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However, the sponsor doesn’t have to give you the state- ment until the date you open (or purchase, if earlier) your IRA, provided you are given at least 7 days from that date to revoke the IRA. The disclosure statement must explain certain items in plain language. For example, the statement should ex- plain when and how you can revoke the IRA, and include the name, address, and telephone number of the person to receive the notice of cancellation. This explanation must appear at the beginning of the disclosure statement. If you revoke your IRA within the revocation period, the sponsor must return to you the entire amount you paid. The sponsor must report on the appropriate IRS forms both your contribution to the IRA (unless it was made by a trustee-to-trustee transfer) and the amount returned to you. These requirements apply to all sponsors. How Much Can Be Contributed? There are limits and other rules that affect the amount that can be contributed to a traditional IRA. These limits and rules are explained below. Community property laws. Except as discussed later under Kay Bailey Hutchison Spousal IRA Limit, each spouse figures his or her limit separately, using his or her own compensation. This is the rule even in states with community property laws. Brokers' commissions. Brokers' commissions paid in connection with your traditional IRA are subject to the con- tribution limit. For information about whether you can de- duct brokers' commissions, see Brokers' commissions, later, under How Much Can You Deduct. Trustees' fees. Trustees' administrative fees aren’t sub- ject to the contribution limit. For information about whether you can deduct trustees' fees, see Trustees' fees, later, under How Much Can You Deduct. Qualified reservist repayments. If you were a member of a reserve component and you were ordered or called to active duty after September 11, 2001, you may be able to contribute (repay) to an IRA amounts equal to any quali- fied reservist distributions (defined under Early Distribu- tions in Pub. 590-B) you received. You can make these re- payment contributions even if they would cause your total contributions to the IRA to be more than the general limit on contributions. To be eligible to make these repayment contributions, you must have received a qualified reservist distribution from an IRA or from a section 401(k) or 403(b) plan or a similar arrangement. See Pub. 590-B under Early Distributions for more information on qualified re- servist distributions. Limit. Your qualified reservist repayments can’t be more than your qualified reservist distributions. When repayment contributions can be made. You can’t make these repayment contributions later than the date that is 2 years after your active duty period ends. No deduction. You can’t deduct qualified reservist re- payments. Reserve component. The term “reserve component” means the: • Army National Guard of the United States, • Army Reserve, • Naval Reserve, • Marine Corps Reserve, • Air National Guard of the United States, • Air Force Reserve, • Coast Guard Reserve, or • Reserve Corps of the Public Health Service. Figuring your IRA deduction. The repayment of qualified reservist distributions doesn’t affect the amount you can deduct as an IRA contribution. Reporting the repayment. If you repay a qualified re- servist distribution, include the amount of the repayment with nondeductible contributions on line 1 of Form 8606. Example. In 2018, your IRA contribution limit is $5,500. However, because of your filing status and AGI, the limit on the amount you can deduct is $3,500. You can make a nondeductible contribution of $2,000 ($5,500 - $3,500). In an earlier year, you received a $3,000 qualified reservist distribution, which you would like to repay this year. For 2018, you can contribute a total of $8,500 to your IRA. This is made up of the maximum deductible contribu- tion of $3,500; a nondeductible contribution of $2,000; and a $3,000 qualified reservist repayment. You contrib- ute the maximum allowable for the year. Since you are making a nondeductible contribution ($2,000) and a quali- fied reservist repayment ($3,000), you must file Form 8606 with your return and include $5,000 ($2,000 + $3,000) on line 1 of Form 8606. The qualified reservist re- payment isn’t deductible. Contributions on your behalf to a traditional IRA reduce your limit for contributions to a Roth IRA. See chapter 2 for information about Roth IRAs. General Limit For 2018, the most that can be contributed to your tradi- tional IRA generally is the smaller of the following amounts. • $5,500 ($6,500 if you are age 50 or older). • Your taxable compensation (defined earlier) for the year. Note. This limit is reduced by any contributions to a section 501(c)(18) plan (generally, a pension plan created CAUTION ! Page 8 Chapter 1 Traditional IRAs