Instructions For Form 8606 - Nondeductible Iras

Income, or Form 2555-EZ, Foreign

Amending Form 8606

Part I—Traditional and

Earned Income Exclusion; and

SIMPLE IRAs

After you file your return, you may

Foreign housing exclusion or

change a nondeductible contribution

deduction from Form 2555.

Line 1

to a traditional IRA to a deductible

contribution or vice versa. You also

If you used the IRA Deduction

When figuring modified AGI for

may be able to make a

Worksheet in the Form 1040 or

Roth IRA purposes, you may

recharacterization (see page 4). If

1040A instructions, subtract line 10

have to refigure items based

CAUTION

necessary, complete a new Form

on modified AGI, such as taxable

of the worksheet (line 8 of the Form

8606 showing the revised information

1040A worksheet) (or the amount you

social security benefits and passive

and file it with Form 1040X, Amended

chose to deduct on Form 1040, line

activity losses allowed under the

U.S. Individual Income Tax Return.

23, or Form 1040A, line 16, if less)

special allowance for rental real

from the smaller of line 8 or line 9 of

estate activities. See Can I

Penalty for Not Filing

the worksheet (line 6 or line 7 of the

Contribute to a Roth IRA in Pub.

Form 1040A worksheet). Enter the

590 for details.

If you are required to file Form 8606

result on line 1 of Form 8606. You

Distributions. See the instructions

for 2000 but do not do so, you must

cannot deduct the amount included

for Part III beginning on page 6.

pay a $50 penalty, unless you can

on line 1.

show reasonable cause.

Overall Contribution Limit for

If you used the Worksheet for

Traditional and Roth IRAs

Reduced IRA Deduction in Pub.

Penalty for Overstatement

590, enter on line 1 of Form 8606 any

If you are not married filing jointly,

If you overstate your nondeductible

nondeductible contributions from the

your limit on contributions to

contributions, you must pay a $100

appropriate lines of that worksheet.

traditional and Roth IRAs is the

penalty, unless you can show

smaller of $2,000 or your taxable

If you did not have any deductible

reasonable cause.

compensation (see below). If you are

contributions, you may make

married filing jointly, your contribution

nondeductible contributions up to

What Records Must I

limit is generally $2,000 (and your

your contribution limit. Enter on line 1

Keep?

spouse's contribution limit is $2,000

of Form 8606 your nondeductible

as well). But if the combined taxable

contributions.

To verify the nontaxable part of

compensation of both you and your

Do not include on line 1

distributions from your IRAs, including

spouse is less than $4,000, see Pub.

contributions that were returned to

Roth IRAs and Ed IRAs, keep a copy

590 for special rules. This limit does

you with the related earnings (or less

of the following forms and records

not apply to employer contributions to

any loss). See the instructions for line

until all distributions are made from

a SEP or SIMPLE IRA.

your IRAs.

The amount you may

Page 1 of Forms 1040 (or Forms

Line 2

1040A, 1040NR, or 1040-T) filed for

contribute to a Roth IRA may

If this is the first year you are required

each year you made a nondeductible

also be limited by your

CAUTION

to file Form 8606, enter zero.

modified AGI (see Roth IRAs on

contribution to a traditional IRA.

Otherwise, use the chart below to find

page 2).

Forms 8606 and any supporting

the amount to enter on line 2.

Taxable compensation includes

statements and worksheets for all

the following.

applicable years.

IF the last

Form 8606 you

THEN enter on

Wages, salaries, tips, etc.

Forms 5498 or similar statements

filed was for . . .

line 2 . . .

you received each year showing

Self-employment income. If you are

contributions you made to a

self-employed (a sole proprietor or a

A year after 1992

The amount from

traditional IRA, Roth IRA, or Ed IRA.

line 12 of that

partner), taxable compensation is

Form 8606

your net earnings from your trade or

Forms 5498 or similar statements

you received showing the value of

business (provided your personal

A year after 1988

The amount from

your traditional IRAs and Ed IRAs for

services are a material

and before 1993

line 14 of that

income-producing factor) reduced by

each year you received a distribution.

Form 8606

your deduction for contributions made

Forms 1099-R or W-2P you

1988

The total of the

on your behalf to retirement plans and

received for each year you received

amounts on lines 7

the deduction allowed for one-half of

a distribution.

and 16 of that Form

your self-employment tax.

8606

Note: Forms 1040-T and W-2P are

Alimony and separate

forms used in prior years.

1987

The total of the

maintenance.

amounts on lines 4

See Pub. 590 for details.

and 13 of that Form

Specific Instructions

8606

Note: Rollovers and Roth IRA

conversions do not affect your

Name and social security number

contribution limit.

Line 4

(SSN). If you file a joint return, enter

only the name and SSN of the spouse

If you made contributions for 2000 in

whose IRA information is being

2000 and 2001 and you have both

reported on Form 8606.

deductible and nondeductible

Page 3

Instructions For Form 8606 - Nondeductible Iras - 2000 Page 3

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