Instructions For Form 8606 - Nondeductible Iras

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No minimum distributions are

are married filing jointly, complete the

g. Foreign earned income exclusion

required during the Roth IRA owner’s

worksheet separately for you and your

from Form 2555, Foreign Earned

lifetime.

spouse.

Income, or Form 2555-EZ, Foreign

•

Qualified distributions are not

Earned Income Exclusion.

If you contributed too much, see

includible in income.

h. Foreign housing exclusion or

Recharacterizations on page 3.

deduction from Form 2555.

Qualified distribution. Generally, a

CAUTION

qualified distribution is any distribution

When figuring modified AGI for

made:

Modified AGI for Roth IRA purposes.

Roth IRA purposes, you may

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First, figure your AGI (Form 1040, line

On or after age 59

have to refigure items based on

CAUTION

•

38; Form 1040A, line 22; or Form

Upon death,

modified AGI, such as taxable social

•

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

Due to disability, or

security benefits and passive activity

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For qualified first-time homebuyer

1. Subtracting the following.

losses allowed under the special

expenses.

allowance for rental real estate

a. Roth IRA conversions included

activities. See Can You Contribute to a

Exception. Any distribution made

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

Roth IRA? in Pub. 590 for details.

during the 5-year period beginning with

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

the first year for which you made a

b. Minimum required distributions

Distributions. See the instructions for

Roth IRA contribution or conversion is

from IRAs (for conversions only).

Part III that begin on page 7.

not a qualified distribution, and may be

2. Adding the following.

Overall Contribution Limit for

taxable.

a. IRA deduction from Form 1040,

Traditional and Roth IRAs

Contributions. You can contribute to a

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

Roth IRA for 2006 only if your 2006

1040NR, line 31.

If you are not married filing jointly, your

modified adjusted gross income (AGI)

b. Student loan interest deduction

limit on contributions to traditional and

for Roth IRA purposes is less than:

from Form 1040, line 33; Form 1040A,

Roth IRAs is the smaller of $4,000

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$10,000 if married filing separately

line 18; or Form 1040NR, line 32.

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

and you lived with your spouse at any

c. Tuition and fees deduction from

2006) or your taxable compensation

time in 2006,

Form 1040, line 35.

(see below). If you are married filing

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$160,000 if married filing jointly or

jointly, your contribution limit is

d. Domestic production activities

qualifying widow(er), or

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

deduction from Form 1040, line 35, or

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$110,000 if single, head of

older at the end of 2006) and your

Form 1040NR, line 33.

household, or if married filing

spouse’s contribution limit is $4,000

e. Exclusion of interest from Form

separately and you did not live with

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

8815, Exclusion of Interest From Series

your spouse at any time in 2006.

2006) as well. But if the combined

EE and I U.S. Savings Bonds Issued

taxable compensation of both you and

After 1989.

Use the Maximum Roth IRA

your spouse is less than $8,000

Contribution Worksheet below to figure

f. Exclusion of employer-provided

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

the maximum amount you can

adoption benefits from Form 8839,

the end of 2006; $10,000 if both

contribute to a Roth IRA for 2006. If you

Qualified Adoption Expenses.

spouses are 50 or older at the end of

2006), see Pub. 590 for special rules.

Maximum Roth IRA Contribution Worksheet (keep for your records)

This limit does not apply to employer

contributions to a SEP or SIMPLE IRA.

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

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

Note. Rollovers, Roth IRA conversions,

the end of 2006; $10,000 if both spouses are 50 or older at the end of 2006), do not use

and repayments of qualified hurricane

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

and reservists distributions do not affect

your contribution limit.

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

the end of 2006). All others, enter the smaller of $4,000

The amount you can contribute

($5,000 if age 50 or older at the end of 2006) or your taxable

to a Roth IRA may also be

compensation (defined on this page) . . . . . . . . . . . . . . . . . .

limited by your modified AGI

CAUTION

2 Enter your total contributions to traditional IRAs for 2006 . . . . .

(see Contributions and the Maximum

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

Roth IRA Contribution Worksheet on

4 Enter: $160,000 if married filing jointly or qualifying widow(er);

this page).

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

Taxable compensation includes the

spouse at any time in 2006. All others, enter $110,000 . . . . . .

following.

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

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Wages, salaries, tips, etc. If you

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

received a distribution from a

not contribute to a Roth IRA for 2006. See

nonqualified deferred compensation

Recharacterizations on page 3 if you made Roth IRA

plan or nongovernmental section 457

contributions for 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

plan that is included in Form W-2, box

7 If line 4 above is $110,000, enter $15,000; otherwise, enter

1, or in Form 1099-MISC, box 7, do not

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

include that distribution in taxable

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

compensation. The distribution should

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

be shown in (a) Form W-2, box 11, (b)

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

Form W-2, box 12, with code Z, or (c)

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

Form 1099-MISC, box 15b. If it is not,

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

contact your employer for the amount

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

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

of the distribution.

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Nontaxable combat pay if you were a

10 Maximum 2006 Roth IRA Contribution. Enter the smaller of

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

member of the U.S. Armed Forces.

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contributed more than this amount to Roth IRAs for 2006 . . . .

Self-employment income. If you are

self-employed (a sole proprietor or a

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Instructions For Form 8606 - Nondeductible Iras - 2006 Page 2

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