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Free Tax 2012

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Free Tax 2012

Free tax 2012 12. Free tax 2012   How To Get More Information Table of Contents Internal Revenue ServiceLow Income Taxpayer Clinics (LITCs) Small Business Administration Other Federal Agencies This section describes the help the IRS and other federal agencies offer to taxpayers who operate their own businesses. Free tax 2012 Internal Revenue Service Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Free tax 2012 Free help with your return. Free tax 2012   You can get free help preparing your return nationwide from IRS-certified volunteers. Free tax 2012 The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Free tax 2012 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free tax 2012 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free tax 2012 In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Free tax 2012 To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Free tax 2012 gov, download the IRS2Go app, or call 1-800-906-9887. Free tax 2012   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free tax 2012 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Free tax 2012 aarp. Free tax 2012 org/money/taxaide or call 1-888-227-7669. Free tax 2012 For more information on these programs, go to IRS. Free tax 2012 gov and enter “VITA” in the search box. Free tax 2012 Internet. Free tax 2012    IRS. Free tax 2012 gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Free tax 2012 Download the free IRS2Go app from the iTunes app store or from Google Play. Free tax 2012 Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Free tax 2012 Check the status of your 2013 refund with the Where's My Refund? application on IRS. Free tax 2012 gov or download the IRS2Go app and select the Refund Status option. Free tax 2012 The IRS issues more than 9 out of 10 refunds in less than 21 days. Free tax 2012 Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Free tax 2012 You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free tax 2012 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free tax 2012 Use the Interactive Tax Assistant (ITA) to research your tax questions. Free tax 2012 No need to wait on the phone or stand in line. Free tax 2012 The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Free tax 2012 When you reach the response screen, you can print the entire interview and the final response for your records. Free tax 2012 New subject areas are added on a regular basis. Free tax 2012  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Free tax 2012 gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Free tax 2012 You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Free tax 2012 The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Free tax 2012 When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Free tax 2012 Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Free tax 2012 You can also ask the IRS to mail a return or an account transcript to you. Free tax 2012 Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Free tax 2012 gov or by calling 1-800-908-9946. Free tax 2012 Tax return and tax account transcripts are generally available for the current year and the past three years. Free tax 2012 Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Free tax 2012 Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Free tax 2012 If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Free tax 2012 Check the status of your amended return using Where's My Amended Return? Go to IRS. Free tax 2012 gov and enter Where's My Amended Return? in the search box. Free tax 2012 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free tax 2012 It can take up to 3 weeks from the date you mailed it to show up in our system. Free tax 2012 Make a payment using one of several safe and convenient electronic payment options available on IRS. Free tax 2012 gov. Free tax 2012 Select the Payment tab on the front page of IRS. Free tax 2012 gov for more information. Free tax 2012 Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Free tax 2012 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Free tax 2012 gov. Free tax 2012 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Free tax 2012 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Free tax 2012 gov. Free tax 2012 Request an Electronic Filing PIN by going to IRS. Free tax 2012 gov and entering Electronic Filing PIN in the search box. Free tax 2012 Download forms, instructions and publications, including accessible versions for people with disabilities. Free tax 2012 Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Free tax 2012 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Free tax 2012 An employee can answer questions about your tax account or help you set up a payment plan. Free tax 2012 Before you visit, check the Office Locator on IRS. Free tax 2012 gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Free tax 2012 If you have a special need, such as a disability, you can request an appointment. Free tax 2012 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Free tax 2012 Apply for an Employer Identification Number (EIN). Free tax 2012 Go to IRS. Free tax 2012 gov and enter Apply for an EIN in the search box. Free tax 2012 Read the Internal Revenue Code, regulations, or other official guidance. Free tax 2012 Read Internal Revenue Bulletins. Free tax 2012 Sign up to receive local and national tax news and more by email. Free tax 2012 Just click on “subscriptions” above the search box on IRS. Free tax 2012 gov and choose from a variety of options. Free tax 2012    Phone. Free tax 2012 You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Free tax 2012 Download the free IRS2Go app from the iTunes app store or from Google Play. Free tax 2012 Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Free tax 2012 gov, or download the IRS2Go app. Free tax 2012 Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Free tax 2012 The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free tax 2012 Most VITA and TCE sites offer free electronic filing. Free tax 2012 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Free tax 2012 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Free tax 2012 Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Free tax 2012 If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Free tax 2012 The IRS issues more than 9 out of 10 refunds in less than 21 days. Free tax 2012 Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free tax 2012 Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Free tax 2012 The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free tax 2012 Note, the above information is for our automated hotline. Free tax 2012 Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Free tax 2012 Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Free tax 2012 You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free tax 2012 It can take up to 3 weeks from the date you mailed it to show up in our system. Free tax 2012 Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Free tax 2012 You should receive your order within 10 business days. Free tax 2012 Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Free tax 2012 If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Free tax 2012 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Free tax 2012 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Free tax 2012 These individuals can also contact the IRS through relay services such as the Federal Relay Service. Free tax 2012    Walk-in. Free tax 2012 You can find a selection of forms, publications and services — in-person. Free tax 2012 Products. Free tax 2012 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free tax 2012 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Free tax 2012 Services. Free tax 2012 You can walk in to your local TAC for face-to-face tax help. Free tax 2012 An employee can answer questions about your tax account or help you set up a payment plan. Free tax 2012 Before visiting, use the Office Locator tool on IRS. Free tax 2012 gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Free tax 2012    Mail. Free tax 2012 You can send your order for forms, instructions, and publications to the address below. Free tax 2012 You should receive a response within 10 business days after your request is received. Free tax 2012  Internal Revenue Service 1201 N. Free tax 2012 Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Free tax 2012 The Taxpayer Advocate Service (TAS) is your voice at the IRS. Free tax 2012 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Free tax 2012   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Free tax 2012 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Free tax 2012 You face (or your business is facing) an immediate threat of adverse action. Free tax 2012 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Free tax 2012   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Free tax 2012 Here's why we can help: TAS is an independent organization within the IRS. Free tax 2012 Our advocates know how to work with the IRS. Free tax 2012 Our services are free and tailored to meet your needs. Free tax 2012 We have offices in every state, the District of Columbia, and Puerto Rico. Free tax 2012   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Free tax 2012   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Free tax 2012 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Free tax 2012 Low Income Taxpayer Clinics (LITCs) Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Free tax 2012 Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Free tax 2012 Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Free tax 2012 Small Business Administration The Small Business Administration (SBA) offers training and educational programs, counseling services, financial programs, and contract assistance for small business owners. Free tax 2012 The SBA also has publications and videos on a variety of business topics. Free tax 2012 The following briefly describes assistance provided by the SBA. Free tax 2012 Small Business Development Centers (SBDCs). Free tax 2012   SBDCs provide counseling, training, and technical services to current and prospective small business owners who cannot afford the services of a private consultant. Free tax 2012 Help is available when beginning, improving, or expanding a small business. Free tax 2012 Business Information Centers (BICs). Free tax 2012   BICs offer a small business reference library, management video tapes, and computer technology to help plan a business. Free tax 2012 BICs also offer one-on-one assistance. Free tax 2012 Individuals who are in business or are interested in starting a business can use BICs as often as they wish at no charge. Free tax 2012 Service Corps of Retired Executives (SCORE). Free tax 2012   SCORE provides small business counseling and training to current and prospective small business owners. Free tax 2012 SCORE is made up of current and former business people who offer their expertise and knowledge to help people start, manage, and expand a small business. Free tax 2012 SCORE also offers a variety of small business workshops. Free tax 2012 Internet. Free tax 2012    You can visit the SBA website at www. Free tax 2012 sba. Free tax 2012 gov. Free tax 2012 While visiting the SBA website, you can find a variety of information of interest to small business owners. Free tax 2012 Phone. Free tax 2012    Call the SBA Answer Desk at 1-800-U-ASK-SBA (1-800-827-5722) for general information about programs available to assist small business owners. Free tax 2012 Walk-in. Free tax 2012   You can walk in to a Small Business Development Center or Business Information Center to request assistance with your small business. Free tax 2012 To find the location nearest you, visit the SBA website or call the SBA Answer Desk. Free tax 2012 Other Federal Agencies Other federal agencies also publish publications and pamphlets to assist small businesses. Free tax 2012 Most of these are available from the Superintendent of Documents at the Government Printing Office. Free tax 2012 You can get information and order these publications and pamphlets in several ways. Free tax 2012 Internet. Free tax 2012   You can visit the GPO website at  www. Free tax 2012 access. Free tax 2012 gpo. Free tax 2012 gov. Free tax 2012 Mail. Free tax 2012   Write to the GPO at the following address. Free tax 2012  Superintendent of Documents U. Free tax 2012 S. Free tax 2012 Government Printing Office P. Free tax 2012 O. Free tax 2012 Box 979050 St. Free tax 2012 Louis, MO 63917-9000 Phone. Free tax 2012   Call the GPO toll-free at 1-866-512-1800 or at 202-512-1800 from the Washington, DC, area. Free tax 2012 Prev  Up  Next   Home   More Online Publications
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The Free Tax 2012

Free tax 2012 3. Free tax 2012   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. Free tax 2012 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. Free tax 2012 In addition, you will contribute matching or nonelective contributions. Free tax 2012 SIMPLE plans can only be maintained on a calendar-year basis. Free tax 2012 A SIMPLE plan can be set up in either of the following ways. Free tax 2012 Using SIMPLE IRAs (SIMPLE IRA plan). Free tax 2012 As part of a 401(k) plan (SIMPLE 401(k) plan). Free tax 2012 Many financial institutions will help you set up a SIMPLE plan. Free tax 2012 SIMPLE IRA Plan A SIMPLE IRA plan is a retirement plan that uses SIMPLE IRAs for each eligible employee. Free tax 2012 Under a SIMPLE IRA plan, a SIMPLE IRA must be set up for each eligible employee. Free tax 2012 For the definition of an eligible employee, see Who Can Participate in a SIMPLE IRA Plan , later. Free tax 2012 Who Can Set Up a SIMPLE IRA Plan? You can set up a SIMPLE IRA plan if you meet both the following requirements. Free tax 2012 You meet the employee limit. Free tax 2012 You do not maintain another qualified plan unless the other plan is for collective bargaining employees. Free tax 2012 Employee limit. Free tax 2012   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. Free tax 2012 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. Free tax 2012 Employees include self-employed individuals who received earned income and leased employees (defined in chapter 1). Free tax 2012   Once you set up a SIMPLE IRA plan, you must continue to meet the 100-employee limit each year you maintain the plan. Free tax 2012 Grace period for employers who cease to meet the 100-employee limit. Free tax 2012   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. Free tax 2012   A different rule applies if you do not meet the 100-employee limit because of an acquisition, disposition, or similar transaction. Free tax 2012 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. Free tax 2012 Coverage under the plan has not significantly changed during the grace period. Free tax 2012 The SIMPLE IRA plan would have continued to qualify after the transaction if you had remained a separate employer. Free tax 2012    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. Free tax 2012 Other qualified plan. Free tax 2012   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. Free tax 2012 Exception. Free tax 2012   If you maintain a qualified plan for collective bargaining employees, you are permitted to maintain a SIMPLE IRA plan for other employees. Free tax 2012 Who Can Participate in a SIMPLE IRA Plan? Eligible employee. Free tax 2012   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. Free tax 2012 The term “employee” includes a self-employed individual who received earned income. Free tax 2012   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. Free tax 2012 For example, you can allow participation for employees who received at least $3,000 in compensation during any preceding calendar year. Free tax 2012 However, you cannot impose any other conditions for participating in a SIMPLE IRA plan. Free tax 2012 Excludable employees. Free tax 2012   The following employees do not need to be covered under a SIMPLE IRA plan. Free tax 2012 Employees who are covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Free tax 2012 Nonresident alien employees who have received no U. Free tax 2012 S. Free tax 2012 source wages, salaries, or other personal services compensation from you. Free tax 2012 Compensation. Free tax 2012   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. Free tax 2012 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. Free tax 2012 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. Free tax 2012 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. Free tax 2012 Each form is a model savings incentive match plan for employees (SIMPLE) plan document. Free tax 2012 Which form you use depends on whether you select a financial institution or your employees select the institution that will receive the contributions. Free tax 2012 Use Form 5304-SIMPLE if you allow each plan participant to select the financial institution for receiving his or her SIMPLE IRA plan contributions. Free tax 2012 Use Form 5305-SIMPLE if you require that all contributions under the SIMPLE IRA plan be deposited initially at a designated financial institution. Free tax 2012 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. Free tax 2012 Keep the original form. Free tax 2012 Do not file it with the IRS. Free tax 2012 Other uses of the forms. Free tax 2012   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. Free tax 2012 Meeting employer notification requirements for the SIMPLE IRA plan. Free tax 2012 Form 5304-SIMPLE and Form 5305-SIMPLE contain a Model Notification to Eligible Employees that provides the necessary information to the employee. Free tax 2012 Maintaining the SIMPLE IRA plan records and proving you set up a SIMPLE IRA plan for employees. Free tax 2012 Deadline for setting up a SIMPLE IRA plan. Free tax 2012   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. Free tax 2012 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. Free tax 2012 If you previously maintained a SIMPLE IRA plan, you can set up a SIMPLE IRA plan effective only on January 1 of a year. Free tax 2012 A SIMPLE IRA plan cannot have an effective date that is before the date you actually adopt the plan. Free tax 2012 Setting up a SIMPLE IRA. Free tax 2012   SIMPLE IRAs are the individual retirement accounts or annuities into which the contributions are deposited. Free tax 2012 A SIMPLE IRA must be set up for each eligible employee. Free tax 2012 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. Free tax 2012   A SIMPLE IRA cannot be a Roth IRA. Free tax 2012 Contributions to a SIMPLE IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Free tax 2012 Deadline for setting up a SIMPLE IRA. Free tax 2012   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. Free tax 2012 See Time limits for contributing funds , later, under Contribution Limits. Free tax 2012 Credit for startup costs. Free tax 2012   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. Free tax 2012 For more information, see Credit for startup costs under Reminders, earlier. Free tax 2012 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. Free tax 2012 The employee's opportunity to make or change a salary reduction choice under a SIMPLE IRA plan. Free tax 2012 Your decision to make either matching contributions or nonelective contributions (discussed later). Free tax 2012 A summary description provided by the financial institution. Free tax 2012 Written notice that his or her balance can be transferred without cost or penalty if they use a designated financial institution. Free tax 2012 Election period. Free tax 2012   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). Free tax 2012 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. Free tax 2012   A SIMPLE IRA plan can provide longer periods for permitting employees to enter into salary reduction agreements or to modify prior agreements. Free tax 2012 For example, a SIMPLE IRA plan can provide a 90-day election period instead of the 60-day period. Free tax 2012 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. Free tax 2012 Contribution Limits Contributions are made up of salary reduction contributions and employer contributions. Free tax 2012 You, as the employer, must make either matching contributions or nonelective contributions, defined later. Free tax 2012 No other contributions can be made to the SIMPLE IRA plan. Free tax 2012 These contributions, which you can deduct, must be made timely. Free tax 2012 See Time limits for contributing funds , later. Free tax 2012 Salary reduction contributions. Free tax 2012   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. Free tax 2012 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. Free tax 2012 You cannot place restrictions on the contribution amount (such as limiting the contribution percentage), except to comply with the $12,000 limit. Free tax 2012   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. Free tax 2012 Catch-up contributions. Free tax 2012   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. Free tax 2012 The catch-up contribution limit for 2013 and 2014 for SIMPLE IRA plans is $2,500. Free tax 2012 Salary reduction contributions are not treated as catch-up contributions for 2013 or 2014 until they exceed $12,000. Free tax 2012 However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Free tax 2012 The catch-up contribution limit. Free tax 2012 The excess of the participant's compensation over the salary reduction contributions that are not catch-up contributions. Free tax 2012 Employer matching contributions. Free tax 2012   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. Free tax 2012 This requirement does not apply if you make nonelective contributions as discussed later. Free tax 2012 Example. Free tax 2012 In 2013, your employee, John Rose, earned $25,000 and chose to defer 5% of his salary. Free tax 2012 Your net earnings from self-employment are $40,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Free tax 2012 You make 3% matching contributions. Free tax 2012 The total contribution you make for John is $2,000, figured as follows. Free tax 2012 Salary reduction contributions ($25,000 × . Free tax 2012 05) $1,250 Employer matching contribution ($25,000 × . Free tax 2012 03) 750 Total contributions $2,000     The total contribution you make for yourself is $5,200, figured as follows. Free tax 2012 Salary reduction contributions ($40,000 × . Free tax 2012 10) $4,000 Employer matching contribution ($40,000 × . Free tax 2012 03) 1,200 Total contributions $5,200 Lower percentage. Free tax 2012   If you choose a matching contribution less than 3%, the percentage must be at least 1%. Free tax 2012 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. Free tax 2012 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. Free tax 2012 Nonelective contributions. Free tax 2012   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. Free tax 2012 If you make this choice, you must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. Free tax 2012 Only $255,000 of the employee's compensation can be taken into account to figure the contribution limit in 2013 ($260,000 in 2014). Free tax 2012   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. Free tax 2012 Example 1. Free tax 2012 In 2013, your employee, Jane Wood, earned $36,000 and chose to have you contribute 10% of her salary. Free tax 2012 Your net earnings from self-employment are $50,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Free tax 2012 You make a 2% nonelective contribution. Free tax 2012 Both of you are under age 50. Free tax 2012 The total contribution you make for Jane is $4,320, figured as follows. Free tax 2012 Salary reduction contributions ($36,000 × . Free tax 2012 10) $3,600 2% nonelective contributions ($36,000 × . Free tax 2012 02) 720 Total contributions $4,320     The total contribution you make for yourself is $6,000, figured as follows. Free tax 2012 Salary reduction contributions ($50,000 × . Free tax 2012 10) $5,000 2% nonelective contributions ($50,000 × . Free tax 2012 02) 1,000 Total contributions $6,000 Example 2. Free tax 2012 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. Free tax 2012 Salary reduction contributions (maximum amount allowed) $12,000 2% nonelective contributions ($75,000 × . Free tax 2012 02) 1,500 Total contributions $13,500 Time limits for contributing funds. Free tax 2012   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. Free tax 2012 You must make matching contributions or nonelective contributions by the due date (including extensions) for filing your federal income tax return for the year. Free tax 2012 Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions. Free tax 2012 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. Free tax 2012 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. Free tax 2012 Example 1. Free tax 2012 Your tax year is the fiscal year ending June 30. Free tax 2012 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. Free tax 2012 Example 2. Free tax 2012 You are a sole proprietor whose tax year is the calendar year. Free tax 2012 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. Free tax 2012 Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Free tax 2012 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. Free tax 2012 Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Free tax 2012 (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you receive from the partnership. Free tax 2012 ) Tax Treatment of Contributions You can deduct your contributions and your employees can exclude these contributions from their gross income. Free tax 2012 SIMPLE IRA plan contributions are not subject to federal income tax withholding. Free tax 2012 However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. Free tax 2012 Matching and nonelective contributions are not subject to these taxes. Free tax 2012 Reporting on Form W-2. Free tax 2012   Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation” box of Form W-2. Free tax 2012 You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Free tax 2012 You must also include them in box 12. Free tax 2012 Mark the “Retirement plan” checkbox in box 13. Free tax 2012 For more information, see the Form W-2 instructions. Free tax 2012 Distributions (Withdrawals) Distributions from a SIMPLE IRA are subject to IRA rules and generally are includible in income for the year received. Free tax 2012 Tax-free rollovers can be made from one SIMPLE IRA into another SIMPLE IRA. Free tax 2012 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. Free tax 2012 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. Free tax 2012 Early withdrawals generally are subject to a 10% additional tax. Free tax 2012 However, the additional tax is increased to 25% if funds are withdrawn within 2 years of beginning participation. Free tax 2012 More information. Free tax 2012   See Publication 590 for information about IRA rules, including those on the tax treatment of distributions, rollovers, required distributions, and income tax withholding. Free tax 2012 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. Free tax 2012 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. Free tax 2012 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. Free tax 2012 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. Free tax 2012 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. Free tax 2012 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. Free tax 2012 See Catch-up contributions , earlier under Contribution Limits. Free tax 2012 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. Free tax 2012 No other contributions can be made to the trust. Free tax 2012 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. Free tax 2012 The employee's rights to any contributions are nonforfeitable. Free tax 2012 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). Free tax 2012 Compensation is defined earlier in this chapter. Free tax 2012 Employee notification. Free tax 2012   The notification requirement that applies to SIMPLE IRA plans also applies to SIMPLE 401(k) plans. Free tax 2012 See Notification Requirement in this chapter. Free tax 2012 Credit for startup costs. Free tax 2012   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. Free tax 2012 For more information, see Credit for startup costs under Reminders, earlier. Free tax 2012 Note on Forms. Free tax 2012   Please note that Forms 5304-SIMPLE and 5305-SIMPLE can not be used to establish a SIMPLE 401(k) plan. Free tax 2012 To set up a SIMPLE 401(k) plan, see Adopting a Written Plan in chapter 4. Free tax 2012 Prev  Up  Next   Home   More Online Publications