Page 90 - 2020 Publication 17

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
additional taxes mentioned earlier, file the com- Contributions not reported. You don't report and your modified AGI (defined later) is less
pleted Form 5329 with the IRS at the time and Roth IRA contributions on your return. than:
place you would have filed your Form 1040 or • $206,000 for married filing jointly or qualify-
1040-SR. Be sure to include your address on What Is a Roth IRA? ing widow(er);
page 1 and your signature and date on page 2.
Enclose, but don't attach, a check or money or- A Roth IRA is an individual retirement plan that, • $139,000 for single, head of household, or
der payable to “United States Treasury” for the except as explained in this chapter, is subject to married filing separately and you didn't live
tax you owe, as shown on Form 5329. Enter the rules that apply to a traditional IRA (defined with your spouse at any time during the
your social security number and “2020 Form earlier). It can be either an account or an annu- year; or
5329” on your check or money order. ity. Individual retirement accounts and annuities • $10,000 for married filing separately and
Form 5329 not required. You don't have to are described under How Can a Traditional IRA you lived with your spouse at any time dur-
use Form 5329 if any of the following situations Be Opened? in chapter 1 of Pub. 590-A. ing the year.
exists. To be a Roth IRA, the account or annuity You may be eligible to claim a credit for
• Distribution code 1 (early distribution) is must be designated as a Roth IRA when it is TIP contributions to your Roth IRA. For
correctly shown in box 7 of all your Forms opened. A deemed IRA can be a Roth IRA, but more information, see chapter 3 of
1099-R. If you don't owe any other addi- neither a SEP IRA nor a SIMPLE IRA can be Pub. 590-A.
tional tax on a distribution, multiply the tax- designated as a Roth IRA.
able part of the early distribution by 10% Unlike a traditional IRA, you can't deduct Is there an age limit for contributions? Con-
(0.10) and enter the result on Schedule 2 contributions to a Roth IRA. But, if you satisfy tributions can be made to your Roth IRA regard-
(Form 1040), line 6. Enter “No” to the left of the requirements, qualified distributions (dis- less of your age.
the line to indicate that you don't have to cussed later) are tax free. You can leave Can you contribute to a Roth IRA for your
file Form 5329. However, if you owe this amounts in your Roth IRA as long as you live. spouse? You can contribute to a Roth IRA for
tax and also owe any other additional tax your spouse provided the contributions satisfy
on a distribution, don't enter this 10% addi- When Can a Roth IRA Be the Kay Bailey Hutchison Spousal IRA limit (dis-
tional tax directly on your Form 1040 or Opened? cussed under How Much Can Be Contributed,
1040-SR. You must file Form 5329 to re- earlier, under Traditional IRAs), you file jointly,
port your additional taxes. You can open a Roth IRA at any time. However, and your modified AGI is less than $206,000.
• If you rolled over part or all of a distribution the time for making contributions for any year is Compensation. Compensation includes wa-
from a qualified retirement plan, the part limited. See When Can You Make Contribu-
rolled over isn't subject to the tax on early tions, later, under Can You Contribute to a Roth ges, salaries, tips, professional fees, bonuses,
and other amounts received for providing per-
distributions. IRA. sonal services. It also includes commissions,
• If you have a qualified 2018, 2019, or 2020 self-employment income, nontaxable combat
qualified disaster distribution. See Form Can You Contribute to a pay, military differential pay, and taxable ali-
8915-C, Form 8915-D, or Form 8915-E, as mony and separate maintenance payments.
applicable, for more details. Roth IRA? Modified AGI. Your modified AGI for Roth IRA
Roth IRAs Generally, you can contribute to a Roth IRA if purposes is your adjusted gross income (AGI)
you have taxable compensation (defined later)
as shown on your return with some adjust-
ments. Use Worksheet 9-2 below to determine
Regardless of your age, you may be able to es- your modified AGI.
tablish and make nondeductible contributions to
a retirement plan called a Roth IRA.

Page 86 Chapter 9 Individual Retirement Arrangements (IRAs)