5.1 Pensions and Annuities: General
Am I considered covered by an employer sponsored retirement plan
for the year if I do not participate in the plan or if I did not work long
enough to be vested?
The answer to this question depends on your type of retirement plan. If
your employer's plan has a separate account for each employee. This is called
a defined contribution plan if any amount was contributed or allocated by
you or your employer to your account, you are considered covered. It does
not matter if you have worked long enough to be vested.
In the other type of plan, the plan employer must make enough contributions
(together with earnings) to provide the retirement benefit promised in the
retirement plan. This is called a defined benefit plan. In this type of plan,
if you meet the minimum age and years of service requirements to participate
in your employer's plan, you are considered covered even if you decline coverage.
It does not matter if you are vested.
The Form W-2 you receive from your employer has a box used to indicate
whether you were covered for the year. The "Pension Plan" box should have
a mark in it if you were covered.
References:
17.3 Individual Retirement Arrangements (IRAs): Roth IRA
Do I report my nondeductible Roth IRA contributions on Form 8606?
There are no forms to report a Roth contribution. The financial institution,
which is the trustee of your Roth IRA, will send you information on the amount
in your Roth IRA. They will also send the information to the Internal Revenue
Service. Use Form 8606 (PDF), Nondeductible
IRAs, if you made a nondeductible contribution to a traditional IRA;
converted from a traditional IRA, a SEP, or Simple IRA to a Roth IRA, received
a distribution from a traditional IRA, a SEP, or a Simple IRA and made nondeductible
contributions to a traditional IRA, or received a distribution from a Roth
or IRA.
References:
Can a person make a contribution to a SEP-IRA and a Roth IRA, too?
Yes, you can make a contribution to a SEP-IRA and a Roth IRA. See Publication 590, Individual Retirement Arrangements, for
the requirements to contribute to a SEP and a Roth IRA. However, your SEP
IRA contribution and Roth IRA contribution can not be made to the same IRA.
References:
17.4 Individual Retirement Arrangements (IRAs): Traditional IRA
If I am covered by a employer sponsored retirement plan for part
of the year, but work the rest of the year for an employer without a retirement
plan, how much of my earnings may I deduct for a traditional IRA?
The amount you can deduct will be determined by your modified Adjusted
Gross Income (AGI) and filing status. For specific information refer to Publication 590, Individual Retirement Accounts (IRAs).
References:
Tax Topics & FAQs | 2003 Tax Year Archives | Tax Help Archives | Home
