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Free 1040ez Tax Filing

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Free 1040ez Tax Filing

Free 1040ez tax filing 15. Free 1040ez tax filing   Estimated Tax Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Special Estimated Tax Rules for Qualified FarmersQualified Farmer Special Rules for Qualified Farmers Estimated Tax Penalty for 2013 What's New Net Investment Income Tax. Free 1040ez tax filing . Free 1040ez tax filing  For tax years beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). Free 1040ez tax filing NIIT is a 3. Free 1040ez tax filing 8% tax on the lesser of net investment income or the excess of your modified adjusted gross income (MAGI) over the threshold amount. Free 1040ez tax filing NIIT may need to be included when calculating your estimated tax. Free 1040ez tax filing For more information, see Publication 505,Tax Withholding and Estimated Tax. Free 1040ez tax filing Additional Medicare Tax. Free 1040ez tax filing  For tax years beginning in 2013, a 0. Free 1040ez tax filing 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income over a threshold amount based on your filing status. Free 1040ez tax filing You may need to include this amount when figuring your estimated tax. Free 1040ez tax filing For more information, see Publication 505. Free 1040ez tax filing Introduction Estimated tax is the method used to pay tax on income that is not subject to withholding. Free 1040ez tax filing See Publication 505 for the general rules and requirements for paying estimated tax. Free 1040ez tax filing If you are a qualified farmer, defined below, you are subject to the special rules covered in this chapter for paying estimated tax. Free 1040ez tax filing Topics - This chapter discusses: Special estimated tax rules for qualified farmers Estimated tax penalty Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 1040 U. Free 1040ez tax filing S. Free 1040ez tax filing Individual Income Tax Return 1040-ES Estimated Tax for Individuals 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 16 for information about getting publications and forms. Free 1040ez tax filing Special Estimated Tax Rules for Qualified Farmers Special rules apply to the payment of estimated tax by individuals who are qualified farmers. Free 1040ez tax filing If you are not a qualified farmer as defined next, see Publication 505 for the estimated tax rules that apply. Free 1040ez tax filing Qualified Farmer An individual is a qualified farmer for 2013 if at least two-thirds of his or her gross income from all sources for 2012 or 2013 was from farming. Free 1040ez tax filing See Gross Income , next, for information on how to figure your gross income from all sources and see Gross Income From Farming , later, for information on how to figure your gross income from farming. Free 1040ez tax filing See also Percentage From Farming , later, for information on how to determine the percentage of your gross income from farming. Free 1040ez tax filing Gross Income Gross income is all income you receive in the form of money, goods, property, and services that is not exempt from income tax. Free 1040ez tax filing On a joint return, you must add your spouse's gross income to your gross income. Free 1040ez tax filing To decide whether two-thirds of your gross income was from farming, use as your gross income the total of the following income (not loss) amounts from your tax return. Free 1040ez tax filing Wages, salaries, tips, etc. Free 1040ez tax filing Taxable interest. Free 1040ez tax filing Ordinary dividends. Free 1040ez tax filing Taxable refunds, credits, or offsets of state and local income taxes. Free 1040ez tax filing Alimony. Free 1040ez tax filing Gross business income from Schedule C (Form 1040). Free 1040ez tax filing Gross business receipts from Schedule C-EZ (Form 1040). Free 1040ez tax filing Capital gains from Schedule D (Form 1040). Free 1040ez tax filing Losses are not netted against gains. Free 1040ez tax filing Gains on sales of business property. Free 1040ez tax filing Taxable IRA distributions, pensions, annuities, and social security benefits. Free 1040ez tax filing Gross rental income from Schedule E (Form 1040). Free 1040ez tax filing Gross royalty income from Schedule E (Form 1040). Free 1040ez tax filing Taxable net income from an estate or trust reported on Schedule E (Form 1040). Free 1040ez tax filing Income from a Real Estate Mortgage Investment Conduit reported on Schedule E (Form 1040). Free 1040ez tax filing Gross farm rental income from Form 4835. Free 1040ez tax filing Gross farm income from Schedule F (Form 1040). Free 1040ez tax filing Your distributive share of gross income from a partnership, or limited liability company treated as a partnership, from Schedule K-1 (Form 1065). Free 1040ez tax filing Your pro rata share of gross income from an S corporation, from Schedule K-1 (Form 1120S). Free 1040ez tax filing Unemployment compensation. Free 1040ez tax filing Other income not included with any of the items listed above. Free 1040ez tax filing Gross Income From Farming Gross income from farming is income from cultivating the soil or raising agricultural commodities. Free 1040ez tax filing It includes the following amounts. Free 1040ez tax filing Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. Free 1040ez tax filing Income from a plantation, ranch, nursery, range, orchard, or oyster bed. Free 1040ez tax filing Crop shares for the use of your land. Free 1040ez tax filing Gains from sales of draft, breeding, dairy, or sporting livestock. Free 1040ez tax filing Gross income from farming is the total of the following amounts from your tax return. Free 1040ez tax filing Gross farm income from Schedule F (Form 1040). Free 1040ez tax filing Gross farm rental income from Form 4835. Free 1040ez tax filing Gross farm income from Schedule E (Form 1040), Parts II and III. Free 1040ez tax filing Gains from the sale of livestock used for draft, breeding, sport, or dairy purposes reported on Form 4797. Free 1040ez tax filing For more information about income from farming, see chapter 3. Free 1040ez tax filing Farm income does not include any of the following: Wages you receive as a farm employee. Free 1040ez tax filing Income you receive from contract grain harvesting and hauling with workers and machines you furnish. Free 1040ez tax filing Gains you receive from the sale of farm land and depreciable farm equipment. Free 1040ez tax filing Percentage From Farming Figure your gross income from all sources, discussed earlier. Free 1040ez tax filing Then figure your gross income from farming, discussed earlier. Free 1040ez tax filing Divide your farm gross income by your total gross income to determine the percentage of gross income from farming. Free 1040ez tax filing Example 1. Free 1040ez tax filing Jane Smith had the following total gross income and farm gross income amounts in 2013. Free 1040ez tax filing Gross Income   Total Farm Taxable interest $3,000   Dividends 500   Rental income (Sch E) 41,500   Farm income (Sch F) 75,000 $75,000 Gain (Form 4797) 5,000 5,000 Total $125,000 $80,000 Schedule D showed gain from the sale of dairy cows carried over from Form 4797 ($5,000) in addition to a loss from the sale of corporate stock ($2,000). Free 1040ez tax filing However, that loss is not netted against the gain to figure Ms. Free 1040ez tax filing Smith's total gross income or her gross farm income. Free 1040ez tax filing Her gross farm income is 64% of her total gross income ($80,000 ÷ $125,000 = 0. Free 1040ez tax filing 64). Free 1040ez tax filing Special Rules for Qualified Farmers The following special estimated tax rules apply if you are a qualified farmer for 2013. Free 1040ez tax filing You do not have to pay estimated tax if you file your 2013 tax return and pay all the tax due by March 3, 2014. Free 1040ez tax filing You do not have to pay estimated tax if your 2013 income tax withholding (including any amount applied to your 2013 estimated tax from your 2012 return) will be at least 662/3% (. Free 1040ez tax filing 6667) of the total tax shown on your 2013 tax return or 100% of the total tax shown on your 2012 return. Free 1040ez tax filing If you must pay estimated tax, you are required to make only one estimated tax payment (your required annual payment) by January 15, 2014, using special rules to figure the amount of the payment. Free 1040ez tax filing See Required Annual Payment , next, for details. Free 1040ez tax filing Figure 15-1 presents an overview of the special estimated tax rules that apply to qualified farmers. Free 1040ez tax filing Example 2. Free 1040ez tax filing Assume the same fact as in Example 1. Free 1040ez tax filing Ms. Free 1040ez tax filing Smith's gross farm income is only 64% of her total income. Free 1040ez tax filing Therefore, based on her 2013 income, she does not qualify to use the special estimated tax rules for qualified farmers. Free 1040ez tax filing However, she does qualify if at least two-thirds of her 2012 gross income was from farming. Free 1040ez tax filing Example 3. Free 1040ez tax filing Assume the same facts as in Example 1 except that Ms. Free 1040ez tax filing Smith's farm income from Schedule F was $90,000 instead of $75,000. Free 1040ez tax filing This made her total gross income $140,000 ($3,000 + $500 + $41,500 + $90,000 + $5,000) and her farm gross income $95,000 ($90,000 + $5,000). Free 1040ez tax filing She qualifies to use the special estimated tax rules for qualified farmers, since 67. Free 1040ez tax filing 9% (at least two-thirds) of her gross income is from farming ($95,000 ÷ $140,000 = . Free 1040ez tax filing 679). Free 1040ez tax filing Required Annual Payment If you are a qualified farmer and must pay estimated tax for 2013, use the worksheet on Form 1040-ES to figure the amount of your required annual payment. Free 1040ez tax filing Apply the following special rules for qualified farmers to the worksheet. Free 1040ez tax filing On line 14a, multiply line 13c by 662/3% (. Free 1040ez tax filing 6667). Free 1040ez tax filing On line 14b, enter 100% of the tax shown on your 2012 tax return regardless of the amount of your adjusted gross income. Free 1040ez tax filing For this purpose, the “tax shown on your 2012 tax return” is the amount on line 61 of your 2012 return modified by certain adjustments. Free 1040ez tax filing For more information, see chapter 4 of Publication 505. Free 1040ez tax filing Estimated Tax Penalty for 2013 If you do not pay all your required estimated tax for 2013 by January 15, 2014, or file your 2013 return and pay any tax due by March 3, 2014, you may owe a penalty. Free 1040ez tax filing Use Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen, to determine if you owe a penalty. Free 1040ez tax filing See the instructions for Form 2210-F. Free 1040ez tax filing Figure 15-1. Free 1040ez tax filing Estimated Tax for Farmers Please click here for the text description of the image. Free 1040ez tax filing Figure 2–A If you receive a penalty notice, do not ignore it, even if you think it is in error. Free 1040ez tax filing You may get a penalty notice even though you filed your return on time, attached Form 2210-F, and met the gross-income-from-farming requirement. Free 1040ez tax filing If you receive a penalty notice for underpaying estimated tax and you think it is in error, write to the address on the notice and explain why you think the notice is in error. Free 1040ez tax filing Include a computation similar to the one in Example 1 (earlier), showing that you met the gross income from farming requirement. Free 1040ez tax filing Prev  Up  Next   Home   More Online Publications
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The Free 1040ez Tax Filing

Free 1040ez tax filing 3. Free 1040ez tax filing   Savings Incentive Match Plans for Employees (SIMPLE) Table of Contents Introduction What Is a SIMPLE Plan?Eligible Employees How Are Contributions Made? How Much Can Be Contributed on Your Behalf?Matching contributions less than 3%. Free 1040ez tax filing Traditional IRA mistakenly moved to SIMPLE IRA. Free 1040ez tax filing When Can You Withdraw or Use Assets?Are Distributions Taxable? Introduction This chapter is for employees who need information about savings incentive match plans for employees (SIMPLE plans). Free 1040ez tax filing It explains what a SIMPLE plan is, contributions to a SIMPLE plan, and distributions from a SIMPLE plan. Free 1040ez tax filing Under a SIMPLE plan, SIMPLE retirement accounts for participating employees can be set up either as: Part of a 401(k) plan, or A plan using IRAs (SIMPLE IRA). Free 1040ez tax filing This chapter only discusses the SIMPLE plan rules that relate to SIMPLE IRAs. Free 1040ez tax filing See chapter 3 of Publication 560 for information on any special rules for SIMPLE plans that do not use IRAs. Free 1040ez tax filing If your employer maintains a SIMPLE plan, you must be notified, in writing, that you can choose the financial institution that will serve as trustee for your SIMPLE IRA and that you can roll over or transfer your SIMPLE IRA to another financial institution. Free 1040ez tax filing See Rollovers and Transfers Exception, later under When Can You Withdraw or Use Assets. Free 1040ez tax filing What Is a SIMPLE Plan? A SIMPLE plan is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. Free 1040ez tax filing See chapter 3 of Publication 560 for information on the requirements employers must satisfy to set up a SIMPLE plan. Free 1040ez tax filing A SIMPLE plan is a written agreement (salary reduction agreement) between you and your employer that allows you, if you are an eligible employee (including a self-employed individual), to choose to: Reduce your compensation (salary) by a certain percentage each pay period, and Have your employer contribute the salary reductions to a SIMPLE IRA on your behalf. Free 1040ez tax filing These contributions are called salary reduction contributions. Free 1040ez tax filing All contributions under a SIMPLE IRA plan must be made to SIMPLE IRAs, not to any other type of IRA. Free 1040ez tax filing The SIMPLE IRA can be an individual retirement account or an individual retirement annuity, described in chapter 1. Free 1040ez tax filing Contributions are made on behalf of eligible employees. Free 1040ez tax filing (See Eligible Employees below. Free 1040ez tax filing ) Contributions are also subject to various limits. Free 1040ez tax filing (See How Much Can Be Contributed on Your Behalf , later. Free 1040ez tax filing ) In addition to salary reduction contributions, your employer must make either matching contributions or nonelective contributions. Free 1040ez tax filing See How Are Contributions Made , later. Free 1040ez tax filing You may be able to claim a credit for contributions to your SIMPLE plan. Free 1040ez tax filing For more information, see chapter 4. Free 1040ez tax filing Eligible Employees You must be allowed to participate in your employer's SIMPLE plan if you: Received at least $5,000 in compensation from your employer during any 2 years prior to the current year, and Are reasonably expected to receive at least $5,000 in compensation during the calendar year for which contributions are made. Free 1040ez tax filing Self-employed individual. Free 1040ez tax filing   For SIMPLE plan purposes, the term employee includes a self-employed individual who received earned income. Free 1040ez tax filing Excludable employees. Free 1040ez tax filing   Your employer can exclude the following employees from participating in the SIMPLE plan. Free 1040ez tax filing Employees whose retirement benefits are covered by a collective bargaining agreement (union contract). Free 1040ez tax filing Employees who are nonresident aliens and received no earned income from sources within the United States. Free 1040ez tax filing Employees who would not have been eligible employees if an acquisition, disposition, or similar transaction had not occurred during the year. Free 1040ez tax filing Compensation. Free 1040ez tax filing   For purposes of the SIMPLE plan rules, your compensation for a year generally includes the following amounts. Free 1040ez tax filing Wages, tips, and other pay from your employer that is subject to income tax withholding. Free 1040ez tax filing Deferred amounts elected under any 401(k) plans, 403(b) plans, government (section 457) plans, SEP plans, and SIMPLE plans. Free 1040ez tax filing Self-employed individual compensation. Free 1040ez tax filing   For purposes of the SIMPLE plan rules, if you are self-employed, your compensation for a year is your net earnings from self-employment (Schedule SE (Form 1040), Section A, line 4, or Section B, line 6) before subtracting any contributions made to a SIMPLE IRA on your behalf. Free 1040ez tax filing   For these purposes, net earnings from self-employment include services performed while claiming exemption from self-employment tax as a member of a group conscientiously opposed to social security benefits. Free 1040ez tax filing How Are Contributions Made? Contributions under a salary reduction agreement are called salary reduction contributions. Free 1040ez tax filing They are made on your behalf by your employer. Free 1040ez tax filing Your employer must also make either matching contributions or nonelective contributions. Free 1040ez tax filing Salary reduction contributions. Free 1040ez tax filing   During the 60-day period before the beginning of any year, and during the 60-day period before you are eligible, you can choose salary reduction contributions expressed either as a percentage of compensation, or as a specific dollar amount (if your employer offers this choice). Free 1040ez tax filing You can choose to cancel the election at any time during the year. Free 1040ez tax filing   Salary reduction contributions are also referred to as “elective deferrals. Free 1040ez tax filing ”   Your employer cannot place restrictions on the contributions amount (such as by limiting the contributions percentage), except to comply with the salary reduction contributions limit, discussed under How Much Can Be Contributed on Your Behalf, later. Free 1040ez tax filing Matching contributions. Free 1040ez tax filing   Unless your employer chooses to make nonelective contributions, your employer must make contributions equal to the salary reduction contributions you choose (elect), but only up to certain limits. Free 1040ez tax filing See How Much Can Be Contributed on Your Behalf below. Free 1040ez tax filing These contributions are in addition to the salary reduction contributions and must be made to the SIMPLE IRAs of all eligible employees (defined earlier) who chose salary reductions. Free 1040ez tax filing These contributions are referred to as matching contributions. Free 1040ez tax filing   Matching contributions on behalf of a self-employed individual are not treated as salary reduction contributions. Free 1040ez tax filing Nonelective contributions. Free 1040ez tax filing   Instead of making matching contributions, your employer may be able to choose to make nonelective contributions on behalf of all eligible employees. Free 1040ez tax filing These nonelective contributions must be made on behalf of each eligible employee who has at least $5,000 of compensation from your employer, whether or not the employee chose salary reductions. Free 1040ez tax filing   One of the requirements your employer must satisfy is notifying the employees that the election was made. Free 1040ez tax filing For other requirements that your employer must satisfy, see chapter 3 of Publication 560. Free 1040ez tax filing How Much Can Be Contributed on Your Behalf? The limits on contributions to a SIMPLE IRA vary with the type of contribution that is made. Free 1040ez tax filing Salary reduction contributions limit. Free 1040ez tax filing   Salary reduction contributions (employee-chosen contributions or elective deferrals) that your employer can make on your behalf under a SIMPLE plan are limited to $12,000 for 2013. Free 1040ez tax filing The limitation remains at $12,000 for 2014. Free 1040ez tax filing If you are a participant in any other employer plans during 2013 and you have elective salary reductions or deferred compensation under those plans, the salary reduction contributions under the SIMPLE plan also are included in the annual limit of $17,500 for 2013 on exclusions of salary reductions and other elective deferrals. Free 1040ez tax filing You, not your employer, are responsible for monitoring compliance with these limits. Free 1040ez tax filing Additional elective deferrals can be contributed to your SIMPLE plan if: You reached age 50 by the end of 2013, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions, such as the regular annual limit. Free 1040ez tax filing The most that can be contributed in additional elective deferrals to your SIMPLE plan is the lesser of the following two amounts. Free 1040ez tax filing $2,500 for 2013, or Your compensation for the year reduced by your other elective deferrals for the year. Free 1040ez tax filing The additional deferrals are not subject to any other contribution limit and are not taken into account in applying other contribution limits. Free 1040ez tax filing The additional deferrals are not subject to the nondiscrimination rules as long as all eligible participants are allowed to make them. Free 1040ez tax filing Matching employer contributions limit. Free 1040ez tax filing   Generally, your employer must make matching contributions to your SIMPLE IRA in an amount equal to your salary reduction contributions. Free 1040ez tax filing These matching contributions cannot be more than 3% of your compensation for the calendar year. Free 1040ez tax filing See Matching contributions less than 3% below. Free 1040ez tax filing Example 1. Free 1040ez tax filing In 2013, Joshua was a participant in his employer's SIMPLE plan. Free 1040ez tax filing His compensation, before SIMPLE plan contributions, was $41,600 ($800 per week). Free 1040ez tax filing Instead of taking it all in cash, Joshua elected to have 12. Free 1040ez tax filing 5% of his weekly pay ($100) contributed to his SIMPLE IRA. Free 1040ez tax filing For the full year, Joshua's salary reduction contributions were $5,200, which is less than the $12,000 limit on these contributions. Free 1040ez tax filing Under the plan, Joshua's employer was required to make matching contributions to Joshua's SIMPLE IRA. Free 1040ez tax filing Because his employer's matching contributions must equal Joshua's salary reductions, but cannot be more than 3% of his compensation (before salary reductions) for the year, his employer's matching contribution was limited to $1,248 (3% of $41,600). Free 1040ez tax filing Example 2. Free 1040ez tax filing Assume the same facts as in Example 1 , except that Joshua's compensation for the year was $408,163 and he chose to have 2. Free 1040ez tax filing 94% of his weekly pay contributed to his SIMPLE IRA. Free 1040ez tax filing In this example, Joshua's salary reduction contributions for the year (2. Free 1040ez tax filing 94% × $408,163) were equal to the 2013 limit for salary reduction contributions ($12,000). Free 1040ez tax filing Because 3% of Joshua's compensation ($12,245) is more than the amount his employer was required to match ($12,000), his employer's matching contributions were limited to $12,000. Free 1040ez tax filing In this example, total contributions made on Joshua's behalf for the year were $24,000 ($12,000 (Joshua's contributions) + $12,000 (matching contributions)), the maximum contributions permitted under a SIMPLE IRA for 2013. Free 1040ez tax filing Matching contributions less than 3%. Free 1040ez tax filing   Your employer can reduce the 3% limit on matching contributions for a calendar year, but only if: The limit is not reduced below 1%, The limit is not reduced for more than 2 years out of the 5-year period that ends with (and includes) the year for which the election is effective, and Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which they can enter into salary reduction agreements. Free 1040ez tax filing   For purposes of applying the rule in item (2) in determining whether the limit was reduced below 3% for the year, any year before the first year in which your employer (or a former employer) maintains a SIMPLE IRA plan will be treated as a year for which the limit was 3%. Free 1040ez tax filing If your employer chooses to make nonelective contributions for a year, that year also will be treated as a year for which the limit was 3%. Free 1040ez tax filing Nonelective employer contributions limit. Free 1040ez tax filing   If your employer chooses to make nonelective contributions, instead of matching contributions, to each eligible employee's SIMPLE IRA, contributions must be 2% of your compensation for the entire year. Free 1040ez tax filing For 2013, only $255,000 of your compensation can be taken into account to figure the contribution limit. Free 1040ez tax filing   Your employer can substitute the 2% nonelective contribution for the matching contribution for a year if both of the following requirements are met. Free 1040ez tax filing Eligible employees are notified that a 2% nonelective contribution will be made instead of a matching contribution. Free 1040ez tax filing This notice is provided within a reasonable period during which employees can enter into salary reduction agreements. Free 1040ez tax filing Example 3. Free 1040ez tax filing Assume the same facts as in Example 2 , except that Joshua's employer chose to make nonelective contributions instead of matching contributions. Free 1040ez tax filing Because his employer's nonelective contributions are limited to 2% of up to $255,000 of Joshua's compensation, his employer's contribution to Joshua's SIMPLE IRA was limited to $5,100. Free 1040ez tax filing In this example, total contributions made on Joshua's behalf for the year were $17,100 (Joshua's salary reductions of $12,000 plus his employer's contribution of $5,100). Free 1040ez tax filing Traditional IRA mistakenly moved to SIMPLE IRA. Free 1040ez tax filing   If you mistakenly roll over or transfer an amount from a traditional IRA to a SIMPLE IRA, you can later recharacterize the amount as a contribution to another traditional IRA. Free 1040ez tax filing For more information, see Recharacterizations in chapter 1. Free 1040ez tax filing Recharacterizing employer contributions. Free 1040ez tax filing   You cannot recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. Free 1040ez tax filing SEPs are discussed in chapter 2 of Publication 560. Free 1040ez tax filing SIMPLE plans are discussed in this chapter. Free 1040ez tax filing Converting from a SIMPLE IRA. Free 1040ez tax filing   Generally, you can convert an amount in your SIMPLE IRA to a Roth IRA under the same rules explained in chapter 1 under Converting From Any Traditional IRA Into a Roth IRA . Free 1040ez tax filing    However, you cannot convert any amount distributed from the SIMPLE IRA during the 2-year period beginning on the date you first participated in any SIMPLE IRA plan maintained by your employer. Free 1040ez tax filing When Can You Withdraw or Use Assets? Generally, the same distribution (withdrawal) rules that apply to traditional IRAs apply to SIMPLE IRAs. Free 1040ez tax filing These rules are discussed in chapter 1. Free 1040ez tax filing Your employer cannot restrict you from taking distributions from a SIMPLE IRA. Free 1040ez tax filing Are Distributions Taxable? Generally, distributions from a SIMPLE IRA are fully taxable as ordinary income. Free 1040ez tax filing If the distribution is an early distribution (discussed in chapter 1), it may be subject to the additional tax on early distributions. Free 1040ez tax filing See Additional Tax on Early Distributions, later. Free 1040ez tax filing Rollovers and Transfers Exception Generally, rollovers and trustee-to-trustee transfers are not taxable distributions. Free 1040ez tax filing Two-year rule. Free 1040ez tax filing   To qualify as a tax-free rollover (or a tax-free trustee-to-trustee transfer), a rollover distribution (or a transfer) made from a SIMPLE IRA during the 2-year period beginning on the date on which you first participated in your employer's SIMPLE plan must be contributed (or transferred) to another SIMPLE IRA. Free 1040ez tax filing The 2-year period begins on the first day on which contributions made by your employer are deposited in your SIMPLE IRA. Free 1040ez tax filing   After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan), or deferred compensation plan of a state or local government (section 457 plan). Free 1040ez tax filing Additional Tax on Early Distributions The additional tax on early distributions (discussed in chapter 1) applies to SIMPLE IRAs. Free 1040ez tax filing If a distribution is an early distribution and occurs during the 2-year period following the date on which you first participated in your employer's SIMPLE plan, the additional tax on early distributions is increased from 10% to 25%. Free 1040ez tax filing If a rollover distribution (or transfer) from a SIMPLE IRA does not satisfy the 2-year rule, and is otherwise an early distribution, the additional tax imposed because of the early distribution is increased from 10% to 25% of the amount distributed. Free 1040ez tax filing Prev  Up  Next   Home   More Online Publications