taxmap/pubs/p590-000.htm#en_us_publink1000230269taxmap/pubs/p590-000.htm#en_us_publink1000248095Due date for contributions and withdrawals.(p2)
Contributions can be made to your IRA for a year at any time
during the year or by the due date for filing your return for that year, not
including extensions. Because Emancipation Day, Saturday, April 16, 2011, a
legal holiday in the District of Columbia, will be observed on Friday, April 15,
2011, the due date for making contributions for 2010 is April 18, 2011. See
When Can Contributions Be Made? in chapter 1.
There is a 6% excise tax on excess contributions not withdrawn
by the due date (including extensions) for your return. You will not have to pay
the 6% tax if any 2010 excess contributions are withdrawn by April 18, 2011
(including extensions). See
Excess Contributions under
What Acts Result in Penalties or Additional Taxes? in chapter 1.
Modified AGI limit for traditional IRA contributions increased.(p2)
For 2010, if you were covered by a retirement plan at work, your
deduction for contributions to a traditional IRA is reduced (phased out) if your
modified AGI is:
- More than $89,000 but less than $109,000 for a married couple
filing a joint return or a qualifying widow(er),
- More than $56,000 but less than $66,000 for a single individual
or head of household, or
- Less than $10,000 for a married individual filing a separate
return.
If you either lived with your spouse or file a joint return,
and your spouse was covered by a retirement plan at work, but you were not, your
deduction is phased out if your modified AGI is more than $167,000 but less than
$177,000. If your modified AGI is $177,000 or more, you cannot take a deduction
for contributions to a traditional IRA. See
How Much Can You Deduct? in chapter 1.
Modified AGI limit for Roth IRA contributions increased.(p2)
For 2010, your Roth IRA contribution limit is reduced (phased
out) in the following situations.
- Your filing status is married filing jointly or qualifying
widow(er) and your modified AGI is at least $167,000. You cannot make a Roth IRA
contribution if your modified AGI is $177,000 or more.
- Your filing status is single, head of household, or married
filing separately and you did not live with your spouse at any time in 2010 and
your modified AGI is at least $105,000. You cannot make a Roth IRA contribution
if your modified AGI is $120,000 or more.
- Your filing status is married filing separately, you lived
with your spouse at any time during the year, and your modified AGI is more than
-0-. You cannot make a Roth IRA contribution if your modified AGI is $10,000 or
more.
See
Can You Contribute to a Roth IRA? in chapter 2.
Conversions and rollovers to Roth IRAs.(p2)
The modified AGI and filing status requirements for converting
and rolling over amounts to a Roth IRA are eliminated.
Also, for any 2010 conversion or rollover, any amounts that would
be included as income will be included in income in equal amounts in 2011 and
2012. You can choose to include the entire amount in income in 2010.
taxmap/pubs/p590-000.htm#en_us_publink1000230287Catch-up contributions in certain employer bankruptcies.(p2)
The provision for additional catch-up contributions in certain
employer bankruptcies does not apply for 2010 or later years.
taxmap/pubs/p590-000.htm#en_us_publink1000256038Qualified charitable distributions (QCDs) made in January 2011.(p2)
The provision for QCDs has been extended for 2010 and 2011. If
you make a QCD in January 2011, you can elect to have it treated as made in
2010. See
January 2011 QCDs in chapter 1 for more information.
Modified AGI limit for traditional IRA contributions increased.(p2)
For 2011, if you are covered by a retirement plan at work, your
deduction for contributions to a traditional IRA is reduced (phased out) if your
modified AGI is:
- More than $90,000 but less than $110,000 for a married couple
filing a joint return or a qualifying widow(er),
- More than $56,000 but less than $66,000 for a single individual
or head of household, or
- Less than $10,000 for a married individual filing a separate
return.
If you either live with your spouse or file a joint return, and
your spouse is covered by a retirement plan at work, but you are not, your
deduction is phased out if your modified AGI is more than $169,000 but less than
$179,000. If your modified AGI is $179,000 or more, you cannot take a deduction
for contributions to a traditional IRA.
taxmap/pubs/p590-000.htm#en_us_publink1000254866Modified AGI limit for Roth IRA contributions increased.(p2)
For 2011, your Roth IRA contribution limit is reduced (phased
out) in the following situations.
- Your filing status is married filing jointly or qualifying
widow(er) and your modified AGI is at least $169,000. You cannot make a Roth IRA
contribution if your modified AGI is $179,000 or more.
- Your filing status is single, head of household, or married
filing separately and you did not live with your spouse at any time in 2011 and
your modified AGI is at least $107,000. You cannot make a Roth IRA contribution
if your modified AGI is $122,000 or more.
- Your filing status is married filing separately, you lived
with your spouse at any time during the year, and your modified AGI is more than
-0-. You cannot make a Roth IRA contribution if your modified AGI is $10,000 or
more.
Simplified employee pension (SEP).(p3)
SEP IRAs are not covered in this publication. They are covered
in Publication 560, Retirement Plans for Small Business.
taxmap/pubs/p590-000.htm#en_us_publink1000230291Deemed IRAs.(p3)
A qualified employer plan (retirement plan) can maintain a separate
account or annuity under the plan (a deemed IRA) to receive voluntary employee
contributions. If the separate account or annuity otherwise meets the
requirements of an IRA, it will be subject only to IRA rules. An employee's
account can be treated as a traditional IRA or a Roth IRA.
For this purpose, a "qualified employer plan" includes:
- A qualified pension, profit-sharing, or stock bonus plan (section
401(a) plan),
- A qualified employee annuity plan (section 403(a) plan),
- A tax-sheltered annuity plan (section 403(b) plan), and
- A deferred compensation plan (section 457 plan) maintained
by a state, a political subdivision of a state, or an agency or instrumentality
of a state or political subdivision of a state.
Contributions to both traditional and Roth IRAs.(p3)
For information on your combined contribution limit if you contribute
to both traditional and Roth IRAs, see
Roth IRAs and traditional IRAs under
How Much Can Be Contributed? in chapter 2.
Statement of required minimum distribution (RMD).(p3)
If an RMD is required from your IRA, the trustee, custodian,
or issuer that held the IRA at the end of the preceding year must either report
the amount of the RMD to you, or offer to calculate it for you. The report or
offer must include the date by which the amount must be distributed. The report
is due January 31 of the year in which the minimum distribution is required. It
can be provided with the year-end fair market value statement that you normally
get each year. No report is required for section 403(b) contracts (generally
tax-sheltered annuities) or for IRAs of owners who have died.
taxmap/pubs/p590-000.htm#en_us_publink1000230296IRA interest.(p3)
Although interest earned from your IRA is generally not taxed
in the year earned, it is not tax-exempt interest. Tax on your traditional IRA
is generally deferred until you take a distribution. Do not report this interest
on your return as tax-exempt interest. For more information on tax exempt
interest, see the instructions for your tax return.
taxmap/pubs/p590-000.htm#en_us_publink1000230297Disaster-related tax relief.(p3)
Special rules apply to the use of retirement funds (including
IRAs) by qualified individuals who suffered an economic loss as a result of:
- The storms that began on May 4, 2007, in the Kansas disaster
area, or
- The severe storms in the Midwestern disaster areas in 2008.
For more information on these special rules, see
Tax Relief for Kansas Disaster Area and
Tax Relief for Midwestern Disaster Areas in chapter 4.
Photographs of missing children.(p3)
The Internal Revenue Service is a proud partner with the National
Center for Missing and Exploited Children. Photographs of missing children
selected by the Center may appear in this publication on pages that would
otherwise be blank. You can help bring these children home by looking at the
photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a
child.
This publication discusses individual retirement arrangements
(IRAs). An IRA is a personal savings plan that gives you tax advantages for
setting aside money for retirement.
taxmap/pubs/p590-000.htm#en_us_publink1000230302Two tax advantages of an IRA are that:
- Contributions you make to an IRA may be fully or partially
deductible, depending on which type of IRA you have and on your circumstances,
and
- Generally, amounts in your IRA (including earnings and gains)
are not taxed until distributed. In some cases, amounts are not taxed at all if
distributed according to the rules.
This publication discusses traditional, Roth, and SIMPLE IRAs.
It explains the rules for:
- Setting up an IRA,
- Contributing to an IRA,
- Transferring money or property to and from an IRA,
- Handling an inherited IRA,
- Receiving distributions (making withdrawals) from an IRA,
- Disaster area tax relief, and
- Taking a credit for contributions to an IRA.
It also explains the penalties and additional taxes that apply
when the rules are not followed. To assist you in complying with the tax rules
for IRAs, this publication contains worksheets, sample forms, and tables, which
can be found throughout the publication and in the appendices at the back of the
publication.
taxmap/pubs/p590-000.htm#en_us_publink1000230304The rules that you must follow depend on which type of IRA you
have. Use Table I-1 to help you determine which parts of this publication to
read. Also use Table I-1 if you were referred to this publication from
instructions to a form.
taxmap/pubs/p590-000.htm#en_us_publink1000253494We welcome your comments about this publication and your suggestions
for future editions.
You can write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would
be helpful if you would include your daytime phone number, including the area
code, in your correspondence.
You can email us at
*taxforms@irs.gov. (The asterisk must be included in the address.) Please put
"Publications Comment" on the subject line. You can also send us comments from
www.irs.gov/formspubs, select "Comment on Tax Forms and Publications" under "Information
about."
Although we cannot respond individually to each comment received,
we do appreciate your feedback and will consider your comments as we revise our
tax products.
taxmap/pubs/p590-000.htm#en_us_publink1000253495Visit
www.irs.gov/formspubs
to download forms and publications, call 1-800-829-3676, or write to the address
below and receive a response within 10 days after your request is received.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613If you have a tax question, check the information available on
IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of
the above addresses.
taxmap/pubs/p590-000.htm#TXMP4c3ca077Useful items
You may want to see:
Publications 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified
Plans) 571 Tax-Sheltered Annuity Plans (403(b) Plans) 575 Pension and Annuity Income 939 General Rule for Pensions and Annuities 4492-A Information for Taxpayers Affected by the May 4, 2007, Kansas
Storms and Tornadoes 4492-B Information for Affected Taxpayers in the Midwestern Disaster
Areas Forms (and instructions) W-4P:
Withholding Certificate for Pension or Annuity Payments 1099-R:
Distributions From Pensions, Annuities, Retirement or Profit-Sharing
Plans, IRAs, Insurance Contracts, etc. 5304-SIMPLE:
Savings Incentive Match Plan for Employees of Small Employers
(SIMPLE)–Not for Use With a Designated Financial Institution 5305-S:
SIMPLE Individual Retirement Trust Account 5305-SA:
SIMPLE Individual Retirement Custodial Account 5305-SIMPLE:
Savings Incentive Match Plan for Employees of Small Employers
(SIMPLE)–for Use With a Designated Financial Institution 5329:
Additional Taxes on Qualified Plans (Including IRAs) and Other
Tax-Favored Accounts 5498:
IRA Contribution Information 8606:
Nondeductible IRAs 8815:
Exclusion of Interest From Series EE and I U.S. Savings Bonds
Issued After 1989 8839:
Qualified Adoption Expenses 8880:
Credit for Qualified Retirement Savings Contributions 8930:
Qualified Disaster Recovery Assistance Retirement Plan Distributions
and Repayments See
chapter 6 for information about getting these publications and forms.
Table I-1.
Using This Publication
IF you need
information on ...
| THEN see ...
|
| traditional IRAs |
chapter 1.
|
| Roth IRAs |
chapter 2, and parts of
chapter 1.
|
| SIMPLE IRAs |
chapter 3.
|
| disaster-related relief (Midwestern, and Kansas) |
chapter 4.
|
| the credit for qualified retirement savings contributions
(the saver's credit) |
chapter 5.
|
| how to keep a record of your contributions to, and distributions
from, your traditional IRA(s) |
appendix A.
|
| SEP IRAs and 401(k) plans | Publication 560. |
| Coverdell education savings accounts (formerly called education
IRAs) | Publication 970. |
| | |
IF for 2010, you
- received
social security benefits,
- had taxable compensation,
- contributed to a traditional IRA, and
- you or your spouse was covered by an employer retirement
plan,
and you want to...
| THEN see ...
|
| first figure your modified adjusted gross income (AGI) |
appendix B worksheet 1.
|
| then figure how much of your traditional IRA contribution
you can deduct |
appendix B worksheet 2.
|
| and finally figure how much of your social security is taxable |
appendix B. worksheet 3.
|
taxmap/pubs/p590-000.htm#en_us_publink1000230320
Table I-2. How Are a Traditional IRA and a Roth IRA Different?
This table shows the differences between traditional and Roth
IRAs. Answers in the middle column apply to traditional IRAs. Answers in the
right column apply to Roth IRAs.
| Question | Answer |
| | Traditional IRA? |
Roth IRA? |
| Is there an age limit on when I can open and contribute
to a | Yes. You must not have reached age 701/2 by the end of the year. See
Who Can Open a Traditional IRA? in chapter 1.
| No. You can be any age. See
Can You Contribute to a Roth IRA? in chapter 2.
|
| If I earned more than $5,000 in 2010 ($6,000 if I was 50
or older by the end of 2010), is there a limit on how much I can contribute to a
| Yes. For 2010, you can contribute to a traditional IRA up
to:
- $5,000, or
- $6,000 if you were age 50 or older by the end of 2010.
There is no upper limit on how much you can earn and still
contribute. See
How Much Can Be Contributed? in chapter 1.
| Yes. For 2010, you may be able to contribute to a Roth IRA
up to:
- $5,000, or
- $6,000 if you were age 50 or older by the end of 2010,
but the amount you can contribute may be less than that
depending on your income, filing status, and if you contribute to another IRA.
See
How Much Can Be Contributed? and Table 2-1 in chapter 2.
|
| Can I deduct contributions to a | Yes. You may be able to deduct your contributions to a traditional
IRA depending on your income, filing status, whether you are covered by a
retirement plan at work, and whether you receive social security benefits. See
How Much Can You Deduct? in chapter 1.
| No. You can never deduct contributions to a Roth IRA. See
What Is a Roth IRA? in chapter 2.
|
| Do I have to file a form just because I contribute to a | Not unless you make nondeductible contributions to your
traditional IRA. In that case, you must file Form 8606. See
Nondeductible Contributions in chapter 1.
| No. You do not have to file a form if you contribute to
a Roth IRA. See
Contributions not reported in chapter 2.
|
| Do I have to start taking distributions when I reach a certain
age from a | Yes. You must begin receiving required minimum distributions
by April 1 of the year following the year you reach age 701/2. See
When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1.
| No. If you are the original owner of a Roth IRA, you do
not have to take distributions regardless of your age. See
Are Distributions Taxable?
in chapter 2. However, if you are the beneficiary of a Roth IRA, you may have to
take distributions. See
Distributions After Owner's Death in chapter 2.
|
| How are distributions taxed from a | Distributions from a traditional IRA are taxed as ordinary
income, but if you made nondeductible contributions, not all of the distribution
is taxable. See
Are Distributions Taxable? in chapter 1.
| Distributions from a Roth IRA are not taxed as long as you
meet certain criteria. See
Are Distributions Taxable? in chapter 2.
|
| Do I have to file a form just because I receive distributions
from a | Not unless you have ever made a nondeductible contribution
to a traditional IRA. If you have, file Form 8606. | Yes. File Form 8606 if you received distributions from a
Roth IRA (other than a rollover, qualified charitable distribution, one-time
distribution to fund an HSA, recharacterization, certain qualified
distributions, or a return of certain contributions).
|
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