Instructions For Form 8606 - Nondeductible Iras

Traditional IRAs

the same manner as traditional IRA

Contributions. You can contribute to

distributions.

a Roth IRA for 2010 only if your 2010

For purposes of Form 8606, a

modified adjusted gross income (AGI)

SIMPLE IRAs

traditional IRA is an individual

for Roth IRA purposes is less than:

retirement account or an individual

•

Your participation in your employer’s

$10,000 if married filing separately

retirement annuity other than a SEP,

SIMPLE IRA plan does not prevent you

and you lived with your spouse at any

SIMPLE, or Roth IRA.

from making contributions to a

time in 2010,

Contributions. An overall contribution

•

traditional or Roth IRA.

$177,000 if married filing jointly or

limit applies to traditional IRAs and

qualifying widow(er), or

Roth IRAs

Roth IRAs. See Overall Contribution

•

$120,000 if single, head of

Limit for Traditional and Roth IRAs on

A Roth IRA is similar to a traditional

household, or if married filing

page 3. Contributions to a traditional

IRA, but has the following features.

separately and you did not live with

•

IRA may be fully deductible, partially

Contributions are never deductible.

your spouse at any time in 2010.

•

deductible, or completely

Contributions can be made after the

nondeductible.

Use the Maximum Roth IRA

owner reaches age 70

•

Contribution Worksheet below to figure

No minimum distributions are

Basis. Your basis in traditional IRAs is

the maximum amount you can

required during the Roth IRA owner’s

the total of all your nondeductible

contribute to a Roth IRA for 2010. If you

lifetime.

contributions and nontaxable amounts

•

are married filing jointly, complete the

Qualified distributions are generally

included in rollovers made to traditional

worksheet separately for you and your

not includible in income. However, see

IRAs minus the total of all your

spouse.

Certain qualified distributions (other

nontaxable distributions, adjusted if

than qualified first-time homebuyer

necessary (see the instructions for line

If you contributed too much, see

distributions) on page 8 for an

2 on page 5).

Recharacterizations on page 3.

exception.

Keep track of your basis to

CAUTION

Qualified distribution. Generally, a

figure the nontaxable part of

qualified distribution is any distribution

Modified AGI for Roth IRA purposes.

your future distributions.

CAUTION

made:

First, figure your AGI (Form 1040, line

SEP IRAs

•

38; Form 1040A, line 22; or Form

On or after age 59

•

1040NR, line 37). Then, refigure it by:

Upon death,

A simplified employee pension (SEP) is

•

Due to disability, or

1. Subtracting the following.

an employer-sponsored plan under

•

For qualified first-time homebuyer

a. Roth IRA conversions included

which an employer can make

expenses.

contributions to traditional IRAs for its

on Form 1040, line 15b; Form 1040A,

Exception. Any distribution made

line 11b; or Form 1040NR, line 16b.

employees. If you make contributions to

that IRA (excluding employer

during the 5-year period beginning with

b. Roth IRA rollovers from qualified

contributions you make if you are

the first year for which you made a

retirement plans included on Form

self-employed), they are treated as

Roth IRA contribution or conversion

1040, line 16b; Form 1040A, line 12b;

contributions to a traditional IRA and

(rollover in the case of a qualified

or Form 1040NR, line 17b.

may be deductible or nondeductible.

retirement plan) is not a qualified

2. Adding the following.

SEP IRA distributions are reported in

distribution, and may be taxable.

a. IRA deduction from Form 1040,

line 32; Form 1040A, line 17; or Form

1040NR, line 32.

Maximum Roth IRA Contribution Worksheet (keep for your records)

b. Student loan interest deduction

from Form 1040, line 33; Form 1040A,

Caution: If married filing jointly and the combined taxable compensation (defined on page

line 18; or Form 1040NR, line 33.

3) for you and your spouse is less than $10,000 ($11,000 if one spouse is 50 or older at

c. Tuition and fees deduction from

the end of 2010; $12,000 if both spouses are 50 or older at the end of 2010), do not use

Form 1040, line 34; or Form 1040A,

this worksheet. Instead, see Pub. 590 for special rules.

line 19.

d. Domestic production activities

1. If married filing jointly, enter $5,000 ($6,000 if age 50 or older at

deduction from Form 1040, line 35; or

the end of 2010). All others, enter the smaller of $5,000

Form 1040NR, line 34.

($6,000 if age 50 or older at the end of 2010) or your taxable

e. Exclusion of interest from Form

compensation (defined on page 3) . . . . . . . . . . . . . . . . . . . .

8815, Exclusion of Interest From Series

2. Enter your total contributions to traditional IRAs for 2010 . . . . .

EE and I U.S. Savings Bonds Issued

3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . .

After 1989.

4. Enter: $177,000 if married filing jointly or qualifying widow(er);

f. Exclusion of employer-provided

$10,000 if married filing separately and you lived with your

adoption benefits from Form 8839,

spouse at any time in 2010. All others, enter $120,000 . . . . . .

Qualified Adoption Expenses.

g. Foreign earned income exclusion

5. Enter your modified AGI for Roth IRA purposes (see this page)

from Form 2555, Foreign Earned

6. Subtract line 5 from line 4. If zero or less, stop here; you may

Income, or Form 2555-EZ, Foreign

not contribute to a Roth IRA for 2010. See

Earned Income Exclusion.

Recharacterizations on page 3 if you made Roth IRA

h. Foreign housing exclusion or

contributions for 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

deduction from Form 2555.

7. If line 4 above is $120,000, enter $15,000; otherwise, enter

$10,000. If line 6 is more than or equal to line 7, skip lines 8 and

When figuring modified AGI for

9 and enter the amount from line 3 on line 10 . . . . . . . . . . . .

Roth IRA purposes, you may

8. Divide line 6 by line 7 and enter the result as a decimal

have to refigure items based on

(rounded to at least 3 places). If the result is 1.000 or more,

CAUTION

modified AGI, such as taxable social

enter 1.000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

security benefits and passive activity

9. Multiply line 1 by line 8. If the result is not a multiple of $10,

losses allowed under the special

increase it to the next multiple of $10 (for example, increase

allowance for rental real estate

$490.30 to $500). Enter the result, but not less than $200 . . . .

activities. See Can You Contribute to a

10. Maximum 2010 Roth IRA Contribution. Enter the smaller of

Roth IRA? in Pub. 590 for details.

line 3 or line 9. See Recharacterizations on page 3 if you

10.

contributed more than this amount to Roth IRAs for 2010 . . . .

Distributions. See the instructions for

Part IV on page 7.

-2-

Instructions for Form 8606 (2010)

Instructions For Form 8606 - Nondeductible Iras - 2010 Page 2

Related Articles

Related forms

Related Categories