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Irs Tax Return

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Irs Tax Return

Irs tax return Publication 596SP - Introductory Material Table of Contents Acontecimientos Futuros ¿Qué es el Crédito por Ingreso del Trabajo (EIC)? ¿Puedo Reclamar el Crédito por Ingreso del Trabajo (EIC)? ¿Necesito esta Publicación? ¿Hay que Tener un Hijo para Tener Derecho al Crédito por Ingreso del Trabajo (EIC)? ¿Cómo Calculo la Cantidad del Crédito por Ingreso del Trabajo (EIC)? ¿Cómo Puedo Encontrar Rápidamente Información Específica? ¿Hay Ayuda Disponible en Internet? Qué Hay de Nuevo para el año 2013 Recordatorios Acontecimientos Futuros Para la información más actualizada sobre los acontecimientos que afectan la Publicación 596(SP), tales como legislación promulgada después de su publicación, visite www. Irs tax return irs. Irs tax return gov/pub596sp, en inglés. Irs tax return ¿Qué es el Crédito por Ingreso del Trabajo (EIC)? El crédito por ingreso del trabajo (EIC, por sus siglas en inglés) es un crédito tributario para aquellas personas que trabajan y que reciben ingreso del trabajo inferior a $51,567. Irs tax return Un crédito tributario significa que va a tener más dinero disponible porque reduce la cantidad de impuesto a pagar. Irs tax return El crédito por ingreso del trabajo (EIC) también podría proporcionarle un reembolso. Irs tax return ¿Puedo Reclamar el Crédito por Ingreso del Trabajo (EIC)? Para tener derecho al crédito por ingreso del trabajo (EIC), tiene que cumplir determinados requisitos. Irs tax return Dichos requisitos se resumen en la Tabla 1. Irs tax return Tabla 1. Irs tax return Síntesis del Crédito por Ingreso del Trabajo Primero, tiene que cumplir todos los requisitos de esta columna. Irs tax return Segundo, tiene que cumplir todos los requisitos de una de estas columnas, la que le corresponda. Irs tax return Tercero, tiene que cumplir el requisito de esta columna. Irs tax return Capítulo 1. Irs tax return  Requisitos para Todos Capítulo 2. Irs tax return  Requisitos que Tiene que Cumplir si Tiene un Hijo Calificado Capítulo 3. Irs tax return  Requisitos que Tiene que Cumplir si no Tiene un Hijo Calificado Capítulo 4. Irs tax return  Calcular y Reclamar el Crédito por Ingreso del Trabajo (EIC) 1. Irs tax return Tiene que tener  ingresos brutos ajustados (AGI, por sus siglas en inglés) inferiores a:  • $46,227 ($51,567 para casados que presentan una declaración conjunta) si tiene tres o más hijos calificados,  • $43,038 ($48,378 para casados que presentan una declaración conjunta) si tiene dos hijos calificados,  • $37,870 ($43,210 para casados que presentan una declaración conjunta) si tiene un hijo calificado o  • $14,340 ($19,680 para casados que presentan una declaración conjunta) si no tiene un hijo calificado. Irs tax return 2. Irs tax return Tiene que tener un número de Seguro Social válido. Irs tax return   3. Irs tax return Su estado civil para efectos de la declaración no puede ser  “casado que presenta la declaración por separado”. Irs tax return   4. Irs tax return Tiene que ser ciudadano de los Estados Unidos o extranjero residente durante todo el año. Irs tax return   5. Irs tax return No puede presentar el Formulario 2555 ni el Formulario 2555-EZ (relacionado con el ingreso del trabajo en el extranjero). Irs tax return   6. Irs tax return Sus ingresos procedentes de inversiones tienen que ser de $3,300 o menos. Irs tax return    7. Irs tax return Tiene que haber recibido ingreso del trabajo. Irs tax return 8. Irs tax return Su hijo tiene que cumplir los requisitos de parentesco, edad, residencia y de declaración conjunta. Irs tax return   9. Irs tax return Soló una persona puede utilizar su hijo calificado para fines de reclamar el crédito por ingreso del trabajo (EIC). Irs tax return   10. Irs tax return Usted no puede ser el hijo calificado de otra persona. Irs tax return 11. Irs tax return Tiene que tener por lo menos 25 años de edad pero menos de 65 años de edad. Irs tax return   12. Irs tax return Usted no puede ser dependiente de otra persona. Irs tax return   13. Irs tax return Usted no puede ser el hijo calificado de otra persona. Irs tax return   14. Irs tax return Tiene que haber vivido en los Estados Unidos durante más de la mitad del año. Irs tax return 15. Irs tax return Tiene que tener ingresos del trabajo inferiores a:  • $46,227 ($51,567 para casados que presentan una declaración conjunta) si tiene tres o más hijos calificados,  • $43,038 ($48,378 para casados que presentan una declaración conjunta) si tiene dos hijos calificados,  • $37,870 ($43,210 para casados que presentan una declaración conjunta) si tiene un hijo calificado o  • $14,340 ($19,680 para casados que presentan una declaración conjunta) si no tiene un hijo calificado. Irs tax return ¿Necesito esta Publicación? Algunas personas que presenten el Formulario 1040 tienen que usar la Hoja de Trabajo 1 de esta publicación, en vez de consultar el Paso 2 de las instrucciones para el Formulario 1040, para determinar si pueden reclamar el crédito por ingreso del trabajo (EIC). Irs tax return Usted se encuentra en esta categoría si alguna de las siguientes situaciones le corresponde para el año 2013. Irs tax return Presenta el Anexo E (Formulario 1040). Irs tax return Declara ingresos provenientes del alquiler de bienes inmuebles/muebles que no son utilizados en un oficio o negocio. Irs tax return Declara ingresos en la línea 21 del Formulario 1040 que provienen del Formulario 8814 (relacionados con la elección de declarar los intereses y dividendos recibidos por un hijo). Irs tax return Declara una cantidad en la línea 13 del Formulario 1040 que incluye una cantidad del Formulario 4797. Irs tax return Si ninguna de las situaciones que aparecen anteriormente le corresponde, las instrucciones del formulario de impuestos contienen toda la información que necesita para saber si puede reclamar el crédito por ingreso del trabajo (EIC) y para calcular la cantidad del mismo. Irs tax return No necesita esta publicación, pero puede leerla para saber si puede reclamar el crédito por ingreso del trabajo (EIC) y para aprender más sobre este crédito. Irs tax return ¿Hay que Tener un Hijo para Tener Derecho al Crédito por Ingreso del Trabajo (EIC)? No. Irs tax return Puede reunir los requisitos del crédito por ingreso del trabajo (EIC) aunque no tenga un hijo calificado si usted tiene como mínimo 25 años de edad pero menos de 65 años y tiene ingresos del trabajo inferiores a $14,340 ($19,680 si es casado que presenta una declaración conjunta). Irs tax return Vea el capítulo 3 para información adicional. Irs tax return ¿Cómo Calculo la Cantidad del Crédito por Ingreso del Trabajo (EIC)? Si puede reclamar el crédito por ingreso del trabajo (EIC), tiene la opción de solicitar que el IRS le calcule la cantidad del crédito o puede calcularlo usted mismo. Irs tax return Para calcularlo usted mismo, puede llenar la hoja de trabajo que se encuentra en las instrucciones del formulario que presente. Irs tax return Para saber cómo solicitar que el IRS le calcule la cantidad del crédito, vea el capítulo 4. Irs tax return ¿Cómo Puedo Encontrar Rápidamente Información Específica? Puede utilizar el índice para buscar información específica. Irs tax return En la mayoría de los casos, el índice hace referencia a títulos, tablas u hojas de trabajo. Irs tax return ¿Hay Ayuda Disponible en Internet? Sí. Irs tax return Puede utilizar el Asistente EITC en el sitio web www. Irs tax return irs. Irs tax return gov/espanol para saber si tiene derecho al crédito. Irs tax return El Asistente EITC está disponible en español y en inglés. Irs tax return Qué Hay de Nuevo para el año 2013 La cantidad de ingresos del trabajo ha aumentado. Irs tax return La cantidad máxima de ingresos que usted puede ganar y aún obtener el crédito ha aumentado. Irs tax return Tal vez pueda reclamar el crédito si: Tiene tres o más hijos calificados y gana menos de $46,227 ($51,567 si es casado que presenta una declaración conjunta), Tiene dos hijos calificados y gana menos de $43,038 ($48,378 si es casado que presenta una declaración conjunta), Tiene un hijo calificado y gana menos de $37,870 ($43,210 si es casado que presenta una declaración conjunta) o No tiene un hijo calificado y gana menos de $14,340 ($19,680 si es casado que presenta una declaración conjunta). Irs tax return Además, tiene que tener ingresos brutos ajustados inferiores a la cantidad que le corresponda de la lista anterior. Irs tax return Para más información, vea los Requisitos 1 y 15. Irs tax return La cantidad de ingresos de inversiones ha aumentado. Irs tax return La cantidad máxima de ingresos de inversiones que usted puede ganar y aún obtener el crédito ha aumentado a $3,300. Irs tax return Vea el Requisito 6 —Tiene que tener ingresos de inversiones de $3,300 o menos . Irs tax return Recordatorios Aumento del crédito por ingreso del trabajo (EIC) en ciertas declaraciones conjuntas. Irs tax return  Una persona casada que presente una declaración conjunta podría recibir un crédito mayor que el que recibe otra persona que tenga los mismos ingresos pero con un estado civil diferente para efectos de la declaración. Irs tax return Por lo tanto, la Tabla del Crédito por Ingreso del Trabajo (EIC) tiene columnas distintas para las personas casadas que presenten una declaración conjunta que para los demás. Irs tax return Cuando busque su crédito por ingreso del trabajo en la Tabla del Crédito por Ingreso del Trabajo (EIC), asegúrese de usar la columna correcta para su estado civil para efectos de la declaración y el número de hijos que tenga. Irs tax return El crédito por ingreso del trabajo (EIC) no afecta ciertos pagos de bienestar social. Irs tax return  Todo reembolso que reciba por el crédito por ingreso del trabajo (EIC) no se considera ingreso al determinar si usted u otra persona tiene derecho a recibir beneficios de los programas de asistencia social que se indican a continuación, ni al determinar la cantidad que usted u otra persona puede recibir de algún programa federal, o algún programa estatal o local que recibe todo o parte de sus fondos de fuentes federales. Irs tax return Tales programas incluyen los siguientes: Asistencia Temporal para Familias Necesitadas (TANF, por sus siglas en inglés). Irs tax return Seguro Medicaid. Irs tax return Seguridad de Ingreso Suplementario (SSI, por sus siglas en inglés). Irs tax return Programas de Asistencia Suplementaria de Alimentación (SNAP, por sus siglas en inglés) (cupones para alimentos). Irs tax return Viviendas para personas de bajos ingresos. Irs tax return Además, cuando determine la elegibilidad, el reembolso no podrá ser contado como una fuente de ingresos, durante por lo menos 12 meses después que usted lo reciba. Irs tax return Hable con el coordinador de beneficios local para averiguar si su reembolso afectará sus beneficios. Irs tax return No se olvide del crédito estatal. Irs tax return  Si reúne los requisitos para reclamar el crédito por ingreso del trabajo (EIC) en la declaración de impuestos federales sobre los ingresos, podría tener también derecho a reclamar un crédito parecido en la declaración de impuestos estatales o locales sobre los ingresos. Irs tax return Para ver una lista de estados que ofrecen el crédito estatal por ingreso del trabajo, visite www. Irs tax return irs. Irs tax return gov/eitc. Irs tax return En caso de que el IRS cuestione el crédito por ingreso del trabajo (EIC). Irs tax return  El IRS puede pedirle que entregue documentos para comprobar que usted tiene derecho al crédito por ingreso del trabajo (EIC). Irs tax return Le informaremos cuáles documentos debe enviarnos. Irs tax return Éstos pueden incluir actas de nacimiento, expedientes académicos, expedientes médicos, etc. Irs tax return El proceso para determinar su derecho al crédito demorará su reembolso. Irs tax return Fotografías de niños desaparecidos. Irs tax return  El IRS se complace en colaborar con el Centro Nacional de Niños Desaparecidos y Explotados (National Center for Missing and Exploited Children). Irs tax return Esta publicación puede contener fotografías de niños desaparecidos seleccionadas por el Centro en páginas que de otra manera estarían en blanco. Irs tax return Usted puede ayudar a que estos niños regresen a su hogar si al mirar sus fotografías los identifica y llama gratis al 1-800-THE-LOST (1-800-843-5678). Irs tax return Comentarios y sugerencias. Irs tax return  Agradeceremos sus comentarios acerca de esta publicación, así como sus sugerencias para ediciones futuras. Irs tax return Nos puede escribir a la dirección siguiente:  Internal Revenue Service Tax Forms and Publications 1111 Constitution Ave. Irs tax return NW, IR-6526 Washington, DC 20224 Contestamos muchas cartas por teléfono. Irs tax return Por lo tanto, sería útil que incluyera en la correspondencia su número de teléfono, con el código de área, para llamar durante el día. Irs tax return Usted nos puede enviar comentarios desde la página web en www. Irs tax return irs. Irs tax return gov/formspubs, en inglés. Irs tax return Pulse sobre “More Information,” (Más información) y seleccionando “Give us feedback. Irs tax return ” (Proveer comentarios). Irs tax return Aunque no podemos contestar individualmente cada comentario, agradecemos sus comentarios y sugerencias y los tendremos en cuenta para ediciones futuras de nuestros productos tributarios. Irs tax return Para pedir formularios y publicaciones. Irs tax return  Visite www. Irs tax return irs. Irs tax return gov/formspubs para descargar formularios y publicaciones, llame al 1-800-829-3676 para pedir formularios y publicaciones o escriba a la dirección a continuación para recibir una respuesta dentro de los 10 días después de recibir su solicitud. Irs tax return  Internal Revenue Service 1201 N. Irs tax return Mitsubishi Motorway Bloomington, IL 61705-6613 Preguntas sobre los impuestos. Irs tax return  Si tiene una pregunta sobre los impuestos, verifique la información disponible en IRS. Irs tax return gov/espanol o llame al 1-800-829-1040. Irs tax return No podemos contestar preguntas sobre impuestos enviadas a ninguna de las dos direcciones anteriores. Irs tax return Prev  Up  Next   Home   More Online Publications
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Irs tax return 3. Irs tax return   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 tax return 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 tax return In addition, you will contribute matching or nonelective contributions. Irs tax return SIMPLE plans can only be maintained on a calendar-year basis. Irs tax return A SIMPLE plan can be set up in either of the following ways. Irs tax return Using SIMPLE IRAs (SIMPLE IRA plan). Irs tax return As part of a 401(k) plan (SIMPLE 401(k) plan). Irs tax return Many financial institutions will help you set up a SIMPLE plan. Irs tax return SIMPLE IRA Plan A SIMPLE IRA plan is a retirement plan that uses SIMPLE IRAs for each eligible employee. Irs tax return Under a SIMPLE IRA plan, a SIMPLE IRA must be set up for each eligible employee. Irs tax return For the definition of an eligible employee, see Who Can Participate in a SIMPLE IRA Plan , later. Irs tax return Who Can Set Up a SIMPLE IRA Plan? You can set up a SIMPLE IRA plan if you meet both the following requirements. Irs tax return You meet the employee limit. Irs tax return You do not maintain another qualified plan unless the other plan is for collective bargaining employees. Irs tax return Employee limit. Irs tax return   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 tax return 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 tax return Employees include self-employed individuals who received earned income and leased employees (defined in chapter 1). Irs tax return   Once you set up a SIMPLE IRA plan, you must continue to meet the 100-employee limit each year you maintain the plan. Irs tax return Grace period for employers who cease to meet the 100-employee limit. Irs tax return   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 tax return   A different rule applies if you do not meet the 100-employee limit because of an acquisition, disposition, or similar transaction. Irs tax return 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 tax return Coverage under the plan has not significantly changed during the grace period. Irs tax return The SIMPLE IRA plan would have continued to qualify after the transaction if you had remained a separate employer. Irs tax return    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 tax return Other qualified plan. Irs tax return   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 tax return Exception. Irs tax return   If you maintain a qualified plan for collective bargaining employees, you are permitted to maintain a SIMPLE IRA plan for other employees. Irs tax return Who Can Participate in a SIMPLE IRA Plan? Eligible employee. Irs tax return   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 tax return The term “employee” includes a self-employed individual who received earned income. Irs tax return   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 tax return For example, you can allow participation for employees who received at least $3,000 in compensation during any preceding calendar year. Irs tax return However, you cannot impose any other conditions for participating in a SIMPLE IRA plan. Irs tax return Excludable employees. Irs tax return   The following employees do not need to be covered under a SIMPLE IRA plan. Irs tax return 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 tax return Nonresident alien employees who have received no U. Irs tax return S. Irs tax return source wages, salaries, or other personal services compensation from you. Irs tax return Compensation. Irs tax return   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 tax return 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 tax return 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 tax return 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 tax return Each form is a model savings incentive match plan for employees (SIMPLE) plan document. Irs tax return Which form you use depends on whether you select a financial institution or your employees select the institution that will receive the contributions. Irs tax return 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 tax return Use Form 5305-SIMPLE if you require that all contributions under the SIMPLE IRA plan be deposited initially at a designated financial institution. Irs tax return 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 tax return Keep the original form. Irs tax return Do not file it with the IRS. Irs tax return Other uses of the forms. Irs tax return   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 tax return Meeting employer notification requirements for the SIMPLE IRA plan. Irs tax return Form 5304-SIMPLE and Form 5305-SIMPLE contain a Model Notification to Eligible Employees that provides the necessary information to the employee. Irs tax return Maintaining the SIMPLE IRA plan records and proving you set up a SIMPLE IRA plan for employees. Irs tax return Deadline for setting up a SIMPLE IRA plan. Irs tax return   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 tax return 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 tax return 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 tax return A SIMPLE IRA plan cannot have an effective date that is before the date you actually adopt the plan. Irs tax return Setting up a SIMPLE IRA. Irs tax return   SIMPLE IRAs are the individual retirement accounts or annuities into which the contributions are deposited. Irs tax return A SIMPLE IRA must be set up for each eligible employee. Irs tax return 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 tax return   A SIMPLE IRA cannot be a Roth IRA. Irs tax return Contributions to a SIMPLE IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Irs tax return Deadline for setting up a SIMPLE IRA. Irs tax return   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 tax return See Time limits for contributing funds , later, under Contribution Limits. Irs tax return Credit for startup costs. Irs tax return   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 tax return For more information, see Credit for startup costs under Reminders, earlier. Irs tax return 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 tax return The employee's opportunity to make or change a salary reduction choice under a SIMPLE IRA plan. Irs tax return Your decision to make either matching contributions or nonelective contributions (discussed later). Irs tax return A summary description provided by the financial institution. Irs tax return Written notice that his or her balance can be transferred without cost or penalty if they use a designated financial institution. Irs tax return Election period. Irs tax return   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 tax return 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 tax return   A SIMPLE IRA plan can provide longer periods for permitting employees to enter into salary reduction agreements or to modify prior agreements. Irs tax return For example, a SIMPLE IRA plan can provide a 90-day election period instead of the 60-day period. Irs tax return 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 tax return Contribution Limits Contributions are made up of salary reduction contributions and employer contributions. Irs tax return You, as the employer, must make either matching contributions or nonelective contributions, defined later. Irs tax return No other contributions can be made to the SIMPLE IRA plan. Irs tax return These contributions, which you can deduct, must be made timely. Irs tax return See Time limits for contributing funds , later. Irs tax return Salary reduction contributions. Irs tax return   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 tax return 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 tax return You cannot place restrictions on the contribution amount (such as limiting the contribution percentage), except to comply with the $12,000 limit. Irs tax return   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 tax return Catch-up contributions. Irs tax return   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 tax return The catch-up contribution limit for 2013 and 2014 for SIMPLE IRA plans is $2,500. Irs tax return Salary reduction contributions are not treated as catch-up contributions for 2013 or 2014 until they exceed $12,000. Irs tax return However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Irs tax return The catch-up contribution limit. Irs tax return The excess of the participant's compensation over the salary reduction contributions that are not catch-up contributions. Irs tax return Employer matching contributions. Irs tax return   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 tax return This requirement does not apply if you make nonelective contributions as discussed later. Irs tax return Example. Irs tax return In 2013, your employee, John Rose, earned $25,000 and chose to defer 5% of his salary. Irs tax return Your net earnings from self-employment are $40,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Irs tax return You make 3% matching contributions. Irs tax return The total contribution you make for John is $2,000, figured as follows. Irs tax return Salary reduction contributions ($25,000 × . Irs tax return 05) $1,250 Employer matching contribution ($25,000 × . Irs tax return 03) 750 Total contributions $2,000     The total contribution you make for yourself is $5,200, figured as follows. Irs tax return Salary reduction contributions ($40,000 × . Irs tax return 10) $4,000 Employer matching contribution ($40,000 × . Irs tax return 03) 1,200 Total contributions $5,200 Lower percentage. Irs tax return   If you choose a matching contribution less than 3%, the percentage must be at least 1%. Irs tax return 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 tax return 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 tax return Nonelective contributions. Irs tax return   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 tax return If you make this choice, you must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. Irs tax return 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 tax return   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 tax return Example 1. Irs tax return In 2013, your employee, Jane Wood, earned $36,000 and chose to have you contribute 10% of her salary. Irs tax return Your net earnings from self-employment are $50,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Irs tax return You make a 2% nonelective contribution. Irs tax return Both of you are under age 50. Irs tax return The total contribution you make for Jane is $4,320, figured as follows. Irs tax return Salary reduction contributions ($36,000 × . Irs tax return 10) $3,600 2% nonelective contributions ($36,000 × . Irs tax return 02) 720 Total contributions $4,320     The total contribution you make for yourself is $6,000, figured as follows. Irs tax return Salary reduction contributions ($50,000 × . Irs tax return 10) $5,000 2% nonelective contributions ($50,000 × . Irs tax return 02) 1,000 Total contributions $6,000 Example 2. Irs tax return 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 tax return Salary reduction contributions (maximum amount allowed) $12,000 2% nonelective contributions ($75,000 × . Irs tax return 02) 1,500 Total contributions $13,500 Time limits for contributing funds. Irs tax return   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 tax return 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 tax return Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions. Irs tax return 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 tax return 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 tax return Example 1. Irs tax return Your tax year is the fiscal year ending June 30. Irs tax return 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 tax return Example 2. Irs tax return You are a sole proprietor whose tax year is the calendar year. Irs tax return 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 tax return Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Irs tax return 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 tax return Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Irs tax return (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you receive from the partnership. Irs tax return ) Tax Treatment of Contributions You can deduct your contributions and your employees can exclude these contributions from their gross income. Irs tax return SIMPLE IRA plan contributions are not subject to federal income tax withholding. Irs tax return However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. Irs tax return Matching and nonelective contributions are not subject to these taxes. Irs tax return Reporting on Form W-2. Irs tax return   Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation” box of Form W-2. Irs tax return You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Irs tax return You must also include them in box 12. Irs tax return Mark the “Retirement plan” checkbox in box 13. Irs tax return For more information, see the Form W-2 instructions. Irs tax return Distributions (Withdrawals) Distributions from a SIMPLE IRA are subject to IRA rules and generally are includible in income for the year received. Irs tax return Tax-free rollovers can be made from one SIMPLE IRA into another SIMPLE IRA. Irs tax return 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 tax return 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 tax return Early withdrawals generally are subject to a 10% additional tax. Irs tax return However, the additional tax is increased to 25% if funds are withdrawn within 2 years of beginning participation. Irs tax return More information. Irs tax return   See Publication 590 for information about IRA rules, including those on the tax treatment of distributions, rollovers, required distributions, and income tax withholding. Irs tax return 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 tax return 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 tax return 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 tax return 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 tax return 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 tax return 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 tax return See Catch-up contributions , earlier under Contribution Limits. Irs tax return 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 tax return No other contributions can be made to the trust. Irs tax return 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 tax return The employee's rights to any contributions are nonforfeitable. Irs tax return 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 tax return Compensation is defined earlier in this chapter. Irs tax return Employee notification. Irs tax return   The notification requirement that applies to SIMPLE IRA plans also applies to SIMPLE 401(k) plans. Irs tax return See Notification Requirement in this chapter. Irs tax return Credit for startup costs. Irs tax return   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 tax return For more information, see Credit for startup costs under Reminders, earlier. Irs tax return Note on Forms. Irs tax return   Please note that Forms 5304-SIMPLE and 5305-SIMPLE can not be used to establish a SIMPLE 401(k) plan. Irs tax return To set up a SIMPLE 401(k) plan, see Adopting a Written Plan in chapter 4. Irs tax return Prev  Up  Next   Home   More Online Publications