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Publication 590-A - Introductory Material


What's New for 2015

Modified AGI limit for traditional IRA contributions increased. For 2015, 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 $98,000 but less than $118,000 for a married couple filing a joint return or a qualifying widow(er),

  • More than $61,000 but less than $71,000 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 $183,000 but less than $193,000. If your modified AGI is $193,000 or more, you cannot take a deduction for contributions to a traditional IRA.

Modified AGI limit for Roth IRA contributions increased. For 2015, 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 $183,000. You cannot make a Roth IRA contribution if your modified AGI is $193,000 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 2015 and your modified AGI is at least $116,000. You cannot make a Roth IRA contribution if your modified AGI is $131,000 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.

Application of one-rollover-per-year limitation. Beginning in 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 1-year period regardless of the number of IRAs you own. However, you can continue to make unlimited trustee-to-trustee transfers between IRAs because it is not considered a rollover. Furthermore, you can also make as many rollovers from a traditional IRA to a Roth IRA (also known as “conversions”). For more information, see Can You Move Retirement Plan Assets? in chapter 1.

Rollovers to SIMPLE Retirement Accounts. Beginning after December 18, 2015, you are able to roll over amounts from a qualified retirement plan (as described under Table 1-4. Rollover Chart, later) or an IRA into a SIMPLE retirement account as follows:

  1. During the first 2 years of participation in a SIMPLE retirement account, you may roll over amounts from one SIMPLE retirement account into another SIMPLE retirement account; and

  2. After the first 2 years of participation in a SIMPLE retirement account, you may roll over amounts from a qualified retirement plan or an IRA into the SIMPLE retirement account.

Reminders

Future developments. For the latest information about developments related to Pub. 590-A, such as legislation enacted after it was published, go to www.irs.gov/pub590a.

Publication 590 split.  Pub. 590 has been split into two separate publications as follows.

  • Pub. 590-A, covers contributions to traditional IRAs as well as Roth IRAs. This publication includes the rules for rollover and conversion contributions.

  • Pub. 590-B, covers distributions from traditional IRAs as well as Roth IRAs. This publication includes the rules for required minimum distributions and IRA beneficiaries.

SIMPLE IRAs. SIMPLE IRAs are not covered in this publication. They are covered in Pub. 560.

Simplified employee pension (SEP). SEP IRAs are not covered in this publication. They are covered in Pub. 560, Retirement Plans for Small Business.

Deemed IRAs. 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. 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.

IRA interest. 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.

Photographs of missing children. The IRS 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.

Introduction

This publication discusses contributions to individual retirement arrangements (IRAs). An IRA is a personal savings plan that gives you tax advantages for setting aside money for retirement. For information about distributions from an IRA, see Pub. 590-B.

What are some tax advantages of an IRA?   Two 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.

What's in this publication?   This publication discusses contributions to traditional and Roth IRAs. It explains the rules for:
  • Setting up an IRA,

  • Contributing to an IRA,

  • Transferring money or property to and from an IRA, 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 and sample forms which can be found throughout the publication and in the appendices at the back of the publication.

How to use this publication.   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.

Comments and suggestions.    We welcome your comments about this publication and your suggestions for future editions.

  You can send us comments from www.irs.gov/formspubs. Click on “More Information” and then on “Give us feedback.

  Or you can write to:

Internal Revenue Service 
Tax Forms and Publications 
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.

  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.

Ordering forms and publications.    Visit www.irs.gov/formspubs to download forms and publications. Otherwise, you can go to www.irs.gov/orderforms to order current and prior-year forms and instructions. Your order should arrive within 10 business days.

Tax questions.   If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication.

Useful Items - You may want to see:

Publications

  • 590-B Distributions from Individual Retirement Arrangements (IRAs)

  • 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

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

See chapter 4 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.
the credit for qualified retirement savings contributions (the saver's credit) chapter 3.
how to keep a record of your contributions to, and distributions from, your traditional IRA(s) Appendix A.
SEP IRAs, SIMPLE IRAs, and 401(k) plans Pub. 560.
Coverdell education savings accounts (formerly called education IRAs) Pub. 970.
IF for 2015, 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.

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  
70½ 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 $5,500 in 2015 ($6,500 if I was 50 or older by the end of 2015), is there a limit on how much I can contribute to a Yes. For 2015, you can contribute to a traditional IRA up to:
  • $5,500, or

  • $6,500 if you were age 50 or older by the end of 2015.

 
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 2015, you may be able to contribute to a Roth IRA up to:
  • $5,500, or

  • $6,500 if you were age 50 or older by the end of 2015,

 
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.


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