Instructions For Form 8606 - Nondeductible Iras

If you received any qualified

on which type it was. See Pub. 590 for

may be deductible or nondeductible.

disaster recovery assistance

more details.

SEP IRA distributions are reported in

distributions, complete Part I of

the same manner as traditional IRA

CAUTION

Traditional IRAs

Form 8930 before you complete Form

distributions.

8606. If you received any qualified

For purposes of Form 8606, a

SIMPLE IRAs

recovery assistance distributions, see

traditional IRA is an individual

Pub. 4492-A for instructions on

retirement account or an individual

Your participation in your employer’s

completing Part I of the 2006 version of

retirement annuity other than a SEP,

SIMPLE IRA plan does not prevent you

Form 8915 before completing Form

SIMPLE, or Roth IRA.

from making contributions to a

8606.

traditional, SEP, or Roth IRA.

Contributions. An overall contribution

limit applies to traditional IRAs and

You do not have to file Form

Roth IRAs

Roth IRAs. See Overall Contribution

TIP

8606 solely to report regular

Limit for Traditional and Roth IRAs on

A Roth IRA is similar to a traditional

contributions to Roth IRAs or

page 3. Contributions to a traditional

IRA, but has the following features.

rollovers from qualified retirement plans

•

IRA may be fully deductible, partially

Contributions are never deductible.

to Roth IRAs. But see What Records

•

deductible, or completely

Contributions can be made after the

Must I Keep? on page 5.

nondeductible.

owner reaches age 70

•

No minimum distributions are

When and Where To File

Basis. Your basis in traditional IRAs is

required during the Roth IRA owner’s

the total of all your nondeductible

File Form 8606 with your 2008 Form

lifetime.

contributions and nontaxable amounts

•

1040, 1040A, or 1040NR. If you are not

Qualified distributions are not

included in rollovers made to traditional

required to file an income tax return but

includible in income.

IRAs minus the total of all your

are required to file Form 8606, sign

nontaxable distributions, adjusted if

Qualified distribution. Generally, a

Form 8606 and send it to the Internal

necessary (see the instructions for line

qualified distribution is any distribution

Revenue Service at the same time and

2 on page 6). Keep track of your basis

made:

place you would otherwise file Form

to figure the nontaxable part of your

•

1040, 1040A, or 1040NR.

On or after age 59

future distributions.

•

Upon death,

•

Definitions

SEP IRAs

Due to disability, or

•

For qualified first-time homebuyer

A simplified employee pension (SEP) is

Deemed IRAs

expenses.

an employer-sponsored plan under

Exception. Any distribution made

A qualified employer plan (retirement

which an employer can make

during the 5-year period beginning with

plan) can maintain a separate account

contributions to traditional IRAs for its

the first year for which you made a

or annuity under the plan (a deemed

employees. If you make contributions to

Roth IRA contribution or conversion is

IRA) to receive voluntary employee

that IRA (excluding employer

not a qualified distribution, and may be

contributions. If in 2008 you had a

contributions you make if you are

taxable.

deemed IRA, use the rules for either a

self-employed), they are treated as

traditional IRA or a Roth IRA depending

contributions to a traditional IRA and

Contributions. You can contribute to

a Roth IRA for 2008 only if your 2008

Maximum Roth IRA Contribution Worksheet (keep for your records)

modified adjusted gross income (AGI)

for Roth IRA purposes is less than:

•

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

$10,000 if married filing separately

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

and you lived with your spouse at any

the end of 2008; $12,000 if both spouses are 50 or older at the end of 2008), do not use

time in 2008,

•

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

$169,000 if married filing jointly or

qualifying widow(er), or

catch-up contributions for certain employer bankruptcies. Instead, see Pub. 590 for special

•

$116,000 if single, head of

rules.

household, or if married filing

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

separately and you did not live with

the end of 2008). All others, enter the smaller of $5,000

your spouse at any time in 2008.

($6,000 if age 50 or older at the end of 2008) or your taxable

Use the Maximum Roth IRA

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

Contribution Worksheet on this page to

2. Enter your total contributions to traditional IRAs for 2008 . . . . .

figure the maximum amount you can

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

contribute to a Roth IRA for 2008. If you

4. Enter: $169,000 if married filing jointly or qualifying widow(er);

are married filing jointly, complete the

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

worksheet separately for you and your

spouse at any time in 2008. All others, enter $116,000 . . . . . .

spouse.

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

If you contributed too much, see

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

Recharacterizations on page 3.

not contribute to a Roth IRA for 2008. See

CAUTION

Recharacterizations on page 3 if you made Roth IRA

contributions for 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Modified AGI for Roth IRA purposes.

7. If line 4 above is $116,000, enter $15,000; otherwise, enter

First, figure your AGI (Form 1040, line

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

38; Form 1040A, line 22; or Form

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

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

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

1. Subtracting the following.

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

a. Roth IRA conversions included

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

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

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

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

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

b. Roth IRA rollovers from qualified

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

retirement plans included on Form

10. Maximum 2008 Roth IRA Contribution. Enter the smaller of

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

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

or Form 1040NR, line 17b.

contributed more than this amount to Roth IRAs for 2008 . . . .

10.

c. Minimum required distributions

from IRAs (for conversions and

-2-

Instructions For Form 8606 - Nondeductible Iras - 2008 Page 2

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