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1040 Ez Instructions 2014

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1040 Ez Instructions 2014

1040 ez instructions 2014 Publication 575 - Introductory Material Table of Contents What's New Reminders IntroductionThe General Rule. 1040 ez instructions 2014 Individual retirement arrangements (IRAs). 1040 ez instructions 2014 Civil service retirement benefits. 1040 ez instructions 2014 Social security and equivalent tier 1 railroad retirement benefits. 1040 ez instructions 2014 Tax-sheltered annuity plans (403(b) plans). 1040 ez instructions 2014 Ordering forms and publications. 1040 ez instructions 2014 Tax questions. 1040 ez instructions 2014 Useful Items - You may want to see: What's New For purposes of the net investment income tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). 1040 ez instructions 2014 However, these distributions are taken into account when determining the modified adjusted gross income threshold. 1040 ez instructions 2014 Distributions from a nonqualified retirement plan are included in net investment income. 1040 ez instructions 2014 See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. 1040 ez instructions 2014 Reminders Future developments. 1040 ez instructions 2014  For the latest information about developments related to Publication 575, such as legislation enacted after it was published, go to www. 1040 ez instructions 2014 irs. 1040 ez instructions 2014 gov/pub575. 1040 ez instructions 2014 In-plan Roth rollovers. 1040 ez instructions 2014   Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. 1040 ez instructions 2014 For more information, see In-plan Roth rollovers under Rollovers, discussed later. 1040 ez instructions 2014 Photographs of missing children. 1040 ez instructions 2014  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 1040 ez instructions 2014 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040 ez instructions 2014 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040 ez instructions 2014 Introduction This publication discusses the tax treatment of distributions you receive from pension and annuity plans and also shows you how to report the income on your federal income tax return. 1040 ez instructions 2014 How these distributions are taxed depends on whether they are periodic payments (amounts received as an annuity) that are paid at regular intervals over several years or nonperiodic payments (amounts not received as an annuity). 1040 ez instructions 2014 What is covered in this publication?   This publication contains information that you need to understand the following topics. 1040 ez instructions 2014 How to figure the tax-free part of periodic payments under a pension or annuity plan, including using a simple worksheet for payments under a qualified plan. 1040 ez instructions 2014 How to figure the tax-free part of nonperiodic payments from qualified and nonqualified plans, and how to use the optional methods to figure the tax on lump-sum distributions from pension, stock bonus, and profit-sharing plans. 1040 ez instructions 2014 How to roll over certain distributions from a retirement plan into another retirement plan or IRA. 1040 ez instructions 2014 How to report disability payments, and how beneficiaries and survivors of employees and retirees must report benefits paid to them. 1040 ez instructions 2014 How to report railroad retirement benefits. 1040 ez instructions 2014 When additional taxes on certain distributions may apply (including the tax on early distributions and the tax on excess accumulation). 1040 ez instructions 2014 For additional information on how to report pension or annuity payments on your federal income tax return, be sure to review the instructions on the back of Copies B, C, and 2 of the Form 1099-R that you received and the instructions for Form 1040, lines 16a and 16b (Form 1040A, lines 12a and 12b or Form 1040NR, lines 17a and 17b). 1040 ez instructions 2014 A “corrected” Form 1099-R replaces the corresponding original Form 1099-R if the original Form 1099-R contained an error. 1040 ez instructions 2014 Make sure you use the amounts shown on the corrected Form 1099-R when reporting information on your tax return. 1040 ez instructions 2014 What is not covered in this publication?   The following topics are not discussed in this publication. 1040 ez instructions 2014 The General Rule. 1040 ez instructions 2014   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). 1040 ez instructions 2014 For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. 1040 ez instructions 2014 Although this publication will help you determine whether you can use the General Rule, it will not help you use it to determine the tax treatment of your pension or annuity income. 1040 ez instructions 2014 For that and other information on the General Rule, see Publication 939, General Rule for Pensions and Annuities. 1040 ez instructions 2014 Individual retirement arrangements (IRAs). 1040 ez instructions 2014   Information on the tax treatment of amounts you receive from an IRA is in Publication 590, Individual Retirement Arrangements (IRAs). 1040 ez instructions 2014 Civil service retirement benefits. 1040 ez instructions 2014   If you are retired from the federal government (regular, phased, or disability retirement) or are the survivor or beneficiary of a federal employee or retiree who died, get Publication 721, Tax Guide to U. 1040 ez instructions 2014 S. 1040 ez instructions 2014 Civil Service Retirement Benefits. 1040 ez instructions 2014 Publication 721 covers the tax treatment of federal retirement benefits, primarily those paid under the Civil Service Retirement System (CSRS) or the Federal Employees' Retirement System (FERS). 1040 ez instructions 2014 It also covers benefits paid from the Thrift Savings Plan (TSP). 1040 ez instructions 2014 Social security and equivalent tier 1 railroad retirement benefits. 1040 ez instructions 2014   For information about the tax treatment of these benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. 1040 ez instructions 2014 However, this publication (575) covers the tax treatment of the non-social security equivalent benefit portion of tier 1 railroad retirement benefits, tier 2 benefits, vested dual benefits, and supplemental annuity benefits paid by the U. 1040 ez instructions 2014 S. 1040 ez instructions 2014 Railroad Retirement Board. 1040 ez instructions 2014 Tax-sheltered annuity plans (403(b) plans). 1040 ez instructions 2014   If you work for a public school or certain tax-exempt organizations, you may be eligible to participate in a 403(b) retirement plan offered by your employer. 1040 ez instructions 2014 Although this publication covers the treatment of benefits under 403(b) plans and discusses in-plan Roth rollovers from 403(b) plans to designated Roth accounts, it does not cover other tax provisions that apply to these plans. 1040 ez instructions 2014 For that and other information on 403(b) plans, see Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations. 1040 ez instructions 2014 Comments and suggestions. 1040 ez instructions 2014   We welcome your comments about this publication and your suggestions for future editions. 1040 ez instructions 2014   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 1040 ez instructions 2014 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040 ez instructions 2014 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040 ez instructions 2014   You can send your comments from www. 1040 ez instructions 2014 irs. 1040 ez instructions 2014 gov/formspubs/. 1040 ez instructions 2014 Click on “More Information” and then on “Comment on Tax Forms and Publications. 1040 ez instructions 2014 ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040 ez instructions 2014 Ordering forms and publications. 1040 ez instructions 2014   Visit www. 1040 ez instructions 2014 irs. 1040 ez instructions 2014 gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 1040 ez instructions 2014 Internal Revenue Service 1201 N. 1040 ez instructions 2014 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040 ez instructions 2014   If you have a tax question, check the information available on IRS. 1040 ez instructions 2014 gov or call 1-800-829-1040. 1040 ez instructions 2014 We cannot answer tax questions sent to either of the above addresses. 1040 ez instructions 2014 Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 525 Taxable and Nontaxable Income 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) 571 Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations 590 Individual Retirement Arrangements (IRAs) 721 Tax Guide to U. 1040 ez instructions 2014 S. 1040 ez instructions 2014 Civil Service Retirement Benefits 915 Social Security and Equivalent Railroad Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040 ez instructions 2014 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts See How To Get Tax Help near the end of this publication for information about getting publications and forms. 1040 ez instructions 2014 Prev  Up  Next   Home   More Online Publications
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IRS Seeks Applications for the Electronic Tax Administration Advisory Committee

IR-2014-25 March 7, 2014

WASHINGTON — The Internal Revenue Service is opening the nomination and application process for membership on the Electronic Tax Administration Advisory Committee (ETAAC). The deadline for submitting applications is April 21, 2014.

ETAAC was established as required by the Internal Revenue Service Restructuring and Reform Act of 1998. The purpose of the ETAAC is to provide continued input into the development and implementation of the agency’s strategy for electronic tax administration as well as to provide an organized public forum for the discussion of issues in electronic tax administration.

Nominations of qualified individuals may be made by letter and received from individuals or professional associations. Applicants should complete the ETAAC application including a short statement of interest and a resume. Be sure to describe and document your qualifications, past and current affiliations, and dealings in electronic tax administration. A notice published in the Federal Register contains more details about the ETAAC and the application process.

Members are approved by Treasury to serve three-year terms, beginning in the fall of 2014. Members must pass an IRS tax compliance check and Federal Bureau of Investigation (FBI) background investigation and may not be federally registered lobbyists.

Questions about the application process can be sent to etaac@irs.gov.

 

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Page Last Reviewed or Updated: 07-Mar-2014

The 1040 Ez Instructions 2014

1040 ez instructions 2014 3. 1040 ez instructions 2014   Limit on Annual Additions Table of Contents Ministers and church employees. 1040 ez instructions 2014 Includible Compensation for Your Most Recent Year of ServiceMost Recent Year of Service Includible Compensation The first component of MAC is the limit on annual additions. 1040 ez instructions 2014 This is a limit on the total contributions (elective deferrals, nonelective contributions, and after-tax contributions) that can be made to your 403(b) account. 1040 ez instructions 2014 The limit on annual additions generally is the lesser of: $51,000 for 2013 and $52,000 for 2014, or 100% of your includible compensation for your most recent year of service. 1040 ez instructions 2014 More than one 403(b) account. 1040 ez instructions 2014 If you contributed to more than one 403(b) account, you must combine the contributions made to all 403(b) accounts on your behalf by your employer. 1040 ez instructions 2014 Ministers and church employees. 1040 ez instructions 2014   If you are a minister or a church employee, you may be able to increase your limit on annual additions or use different rules when figuring your limit on annual additions. 1040 ez instructions 2014 For more information, see chapter 5. 1040 ez instructions 2014 Participation in a qualified plan. 1040 ez instructions 2014 If you participated in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a qualified plan and simplified employee pensions of all corporations, partnerships, and sole proprietorships in which you have more than 50% control. 1040 ez instructions 2014 You can use Part I of Worksheet 1 in chapter 9 to figure your limit on annual additions. 1040 ez instructions 2014 Includible Compensation for Your Most Recent Year of Service Definition. 1040 ez instructions 2014   Generally, includible compensation for your most recent year of service is the amount of taxable wages and benefits you received from the employer that maintained a 403(b) account for your benefit during your most recent year of service. 1040 ez instructions 2014 When figuring your includible compensation for your most recent year of service, keep in mind that your most recent year of service may not be the same as your employer's most recent annual work period. 1040 ez instructions 2014 This can happen if your tax year is not the same as your employer's annual work period. 1040 ez instructions 2014 When figuring includible compensation for your most recent year of service, do not mix compensation or service of one employer with compensation or service of another employer. 1040 ez instructions 2014 Most Recent Year of Service Your most recent year of service is your last full year of service, ending on the last day of your tax year that you worked for the employer that maintained a 403(b) account on your behalf. 1040 ez instructions 2014 Tax year different from employer's annual work period. 1040 ez instructions 2014   If your tax year is not the same as your employer's annual work period, your most recent year of service is made up of parts of at least two of your employer's annual work periods. 1040 ez instructions 2014 Example. 1040 ez instructions 2014 A professor who reports her income on a calendar-year basis is employed on a full-time basis by a university that operates on an academic year (October through May). 1040 ez instructions 2014 To figure her includible compensation for 2013, the professor's most recent year of service is her service from January through May 2013 and from October through December 2013. 1040 ez instructions 2014 Figuring Your Most Recent Year of Service To figure your most recent year of service, begin by determining what is a full year of service for your position. 1040 ez instructions 2014 A full year of service is equal to full-time employment for your employer's annual work period. 1040 ez instructions 2014 After identifying a full year of service, begin counting the service you have provided for your employer starting with the service provided in the current year. 1040 ez instructions 2014 Part-time or employed only part of the year. 1040 ez instructions 2014   If you are a part-time or a full-time employee who is employed for only part of the year, your most recent year of service is your service this year and your service for as many previous years as is necessary to total 1 full year of service. 1040 ez instructions 2014 To determine your most recent year of service, add the following periods of service: Your service during the year for which you are figuring the limit on annual additions, and Your service during your preceding tax years until the total service equals 1 year of service or you have figured all of your service with the employer. 1040 ez instructions 2014 Example. 1040 ez instructions 2014 You were employed on a full-time basis from July through December 2011 (1/2 year of service), July through December 2012 (1/2 year of service), and October through December 2013 (1/4 year of service). 1040 ez instructions 2014 Your most recent year of service for computing your limit on annual additions for 2013 is the total of your service during 2013 (1/4 year of service), your service during 2012 (1/2 year of service), and your service during the months October through December 2011 (1/4 year of service). 1040 ez instructions 2014 Not yet employed for 1 year. 1040 ez instructions 2014   If, at the close of the year, you have not yet worked for your employer for 1 year (including time you worked for the same employer in all earlier years), use the period of time you have worked for the employer as your most recent year of service. 1040 ez instructions 2014 Includible Compensation After identifying your most recent year of service, the next step is to identify the includible compensation associated with that full year of service. 1040 ez instructions 2014 Includible compensation is not the same as income included on your tax return. 1040 ez instructions 2014 Compensation is a combination of income and benefits received in exchange for services provided to your employer. 1040 ez instructions 2014 Generally, includible compensation is the amount of income and benefits: Received from the employer who maintains your 403(b) account, and Must be included in your income. 1040 ez instructions 2014 Includible compensation includes the following amounts. 1040 ez instructions 2014 Elective deferrals (employer's contributions made on your behalf under a salary reduction agreement). 1040 ez instructions 2014 Amounts contributed or deferred by your employer under a section 125 cafeteria plan. 1040 ez instructions 2014 Amounts contributed or deferred, at the election of the employee, under an eligible section 457 nonqualified deferred compensation plan (state or local government or tax-exempt organization plan). 1040 ez instructions 2014  Note. 1040 ez instructions 2014 For information about treating elective deferrals under section 457 plans as Roth contributions, see Publication 575. 1040 ez instructions 2014 Wages, salaries, and fees for personal services earned with the employer maintaining your 403(b) account. 1040 ez instructions 2014 Income otherwise excluded under the foreign earned income exclusion. 1040 ez instructions 2014 Pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan. 1040 ez instructions 2014 Includible compensation does not include the following items. 1040 ez instructions 2014 Your employer's contributions to your 403(b) account. 1040 ez instructions 2014 Compensation earned while your employer was not an eligible employer. 1040 ez instructions 2014 Your employer's contributions to a qualified plan that: Are on your behalf, and Are excludable from income. 1040 ez instructions 2014 The cost of incidental life insurance. 1040 ez instructions 2014 See Cost of Incidental Life Insurance, later. 1040 ez instructions 2014 If you are a church employee or a foreign missionary, figure includible compensation using the rules explained in chapter 5. 1040 ez instructions 2014 Contributions after retirement. 1040 ez instructions 2014   Nonelective contributions may be made for an employee for up to 5 years after retirement. 1040 ez instructions 2014 These contributions would be based on includible compensation for the last year of service before retirement. 1040 ez instructions 2014 Cost of Incidental Life Insurance Includible compensation does not include the cost of incidental life insurance. 1040 ez instructions 2014 If all of your 403(b) accounts invest only in mutual funds, then you have no incidental life insurance. 1040 ez instructions 2014 If you have an annuity contract, a portion of the cost of that contract may be for incidental life insurance. 1040 ez instructions 2014 If so, the cost of the insurance is taxable to you in the year contributed and is considered part of your basis when distributed. 1040 ez instructions 2014 Your employer will include the cost of your insurance as taxable wages in box 1 of Form W-2. 1040 ez instructions 2014 Not all annuity contracts include life insurance. 1040 ez instructions 2014 Contact your plan administrator to determine if your contract includes incidental life insurance. 1040 ez instructions 2014 If it does, you will need to figure the cost of life insurance each year the policy is in effect. 1040 ez instructions 2014 Figuring the cost of incidental life insurance. 1040 ez instructions 2014 If you have determined that part of the cost of your annuity contract is for an incidental life insurance premium, you will need to determine the amount of the premium and subtract it from your includible compensation. 1040 ez instructions 2014 To determine the amount of the life insurance premiums, you will need to know the following information. 1040 ez instructions 2014 The value of your life insurance contract, which is the amount payable upon your death. 1040 ez instructions 2014 The cash value of your life insurance contract at the end of the tax year. 1040 ez instructions 2014 Your age on your birthday nearest the beginning of the policy year. 1040 ez instructions 2014 Your current life insurance protection under an ordinary retirement income life insurance policy, which is the amount payable upon your death minus the cash value of the contract at the end of the year. 1040 ez instructions 2014 You can use Worksheet A, in chapter 9, to determine the cost of your incidental life insurance. 1040 ez instructions 2014 Example. 1040 ez instructions 2014 Your new contract provides that your beneficiary will receive $10,000 if you should die before retirement. 1040 ez instructions 2014 Your cash value in the contract at the end of the first year is zero. 1040 ez instructions 2014 Your current life insurance protection for the first year is $10,000 ($10,000 − 0). 1040 ez instructions 2014 The cash value in the contract at the end of year two is $1,000, and the current life insurance protection for the second year is $9,000 ($10,000 – $1,000). 1040 ez instructions 2014 The 1-year cost of the protection can be calculated by using Figure 3-1, Table of One-Year Term Premiums for $1,000 Life Insurance Protection . 1040 ez instructions 2014 The premium rate is determined based on your age on your birthday nearest the beginning of the policy year. 1040 ez instructions 2014 Figure 3-1. 1040 ez instructions 2014 Table of One-Year Term Premiums for $1,000 Life Insurance Protection Age Cost   Age Cost   Age Cost 0 $0. 1040 ez instructions 2014 70   35 $0. 1040 ez instructions 2014 99   70 $20. 1040 ez instructions 2014 62 1 0. 1040 ez instructions 2014 41   36 1. 1040 ez instructions 2014 01   71 22. 1040 ez instructions 2014 72 2 0. 1040 ez instructions 2014 27   37 1. 1040 ez instructions 2014 04   72 25. 1040 ez instructions 2014 07 3 0. 1040 ez instructions 2014 19   38 1. 1040 ez instructions 2014 06   73 27. 1040 ez instructions 2014 57 4 0. 1040 ez instructions 2014 13   39 1. 1040 ez instructions 2014 07   74 30. 1040 ez instructions 2014 18 5 0. 1040 ez instructions 2014 13   40 1. 1040 ez instructions 2014 10   75 33. 1040 ez instructions 2014 05 6 0. 1040 ez instructions 2014 14   41 1. 1040 ez instructions 2014 13   76 36. 1040 ez instructions 2014 33 7 0. 1040 ez instructions 2014 15   42 1. 1040 ez instructions 2014 20   77 40. 1040 ez instructions 2014 17 8 0. 1040 ez instructions 2014 16   43 1. 1040 ez instructions 2014 29   78 44. 1040 ez instructions 2014 33 9 0. 1040 ez instructions 2014 16   44 1. 1040 ez instructions 2014 40   79 49. 1040 ez instructions 2014 23 10 0. 1040 ez instructions 2014 16   45 1. 1040 ez instructions 2014 53   80 54. 1040 ez instructions 2014 56 11 0. 1040 ez instructions 2014 19   46 1. 1040 ez instructions 2014 67   81 60. 1040 ez instructions 2014 51 12 0. 1040 ez instructions 2014 24   47 1. 1040 ez instructions 2014 83   82 66. 1040 ez instructions 2014 74 13 0. 1040 ez instructions 2014 28   48 1. 1040 ez instructions 2014 98   83 73. 1040 ez instructions 2014 07 14 0. 1040 ez instructions 2014 33   49 2. 1040 ez instructions 2014 13   84 80. 1040 ez instructions 2014 35 15 0. 1040 ez instructions 2014 38   50 2. 1040 ez instructions 2014 30   85 88. 1040 ez instructions 2014 76 16 0. 1040 ez instructions 2014 52   51 2. 1040 ez instructions 2014 52   86 99. 1040 ez instructions 2014 16 17 0. 1040 ez instructions 2014 57   52 2. 1040 ez instructions 2014 81   87 110. 1040 ez instructions 2014 40 18 0. 1040 ez instructions 2014 59   53 3. 1040 ez instructions 2014 20   88 121. 1040 ez instructions 2014 85 19 0. 1040 ez instructions 2014 61   54 3. 1040 ez instructions 2014 65   89 133. 1040 ez instructions 2014 40 20 0. 1040 ez instructions 2014 62   55 4. 1040 ez instructions 2014 15   90 144. 1040 ez instructions 2014 30 21 0. 1040 ez instructions 2014 62   56 4. 1040 ez instructions 2014 68   91 155. 1040 ez instructions 2014 80 22 0. 1040 ez instructions 2014 64   57 5. 1040 ez instructions 2014 20   92 168. 1040 ez instructions 2014 75 23 0. 1040 ez instructions 2014 66   58 5. 1040 ez instructions 2014 66   93 186. 1040 ez instructions 2014 44 24 0. 1040 ez instructions 2014 68   59 6. 1040 ez instructions 2014 06   94 206. 1040 ez instructions 2014 70 25 0. 1040 ez instructions 2014 71   60 6. 1040 ez instructions 2014 51   95 228. 1040 ez instructions 2014 35 26 0. 1040 ez instructions 2014 73   61 7. 1040 ez instructions 2014 11   96 250. 1040 ez instructions 2014 01 27 0. 1040 ez instructions 2014 76   62 7. 1040 ez instructions 2014 96   97 265. 1040 ez instructions 2014 09 28 0. 1040 ez instructions 2014 80   63 9. 1040 ez instructions 2014 08   98 270. 1040 ez instructions 2014 11 29 0. 1040 ez instructions 2014 83   64 10. 1040 ez instructions 2014 41   99 281. 1040 ez instructions 2014 05 30 0. 1040 ez instructions 2014 87   65 11. 1040 ez instructions 2014 90       31 0. 1040 ez instructions 2014 90   66 13. 1040 ez instructions 2014 51       32 0. 1040 ez instructions 2014 93   67 15. 1040 ez instructions 2014 20       33 0. 1040 ez instructions 2014 96   68 16. 1040 ez instructions 2014 92       34 0. 1040 ez instructions 2014 98   69 18. 1040 ez instructions 2014 70                       If the current published premium rates per $1,000 of insurance protection charged by an insurer for individual 1-year term life insurance premiums available to all standard risks are lower than those in the preceding table, you can use the lower rates for figuring the cost of insurance in connection with individual policies issued by the same insurer. 1040 ez instructions 2014 Example 1. 1040 ez instructions 2014 Lynne Green, age 44, and her employer enter into a 403(b) plan that will provide her with a $500 a month annuity upon retirement at age 65. 1040 ez instructions 2014 The agreement also provides that if she should die before retirement, her beneficiary will receive the greater of $20,000 or the cash surrender value in the life insurance contract. 1040 ez instructions 2014 Using the facts presented we can determine the cost of Lynne's life insurance protection as shown in Table 3-1. 1040 ez instructions 2014 Lynne's employer has included $28 for the cost of the life insurance protection in her current year's income. 1040 ez instructions 2014 When figuring her includible compensation for this year, Lynne will subtract $28. 1040 ez instructions 2014 Table 3-1. 1040 ez instructions 2014 Worksheet A. 1040 ez instructions 2014 Cost of Incidental Life Insurance Note. 1040 ez instructions 2014 Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. 1040 ez instructions 2014 This amount will be used to figure includible compensation for your most recent year of service. 1040 ez instructions 2014 1. 1040 ez instructions 2014 Enter the value of the contract (amount payable upon your death) 1. 1040 ez instructions 2014 $20,000. 1040 ez instructions 2014 00 2. 1040 ez instructions 2014 Enter the cash value in the contract at the end of the year 2. 1040 ez instructions 2014 0. 1040 ez instructions 2014 00 3. 1040 ez instructions 2014 Subtract line 2 from line 1. 1040 ez instructions 2014 This is the value of your current life insurance protection 3. 1040 ez instructions 2014 $20,000. 1040 ez instructions 2014 00 4. 1040 ez instructions 2014 Enter your age on your birthday nearest the beginning of the policy year 4. 1040 ez instructions 2014 44 5. 1040 ez instructions 2014 Enter the 1-year term premium for $1,000 of life insurance based on your age. 1040 ez instructions 2014 (From Figure 3-1) 5. 1040 ez instructions 2014 $1. 1040 ez instructions 2014 40 6. 1040 ez instructions 2014 Divide line 3 by $1,000 6. 1040 ez instructions 2014 20 7. 1040 ez instructions 2014 Multiply line 6 by line 5. 1040 ez instructions 2014 This is the cost of your incidental life insurance 7. 1040 ez instructions 2014 $28. 1040 ez instructions 2014 00 Example 2. 1040 ez instructions 2014 Lynne's cash value in the contract at the end of the second year is $1,000. 1040 ez instructions 2014 In year two, the cost of Lynne's life insurance is calculated as shown in Table 3-2. 1040 ez instructions 2014 In year two, Lynne's employer will include $29. 1040 ez instructions 2014 07 in her current year's income. 1040 ez instructions 2014 Lynne will subtract this amount when figuring her includible compensation. 1040 ez instructions 2014 Table 3-2. 1040 ez instructions 2014 Worksheet A. 1040 ez instructions 2014 Cost of Incidental Life Insurance Note. 1040 ez instructions 2014 Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. 1040 ez instructions 2014 This amount will be used to figure includible compensation for your most recent year of service. 1040 ez instructions 2014 1. 1040 ez instructions 2014 Enter the value of the contract (amount payable upon your death) 1. 1040 ez instructions 2014 $20,000. 1040 ez instructions 2014 00 2. 1040 ez instructions 2014 Enter the cash value in the contract at the end of the year 2. 1040 ez instructions 2014 $1,000. 1040 ez instructions 2014 00 3. 1040 ez instructions 2014 Subtract line 2 from line 1. 1040 ez instructions 2014 This is the value of your current life insurance protection 3. 1040 ez instructions 2014 $19,000. 1040 ez instructions 2014 00 4. 1040 ez instructions 2014 Enter your age on your birthday nearest the beginning of the policy year 4. 1040 ez instructions 2014 45 5. 1040 ez instructions 2014 Enter the 1-year term premium for $1,000 of life insurance based on your age. 1040 ez instructions 2014 (From Figure 3-1) 5. 1040 ez instructions 2014 $1. 1040 ez instructions 2014 53 6. 1040 ez instructions 2014 Divide line 3 by $1,000 6. 1040 ez instructions 2014 19 7. 1040 ez instructions 2014 Multiply line 6 by line 5. 1040 ez instructions 2014 This is the cost of your incidental life insurance 7. 1040 ez instructions 2014 $29. 1040 ez instructions 2014 07 Figuring Includible Compensation for Your Most Recent Year of Service You can use Worksheet B in chapter 9 to determine your includible compensation for your most recent year of service. 1040 ez instructions 2014 Example. 1040 ez instructions 2014 Floyd has been periodically working full-time for a local hospital since September 2011. 1040 ez instructions 2014 He needs to figure his limit on annual additions for 2014. 1040 ez instructions 2014 The hospital's normal annual work period for employees in Floyd's general type of work runs from January to December. 1040 ez instructions 2014 During the periods that Floyd was employed with the hospital, the hospital has always been eligible to provide a 403(b) plan to employees. 1040 ez instructions 2014 Additionally, the hospital has never provided the employees with a 457 deferred compensation plan, a transportation fringe benefit plan, or a cafeteria plan. 1040 ez instructions 2014 Floyd has never worked abroad and there is no life insurance provided under the plan. 1040 ez instructions 2014 Table 3-3 shows the service Floyd provided to his employer, his compensation for the periods worked, his elective deferrals, and his taxable wages. 1040 ez instructions 2014 Table 3-3. 1040 ez instructions 2014 Floyd's Compensation Note. 1040 ez instructions 2014 This table shows information Floyd will use to figure includible compensation for his most recent year of service. 1040 ez instructions 2014   Year Years of Service Taxable Wages Elective Deferrals 2014 6/12 of  a year $42,000 $2,000 2013 4/12 of  a year $16,000 $1,650 2012 4/12 of  a year $16,000 $1,650 Before Floyd can figure his limit on annual additions, he must figure includible compensation for his most recent year of service. 1040 ez instructions 2014 Because Floyd is not planning to work the entire 2014 year, his most recent year of service will include the time he is planning to work in 2014 plus time he worked in the preceding 3 years until the time he worked for the hospital totals 1 year. 1040 ez instructions 2014 If the total time he worked is less than 1 year, Floyd will treat it as if it were 1 year. 1040 ez instructions 2014 He figures his most recent year of service shown in the following list. 1040 ez instructions 2014 Time he will work in 2014 is 6/12 of a year. 1040 ez instructions 2014 Time worked in 2013 is 4/12 of a year. 1040 ez instructions 2014 All of this time will be used to determine Floyd's most recent year of service. 1040 ez instructions 2014 Time worked in 2012 is 4/12 of a year. 1040 ez instructions 2014 Floyd only needs 2 months of the 4 months he worked in 2012 to have enough time to total 1 full year. 1040 ez instructions 2014 Because he needs only one-half of the actual time he worked, Floyd will use only one-half of his income earned during that period to calculate wages that will be used in figuring his includible compensation. 1040 ez instructions 2014 Using the information provided in Table 3-3, wages for Floyd's most recent year of service are $66,000 ($42,000 + $16,000 + $8,000). 1040 ez instructions 2014 His includible compensation for his most recent year of service is figured as shown in Table 3-4. 1040 ez instructions 2014 After figuring his includible compensation, Floyd determines his limit on annual additions for 2014 to be $52,000, the lesser of his includible compensation, $70,475 (Table 3-4), and the maximum amount of $52,000. 1040 ez instructions 2014 Table 3-4. 1040 ez instructions 2014 Worksheet B. 1040 ez instructions 2014 Includible Compensation for Your Most Recent Year of Service1 Note. 1040 ez instructions 2014 Use this worksheet to figure includible compensation for your most recent year of service. 1040 ez instructions 2014 1. 1040 ez instructions 2014 Enter your includible wages from the employer maintaining your 403(b) account for your most recent year of service 1. 1040 ez instructions 2014 $66,000 2. 1040 ez instructions 2014 Enter elective deferrals excluded from your gross income for your most recent year of service2 2. 1040 ez instructions 2014 4,4753 3. 1040 ez instructions 2014 Enter amounts contributed or deferred by your employer under a cafeteria plan for your most recent year of service 3. 1040 ez instructions 2014 -0- 4. 1040 ez instructions 2014 Enter amounts contributed or deferred by your employer according to your election to your 457 account (a nonqualified plan of a state or local government, or of a tax-exempt organization) for your most recent year of service 4. 1040 ez instructions 2014 -0- 5. 1040 ez instructions 2014 Enter pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan for your most recent year of service 5. 1040 ez instructions 2014 -0- 6. 1040 ez instructions 2014 Enter your foreign earned income exclusion for your most recent year of service 6. 1040 ez instructions 2014 -0- 7. 1040 ez instructions 2014 Add lines 1, 2, 3, 4, 5, and 6 7. 1040 ez instructions 2014 70,475 8. 1040 ez instructions 2014 Enter the cost of incidental life insurance that is part of your annuity contract for your most recent year of service 8. 1040 ez instructions 2014 -0- 9. 1040 ez instructions 2014 Enter compensation that was both: Earned during your most recent year of service, and Earned while your employer was not qualified to maintain a 403(b) plan 9. 1040 ez instructions 2014 -0- 10. 1040 ez instructions 2014 Add lines 8 and 9 10. 1040 ez instructions 2014 -0- 11. 1040 ez instructions 2014 Subtract line 10 from line 7. 1040 ez instructions 2014 This is your includible compensation for your most recent year of service 11. 1040 ez instructions 2014 70,475 1Use estimated amounts if figuring includible compensation before the end of the year. 1040 ez instructions 2014 2Elective deferrals made to a designated Roth account are not excluded from your gross income and should not be included on this line. 1040 ez instructions 2014  3$4,475 ($2,000 + $1,650 + $825). 1040 ez instructions 2014 Prev  Up  Next   Home   More Online Publications