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Tax Form For College Students

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Tax Form For College Students

Tax form for college students Publication 509 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionOrdering forms and publications. Tax form for college students Tax questions. Tax form for college students Background Information for Using the Tax CalendarsElectronic deposit requirement. Tax form for college students Legal holidays. Tax form for college students Statewide legal holidays. Tax form for college students Future Developments For the latest information about developments related to Publication 509, such as legislation enacted after it was published, go to www. Tax form for college students irs. Tax form for college students gov/pub509. Tax form for college students What's New Publication 1518 discontinued after 2013. Tax form for college students  Publication 1518, IRS Tax Calendar for Small Businesses and Self-Employed, is discontinued after 2013. Tax form for college students An IRS Tax Calendar and most of the information previously contained in Publication 1518 can be found at www. Tax form for college students irs. Tax form for college students gov/taxcalendar. Tax form for college students Reminders Photographs of missing children. Tax form for college students  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Tax form for college students Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Tax form for college students You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Tax form for college students Introduction A tax calendar is a 12-month calendar divided into quarters. Tax form for college students The calendar gives specific due dates for: Filing tax forms, Paying taxes, and Taking other actions required by federal tax law. Tax form for college students What does this publication contain?   This publication contains the following. Tax form for college students A section on how to use the tax calendars. Tax form for college students Three tax calendars: General Tax Calendar, Employer's Tax Calendar, and Excise Tax Calendar. Tax form for college students A table showing the semiweekly deposit due dates for payroll taxes for 2014. Tax form for college students   Most of the due dates discussed in this publication are also included in the IRS Tax Calendar available at www. Tax form for college students irs. Tax form for college students gov/taxcalendar. Tax form for college students Who should use this publication?   Primarily, employers need to use this publication. Tax form for college students However, the General Tax Calendar has important due dates for all businesses and individuals. Tax form for college students Anyone who must pay excise taxes may need the Excise Tax Calendar . Tax form for college students What are the advantages of using a tax calendar?   The following are advantages of using a calendar. Tax form for college students You do not have to figure the due dates yourself. Tax form for college students You can file or pay timely and avoid penalties. Tax form for college students You do not have to adjust the due dates for Saturdays, Sundays, and legal holidays. Tax form for college students You do not have to adjust the due dates for special banking rules if you use the Employer's Tax Calendar or Excise Tax Calendar . Tax form for college students Which calendar(s) should I use?   To decide which calendar(s) to use, first look at the General Tax Calendar and highlight the dates that apply to you. Tax form for college students If you are an employer, also use the Employer's Tax Calendar . Tax form for college students If you must pay excise taxes, use the Excise Tax Calendar . Tax form for college students Depending on your situation, you may need to use more than one calendar. Tax form for college students Table 1. Tax form for college students Useful Publications IF you are. Tax form for college students . Tax form for college students . Tax form for college students THEN you may need. Tax form for college students . Tax form for college students . Tax form for college students An employer • Publication 15 (Circular E), Employer's Tax Guide. Tax form for college students  • Publication 15-A, Employer's Supplemental Tax Guide. Tax form for college students  • Publication 15-B, Employer's Tax Guide to Fringe Benefits. Tax form for college students  • Publication 926, Household Employer's Tax Guide. Tax form for college students A farmer • Publication 51 (Circular A), Agricultural Employer's Tax Guide. Tax form for college students  • Publication 225, Farmer's Tax Guide. Tax form for college students An individual • Publication 505, Tax Withholding and Estimated Tax. Tax form for college students Required to pay excise taxes • Publication 510, Excise Taxes. Tax form for college students What is not in these calendars?   The calendars do not cover the employment or excise tax deposit rules. Tax form for college students You can find the deposit rules for employment taxes in Publication 15 (Circular E), Employer's Tax Guide. Tax form for college students The deposit rules for excise taxes are in Publication 510, Excise Taxes, and in the Instructions for Form 720, Quarterly Federal Excise Tax Return. Tax form for college students In addition, the calendars do not cover filing forms and other requirements for: Estate taxes, Gift taxes, Trusts, Exempt organizations, Certain types of corporations, or Foreign partnerships. Tax form for college students What other publications and tax forms will I need?   Table 1 lists other publications you may need to order. Tax form for college students Each calendar lists the forms you may need. Tax form for college students   See How To Get Tax Help near the end of this publication for information about getting publications and forms. Tax form for college students Comments and suggestions. Tax form for college students   We welcome your comments about this publication and your suggestions for future editions. Tax form for college students   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Tax form for college students NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Tax form for college students Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Tax form for college students   You can send us comments from www. Tax form for college students irs. Tax form for college students gov/formspubs. Tax form for college students Click on More Information and then click on Comment on Tax Forms and Publications. Tax form for college students   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our forms and publications. Tax form for college students Ordering forms and publications. Tax form for college students   Visit www. Tax form for college students irs. Tax form for college students gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Tax form for college students Internal Revenue Service 1201 N. Tax form for college students Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Tax form for college students   If you have a tax question, check the information available on IRS. Tax form for college students gov or call 1-800-829-1040. Tax form for college students We cannot answer tax questions sent to either of the above addresses. Tax form for college students Background Information for Using the Tax Calendars The following brief explanations may be helpful to you in using the tax calendars. Tax form for college students IRS e-services make taxes easier. Tax form for college students   Now more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Tax form for college students Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make taxes easier. Tax form for college students    You can e-file your Form 1040; certain business tax returns such as Forms 1120, 1120S, and 1065; certain employment tax returns such as Forms 940 and 941; certain excise tax returns such as Forms 720, 2290, and 8849; and Form 1099 and other information returns. Tax form for college students Visit www. Tax form for college students irs. Tax form for college students gov/efile for more information. Tax form for college students You can pay taxes online or by phone using the Electronic Federal Tax Payments System (EFTPS). Tax form for college students For detailed information about using this free service, see Electronic deposit requirement below. Tax form for college students   Use these electronic options to make filing and paying taxes easier. Tax form for college students For more information on electronic payments, visit the IRS website at www. Tax form for college students irs. Tax form for college students gov/e-pay. Tax form for college students Tax deposits. Tax form for college students   Some taxes can be paid with the return on which they are reported. Tax form for college students However, in many cases, you have to deposit the tax before the due date for filing the return. Tax form for college students Tax deposits are figured for periods of time that are shorter than the time period covered by the return. Tax form for college students See Publication 15 (Circular E) for the employment tax deposit rules. Tax form for college students For the excise tax deposit rules, see Publication 510 or the Instructions for Form 720. Tax form for college students    Electronic deposit requirement. Tax form for college students   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Tax form for college students Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Tax form for college students EFTPS is a free service provided by the Department of Treasury. Tax form for college students If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Tax form for college students   To get more information or to enroll in EFTPS, call 1-800-555-4477 (business), 1-800-316-6541 (individual), or 1-800-733-4829 (TDD/TTY). Tax form for college students You can also visit the EFTPS website at www. Tax form for college students eftps. Tax form for college students gov. Tax form for college students Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. Tax form for college students    If you fail to timely, properly, and in full make your federal tax deposit, you may be subject to a failure-to-deposit penalty. Tax form for college students For an EFTPS deposit to be on time, you must initiate the deposit by 8 p. Tax form for college students m. Tax form for college students Eastern time the day before the date the deposit is due. Tax form for college students Saturday, Sunday, or legal holiday. Tax form for college students   Generally, if a due date for performing any act for tax purposes falls on a Saturday, Sunday, or legal holiday, the act is considered to be performed timely if it is performed no later than the next day that is not a Saturday, Sunday, or legal holiday. Tax form for college students The term legal holiday means any legal holiday in the District of Columbia. Tax form for college students The calendars provided in this publication make the adjustment for Saturdays, Sundays, and legal holidays. Tax form for college students But you must make any adjustments for statewide legal holidays, as discussed next. Tax form for college students An exception to this rule for certain excise taxes is noted later under the Excise Tax Calendar. Tax form for college students Legal holidays. Tax form for college students   Legal holidays for 2014 are listed below. Tax form for college students January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. Tax form for college students / Inauguration Day February 17— Washington's Birthday April 16— District of Columbia Emancipation Day May 26— Memorial Day July 4— Independence Day September 1— Labor Day October 13— Columbus Day November 11— Veterans Day November 27— Thanksgiving Day December 25— Christmas Day Statewide legal holidays. Tax form for college students   A statewide legal holiday delays a due date for filing a return only if the IRS office where you are required to file is located in that state. Tax form for college students A statewide legal holiday does not delay a due date for making a federal tax deposit. Tax form for college students Extended due date for Forms 1098, 1099, and W-2 if filed electronically. Tax form for college students   If you file Forms 1098, 1099, or W-2 electronically, your due date for filing them with the IRS or the Social Security Administration (SSA) will be extended to March 31. Tax form for college students   For 2014, the due date for giving the recipient these forms is January 31. Tax form for college students   For information about filing Forms 1098, 1099, or W-2G electronically, see Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. Tax form for college students For information about filing Form W-2 electronically with the SSA, visit www. Tax form for college students ssa. Tax form for college students gov/employer or call 1-800-772-6270. Tax form for college students Penalties. Tax form for college students   Whenever possible, you should take action before the listed due date. Tax form for college students If you are late, you may have to pay a penalty as well as interest on any overdue taxes. Tax form for college students   Be sure to follow all the tax laws that apply to you. Tax form for college students In addition to civil penalties, criminal penalties may be imposed for intentionally not paying taxes, for intentionally filing a false return, or for not filing a required return. Tax form for college students Use of private delivery services. Tax form for college students   You can use certain private delivery services designated by the IRS to meet the timely mailing as timely filing/paying rule for tax returns and payments. Tax form for college students These private delivery services include only the following. Tax form for college students DHL Express (DHL): DHL Same Day Service. Tax form for college students Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Priority, and FedEx International First. Tax form for college students United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Tax form for college students M. Tax form for college students , UPS Worldwide Express Plus, and UPS Worldwide Express. Tax form for college students   For the IRS mailing address to use if you are using a private delivery service, go to IRS. Tax form for college students gov and enter “private delivery service” in the search box. Tax form for college students   The private delivery service can tell you how to get written proof of the mailing date. Tax form for college students    The U. Tax form for college students S. Tax form for college students Postal Service advises that private delivery services cannot deliver items to P. Tax form for college students O. Tax form for college students boxes. Tax form for college students You must use the U. Tax form for college students S. Tax form for college students Postal Service to mail any item to an IRS P. Tax form for college students O. Tax form for college students box address. Tax form for college students Prev  Up  Next   Home   More Online Publications
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Choosing a Credit Counseling Agency

Counseling services are available to help people budget money and pay bills. Credit unions, Cooperative Extension offices, military family service centers and religious organizations are among those that may offer free or low-cost credit counseling.

Local, nonprofit agencies that provide educational programs on money management and help in developing debt payment plans operate under the name Consumer Credit Counseling Service (CCCS). Make certain that the agency is accredited by the Council on Accreditation, (COA), or the International Organization for Standardization (ISO). The counselor should also be certified by the National Foundation for Credit Counseling (NFCC), an organization that supports a national network of credit counselors.

Typically, a counseling service will negotiate lower payments with your creditors, then make the payments using money you send to it each month. The cost of setting up this debt-management plan is paid by the creditor, not you. Ask these questions to find the best counselor for you:

  • What services do you offer? Look for an organization that offers budget counseling and money management classes as well as a debt-management plan.
  • Do you offer free information? Avoid organizations that charge for information or make you provide a lot of details about your problem first.
  • What are your fees? Are there set-up and/or monthly fees? A typical set-up fee is $10. Beware of agencies that charge large up-front fees.
  • How will the debt management plan work? What debts can be included in the plan and will you get regular reports on your accounts?
  • Ask whether the counselor can get creditors to lower or eliminate interest and fees. If the answer is yes, contact your creditors to verify this.
  • Ask what happens if you can't afford to pay. If an organization won't help you because you can't afford to pay, go somewhere else for help.
  • Will your counselor help you avoid future problems? Getting a plan for avoiding future debt is as important as solving the immediate debt problem.
  • Ask for a contract. All verbal promises should be in writing before you pay any money.
  • Are your counselors accredited or certified? Legitimate credit counseling firms are affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

Check with your local consumer protection agency and the Better Business Bureau to see if any complaints have been filed about the counseling service you're considering.

If you have concerns about approved credit counseling agencies or credit counseling providers, please contact the U.S. Trustee Program .

The Tax Form For College Students

Tax form for college students 2. Tax form for college students   Simplified Employee Pensions (SEPs) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Setting Up a SEPWhen not to use Form 5305-SEP. Tax form for college students How Much Can I Contribute?Contribution Limits Deducting ContributionsDeduction Limit for Contributions for Participants Deduction Limit for Self-Employed Individuals Carryover of Excess SEP Contributions When To Deduct Contributions Where To Deduct Contributions Salary Reduction Simplified Employee Pensions (SARSEPs)SARSEP ADP test. Tax form for college students Deferral percentage. Tax form for college students Employee compensation. Tax form for college students Compensation of self-employed individuals. Tax form for college students Choice not to treat deferrals as compensation. Tax form for college students Limit on Elective Deferrals Tax Treatment of Deferrals Distributions (Withdrawals) Additional TaxesEffects on employee. Tax form for college students Reporting and Disclosure Requirements Topics - This chapter discusses: Setting up a SEP How much can I contribute Deducting contributions Salary reduction simplified employee pensions (SARSEPs) Distributions (withdrawals) Additional taxes Reporting and disclosure requirements Useful Items - You may want to see: Publication 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4285 SEP Checklist 4286 SARSEP Checklist 4333 SEP Retirement Plans for Small Businesses 4336 SARSEP for Small Businesses 4407 SARSEP—Key Issues and Assistance Forms (and Instructions) W-2 Wage and Tax Statement 1040 U. Tax form for college students S. Tax form for college students Individual Income Tax Return 5305-SEP Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 5305A-SEP Salary Reduction Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A SEP is a written plan that allows you to make contributions toward your own retirement and your employees' retirement without getting involved in a more complex qualified plan. Tax form for college students Under a SEP, you make contributions to a traditional individual retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. Tax form for college students A SEP-IRA is owned and controlled by the employee, and you make contributions to the financial institution where the SEP-IRA is maintained. Tax form for college students SEP-IRAs are set up for, at a minimum, each eligible employee (defined below). Tax form for college students A SEP-IRA may have to be set up for a leased employee (defined in chapter 1), but does not need to be set up for excludable employees (defined later). Tax form for college students Eligible employee. Tax form for college students   An eligible employee is an individual who meets all the following requirements. Tax form for college students Has reached age 21. Tax form for college students Has worked for you in at least 3 of the last 5 years. Tax form for college students Has received at least $550 in compensation from you in 2013. Tax form for college students This amount remains the same in 2014. Tax form for college students    You can use less restrictive participation requirements than those listed, but not more restrictive ones. Tax form for college students Excludable employees. Tax form for college students   The following employees can be excluded from coverage under a SEP. Tax form for college students Employees covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Tax form for college students Nonresident alien employees who have received no U. Tax form for college students S. Tax form for college students source wages, salaries, or other personal services compensation from you. Tax form for college students For more information about nonresident aliens, see Publication 519, U. Tax form for college students S. Tax form for college students Tax Guide for Aliens. Tax form for college students Setting Up a SEP There are three basic steps in setting up a SEP. Tax form for college students You must execute a formal written agreement to provide benefits to all eligible employees. Tax form for college students You must give each eligible employee certain information about the SEP. Tax form for college students A SEP-IRA must be set up by or for each eligible employee. Tax form for college students Many financial institutions will help you set up a SEP. Tax form for college students Formal written agreement. Tax form for college students   You must execute a formal written agreement to provide benefits to all eligible employees under a SEP. Tax form for college students You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP. Tax form for college students However, see When not to use Form 5305-SEP, below. Tax form for college students   If you adopt an IRS model SEP using Form 5305-SEP, no prior IRS approval or determination letter is required. Tax form for college students Keep the original form. Tax form for college students Do not file it with the IRS. Tax form for college students Also, using Form 5305-SEP will usually relieve you from filing annual retirement plan information returns with the IRS and the Department of Labor. Tax form for college students See the Form 5305-SEP instructions for details. Tax form for college students If you choose not to use Form 5305-SEP, you should seek professional advice in adopting a SEP. Tax form for college students When not to use Form 5305-SEP. Tax form for college students   You cannot use Form 5305-SEP if any of the following apply. Tax form for college students You currently maintain any other qualified retirement plan other than another SEP. Tax form for college students You have any eligible employees for whom IRAs have not been set up. Tax form for college students You use the services of leased employees, who are not your common-law employees (as described in chapter 1). Tax form for college students You are a member of any of the following unless all eligible employees of all the members of these groups, trades, or businesses participate under the SEP. Tax form for college students An affiliated service group described in section 414(m). Tax form for college students A controlled group of corporations described in section 414(b). Tax form for college students Trades or businesses under common control described in section 414(c). Tax form for college students You do not pay the cost of the SEP contributions. Tax form for college students Information you must give to employees. Tax form for college students   You must give each eligible employee a copy of Form 5305-SEP, its instructions, and the other information listed in the Form 5305-SEP instructions. Tax form for college students An IRS model SEP is not considered adopted until you give each employee this information. Tax form for college students Setting up the employee's SEP-IRA. Tax form for college students   A SEP-IRA must be set up by or for each eligible employee. Tax form for college students SEP-IRAs can be set up with banks, insurance companies, or other qualified financial institutions. Tax form for college students You send SEP contributions to the financial institution where the SEP-IRA is maintained. Tax form for college students Deadline for setting up a SEP. Tax form for college students   You can set up a SEP for any year as late as the due date (including extensions) of your income tax return for that year. Tax form for college students Credit for startup costs. Tax form for college students   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP that first became effective in 2013. Tax form for college students For more information, see Credit for startup costs under Reminders, earlier. Tax form for college students How Much Can I Contribute? The SEP rules permit you to contribute a limited amount of money each year to each employee's SEP-IRA. Tax form for college students If you are self-employed, you can contribute to your own SEP-IRA. Tax form for college students Contributions must be in the form of money (cash, check, or money order). Tax form for college students You cannot contribute property. Tax form for college students However, participants may be able to transfer or roll over certain property from one retirement plan to another. Tax form for college students See Publication 590 for more information about rollovers. Tax form for college students You do not have to make contributions every year. Tax form for college students But if you make contributions, they must be based on a written allocation formula and must not discriminate in favor of highly compensated employees (defined in chapter 1). Tax form for college students When you contribute, you must contribute to the SEP-IRAs of all participants who actually performed personal services during the year for which the contributions are made, including employees who die or terminate employment before the contributions are made. Tax form for college students Contributions are deductible within limits, as discussed later, and generally are not taxable to the plan participants. Tax form for college students A SEP-IRA cannot be a Roth IRA. Tax form for college students Employer contributions to a SEP-IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Tax form for college students Unlike regular contributions to a traditional IRA, contributions under a SEP can be made to participants over age 70½. Tax form for college students If you are self-employed, you can also make contributions under the SEP for yourself even if you are over 70½. Tax form for college students Participants age 70½ or over must take required minimum distributions. Tax form for college students Time limit for making contributions. Tax form for college students   To deduct contributions for a year, you must make the contributions by the due date (including extensions) of your tax return for the year. Tax form for college students Contribution Limits Contributions you make for 2013 to a common-law employee's SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000. Tax form for college students Compensation generally does not include your contributions to the SEP. Tax form for college students The SEP plan document will specify how the employer contribution is determined and how it will be allocated to participants. Tax form for college students Example. Tax form for college students Your employee, Mary Plant, earned $21,000 for 2013. Tax form for college students The maximum contribution you can make to her SEP-IRA is $5,250 (25% x $21,000). Tax form for college students Contributions for yourself. Tax form for college students   The annual limits on your contributions to a common-law employee's SEP-IRA also apply to contributions you make to your own SEP-IRA. Tax form for college students However, special rules apply when figuring your maximum deductible contribution. Tax form for college students See Deduction Limit for Self-Employed Individuals , later. Tax form for college students Annual compensation limit. Tax form for college students   You cannot consider the part of an employee's compensation over $255,000 when figuring your contribution limit for that employee. Tax form for college students However, $51,000 is the maximum contribution for an eligible employee. Tax form for college students These limits are $260,000 and $52,000, respectively, in 2014. Tax form for college students Example. Tax form for college students Your employee, Susan Green, earned $210,000 for 2013. Tax form for college students Because of the maximum contribution limit for 2013, you can only contribute $51,000 to her SEP-IRA. Tax form for college students More than one plan. Tax form for college students   If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $51,000 or 100% of the participant's compensation. Tax form for college students When you figure this limit, you must add your contributions to all defined contribution plans maintained by you. Tax form for college students Because a SEP is considered a defined contribution plan for this limit, your contributions to a SEP must be added to your contributions to other defined contribution plans you maintain. Tax form for college students Tax treatment of excess contributions. Tax form for college students   Excess contributions are your contributions to an employee's SEP-IRA (or to your own SEP-IRA) for 2013 that exceed the lesser of the following amounts. Tax form for college students 25% of the employee's compensation (or, for you, 20% of your net earnings from self-employment). Tax form for college students $51,000. Tax form for college students Excess contributions are included in the employee's income for the year and are treated as contributions by the employee to his or her SEP-IRA. Tax form for college students For more information on employee tax treatment of excess contributions, see chapter 1 in Publication 590. Tax form for college students Reporting on Form W-2. Tax form for college students   Do not include SEP contributions on your employee's Form W-2 unless contributions were made under a salary reduction arrangement (discussed later). Tax form for college students Deducting Contributions Generally, you can deduct the contributions you make each year to each employee's SEP-IRA. Tax form for college students If you are self-employed, you can deduct the contributions you make each year to your own SEP-IRA. Tax form for college students Deduction Limit for Contributions for Participants The most you can deduct for your contributions to you or your employee's SEP-IRA is the lesser of the following amounts. Tax form for college students Your contributions (including any excess contributions carryover). Tax form for college students 25% of the compensation (limited to $255,000 per participant) paid to the participants during 2013 from the business that has the plan, not to exceed $51,000 per participant. Tax form for college students In 2014, the amounts in (2) above are $260,000 and $52,000, respectively. Tax form for college students Deduction Limit for Self-Employed Individuals If you contribute to your own SEP-IRA, you must make a special computation to figure your maximum deduction for these contributions. Tax form for college students When figuring the deduction for contributions made to your own SEP-IRA, compensation is your net earnings from self-employment (defined in chapter 1), which takes into account both the following deductions. Tax form for college students The deduction for the deductible part of your self-employment tax. Tax form for college students The deduction for contributions to your own SEP-IRA. Tax form for college students The deduction for contributions to your own SEP-IRA and your net earnings depend on each other. Tax form for college students For this reason, you determine the deduction for contributions to your own SEP-IRA indirectly by reducing the contribution rate called for in your plan. Tax form for college students To do this, use the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed, whichever is appropriate for your plan's contribution rate, in chapter 5. Tax form for college students Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Tax form for college students Carryover of Excess SEP Contributions If you made SEP contributions that are more than the deduction limit (nondeductible contributions), you can carry over and deduct the difference in later years. Tax form for college students However, the carryover, when combined with the contribution for the later year, is subject to the deduction limit for that year. Tax form for college students If you also contributed to a defined benefit plan or defined contribution plan, see Carryover of Excess Contributions under Employer Deduction in chapter 4 for the carryover limit. Tax form for college students Excise tax. Tax form for college students   If you made nondeductible (excess) contributions to a SEP, you may be subject to a 10% excise tax. Tax form for college students For information about the excise tax, see Excise Tax for Nondeductible (Excess) Contributions under Employer Deduction in chapter 4. Tax form for college students When To Deduct Contributions When you can deduct contributions made for a year depends on the tax year on which the SEP is maintained. Tax form for college students If the SEP is maintained on a calendar year basis, you deduct the yearly contributions on your tax return for the year within which the calendar year ends. Tax form for college students If you file your tax return and maintain the SEP using a fiscal year or short tax year, you deduct contributions made for a year on your tax return for that year. Tax form for college students Example. Tax form for college students You are a fiscal year taxpayer whose tax year ends June 30. Tax form for college students You maintain a SEP on a calendar year basis. Tax form for college students You deduct SEP contributions made for calendar year 2013 on your tax return for your tax year ending June 30, 2014. Tax form for college students Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Tax form for college students For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040), Profit or Loss From Farming; partnerships deduct them on Form 1065, U. Tax form for college students S. Tax form for college students Return of Partnership Income; and corporations deduct them on Form 1120, U. Tax form for college students S. Tax form for college students Corporation Income Tax Return, or Form 1120S, U. Tax form for college students S. Tax form for college students Income Tax Return for an S Corporation. Tax form for college students Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Tax form for college students (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Tax form for college students , you receive from the partnership. Tax form for college students ) Remember that sole proprietors and partners can't deduct as a business expense contributions made to a SEP for themselves, only those made for their common-law employees. Tax form for college students Salary Reduction Simplified Employee Pensions (SARSEPs) A SARSEP is a SEP set up before 1997 that includes a salary reduction arrangement. Tax form for college students (See the Caution, next. Tax form for college students ) Under a SARSEP, your employees can choose to have you contribute part of their pay to their SEP-IRAs rather than receive it in cash. Tax form for college students This contribution is called an “elective deferral” because employees choose (elect) to set aside the money, and they defer the tax on the money until it is distributed to them. Tax form for college students You are not allowed to set up a SARSEP after 1996. Tax form for college students However, participants (including employees hired after 1996) in a SARSEP set up before 1997 can continue to have you contribute part of their pay to the plan. Tax form for college students If you are interested in setting up a retirement plan that includes a salary reduction arrangement, see chapter 3. Tax form for college students Who can have a SARSEP?   A SARSEP set up before 1997 is available to you and your eligible employees only if all the following requirements are met. Tax form for college students At least 50% of your employees eligible to participate choose to make elective deferrals. Tax form for college students You have 25 or fewer employees who were eligible to participate in the SEP at any time during the preceding year. Tax form for college students The elective deferrals of your highly compensated employees meet the SARSEP ADP test. Tax form for college students SARSEP ADP test. Tax form for college students   Under the SARSEP ADP test, the amount deferred each year by each eligible highly compensated employee as a percentage of pay (the deferral percentage) cannot be more than 125% of the average deferral percentage (ADP) of all non-highly compensated employees eligible to participate. Tax form for college students A highly compensated employee is defined in chapter 1. Tax form for college students Deferral percentage. Tax form for college students   The deferral percentage for an employee for a year is figured as follows. Tax form for college students   The elective employer contributions (excluding certain catch-up contributions)  paid to the SEP for the employee for the year     The employee's compensation (limited to $255,000 in 2013)   The instructions for Form 5305A-SEP have a worksheet you can use to determine whether the elective deferrals of your highly compensated employees meet the SARSEP ADP test. Tax form for college students Employee compensation. Tax form for college students   For figuring the deferral percentage, compensation is generally the amount you pay to the employee for the year. Tax form for college students Compensation includes the elective deferral and other amounts deferred in certain employee benefit plans. Tax form for college students See Compensation in chapter 1. Tax form for college students Elective deferrals under the SARSEP are included in figuring your employees' deferral percentage even though they are not included in the income of your employees for income tax purposes. Tax form for college students Compensation of self-employed individuals. Tax form for college students   If you are self-employed, compensation is your net earnings from self-employment as defined in chapter 1. Tax form for college students   Compensation does not include tax-free items (or deductions related to them) other than foreign earned income and housing cost amounts. Tax form for college students Choice not to treat deferrals as compensation. Tax form for college students   You can choose not to treat elective deferrals (and other amounts deferred in certain employee benefit plans) for a year as compensation under your SARSEP. Tax form for college students Limit on Elective Deferrals The most a participant can choose to defer for calendar year 2013 is the lesser of the following amounts. Tax form for college students 25% of the participant's compensation (limited to $255,000 of the participant's compensation). Tax form for college students $17,500. Tax form for college students The $17,500 limit applies to the total elective deferrals the employee makes for the year to a SEP and any of the following. Tax form for college students Cash or deferred arrangement (section 401(k) plan). Tax form for college students Salary reduction arrangement under a tax-sheltered annuity plan (section 403(b) plan). Tax form for college students SIMPLE IRA plan. Tax form for college students In 2014, the $255,000 limit increases to $260,000 and the $17,500 limit remains at $17,500. Tax form for college students Catch-up contributions. Tax form for college students   A SARSEP can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Tax form for college students The catch-up contribution limit for 2013 is $5,500 and remains at $5,500 for 2014. Tax form for college students Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the elective deferral limit (the lesser of 25% of compensation or $17,500), the SARSEP ADP test limit discussed earlier, or the plan limit (if any). Tax form for college students However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Tax form for college students The catch-up contribution limit. Tax form for college students The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Tax form for college students   Catch-up contributions are not subject to the elective deferral limit (the lesser of 25% of compensation or $17,500 in 2013 and in 2014). Tax form for college students Overall limit on SEP contributions. Tax form for college students   If you also make nonelective contributions to a SEP-IRA, the total of the nonelective and elective contributions to that SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000 for 2013 ($52,000 for 2014). Tax form for college students The same rule applies to contributions you make to your own SEP-IRA. Tax form for college students See Contribution Limits , earlier. Tax form for college students Figuring the elective deferral. Tax form for college students   For figuring the 25% limit on elective deferrals, compensation does not include SEP contributions, including elective deferrals or other amounts deferred in certain employee benefit plans. Tax form for college students Tax Treatment of Deferrals Elective deferrals that are not more than the limits discussed earlier under Limit on Elective Deferrals are excluded from your employees' wages subject to federal income tax in the year of deferral. Tax form for college students However, these deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Tax form for college students Excess deferrals. Tax form for college students   For 2013, excess deferrals are the elective deferrals for the year that are more than the $17,500 limit discussed earlier. Tax form for college students For a participant who is eligible to make catch-up contributions, excess deferrals are the elective deferrals that are more than $23,000. Tax form for college students The treatment of excess deferrals made under a SARSEP is similar to the treatment of excess deferrals made under a qualified plan. Tax form for college students See Treatment of Excess Deferrals under Elective Deferrals (401(k) Plans) in chapter 4. Tax form for college students Excess SEP contributions. Tax form for college students   Excess SEP contributions are elective deferrals of highly compensated employees that are more than the amount permitted under the SARSEP ADP test. Tax form for college students You must notify your highly compensated employees within 2½ months after the end of the plan year of their excess SEP contributions. Tax form for college students If you do not notify them within this time period, you must pay a 10% tax on the excess. Tax form for college students For an explanation of the notification requirements, see Rev. Tax form for college students Proc. Tax form for college students 91-44, 1991-2 C. Tax form for college students B. Tax form for college students 733. Tax form for college students If you adopted a SARSEP using Form 5305A-SEP, the notification requirements are explained in the instructions for that form. Tax form for college students Reporting on Form W-2. Tax form for college students   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Tax form for college students You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Tax form for college students You must also include them in box 12. Tax form for college students Mark the “Retirement plan” checkbox in box 13. Tax form for college students For more information, see the Form W-2 instructions. Tax form for college students Distributions (Withdrawals) As an employer, you cannot prohibit distributions from a SEP-IRA. Tax form for college students Also, you cannot make your contributions on the condition that any part of them must be kept in the account after you have made your contributions to the employee's accounts. Tax form for college students Distributions are subject to IRA rules. Tax form for college students Generally, you or your employee must begin to receive distributions from a SEP-IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. Tax form for college students For more information about IRA rules, including the tax treatment of distributions, rollovers, required distributions, and income tax withholding, see Publication 590. Tax form for college students Additional Taxes The tax advantages of using SEP-IRAs for retirement savings can be offset by additional taxes that may be imposed for all the following actions. Tax form for college students Making excess contributions. Tax form for college students Making early withdrawals. Tax form for college students Not making required withdrawals. Tax form for college students For information about these taxes, see chapter 1 in Publication 590. Tax form for college students Also, a SEP-IRA may be disqualified, or an excise tax may apply, if the account is involved in a prohibited transaction, discussed next. Tax form for college students Prohibited transaction. Tax form for college students   If an employee improperly uses his or her SEP-IRA, such as by borrowing money from it, the employee has engaged in a prohibited transaction. Tax form for college students In that case, the SEP-IRA will no longer qualify as an IRA. Tax form for college students For a list of prohibited transactions, see Prohibited Transactions in chapter 4. Tax form for college students Effects on employee. Tax form for college students   If a SEP-IRA is disqualified because of a prohibited transaction, the assets in the account will be treated as having been distributed to the employee on the first day of the year in which the transaction occurred. Tax form for college students The employee must include in income the fair market value of the assets (on the first day of the year) that is more than any cost basis in the account. Tax form for college students Also, the employee may have to pay the additional tax for making early withdrawals. Tax form for college students Reporting and Disclosure Requirements If you set up a SEP using Form 5305-SEP, you must give your eligible employees certain information about the SEP when you set it up. Tax form for college students See Setting Up a SEP , earlier. Tax form for college students Also, you must give your eligible employees a statement each year showing any contributions to their SEP-IRAs. Tax form for college students You must also give them notice of any excess contributions. Tax form for college students For details about other information you must give them, see the instructions for Form 5305-SEP or Form 5305A-SEP (for a salary reduction SEP). Tax form for college students Even if you did not use Form 5305-SEP or Form 5305A-SEP to set up your SEP, you must give your employees information similar to that described above. Tax form for college students For more information, see the instructions for either Form 5305-SEP or Form 5305A-SEP. Tax form for college students Prev  Up  Next   Home   More Online Publications