Instructions For Form 8606 - Nondeductible Iras

2 0 08

Department of the Treasury

Internal Revenue Service

Instructions for Form 8606

Nondeductible IRAs

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Tax relief for the Midwestern disaster

Conversions from traditional, SEP, or

Section references are to the Internal

areas. Special rules may apply if you

SIMPLE IRAs to Roth IRAs.

Revenue Code unless otherwise noted.

received a distribution from your IRA

Additional information. See Pub.

General Instructions

and your main home was located in a

590, for more details.

Midwestern disaster area on the date

the disaster occurred, and you

If you received distributions from

What’s New

sustained an economic loss due to the

TIP

a traditional, SEP, or SIMPLE

severe storms, tornadoes, or flooding.

IRA contribution limit increased.

IRA in 2008 and you have never

You and your spouse, if filing jointly,

made nondeductible contributions to

Special rules may also apply if you

each may be able to contribute up to

traditional IRAs, do not report the

received a distribution to purchase or

$5,000 ($6,000 if age 50 or older at the

distributions on Form 8606. Instead,

construct a main home in a Midwestern

end of 2008) to your IRA. See Overall

see the instructions for Form 1040,

disaster area, but the home was not

Contribution Limit for Traditional and

lines 15a and 15b; Form 1040A, lines

purchased or constructed because of

Roth IRAs on page 3.

11a and 11b; or Form 1040NR, lines

the severe storms, tornadoes, or

16a and 16b. Also, to find out if any of

flooding.

Modified AGI limit for Roth IRA

your contributions to traditional IRAs

contributions increased. You can

See Pub. 4492-B, Information for

are deductible, see the instructions for

contribute to a Roth IRA for 2008 only if

Affected Taxpayers in the Midwestern

Form 1040, line 32; Form 1040A, line

your 2008 modified adjusted gross

Disaster Areas, and Form 8930,

17; or Form 1040NR, line 31.

income (AGI) for Roth IRA purposes is

Qualified Disaster Recovery Assistance

less than:

Retirement Plan Distributions and

Who Must File

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$169,000 if married filing jointly or

Repayments, for more information.

File Form 8606 if any of the following

qualifying widow(er),

Qualified settlement income. If you

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apply.

$116,000 if single, head of

received qualified settlement income in

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You made nondeductible

household, or married filing separately

connection with the Exxon Valdez

contributions to a traditional IRA for

and you did not live with your spouse at

litigation, you may be able to roll over

2008, including a repayment of a

any time in 2008, or

some or all of the amount you received

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qualified reservist distribution.

$10,000 if married filing separately

to your IRA. For more information on

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Your economic stimulus payment or

and you lived with your spouse at any

qualified settlement income, see Pub.

tax refund was directly deposited into a

time in 2008.

590.

traditional IRA and you are treating it as

See Roth IRAs on page 2.

Military death gratuities and

a nondeductible contribution.

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servicemembers’ group life

Rollovers from qualified retirement

You received distributions from a

insurance (SGLI) payments. If you

plans to Roth IRAs. Beginning in

traditional, SEP, or SIMPLE IRA in

received a military death gratuity or

2008, you can roll over amounts from a

2008 and your basis in traditional IRAs

SGLI payment with respect to a death

qualified retirement plan to a Roth IRA.

is more than zero. For this purpose, a

from injury that occurred after October

Any amount rolled over is subject to the

distribution does not include a rollover

6, 2001, you may be able to roll over

same rules for converting a traditional

(other than a repayment of a qualified

some or all of the amount you received

IRA to a Roth IRA. However, do not file

disaster recovery assistance

to your Roth IRA. For more information

Form 8606 solely to report rollovers

distribution or a qualified recovery

on military death gratuities and SGLI

from qualified retirement plans. For

assistance distribution), qualified

payments, see Pub. 590.

more information, see Rollover From

charitable distribution, a one-time

Employer’s Plan Into a Roth IRA in

distribution to fund an HSA, conversion,

Airline payments. If you are a

recharacterization, or return of certain

chapter 2 of Pub. 590, Individual

qualified airline employee, you may

contributions.

Retirement Arrangements (IRAs).

contribute any portion of an airline

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You converted an amount from a

payment you receive as a result of an

Tax relief for the Kansas disaster

traditional, SEP, or SIMPLE IRA to a

airline carrier bankruptcy to a Roth IRA.

area. Special rules may apply if you

Roth IRA in 2008 (unless you

For more information on airline

received a distribution from your IRA

recharacterized the entire

payments, see Pub. 590.

and your main home was located in the

conversion — see page 3).

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Kansas disaster area, and you

Required minimum distributions for

You received distributions from a

sustained an economic loss due to the

2009. For 2009, you are not required

Roth IRA in 2008 (other than a rollover,

storms and tornadoes that began on

to take a minimum distribution from

recharacterization, or return of certain

May 4, 2007.

your IRA. For more information, see

contributions — see page 7).

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Pub. 590.

You made a repayment of a qualified

Special rules may also apply if you

hurricane, disaster recovery assistance,

received a distribution to purchase or

Purpose of Form

or recovery assistance distribution that

construct a main home in the Kansas

Use Form 8606 to report:

is attributable to previously

disaster area, but the home was not

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Nondeductible contributions you

nondeductible contributions.

purchased or constructed because of

made to traditional IRAs,

Note. If you recharacterized a 2008

the storms and tornadoes.

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Distributions from traditional, SEP, or

Roth IRA contribution as a traditional

See Pub. 4492-A, Information for

SIMPLE IRAs, if you have ever made

IRA contribution, or vice versa, treat the

Taxpayers Affected by the May 4,

nondeductible contributions to

contribution as having been made to

2007, Kansas Storms and Tornadoes,

traditional IRAs,

the second IRA, not the first IRA. See

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for more information.

Distributions from Roth IRAs, and

page 3.

Cat. No. 25399E

Instructions For Form 8606 - Nondeductible Iras - 2008

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