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Taxact 1040nr 2. Taxact 1040nr 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. Taxact 1040nr 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. Taxact 1040nr Deferral percentage. Taxact 1040nr Employee compensation. Taxact 1040nr Compensation of self-employed individuals. Taxact 1040nr Choice not to treat deferrals as compensation. Taxact 1040nr Limit on Elective Deferrals Tax Treatment of Deferrals Distributions (Withdrawals) Additional TaxesEffects on employee. Taxact 1040nr 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. Taxact 1040nr S. Taxact 1040nr 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. Taxact 1040nr Under a SEP, you make contributions to a traditional individual retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. Taxact 1040nr A SEP-IRA is owned and controlled by the employee, and you make contributions to the financial institution where the SEP-IRA is maintained. Taxact 1040nr SEP-IRAs are set up for, at a minimum, each eligible employee (defined below). Taxact 1040nr 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). Taxact 1040nr Eligible employee. Taxact 1040nr An eligible employee is an individual who meets all the following requirements. Taxact 1040nr Has reached age 21. Taxact 1040nr Has worked for you in at least 3 of the last 5 years. Taxact 1040nr Has received at least $550 in compensation from you in 2013. Taxact 1040nr This amount remains the same in 2014. Taxact 1040nr You can use less restrictive participation requirements than those listed, but not more restrictive ones. Taxact 1040nr Excludable employees. Taxact 1040nr The following employees can be excluded from coverage under a SEP. Taxact 1040nr Employees covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Taxact 1040nr Nonresident alien employees who have received no U. Taxact 1040nr S. Taxact 1040nr source wages, salaries, or other personal services compensation from you. Taxact 1040nr For more information about nonresident aliens, see Publication 519, U. Taxact 1040nr S. Taxact 1040nr Tax Guide for Aliens. Taxact 1040nr Setting Up a SEP There are three basic steps in setting up a SEP. Taxact 1040nr You must execute a formal written agreement to provide benefits to all eligible employees. Taxact 1040nr You must give each eligible employee certain information about the SEP. Taxact 1040nr A SEP-IRA must be set up by or for each eligible employee. Taxact 1040nr Many financial institutions will help you set up a SEP. Taxact 1040nr Formal written agreement. Taxact 1040nr You must execute a formal written agreement to provide benefits to all eligible employees under a SEP. Taxact 1040nr You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP. Taxact 1040nr However, see When not to use Form 5305-SEP, below. Taxact 1040nr If you adopt an IRS model SEP using Form 5305-SEP, no prior IRS approval or determination letter is required. Taxact 1040nr Keep the original form. Taxact 1040nr Do not file it with the IRS. Taxact 1040nr Also, using Form 5305-SEP will usually relieve you from filing annual retirement plan information returns with the IRS and the Department of Labor. Taxact 1040nr See the Form 5305-SEP instructions for details. Taxact 1040nr If you choose not to use Form 5305-SEP, you should seek professional advice in adopting a SEP. Taxact 1040nr When not to use Form 5305-SEP. Taxact 1040nr You cannot use Form 5305-SEP if any of the following apply. Taxact 1040nr You currently maintain any other qualified retirement plan other than another SEP. Taxact 1040nr You have any eligible employees for whom IRAs have not been set up. Taxact 1040nr You use the services of leased employees, who are not your common-law employees (as described in chapter 1). Taxact 1040nr 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. Taxact 1040nr An affiliated service group described in section 414(m). Taxact 1040nr A controlled group of corporations described in section 414(b). Taxact 1040nr Trades or businesses under common control described in section 414(c). Taxact 1040nr You do not pay the cost of the SEP contributions. Taxact 1040nr Information you must give to employees. Taxact 1040nr 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. Taxact 1040nr An IRS model SEP is not considered adopted until you give each employee this information. Taxact 1040nr Setting up the employee's SEP-IRA. Taxact 1040nr A SEP-IRA must be set up by or for each eligible employee. Taxact 1040nr SEP-IRAs can be set up with banks, insurance companies, or other qualified financial institutions. Taxact 1040nr You send SEP contributions to the financial institution where the SEP-IRA is maintained. Taxact 1040nr Deadline for setting up a SEP. Taxact 1040nr 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. Taxact 1040nr Credit for startup costs. Taxact 1040nr 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. Taxact 1040nr For more information, see Credit for startup costs under Reminders, earlier. Taxact 1040nr 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. Taxact 1040nr If you are self-employed, you can contribute to your own SEP-IRA. Taxact 1040nr Contributions must be in the form of money (cash, check, or money order). Taxact 1040nr You cannot contribute property. Taxact 1040nr However, participants may be able to transfer or roll over certain property from one retirement plan to another. Taxact 1040nr See Publication 590 for more information about rollovers. Taxact 1040nr You do not have to make contributions every year. Taxact 1040nr 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). Taxact 1040nr 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. Taxact 1040nr Contributions are deductible within limits, as discussed later, and generally are not taxable to the plan participants. Taxact 1040nr A SEP-IRA cannot be a Roth IRA. Taxact 1040nr Employer contributions to a SEP-IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Taxact 1040nr Unlike regular contributions to a traditional IRA, contributions under a SEP can be made to participants over age 70½. Taxact 1040nr If you are self-employed, you can also make contributions under the SEP for yourself even if you are over 70½. Taxact 1040nr Participants age 70½ or over must take required minimum distributions. Taxact 1040nr Time limit for making contributions. Taxact 1040nr To deduct contributions for a year, you must make the contributions by the due date (including extensions) of your tax return for the year. Taxact 1040nr 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. Taxact 1040nr Compensation generally does not include your contributions to the SEP. Taxact 1040nr The SEP plan document will specify how the employer contribution is determined and how it will be allocated to participants. Taxact 1040nr Example. Taxact 1040nr Your employee, Mary Plant, earned $21,000 for 2013. Taxact 1040nr The maximum contribution you can make to her SEP-IRA is $5,250 (25% x $21,000). Taxact 1040nr Contributions for yourself. Taxact 1040nr 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. Taxact 1040nr However, special rules apply when figuring your maximum deductible contribution. Taxact 1040nr See Deduction Limit for Self-Employed Individuals , later. Taxact 1040nr Annual compensation limit. Taxact 1040nr You cannot consider the part of an employee's compensation over $255,000 when figuring your contribution limit for that employee. Taxact 1040nr However, $51,000 is the maximum contribution for an eligible employee. Taxact 1040nr These limits are $260,000 and $52,000, respectively, in 2014. Taxact 1040nr Example. Taxact 1040nr Your employee, Susan Green, earned $210,000 for 2013. Taxact 1040nr Because of the maximum contribution limit for 2013, you can only contribute $51,000 to her SEP-IRA. Taxact 1040nr More than one plan. Taxact 1040nr 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. Taxact 1040nr When you figure this limit, you must add your contributions to all defined contribution plans maintained by you. Taxact 1040nr 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. Taxact 1040nr Tax treatment of excess contributions. Taxact 1040nr 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. Taxact 1040nr 25% of the employee's compensation (or, for you, 20% of your net earnings from self-employment). Taxact 1040nr $51,000. Taxact 1040nr 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. Taxact 1040nr For more information on employee tax treatment of excess contributions, see chapter 1 in Publication 590. Taxact 1040nr Reporting on Form W-2. Taxact 1040nr Do not include SEP contributions on your employee's Form W-2 unless contributions were made under a salary reduction arrangement (discussed later). Taxact 1040nr Deducting Contributions Generally, you can deduct the contributions you make each year to each employee's SEP-IRA. Taxact 1040nr If you are self-employed, you can deduct the contributions you make each year to your own SEP-IRA. Taxact 1040nr 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. Taxact 1040nr Your contributions (including any excess contributions carryover). Taxact 1040nr 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. Taxact 1040nr In 2014, the amounts in (2) above are $260,000 and $52,000, respectively. Taxact 1040nr 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. Taxact 1040nr 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. Taxact 1040nr The deduction for the deductible part of your self-employment tax. Taxact 1040nr The deduction for contributions to your own SEP-IRA. Taxact 1040nr The deduction for contributions to your own SEP-IRA and your net earnings depend on each other. Taxact 1040nr 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. Taxact 1040nr 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. Taxact 1040nr Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Taxact 1040nr 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. Taxact 1040nr However, the carryover, when combined with the contribution for the later year, is subject to the deduction limit for that year. Taxact 1040nr 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. Taxact 1040nr Excise tax. Taxact 1040nr If you made nondeductible (excess) contributions to a SEP, you may be subject to a 10% excise tax. Taxact 1040nr For information about the excise tax, see Excise Tax for Nondeductible (Excess) Contributions under Employer Deduction in chapter 4. Taxact 1040nr When To Deduct Contributions When you can deduct contributions made for a year depends on the tax year on which the SEP is maintained. Taxact 1040nr 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. Taxact 1040nr 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. Taxact 1040nr Example. Taxact 1040nr You are a fiscal year taxpayer whose tax year ends June 30. Taxact 1040nr You maintain a SEP on a calendar year basis. Taxact 1040nr You deduct SEP contributions made for calendar year 2013 on your tax return for your tax year ending June 30, 2014. Taxact 1040nr Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Taxact 1040nr 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. Taxact 1040nr S. Taxact 1040nr Return of Partnership Income; and corporations deduct them on Form 1120, U. Taxact 1040nr S. Taxact 1040nr Corporation Income Tax Return, or Form 1120S, U. Taxact 1040nr S. Taxact 1040nr Income Tax Return for an S Corporation. Taxact 1040nr Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Taxact 1040nr (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. Taxact 1040nr , you receive from the partnership. Taxact 1040nr ) 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. Taxact 1040nr Salary Reduction Simplified Employee Pensions (SARSEPs) A SARSEP is a SEP set up before 1997 that includes a salary reduction arrangement. Taxact 1040nr (See the Caution, next. Taxact 1040nr ) 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. Taxact 1040nr 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. Taxact 1040nr You are not allowed to set up a SARSEP after 1996. Taxact 1040nr 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. Taxact 1040nr If you are interested in setting up a retirement plan that includes a salary reduction arrangement, see chapter 3. Taxact 1040nr 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. Taxact 1040nr At least 50% of your employees eligible to participate choose to make elective deferrals. Taxact 1040nr You have 25 or fewer employees who were eligible to participate in the SEP at any time during the preceding year. Taxact 1040nr The elective deferrals of your highly compensated employees meet the SARSEP ADP test. Taxact 1040nr SARSEP ADP test. Taxact 1040nr 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. Taxact 1040nr A highly compensated employee is defined in chapter 1. Taxact 1040nr Deferral percentage. Taxact 1040nr The deferral percentage for an employee for a year is figured as follows. Taxact 1040nr 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. Taxact 1040nr Employee compensation. Taxact 1040nr For figuring the deferral percentage, compensation is generally the amount you pay to the employee for the year. Taxact 1040nr Compensation includes the elective deferral and other amounts deferred in certain employee benefit plans. Taxact 1040nr See Compensation in chapter 1. Taxact 1040nr 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. Taxact 1040nr Compensation of self-employed individuals. Taxact 1040nr If you are self-employed, compensation is your net earnings from self-employment as defined in chapter 1. Taxact 1040nr Compensation does not include tax-free items (or deductions related to them) other than foreign earned income and housing cost amounts. Taxact 1040nr Choice not to treat deferrals as compensation. Taxact 1040nr 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. Taxact 1040nr Limit on Elective Deferrals The most a participant can choose to defer for calendar year 2013 is the lesser of the following amounts. Taxact 1040nr 25% of the participant's compensation (limited to $255,000 of the participant's compensation). Taxact 1040nr $17,500. Taxact 1040nr The $17,500 limit applies to the total elective deferrals the employee makes for the year to a SEP and any of the following. Taxact 1040nr Cash or deferred arrangement (section 401(k) plan). Taxact 1040nr Salary reduction arrangement under a tax-sheltered annuity plan (section 403(b) plan). Taxact 1040nr SIMPLE IRA plan. Taxact 1040nr In 2014, the $255,000 limit increases to $260,000 and the $17,500 limit remains at $17,500. Taxact 1040nr Catch-up contributions. Taxact 1040nr A SARSEP can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Taxact 1040nr The catch-up contribution limit for 2013 is $5,500 and remains at $5,500 for 2014. Taxact 1040nr 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). Taxact 1040nr However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Taxact 1040nr The catch-up contribution limit. Taxact 1040nr The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Taxact 1040nr 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). Taxact 1040nr Overall limit on SEP contributions. Taxact 1040nr 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). Taxact 1040nr The same rule applies to contributions you make to your own SEP-IRA. Taxact 1040nr See Contribution Limits , earlier. Taxact 1040nr Figuring the elective deferral. Taxact 1040nr 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. Taxact 1040nr 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. Taxact 1040nr However, these deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Taxact 1040nr Excess deferrals. Taxact 1040nr For 2013, excess deferrals are the elective deferrals for the year that are more than the $17,500 limit discussed earlier. Taxact 1040nr For a participant who is eligible to make catch-up contributions, excess deferrals are the elective deferrals that are more than $23,000. Taxact 1040nr The treatment of excess deferrals made under a SARSEP is similar to the treatment of excess deferrals made under a qualified plan. Taxact 1040nr See Treatment of Excess Deferrals under Elective Deferrals (401(k) Plans) in chapter 4. Taxact 1040nr Excess SEP contributions. Taxact 1040nr Excess SEP contributions are elective deferrals of highly compensated employees that are more than the amount permitted under the SARSEP ADP test. Taxact 1040nr You must notify your highly compensated employees within 2½ months after the end of the plan year of their excess SEP contributions. Taxact 1040nr If you do not notify them within this time period, you must pay a 10% tax on the excess. Taxact 1040nr For an explanation of the notification requirements, see Rev. Taxact 1040nr Proc. Taxact 1040nr 91-44, 1991-2 C. Taxact 1040nr B. Taxact 1040nr 733. Taxact 1040nr If you adopted a SARSEP using Form 5305A-SEP, the notification requirements are explained in the instructions for that form. Taxact 1040nr Reporting on Form W-2. Taxact 1040nr Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Taxact 1040nr You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Taxact 1040nr You must also include them in box 12. Taxact 1040nr Mark the “Retirement plan” checkbox in box 13. Taxact 1040nr For more information, see the Form W-2 instructions. Taxact 1040nr Distributions (Withdrawals) As an employer, you cannot prohibit distributions from a SEP-IRA. Taxact 1040nr 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. Taxact 1040nr Distributions are subject to IRA rules. Taxact 1040nr 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. Taxact 1040nr For more information about IRA rules, including the tax treatment of distributions, rollovers, required distributions, and income tax withholding, see Publication 590. Taxact 1040nr 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. Taxact 1040nr Making excess contributions. Taxact 1040nr Making early withdrawals. Taxact 1040nr Not making required withdrawals. Taxact 1040nr For information about these taxes, see chapter 1 in Publication 590. Taxact 1040nr Also, a SEP-IRA may be disqualified, or an excise tax may apply, if the account is involved in a prohibited transaction, discussed next. Taxact 1040nr Prohibited transaction. Taxact 1040nr 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. Taxact 1040nr In that case, the SEP-IRA will no longer qualify as an IRA. Taxact 1040nr For a list of prohibited transactions, see Prohibited Transactions in chapter 4. Taxact 1040nr Effects on employee. Taxact 1040nr 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. Taxact 1040nr 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. Taxact 1040nr Also, the employee may have to pay the additional tax for making early withdrawals. Taxact 1040nr 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. Taxact 1040nr See Setting Up a SEP , earlier. Taxact 1040nr Also, you must give your eligible employees a statement each year showing any contributions to their SEP-IRAs. Taxact 1040nr You must also give them notice of any excess contributions. Taxact 1040nr 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). Taxact 1040nr 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. Taxact 1040nr For more information, see the instructions for either Form 5305-SEP or Form 5305A-SEP. Taxact 1040nr Prev Up Next Home More Online Publications
Understanding Your CP286 Notice
We send this notice when we approve Form 8716, Election To Have a Tax Year Other Than a Required Tax Year.
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Answers to Common Questions
What should I do if I want to change my tax year for Form 1065 or Form 1120S to a calendar year filing?
File a final Form 8752, which will terminate your section 444 election. If you have a credit on your account, you must file a final Form 8752 for us to refund the payments to you. You must also file a short period business income tax return with your final Form 8752 (Form 1065 or Form 1120S) ending December 31.
Do I need to file Form 8752 when I don’t owe a payment?
Yes. You must file Form 8752 each year the section 444 election is in effect, even if no payment is due.
What if I am no longer required to file a Form 1065 or Form 1120S? Do I need to ask the IRS to terminate my election?
Yes. You must send a final Form 1065 or Form 1120S, along with a final Form 8752.
Are there any consequences if I don’t file Form 8752 or send in my payment when I file?
Failure to file or failure to pay will result in the termination of your fiscal year election.
Understanding your notice
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Notice CP286, Page 1
Page Last Reviewed or Updated: 14-Jan-2014
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- Call the 1-800 number listed on the top right corner of your notice.
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The Taxact 1040nr
Taxact 1040nr Publication 915 - Introductory Material Table of Contents Reminders IntroductionOrdering forms and publications. Taxact 1040nr Tax questions. Taxact 1040nr Useful Items - You may want to see: Reminders Future developments. Taxact 1040nr The IRS has created a page on IRS. Taxact 1040nr gov for information about Publication 915, at www. Taxact 1040nr irs. Taxact 1040nr gov/pub915. Taxact 1040nr Information about any future developments affecting Publication 915 (such as legislation enacted after we release it) will be posted on that page. Taxact 1040nr Photographs of missing children. Taxact 1040nr The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Taxact 1040nr Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Taxact 1040nr 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. Taxact 1040nr Introduction This publication explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. Taxact 1040nr It is prepared through the joint efforts of the Internal Revenue Service (IRS), the Social Security Administration (SSA), and the U. Taxact 1040nr S. Taxact 1040nr Railroad Retirement Board (RRB). Taxact 1040nr Social security benefits include monthly retirement, survivor, and disability benefits. Taxact 1040nr They do not include supplemental security income (SSI) payments, which are not taxable. Taxact 1040nr Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. Taxact 1040nr They are commonly called the social security equivalent benefit (SSEB) portion of tier 1 benefits. Taxact 1040nr If you received these benefits during 2013, you should have received a Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Payments by the Railroad Retirement Board, showing the amount. Taxact 1040nr (If you are a nonresident alien, you should have received Form SSA-1042S, Social Security Benefit Statement, or Form RRB-1042S, Statement for Nonresident Alien Recipients of: Payments by the Railroad Retirement Board. Taxact 1040nr ) Note. Taxact 1040nr When the term “benefits” is used in this publication, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. Taxact 1040nr What is covered in this publication. Taxact 1040nr This publication covers the following topics: Whether any of your benefits are taxable, How much is taxable, How to report taxable benefits, How to treat lump-sum benefit payments, and Deductions related to your benefits, including a deduction or credit you can claim if your repayments are more than your gross benefits. Taxact 1040nr The Appendix at the end of this publication explains items shown on your Form SSA-1099, SSA-1042S, RRB-1099, or RRB-1042S. Taxact 1040nr What is not covered in this publication. Taxact 1040nr This publication does not cover the tax rules for the following railroad retirement benefits: Non-social security equivalent benefit (NSSEB) portion of tier 1 benefits, Tier 2 benefits, Vested dual benefits, and Supplemental annuity benefits. Taxact 1040nr For information on these taxable pension benefits, see Publication 575, Pension and Annuity Income. Taxact 1040nr This publication also does not cover the tax rules for foreign social security benefits. Taxact 1040nr These benefits are taxable as annuities, unless they are exempt from U. Taxact 1040nr S. Taxact 1040nr tax or treated as a U. Taxact 1040nr S. Taxact 1040nr social security benefit under a tax treaty. Taxact 1040nr Comments and suggestions. Taxact 1040nr We welcome your comments about this publication and your suggestions for future editions. Taxact 1040nr You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Taxact 1040nr NW, IR-6526 Washington, DC 20224 We respond to many letters by telephone. Taxact 1040nr Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Taxact 1040nr You can send your comments from www. Taxact 1040nr irs. Taxact 1040nr gov/formspubs/. Taxact 1040nr Click on “More Information” and then on “Comment on Tax Forms and Publications”. Taxact 1040nr Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Taxact 1040nr Ordering forms and publications. Taxact 1040nr Visit www. Taxact 1040nr irs. Taxact 1040nr 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. Taxact 1040nr Internal Revenue Service 1201 N. Taxact 1040nr Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Taxact 1040nr If you have a tax question, check the information available on IRS. Taxact 1040nr gov or call 1-800-829-1040. Taxact 1040nr We cannot answer tax questions sent to either of the above addresses. Taxact 1040nr Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) Forms (and Instructions) 1040-ES Estimated Tax for Individuals SSA-1099 Social Security Benefit Statement RRB-1099 Payments by the Railroad Retirement Board W-4V Voluntary Withholding Request See How To Get Tax Help near the end of this publication for information about getting these publications and forms. Taxact 1040nr Prev Up Next Home More Online Publications