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on which type it was. See Pub. 590 for

contributions to a traditional IRA and

retirement plan) is not a qualified

more details.

may be deductible or nondeductible.

distribution, and may be taxable.

SEP IRA distributions are reported in

Traditional IRAs

Contributions. You can contribute to

the same manner as traditional IRA

a Roth IRA for 2010 only if your 2010

distributions.

For purposes of Form 8606, a

modified adjusted gross income (AGI)

traditional IRA is an individual

SIMPLE IRAs

for Roth IRA purposes is less than:

retirement account or an individual

•

$10,000 if married filing separately

retirement annuity other than a SEP,

Your participation in your employer’s

and you lived with your spouse at any

SIMPLE, or Roth IRA.

SIMPLE IRA plan does not prevent you

time in 2010,

Contributions. An overall contribution

from making contributions to a

•

$177,000 if married filing jointly or

traditional or Roth IRA.

limit applies to traditional IRAs and

qualifying widow(er), or

•

Roth IRAs. See Overall Contribution

Roth IRAs

$120,000 if single, head of

Limit for Traditional and Roth IRAs on

household, or if married filing

A Roth IRA is similar to a traditional

page 3. Contributions to a traditional

separately and you did not live with

IRA, but has the following features.

IRA may be fully deductible, partially

your spouse at any time in 2010.

•

Contributions are never deductible.

deductible, or completely

•

Contributions can be made after the

Use the Maximum Roth IRA

nondeductible.

owner reaches age 70

Contribution Worksheet below to figure

Basis. Your basis in traditional IRAs is

•

No minimum distributions are

the maximum amount you can

the total of all your nondeductible

required during the Roth IRA owner’s

contribute to a Roth IRA for 2010. If you

contributions and nontaxable amounts

lifetime.

are married filing jointly, complete the

included in rollovers made to traditional

•

Qualified distributions are generally

worksheet separately for you and your

IRAs minus the total of all your

not includible in income. However, see

spouse.

nontaxable distributions, adjusted if

Made

Certain qualified distributions on page 7

necessary (see the instructions for line

into

If you contributed too much, see

for an exception.

2 on page 5).

caution

Recharacterizations on page 3.

Qualified distribution. Generally, a

for added

Keep track of your basis to

CAUTION

emphasis

qualified distribution is any distribution

, was part

figure the nontaxable part of

made:

Modified AGI for Roth IRA purposes.

of abover

your future distributions.

CAUTION

•

para.

First, figure your AGI (Form 1040, line

On or after age 59

Emp.

•

SEP IRAs

38; Form 1040A, line 22; or Form

Upon death,

Sug,

•

1040NR, line 37). Then, refigure it by:

Due to disability, or

A simplified employee pension (SEP) is

•

For qualified first-time homebuyer

1. Subtracting the following.

an employer-sponsored plan under

expenses.

a. Roth IRA conversions included

which an employer can make

Exception. Any distribution made

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

contributions to traditional IRAs for its

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

employees. If you make contributions to

during the 5-year period beginning with

b. Roth IRA rollovers from qualified

that IRA (excluding employer

the first year for which you made a

retirement plans included on Form

contributions you make if you are

Roth IRA contribution or conversion

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

self-employed), they are treated as

(rollover in the case of a qualified

or Form 1040NR, line 17b.

Deleted c. MRDs from IRAs

Deleted Cauiton on 2009 RMD

2. Adding the following.

waiver

a. IRA deduction from Form 1040,

Maximum Roth IRA Contribution Worksheet (keep for your records)

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

1040NR, line 32.

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

b. Student loan interest deduction

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

from Form 1040, line 33; Form 1040A,

the end of 2010; $12,000 if both spouses are 50 or older at the end of 2010), do not use

line 18; or Form 1040NR, line 33.

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

Deleted ref to catch-up contrib

c. Tuition and fees deduction from

for certain ER bankruptcies

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

Form 1040, line 34; or Form 1040A,

the end of 2010). All others, enter the smaller of $5,000

line 19.

d. Domestic production activities

($6,000 if age 50 or older at the end of 2010) or your taxable

deduction from Form 1040, line 35; or

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

2. Enter your total contributions to traditional IRAs for 2010 . . . . .

Form 1040NR, line 34.

e. Exclusion of interest from Form

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

8815, Exclusion of Interest From Series

4. Enter: $177,000 if married filing jointly or qualifying widow(er);

EE and I U.S. Savings Bonds Issued

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

After 1989.

spouse at any time in 2010. All others, enter $120,000 . . . . . .

f. Exclusion of employer-provided

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

adoption benefits from Form 8839,

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

Qualified Adoption Expenses.

not contribute to a Roth IRA for 2010. See

g. Foreign earned income exclusion

Recharacterizations on page 3 if you made Roth IRA

from Form 2555, Foreign Earned

contributions for 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income, or Form 2555-EZ, Foreign

7. If line 4 above is $120,000, enter $15,000; otherwise, enter

Earned Income Exclusion.

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

h. Foreign housing exclusion or

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

deduction from Form 2555.

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

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

When figuring modified AGI for

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

Roth IRA purposes, you may

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

have to refigure items based on

CAUTION

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

modified AGI, such as taxable social

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

security benefits and passive activity

10. Maximum 2010 Roth IRA Contribution. Enter the smaller of

losses allowed under the special

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

allowance for rental real estate

10.

contributed more than this amount to Roth IRAs for 2010 . . . .

activities. See Can You Contribute to a

Roth IRA? in Pub. 590 for details.

-2-

Instructions for Form 8606 (2010)

Description Of Major Changes And Instructions For Form 8606 - Nondeductible Iras - 2010 Page 4

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