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 Previous Page: Publication 587 - Business Use of Your Home (Including Use by Day-Care Providers) - How To Get Tax Help Next Page: Publication 590 - Individual Retirement Arrangements (IRAs) - Traditional IRAs
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For 2007, 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:
For 2007, 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 $156,000 but less than $166,000. If your modified AGI is $166,000 or more, you cannot take a deduction for contributions to a traditional IRA. See How Much Can You Deduct? in chapter 1.
For 2007, your Roth IRA contribution limit is reduced (phased out) in the following situations.
For 2007, you may be able to claim the retirement savings contributions credit if your modified AGI is not more than:
A direct transfer from a deceased employee's qualified pension, profit-sharing or stock bonus plan, annuity plan, tax-sheltered annuity (section 403(b)) plan, or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. The IRA is treated as an inherited IRA. For more information about rollovers, see Rollovers under Can You Move Retirement Plan Assets? in chapter 1.
If you are covered by a high deductible health plan (HDHP), you may be able to make a nontaxable HSA funding distribution from your IRA (other than a SEP or SIMPLE IRA) that would otherwise be included in income. The distribution must be a direct trustee-to-trustee transfer to an HSA. The distribution will be nontaxable to the extent it is not more than the limit on your annual HSA contributions.
Generally, you can make only one nontaxable HSA funding distribution during your lifetime. However, if you change your HDHP coverage from self-only to family, you may be able to make an additional distribution during the same year. For more information, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.
If you participated in a 401(k) plan and the employer who maintained the plan went into bankruptcy in an earlier year, you may be able to contribute up to $7,000 to your IRA. See Catch-up contributions in certain employer bankruptcies in chapter 1 for traditional IRAs and in chapter 2 for Roth IRAs.
For 2007, salary reduction contributions that your employer could make on your behalf under a SIMPLE plan increased to $10,500.
For more information about salary reduction contributions, see How Much Can Be Contributed on Your Behalf? in chapter 3.
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The contribution limit to your traditional IRA for 2008 will be increased to the smaller of the following amounts:
If you were age 50 or older before 2009, the most that can be contributed to your traditional IRA for 2008 will be the smaller of the following amounts:
For more information, see How Much Can Be Contributed? in chapter 1.
If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2008 will generally be the lesser of:
If you were age 50 or older before 2009 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2008 will generally be the lesser of:
However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in chapter 2.For 2008, 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 adjusted gross income (AGI) is:
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 AGI is more than $159,000 but less than $169,000. If your AGI is $169,000 or more, you cannot take a deduction for contributions to a traditional IRA. See How Much Can You Deduct? in chapter 1.
For 2008, your Roth IRA contribution limit is reduced (phased out) in the following situations.
For 2008, you may be able to claim the retirement savings contributions credit if your modified adjusted gross income (AGI) is not more than:
For 2008, you can roll over amounts from an eligible retirement plan into a Roth IRA. For more information, see Rollovers from other retirement plans in chapter 2.
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SEP IRAs are not covered in this publication. They are covered in Publication 560, Retirement Plans for Small Business.
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:
If a minimum distribution 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 required minimum distribution 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.
Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Do not report this interest on your return as tax-exempt interest.
Special rules apply to the use of retirement funds (including IRAs) by qualified individuals who suffered an economic loss as a result of Hurricane Katrina, Rita, or Wilma. While qualified hurricane distributions can no longer be made, special rules apply to the repayment of these distributions. See chapter 4, Hurricane-Related Relief, for information on these special rules.
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.
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Two tax advantages of an IRA are that:
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This publication discusses traditional, Roth, and SIMPLE IRAs. It explains the rules for:
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.
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The 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.
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We 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. Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products.
taxmap/pubs/p590-000.htm#TXMP0c15e625 Ordering forms and publications.(p4) |
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Visit 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.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
taxmap/pubs/p590-000.htm#TXMP75ba833d Tax questions.(p4) |
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If you have a tax question, check the information available on www.irs.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.
| IF you need information on ... | THEN see ... |
| traditional IRAs | chapter 1. |
| Roth IRAs | chapter 2, and parts of chapter 1. |
| SIMPLE IRAs | chapter 3. |
| hurricane-related relief | chapter 4. |
| the credit for qualified retirement savings contributions | 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 2007, you
| 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. |
You may want to see:
See chapter 6 for information about getting these publications and forms.
| Question | Answer | |
| Traditional IRA? | Roth IRA? | |
| Is there an age limit on when I can set up and contribute to a | Yes. You must not have reached age 701/2 by the end of the year. See Who Can Set Up 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 $4,000 in 2007 ($5,000 if I was 50 or older by the end of 2007), is there a limit on how much I can contribute to a | Yes. For 2007, you can contribute to a traditional IRA up to:
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 2007, you may be able to contribute to a Roth IRA up to:
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 Introduction 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 owner of a Roth IRA, you do not have to take distributions regardless of your age. See Are Distributions Taxable? 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, recharacterization, certain qualified distributions, or a return of certain contributions). |
Previous Page:
Publication 587 - Business Use of Your Home (Including Use by Day-Care Providers) - How To Get Tax HelpNext Page:
Publication 590 - Individual Retirement Arrangements (IRAs) - Traditional IRAs
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