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Irs1040ez Form

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Irs1040ez Form

Irs1040ez form Publication 4492 - Main Contents Table of Contents DefinitionsHurricane Katrina Disaster Area Katrina Covered Disaster Area Gulf Opportunity (GO) Zone (Core Disaster Area) Hurricane Rita Disaster Area (Rita Covered Disaster Area) Rita GO Zone Hurricane Wilma Disaster Area Wilma Covered Disaster Area Wilma GO Zone Extended Tax Deadlines Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Charitable Deduction for Contributions of Food Inventory Charitable Deduction for Contributions of Book Inventories to Public Schools Casualty and Theft LossesTime limit for making election. Irs1040ez form Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Hurricane Distributions Repayment of Qualified Hurricane Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by Hurricane Katrina Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Work Opportunity Credit Employee Retention Credit Hurricane Katrina Housing Credit Reforestation Costs Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax Help Definitions The following definitions are used throughout this publication. Irs1040ez form Hurricane Katrina Disaster Area The Hurricane Katrina disaster area covers the area for which the President declared a major disaster before September 14, 2005, because of Hurricane Katrina. Irs1040ez form The Hurricane Katrina disaster area covers the entire states of Alabama, Florida, Louisiana, and Mississippi. Irs1040ez form Katrina Covered Disaster Area A portion of the Hurricane Katrina disaster area has been designated by the IRS as a covered disaster area. Irs1040ez form The Katrina covered disaster area covers the following areas in four states. Irs1040ez form Alabama. Irs1040ez form   The counties of Baldwin, Bibb, Choctaw, Clarke, Colbert, Cullman, Greene, Hale, Jefferson, Lamar, Lauderdale, Marengo, Marion, Mobile, Monroe, Perry, Pickens, Sumter, Tuscaloosa, Washington, Wilcox, and Winston. Irs1040ez form Florida. Irs1040ez form   The counties of Bay, Broward, Collier, Escambia, Franklin, Gulf, Miami-Dade, Monroe, Okaloosa, Santa Rosa, and Walton. Irs1040ez form Louisiana. Irs1040ez form   All parishes. Irs1040ez form Mississippi. Irs1040ez form   All counties. Irs1040ez form Gulf Opportunity (GO) Zone (Core Disaster Area) The GO Zone (also called the core disaster area) covers the portion of the Hurricane Katrina disaster area determined by the Federal Emergency Management Agency (FEMA) to be eligible for either individual only or both individual and public assistance from the Federal Government. Irs1040ez form The GO Zone covers the following areas in three states. Irs1040ez form Alabama. Irs1040ez form   The counties of Baldwin, Choctaw, Clarke, Greene, Hale, Marengo, Mobile, Pickens, Sumter, Tuscaloosa, and Washington. Irs1040ez form Louisiana. Irs1040ez form   The parishes of Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Irs1040ez form Bernard, St. Irs1040ez form Charles, St. Irs1040ez form Helena, St. Irs1040ez form James, St. Irs1040ez form John the Baptist, St. Irs1040ez form Martin, St. Irs1040ez form Mary, St. Irs1040ez form Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge, and West Feliciana. Irs1040ez form Mississippi. Irs1040ez form   The counties of Adams, Amite, Attala, Choctaw, Claiborne, Clarke, Copiah, Covington, Forrest, Franklin, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston, and Yazoo. Irs1040ez form Hurricane Rita Disaster Area (Rita Covered Disaster Area) The Hurricane Rita disaster area (also designated by the IRS as the Rita covered disaster area) covers the area for which the President declared a major disaster before October 6, 2005, because of Hurricane Rita. Irs1040ez form This area covers the entire states of Louisiana and Texas. Irs1040ez form Rita GO Zone The Rita GO Zone covers the portion of the Hurricane Rita disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. Irs1040ez form The Rita GO Zone covers the following areas in two states. Irs1040ez form Louisiana. Irs1040ez form   The parishes of Acadia, Allen, Ascension, Beauregard, Calcasieu, Cameron, Evangeline, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Plaquemines, Sabine, St. Irs1040ez form Landry, St. Irs1040ez form Martin, St. Irs1040ez form Mary, St. Irs1040ez form Tammany, Terrebonne, Vermilion, Vernon, and West Baton Rouge. Irs1040ez form Texas. Irs1040ez form   The counties of Angelina, Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Trinity, Tyler, and Walker. Irs1040ez form Hurricane Wilma Disaster Area The Hurricane Wilma disaster area covers the area for which the President declared a major disaster before November 14, 2005, because of Hurricane Wilma. Irs1040ez form The Hurricane Wilma disaster area covers the entire state of Florida. Irs1040ez form Wilma Covered Disaster Area A portion of the Hurricane Wilma disaster area has been designated by the IRS as a covered disaster area. Irs1040ez form The Wilma covered disaster area covers the following counties. Irs1040ez form Florida. Irs1040ez form   Brevard, Broward, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Osceola, Palm Beach, Polk, St. Irs1040ez form Lucie, and Sarasota. Irs1040ez form Wilma GO Zone The Wilma GO Zone covers the portion of the Hurricane Wilma disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. Irs1040ez form The Wilma GO Zone covers the following counties. Irs1040ez form Florida. Irs1040ez form   Brevard, Broward, Collier, Glades, Hendry, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Palm Beach, and St. Irs1040ez form Lucie. Irs1040ez form Extended Tax Deadlines The IRS has extended deadlines that apply to filing returns, paying taxes, and performing certain other time-sensitive acts for certain taxpayers affected by Hurricane Katrina, Rita, or Wilma, until February 28, 2006. Irs1040ez form The extension applies to deadlines (either an original or extended due date) that occur during the following periods. Irs1040ez form After August 28, 2005 (August 23, 2005, for Florida affected taxpayers), and before February 28, 2006, for taxpayers affected by Hurricane Katrina. Irs1040ez form After September 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Rita. Irs1040ez form After October 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Wilma. Irs1040ez form Affected taxpayer. Irs1040ez form   The following taxpayers are eligible for the extension. Irs1040ez form Any individual whose main home is located in a covered disaster area. Irs1040ez form Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Irs1040ez form Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained or whose tax professional's office is in a covered disaster area. Irs1040ez form The main home or principal place of business does not have to be located in the covered area. Irs1040ez form Any individual visiting a county or parish in the Hurricane Katrina or Hurricane Rita covered disaster area that was injured or killed (and the estate of an individual killed) as a result of the hurricane or its aftermath. Irs1040ez form Any estate or trust whose tax records needed to meet a filing or payment deadline are maintained in a covered disaster area. Irs1040ez form Generally, any individual who is a worker assisting in the relief activities in a covered disaster area. Irs1040ez form However, a relief worker assisting in the Wilma covered disaster area is not an affected taxpayer unless the worker is affiliated with a recognized government or philanthropic organization assisting in the relief activities. Irs1040ez form The spouse of an affected taxpayer, solely with regard to a joint income tax return with that taxpayer. Irs1040ez form   To ensure correct processing, affected taxpayers should write the assigned disaster designation (for example, “Hurricane Katrina”) in red ink at the top of any forms or documents filed with the IRS. Irs1040ez form Affected taxpayers can also identify themselves to the IRS or ask hurricane-related questions by calling the special IRS disaster hotline at 1-866-562-5227. Irs1040ez form Acts extended. Irs1040ez form   Deadlines for performing the following acts are extended. Irs1040ez form Filing any return of income, estate, gift, generation-skipping transfer, excise, or employment tax. Irs1040ez form Paying any income, estate, gift, generation-skipping transfer, excise, or employment tax. Irs1040ez form This includes making estimated tax payments. Irs1040ez form Making certain contributions, distributions, recharacterizing contributions, or making a rollover to or from a qualified retirement plan. Irs1040ez form Filing certain petitions with the Tax Court. Irs1040ez form Filing a claim for credit or refund of any tax. Irs1040ez form Bringing suit upon a claim for credit or refund. Irs1040ez form Certain other acts described in Revenue Procedure 2005-27. Irs1040ez form You can find Revenue Procedure 2005-27 on page 1050 of Internal Revenue Bulletin 2005-20 at www. Irs1040ez form irs. Irs1040ez form gov/pub/irs-irbs/irb05-20. Irs1040ez form pdf. Irs1040ez form Forgiveness of interest and penalties. Irs1040ez form   The IRS may forgive the interest and penalties on any underpaid income, estate, gift, employment, or excise tax for the length of any extension. Irs1040ez form Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions Individuals. Irs1040ez form   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% adjusted gross income (AGI) limit. Irs1040ez form A qualified contribution is a charitable contribution paid in cash or by check after August 27, 2005, and before January 1, 2006, to a 50% limit organization (other than certain private foundations described in section 509(a)(3)) if you make an election to have the 50% limit not apply to these contributions. Irs1040ez form   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. Irs1040ez form You can carry over any contributions you are not able to deduct for 2005 because of this limit. Irs1040ez form In 2006, treat the carryover of your unused qualified contributions as a carryover of contributions subject to the 50% limit. Irs1040ez form Exception. Irs1040ez form   Qualified contributions do not include a contribution to a segregated fund or account for which you (or any person you appoint or designate) have or expect to have advisory privileges with respect to distributions or investments based on your contribution. Irs1040ez form Corporations. Irs1040ez form   A corporation may elect to deduct qualified cash contributions without regard to the 10% taxable income limit if the contributions were made after August 27, 2005, and before January 1, 2006, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3)), for Hurricane Katrina, Rita, or Wilma relief efforts. Irs1040ez form The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. Irs1040ez form Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% limit. Irs1040ez form Partners and shareholders. Irs1040ez form   Each partner in a partnership and each shareholder in an S corporation makes a separate election to have the appropriate limit not apply. Irs1040ez form More information. Irs1040ez form   For more information, see Publication 526 or Publication 542, Corporations. Irs1040ez form Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. Irs1040ez form Standard Mileage Rate for Charitable Use of Vehicles The following are special standard mileage rates in effect in 2005 and 2006 for the cost of operating your automobile for providing charitable services solely related to Hurricane Katrina. Irs1040ez form 29 cents per mile for the period August 25 through August 31, 2005. Irs1040ez form 34 cents per mile for the period September 1 through December 31, 2005. Irs1040ez form 32 cents per mile for the period January 1 through December 31, 2006. Irs1040ez form Mileage Reimbursements to Charitable Volunteers You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger automobile for the benefit of a qualified charitable organization in providing relief related to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006. Irs1040ez form You cannot claim a deduction or credit for amounts you receive as a mileage reimbursement. Irs1040ez form You must keep records of miles driven, time, place (or use), and purpose of the mileage. Irs1040ez form The amount you can exclude from income cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. Irs1040ez form 40. Irs1040ez form 5 cents per mile for the period August 25 through August 31, 2005. Irs1040ez form 48. Irs1040ez form 5 cents per mile for the period September 1 through December 31, 2005. Irs1040ez form 44. Irs1040ez form 5 cents per mile for the period January 1 through December 31, 2006. Irs1040ez form Charitable Deduction for Contributions of Food Inventory Any taxpayer engaged in a trade or business is eligible to claim a deduction for a contribution of “apparently wholesome food” inventory to a qualified charitable organization described in section 501(c)(3) (except for private nonoperating foundations) after August 27, 2005, and before January 1, 2006. Irs1040ez form “Apparently wholesome food” is food that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions. Irs1040ez form The deduction is equal to the lesser of: The basis of the donated food plus one-half of the gain that would have been realized if the donated food had been sold at fair market value on the date of the donation, or Two times the basis of the donated food. Irs1040ez form The taxpayer must receive written certification from the donee stating: The donated food is related to the purpose or function of the donee's basis for exemption under section 501(c)(3) and is to be used solely for the care of the ill, the needy, or infants; and The food was not given in exchange for money, other property, or services. Irs1040ez form For a taxpayer other than a C corporation, the deduction is limited to 10% of the taxpayer's total net income from all trades or businesses from which the food contributions were made (figured without regard to the deduction for charitable contributions). Irs1040ez form For example, if a taxpayer is a sole proprietor, a shareholder in an S corporation, and a partner in a partnership, and each made a contribution of apparently wholesome food inventory, the taxpayer's deduction is limited to 10% of the taxpayer's total net income from the sole proprietorship, S corporation, and partnership (figured without regard to the deduction for charitable contributions). Irs1040ez form Charitable Deduction for Contributions of Book Inventories to Public Schools A corporation (other than an S corporation) may be allowed a charitable deduction for a qualified book contribution made after August 27, 2005, and before January 1, 2006, to a public school that: Provides elementary or secondary education (kindergarten through grade 12), and Normally maintains a regular faculty and curriculum and has a regular enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Irs1040ez form . Irs1040ez form The deduction is equal to the lesser of: The basis of the donated books plus one-half of the gain that would have been realized if the donated books had been sold at fair market value on the date of the donation, or Two times the basis of the donated books. Irs1040ez form The corporation must receive written certification from the school stating that the donated books are suitable for the organization's educational programs and will be used for such programs. Irs1040ez form Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that were caused by Hurricane Katrina, Rita, or Wilma. Irs1040ez form For more information, see Publication 547. Irs1040ez form Limits on personal casualty or theft losses caused by Hurricane Katrina, Rita, or Wilma. Irs1040ez form   The following losses to personal use property are not subject to the $100 or 10% of adjusted gross income limits. Irs1040ez form Losses that arose in the Hurricane Katrina disaster area after August 24, 2005, and that were caused by Hurricane Katrina. Irs1040ez form Losses that arose in the Hurricane Rita disaster area after September 22, 2005, and that were caused by Hurricane Rita. Irs1040ez form Losses that arose in the Hurricane Wilma disaster area after October 22, 2005, and that were caused by Hurricane Wilma. Irs1040ez form Qualifying losses include losses from flooding or other casualty, and from theft, that arose in the hurricane disaster area and that were caused by the hurricane. Irs1040ez form Special instructions for individuals who elect to claim a Hurricane Katrina, Rita, or Wilma casualty or theft loss for 2004. Irs1040ez form   Casualty and theft losses are generally deductible only in the year the casualty occurred or theft was discovered. Irs1040ez form However, Hurricane Katrina, Rita, and Wilma are Presidentially declared disasters. Irs1040ez form Therefore, you can elect to deduct losses from these hurricanes on your tax return for the previous year. Irs1040ez form If you make this election, use the following additional instructions to complete your forms. Irs1040ez form   Individuals filing or amending their 2004 tax return whose only casualty or theft losses to personal use property claimed on that return were caused by Hurricane Katrina, Rita, or Wilma should write “Hurricane Katrina,” “Hurricane Rita,” or “Hurricane Wilma” at the top of Form 1040 or 1040X. Irs1040ez form They must also complete and attach the 2004 Form 4684 and write “Hurricane Katrina,”“Hurricane Rita,” or “Hurricane Wilma” on the dotted line next to line 11 and enter -0- on lines 11 and 17. Irs1040ez form   Individuals filing or amending their 2004 tax return who also have casualty or theft losses to personal use property not related to Hurricane Katrina, Rita, or Wilma should disregard the caution directing taxpayers to use only one Form 4684, located above line 13, and complete lines 13 through 18 on two Forms 4684. Irs1040ez form The Form 1040 or 1040X and the first Form 4684 should be prepared as explained above for Hurricane Katrina, Rita, or Wilma losses only. Irs1040ez form The second Form 4684 should be prepared in the normal manner for all gains and non-Hurricane Katrina, Rita or Wilma losses. Irs1040ez form If both Forms 4684 have a loss on line 18, they should carry the combined losses from that line to Schedule A (Form 1040), line 19. Irs1040ez form If there is a gain on line 15 of the second Form 4684, disregard the instruction to enter it on Schedule D (Form 1040), and instead enter on Schedule A (Form 1040), line 19, the excess of the loss from the first Form 4684 over the gain on line 15 of the second Form 4684. Irs1040ez form , Time limit for making election. Irs1040ez form   You must make this election to claim your casualty or theft loss in 2004 by the later of the following dates. Irs1040ez form The due date (without extensions) for filing your 2005 income tax return. Irs1040ez form The due date (with extensions) for filing your 2004 income tax return. Irs1040ez form Example. Irs1040ez form If you are a calendar year individual taxpayer, you have until April 17, 2006, to amend your 2004 tax return to claim a casualty or theft loss that occurred during 2005. Irs1040ez form Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. Irs1040ez form Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). Irs1040ez form However, for property that was involuntarily converted after August 24, 2005, as a result of Hurricane Katrina, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. Irs1040ez form For more information, see the Instructions for Form 4684. Irs1040ez form Net Operating Losses Qualified GO Zone loss. Irs1040ez form   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. Irs1040ez form However, the portion of an NOL that is a qualified GO Zone loss can be carried back to the 5 tax years before the NOL year. Irs1040ez form In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. Irs1040ez form   A qualified GO Zone loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified GO Zone casualty loss (as defined below), Moving expenses paid or incurred after August 27, 2005, and before January 1, 2008, for the employment of an individual whose main home was in the GO Zone before August 28, 2005, who was unable to remain in that home because of Hurricane Katrina, and whose main job location (after the move) is in the GO Zone, Temporary housing expenses paid or incurred after August 27, 2005, and before January 1, 2008, to house employees of the taxpayer whose main job location is in the GO Zone, Depreciation or amortization allowable for any qualified GO Zone property (even if you elected not to claim the special GO Zone depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after August 27, 2005, and before January 1, 2008, for any damage from Hurricane Katrina to property located in the GO Zone. Irs1040ez form Qualified GO Zone casualty loss. Irs1040ez form   A qualified GO Zone casualty loss is any deductible section 1231 loss of property located in the GO Zone if the loss was caused by Hurricane Katrina. Irs1040ez form For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by Hurricane Katrina of property located in the GO Zone. Irs1040ez form Any such loss taken into account in figuring your qualified GO Zone loss is not eligible for the election to be treated as having occurred in the previous tax year. Irs1040ez form 5-year NOL carryback of certain timber losses. Irs1040ez form   Generally, you can carry the portion of an NOL due to income and deductions attributable to a farming business back to the 5 tax years before the NOL year. Irs1040ez form You can treat income and deductions attributable to qualified timber property as attributable to a farming business if any portion of the property is located in the GO Zone, Rita GO Zone, or Wilma GO Zone, and the income and deductions are allocable to the part of your tax year which is after the applicable date below. Irs1040ez form August 27, 2005, if any portion of the property is located in the GO Zone. Irs1040ez form September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). Irs1040ez form October 22, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the RITA GO Zone). Irs1040ez form   These rules will not apply after 2006. Irs1040ez form   However, these rules apply only to a timber producer who: Held qualified timber property (defined in Publication 535, Business Expenses) on the applicable date below: August 28, 2005, if any portion of the property is located in the GO Zone, September 23, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone), or October 23, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the Rita GO Zone); Is not a corporation with stock publicly traded on an established securities market; Is not a real estate investment trust; and Did not hold more than 500 acres of qualified timber property on the applicable date above. Irs1040ez form More information. Irs1040ez form   For more information on NOLs, see Publication 536 or Publication 542, Corporations. Irs1040ez form IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of Hurricane Katrina, Rita, or Wilma. Irs1040ez form Definitions Qualified hurricane distribution. Irs1040ez form   A qualified hurricane distribution is any distribution you received from an eligible retirement plan if all of the following apply. Irs1040ez form The distribution was made: After August 24, 2005, and before January 1, 2007, for Hurricane Katrina; After September 22, 2005, and before January 1, 2007, for Hurricane Rita; or After October 22, 2005, and before January 1, 2007, for Hurricane Wilma. Irs1040ez form Your main home was located in a hurricane disaster area listed below on the date shown for that area. Irs1040ez form August 28, 2005, for the Hurricane Katrina disaster area. Irs1040ez form September 23, 2005, for the Hurricane Rita disaster area. Irs1040ez form October 23, 2005, for the Hurricane Wilma disaster area. Irs1040ez form You sustained an economic loss because of Hurricane Katrina, Rita, or Wilma and your main home was in that hurricane disaster area on the date shown in (2) above for that hurricane. Irs1040ez form Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Irs1040ez form   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified hurricane distribution, regardless of whether the distribution was made on account of Hurricane Katrina, Rita, or Wilma. Irs1040ez form Qualified hurricane distributions are permitted without regard to your need or the actual amount of your economic loss. Irs1040ez form   The total of your qualified hurricane distributions from all plans is limited to $100,000. Irs1040ez form If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. Irs1040ez form   A reduction or offset (after August 24, 2005, for Katrina; after September 22, 2005, for Rita; or after October 22, 2005, for Wilma) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified hurricane distribution. Irs1040ez form Eligible retirement plan. Irs1040ez form   An eligible retirement plan can be any of the following. Irs1040ez form A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). Irs1040ez form A qualified annuity plan. Irs1040ez form A tax-sheltered annuity contract. Irs1040ez form A governmental section 457 deferred compensation plan. Irs1040ez form A traditional, SEP, SIMPLE, or Roth IRA. Irs1040ez form Main home. Irs1040ez form   Generally, your main home is the home where you live most of the time. Irs1040ez form A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. Irs1040ez form Taxation of Qualified Hurricane Distributions Qualified hurricane distributions are included in income in equal amounts over three years. Irs1040ez form However, if you elect, you can include the entire distribution in your income in the year it was received. Irs1040ez form Qualified hurricane distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). Irs1040ez form However, any distributions you receive in excess of the $100,000 qualified hurricane distribution limit may be subject to the additional tax on early distributions. Irs1040ez form For more information, see Form 8915. Irs1040ez form Repayment of Qualified Hurricane Distributions If you choose, you generally can repay any portion of a qualified hurricane distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Irs1040ez form Also, you can repay a qualified hurricane distribution made on account of a hardship from a retirement plan. Irs1040ez form However, see Exceptions below for qualified hurricane distributions you cannot repay. Irs1040ez form You have three years from the day after the date you received the distribution to make a repayment. Irs1040ez form Amounts that are repaid are treated as a qualified rollover and are not included in income. Irs1040ez form Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Irs1040ez form See Form 8915 for more information on how to report repayments. Irs1040ez form Exceptions. Irs1040ez form   You cannot repay the following types of distributions. Irs1040ez form Qualified hurricane distributions received as a beneficiary (other than a surviving spouse). Irs1040ez form Required minimum distributions. Irs1040ez form Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. Irs1040ez form Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area, you can repay that distribution before March 1, 2006, to an eligible retirement plan after August 24, 2005 (Katrina); after September 22, 2005 (Rita); or after October 22, 2005 (Wilma). Irs1040ez form For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. Irs1040ez form To be a qualified distribution, the distribution must meet all of the following requirements. Irs1040ez form The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. Irs1040ez form The distribution was received in 2005 after February 28 and before: August 29 for Hurricane Katrina; September 24 for Hurricane Rita; or October 24 for Hurricane Wilma. Irs1040ez form The distribution was to be used to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area that was not purchased or constructed because of Hurricane Katrina, Rita, or Wilma. Irs1040ez form Amounts that are repaid before March 1, 2006, are treated as a qualified rollover and are not included in income. Irs1040ez form Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Irs1040ez form A qualified distribution not repaid before March 1, 2006, may be taxable for 2005 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. Irs1040ez form You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before March 1, 2006. Irs1040ez form Loans From Qualified Plans The following benefits are available to qualified individuals. Irs1040ez form Increases to the limits for distributions treated as loans from employer plans. Irs1040ez form A 1-year suspension for payments due on plan loans. Irs1040ez form Qualified individual. Irs1040ez form   You are a qualified individual if any of the following apply. Irs1040ez form Your main home on August 28, 2005, was located in the Hurricane Katrina disaster area and you had an economic loss because of Hurricane Katrina. Irs1040ez form Your main home on September 23, 2005, was located in the Hurricane Rita disaster area and you had an economic loss because of Hurricane Rita. Irs1040ez form Your main home on October 23, 2005, was located in the Hurricane Wilma disaster area and you had an economic loss because of Hurricane Wilma. Irs1040ez form Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Irs1040ez form Limits on plan loans. Irs1040ez form   The $50,000 limit for distributions treated as plan loans is increased to $100,000. Irs1040ez form In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. Irs1040ez form The higher limits apply only to loans received during the following period. Irs1040ez form If your main home was located in the Hurricane Katrina disaster area, the period began on September 24, 2005, and ends on December 31, 2006. Irs1040ez form If your main home was located in the Hurricane Rita or Wilma disaster area, the period began on December 21, 2005, and ends on December 31, 2006. Irs1040ez form If you are a qualified individual based on Hurricane Katrina and another hurricane, use the period based on Hurricane Katrina. Irs1040ez form One-year suspension of loan payments. Irs1040ez form   Payments on plan loans due before 2007 may be suspended for 1 year by the plan administrator. Irs1040ez form To qualify for the suspension, the due date for any loan payment must occur during the period beginning on: August 28, 2005, if your main home was located in the Hurricane Katrina disaster area. Irs1040ez form September 23, 2005, if your main home was located in the Hurricane Rita disaster area. Irs1040ez form October 23, 2005, if your main home was located in the Hurricane Wilma disaster area. Irs1040ez form If you are a qualified individual based on more than one hurricane, use the period with the earliest beginning date. Irs1040ez form Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit You can elect to use your 2004 earned income to figure your earned income credit (EIC) and additional child tax credit for 2005 if: Your 2005 earned income is less than your 2004 earned income, and At least one of the following statements is true. Irs1040ez form Your main home on August 25, 2005, was in the Gulf Opportunity (GO) Zone. Irs1040ez form Your main home on August 25, 2005, was in the Hurricane Katrina disaster area and you were displaced from that home because of Hurricane Katrina. Irs1040ez form Your main home on September 23, 2005, was in the Rita GO Zone. Irs1040ez form Your main home on September 23, 2005, was in the Hurricane Rita disaster area and you were displaced from that home because of Hurricane Rita. Irs1040ez form Your main home on October 23, 2005, was in the Wilma GO Zone. Irs1040ez form Your main home on October 23, 2005, was in the Hurricane Wilma disaster area and you were displaced from that home because of Hurricane Wilma. Irs1040ez form Earned income. Irs1040ez form    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. Irs1040ez form If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. Irs1040ez form Joint returns. Irs1040ez form   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. Irs1040ez form If you make the election, your 2004 earned income is the sum of your 2004 earned income and your spouse's 2004 earned income. Irs1040ez form Making the election. Irs1040ez form   If you make the election to use your 2004 earned income, the election applies for figuring both the EIC and the additional child tax credit. Irs1040ez form However, you can make the election for the additional child tax credit even if you do not take the EIC. Irs1040ez form   Electing to use your 2004 earned income may increase or decrease your EIC. Irs1040ez form Take the following steps to decide whether to make the election. Irs1040ez form Figure your 2005 EIC using your 2004 earned income. Irs1040ez form Figure your 2005 additional child tax credit using your 2004 earned income for EIC purposes. Irs1040ez form Add the results of (1) and (2). Irs1040ez form Figure your 2005 EIC using your 2005 earned income. Irs1040ez form Figure your 2005 additional child tax credit using your 2005 earned income for additional child tax credit purposes. Irs1040ez form Add the results of (4) and (5). Irs1040ez form Compare the results of (3) and (6). Irs1040ez form If (3) is larger than (6), it is to your benefit to make the election. Irs1040ez form If (3) is equal to or smaller than (6), making the election will not help you. Irs1040ez form   If you elect to use your 2004 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2004 earned income on the dotted line next to line 66a of Form 1040, on the line next to line 41a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. Irs1040ez form   If you elect to use your 2004 earned income and you are claiming the additional child tax credit, enter your 2004 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. Irs1040ez form   Because Form 8812 was released before the GO Zone legislation was enacted, the instructions refer only to individuals whose main home was in the Hurricane Katrina disaster area. Irs1040ez form When completing Form 8812, line 4a, use the above rules to determine your eligibility to make the election (instead of the Form 8812 instructions). Irs1040ez form Getting your 2004 tax return information. Irs1040ez form   If you do not have your 2004 tax records, you can get the amount of earned income used to figure your 2004 EIC by calling 1-866-562-5227. Irs1040ez form You can also get this information by visiting the IRS website at www. Irs1040ez form irs. Irs1040ez form gov. Irs1040ez form   If you prefer to figure your 2004 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. Irs1040ez form See Request for Copy or Transcript of Tax Return on page 16. Irs1040ez form Additional Exemption for Housing Individuals Displaced by Hurricane Katrina You may be able to claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by Hurricane Katrina. Irs1040ez form The additional exemption amount is claimed on new Form 8914. Irs1040ez form The additional exemption amount is allowable once per taxpayer for a specific individual in 2005 or 2006, but not in both years. Irs1040ez form The maximum additional exemption amount you can claim for all displaced individuals is $2,000 ($1,000 if married filing separately). Irs1040ez form The additional exemption amount you claim for displaced individuals in 2005 will reduce the $2,000 maximum for 2006. Irs1040ez form If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. Irs1040ez form If married filing separately, only one spouse may claim the additional exemption amount for a specific displaced individual. Irs1040ez form In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). Irs1040ez form To qualify as a displaced individual, the individual: Must have had his or her main home in the Hurricane Katrina disaster area on August 28, 2005, and he or she must have been displaced from that home. Irs1040ez form If the individual's main home was located outside the core disaster area, that home must have been damaged by Hurricane Katrina or the individual must have been evacuated from that home because of Hurricane Katrina, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. Irs1040ez form You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. Irs1040ez form You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. Irs1040ez form Food, clothing, or personal items consumed or used by the displaced individual. Irs1040ez form Reimbursement for the cost of any long distance telephone calls made by the displaced individual. Irs1040ez form Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. Irs1040ez form However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. Irs1040ez form Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. Irs1040ez form For more information, see Form 8914. Irs1040ez form Education Credits The education credits have been expanded for students attending an eligible educational institution located in the Gulf Opportunity Zone (GOZ students) for any tax year beginning in 2005 or 2006. Irs1040ez form The Hope credit for a GOZ student is increased to 100% of the first $2,000 in qualified education expenses and 50% of the next $2,000 of qualified education expenses for a maximum credit of $3,000 per student. Irs1040ez form The lifetime learning credit rate for a GOZ student is increased from 20% to 40%. Irs1040ez form The definition of qualified education expenses for a GOZ student also has been expanded. Irs1040ez form In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a GOZ student include the following. Irs1040ez form Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Irs1040ez form For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. Irs1040ez form For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. Irs1040ez form The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. Irs1040ez form The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Irs1040ez form You will need to contact the eligible educational institution for qualified room and board costs. Irs1040ez form For more information, see Form 8863. Irs1040ez form Recapture of Federal Mortgage Subsidy Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. Irs1040ez form However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. Irs1040ez form This amount is increased to $150,000 if the loan was provided before 2011 and was used to: Repair damage caused by Hurricane Katrina to a residence in the Hurricane Katrina disaster area, or Alter, repair, or improve an existing owner-occupied residence in the GO Zone, Rita GO Zone, or Wilma GO Zone. Irs1040ez form Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Generally, discharges of nonbusiness debts (such as mortgages) made after August 24, 2005, and before January 1, 2007, are excluded from income for individuals whose main home was in the Hurricane Katrina disaster area on August 25, 2005. Irs1040ez form If the individual's main home was located outside the core disaster area, the individual also must have had an economic loss because of Hurricane Katrina. Irs1040ez form Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Irs1040ez form This relief does not apply to any debt secured by real property located outside the Hurricane Katrina disaster area. Irs1040ez form You may also have to reduce certain tax attributes by the amount excluded. Irs1040ez form For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Irs1040ez form Tax Relief for Temporary Relocation Under the Gulf Opportunity Zone Act of 2005, the IRS may adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2005 or 2006 as a result of a temporary relocation caused by Hurricane Katrina, Rita, or Wilma. Irs1040ez form However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. Irs1040ez form The IRS has exercised this authority as follows. Irs1040ez form In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. Irs1040ez form In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. Irs1040ez form You can treat as a student an individual who enrolled in school before August 25, 2005, and who is unable to attend classes because of Hurricane Katrina, for each month of the enrollment period that individual is prevented by Hurricane Katrina from attending school as planned. Irs1040ez form You can treat as a student an individual who enrolled in school before September 23, 2005, and who is unable to attend classes because of Hurricane Rita, for each month of the enrollment period that individual is prevented by Hurricane Rita from attending school as planned. Irs1040ez form You can treat as a student an individual who enrolled in school before October 23, 2005, and who is unable to attend classes because of Hurricane Wilma, for each month of the enrollment period that individual is prevented by Hurricane Wilma from attending school as planned. Irs1040ez form Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified Gulf Opportunity (GO) Zone property (as defined below) you place in service after August 27, 2005. Irs1040ez form The allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). Irs1040ez form The special allowance applies only for the first year the property is placed in service. Irs1040ez form The allowance is deductible for both the regular tax and the alternative minimum tax (AMT). Irs1040ez form There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Irs1040ez form You can elect not to deduct the special GO Zone depreciation allowance for qualified property. Irs1040ez form If you make this election for any property, it applies to all property in the same class placed in service during the year. Irs1040ez form Qualified GO Zone property. Irs1040ez form   Property that qualifies for the special GO Zone depreciation allowance includes the following. Irs1040ez form Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. Irs1040ez form Water utility property. Irs1040ez form Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. Irs1040ez form (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Irs1040ez form ) Qualified leasehold improvement property. Irs1040ez form Nonresidential real property and residential rental property. Irs1040ez form   For more information on this property, see Publication 946. Irs1040ez form Other tests to be met. Irs1040ez form   To be qualified GO Zone property, the property must also meet all of the following tests. Irs1040ez form You must have acquired the property, by purchase, after August 27, 2005, but only if no binding written contract for the acquisition was in effect before August 28, 2005. Irs1040ez form The property must be placed in service before 2008 (2009 in the case of nonresidential real property and residential rental property). Irs1040ez form Substantially all of the use of the property must be in the GO Zone and in the active conduct of your trade or business in the GO Zone. Irs1040ez form The original use of the property in the GO Zone must begin with you after August 27, 2005. Irs1040ez form Used property can be qualified GO Zone property if it has not previously been used within the GO Zone. Irs1040ez form Also, additional capital expenditures you incurred after August 27, 2005, to recondition or rebuild your property meet the original use test if the original use of the property in the GO Zone began with you. Irs1040ez form Excepted property. Irs1040ez form   Qualified GO Zone property does not include any of the following. Irs1040ez form Property required to be depreciated using the Alternative Depreciation System (ADS). Irs1040ez form Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. Irs1040ez form Property for which you are claiming a commercial revitalization deduction. Irs1040ez form Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. Irs1040ez form Any gambling or animal racing property (as defined below). Irs1040ez form Property in the same class as that for which you elected not to claim the special GO Zone depreciation allowance. Irs1040ez form   Gambling or animal racing property is: Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and The portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. Irs1040ez form Recapture of special allowance. Irs1040ez form   If, in any year after the year you claim the special allowance, the property ceases to be qualified GO Zone property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. Irs1040ez form Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 Gulf Opportunity (GO) Zone property (as defined later) placed in service in the GO Zone. Irs1040ez form Increased dollar limit. Irs1040ez form   The limit on the section 179 deduction ($105,000 for 2005, $108,000 for 2006) for qualified section 179 GO Zone property acquired after August 27, 2005, is increased by the smaller of: $100,000, or The cost of qualified section 179 GO Zone property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). Irs1040ez form   The amount for which you can make the election is reduced if the cost of all qualified section 179 GO Zone property you placed in service during the year exceeds $420,000 for 2005 ($430,000 for 2006) increased by the smaller of: $600,000, or The cost of qualified section 179 GO Zone property placed in service during the year. Irs1040ez form Qualified section 179 GO Zone property. Irs1040ez form   Qualified section 179 GO Zone property is section 179 property that is qualified GO Zone property (explained earlier under Special Depreciation Allowance). Irs1040ez form Section 179 property does not include nonresidential real property or residential rental property. Irs1040ez form For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. Irs1040ez form Work Opportunity Credit For the work opportunity credit, the definition of “targeted group employee” has been expanded to include a Hurricane Katrina employee. Irs1040ez form Hurricane Katrina employee. Irs1040ez form   A Hurricane Katrina employee is: A person who, on August 28, 2005, had a main home in the core disaster area and, within a two-year period beginning on that date, is hired to perform services principally in the core disaster area; or A person who, on August 28, 2005, had a main home in the core disaster area, was displaced from that main home as a result of Hurricane Katrina, and was hired during the period beginning on August 28, 2005, and ending on December 31, 2005. Irs1040ez form Qualified wages. Irs1040ez form   Generally, qualified wages do not include wages you paid to a targeted group employee who worked for you previously. Irs1040ez form However, wages will qualify if: You paid them to an employee who is a Hurricane Katrina employee, The employee was not in your employment on August 28, 2005, and This is your first hire of the employee as a Hurricane Katrina employee after August 28, 2005. Irs1040ez form   For more information, see Form 5884. Irs1040ez form Certification requirements. Irs1040ez form   An employee must provide to the employer reasonable evidence that he or she is a Hurricane Katrina employee. Irs1040ez form An employer may accept a completed Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits, as such evidence. Irs1040ez form The certification requirements described in Form 8850 do not apply to a Hurricane Katrina employee. Irs1040ez form Do not send any Forms 8850 that have only box 1 checked to the state employment security agency. Irs1040ez form Instead, the employer should keep these Forms 8850 with the employer's other records. Irs1040ez form For more information, see Form 8850 and its instructions. Irs1040ez form Employee Retention Credit An eligible employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone, the Rita GO Zone, or the Wilma GO Zone can claim the employee retention credit. Irs1040ez form The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Irs1040ez form Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Irs1040ez form Use Form 5884-A to claim the credit. Irs1040ez form See the following rules and definitions for each hurricane. Irs1040ez form Employers affected by Hurricane Katrina. Irs1040ez form   The following definitions apply to employers affected by Hurricane Katrina. Irs1040ez form Eligible employer. Irs1040ez form   For this purpose, an eligible employer is any employer who conducted an active trade or business on August 28, 2005, in the GO Zone and whose trade or business was inoperable on any day after August 28, 2005, and before January 1, 2006, because of damage caused by Hurricane Katrina. Irs1040ez form Eligible employee. Irs1040ez form   For this purpose, an eligible employee is an employee whose principal place of employment on August 28, 2005, with such eligible employer was in the GO Zone. Irs1040ez form An employee is not an eligible employee for purposes of Hurricane Katrina if the employee is treated as an eligible employee for the work opportunity credit. Irs1040ez form Employers affected by Hurricane Rita. Irs1040ez form   The following definitions apply to employers affected by Hurricane Rita. Irs1040ez form Eligible employer. Irs1040ez form   For this purpose, an eligible employer is any employer who conducted an active trade or business on September 23, 2005, in the Rita GO Zone and whose trade or business was inoperable on any day after September 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Rita. Irs1040ez form Eligible employee. Irs1040ez form   For this purpose, an eligible employee is an employee whose principal place of employment on September 23, 2005, with such eligible employer was in the Rita GO Zone. Irs1040ez form An employee is not an eligible employee for purposes of Hurricane Rita if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina employee retention credit. Irs1040ez form Employers affected by Hurricane Wilma. Irs1040ez form   The following definitions apply to employers affected by Hurricane Wilma. Irs1040ez form Eligible employer. Irs1040ez form   For this purpose, an eligible employer is any employer who conducted an active trade or business on October 23, 2005, in the Wilma GO Zone and whose trade or business was inoperable on any day after October 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Wilma. Irs1040ez form Eligible employee. Irs1040ez form   For this purpose, an eligible employee is an employee whose principal place of employment on October 23, 2005, with such eligible employer was in the Wilma GO Zone. Irs1040ez form An employee is not an eligible employee for purposes of Hurricane Wilma if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina or Rita employee retention credit. Irs1040ez form Qualified wages. Irs1040ez form   Qualified wages are wages you paid or incurred before January 1, 2006, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable hurricane, and ending on the date your trade or business resumed significant operations at that place. Irs1040ez form In addition, the wages must have been paid or incurred after the following date. Irs1040ez form August 28, 2005, for Hurricane Katrina. Irs1040ez form September 23, 2005, for Hurricane Rita. Irs1040ez form October 23, 2005, for Hurricane Wilma. Irs1040ez form    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. Irs1040ez form    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). Irs1040ez form Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Irs1040ez form Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. Irs1040ez form   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. Irs1040ez form For a special rule that applies to railroad employees, see section 51(h)(1)(B). Irs1040ez form   Qualified wages do not include the following. Irs1040ez form Wages paid to your dependent or a related individual. Irs1040ez form See section 51(i)(1). Irs1040ez form Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. Irs1040ez form Wages for services of replacement workers during a strike or lockout. Irs1040ez form   For more information, see Form 5884-A. Irs1040ez form Hurricane Katrina Housing Credit An employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone can claim the Hurricane Katrina housing credit. Irs1040ez form The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from January 1, 2006, through July 1, 2006. Irs1040ez form The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). Irs1040ez form Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Irs1040ez form The employer must use Form 5884-A to claim the credit. Irs1040ez form A qualified employee is an individual who had a main home in the GO Zone on August 28, 2005, and who performs substantially all employment services in the GO Zone for the employer furnishing the lodging. Irs1040ez form The employee cannot be your dependent or a related individual. Irs1040ez form See section 51(i)(1). Irs1040ez form For more information, see Form 5884-A. Irs1040ez form Reforestation Costs You may be able to elect to deduct a limited amount of reforestation costs for each qualified timber property. Irs1040ez form The deduction for any tax year generally is limited to $10,000 ($5,000 if married filing separately, $0 for a trust). Irs1040ez form However, this limit is increased if you paid or incurred reforestation costs after the applicable date below and any portion of the qualified timber property is located in one of the following areas. Irs1040ez form August 27, 2005, if any portion of the property is located in the GO Zone. Irs1040ez form September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). Irs1040ez form October 22, 2005, if any portion of the property is located in the Wilma GO Zone. Irs1040ez form The limit for each qualified timber property is increased by the smaller of: $10,000 ($5,000 if married filing separately, $0 for a trust), or The amount of reforestation costs you paid or incurred after the applicable date for the qualified timber property, any portion of which is located in the zone described above. Irs1040ez form The increase in the limit applies only to costs paid or incurred before 2008. Irs1040ez form However, these rules do not apply to any timber producer who: Held more than 500 acres of qualified timber property at any time during the tax year, Is a corporation with stock publicly traded on an established securities market, or Is a real estate investment trust. Irs1040ez form For more information about the election to deduct reforestation costs, see chapter 8 in Publication 535, Business Expenses. Irs1040ez form Demolition and Clean-up Costs You can elect to deduct 50% of any qualified GO Zone clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Irs1040ez form Qualified GO Zone clean-up costs are any amounts paid or incurred after August 27, 2005, and before January 1, 2008, for the removal of debris from, or the demolition of structures on, real property located in the GO Zone that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. Irs1040ez form Increase in Rehabilitation Tax Credit The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred after August 27, 2005, and before January 1, 2009, on buildings located in the GO Zone as follows. Irs1040ez form For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. Irs1040ez form For certified historic structures, the credit percentage is increased from 20% to 26%. Irs1040ez form For more information, see Form 3468, Investment Credit. Irs1040ez form Request for Copy or Transcript of Tax Return Request for copy of tax return. Irs1040ez form   You can use Form 4506 to order a copy of your tax return. Irs1040ez form Generally, there is a $39. Irs1040ez form 00 fee for requesting each copy of a tax return. Irs1040ez form If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Hurricane Katrina”) is written in red across the top of the form when filed. Irs1040ez form Request for transcript of tax return. Irs1040ez form   You can use Form 4506-T to order a free transcript of your tax return. Irs1040ez form A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. Irs1040ez form You can also call 1-800-829-1040 to order a transcript. Irs1040ez form How To Get Tax Help Special IRS assistance. Irs1040ez form   The IRS is providing special help for those affected by Hurricane Katrina, Rita, or Wilma, as well as survivors and personal representatives of the victims. Irs1040ez form We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by Hurricane Katrina, Rita, or Wilma, or who have other tax issues related to the hurricanes. Irs1040ez form Call 1-866-562-5227 Monday through Friday In English-7 a. Irs1040ez form m. Irs1040ez form to 10 p. Irs1040ez form m. Irs1040ez form local time In Spanish-8 a. Irs1040ez form m. Irs1040ez form to 9:30 p. Irs1040ez form m. Irs1040ez form local time   The IRS website at www. Irs1040ez form irs. Irs1040ez form gov has notices and other tax relief information. Irs1040ez form Check it periodically for any new guidance. Irs1040ez form Other help from the IRS. Irs1040ez form   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Irs1040ez form By selecting the method that is best for you, you will have quick and easy access to tax help. Irs1040ez form Contacting your Taxpayer Advocate. Irs1040ez form   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. Irs1040ez form   The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. Irs1040ez form While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. Irs1040ez form   To contact your Taxpayer Advocate: Call the Taxpayer Advocate toll free at 1-877-777-4778. Irs1040ez form Call, write, or fax the Taxpayer Advocate office in your area. Irs1040ez form Call 1-800-829-4059 if you are a TTY/TDD user. Irs1040ez form Visit www. Irs1040ez form irs. Irs1040ez form gov/advocate. Irs1040ez form   For more information, see Publication 1546, How To Get Help With Unresolved Tax Problems (now available in Chinese, Korean, Russian, and Vietnamese, in addition to English and Spanish). Irs1040ez form Free tax services. Irs1040ez form   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. Irs1040ez form It contains a list of free tax publications and an index of tax topics. Irs1040ez form It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. Irs1040ez form Internet. Irs1040ez form You can access the IRS website 24 hours a day, 7 days a week, at www. Irs1040ez form irs. Irs1040ez form gov to: E-file your return. Irs1040ez form Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Irs1040ez form Check the status of your refund. Irs1040ez form Click on Where's My Refund. Irs1040ez form Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Irs1040ez form Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. Irs1040ez form Download forms, instructions, and publications. Irs1040ez form Order IRS products online. Irs1040ez form Research your tax questions online. Irs1040ez form Search publications online by topic or keyword. Irs1040ez form View Internal Revenue Bulletins (IRBs) published in the last few years. Irs1040ez form Figure your withholdin
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The Irs1040ez Form

Irs1040ez form 1. Irs1040ez form   Traditional IRAs Table of Contents What's New for 2013 What's New for 2014 Introduction Who Can Open a Traditional IRA?What Is Compensation? When Can a Traditional IRA Be Opened? How Can a Traditional IRA Be Opened?Individual Retirement Account Individual Retirement Annuity Individual Retirement Bonds Simplified Employee Pension (SEP) Employer and Employee Association Trust Accounts Required Disclosures How Much Can Be Contributed?Limit. Irs1040ez form When repayment contributions can be made. Irs1040ez form No deduction. Irs1040ez form Reserve component. Irs1040ez form Figuring your IRA deduction. Irs1040ez form Reporting the repayment. Irs1040ez form Example. Irs1040ez form General Limit Kay Bailey Hutchison Spousal IRA Limit Filing Status Less Than Maximum Contributions More Than Maximum Contributions When Can Contributions Be Made? How Much Can You Deduct?Kay Bailey Hutchison Spousal IRA. Irs1040ez form Are You Covered by an Employer Plan? Limit if Covered by Employer Plan Reporting Deductible Contributions Nondeductible Contributions Examples — Worksheet for Reduced IRA Deduction for 2013 What if You Inherit an IRA?Treating it as your own. Irs1040ez form Can You Move Retirement Plan Assets?Transfers to Roth IRAs from other retirement plans. Irs1040ez form Trustee-to-Trustee Transfer Rollovers Transfers Incident To Divorce Converting From Any Traditional IRA Into a Roth IRA Recharacterizations When Can You Withdraw or Use Assets?Contributions Returned Before Due Date of Return When Must You Withdraw Assets? (Required Minimum Distributions)IRA Owners IRA Beneficiaries Which Table Do You Use To Determine Your Required Minimum Distribution? What Age(s) Do You Use With the Table(s)? Miscellaneous Rules for Required Minimum Distributions Are Distributions Taxable?January 2013 QCDs treated as made in 2012. Irs1040ez form 2013 Reporting. Irs1040ez form Additional reporting requirements if you made the election to treat a January 2013 QCD as made in 2012. Irs1040ez form One-time transfer. Irs1040ez form Testing period rules apply. Irs1040ez form More information. Irs1040ez form Distributions Fully or Partly Taxable Figuring the Nontaxable and Taxable Amounts Recognizing Losses on Traditional IRA Investments Other Special IRA Distribution Situations Reporting and Withholding Requirements for Taxable Amounts What Acts Result in Penalties or Additional Taxes?Prohibited Transactions Investment in Collectibles Excess Contributions Early Distributions Excess Accumulations (Insufficient Distributions) Reporting Additional Taxes What's New for 2013 Traditional IRA contribution and deduction limit. Irs1040ez form  The contribution limit to your traditional IRA for 2013 will be increased to the smaller of the following amounts: $5,500, or Your taxable compensation for the year. Irs1040ez form If you were age 50 or older before 2014, the most that can be contributed to your traditional IRA for 2013 will be the smaller of the following amounts: $6,500, or Your taxable compensation for the year. Irs1040ez form For more information, see How Much Can Be Contributed? in this chapter. Irs1040ez form Modified AGI limit for traditional IRA contributions increased. Irs1040ez form  For 2013, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $95,000 but less than $115,000 for a married couple filing a joint return or a qualifying widow(er), More than $59,000 but less than $69,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Irs1040ez form If you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $178,000 but less than $188,000. Irs1040ez form If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Irs1040ez form See How Much Can You Deduct? in this chapter. Irs1040ez form Net Investment Income Tax. Irs1040ez form  For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 457(b) plans, and IRAs). Irs1040ez form However, these distributions are taken into account when determining the modified adjusted gross income threshold. Irs1040ez form Distributions from a nonqualified retirement plan are included in net investment income. Irs1040ez form See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Irs1040ez form What's New for 2014 Modified AGI limit for traditional IRA contributions increased. Irs1040ez form  For 2014, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $96,000 but less than $116,000 for a married couple filing a joint return or a qualifying widow(er), More than $60,000 but less than $70,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Irs1040ez form If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Irs1040ez form If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. Irs1040ez form Introduction This chapter discusses the original IRA. Irs1040ez form In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a “traditional IRA. Irs1040ez form ” A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA. Irs1040ez form The following are two advantages of a traditional IRA: You may be able to deduct some or all of your contributions to it, depending on your circumstances. Irs1040ez form Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed. Irs1040ez form Who Can Open a Traditional IRA? You can open and make contributions to a traditional IRA if: You (or, if you file a joint return, your spouse) received taxable compensation during the year, and You were not age 70½ by the end of the year. Irs1040ez form You can have a traditional IRA whether or not you are covered by any other retirement plan. Irs1040ez form However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan. Irs1040ez form See How Much Can You Deduct , later. Irs1040ez form Both spouses have compensation. Irs1040ez form   If both you and your spouse have compensation and are under age 70½, each of you can open an IRA. Irs1040ez form You cannot both participate in the same IRA. Irs1040ez form If you file a joint return, only one of you needs to have compensation. Irs1040ez form What Is Compensation? Generally, compensation is what you earn from working. Irs1040ez form For a summary of what compensation does and does not include, see Table 1-1. Irs1040ez form Compensation includes all of the items discussed next (even if you have more than one type). Irs1040ez form Wages, salaries, etc. Irs1040ez form   Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. Irs1040ez form The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2, Wage and Tax Statement, provided that amount is reduced by any amount properly shown in box 11 (Nonqualified plans). Irs1040ez form Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2. Irs1040ez form Commissions. Irs1040ez form   An amount you receive that is a percentage of profits or sales price is compensation. Irs1040ez form Self-employment income. Irs1040ez form   If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by the total of: The deduction for contributions made on your behalf to retirement plans, and The deduction allowed for the deductible part of your self-employment taxes. Irs1040ez form   Compensation includes earnings from self-employment even if they are not subject to self-employment tax because of your religious beliefs. Irs1040ez form Self-employment loss. Irs1040ez form   If you have a net loss from self-employment, do not subtract the loss from your salaries or wages when figuring your total compensation. Irs1040ez form Alimony and separate maintenance. Irs1040ez form   For IRA purposes, compensation includes any taxable alimony and separate maintenance payments you receive under a decree of divorce or separate maintenance. Irs1040ez form Nontaxable combat pay. Irs1040ez form   If you were a member of the U. Irs1040ez form S. Irs1040ez form Armed Forces, compensation includes any nontaxable combat pay you received. Irs1040ez form This amount should be reported in box 12 of your 2013 Form W-2 with code Q. Irs1040ez form Table 1-1. Irs1040ez form Compensation for Purposes of an IRA Includes . Irs1040ez form . Irs1040ez form . Irs1040ez form Does not include . Irs1040ez form . Irs1040ez form . Irs1040ez form   earnings and profits from property. Irs1040ez form wages, salaries, etc. Irs1040ez form     interest and dividend income. Irs1040ez form commissions. Irs1040ez form     pension or annuity income. Irs1040ez form self-employment income. Irs1040ez form     deferred compensation. Irs1040ez form alimony and separate maintenance. Irs1040ez form     income from certain  partnerships. Irs1040ez form nontaxable combat pay. Irs1040ez form     any amounts you exclude from income. Irs1040ez form     What Is Not Compensation? Compensation does not include any of the following items. Irs1040ez form Earnings and profits from property, such as rental income, interest income, and dividend income. Irs1040ez form Pension or annuity income. Irs1040ez form Deferred compensation received (compensation payments postponed from a past year). Irs1040ez form Income from a partnership for which you do not provide services that are a material income-producing factor. Irs1040ez form Conservation Reserve Program (CRP) payments reported on Schedule SE (Form 1040), line 1b. Irs1040ez form Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs. Irs1040ez form When Can a Traditional IRA Be Opened? You can open a traditional IRA at any time. Irs1040ez form However, the time for making contributions for any year is limited. Irs1040ez form See When Can Contributions Be Made , later. Irs1040ez form How Can a Traditional IRA Be Opened? You can open different kinds of IRAs with a variety of organizations. Irs1040ez form You can open an IRA at a bank or other financial institution or with a mutual fund or life insurance company. Irs1040ez form You can also open an IRA through your stockbroker. Irs1040ez form Any IRA must meet Internal Revenue Code requirements. Irs1040ez form The requirements for the various arrangements are discussed below. Irs1040ez form Kinds of traditional IRAs. Irs1040ez form   Your traditional IRA can be an individual retirement account or annuity. Irs1040ez form It can be part of either a simplified employee pension (SEP) or an employer or employee association trust account. Irs1040ez form Individual Retirement Account An individual retirement account is a trust or custodial account set up in the United States for the exclusive benefit of you or your beneficiaries. Irs1040ez form The account is created by a written document. Irs1040ez form The document must show that the account meets all of the following requirements. Irs1040ez form The trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian. Irs1040ez form The trustee or custodian generally cannot accept contributions of more than the deductible amount for the year. Irs1040ez form However, rollover contributions and employer contributions to a simplified employee pension (SEP) can be more than this amount. Irs1040ez form Contributions, except for rollover contributions, must be in cash. Irs1040ez form See Rollovers , later. Irs1040ez form You must have a nonforfeitable right to the amount at all times. Irs1040ez form Money in your account cannot be used to buy a life insurance policy. Irs1040ez form Assets in your account cannot be combined with other property, except in a common trust fund or common investment fund. Irs1040ez form You must start receiving distributions by April 1 of the year following the year in which you reach age 70½. Irs1040ez form See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Irs1040ez form Individual Retirement Annuity You can open an individual retirement annuity by purchasing an annuity contract or an endowment contract from a life insurance company. Irs1040ez form An individual retirement annuity must be issued in your name as the owner, and either you or your beneficiaries who survive you are the only ones who can receive the benefits or payments. Irs1040ez form An individual retirement annuity must meet all the following requirements. Irs1040ez form Your entire interest in the contract must be nonforfeitable. Irs1040ez form The contract must provide that you cannot transfer any portion of it to any person other than the issuer. Irs1040ez form There must be flexible premiums so that if your compensation changes, your payment can also change. Irs1040ez form This provision applies to contracts issued after November 6, 1978. Irs1040ez form The contract must provide that contributions cannot be more than the deductible amount for an IRA for the year, and that you must use any refunded premiums to pay for future premiums or to buy more benefits before the end of the calendar year after the year in which you receive the refund. Irs1040ez form Distributions must begin by April 1 of the year following the year in which you reach age 70½. Irs1040ez form See When Must You Withdraw Assets? (Required Minimum Distributions) , later. Irs1040ez form Individual Retirement Bonds The sale of individual retirement bonds issued by the federal government was suspended after April 30, 1982. Irs1040ez form The bonds have the following features. Irs1040ez form They stop earning interest when you reach age 70½. Irs1040ez form If you die, interest will stop 5 years after your death, or on the date you would have reached age 70½, whichever is earlier. Irs1040ez form You cannot transfer the bonds. Irs1040ez form If you cash (redeem) the bonds before the year in which you reach age 59½, you may be subject to a 10% additional tax. Irs1040ez form See Age 59½ Rule under Early Distributions, later. Irs1040ez form You can roll over redemption proceeds into IRAs. Irs1040ez form Simplified Employee Pension (SEP) A simplified employee pension (SEP) is a written arrangement that allows your employer to make deductible contributions to a traditional IRA (a SEP IRA) set up for you to receive such contributions. Irs1040ez form Generally, distributions from SEP IRAs are subject to the withdrawal and tax rules that apply to traditional IRAs. Irs1040ez form See Publication 560 for more information about SEPs. Irs1040ez form Employer and Employee Association Trust Accounts Your employer or your labor union or other employee association can set up a trust to provide individual retirement accounts for employees or members. Irs1040ez form The requirements for individual retirement accounts apply to these traditional IRAs. Irs1040ez form Required Disclosures The trustee or issuer (sometimes called the sponsor) of your traditional IRA generally must give you a disclosure statement at least 7 days before you open your IRA. Irs1040ez form However, the sponsor does not have to give you the statement until the date you open (or purchase, if earlier) your IRA, provided you are given at least 7 days from that date to revoke the IRA. Irs1040ez form The disclosure statement must explain certain items in plain language. Irs1040ez form For example, the statement should explain when and how you can revoke the IRA, and include the name, address, and telephone number of the person to receive the notice of cancellation. Irs1040ez form This explanation must appear at the beginning of the disclosure statement. Irs1040ez form If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. Irs1040ez form The sponsor must report on the appropriate IRS forms both your contribution to the IRA (unless it was made by a trustee-to-trustee transfer) and the amount returned to you. Irs1040ez form These requirements apply to all sponsors. Irs1040ez form How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. Irs1040ez form These limits and rules are explained below. Irs1040ez form Community property laws. Irs1040ez form   Except as discussed later under Kay Bailey Hutchison Spousal IRA Limit , each spouse figures his or her limit separately, using his or her own compensation. Irs1040ez form This is the rule even in states with community property laws. Irs1040ez form Brokers' commissions. Irs1040ez form   Brokers' commissions paid in connection with your traditional IRA are subject to the contribution limit. Irs1040ez form For information about whether you can deduct brokers' commissions, see Brokers' commissions , later, under How Much Can You Deduct. Irs1040ez form Trustees' fees. Irs1040ez form   Trustees' administrative fees are not subject to the contribution limit. Irs1040ez form For information about whether you can deduct trustees' fees, see Trustees' fees , later, under How Much Can You Deduct. Irs1040ez form Qualified reservist repayments. Irs1040ez form   If you were a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any qualified reservist distributions (defined later under Early Distributions) you received. Irs1040ez form You can make these repayment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. Irs1040ez form To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or a similar arrangement. Irs1040ez form Limit. Irs1040ez form   Your qualified reservist repayments cannot be more than your qualified reservist distributions, explained under Early Distributions , later. Irs1040ez form When repayment contributions can be made. Irs1040ez form   You cannot make these repayment contributions later than the date that is 2 years after your active duty period ends. Irs1040ez form No deduction. Irs1040ez form   You cannot deduct qualified reservist repayments. Irs1040ez form Reserve component. Irs1040ez form   The term “reserve component” means the: Army National Guard of the United States, Army Reserve, Naval Reserve, Marine Corps Reserve, Air National Guard of the United States, Air Force Reserve, Coast Guard Reserve, or Reserve Corps of the Public Health Service. Irs1040ez form Figuring your IRA deduction. Irs1040ez form   The repayment of qualified reservist distributions does not affect the amount you can deduct as an IRA contribution. Irs1040ez form Reporting the repayment. Irs1040ez form   If you repay a qualified reservist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. Irs1040ez form Example. Irs1040ez form   In 2013, your IRA contribution limit is $5,500. Irs1040ez form However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. Irs1040ez form You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). Irs1040ez form In an earlier year you received a $3,000 qualified reservist distribution, which you would like to repay this year. Irs1040ez form   For 2013, you can contribute a total of $8,500 to your IRA. Irs1040ez form This is made up of the maximum deductible contribution of $3,500; a nondeductible contribution of $2,000; and a $3,000 qualified reservist repayment. Irs1040ez form You contribute the maximum allowable for the year. Irs1040ez form Since you are making a nondeductible contribution ($2,000) and a qualified reservist repayment ($3,000), you must file Form 8606 with your return and include $5,000 ($2,000 + $3,000) on line 1 of Form 8606. Irs1040ez form The qualified reservist repayment is not deductible. Irs1040ez form Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. Irs1040ez form See chapter 2 for information about Roth IRAs. Irs1040ez form General Limit For 2013, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year. Irs1040ez form Note. Irs1040ez form This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Irs1040ez form This is the most that can be contributed regardless of whether the contributions are to one or more traditional IRAs or whether all or part of the contributions are nondeductible. Irs1040ez form (See Nondeductible Contributions , later. Irs1040ez form ) Qualified reservist repayments do not affect this limit. Irs1040ez form Examples. Irs1040ez form George, who is 34 years old and single, earns $24,000 in 2013. Irs1040ez form His IRA contributions for 2013 are limited to $5,500. Irs1040ez form Danny, an unmarried college student working part time, earns $3,500 in 2013. Irs1040ez form His IRA contributions for 2013 are limited to $3,500, the amount of his compensation. Irs1040ez form More than one IRA. Irs1040ez form   If you have more than one IRA, the limit applies to the total contributions made on your behalf to all your traditional IRAs for the year. Irs1040ez form Annuity or endowment contracts. Irs1040ez form   If you invest in an annuity or endowment contract under an individual retirement annuity, no more than $5,500 ($6,500 if you are age 50 or older) can be contributed toward its cost for the tax year, including the cost of life insurance coverage. Irs1040ez form If more than this amount is contributed, the annuity or endowment contract is disqualified. Irs1040ez form Kay Bailey Hutchison Spousal IRA Limit For 2013, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts: $5,500 ($6,500 if you are age 50 or older), or The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts. Irs1040ez form Your spouse's IRA contribution for the year to a traditional IRA. Irs1040ez form Any contributions for the year to a Roth IRA on behalf of your spouse. Irs1040ez form This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is age 50 or older or $13,000 if both of you are age 50 or older). Irs1040ez form Note. Irs1040ez form This traditional IRA limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions). Irs1040ez form Example. Irs1040ez form Kristin, a full-time student with no taxable compensation, marries Carl during the year. Irs1040ez form Neither of them was age 50 by the end of 2013. Irs1040ez form For the year, Carl has taxable compensation of $30,000. Irs1040ez form He plans to contribute (and deduct) $5,500 to a traditional IRA. Irs1040ez form If he and Kristin file a joint return, each can contribute $5,500 to a traditional IRA. Irs1040ez form This is because Kristin, who has no compensation, can add Carl's compensation, reduced by the amount of his IRA contribution ($30,000 − $5,500 = $24,500), to her own compensation (-0-) to figure her maximum contribution to a traditional IRA. Irs1040ez form In her case, $5,500 is her contribution limit, because $5,500 is less than $24,500 (her compensation for purposes of figuring her contribution limit). Irs1040ez form Filing Status Generally, except as discussed earlier under Kay Bailey Hutchison Spousal IRA Limit , your filing status has no effect on the amount of allowable contributions to your traditional IRA. Irs1040ez form However, if during the year either you or your spouse was covered by a retirement plan at work, your deduction may be reduced or eliminated, depending on your filing status and income. Irs1040ez form See How Much Can You Deduct , later. Irs1040ez form Example. Irs1040ez form Tom and Darcy are married and both are 53. Irs1040ez form They both work and each has a traditional IRA. Irs1040ez form Tom earned $3,800 and Darcy earned $48,000 in 2013. Irs1040ez form Because of the Kay Bailey Hutchison Spousal IRA limit rule, even though Tom earned less than $6,500, they can contribute up to $6,500 to his IRA for 2013 if they file a joint return. Irs1040ez form They can contribute up to $6,500 to Darcy's IRA. Irs1040ez form If they file separate returns, the amount that can be contributed to Tom's IRA is limited by his earned income, $3,800. Irs1040ez form Less Than Maximum Contributions If contributions to your traditional IRA for a year were less than the limit, you cannot contribute more after the due date of your return for that year to make up the difference. Irs1040ez form Example. Irs1040ez form Rafael, who is 40, earns $30,000 in 2013. Irs1040ez form Although he can contribute up to $5,500 for 2013, he contributes only $3,000. Irs1040ez form After April 15, 2014, Rafael cannot make up the difference between his actual contributions for 2013 ($3,000) and his 2013 limit ($5,500). Irs1040ez form He cannot contribute $2,500 more than the limit for any later year. Irs1040ez form More Than Maximum Contributions If contributions to your IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. Irs1040ez form However, a penalty or additional tax may apply. Irs1040ez form See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes. Irs1040ez form When Can Contributions Be Made? As soon as you open your traditional IRA, contributions can be made to it through your chosen sponsor (trustee or other administrator). Irs1040ez form Contributions must be in the form of money (cash, check, or money order). Irs1040ez form Property cannot be contributed. Irs1040ez form Although property cannot be contributed, your IRA may invest in certain property. Irs1040ez form For example, your IRA may purchase shares of stock. Irs1040ez form For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. Irs1040ez form You may be able to transfer or roll over certain property from one retirement plan to another. Irs1040ez form See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets . Irs1040ez form You can make a contribution to your IRA by having your income tax refund (or a portion of your refund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. Irs1040ez form For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases). Irs1040ez form Contributions can be made to your traditional IRA for each year that you receive compensation and have not reached age 70½. Irs1040ez form For any year in which you do not work, contributions cannot be made to your IRA unless you receive alimony, nontaxable combat pay, military differential pay, or file a joint return with a spouse who has compensation. Irs1040ez form See Who Can Open a Traditional IRA , earlier. Irs1040ez form Even if contributions cannot be made for the current year, the amounts contributed for years in which you did qualify can remain in your IRA. Irs1040ez form Contributions can resume for any years that you qualify. Irs1040ez form Contributions must be made by due date. Irs1040ez form   Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. Irs1040ez form For most people, this means that contributions for 2013 must be made by April 15, 2014, and contributions for 2014 must be made by April 15, 2015. Irs1040ez form Age 70½ rule. Irs1040ez form   Contributions cannot be made to your traditional IRA for the year in which you reach age 70½ or for any later year. Irs1040ez form   You attain age 70½ on the date that is 6 calendar months after the 70th anniversary of your birth. Irs1040ez form If you were born on or before June 30, 1943, you cannot contribute for 2013 or any later year. Irs1040ez form Designating year for which contribution is made. Irs1040ez form   If an amount is contributed to your traditional IRA between January 1 and April 15, you should tell the sponsor which year (the current year or the previous year) the contribution is for. Irs1040ez form If you do not tell the sponsor which year it is for, the sponsor can assume, and report to the IRS, that the contribution is for the current year (the year the sponsor received it). Irs1040ez form Filing before a contribution is made. Irs1040ez form    You can file your return claiming a traditional IRA contribution before the contribution is actually made. Irs1040ez form Generally, the contribution must be made by the due date of your return, not including extensions. Irs1040ez form Contributions not required. Irs1040ez form   You do not have to contribute to your traditional IRA for every tax year, even if you can. Irs1040ez form How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if applicable) explained earlier under How Much Can Be Contributed . Irs1040ez form However, if you or your spouse was covered by an employer retirement plan, you may not be able to deduct this amount. Irs1040ez form See Limit if Covered by Employer Plan , later. Irs1040ez form You may be able to claim a credit for contributions to your traditional IRA. Irs1040ez form For more information, see chapter 4. Irs1040ez form Trustees' fees. Irs1040ez form   Trustees' administrative fees that are billed separately and paid in connection with your traditional IRA are not deductible as IRA contributions. Irs1040ez form However, they may be deductible as a miscellaneous itemized deduction on Schedule A (Form 1040). Irs1040ez form For information about miscellaneous itemized deductions, see Publication 529, Miscellaneous Deductions. Irs1040ez form Brokers' commissions. Irs1040ez form   These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Irs1040ez form Full deduction. Irs1040ez form   If neither you nor your spouse was covered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more of your traditional IRAs of up to the lesser of: $5,500 ($6,500 if you are age 50 or older), or 100% of your compensation. Irs1040ez form   This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Irs1040ez form Kay Bailey Hutchison Spousal IRA. Irs1040ez form   In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of: $5,500 ($6,500 if the spouse with the lower compensation is age 50 or older), or The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. Irs1040ez form The IRA deduction for the year of the spouse with the greater compensation. Irs1040ez form Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. Irs1040ez form Any contributions for the year to a Roth IRA on behalf of the spouse with the greater compensation. Irs1040ez form   This limit is reduced by any contributions to a section 501(c)(18) plan on behalf of the spouse with the lesser compensation. Irs1040ez form Note. Irs1040ez form If you were divorced or legally separated (and did not remarry) before the end of the year, you cannot deduct any contributions to your spouse's IRA. Irs1040ez form After a divorce or legal separation, you can deduct only the contributions to your own IRA. Irs1040ez form Your deductions are subject to the rules for single individuals. Irs1040ez form Covered by an employer retirement plan. Irs1040ez form   If you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, your deduction may be further limited. Irs1040ez form This is discussed later under Limit if Covered by Employer Plan . Irs1040ez form Limits on the amount you can deduct do not affect the amount that can be contributed. Irs1040ez form Are You Covered by an Employer Plan? The Form W-2 you receive from your employer has a box used to indicate whether you were covered for the year. Irs1040ez form The “Retirement Plan” box should be checked if you were covered. Irs1040ez form Reservists and volunteer firefighters should also see Situations in Which You Are Not Covered , later. Irs1040ez form If you are not certain whether you were covered by your employer's retirement plan, you should ask your employer. Irs1040ez form Federal judges. Irs1040ez form   For purposes of the IRA deduction, federal judges are covered by an employer plan. Irs1040ez form For Which Year(s) Are You Covered? Special rules apply to determine the tax years for which you are covered by an employer plan. Irs1040ez form These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan. Irs1040ez form Tax year. Irs1040ez form   Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. Irs1040ez form For almost all people, the tax year is the calendar year. Irs1040ez form Defined contribution plan. Irs1040ez form   Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year. Irs1040ez form However, also see Situations in Which You Are Not Covered , later. Irs1040ez form   A defined contribution plan is a plan that provides for a separate account for each person covered by the plan. Irs1040ez form In a defined contribution plan, the amount to be contributed to each participant's account is spelled out in the plan. Irs1040ez form The level of benefits actually provided to a participant depends on the total amount contributed to that participant's account and any earnings and losses on those contributions. Irs1040ez form Types of defined contribution plans include profit-sharing plans, stock bonus plans, and money purchase pension plans. Irs1040ez form Example. Irs1040ez form Company A has a money purchase pension plan. Irs1040ez form Its plan year is from July 1 to June 30. Irs1040ez form The plan provides that contributions must be allocated as of June 30. Irs1040ez form Bob, an employee, leaves Company A on December 31, 2012. Irs1040ez form The contribution for the plan year ending on June 30, 2013, is made February 15, 2014. Irs1040ez form Because an amount is contributed to Bob's account for the plan year, Bob is covered by the plan for his 2013 tax year. Irs1040ez form   A special rule applies to certain plans in which it is not possible to determine if an amount will be contributed to your account for a given plan year. Irs1040ez form If, for a plan year, no amounts have been allocated to your account that are attributable to employer contributions, employee contributions, or forfeitures, by the last day of the plan year, and contributions are discretionary for the plan year, you are not covered for the tax year in which the plan year ends. Irs1040ez form If, after the plan year ends, the employer makes a contribution for that plan year, you are covered for the tax year in which the contribution is made. Irs1040ez form Example. Irs1040ez form Mickey was covered by a profit-sharing plan and left the company on December 31, 2012. Irs1040ez form The plan year runs from July 1 to June 30. Irs1040ez form Under the terms of the plan, employer contributions do not have to be made, but if they are made, they are contributed to the plan before the due date for filing the company's tax return. Irs1040ez form Such contributions are allocated as of the last day of the plan year, and allocations are made to the accounts of individuals who have any service during the plan year. Irs1040ez form As of June 30, 2013, no contributions were made that were allocated to the June 30, 2013, plan year, and no forfeitures had been allocated within the plan year. Irs1040ez form In addition, as of that date, the company was not obligated to make a contribution for such plan year and it was impossible to determine whether or not a contribution would be made for the plan year. Irs1040ez form On December 31, 2013, the company decided to contribute to the plan for the plan year ending June 30, 2013. Irs1040ez form That contribution was made on February 15, 2014. Irs1040ez form Mickey is an active participant in the plan for his 2014 tax year but not for his 2013 tax year. Irs1040ez form No vested interest. Irs1040ez form   If an amount is allocated to your account for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the account. Irs1040ez form Defined benefit plan. Irs1040ez form   If you are eligible to participate in your employer's defined benefit plan for the plan year that ends within your tax year, you are covered by the plan. Irs1040ez form This rule applies even if you: Declined to participate in the plan, Did not make a required contribution, or Did not perform the minimum service required to accrue a benefit for the year. Irs1040ez form   A defined benefit plan is any plan that is not a defined contribution plan. Irs1040ez form In a defined benefit plan, the level of benefits to be provided to each participant is spelled out in the plan. Irs1040ez form The plan administrator figures the amount needed to provide those benefits and those amounts are contributed to the plan. Irs1040ez form Defined benefit plans include pension plans and annuity plans. Irs1040ez form Example. Irs1040ez form Nick, an employee of Company B, is eligible to participate in Company B's defined benefit plan, which has a July 1 to June 30 plan year. Irs1040ez form Nick leaves Company B on December 31, 2012. Irs1040ez form Because Nick is eligible to participate in the plan for its year ending June 30, 2013, he is covered by the plan for his 2013 tax year. Irs1040ez form No vested interest. Irs1040ez form   If you accrue a benefit for a plan year, you are covered by that plan even if you have no vested interest in (legal right to) the accrual. Irs1040ez form Situations in Which You Are Not Covered Unless you are covered by another employer plan, you are not covered by an employer plan if you are in one of the situations described below. Irs1040ez form Social security or railroad retirement. Irs1040ez form   Coverage under social security or railroad retirement is not coverage under an employer retirement plan. Irs1040ez form Benefits from previous employer's plan. Irs1040ez form   If you receive retirement benefits from a previous employer's plan, you are not covered by that plan. Irs1040ez form Reservists. Irs1040ez form   If the only reason you participate in a plan is because you are a member of a reserve unit of the Armed Forces, you may not be covered by the plan. Irs1040ez form You are not covered by the plan if both of the following conditions are met. Irs1040ez form The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. Irs1040ez form You did not serve more than 90 days on active duty during the year (not counting duty for training). Irs1040ez form Volunteer firefighters. Irs1040ez form   If the only reason you participate in a plan is because you are a volunteer firefighter, you may not be covered by the plan. Irs1040ez form You are not covered by the plan if both of the following conditions are met. Irs1040ez form The plan you participate in is established for its employees by: The United States, A state or political subdivision of a state, or An instrumentality of either (a) or (b) above. Irs1040ez form Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement. Irs1040ez form Limit if Covered by Employer Plan As discussed earlier, the deduction you can take for contributions made to your traditional IRA depends on whether you or your spouse was covered for any part of the year by an employer retirement plan. Irs1040ez form Your deduction is also affected by how much income you had and by your filing status. Irs1040ez form Your deduction may also be affected by social security benefits you received. Irs1040ez form Reduced or no deduction. Irs1040ez form   If either you or your spouse was covered by an employer retirement plan, you may be entitled to only a partial (reduced) deduction or no deduction at all, depending on your income and your filing status. Irs1040ez form   Your deduction begins to decrease (phase out) when your income rises above a certain amount and is eliminated altogether when it reaches a higher amount. Irs1040ez form These amounts vary depending on your filing status. Irs1040ez form   To determine if your deduction is subject to the phaseout, you must determine your modified adjusted gross income (AGI) and your filing status, as explained later under Deduction Phaseout . Irs1040ez form Once you have determined your modified AGI and your filing status, you can use Table 1-2 or Table 1-3 to determine if the phaseout applies. Irs1040ez form Social Security Recipients Instead of using Table 1-2 or Table 1-3 and Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, later, complete the worksheets in Appendix B of this publication if, for the year, all of the following apply. Irs1040ez form You received social security benefits. Irs1040ez form You received taxable compensation. Irs1040ez form Contributions were made to your traditional IRA. Irs1040ez form You or your spouse was covered by an employer retirement plan. Irs1040ez form Use the worksheets in Appendix B to figure your IRA deduction, your nondeductible contribution, and the taxable portion, if any, of your social security benefits. Irs1040ez form Appendix B includes an example with filled-in worksheets to assist you. Irs1040ez form Table 1-2. Irs1040ez form Effect of Modified AGI1 on Deduction if You Are Covered by a Retirement Plan at Work If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Irs1040ez form IF your filing status is . Irs1040ez form . Irs1040ez form . Irs1040ez form AND your modified adjusted gross income (modified AGI) is . Irs1040ez form . Irs1040ez form . Irs1040ez form THEN you can take . Irs1040ez form . Irs1040ez form . Irs1040ez form single or head of household $59,000 or less a full deduction. Irs1040ez form more than $59,000 but less than $69,000 a partial deduction. Irs1040ez form $69,000 or more no deduction. Irs1040ez form married filing jointly or  qualifying widow(er) $95,000 or less a full deduction. Irs1040ez form more than $95,000 but less than $115,000 a partial deduction. Irs1040ez form $115,000 or more no deduction. Irs1040ez form married filing separately2 less than $10,000 a partial deduction. Irs1040ez form $10,000 or more no deduction. Irs1040ez form 1 Modified AGI (adjusted gross income). Irs1040ez form See Modified adjusted gross income (AGI) , later. Irs1040ez form  2 If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the “Single” filing status). Irs1040ez form Table 1-3. Irs1040ez form Effect of Modified AGI1 on Deduction if You Are NOT Covered by a Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction. Irs1040ez form IF your filing status is . Irs1040ez form . Irs1040ez form . Irs1040ez form AND your modified adjusted gross income (modified AGI) is . Irs1040ez form . Irs1040ez form . Irs1040ez form THEN you can take . Irs1040ez form . Irs1040ez form . Irs1040ez form single, head of household, or qualifying widow(er) any amount a full deduction. Irs1040ez form married filing jointly or separately with a spouse who is not covered by a plan at work any amount a full deduction. Irs1040ez form married filing jointly with a spouse who is covered by a plan at work $178,000 or less a full deduction. Irs1040ez form more than $178,000 but less than $188,000 a partial deduction. Irs1040ez form $188,000 or more no deduction. Irs1040ez form married filing separately with a spouse who is covered by a plan at work2 less than $10,000 a partial deduction. Irs1040ez form $10,000 or more no deduction. Irs1040ez form 1 Modified AGI (adjusted gross income). Irs1040ez form See Modified adjusted gross income (AGI) , later. Irs1040ez form  2 You are entitled to the full deduction if you did not live with your spouse at any time during the year. Irs1040ez form For 2014, if you are not covered by a retirement plan at work and you are married filing jointly with a spouse who is covered by a plan at work, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Irs1040ez form If your AGI is $191,000 or more, you cannot take a deduction for a contribution to a traditional IRA. Irs1040ez form Deduction Phaseout The amount of any reduction in the limit on your IRA deduction (phaseout) depends on whether you or your spouse was covered by an employer retirement plan. Irs1040ez form Covered by a retirement plan. Irs1040ez form   If you are covered by an employer retirement plan and you did not receive any social security retirement benefits, your IRA deduction may be reduced or eliminated depending on your filing status and modified AGI, as shown in Table 1-2. Irs1040ez form For 2014, if you are covered by a retirement plan at work, your IRA deduction will not be reduced (phased out) unless your modified AGI is: More than $60,000 but less than $70,000 for a single individual (or head of household), More than $96,000 but less than $116,000 for a married couple filing a joint return (or a qualifying widow(er)), or Less than $10,000 for a married individual filing a separate return. Irs1040ez form If your spouse is covered. Irs1040ez form   If you are not covered by an employer retirement plan, but your spouse is, and you did not receive any social security benefits, your IRA deduction may be reduced or eliminated entirely depending on your filing status and modified AGI as shown in Table 1-3. Irs1040ez form Filing status. Irs1040ez form   Your filing status depends primarily on your marital status. Irs1040ez form For this purpose, you need to know if your filing status is single or head of household, married filing jointly or qualifying widow(er), or married filing separately. Irs1040ez form If you need more information on filing status, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Irs1040ez form Lived apart from spouse. Irs1040ez form   If you did not live with your spouse at any time during the year and you file a separate return, your filing status, for this purpose, is single. Irs1040ez form Modified adjusted gross income (AGI). Irs1040ez form   You can use Worksheet 1-1 to figure your modified AGI. Irs1040ez form If you made contributions to your IRA for 2013 and received a distribution from your IRA in 2013, see Both contributions for 2013 and distributions in 2013 , later. Irs1040ez form    Do not assume that your modified AGI is the same as your compensation. Irs1040ez form Your modified AGI may include income in addition to your compensation (discussed earlier) such as interest, dividends, and income from IRA distributions. Irs1040ez form Form 1040. Irs1040ez form   If you file Form 1040, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Irs1040ez form IRA deduction. Irs1040ez form Student loan interest deduction. Irs1040ez form Tuition and fees deduction. Irs1040ez form Domestic production activities deduction. Irs1040ez form Foreign earned income exclusion. Irs1040ez form Foreign housing exclusion or deduction. Irs1040ez form Exclusion of qualified savings bond interest shown on Form 8815. Irs1040ez form Exclusion of employer-provided adoption benefits shown on Form 8839. Irs1040ez form This is your modified AGI. Irs1040ez form Form 1040A. Irs1040ez form   If you file Form 1040A, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Irs1040ez form IRA deduction. Irs1040ez form Student loan interest deduction. Irs1040ez form Tuition and fees deduction. Irs1040ez form Exclusion of qualified savings bond interest shown on Form 8815. Irs1040ez form This is your modified AGI. Irs1040ez form Form 1040NR. Irs1040ez form   If you file Form 1040NR, refigure the amount on the page 1 “adjusted gross income” line without taking into account any of the following amounts. Irs1040ez form IRA deduction. Irs1040ez form Student loan interest deduction. Irs1040ez form Domestic production activities deduction. Irs1040ez form Exclusion of qualified savings bond interest shown on Form 8815. Irs1040ez form Exclusion of employer-provided adoption benefits shown on Form 8839. Irs1040ez form This is your modified AGI. Irs1040ez form Income from IRA distributions. Irs1040ez form   If you received distributions in 2013 from one or more traditional IRAs and your traditional IRAs include only deductible contributions, the distributions are fully taxable and are included in your modified AGI. Irs1040ez form Both contributions for 2013 and distributions in 2013. Irs1040ez form   If all three of the following apply, any IRA distributions you received in 2013 may be partly tax free and partly taxable. Irs1040ez form You received distributions in 2013 from one or more traditional IRAs, You made contributions to a traditional IRA for 2013, and Some of those contributions may be nondeductible contributions. Irs1040ez form (See Nondeductible Contributions and Worksheet 1-2, later. Irs1040ez form ) If this is your situation, you must figure the taxable part of the traditional IRA distribution before you can figure your modified AGI. Irs1040ez form To do this, you can use Worksheet 1-5, later. Irs1040ez form   If at least one of the above does not apply, figure your modified AGI using Worksheet 1-1, later. Irs1040ez form How To Figure Your Reduced IRA Deduction If you or your spouse is covered by an employer retirement plan and you did not receive any social security benefits, you can figure your reduced IRA deduction by using Worksheet 1-2. Irs1040ez form Figuring Your Reduced IRA Deduction for 2013. Irs1040ez form The Instructions for Form 1040, Form 1040A, and Form 1040NR include similar worksheets that you can use instead of the worksheet in this publication. Irs1040ez form If you or your spouse is covered by an employer retirement plan, and you received any social security benefits, see Social Security Recipients , earlier. Irs1040ez form Note. Irs1040ez form If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Irs1040ez form Worksheet 1-1. Irs1040ez form Figuring Your Modified AGI Use this worksheet to figure your modified AGI for traditional IRA purposes. Irs1040ez form 1. Irs1040ez form Enter your adjusted gross income (AGI) from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37, figured without taking into account the amount from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 1. Irs1040ez form   2. Irs1040ez form Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 2. Irs1040ez form   3. Irs1040ez form Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 3. Irs1040ez form   4. Irs1040ez form Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 4. Irs1040ez form   5. Irs1040ez form Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 5. Irs1040ez form   6. Irs1040ez form Enter any foreign housing deduction from Form 2555, line 50 6. Irs1040ez form   7. Irs1040ez form Enter any excludable savings bond interest from Form 8815, line 14 7. Irs1040ez form   8. Irs1040ez form Enter any excluded employer-provided adoption benefits from Form 8839, line 28 8. Irs1040ez form   9. Irs1040ez form Add lines 1 through 8. Irs1040ez form This is your Modified AGI for traditional IRA purposes 9. Irs1040ez form   Reporting Deductible Contributions If you file Form 1040, enter your IRA deduction on line 32 of that form. Irs1040ez form If you file Form 1040A, enter your IRA deduction on line 17 of that form. Irs1040ez form If you file Form 1040NR, enter your IRA deduction on line 32 of that form. Irs1040ez form You cannot deduct IRA contributions on Form 1040EZ or Form 1040NR-EZ. Irs1040ez form Self-employed. Irs1040ez form   If you are self-employed (a sole proprietor or partner) and have a SIMPLE IRA, enter your deduction for allowable plan contributions on Form 1040, line 28. Irs1040ez form If you file Form 1040NR, enter your deduction on line 28 of that form. Irs1040ez form Nondeductible Contributions Although your deduction for IRA contributions may be reduced or eliminated, contributions can be made to your IRA of up to the general limit or, if it applies, the Kay Bailey Hutchison Spousal IRA limit. Irs1040ez form The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Irs1040ez form Example. Irs1040ez form Tony is 29 years old and single. Irs1040ez form In 2013, he was covered by a retirement plan at work. Irs1040ez form His salary is $62,000. Irs1040ez form His modified AGI is $70,000. Irs1040ez form Tony makes a $5,500 IRA contribution for 2013. Irs1040ez form Because he was covered by a retirement plan and his modified AGI is above $69,000, he cannot deduct his $5,500 IRA contribution. Irs1040ez form He must designate this contribution as a nondeductible contribution by reporting it on Form 8606. Irs1040ez form Repayment of reservist distributions. Irs1040ez form   Nondeductible contributions may include repayments of qualified reservist distributions. Irs1040ez form For more information, see Qualified reservist repayments under How Much Can Be Contributed, earlier. Irs1040ez form Form 8606. Irs1040ez form   To designate contributions as nondeductible, you must file Form 8606. Irs1040ez form (See the filled-in Forms 8606 in this chapter. Irs1040ez form )   You do not have to designate a contribution as nondeductible until you file your tax return. Irs1040ez form When you file, you can even designate otherwise deductible contributions as nondeductible contributions. Irs1040ez form   You must file Form 8606 to report nondeductible contributions even if you do not have to file a tax return for the year. Irs1040ez form    A Form 8606 is not used for the year that you make a rollover from a qualified retirement plan to a traditional IRA and the rollover includes nontaxable amounts. Irs1040ez form In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. Irs1040ez form See Form 8606 under Distributions Fully or Partly Taxable, later. Irs1040ez form Failure to report nondeductible contributions. Irs1040ez form   If you do not report nondeductible contributions, all of the contributions to your traditional IRA will be treated like deductible contributions when withdrawn. Irs1040ez form All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Irs1040ez form Penalty for overstatement. Irs1040ez form   If you overstate the amount of nondeductible contributions on your Form 8606 for any tax year, you must pay a penalty of $100 for each overstatement, unless it was due to reasonable cause. Irs1040ez form Penalty for failure to file Form 8606. Irs1040ez form   You will have to pay a $50 penalty if you do not file a required Form 8606, unless you can prove that the failure was due to reasonable cause. Irs1040ez form Tax on earnings on nondeductible contributions. Irs1040ez form   As long as contributions are within the contribution limits, none of the earnings or gains on contributions (deductible or nondeductible) will be taxed until they are distributed. Irs1040ez form Cost basis. Irs1040ez form   You will have a cost basis in your traditional IRA if you made any nondeductible contributions. Irs1040ez form Your cost basis is the sum of the nondeductible contributions to your IRA minus any withdrawals or distributions of nondeductible contributions. Irs1040ez form    Commonly, distributions from your traditional IRAs will include both taxable and nontaxable (cost basis) amounts. Irs1040ez form See Are Distributions Taxable, later, for more information. Irs1040ez form Recordkeeping. Irs1040ez form There is a recordkeeping worksheet, Appendix A. Irs1040ez form Summary Record of Traditional IRA(s) for 2013 , that you can use to keep a record of deductible and nondeductible IRA contributions. Irs1040ez form Examples — Worksheet for Reduced IRA Deduction for 2013 The following examples illustrate the use of Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013. Irs1040ez form Example 1. Irs1040ez form For 2013, Tom and Betty file a joint return on Form 1040. Irs1040ez form They are both 39 years old. Irs1040ez form They are both employed and Tom is covered by his employer's retirement plan. Irs1040ez form Tom's salary is $59,000 and Betty's is $32,555. Irs1040ez form They each have a traditional IRA and their combined modified AGI, which includes $5,000 interest and dividend income, is $96,555. Irs1040ez form Because their modified AGI is between $95,000 and $115,000 and Tom is covered by an employer plan, Tom is subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Irs1040ez form For 2013, Tom contributed $5,500 to his IRA and Betty contributed $5,500 to hers. Irs1040ez form Even though they file a joint return, they must use separate worksheets to figure the IRA deduction for each of them. Irs1040ez form Tom can take a deduction of only $5,080. Irs1040ez form He can choose to treat the $5,080 as either deductible or nondeductible contributions. Irs1040ez form He can either leave the $420 ($5,500 − $5,080) of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Irs1040ez form He decides to treat the $5,080 as deductible contributions and leave the $420 of nondeductible contributions in his IRA. Irs1040ez form Using Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, Tom figures his deductible and nondeductible amounts as shown on Worksheet 1-2. Irs1040ez form Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated. Irs1040ez form Betty figures her IRA deduction as follows. Irs1040ez form Betty can treat all or part of her contributions as either deductible or nondeductible. Irs1040ez form This is because her $5,500 contribution for 2013 is not subject to the deduction phaseout discussed earlier under Limit if Covered by Employer Plan . Irs1040ez form She does not need to use Worksheet 1-2, Figuring Your Reduced IRA Deduction for 2013, because their modified AGI is not within the phaseout range that applies. Irs1040ez form Betty decides to treat her $5,500 IRA contributions as deductible. Irs1040ez form The IRA deductions of $5,080 and $5,500 on the joint return for Tom and Betty total $10,580. Irs1040ez form Example 2. Irs1040ez form For 2013, Ed and Sue file a joint return on Form 1040. Irs1040ez form They are both 39 years old. Irs1040ez form Ed is covered by his employer's retirement plan. Irs1040ez form Ed's salary is $45,000. Irs1040ez form Sue had no compensation for the year and did not contribute to an IRA. Irs1040ez form Sue is not covered by an employer plan. Irs1040ez form Ed contributed $5,500 to his traditional IRA and $5,500 to a traditional IRA for Sue (a Kay Bailey Hutchison Spousal IRA). Irs1040ez form Their combined modified AGI, which includes $2,000 interest and dividend income and a large capital gain from the sale of stock, is $180,555. Irs1040ez form Because the combined modified AGI is $115,000 or more, Ed cannot deduct any of the contribution to his traditional IRA. Irs1040ez form He can either leave the $5,500 of nondeductible contributions in his IRA or withdraw them by April 15, 2014. Irs1040ez form Sue figures her IRA deduction as shown on Worksheet 1-2. Irs1040ez form Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated. Irs1040ez form Worksheet 1-2. Irs1040ez form Figuring Your Reduced IRA Deduction for 2013 (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Irs1040ez form ) Note. Irs1040ez form If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Irs1040ez form IF you . Irs1040ez form . Irs1040ez form . Irs1040ez form AND your  filing status is . Irs1040ez form . Irs1040ez form . Irs1040ez form AND your modified AGI is over . Irs1040ez form . Irs1040ez form . Irs1040ez form THEN enter on  line 1 below . Irs1040ez form . Irs1040ez form . Irs1040ez form       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Irs1040ez form Enter applicable amount from table above 1. Irs1040ez form   2. Irs1040ez form Enter your modified AGI (that of both spouses, if married filing jointly) 2. Irs1040ez form     Note. Irs1040ez form If line 2 is equal to or more than the amount on line 1, stop here. Irs1040ez form  Your IRA contributions are not deductible. Irs1040ez form See Nondeductible Contributions , earlier. Irs1040ez form     3. Irs1040ez form Subtract line 2 from line 1. Irs1040ez form If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Irs1040ez form You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Irs1040ez form   4. Irs1040ez form Multiply line 3 by the percentage below that applies to you. Irs1040ez form If the result is not a multiple of $10, round it to the next highest multiple of $10. Irs1040ez form (For example, $611. Irs1040ez form 40 is rounded to $620. Irs1040ez form ) However, if the result is less than $200, enter $200. Irs1040ez form         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Irs1040ez form 5% (. Irs1040ez form 275) (by 32. Irs1040ez form 5% (. Irs1040ez form 325) if you are age 50 or older). Irs1040ez form All others, multiply line 3 by 55% (. Irs1040ez form 55) (by 65% (. Irs1040ez form 65) if you are age 50 or older). Irs1040ez form 4. Irs1040ez form   5. Irs1040ez form Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Irs1040ez form If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Irs1040ez form If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Irs1040ez form   6. Irs1040ez form Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Irs1040ez form If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Irs1040ez form 6. Irs1040ez form   7. Irs1040ez form IRA deduction. Irs1040ez form Compare lines 4, 5, and 6. Irs1040ez form Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Irs1040ez form If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Irs1040ez form   8. Irs1040ez form Nondeductible contribution. Irs1040ez form Subtract line 7 from line 5 or 6, whichever is smaller. Irs1040ez form  Enter the result here and on line 1 of your Form 8606 8. Irs1040ez form   Worksheet 1-2. Irs1040ez form Figuring Your Reduced IRA Deduction for 2013—Example 1 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Irs1040ez form ) Note. Irs1040ez form If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Irs1040ez form IF you . Irs1040ez form . Irs1040ez form . Irs1040ez form AND your  filing status is . Irs1040ez form . Irs1040ez form . Irs1040ez form AND your modified AGI is over . Irs1040ez form . Irs1040ez form . Irs1040ez form THEN enter on  line 1 below . Irs1040ez form . Irs1040ez form . Irs1040ez form       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Irs1040ez form Enter applicable amount from table above 1. Irs1040ez form 115,000 2. Irs1040ez form Enter your modified AGI (that of both spouses, if married filing jointly) 2. Irs1040ez form 96,555   Note. Irs1040ez form If line 2 is equal to or more than the amount on line 1, stop here. Irs1040ez form  Your IRA contributions are not deductible. Irs1040ez form See Nondeductible Contributions , earlier. Irs1040ez form     3. Irs1040ez form Subtract line 2 from line 1. Irs1040ez form If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Irs1040ez form You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Irs1040ez form 18,445 4. Irs1040ez form Multiply line 3 by the percentage below that applies to you. Irs1040ez form If the result is not a multiple of $10, round it to the next highest multiple of $10. Irs1040ez form (For example, $611. Irs1040ez form 40 is rounded to $620. Irs1040ez form ) However, if the result is less than $200, enter $200. Irs1040ez form         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Irs1040ez form 5% (. Irs1040ez form 275) (by 32. Irs1040ez form 5% (. Irs1040ez form 325) if you are age 50 or older). Irs1040ez form All others, multiply line 3 by 55% (. Irs1040ez form 55) (by 65% (. Irs1040ez form 65) if you are age 50 or older). Irs1040ez form 4. Irs1040ez form 5,080 5. Irs1040ez form Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Irs1040ez form If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Irs1040ez form If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Irs1040ez form 59,000 6. Irs1040ez form Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Irs1040ez form If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Irs1040ez form 6. Irs1040ez form 5,500 7. Irs1040ez form IRA deduction. Irs1040ez form Compare lines 4, 5, and 6. Irs1040ez form Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Irs1040ez form If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Irs1040ez form 5,080 8. Irs1040ez form Nondeductible contribution. Irs1040ez form Subtract line 7 from line 5 or 6, whichever is smaller. Irs1040ez form  Enter the result here and on line 1 of your Form 8606 8. Irs1040ez form 420 Worksheet 1-2. Irs1040ez form Figuring Your Reduced IRA Deduction for 2013—Example 2 Illustrated (Use only if you or your spouse is covered by an employer plan and your modified AGI falls between the two amounts shown below for your coverage situation and filing status. Irs1040ez form ) Note. Irs1040ez form If you were married and both you and your spouse contributed to IRAs, figure your deduction and your spouse's deduction separately. Irs1040ez form IF you . Irs1040ez form . Irs1040ez form . Irs1040ez form AND your  filing status is . Irs1040ez form . Irs1040ez form . Irs1040ez form AND your modified AGI is over . Irs1040ez form . Irs1040ez form . Irs1040ez form THEN enter on  line 1 below . Irs1040ez form . Irs1040ez form . Irs1040ez form       are covered by an employer plan single or head of household $59,000 $69,000     married filing jointly or qualifying widow(er) $95,000 $115,000     married filing separately $0 $10,000     are not covered by an employer plan, but your spouse is covered married filing jointly $178,000 $188,000     married filing separately $0 $10,000     1. Irs1040ez form Enter applicable amount from table above 1. Irs1040ez form 188,000 2. Irs1040ez form Enter your modified AGI (that of both spouses, if married filing jointly) 2. Irs1040ez form 180,555   Note. Irs1040ez form If line 2 is equal to or more than the amount on line 1, stop here. Irs1040ez form  Your IRA contributions are not deductible. Irs1040ez form See Nondeductible Contributions , earlier. Irs1040ez form     3. Irs1040ez form Subtract line 2 from line 1. Irs1040ez form If line 3 is $10,000 or more ($20,000 or more if married filing jointly or qualifying widow(er) and you are covered by an employer plan), stop here. Irs1040ez form You can take a full IRA deduction for contributions of up to $5,500 ($6,500 if you are age 50 or older) or 100% of your (and if married filing jointly, your spouse's) compensation, whichever is less 3. Irs1040ez form 7,445 4. Irs1040ez form Multiply line 3 by the percentage below that applies to you. Irs1040ez form If the result is not a multiple of $10, round it to the next highest multiple of $10. Irs1040ez form (For example, $611. Irs1040ez form 40 is rounded to $620. Irs1040ez form ) However, if the result is less than $200, enter $200. Irs1040ez form         Married filing jointly or qualifying widow(er) and you are covered by an employer plan, multiply line 3 by 27. Irs1040ez form 5% (. Irs1040ez form 275) (by 32. Irs1040ez form 5% (. Irs1040ez form 325) if you are age 50 or older). Irs1040ez form All others, multiply line 3 by 55% (. Irs1040ez form 55) (by 65% (. Irs1040ez form 65) if you are age 50 or older). Irs1040ez form 4. Irs1040ez form 4,100 5. Irs1040ez form Enter your compensation minus any deductions on Form 1040 or Form 1040NR, line 27 (deductible part of self-employment tax) and line 28 (self-employed SEP, SIMPLE, and qualified plans). Irs1040ez form If you are filing a joint return and your compensation is less than your spouse's, include your spouse's compensation reduced by his or her traditional IRA and Roth IRA contributions for this year. Irs1040ez form If you file Form 1040 or Form 1040NR, do not reduce your compensation by any losses from self-employment 5. Irs1040ez form 39,500 6. Irs1040ez form Enter contributions made, or to be made, to your IRA for 2013, but do not enter more than $5,500 ($6,500 if you are age 50 or older). Irs1040ez form If contributions are more than $5,500 ($6,500 if you are age 50 or older), see Excess Contributions , later. Irs1040ez form 6. Irs1040ez form 5,500 7. Irs1040ez form IRA deduction. Irs1040ez form Compare lines 4, 5, and 6. Irs1040ez form Enter the smallest amount (or a smaller amount if you choose) here and on the Form 1040, 1040A, or 1040NR line for your IRA, whichever applies. Irs1040ez form If line 6 is more than line 7 and you want to make a nondeductible contribution, go to line 8 7. Irs1040ez form 4,100 8. Irs1040ez form Nondeductible contribution. Irs1040ez form Subtract line 7 from line 5 or 6, whichever is smaller. Irs1040ez form  Enter the result here and on line 1 of your Form 8606 8. Irs1040ez form 1,400 What if You Inherit an IRA? If you inherit a traditional IRA, you are called a beneficiary. Irs1040ez form A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Irs1040ez form Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. Irs1040ez form Inherited from spouse. Irs1040ez form   If you inherit a traditional IRA from your spouse, you generally have the following three choices. Irs1040ez form You can: Treat it as your own IRA by designating yourself as the account owner. Irs1040ez form Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a: Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (s