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Free State Tax Forms

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Free State Tax Forms

Free state tax forms Index A Adjusted gross income (AGI) Income limits for, Income Limits Age Age 65, Age 65. Free state tax forms Mandatory retirement age, Payments that are not disability income. Free state tax forms Assistance (see Tax help) C Citizenship requirement, U. Free state tax forms S. Free state tax forms Citizen or Resident Alien Credit figured by IRS, Credit Figured for You Credit figured for you, Credit Figured for You D Disability benefits Nontaxable by law, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Disability income, Disability income. Free state tax forms Disability, permanent and total disability, Qualified Individual, Permanent and total disability. Free state tax forms E Eligibility for credit, Are You Eligible for the Credit? Employer's accident or health plans or pension plans Disability income from, Disability income. Free state tax forms Excess adjusted gross income, Step 3. Free state tax forms Determine Excess Adjusted Gross Income F Figuring the credit yourself, Figuring the Credit Yourself Determine excess AGI, Step 3. Free state tax forms Determine Excess Adjusted Gross Income Determine initial amount, Step 1. Free state tax forms Determine Initial Amount Determine the credit, Step 5. Free state tax forms Determine Your Credit Determine the total of steps 2 and 3, Step 4. Free state tax forms Determine the Total of Steps 2 and 3 Total certain nontaxable pensions and benefits, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Foreign military service Pension, annuity, or disability benefit from, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Foreign Service Pension, annuity, or disability benefit from, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Form RRB-1099 Payments by Railroad Retirement Board, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Form SSA-1099 Social security benefit statement, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Free tax services, Free help with your tax return. Free state tax forms H Head of household, Head of household. Free state tax forms Help (see Tax help) I Income limits, Income Limits Initial amounts for persons under age 65, Initial amounts for persons under age 65. Free state tax forms J Joint returns, Married Persons L Limit on credit, Limit on credit. Free state tax forms Lump-sum payments Accrued annual leave, Payments that are not disability income. Free state tax forms Death benefits paid to surviving spouse or child, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits M Mandatory retirement age, Payments that are not disability income. Free state tax forms Married taxpayers, Married Persons Mentally incompetent persons Sheltered employment for, Sheltered employment. Free state tax forms Missing children Photographs of, Reminders N National Oceanic and Atmospheric Administration Pension, annuity, or disability benefit from, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Nonresident aliens, Exceptions. Free state tax forms Nontaxable payments, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits O Out of work, Substantial gainful activity. Free state tax forms P Pension or annuity payments Nontaxable by law, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Permanent and total disability, Qualified Individual, Permanent and total disability. Free state tax forms Physician certification, Permanent and total disability. Free state tax forms , Physician's statement. Free state tax forms Public Health Service Pension, annuity, or disability benefit from, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Publications (see Tax help) Q Qualified individual, Qualified Individual Age 65 or older, Qualified Individual Under age 65 and retired on permanent and total disability, Qualified Individual, Under Age 65 R Residence requirement, U. Free state tax forms S. Free state tax forms Citizen or Resident Alien S Schedule R, Credit Figured for You, Figuring the Credit Yourself, , Examples Sheltered employment, Sheltered employment. Free state tax forms Social security payments, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Substantial gainful activity, Substantial gainful activity. Free state tax forms T Tables and figures Figure A, Qualified individual determination, Substantial gainful activity. Free state tax forms Table 1, Income limits, Substantial gainful activity. Free state tax forms , Table 1. Free state tax forms Income Limits Table 2, Initial amounts, Table 2. Free state tax forms Initial Amounts Tax help, How To Get Tax Help TTY/TDD information, How To Get Tax Help U U. Free state tax forms S. Free state tax forms citizens and resident aliens, U. Free state tax forms S. Free state tax forms Citizen or Resident Alien V VA Form 21-0172 Certification of permanent and total disability, Veterans. Free state tax forms Veterans Certification by VA of permanent and total disability, Veterans. Free state tax forms Exclusion of nontaxable pension or annuity payment or disability benefits, Step 2. Free state tax forms Total Certain Nontaxable Pensions and Benefits Prev  Up     Home   More Online Publications
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How Do You Report Suspected Tax Fraud Activity?

If You…

Then

And

… suspect or know of an individual or a business that is not complying with the tax laws on issues such as

  • False Exemptions or Deductions
  • Kickbacks
  • False/Altered Document
  • Failure to Pay Tax
  • Unreported Income
  • Organized Crime
  • Failure to Withhold
Use Form 3949-A,
Information Referral

CAUTION: Do NOT use Form 3949-A to report the  issues below

Print the form and mail to:

  • Internal Revenue Service
  • Fresno, CA 93888

 

or, order the form by mail or by calling the Tax Fraud Hotline recording at 1-800-829-0433. Note: we don't accept alleged tax law violation referrals over the phone.

 

You may also send a letter to the address above instead of using Form 3949-A. Please include as much information as possible, such as these important points: 

  1. Name and Address of person or business you are reporting
  2. The individual’s social security number or the business’ employer identification number
  3. A brief description of the alleged violation(s), including how you became aware or obtained information about  the violation(s)
  4. The years involved
  5. The estimated dollar amount of any unreported income
  6. Your name, address and telephone number*

 

*Although you are not required to identify yourself, it is helpful to do so. Your identity will be kept confidential.

…suspect someone stole your identity and used your SSN for employment purposes or could use your SSN to file a tax return

Use Form 14039*

 

*Spanish version: Form 14039SP

Complete the form online, print it and mail or fax to the appropriate office using the options listed on page 2 of the form. Include photocopies of at least one of the documents listed on the form to verify your identity.  For additional information, refer to the Taxpayer Guide to Identity Theft

…suspect fraudulent activity or an abusive tax scheme by a tax return preparer or tax preparation company

Use Form 14157**

 

**Form 14157-A (see below) may also be required

You may complete the form online, print it and mail it to the IRS address on the form.

 

…suspect  a tax return preparer filed a return or altered your return without your consent and you are seeking a change to your account

Use  Form 14157

AND

Form 14157-A

Send BOTH forms (Form 14157 and Form 14157-A) to the address shown in the Instructions for Form 14157-A.

…suspect an abusive tax promotion or promoter

Use Form 14242

The form can be mailed or faxed to the IRS address or fax number on the form.

…suspect misconduct or wrongdoing by an exempt organization or employee plan

Use Form 13909

Mail it to the address provided on the form.

…have information and want to claim a reward

Use Form 211

Mail it to the address in the Instructions for the form.

…suspect you received or are aware of fraudulent IRS

e-mails and websites

Please let us know! See our Phishing web page.

Page Last Reviewed or Updated: 20-Nov-2013

The Free State Tax Forms

Free state tax forms 2. Free state tax forms   Simplified Employee Pensions (SEPs) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Setting Up a SEPWhen not to use Form 5305-SEP. Free state tax forms How Much Can I Contribute?Contribution Limits Deducting ContributionsDeduction Limit for Contributions for Participants Deduction Limit for Self-Employed Individuals Carryover of Excess SEP Contributions When To Deduct Contributions Where To Deduct Contributions Salary Reduction Simplified Employee Pensions (SARSEPs)SARSEP ADP test. Free state tax forms Deferral percentage. Free state tax forms Employee compensation. Free state tax forms Compensation of self-employed individuals. Free state tax forms Choice not to treat deferrals as compensation. Free state tax forms Limit on Elective Deferrals Tax Treatment of Deferrals Distributions (Withdrawals) Additional TaxesEffects on employee. Free state tax forms Reporting and Disclosure Requirements Topics - This chapter discusses: Setting up a SEP How much can I contribute Deducting contributions Salary reduction simplified employee pensions (SARSEPs) Distributions (withdrawals) Additional taxes Reporting and disclosure requirements Useful Items - You may want to see: Publication 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4285 SEP Checklist 4286 SARSEP Checklist 4333 SEP Retirement Plans for Small Businesses 4336 SARSEP for Small Businesses 4407 SARSEP—Key Issues and Assistance Forms (and Instructions) W-2 Wage and Tax Statement 1040 U. Free state tax forms S. Free state tax forms Individual Income Tax Return 5305-SEP Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 5305A-SEP Salary Reduction Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A SEP is a written plan that allows you to make contributions toward your own retirement and your employees' retirement without getting involved in a more complex qualified plan. Free state tax forms Under a SEP, you make contributions to a traditional individual retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. Free state tax forms A SEP-IRA is owned and controlled by the employee, and you make contributions to the financial institution where the SEP-IRA is maintained. Free state tax forms SEP-IRAs are set up for, at a minimum, each eligible employee (defined below). Free state tax forms A SEP-IRA may have to be set up for a leased employee (defined in chapter 1), but does not need to be set up for excludable employees (defined later). Free state tax forms Eligible employee. Free state tax forms   An eligible employee is an individual who meets all the following requirements. Free state tax forms Has reached age 21. Free state tax forms Has worked for you in at least 3 of the last 5 years. Free state tax forms Has received at least $550 in compensation from you in 2013. Free state tax forms This amount remains the same in 2014. Free state tax forms    You can use less restrictive participation requirements than those listed, but not more restrictive ones. Free state tax forms Excludable employees. Free state tax forms   The following employees can be excluded from coverage under a SEP. Free state tax forms Employees covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Free state tax forms Nonresident alien employees who have received no U. Free state tax forms S. Free state tax forms source wages, salaries, or other personal services compensation from you. Free state tax forms For more information about nonresident aliens, see Publication 519, U. Free state tax forms S. Free state tax forms Tax Guide for Aliens. Free state tax forms Setting Up a SEP There are three basic steps in setting up a SEP. Free state tax forms You must execute a formal written agreement to provide benefits to all eligible employees. Free state tax forms You must give each eligible employee certain information about the SEP. Free state tax forms A SEP-IRA must be set up by or for each eligible employee. Free state tax forms Many financial institutions will help you set up a SEP. Free state tax forms Formal written agreement. Free state tax forms   You must execute a formal written agreement to provide benefits to all eligible employees under a SEP. Free state tax forms You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP. Free state tax forms However, see When not to use Form 5305-SEP, below. Free state tax forms   If you adopt an IRS model SEP using Form 5305-SEP, no prior IRS approval or determination letter is required. Free state tax forms Keep the original form. Free state tax forms Do not file it with the IRS. Free state tax forms Also, using Form 5305-SEP will usually relieve you from filing annual retirement plan information returns with the IRS and the Department of Labor. Free state tax forms See the Form 5305-SEP instructions for details. Free state tax forms If you choose not to use Form 5305-SEP, you should seek professional advice in adopting a SEP. Free state tax forms When not to use Form 5305-SEP. Free state tax forms   You cannot use Form 5305-SEP if any of the following apply. Free state tax forms You currently maintain any other qualified retirement plan other than another SEP. Free state tax forms You have any eligible employees for whom IRAs have not been set up. Free state tax forms You use the services of leased employees, who are not your common-law employees (as described in chapter 1). Free state tax forms You are a member of any of the following unless all eligible employees of all the members of these groups, trades, or businesses participate under the SEP. Free state tax forms An affiliated service group described in section 414(m). Free state tax forms A controlled group of corporations described in section 414(b). Free state tax forms Trades or businesses under common control described in section 414(c). Free state tax forms You do not pay the cost of the SEP contributions. Free state tax forms Information you must give to employees. Free state tax forms   You must give each eligible employee a copy of Form 5305-SEP, its instructions, and the other information listed in the Form 5305-SEP instructions. Free state tax forms An IRS model SEP is not considered adopted until you give each employee this information. Free state tax forms Setting up the employee's SEP-IRA. Free state tax forms   A SEP-IRA must be set up by or for each eligible employee. Free state tax forms SEP-IRAs can be set up with banks, insurance companies, or other qualified financial institutions. Free state tax forms You send SEP contributions to the financial institution where the SEP-IRA is maintained. Free state tax forms Deadline for setting up a SEP. Free state tax forms   You can set up a SEP for any year as late as the due date (including extensions) of your income tax return for that year. Free state tax forms Credit for startup costs. Free state tax forms   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP that first became effective in 2013. Free state tax forms For more information, see Credit for startup costs under Reminders, earlier. Free state tax forms How Much Can I Contribute? The SEP rules permit you to contribute a limited amount of money each year to each employee's SEP-IRA. Free state tax forms If you are self-employed, you can contribute to your own SEP-IRA. Free state tax forms Contributions must be in the form of money (cash, check, or money order). Free state tax forms You cannot contribute property. Free state tax forms However, participants may be able to transfer or roll over certain property from one retirement plan to another. Free state tax forms See Publication 590 for more information about rollovers. Free state tax forms You do not have to make contributions every year. Free state tax forms But if you make contributions, they must be based on a written allocation formula and must not discriminate in favor of highly compensated employees (defined in chapter 1). Free state tax forms When you contribute, you must contribute to the SEP-IRAs of all participants who actually performed personal services during the year for which the contributions are made, including employees who die or terminate employment before the contributions are made. Free state tax forms Contributions are deductible within limits, as discussed later, and generally are not taxable to the plan participants. Free state tax forms A SEP-IRA cannot be a Roth IRA. Free state tax forms Employer contributions to a SEP-IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Free state tax forms Unlike regular contributions to a traditional IRA, contributions under a SEP can be made to participants over age 70½. Free state tax forms If you are self-employed, you can also make contributions under the SEP for yourself even if you are over 70½. Free state tax forms Participants age 70½ or over must take required minimum distributions. Free state tax forms Time limit for making contributions. Free state tax forms   To deduct contributions for a year, you must make the contributions by the due date (including extensions) of your tax return for the year. Free state tax forms Contribution Limits Contributions you make for 2013 to a common-law employee's SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000. Free state tax forms Compensation generally does not include your contributions to the SEP. Free state tax forms The SEP plan document will specify how the employer contribution is determined and how it will be allocated to participants. Free state tax forms Example. Free state tax forms Your employee, Mary Plant, earned $21,000 for 2013. Free state tax forms The maximum contribution you can make to her SEP-IRA is $5,250 (25% x $21,000). Free state tax forms Contributions for yourself. Free state tax forms   The annual limits on your contributions to a common-law employee's SEP-IRA also apply to contributions you make to your own SEP-IRA. Free state tax forms However, special rules apply when figuring your maximum deductible contribution. Free state tax forms See Deduction Limit for Self-Employed Individuals , later. Free state tax forms Annual compensation limit. Free state tax forms   You cannot consider the part of an employee's compensation over $255,000 when figuring your contribution limit for that employee. Free state tax forms However, $51,000 is the maximum contribution for an eligible employee. Free state tax forms These limits are $260,000 and $52,000, respectively, in 2014. Free state tax forms Example. Free state tax forms Your employee, Susan Green, earned $210,000 for 2013. Free state tax forms Because of the maximum contribution limit for 2013, you can only contribute $51,000 to her SEP-IRA. Free state tax forms More than one plan. Free state tax forms   If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $51,000 or 100% of the participant's compensation. Free state tax forms When you figure this limit, you must add your contributions to all defined contribution plans maintained by you. Free state tax forms Because a SEP is considered a defined contribution plan for this limit, your contributions to a SEP must be added to your contributions to other defined contribution plans you maintain. Free state tax forms Tax treatment of excess contributions. Free state tax forms   Excess contributions are your contributions to an employee's SEP-IRA (or to your own SEP-IRA) for 2013 that exceed the lesser of the following amounts. Free state tax forms 25% of the employee's compensation (or, for you, 20% of your net earnings from self-employment). Free state tax forms $51,000. Free state tax forms Excess contributions are included in the employee's income for the year and are treated as contributions by the employee to his or her SEP-IRA. Free state tax forms For more information on employee tax treatment of excess contributions, see chapter 1 in Publication 590. Free state tax forms Reporting on Form W-2. Free state tax forms   Do not include SEP contributions on your employee's Form W-2 unless contributions were made under a salary reduction arrangement (discussed later). Free state tax forms Deducting Contributions Generally, you can deduct the contributions you make each year to each employee's SEP-IRA. Free state tax forms If you are self-employed, you can deduct the contributions you make each year to your own SEP-IRA. Free state tax forms Deduction Limit for Contributions for Participants The most you can deduct for your contributions to you or your employee's SEP-IRA is the lesser of the following amounts. Free state tax forms Your contributions (including any excess contributions carryover). Free state tax forms 25% of the compensation (limited to $255,000 per participant) paid to the participants during 2013 from the business that has the plan, not to exceed $51,000 per participant. Free state tax forms In 2014, the amounts in (2) above are $260,000 and $52,000, respectively. Free state tax forms Deduction Limit for Self-Employed Individuals If you contribute to your own SEP-IRA, you must make a special computation to figure your maximum deduction for these contributions. Free state tax forms When figuring the deduction for contributions made to your own SEP-IRA, compensation is your net earnings from self-employment (defined in chapter 1), which takes into account both the following deductions. Free state tax forms The deduction for the deductible part of your self-employment tax. Free state tax forms The deduction for contributions to your own SEP-IRA. Free state tax forms The deduction for contributions to your own SEP-IRA and your net earnings depend on each other. Free state tax forms For this reason, you determine the deduction for contributions to your own SEP-IRA indirectly by reducing the contribution rate called for in your plan. Free state tax forms To do this, use the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed, whichever is appropriate for your plan's contribution rate, in chapter 5. Free state tax forms Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Free state tax forms Carryover of Excess SEP Contributions If you made SEP contributions that are more than the deduction limit (nondeductible contributions), you can carry over and deduct the difference in later years. Free state tax forms However, the carryover, when combined with the contribution for the later year, is subject to the deduction limit for that year. Free state tax forms If you also contributed to a defined benefit plan or defined contribution plan, see Carryover of Excess Contributions under Employer Deduction in chapter 4 for the carryover limit. Free state tax forms Excise tax. Free state tax forms   If you made nondeductible (excess) contributions to a SEP, you may be subject to a 10% excise tax. Free state tax forms For information about the excise tax, see Excise Tax for Nondeductible (Excess) Contributions under Employer Deduction in chapter 4. Free state tax forms When To Deduct Contributions When you can deduct contributions made for a year depends on the tax year on which the SEP is maintained. Free state tax forms If the SEP is maintained on a calendar year basis, you deduct the yearly contributions on your tax return for the year within which the calendar year ends. Free state tax forms If you file your tax return and maintain the SEP using a fiscal year or short tax year, you deduct contributions made for a year on your tax return for that year. Free state tax forms Example. Free state tax forms You are a fiscal year taxpayer whose tax year ends June 30. Free state tax forms You maintain a SEP on a calendar year basis. Free state tax forms You deduct SEP contributions made for calendar year 2013 on your tax return for your tax year ending June 30, 2014. Free state tax forms Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Free state tax forms For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040), Profit or Loss From Farming; partnerships deduct them on Form 1065, U. Free state tax forms S. Free state tax forms Return of Partnership Income; and corporations deduct them on Form 1120, U. Free state tax forms S. Free state tax forms Corporation Income Tax Return, or Form 1120S, U. Free state tax forms S. Free state tax forms Income Tax Return for an S Corporation. Free state tax forms Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Free state tax forms (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Free state tax forms , you receive from the partnership. Free state tax forms ) Remember that sole proprietors and partners can't deduct as a business expense contributions made to a SEP for themselves, only those made for their common-law employees. Free state tax forms Salary Reduction Simplified Employee Pensions (SARSEPs) A SARSEP is a SEP set up before 1997 that includes a salary reduction arrangement. Free state tax forms (See the Caution, next. Free state tax forms ) Under a SARSEP, your employees can choose to have you contribute part of their pay to their SEP-IRAs rather than receive it in cash. Free state tax forms This contribution is called an “elective deferral” because employees choose (elect) to set aside the money, and they defer the tax on the money until it is distributed to them. Free state tax forms You are not allowed to set up a SARSEP after 1996. Free state tax forms However, participants (including employees hired after 1996) in a SARSEP set up before 1997 can continue to have you contribute part of their pay to the plan. Free state tax forms If you are interested in setting up a retirement plan that includes a salary reduction arrangement, see chapter 3. Free state tax forms Who can have a SARSEP?   A SARSEP set up before 1997 is available to you and your eligible employees only if all the following requirements are met. Free state tax forms At least 50% of your employees eligible to participate choose to make elective deferrals. Free state tax forms You have 25 or fewer employees who were eligible to participate in the SEP at any time during the preceding year. Free state tax forms The elective deferrals of your highly compensated employees meet the SARSEP ADP test. Free state tax forms SARSEP ADP test. Free state tax forms   Under the SARSEP ADP test, the amount deferred each year by each eligible highly compensated employee as a percentage of pay (the deferral percentage) cannot be more than 125% of the average deferral percentage (ADP) of all non-highly compensated employees eligible to participate. Free state tax forms A highly compensated employee is defined in chapter 1. Free state tax forms Deferral percentage. Free state tax forms   The deferral percentage for an employee for a year is figured as follows. Free state tax forms   The elective employer contributions (excluding certain catch-up contributions)  paid to the SEP for the employee for the year     The employee's compensation (limited to $255,000 in 2013)   The instructions for Form 5305A-SEP have a worksheet you can use to determine whether the elective deferrals of your highly compensated employees meet the SARSEP ADP test. Free state tax forms Employee compensation. Free state tax forms   For figuring the deferral percentage, compensation is generally the amount you pay to the employee for the year. Free state tax forms Compensation includes the elective deferral and other amounts deferred in certain employee benefit plans. Free state tax forms See Compensation in chapter 1. Free state tax forms Elective deferrals under the SARSEP are included in figuring your employees' deferral percentage even though they are not included in the income of your employees for income tax purposes. Free state tax forms Compensation of self-employed individuals. Free state tax forms   If you are self-employed, compensation is your net earnings from self-employment as defined in chapter 1. Free state tax forms   Compensation does not include tax-free items (or deductions related to them) other than foreign earned income and housing cost amounts. Free state tax forms Choice not to treat deferrals as compensation. Free state tax forms   You can choose not to treat elective deferrals (and other amounts deferred in certain employee benefit plans) for a year as compensation under your SARSEP. Free state tax forms Limit on Elective Deferrals The most a participant can choose to defer for calendar year 2013 is the lesser of the following amounts. Free state tax forms 25% of the participant's compensation (limited to $255,000 of the participant's compensation). Free state tax forms $17,500. Free state tax forms The $17,500 limit applies to the total elective deferrals the employee makes for the year to a SEP and any of the following. Free state tax forms Cash or deferred arrangement (section 401(k) plan). Free state tax forms Salary reduction arrangement under a tax-sheltered annuity plan (section 403(b) plan). Free state tax forms SIMPLE IRA plan. Free state tax forms In 2014, the $255,000 limit increases to $260,000 and the $17,500 limit remains at $17,500. Free state tax forms Catch-up contributions. Free state tax forms   A SARSEP can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Free state tax forms The catch-up contribution limit for 2013 is $5,500 and remains at $5,500 for 2014. Free state tax forms Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the elective deferral limit (the lesser of 25% of compensation or $17,500), the SARSEP ADP test limit discussed earlier, or the plan limit (if any). Free state tax forms However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Free state tax forms The catch-up contribution limit. Free state tax forms The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Free state tax forms   Catch-up contributions are not subject to the elective deferral limit (the lesser of 25% of compensation or $17,500 in 2013 and in 2014). Free state tax forms Overall limit on SEP contributions. Free state tax forms   If you also make nonelective contributions to a SEP-IRA, the total of the nonelective and elective contributions to that SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000 for 2013 ($52,000 for 2014). Free state tax forms The same rule applies to contributions you make to your own SEP-IRA. Free state tax forms See Contribution Limits , earlier. Free state tax forms Figuring the elective deferral. Free state tax forms   For figuring the 25% limit on elective deferrals, compensation does not include SEP contributions, including elective deferrals or other amounts deferred in certain employee benefit plans. Free state tax forms Tax Treatment of Deferrals Elective deferrals that are not more than the limits discussed earlier under Limit on Elective Deferrals are excluded from your employees' wages subject to federal income tax in the year of deferral. Free state tax forms However, these deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Free state tax forms Excess deferrals. Free state tax forms   For 2013, excess deferrals are the elective deferrals for the year that are more than the $17,500 limit discussed earlier. Free state tax forms For a participant who is eligible to make catch-up contributions, excess deferrals are the elective deferrals that are more than $23,000. Free state tax forms The treatment of excess deferrals made under a SARSEP is similar to the treatment of excess deferrals made under a qualified plan. Free state tax forms See Treatment of Excess Deferrals under Elective Deferrals (401(k) Plans) in chapter 4. Free state tax forms Excess SEP contributions. Free state tax forms   Excess SEP contributions are elective deferrals of highly compensated employees that are more than the amount permitted under the SARSEP ADP test. Free state tax forms You must notify your highly compensated employees within 2½ months after the end of the plan year of their excess SEP contributions. Free state tax forms If you do not notify them within this time period, you must pay a 10% tax on the excess. Free state tax forms For an explanation of the notification requirements, see Rev. Free state tax forms Proc. Free state tax forms 91-44, 1991-2 C. Free state tax forms B. Free state tax forms 733. Free state tax forms If you adopted a SARSEP using Form 5305A-SEP, the notification requirements are explained in the instructions for that form. Free state tax forms Reporting on Form W-2. Free state tax forms   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Free state tax forms You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Free state tax forms You must also include them in box 12. Free state tax forms Mark the “Retirement plan” checkbox in box 13. Free state tax forms For more information, see the Form W-2 instructions. Free state tax forms Distributions (Withdrawals) As an employer, you cannot prohibit distributions from a SEP-IRA. Free state tax forms Also, you cannot make your contributions on the condition that any part of them must be kept in the account after you have made your contributions to the employee's accounts. Free state tax forms Distributions are subject to IRA rules. Free state tax forms Generally, you or your employee must begin to receive distributions from a SEP-IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. Free state tax forms For more information about IRA rules, including the tax treatment of distributions, rollovers, required distributions, and income tax withholding, see Publication 590. Free state tax forms Additional Taxes The tax advantages of using SEP-IRAs for retirement savings can be offset by additional taxes that may be imposed for all the following actions. Free state tax forms Making excess contributions. Free state tax forms Making early withdrawals. Free state tax forms Not making required withdrawals. Free state tax forms For information about these taxes, see chapter 1 in Publication 590. Free state tax forms Also, a SEP-IRA may be disqualified, or an excise tax may apply, if the account is involved in a prohibited transaction, discussed next. Free state tax forms Prohibited transaction. Free state tax forms   If an employee improperly uses his or her SEP-IRA, such as by borrowing money from it, the employee has engaged in a prohibited transaction. Free state tax forms In that case, the SEP-IRA will no longer qualify as an IRA. Free state tax forms For a list of prohibited transactions, see Prohibited Transactions in chapter 4. Free state tax forms Effects on employee. Free state tax forms   If a SEP-IRA is disqualified because of a prohibited transaction, the assets in the account will be treated as having been distributed to the employee on the first day of the year in which the transaction occurred. Free state tax forms The employee must include in income the fair market value of the assets (on the first day of the year) that is more than any cost basis in the account. Free state tax forms Also, the employee may have to pay the additional tax for making early withdrawals. Free state tax forms Reporting and Disclosure Requirements If you set up a SEP using Form 5305-SEP, you must give your eligible employees certain information about the SEP when you set it up. Free state tax forms See Setting Up a SEP , earlier. Free state tax forms Also, you must give your eligible employees a statement each year showing any contributions to their SEP-IRAs. Free state tax forms You must also give them notice of any excess contributions. Free state tax forms For details about other information you must give them, see the instructions for Form 5305-SEP or Form 5305A-SEP (for a salary reduction SEP). Free state tax forms Even if you did not use Form 5305-SEP or Form 5305A-SEP to set up your SEP, you must give your employees information similar to that described above. Free state tax forms For more information, see the instructions for either Form 5305-SEP or Form 5305A-SEP. Free state tax forms Prev  Up  Next   Home   More Online Publications