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Closed tax year. A special rule applies if you incorrectly deducted part of the excess contribution in a closed tax year (one for which the period to assess a tax deficiency has expired). The amount allowable as a traditional IRA deduction for a later correction year (the year you contrib- ute less than the allowable amount) must be reduced by the amount of the excess contribution deducted in the closed year. To figure the amount of excess contributions for previ- ous years that you can deduct this year if you incorrectly deducted part of the excess contribution in a closed tax year, see Worksheet 1-6. Excess Contributions Deductible This Year if Any Were Deducted in a Closed Tax Year Use this worksheet to figure the amount of excess contributions for prior years that you can deduct this year if you incorrectly deducted excess contributions in a closed tax year. 1. Maximum IRA deduction for the current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 2. IRA contributions for the current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 3. If line 2 is less than line 1, enter any excess contributions that were deducted in a closed tax year. Otherwise, enter -0- . . . . . 3. 4. Subtract line 3 from line 1 . . . . . . . . . . . . . . 4. 5. Subtract line 2 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 6. Excess contributions in IRA at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. 7. Enter the lesser of line 5 or line 6. This is the amount of excess contributions for previous years that you can deduct this year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Reporting Additional Taxes Generally, you must use Form 5329 to report the tax on excess contributions, early distributions, and excess ac- cumulations. Filing a tax return. If you must file an individual income tax return, complete Form 5329 and attach it to your Form 1040 or Form 1040NR. Enter the total additional taxes due on Schedule 4 (Form 1040), line 59; or on Form 1040NR, line 57. Not filing a tax return. If you don’t have to file a return, but do have to pay one of the additional taxes mentioned earlier, file the completed Form 5329 with the IRS at the time and place you would have filed Form 1040 or Form 1040NR. Be sure to include your address on page 1 and your signature and date on page 2. Enclose, but don’t at- tach, a check or money order payable to “United States Treasury” for the tax you owe, as shown on Form 5329. Worksheet 1-6. Write your social security number and “2018 Form 5329” on your check or money order. Form 5329 not required. You don’t have to use Form 5329 if either of the following situations exists. • Distribution code 1 (early distribution) is correctly shown in box 7 of Form 1099-R. If you don’t owe any other additional tax on a distribution, multiply the taxa- ble part of the early distribution by 10% and enter the result on Schedule 4 (Form 1040), line 59; or on Form 1040NR, line 57. Enter “No” to the left of the line to in- dicate that you don’t have to file Form 5329. However, if you owe this tax and also owe any other additional tax on a distribution, don’t enter this 10% additional tax directly on your Form 1040 or Form 1040NR. You must file Form 5329 to report your additional taxes. • If you rolled over part or all of a distribution from a qualified retirement plan, the part rolled over isn’t sub- ject to the tax on early distributions. 2. Roth IRAs Reminders Deemed IRAs. For plan years beginning after 2002, 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 require- ments 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. Designated Roth accounts. Designated Roth accounts are separate accounts under 401(k), 403(b), or 457(b) plans that accept elective deferrals that are referred to as Roth contributions. These elective deferrals are included in your income, but qualified distributions from these ac- counts aren’t included in your income. Designated Roth accounts aren’t IRAs and shouldn’t be confused with Roth IRAs. Contributions, up to their respective limits, can be Page 38 Chapter 2 Roth IRAs