File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Www Military Com

40 Ez FormI Need Tax Instruction Booklet For 1040ezWww Myfreetaxes Com PhillyHow Do I File 2011 Taxes Online2011 Federal Income Tax FormsFill 1040x Form E TaxesFree File Form 4868Turbotax 2011 Free1040ez Tax1040ez Form 2012Can I Do My State Taxes Online For FreeFile 2012 Income TaxFree Efile H&r BlockRi 1040nr040ezFiling/late Taxes For 2012Can I File A Amended Tax Return OnlineTax Forms 1040 EzFreetaxusa 2012How To File Taxes1040ez 2011Where Do I Get 2012 Tax FormsFile 1040ez By PhoneAmending 2011 Tax ReturnFederal Tax Ez FormFederal Income Tax Form 1040ezTax Act 2008Irs Income Tax Forms 20112012 1040 Irs Tax FormsForm 1040nr SoftwareHr Block Free Tax FilingAmendment Form For Taxes2012 Tax Forms IrsIrs Tax Form 1040xHr Block MilitaryFree State Tax UsaE File IrsPrepare 2011 TaxesFile 2009 Taxes Online LateWhere Can I Get 2012 Federal Tax Forms

Www Military Com

Www military com Index A Accidentes, Pérdidas deducibles. Www military com , Pérdidas no deducibles. Www military com Agencia Federal para el Manejo de Emergencias (FEMA) , cómo comunicarse con la, Cómo Comunicarse con la Agencia Federal para el Manejo de Emergencias (FEMA) Ajustes a la base, Ajuste a la base de los bienes de una sociedad anónima. Www military com , Ajustes a la Base Aplazamiento de la declaración de una ganancia, Aplazamiento de la Declaración de una Ganancia Bienes de reposición adquiridos antes de presentar la declaración de impuestos, Bienes de reposición adquiridos antes de presentar la declaración de impuestos. Www military com Bienes de reposición adquiridos después de haber presentado la declaración de impuestos, Bienes de reposición adquiridos después de haber presentado la declaración de impuestos. Www military com Cambio de idea, Si cambia de idea. Www military com Declaración enmendada, Declaración enmendada. Www military com Documento escrito requerido, Documento escrito requerido. Www military com Límite de 3 años, Límite de 3 años. Www military com Sustitución de los bienes de reposición, Sustitución de los bienes de reposición. Www military com Asistencia (see Ayuda con los impuestos) Automóviles Accidentes, Pérdidas deducibles. Www military com Valor justo de mercado de, Valor de automóviles. Www military com Ayuda (see Ayuda con los impuestos) Ayuda con los impuestos, Cómo Obtener Ayuda con los Impuestos B Base Ajustada, Base Ajustada Ajustes a, Ajuste a la base de los bienes de una sociedad anónima. Www military com , Ajustes a la Base Propiedad de Reposición, Base de la propiedad de reposición. Www military com Base ajustada, Base Ajustada Bienes de reposición, Bienes de Reposición Ajuste a la base de los bienes de una sociedad anónima, Ajuste a la base de los bienes de una sociedad anónima. Www military com Aplazamiento de la declaración de una ganancia, Bienes de reposición adquiridos antes de presentar la declaración de impuestos. Www military com Pago adelantado, Pago adelantado. Www military com Vivienda principal Ubicada en zona de desastre, Vivienda principal en una zona de desastre. Www military com Bienes de uso personal Cómo declarar pérdidas y ganancias, Bienes de uso personal. Www military com Bienes extraviados o perdidos, Bienes extraviados o perdidos. Www military com Bienes muebles Deducción de pérdidas, cálculo de, Bienes muebles. Www military com Bienes raíces de uso personal, Excepción en el caso de bienes inmuebles de uso personal. Www military com Bienes robados (see Pérdidas por robo) Bienes robados recuperados, Bienes robados recuperados. Www military com C Comentarios sobre la publicación, Comentarios y sugerencias. Www military com Cómo aplazar la declaración de una ganancia, Cómo Aplazar la Declaración de una Ganancia Cómo calcular una ganancia, Propiedad usada en parte para fines comerciales y en parte para fines personales. Www military com Cómo calcular una pérdida, Comprobación de las pérdidas por robo. Www military com Base ajustada, Base Ajustada Pérdidas en zonas de desastre, Cómo calcular la deducción de pérdidas. Www military com Seguro y otros reembolsos, Seguro y Otros Reembolsos Cómo Calcular una Pérdida, Cómo Calcular la Deducción Cómo declarar pérdidas y ganancias, Declaración de una ganancia. Www military com , Cómo Declarar Pérdidas y Ganancias Adquiridos antes o después de presentar la declaración de impuestos, Cuándo Declarar Pérdidas y Ganancias Base, ajustes a la, Ajustes a la Base Bienes de uso personal, Bienes de uso personal. Www military com Deducciones mayores al ingreso, Si las Deducciones son Mayores que el Ingreso Depósitos monetarios, Cómo se declaran las pérdidas de depósitos monetarios. Www military com Tabla 1, Tabla 1. Www military com Cómo Declarar la Pérdida de Depósitos Monetarios Pérdidas en zonas de desastre, Cómo declarar la pérdida en el Formulario 1040X. Www military com Propiedad comercial y de generación de ingresos, Bienes comerciales y de generación de ingresos. Www military com Comprobación de las Pérdidas, Comprobación de las Pérdidas Contribuyentes casados Límites de la deducción, Contribuyentes casados. Www military com , Contribuyentes casados. Www military com Costos Fotografías tomadas después de la pérdida, Costos de fotografías y tasaciones. Www military com Gastos imprevistos, Gastos afines. Www military com Jardines, Jardines. Www military com Limpieza, Costos de limpieza y reparaciones. Www military com Protección, Costos de protección. Www military com Reparaciones, Costos de limpieza y reparaciones. Www military com Reposición, Costos de reposición. Www military com Tasaciones, Costos de fotografías y tasaciones. Www military com Costos de limpieza, Costos de limpieza y reparaciones. Www military com Costos de protección, Costos de protección. Www military com Costos de reparación, Costos de limpieza y reparaciones. Www military com Costos de reposición, Costos de reposición. Www military com D Declaración enmendada, Declaración enmendada. Www military com Defensor del Contribuyente, El Servicio del Defensor del Contribuyente está aquí para ayudarlo a usted. Www military com Desastres declarados por el gobierno federal, Propiedad comercial o de generación de ingresos ubicada en una zona de desastre declarada por el gobierno federal. Www military com , Pérdidas en Zonas de Desastre Deudas incobrables, Deudas incobrables no relacionadas con los negocios. Www military com Deudas incobrables no relacionadas con los negocios, Deudas incobrables no relacionadas con los negocios. Www military com Documentación de la pérdida, Comprobación de las pérdidas por robo. Www military com Donaciones en efectivo, Donaciones en efectivo. Www military com E Entidad afín, compra de bienes de reposición de una, Compra de bienes de reposición de una entidad afín. Www military com Esquemas de inversión de tipo Ponzi , Pérdidas provenientes de esquemas de inversión de tipo Ponzi (Ponzi-type schemes). Www military com Expropiaciones forzosas, Expropiaciones forzosas. Www military com F Fallecimiento de un contribuyente Aplazamiento de la declaración de una ganancia, Fallecimiento de un contribuyente. Www military com Fines comerciales, propiedad usada en parte para, Propiedad usada en parte para fines comerciales y en parte para fines personales. Www military com Fondo de emergencia del empleador en caso de desastre, Fondo de emergencia del empleador en caso de desastre. Www military com Formulario 1040, Anexo A, Bienes de uso personal. Www military com Formulario 1040, Anexo D, Bienes de uso personal. Www military com Formulario 1040X Pérdidas en zonas de desastre, Cómo declarar la pérdida en el Formulario 1040X. Www military com Formulario 4684 Cómo declarar pérdidas y ganancias en bienes de uso personal, Bienes de uso personal. Www military com Fotografías Documentación de la pérdida, Costos de fotografías y tasaciones. Www military com G Ganancias Aplazamiento de, Aplazamiento de la Declaración de una Ganancia, Cómo Aplazar la Declaración de una Ganancia Cómo calcular, Cómo Calcular una Ganancia Cómo declarar, Cómo Comunicarse con la Agencia Federal para el Manejo de Emergencias (FEMA) Cuándo declarar, Si cambia de idea. Www military com Reembolsos, Ganancias por reembolsos. Www military com Gastos afines, Gastos afines. Www military com Gastos imprevistos, Gastos afines. Www military com I Información adicional (see Ayuda con los impuestos) J Jardines, Jardines. Www military com L Límites de la deducción, Límites de la Deducción Límites de la Deducción Regla de los $100, Regla de los $100 Regla del 10%, Regla del 10% Regla del 2%, Regla del 2% N Niños desaparecidos, fotografías de, Recordatorios P Pagos calificados para mitigación de desastres, Pagos calificados para mitigación de desastres. Www military com Pagos del seguro por gastos de manutención, Pagos del seguro por gastos de manutención. Www military com Paneles de Yeso (Drywall) Corrosivos, Procedimiento Especial Correspondiente a Daños Ocasionados por Paneles de Yeso (Drywall) Corrosivos Pérdida de inventario, Pérdida de inventario. Www military com Pérdidas en zonas de desastre, Pérdida de inventario por desastre. Www military com Pérdida de madera en pie, Pérdida de madera en pie. Www military com Pérdidas Calcular la cantidad (see Cómo calcular una pérdida) Cómo declarar, Cómo Comunicarse con la Agencia Federal para el Manejo de Emergencias (FEMA) Comprobación de las, Recuperación de pérdida deducida. Www military com Cuándo declarar, Si cambia de idea. Www military com (Tabla 3), Tabla 3. Www military com Cuándo deducir una pérdida por hecho fortuito o robo Depósitos monetarios (see Pérdidas de depósitos) Documentación de, Comprobación de las pérdidas por robo. Www military com Hecho Fortuito (see Pérdidas por hecho fortuito) Robo (see Pérdidas por robo) Zonas de desastre (see Pérdidas en zonas de desastre) Pérdidas de Depósitos Declaración de (Tabla 1), Tabla 1. Www military com Cómo Declarar la Pérdida de Depósitos Monetarios Pérdidas de depósitos monetarios, Bienes extraviados o perdidos. Www military com , Tabla 3. Www military com Cuándo deducir una pérdida por hecho fortuito o robo Cuándo declarar, Pérdidas de depósitos monetarios. Www military com Pérdidas deducibles, Pérdidas deducibles. Www military com Pérdidas en Zonas de Desastre Cómo calcular la deducción de pérdidas, Cómo calcular la deducción de pérdidas. Www military com Cómo deducir la pérdida del año anterior, Cómo deducir la pérdida del año anterior. Www military com Cuándo deducir, Cuándo deducir la pérdida. Www military com Tabla 3, Tabla 3. Www military com Cuándo deducir una pérdida por hecho fortuito o robo Declaración en una declaración enmendada, Declaración de pérdida por desastre en declaración de impuestos enmendada. Www military com Desastre declarado por el gobierno federal, Propiedad comercial o de generación de ingresos ubicada en una zona de desastre declarada por el gobierno federal. Www military com , Pérdidas en Zonas de Desastre Documentación, Documentación. Www military com Formulario 1040X, Cómo declarar la pérdida en el Formulario 1040X. Www military com Inventario, Pérdida de inventario por desastre. Www military com Pagos calificados de asistencia en caso de desastre, Pagos calificados de asistencia en caso de desastre. Www military com Pagos calificados para mitigación de desastres, Pagos calificados para mitigación de desastres. Www military com Plazos Tributarios Aplazados, Zona de desastre con cobertura. Www military com Préstamo federal cancelado, Préstamo federal cancelado. Www military com Reglas para vivienda principal, Vivienda principal en zona de desastre. Www military com , Ganancias. Www military com Vivienda inhabitable, Vivienda inhabitable por desastre. Www military com Pérdidas en zonas de desastre, Pérdida del inquilino. Www military com Pérdidas no deducibles, Pérdidas no deducibles. Www military com Pérdidas por hecho fortuito, Tabla 3. Www military com Cuándo deducir una pérdida por hecho fortuito o robo Comprobación de las, Comprobación de las pérdidas por hecho fortuito. Www military com Cuándo declarar, Pérdidas. Www military com Definición, Hecho Fortuito Depósitos monetarios, pérdidas de, Pérdida ordinaria o por hechos fortuitos. Www military com Deterioro progresivo, Deterioro progresivo. Www military com Pérdidas deducibles, Pérdidas deducibles. Www military com Pérdidas no deducibles, Pérdidas no deducibles. Www military com Registros para el cálculo de, Registros para el cálculo de pérdidas por hecho fortuito y robo. Www military com Pérdidas por robo, Robo Bienes extraviados o perdidos, Bienes extraviados o perdidos. Www military com Comprobación de las, Comprobación de las pérdidas por robo. Www military com Cuándo declarar, Pérdidas. Www military com Cuándo Deducir una Pérdida por Hecho Fortuito (Tabla 3), Tabla 3. Www military com Cuándo deducir una pérdida por hecho fortuito o robo Esquemas de inversión de tipo Ponzi , Pérdidas provenientes de esquemas de inversión de tipo Ponzi (Ponzi-type schemes). Www military com Registros para el cálculo de, Registros para el cálculo de pérdidas por hecho fortuito y robo. Www military com Valor justo de mercado de los bienes robados, Valor justo de mercado de los bienes robados. Www military com Plazo de reposición, Plazo de Reposición Prórroga de, Prórroga. Www military com Plazos Plazos Tributarios Aplazados, Plazos Tributarios Aplazados Plazos Tributarios Aplazados, Plazos Tributarios Aplazados Propiedad alquilada, Propiedad alquilada. Www military com Cuándo declarar, Pérdida del inquilino. Www military com Propiedad comercial o de generación de ingresos, Propiedad comercial o de generación de ingresos. Www military com Propiedad de reposición Base de, Base de la propiedad de reposición. Www military com Vivienda principal, Vivienda principal repuesta. Www military com Publicaciones (see Ayuda con los impuestos) R Reducción de intereses, Reducción de intereses y multas. Www military com Reducción de intereses y multas, Reducción de intereses y multas. Www military com Reducción de multas, Reducción de intereses y multas. Www military com Reembolsos Asistencia en caso de desastre, Asistencia en caso de desastre. Www military com Donaciones en efectivo, Donaciones en efectivo. Www military com Falta de presentación de una solicitud, Falta de presentación de una solicitud de reembolso. Www military com Fondo de emergencia del empleador en caso de desastre, Fondo de emergencia del empleador en caso de desastre. Www military com Recibido después de la deducción de una pérdida, Reembolso Recibido Después de la Deducción de una Pérdida Tipos de, Tipos de Reembolsos Registros para el cálculo de pérdidas por hecho fortuito y robo, Registros para el cálculo de pérdidas por hecho fortuito y robo. Www military com S Seguros, Seguro y Otros Reembolsos Gastos de manutención, pagos del seguro por, Pagos del seguro por gastos de manutención. Www military com Servicio del Defensor del Contribuyente, El Servicio del Defensor del Contribuyente está aquí para ayudarlo a usted. Www military com Servicios gratuitos para los impuestos, Cómo Obtener Ayuda con los Impuestos Subsidios de asistencia en caso de desastre, Asistencia en caso de desastre. Www military com Subsidios estales de asistencia por desastres para empresas, Subsidios estatales de asistencia por desastre para empresas. Www military com Subsidios federales de asistencia en caso de desastre, Subsidios federales de asistencia en caso de desastre. Www military com Sugerencias para la publicación, Comentarios y sugerencias. Www military com T Tablas y figuras Cómo Declarar la Pérdida de Depósitos Monetarios (Tabla 1), Tabla 1. Www military com Cómo Declarar la Pérdida de Depósitos Monetarios Cuándo Deducir una Pérdida por Hecho Fortuito (Tabla 3), Tabla 1. Www military com Cómo Declarar la Pérdida de Depósitos Monetarios , Tabla 3. Www military com Cuándo deducir una pérdida por hecho fortuito o robo Tasaciones, Tasaciones. Www military com , Costos de fotografías y tasaciones. Www military com V Valor justo de mercado Cálculo de la disminución de, Disminución del Valor Justo de Mercado Puntos a no tener en cuenta, Cómo Calcular la Disminución del Valor Justo de Mercado —Puntos a No Tener en Cuenta Puntos a tener en cuenta, Cómo Calcular la Disminución del Valor Justo de Mercado —Puntos a Tener en Cuenta Disminución del valor de mercado de la propiedad en la zona del hecho fortuito o en sus alrededores, Disminución del valor de mercado de la propiedad en la zona del hecho fortuito o en sus alrededores. Www military com Valor sentimental, Valor sentimental. Www military com Prev  Up     Home   More Online Publications
Print - Click this link to Print this page

Tax Quotes

When it comes to taxes, everyone has an opinion. These quotes reflect the opinions of their authors; their inclusion here is not an official IRS endorsement of the sentiments expressed.

"Taxes are what we pay for civilized society.'' — Oliver Wendell Holmes, Jr., U.S. Supreme Court Justice

"The power of taxing people and their property is essential to the very existence of government.'' — James Madison, U.S. President

"To tax and to please, no more than to love and to be wise, is not given to men." —  Edmund Burke, 18th Century Irish political philosopher and British statesman

“I am proud to be paying taxes in the United States. The only thing is – I could be just as proud for half the money.” — Arthur Godfrey, entertainer

“People who complain about taxes can be divided into two classes: men and women.” 
— Unknown

"No government can exist without taxation. This money must necessarily be levied on the people; and the grand art consists of levying so as not to oppress.'' — Frederick the Great, 18th Century Prussian king

"Like mothers, taxes are often misunderstood, but seldom forgotten.'' — Lord Bramwell, 19th Century English jurist

"The best measure of a man's honesty isn't his income tax return. It's the zero adjust on his bathroom scale.'' — Arthur C. Clarke, author

"Next to being shot at and missed, nothing is really quite as satisfying as an income tax refund.” — F. J. Raymond, humorist

A tax loophole is "something that benefits the other guy. If it benefits you, it is tax reform.'' 
— Russell B. Long, U.S. Senator

"Few of us ever test our powers of deduction, except when filling out an income tax form.'' 
— Laurence J. Peter, author

“The hardest thing in the world to understand is the income tax.” — Albert Einstein, physicist

“Taxation with representation ain’t so hot either.” — Gerald Barzan, humorist

“Where there is an income tax, the just man will pay more and the unjust less on the same amount of income.” — Plato

“Income tax has made more liars out of the American people than golf.” — Will Rogers, humorist

Page Last Reviewed or Updated: 10-Mar-2014

The Www Military Com

Www military com 4. Www military com   Qualified Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Kinds of PlansDefined Contribution Plan Defined Benefit Plan Qualification RulesEarly retirement. Www military com Loan secured by benefits. Www military com Waiver of survivor benefits. Www military com Waiver of 30-day waiting period before annuity starting date. Www military com Involuntary cash-out of benefits not more than dollar limit. Www military com Exception for certain loans. Www military com Exception for QDRO. Www military com SIMPLE and safe harbor 401(k) plan exception. Www military com Setting Up a Qualified PlanAdopting a Written Plan Investing Plan Assets Minimum Funding RequirementDue dates. Www military com Installment percentage. Www military com Extended period for making contributions. Www military com ContributionsEmployer Contributions Employee Contributions When Contributions Are Considered Made Employer DeductionDeduction Limits Deduction Limit for Self-Employed Individuals Where To Deduct Contributions Carryover of Excess Contributions Excise Tax for Nondeductible (Excess) Contributions Elective Deferrals (401(k) Plans)Limit on Elective Deferrals Automatic Enrollment Treatment of Excess Deferrals Qualified Roth Contribution ProgramElective Deferrals Qualified Distributions Reporting Requirements DistributionsRequired Distributions Distributions From 401(k) Plans Tax Treatment of Distributions Tax on Early Distributions Tax on Excess Benefits Excise Tax on Reversion of Plan Assets Notification of Significant Benefit Accrual Reduction Prohibited TransactionsTax on Prohibited Transactions Reporting RequirementsOne-participant plan. Www military com Caution: Form 5500-EZ not required. Www military com Form 5500. Www military com Electronic filing of Forms 5500 and 5500-SF. Www military com Topics - This chapter discusses: Kinds of plans Qualification rules Setting up a qualified plan Minimum funding requirement Contributions Employer deduction Elective deferrals (401(k) plans) Qualified Roth contribution program Distributions Prohibited transactions Reporting requirements Useful Items - You may want to see: Publications 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 3066 Have you had your Check-up this year? for Retirement Plans 3998 Choosing A Retirement Solution for Your Small Business 4222 401(k) Plans for Small Businesses 4530 Designated Roth Accounts under a 401(k), 403(b), or governmental 457(b) plans 4531 401(k) Plan Checklist 4674 Automatic Enrollment 401(k) Plans for Small Businesses 4806 Profit Sharing Plans for Small Businesses Forms (and Instructions) www. Www military com dol. Www military com gov/ebsa/pdf/2013-5500. Www military com pdf www. Www military com dol. Www military com gov/ebsa/pdf/2013-5500-SF. Www military com pdf W-2 Wage and Tax Statement Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Www military com 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Www military com 1040 U. Www military com S. Www military com Individual Income Tax Return Schedule C (Form 1040) Profit or Loss From Business Schedule F (Form 1040) Profit or Loss From Farming 5300 Application for Determination for Employee Benefit Plan 5310 Application for Determination for Terminating Plan 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 5330 Return of Excise Taxes Related to Employee Benefit Plans 5500 Annual Return/Report of Employee Benefit Plan. Www military com For copies of this form, go to: 5500-EZ Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan. Www military com For copies of this form, go to: 8717 User Fee for Employee Plan Determination Letter Request 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs 8955-SSA Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits These qualified retirement plans set up by self-employed individuals are sometimes called Keogh or H. Www military com R. Www military com 10 plans. Www military com A sole proprietor or a partnership can set up one of these plans. Www military com A common-law employee or a partner cannot set up one of these plans. Www military com The plans described here can also be set up and maintained by employers that are corporations. Www military com All the rules discussed here apply to corporations except where specifically limited to the self-employed. Www military com The plan must be for the exclusive benefit of employees or their beneficiaries. Www military com These qualified plans can include coverage for a self-employed individual. Www military com As an employer, you can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Www military com The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Www military com Kinds of Plans There are two basic kinds of qualified plans—defined contribution plans and defined benefit plans—and different rules apply to each. Www military com You can have more than one qualified plan, but your contributions to all the plans must not total more than the overall limits discussed under Contributions and Employer Deduction, later. Www military com Defined Contribution Plan A defined contribution plan provides an individual account for each participant in the plan. Www military com It provides benefits to a participant largely based on the amount contributed to that participant's account. Www military com Benefits are also affected by any income, expenses, gains, losses, and forfeitures of other accounts that may be allocated to an account. Www military com A defined contribution plan can be either a profit-sharing plan or a money purchase pension plan. Www military com Profit-sharing plan. Www military com   Although it is called a “profit-sharing plan,” you do not actually have to make a business profit for the year in order to make a contribution (except for yourself if you are self-employed as discussed under Self-employed Individual, later). Www military com A profit-sharing plan can be set up to allow for discretionary employer contributions, meaning the amount contributed each year to the plan is not fixed. Www military com An employer may even make no contribution to the plan for a given year. Www military com   The plan must provide a definite formula for allocating the contribution among the participants and for distributing the accumulated funds to the employees after they reach a certain age, after a fixed number of years, or upon certain other occurrences. Www military com   In general, you can be more flexible in making contributions to a profit-sharing plan than to a money purchase pension plan (discussed next) or a defined benefit plan (discussed later). Www military com Money purchase pension plan. Www military com   Contributions to a money purchase pension plan are fixed and are not based on your business profits. Www military com For example, if the plan requires that contributions be 10% of the participants' compensation without regard to whether you have profits (or the self-employed person has earned income), the plan is a money purchase pension plan. Www military com This applies even though the compensation of a self-employed individual as a participant is based on earned income derived from business profits. Www military com Defined Benefit Plan A defined benefit plan is any plan that is not a defined contribution plan. Www military com Contributions to a defined benefit plan are based on what is needed to provide definitely determinable benefits to plan participants. Www military com Actuarial assumptions and computations are required to figure these contributions. Www military com Generally, you will need continuing professional help to have a defined benefit plan. Www military com Qualification Rules To qualify for the tax benefits available to qualified plans, a plan must meet certain requirements (qualification rules) of the tax law. Www military com Generally, unless you write your own plan, the financial institution that provided your plan will take the continuing responsibility for meeting qualification rules that are later changed. Www military com The following is a brief overview of important qualification rules that generally have not yet been discussed. Www military com It is not intended to be all-inclusive. Www military com See Setting Up a Qualified Plan , later. Www military com Generally, the following qualification rules also apply to a SIMPLE 401(k) retirement plan. Www military com A SIMPLE 401(k) plan is, however, not subject to the top-heavy plan rules and nondiscrimination rules if the plan satisfies the provisions discussed in chapter 3 under SIMPLE 401(k) Plan. Www military com Plan assets must not be diverted. Www military com   Your plan must make it impossible for its assets to be used for, or diverted to, purposes other than the benefit of employees and their beneficiaries. Www military com As a general rule, the assets cannot be diverted to the employer. Www military com Minimum coverage requirement must be met. Www military com   To be a qualified plan, a defined benefit plan must benefit at least the lesser of the following. Www military com 50 employees, or The greater of: 40% of all employees, or Two employees. Www military com If there is only one employee, the plan must benefit that employee. Www military com Contributions or benefits must not discriminate. Www military com   Under the plan, contributions or benefits to be provided must not discriminate in favor of highly compensated employees. Www military com Contributions and benefits must not be more than certain limits. Www military com   Your plan must not provide for contributions or benefits that are more than certain limits. Www military com The limits apply to the annual contributions and other additions to the account of a participant in a defined contribution plan and to the annual benefit payable to a participant in a defined benefit plan. Www military com These limits are discussed later in this chapter under Contributions. Www military com Minimum vesting standard must be met. Www military com   Your plan must satisfy certain requirements regarding when benefits vest. Www military com A benefit is vested (you have a fixed right to it) when it becomes nonforfeitable. Www military com A benefit is nonforfeitable if it cannot be lost upon the happening, or failure to happen, of any event. Www military com Special rules apply to forfeited benefit amounts. Www military com In defined contribution plans, forfeitures can be allocated to the accounts of remaining participants in a nondiscriminatory way, or they can be used to reduce your contributions. Www military com   Forfeitures under a defined benefit plan cannot be used to increase the benefits any employee would otherwise receive under the plan. Www military com Forfeitures must be used instead to reduce employer contributions. Www military com Participation. Www military com   In general, an employee must be allowed to participate in your plan if he or she meets both the following requirements. Www military com Has reached age 21. Www military com Has at least 1 year of service (2 years if the plan is not a 401(k) plan and provides that after not more than 2 years of service the employee has a nonforfeitable right to all his or her accrued benefit). Www military com A plan cannot exclude an employee because he or she has reached a specified age. Www military com Leased employee. Www military com   A leased employee, defined in chapter 1, who performs services for you (recipient of the services) is treated as your employee for certain plan qualification rules. Www military com These rules include those in all the following areas. Www military com Nondiscrimination in coverage, contributions, and benefits. Www military com Minimum age and service requirements. Www military com Vesting. Www military com Limits on contributions and benefits. Www military com Top-heavy plan requirements. Www military com Contributions or benefits provided by the leasing organization for services performed for you are treated as provided by you. Www military com Benefit payment must begin when required. Www military com   Your plan must provide that, unless the participant chooses otherwise, the payment of benefits to the participant must begin within 60 days after the close of the latest of the following periods. Www military com The plan year in which the participant reaches the earlier of age 65 or the normal retirement age specified in the plan. Www military com The plan year in which the 10th anniversary of the year in which the participant began participating in the plan occurs. Www military com The plan year in which the participant separates from service. Www military com Early retirement. Www military com   Your plan can provide for payment of retirement benefits before the normal retirement age. Www military com If your plan offers an early retirement benefit, a participant who separates from service before satisfying the early retirement age requirement is entitled to that benefit if he or she meets both the following requirements. Www military com Satisfies the service requirement for the early retirement benefit. Www military com Separates from service with a nonforfeitable right to an accrued benefit. Www military com The benefit, which may be actuarially reduced, is payable when the early retirement age requirement is met. Www military com Required minimum distributions. Www military com   Special rules require minimum annual distributions from qualified plans, generally beginning after age  70½. Www military com See Required Distributions , under Distributions, later. Www military com Survivor benefits. Www military com   Defined benefit and money purchase pension plans must provide automatic survivor benefits in both the following forms. Www military com A qualified joint and survivor annuity for a vested participant who does not die before the annuity starting date. Www military com A qualified pre-retirement survivor annuity for a vested participant who dies before the annuity starting date and who has a surviving spouse. Www military com   The automatic survivor benefit also applies to any participant under a profit-sharing plan unless all the following conditions are met. Www military com The participant does not choose benefits in the form of a life annuity. Www military com The plan pays the full vested account balance to the participant's surviving spouse (or other beneficiary if the surviving spouse consents or if there is no surviving spouse) if the participant dies. Www military com The plan is not a direct or indirect transferee of a plan that must provide automatic survivor benefits. Www military com Loan secured by benefits. Www military com   If automatic survivor benefits are required for a spouse under a plan, he or she must consent to a loan that uses as security the accrued benefits in the plan. Www military com Waiver of survivor benefits. Www military com   Each plan participant may be permitted to waive the joint and survivor annuity or the pre-retirement survivor annuity (or both), but only if the participant has the written consent of the spouse. Www military com The plan also must allow the participant to withdraw the waiver. Www military com The spouse's consent must be witnessed by a plan representative or notary public. Www military com Waiver of 30-day waiting period before annuity starting date. Www military com    A plan may permit a participant to waive (with spousal consent) the 30-day minimum waiting period after a written explanation of the terms and conditions of a joint and survivor annuity is provided to each participant. Www military com   The waiver is allowed only if the distribution begins more than 7 days after the written explanation is provided. Www military com Involuntary cash-out of benefits not more than dollar limit. Www military com   A plan may provide for the immediate distribution of the participant's benefit under the plan if the present value of the benefit is not greater than $5,000. Www military com   However, the distribution cannot be made after the annuity starting date unless the participant and the spouse or surviving spouse of a participant who died (if automatic survivor benefits are required for a spouse under the plan) consents in writing to the distribution. Www military com If the present value is greater than $5,000, the plan must have the written consent of the participant and the spouse or surviving spouse (if automatic survivor benefits are required for a spouse under the plan) for any immediate distribution of the benefit. Www military com   Benefits attributable to rollover contributions and earnings on them can be ignored in determining the present value of these benefits. Www military com   A plan must provide for the automatic rollover of any cash-out distribution of more than $1,000 to an individual retirement account or annuity, unless the participant chooses otherwise. Www military com A section 402(f) notice must be sent prior to an involuntary cash-out of an eligible rollover distribution. Www military com See Section 402(f) Notice under Distributions, later, for more details. Www military com Consolidation, merger, or transfer of assets or liabilities. Www military com   Your plan must provide that, in the case of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each participant would (if the plan then terminated) receive a benefit equal to or more than the benefit he or she would have been entitled to just before the merger, etc. Www military com (if the plan had then terminated). Www military com Benefits must not be assigned or alienated. Www military com   Your plan must provide that a participant's or beneficiary's benefits under the plan cannot be taken away by any legal or equitable proceeding except as provided below or pursuant to certain judgements or settlements against the participant for violations of plan rules. Www military com Exception for certain loans. Www military com   A loan from the plan (not from a third party) to a participant or beneficiary is not treated as an assignment or alienation if the loan is secured by the participant's accrued nonforfeitable benefit and is exempt from the tax on prohibited transactions under section 4975(d)(1) or would be exempt if the participant were a disqualified person. Www military com A disqualified person is defined later in this chapter under Prohibited Transactions. Www military com Exception for QDRO. Www military com   Compliance with a QDRO (qualified domestic relations order) does not result in a prohibited assignment or alienation of benefits. Www military com   Payments to an alternate payee under a QDRO before the participant attains age 59½ are not subject to the 10% additional tax that would otherwise apply under certain circumstances. Www military com Benefits distributed to an alternate payee under a QDRO can be rolled over tax free to an individual retirement account or to an individual retirement annuity. Www military com No benefit reduction for social security increases. Www military com   Your plan must not permit a benefit reduction for a post-separation increase in the social security benefit level or wage base for any participant or beneficiary who is receiving benefits under your plan, or who is separated from service and has nonforfeitable rights to benefits. Www military com This rule also applies to plans supplementing the benefits provided by other federal or state laws. Www military com Elective deferrals must be limited. Www military com   If your plan provides for elective deferrals, it must limit those deferrals to the amount in effect for that particular year. Www military com See Limit on Elective Deferrals later in this chapter. Www military com Top-heavy plan requirements. Www military com   A top-heavy plan is one that mainly favors partners, sole proprietors, and other key employees. Www military com   A plan is top-heavy for a plan year if, for the preceding plan year, the total value of accrued benefits or account balances of key employees is more than 60% of the total value of accrued benefits or account balances of all employees. Www military com Additional requirements apply to a top-heavy plan primarily to provide minimum benefits or contributions for non-key employees covered by the plan. Www military com   Most qualified plans, whether or not top-heavy, must contain provisions that meet the top-heavy requirements and will take effect in plan years in which the plans are top-heavy. Www military com These qualification requirements for top-heavy plans are explained in section 416 and its regulations. Www military com SIMPLE and safe harbor 401(k) plan exception. Www military com   The top-heavy plan requirements do not apply to SIMPLE 401(k) plans, discussed earlier in chapter 3, or to safe harbor 401(k) plans that consist solely of safe harbor contributions, discussed later in this chapter. Www military com QACAs (discussed later) also are not subject to top-heavy requirements. Www military com Setting Up a Qualified Plan There are two basic steps in setting up a qualified plan. Www military com First you adopt a written plan. Www military com Then you invest the plan assets. Www military com You, the employer, are responsible for setting up and maintaining the plan. Www military com If you are self-employed, it is not necessary to have employees besides yourself to sponsor and set up a qualified plan. Www military com If you have employees, see Participation, under Qualification Rules, earlier. Www military com Set-up deadline. Www military com   To take a deduction for contributions for a tax year, your plan must be set up (adopted) by the last day of that year (December 31 for calendar-year employers). Www military com Credit for startup costs. Www military com   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a qualified plan that first became effective in 2013. Www military com For more information, see Credit for startup costs under Reminders, earlier. Www military com Adopting a Written Plan You must adopt a written plan. Www military com The plan can be an IRS-approved master or prototype plan offered by a sponsoring organization. Www military com Or it can be an individually designed plan. Www military com Written plan requirement. Www military com   To qualify, the plan you set up must be in writing and must be communicated to your employees. Www military com The plan's provisions must be stated in the plan. Www military com It is not sufficient for the plan to merely refer to a requirement of the Internal Revenue Code. Www military com Master or prototype plans. Www military com   Most qualified plans follow a standard form of plan (a master or prototype plan) approved by the IRS. Www military com Master and prototype plans are plans made available by plan providers for adoption by employers (including self-employed individuals). Www military com Under a master plan, a single trust or custodial account is established, as part of the plan, for the joint use of all adopting employers. Www military com Under a prototype plan, a separate trust or custodial account is established for each employer. Www military com Plan providers. Www military com   The following organizations generally can provide IRS-approved master or prototype plans. Www military com Banks (including some savings and loan associations and federally insured credit unions). Www military com Trade or professional organizations. Www military com Insurance companies. Www military com Mutual funds. Www military com Individually designed plan. Www military com   If you prefer, you can set up an individually designed plan to meet specific needs. Www military com Although advance IRS approval is not required, you can apply for approval by paying a fee and requesting a determination letter. Www military com You may need professional help for this. Www military com See Rev. Www military com Proc. Www military com 2014-6, 2014-1 I. Www military com R. Www military com B. Www military com 198, available at www. Www military com irs. Www military com gov/irb/2014-1_IRB/ar10. Www military com html, as annually updated, that may help you decide whether to apply for approval. Www military com Internal Revenue Bulletins are available on the IRS website at IRS. Www military com gov They are also available at most IRS offices and at certain libraries. Www military com User fee. Www military com   The fee mentioned earlier for requesting a determination letter does not apply to employers who have 100 or fewer employees who received at least $5,000 of compensation from the employer for the preceding year. Www military com At least one of them must be a non-highly compensated employee participating in the plan. Www military com The fee does not apply to requests made by the later of the following dates. Www military com The end of the 5th plan year the plan is in effect. Www military com The end of any remedial amendment period for the plan that begins within the first 5 plan years. Www military com The request cannot be made by the sponsor of a prototype or similar plan the sponsor intends to market to participating employers. Www military com   For more information about whether the user fee applies, see Rev. Www military com Proc. Www military com 2014-8, 2014-1 I. Www military com R. Www military com B. Www military com 242, available at www. Www military com irs. Www military com gov/irb/2014-1_IRB/ar12. Www military com html, as may be annually updated; Notice 2003-49, 2003-32 I. Www military com R. Www military com B. Www military com 294, available at www. Www military com irs. Www military com gov/irb/2003-32_IRB/ar13. Www military com html; and Notice 2011-86, 2011-45 I. Www military com R. Www military com B. Www military com 698, available at www. Www military com irs. Www military com gov/irb/2011-45_IRB/ar11. Www military com html. Www military com Investing Plan Assets In setting up a qualified plan, you arrange how the plan's funds will be used to build its assets. Www military com You can establish a trust or custodial account to invest the funds. Www military com You, the trust, or the custodial account can buy an annuity contract from an insurance company. Www military com Life insurance can be included only if it is incidental to the retirement benefits. Www military com You set up a trust by a legal instrument (written document). Www military com You may need professional help to do this. Www military com You can set up a custodial account with a bank, savings and loan association, credit union, or other person who can act as the plan trustee. Www military com You do not need a trust or custodial account, although you can have one, to invest the plan's funds in annuity contracts or face-amount certificates. Www military com If anyone other than a trustee holds them, however, the contracts or certificates must state they are not transferable. Www military com Other plan requirements. Www military com   For information on other important plan requirements, see Qualification Rules , earlier in this chapter. Www military com Minimum Funding Requirement In general, if your plan is a money purchase pension plan or a defined benefit plan, you must actually pay enough into the plan to satisfy the minimum funding standard for each year. Www military com Determining the amount needed to satisfy the minimum funding standard for a defined benefit plan is complicated, and you should seek professional help in order to meet these contribution requirements. Www military com For information on this funding requirement, see section 412 and its regulations. Www military com Quarterly installments of required contributions. Www military com   If your plan is a defined benefit plan subject to the minimum funding requirements, you generally must make quarterly installment payments of the required contributions. Www military com If you do not pay the full installments timely, you may have to pay interest on any underpayment for the period of the underpayment. Www military com Due dates. Www military com   The due dates for the installments are 15 days after the end of each quarter. Www military com For a calendar-year plan, the installments are due April 15, July 15, October 15, and January 15 (of the following year). Www military com Installment percentage. Www military com   Each quarterly installment must be 25% of the required annual payment. Www military com Extended period for making contributions. Www military com   Additional contributions required to satisfy the minimum funding requirement for a plan year will be considered timely if made by 8½ months after the end of that year. Www military com Contributions A qualified plan is generally funded by your contributions. Www military com However, employees participating in the plan may be permitted to make contributions, and you may be permitted to make contributions on your own behalf. Www military com See Employee Contributions and Elective Deferrals later. Www military com Contributions deadline. Www military com   You can make deductible contributions for a tax year up to the due date of your return (plus extensions) for that year. Www military com Self-employed individual. Www military com   You can make contributions on behalf of yourself only if you have net earnings (compensation) from self-employment in the trade or business for which the plan was set up. Www military com Your net earnings must be from your personal services, not from your investments. Www military com If you have a net loss from self-employment, you cannot make contributions for yourself for the year, even if you can contribute for common-law employees based on their compensation. Www military com Employer Contributions There are certain limits on the contributions and other annual additions you can make each year for plan participants. Www military com There are also limits on the amount you can deduct. Www military com See Deduction Limits , later. Www military com Limits on Contributions and Benefits Your plan must provide that contributions or benefits cannot exceed certain limits. Www military com The limits differ depending on whether your plan is a defined contribution plan or a defined benefit plan. Www military com Defined benefit plan. Www military com   For 2013, the annual benefit for a participant under a defined benefit plan cannot exceed the lesser of the following amounts. Www military com 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. Www military com $205,000 ($210,000 for 2014). Www military com Defined contribution plan. Www military com   For 2013, a defined contribution plan's annual contributions and other additions (excluding earnings) to the account of a participant cannot exceed the lesser of the following amounts. Www military com 100% of the participant's compensation. Www military com $51,000 ($52,000 for 2014). Www military com   Catch-up contributions (discussed later under Limit on Elective Deferrals) are not subject to the above limit. Www military com Employee Contributions Participants may be permitted to make nondeductible contributions to a plan in addition to your contributions. Www military com Even though these employee contributions are not deductible, the earnings on them are tax free until distributed in later years. Www military com Also, these contributions must satisfy the actual contribution percentage (ACP) test of section 401(m)(2), a nondiscrimination test that applies to employee contributions and matching contributions. Www military com See Regulations sections 1. Www military com 401(k)-2 and 1. Www military com 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Www military com When Contributions Are Considered Made You generally apply your plan contributions to the year in which you make them. Www military com But you can apply them to the previous year if all the following requirements are met. Www military com You make them by the due date of your tax return for the previous year (plus extensions). Www military com The plan was established by the end of the previous year. Www military com The plan treats the contributions as though it had received them on the last day of the previous year. Www military com You do either of the following. Www military com You specify in writing to the plan administrator or trustee that the contributions apply to the previous year. Www military com You deduct the contributions on your tax return for the previous year. Www military com A partnership shows contributions for partners on Form 1065. Www military com Employer's promissory note. Www military com   Your promissory note made out to the plan is not a payment that qualifies for the deduction. Www military com Also, issuing this note is a prohibited transaction subject to tax. Www military com See Prohibited Transactions , later. Www military com Employer Deduction You can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Www military com The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Www military com Deduction Limits The deduction limit for your contributions to a qualified plan depends on the kind of plan you have. Www military com Defined contribution plans. Www military com   The deduction for contributions to a defined contribution plan (profit-sharing plan or money purchase pension plan) cannot be more than 25% of the compensation paid (or accrued) during the year to your eligible employees participating in the plan. Www military com If you are self-employed, you must reduce this limit in figuring the deduction for contributions you make for your own account. Www military com See Deduction Limit for Self-Employed Individuals , later. Www military com   When figuring the deduction limit, the following rules apply. Www military com Elective deferrals (discussed later) are not subject to the limit. Www military com Compensation includes elective deferrals. Www military com The maximum compensation that can be taken into account for each employee in 2013 is $255,000 ($260,000 for 2014). Www military com Defined benefit plans. Www military com   The deduction for contributions to a defined benefit plan is based on actuarial assumptions and computations. Www military com Consequently, an actuary must figure your deduction limit. Www military com    In figuring the deduction for contributions, you cannot take into account any contributions or benefits that are more than the limits discussed earlier under Limits on Contributions and Benefits, earlier. Www military com Table 4–1. Www military com Carryover of Excess Contributions Illustrated—Profit-Sharing Plan (000's omitted) Year Participants' compensation Participants' share of required contribution (10% of annual profit) Deductible  limit for current year (25% of compensation) Contribution Excess contribution carryover used1 Total  deduction including carryovers Excess contribution carryover available at end of year 2010 $1,000 $100 $250 $100 $ 0 $100 $ 0 2011 400 165 100 165 0 100 65 2012 500 100 125 100 25 125 40 2013 600 100 150 100 40 140 0  1There were no carryovers from years before 2010. Www military com Deduction Limit for Self-Employed Individuals If you make contributions for yourself, you need to make a special computation to figure your maximum deduction for these contributions. Www military com Compensation is your net earnings from self-employment, defined in chapter 1. Www military com This definition takes into account both the following items. Www military com The deduction for the deductible part of your self-employment tax. Www military com The deduction for contributions on your behalf to the plan. Www military com The deduction for your own contributions and your net earnings depend on each other. Www military com For this reason, you determine the deduction for your own contributions indirectly by reducing the contribution rate called for in your plan. Www military com To do this, use either the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed in chapter 5. Www military com Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Www military com Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Www military com 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. Www military com Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Www military com (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you get from the partnership. Www military com ) Carryover of Excess Contributions If you contribute more to the plans than you can deduct for the year, you can carry over and deduct the difference in later years, combined with your contributions for those years. Www military com Your combined deduction in a later year is limited to 25% of the participating employees' compensation for that year. Www military com For purposes of this limit, a SEP is treated as a profit-sharing (defined contribution) plan. Www military com However, this percentage limit must be reduced to figure your maximum deduction for contributions you make for yourself. Www military com See Deduction Limit for Self-Employed Individuals, earlier. Www military com The amount you carry over and deduct may be subject to the excise tax discussed next. Www military com Table 4-1, earlier, illustrates the carryover of excess contributions to a profit-sharing plan. Www military com Excise Tax for Nondeductible (Excess) Contributions If you contribute more than your deduction limit to a retirement plan, you have made nondeductible contributions and you may be liable for an excise tax. Www military com In general, a 10% excise tax applies to nondeductible contributions made to qualified pension and profit-sharing plans and to SEPs. Www military com Special rule for self-employed individuals. Www military com   The 10% excise tax does not apply to any contribution made to meet the minimum funding requirements in a money purchase pension plan or a defined benefit plan. Www military com Even if that contribution is more than your earned income from the trade or business for which the plan is set up, the difference is not subject to this excise tax. Www military com See Minimum Funding Requirement , earlier. Www military com Reporting the tax. Www military com   You must report the tax on your nondeductible contributions on Form 5330. Www military com Form 5330 includes a computation of the tax. Www military com See the separate instructions for completing the form. Www military com Elective Deferrals (401(k) Plans) Your qualified plan can include a cash or deferred arrangement under which participants can choose to have you contribute part of their before-tax compensation to the plan rather than receive the compensation in cash. Www military com A plan with this type of arrangement is popularly known as a “401(k) plan. Www military com ” (As a self-employed individual participating in the plan, you can contribute part of your before-tax net earnings from the business. Www military com ) This contribution is called an “elective deferral” because participants choose (elect) to defer receipt of the money. Www military com In general, a qualified plan can include a cash or deferred arrangement only if the qualified plan is one of the following plans. Www military com A profit-sharing plan. Www military com A money purchase pension plan in existence on June 27, 1974, that included a salary reduction arrangement on that date. Www military com Partnership. Www military com   A partnership can have a 401(k) plan. Www military com Restriction on conditions of participation. Www military com   The plan cannot require, as a condition of participation, that an employee complete more than 1 year of service. Www military com Matching contributions. Www military com   If your plan permits, you can make matching contributions for an employee who makes an elective deferral to your 401(k) plan. Www military com For example, the plan might provide that you will contribute 50 cents for each dollar your participating employees choose to defer under your 401(k) plan. Www military com Matching contributions are generally subject to the ACP test discussed earlier under Employee Contributions. Www military com Nonelective contributions. Www military com   You can also make contributions (other than matching contributions) for your participating employees without giving them the choice to take cash instead. Www military com These are called nonelective contributions. Www military com Employee compensation limit. Www military com   No more than $255,000 of the employee's compensation can be taken into account when figuring contributions other than elective deferrals in 2013. Www military com This limit is $260,000 in 2014. Www military com SIMPLE 401(k) plan. Www military com   If you had 100 or fewer employees who earned $5,000 or more in compensation during the preceding year, you may be able to set up a SIMPLE 401(k) plan. Www military com A SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy plan requirements discussed earlier under Qualification Rules. Www military com For details about SIMPLE 401(k) plans, see SIMPLE 401(k) Plan in chapter 3. Www military com Distributions. Www military com   Certain rules apply to distributions from 401(k) plans. Www military com See Distributions From 401(k) Plans , later. Www military com Limit on Elective Deferrals There is a limit on the amount an employee can defer each year under these plans. Www military com This limit applies without regard to community property laws. Www military com Your plan must provide that your employees cannot defer more than the limit that applies for a particular year. Www military com For 2013 and 2014, the basic limit on elective deferrals is $17,500. Www military com This limit applies to all salary reduction contributions and elective deferrals. Www military com If, in conjunction with other plans, the deferral limit is exceeded, the difference is included in the employee's gross income. Www military com Catch-up contributions. Www military com   A 401(k) plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Www military com The catch-up contribution limit for 2013 and 2014 is $5,500. Www military com Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the $17,500 limit, the actual deferral percentage (ADP) test limit of section 401(k)(3), or the plan limit (if any). Www military com However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Www military com The catch-up contribution limit. Www military com The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Www military com Treatment of contributions. Www military com   Your contributions to your own 401(k) plan are generally deductible by you for the year they are contributed to the plan. Www military com Matching or nonelective contributions made to the plan are also deductible by you in the year of contribution. Www military com Your employees' elective deferrals other than designated Roth contributions are tax free until distributed from the plan. Www military com Elective deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Www military com Forfeiture. Www military com   Employees have a nonforfeitable right at all times to their accrued benefit attributable to elective deferrals. Www military com Reporting on Form W-2. Www military com   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Www military com You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Www military com You must also include them in box 12. Www military com Mark the “Retirement plan” checkbox in box 13. Www military com For more information, see the Form W-2 instructions. Www military com Automatic Enrollment Your 401(k) plan can have an automatic enrollment feature. Www military com Under this feature, you can automatically reduce an employee's pay by a fixed percentage and contribute that amount to the 401(k) plan on his or her behalf unless the employee affirmatively chooses not to have his or her pay reduced or chooses to have it reduced by a different percentage. Www military com These contributions are elective deferrals. Www military com An automatic enrollment feature will encourage employees' saving for retirement and will help your plan pass nondiscrimination testing (if applicable). Www military com For more information, see Publication 4674, Automatic Enrollment 401(k) Plans for Small Businesses. Www military com Eligible automatic contribution arrangement. Www military com   Under an eligible automatic contribution arrangement (EACA), a participant is treated as having elected to have the employer make contributions in an amount equal to a uniform percentage of compensation. Www military com This automatic election will remain in place until the participant specifically elects not to have such deferral percentage made (or elects a different percentage). Www military com There is no required deferral percentage. Www military com Withdrawals. Www military com   Under an EACA, you may allow participants to withdraw their automatic contributions to the plan if certain conditions are met. Www military com The participant must elect the withdrawal no later than 90 days after the date of the first elective contributions under the EACA. Www military com The participant must withdraw the entire amount of EACA default contributions, including any earnings thereon. Www military com   If the plan allows withdrawals under the EACA, the amount of the withdrawal other than the amount of any designated Roth contributions must be included in the employee's gross income for the tax year in which the distribution is made. Www military com The additional 10% tax on early distributions will not apply to the distribution. Www military com Notice requirement. Www military com   Under an EACA, employees must be given written notice of the terms of the EACA within a reasonable period of time before each plan year. Www military com The notice must be written in a manner calculated to be understood by the average employee and be sufficiently accurate and comprehensive in order to apprise the employee of his or her rights and obligations under the EACA. Www military com The notice must include an explanation of the employee's right to elect not to have elective contributions made on his or her behalf, or to elect a different percentage, and the employee must be given a reasonable period of time after receipt of the notice before the first elective contribution is made. Www military com The notice also must explain how contributions will be invested in the absence of an investment election by the employee. Www military com Qualified automatic contribution arrangement. Www military com    A qualified automatic contribution arrangement (QACA) is a type of safe harbor plan. Www military com It contains an automatic enrollment feature, and mandatory employer contributions are required. Www military com If your plan includes a QACA, it will not be subject to the ADP test (discussed later) nor the top-heavy requirements (discussed earlier). Www military com Additionally, your plan will not be subject to the actual contribution percentage (ACP) test if certain additional requirements are met. Www military com Under a QACA, each employee who is eligible to participate in the plan will be treated as having elected to make elective deferral contributions equal to a certain default percentage of compensation. Www military com In order to not have default elective deferrals made, an employee must make an affirmative election specifying a deferral percentage (including zero, if desired). Www military com If an employee does not make an affirmative election, the default deferral percentage must meet the following conditions. Www military com It must be applied uniformly. Www military com It must not exceed 10%. Www military com It must be at least 3% in the first plan year it applies to an employee and through the end of the following year. Www military com It must increase to at least 4% in the following plan year. Www military com It must increase to at least 5% in the following plan year. Www military com It must increase to at least 6% in subsequent plan years. Www military com Matching or nonelective contributions. Www military com   Under the terms of the QACA, you must make either matching or nonelective contributions according to the following terms. Www military com Matching contributions. Www military com You must make matching contributions on behalf of each non-highly compensated employee in the following amounts. Www military com An amount equal to 100% of elective deferrals, up to 1% of compensation. Www military com An amount equal to 50% of elective deferrals, from 1% up to 6% of compensation. Www military com Other formulas may be used as long as they are at least as favorable to non-highly compensated employees. Www military com The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Www military com Nonelective contributions. Www military com You must make nonelective contributions on behalf of every non-highly compensated employee eligible to participate in the plan, regardless of whether they elected to participate, in an amount equal to at least 3% of their compensation. Www military com Vesting requirements. Www military com   All accrued benefits attributed to matching or nonelective contributions under the QACA must be 100% vested for all employees who complete 2 years of service. Www military com These contributions are subject to special withdrawal restrictions, discussed later. Www military com Notice requirements. Www military com   Each employee eligible to participate in the QACA must receive written notice of their rights and obligations under the QACA, within a reasonable period before each plan year. Www military com The notice must be written in a manner calculated to be understood by the average employee, and it must be accurate and comprehensive. Www military com The notice must explain their right to elect not to have elective contributions made on their behalf, or to have contributions made at a different percentage than the default percentage. Www military com Additionally, the notice must explain how contributions will be invested in the absence of any investment election by the employee. Www military com The employee must have a reasonable period of time after receiving the notice to make such contribution and investment elections prior to the first contributions under the QACA. Www military com Treatment of Excess Deferrals If the total of an employee's deferrals is more than the limit for 2013, the employee can have the difference (called an excess deferral) paid out of any of the plans that permit these distributions. Www military com He or she must notify the plan by April 15, 2014 (or an earlier date specified in the plan), of the amount to be paid from each plan. Www military com The plan must then pay the employee that amount, plus earnings on the amount through the end of 2013, by April 15, 2014. Www military com Excess withdrawn by April 15. Www military com   If the employee takes out the excess deferral by April 15, 2014, it is not reported again by including it in the employee's gross income for 2014. Www military com However, any income earned in 2013 on the excess deferral taken out is taxable in the tax year in which it is taken out. Www military com The distribution is not subject to the additional 10% tax on early distributions. Www military com   If the employee takes out part of the excess deferral and the income on it, the distribution is treated as made proportionately from the excess deferral and the income. Www military com   Even if the employee takes out the excess deferral by April 15, the amount will be considered for purposes of nondiscrimination testing requirements of the plan, unless the distributed amount is for a non-highly compensated employee who participates in only one employer's 401(k) plan or plans. Www military com Excess not withdrawn by April 15. Www military com   If the employee does not take out the excess deferral by April 15, 2014, the excess, though taxable in 2013, is not included in the employee's cost basis in figuring the taxable amount of any eventual distributions under the plan. Www military com In effect, an excess deferral left in the plan is taxed twice, once when contributed and again when distributed. Www military com Also, if the employee's excess deferral is allowed to stay in the plan and the employee participates in no other employer's plan, the plan can be disqualified. Www military com Reporting corrective distributions on Form 1099-R. Www military com   Report corrective distributions of excess deferrals (including any earnings) on Form 1099-R. Www military com For specific information about reporting corrective distributions, see the Instructions for Forms 1099-R and 5498. Www military com Tax on excess contributions of highly compensated employees. Www military com   The law provides tests to detect discrimination in a plan. Www military com If tests, such as the actual deferral percentage test (ADP test) (see section 401(k)(3)) and the actual contribution percentage test (ACP test) (see section 401(m)(2)), show that contributions for highly compensated employees are more than the test limits for these contributions, the employer may have to pay a 10% excise tax. Www military com Report the tax on Form 5330. Www military com The ADP test does not apply to a safe harbor 401(k) plan (discussed next) nor to a QACA. Www military com Also, the ACP test does not apply to these plans if certain additional requirements are met. Www military com   The tax for the year is 10% of the excess contributions for the plan year ending in your tax year. Www military com Excess contributions are elective deferrals, employee contributions, or employer matching or nonelective contributions that are more than the amount permitted under the ADP test or the ACP test. Www military com   See Regulations sections 1. Www military com 401(k)-2 and 1. Www military com 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Www military com    If the plan fails the ADP or ACP testing, and the failure is not corrected by the end of the next plan year, the plan can be disqualified. Www military com Safe harbor 401(k) plan. Www military com If you meet the requirements for a safe harbor 401(k) plan, you do not have to satisfy the ADP test, nor the ACP test, if certain additional requirements are met. Www military com For your plan to be a safe harbor plan, you must meet the following conditions. Www military com Matching or nonelective contributions. Www military com You must make matching or nonelective contributions according to one of the following formulas. Www military com Matching contributions. Www military com You must make matching contributions according to the following rules. Www military com You must contribute an amount equal to 100% of each non-highly compensated employee's elective deferrals, up to 3% of compensation. Www military com You must contribute an amount equal to 50% of each non-highly compensated employee's elective deferrals, from 3% up to 5% of compensation. Www military com The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Www military com Nonelective contributions. Www military com You must make nonelective contributions, without regard to whether the employee made elective deferrals, on behalf of all non-highly compensated employees eligible to participate in the plan, equal to at least 3% of the employee's compensation. Www military com These mandatory matching and nonelective contributions must be immediately 100% vested and are subject to special withdrawal restrictions. Www military com Notice requirement. Www military com You must give eligible employees written notice of their rights and obligations with regard to contributions under the plan, within a reasonable period before the plan year. Www military com The other requirements for a 401(k) plan, including withdrawal and vesting rules, must also be met for your plan to qualify as a safe harbor 401(k) plan. Www military com Qualified Roth Contribution Program Under this program an eligible employee can designate all or a portion of his or her elective deferrals as after-tax Roth contributions. Www military com Elective deferrals designated as Roth contributions must be maintained in a separate Roth account. Www military com However, unlike other elective deferrals, designated Roth contributions are not excluded from employees' gross income, but qualified distributions from a Roth account are excluded from employees' gross income. Www military com Elective Deferrals Under a qualified Roth contribution program, the amount of elective deferrals that an employee may designate as a Roth contribution is limited to the maximum amount of elective deferrals excludable from gross income for the year (for 2013 and 2014, $17,500 if under age 50 and $23,000 if age 50 or over) less the total amount of the employee's elective deferrals not designated as Roth contributions. Www military com Designated Roth deferrals are treated the same as pre-tax elective deferrals for most purposes, including: The annual individual elective deferral limit (total of all designated Roth contributions and traditional, pre-tax elective deferrals) of $17,500 for 2013 and 2014, with an additional $5,500 if age 50 or over for 2013 and 2014, Determining the maximum employee and employer annual contributions of the lesser of 100% of compensation or $51,000 for 2013 ($52,000 for 2014), Nondiscrimination testing, Required distributions, and Elective deferrals not taken into account for purposes of deduction limits. Www military com Qualified Distributions A qualified distribution is a distribution that is made after the employee's nonexclusion period and: On or after the employee attains age   59½, On account of the employee's being disabled, or On or after the employee's death. Www military com An employee's nonexclusion period for a plan is the 5-tax-year period beginning with the earlier of the following tax years. Www military com The first tax year in which the employee made a contribution to his or her Roth account in the plan, or If a rollover contribution was made to the employee's designated Roth account from a designated Roth account previously established for the employee under another plan, then the first tax year the employee made a designated Roth contribution to the previously established account. Www military com Rollover. Www military com   Beginning September 28, 2010, a rollover from another account can be made to a designated Roth account in the same plan. Www military com For additional information on these in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. Www military com R. Www military com B. Www military com 872, available at www. Www military com irs. Www military com gov/irb/2010-51_IRB/ar11. Www military com html, and Notice 2013-74. Www military com A distribution from a designated Roth account can only be rolled over to another designated Roth account or a Roth IRA. Www military com Rollover amounts do not apply toward the annual deferral limit. Www military com Reporting Requirements You must report a contribution to a Roth account on Form W-2 and a distribution from a Roth account on Form 1099-R. Www military com See the Form W-2 and 1099-R instructions for detailed information. Www military com Distributions Amounts paid to plan participants from a qualified plan are called distributions. Www military com Distributions may be nonperiodic, such as lump-sum distributions, or periodic, such as annuity payments. Www military com Also, certain loans may be treated as distributions. Www military com See Loans Treated as Distributions in Publication 575. Www military com Required Distributions A qualified plan must provide that each participant will either: Receive his or her entire interest (benefits) in the plan by the required beginning date (defined later), or Begin receiving regular periodic distributions by the required beginning date in annual amounts calculated to distribute the participant's entire interest (benefits) over his or her life expectancy or over the joint life expectancy of the participant and the designated beneficiary (or over a shorter period). Www military com These distribution rules apply individually to each qualified plan. Www military com You cannot satisfy the requirement for one plan by taking a distribution from another. Www military com The plan must provide that these rules override any inconsistent distribution options previously offered. Www military com Minimum distribution. Www military com   If the account balance of a qualified plan participant is to be distributed (other than as an annuity), the plan administrator must figure the minimum amount required to be distributed each distribution calendar year. Www military com This minimum is figured by dividing the account balance by the applicable life expectancy. Www military com The plan administrator can use the life expectancy tables in Appendix C of Publication 590 for this purpose. Www military com For more information on figuring the minimum distribution, see Tax on Excess Accumulation in Publication 575. Www military com Required beginning date. Www military com   Generally, each participant must receive his or her entire benefits in the plan or begin to receive periodic distributions of benefits from the plan by the required beginning date. Www military com   A participant must begin to receive distributions from his or her qualified retirement plan by April 1 of the first year after the later of the following years. Www military com Calendar year in which he or she reaches age 70½. Www military com Calendar year in which he or she retires from employment with the employer maintaining the plan. Www military com However, the plan may require the participant to begin receiving distributions by April 1 of the year after the participant reaches age 70½ even if the participant has not retired. Www military com   If the participant is a 5% owner of the employer maintaining the plan, the participant must begin receiving distributions by April 1 of the first year after the calendar year in which the participant reached age 70½. Www military com For more information, see Tax on Excess Accumulation in Publication 575. Www military com Distributions after the starting year. Www military com   The distribution required to be made by April 1 is treated as a distribution for the starting year. Www military com (The starting year is the year in which the participant meets (1) or (2) above, whichever applies. Www military com ) After the starting year, the participant must receive the required distribution for each year by December 31 of that year. Www military com If no distribution is made in the starting year, required distributions for 2 years must be made in the next year (one by April 1 and one by December 31). Www military com Distributions after participant's death. Www military com   See Publication 575 for the special rules covering distributions made after the death of a participant. Www military com Distributions From 401(k) Plans Generally, distributions cannot be made until one of the following occurs. Www military com The employee retires, dies, becomes disabled, or otherwise severs employment. Www military com The plan ends and no other defined contribution plan is established or continued. Www military com In the case of a 401(k) plan that is part of a profit-sharing plan, the employee reaches age 59½ or suffers financial hardship. Www military com For the rules on hardship distributions, including the limits on them, see Regulations section 1. Www military com 401(k)-1(d). Www military com The employee becomes eligible for a qualified reservist distribution (defined next). Www military com Certain distributions listed above may be subject to the tax on early distributions discussed later. Www military com Qualified reservist distributions. Www military com   A qualified reservist distribution is a distribution from an IRA or an elective deferral account made after September 11, 2001, to a military reservist or a member of the National Guard who has been called to active duty for at least 180 days or for an indefinite period. Www military com All or part of a qualified reservist distribution can be recontributed to an IRA. Www military com The additional 10% tax on early distributions does not apply to a qualified reservist distribution. Www military com Tax Treatment of Distributions Distributions from a qualified plan minus a prorated part of any cost basis are subject to income tax in the year they are distributed. Www military com Since most recipients have no cost basis, a distribution is generally fully taxable. Www military com An exception is a distribution that is properly rolled over as discussed under Rollover, next. Www military com The tax treatment of distributions depends on whether they are made periodically over several years or life (periodic distributions) or are nonperiodic distributions. Www military com See Taxation of Periodic Payments and Taxation of Nonperiodic Payments in Publication 575 for a detailed description of how distributions are taxed, including the 10-year tax option or capital gain treatment of a lump-sum distribution. Www military com Note. Www military com A recipient of a distribution from a designated Roth account will have a cost basis since designated Roth contributions are made on an after-tax basis. Www military com Also, a distribution from a designated Roth account is entirely tax-free if certain conditions are met. Www military com See Qualified distributions under Qualified Roth Contribution Program, earlier. Www military com Rollover. Www military com   The recipient of an eligible rollover distribution from a qualified plan can defer the tax on it by rolling it over into a traditional IRA or another eligible retirement plan. Www military com However, it may be subject to withholding as discussed under Withholding requirement, later. Www military com A rollover can also be made to a Roth IRA, in which case, any previously untaxed amounts are includible in gross income unless the rollover is from a designated Roth account. Www military com Eligible rollover distribution. Www military com   This is a distribution of all or any part of an employee's balance in a qualified retirement plan that is not any of the following. Www military com A required minimum distribution. Www military com See Required Distributions , earlier. Www military com Any of a series of substantially equal payments made at least once a year over any of the following periods. Www military com The employee's life or life expectancy. Www military com The joint lives or life expectancies of the employee and beneficiary. Www military com A period of 10 years or longer. Www military com A hardship distribution. Www military com The portion of a distribution that represents the return of an employee's nondeductible contributions to the plan. Www military com See Employee Contributions , earlier, and Rollover of nontaxable amounts, next. Www military com Loans treated as distributions. Www military com Dividends on employer securities. Www military com The cost of any life insurance coverage provided under a qualified retirement plan. Www military com Similar items designated by the IRS in published guidance. Www military com See, for example, the Instructions for Forms 1099-R and 5498. Www military com Rollover of nontaxable amounts. Www military com   You may be able to roll over the nontaxable part of a distribution to another qualified retirement plan or a section 403(b) plan, or to an IRA. Www military com If the rollover is to a qualified retirement plan or a section 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover, the transfer must be made through a direct (trustee-to-trustee) rollover. Www military com If the rollover is to an IRA, the transfer can be made by any rollover method. Www military com Note. Www military com A distribution from a designated Roth account can be rolled over to another designated Roth account or to a Roth IRA. Www military com If the rollover is to a Roth IRA, it can be rolled over by any rollover method, but if the rollover is to another designated Roth account, it must be rolled over directly (trustee-to-trustee). Www military com More information. Www military com   For more information about rollovers, see Rollovers in Pubs. Www military com 575 and 590. Www military com Withholding requirement. Www military com   If, during a year, a qualified plan pays to a participant one or more eligible rollover distributions (defined earlier) that are reasonably expected to total $200 or more, the payor must withhold 20% of the taxable portion of each distribution for federal income tax. Www military com Exceptions. Www military com   If, instead of having the distribution paid to him or her, the participant chooses to have the plan pay it directly to an IRA or another eligible retirement plan (a direct rollover), no withholding is required. Www military com   If the distribution is not an eligible rollover distribution, defined earlier, the 20% withholding requirement does not apply. Www military com Other withholding rules apply to distributions that are not eligible rollover distributions, such as long-term periodic distributions and required distributions (periodic or nonperiodic). Www military com However, the participant can choose not to have tax withheld from these distributions. Www military com If the participant does not make this choice, the following withholding rules apply. Www military com For periodic distributions, withholding is based on their treatment as wages. Www military com For nonperiodic distributions, 10% of the taxable part is withheld. Www military com Estimated tax payments. Www military com   If no income tax is withheld or not enough tax is withheld, the recipient of a distribution may have to make estimated tax payments. Www military com For more information, see Withholding Tax and Estimated Tax in Publication 575. Www military com Section 402(f) Notice. Www military com   If a distribution is an eligible rollover distribution, as defined earlier, you must provide a written notice to the recipient that explains the following rules regarding such distributions. Www military com That the distribution may be directly transferred to an eligible retirement plan and information about which distributions are eligible for this direct transfer. Www military com That tax will be withheld from the distribution if it is not directly transferred to an eligible retirement plan. Www military com That the distribution will not be subject to tax if transferred to an eligible retirement plan within 60 days after the date the recipient receives the distribution. Www military com Certain other rules that may be applicable. Www military com   Notice 2009-68, 2009-39 I. Www military com R. Www military com B. Www military com 423, available at www. Www military com irs. Www military com gov/irb/2009-39_IRB/ar14. Www military com html, contains two updated safe harbor section 402(f) notices that plan administrators may provide recipients of eligible rollover distributions. Www military com If the plan allows in-plan Roth rollovers, the 402(f) notice must be amended to reflect this. Www military com Notice 2010-84 contains guidance on how to modify a 402(f) notice for in-plan Roth rollovers. Www military com Timing of notice. Www military com   The notice generally must be provided no less than 30 days and no more than 180 days before the date of a distribution. Www military com Method of notice. Www military com   The written notice must be provided individually to each distributee of an eligible rollover distribution. Www military com Posting of the notice is not sufficient. Www military com However, the written requirement may be satisfied through the use of electronic media if certain additional conditions are met. Www military com See Regulations section 1. Www military com 401(a)-21. Www military com Tax on failure to give notice. Www military com   Failure to give a 402(f) notice will result in a tax of $100 for each failure, with a total not exceeding $50,000 per calendar year. Www military com The tax will not be imposed if it is shown that such failure is due to reasonable cause and not to willful neglect. Www military com Tax on Early Distributions If a distribution is made to an employee under the plan before he or she reaches age 59½, the employee may have to pay a 10% additional tax on the distribution. Www military com This tax applies to the amount received that the employee must include in income. Www military com Exceptions. Www military com   The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances. Www military com Made to a beneficiary (or to the estate of the employee) on or after the death of the employee. Www military com Made due to the employee having a qualifying disability. Www military com Made as part of a series of substantially equal periodic payments beginning after separation from service and made at least annually for the life or life expectancy of the employee or the joint lives or life expectancies of the employee and his or her designated beneficiary. Www military com (The payments under this exception, except in the case of death or disability, must continue for at least 5 years or until the employee reaches age 59½, whichever is the longer period. Www military com ) Made to an employee after separation from service if the separation occurred during o