Instructions For Form 8606 - Nondeductible Iras

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$10,000 if married filing separately

b. Student loan interest deduction

SIMPLE IRAs

and you lived with your spouse at any

from Form 1040, line 33; Form 1040A,

Your participation in your employer’s

time in 2007,

line 18; or Form 1040NR, line 32.

SIMPLE IRA plan does not prevent you

•

c. Tuition and fees deduction from

$166,000 if married filing jointly or

from making contributions to a

Form 1040, line 34; or Form 1040A,

qualifying widow(er), or

traditional, SEP, or Roth IRA.

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line 19.

$114,000 if single, head of

d. Domestic production activities

household, or if married filing

Roth IRAs

deduction from Form 1040, line 35; or

separately and you did not live with

A Roth IRA is similar to a traditional

Form 1040NR, line 33.

your spouse at any time in 2007.

IRA, but has the following features.

e. Exclusion of interest from Form

•

Contributions are never deductible.

Use the Maximum Roth IRA

8815, Exclusion of Interest From Series

•

Contributions can be made after the

Contribution Worksheet below to figure

EE and I U.S. Savings Bonds Issued

owner reaches age 70

the maximum amount you can

After 1989.

•

No minimum distributions are

contribute to a Roth IRA for 2007. If you

f. Exclusion of employer-provided

required during the Roth IRA owner’s

are married filing jointly, complete the

adoption benefits from Form 8839,

lifetime.

worksheet separately for you and your

Qualified Adoption Expenses.

•

Qualified distributions are not

spouse.

g. Foreign earned income exclusion

includible in income.

from Form 2555, Foreign Earned

Qualified distribution. Generally, a

Income, or Form 2555-EZ, Foreign

If you contributed too much, see

qualified distribution is any distribution

Earned Income Exclusion.

Recharacterizations on page 3.

made:

h. Foreign housing exclusion or

CAUTION

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deduction from Form 2555.

On or after age 59

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Modified AGI for Roth IRA purposes.

Upon death,

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First, figure your AGI (Form 1040, line

When figuring modified AGI for

Due to disability, or

•

38; Form 1040A, line 22; or Form

Roth IRA purposes, you may

For qualified first-time homebuyer

1040NR, line 36). Then, refigure it by:

have to refigure items based on

expenses.

CAUTION

modified AGI, such as taxable social

1. Subtracting the following.

Exception. Any distribution made

security benefits and passive activity

a. Roth IRA conversions included

during the 5-year period beginning with

losses allowed under the special

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

the first year for which you made a

allowance for rental real estate

Roth IRA contribution or conversion is

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

activities. See Can You Contribute to a

not a qualified distribution, and may be

b. Minimum required distributions

Roth IRA? in Pub. 590 for details.

taxable.

from IRAs (for conversions only).

Distributions. See the instructions for

2. Adding the following.

Contributions. You can contribute to

Part III that begin on page 6.

a Roth IRA for 2007 only if your 2007

a. IRA deduction from Form 1040,

modified adjusted gross income (AGI)

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

Overall Contribution Limit for

for Roth IRA purposes is less than:

1040NR, line 31.

Traditional and Roth IRAs

Maximum Roth IRA Contribution Worksheet (keep for your records)

If you are not married filing jointly, your

limit on contributions to traditional and

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

Roth IRAs is the smaller of $4,000

3) for you and your spouse is less than $8,000 ($9,000 if one spouse is 50 or older at the

($5,000 if age 50 or older at the end of

end of 2007; $10,000 if both spouses are 50 or older at the end of 2007), do not use this

2007) or your taxable compensation

worksheet. Also, do not use this worksheet if you or your spouse qualify for the catch-up

(see page 3). If you are married filing

contributions for certain employer bankruptcies. Instead, see Pub. 590 for special rules.

jointly, your contribution limit is

generally $4,000 ($5,000 if age 50 or

1. If married filing jointly, enter $4,000 ($5,000 if age 50 or older at

older at the end of 2007) and your

the end of 2007). All others, enter the smaller of $4,000

spouse’s contribution limit is $4,000

($5,000 if age 50 or older at the end of 2007) or your taxable

($5,000 if age 50 or older at the end of

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

2007) as well. But if the combined

2. Enter your total contributions to traditional IRAs for 2007 . . . . .

taxable compensation of both you and

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

your spouse is less than $8,000

4. Enter: $166,000 if married filing jointly or qualifying widow(er);

($9,000 if one spouse is 50 or older at

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

the end of 2007; $10,000 if both

spouse at any time in 2007. All others, enter $114,000 . . . . . .

spouses are 50 or older at the end of

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

2007), see Pub. 590 for special rules.

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

This limit does not apply to employer

not contribute to a Roth IRA for 2007. See

contributions to a SEP or SIMPLE IRA.

Recharacterizations on page 3 if you made Roth IRA

contributions for 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Catch-up contributions in certain

7. If line 4 above is $114,000, enter $15,000; otherwise, enter

employer bankruptcies. If you

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

participated in a 401(k) plan and the

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

employer who maintained the plan filed

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

for bankruptcy in an earlier year, you

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

may be able to contribute an additional

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

$3,000 to your IRA. For more

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

information, see Catch-up contributions

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

in certain employer bankruptcies in

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

Pub. 590.

10. Maximum 2007 Roth IRA Contribution. Enter the smaller of

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

Note. Rollovers, Roth IRA

contributed more than this amount to Roth IRAs for 2007 . . . .

10.

conversions, and repayments of

qualified hurricane and reservists

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Instructions For Form 8606 - Nondeductible Iras - 2007 Page 2

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