing 2012 taxes If nondeductible contributions have been made or after-tax amounts have been rolled over to your IRA, distributions consist partly of nondeductible contributions (basis) and partly of deductible contributions, earnings, and gains (if there are any). Filing 2012 taxes Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable. Filing 2012 taxes Form 8606. Filing 2012 taxes   You must complete Form 8606 and attach it to your return if you receive a distribution from a traditional IRA and have ever made nondeductible contributions or rolled over after-tax amounts to any of your traditional IRAs. Filing 2012 taxes Using the form, you will figure the nontaxable distributions for 2013 and your total IRA basis for 2013 and earlier years. Filing 2012 taxes Note. Filing 2012 taxes If you are required to file Form 8606, but you are not required to file an income tax return, you still must file Form 8606. Filing 2012 taxes Send it to the IRS at the time and place you would otherwise file an income tax return. Filing 2012 taxes Distributions reported on Form 1099-R. Filing 2012 taxes   If you receive a distribution from your traditional IRA, you will receive Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Filing 2012 taxes , or a similar statement. Filing 2012 taxes IRA distributions are shown in boxes 1 and 2a of Form 1099-R. Filing 2012 taxes A number or letter code in box 7 tells you what type of distribution you received from your IRA. Filing 2012 taxes Withholding. Filing 2012 taxes   Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld. Filing 2012 taxes See chapter 4. Filing 2012 taxes IRA distributions delivered outside the United States. Filing 2012 taxes   In general, if you are a U. Filing 2012 taxes S. Filing 2012 taxes citizen or resident alien and your home address is outside the United States or its possessions, you cannot choose exemption from withholding on distributions from your traditional IRA. Filing 2012 taxes Reporting taxable distributions on your return. Filing 2012 taxes    Report fully taxable distributions, including early distributions on Form 1040, line 15b, or Form 1040A, line 11b (no entry is required on Form 1040, line 15a, or Form 1040A, line 11a). Filing 2012 taxes If only part of the distribution is taxable, enter the total amount on Form 1040, line 15a, or Form 1040A, line 11a, and the taxable part on Form 1040, line 15b, or Form 1040A, line 11b. Filing 2012 taxes You cannot report distributions on Form 1040EZ. Filing 2012 taxes What Acts Result in Penalties or Additional Taxes? The tax advantages of using traditional IRAs for retirement savings can be offset by additional taxes and penalties if you do not follow the rules. Filing 2012 taxes There are additions to the regular tax for using your IRA funds in prohibited transactions. Filing 2012 taxes There are also additional taxes for the following activities. Filing 2012 taxes Investing in collectibles. Filing 2012 taxes Making excess contributions. Filing 2012 taxes Taking early distributions. Filing 2012 taxes Allowing excess amounts to accumulate (failing to take required distributions). Filing 2012 taxes There are penalties for overstating the amount of nondeductible contributions and for failure to file a Form 8606, if required. Filing 2012 taxes Prohibited Transactions Generally, a prohibited transaction is any improper use of your traditional IRA by you, your beneficiary, or any disqualified person. Filing 2012 taxes Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendent, and any spouse of a lineal descendent). Filing 2012 taxes The following are examples of prohibited transactions with a traditional IRA. Filing 2012 taxes Borrowing money from it. Filing 2012 taxes Selling property to it. Filing 2012 taxes Receiving unreasonable compensation for managing it. Filing 2012 taxes Using it as security for a loan. Filing 2012 taxes Buying property for personal use (present or future) with IRA funds. Filing 2012 taxes Effect on an IRA account. Filing 2012 taxes   Generally, if you or your beneficiary engages in a prohibited transaction in connection with your traditional IRA account at any time during the year, the account stops being an IRA as of the first day of that year. Filing 2012 taxes Effect on you or your beneficiary. Filing 2012 taxes   If your account stops being an IRA because you or your beneficiary engaged in a prohibited transaction, the account is treated as distributing all its assets to you at their fair market values on the first day of the year. Filing 2012 taxes If the total of those values is more than your basis in the IRA, you will have a taxable gain that is includible in your income. Filing 2012 taxes For information on figuring your gain and reporting it in income, see Are Distributions Taxable , earlier. Filing 2012 taxes The distribution may be subject to additional taxes or penalties. Filing 2012 taxes Taxes on prohibited transactions. Filing 2012 taxes   If someone other than the owner or beneficiary of a traditional IRA engages in a prohibited transaction, that person may be liable for certain taxes. Filing 2012 taxes In general, there is a 15% tax on the amount of the prohibited transaction and a 100% additional tax if the transaction is not corrected. Filing 2012 taxes More information. Filing 2012 taxes   For more information on prohibited transactions, see What Acts Result in Penalties or Additional Taxes? in chapter 1 of Publication 590. Filing 2012 taxes Investment in Collectibles If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. Filing 2012 taxes You may have to pay the 10% additional tax on early distributions, discussed later. Filing 2012 taxes Collectibles. Filing 2012 taxes   These include: Artworks, Rugs, Antiques, Metals, Gems, Stamps, Coins, Alcoholic beverages, and Certain other tangible personal property. Filing 2012 taxes Exception. Filing 2012 taxes    Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U. Filing 2012 taxes S. Filing 2012 taxes gold coins, or one-ounce silver coins minted by the Treasury Department. Filing 2012 taxes It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. Filing 2012 taxes Excess Contributions Generally, an excess contribution is the amount contributed to your traditional IRA(s) for the year that is more than the smaller of: The maximum deductible amount for the year. Filing 2012 taxes For 2013, this is $5,500 ($6,500 if you are 50 or older), or Your taxable compensation for the year. Filing 2012 taxes Tax on excess contributions. Filing 2012 taxes   In general, if the excess contributions for a year are not withdrawn by the date your return for the year is due (including extensions), you are subject to a 6% tax. Filing 2012 taxes You must pay the 6% tax each year on excess amounts that remain in your traditional IRA at the end of your tax year. Filing 2012 taxes The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. Filing 2012 taxes Excess contributions withdrawn by due date of return. Filing 2012 taxes   You will not have to pay the 6% tax if you withdraw an excess contribution made during a tax year and you also withdraw interest or other income earned on the excess contribution. Filing 2012 taxes You must complete your withdrawal by the date your tax return for that year is due, including extensions. Filing 2012 taxes How to treat withdrawn contributions. Filing 2012 taxes   Do not include in your gross income an excess contribution that you withdraw from your traditional IRA before your tax return is due if both the following conditions are met. Filing 2012 taxes No deduction was allowed for the excess contribution. Filing 2012 taxes You withdraw the interest or other income earned on the excess contribution. Filing 2012 taxes You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. Filing 2012 taxes If there was a loss, the net income you must withdraw may be a negative amount. Filing 2012 taxes How to treat withdrawn interest or other income. Filing 2012 taxes   You must include in your gross income the interest or other income that was earned on the excess contribution. Filing 2012 taxes Report it on your return for the year in which the excess contribution was made. Filing 2012 taxes Your withdrawal of interest or other income may be subject to an additional 10% tax on early distributions, discus
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Understanding your CP88 Notice

We are holding your refund because you have not filed one or more tax returns and we believe you will owe tax.


What you need to do

  • File your personal tax return immediately or explain to us why you don't need to file.
  • Use the response form on your notice to explain:
    • why you're filing late
    • why you don't have to file
    • that you've already filed

You may want to...

 

Page Last Reviewed or Updated: 07-Mar-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 Filing 2012 Taxes

Filing 2012 taxes Publication 80 - Introductory Material Table of Contents Future Developments What's New Reminders Calendar Future Developments For the latest information about developments related to Publication 80 (Circular SS), such as legislation enacted after it was published, go to www. Filing 2012 taxes irs. Filing 2012 taxes gov/pub80. Filing 2012 taxes What's New Social security and Medicare tax for 2014. Filing 2012 taxes  The social security tax rate is 6. Filing 2012 taxes 2% each for the employee and employer, unchanged from 2013. Filing 2012 taxes The social security wage base limit is $117,000. Filing 2012 taxes The Medicare tax rate is 1. Filing 2012 taxes 45% each for the employee and employer, unchanged from 2013. Filing 2012 taxes There is no wage base limit for Medicare tax. Filing 2012 taxes Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. Filing 2012 taxes Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. Filing 2012 taxes Change of responsible party. Filing 2012 taxes . Filing 2012 taxes  Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party—Business, to report the latest change to its responsible party. Filing 2012 taxes Form 8822-B must be filed within 60 days of the change. Filing 2012 taxes If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. Filing 2012 taxes For a definition of “responsible party”, see the Form 8822-B instructions. Filing 2012 taxes Same-sex marriage. Filing 2012 taxes  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Filing 2012 taxes For more information, see Revenue Ruling 2013-17, 2013-38 I. Filing 2012 taxes R. Filing 2012 taxes B. Filing 2012 taxes 201, available at www. Filing 2012 taxes irs. Filing 2012 taxes gov/irb/2013-38_IRB/ar07. Filing 2012 taxes html. Filing 2012 taxes Notice 2013-61 provides special administrative procedures for employers to make claims for refund or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Filing 2012 taxes Notice 2013-61, 2013-44 I. Filing 2012 taxes R. Filing 2012 taxes B. Filing 2012 taxes 432, is available at www. Filing 2012 taxes irs. Filing 2012 taxes gov/irb/2013-44_IRB/ar10. Filing 2012 taxes html. Filing 2012 taxes Reminders Additional Medicare Tax withholding. Filing 2012 taxes  In addition to withholding Medicare tax at 1. Filing 2012 taxes 45%, you must withhold a 0. Filing 2012 taxes 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Filing 2012 taxes You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Filing 2012 taxes Additional Medicare Tax is only imposed on the employee. Filing 2012 taxes There is no employer share of Additional Medicare Tax. Filing 2012 taxes All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Filing 2012 taxes For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Employment and Payments , in section 12. Filing 2012 taxes For more information on Additional Medicare Tax, visit IRS. Filing 2012 taxes gov and enter “Additional Medicare Tax” in the search box. Filing 2012 taxes Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. Filing 2012 taxes  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. Filing 2012 taxes Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Filing 2012 taxes For more information, visit IRS. Filing 2012 taxes gov and enter “work opportunity tax credit” in the search box. Filing 2012 taxes Outsourcing payroll duties. Filing 2012 taxes  Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. Filing 2012 taxes The employer remains responsible if the third party fails to perform any required action. Filing 2012 taxes If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. Filing 2012 taxes gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. Filing 2012 taxes Residents of the Philippines working in the Commonwealth of the Northern Mariana Islands (CNMI). Filing 2012 taxes  The IRS will not assert that an employer has understated liability for social security and Medicare taxes because they failed to treat services performed before January 1, 2015, in the CNMI by a resident of the Philippines as employment as defined under Internal Revenue Code section 3121(b). Filing 2012 taxes For more information, see Announcement 2012-43, 2012-51 I. Filing 2012 taxes R. Filing 2012 taxes B. Filing 2012 taxes 723, available at www. Filing 2012 taxes irs. Filing 2012 taxes gov/irb/2012-51_IRB/ar15. Filing 2012 taxes html. Filing 2012 taxes CNMI government employees now subject to social security and Medicare taxes. Filing 2012 taxes  Beginning in the fourth calendar quarter of 2012, CNMI government employees are subject to social security and Medicare taxes. Filing 2012 taxes COBRA premium assistance credit. Filing 2012 taxes  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008 and May 31, 2010, and to premiums paid for up to 15 months. Filing 2012 taxes See COBRA premium assistance credit in Publication 15 (Circular E), Employer's Tax Guide. Filing 2012 taxes You can get Publication 15 (Circular E) at IRS. Filing 2012 taxes gov. Filing 2012 taxes You must receive written notice from the IRS to file Form 944. Filing 2012 taxes  If you have been filing Forms 941-SS and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941-SS, you must contact the IRS to request to file Form 944. Filing 2012 taxes You must receive written notice from the IRS to file Form 944 instead of Forms 941-SS before you may file this form. Filing 2012 taxes For more information on requesting to file Form 944 visit IRS. Filing 2012 taxes gov and enter “file employment taxes annually” in the search box. Filing 2012 taxes Federal employers in the CNMI. Filing 2012 taxes  The U. Filing 2012 taxes S. Filing 2012 taxes Treasury Department and the CNMI Division of Revenue and Taxation entered into an agreement under 5 USC 5517 in December 2006. Filing 2012 taxes Under this agreement, all federal employers (including the Department of Defense) are required to withhold CNMI income taxes (rather than federal income taxes) and deposit the CNMI taxes with the CNMI Treasury for employees who are subject to CNMI taxes and whose regular place of federal employment is in the CNMI. Filing 2012 taxes Federal employers are also required to file quarterly and annual reports with the CNMI Division of Revenue and Taxation. Filing 2012 taxes For questions, contact the CNMI Division of Revenue and Taxation. Filing 2012 taxes Change of address. Filing 2012 taxes  Use Form 8822-B to notify the IRS of an address change. Filing 2012 taxes Do not mail Form 8822-B with your employment tax return. Filing 2012 taxes Federal tax deposits must be made by electronic funds transfer. Filing 2012 taxes  You must use electronic funds transfer to make all federal tax deposits. Filing 2012 taxes Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Filing 2012 taxes If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Filing 2012 taxes Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Filing 2012 taxes EFTPS is a free service provided by the Department of Treasury. Filing 2012 taxes Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Filing 2012 taxes For more information on making federal tax deposits, see How To Deposit in section 8. Filing 2012 taxes For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at www. Filing 2012 taxes eftps. Filing 2012 taxes gov or call 1-800-555-4477 (U. Filing 2012 taxes S. Filing 2012 taxes Virgin Islands only) or 303-967-5916 (toll call) or 1-800-733-4829 (TDD). Filing 2012 taxes Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Filing 2012 taxes Electronic filing and payment. Filing 2012 taxes  Using electronic options can make filing a return and paying your federal tax easier. Filing 2012 taxes Use the Electronic Federal Tax Payment System (EFTPS) to make deposits or pay in full, whether you rely on a tax professional or prepare your own taxes. Filing 2012 taxes You can use IRS e-file to file certain returns. Filing 2012 taxes If there is a balance due on the return, you can e-file and e-pay in a single step by authorizing an electronic funds withdrawal (EFW) from your bank account while e-filing. Filing 2012 taxes Do not use EFW to pay taxes that are required to be deposited. Filing 2012 taxes Visit the IRS website at www. Filing 2012 taxes irs. Filing 2012 taxes gov/efile for more information on filing electronically. Filing 2012 taxes For more information on paying your taxes using EFW, visit the IRS website at www. Filing 2012 taxes irs. Filing 2012 taxes gov/e-pay. Filing 2012 taxes A fee may be charged to file electronically. Filing 2012 taxes For EFTPS, visit www. Filing 2012 taxes eftps. Filing 2012 taxes gov or call EFTPS Customer Service at 1-800-555-4477 (U. Filing 2012 taxes S. Filing 2012 taxes Virgin Islands only) or 303-967-5916 (toll call). Filing 2012 taxes For electronic filing of Forms W-2AS, W-2CM, W-2GU, W-2VI, Wage and Tax Statements; W-3SS, Transmittal of Wage and Tax Statements; and W-2c, Corrected Wage and Tax Statement, visit www. Filing 2012 taxes socialsecurity. Filing 2012 taxes gov/employer. Filing 2012 taxes If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. Filing 2012 taxes If a valid EIN is not provided, the return or payment will not be processed. Filing 2012 taxes This may result in penalties and delays in processing your return or payment. Filing 2012 taxes Electronic option for filing Forms W-2AS, W-2CM, W-2GU, or W-2VI. Filing 2012 taxes  Employers in American Samoa, the CNMI, Guam, and the U. Filing 2012 taxes S. Filing 2012 taxes Virgin Islands can now use the Social Security Administration's W-2 Online service to create, save, print, and submit up to 50 Forms W-2AS, W-2CM, W-2GU, or W-2VI at a time over the Internet. Filing 2012 taxes Form W-3SS will be generated automatically based on your Forms W-2AS, W-2CM, W-2GU, or W-2VI. Filing 2012 taxes For more information, visit Social Security Administration's SSA website at www. Filing 2012 taxes ssa. Filing 2012 taxes gov/bso/bsowelcome. Filing 2012 taxes htm. Filing 2012 taxes Credit or debit card payments. Filing 2012 taxes  For information on paying your taxes with a credit or debit card, visit the IRS website at www. Filing 2012 taxes irs. Filing 2012 taxes gov/e-pay. Filing 2012 taxes However, do not use credit or debit cards to make federal tax deposits. Filing 2012 taxes Hiring new employees. Filing 2012 taxes  Record the number and name from each new employee's social security card. Filing 2012 taxes An employee who does not have a social security card should apply for one on Form SS-5, Application for a Social Security Card. Filing 2012 taxes See section 3. Filing 2012 taxes Reporting discrepancies between Forms 941-SS (or Form 944) and Forms W-2. Filing 2012 taxes  File Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, to explain certain wage, tax, and payment discrepancies between Forms 941-SS (or Form 944), and Forms W-2 that were caused by acquisitions, statutory mergers, or consolidations. Filing 2012 taxes For more information, see the Instructions for Schedule D (Form 941). Filing 2012 taxes Apply for an employer identification number (EIN) online. Filing 2012 taxes  You can apply for an EIN online by visiting IRS. Filing 2012 taxes gov and clicking on the Apply for an EIN Online link under Tools. Filing 2012 taxes Dishonored payments. Filing 2012 taxes  Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. Filing 2012 taxes The penalty is $25 or 2% of the payment, whichever is more. Filing 2012 taxes However, the penalty on dishonored payments of $24. Filing 2012 taxes 99 or less is an amount equal to the payment. Filing 2012 taxes For example, a dishonored payment of $18 is charged a penalty of $18. Filing 2012 taxes Private delivery services. Filing 2012 taxes  You can use certain private delivery services designated by the IRS to send tax returns or payments. Filing 2012 taxes The list includes only the following: DHL Express (DHL): DHL Same Day Service. Filing 2012 taxes Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. Filing 2012 taxes United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Filing 2012 taxes M. Filing 2012 taxes , UPS Worldwide Express Plus, and UPS Worldwide Express. Filing 2012 taxes For the IRS mailing address to use if you are using a private delivery service, go to IRS. Filing 2012 taxes gov and enter “private delivery service” in the search box. Filing 2012 taxes Your private delivery service can tell you how to get written proof of the mailing date. Filing 2012 taxes Private delivery services cannot deliver items to P. Filing 2012 taxes O. Filing 2012 taxes boxes. Filing 2012 taxes You must use the U. Filing 2012 taxes S. Filing 2012 taxes Postal Service to mail any item to an IRS P. Filing 2012 taxes O. Filing 2012 taxes box address. Filing 2012 taxes Recordkeeping. Filing 2012 taxes  Keep all records of employment taxes for 4 years. Filing 2012 taxes These should be available for IRS review. Filing 2012 taxes There is no required format for such records, but they should include your EIN; the amounts and dates of all wage payments (including fringe benefits) and tips reported; the names, addresses, and occupations of employees receiving such payments and their social security numbers; copies of returns filed; dates of employment; and the dates and amounts of deposits made. Filing 2012 taxes Farm employers must keep a record of the name, permanent address, and EIN of each crew leader. Filing 2012 taxes See Farm Crew Leaders in section 2. Filing 2012 taxes Disregarded entities and qualified subchapter S subsidiaries (QSubs). Filing 2012 taxes  Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. Filing 2012 taxes Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. Filing 2012 taxes See Regulations sections 1. Filing 2012 taxes 1361-4(a)(7) and 301. Filing 2012 taxes 7701-2(c)(2)(iv). Filing 2012 taxes Photographs of missing children. Filing 2012 taxes  The IRS is a proud partner with the National Center for Missing and Exploited Children. Filing 2012 taxes Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Filing 2012 taxes You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Filing 2012 taxes Calendar   If any date for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. Filing 2012 taxes A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. Filing 2012 taxes However, a statewide legal holiday does not delay the due date of federal tax deposits. Filing 2012 taxes See Deposits on Business Days Only in section 8. Filing 2012 taxes For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. Filing 2012 taxes S. Filing 2012 taxes Postal Service on or before the due date, or sent by an IRS-designated delivery service on or before the due date. Filing 2012 taxes See Private delivery services under Reminders. Filing 2012 taxes The following are important dates and responsibilities. Filing 2012 taxes Also see Publication 509, Tax Calendars. Filing 2012 taxes By January 31. Filing 2012 taxes   Furnish wage and tax statements to employees. Filing 2012 taxes Give each employee a completed Form W-2AS, W-2CM, W-2GU, or W-2VI. Filing 2012 taxes See section 10 for more information. Filing 2012 taxes File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, with the IRS. Filing 2012 taxes If you deposited all Form 943 taxes when due, you have 10 additional calendar days to file. Filing 2012 taxes U. Filing 2012 taxes S. Filing 2012 taxes Virgin Islands employers only must file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. Filing 2012 taxes Pay or deposit (if more than $500) any balance of the tax due. Filing 2012 taxes If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Filing 2012 taxes File Form 944 with the IRS if you were notified by the IRS to file Form 944 instead of quarterly Forms 941-SS. Filing 2012 taxes If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Filing 2012 taxes By February 28. Filing 2012 taxes  File paper wage and tax statements with the Social Security Administration (SSA). Filing 2012 taxes File Copy A of Forms W-2AS, W-2CM, W-2GU, or W-2VI, and Form W-3SS with the Social Security Administration (SSA). Filing 2012 taxes For electronically filed returns, see By March 31 next. Filing 2012 taxes By March 31. Filing 2012 taxes  File electronic Forms W-2AS, W-2CM, W-2GU, or W-2VI with the SSA. Filing 2012 taxes Visit the SSA's Reporting Instructions & Information webpage at www. Filing 2012 taxes socialsecurity. Filing 2012 taxes gov/employer for more information. Filing 2012 taxes By April 30, July 31, October 31, and January 31. Filing 2012 taxes  File Form 941-SS with the IRS. Filing 2012 taxes If you deposited the full amount of taxes when due, you have 10 additional calendar days to file. Filing 2012 taxes Do not file Forms 941-SS for these quarters if you have been notified to file Form 944 and you did not request to file quarterly Forms 941-SS. Filing 2012 taxes Deposit FUTA tax for the quarter (including any amount carried over from other quarters) if over $500. Filing 2012 taxes If $500 or less, carry it over to the next quarter. Filing 2012 taxes See section 11 for more information. Filing 2012 taxes Prev  Up  Next   Home   More Online Publications