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Filling 1040x W Form 8863

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Filling 1040x W Form 8863

Filling 1040x w form 8863 1. Filling 1040x w form 8863   Traditional IRAs Table of Contents What's New for 2013 What's New for 2014 Introduction Who Can Open a Traditional IRA?What Is Compensation? When Can a Traditional IRA Be Opened? How Can a Traditional IRA Be Opened?Individual Retirement Account Individual Retirement Annuity Individual Retirement Bonds Simplified Employee Pension (SEP) Employer and Employee Association Trust Accounts Required Disclosures How Much Can Be Contributed?Limit. Filling 1040x w form 8863 When repayment contributions can be made. Filling 1040x w form 8863 No deduction. Filling 1040x w form 8863 Reserve component. Filling 1040x w form 8863 Figuring your IRA deduction. Filling 1040x w form 8863 Reporting the repayment. Filling 1040x w form 8863 Example. Filling 1040x w form 8863 General Limit Kay Bailey Hutchison Spousal IRA Limit Filing Status Less Than Maximum Contributions More Than Maximum Contributions When Can Contributions Be Made? How Much Can You Deduct?Kay Bailey Hutchison Spousal IRA. Filling 1040x w form 8863 Are You Covered by an Employer Plan? Limit if Covered by Employer Plan Reporting Deductible Contributions Nondeductible Contributions Examples — Worksheet for Reduced IRA Deduction for 2013 What if You Inherit an IRA?Treating it as your own. Filling 1040x w form 8863 Can You Move Retirement Plan Assets?Transfers to Roth IRAs from other retirement plans. Filling 1040x w form 8863 Trustee-to-Trustee Transfer Rollovers Transfers Incident To Divorce Converting From Any Traditional IRA Into a Roth IRA Recharacterizations When Can You Withdraw or Use Assets?Contributions Returned Before Due Date of Return When Must You Withdraw Assets? (Required Minimum Distributions)IRA Owners IRA Beneficiaries Which Table Do You Use To Determine Your Required Minimum Distribution? What Age(s) Do You Use With the Table(s)? Miscellaneous Rules for Required Minimum Distributions Are Distributions Taxable?January 2013 QCDs treated as made in 2012. Filling 1040x w form 8863 2013 Reporting. Filling 1040x w form 8863 Additional reporting requirements if you made the election to treat a January 2013 QCD as made in 2012. Filling 1040x w form 8863 One-time transfer. Filling 1040x w form 8863 Testing period rules apply. Filling 1040x w form 8863 More information. Filling 1040x w form 8863 Distributions Fully or Partly Taxable Figuring the Nontaxable and Taxable Amounts Recognizing Losses on Traditional IRA Investments Other Special IRA Distribution Situations Reporting and Withholding Requirements for Taxable Amounts What Acts Result in Penalties or Additional Taxes?Prohibited Transactions Investment in Collectibles Excess Contributions Early Distributions Excess Accumulations (Insufficient Distributions) Reporting Additional Taxes What's New for 2013 Traditional IRA contribution and deduction limit. Filling 1040x w form 8863  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. Filling 1040x w form 8863 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. Filling 1040x w form 8863 For more information, see How Much Can Be Contributed? in this chapter. Filling 1040x w form 8863 Modified AGI limit for traditional IRA contributions increased. Filling 1040x w form 8863  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. Filling 1040x w form 8863 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. Filling 1040x w form 8863 If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Filling 1040x w form 8863 See How Much Can You Deduct? in this chapter. Filling 1040x w form 8863 Net Investment Income Tax. Filling 1040x w form 8863  For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 457(b) plans, and IRAs). Filling 1040x w form 8863 However, these distributions are taken into account when determining the modified adjusted gross income threshold. Filling 1040x w form 8863 Distributions from a nonqualified retirement plan are included in net investment income. Filling 1040x w form 8863 See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Filling 1040x w form 8863 What's New for 2014 Modified AGI limit for traditional IRA contributions increased. Filling 1040x w form 8863  For 2014, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $96,000 but less than $116,000 for a married couple filing a joint return or a qualifying widow(er), More than $60,000 but less than $70,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Filling 1040x w form 8863 If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Filling 1040x w form 8863 If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. Filling 1040x w form 8863 Introduction This chapter discusses the original IRA. Filling 1040x w form 8863 In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Filling 1040x w form 8863 ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Filling 1040x w form 8863 The following are two advantages of a traditional IRA: You may be able to deduct some or all of your contributions to it, depending on your circumstances. Filling 1040x w form 8863 Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Filling 1040x w form 8863 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. Filling 1040x w form 8863 You can have a traditional IRA whether or not you are covered by any other retirement plan. Filling 1040x w form 8863 However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan. Filling 1040x w form 8863 See How Much Can You Deduct , later. Filling 1040x w form 8863 Both spouses have compensation. Filling 1040x w form 8863   If both you and your spouse have compensation and are under age 70½, each of you can open an IRA. Filling 1040x w form 8863 You cannot both participate in the same IRA. Filling 1040x w form 8863 If you file a joint return, only one of you needs to have compensation. Filling 1040x w form 8863 What Is Compensation? Generally, compensation is what you earn from working. Filling 1040x w form 8863 For a summary of what compensation does and does not include, see Table 1-1. Filling 1040x w form 8863 Compensation includes all of the items discussed next (even if you have more than one type). Filling 1040x w form 8863 Wages, salaries, etc. Filling 1040x w form 8863   Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. Filling 1040x w form 8863 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). Filling 1040x w form 8863 Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2. Filling 1040x w form 8863 Commissions. Filling 1040x w form 8863   An amount you receive that is a percentage of profits or sales price is compensation. Filling 1040x w form 8863 Self-employment income. Filling 1040x w form 8863   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deduction allowed for the deductible part of your self-employment taxes. Filling 1040x w form 8863   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Filling 1040x w form 8863 Self-employment loss. Filling 1040x w form 8863   If you have a net loss from self-employment, do not subtract the loss from your salaries or wages when figuring your total compensation. Filling 1040x w form 8863 Alimony and separate maintenance. Filling 1040x w form 8863   For IRA purposes, compensation includes any taxable alimony and separate maintenance payments you receive under a decree of divorce or separate maintenance. Filling 1040x w form 8863 Nontaxable combat pay. Filling 1040x w form 8863   If you were a member of the U. Filling 1040x w form 8863 S. Filling 1040x w form 8863 Armed Forces, compensation includes any nontaxable combat pay you received. Filling 1040x w form 8863 This amount should be reported in box 12 of your 2013 Form W-2 with code Q. Filling 1040x w form 8863 Table 1-1. Filling 1040x w form 8863 Compensation for Purposes of an IRA Includes . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 Does not include . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863   earnings and profits from property. Filling 1040x w form 8863 wages, salaries, etc. Filling 1040x w form 8863     interest and dividend income. Filling 1040x w form 8863 commissions. Filling 1040x w form 8863     pension or annuity income. Filling 1040x w form 8863 self-employment income. Filling 1040x w form 8863     deferred compensation. Filling 1040x w form 8863 alimony and separate maintenance. Filling 1040x w form 8863     income from certain  partnerships. Filling 1040x w form 8863 nontaxable combat pay. Filling 1040x w form 8863     any amounts you exclude from income. Filling 1040x w form 8863     What Is Not Compensation? Compensation does not include any of the following items. Filling 1040x w form 8863 Earnings and profits from property, such as rental income, interest income, and dividend income. Filling 1040x w form 8863 Pension or annuity income. Filling 1040x w form 8863 Deferred compensation received (compensation payments postponed from a past year). Filling 1040x w form 8863 Income from a partnership for which you do not provide services that are a material income-producing factor. Filling 1040x w form 8863 Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Filling 1040x w form 8863 Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Filling 1040x w form 8863 When Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Filling 1040x w form 8863 However, the time for making contributions for any year is limited. Filling 1040x w form 8863 See When Can Contributions Be Made , later. Filling 1040x w form 8863 How Can a Traditional IRA Be Opened? You can open different kinds of IRAs with a variety of organizations. Filling 1040x w form 8863 You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Filling 1040x w form 8863 You can also open an IRA through your stockbroker. Filling 1040x w form 8863 Any IRA must meet Internal Revenue Code requirements. Filling 1040x w form 8863 The requirements for the various arrangements are discussed below. Filling 1040x w form 8863 Kinds of traditional IRAs. Filling 1040x w form 8863   Your traditional IRA can be an individual retirement account or annuity. Filling 1040x w form 8863 It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Filling 1040x w form 8863 Individual Retirement Account An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of you or your beneficiaries. Filling 1040x w form 8863 The account is created by a written document. Filling 1040x w form 8863 The document must show that the account meets all of the following requirements. Filling 1040x w form 8863 The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian. Filling 1040x w form 8863 The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. Filling 1040x w form 8863 However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount. Filling 1040x w form 8863 Contributions, except for rollover contributions, must be in cash. Filling 1040x w form 8863 See Rollovers , later. Filling 1040x w form 8863 You must have a nonforfeitable right to the amount at all times. Filling 1040x w form 8863 Money in your account cannot be used to buy a life insurance policy. Filling 1040x w form 8863 Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund. Filling 1040x w form 8863 You must start receiving distributions by April 1 of the year following the year in which you reach age 70½. Filling 1040x w form 8863 See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Filling 1040x w form 8863 Individual Retirement Annuity You can open an individual retirement annuity by purchasing an annuity contract or an endowment contract from a life insurance company. Filling 1040x w form 8863 An individual retirement annuity must be issued in your name as the owner, and either you or your beneficiaries who survive you are the only ones who can receive the benefits or payments. Filling 1040x w form 8863 An individual retirement annuity must meet all the following requirements. Filling 1040x w form 8863 Your entire interest in the contract must be nonforfeitable. Filling 1040x w form 8863 The contract must provide that you cannot transfer any portion of it to any person other than the issuer. Filling 1040x w form 8863 There must be flexible premiums so that if your compensation changes, your payment can also change. Filling 1040x w form 8863 This provision applies to contracts issued after November 6, 1978. Filling 1040x w form 8863 The contract must provide that contributions cannot be more than the deductible amount for an IRA for the year, and that you must use any refunded premiums to pay for future premiums or to buy more benefits before the end of the calendar year after the year in which you receive the refund. Filling 1040x w form 8863 Distributions must begin by April 1 of the year following the year in which you reach age 70½. Filling 1040x w form 8863 See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Filling 1040x w form 8863 Individual Retirement Bonds The sale of individual retirement bonds issued by the federal government was suspended after April 30, 1982. Filling 1040x w form 8863 The bonds have the following features. Filling 1040x w form 8863 They stop earning interest when you reach age 70½. Filling 1040x w form 8863 If you die, interest will stop 5 years after your death, or on the date you would have reached age 70½, whichever is earlier. Filling 1040x w form 8863 You cannot transfer the bonds. Filling 1040x w form 8863 If you cash (redeem) the bonds before the year in which you reach age 59½, you may be subject to a 10% additional tax. Filling 1040x w form 8863 See Age 59½ Rule under Early Distributions, later. Filling 1040x w form 8863 You can roll over redemption proceeds into IRAs. Filling 1040x w form 8863 Simplified Employee Pension (SEP) A simplified employee pension (SEP) is a written arrangement that allows your employer to make deductible contributions to a traditional IRA (a SEP IRA) set up for you to receive such contributions. Filling 1040x w form 8863 Generally, distributions from SEP IRAs are subject to the withdrawal and tax rules that apply to traditional IRAs. Filling 1040x w form 8863 See Publication 560 for more information about SEPs. Filling 1040x w form 8863 Employer and Employee Association Trust Accounts Your employer or your labor union or other employee association can set up a trust to provide individual retirement accounts for employees or members. Filling 1040x w form 8863 The requirements for individual retirement accounts apply to these traditional IRAs. Filling 1040x w form 8863 Required Disclosures The trustee or issuer (sometimes called the sponsor) of your traditional IRA generally must give you a disclosure statement at least 7 days before you open your IRA. Filling 1040x w form 8863 However, the sponsor does not have to give you the statement until the date you open (or purchase, if earlier) your IRA, provided you are given at least 7 days from that date to revoke the IRA. Filling 1040x w form 8863 The disclosure statement must explain certain items in plain language. Filling 1040x w form 8863 For example, the statement should explain when and how you can revoke the IRA, and include the name, address, and telephone number of the person to receive the notice of cancellation. Filling 1040x w form 8863 This explanation must appear at the beginning of the disclosure statement. Filling 1040x w form 8863 If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. Filling 1040x w form 8863 The sponsor must report on the appropriate IRS forms both your contribution to the IRA (unless it was made by a trustee-to-trustee transfer) and the amount returned to you. Filling 1040x w form 8863 These requirements apply to all sponsors. Filling 1040x w form 8863 How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Filling 1040x w form 8863 These limits and rules are explained below. Filling 1040x w form 8863 Community property laws. Filling 1040x w form 8863   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. Filling 1040x w form 8863 This is the rule even in states with community property laws. Filling 1040x w form 8863 Brokers' commissions. Filling 1040x w form 8863   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Filling 1040x w form 8863 For information about whether you can deduct brokers' commissions, see Brokers' commissions , later, under How Much Can You Deduct. Filling 1040x w form 8863 Trustees' fees. Filling 1040x w form 8863   Trustees' administrative fees are not subject to the contribution limit. Filling 1040x w form 8863 For information about whether you can deduct trustees' fees, see Trustees' fees , later, under How Much Can You Deduct. Filling 1040x w form 8863 Qualified reservist repayments. Filling 1040x w form 8863   If you were a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined later under Early Distributions) you received. Filling 1040x w form 8863 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. Filling 1040x w form 8863 To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or a similar arrangement. Filling 1040x w form 8863 Limit. Filling 1040x w form 8863   Your qualified reservist repayments cannot be more than your qualified reservist distributions, explained under Early Distributions , later. Filling 1040x w form 8863 When repayment contributions can be made. Filling 1040x w form 8863   You cannot make these repayment contributions later than the date that is 2 years after your active duty period ends. Filling 1040x w form 8863 No deduction. Filling 1040x w form 8863   You cannot deduct qualified reservist repayments. Filling 1040x w form 8863 Reserve component. Filling 1040x w form 8863   The term “reserve component” means the: Army National Guard of the United States, Army Reserve, Naval Reserve, Marine Corps Reserve, Air National Guard of the United States, Air Force Reserve, Coast Guard Reserve, or Reserve Corps of the Public Health Service. Filling 1040x w form 8863 Figuring your IRA deduction. Filling 1040x w form 8863   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. Filling 1040x w form 8863 Reporting the repayment. Filling 1040x w form 8863   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. Filling 1040x w form 8863 Example. Filling 1040x w form 8863   In 2013, your IRA contribution limit is $5,500. Filling 1040x w form 8863 However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. Filling 1040x w form 8863 You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). Filling 1040x w form 8863 In an earlier year you received a $3,000 qualified reservist distribution, which you would like to repay this year. Filling 1040x w form 8863   For 2013, you can contribute a total of $8,500 to your IRA. Filling 1040x w form 8863 This is made up of the maximum deductible contribution of $3,500; a nondeductible contribution of $2,000; and a $3,000 qualified reservist repayment. Filling 1040x w form 8863 You contribute the maximum allowable for the year. Filling 1040x w form 8863 Since you are making a nondeductible contribution ($2,000) and a qualified reservist repayment ($3,000), you must file Form 8606 with your return and include $5,000 ($2,000 + $3,000) on line 1 of Form 8606. Filling 1040x w form 8863 The qualified reservist repayment is not deductible. Filling 1040x w form 8863 Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Filling 1040x w form 8863 See chapter 2 for information about Roth IRAs. Filling 1040x w form 8863 General Limit For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year. Filling 1040x w form 8863 Note. Filling 1040x w form 8863 This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Filling 1040x w form 8863 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. Filling 1040x w form 8863 (See Nondeductible Contributions , later. Filling 1040x w form 8863 ) Qualified reservist repayments do not affect this limit. Filling 1040x w form 8863 Examples. Filling 1040x w form 8863 George, who is 34 years old and single, earns $24,000 in 2013. Filling 1040x w form 8863 His IRA contributions for 2013 are limited to $5,500. Filling 1040x w form 8863 Danny, an unmarried college student working part time, earns $3,500 in 2013. Filling 1040x w form 8863 His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Filling 1040x w form 8863 More than one IRA. Filling 1040x w form 8863   If you have more than one IRA, the limit applies to the total contributions made on your behalf to all your traditional IRAs for the year. Filling 1040x w form 8863 Annuity or endowment contracts. Filling 1040x w form 8863   If you invest in an annuity or endowment contract under an individual retirement annuity, no more than $5,500 ($6,500 if you are age 50 or older) can be contributed toward its cost for the tax year, including the cost of life insurance coverage. Filling 1040x w form 8863 If more than this amount is contributed, the annuity or endowment contract is disqualified. Filling 1040x w form 8863 Kay Bailey Hutchison Spousal IRA Limit For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts: $5,500 ($6,500 if you are age 50 or older), or The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Filling 1040x w form 8863 Your spouse's IRA contribution for the year to a traditional IRA. Filling 1040x w form 8863 Any contributions for the year to a Roth IRA on behalf of your spouse. Filling 1040x w form 8863 This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is age 50 or older or $13,000 if both of you are age 50 or older). Filling 1040x w form 8863 Note. Filling 1040x w form 8863 This traditional IRA limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Filling 1040x w form 8863 Example. Filling 1040x w form 8863 Kristin, a full-time student with no taxable compensation, marries Carl during the year. Filling 1040x w form 8863 Neither of them was age 50 by the end of 2013. Filling 1040x w form 8863 For the year, Carl has taxable compensation of $30,000. Filling 1040x w form 8863 He plans to contribute (and deduct) $5,500 to a traditional IRA. Filling 1040x w form 8863 If he and Kristin file a joint return, each can contribute $5,500 to a traditional IRA. Filling 1040x w form 8863 This is because Kristin, who has no compensation, can add Carl's compensation, reduced by the amount of his IRA contribution ($30,000 − $5,500 = $24,500), to her own compensation (-0-) to figure her maximum contribution to a traditional IRA. Filling 1040x w form 8863 In her case, $5,500 is her contribution limit, because $5,500 is less than $24,500 (her compensation for purposes of figuring her contribution limit). Filling 1040x w form 8863 Filing Status Generally, except as discussed earlier under Kay Bailey Hutchison Spousal IRA Limit , your filing status has no effect on the amount of allowable contributions to your traditional IRA. Filling 1040x w form 8863 However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. Filling 1040x w form 8863 See How Much Can You Deduct , later. Filling 1040x w form 8863 Example. Filling 1040x w form 8863 Tom and Darcy are married and both are 53. Filling 1040x w form 8863 They both work and each has a traditional IRA. Filling 1040x w form 8863 Tom earned $3,800 and Darcy earned $48,000 in 2013. Filling 1040x w form 8863 Because of the Kay Bailey Hutchison Spousal IRA limit rule, even though Tom earned less than $6,500, they can contribute up to $6,500 to his IRA for 2013 if they file a joint return. Filling 1040x w form 8863 They can contribute up to $6,500 to Darcy's IRA. Filling 1040x w form 8863 If they file separate returns, the amount that can be contributed to Tom's IRA is limited by his earned income, $3,800. Filling 1040x w form 8863 Less Than Maximum Contributions If contributions to your traditional IRA for a year were less than the limit, you cannot contribute more after the due date of your return for that year to make up the difference. Filling 1040x w form 8863 Example. Filling 1040x w form 8863 Rafael, who is 40, earns $30,000 in 2013. Filling 1040x w form 8863 Although he can contribute up to $5,500 for 2013, he contributes only $3,000. Filling 1040x w form 8863 After April 15, 2014, Rafael cannot make up the difference between his actual contributions for 2013 ($3,000) and his 2013 limit ($5,500). Filling 1040x w form 8863 He cannot contribute $2,500 more than the limit for any later year. Filling 1040x w form 8863 More Than Maximum Contributions If contributions to your IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. Filling 1040x w form 8863 However, a penalty or additional tax may apply. Filling 1040x w form 8863 See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes. Filling 1040x w form 8863 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). Filling 1040x w form 8863 Contributions must be in the form of money (cash, check, or money order). Filling 1040x w form 8863 Property cannot be contributed. Filling 1040x w form 8863 Although property cannot be contributed, your IRA may invest in certain property. Filling 1040x w form 8863 For example, your IRA may purchase shares of stock. Filling 1040x w form 8863 For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. Filling 1040x w form 8863 You may be able to transfer or roll over certain property from one retirement plan to another. Filling 1040x w form 8863 See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets . Filling 1040x w form 8863 You can make a contribution to your IRA by having your income tax refund (or a portion of your refund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. Filling 1040x w form 8863 For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases). Filling 1040x w form 8863 Contributions can be made to your traditional IRA for each year that you receive compensation and have not reached age 70½. Filling 1040x w form 8863 For any year in which you do not work, contributions cannot be made to your IRA unless you receive alimony, nontaxable combat pay, military differential pay, or file a joint return with a spouse who has compensation. Filling 1040x w form 8863 See Who Can Open a Traditional IRA , earlier. Filling 1040x w form 8863 Even if contributions cannot be made for the current year, the amounts contributed for years in which you did qualify can remain in your IRA. Filling 1040x w form 8863 Contributions can resume for any years that you qualify. Filling 1040x w form 8863 Contributions must be made by due date. Filling 1040x w form 8863   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. Filling 1040x w form 8863 For most people, this means that contributions for 2013 must be made by April 15, 2014, and contributions for 2014 must be made by April 15, 2015. Filling 1040x w form 8863 Age 70½ rule. Filling 1040x w form 8863   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Filling 1040x w form 8863   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Filling 1040x w form 8863 If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Filling 1040x w form 8863 Designating year for which contribution is made. Filling 1040x w form 8863   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. Filling 1040x w form 8863 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). Filling 1040x w form 8863 Filing before a contribution is made. Filling 1040x w form 8863    You can file your return claiming a traditional IRA contribution before the contribution is actually made. Filling 1040x w form 8863 Generally, the contribution must be made by the due date of your return, not including extensions. Filling 1040x w form 8863 Contributions not required. Filling 1040x w form 8863   You do not have to contribute to your traditional IRA for every tax year, even if you can. Filling 1040x w form 8863 How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if applicable) explained earlier under How Much Can Be Contributed . Filling 1040x w form 8863 However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Filling 1040x w form 8863 See Limit if Covered by Employer Plan , later. Filling 1040x w form 8863 You may be able to claim a credit for contributions to your traditional IRA. Filling 1040x w form 8863 For more information, see chapter 4. Filling 1040x w form 8863 Trustees' fees. Filling 1040x w form 8863   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Filling 1040x w form 8863 However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Filling 1040x w form 8863 For information about miscellaneous itemized deductions, see Publication 529, Miscellaneous Deductions. Filling 1040x w form 8863 Brokers' commissions. Filling 1040x w form 8863   These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Filling 1040x w form 8863 Full deduction. Filling 1040x w form 8863   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more of your traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older), or 100% of your compensation. Filling 1040x w form 8863   This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Filling 1040x w form 8863 Kay Bailey Hutchison Spousal IRA. Filling 1040x w form 8863   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of: $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older), or The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Filling 1040x w form 8863 The IRA deduction for the year of the spouse with the greater compensation. Filling 1040x w form 8863 Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Filling 1040x w form 8863 Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Filling 1040x w form 8863   This limit is reduced by any contributions to a section 501(c)(18) plan on behalf of the spouse with the lesser compensation. Filling 1040x w form 8863 Note. Filling 1040x w form 8863 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. Filling 1040x w form 8863 After a divorce or legal separation, you can deduct only the contributions to your own IRA. Filling 1040x w form 8863 Your deductions are subject to the rules for single individuals. Filling 1040x w form 8863 Covered by an employer retirement plan. Filling 1040x w form 8863   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. Filling 1040x w form 8863 This is discussed later under Limit if Covered by Employer Plan . Filling 1040x w form 8863 Limits on the amount you can deduct do not affect the amount that can be contributed. Filling 1040x w form 8863 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. Filling 1040x w form 8863 The “Retirement Plan” box should be checked if you were covered. Filling 1040x w form 8863 Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered , later. Filling 1040x w form 8863 If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Filling 1040x w form 8863 Federal judges. Filling 1040x w form 8863   For purposes of the IRA deduction, federal judges are covered by an employer plan. Filling 1040x w form 8863 For Which Year(s) Are You Covered? Special rules apply to determine the tax years for which you are covered by an employer plan. Filling 1040x w form 8863 These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Filling 1040x w form 8863 Tax year. Filling 1040x w form 8863   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Filling 1040x w form 8863 For almost all people, the tax year is the calendar year. Filling 1040x w form 8863 Defined contribution plan. Filling 1040x w form 8863   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. Filling 1040x w form 8863 However, also see Situations in Which You Are Not Covered , later. Filling 1040x w form 8863   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Filling 1040x w form 8863 In a defined contribution plan, the amount to be contributed to each participant's account is spelled out in the plan. Filling 1040x w form 8863 The level of benefits actually provided to a participant depends on the total amount contributed to that participant's account and any earnings and losses on those contributions. Filling 1040x w form 8863 Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Filling 1040x w form 8863 Example. Filling 1040x w form 8863 Company A has a money purchase pension plan. Filling 1040x w form 8863 Its plan year is from July 1 to June 30. Filling 1040x w form 8863 The plan provides that contributions must be allocated as of June 30. Filling 1040x w form 8863 Bob, an employee, leaves Company A on December 31, 2012. Filling 1040x w form 8863 The contribution for the plan year ending on June 30, 2013, is made February 15, 2014. Filling 1040x w form 8863 Because an amount is contributed to Bob's account for the plan year, Bob is covered by the plan for his 2013 tax year. Filling 1040x w form 8863   A special rule applies to certain plans in which it is not possible to determine if an amount will be contributed to your account for a given plan year. Filling 1040x w form 8863 If, for a plan year, no amounts have been allocated to your account that are attributable to employer contributions, employee contributions, or forfeitures, by the last day of the plan year, and contributions are discretionary for the plan year, you are not covered for the tax year in which the plan year ends. Filling 1040x w form 8863 If, after the plan year ends, the employer makes a contribution for that plan year, you are covered for the tax year in which the contribution is made. Filling 1040x w form 8863 Example. Filling 1040x w form 8863 Mickey was covered by a profit-sharing plan and left the company on December 31, 2012. Filling 1040x w form 8863 The plan year runs from July 1 to June 30. Filling 1040x w form 8863 Under the terms of the plan, employer contributions do not have to be made, but if they are made, they are contributed to the plan before the due date for filing the company's tax return. Filling 1040x w form 8863 Such contributions are allocated as of the last day of the plan year, and allocations are made to the accounts of individuals who have any service during the plan year. Filling 1040x w form 8863 As of June 30, 2013, no contributions were made that were allocated to the June 30, 2013, plan year, and no forfeitures had been allocated within the plan year. Filling 1040x w form 8863 In addition, as of that date, the company was not obligated to make a contribution for such plan year and it was impossible to determine whether or not a contribution would be made for the plan year. Filling 1040x w form 8863 On December 31, 2013, the company decided to contribute to the plan for the plan year ending June 30, 2013. Filling 1040x w form 8863 That contribution was made on February 15, 2014. Filling 1040x w form 8863 Mickey is an active participant in the plan for his 2014 tax year but not for his 2013 tax year. Filling 1040x w form 8863 No vested interest. Filling 1040x w form 8863   If an amount is allocated to your account for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the account. Filling 1040x w form 8863 Defined benefit plan. Filling 1040x w form 8863   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. Filling 1040x w form 8863 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. Filling 1040x w form 8863   A defined benefit plan is any plan that is not a defined contribution plan. Filling 1040x w form 8863 In a defined benefit plan, the level of benefits to be provided to each participant is spelled out in the plan. Filling 1040x w form 8863 The plan administrator figures the amount needed to provide those benefits and those amounts are contributed to the plan. Filling 1040x w form 8863 Defined benefit plans include pension plans and annuity plans. Filling 1040x w form 8863 Example. Filling 1040x w form 8863 Nick, an employee of Company B, is eligible to participate in Company B's defined benefit plan, which has a July 1 to June 30 plan year. Filling 1040x w form 8863 Nick leaves Company B on December 31, 2012. Filling 1040x w form 8863 Because Nick is eligible to participate in the plan for its year ending June 30, 2013, he is covered by the plan for his 2013 tax year. Filling 1040x w form 8863 No vested interest. Filling 1040x w form 8863   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. Filling 1040x w form 8863 Situations in Which You Are Not Covered Unless you are covered by another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Filling 1040x w form 8863 Social security or railroad retirement. Filling 1040x w form 8863   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Filling 1040x w form 8863 Benefits from previous employer's plan. Filling 1040x w form 8863   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Filling 1040x w form 8863 Reservists. Filling 1040x w form 8863   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. Filling 1040x w form 8863 You are not covered by the plan if both of the following conditions are met. Filling 1040x w form 8863 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. Filling 1040x w form 8863 You did not serve more than 90 days on active duty during the year (not counting duty for training). Filling 1040x w form 8863 Volunteer firefighters. Filling 1040x w form 8863   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Filling 1040x w form 8863 You are not covered by the plan if both of the following conditions are met. Filling 1040x w form 8863 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. Filling 1040x w form 8863 Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Filling 1040x w form 8863 Limit if Covered by Employer Plan As discussed earlier, the deduction you can take for contributions made to your traditional IRA depends on whether you or your spouse was covered for any part of the year by an employer retirement plan. Filling 1040x w form 8863 Your deduction is also affected by how much income you had and by your filing status. Filling 1040x w form 8863 Your deduction may also be affected by social security benefits you received. Filling 1040x w form 8863 Reduced or no deduction. Filling 1040x w form 8863   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. Filling 1040x w form 8863   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. Filling 1040x w form 8863 These amounts vary depending on your filing status. Filling 1040x w form 8863   To determine if your deduction is subject to the phaseout, you must determine your modified adjusted gross income (AGI) and your filing status, as explained later under Deduction Phaseout . Filling 1040x w form 8863 Once you have determined your modified AGI and your filing status, you can use Table 1-2 or Table 1-3 to determine if the phaseout applies. Filling 1040x w form 8863 Social Security Recipients Instead of using Table 1-2 or Table 1-3 and Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, later, complete the worksheets in Appendix B of this publication if, for the year, all of the following apply. Filling 1040x w form 8863 You received social security benefits. Filling 1040x w form 8863 You received taxable compensation. Filling 1040x w form 8863 Contributions were made to your traditional IRA. Filling 1040x w form 8863 You or your spouse was covered by an employer retirement plan. Filling 1040x w form 8863 Use the worksheets in Appendix B to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Filling 1040x w form 8863 Appendix B includes an example with filled-in worksheets to assist you. Filling 1040x w form 8863 Table 1-2. Filling 1040x w form 8863 Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Filling 1040x w form 8863 IF your filing status is . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 AND your modified adjusted gross income (modified AGI) is . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 THEN you can take . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 single or head of household $59,000 or less a full deduction. Filling 1040x w form 8863 more than $59,000 but less than $69,000 a partial deduction. Filling 1040x w form 8863 $69,000 or more no deduction. Filling 1040x w form 8863 married filing jointly or  qualifying widow(er) $95,000 or less a full deduction. Filling 1040x w form 8863 more than $95,000 but less than $115,000 a partial deduction. Filling 1040x w form 8863 $115,000 or more no deduction. Filling 1040x w form 8863 married filing separately2 less than $10,000 a partial deduction. Filling 1040x w form 8863 $10,000 or more no deduction. Filling 1040x w form 8863 1 Modified AGI (adjusted gross income). Filling 1040x w form 8863 See Modified adjusted gross income (AGI) , later. Filling 1040x w form 8863  2 If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” filing status). Filling 1040x w form 8863 Table 1-3. Filling 1040x w form 8863 Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Filling 1040x w form 8863 IF your filing status is . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 AND your modified adjusted gross income (modified AGI) is . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 THEN you can take . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 single, head of household, or qualifying widow(er) any amount a full deduction. Filling 1040x w form 8863 married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction. Filling 1040x w form 8863 married filing jointly with a spouse who is covered by a plan at work $178,000 or less a full deduction. Filling 1040x w form 8863 more than $178,000 but less than $188,000 a partial deduction. Filling 1040x w form 8863 $188,000 or more no deduction. Filling 1040x w form 8863 married filing separately with a spouse who is covered by a plan at work2 less than $10,000 a partial deduction. Filling 1040x w form 8863 $10,000 or more no deduction. Filling 1040x w form 8863 1 Modified AGI (adjusted gross income). Filling 1040x w form 8863 See Modified adjusted gross income (AGI) , later. Filling 1040x w form 8863  2 You are entitled to the full deduction if you did not live with your spouse at any time during the year. Filling 1040x w form 8863 For 2014, if you are not covered by a retirement plan at work and you are married filing jointly with a spouse who is covered by a plan at work, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Filling 1040x w form 8863 If your AGI is $191,000 or more, you cannot take a deduction for a contribution to a traditional IRA. Filling 1040x w form 8863 Deduction Phaseout The amount of any reduction in the limit on your IRA deduction (phaseout) depends on whether you or your spouse was covered by an employer retirement plan. Filling 1040x w form 8863 Covered by a retirement plan. Filling 1040x w form 8863   If you are covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI, as shown in Table 1-2. Filling 1040x w form 8863 For 2014, if you are covered by a retirement plan at work, your IRA deduction will not be reduced (phased out) unless your modified AGI is: More than $60,000 but less than $70,000 for a single individual (or head of household), More than $96,000 but less than $116,000 for a married couple filing a joint return (or a qualifying widow(er)), or Less than $10,000 for a married individual filing a separate return. Filling 1040x w form 8863 If your spouse is covered. Filling 1040x w form 8863   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 1-3. Filling 1040x w form 8863 Filing status. Filling 1040x w form 8863   Your filing status depends primarily on your marital status. Filling 1040x w form 8863 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. Filling 1040x w form 8863 If you need more information on filing status, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Filling 1040x w form 8863 Lived apart from spouse. Filling 1040x w form 8863   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. Filling 1040x w form 8863 Modified adjusted gross income (AGI). Filling 1040x w form 8863   You can use Worksheet 1-1 to figure your modified AGI. Filling 1040x w form 8863 If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Both contributions for 2013 and distributions in 2013 , later. Filling 1040x w form 8863    Do not assume that your modified AGI is the same as your compensation. Filling 1040x w form 8863 Your modified AGI may include income in addition to your compensation (discussed earlier) such as interest, dividends, and income from IRA distributions. Filling 1040x w form 8863 Form 1040. Filling 1040x w form 8863   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Filling 1040x w form 8863 IRA deduction. Filling 1040x w form 8863 Student loan interest deduction. Filling 1040x w form 8863 Tuition and fees deduction. Filling 1040x w form 8863 Domestic production activities deduction. Filling 1040x w form 8863 Foreign earned income exclusion. Filling 1040x w form 8863 Foreign housing exclusion or deduction. Filling 1040x w form 8863 Exclusion of qualified savings bond interest shown on Form 8815. Filling 1040x w form 8863 Exclusion of employer-provided adoption benefits shown on Form 8839. Filling 1040x w form 8863 This is your modified AGI. Filling 1040x w form 8863 Form 1040A. Filling 1040x w form 8863   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. Filling 1040x w form 8863 IRA deduction. Filling 1040x w form 8863 Student loan interest deduction. Filling 1040x w form 8863 Tuition and fees deduction. Filling 1040x w form 8863 Exclusion of qualified savings bond interest shown on Form 8815. Filling 1040x w form 8863 This is your modified AGI. Filling 1040x w form 8863 Form 1040NR. Filling 1040x w form 8863   If you file Form 1040NR, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Filling 1040x w form 8863 IRA deduction. Filling 1040x w form 8863 Student loan interest deduction. Filling 1040x w form 8863 Domestic production activities deduction. Filling 1040x w form 8863 Exclusion of qualified savings bond interest shown on Form 8815. Filling 1040x w form 8863 Exclusion of employer-provided adoption benefits shown on Form 8839. Filling 1040x w form 8863 This is your modified AGI. Filling 1040x w form 8863 Income from IRA distributions. Filling 1040x w form 8863   If you received distributions in 2013 from one or more traditional IRAs and your traditional IRAs include only deductible contributions, the distributions are fully taxable and are included in your modified AGI. Filling 1040x w form 8863 Both contributions for 2013 and distributions in 2013. Filling 1040x w form 8863   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Filling 1040x w form 8863 You received distributions in 2013 from one or more traditional IRAs, You made contributions to a traditional IRA for 2013, and Some of those contributions may be nondeductible contributions. Filling 1040x w form 8863 (See Nondeductible Contributions and Worksheet 1-2, later. Filling 1040x w form 8863 ) If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Filling 1040x w form 8863 To do this, you can use Worksheet 1-5, later. Filling 1040x w form 8863   If at least one of the above does not apply, figure your modified AGI using Worksheet 1-1, later. Filling 1040x w form 8863 How To Figure Your Reduced IRA Deduction If you or your spouse is covered by an employer retirement plan and you did not receive any social security benefits, you can figure your reduced IRA deduction by using Worksheet 1-2. Filling 1040x w form 8863 Figuring Your Reduced IRA Deduction for 2013. Filling 1040x w form 8863 The Instructions for Form 1040, Form 1040A, and Form 1040NR include similar worksheets that you can use instead of the worksheet in this publication. Filling 1040x w form 8863 If you or your spouse is covered by an employer retirement plan, and you received any social security benefits, see Social Security Recipients , earlier. Filling 1040x w form 8863 Note. Filling 1040x w form 8863 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Filling 1040x w form 8863 Worksheet 1-1. Filling 1040x w form 8863 Figuring Your Modified AGI Use this worksheet to figure your modified AGI for traditional IRA purposes. Filling 1040x w form 8863 1. Filling 1040x w form 8863 Enter your adjusted gross income (AGI) from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37, figured without taking into account the amount from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 1. Filling 1040x w form 8863   2. Filling 1040x w form 8863 Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 2. Filling 1040x w form 8863   3. Filling 1040x w form 8863 Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Filling 1040x w form 8863   4. Filling 1040x w form 8863 Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 4. Filling 1040x w form 8863   5. Filling 1040x w form 8863 Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Filling 1040x w form 8863   6. Filling 1040x w form 8863 Enter any foreign housing deduction from Form 2555, line 50 6. Filling 1040x w form 8863   7. Filling 1040x w form 8863 Enter any excludable savings bond interest from Form 8815, line 14 7. Filling 1040x w form 8863   8. Filling 1040x w form 8863 Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Filling 1040x w form 8863   9. Filling 1040x w form 8863 Add lines 1 through 8. Filling 1040x w form 8863 This is your Modified AGI for traditional IRA purposes 9. Filling 1040x w form 8863   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Filling 1040x w form 8863 If you file Form 1040A, enter your IRA deduction on line 17 of that form. Filling 1040x w form 8863 If you file Form 1040NR, enter your IRA deduction on line 32 of that form. Filling 1040x w form 8863 You cannot deduct IRA contributions on Form 1040EZ or Form 1040NR-EZ. Filling 1040x w form 8863 Self-employed. Filling 1040x w form 8863   If you are self-employed (a sole proprietor or partner) and have a SIMPLE IRA, enter your deduction for allowable plan contributions on Form 1040, line 28. Filling 1040x w form 8863 If you file Form 1040NR, enter your deduction on line 28 of that form. Filling 1040x w form 8863 Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA of up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Filling 1040x w form 8863 The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Filling 1040x w form 8863 Example. Filling 1040x w form 8863 Tony is 29 years old and single. Filling 1040x w form 8863 In 2013, he was covered by a retirement plan at work. Filling 1040x w form 8863 His salary is $62,000. Filling 1040x w form 8863 His modified AGI is $70,000. Filling 1040x w form 8863 Tony makes a $5,500 IRA contribution for 2013. Filling 1040x w form 8863 Because he was covered by a retirement plan and his modified AGI is above $69,000, he cannot deduct his $5,500 IRA contribution. Filling 1040x w form 8863 He must designate this contribution as a nondeductible contribution by reporting it on Form 8606. Filling 1040x w form 8863 Repayment of reservist distributions. Filling 1040x w form 8863   Nondeductible contributions may include repayments of qualified reservist distributions. Filling 1040x w form 8863 For more information, see Qualified reservist repayments under How Much Can Be Contributed, earlier. Filling 1040x w form 8863 Form 8606. Filling 1040x w form 8863   To designate contributions as nondeductible, you must file Form 8606. Filling 1040x w form 8863 (See the filled-in Forms 8606 in this chapter. Filling 1040x w form 8863 )   You do not have to designate a contribution as nondeductible until you file your tax return. Filling 1040x w form 8863 When you file, you can even designate otherwise deductible contributions as nondeductible contributions. Filling 1040x w form 8863   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Filling 1040x w form 8863    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. Filling 1040x w form 8863 In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Filling 1040x w form 8863 See Form 8606 under Distributions Fully or Partly Taxable, later. Filling 1040x w form 8863 Failure to report nondeductible contributions. Filling 1040x w form 8863   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated like deductible contributions when withdrawn. Filling 1040x w form 8863 All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Filling 1040x w form 8863 Penalty for overstatement. Filling 1040x w form 8863   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. Filling 1040x w form 8863 Penalty for failure to file Form 8606. Filling 1040x w form 8863   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. Filling 1040x w form 8863 Tax on earnings on nondeductible contributions. Filling 1040x w form 8863   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. Filling 1040x w form 8863 Cost basis. Filling 1040x w form 8863   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Filling 1040x w form 8863 Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Filling 1040x w form 8863    Commonly, distributions from your traditional IRAs will include both taxable and nontaxable (cost basis) amounts. Filling 1040x w form 8863 See Are Distributions Taxable, later, for more information. Filling 1040x w form 8863 Recordkeeping. Filling 1040x w form 8863 There is a recordkeeping worksheet, Appendix A. Filling 1040x w form 8863 Summary Record of Traditional IRA(s) for 2013 , that you can use to keep a record of deductible and nondeductible IRA contributions. Filling 1040x w form 8863 Examples — Worksheet for Reduced IRA Deduction for 2013 The following examples illustrate the use of Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013. Filling 1040x w form 8863 Example 1. Filling 1040x w form 8863 For 2013, Tom and Betty file a joint return on Form 1040. Filling 1040x w form 8863 They are both 39 years old. Filling 1040x w form 8863 They are both employed and Tom is covered by his employer's retirement plan. Filling 1040x w form 8863 Tom's salary is $59,000 and Betty's is $32,555. Filling 1040x w form 8863 They each have a traditional IRA and their combined modified AGI, which includes $5,000 interest and dividend income, is $96,555. Filling 1040x w form 8863 Because their modified AGI is between $95,000 and $115,000 and Tom is covered by an employer plan, Tom is subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Filling 1040x w form 8863 For 2013, Tom contributed $5,500 to his IRA and Betty contributed $5,500 to hers. Filling 1040x w form 8863 Even though they file a joint return, they must use separate worksheets to figure the IRA deduction for each of them. Filling 1040x w form 8863 Tom can take a deduction of only $5,080. Filling 1040x w form 8863 He can choose to treat the $5,080 as either deductible or nondeductible contributions. Filling 1040x w form 8863 He can either leave the $420 ($5,500 − $5,080) of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Filling 1040x w form 8863 He decides to treat the $5,080 as deductible contributions and leave the $420 of nondeductible contributions in his IRA. Filling 1040x w form 8863 Using Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, Tom figures his deductible and nondeductible amounts as shown on Worksheet 1-2. Filling 1040x w form 8863 Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated. Filling 1040x w form 8863 Betty figures her IRA deduction as follows. Filling 1040x w form 8863 Betty can treat all or part of her contributions as either deductible or nondeductible. Filling 1040x w form 8863 This is because her $5,500 contribution for 2013 is not subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Filling 1040x w form 8863 She does not need to use Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, because their modified AGI is not within the phaseout range that applies. Filling 1040x w form 8863 Betty decides to treat her $5,500 IRA contributions as deductible. Filling 1040x w form 8863 The IRA deductions of $5,080 and $5,500 on the joint return for Tom and Betty total $10,580. Filling 1040x w form 8863 Example 2. Filling 1040x w form 8863 For 2013, Ed and Sue file a joint return on Form 1040. Filling 1040x w form 8863 They are both 39 years old. Filling 1040x w form 8863 Ed is covered by his employer's retirement plan. Filling 1040x w form 8863 Ed's salary is $45,000. Filling 1040x w form 8863 Sue had no compensation for the year and did not contribute to an IRA. Filling 1040x w form 8863 Sue is not covered by an employer plan. Filling 1040x w form 8863 Ed contributed $5,500 to his traditional IRA and $5,500 to a traditional IRA for Sue (a Kay Bailey Hutchison Spousal IRA). Filling 1040x w form 8863 Their combined modified AGI, which includes $2,000 interest and dividend income and a large capital gain from the sale of stock, is $180,555. Filling 1040x w form 8863 Because the combined modified AGI is $115,000 or more, Ed cannot deduct any of the contribution to his traditional IRA. Filling 1040x w form 8863 He can either leave the $5,500 of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Filling 1040x w form 8863 Sue figures her IRA deduction as shown on Worksheet 1-2. Filling 1040x w form 8863 Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated. Filling 1040x w form 8863 Worksheet 1-2. Filling 1040x w form 8863 Figuring Your Reduced IRA Deduction for 2013 (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Filling 1040x w form 8863 ) Note. Filling 1040x w form 8863 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Filling 1040x w form 8863 IF you . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 AND your  filing status is . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 AND your modified AGI is over . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 THEN enter on  line 1 below . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Filling 1040x w form 8863 Enter applicable amount from table above 1. Filling 1040x w form 8863   2. Filling 1040x w form 8863 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Filling 1040x w form 8863     Note. Filling 1040x w form 8863 If line 2 is equal to or more than the amount on line 1, stop here. Filling 1040x w form 8863  Your IRA contributions are not deductible. Filling 1040x w form 8863 See Nondeductible Contributions , earlier. Filling 1040x w form 8863     3. Filling 1040x w form 8863 Subtract line 2 from line 1. Filling 1040x w form 8863 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Filling 1040x w form 8863 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Filling 1040x w form 8863   4. Filling 1040x w form 8863 Multiply line 3 by the percentage below that applies to you. Filling 1040x w form 8863 If the result is not a multiple of $10, round it to the next highest multiple of $10. Filling 1040x w form 8863 (For example, $611. Filling 1040x w form 8863 40 is rounded to $620. Filling 1040x w form 8863 ) However, if the result is less than $200, enter $200. Filling 1040x w form 8863         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Filling 1040x w form 8863 5% (. Filling 1040x w form 8863 275) (by 32. Filling 1040x w form 8863 5% (. Filling 1040x w form 8863 325) if you are age 50 or older). Filling 1040x w form 8863 All others, multiply line 3 by 55% (. Filling 1040x w form 8863 55) (by 65% (. Filling 1040x w form 8863 65) if you are age 50 or older). Filling 1040x w form 8863 4. Filling 1040x w form 8863   5. Filling 1040x w form 8863 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Filling 1040x w form 8863 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Filling 1040x w form 8863 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Filling 1040x w form 8863   6. Filling 1040x w form 8863 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Filling 1040x w form 8863 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Filling 1040x w form 8863 6. Filling 1040x w form 8863   7. Filling 1040x w form 8863 IRA deduction. Filling 1040x w form 8863 Compare lines 4, 5, and 6. Filling 1040x w form 8863 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Filling 1040x w form 8863 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Filling 1040x w form 8863   8. Filling 1040x w form 8863 Nondeductible contribution. Filling 1040x w form 8863 Subtract line 7 from line 5 or 6, whichever is smaller. Filling 1040x w form 8863  Enter the result here and on line 1 of your Form 8606 8. Filling 1040x w form 8863   Worksheet 1-2. Filling 1040x w form 8863 Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Filling 1040x w form 8863 ) Note. Filling 1040x w form 8863 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Filling 1040x w form 8863 IF you . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 AND your  filing status is . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 AND your modified AGI is over . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 THEN enter on  line 1 below . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Filling 1040x w form 8863 Enter applicable amount from table above 1. Filling 1040x w form 8863 115,000 2. Filling 1040x w form 8863 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Filling 1040x w form 8863 96,555   Note. Filling 1040x w form 8863 If line 2 is equal to or more than the amount on line 1, stop here. Filling 1040x w form 8863  Your IRA contributions are not deductible. Filling 1040x w form 8863 See Nondeductible Contributions , earlier. Filling 1040x w form 8863     3. Filling 1040x w form 8863 Subtract line 2 from line 1. Filling 1040x w form 8863 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Filling 1040x w form 8863 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Filling 1040x w form 8863 18,445 4. Filling 1040x w form 8863 Multiply line 3 by the percentage below that applies to you. Filling 1040x w form 8863 If the result is not a multiple of $10, round it to the next highest multiple of $10. Filling 1040x w form 8863 (For example, $611. Filling 1040x w form 8863 40 is rounded to $620. Filling 1040x w form 8863 ) However, if the result is less than $200, enter $200. Filling 1040x w form 8863         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Filling 1040x w form 8863 5% (. Filling 1040x w form 8863 275) (by 32. Filling 1040x w form 8863 5% (. Filling 1040x w form 8863 325) if you are age 50 or older). Filling 1040x w form 8863 All others, multiply line 3 by 55% (. Filling 1040x w form 8863 55) (by 65% (. Filling 1040x w form 8863 65) if you are age 50 or older). Filling 1040x w form 8863 4. Filling 1040x w form 8863 5,080 5. Filling 1040x w form 8863 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Filling 1040x w form 8863 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Filling 1040x w form 8863 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Filling 1040x w form 8863 59,000 6. Filling 1040x w form 8863 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Filling 1040x w form 8863 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Filling 1040x w form 8863 6. Filling 1040x w form 8863 5,500 7. Filling 1040x w form 8863 IRA deduction. Filling 1040x w form 8863 Compare lines 4, 5, and 6. Filling 1040x w form 8863 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Filling 1040x w form 8863 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Filling 1040x w form 8863 5,080 8. Filling 1040x w form 8863 Nondeductible contribution. Filling 1040x w form 8863 Subtract line 7 from line 5 or 6, whichever is smaller. Filling 1040x w form 8863  Enter the result here and on line 1 of your Form 8606 8. Filling 1040x w form 8863 420 Worksheet 1-2. Filling 1040x w form 8863 Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Filling 1040x w form 8863 ) Note. Filling 1040x w form 8863 If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Filling 1040x w form 8863 IF you . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 AND your  filing status is . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 AND your modified AGI is over . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863 THEN enter on  line 1 below . Filling 1040x w form 8863 . Filling 1040x w form 8863 . Filling 1040x w form 8863       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Filling 1040x w form 8863 Enter applicable amount from table above 1. Filling 1040x w form 8863 188,000 2. Filling 1040x w form 8863 Enter your modified AGI (that of both spouses, if married filing jointly) 2. Filling 1040x w form 8863 180,555   Note. Filling 1040x w form 8863 If line 2 is equal to or more than the amount on line 1, stop here. Filling 1040x w form 8863  Your IRA contributions are not deductible. Filling 1040x w form 8863 See Nondeductible Contributions , earlier. Filling 1040x w form 8863     3. Filling 1040x w form 8863 Subtract line 2 from line 1. Filling 1040x w form 8863 If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Filling 1040x w form 8863 You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Filling 1040x w form 8863 7,445 4. Filling 1040x w form 8863 Multiply line 3 by the percentage below that applies to you. Filling 1040x w form 8863 If the result is not a multiple of $10, round it to the next highest multiple of $10. Filling 1040x w form 8863 (For example, $611. Filling 1040x w form 8863 40 is rounded to $620. Filling 1040x w form 8863 ) However, if the result is less than $200, enter $200. Filling 1040x w form 8863         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Filling 1040x w form 8863 5% (. Filling 1040x w form 8863 275) (by 32. Filling 1040x w form 8863 5% (. Filling 1040x w form 8863 325) if you are age 50 or older). Filling 1040x w form 8863 All others, multiply line 3 by 55% (. Filling 1040x w form 8863 55) (by 65% (. Filling 1040x w form 8863 65) if you are age 50 or older). Filling 1040x w form 8863 4. Filling 1040x w form 8863 4,100 5. Filling 1040x w form 8863 Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Filling 1040x w form 8863 If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Filling 1040x w form 8863 If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Filling 1040x w form 8863 39,500 6. Filling 1040x w form 8863 Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Filling 1040x w form 8863 If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Filling 1040x w form 8863 6. Filling 1040x w form 8863 5,500 7. Filling 1040x w form 8863 IRA deduction. Filling 1040x w form 8863 Compare lines 4, 5, and 6. Filling 1040x w form 8863 Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Filling 1040x w form 8863 If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Filling 1040x w form 8863 4,100 8. Filling 1040x w form 8863 Nondeductible contribution. Filling 1040x w form 8863 Subtract line 7 from line 5 or 6, whichever is smaller. Filling 1040x w form 8863  Enter the result here and on line 1 of your Form 8606 8. Filling 1040x w form 8863 1,400 What if You Inherit an IRA? If you inherit a traditional IRA, you are called a beneficiary. Filling 1040x w form 8863 A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Filling 1040x w form 8863 Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Filling 1040x w form 8863 Inherited from spouse. Filling 1040x w form 8863   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Filling 1040x w form 8863 You can: Treat it as your own IRA by designating yourself as the account owner. Filling 1040x w form 8863 Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (s
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Virginia Office of the Attorney General

Website: Virginia Office of the Attorney General

Address: Virginia Office of the Attorney General
Consumer Protection Section
900 E. Main St.
Richmond, VA 23219

Phone Number: 804-786-2042

Toll-free: 1-800-552-9963 (VA)

TTY: 1-800-828-1120

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Regional Consumer Protection Offices

Office of the Attorney General- Northern Virginia

Website: Office of the Attorney General- Northern Virginia

Address: Office of the Attorney General- Northern Virginia
10555 Main St., Suite 350
Fairfax, VA 22030

Phone Number: 703-277-3540

Office of the Attorney General- Southwest Region

Website: Office of the Attorney General- Southwest Region

Address: Office of the Attorney General- Southwest Region
204 Abingdon Place
Abingdon, VA 24211

Phone Number: 276-628-2759

Office of the Attorney General- Western Region

Website: Office of the Attorney General- Western Region

Address: Office of the Attorney General- Western Region
3033 Peters Creek Rd.
Roanoke, VA 24019

Phone Number: 540-562-3570

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County Consumer Protection Offices

Fairfax County Department of Cable Communications and Consumer Protection

Website: Fairfax County Department of Cable Communications and Consumer Protection

Address: Fairfax County Department of Cable Communications and Consumer Protection
12000 Government Center Pkwy., Suite 433
Fairfax, VA 22035

Phone Number: 703-222-8435

TTY: 711

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

State Corporation Commission

Website: State Corporation Commission

Address: State Corporation Commission
Bureau of Financial Institutions
PO Box 640
Richmond, VA 23218

Phone Number: 804-371-9657

Toll-free: 1-800-552-7945 (VA)

TTY: 804-371-9206

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

State Corporation Commission

Website: State Corporation Commission

Address: State Corporation Commission
Bureau of Insurance
PO Box 1157
Richmond, VA 23218-1157

Phone Number: 804-371-9741

Toll-free: 1-877-310-6560

TTY: 804-371-9206

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

State Corporation Commission

Website: State Corporation Commission

Address: State Corporation Commission
Division of Securities and Retail Franchising
PO Box 1197
Richmond, VA 23218

Phone Number: 804-371-9051

Toll-free: 1-800-552-7945 (VA)

TTY: 804-371-9206

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

State Corporation Commission

Website: State Corporation Commission

Address: State Corporation Commission
Division of Energy Regulation
PO Box 1197
Richmond, VA 23218

Phone Number: 804-371-9611

Toll-free: 1-800-552-7945 (VA)

TTY: 804-371-9206

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The Filling 1040x W Form 8863

Filling 1040x w form 8863 Publication 3402 - Main Content Table of Contents What is a Limited Liability Company? Classification of an LLC LLCs Classified as Partnerships LLCs Classified as Disregarded Entities LLCs Classified as Corporations Subsequent Elections How To Get More InformationInternal Revenue Service Small Business Administration Other Federal Agencies What is a Limited Liability Company? For purposes of this publication, a limited liability company (LLC) is a business entity organized in the United States under state law. Filling 1040x w form 8863 Unlike a partnership, all of the members of an LLC have limited personal liability for its debts. Filling 1040x w form 8863 An LLC may be classified for federal income tax purposes as a partnership, corporation, or an entity disregarded as separate from its owner by applying the rules in Regulations section 301. Filling 1040x w form 8863 7701-3. Filling 1040x w form 8863 The information in this publication applies to LLCs in general, and different rules may apply to special situations, including banks, insurance companies, or nonprofit organizations that are LLCs or that own LLCs. Filling 1040x w form 8863 Check your state's requirements and the federal tax regulations for further information. Filling 1040x w form 8863 Classification of an LLC Default classification rules. Filling 1040x w form 8863   An LLC with at least two members is classified as a partnership for federal income tax purposes. Filling 1040x w form 8863 An LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes). Filling 1040x w form 8863 Also, an LLC's federal tax classification can subsequently change under certain default rules discussed later. Filling 1040x w form 8863 Elected classification. Filling 1040x w form 8863   If an LLC does not choose to be classified under the above default classifications, it can elect to be classified as an association taxable as a corporation or as an S corporation. Filling 1040x w form 8863 After an LLC has determined its federal tax classification, it can later elect to change that classification. Filling 1040x w form 8863 For details, see Subsequent Elections, later. Filling 1040x w form 8863 LLCs Classified as Partnerships If an LLC has at least two members and is classified as a partnership, it generally must file Form 1065, U. Filling 1040x w form 8863 S. Filling 1040x w form 8863 Return of Partnership Income. Filling 1040x w form 8863 Generally, an LLC classified as a partnership is subject to the same filing and reporting requirements as partnerships. Filling 1040x w form 8863 For certain purposes, members of an LLC are treated as limited partners in a limited partnership. Filling 1040x w form 8863 For example, LLC members are treated as limited partners for purposes of material participation under the passive activity limitation rules (see Temporary Regulation section 1. Filling 1040x w form 8863 469-5T(e)). Filling 1040x w form 8863 See the Instructions for Form 1065 for reporting rules that apply specifically to LLCs. Filling 1040x w form 8863 Member manager. Filling 1040x w form 8863   Only a member manager of an LLC can sign the partnership tax return. Filling 1040x w form 8863 And only a member manager can represent the LLC as the tax matters partner under the consolidated audit proceedings in sections 6221 through 6234. Filling 1040x w form 8863 A member manager is any owner of an interest in the LLC who, alone or together with others, has the continuing authority to make the management decisions necessary to conduct the business for which the LLC was formed. Filling 1040x w form 8863 If there are no elected or designated member managers, each owner is treated as a member manager. Filling 1040x w form 8863 Change in default classification. Filling 1040x w form 8863   If the number of members in an LLC classified as a partnership is reduced to only one member, it becomes an entity disregarded as separate from its owner under Regulations section 301. Filling 1040x w form 8863 7701-3(f)(2). Filling 1040x w form 8863 However, if the LLC has made an election to be classified as a corporation (discussed later) and that elective classification is in effect at the time of the change in membership, the default classification as a disregarded entity will not apply. Filling 1040x w form 8863   Other tax consequences of a change in membership, such as recognition of gain or loss, are determined by the transactions through which an interest in the LLC is acquired or disposed of. Filling 1040x w form 8863 If a partnership that becomes a disregarded entity as a result of a decrease in the number of members makes an election to be classified as a corporation, the applicable deemed transactions discussed under Subsequent Elections, later, apply. Filling 1040x w form 8863 Example 1. Filling 1040x w form 8863 Ethel and Francis are members of an LLC classified as a partnership for federal tax purposes. Filling 1040x w form 8863 Each holds an equal membership interest. Filling 1040x w form 8863 The LLC does not hold any unrealized receivables or substantially appreciated inventory. Filling 1040x w form 8863 Ethel sells her entire interest in the LLC to Francis for $10,000. Filling 1040x w form 8863 After the sale, the business is continued by the LLC, which is owned solely by Francis. Filling 1040x w form 8863 No entity classification election is made after the sale to treat the LLC as a corporation for federal tax purposes. Filling 1040x w form 8863 The partnership terminates when Francis buys Ethel's entire interest. Filling 1040x w form 8863 Ethel must treat the transaction as the sale of a partnership interest and must report gain or loss, if any, resulting from the sale of her partnership interest. Filling 1040x w form 8863 For purposes of determining the tax treatment of Francis, the partnership is deemed to make a liquidating distribution of all of its assets to Ethel and Francis, and after this distribution, Francis is treated as acquiring the assets deemed to have been distributed to Ethel in liquidation of Ethel's partnership interest. Filling 1040x w form 8863 Francis's basis in the assets attributable to Ethel's one-half interest in the partnership is $10,000, the purchase price for Ethel's partnership interest. Filling 1040x w form 8863 Upon the termination of the partnership, Francis is considered to receive a distribution of those assets attributable to Francis's former interest in the partnership. Filling 1040x w form 8863 Francis must recognize gain or loss, if any, on the deemed distribution of the assets to the extent required by Internal Revenue Code section 731(a). Filling 1040x w form 8863 See Partnership Distributions in Publication 541. Filling 1040x w form 8863 Example 2. Filling 1040x w form 8863 George and Henrietta are members of an LLC classified as a partnership for federal tax purposes. Filling 1040x w form 8863 Each holds an equal membership interest. Filling 1040x w form 8863 The LLC does not hold any unrealized receivables or substantially appreciated inventory. Filling 1040x w form 8863 George and Henrietta each sell their entire interests in the LLC to Ian, an unrelated person, in exchange for $10,000. Filling 1040x w form 8863 After the sale, the business is continued by the LLC, which is owned solely by Ian. Filling 1040x w form 8863 No entity classification election is made after the sale to treat the LLC as a corporation for federal tax purposes. Filling 1040x w form 8863 The partnership terminates when Ian purchases the entire interests of George and Henrietta in the LLC. Filling 1040x w form 8863 George and Henrietta must report gain or loss, if any, resulting from the sale of their partnership interests. Filling 1040x w form 8863 For purposes of classifying the acquisition by Ian, the partnership is deemed to make a liquidating distribution of its assets to George and Henrietta. Filling 1040x w form 8863 Immediately following this distribution, Ian is deemed to acquire, by purchase, all of the former partnership's assets. Filling 1040x w form 8863   For more details on the preceding two examples, see Revenue Ruling 99-6, 1999-6 I. Filling 1040x w form 8863 R. Filling 1040x w form 8863 B. Filling 1040x w form 8863 6. Filling 1040x w form 8863 You can find Revenue Ruling 99-6 at www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/pub/irs-irbs/irb99-06. Filling 1040x w form 8863 pdf. Filling 1040x w form 8863 LLCs Classified as Disregarded Entities If an LLC has only one member and is classified as an entity disregarded as separate from its owner, its income, deductions, gains, losses, and credits are reported on the owner's income tax return. Filling 1040x w form 8863 For example, if the owner of the LLC is an individual, the LLC's income and expenses would be reported on the following schedules filed with the owner's Form 1040: Schedule C, Profit or Loss from Business (Sole Proprietorship); Schedule C-EZ, Net Profit From Business (Sole Proprietorship); Schedule E, Supplemental Income and Loss; or Schedule F, Profit or Loss From Farming. Filling 1040x w form 8863 Employment tax and certain excise taxes. Filling 1040x w form 8863   A single-member LLC that is classified as a disregarded entity for income tax purposes is treated as a separate entity for purposes of employment tax and certain excise taxes. Filling 1040x w form 8863 For wages paid after January 1, 2009, the single-member LLC is required to use its name and employer identification number (EIN) for reporting and payment of employment taxes. Filling 1040x w form 8863 A single-member LLC is also required to use its name and EIN to register for excise tax activities on Form 637; pay and report excise taxes reported on Forms 720, 730, 2290, and 11-C; and claim any refunds, credits, and payments on Form 8849. Filling 1040x w form 8863 See the employment and excise tax returns for more information. Filling 1040x w form 8863 Self-employment tax rule for disregarded entity LLCs. Filling 1040x w form 8863   An individual owner of a single-member LLC classified as a disregarded entity is not an employee of the LLC. Filling 1040x w form 8863 Instead, the owner is subject to tax on the net earnings from self-employment of the LLC which is treated in the same manner as a sole-proprietorship. Filling 1040x w form 8863 Example 3. Filling 1040x w form 8863 LLC is a disregarded entity owned by Irene. Filling 1040x w form 8863 LLC has three employees (Kent, Patricia, and Tex) and pays wages. Filling 1040x w form 8863 LLC is treated as an entity separate from its owner for purposes of employment taxes. Filling 1040x w form 8863 For the wages paid to Kent, Patricia, and Tex, LLC is liable for income tax withholding, Federal Insurance Contributions Act (FICA) taxes, and Federal Unemployment Tax Act (FUTA) taxes. Filling 1040x w form 8863 In addition, LLC must file under its name and EIN the applicable employment tax returns; make timely employment tax deposits; and file with the Social Security Administration and furnish to LLC's employees (Kent, Patricia, and Tex) Forms W-2, Wage and Tax Statement. Filling 1040x w form 8863 Irene is self-employed for purposes of the self-employment tax. Filling 1040x w form 8863 Thus, Irene is subject to self-employment tax on her net earnings from self-employment with respect to LLC's activities. Filling 1040x w form 8863 Irene is not an employee of LLC for purposes of employment taxes. Filling 1040x w form 8863 Because LLC is treated as a sole proprietorship of Irene for income tax purposes, Irene must report the income and expenses from LLC on her Schedule C. Filling 1040x w form 8863 Irene will figure the tax due on her net earnings from self-employment on Schedule SE. Filling 1040x w form 8863 Irene can also deduct one-half of her self-employment tax on line 27 of her Form 1040. Filling 1040x w form 8863 Taxpayer identification number. Filling 1040x w form 8863   For all income tax purposes, a single-member LLC classified as a disregarded entity must use the owner's social security number (SSN) or EIN. Filling 1040x w form 8863 This includes all information returns and reporting related to income tax. Filling 1040x w form 8863 For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number and Certification, the LLC must provide the owner's SSN or EIN, not the LLC's EIN. Filling 1040x w form 8863   However, most new single-member LLCs classified as a disregarded entity will need to obtain an EIN for the LLC. Filling 1040x w form 8863 An LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed above (see Employment tax and certain excise taxes earlier). Filling 1040x w form 8863 See Form SS-4, Application for Employer Identification Number, for information on applying for an EIN. Filling 1040x w form 8863 Change in default classification. Filling 1040x w form 8863   If a single-member LLC classified as a disregarded entity for income tax purposes acquires an additional member, it becomes a partnership under Regulations section 301. Filling 1040x w form 8863 7701-3(f)(2). Filling 1040x w form 8863 However, if the LLC has made an election to be classified as a corporation (discussed later) and that elective classification is in effect at the time of the change in membership, the default classification as a partnership will not apply. Filling 1040x w form 8863   Other tax consequences of a change in membership, such as recognition of gain or loss, are determined by the transactions through which an interest in the LLC is acquired or disposed of. Filling 1040x w form 8863 If a disregarded entity that becomes a partnership as a result of an increase in the number of members makes an election to be classified as a corporation, the applicable deemed transactions discussed in Subsequent Elections, later, apply. Filling 1040x w form 8863 Example 4. Filling 1040x w form 8863 Bart, who is not related to Alain, buys 50% of Alain's interest in an LLC that is a disregarded entity for $5,000. Filling 1040x w form 8863 Alain does not contribute any portion of the $5,000 to the LLC. Filling 1040x w form 8863 Alain and Bart continue to operate the business of the LLC as co-owners of the LLC. Filling 1040x w form 8863 The LLC is converted to a partnership when the new member, Bart, buys an interest in the disregarded entity from the owner, Alain. Filling 1040x w form 8863 Bart's buying a 50% interest in Alain's ownership interest in the LLC is treated as Bart's buying a 50% interest in each of the LLC's assets, which are treated as owned directly by Alain for federal income tax purposes. Filling 1040x w form 8863 Immediately thereafter, Alain and Bart are treated as contributing their respective interests in those assets to a partnership in exchange for ownership interests in the partnership. Filling 1040x w form 8863 Alain recognizes gain or loss from the deemed sale to Bart of the 50% interest in the assets. Filling 1040x w form 8863 Neither Alain nor Bart recognizes any gain or loss as a result of the deemed contribution of the assets to the partnership. Filling 1040x w form 8863 Example 5. Filling 1040x w form 8863 Charles, who is not related to Danielle, contributes $10,000 to an LLC owned by Danielle for a 50% ownership interest in the LLC. Filling 1040x w form 8863 The LLC uses all of the contributed cash in its business. Filling 1040x w form 8863 Charles and Danielle continue to operate the business of the LLC as co-owners of the LLC. Filling 1040x w form 8863 The LLC is converted from a disregarded entity to a partnership when Charles contributes cash to the LLC. Filling 1040x w form 8863 Charles's contribution is treated as a contribution to a partnership in exchange for an ownership interest in the partnership. Filling 1040x w form 8863 Danielle is treated as contributing all of the assets of the LLC to the partnership in exchange for a partnership interest. Filling 1040x w form 8863 Neither Charles nor Danielle recognizes gain or loss as a result of the conversion of the disregarded entity to a partnership. Filling 1040x w form 8863   For more details on the preceding two examples, see Revenue Ruling 99-5, 1999-6 I. Filling 1040x w form 8863 R. Filling 1040x w form 8863 B. Filling 1040x w form 8863 8. Filling 1040x w form 8863 You can find Revenue Ruling 99-5 at www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/pub/irs-irbs/irb99-06. Filling 1040x w form 8863 pdf. Filling 1040x w form 8863 LLCs Classified as Corporations An LLC with either a single member or more than one member can elect to be classified as a corporation rather than be classified as a partnership or disregarded entity under the default rules discussed earlier. Filling 1040x w form 8863 File Form 8832, Entity Classification Election, to elect classification as a C corporation. Filling 1040x w form 8863 File Form 2553, Election by a Small Business Corporation, to elect classification as an S corporation. Filling 1040x w form 8863 LLCs electing classification as an S corporation are not required to file Form 8832 to elect classification as a corporation before filing Form 2553. Filling 1040x w form 8863 By filing Form 2553, an LLC is deemed to have elected classification as a corporation in addition to the S corporation classification. Filling 1040x w form 8863 If the LLC elects to be classified as a corporation by filing Form 8832, a copy of the LLC's Form 8832 must be attached to the federal income tax return of each direct and indirect owner of the LLC for the tax year of the owner that includes the date on which the election took effect. Filling 1040x w form 8863 Example 6. Filling 1040x w form 8863 Classification as a corporation without an S election. Filling 1040x w form 8863 Wanda and Sylvester are members of an LLC. Filling 1040x w form 8863 They agree that the LLC should be classified as a corporation but do not want to elect to have the LLC be treated as an S corporation. Filling 1040x w form 8863 The LLC must file Form 8832. Filling 1040x w form 8863 Example 7. Filling 1040x w form 8863 Classification as a corporation with an S election. Filling 1040x w form 8863 Evelyn and Carol are members of an LLC. Filling 1040x w form 8863 They agree that the LLC should be classified as an S corporation. Filling 1040x w form 8863 The LLC must file Form 2553 instead of Form 8832. Filling 1040x w form 8863 If the LLC is classified as a corporation, it must file a corporation income tax return. Filling 1040x w form 8863 If it is a C corporation, it is taxed on its taxable income and distributions to the members are includible in the members' gross income to the extent of the corporation's earnings and profits (double taxation). Filling 1040x w form 8863 If it is an S corporation, the corporation is generally not subject to any income tax and the income, deductions, gains, losses, and credits of the corporation “pass through” to the members. Filling 1040x w form 8863 Corporations generally file either: Form 1120, U. Filling 1040x w form 8863 S. Filling 1040x w form 8863 Corporation Income Tax Return; or Form 1120S, U. Filling 1040x w form 8863 S. Filling 1040x w form 8863 Income Tax Return for an S Corporation. Filling 1040x w form 8863 For more information on the income taxation of corporations and their shareholders, see Publication 542, Corporations. Filling 1040x w form 8863 For more information on the income taxation of S corporations and their shareholders, see the Instructions for Form 1120S, U. Filling 1040x w form 8863 S. Filling 1040x w form 8863 Income Tax Return for an S Corporation. Filling 1040x w form 8863 Subsequent Elections An LLC can elect to change its classification. Filling 1040x w form 8863 Generally, once an LLC has elected to change its classification, it cannot elect again to change it classification during the 60 months after the effective date of the election. Filling 1040x w form 8863 An election by a newly formed LLC that is effective on the date of formation is not considered a change for purposes of this limitation. Filling 1040x w form 8863 For more information and exceptions, see Regulations section 301. Filling 1040x w form 8863 7701-3(c) and the Form 8832 instructions. Filling 1040x w form 8863 An election to change classification can have significant tax consequences based on the following transactions that are deemed to occur as a result of the election. Filling 1040x w form 8863 Partnership to corporation. Filling 1040x w form 8863   An election to change classification from a partnership to a corporation will be treated as if the partnership contributed all of its assets and liabilities to the corporation in exchange for stock and the partnership then immediately liquidated by distributing the stock to its partners. Filling 1040x w form 8863   For more information, see Partnership Distributions in Publication 541 and Property Exchanged for Stock in Publication 542. Filling 1040x w form 8863 Corporation to partnership. Filling 1040x w form 8863   An election to change classification from a corporation to a partnership will be treated as if the corporation distributed all of its assets and liabilities to its shareholders in liquidation and the shareholders then immediately contributed all of the distributed assets and liabilities to a new partnership. Filling 1040x w form 8863   For more information, see Contribution of Property in Publication 541 and Distributions to Shareholders in Publication 542. Filling 1040x w form 8863 Corporation to disregarded entity. Filling 1040x w form 8863   An election to change classification from a corporation to a disregarded entity will be treated as if the corporation distributed all of its assets and liabilities to its single owner in liquidation. Filling 1040x w form 8863   For more information, see Distributions to Shareholders in Publication 542. Filling 1040x w form 8863 Disregarded entity to corporation. Filling 1040x w form 8863   An election to change classification from a disregarded entity to a corporation will be treated as if the owner of the disregarded entity contributed all of the assets and liabilities to the corporation in exchange for stock. Filling 1040x w form 8863   For more information, see Property Exchanged for Stock in Publication 542. Filling 1040x w form 8863 How To Get More Information This section describes the help the IRS and other federal agencies offer to taxpayers who operate their own businesses. Filling 1040x w form 8863 Internal Revenue Service You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Filling 1040x w form 8863 By selecting the method that is best for you, you will have quick and easy access to tax help. Filling 1040x w form 8863 Contacting your Taxpayer Advocate. Filling 1040x w form 8863   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Filling 1040x w form 8863   You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059 to see if you are eligible for assistance. Filling 1040x w form 8863 You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your local telephone directory and in Publication 1546, Taxpayer Advocate Service — Your Voice at the IRS. Filling 1040x w form 8863 You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. Filling 1040x w form 8863 For more information, go to www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/advocate. Filling 1040x w form 8863 Low Income Taxpayer Clinics (LITCs). Filling 1040x w form 8863   LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for a nominal charge. Filling 1040x w form 8863 The clinics also provide tax education and outreach for taxpayers with limited English proficiency or who speak English as a second language. Filling 1040x w form 8863 Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area. Filling 1040x w form 8863 It is available at www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov or at your local IRS office. Filling 1040x w form 8863 Small business workshops. Filling 1040x w form 8863   Small business workshops are designed to help the small business owner understand and fulfill their federal tax responsibilities. Filling 1040x w form 8863 Workshops are sponsored and presented by IRS partners who are federal tax specialists. Filling 1040x w form 8863 Workshop topics vary from a general overview of taxes to more specific topics such as recordkeeping and retirement plans. Filling 1040x w form 8863 Although most are free, some workshops have fees associated with them. Filling 1040x w form 8863 Any fees charged for a workshop are paid to the sponsoring organization, not the IRS. Filling 1040x w form 8863   For more information, visit www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/businesses/small. Filling 1040x w form 8863 Subscribe to e-news for small businesses. Filling 1040x w form 8863   Join the e-News for Small Businesses mailing list to receive updates, reminders, and other information useful to small business owners and self employed individuals. Filling 1040x w form 8863 Visit the website at www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/businesses/small and click on “Subscribe to e-News. Filling 1040x w form 8863 ” Free tax services. Filling 1040x w form 8863   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. Filling 1040x w form 8863 It contains a list of free tax publications and describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. Filling 1040x w form 8863   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Filling 1040x w form 8863 Internet. Filling 1040x w form 8863 You can access the IRS website at www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov 24 hours a day, 7 days a week, to: E-file your return. Filling 1040x w form 8863 Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Filling 1040x w form 8863 Check the status of your refund. Filling 1040x w form 8863 Go to www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov and click on Where's My Refund. Filling 1040x w form 8863 Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Filling 1040x w form 8863 If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Filling 1040x w form 8863 Have your tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Filling 1040x w form 8863 Download forms, instructions, and publications. Filling 1040x w form 8863 Order IRS products online. Filling 1040x w form 8863 Research your tax questions online. Filling 1040x w form 8863 Search publications online by topic or keyword. Filling 1040x w form 8863 View Internal Revenue Bulletins (IRBs) published in the last few years. Filling 1040x w form 8863 Figure your withholding allowances using the withholding calculator online at www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/individuals. Filling 1040x w form 8863 Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant. Filling 1040x w form 8863 Sign up to receive local and national tax news by email. Filling 1040x w form 8863 Get information on starting and operating a small business. Filling 1040x w form 8863 Phone. Filling 1040x w form 8863 Many services are available by phone. Filling 1040x w form 8863 Ordering forms, instructions, and publications. Filling 1040x w form 8863 Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. Filling 1040x w form 8863 You should receive your order within 10 days. Filling 1040x w form 8863 Asking tax questions. Filling 1040x w form 8863 Call the IRS with your tax questions at 1-800-829-1040. Filling 1040x w form 8863 Solving problems. Filling 1040x w form 8863 You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Filling 1040x w form 8863 An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Filling 1040x w form 8863 Call your local Taxpayer Assistance Center for an appointment. Filling 1040x w form 8863 To find the number, go to www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Filling 1040x w form 8863 TTY/TDD equipment. Filling 1040x w form 8863 If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Filling 1040x w form 8863 TeleTax topics. Filling 1040x w form 8863 Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Filling 1040x w form 8863 Refund information. Filling 1040x w form 8863 To check the status of your 2009 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Filling 1040x w form 8863 Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Filling 1040x w form 8863 If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Filling 1040x w form 8863 Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Filling 1040x w form 8863 Refunds are sent out weekly on Fridays. Filling 1040x w form 8863 If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. Filling 1040x w form 8863 Evaluating the quality of our telephone services. Filling 1040x w form 8863 To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Filling 1040x w form 8863 One method is for a second IRS representative to listen in on or record random telephone calls. Filling 1040x w form 8863 Another is to ask some callers to complete a short survey at the end of the call. Filling 1040x w form 8863 Walk-in. Filling 1040x w form 8863 Many products and services are available on a walk-in basis. Filling 1040x w form 8863 Products. Filling 1040x w form 8863 You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Filling 1040x w form 8863 Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Filling 1040x w form 8863 Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Filling 1040x w form 8863 Services. Filling 1040x w form 8863 You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. Filling 1040x w form 8863 An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Filling 1040x w form 8863 If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. Filling 1040x w form 8863 No appointment is necessary—just walk in. Filling 1040x w form 8863 If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. Filling 1040x w form 8863 A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. Filling 1040x w form 8863 If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. Filling 1040x w form 8863 All other issues will be handled without an appointment. Filling 1040x w form 8863 To find the number of your local office, go to www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Filling 1040x w form 8863 Mail. Filling 1040x w form 8863 You can send your order for forms, instructions, and publications to the address below. Filling 1040x w form 8863 You should receive a response within 10 days after your request is received. Filling 1040x w form 8863 Internal Revenue Service1201 N. Filling 1040x w form 8863 Mitsubishi MotorwayBloomington, IL 61705–6613 DVD for tax products. Filling 1040x w form 8863 You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. Filling 1040x w form 8863 Prior-year forms, instructions, and publications. Filling 1040x w form 8863 Tax Map: an electronic research tool and finding aid. Filling 1040x w form 8863 Tax law frequently asked questions. Filling 1040x w form 8863 Tax Topics from the IRS telephone response system. Filling 1040x w form 8863 Internal Revenue Code—Title 26 of the U. Filling 1040x w form 8863 S. Filling 1040x w form 8863 Code. Filling 1040x w form 8863 Fill-in, print, and save features for most tax forms. Filling 1040x w form 8863 Internal Revenue Bulletins. Filling 1040x w form 8863 Toll-free and email technical support. Filling 1040x w form 8863 Two releases during the year. Filling 1040x w form 8863 – The first release will ship the beginning of January. Filling 1040x w form 8863 – The final release will ship the beginning of March. Filling 1040x w form 8863 Purchase the DVD from National Technical Information Service (NTIS) at www. Filling 1040x w form 8863 irs. Filling 1040x w form 8863 gov/cdorders for $30 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the DVD for $30 (plus a $6 handling fee). Filling 1040x w form 8863 Small Business Administration The Small Business Administration (SBA) offers training and educational programs, counseling services, financial programs, and contract assistance for small business owners. Filling 1040x w form 8863 The SBA also has publications and videos on a variety of business topics. Filling 1040x w form 8863 The following briefly describes assistance provided by the SBA. Filling 1040x w form 8863 Small Business Development Centers (SBDCs). Filling 1040x w form 8863   SBDCs provide counseling, training, and technical services to current and prospective small business owners who cannot afford the services of a private consultant. Filling 1040x w form 8863 Help is available when beginning, improving, or expanding a small business. Filling 1040x w form 8863 Business Information Centers (BICs). Filling 1040x w form 8863   BICs offer a small business reference library, management video tapes, and computer technology to help plan a business. Filling 1040x w form 8863 BICs also offer one-on-one assistance. Filling 1040x w form 8863 Individuals who are in business or are interested in starting a business can use BICs as often as they wish at no charge. Filling 1040x w form 8863 Service Corps of Retired Executives (SCORE). Filling 1040x w form 8863   SCORE provides small business counseling and training to current and prospective small business owners. Filling 1040x w form 8863 SCORE is made up of current and former business people who offer their expertise and knowledge to help people start, manage, and expand a small business. Filling 1040x w form 8863 SCORE also offers a variety of small business workshops. Filling 1040x w form 8863    Internet. Filling 1040x w form 8863 You can visit the SBA website at www. Filling 1040x w form 8863 sba. Filling 1040x w form 8863 gov. Filling 1040x w form 8863 While visiting the SBA website, you can find a variety of information of interest to small business owners. Filling 1040x w form 8863    Phone. Filling 1040x w form 8863 Call the SBA Answer Desk at 1-800-UASK-SBA (1-800-827-5722) for general information about programs available to assist small business owners. Filling 1040x w form 8863    Walk-in. Filling 1040x w form 8863 You can walk in to a Small Business Development Center or Business Information Center to request assistance with your small business. Filling 1040x w form 8863 To find the location nearest you, visit the SBA website or call the SBA Answer Desk. Filling 1040x w form 8863 Other Federal Agencies Other federal agencies also publish publications and pamphlets to assist small businesses. Filling 1040x w form 8863 Most of these are available from the Superintendent of Documents at the Government Printing Office. Filling 1040x w form 8863 You can get information and order these publications and pamphlets in several ways. Filling 1040x w form 8863 Internet. Filling 1040x w form 8863 You can visit the GPO website at www. Filling 1040x w form 8863 access. Filling 1040x w form 8863 gpo. Filling 1040x w form 8863 gov. Filling 1040x w form 8863 Mail. Filling 1040x w form 8863 Write to the GPO at the following address. Filling 1040x w form 8863 Superintendent of DocumentsU. Filling 1040x w form 8863 S. Filling 1040x w form 8863 Government Printing OfficeP. Filling 1040x w form 8863 O. Filling 1040x w form 8863 Box 979050St. Filling 1040x w form 8863 Louis, MO 63917-9000 Phone. Filling 1040x w form 8863 Call the GPO toll-free at 1-866-512-1800 or at 202-512-1800 from the Washington, DC area. Filling 1040x w form 8863 Prev  Up  Next   Home   More Online Publications