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1040x 2012 Tax Form

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1040x 2012 Tax Form

1040x 2012 tax form 3. 1040x 2012 tax form   SIMPLE Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: SIMPLE IRA PlanWho Can Set Up a SIMPLE IRA Plan? Who Can Participate in a SIMPLE IRA Plan? How To Set Up a SIMPLE IRA Plan Notification Requirement Contribution Limits When To Deduct Contributions Where To Deduct Contributions Tax Treatment of Contributions Distributions (Withdrawals) More Information on SIMPLE IRA Plans SIMPLE 401(k) Plan Topics - This chapter discusses: SIMPLE IRA plan SIMPLE 401(k) plan Useful Items - You may want to see: Publications 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4284 SIMPLE IRA Plan Checklist 4334 SIMPLE IRA Plans for Small Businesses Forms (and Instructions) W-2 Wage and Tax Statement 5304-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–Not for Use With a Designated Financial Institution 5305-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–for Use With a Designated Financial Institution 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A savings incentive match plan for employees (SIMPLE plan) is a written arrangement that provides you and your employees with a simplified way to make contributions to provide retirement income. 1040x 2012 tax form Under a SIMPLE plan, employees can choose to make salary reduction contributions to the plan rather than receiving these amounts as part of their regular pay. 1040x 2012 tax form In addition, you will contribute matching or nonelective contributions. 1040x 2012 tax form SIMPLE plans can only be maintained on a calendar-year basis. 1040x 2012 tax form A SIMPLE plan can be set up in either of the following ways. 1040x 2012 tax form Using SIMPLE IRAs (SIMPLE IRA plan). 1040x 2012 tax form As part of a 401(k) plan (SIMPLE 401(k) plan). 1040x 2012 tax form Many financial institutions will help you set up a SIMPLE plan. 1040x 2012 tax form SIMPLE IRA Plan A SIMPLE IRA plan is a retirement plan that uses SIMPLE IRAs for each eligible employee. 1040x 2012 tax form Under a SIMPLE IRA plan, a SIMPLE IRA must be set up for each eligible employee. 1040x 2012 tax form For the definition of an eligible employee, see Who Can Participate in a SIMPLE IRA Plan , later. 1040x 2012 tax form Who Can Set Up a SIMPLE IRA Plan? You can set up a SIMPLE IRA plan if you meet both the following requirements. 1040x 2012 tax form You meet the employee limit. 1040x 2012 tax form You do not maintain another qualified plan unless the other plan is for collective bargaining employees. 1040x 2012 tax form Employee limit. 1040x 2012 tax form   You can set up a SIMPLE IRA plan only if you had 100 or fewer employees who received $5,000 or more in compensation from you for the preceding year. 1040x 2012 tax form Under this rule, you must take into account all employees employed at any time during the calendar year regardless of whether they are eligible to participate. 1040x 2012 tax form Employees include self-employed individuals who received earned income and leased employees (defined in chapter 1). 1040x 2012 tax form   Once you set up a SIMPLE IRA plan, you must continue to meet the 100-employee limit each year you maintain the plan. 1040x 2012 tax form Grace period for employers who cease to meet the 100-employee limit. 1040x 2012 tax form   If you maintain the SIMPLE IRA plan for at least 1 year and you cease to meet the 100-employee limit in a later year, you will be treated as meeting it for the 2 calendar years immediately following the calendar year for which you last met it. 1040x 2012 tax form   A different rule applies if you do not meet the 100-employee limit because of an acquisition, disposition, or similar transaction. 1040x 2012 tax form Under this rule, the SIMPLE IRA plan will be treated as meeting the 100-employee limit for the year of the transaction and the 2 following years if both the following conditions are satisfied. 1040x 2012 tax form Coverage under the plan has not significantly changed during the grace period. 1040x 2012 tax form The SIMPLE IRA plan would have continued to qualify after the transaction if you had remained a separate employer. 1040x 2012 tax form    The grace period for acquisitions, dispositions, and similar transactions also applies if, because of these types of transactions, you do not meet the rules explained under Other qualified plan or Who Can Participate in a SIMPLE IRA Plan, below. 1040x 2012 tax form Other qualified plan. 1040x 2012 tax form   The SIMPLE IRA plan generally must be the only retirement plan to which you make contributions, or to which benefits accrue, for service in any year beginning with the year the SIMPLE IRA plan becomes effective. 1040x 2012 tax form Exception. 1040x 2012 tax form   If you maintain a qualified plan for collective bargaining employees, you are permitted to maintain a SIMPLE IRA plan for other employees. 1040x 2012 tax form Who Can Participate in a SIMPLE IRA Plan? Eligible employee. 1040x 2012 tax form   Any employee who received at least $5,000 in compensation during any 2 years preceding the current calendar year and is reasonably expected to receive at least $5,000 during the current calendar year is eligible to participate. 1040x 2012 tax form The term “employee” includes a self-employed individual who received earned income. 1040x 2012 tax form   You can use less restrictive eligibility requirements (but not more restrictive ones) by eliminating or reducing the prior year compensation requirements, the current year compensation requirements, or both. 1040x 2012 tax form For example, you can allow participation for employees who received at least $3,000 in compensation during any preceding calendar year. 1040x 2012 tax form However, you cannot impose any other conditions for participating in a SIMPLE IRA plan. 1040x 2012 tax form Excludable employees. 1040x 2012 tax form   The following employees do not need to be covered under a SIMPLE IRA plan. 1040x 2012 tax form Employees who are covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. 1040x 2012 tax form Nonresident alien employees who have received no U. 1040x 2012 tax form S. 1040x 2012 tax form source wages, salaries, or other personal services compensation from you. 1040x 2012 tax form Compensation. 1040x 2012 tax form   Compensation for employees is the total wages, tips, and other compensation from the employer subject to federal income tax withholding and the amounts paid for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority. 1040x 2012 tax form Compensation also includes the employee's salary reduction contributions made under this plan and, if applicable, elective deferrals under a section 401(k) plan, a SARSEP, or a section 403(b) annuity contract and compensation deferred under a section 457 plan required to be reported by the employer on Form W-2. 1040x 2012 tax form If you are self-employed, compensation is your net earnings from self-employment (line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040)) before subtracting any contributions made to the SIMPLE IRA plan for yourself. 1040x 2012 tax form How To Set Up a SIMPLE IRA Plan You can use Form 5304-SIMPLE or Form 5305-SIMPLE to set up a SIMPLE IRA plan. 1040x 2012 tax form Each form is a model savings incentive match plan for employees (SIMPLE) plan document. 1040x 2012 tax form Which form you use depends on whether you select a financial institution or your employees select the institution that will receive the contributions. 1040x 2012 tax form Use Form 5304-SIMPLE if you allow each plan participant to select the financial institution for receiving his or her SIMPLE IRA plan contributions. 1040x 2012 tax form Use Form 5305-SIMPLE if you require that all contributions under the SIMPLE IRA plan be deposited initially at a designated financial institution. 1040x 2012 tax form The SIMPLE IRA plan is adopted when you have completed all appropriate boxes and blanks on the form and you (and the designated financial institution, if any) have signed it. 1040x 2012 tax form Keep the original form. 1040x 2012 tax form Do not file it with the IRS. 1040x 2012 tax form Other uses of the forms. 1040x 2012 tax form   If you set up a SIMPLE IRA plan using Form 5304-SIMPLE or Form 5305-SIMPLE, you can use the form to satisfy other requirements, including the following. 1040x 2012 tax form Meeting employer notification requirements for the SIMPLE IRA plan. 1040x 2012 tax form Form 5304-SIMPLE and Form 5305-SIMPLE contain a Model Notification to Eligible Employees that provides the necessary information to the employee. 1040x 2012 tax form Maintaining the SIMPLE IRA plan records and proving you set up a SIMPLE IRA plan for employees. 1040x 2012 tax form Deadline for setting up a SIMPLE IRA plan. 1040x 2012 tax form   You can set up a SIMPLE IRA plan effective on any date from January 1 through October 1 of a year, provided you did not previously maintain a SIMPLE IRA plan. 1040x 2012 tax form This requirement does not apply if you are a new employer that comes into existence after October 1 of the year the SIMPLE IRA plan is set up and you set up a SIMPLE IRA plan as soon as administratively feasible after your business comes into existence. 1040x 2012 tax form If you previously maintained a SIMPLE IRA plan, you can set up a SIMPLE IRA plan effective only on January 1 of a year. 1040x 2012 tax form A SIMPLE IRA plan cannot have an effective date that is before the date you actually adopt the plan. 1040x 2012 tax form Setting up a SIMPLE IRA. 1040x 2012 tax form   SIMPLE IRAs are the individual retirement accounts or annuities into which the contributions are deposited. 1040x 2012 tax form A SIMPLE IRA must be set up for each eligible employee. 1040x 2012 tax form Forms 5305-S, SIMPLE Individual Retirement Trust Account, and 5305-SA, SIMPLE Individual Retirement Custodial Account, are model trust and custodial account documents the participant and the trustee (or custodian) can use for this purpose. 1040x 2012 tax form   A SIMPLE IRA cannot be a Roth IRA. 1040x 2012 tax form Contributions to a SIMPLE IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. 1040x 2012 tax form Deadline for setting up a SIMPLE IRA. 1040x 2012 tax form   A SIMPLE IRA must be set up for an employee before the first date by which a contribution is required to be deposited into the employee's IRA. 1040x 2012 tax form See Time limits for contributing funds , later, under Contribution Limits. 1040x 2012 tax form Credit for startup costs. 1040x 2012 tax form   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE IRA plan that first became effective in 2013. 1040x 2012 tax form For more information, see Credit for startup costs under Reminders, earlier. 1040x 2012 tax form Notification Requirement If you adopt a SIMPLE IRA plan, you must notify each employee of the following information before the beginning of the election period. 1040x 2012 tax form The employee's opportunity to make or change a salary reduction choice under a SIMPLE IRA plan. 1040x 2012 tax form Your decision to make either matching contributions or nonelective contributions (discussed later). 1040x 2012 tax form A summary description provided by the financial institution. 1040x 2012 tax form Written notice that his or her balance can be transferred without cost or penalty if they use a designated financial institution. 1040x 2012 tax form Election period. 1040x 2012 tax form   The election period is generally the 60-day period immediately preceding January 1 of a calendar year (November 2 to December 31 of the preceding calendar year). 1040x 2012 tax form However, the dates of this period are modified if you set up a SIMPLE IRA plan in mid-year (for example, on July 1) or if the 60-day period falls before the first day an employee becomes eligible to participate in the SIMPLE IRA plan. 1040x 2012 tax form   A SIMPLE IRA plan can provide longer periods for permitting employees to enter into salary reduction agreements or to modify prior agreements. 1040x 2012 tax form For example, a SIMPLE IRA plan can provide a 90-day election period instead of the 60-day period. 1040x 2012 tax form Similarly, in addition to the 60-day period, a SIMPLE IRA plan can provide quarterly election periods during the 30 days before each calendar quarter, other than the first quarter of each year. 1040x 2012 tax form Contribution Limits Contributions are made up of salary reduction contributions and employer contributions. 1040x 2012 tax form You, as the employer, must make either matching contributions or nonelective contributions, defined later. 1040x 2012 tax form No other contributions can be made to the SIMPLE IRA plan. 1040x 2012 tax form These contributions, which you can deduct, must be made timely. 1040x 2012 tax form See Time limits for contributing funds , later. 1040x 2012 tax form Salary reduction contributions. 1040x 2012 tax form   The amount the employee chooses to have you contribute to a SIMPLE IRA on his or her behalf cannot be more than $12,000 for 2013 and 2014. 1040x 2012 tax form These contributions must be expressed as a percentage of the employee's compensation unless you permit the employee to express them as a specific dollar amount. 1040x 2012 tax form You cannot place restrictions on the contribution amount (such as limiting the contribution percentage), except to comply with the $12,000 limit. 1040x 2012 tax form   If you or an employee participates in any other qualified plan during the year and you or your employee have salary reduction contributions (elective deferrals) under those plans, the salary reduction contributions under a SIMPLE IRA plan also count toward the overall annual limit ($17,500 for 2013 and 2014) on exclusion of salary reduction contributions and other elective deferrals. 1040x 2012 tax form Catch-up contributions. 1040x 2012 tax form   A SIMPLE IRA plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. 1040x 2012 tax form The catch-up contribution limit for 2013 and 2014 for SIMPLE IRA plans is $2,500. 1040x 2012 tax form Salary reduction contributions are not treated as catch-up contributions for 2013 or 2014 until they exceed $12,000. 1040x 2012 tax form However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. 1040x 2012 tax form The catch-up contribution limit. 1040x 2012 tax form The excess of the participant's compensation over the salary reduction contributions that are not catch-up contributions. 1040x 2012 tax form Employer matching contributions. 1040x 2012 tax form   You are generally required to match each employee's salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee's compensation. 1040x 2012 tax form This requirement does not apply if you make nonelective contributions as discussed later. 1040x 2012 tax form Example. 1040x 2012 tax form In 2013, your employee, John Rose, earned $25,000 and chose to defer 5% of his salary. 1040x 2012 tax form Your net earnings from self-employment are $40,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. 1040x 2012 tax form You make 3% matching contributions. 1040x 2012 tax form The total contribution you make for John is $2,000, figured as follows. 1040x 2012 tax form Salary reduction contributions ($25,000 × . 1040x 2012 tax form 05) $1,250 Employer matching contribution ($25,000 × . 1040x 2012 tax form 03) 750 Total contributions $2,000     The total contribution you make for yourself is $5,200, figured as follows. 1040x 2012 tax form Salary reduction contributions ($40,000 × . 1040x 2012 tax form 10) $4,000 Employer matching contribution ($40,000 × . 1040x 2012 tax form 03) 1,200 Total contributions $5,200 Lower percentage. 1040x 2012 tax form   If you choose a matching contribution less than 3%, the percentage must be at least 1%. 1040x 2012 tax form You must notify the employees of the lower match within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. 1040x 2012 tax form You cannot choose a percentage less than 3% for more than 2 years during the 5-year period that ends with (and includes) the year for which the choice is effective. 1040x 2012 tax form Nonelective contributions. 1040x 2012 tax form   Instead of matching contributions, you can choose to make nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 (or some lower amount you select) of compensation from you for the year. 1040x 2012 tax form If you make this choice, you must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. 1040x 2012 tax form Only $255,000 of the employee's compensation can be taken into account to figure the contribution limit in 2013 ($260,000 in 2014). 1040x 2012 tax form   If you choose this 2% contribution formula, you must notify the employees within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. 1040x 2012 tax form Example 1. 1040x 2012 tax form In 2013, your employee, Jane Wood, earned $36,000 and chose to have you contribute 10% of her salary. 1040x 2012 tax form Your net earnings from self-employment are $50,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. 1040x 2012 tax form You make a 2% nonelective contribution. 1040x 2012 tax form Both of you are under age 50. 1040x 2012 tax form The total contribution you make for Jane is $4,320, figured as follows. 1040x 2012 tax form Salary reduction contributions ($36,000 × . 1040x 2012 tax form 10) $3,600 2% nonelective contributions ($36,000 × . 1040x 2012 tax form 02) 720 Total contributions $4,320     The total contribution you make for yourself is $6,000, figured as follows. 1040x 2012 tax form Salary reduction contributions ($50,000 × . 1040x 2012 tax form 10) $5,000 2% nonelective contributions ($50,000 × . 1040x 2012 tax form 02) 1,000 Total contributions $6,000 Example 2. 1040x 2012 tax form Using the same facts as in Example 1, above, the maximum contribution you make for Jane or for yourself if you each earned $75,000 is $13,500, figured as follows. 1040x 2012 tax form Salary reduction contributions (maximum amount allowed) $12,000 2% nonelective contributions ($75,000 × . 1040x 2012 tax form 02) 1,500 Total contributions $13,500 Time limits for contributing funds. 1040x 2012 tax form   You must make the salary reduction contributions to the SIMPLE IRA within 30 days after the end of the month in which the amounts would otherwise have been payable to the employee in cash. 1040x 2012 tax form You must make matching contributions or nonelective contributions by the due date (including extensions) for filing your federal income tax return for the year. 1040x 2012 tax form Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions. 1040x 2012 tax form When To Deduct Contributions You can deduct SIMPLE IRA contributions in the tax year within which the calendar year for which contributions were made ends. 1040x 2012 tax form You can deduct contributions for a particular tax year if they are made for that tax year and are made by the due date (including extensions) of your federal income tax return for that year. 1040x 2012 tax form Example 1. 1040x 2012 tax form Your tax year is the fiscal year ending June 30. 1040x 2012 tax form Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2013 before July 1, 2013) are deductible in the tax year ending June 30, 2014. 1040x 2012 tax form Example 2. 1040x 2012 tax form You are a sole proprietor whose tax year is the calendar year. 1040x 2012 tax form Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2014 by April 15, 2014) are deductible in the 2013 tax year. 1040x 2012 tax form Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. 1040x 2012 tax form 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. 1040x 2012 tax form Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. 1040x 2012 tax form (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you receive from the partnership. 1040x 2012 tax form ) Tax Treatment of Contributions You can deduct your contributions and your employees can exclude these contributions from their gross income. 1040x 2012 tax form SIMPLE IRA plan contributions are not subject to federal income tax withholding. 1040x 2012 tax form However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. 1040x 2012 tax form Matching and nonelective contributions are not subject to these taxes. 1040x 2012 tax form Reporting on Form W-2. 1040x 2012 tax form   Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation” box of Form W-2. 1040x 2012 tax form You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. 1040x 2012 tax form You must also include them in box 12. 1040x 2012 tax form Mark the “Retirement plan” checkbox in box 13. 1040x 2012 tax form For more information, see the Form W-2 instructions. 1040x 2012 tax form Distributions (Withdrawals) Distributions from a SIMPLE IRA are subject to IRA rules and generally are includible in income for the year received. 1040x 2012 tax form Tax-free rollovers can be made from one SIMPLE IRA into another SIMPLE IRA. 1040x 2012 tax form However, a rollover from a SIMPLE IRA to a non-SIMPLE IRA can be made tax free only after a 2-year participation in the SIMPLE IRA plan. 1040x 2012 tax form Generally, you or your employee must begin to receive distributions from a SIMPLE IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. 1040x 2012 tax form Early withdrawals generally are subject to a 10% additional tax. 1040x 2012 tax form However, the additional tax is increased to 25% if funds are withdrawn within 2 years of beginning participation. 1040x 2012 tax form More information. 1040x 2012 tax form   See Publication 590 for information about IRA rules, including those on the tax treatment of distributions, rollovers, required distributions, and income tax withholding. 1040x 2012 tax form More Information on SIMPLE IRA Plans If you need help to set up or maintain a SIMPLE IRA plan, go to the IRS website and search SIMPLE IRA Plan. 1040x 2012 tax form SIMPLE 401(k) Plan You can adopt a SIMPLE plan as part of a 401(k) plan if you meet the 100-employee limit as discussed earlier under SIMPLE IRA Plan. 1040x 2012 tax form A SIMPLE 401(k) plan is a qualified retirement plan and generally must satisfy the rules discussed under Qualification Rules in chapter 4, including the required distribution rules. 1040x 2012 tax form However, a SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy rules discussed in chapter 4 if the plan meets the conditions listed below. 1040x 2012 tax form Under the plan, an employee can choose to have you make salary reduction contributions for the year to a trust in an amount expressed as a percentage of the employee's compensation, but not more than $12,000 for 2013 and 2014. 1040x 2012 tax form If permitted under the plan, an employee who is age 50 or over can also make a catch-up contribution of up to $2,500 for 2013 and 2014. 1040x 2012 tax form See Catch-up contributions , earlier under Contribution Limits. 1040x 2012 tax form You must make either: Matching contributions up to 3% of compensation for the year, or Nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 of compensation from you for the year. 1040x 2012 tax form No other contributions can be made to the trust. 1040x 2012 tax form No contributions are made, and no benefits accrue, for services during the year under any other qualified retirement plan sponsored by you on behalf of any employee eligible to participate in the SIMPLE 401(k) plan. 1040x 2012 tax form The employee's rights to any contributions are nonforfeitable. 1040x 2012 tax form No more than $255,000 of the employee's compensation can be taken into account in figuring matching contributions and nonelective contributions in 2013 ($260,000 in 2014). 1040x 2012 tax form Compensation is defined earlier in this chapter. 1040x 2012 tax form Employee notification. 1040x 2012 tax form   The notification requirement that applies to SIMPLE IRA plans also applies to SIMPLE 401(k) plans. 1040x 2012 tax form See Notification Requirement in this chapter. 1040x 2012 tax form Credit for startup costs. 1040x 2012 tax form   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE 401(k) plan that first became effective in 2013. 1040x 2012 tax form For more information, see Credit for startup costs under Reminders, earlier. 1040x 2012 tax form Note on Forms. 1040x 2012 tax form   Please note that Forms 5304-SIMPLE and 5305-SIMPLE can not be used to establish a SIMPLE 401(k) plan. 1040x 2012 tax form To set up a SIMPLE 401(k) plan, see Adopting a Written Plan in chapter 4. 1040x 2012 tax form Prev  Up  Next   Home   More Online Publications
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The 1040x 2012 Tax Form

1040x 2012 tax form Publication 225 - Introductory Material Table of Contents IntroductionOrdering forms and publications. 1040x 2012 tax form Tax questions. 1040x 2012 tax form Future Developments What's New for 2013 What's New for 2014 Reminders Introduction You are in the business of farming if you cultivate, operate, or manage a farm for profit, either as owner or tenant. 1040x 2012 tax form A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. 1040x 2012 tax form It also includes plantations, ranches, ranges, and orchards. 1040x 2012 tax form This publication explains how the federal tax laws apply to farming. 1040x 2012 tax form Use this publication as a guide to figure your taxes and complete your farm tax return. 1040x 2012 tax form If you need more information on a subject, get the specific IRS tax publication covering that subject. 1040x 2012 tax form We refer to many of these free publications throughout this publication. 1040x 2012 tax form See chapter 16 for information on ordering these publications. 1040x 2012 tax form The explanations and examples in this publication reflect the Internal Revenue Service's interpretation of tax laws enacted by Congress, Treasury regulations, and court decisions. 1040x 2012 tax form However, the information given does not cover every situation and is not intended to replace the law or change its meaning. 1040x 2012 tax form This publication covers subjects on which a court may have made a decision more favorable to taxpayers than the interpretation of the Service. 1040x 2012 tax form Until these differing interpretations are resolved by higher court decisions, or in some other way, this publication will continue to present the interpretation of the Service. 1040x 2012 tax form The IRS Mission. 1040x 2012 tax form   Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. 1040x 2012 tax form Comments and suggestions. 1040x 2012 tax form   We welcome your comments about this publication and your suggestions for future editions. 1040x 2012 tax form   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. 1040x 2012 tax form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040x 2012 tax form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040x 2012 tax form   You can email us at taxforms@irs. 1040x 2012 tax form gov. 1040x 2012 tax form Please put “Publications Comment” on the subject line. 1040x 2012 tax form You can also send us comments from www. 1040x 2012 tax form irs. 1040x 2012 tax form gov/formspubs/, select “Comment on Tax Forms and Publications” under “More Information. 1040x 2012 tax form ”   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. 1040x 2012 tax form Ordering forms and publications. 1040x 2012 tax form   Visit www. 1040x 2012 tax form irs. 1040x 2012 tax form 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. 1040x 2012 tax form Internal Revenue Service 1201 N. 1040x 2012 tax form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040x 2012 tax form   If you have a tax question, check the information available on IRS. 1040x 2012 tax form gov or call 1-800-829-1040. 1040x 2012 tax form We cannot answer tax questions sent to either of the above addresses. 1040x 2012 tax form Comments on IRS enforcement actions. 1040x 2012 tax form   The Small Business and Agricultural Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small business about federal agency enforcement actions. 1040x 2012 tax form The Ombudsman will annually evaluate the enforcement activities of each agency and rate its responsiveness to small business. 1040x 2012 tax form If you wish to comment on the enforcement actions of the IRS, you can: Call 1-888-734-3247, Fax your comments to 202-481-5719, Write to Office of the National Ombudsman U. 1040x 2012 tax form S. 1040x 2012 tax form Small Business Administration 409 3rd Street, S. 1040x 2012 tax form W. 1040x 2012 tax form  Washington, DC 20416 Send an email to ombudsman@sba. 1040x 2012 tax form gov, or Download the appraisal form at  www. 1040x 2012 tax form sba. 1040x 2012 tax form gov/ombudsman. 1040x 2012 tax form Treasury Inspector General for Tax Administration. 1040x 2012 tax form   If you want to confidentially report misconduct, waste, fraud, or abuse by an IRS employee, you can call 1-800-366-4484 (1-800-877-8339 for TTY/TDD users). 1040x 2012 tax form You can remain anonymous. 1040x 2012 tax form Farm tax classes. 1040x 2012 tax form   Many state Cooperative Extension Services conduct farm tax workshops in conjunction with the IRS. 1040x 2012 tax form Contact your county extension office for more information. 1040x 2012 tax form Rural tax education website. 1040x 2012 tax form   The Rural Tax Education website is a source for information concerning agriculturally related income and deductions and self-employment tax. 1040x 2012 tax form The website is available for farmers and ranchers, other agricultural producers, Extension educators, and any one interested in learning about the tax side of the agricultural community. 1040x 2012 tax form Members of the National Farm Income Tax Extension Committee are contributors for the website and the website is hosted by Utah State University Cooperative Extension. 1040x 2012 tax form You can visit the website at www. 1040x 2012 tax form ruraltax. 1040x 2012 tax form org. 1040x 2012 tax form Future Developments The IRS has created a page on IRS. 1040x 2012 tax form gov for information about Publication 225, at  www. 1040x 2012 tax form irs. 1040x 2012 tax form gov/pub225. 1040x 2012 tax form Information about recent developments affecting Publication 225 will be posted on that page. 1040x 2012 tax form What's New for 2013 The following items highlight a number of administrative and tax law changes for 2013. 1040x 2012 tax form They are discussed in more detail throughout the publication. 1040x 2012 tax form Standard mileage rate. 1040x 2012 tax form  For 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 56. 1040x 2012 tax form 5 cents. 1040x 2012 tax form See chapter 4. 1040x 2012 tax form Simplified method for business use of home deduction. 1040x 2012 tax form  The IRS now provides a simplified method to determine your expenses for business use of your home. 1040x 2012 tax form For more information, see Schedule C (Form 1040), Part II, and its instructions. 1040x 2012 tax form See chapter 4. 1040x 2012 tax form Increased section 179 expense deduction dollar limits. 1040x 2012 tax form  The maximum amount you can elect to deduct for most section 179 property you placed in service in 2013 is $500,000. 1040x 2012 tax form This limit is reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2 million. 1040x 2012 tax form See chapter 7. 1040x 2012 tax form Extension of special depreciation allowance for certain qualified property acquired after December 31, 2007. 1040x 2012 tax form  You may be able to take a 50% special depreciation allowance for certain qualified property acquired after December 31, 2007, and placed in service before January 1, 2014. 1040x 2012 tax form See chapter 7. 1040x 2012 tax form Expiration of the 3-year recovery period for certain race horses. 1040x 2012 tax form . 1040x 2012 tax form  The 3-year recovery period for race horses two years old or younger will expire for such horses placed in service after December 31, 2013. 1040x 2012 tax form See chapter 7. 1040x 2012 tax form Tax rates. 1040x 2012 tax form  For tax years beginning in 2013, the social security part of the self-employment tax increases from 10. 1040x 2012 tax form 4% to 12. 1040x 2012 tax form 4%. 1040x 2012 tax form As a result, the self-employment tax is increased from 13. 1040x 2012 tax form 3% to 15. 1040x 2012 tax form 3%. 1040x 2012 tax form See chapter 12. 1040x 2012 tax form Maximum net earnings. 1040x 2012 tax form  The maximum net self-employment earnings subject to the social security part (12. 1040x 2012 tax form 4%) of the self-employment tax increased to $113,700 for 2013. 1040x 2012 tax form There is no maximum limit on earnings subject to the Medicare part (2. 1040x 2012 tax form 9%). 1040x 2012 tax form See chapter 12. 1040x 2012 tax form Net investment income tax. 1040x 2012 tax form  For tax years beginning in 2013, individuals, estates, and trusts may be subject to the net investment income tax (NIIT). 1040x 2012 tax form If you are a trader in financial instruments and commodities and required to file Schedule C (Form 1040), your investment income (for purposes of the NIIT) may be reduced by your interest and other investment expenses to the extent those expenses are not used to reduce your self-employment income. 1040x 2012 tax form For information about NIIT and the special rule for traders in financial instruments and commodities, see the Instructions for Form 8960. 1040x 2012 tax form Social Security and Medicare Tax for 2013. 1040x 2012 tax form  The employee tax rate for social security is 6. 1040x 2012 tax form 2%. 1040x 2012 tax form The employer tax rate for social security remains unchanged at 6. 1040x 2012 tax form 2%. 1040x 2012 tax form The social security wage base limit is $113,700. 1040x 2012 tax form The Medicare tax rate is 1. 1040x 2012 tax form 45% each for the employee and employer, unchanged from 2012. 1040x 2012 tax form There is no wage base limit for Medicare tax. 1040x 2012 tax form See chapter 13. 1040x 2012 tax form Additional Medicare Tax. 1040x 2012 tax form  For tax years beginning in 2013, a 0. 1040x 2012 tax form 9% Additional Medicare Tax applies to your Medicare wages, Railroad Tax Act (RRTA) compensation, and self-employment income above a threshold amount. 1040x 2012 tax form Use Form 8959, Additional Medicare Tax, to figure this tax. 1040x 2012 tax form For more information, see the Instructions for Form 8959 and the Instructions for Schedule SE (Form 1040). 1040x 2012 tax form In addition to withholding Medicare tax at 1. 1040x 2012 tax form 45%, you must withhold a 0. 1040x 2012 tax form 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 1040x 2012 tax form You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 1040x 2012 tax form Additional Medicare Tax is only imposed on the employee. 1040x 2012 tax form There is no employer share of Additional Medicare Tax. 1040x 2012 tax form All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 1040x 2012 tax form For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E), Employer's Tax Guide. 1040x 2012 tax form For more information on Additional Medicare Tax, visit IRS. 1040x 2012 tax form gov and enter “Additional Medicare Tax” in the search box. 1040x 2012 tax form See chapter 13. 1040x 2012 tax form Leave-Based donation programs to aid victims of Hurricane Sandy. 1040x 2012 tax form  Under these programs, employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2014, to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy. 1040x 2012 tax form The donated leave will not be included in the income or wages of the employee. 1040x 2012 tax form The employer may deduct the cash payments as business expenses or charitable contributions. 1040x 2012 tax form See chapter 13. 1040x 2012 tax form Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans extended. 1040x 2012 tax form  The work opportunity tax credit is now available for eligible unemployed veterans who begin work before January 1, 2014. 1040x 2012 tax form Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. 1040x 2012 tax form For more information, visit IRS. 1040x 2012 tax form gov and enter “work opportunity credit” in the search box. 1040x 2012 tax form See chapter 13. 1040x 2012 tax form Estimated tax. 1040x 2012 tax form  For tax years beginning in 2013, the Net Investment Income Tax (NIIT) may need to be included when calculating your estimated tax. 1040x 2012 tax form Also, when figuring your estimated tax, you may need to include the 0. 1040x 2012 tax form 9% Additional Medicare Tax applicable to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above the threshold amount based on your filing status. 1040x 2012 tax form For more information, see Publication 505. 1040x 2012 tax form What's New for 2014 Maximum net earnings. 1040x 2012 tax form  The maximum net self-employment earnings subject to the social security part of the self-employment tax for 2014 will be discussed in the 2013 Publication 334. 1040x 2012 tax form See chapter 12. 1040x 2012 tax form Social security and Medicare tax for 2014. 1040x 2012 tax form  The employee and employer tax rates for social security and the maximum amount of wages subject to social security tax for 2014 will be discussed in Publication 51 (Circular A), Agricultural Employer's Tax Guide (For use in 2014). 1040x 2012 tax form The Medicare tax rate for 2014 will also be discussed in Publication 51 (Circular A) (For use in 2014). 1040x 2012 tax form There is no limit on the amount of wages subject to Medicare tax. 1040x 2012 tax form See chapter 13. 1040x 2012 tax form Reminders The following reminders and other items may help you file your tax return. 1040x 2012 tax form   IRS e-file (Electronic Filing) You can file your tax returns electronically using an IRS e-file option. 1040x 2012 tax form The benefits of IRS e-file include faster refunds, increased accuracy, and acknowledgment of IRS receipt of your return. 1040x 2012 tax form You can use one of the following IRS e-file options. 1040x 2012 tax form Use an authorized IRS e-file provider. 1040x 2012 tax form Use a personal computer. 1040x 2012 tax form Visit a Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) site. 1040x 2012 tax form For details on these fast filing methods, see your income tax package. 1040x 2012 tax form Principal agricultural activity codes. 1040x 2012 tax form  You must enter on line B of Schedule F (Form 1040) a code that identifies your principal agricultural activity. 1040x 2012 tax form It is important to use the correct code because this information will identify market segments of the public for IRS Taxpayer Education programs. 1040x 2012 tax form The U. 1040x 2012 tax form S. 1040x 2012 tax form Census Bureau also uses this information for its economic census. 1040x 2012 tax form See the list of Principal Agricultural Activity Codes on page 2 of Schedule F (Form 1040). 1040x 2012 tax form Publication on employer identification numbers (EIN). 1040x 2012 tax form  Publication 1635, Understanding Your Employer Identification Number, provides general information on employer identification numbers. 1040x 2012 tax form Topics include how to apply for an EIN and how to complete Form SS-4. 1040x 2012 tax form Change of address. 1040x 2012 tax form  If you change your home address, you should use Form 8822, Change of Addres, to notify the IRS. 1040x 2012 tax form If you change your business address, you should use Form 8822-B, Change of Address or Responsible Party — Business, to notify the IRS. 1040x 2012 tax form Be sure to include your suite, room, or other unit number. 1040x 2012 tax form Reportable transactions. 1040x 2012 tax form  You must file Form 8886, Reportable Transaction Disclosure Statement, to report certain transactions. 1040x 2012 tax form You may have to pay a penalty if you are required to file Form 8886 but do not do so. 1040x 2012 tax form Reportable transactions include (1) transactions the same as or substantially similar to tax avoidance transactions identified by the IRS, (2) transactions offered to you under conditions of confidentiality and for which you paid an advisor a minimum fee, (3) transactions for which you have or a related party has a right to a full or partial refund of fees if all or part of the intended tax consequences from the transaction are not sustained, (4) transactions that result in losses of at least $2 million in any single year or $4 million in any combination of years, and (5) transactions with asset holding periods of 45 days or less and that result in a tax credit of more than $250,000. 1040x 2012 tax form For more information, see the Instructions for Form 8886. 1040x 2012 tax form Form W-4 for 2014. 1040x 2012 tax form  You should make new Forms W-4 available to your employees and encourage them to check their income tax withholding for 2014. 1040x 2012 tax form Those employees who owed a large amount of tax or received a large refund for 2013 may need to submit a new Form W-4. 1040x 2012 tax form See Publication 919, How Do I Adjust My Tax Withholding. 1040x 2012 tax form Form 1099-MISC. 1040x 2012 tax form  Generally, file Form 1099-MISC if you pay at least $600 in rents, services, and other miscellaneous payments in your farming business to an individual (for example, an accountant, an attorney, or a veterinarian) who is not your employee. 1040x 2012 tax form Limited Liability Company (LLC). 1040x 2012 tax form  For purposes of this publication, a limited liability company (LLC) is a business entity organized in the United States under state law. 1040x 2012 tax form Unlike a partnership, all of the members of an LLC have limited personal liability for its debts. 1040x 2012 tax form An LLC may be classified for federal income tax purposes as a partnership, corporation, or an entity disregarded as separate from its owner by applying the rules in Regulations section 301. 1040x 2012 tax form 7701-3. 1040x 2012 tax form See Publication 3402 for more details. 1040x 2012 tax form Photographs of missing children. 1040x 2012 tax form  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 1040x 2012 tax form Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040x 2012 tax form 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. 1040x 2012 tax form Prev  Up  Next   Home   More Online Publications