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Tax Amendment Form 2010

File An Extension For 2011 Taxes OnlineWhere To File State Taxes For FreeHow To Amend 2010 Tax Return Online2012 Tax Return FormWhen Last Day File Taxes 20121040ex Form 2014How To File 2011 TaxesFiling State Income TaxFiling Amended Tax Return 20122014 1040ez Tax FormHow To File Taxes For 2010Irs Form 1040ez InstructionsH&r Tax CutWww H And R Block ComFile 2007 Tax Return OnlineOne Source Talent Chicago1040nr Tax ReturnFederal Tax Form 1040File State Tax FreeFiling Military TaxesFree 1040nrTax Form For 20121040x Amended Tax FormH&r Block Free Tax Return2011 1040ez Tax FormState Income Taxes More:label_state_20income_20taxes More:taxesFree Federal And State Efile 20131040 Ez 2010 PdfTaxes And Unemployment2012 Tax Form 8863How To Ammend A Federal Tax ReturnCan I Efile 1040xCompare Tax Software1040x Electronic FilingTurbotax 1040x 2012Ez 1040 FormPrintable Tax Forms 2011File 2010 Taxes For FreeWww Irs GovIrs Tax Form 1040x

Tax Amendment Form 2010

Tax amendment form 2010 Publication 551 - Introductory Material Table of Contents What's New Reminder IntroductionOrdering forms and publications. Tax amendment form 2010 Tax questions. Tax amendment form 2010 Useful Items - You may want to see: What's New Property acquired from a decedent who died in 2010. Tax amendment form 2010  Property acquired from a decedent dying in 2010 will no longer have an automatic increase in basis. Tax amendment form 2010 See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for details. Tax amendment form 2010 Reminder Photographs of missing children. Tax amendment form 2010  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Tax amendment form 2010 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Tax amendment form 2010 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Tax amendment form 2010 Introduction Basis is the amount of your investment in property for tax purposes. Tax amendment form 2010 Use the basis of property to figure depreciation, amortization, depletion, and casualty losses. Tax amendment form 2010 Also use it to figure gain or loss on the sale or other disposition of property. Tax amendment form 2010 You must keep accurate records of all items that affect the basis of property so you can make these computations. Tax amendment form 2010 This publication is divided into the following sections. Tax amendment form 2010 Cost Basis Adjusted Basis Basis Other Than Cost The basis of property you buy is usually its cost. Tax amendment form 2010 You may also have to capitalize (add to basis) certain other costs related to buying or producing the property. Tax amendment form 2010 Your original basis in property is adjusted (increased or decreased) by certain events. Tax amendment form 2010 If you make improvements to the property, increase your basis. Tax amendment form 2010 If you take deductions for depreciation or casualty losses, reduce your basis. Tax amendment form 2010 You cannot determine your basis in some assets by cost. Tax amendment form 2010 This includes property you receive as a gift or inheritance. Tax amendment form 2010 It also applies to property received in an involuntary conversion and certain other circumstances. Tax amendment form 2010 Comments and suggestions. Tax amendment form 2010   We welcome your comments about this publication and your suggestions for future editions. Tax amendment form 2010   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. Tax amendment form 2010 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Tax amendment form 2010 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Tax amendment form 2010   You can email us at taxforms@irs. Tax amendment form 2010 gov. Tax amendment form 2010 Please put “Publications Comment” on the subject line. Tax amendment form 2010 You can also send us comments from www. Tax amendment form 2010 irs. Tax amendment form 2010 gov/formspubs/, select “Comment on Tax Forms and Publications” under “Information about. Tax amendment form 2010 ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Tax amendment form 2010 Ordering forms and publications. Tax amendment form 2010   Visit www. Tax amendment form 2010 irs. Tax amendment form 2010 gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 business days after your request is received. Tax amendment form 2010  Internal Revenue Service  1201 N. Tax amendment form 2010 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Tax amendment form 2010   If you have a tax question, visit IRS. Tax amendment form 2010 gov or call 1-800-829-1040. Tax amendment form 2010 We cannot answer tax questions sent to either of the above addresses. Tax amendment form 2010 Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 523 Selling Your Home 525 Taxable and Nontaxable Income 527 Residential Rental Property 530 Tax Information for First-Time Homeowners 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 559 Survivors, Executors, and Administrators 587 Business Use of Your Home 946 How To Depreciate Property Form (and Instructions) 706 United States Estate (and Generation-Skipping Transfer) Tax Return 706-A United States Additional Estate Tax Return 8594 Asset Acquisition Statement See How To Get Tax Help near the end of this publication for information about getting publications and forms. Tax amendment form 2010 Prev  Up  Next   Home   More Online Publications

Topic 451 - Individual Retirement Arrangements (IRAs)

An individual retirement arrangement, or IRA, is a tax-favored personal savings arrangement, which allows you to set aside money for retirement. There are several different types of IRAs, which you can set up with a bank, insurance company, or other financial institution.

The original IRA is often referred to as a "traditional IRA." You may be able to deduct some or all of your contributions to a traditional IRA. You may also be eligible for a tax credit equal to a percentage of your contribution. Amounts in your traditional IRA, including earnings, generally are not taxed until distributed to you. IRAs cannot be owned jointly. However, any amounts remaining in your IRA upon your death will be paid to your beneficiary or beneficiaries.

To contribute to a traditional IRA, you must be under age 70½ at the end of the tax year. You, and/or your spouse if you file a joint return, must have taxable compensation, such as wages, salaries, commissions, tips, bonuses, or net income from self-employment. Taxable alimony and separate maintenance payments received by an individual are treated as compensation for IRA purposes.

Compensation does not include earnings and profits from property, such as rental income, interest and dividend income, or any amount received as pension or annuity income, or as deferred compensation.

Figure your allowable deduction using the worksheets in the Form 1040 Instructions (PDF), Form 1040A Instructions (PDF) or in Publication 590, Individual Retirement Arrangements (IRAs). You cannot claim an IRA deduction on Form 1040EZ (PDF); you must use either Form 1040A (PDF) or Form 1040 (PDF). If you made nondeductible contributions to a traditional IRA you need to attach Form 8606 (PDF), Nondeductible IRAs. Use Form 8880 (PDF), Credit for Qualified Retirement Savings Contributions, to determine whether you are also eligible for a tax credit. Enter the amount of the credit on either Form 1040A or Form 1040. You cannot use Form 1040EZ to claim this credit.

Distributions from a traditional IRA are fully or partially taxable in the year of distribution. If you made only deductible contributions, distributions are fully taxable. Use Form 8606 to figure the taxable portion of withdrawals.

Distributions made prior to age 59½ may be subject to a 10% additional tax. You also may owe an excise tax if you do not begin to withdraw minimum distributions by April 1 of the year after you reach age 70½. These additional taxes are figured and reported on Form 5329 (PDF), Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. Refer to the Form 5329 Instructions (PDF) for exceptions to the additional taxes.

A Roth IRA differs from a traditional IRA in several respects. Contributions to a Roth IRA are not deductible (and you do not report the contributions on your tax return), but you also are not taxed on qualified distributions or distributions that are a return of contributions. In addition, you do not have to be under age 70½ to contribute to a Roth IRA. To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up. For more information on Roth IRA contributions, refer to Topic 309.

Refer to Publication 590, Individual Retirement Arrangements (IRAs), for additional information on the different types of IRAs, including information on contributions, distributions, as well as conversions from one type of IRA to another.

Page Last Reviewed or Updated: December 12, 2013

The Tax Amendment Form 2010

Tax amendment form 2010 3. Tax amendment form 2010   SIMPLE Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: SIMPLE IRA PlanWho Can Set Up a SIMPLE IRA Plan? Who Can Participate in a SIMPLE IRA Plan? How To Set Up a SIMPLE IRA Plan Notification Requirement Contribution Limits When To Deduct Contributions Where To Deduct Contributions Tax Treatment of Contributions Distributions (Withdrawals) More Information on SIMPLE IRA Plans SIMPLE 401(k) Plan Topics - This chapter discusses: SIMPLE IRA plan SIMPLE 401(k) plan Useful Items - You may want to see: Publications 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4284 SIMPLE IRA Plan Checklist 4334 SIMPLE IRA Plans for Small Businesses Forms (and Instructions) W-2 Wage and Tax Statement 5304-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–Not for Use With a Designated Financial Institution 5305-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–for Use With a Designated Financial Institution 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A savings incentive match plan for employees (SIMPLE plan) is a written arrangement that provides you and your employees with a simplified way to make contributions to provide retirement income. Tax amendment form 2010 Under a SIMPLE plan, employees can choose to make salary reduction contributions to the plan rather than receiving these amounts as part of their regular pay. Tax amendment form 2010 In addition, you will contribute matching or nonelective contributions. Tax amendment form 2010 SIMPLE plans can only be maintained on a calendar-year basis. Tax amendment form 2010 A SIMPLE plan can be set up in either of the following ways. Tax amendment form 2010 Using SIMPLE IRAs (SIMPLE IRA plan). Tax amendment form 2010 As part of a 401(k) plan (SIMPLE 401(k) plan). Tax amendment form 2010 Many financial institutions will help you set up a SIMPLE plan. Tax amendment form 2010 SIMPLE IRA Plan A SIMPLE IRA plan is a retirement plan that uses SIMPLE IRAs for each eligible employee. Tax amendment form 2010 Under a SIMPLE IRA plan, a SIMPLE IRA must be set up for each eligible employee. Tax amendment form 2010 For the definition of an eligible employee, see Who Can Participate in a SIMPLE IRA Plan , later. Tax amendment form 2010 Who Can Set Up a SIMPLE IRA Plan? You can set up a SIMPLE IRA plan if you meet both the following requirements. Tax amendment form 2010 You meet the employee limit. Tax amendment form 2010 You do not maintain another qualified plan unless the other plan is for collective bargaining employees. Tax amendment form 2010 Employee limit. Tax amendment form 2010   You can set up a SIMPLE IRA plan only if you had 100 or fewer employees who received $5,000 or more in compensation from you for the preceding year. Tax amendment form 2010 Under this rule, you must take into account all employees employed at any time during the calendar year regardless of whether they are eligible to participate. Tax amendment form 2010 Employees include self-employed individuals who received earned income and leased employees (defined in chapter 1). Tax amendment form 2010   Once you set up a SIMPLE IRA plan, you must continue to meet the 100-employee limit each year you maintain the plan. Tax amendment form 2010 Grace period for employers who cease to meet the 100-employee limit. Tax amendment form 2010   If you maintain the SIMPLE IRA plan for at least 1 year and you cease to meet the 100-employee limit in a later year, you will be treated as meeting it for the 2 calendar years immediately following the calendar year for which you last met it. Tax amendment form 2010   A different rule applies if you do not meet the 100-employee limit because of an acquisition, disposition, or similar transaction. Tax amendment form 2010 Under this rule, the SIMPLE IRA plan will be treated as meeting the 100-employee limit for the year of the transaction and the 2 following years if both the following conditions are satisfied. Tax amendment form 2010 Coverage under the plan has not significantly changed during the grace period. Tax amendment form 2010 The SIMPLE IRA plan would have continued to qualify after the transaction if you had remained a separate employer. Tax amendment form 2010    The grace period for acquisitions, dispositions, and similar transactions also applies if, because of these types of transactions, you do not meet the rules explained under Other qualified plan or Who Can Participate in a SIMPLE IRA Plan, below. Tax amendment form 2010 Other qualified plan. Tax amendment form 2010   The SIMPLE IRA plan generally must be the only retirement plan to which you make contributions, or to which benefits accrue, for service in any year beginning with the year the SIMPLE IRA plan becomes effective. Tax amendment form 2010 Exception. Tax amendment form 2010   If you maintain a qualified plan for collective bargaining employees, you are permitted to maintain a SIMPLE IRA plan for other employees. Tax amendment form 2010 Who Can Participate in a SIMPLE IRA Plan? Eligible employee. Tax amendment form 2010   Any employee who received at least $5,000 in compensation during any 2 years preceding the current calendar year and is reasonably expected to receive at least $5,000 during the current calendar year is eligible to participate. Tax amendment form 2010 The term “employee” includes a self-employed individual who received earned income. Tax amendment form 2010   You can use less restrictive eligibility requirements (but not more restrictive ones) by eliminating or reducing the prior year compensation requirements, the current year compensation requirements, or both. Tax amendment form 2010 For example, you can allow participation for employees who received at least $3,000 in compensation during any preceding calendar year. Tax amendment form 2010 However, you cannot impose any other conditions for participating in a SIMPLE IRA plan. Tax amendment form 2010 Excludable employees. Tax amendment form 2010   The following employees do not need to be covered under a SIMPLE IRA plan. Tax amendment form 2010 Employees who are covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Tax amendment form 2010 Nonresident alien employees who have received no U. Tax amendment form 2010 S. Tax amendment form 2010 source wages, salaries, or other personal services compensation from you. Tax amendment form 2010 Compensation. Tax amendment form 2010   Compensation for employees is the total wages, tips, and other compensation from the employer subject to federal income tax withholding and the amounts paid for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority. Tax amendment form 2010 Compensation also includes the employee's salary reduction contributions made under this plan and, if applicable, elective deferrals under a section 401(k) plan, a SARSEP, or a section 403(b) annuity contract and compensation deferred under a section 457 plan required to be reported by the employer on Form W-2. Tax amendment form 2010 If you are self-employed, compensation is your net earnings from self-employment (line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040)) before subtracting any contributions made to the SIMPLE IRA plan for yourself. Tax amendment form 2010 How To Set Up a SIMPLE IRA Plan You can use Form 5304-SIMPLE or Form 5305-SIMPLE to set up a SIMPLE IRA plan. Tax amendment form 2010 Each form is a model savings incentive match plan for employees (SIMPLE) plan document. Tax amendment form 2010 Which form you use depends on whether you select a financial institution or your employees select the institution that will receive the contributions. Tax amendment form 2010 Use Form 5304-SIMPLE if you allow each plan participant to select the financial institution for receiving his or her SIMPLE IRA plan contributions. Tax amendment form 2010 Use Form 5305-SIMPLE if you require that all contributions under the SIMPLE IRA plan be deposited initially at a designated financial institution. Tax amendment form 2010 The SIMPLE IRA plan is adopted when you have completed all appropriate boxes and blanks on the form and you (and the designated financial institution, if any) have signed it. Tax amendment form 2010 Keep the original form. Tax amendment form 2010 Do not file it with the IRS. Tax amendment form 2010 Other uses of the forms. Tax amendment form 2010   If you set up a SIMPLE IRA plan using Form 5304-SIMPLE or Form 5305-SIMPLE, you can use the form to satisfy other requirements, including the following. Tax amendment form 2010 Meeting employer notification requirements for the SIMPLE IRA plan. Tax amendment form 2010 Form 5304-SIMPLE and Form 5305-SIMPLE contain a Model Notification to Eligible Employees that provides the necessary information to the employee. Tax amendment form 2010 Maintaining the SIMPLE IRA plan records and proving you set up a SIMPLE IRA plan for employees. Tax amendment form 2010 Deadline for setting up a SIMPLE IRA plan. Tax amendment form 2010   You can set up a SIMPLE IRA plan effective on any date from January 1 through October 1 of a year, provided you did not previously maintain a SIMPLE IRA plan. Tax amendment form 2010 This requirement does not apply if you are a new employer that comes into existence after October 1 of the year the SIMPLE IRA plan is set up and you set up a SIMPLE IRA plan as soon as administratively feasible after your business comes into existence. Tax amendment form 2010 If you previously maintained a SIMPLE IRA plan, you can set up a SIMPLE IRA plan effective only on January 1 of a year. Tax amendment form 2010 A SIMPLE IRA plan cannot have an effective date that is before the date you actually adopt the plan. Tax amendment form 2010 Setting up a SIMPLE IRA. Tax amendment form 2010   SIMPLE IRAs are the individual retirement accounts or annuities into which the contributions are deposited. Tax amendment form 2010 A SIMPLE IRA must be set up for each eligible employee. Tax amendment form 2010 Forms 5305-S, SIMPLE Individual Retirement Trust Account, and 5305-SA, SIMPLE Individual Retirement Custodial Account, are model trust and custodial account documents the participant and the trustee (or custodian) can use for this purpose. Tax amendment form 2010   A SIMPLE IRA cannot be a Roth IRA. Tax amendment form 2010 Contributions to a SIMPLE IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Tax amendment form 2010 Deadline for setting up a SIMPLE IRA. Tax amendment form 2010   A SIMPLE IRA must be set up for an employee before the first date by which a contribution is required to be deposited into the employee's IRA. Tax amendment form 2010 See Time limits for contributing funds , later, under Contribution Limits. Tax amendment form 2010 Credit for startup costs. Tax amendment form 2010   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE IRA plan that first became effective in 2013. Tax amendment form 2010 For more information, see Credit for startup costs under Reminders, earlier. Tax amendment form 2010 Notification Requirement If you adopt a SIMPLE IRA plan, you must notify each employee of the following information before the beginning of the election period. Tax amendment form 2010 The employee's opportunity to make or change a salary reduction choice under a SIMPLE IRA plan. Tax amendment form 2010 Your decision to make either matching contributions or nonelective contributions (discussed later). Tax amendment form 2010 A summary description provided by the financial institution. Tax amendment form 2010 Written notice that his or her balance can be transferred without cost or penalty if they use a designated financial institution. Tax amendment form 2010 Election period. Tax amendment form 2010   The election period is generally the 60-day period immediately preceding January 1 of a calendar year (November 2 to December 31 of the preceding calendar year). Tax amendment form 2010 However, the dates of this period are modified if you set up a SIMPLE IRA plan in mid-year (for example, on July 1) or if the 60-day period falls before the first day an employee becomes eligible to participate in the SIMPLE IRA plan. Tax amendment form 2010   A SIMPLE IRA plan can provide longer periods for permitting employees to enter into salary reduction agreements or to modify prior agreements. Tax amendment form 2010 For example, a SIMPLE IRA plan can provide a 90-day election period instead of the 60-day period. Tax amendment form 2010 Similarly, in addition to the 60-day period, a SIMPLE IRA plan can provide quarterly election periods during the 30 days before each calendar quarter, other than the first quarter of each year. Tax amendment form 2010 Contribution Limits Contributions are made up of salary reduction contributions and employer contributions. Tax amendment form 2010 You, as the employer, must make either matching contributions or nonelective contributions, defined later. Tax amendment form 2010 No other contributions can be made to the SIMPLE IRA plan. Tax amendment form 2010 These contributions, which you can deduct, must be made timely. Tax amendment form 2010 See Time limits for contributing funds , later. Tax amendment form 2010 Salary reduction contributions. Tax amendment form 2010   The amount the employee chooses to have you contribute to a SIMPLE IRA on his or her behalf cannot be more than $12,000 for 2013 and 2014. Tax amendment form 2010 These contributions must be expressed as a percentage of the employee's compensation unless you permit the employee to express them as a specific dollar amount. Tax amendment form 2010 You cannot place restrictions on the contribution amount (such as limiting the contribution percentage), except to comply with the $12,000 limit. Tax amendment form 2010   If you or an employee participates in any other qualified plan during the year and you or your employee have salary reduction contributions (elective deferrals) under those plans, the salary reduction contributions under a SIMPLE IRA plan also count toward the overall annual limit ($17,500 for 2013 and 2014) on exclusion of salary reduction contributions and other elective deferrals. Tax amendment form 2010 Catch-up contributions. Tax amendment form 2010   A SIMPLE IRA plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Tax amendment form 2010 The catch-up contribution limit for 2013 and 2014 for SIMPLE IRA plans is $2,500. Tax amendment form 2010 Salary reduction contributions are not treated as catch-up contributions for 2013 or 2014 until they exceed $12,000. Tax amendment form 2010 However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Tax amendment form 2010 The catch-up contribution limit. Tax amendment form 2010 The excess of the participant's compensation over the salary reduction contributions that are not catch-up contributions. Tax amendment form 2010 Employer matching contributions. Tax amendment form 2010   You are generally required to match each employee's salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee's compensation. Tax amendment form 2010 This requirement does not apply if you make nonelective contributions as discussed later. Tax amendment form 2010 Example. Tax amendment form 2010 In 2013, your employee, John Rose, earned $25,000 and chose to defer 5% of his salary. Tax amendment form 2010 Your net earnings from self-employment are $40,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Tax amendment form 2010 You make 3% matching contributions. Tax amendment form 2010 The total contribution you make for John is $2,000, figured as follows. Tax amendment form 2010 Salary reduction contributions ($25,000 × . Tax amendment form 2010 05) $1,250 Employer matching contribution ($25,000 × . Tax amendment form 2010 03) 750 Total contributions $2,000     The total contribution you make for yourself is $5,200, figured as follows. Tax amendment form 2010 Salary reduction contributions ($40,000 × . Tax amendment form 2010 10) $4,000 Employer matching contribution ($40,000 × . Tax amendment form 2010 03) 1,200 Total contributions $5,200 Lower percentage. Tax amendment form 2010   If you choose a matching contribution less than 3%, the percentage must be at least 1%. Tax amendment form 2010 You must notify the employees of the lower match within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. Tax amendment form 2010 You cannot choose a percentage less than 3% for more than 2 years during the 5-year period that ends with (and includes) the year for which the choice is effective. Tax amendment form 2010 Nonelective contributions. Tax amendment form 2010   Instead of matching contributions, you can choose to make nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 (or some lower amount you select) of compensation from you for the year. Tax amendment form 2010 If you make this choice, you must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. Tax amendment form 2010 Only $255,000 of the employee's compensation can be taken into account to figure the contribution limit in 2013 ($260,000 in 2014). Tax amendment form 2010   If you choose this 2% contribution formula, you must notify the employees within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. Tax amendment form 2010 Example 1. Tax amendment form 2010 In 2013, your employee, Jane Wood, earned $36,000 and chose to have you contribute 10% of her salary. Tax amendment form 2010 Your net earnings from self-employment are $50,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Tax amendment form 2010 You make a 2% nonelective contribution. Tax amendment form 2010 Both of you are under age 50. Tax amendment form 2010 The total contribution you make for Jane is $4,320, figured as follows. Tax amendment form 2010 Salary reduction contributions ($36,000 × . Tax amendment form 2010 10) $3,600 2% nonelective contributions ($36,000 × . Tax amendment form 2010 02) 720 Total contributions $4,320     The total contribution you make for yourself is $6,000, figured as follows. Tax amendment form 2010 Salary reduction contributions ($50,000 × . Tax amendment form 2010 10) $5,000 2% nonelective contributions ($50,000 × . Tax amendment form 2010 02) 1,000 Total contributions $6,000 Example 2. Tax amendment form 2010 Using the same facts as in Example 1, above, the maximum contribution you make for Jane or for yourself if you each earned $75,000 is $13,500, figured as follows. Tax amendment form 2010 Salary reduction contributions (maximum amount allowed) $12,000 2% nonelective contributions ($75,000 × . Tax amendment form 2010 02) 1,500 Total contributions $13,500 Time limits for contributing funds. Tax amendment form 2010   You must make the salary reduction contributions to the SIMPLE IRA within 30 days after the end of the month in which the amounts would otherwise have been payable to the employee in cash. Tax amendment form 2010 You must make matching contributions or nonelective contributions by the due date (including extensions) for filing your federal income tax return for the year. Tax amendment form 2010 Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions. Tax amendment form 2010 When To Deduct Contributions You can deduct SIMPLE IRA contributions in the tax year within which the calendar year for which contributions were made ends. Tax amendment form 2010 You can deduct contributions for a particular tax year if they are made for that tax year and are made by the due date (including extensions) of your federal income tax return for that year. Tax amendment form 2010 Example 1. Tax amendment form 2010 Your tax year is the fiscal year ending June 30. Tax amendment form 2010 Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2013 before July 1, 2013) are deductible in the tax year ending June 30, 2014. Tax amendment form 2010 Example 2. Tax amendment form 2010 You are a sole proprietor whose tax year is the calendar year. Tax amendment form 2010 Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2014 by April 15, 2014) are deductible in the 2013 tax year. Tax amendment form 2010 Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Tax amendment form 2010 For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040); partnerships deduct them on Form 1065; and corporations deduct them on Form 1120 or Form 1120S. Tax amendment form 2010 Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Tax amendment form 2010 (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you receive from the partnership. Tax amendment form 2010 ) Tax Treatment of Contributions You can deduct your contributions and your employees can exclude these contributions from their gross income. Tax amendment form 2010 SIMPLE IRA plan contributions are not subject to federal income tax withholding. Tax amendment form 2010 However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. Tax amendment form 2010 Matching and nonelective contributions are not subject to these taxes. Tax amendment form 2010 Reporting on Form W-2. Tax amendment form 2010   Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation” box of Form W-2. Tax amendment form 2010 You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Tax amendment form 2010 You must also include them in box 12. Tax amendment form 2010 Mark the “Retirement plan” checkbox in box 13. Tax amendment form 2010 For more information, see the Form W-2 instructions. Tax amendment form 2010 Distributions (Withdrawals) Distributions from a SIMPLE IRA are subject to IRA rules and generally are includible in income for the year received. Tax amendment form 2010 Tax-free rollovers can be made from one SIMPLE IRA into another SIMPLE IRA. Tax amendment form 2010 However, a rollover from a SIMPLE IRA to a non-SIMPLE IRA can be made tax free only after a 2-year participation in the SIMPLE IRA plan. Tax amendment form 2010 Generally, you or your employee must begin to receive distributions from a SIMPLE IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. Tax amendment form 2010 Early withdrawals generally are subject to a 10% additional tax. Tax amendment form 2010 However, the additional tax is increased to 25% if funds are withdrawn within 2 years of beginning participation. Tax amendment form 2010 More information. Tax amendment form 2010   See Publication 590 for information about IRA rules, including those on the tax treatment of distributions, rollovers, required distributions, and income tax withholding. Tax amendment form 2010 More Information on SIMPLE IRA Plans If you need help to set up or maintain a SIMPLE IRA plan, go to the IRS website and search SIMPLE IRA Plan. Tax amendment form 2010 SIMPLE 401(k) Plan You can adopt a SIMPLE plan as part of a 401(k) plan if you meet the 100-employee limit as discussed earlier under SIMPLE IRA Plan. Tax amendment form 2010 A SIMPLE 401(k) plan is a qualified retirement plan and generally must satisfy the rules discussed under Qualification Rules in chapter 4, including the required distribution rules. Tax amendment form 2010 However, a SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy rules discussed in chapter 4 if the plan meets the conditions listed below. Tax amendment form 2010 Under the plan, an employee can choose to have you make salary reduction contributions for the year to a trust in an amount expressed as a percentage of the employee's compensation, but not more than $12,000 for 2013 and 2014. Tax amendment form 2010 If permitted under the plan, an employee who is age 50 or over can also make a catch-up contribution of up to $2,500 for 2013 and 2014. Tax amendment form 2010 See Catch-up contributions , earlier under Contribution Limits. Tax amendment form 2010 You must make either: Matching contributions up to 3% of compensation for the year, or Nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 of compensation from you for the year. Tax amendment form 2010 No other contributions can be made to the trust. Tax amendment form 2010 No contributions are made, and no benefits accrue, for services during the year under any other qualified retirement plan sponsored by you on behalf of any employee eligible to participate in the SIMPLE 401(k) plan. Tax amendment form 2010 The employee's rights to any contributions are nonforfeitable. Tax amendment form 2010 No more than $255,000 of the employee's compensation can be taken into account in figuring matching contributions and nonelective contributions in 2013 ($260,000 in 2014). Tax amendment form 2010 Compensation is defined earlier in this chapter. Tax amendment form 2010 Employee notification. Tax amendment form 2010   The notification requirement that applies to SIMPLE IRA plans also applies to SIMPLE 401(k) plans. Tax amendment form 2010 See Notification Requirement in this chapter. Tax amendment form 2010 Credit for startup costs. Tax amendment form 2010   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE 401(k) plan that first became effective in 2013. Tax amendment form 2010 For more information, see Credit for startup costs under Reminders, earlier. Tax amendment form 2010 Note on Forms. Tax amendment form 2010   Please note that Forms 5304-SIMPLE and 5305-SIMPLE can not be used to establish a SIMPLE 401(k) plan. Tax amendment form 2010 To set up a SIMPLE 401(k) plan, see Adopting a Written Plan in chapter 4. Tax amendment form 2010 Prev  Up  Next   Home   More Online Publications