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Irs Forms 1040ez 2011

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Irs Forms 1040ez 2011

Irs forms 1040ez 2011 Publication 503 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. Irs forms 1040ez 2011 Tax questions. Irs forms 1040ez 2011 Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 503, such as legislation enacted after it was published, go to www. Irs forms 1040ez 2011 irs. Irs forms 1040ez 2011 gov/pub503. Irs forms 1040ez 2011 Reminders Taxpayer identification number needed for each qualifying person. Irs forms 1040ez 2011  You must include on line 2 of Form 2441, Child and Dependent Care Expenses, the name and taxpayer identification number (generally the social security number) of each qualifying person. Irs forms 1040ez 2011 See Taxpayer identification number under Qualifying Person Test, later. Irs forms 1040ez 2011 You may have to pay employment taxes. Irs forms 1040ez 2011  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. Irs forms 1040ez 2011 Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. Irs forms 1040ez 2011 See Employment Taxes for Household Employers, later. Irs forms 1040ez 2011 Photographs of missing children. Irs forms 1040ez 2011  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Irs forms 1040ez 2011 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Introduction This publication explains the tests you must meet to claim the credit for child and dependent care expenses. Irs forms 1040ez 2011 It explains how to figure and claim the credit. Irs forms 1040ez 2011 You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. Irs forms 1040ez 2011 The credit can be up to 35% of your expenses. Irs forms 1040ez 2011 To qualify, you must pay these expenses so you can work or look for work. Irs forms 1040ez 2011 This publication also discusses some of the employment tax rules for household employers. Irs forms 1040ez 2011 Dependent care benefits. Irs forms 1040ez 2011   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. Irs forms 1040ez 2011 You must complete Form 2441, Part III, before you can figure the amount of your credit. Irs forms 1040ez 2011 See Dependent Care Benefits under How To Figure the Credit, later. Irs forms 1040ez 2011 Comments and suggestions. Irs forms 1040ez 2011   We welcome your comments about this publication and your suggestions for future editions. Irs forms 1040ez 2011   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Irs forms 1040ez 2011 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Irs forms 1040ez 2011 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Irs forms 1040ez 2011   You can send your comments from www. Irs forms 1040ez 2011 irs. Irs forms 1040ez 2011 gov/formspubs/. Irs forms 1040ez 2011 Click on “More Information” and then on “Comment on Tax Forms and Publications. Irs forms 1040ez 2011 ”   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. Irs forms 1040ez 2011 Ordering forms and publications. Irs forms 1040ez 2011   Visit www. Irs forms 1040ez 2011 irs. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Internal Revenue Service 1201 N. Irs forms 1040ez 2011 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Irs forms 1040ez 2011   If you have a tax question, check the information available on IRS. Irs forms 1040ez 2011 gov or call 1-800-829-1040. Irs forms 1040ez 2011 We cannot answer tax questions sent to either of the above addresses. Irs forms 1040ez 2011 Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-10 Dependent Care Provider's Identification and Certification See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. Irs forms 1040ez 2011 Prev  Up  Next   Home   More Online Publications
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Irs forms 1040ez 2011 3. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 In addition, you will contribute matching or nonelective contributions. Irs forms 1040ez 2011 SIMPLE plans can only be maintained on a calendar-year basis. Irs forms 1040ez 2011 A SIMPLE plan can be set up in either of the following ways. Irs forms 1040ez 2011 Using SIMPLE IRAs (SIMPLE IRA plan). Irs forms 1040ez 2011 As part of a 401(k) plan (SIMPLE 401(k) plan). Irs forms 1040ez 2011 Many financial institutions will help you set up a SIMPLE plan. Irs forms 1040ez 2011 SIMPLE IRA Plan A SIMPLE IRA plan is a retirement plan that uses SIMPLE IRAs for each eligible employee. Irs forms 1040ez 2011 Under a SIMPLE IRA plan, a SIMPLE IRA must be set up for each eligible employee. Irs forms 1040ez 2011 For the definition of an eligible employee, see Who Can Participate in a SIMPLE IRA Plan , later. Irs forms 1040ez 2011 Who Can Set Up a SIMPLE IRA Plan? You can set up a SIMPLE IRA plan if you meet both the following requirements. Irs forms 1040ez 2011 You meet the employee limit. Irs forms 1040ez 2011 You do not maintain another qualified plan unless the other plan is for collective bargaining employees. Irs forms 1040ez 2011 Employee limit. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Employees include self-employed individuals who received earned income and leased employees (defined in chapter 1). Irs forms 1040ez 2011   Once you set up a SIMPLE IRA plan, you must continue to meet the 100-employee limit each year you maintain the plan. Irs forms 1040ez 2011 Grace period for employers who cease to meet the 100-employee limit. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011   A different rule applies if you do not meet the 100-employee limit because of an acquisition, disposition, or similar transaction. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Coverage under the plan has not significantly changed during the grace period. Irs forms 1040ez 2011 The SIMPLE IRA plan would have continued to qualify after the transaction if you had remained a separate employer. Irs forms 1040ez 2011    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. Irs forms 1040ez 2011 Other qualified plan. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 Exception. Irs forms 1040ez 2011   If you maintain a qualified plan for collective bargaining employees, you are permitted to maintain a SIMPLE IRA plan for other employees. Irs forms 1040ez 2011 Who Can Participate in a SIMPLE IRA Plan? Eligible employee. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 The term “employee” includes a self-employed individual who received earned income. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 For example, you can allow participation for employees who received at least $3,000 in compensation during any preceding calendar year. Irs forms 1040ez 2011 However, you cannot impose any other conditions for participating in a SIMPLE IRA plan. Irs forms 1040ez 2011 Excludable employees. Irs forms 1040ez 2011   The following employees do not need to be covered under a SIMPLE IRA plan. Irs forms 1040ez 2011 Employees who are covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Irs forms 1040ez 2011 Nonresident alien employees who have received no U. Irs forms 1040ez 2011 S. Irs forms 1040ez 2011 source wages, salaries, or other personal services compensation from you. Irs forms 1040ez 2011 Compensation. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Each form is a model savings incentive match plan for employees (SIMPLE) plan document. Irs forms 1040ez 2011 Which form you use depends on whether you select a financial institution or your employees select the institution that will receive the contributions. Irs forms 1040ez 2011 Use Form 5304-SIMPLE if you allow each plan participant to select the financial institution for receiving his or her SIMPLE IRA plan contributions. Irs forms 1040ez 2011 Use Form 5305-SIMPLE if you require that all contributions under the SIMPLE IRA plan be deposited initially at a designated financial institution. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Keep the original form. Irs forms 1040ez 2011 Do not file it with the IRS. Irs forms 1040ez 2011 Other uses of the forms. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 Meeting employer notification requirements for the SIMPLE IRA plan. Irs forms 1040ez 2011 Form 5304-SIMPLE and Form 5305-SIMPLE contain a Model Notification to Eligible Employees that provides the necessary information to the employee. Irs forms 1040ez 2011 Maintaining the SIMPLE IRA plan records and proving you set up a SIMPLE IRA plan for employees. Irs forms 1040ez 2011 Deadline for setting up a SIMPLE IRA plan. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 If you previously maintained a SIMPLE IRA plan, you can set up a SIMPLE IRA plan effective only on January 1 of a year. Irs forms 1040ez 2011 A SIMPLE IRA plan cannot have an effective date that is before the date you actually adopt the plan. Irs forms 1040ez 2011 Setting up a SIMPLE IRA. Irs forms 1040ez 2011   SIMPLE IRAs are the individual retirement accounts or annuities into which the contributions are deposited. Irs forms 1040ez 2011 A SIMPLE IRA must be set up for each eligible employee. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011   A SIMPLE IRA cannot be a Roth IRA. Irs forms 1040ez 2011 Contributions to a SIMPLE IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Irs forms 1040ez 2011 Deadline for setting up a SIMPLE IRA. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 See Time limits for contributing funds , later, under Contribution Limits. Irs forms 1040ez 2011 Credit for startup costs. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 For more information, see Credit for startup costs under Reminders, earlier. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 The employee's opportunity to make or change a salary reduction choice under a SIMPLE IRA plan. Irs forms 1040ez 2011 Your decision to make either matching contributions or nonelective contributions (discussed later). Irs forms 1040ez 2011 A summary description provided by the financial institution. Irs forms 1040ez 2011 Written notice that his or her balance can be transferred without cost or penalty if they use a designated financial institution. Irs forms 1040ez 2011 Election period. Irs forms 1040ez 2011   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). Irs forms 1040ez 2011 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. Irs forms 1040ez 2011   A SIMPLE IRA plan can provide longer periods for permitting employees to enter into salary reduction agreements or to modify prior agreements. Irs forms 1040ez 2011 For example, a SIMPLE IRA plan can provide a 90-day election period instead of the 60-day period. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Contribution Limits Contributions are made up of salary reduction contributions and employer contributions. Irs forms 1040ez 2011 You, as the employer, must make either matching contributions or nonelective contributions, defined later. Irs forms 1040ez 2011 No other contributions can be made to the SIMPLE IRA plan. Irs forms 1040ez 2011 These contributions, which you can deduct, must be made timely. Irs forms 1040ez 2011 See Time limits for contributing funds , later. Irs forms 1040ez 2011 Salary reduction contributions. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 You cannot place restrictions on the contribution amount (such as limiting the contribution percentage), except to comply with the $12,000 limit. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 Catch-up contributions. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 The catch-up contribution limit for 2013 and 2014 for SIMPLE IRA plans is $2,500. Irs forms 1040ez 2011 Salary reduction contributions are not treated as catch-up contributions for 2013 or 2014 until they exceed $12,000. Irs forms 1040ez 2011 However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Irs forms 1040ez 2011 The catch-up contribution limit. Irs forms 1040ez 2011 The excess of the participant's compensation over the salary reduction contributions that are not catch-up contributions. Irs forms 1040ez 2011 Employer matching contributions. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 This requirement does not apply if you make nonelective contributions as discussed later. Irs forms 1040ez 2011 Example. Irs forms 1040ez 2011 In 2013, your employee, John Rose, earned $25,000 and chose to defer 5% of his salary. Irs forms 1040ez 2011 Your net earnings from self-employment are $40,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Irs forms 1040ez 2011 You make 3% matching contributions. Irs forms 1040ez 2011 The total contribution you make for John is $2,000, figured as follows. Irs forms 1040ez 2011 Salary reduction contributions ($25,000 × . Irs forms 1040ez 2011 05) $1,250 Employer matching contribution ($25,000 × . Irs forms 1040ez 2011 03) 750 Total contributions $2,000     The total contribution you make for yourself is $5,200, figured as follows. Irs forms 1040ez 2011 Salary reduction contributions ($40,000 × . Irs forms 1040ez 2011 10) $4,000 Employer matching contribution ($40,000 × . Irs forms 1040ez 2011 03) 1,200 Total contributions $5,200 Lower percentage. Irs forms 1040ez 2011   If you choose a matching contribution less than 3%, the percentage must be at least 1%. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Nonelective contributions. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 If you make this choice, you must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. Irs forms 1040ez 2011 Only $255,000 of the employee's compensation can be taken into account to figure the contribution limit in 2013 ($260,000 in 2014). Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 Example 1. Irs forms 1040ez 2011 In 2013, your employee, Jane Wood, earned $36,000 and chose to have you contribute 10% of her salary. Irs forms 1040ez 2011 Your net earnings from self-employment are $50,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Irs forms 1040ez 2011 You make a 2% nonelective contribution. Irs forms 1040ez 2011 Both of you are under age 50. Irs forms 1040ez 2011 The total contribution you make for Jane is $4,320, figured as follows. Irs forms 1040ez 2011 Salary reduction contributions ($36,000 × . Irs forms 1040ez 2011 10) $3,600 2% nonelective contributions ($36,000 × . Irs forms 1040ez 2011 02) 720 Total contributions $4,320     The total contribution you make for yourself is $6,000, figured as follows. Irs forms 1040ez 2011 Salary reduction contributions ($50,000 × . Irs forms 1040ez 2011 10) $5,000 2% nonelective contributions ($50,000 × . Irs forms 1040ez 2011 02) 1,000 Total contributions $6,000 Example 2. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Salary reduction contributions (maximum amount allowed) $12,000 2% nonelective contributions ($75,000 × . Irs forms 1040ez 2011 02) 1,500 Total contributions $13,500 Time limits for contributing funds. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 You must make matching contributions or nonelective contributions by the due date (including extensions) for filing your federal income tax return for the year. Irs forms 1040ez 2011 Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Example 1. Irs forms 1040ez 2011 Your tax year is the fiscal year ending June 30. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Example 2. Irs forms 1040ez 2011 You are a sole proprietor whose tax year is the calendar year. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Irs forms 1040ez 2011 (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you receive from the partnership. Irs forms 1040ez 2011 ) Tax Treatment of Contributions You can deduct your contributions and your employees can exclude these contributions from their gross income. Irs forms 1040ez 2011 SIMPLE IRA plan contributions are not subject to federal income tax withholding. Irs forms 1040ez 2011 However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. Irs forms 1040ez 2011 Matching and nonelective contributions are not subject to these taxes. Irs forms 1040ez 2011 Reporting on Form W-2. Irs forms 1040ez 2011   Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation” box of Form W-2. Irs forms 1040ez 2011 You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Irs forms 1040ez 2011 You must also include them in box 12. Irs forms 1040ez 2011 Mark the “Retirement plan” checkbox in box 13. Irs forms 1040ez 2011 For more information, see the Form W-2 instructions. Irs forms 1040ez 2011 Distributions (Withdrawals) Distributions from a SIMPLE IRA are subject to IRA rules and generally are includible in income for the year received. Irs forms 1040ez 2011 Tax-free rollovers can be made from one SIMPLE IRA into another SIMPLE IRA. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 Early withdrawals generally are subject to a 10% additional tax. Irs forms 1040ez 2011 However, the additional tax is increased to 25% if funds are withdrawn within 2 years of beginning participation. Irs forms 1040ez 2011 More information. Irs forms 1040ez 2011   See Publication 590 for information about IRA rules, including those on the tax treatment of distributions, rollovers, required distributions, and income tax withholding. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 See Catch-up contributions , earlier under Contribution Limits. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 No other contributions can be made to the trust. Irs forms 1040ez 2011 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. Irs forms 1040ez 2011 The employee's rights to any contributions are nonforfeitable. Irs forms 1040ez 2011 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). Irs forms 1040ez 2011 Compensation is defined earlier in this chapter. Irs forms 1040ez 2011 Employee notification. Irs forms 1040ez 2011   The notification requirement that applies to SIMPLE IRA plans also applies to SIMPLE 401(k) plans. Irs forms 1040ez 2011 See Notification Requirement in this chapter. Irs forms 1040ez 2011 Credit for startup costs. Irs forms 1040ez 2011   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. Irs forms 1040ez 2011 For more information, see Credit for startup costs under Reminders, earlier. Irs forms 1040ez 2011 Note on Forms. Irs forms 1040ez 2011   Please note that Forms 5304-SIMPLE and 5305-SIMPLE can not be used to establish a SIMPLE 401(k) plan. Irs forms 1040ez 2011 To set up a SIMPLE 401(k) plan, see Adopting a Written Plan in chapter 4. Irs forms 1040ez 2011 Prev  Up  Next   Home   More Online Publications