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Tax Act 2012 Returning User

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Tax Act 2012 Returning User

Tax act 2012 returning user Index Symbols 403(b) plans Defined, Tax-sheltered annuity plan. Tax act 2012 returning user Loans from, without tax consequences, Exception for qualified plan, 403(b) plan, and government plan loans. Tax act 2012 returning user Simplified Method to be used, Who must use the Simplified Method. Tax act 2012 returning user 5% owners, 5% owners. Tax act 2012 returning user A Age 70, Age 70½. Tax act 2012 returning user Alimony (see Qualified domestic relations orders (QDROs)) Annuities 5% rate on early distributions, 5% rate on certain early distributions from deferred annuity contracts. Tax act 2012 returning user Defined, Annuity. Tax act 2012 returning user Fixed-period, Fixed-period annuities. Tax act 2012 returning user , Fixed-period annuity. Tax act 2012 returning user Guaranteed payments, Guaranteed payments. Tax act 2012 returning user Joint and survivor annuities, Joint and survivor annuities. Tax act 2012 returning user Minimum distributions from, Minimum distributions from an annuity plan. Tax act 2012 returning user Payments under, Annuity payments. Tax act 2012 returning user Qualified plan annuity starting before November 19, 1996, Qualified plan annuity starting before November 19, 1996. Tax act 2012 returning user Rollovers, Annuity contracts. Tax act 2012 returning user (see also Rollovers) Single-life, Annuities for a single life. Tax act 2012 returning user , Single-life annuity. Tax act 2012 returning user Starting date of, Annuity starting date defined. Tax act 2012 returning user , Who must use the Simplified Method. Tax act 2012 returning user , Annuity starting before November 19, 1996. Tax act 2012 returning user , Annuity starting date. Tax act 2012 returning user Before November 19, 1996, Annuity starting before November 19, 1996. Tax act 2012 returning user Distribution on or after, Distribution On or After Annuity Starting Date Transfers of contracts, Transfers of Annuity Contracts Types of, Types of pensions and annuities. Tax act 2012 returning user Variable annuities, Variable annuities. Tax act 2012 returning user , Variable Annuities, Death benefits. Tax act 2012 returning user Assistance (see Tax help) B Beneficiaries, Survivors and Beneficiaries C Capital gains Lump-sum distributions, Capital Gain Treatment Cash withdrawals (see Nonperiodic payments) Child support (see Qualified domestic relations orders (QDROs)) Corrective distributions of excess plan contributions, Corrective distributions of excess plan contributions. Tax act 2012 returning user Costs Investment in the contract, Cost (Investment in the Contract) Lump-sum distribution, determination for, Cost. Tax act 2012 returning user D Death benefits, Death benefits. Tax act 2012 returning user Death of employee, Distributions after the employee's death. Tax act 2012 returning user , Survivors of employees. Tax act 2012 returning user Death of retiree, Survivors of retirees. Tax act 2012 returning user Deductible voluntary employee contributions, Deductible voluntary employee contributions. Tax act 2012 returning user Defined contribution plans, Defined contribution plan. Tax act 2012 returning user Designated Roth accounts Costs, Designated Roth accounts. Tax act 2012 returning user Defined, Designated Roth account. Tax act 2012 returning user Qualified distributions, Designated Roth accounts. Tax act 2012 returning user Rollovers, Designated Roth accounts. Tax act 2012 returning user Disability pensions, Disability pensions. Tax act 2012 returning user , Disability Pensions Distributions, Examples (see also Rollovers) Beginning date for, Required beginning date. Tax act 2012 returning user Early distributions and penalty tax, Payment to you option. Tax act 2012 returning user , Tax on Early Distributions Employer securities, Distributions of employer securities. Tax act 2012 returning user Loans treated as, Loans Treated as Distributions Lump-sum, Distributions of employer securities. Tax act 2012 returning user , Lump-Sum Distributions, Examples Minimum required, Recapture tax for changes in distribution method under equal payment exception. Tax act 2012 returning user Nonperiodic, taxation of, Taxation of Nonperiodic Payments Periodic, taxation of, Taxation of Periodic Payments Public safety employees, Qualified public safety employees. Tax act 2012 returning user Qualified reservist, Qualified reservist distributions. Tax act 2012 returning user U. Tax act 2012 returning user S. Tax act 2012 returning user savings bonds, Distribution of U. Tax act 2012 returning user S. Tax act 2012 returning user savings bonds. Tax act 2012 returning user Dividends, Taxation of Nonperiodic Payments E Early withdrawal from deferred interest account Penalty tax on, Payment to you option. Tax act 2012 returning user , Tax on Early Distributions Employer securities, distributions of, Distributions of employer securities. Tax act 2012 returning user Estate tax, Reduction for federal estate tax. Tax act 2012 returning user Deduction, Estate tax deduction. Tax act 2012 returning user Estimated tax, Estimated tax. Tax act 2012 returning user Excess accumulation, tax on, Recapture tax for changes in distribution method under equal payment exception. Tax act 2012 returning user Excess plan contributions, corrective distributions of, Corrective distributions of excess plan contributions. Tax act 2012 returning user F Figuring taxable amount, Figuring the Taxable Amount, Distribution of U. Tax act 2012 returning user S. Tax act 2012 returning user savings bonds. Tax act 2012 returning user Fixed-period annuities, Fixed-period annuities. Tax act 2012 returning user , Fixed-period annuity. Tax act 2012 returning user Foreign employment contributions, Foreign employment contributions. Tax act 2012 returning user Form 4972, Lump-Sum Distributions W-4P, Choosing no withholding. Tax act 2012 returning user Form 1040/1040A Rollovers, How to report. Tax act 2012 returning user Form 1040X Changing your mind on lump-sum treatment, Changing your mind. Tax act 2012 returning user Form 1099-INT U. Tax act 2012 returning user S. Tax act 2012 returning user savings bonds distributions, Distribution of U. Tax act 2012 returning user S. Tax act 2012 returning user savings bonds. Tax act 2012 returning user Form 1099-R 10-year tax option for lump-sum distribution, 10-Year Tax Option Corrected form, Introduction Corrective distributions of excess plan contributions, Corrective distributions of excess plan contributions. Tax act 2012 returning user Exceptions to tax, Exceptions to tax. Tax act 2012 returning user Investment in the contract, Cost (Investment in the Contract) Loan treated as distribution from plan, Reporting by plan. Tax act 2012 returning user Rollovers, How to report. Tax act 2012 returning user Tax-free exchanges, Tax-free exchange reported on Form 1099-R. Tax act 2012 returning user Form 4972 10-year tax option for lump-sum distribution, 10-Year Tax Option Lump-sum distributions, Lump-Sum Distributions, Electing optional lump-sum treatment. Tax act 2012 returning user Form 5329 Recapture tax, Recapture tax for changes in distribution method under equal payment exception. Tax act 2012 returning user Special additional taxes (penalty taxes), Special Additional Taxes, Exceptions to tax. Tax act 2012 returning user Form RRB-1099-R, Form RRB-1099-R. Tax act 2012 returning user Form W-4P Withholding from retirement plan payments, Choosing no withholding. Tax act 2012 returning user , Nonperiodic distributions. Tax act 2012 returning user Form W-4V Voluntary withholding request for social security or railroad retirement benefits, Withholding Tax and Estimated Tax Free tax services, Free help with your tax return. Tax act 2012 returning user Frozen deposits, Frozen deposits. Tax act 2012 returning user Fully taxable payments, Fully Taxable Payments G General Rule, Partly Taxable Payments, General Rule Death of retiree under, Survivors of retirees. Tax act 2012 returning user Investment in the contract, determination of, Cost (Investment in the Contract) Guaranteed payments, Guaranteed payments. Tax act 2012 returning user H Help (see Tax help) Home purchase Loans from qualified plans for, Exception for qualified plan, 403(b) plan, and government plan loans. Tax act 2012 returning user I In-plan Roth rollovers, In-plan Roth rollovers. Tax act 2012 returning user Individual retirement accounts Minimum distributions from, Minimum distributions from an individual account plan. Tax act 2012 returning user Rollovers, Rollovers (see also Rollovers) Interest deduction Denial on loan from plan, Denial of interest deduction. Tax act 2012 returning user J Joint and survivor annuities, Joint and survivor annuities. Tax act 2012 returning user L Loans treated as distributions, Loans Treated as Distributions Local government employees Section 457 plans, Section 457 Deferred Compensation Plans Losses Lump-sum distribution, Losses. Tax act 2012 returning user Lump-sum distributions, Distributions of employer securities. Tax act 2012 returning user , Lump-Sum Distributions, Examples 10-year tax option, 10-Year Tax Option Capital gain treatment, Capital Gain Treatment Defined, Lump-Sum Distributions Election of, Changing your mind. Tax act 2012 returning user Form 4972, Lump-Sum Distributions M Minimum required distributions, Recapture tax for changes in distribution method under equal payment exception. Tax act 2012 returning user Missing children, photographs of, Reminders Multiple annuitants, Multiple annuitants. Tax act 2012 returning user Multiple-lives annuities, Multiple-lives annuity. Tax act 2012 returning user N Net Investment Income Tax, Net investment income tax. Tax act 2012 returning user , Distribution Before Annuity Starting Date From a Nonqualified Plan Net unrealized appreciation (NUA), Net unrealized appreciation (NUA). Tax act 2012 returning user Deferring tax on, Distributions of employer securities. Tax act 2012 returning user Nonperiodic payments Loan treated as, Loans Treated as Distributions Taxation of, Taxation of Nonperiodic Payments Nonqualified plans Distribution before annuity start date, Distribution Before Annuity Starting Date From a Nonqualified Plan General Rule to be used, Who must use the General Rule. Tax act 2012 returning user Loans treated as distributions from, Effect on investment in the contract. Tax act 2012 returning user Nonresident aliens Railroad retirement, Nonresident aliens. Tax act 2012 returning user P Partial rollovers, Partial rollovers. Tax act 2012 returning user Partly taxable payments, Partly Taxable Payments Penalty taxes Early distributions, Tax on Early Distributions Excess accumulation, Tax on Excess Accumulation Pensions Defined, Pension. Tax act 2012 returning user Disability pensions, Disability pensions. Tax act 2012 returning user , Disability Pensions Types of, Types of pensions and annuities. Tax act 2012 returning user Periodic payments Taxation of, Taxation of Periodic Payments Withholding tax, Periodic payments. Tax act 2012 returning user Public safety officers insurance premiums, Insurance Premiums for Retired Public Safety Officers Public school employees Tax-sheltered annuity plans for (see 403(b) plans) Publications (see Tax help) Q Qualified domestic relations orders (QDROs), Qualified domestic relations order (QDRO). Tax act 2012 returning user , Qualified domestic relations order (QDRO). Tax act 2012 returning user Alternate payee under and lump-sum distribution, Alternate payee under qualified domestic relations order. Tax act 2012 returning user Qualified employee annuities Defined, Qualified employee annuity. Tax act 2012 returning user Simplified Method to be used, Who must use the Simplified Method. Tax act 2012 returning user Qualified employee plans Defined, Qualified employee plan. Tax act 2012 returning user Simplified Method to be used, Who must use the Simplified Method. Tax act 2012 returning user Qualified plans, Who must use the General Rule. Tax act 2012 returning user (see also specific type of plan ) Distribution before annuity starting date, Distribution Before Annuity Starting Date From a Qualified Plan General Rule, Who must use the General Rule. Tax act 2012 returning user Loans from, without tax consequences, Exception for qualified plan, 403(b) plan, and government plan loans. Tax act 2012 returning user Rollovers, Qualified retirement plan. Tax act 2012 returning user Qualified settlement income Exxon Valdez litigation settlement, Qualified settlement income. Tax act 2012 returning user R Railroad retirement benefits, Railroad Retirement Benefits, Repayment of benefits received in an earlier year. Tax act 2012 returning user Taxability of, Withholding Tax and Estimated Tax Recapture tax Changes in distribution method, Recapture tax for changes in distribution method under equal payment exception. Tax act 2012 returning user Reemployment, Reemployment. Tax act 2012 returning user Related employers and related plans, Related employers and related plans. Tax act 2012 returning user Repayment of loan within 5 years, Exception for qualified plan, 403(b) plan, and government plan loans. Tax act 2012 returning user Required beginning date, Required beginning date. Tax act 2012 returning user Required distributions, minimum, Recapture tax for changes in distribution method under equal payment exception. Tax act 2012 returning user Retirement bonds, Retirement bonds. Tax act 2012 returning user Rollovers, Rollovers, Choosing the right option. Tax act 2012 returning user 20% tax rate on distribution, Eligible rollover distribution. Tax act 2012 returning user Comparison of direct payment vs. Tax act 2012 returning user direct rollover (Table 1), Choosing the right option. Tax act 2012 returning user Direct rollover to another qualified plan, Eligible rollover distribution. Tax act 2012 returning user , Direct rollover option. Tax act 2012 returning user In-plan Roth, In-plan Roth rollovers. Tax act 2012 returning user Nonspouse beneficiary, Rollovers by nonspouse beneficiary. Tax act 2012 returning user Nontaxable amounts, Rollover of nontaxable amounts. Tax act 2012 returning user Notice to recipients of eligible rollover distribution, Written explanation to recipients. Tax act 2012 returning user Property and cash distributed, Property and cash distributed. Tax act 2012 returning user Roth IRAs, Rollovers to Roth IRAs. Tax act 2012 returning user Substitution of other property, Rollovers of property. Tax act 2012 returning user Surviving spouse making, Rollover by surviving spouse. Tax act 2012 returning user S Section 457 deferred compensation plans, Section 457 Deferred Compensation Plans Securities of employer, distributions of, Distributions of employer securities. Tax act 2012 returning user Self-employed persons' rollovers, Rollovers Simplified Method, Partly Taxable Payments, Simplified Method Death of retiree under, Survivors of retirees. Tax act 2012 returning user How to use, How to use the Simplified Method. Tax act 2012 returning user Investment in the contract, determination of, Cost (Investment in the Contract) Not allowed, Who cannot use the Simplified Method. Tax act 2012 returning user Single-sum in connection with start of payments, Single-sum in connection with the start of annuity payments. Tax act 2012 returning user Single-life annuities, Annuities for a single life. Tax act 2012 returning user , Single-life annuity. Tax act 2012 returning user Social security, tax on, Withholding Tax and Estimated Tax State employees Section 457 plans, Section 457 Deferred Compensation Plans State insurer delinquency proceedings, State insurer delinquency proceedings. Tax act 2012 returning user Surviving spouse Distribution rules for, Distributions after the employee's death. Tax act 2012 returning user Rollovers by, Rollover by surviving spouse. Tax act 2012 returning user T Tables Comparison of direct payment vs. Tax act 2012 returning user direct rollover (Table 1), Choosing the right option. Tax act 2012 returning user Tax help, How To Get Tax Help Tax-free exchanges, Tax-free exchange. Tax act 2012 returning user Ten percent tax for early withdrawal, Payment to you option. Tax act 2012 returning user , Tax on Early Distributions Ten-year tax option, 10-Year Tax Option Time for making rollover, Time for making rollover. Tax act 2012 returning user Transfers of annuity contracts, Transfers of Annuity Contracts TTY/TDD information, How To Get Tax Help U U. Tax act 2012 returning user S. Tax act 2012 returning user savings bonds Distribution of, Distribution of U. Tax act 2012 returning user S. Tax act 2012 returning user savings bonds. Tax act 2012 returning user V Variable annuities, Variable annuities. Tax act 2012 returning user , Variable Annuities Voluntary employee contributions, Deductible voluntary employee contributions. Tax act 2012 returning user W Withdrawals, Withdrawals. Tax act 2012 returning user Employees withdrawing contributions, Plans that permitted withdrawal of employee contributions. Tax act 2012 returning user Withholding, Withholding Tax and Estimated Tax 10% rate used, Nonperiodic distributions. Tax act 2012 returning user 20% of eligible rollover, Withholding requirements. Tax act 2012 returning user , Payment to you option. Tax act 2012 returning user , 20% Mandatory withholding. Tax act 2012 returning user Periodic payments, Periodic payments. Tax act 2012 returning user Railroad retirement, Tax withholding. Tax act 2012 returning user Worksheets Simplified Method, How to use the Simplified Method. Tax act 2012 returning user Worksheet A, illustrated, Worksheet A. Tax act 2012 returning user Simplified Method Worksheet for Bill Smith Worksheet A, Simplified Method, Worksheet A. Tax act 2012 returning user Simplified Method Prev  Up     Home   More Online Publications
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The Tax Act 2012 Returning User

Tax act 2012 returning user 1. Tax act 2012 returning user   Definitions You Need To Know Table of Contents Other options. Tax act 2012 returning user Exception. Tax act 2012 returning user Certain terms used in this publication are defined below. Tax act 2012 returning user The same term used in another publication may have a slightly different meaning. Tax act 2012 returning user Annual additions. Tax act 2012 returning user   Annual additions are the total of all your contributions in a year, employee contributions (not including rollovers), and forfeitures allocated to a participant's account. Tax act 2012 returning user Annual benefits. Tax act 2012 returning user   Annual benefits are the benefits to be paid yearly in the form of a straight life annuity (with no extra benefits) under a plan to which employees do not contribute and under which no rollover contributions are made. Tax act 2012 returning user Business. Tax act 2012 returning user   A business is an activity in which a profit motive is present and economic activity is involved. Tax act 2012 returning user Service as a newspaper carrier under age 18 or as a public official is not a business. Tax act 2012 returning user Common-law employee. Tax act 2012 returning user   A common-law employee is any individual who, under common law, would have the status of an employee. Tax act 2012 returning user A leased employee can also be a common-law employee. Tax act 2012 returning user   A common-law employee is a person who performs services for an employer who has the right to control and direct the results of the work and the way in which it is done. Tax act 2012 returning user For example, the employer: Provides the employee's tools, materials, and workplace, and Can fire the employee. Tax act 2012 returning user   Common-law employees are not self-employed and cannot set up retirement plans for income from their work, even if that income is self-employment income for social security tax purposes. Tax act 2012 returning user For example, common-law employees who are ministers, members of religious orders, full-time insurance salespeople, and U. Tax act 2012 returning user S. Tax act 2012 returning user citizens employed in the United States by foreign governments cannot set up retirement plans for their earnings from those employments, even though their earnings are treated as self-employment income. Tax act 2012 returning user   However, an individual may be a common-law employee and a self-employed person as well. Tax act 2012 returning user For example, an attorney can be a corporate common-law employee during regular working hours and also practice law in the evening as a self-employed person. Tax act 2012 returning user In another example, a minister employed by a congregation for a salary is a common-law employee even though the salary is treated as self-employment income for social security tax purposes. Tax act 2012 returning user However, fees reported on Schedule C (Form 1040), Profit or Loss From Business, for performing marriages, baptisms, and other personal services are self-employment earnings for qualified plan purposes. Tax act 2012 returning user Compensation. Tax act 2012 returning user   Compensation for plan allocations is the pay a participant received from you for personal services for a year. Tax act 2012 returning user You can generally define compensation as including all the following payments. Tax act 2012 returning user Wages and salaries. Tax act 2012 returning user Fees for professional services. Tax act 2012 returning user Other amounts received (cash or noncash) for personal services actually rendered by an employee, including, but not limited to, the following items. Tax act 2012 returning user Commissions and tips. Tax act 2012 returning user Fringe benefits. Tax act 2012 returning user Bonuses. Tax act 2012 returning user   For a self-employed individual, compensation means the earned income, discussed later, of that individual. Tax act 2012 returning user   Compensation generally includes amounts deferred in the following employee benefit plans. Tax act 2012 returning user These amounts are elective deferrals. Tax act 2012 returning user Qualified cash or deferred arrangement (section 401(k) plan). Tax act 2012 returning user Salary reduction agreement to contribute to a tax-sheltered annuity (section 403(b) plan), a SIMPLE IRA plan, or a SARSEP. Tax act 2012 returning user Section 457 nonqualified deferred compensation plan. Tax act 2012 returning user Section 125 cafeteria plan. Tax act 2012 returning user   However, an employer can choose to exclude elective deferrals under the above plans from the definition of compensation. Tax act 2012 returning user The limit on elective deferrals is discussed in chapter 2 under Salary Reduction Simplified Employee Pension (SARSEP) and in chapter 4. Tax act 2012 returning user Other options. Tax act 2012 returning user   In figuring the compensation of a participant, you can treat any of the following amounts as the employee's compensation. Tax act 2012 returning user The employee's wages as defined for income tax withholding purposes. Tax act 2012 returning user The employee's wages you report in box 1 of Form W-2, Wage and Tax Statement. Tax act 2012 returning user The employee's social security wages (including elective deferrals). Tax act 2012 returning user   Compensation generally cannot include either of the following items. Tax act 2012 returning user Nontaxable reimbursements or other expense allowances. Tax act 2012 returning user Deferred compensation (other than elective deferrals). Tax act 2012 returning user SIMPLE plans. Tax act 2012 returning user   A special definition of compensation applies for SIMPLE plans. Tax act 2012 returning user See chapter 3. Tax act 2012 returning user Contribution. Tax act 2012 returning user   A contribution is an amount you pay into a plan for all those participating in the plan, including self-employed individuals. Tax act 2012 returning user Limits apply to how much, under the contribution formula of the plan, can be contributed each year for a participant. Tax act 2012 returning user Deduction. Tax act 2012 returning user   A deduction is the plan contributions you can subtract from gross income on your federal income tax return. Tax act 2012 returning user Limits apply to the amount deductible. Tax act 2012 returning user Earned income. Tax act 2012 returning user   Earned income is net earnings from self-employment, discussed later, from a business in which your services materially helped to produce the income. Tax act 2012 returning user   You can also have earned income from property your personal efforts helped create, such as royalties from your books or inventions. Tax act 2012 returning user Earned income includes net earnings from selling or otherwise disposing of the property, but it does not include capital gains. Tax act 2012 returning user It includes income from licensing the use of property other than goodwill. Tax act 2012 returning user   Earned income includes amounts received for services by self-employed members of recognized religious sects opposed to social security benefits who are exempt from self-employment tax. Tax act 2012 returning user   If you have more than one business, but only one has a retirement plan, only the earned income from that business is considered for that plan. Tax act 2012 returning user Employer. Tax act 2012 returning user   An employer is generally any person for whom an individual performs or did perform any service, of whatever nature, as an employee. Tax act 2012 returning user A sole proprietor is treated as his or her own employer for retirement plan purposes. Tax act 2012 returning user However, a partner is not an employer for retirement plan purposes. Tax act 2012 returning user Instead, the partnership is treated as the employer of each partner. Tax act 2012 returning user Highly compensated employee. Tax act 2012 returning user   A highly compensated employee is an individual who: Owned more than 5% of the interest in your business at any time during the year or the preceding year, regardless of how much compensation that person earned or received, or For the preceding year, received compensation from you of more than $115,000 (if the preceding year is 2012, 2013, or 2014) and, if you so choose, was in the top 20% of employees when ranked by compensation. Tax act 2012 returning user Leased employee. Tax act 2012 returning user   A leased employee who is not your common-law employee must generally be treated as your employee for retirement plan purposes if he or she does all the following. Tax act 2012 returning user Provides services to you under an agreement between you and a leasing organization. Tax act 2012 returning user Has performed services for you (or for you and related persons) substantially full time for at least 1 year. Tax act 2012 returning user Performs services under your primary direction or control. Tax act 2012 returning user Exception. Tax act 2012 returning user   A leased employee is not treated as your employee if all the following conditions are met. Tax act 2012 returning user Leased employees are not more than 20% of your non-highly compensated work force. Tax act 2012 returning user The employee is covered under the leasing organization's qualified pension plan. Tax act 2012 returning user The leasing organization's plan is a money purchase pension plan that has all the following provisions. Tax act 2012 returning user Immediate participation. Tax act 2012 returning user (This requirement does not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000. Tax act 2012 returning user ) Full and immediate vesting. Tax act 2012 returning user A nonintegrated employer contribution rate of at least 10% of compensation for each participant. Tax act 2012 returning user However, if the leased employee is your common-law employee, that employee will be your employee for all purposes, regardless of any pension plan of the leasing organization. Tax act 2012 returning user Net earnings from self-employment. Tax act 2012 returning user   For SEP and qualified plans, net earnings from self-employment is your gross income from your trade or business (provided your personal services are a material income-producing factor) minus allowable business deductions. Tax act 2012 returning user Allowable deductions include contributions to SEP and qualified plans for common-law employees and the deduction allowed for the deductible part of your self-employment tax. Tax act 2012 returning user   Net earnings from self-employment does not include items excluded from gross income (or their related deductions) other than foreign earned income and foreign housing cost amounts. Tax act 2012 returning user   For the deduction limits, earned income is net earnings for personal services actually rendered to the business. Tax act 2012 returning user You take into account the income tax deduction for the deductible part of self-employment tax and the deduction for contributions to the plan made on your behalf when figuring net earnings. Tax act 2012 returning user   Net earnings include a partner's distributive share of partnership income or loss (other than separately stated items, such as capital gains and losses). Tax act 2012 returning user It does not include income passed through to shareholders of S corporations. Tax act 2012 returning user Guaranteed payments to limited partners are net earnings from self-employment if they are paid for services to or for the partnership. Tax act 2012 returning user Distributions of other income or loss to limited partners are not net earnings from self-employment. Tax act 2012 returning user   For SIMPLE plans, net earnings from self-employment is the amount on line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040), Self-Employment Tax, before subtracting any contributions made to the SIMPLE plan for yourself. Tax act 2012 returning user Qualified plan. Tax act 2012 returning user   A qualified plan is a retirement plan that offers a tax-favored way to save for retirement. Tax act 2012 returning user You can deduct contributions made to the plan for your employees. Tax act 2012 returning user Earnings on these contributions are generally tax free until distributed at retirement. Tax act 2012 returning user Profit-sharing, money purchase, and defined benefit plans are qualified plans. Tax act 2012 returning user A 401(k) plan is also a qualified plan. Tax act 2012 returning user Participant. Tax act 2012 returning user   A participant is an eligible employee who is covered by your retirement plan. Tax act 2012 returning user See the discussions of the different types of plans for the definition of an employee eligible to participate in each type of plan. Tax act 2012 returning user Partner. Tax act 2012 returning user   A partner is an individual who shares ownership of an unincorporated trade or business with one or more persons. Tax act 2012 returning user For retirement plans, a partner is treated as an employee of the partnership. Tax act 2012 returning user Self-employed individual. Tax act 2012 returning user   An individual in business for himself or herself, and whose business is not incorporated, is self-employed. Tax act 2012 returning user Sole proprietors and partners are self-employed. Tax act 2012 returning user Self-employment can include part-time work. Tax act 2012 returning user   Not everyone who has net earnings from self-employment for social security tax purposes is self-employed for qualified plan purposes. Tax act 2012 returning user See Common-law employee and Net earnings from self-employment , earlier. Tax act 2012 returning user   In addition, certain fishermen may be considered self-employed for setting up a qualified plan. Tax act 2012 returning user See Publication 595, Capital Construction Fund for Commercial Fishermen, for the special rules used to determine whether fishermen are self-employed. Tax act 2012 returning user Sole proprietor. Tax act 2012 returning user   A sole proprietor is an individual who owns an unincorporated business by himself or herself, including a single member limited liability company that is treated as a disregarded entity for tax purposes. Tax act 2012 returning user For retirement plans, a sole proprietor is treated as both an employer and an employee. Tax act 2012 returning user Prev  Up  Next   Home   More Online Publications