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Free State Tax File

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Free State Tax File

Free state tax file Index , Hardest Hit Fund and Emergency Homeowners' Loan Programs. Free state tax file , Form 1098. Free state tax file , How To Report, Form 1098. Free state tax file A Acquisition debt, Fully deductible interest. Free state tax file , Home Acquisition Debt, Part of home not a qualified home. Free state tax file Alimony, Divorced or separated individuals. Free state tax file Amortization Points, General Rule Appraisal fees, Amounts charged for services. Free state tax file Armed forces Housing allowance, Ministers' and military housing allowance. Free state tax file Assistance (see Tax help) Average mortgage balance, Average Mortgage Balance B Borrowers More than one, More than one borrower. Free state tax file Seller-paid points, treatment by buyer, Treatment by buyer. Free state tax file Business Average mortgage balance, total amount of interest otherwise allowable to each activity, Line 13 Mortgage proceeds used for, Mortgage proceeds used for business or investment. Free state tax file C Clergy Ministers' and military housing allowance, Ministers' and military housing allowance. Free state tax file Cooperative housing, Cooperative apartment owner. Free state tax file , Cooperative apartment owner. Free state tax file , Special Rule for Tenant-Stockholders in Cooperative Housing Corporations, Form 1098. Free state tax file Cost of home or improvements, Cost of home or improvements. Free state tax file Credits, Mortgage interest credit. Free state tax file D Date of mortgage, Date of the mortgage. Free state tax file Debt Choice to treat as not secured by home, Choice to treat the debt as not secured by your home. Free state tax file Grandfathered, Fully deductible interest. Free state tax file , Grandfathered Debt, Line-of-credit mortgage. Free state tax file Home acquisition, Fully deductible interest. Free state tax file , Home Acquisition Debt Home equity, Fully deductible interest. Free state tax file , Home Equity Debt Home equity only (Table 1), Home equity debt only. Free state tax file Not secured by home, Debt not secured by home. Free state tax file Secured, Secured Debt Deductions, Part I. Free state tax file Home Mortgage Interest, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Free state tax file Home office, Office in home. Free state tax file Mortgage insurance premiums, Claiming your deductible mortgage insurance premiums. Free state tax file Points, General Rule, Claiming your deductible points. Free state tax file Deed preparation costs, Amounts charged for services. Free state tax file Divorced taxpayers, Divorced or separated individuals. Free state tax file , Acquiring an interest in a home because of a divorce. Free state tax file E Emergency Homeowners' Loan Program, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Free state tax file Equity debt, Fully deductible interest. Free state tax file , Home Equity Debt, Fair market value (FMV). Free state tax file Equity debt only (Table 1), Home equity debt only. Free state tax file F Fair market value (FMV), Fair market value (FMV). Free state tax file Fees Appraisal, Amounts charged for services. Free state tax file Notaries, Amounts charged for services. Free state tax file Points (see Points) Figures (see Tables and figures) Form 1040, Schedule A, How To Report, Table 2. Free state tax file Where To Deduct Your Interest Expense Form 1040, Schedule C or C-EZ, Table 2. Free state tax file Where To Deduct Your Interest Expense Form 1040, Schedule E, Table 2. Free state tax file Where To Deduct Your Interest Expense Form 1040, Schedule F, Table 2. Free state tax file Where To Deduct Your Interest Expense Form 1098, Form 1098, Mortgage Interest Statement Mortgage insurance premiums, Form 1098. Free state tax file Form 8396, Mortgage interest credit. Free state tax file Free tax services, Free help with your tax return. Free state tax file G Grandfathered debt, Fully deductible interest. Free state tax file , Grandfathered Debt, Line-of-credit mortgage. Free state tax file Ground rents, Redeemable ground rents. Free state tax file H Hardest Hit Fund Program, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Free state tax file Help (see Tax help) Home, Publication 936 - Introductory Material Acquisition debt, Fully deductible interest. Free state tax file , Home Acquisition Debt Construction, Home under construction. Free state tax file Cost of, Cost of home or improvements. Free state tax file Destroyed, Home destroyed. Free state tax file Divided use, Divided use of your home. Free state tax file , Part of home not a qualified home. Free state tax file , Part of home not a qualified home. Free state tax file Equity debt, Fully deductible interest. Free state tax file , Home Equity Debt Equity debt only (Table 1), Home equity debt only. Free state tax file Fair market value, Fair market value (FMV). Free state tax file Grandfathered debt, Fully deductible interest. Free state tax file , Grandfathered Debt, Line-of-credit mortgage. Free state tax file Improvement loan, points, Home improvement loan. Free state tax file Main, Main home. Free state tax file Office in, Office in home. Free state tax file Qualified, Qualified Home Renting out part of, Renting out part of home. Free state tax file Sale of, Sale of home. Free state tax file Second, Second home. Free state tax file Time-sharing arrangements, Time-sharing arrangements. Free state tax file Housing allowance Ministers and military, Ministers' and military housing allowance. Free state tax file I Improvements Cost of, Cost of home or improvements. Free state tax file Home acquisition debt, Mortgage treated as used to buy, build, or improve home. Free state tax file Points, Home improvement loan. Free state tax file Substantial, Substantial improvement. Free state tax file Interest, Part I. Free state tax file Home Mortgage Interest (see also Mortgage interest) Interest rate method, Interest paid divided by interest rate method. Free state tax file Refunded, Refunds of interest. Free state tax file , Refunded interest. Free state tax file Where to deduct, Table 2. Free state tax file Where To Deduct Your Interest Expense Investments Average mortgage balance and total amount of interest allowable, Line 13 Mortgage proceeds used for, Mortgage proceeds invested in tax-exempt securities. Free state tax file , Mortgage proceeds used for business or investment. Free state tax file J Joint returns, Married taxpayers. Free state tax file L Lender mortgage statements, Statements provided by your lender. Free state tax file Limits Cooperative housing, mortgage interest deduction, Limits on deduction. Free state tax file Deductibility of mortgage insurance premiums, Limit on deduction. Free state tax file Deductibility of points, Limits on deduction. Free state tax file Home acquisition debt, Home acquisition debt limit. Free state tax file Home equity debt, Home equity debt limit. Free state tax file Home mortgage interest deduction, Form 1098. Free state tax file Qualified loan limit, Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file , Average Mortgage Balance Line-of-credit mortgage, Line-of-credit mortgage. Free state tax file Loans, Mortgage proceeds used for business or investment. Free state tax file , Mortgage treated as used to buy, build, or improve home. Free state tax file (see also Mortgages) Home improvement, points, Home improvement loan. Free state tax file Qualified loan limit, Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file M Main home, Main home. Free state tax file Married taxpayers, Married taxpayers. Free state tax file Military housing allowance, Ministers' and military housing allowance. Free state tax file Ministers' housing allowance, Ministers' and military housing allowance. Free state tax file Missing children, photographs of, Reminders Mixed-use mortgages, Mixed-use mortgages. Free state tax file Mortgage insurance premiums Claiming deductible, Claiming your deductible mortgage insurance premiums. Free state tax file Mortgage interest, Publication 936 - Introductory Material, Part I. Free state tax file Home Mortgage Interest Cooperative housing, Figuring deductible home mortgage interest. Free state tax file Credit, Mortgage interest credit. Free state tax file Fully deductible interest, Fully deductible interest. Free state tax file Home mortgage interest, Part I. Free state tax file Home Mortgage Interest, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Free state tax file How to report, How To Report Late payment charges, Late payment charge on mortgage payment. Free state tax file Limits on deduction, Part II. Free state tax file Limits on Home Mortgage Interest Deduction Ministers' and military housing allowance, Ministers' and military housing allowance. Free state tax file Prepaid interest, Prepaid interest. Free state tax file , Prepaid interest on Form 1098. Free state tax file Prepayment penalty, Mortgage prepayment penalty. Free state tax file Refunds, Refunds of interest. Free state tax file , Refunded interest. Free state tax file Sale of home, Sale of home. Free state tax file Special situations, Special Situations Statement, Form 1098, Mortgage Interest Statement Where to deduct, Table 2. Free state tax file Where To Deduct Your Interest Expense Worksheet to figure (Table 1), Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file Mortgages Assistance payments (under sec. Free state tax file 235 of National Housing Act), Mortgage assistance payments under section 235 of the National Housing Act. Free state tax file Average balance, Average Mortgage Balance Date of, Date of the mortgage. Free state tax file Ending early, Mortgage ending early. Free state tax file Late qualifying, Mortgage that qualifies later. Free state tax file Line-of-credit, Line-of-credit mortgage. Free state tax file Mixed-use, Mixed-use mortgages. Free state tax file Preparation costs for note or deed of trust, Amounts charged for services. Free state tax file Proceeds invested in tax-exempt securities, Mortgage proceeds invested in tax-exempt securities. Free state tax file Proceeds used for business, Mortgage proceeds used for business or investment. Free state tax file Proceeds used for investment, Mortgage proceeds used for business or investment. Free state tax file Qualified loan limit, Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file , Average Mortgage Balance Refinanced, Refinancing. Free state tax file , Refinanced home acquisition debt. Free state tax file , Refinanced grandfathered debt. Free state tax file Reverse, Reverse mortgages. Free state tax file Statements provided by lender, Statements provided by your lender. Free state tax file To buy, build, or improve, Mortgage treated as used to buy, build, or improve home. Free state tax file Wraparound, Wraparound mortgage. Free state tax file N Nonredeemable ground rents, Nonredeemable ground rents. Free state tax file Notary fees, Amounts charged for services. Free state tax file O Office in home, Office in home. Free state tax file P Penalties Mortgage prepayment, Mortgage prepayment penalty. Free state tax file Points, Points, Deduction Allowed in Year Paid, Form 1098. Free state tax file Claiming deductible, Claiming your deductible points. Free state tax file Exception to general rule, Deduction Allowed in Year Paid Excess, Excess points. Free state tax file Funds provided less than, Funds provided are less than points. Free state tax file General rule, General Rule Home improvement loans, Home improvement loan. Free state tax file Seller paid, Points paid by the seller. Free state tax file Prepaid interest, Prepaid interest. Free state tax file , Prepaid interest on Form 1098. Free state tax file Prepayment penalties, Mortgage prepayment penalty. Free state tax file Publications (see Tax help) Q Qualified homes, Qualified Home Qualified loan limit Average mortgage balance, Average Mortgage Balance Worksheet to figure (Table 1), Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file R Redeemable ground rents, Redeemable ground rents. Free state tax file Refinancing, Refinancing. Free state tax file Grandfathered debt, Refinanced grandfathered debt. Free state tax file Home acquisition debt, Refinanced home acquisition debt. Free state tax file Refunds, Refunds of interest. Free state tax file , Refunded interest. Free state tax file Rent Nonredeemable ground rents, Nonredeemable ground rents. Free state tax file Redeemable ground rents, Redeemable ground rents. Free state tax file Rental payments, Rental payments. Free state tax file Renting of home Part of, Renting out part of home. Free state tax file Time-sharing arrangements, Rental of time-share. Free state tax file Repairs, Substantial improvement. Free state tax file Reverse Mortgages, Reverse mortgages. Free state tax file S Sale of home, Sale of home. Free state tax file Second home, Second home. Free state tax file , Deduction Allowed in Year Paid Secured debt, Secured Debt Seller-paid points, Points paid by the seller. Free state tax file Separate returns, Separate returns. Free state tax file Separated taxpayers, Divorced or separated individuals. Free state tax file Spouses, Married taxpayers. Free state tax file Statements provided by lender, Statements provided by your lender. Free state tax file Stock Cooperative housing, Stock used to secure debt. Free state tax file T Tables and figures Deductible home mortgage interest Fully deductible, determination of (Figure A), Fully deductible interest. Free state tax file How to figure (Table 1), Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file Mortgage to buy, build, or improve home (Figure C), Mortgage treated as used to buy, build, or improve home. Free state tax file Points (Figure B), Points Qualified loan limit worksheet (Table 1), Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file Tax credits, Mortgage interest credit. Free state tax file Tax help, How To Get Tax Help Tax-exempt securities Mortgage proceeds invested in, Mortgage proceeds invested in tax-exempt securities. Free state tax file Time-sharing arrangements, Time-sharing arrangements. Free state tax file V Valuation Fair market value, Fair market value (FMV). Free state tax file W Worksheets Deductible home mortgage interest, Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file Qualified loan limit, Table 1. Free state tax file Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free state tax file Wraparound mortgages, Wraparound mortgage. Free state tax file Prev  Up     Home   More Online Publications
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Understanding your CP276B Notice

We didn't receive the correct amount of tax deposits. We normally charge a Federal Tax Deposit penalty when this happens. We decided not to do so this time.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the toll free number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).
 


What you need to do

  • Review your records to see if you are paying your current payroll taxes on time.
  • Correct the copy of your tax return and the tax liability schedule that you kept for your records.

You may want to...


Answers to Common Questions

Do I have to reply to this notice?
No, but you should check your records to see why your tax deposits were incorrect.

How do I know whether I should make monthly or semiweekly payroll tax deposits?
Go back and look at the total tax liability for the four quarters before the quarter ending in June of last year if you file a quarterly return. Annual return filers should go back and look at the total tax liability of the year before their previous filing year.

For either a quarterly or an annual filer, a total tax liability of $50,000 or less means you can make your federal payroll tax deposits monthly. A tax liability greater than $50,000 means you have to make semiweekly payroll tax deposits.

When are my payroll tax deposits due?
The following table shows the schedule for semiweekly payroll tax deposits:

When Then
The payroll tax liability period is Saturday, Sunday, Monday, and Tuesday Make the tax deposit by the following Friday.
The payroll tax liability period is Wednesday, Thursday, and Friday Make the tax deposit by the following Wednesday.
A holiday falls on a weekday after the payroll tax liability period and before or on the normal deposit day Extend the deposit due date one business day for each day of holiday.

Monthly payroll tax depositors must make their tax deposits by the fifteenth of each month. When the fifteenth falls on a Saturday, a Sunday, or a legal holiday, tax deposits are due on the next business day.

Do I have to make my payroll tax deposits electronically?
Normally, yes. However, you may send your payment in with your tax return when your tax liability is $2,500 or less. If you file a quarterly tax return, another time when you may send in your payment with your return is when:

  • Your tax liabilities never totaled $100,000 or more in a deposit period, and
  • Your tax liability in the preceding quarter was $2,500 or less.

Tips for next time you file

Report each tax liability (not your deposits) on the tax liability schedule.

Make sure that that the amount on your tax liability schedule matches the payroll tax amount on your tax return.

Do not list negative amounts on your tax liability schedule.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP276B, Page 1

Notice CP276B, Page 2

Page Last Reviewed or Updated: 27-Jan-2014

The Free State Tax File

Free state tax file 3. Free state tax file   Limit on Annual Additions Table of Contents Ministers and church employees. Free state tax file Includible Compensation for Your Most Recent Year of ServiceMost Recent Year of Service Includible Compensation The first component of MAC is the limit on annual additions. Free state tax file This is a limit on the total contributions (elective deferrals, nonelective contributions, and after-tax contributions) that can be made to your 403(b) account. Free state tax file The limit on annual additions generally is the lesser of: $51,000 for 2013 and $52,000 for 2014, or 100% of your includible compensation for your most recent year of service. Free state tax file More than one 403(b) account. Free state tax file If you contributed to more than one 403(b) account, you must combine the contributions made to all 403(b) accounts on your behalf by your employer. Free state tax file Ministers and church employees. Free state tax file   If you are a minister or a church employee, you may be able to increase your limit on annual additions or use different rules when figuring your limit on annual additions. Free state tax file For more information, see chapter 5. Free state tax file Participation in a qualified plan. Free state tax file If you participated in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a qualified plan and simplified employee pensions of all corporations, partnerships, and sole proprietorships in which you have more than 50% control. Free state tax file You can use Part I of Worksheet 1 in chapter 9 to figure your limit on annual additions. Free state tax file Includible Compensation for Your Most Recent Year of Service Definition. Free state tax file   Generally, includible compensation for your most recent year of service is the amount of taxable wages and benefits you received from the employer that maintained a 403(b) account for your benefit during your most recent year of service. Free state tax file When figuring your includible compensation for your most recent year of service, keep in mind that your most recent year of service may not be the same as your employer's most recent annual work period. Free state tax file This can happen if your tax year is not the same as your employer's annual work period. Free state tax file When figuring includible compensation for your most recent year of service, do not mix compensation or service of one employer with compensation or service of another employer. Free state tax file Most Recent Year of Service Your most recent year of service is your last full year of service, ending on the last day of your tax year that you worked for the employer that maintained a 403(b) account on your behalf. Free state tax file Tax year different from employer's annual work period. Free state tax file   If your tax year is not the same as your employer's annual work period, your most recent year of service is made up of parts of at least two of your employer's annual work periods. Free state tax file Example. Free state tax file A professor who reports her income on a calendar-year basis is employed on a full-time basis by a university that operates on an academic year (October through May). Free state tax file To figure her includible compensation for 2013, the professor's most recent year of service is her service from January through May 2013 and from October through December 2013. Free state tax file Figuring Your Most Recent Year of Service To figure your most recent year of service, begin by determining what is a full year of service for your position. Free state tax file A full year of service is equal to full-time employment for your employer's annual work period. Free state tax file After identifying a full year of service, begin counting the service you have provided for your employer starting with the service provided in the current year. Free state tax file Part-time or employed only part of the year. Free state tax file   If you are a part-time or a full-time employee who is employed for only part of the year, your most recent year of service is your service this year and your service for as many previous years as is necessary to total 1 full year of service. Free state tax file To determine your most recent year of service, add the following periods of service: Your service during the year for which you are figuring the limit on annual additions, and Your service during your preceding tax years until the total service equals 1 year of service or you have figured all of your service with the employer. Free state tax file Example. Free state tax file You were employed on a full-time basis from July through December 2011 (1/2 year of service), July through December 2012 (1/2 year of service), and October through December 2013 (1/4 year of service). Free state tax file Your most recent year of service for computing your limit on annual additions for 2013 is the total of your service during 2013 (1/4 year of service), your service during 2012 (1/2 year of service), and your service during the months October through December 2011 (1/4 year of service). Free state tax file Not yet employed for 1 year. Free state tax file   If, at the close of the year, you have not yet worked for your employer for 1 year (including time you worked for the same employer in all earlier years), use the period of time you have worked for the employer as your most recent year of service. Free state tax file Includible Compensation After identifying your most recent year of service, the next step is to identify the includible compensation associated with that full year of service. Free state tax file Includible compensation is not the same as income included on your tax return. Free state tax file Compensation is a combination of income and benefits received in exchange for services provided to your employer. Free state tax file Generally, includible compensation is the amount of income and benefits: Received from the employer who maintains your 403(b) account, and Must be included in your income. Free state tax file Includible compensation includes the following amounts. Free state tax file Elective deferrals (employer's contributions made on your behalf under a salary reduction agreement). Free state tax file Amounts contributed or deferred by your employer under a section 125 cafeteria plan. Free state tax file Amounts contributed or deferred, at the election of the employee, under an eligible section 457 nonqualified deferred compensation plan (state or local government or tax-exempt organization plan). Free state tax file  Note. Free state tax file For information about treating elective deferrals under section 457 plans as Roth contributions, see Publication 575. Free state tax file Wages, salaries, and fees for personal services earned with the employer maintaining your 403(b) account. Free state tax file Income otherwise excluded under the foreign earned income exclusion. Free state tax file Pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan. Free state tax file Includible compensation does not include the following items. Free state tax file Your employer's contributions to your 403(b) account. Free state tax file Compensation earned while your employer was not an eligible employer. Free state tax file Your employer's contributions to a qualified plan that: Are on your behalf, and Are excludable from income. Free state tax file The cost of incidental life insurance. Free state tax file See Cost of Incidental Life Insurance, later. Free state tax file If you are a church employee or a foreign missionary, figure includible compensation using the rules explained in chapter 5. Free state tax file Contributions after retirement. Free state tax file   Nonelective contributions may be made for an employee for up to 5 years after retirement. Free state tax file These contributions would be based on includible compensation for the last year of service before retirement. Free state tax file Cost of Incidental Life Insurance Includible compensation does not include the cost of incidental life insurance. Free state tax file If all of your 403(b) accounts invest only in mutual funds, then you have no incidental life insurance. Free state tax file If you have an annuity contract, a portion of the cost of that contract may be for incidental life insurance. Free state tax file If so, the cost of the insurance is taxable to you in the year contributed and is considered part of your basis when distributed. Free state tax file Your employer will include the cost of your insurance as taxable wages in box 1 of Form W-2. Free state tax file Not all annuity contracts include life insurance. Free state tax file Contact your plan administrator to determine if your contract includes incidental life insurance. Free state tax file If it does, you will need to figure the cost of life insurance each year the policy is in effect. Free state tax file Figuring the cost of incidental life insurance. Free state tax file If you have determined that part of the cost of your annuity contract is for an incidental life insurance premium, you will need to determine the amount of the premium and subtract it from your includible compensation. Free state tax file To determine the amount of the life insurance premiums, you will need to know the following information. Free state tax file The value of your life insurance contract, which is the amount payable upon your death. Free state tax file The cash value of your life insurance contract at the end of the tax year. Free state tax file Your age on your birthday nearest the beginning of the policy year. Free state tax file Your current life insurance protection under an ordinary retirement income life insurance policy, which is the amount payable upon your death minus the cash value of the contract at the end of the year. Free state tax file You can use Worksheet A, in chapter 9, to determine the cost of your incidental life insurance. Free state tax file Example. Free state tax file Your new contract provides that your beneficiary will receive $10,000 if you should die before retirement. Free state tax file Your cash value in the contract at the end of the first year is zero. Free state tax file Your current life insurance protection for the first year is $10,000 ($10,000 − 0). Free state tax file The cash value in the contract at the end of year two is $1,000, and the current life insurance protection for the second year is $9,000 ($10,000 – $1,000). Free state tax file The 1-year cost of the protection can be calculated by using Figure 3-1, Table of One-Year Term Premiums for $1,000 Life Insurance Protection . Free state tax file The premium rate is determined based on your age on your birthday nearest the beginning of the policy year. Free state tax file Figure 3-1. Free state tax file Table of One-Year Term Premiums for $1,000 Life Insurance Protection Age Cost   Age Cost   Age Cost 0 $0. Free state tax file 70   35 $0. Free state tax file 99   70 $20. Free state tax file 62 1 0. Free state tax file 41   36 1. Free state tax file 01   71 22. Free state tax file 72 2 0. Free state tax file 27   37 1. Free state tax file 04   72 25. Free state tax file 07 3 0. Free state tax file 19   38 1. Free state tax file 06   73 27. Free state tax file 57 4 0. Free state tax file 13   39 1. Free state tax file 07   74 30. Free state tax file 18 5 0. Free state tax file 13   40 1. Free state tax file 10   75 33. Free state tax file 05 6 0. Free state tax file 14   41 1. Free state tax file 13   76 36. Free state tax file 33 7 0. Free state tax file 15   42 1. Free state tax file 20   77 40. Free state tax file 17 8 0. Free state tax file 16   43 1. Free state tax file 29   78 44. Free state tax file 33 9 0. Free state tax file 16   44 1. Free state tax file 40   79 49. Free state tax file 23 10 0. Free state tax file 16   45 1. Free state tax file 53   80 54. Free state tax file 56 11 0. Free state tax file 19   46 1. Free state tax file 67   81 60. Free state tax file 51 12 0. Free state tax file 24   47 1. Free state tax file 83   82 66. Free state tax file 74 13 0. Free state tax file 28   48 1. Free state tax file 98   83 73. Free state tax file 07 14 0. Free state tax file 33   49 2. Free state tax file 13   84 80. Free state tax file 35 15 0. Free state tax file 38   50 2. Free state tax file 30   85 88. Free state tax file 76 16 0. Free state tax file 52   51 2. Free state tax file 52   86 99. Free state tax file 16 17 0. Free state tax file 57   52 2. Free state tax file 81   87 110. Free state tax file 40 18 0. Free state tax file 59   53 3. Free state tax file 20   88 121. Free state tax file 85 19 0. Free state tax file 61   54 3. Free state tax file 65   89 133. Free state tax file 40 20 0. Free state tax file 62   55 4. Free state tax file 15   90 144. Free state tax file 30 21 0. Free state tax file 62   56 4. Free state tax file 68   91 155. Free state tax file 80 22 0. Free state tax file 64   57 5. Free state tax file 20   92 168. Free state tax file 75 23 0. Free state tax file 66   58 5. Free state tax file 66   93 186. Free state tax file 44 24 0. Free state tax file 68   59 6. Free state tax file 06   94 206. Free state tax file 70 25 0. Free state tax file 71   60 6. Free state tax file 51   95 228. Free state tax file 35 26 0. Free state tax file 73   61 7. Free state tax file 11   96 250. Free state tax file 01 27 0. Free state tax file 76   62 7. Free state tax file 96   97 265. Free state tax file 09 28 0. Free state tax file 80   63 9. Free state tax file 08   98 270. Free state tax file 11 29 0. Free state tax file 83   64 10. Free state tax file 41   99 281. Free state tax file 05 30 0. Free state tax file 87   65 11. Free state tax file 90       31 0. Free state tax file 90   66 13. Free state tax file 51       32 0. Free state tax file 93   67 15. Free state tax file 20       33 0. Free state tax file 96   68 16. Free state tax file 92       34 0. Free state tax file 98   69 18. Free state tax file 70                       If the current published premium rates per $1,000 of insurance protection charged by an insurer for individual 1-year term life insurance premiums available to all standard risks are lower than those in the preceding table, you can use the lower rates for figuring the cost of insurance in connection with individual policies issued by the same insurer. Free state tax file Example 1. Free state tax file Lynne Green, age 44, and her employer enter into a 403(b) plan that will provide her with a $500 a month annuity upon retirement at age 65. Free state tax file The agreement also provides that if she should die before retirement, her beneficiary will receive the greater of $20,000 or the cash surrender value in the life insurance contract. Free state tax file Using the facts presented we can determine the cost of Lynne's life insurance protection as shown in Table 3-1. Free state tax file Lynne's employer has included $28 for the cost of the life insurance protection in her current year's income. Free state tax file When figuring her includible compensation for this year, Lynne will subtract $28. Free state tax file Table 3-1. Free state tax file Worksheet A. Free state tax file Cost of Incidental Life Insurance Note. Free state tax file Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. Free state tax file This amount will be used to figure includible compensation for your most recent year of service. Free state tax file 1. Free state tax file Enter the value of the contract (amount payable upon your death) 1. Free state tax file $20,000. Free state tax file 00 2. Free state tax file Enter the cash value in the contract at the end of the year 2. Free state tax file 0. Free state tax file 00 3. Free state tax file Subtract line 2 from line 1. Free state tax file This is the value of your current life insurance protection 3. Free state tax file $20,000. Free state tax file 00 4. Free state tax file Enter your age on your birthday nearest the beginning of the policy year 4. Free state tax file 44 5. Free state tax file Enter the 1-year term premium for $1,000 of life insurance based on your age. Free state tax file (From Figure 3-1) 5. Free state tax file $1. Free state tax file 40 6. Free state tax file Divide line 3 by $1,000 6. Free state tax file 20 7. Free state tax file Multiply line 6 by line 5. Free state tax file This is the cost of your incidental life insurance 7. Free state tax file $28. Free state tax file 00 Example 2. Free state tax file Lynne's cash value in the contract at the end of the second year is $1,000. Free state tax file In year two, the cost of Lynne's life insurance is calculated as shown in Table 3-2. Free state tax file In year two, Lynne's employer will include $29. Free state tax file 07 in her current year's income. Free state tax file Lynne will subtract this amount when figuring her includible compensation. Free state tax file Table 3-2. Free state tax file Worksheet A. Free state tax file Cost of Incidental Life Insurance Note. Free state tax file Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. Free state tax file This amount will be used to figure includible compensation for your most recent year of service. Free state tax file 1. Free state tax file Enter the value of the contract (amount payable upon your death) 1. Free state tax file $20,000. Free state tax file 00 2. Free state tax file Enter the cash value in the contract at the end of the year 2. Free state tax file $1,000. Free state tax file 00 3. Free state tax file Subtract line 2 from line 1. Free state tax file This is the value of your current life insurance protection 3. Free state tax file $19,000. Free state tax file 00 4. Free state tax file Enter your age on your birthday nearest the beginning of the policy year 4. Free state tax file 45 5. Free state tax file Enter the 1-year term premium for $1,000 of life insurance based on your age. Free state tax file (From Figure 3-1) 5. Free state tax file $1. Free state tax file 53 6. Free state tax file Divide line 3 by $1,000 6. Free state tax file 19 7. Free state tax file Multiply line 6 by line 5. Free state tax file This is the cost of your incidental life insurance 7. Free state tax file $29. Free state tax file 07 Figuring Includible Compensation for Your Most Recent Year of Service You can use Worksheet B in chapter 9 to determine your includible compensation for your most recent year of service. Free state tax file Example. Free state tax file Floyd has been periodically working full-time for a local hospital since September 2011. Free state tax file He needs to figure his limit on annual additions for 2014. Free state tax file The hospital's normal annual work period for employees in Floyd's general type of work runs from January to December. Free state tax file During the periods that Floyd was employed with the hospital, the hospital has always been eligible to provide a 403(b) plan to employees. Free state tax file Additionally, the hospital has never provided the employees with a 457 deferred compensation plan, a transportation fringe benefit plan, or a cafeteria plan. Free state tax file Floyd has never worked abroad and there is no life insurance provided under the plan. Free state tax file Table 3-3 shows the service Floyd provided to his employer, his compensation for the periods worked, his elective deferrals, and his taxable wages. Free state tax file Table 3-3. Free state tax file Floyd's Compensation Note. Free state tax file This table shows information Floyd will use to figure includible compensation for his most recent year of service. Free state tax file   Year Years of Service Taxable Wages Elective Deferrals 2014 6/12 of  a year $42,000 $2,000 2013 4/12 of  a year $16,000 $1,650 2012 4/12 of  a year $16,000 $1,650 Before Floyd can figure his limit on annual additions, he must figure includible compensation for his most recent year of service. Free state tax file Because Floyd is not planning to work the entire 2014 year, his most recent year of service will include the time he is planning to work in 2014 plus time he worked in the preceding 3 years until the time he worked for the hospital totals 1 year. Free state tax file If the total time he worked is less than 1 year, Floyd will treat it as if it were 1 year. Free state tax file He figures his most recent year of service shown in the following list. Free state tax file Time he will work in 2014 is 6/12 of a year. Free state tax file Time worked in 2013 is 4/12 of a year. Free state tax file All of this time will be used to determine Floyd's most recent year of service. Free state tax file Time worked in 2012 is 4/12 of a year. Free state tax file Floyd only needs 2 months of the 4 months he worked in 2012 to have enough time to total 1 full year. Free state tax file Because he needs only one-half of the actual time he worked, Floyd will use only one-half of his income earned during that period to calculate wages that will be used in figuring his includible compensation. Free state tax file Using the information provided in Table 3-3, wages for Floyd's most recent year of service are $66,000 ($42,000 + $16,000 + $8,000). Free state tax file His includible compensation for his most recent year of service is figured as shown in Table 3-4. Free state tax file After figuring his includible compensation, Floyd determines his limit on annual additions for 2014 to be $52,000, the lesser of his includible compensation, $70,475 (Table 3-4), and the maximum amount of $52,000. Free state tax file Table 3-4. Free state tax file Worksheet B. Free state tax file Includible Compensation for Your Most Recent Year of Service1 Note. Free state tax file Use this worksheet to figure includible compensation for your most recent year of service. Free state tax file 1. Free state tax file Enter your includible wages from the employer maintaining your 403(b) account for your most recent year of service 1. Free state tax file $66,000 2. Free state tax file Enter elective deferrals excluded from your gross income for your most recent year of service2 2. Free state tax file 4,4753 3. Free state tax file Enter amounts contributed or deferred by your employer under a cafeteria plan for your most recent year of service 3. Free state tax file -0- 4. Free state tax file Enter amounts contributed or deferred by your employer according to your election to your 457 account (a nonqualified plan of a state or local government, or of a tax-exempt organization) for your most recent year of service 4. Free state tax file -0- 5. Free state tax file Enter pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan for your most recent year of service 5. Free state tax file -0- 6. Free state tax file Enter your foreign earned income exclusion for your most recent year of service 6. Free state tax file -0- 7. Free state tax file Add lines 1, 2, 3, 4, 5, and 6 7. Free state tax file 70,475 8. Free state tax file Enter the cost of incidental life insurance that is part of your annuity contract for your most recent year of service 8. Free state tax file -0- 9. Free state tax file Enter compensation that was both: Earned during your most recent year of service, and Earned while your employer was not qualified to maintain a 403(b) plan 9. Free state tax file -0- 10. Free state tax file Add lines 8 and 9 10. Free state tax file -0- 11. Free state tax file Subtract line 10 from line 7. Free state tax file This is your includible compensation for your most recent year of service 11. Free state tax file 70,475 1Use estimated amounts if figuring includible compensation before the end of the year. Free state tax file 2Elective deferrals made to a designated Roth account are not excluded from your gross income and should not be included on this line. Free state tax file  3$4,475 ($2,000 + $1,650 + $825). Free state tax file Prev  Up  Next   Home   More Online Publications