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State Tax Preparation

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State Tax Preparation

State tax preparation 2. State tax preparation   Filing Requirements and Required Disclosures Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Annual Information ReturnsSupporting Organization Annual Information Return Unrelated Business Income Tax ReturnEstimated tax. State tax preparation Employment Tax ReturnsException. State tax preparation FUTA tax exception. State tax preparation FICA tax exemption election. State tax preparation Revoking the election. State tax preparation Definitions. State tax preparation Effect on employees. State tax preparation Political Organization Income Tax ReturnExempt function. State tax preparation Political organization taxable income. State tax preparation Separate fund. State tax preparation Failure to file. State tax preparation Failure to pay on time. State tax preparation Reporting Requirements for a Political OrganizationForm 8871 Form 8872 Donee Information ReturnCharitable deduction property. State tax preparation Publicly traded securities. State tax preparation Exceptions. State tax preparation Form 8283. State tax preparation Information Provided to DonorsDisclosure of Quid Pro Quo Contributions Acknowledgment of Charitable Contributions of $250 or More Acknowledgment of Vehicle Contribution Qualified Intellectual Property Report of Cash Received Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting FormsAnnual Information Return Public Inspection of Exemption Application Political Organization Reporting Forms Required DisclosuresSolicitation of Nondeductible Contributions Sales of Information or Services Available Free From Government Dues Used for Lobbying or Political Activities Prohibited Tax Shelter Transactions Miscellaneous RulesOrganizational Changes and Exempt Status Introduction Most exempt organizations (including private foundations) must file various returns and reports at some time during (or following the close of) their accounting period. State tax preparation Topics - This chapter discusses: Annual information returns Unrelated business income tax return Employment tax returns Political organization income tax return Reporting requirements for a political organization Donee information return Information provided to donors Report of cash received Public inspection of exemption applications, annual returns, and political organizations reporting forms Required disclosures Miscellaneous rules Useful Items - You may want to see: Publication 15 Circular E, Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 598 Tax on Unrelated Business Income of Exempt Organizations Form (and Instructions) 941 Employer's Quarterly Federal Tax Return 990 Return of Organization Exempt From Income Tax 990-EZ Short Form Return of Organization Exempt From Income Tax Schedule A (Form 990 or 990-EZ) Public Charity Status and Public Support Schedule B (Form 990, 990-EZ, or 990-PF) Schedule of Contributors Schedule C (Form 990 or 990-EZ) Political Campaign and Lobbying Activities Schedule D (Form 990) Supplemental Financial Statements Schedule E (Form 990 or 990-EZ) Schools Schedule F (Form 990) Statement of Activities Outside the United States Schedule G (Form 990 or 990-EZ) Supplemental Information Regarding Fundraising or Gaming Activities Schedule H (Form 990) Hospitals Schedule I (Form 990) Grants and Other Assistance to Organizations, Governments, and Individuals in the United States Schedule J (Form 990) Compensation Information Schedule K (Form 990) Supplemental Information on Tax-Exempt Bonds Schedule L (Form 990 or 990-EZ) Transactions With Interested Persons Schedule M (Form 990) Noncash Contributions Schedule N (Form 990 or 990-EZ) Liquidation, Termination, Dissolution, or Significant Disposition of Assets Schedule O (Form 990 or 990-EZ) Supplemental Information to Form 990 Schedule R (Form 990) Related Organizations and Unrelated Partnerships 990-PF Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation 990-BL Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons 990-T Exempt Organization Business Income Tax Return 990-W Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations 1120-POL U. State tax preparation S. State tax preparation Income Tax Return for Certain Political Organizations 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code 5768 Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation 6069 Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption from Employer Social Security and Medicare Taxes 8282 Donee Information Return 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8453-X Political Organization Declaration for Electronic Filing of Notice of Section 527 Status 8822-B Change of Address-Business 8868 Application for Extension of Time to File an Exempt Organization Return 8870 Information Return for Transfers Associated with Certain Personal Benefits Contracts 8871 Political Organization Notice of Section 527 Status 8872 Political Organization Report of Contributions and Expenditures 8886-T Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction 8899 Notice of Income from Donated Intellectual Property 8940 Request for Miscellaneous Determination See chapter 6 for information about getting these publications and forms. State tax preparation Annual Information Returns Every organization exempt from federal income tax under section 501(a) must file an Annual Exempt Organization Return except: A church, an interchurch organization of local units of a church, a convention or association of churches, An integrated auxiliary of a church, A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs, A school below college level affiliated with a church or operated by a religious order, Church-affiliated mission societies if more than half of their activities are conducted in, or are directed at persons in, foreign countries, An exclusively religious activity of any religious order, A state institution, the income of which is excluded from gross income under section 115, A corporation described in section 501(c)(1) that is organized under an Act of Congress, an instrumentality of the United States, and is exempt from Federal income taxes, A stock bonus, pension, or profit-sharing trust that qualifies under section 401 (required to file Form 5500, Annual Return/Report of Employee Benefit Plan), A religious or apostolic organization described in section 501(d) (required to file Form 1065, U. State tax preparation S. State tax preparation Return of Partnership Income), A governmental unit or an affiliate of a governmental unit that meets the requirements of Revenue Procedure 95-48, 1995-2 C. State tax preparation B. State tax preparation 418, www. State tax preparation irs. State tax preparation gov/pub/irs-tege/rp1995-48. State tax preparation pdf, A private foundation described in section 501(c)(3) and exempt under section 501(a) (required to file Form 990-PF, Return of Private Foundation), A political organization that is a state or local committee of a political party, a political committee of a state or local candidate, a caucus or association of state or local officials, or required to report under the Federal Election Campaign Act of 1971 as a political committee, An exempt organization (other than a private foundation) that normally has annual gross receipts of $50,000 or less, or A foreign organization, or an organization located in a U. State tax preparation S. State tax preparation possession, that normally has annual gross receipts from sources within the United States of $50,000 or less. State tax preparation Supporting Organization Annual Information Return For tax years ending after August 17, 2006, all section 509(a)(3) supporting organizations are required to file Form 990 or 990-EZ with the IRS regardless of the organization's gross receipts, unless it qualifies as one of the following: An integrated auxiliary of a church; The exclusively religious activities of a religious order; or An organization, the gross receipts of which are normally not more than $5,000, that supports a section 509(a)(3) religious order. State tax preparation If the organization is described in item (3) above, then it must submit Form 990-N (e-Postcard) unless it voluntarily files Form 990 or 990-EZ. State tax preparation On its annual information return, at Part I, Schedule A (Form 990 or 990-EZ) a supporting organization must: List the section 509(a)(3) organizations to which it provides support, Indicate whether it is a Type I, Type II, or Type III supporting organization, and Certify that the organization is not controlled directly or indirectly by disqualified persons (other than by foundation managers and other than one or more publicly supported organizations). State tax preparation Annual Electronic Filing Requirement for Small Tax-Exempt Organizations Small tax-exempt organizations with annual gross receipts normally $50,000 or less must submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, with the IRS each year, if they choose not to file a Form 990 or 990-EZ. State tax preparation Form 990-N requires the following information: The organization's legal name, and mailing address; Any name under which it operates and does business; Its Internet website address (if any); Its taxpayer identification number; The name and address of a principal officer; Organization's annual tax period; Verification that the organization's annual gross receipts are normally $50,000 or less; and Notification if the organization has terminated. State tax preparation Form 990-N is due by the 15th day of the fifth month after the close of the tax year. State tax preparation For tax years beginning after December 31, 2006, any organization that fails to meet its annual reporting requirement for 3 consecutive years will automatically lose its tax-exempt status. State tax preparation To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization. State tax preparation Exceptions. State tax preparation   This filing requirement does not apply to: Churches, their integrated auxiliaries, and conventions or associations of churches; Organizations that are included in a group return; Private foundations required to file Form 990-PF; and Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ. State tax preparation Forms 990 and 990-EZ Exempt organizations, other than private foundations, must file their annual information returns on Form 990 or 990-EZ, unless excepted from filing or allowed to submit Form 990-N, described earlier. State tax preparation Generally, political organizations with gross receipts of $25,000 ($100,000 for a qualified state or local political organization (QSLPO)) or more for the tax year are required to file Form 990 or 990-EZ unless specifically excepted from filing the annual return. State tax preparation The following political organizations are not required to file Form 990 or Form 990-EZ. State tax preparation A state or local committee of a political party. State tax preparation A political committee of a state or local candidate. State tax preparation A caucus or association of state or local officials. State tax preparation A political organization that is required to report as a political committee under the Federal Election Campaign Act. State tax preparation A 501(c) organization that has expenditures for influencing or attempting to influence the selection, nomination, election, or appointment of any individual for a federal, state, or local public office. State tax preparation Form 990-EZ. State tax preparation   This is a shortened version of Form 990. State tax preparation It is designed for use by small exempt organizations and nonexempt charitable trusts. State tax preparation   Beginning in tax year 2010, an organization can file either Form 990 or 990-EZ if it meets the following: Its gross receipts during the year are less than $200,000. State tax preparation Its total assets (line 25, column (B) of Form 990-EZ) at the end of the year are less than $500,000. State tax preparation If your organization does not meet either of these conditions, you cannot file Form 990-EZ. State tax preparation Instead you must file Form 990. State tax preparation Group return. State tax preparation   A group return on Form 990 may be filed by a central, parent, or like organization for two or more local organizations, none of which is a private foundation. State tax preparation This return is in addition to the central organization's separate annual return if it must file a return. State tax preparation It cannot be included in the group return. State tax preparation See the instructions for Form 990 for the conditions under which this procedure may be used. State tax preparation    In any year that an organization is properly included as a subordinate organization on a group return, it should not file its own Form 990. State tax preparation Schedule A (Form 990 or 990-EZ). State tax preparation   Organizations, other than private foundations, that are described in section 501(c)(3) and that are otherwise required to file Form 990 or 990-EZ must also complete Schedule A of that form. State tax preparation Schedule B (Form 990, Form 990-EZ, or 990-PF). State tax preparation   Organizations that file Form 990 or 990-EZ use this schedule to provide required information regarding their contributors. State tax preparation Schedule O (Form 990). State tax preparation   Organizations that file Form 990 must use this schedule to provide required additional information or if additional space is needed. State tax preparation   Other schedules may be required to be filed with Form 990 or 990-EZ. State tax preparation See the instructions for Form 990 or the instructions for Form 990-EZ for more information. State tax preparation Report significant new or changed program services and changes to organizational documents. State tax preparation    An organization should report new significant program services or significant changes in how it conducts program services, and significant changes to its organizational documents, on its Form 990 rather than in a letter to EO Determinations. State tax preparation EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report new services or significant changes, or changes to organizational documents. State tax preparation See Miscellaneous Rules, Organization Changes and Exempt Status, later. State tax preparation Form 990-PF All private foundations exempt under section 501(c)(3) must file Form 990-PF. State tax preparation These organizations are discussed in chapter 3. State tax preparation Electronic Filing You may be required to file Form 990, Form 990-EZ, or Form 990-PF, and related forms, schedules, and attachments electronically. State tax preparation If an organization is required to file a return electronically but does not, the organization is considered to have not filed its return. State tax preparation See Regulations section 301. State tax preparation 6033-4 for more information. State tax preparation The IRS may waive the requirement to file electronically in cases of undue hardship. State tax preparation For information on filing a waiver, see Notice 2010-13, 2010-4 I. State tax preparation R. State tax preparation B. State tax preparation 327, available at www. State tax preparation irs. State tax preparation gov/ir/2010-04_IRSB/ar14. State tax preparation html. State tax preparation Form 990. State tax preparation   An organization is required to file Form 990 electronically if it files at least 250 returns during the calendar year and has total assets of $10 million or more at the end of the tax year. State tax preparation Form 990-PF. State tax preparation   An organization is required to file Form 990-PF electronically if it files at least 250 returns during the calendar year. State tax preparation Due Date Forms 990, 990-EZ, or 990-PF must be filed by the 15th day of the fifth month after the end of your organization's accounting period. State tax preparation Thus, for a calendar year taxpayer, Forms 990, 990-EZ, or 990-PF is due May 15 of the following year. State tax preparation Extension of time to file. State tax preparation   Use Form 8868 to request an automatic 3-month extension of time to file Forms 990, 990-EZ, or 990-PF and also to apply for an additional (not automatic) 3-month extension if needed. State tax preparation   Do not apply for both the automatic 3-month extension and the additional 3-month extension at the same time. State tax preparation For more information, see Form 8868 and its instructions. State tax preparation   When filing Form 8868 for an automatic 3-month extension, neither a signature, nor an explanation is required. State tax preparation However, when filing Form 8868 for an additional 3-month extension, both a signature and an explanation are required. State tax preparation Application for exemption pending. State tax preparation   An organization that claims to be exempt under section 501(a) but has not established its exempt status by the due date for filing an information return must complete and file Form 990, 990-EZ, 990–N or 990-PF (if it considers itself a private foundation), unless the organization is exempt from Form 990-series filing requirements. State tax preparation If the organization's application is pending with the IRS, it must so indicate on Forms 990, 990-EZ, or 990-PF (whichever applies) by checking the application pending block at the top of page 1 of the return. State tax preparation For more information on the filing requirements, see the Instructions for Forms 990, 990-EZ, and 990-PF. State tax preparation State reporting requirements. State tax preparation   Copies of Forms 990, 990-EZ, or 990-PF may be used to satisfy state reporting requirements. State tax preparation See the instructions for those forms. State tax preparation Form 8870. State tax preparation   Organizations that filed a Form 990, 990-EZ, or 990-PF, and paid premiums or received transfers on certain life insurance, annuity, and endowment contracts (personal benefit contracts), must file Form 8870. State tax preparation For more information, see Form 8870 and the instructions for that form. State tax preparation Automatic Revocation If the organization fails to file a Form 990, 990-EZ, or 990-PF, or fails to submit a Form 990-N, as required, for 3 consecutive years, it will automatically lose its tax-exempt status by operation of law. State tax preparation The list of organizations whose tax-exempt status has been automatically revoked is available on IRS. State tax preparation gov. State tax preparation This list (Auto-Revocation List) may be viewed and searched on Exempt Organizations Select Check. State tax preparation The Auto-Revocation List includes each organization's name, Employer Identification Number (EIN) and last known address. State tax preparation It also includes the effective date of the automatic revocation and the date it was posted to the list. State tax preparation The IRS updates the list monthly to include additional organizations that lose their tax-exempt status. State tax preparation Tax Effect of Loss of Tax-Exempt Status If your organization’s tax-exempt status is automatically revoked, you may be required to file one of the following federal income tax returns and pay any applicable income taxes: Form 1120, U. State tax preparation S. State tax preparation Corporation Income Tax Return, due by the 15th day of the 3rd month after the end of your organization’s tax year, or Form 1041, U. State tax preparation S. State tax preparation Income Tax Return for Estates and Trusts, due by the 15th day of the 4th month after the end of your organization’s tax year. State tax preparation In addition, a section 501(c)(3) organization that loses its tax-exempt status cannot receive tax-deductible contributions and will not be identified in the IRS Business Master File extract as eligible to received tax-deductible contributions, or be included in Exempt Organizations Select Check (Pub 78 database). State tax preparation An organization whose exemption was automatically revoked must apply for tax exemption in order to regain its tax exemption (even if it was not originally required to apply). State tax preparation In some situations, an organization may be able to obtain exemption retroactive to its date of revocation. State tax preparation For more information about automatic revocation, go to IRS. State tax preparation gov and select Charities & Non-Profits and then select Revoked? Reinstated? Learn More. State tax preparation Penalties Penalties for failure to file. State tax preparation   Generally, an exempt organization that fails to file a required return must pay a penalty of $20 a day for each day the failure continues. State tax preparation The same penalty will apply if the organization does not give all the information required on the return or does not give the correct information. State tax preparation Maximum penalty. State tax preparation   The maximum penalty for any one return is the smaller of $10,000 or 5% of the organization's gross receipts for the year. State tax preparation Organization with gross receipts over $1 million. State tax preparation   For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000. State tax preparation Managers. State tax preparation   If the organization is subject to this penalty, the IRS may specify a date by which the return or correct information must be supplied by the organization. State tax preparation Failure to comply with this demand will result in a penalty imposed upon the manager of the organization, or upon any other person responsible for filing a correct return. State tax preparation The penalty is $10 a day for each day that a return is not filed after the period given for filing. State tax preparation The maximum penalty imposed on all persons with respect to any one return is $5,000. State tax preparation Exception for reasonable cause. State tax preparation   No penalty will be imposed if reasonable cause for failure to file timely can be shown. State tax preparation Unrelated Business Income Tax Return Even though your organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. State tax preparation Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. State tax preparation If your organization has $1,000 or more of unrelated business income, you must file Form 990-T in addition to your required annual information return. State tax preparation Estimated tax. State tax preparation   Quarterly estimated tax payments are due if your organization expects to owe $500 or more in tax including unrelated business income. State tax preparation Use Form 990-W to figure your organization's estimated tax payments. State tax preparation Travel tour programs. State tax preparation   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose to which tax exemption was granted to the organization. State tax preparation   Whether travel tour activities conducted by an organization are substantially related to the organization's tax exempt purpose is determined by looking at all the relevant facts and circumstances, including, but not limited to, how a travel tour is developed, promoted, and operated. State tax preparation Example. State tax preparation ABC, a university alumni association, is tax exempt as an educational organization under section 501(c)(3). State tax preparation As part of its activities, ABC operates a travel tour program. State tax preparation The program is open to all current members of ABC and their guests. State tax preparation ABC works with travel agents to schedule approximately ten tours annually to various destinations around the world. State tax preparation Members of ABC pay $1,000 to XYZ Travel Agency to participate in a tour. State tax preparation XYZ pays ABC a per person fee for each participant. State tax preparation Although the literature advertising the tours encourages ABC members to continue their lifelong learning by joining the tours, and a faculty member of ABC's related university frequently joins the tour as a guest of the alumni association, none of the tours include any scheduled instruction or curriculum related to the destinations being visited. State tax preparation The travel tours made available to ABC's members do not contribute importantly to the accomplishment of ABC's educational purpose. State tax preparation Rather, ABC's program is designed to generate revenues for ABC by regularly offering its members travel services. State tax preparation Therefore, ABC's tour program is an unrelated trade or business. State tax preparation For additional information on unrelated business income, see Publication 598 and the Instructions for Form 990-T. State tax preparation Employment Tax Returns Every employer, including an organization exempt from federal income tax, who pays wages to employees is responsible for withholding, depositing, paying, and reporting federal income tax, social security and Medicare (FICA) taxes, and federal unemployment tax (FUTA), unless that employer is specifically excepted by law from those requirements, or if the taxes clearly do not apply. State tax preparation For more information, obtain a copy of Publication 15, which summarizes the responsibilities of an employer, Publication 15-A, Publication 15-B, and Form 941. State tax preparation Small Business Health Care Tax Credit. State tax preparation   If your small tax-exempt organization provides health care coverage for your workers you may qualify for the small business health care tax credit. State tax preparation Go to IRS. State tax preparation gov and select Affordable Care Act Tax Provisions for more details. State tax preparation See Small Business Health Care Tax Credit at www. State tax preparation irs. State tax preparation gov/newsroom/article/0,,id=223666,00. State tax preparation html. State tax preparation Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. State tax preparation   The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC). State tax preparation The Act added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer's share of social security tax. State tax preparation The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013. State tax preparation This tax credit was extended through December 31, 2013, under the American Taxpayer Relief Act, passed on January 1, 2013. State tax preparation   The credit can be as high as $6,240 for qualified tax-exempt organizations. State tax preparation The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. State tax preparation The amount of the credit for qualified tax-exempt organizations may not exceed the organization's employer social security tax for the period for which the credit is claimed. State tax preparation   All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. State tax preparation The process for certifying veterans for this credit is the same for all employers. State tax preparation For more information, see Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and the instructions to Form 8850. State tax preparation Notice 2012-13, 2012-9 I. State tax preparation R. State tax preparation B. State tax preparation 421, also provides additional guidance on submission Form 8850. State tax preparation   Organizations described in section 501(c) and exempt from taxation under section 501(a) may claim the credit for qualified veterans who begin work on or after Nov. State tax preparation 22, 2011, and before January 1, 2013. State tax preparation After the required certification is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, Form 5884-C. State tax preparation File Form 5884-C after filing the related employment tax return for the employment tax period for which the credit is claimed. State tax preparation It is recommended that qualified tax-exempt employers do not reduce their required deposits in anticipation of any credit as the forms are processed separately. State tax preparation In addition to Form 5884-C and its instructions, tax-exempt employers should see Notice 2012-13 and the Frequently Asked Questions & Answers for more details for claiming the credit. State tax preparation Trust fund recovery penalty. State tax preparation   If any person required to collect, truthfully account for, and pay over any of these taxes willfully fails to satisfy any of these requirements or willfully tries in any way to evade or defeat any of them, that person will be subject to a penalty. State tax preparation The penalty is equal to the tax evaded, not collected, or not accounted for and paid over. State tax preparation The term person includes: An officer or employee of a corporation, or A member or employee of a partnership. State tax preparation Exception. State tax preparation   The penalty is not imposed on any unpaid volunteer director or member of a board of trustees of an exempt organization if the unpaid volunteer serves solely in an honorary capacity, does not participate in the day-to-day or financial operations of the organization, and does not have actual knowledge of the failure on which the penalty is imposed. State tax preparation   This exception does not apply if it results in no one being liable for the penalty. State tax preparation FICA and FUTA tax exceptions. State tax preparation   Payments for services performed by a minister of a church in the exercise of the ministry, or a member of a religious order performing duties required by the order, are generally not subject to FICA or FUTA taxes. State tax preparation FUTA tax exception. State tax preparation   Payments for services performed by an employee of a religious, charitable, educational, or other organization described in section 501(c)(3) that are generally subject to FICA taxes if the payments are $100 or more for the year, are not subject to FUTA taxes. State tax preparation FICA tax exemption election. State tax preparation   Churches and qualified church-controlled organizations can elect exemption from employer FICA taxes by filing Form 8274. State tax preparation   To elect the exemption, Form 8274 must be filed before the first date on which a quarterly employment tax return would otherwise be due from the electing organization. State tax preparation The organization can make the election only if it is opposed for religious reasons to the payment of FICA taxes. State tax preparation   The election applies to payments for services of current and future employees other than services performed in an unrelated trade or business. State tax preparation Revoking the election. State tax preparation   The election can be revoked by the IRS if the organization fails to file Form W-2, Wage and Tax Statement, for 2 years and fails to furnish certain information upon request by the IRS. State tax preparation Such revocation will apply retroactively to the beginning of the 2-year period. State tax preparation Definitions. State tax preparation   For purposes of this election, the term church means a church, a convention or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or by a convention or association of churches. State tax preparation   The term qualified church-controlled organization means any church-controlled section 501(c)(3) tax-exempt organization, other than an organization that both: Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public at other than a nominal charge that is substantially less than the cost of providing such goods, services, or facilities, and Normally receives more than 25% of its support from the sum of governmental sources and receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities that are not unrelated trades or businesses. State tax preparation Effect on employees. State tax preparation   If a church or qualified church-controlled organization has made an election, payment for services performed for that church or organization, other than in an unrelated trade or business, will not be subject to FICA taxes. State tax preparation However, the employee, unless otherwise exempt, will be subject to self-employment tax on the income. State tax preparation The tax applies to income of $108. State tax preparation 28 or more for the tax year from that church or organization, and no deductions for trade or business expenses are allowed against this self-employment income. State tax preparation   Schedule SE (Form 1040), Self-Employment Tax, should be attached to the employee's income tax return. State tax preparation Political Organization Income Tax Return Generally, a political organization is treated as an organization exempt from tax. State tax preparation Certain political organizations, however, must file an annual income tax return, Form 1120-POL, U. State tax preparation S. State tax preparation Income Tax Return for Certain Political Organizations, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527. State tax preparation A political organization that has $25,000 ($100,000 for a qualified state or local political organization) or more in gross receipts for the tax year must file Form 990 or Form 990-EZ (and Schedule B of the form), unless excepted. State tax preparation See Forms 990 and 990-EZ , earlier. State tax preparation Political organization. State tax preparation   A political organization is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. State tax preparation Exempt function. State tax preparation   An exempt function means influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, local public office or office in a political organization, or the election of the Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. State tax preparation It also includes certain office expenses of a holder of public office or an office in a political organization. State tax preparation Certain political organizations are required to notify the IRS that they are section 527 organizations. State tax preparation These organizations must use Form 8871. State tax preparation Some of these section 527 organizations must use Form 8872 to file periodic reports with the IRS disclosing their contributions and expenditures. State tax preparation For a discussion on these forms, see Reporting Requirements for a Political Organization, later. State tax preparation Political organization taxable income. State tax preparation   Political organization taxable income is the excess of: Gross income for the tax year (excluding exempt function income) minus Deductions directly connected with the earning of gross income. State tax preparation To figure taxable income, allow for a $100 specific deduction, but do not allow for the net operating loss deduction, the dividends-received deduction, and other special deductions for corporations. State tax preparation Exempt organization not a political organization. State tax preparation   An organization exempt under section 501(c) that spends any amount for an exempt function must file Form 1120-POL for any year which it has political taxable income. State tax preparation These organizations must include in gross income the lesser of: The total amount of its exempt function expenditures, or The organization's net investment income. State tax preparation Separate fund. State tax preparation   A section 501(c) organization can set up a separate segregated fund that will be treated as an independent political organization. State tax preparation The earnings and expenditures made by the separate fund will not be attributed to the section 501(c) organization. State tax preparation Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office. State tax preparation Due date. State tax preparation   Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. State tax preparation Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. State tax preparation If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. State tax preparation    Form 1120-POL is not required of an exempt organization that makes expenditures for political purposes if its gross income does not exceed its directly connected deductions by more than $100 for the tax year. State tax preparation Extension of time to file. State tax preparation    Use Form 7004 to request an automatic 6-month extension of time to file Form 1120-POL. State tax preparation The extension will be granted if you complete Form 7004 properly, make a proper estimate of the tax (if applicable), file Form 1120-POL by the due date, and pay any tax due. State tax preparation Failure to file. State tax preparation   A political organization that fails to file Form 1120-POL is subject to a penalty equal to 5% of the tax due for each month (or partial month) the return is late up to a maximum of 25% of the tax due, unless the organization shows the failure was due to reasonable cause. State tax preparation For more information about filing Form 1120-POL, refer to the instructions accompanying the form. State tax preparation Failure to pay on time. State tax preparation   An organization that does not pay the tax when due generally may have to pay a penalty of 1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. State tax preparation The penalty will not be imposed if the organization can show that the failure to pay on time was due to reasonable cause. State tax preparation Reporting Requirements for a Political Organization Certain political organizations are required to notify the IRS that the organization is to be treated as a section 527 political organization. State tax preparation The organization is also required to periodically report certain contributions received and expenditures made by the organization. State tax preparation To notify the IRS of section 527 treatment, an organization must file Form 8871. State tax preparation To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872. State tax preparation Form 8871 A political organization must electronically file Form 8871 to notify the IRS that it is to be treated as a section 527 organization. State tax preparation However, an organization is not required to file Form 8871 if: It reasonably expects its annual gross receipts to always be less than $25,000. State tax preparation It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U. State tax preparation S. State tax preparation C. State tax preparation 431(4)). State tax preparation It is a state or local candidate committee. State tax preparation It is a state or local committee of a political party. State tax preparation It is a section 501(c) organization that has made an “exempt function expenditure. State tax preparation ” All other political organizations are required to file Form 8871. State tax preparation An organization must provide on Form 8871: Its name and address (including any business address, if different) and its electronic mailing address; Its purpose; The names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its board of directors; The name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4)); and Whether it intends to claim an exemption from filing Form 8872, Form 990, or Form 990-EZ. State tax preparation Employer identification number. State tax preparation   If your organization needs an EIN, you can apply for one: Online—Click on the Employer ID Numbers (EINs) link at www. State tax preparation IRS. State tax preparation gov/businesses/small. State tax preparation By telephone at 1-800-829-4933 from 7:00 a. State tax preparation m. State tax preparation to 10:00 p. State tax preparation m. State tax preparation in the organization's local time zone. State tax preparation By mailing or faxing Form SS-4. State tax preparation   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. State tax preparation Due dates. State tax preparation   The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. State tax preparation If there is a material change, an amended Form 8871 must be filed within 30 days of the material change. State tax preparation When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination. State tax preparation   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. State tax preparation How to file. State tax preparation   An organization must file Form 8871 electronically via the IRS Internet website at www. State tax preparation IRS. State tax preparation gov/polorgs (Keyword: political orgs). State tax preparation Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status. State tax preparation   After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. State tax preparation Upon receipt of the Form 8453-X, the IRS will send the organization a username and password that must be used to file an amended or final Form 8871 or to electronically file Form 8872. State tax preparation Penalties Failure to file. State tax preparation   An organization that is required to file Form 8871, but fails to do so on a timely basis, will not be treated as a tax-exempt section 527 organization for any period before the date Form 8871 is filed. State tax preparation Also, the taxable income of the organization for that period will include its exempt function income (including contributions received, membership dues, and political fundraising receipts) minus any deductions directly connected with the production of that income. State tax preparation   Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. State tax preparation If an organization is treated as not being a tax-exempt section 527 organization, the taxable income of the organization will be determined by considering any exempt function income and deductions during the period beginning on the date of the material change and ending on the date that the amended Form 8871 is filed. State tax preparation    The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. State tax preparation Fraudulent returns. State tax preparation   Any individual or corporation that willfully delivers or discloses to the IRS any list, return, account, statement or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned for not more than 1 year or both. State tax preparation Waiver of penalties. State tax preparation   The IRS may waive any additional tax assessed on an organization for failure to file Form 8871 if the failure was due to reasonable cause and not willful neglect. State tax preparation Additional information. State tax preparation   For more information on Form 8871, see the form and its instructions. State tax preparation For a discussion on the public inspection requirements for the form, see Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms , later. State tax preparation Form 8872 Every tax-exempt section 527 political organization that accepts a contribution or makes an expenditure, for an exempt function during the calendar year, must file Form 8872 except: A political organization that is not required to file Form 8871 (discussed earlier). State tax preparation A political organization that is subject to tax on its income because it did not file or amend Form 8871. State tax preparation A qualified state or local political organization (QSLPO), discussed below. State tax preparation All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872. State tax preparation Qualified state or local political organization. State tax preparation   A state or local political organization may be a QSLPO if: All of its political activities relate solely to state or local public office (or office in a state or local political organization). State tax preparation It is subject to a state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS. State tax preparation The state agency and the organization make the reports publicly available. State tax preparation No federal candidate or office holder: Controls or materially participates in the direction of the organization, Solicits contributions for the organization, or Directs the disbursements of the organization. State tax preparation Information required on Form 8872. State tax preparation   If an organization pays an individual $500 or more for the calendar year, the organization is required to disclose the individual's name, address, occupation, employer, amount of the expense, the date the expense was paid, and the purpose of the expense on Form 8872. State tax preparation   If an organization receives contributions of $200 or more from one contributor for the calendar year, the organization must disclose the donor's name, address, occupation, employer, and the date the contributions were made. State tax preparation   For additional information that is required, see Form 8872. State tax preparation Due dates. State tax preparation   The due dates for filing Form 8872 vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election is held, or any other calendar year (a nonelection year). State tax preparation   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. State tax preparation Election year filing. State tax preparation    In election years, Form 8872 must be filed on either a quarterly or a monthly basis. State tax preparation Both a pre-election report and a post-election report are also required to be filed in an election year. State tax preparation An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). State tax preparation Nonelection year filing. State tax preparation    In nonelection years, the form must be filed on a semiannual or monthly basis. State tax preparation A complete listing of these filing periods are in the Form 8872 Instructions. State tax preparation A nonelection year is any odd-numbered year. State tax preparation How to file. State tax preparation   Form 8872 can be filed either electronically or by mail. State tax preparation However, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically. State tax preparation    To file by mail, send Form 8872 to the:   Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0027 Electronic filing. State tax preparation   File electronically via the IRS internet website at www. State tax preparation IRS. State tax preparation gov/polorgs. State tax preparation You will need a user ID and password to electronically file Form 8872. State tax preparation Organizations that have completed the electronic filing of Form 8871 and submitted a completed and signed Form 8453-X will receive a username and password in the mail. State tax preparation   Organizations that have completed the electronic filing of Form 8871, but have not received their user ID and password can request one by writing to the following address: Internal Revenue Service Attn: Request for 8872 Password Mail Stop 6273 Ogden, UT 84201 Lost username and password. State tax preparation   If you have forgotten or misplaced the username and password issued to your organization after you filed your initial Form 8871, send a letter requesting a new username and password to the address under Electronic filing. State tax preparation You can also fax your request to (801) 620-3249. State tax preparation It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. State tax preparation Penalty A penalty will be imposed if the organization is required to file Form 8872 and it: Fails to file the form by the due date, or Files the form but fails to report all of the information required or reports incorrect information. State tax preparation The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. State tax preparation Fraudulent returns. State tax preparation   Any individual or corporation that willfully delivers or discloses any list, return, account, statement, or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned for not more than 1 year, or both. State tax preparation Waiver of penalties. State tax preparation   The IRS may waive any additional tax assessed on an organization for failure to file Form 8872 if the failure was due to reasonable cause and not willful neglect. State tax preparation Donee Information Return Dispositions of donated property. State tax preparation   If an organization receives charitable deduction property and within three years sells, exchanges, or otherwise disposes of the property, the organization must file Form 8282, Donee Information Return. State tax preparation However, an organization is not required to file Form 8282 if: The property is valued at $500 or less, or The property is consumed or distributed for charitable purposes. State tax preparation   Form 8282 must be filed with the IRS within 125 days after the disposition. State tax preparation Additionally, a copy of Form 8282 must be given to the donor. State tax preparation If the organization fails to file the required information return, penalties may apply. State tax preparation Charitable deduction property. State tax preparation   This is any property (other than money or publicly traded securities) for which the donee organization signed an appraisal summary or Form 8283, Noncash Charitable Contributions. State tax preparation Publicly traded securities. State tax preparation   These are securities for which market quotations are readily available on an established securities market as of the date of the contribution. State tax preparation Appraisal summary. State tax preparation   If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property, see the Exceptions. State tax preparation below. State tax preparation Exceptions. State tax preparation   A written appraisal is not needed if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane), if your deduction for the vehicle is limited to the gross proceeds from its sale, Intellectual property, Certain securities considered to have market quotations readily available (see Regulations section 1. State tax preparation 170A-13(c)(7)(xi)(B)), Inventory and other property donated by a corporation that are qualified contributions for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A), or Any donation of stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. State tax preparation   The donee organization is not a qualified appraiser for the purpose of valuing the donated property. State tax preparation For more information, get Publication 561, Determining the Value of Donated Property. State tax preparation Form 8283. State tax preparation   For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. State tax preparation The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. State tax preparation The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. State tax preparation The signature does not represent concurrence in the appraised value of the contributed property. State tax preparation A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. State tax preparation The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. State tax preparation A copy of Form 8283 must be given to the donee. State tax preparation Information Provided to Donors In some situations, a donor must obtain certain information from a donee organization to obtain a deduction for a charitable contribution. State tax preparation In other situations, the donee organization is required to provide information to the donor. State tax preparation A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. State tax preparation (See Disclosure statement. State tax preparation later. State tax preparation ) This is a payment a donor makes to a charity partly as a contribution and partly for goods or services. State tax preparation See Quid pro quo contribution below for an example. State tax preparation Failure to make the required disclosure may result in a penalty to the organization. State tax preparation A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgment from the charitable organization. State tax preparation In certain circumstances, an organization may be able to meet both of these requirements with the same written document. State tax preparation Disclosure of Quid Pro Quo Contributions A charitable organization must provide a written disclosure statement to donors of a quid pro quo contribution over $75. State tax preparation Quid pro quo contribution. State tax preparation   A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. State tax preparation Your charitable organization must provide the donor a written statement informing the donor of the fair market value of the items or services it provided in exchange for the contribution. State tax preparation Generally, a written statement is required for each payment, whenever the contribution portion is over $75. State tax preparation Example. State tax preparation If a donor gives your charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. State tax preparation In this example, the charitable part of the payment is $60. State tax preparation Even though the deductible part of the payment is not more than $75, a written statement must be filed because the total payment is more than $75. State tax preparation If your organization fails to disclose quid pro quo contributions, the organization may be subject to a penalty. State tax preparation Disclosure statement. State tax preparation   The required written disclosure statement must: Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the fair market value of goods or services provided by the charity, and Provide the donor with a good faith estimate of the fair market value of the goods or services that the donor received. State tax preparation The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. State tax preparation If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when it actually receives the contribution. State tax preparation   No disclosure statement is required if any of the following are true. State tax preparation The goods or services given to a donor have insubstantial value as described in Revenue Procedure 90-12, 1990-1 C. State tax preparation B. State tax preparation 471, Revenue Procedure 90-12, and Revenue Procedure 92-49, 1992-1 C. State tax preparation B. State tax preparation 507 (as adjusted for inflation), Revenue Procedure 92-49. State tax preparation There is no donative element involved in a particular transaction with a charity (for example, there is generally no donative element involved in a visitor's purchase from a museum gift shop). State tax preparation There is only an intangible religious benefit provided to the donor. State tax preparation The intangible religious benefit must be provided to the donor by an organization organized exclusively for religious purposes, and must be of a type that generally is not sold in a commercial transaction outside the donative context. State tax preparation For example, a donor who, for a payment, is granted admission to a religious ceremony for which there is no admission charge is provided an intangible religious benefit. State tax preparation A donor is not provided intangible religious benefits for payments made for tuition for education leading to a recognized degree, travel services, or consumer goods. State tax preparation The donor makes a payment of $75 or less per year and receives only annual membership benefits that consist of: Any rights or privileges (other than the right to purchase tickets for college athletic events) that the taxpayer can exercise often during the membership period, such as free or discounted admissions or parking or preferred access to goods or services, or Admission to events that are open only to members and the cost per person of which is within the limits for low-cost articles described in Revenue Procedure 90-12 (as adjusted for inflation), Revenue Procedure 90-12. State tax preparation Good faith estimate of fair market value (FMV). State tax preparation   An organization can use any reasonable method to estimate the FMV of goods or services it provided to a donor, as long as it applies the method in good faith. State tax preparation   The organization can estimate the FMV of goods or services that generally are not commercially available by using the FMV of similar or comparable goods or services. State tax preparation Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued. State tax preparation Example 1. State tax preparation A charity provides a 1-hour tennis lesson with a tennis professional for the first $500 payment it receives. State tax preparation The tennis professional provides 1-hour lessons on a commercial basis for $100. State tax preparation A good faith estimate of the lesson's FMV is $100. State tax preparation Example 2. State tax preparation For a payment of $50,000, a museum allows a donor to hold a private event in a room of the museum. State tax preparation A good faith estimate of the FMV of the right to hold the event in the museum can be made by using the cost of renting a hotel ballroom with a capacity, amenities, and atmosphere comparable to the museum room, even though the hotel ballroom lacks the unique art displayed in the museum room. State tax preparation If the hotel ballroom rents for $2,500, a good faith estimate of the FMV of the right to hold the event in the museum is $2,500. State tax preparation Example 3. State tax preparation For a payment of $1,000, a charity provides an evening tour of a museum conducted by a well-known artist. State tax preparation The artist does not provide tours on a commercial basis. State tax preparation Tours of the museum normally are free to the public. State tax preparation A good faith estimate of the FMV of the evening museum tour is $0 even though it is conducted by the artist. State tax preparation Penalty for failure to disclose. State tax preparation   A penalty is imposed on a charity that does not make the required disclosure of a quid pro quo contribution of more than $75. State tax preparation The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing. State tax preparation The charity can avoid the penalty if it can show that the failure was due to reasonable cause. State tax preparation Acknowledgment of Charitable Contributions of $250 or More A donor can deduct a charitable contribution of $250 or more only if the donor has a written acknowledgment from the charitable organization. State tax preparation The donor must get the acknowledgment by the earlier of: The date the donor files the original return for the year the contribution is made, or The due date, including extensions, for filing the return. State tax preparation The donor is responsible for requesting and obtaining the written acknowledgment from the donee. State tax preparation A charitable organization that receives a payment made as a contribution is treated as the donee organization for this purpose even if the organization (according to the donor's instructions or otherwise) distributes the amount received to one or more charities. State tax preparation Quid pro quo contribution. State tax preparation   If the donee provides goods or services to the donor in exchange for the contribution (a quid pro quo contribution), the acknowledgment must include a good faith estimate of the value of the goods or services. State tax preparation See Disclosure of Quid Pro Quo Contributions earlier. State tax preparation Form of acknowledgment. State tax preparation   Although there is no prescribed format for the written acknowledgment, it must provide enough information to substantiate the amount of the contribution. State tax preparation For more information, see IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements. State tax preparation Cash contributions. State tax preparation   To deduct a contribution of cash, a check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee's name, date, and amount of the contribution. State tax preparation In the case of a lump-sum contribution (rather than a contribution by payroll deduction) made through the Combined Federal Campaign or a similar program such as a United Way Campaign, the written communication must include the name of the donee organization that is the ultimate recipient of the charitable contribution. State tax preparation Contributions by payroll deduction. State tax preparation   An organization may substantiate an employee's contribution by deduction from its payroll by: A pay stub, Form W-2, or other document showing a contribution to a donee organization, together with A pledge card or other document from the donee organization that shows its name. State tax preparation   For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions. State tax preparation The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution. State tax preparation Acknowledgment of Vehicle Contribution If an exempt organization receives a contribution of a qualified vehicle with a claimed value of more than $500, the donee organization is required to provide a contemporaneous written acknowledgment to the donor. State tax preparation The donee organization can use a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, for the contemporaneous written acknowledgment. State tax preparation See section 3. State tax preparation 03 of Notice 2005-44 for guidance on the information that must be included in a contemporaneous written acknowledgment and the deadline for furnishing the acknowledgment to the donor. State tax preparation Any donee organization that provides a contemporaneous written acknowledgment to a donor is required to report to the IRS the information contained in the acknowledgment. State tax preparation The report is due by February 28 (March 31 if filing electronically) of the year following the year in which the donee organization provides the acknowledgment to the donor. State tax preparation The organization must file the report on Copy A of Form 1098-C. State tax preparation An organization that files Form 1098-C on paper should send it with Form 1096, Annual Summary and Transmittal of U. State tax preparation S. State tax preparation Information Returns. State tax preparation See the Instructions for Form 1096 for the correct filing location. State tax preparation An organization that is required to file 250 or more Forms 1098-C during the calendar year must file the forms electronically or magnetically. State tax preparation Specifications for filing Form 1098-C electronically or magnetically can be found in Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically at www. State tax preparation IRS. State tax preparation gov/pub/irs-pdf/p1220. State tax preparation pdf. State tax preparation Acknowledgment For a contribution of a qualified vehicle with a claimed value of $500 or less, do not file Form 1098-C. State tax preparation However, you can use it as the contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. State tax preparation See the Instructions for Form 1098-C. State tax preparation Generally, the organization should complete Form 1098-C as the written acknowledgment to the donor and the IRS. State tax preparation The contents of the acknowledgment depend upon whether the organization: Sells a qualified vehicle without any significant intervening use or material improvement, Intends to make a significant intervening use of or material improvement to a qualified vehicle prior to sale, or Sells a qualified vehicle to a needy individual at a price significantly below fair market value, or a gratuitous transfer to a needy individual in direct furtherance of a charitable purpose of the organization of relieving the poor and distressed or the underprivileged who are in need of a means of transportation. State tax preparation For more information on the acknowledgment, see Notice 2005-44, 2005-25 I. State tax preparation R. State tax preparation B. State tax preparation 1287, at www. State tax preparation irs. State tax preparation gov/irb/2005-25_IRB/2005-25_IRB/ar09. State tax preparation html. State tax preparation Material improvements or significant intervening use. State tax preparation   To constitute significant intervening use, the organization must actually use the vehicle to substantially further the organization's regularly conducted activities, and the use must be significant, not incidental. State tax preparation Factors in determining whether a use is a significant intervening use depend on the nature, extent, frequency, and duration. State tax preparation For this purpose, use includes providing transportation on a regular basis for a significant period of time or significant use directly related to training in vehicle repair. State tax preparation Use does not include the use of a vehicle to provide training in business skills, such as marketing or sales. State tax preparation Examples of significant use include: Driving a vehicle every day for 1 year to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. State tax preparation Driving a vehicle for 10,000 miles over a 1-year period to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. State tax preparation   Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly increases the value. State tax preparation To be a material improvement, the improvement cannot be funded by an additional payment to the organization from the donor of the vehicle. State tax preparation Material improvements do not include cleaning, minor repairs, routine maintenance, painting, removal of dents or scratches, cleaning or repair of upholstery, and installation of theft deterrent devices. State tax preparation Penalties. State tax preparation   If your charitable organization receives contributions of used motor vehicles, boats, and airplanes valued over $500 it may be subject to a penalty if it knowingly: Fails to furnish an acknowledgement in a timely manner, showing the required information, or Furnishes a false or fraudulent acknowledgement of the contribution. State tax preparation    Other penalties may apply. State tax preparation See Part O in the 2012 General Instructions for Certain Information Returns. State tax preparation   An acknowledgment containing a certification will be presumed to be false or fraudulent if the qualified vehicle is sold to a buyer other than a needy individual without a significant intervening use or material improvement within 6 months of the date of the contribution. State tax preparation   If a charity sells a donated vehicle at auction, the IRS will not accept as substantiation an acknowledgment from the charity stating that the vehicle is to be transferred to a needy individual for significantly below fair market value. State tax preparation Vehicles sold at auction are not sold at prices significantly below fair market value, and the IRS will not treat vehicles sold at auction as qualifying for this exception. State tax preparation   The penalty for a false or fraudulent acknowledgment where the donee certifies that the vehicle will not be transferred for money, other property, or services before completion of material improvements or significant intervening use or the donee certifies that the vehicle is to be transferred to a needy individual for significantly below fair market value in furtherance of the donee's charitable purpose is the larger of $5,000 or the claimed value of the vehicle multiplied by 39. State tax preparation 6%. State tax preparation   The penalty for an acknowledgment relating to a qualified vehicle being sold in an arm's length transaction to an unrelated party is the larger of the gross proceeds from the sale or the sales price stated in the acknowledgment multiplied by 39. State tax preparation 6%. State tax preparation Qualified Intellectual Property A taxpayer who contributes qualified intellectual property to a charity may be entitled to a charitable deduction, in addition to any initial deduction allowed in the year of contribution. State tax preparation The additional deduction is based on a specified percentage of the qualified donee income with respect to the qualified intellectual property. State tax preparation To qualify for the additional charitable deduction, the donor must provide notice to the donee at the time of the contribution that the donor intends to treat the contribution as qualified intellectual property contribution for purposes of sections 170(m) and 6050L. State tax preparation Every donee organization described in section 170(c) (except a private foundation as defined in section 509(a) that is not described in section 170(b)(1)(F)) that receives or accrues net income from a charitable gift of qualified intellectual property must file Form 8899. State tax preparation Form 8899. State tax preparation   Form 8899, Notice of Income From Donated Intellectual Property, is used by a donee to report net income from qualified intellectual property to the donor of the property and to the IRS and is due by the last day of the first full month following the close of the donee’s tax year. State tax preparation This form must be filed for each tax year of the donee in which the donated property produces net income, but only if all or part of that tax year occurs during the 10-year period beginning on the date of the contribution and that tax year does not begin after the expiration of the legal life of the donated property. State tax preparation Qualified donee income. State tax preparation   Qualified donee income is any net income received by or accrued to the donee that is properly allocable to the qualified intellectual property for the tax year of the donee which ends within or with the tax year of the donor. State tax preparation Income is not treated as allocated to qualified intellectual property if it is received or accrued after the earlier of the expiration of the legal life of the qualified intellectual property, or the 10-year period beginning with the date of
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Mobile App Gallery API Documentation

About the API

The USA.gov Mobile Apps Gallery and GobiernoUSA.gov Aplicaciones (apps) móviles feature mobile apps and websites from government agencies on a variety of platforms in English and Spanish.

The Mobile App Gallery API can be used to retrieve information about all of the apps in the galleries.

If you are using the Mobile App Gallery API and have feedback or want to tell us about your product, please e-mail us.

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Accessing the API

Our Mobile App Gallery API is accessible via HTTP GET requests and does not require a login or API key to use.

The base URL for the API is http://apps.usa.gov/apps-gallery/api/. Append the API call you'd like to make to this URL.

There are 4 URLs available to query against.

Query Examples

Error Handling

  • HTTP Code 500 = internal server error
  • HTTP Code 200 = results found
  • HTTP Code 404 = query error

JSONP

API Data Model

The following fields are associated with mobile apps. Please note that not every record has data in every field, and the API will only return completed fields.

  • Id - Unique Sytem Id of the app.
  • Name – The name of the app.
  • Organization – The agency or organization for the app.
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The State Tax Preparation

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