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1040 Ez Tax Form

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1040 Ez Tax Form

1040 ez tax form 3. 1040 ez tax form   Savings Incentive Match Plans for Employees (SIMPLE) Table of Contents Introduction What Is a SIMPLE Plan?Eligible Employees How Are Contributions Made? How Much Can Be Contributed on Your Behalf?Matching contributions less than 3%. 1040 ez tax form Traditional IRA mistakenly moved to SIMPLE IRA. 1040 ez tax form When Can You Withdraw or Use Assets?Are Distributions Taxable? Introduction This chapter is for employees who need information about savings incentive match plans for employees (SIMPLE plans). 1040 ez tax form It explains what a SIMPLE plan is, contributions to a SIMPLE plan, and distributions from a SIMPLE plan. 1040 ez tax form Under a SIMPLE plan, SIMPLE retirement accounts for participating employees can be set up either as: Part of a 401(k) plan, or A plan using IRAs (SIMPLE IRA). 1040 ez tax form This chapter only discusses the SIMPLE plan rules that relate to SIMPLE IRAs. 1040 ez tax form See chapter 3 of Publication 560 for information on any special rules for SIMPLE plans that do not use IRAs. 1040 ez tax form If your employer maintains a SIMPLE plan, you must be notified, in writing, that you can choose the financial institution that will serve as trustee for your SIMPLE IRA and that you can roll over or transfer your SIMPLE IRA to another financial institution. 1040 ez tax form See Rollovers and Transfers Exception, later under When Can You Withdraw or Use Assets. 1040 ez tax form What Is a SIMPLE Plan? A SIMPLE plan is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. 1040 ez tax form See chapter 3 of Publication 560 for information on the requirements employers must satisfy to set up a SIMPLE plan. 1040 ez tax form A SIMPLE plan is a written agreement (salary reduction agreement) between you and your employer that allows you, if you are an eligible employee (including a self-employed individual), to choose to: Reduce your compensation (salary) by a certain percentage each pay period, and Have your employer contribute the salary reductions to a SIMPLE IRA on your behalf. 1040 ez tax form These contributions are called salary reduction contributions. 1040 ez tax form All contributions under a SIMPLE IRA plan must be made to SIMPLE IRAs, not to any other type of IRA. 1040 ez tax form The SIMPLE IRA can be an individual retirement account or an individual retirement annuity, described in chapter 1. 1040 ez tax form Contributions are made on behalf of eligible employees. 1040 ez tax form (See Eligible Employees below. 1040 ez tax form ) Contributions are also subject to various limits. 1040 ez tax form (See How Much Can Be Contributed on Your Behalf , later. 1040 ez tax form ) In addition to salary reduction contributions, your employer must make either matching contributions or nonelective contributions. 1040 ez tax form See How Are Contributions Made , later. 1040 ez tax form You may be able to claim a credit for contributions to your SIMPLE plan. 1040 ez tax form For more information, see chapter 4. 1040 ez tax form Eligible Employees You must be allowed to participate in your employer's SIMPLE plan if you: Received at least $5,000 in compensation from your employer during any 2 years prior to the current year, and Are reasonably expected to receive at least $5,000 in compensation during the calendar year for which contributions are made. 1040 ez tax form Self-employed individual. 1040 ez tax form   For SIMPLE plan purposes, the term employee includes a self-employed individual who received earned income. 1040 ez tax form Excludable employees. 1040 ez tax form   Your employer can exclude the following employees from participating in the SIMPLE plan. 1040 ez tax form Employees whose retirement benefits are covered by a collective bargaining agreement (union contract). 1040 ez tax form Employees who are nonresident aliens and received no earned income from sources within the United States. 1040 ez tax form Employees who would not have been eligible employees if an acquisition, disposition, or similar transaction had not occurred during the year. 1040 ez tax form Compensation. 1040 ez tax form   For purposes of the SIMPLE plan rules, your compensation for a year generally includes the following amounts. 1040 ez tax form Wages, tips, and other pay from your employer that is subject to income tax withholding. 1040 ez tax form Deferred amounts elected under any 401(k) plans, 403(b) plans, government (section 457) plans, SEP plans, and SIMPLE plans. 1040 ez tax form Self-employed individual compensation. 1040 ez tax form   For purposes of the SIMPLE plan rules, if you are self-employed, your compensation for a year is your net earnings from self-employment (Schedule SE (Form 1040), Section A, line 4, or Section B, line 6) before subtracting any contributions made to a SIMPLE IRA on your behalf. 1040 ez tax form   For these purposes, net earnings from self-employment include services performed while claiming exemption from self-employment tax as a member of a group conscientiously opposed to social security benefits. 1040 ez tax form How Are Contributions Made? Contributions under a salary reduction agreement are called salary reduction contributions. 1040 ez tax form They are made on your behalf by your employer. 1040 ez tax form Your employer must also make either matching contributions or nonelective contributions. 1040 ez tax form Salary reduction contributions. 1040 ez tax form   During the 60-day period before the beginning of any year, and during the 60-day period before you are eligible, you can choose salary reduction contributions expressed either as a percentage of compensation, or as a specific dollar amount (if your employer offers this choice). 1040 ez tax form You can choose to cancel the election at any time during the year. 1040 ez tax form   Salary reduction contributions are also referred to as “elective deferrals. 1040 ez tax form ”   Your employer cannot place restrictions on the contributions amount (such as by limiting the contributions percentage), except to comply with the salary reduction contributions limit, discussed under How Much Can Be Contributed on Your Behalf, later. 1040 ez tax form Matching contributions. 1040 ez tax form   Unless your employer chooses to make nonelective contributions, your employer must make contributions equal to the salary reduction contributions you choose (elect), but only up to certain limits. 1040 ez tax form See How Much Can Be Contributed on Your Behalf below. 1040 ez tax form These contributions are in addition to the salary reduction contributions and must be made to the SIMPLE IRAs of all eligible employees (defined earlier) who chose salary reductions. 1040 ez tax form These contributions are referred to as matching contributions. 1040 ez tax form   Matching contributions on behalf of a self-employed individual are not treated as salary reduction contributions. 1040 ez tax form Nonelective contributions. 1040 ez tax form   Instead of making matching contributions, your employer may be able to choose to make nonelective contributions on behalf of all eligible employees. 1040 ez tax form These nonelective contributions must be made on behalf of each eligible employee who has at least $5,000 of compensation from your employer, whether or not the employee chose salary reductions. 1040 ez tax form   One of the requirements your employer must satisfy is notifying the employees that the election was made. 1040 ez tax form For other requirements that your employer must satisfy, see chapter 3 of Publication 560. 1040 ez tax form How Much Can Be Contributed on Your Behalf? The limits on contributions to a SIMPLE IRA vary with the type of contribution that is made. 1040 ez tax form Salary reduction contributions limit. 1040 ez tax form   Salary reduction contributions (employee-chosen contributions or elective deferrals) that your employer can make on your behalf under a SIMPLE plan are limited to $12,000 for 2013. 1040 ez tax form The limitation remains at $12,000 for 2014. 1040 ez tax form If you are a participant in any other employer plans during 2013 and you have elective salary reductions or deferred compensation under those plans, the salary reduction contributions under the SIMPLE plan also are included in the annual limit of $17,500 for 2013 on exclusions of salary reductions and other elective deferrals. 1040 ez tax form You, not your employer, are responsible for monitoring compliance with these limits. 1040 ez tax form Additional elective deferrals can be contributed to your SIMPLE plan if: You reached age 50 by the end of 2013, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions, such as the regular annual limit. 1040 ez tax form The most that can be contributed in additional elective deferrals to your SIMPLE plan is the lesser of the following two amounts. 1040 ez tax form $2,500 for 2013, or Your compensation for the year reduced by your other elective deferrals for the year. 1040 ez tax form The additional deferrals are not subject to any other contribution limit and are not taken into account in applying other contribution limits. 1040 ez tax form The additional deferrals are not subject to the nondiscrimination rules as long as all eligible participants are allowed to make them. 1040 ez tax form Matching employer contributions limit. 1040 ez tax form   Generally, your employer must make matching contributions to your SIMPLE IRA in an amount equal to your salary reduction contributions. 1040 ez tax form These matching contributions cannot be more than 3% of your compensation for the calendar year. 1040 ez tax form See Matching contributions less than 3% below. 1040 ez tax form Example 1. 1040 ez tax form In 2013, Joshua was a participant in his employer's SIMPLE plan. 1040 ez tax form His compensation, before SIMPLE plan contributions, was $41,600 ($800 per week). 1040 ez tax form Instead of taking it all in cash, Joshua elected to have 12. 1040 ez tax form 5% of his weekly pay ($100) contributed to his SIMPLE IRA. 1040 ez tax form For the full year, Joshua's salary reduction contributions were $5,200, which is less than the $12,000 limit on these contributions. 1040 ez tax form Under the plan, Joshua's employer was required to make matching contributions to Joshua's SIMPLE IRA. 1040 ez tax form Because his employer's matching contributions must equal Joshua's salary reductions, but cannot be more than 3% of his compensation (before salary reductions) for the year, his employer's matching contribution was limited to $1,248 (3% of $41,600). 1040 ez tax form Example 2. 1040 ez tax form Assume the same facts as in Example 1 , except that Joshua's compensation for the year was $408,163 and he chose to have 2. 1040 ez tax form 94% of his weekly pay contributed to his SIMPLE IRA. 1040 ez tax form In this example, Joshua's salary reduction contributions for the year (2. 1040 ez tax form 94% × $408,163) were equal to the 2013 limit for salary reduction contributions ($12,000). 1040 ez tax form Because 3% of Joshua's compensation ($12,245) is more than the amount his employer was required to match ($12,000), his employer's matching contributions were limited to $12,000. 1040 ez tax form In this example, total contributions made on Joshua's behalf for the year were $24,000 ($12,000 (Joshua's contributions) + $12,000 (matching contributions)), the maximum contributions permitted under a SIMPLE IRA for 2013. 1040 ez tax form Matching contributions less than 3%. 1040 ez tax form   Your employer can reduce the 3% limit on matching contributions for a calendar year, but only if: The limit is not reduced below 1%, The limit is not reduced for more than 2 years out of the 5-year period that ends with (and includes) the year for which the election is effective, and Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which they can enter into salary reduction agreements. 1040 ez tax form   For purposes of applying the rule in item (2) in determining whether the limit was reduced below 3% for the year, any year before the first year in which your employer (or a former employer) maintains a SIMPLE IRA plan will be treated as a year for which the limit was 3%. 1040 ez tax form If your employer chooses to make nonelective contributions for a year, that year also will be treated as a year for which the limit was 3%. 1040 ez tax form Nonelective employer contributions limit. 1040 ez tax form   If your employer chooses to make nonelective contributions, instead of matching contributions, to each eligible employee's SIMPLE IRA, contributions must be 2% of your compensation for the entire year. 1040 ez tax form For 2013, only $255,000 of your compensation can be taken into account to figure the contribution limit. 1040 ez tax form   Your employer can substitute the 2% nonelective contribution for the matching contribution for a year if both of the following requirements are met. 1040 ez tax form Eligible employees are notified that a 2% nonelective contribution will be made instead of a matching contribution. 1040 ez tax form This notice is provided within a reasonable period during which employees can enter into salary reduction agreements. 1040 ez tax form Example 3. 1040 ez tax form Assume the same facts as in Example 2 , except that Joshua's employer chose to make nonelective contributions instead of matching contributions. 1040 ez tax form Because his employer's nonelective contributions are limited to 2% of up to $255,000 of Joshua's compensation, his employer's contribution to Joshua's SIMPLE IRA was limited to $5,100. 1040 ez tax form In this example, total contributions made on Joshua's behalf for the year were $17,100 (Joshua's salary reductions of $12,000 plus his employer's contribution of $5,100). 1040 ez tax form Traditional IRA mistakenly moved to SIMPLE IRA. 1040 ez tax form   If you mistakenly roll over or transfer an amount from a traditional IRA to a SIMPLE IRA, you can later recharacterize the amount as a contribution to another traditional IRA. 1040 ez tax form For more information, see Recharacterizations in chapter 1. 1040 ez tax form Recharacterizing employer contributions. 1040 ez tax form   You cannot recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. 1040 ez tax form SEPs are discussed in chapter 2 of Publication 560. 1040 ez tax form SIMPLE plans are discussed in this chapter. 1040 ez tax form Converting from a SIMPLE IRA. 1040 ez tax form   Generally, you can convert an amount in your SIMPLE IRA to a Roth IRA under the same rules explained in chapter 1 under Converting From Any Traditional IRA Into a Roth IRA . 1040 ez tax form    However, you cannot convert any amount distributed from the SIMPLE IRA during the 2-year period beginning on the date you first participated in any SIMPLE IRA plan maintained by your employer. 1040 ez tax form When Can You Withdraw or Use Assets? Generally, the same distribution (withdrawal) rules that apply to traditional IRAs apply to SIMPLE IRAs. 1040 ez tax form These rules are discussed in chapter 1. 1040 ez tax form Your employer cannot restrict you from taking distributions from a SIMPLE IRA. 1040 ez tax form Are Distributions Taxable? Generally, distributions from a SIMPLE IRA are fully taxable as ordinary income. 1040 ez tax form If the distribution is an early distribution (discussed in chapter 1), it may be subject to the additional tax on early distributions. 1040 ez tax form See Additional Tax on Early Distributions, later. 1040 ez tax form Rollovers and Transfers Exception Generally, rollovers and trustee-to-trustee transfers are not taxable distributions. 1040 ez tax form Two-year rule. 1040 ez tax form   To qualify as a tax-free rollover (or a tax-free trustee-to-trustee transfer), a rollover distribution (or a transfer) made from a SIMPLE IRA during the 2-year period beginning on the date on which you first participated in your employer's SIMPLE plan must be contributed (or transferred) to another SIMPLE IRA. 1040 ez tax form The 2-year period begins on the first day on which contributions made by your employer are deposited in your SIMPLE IRA. 1040 ez tax form   After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan), or deferred compensation plan of a state or local government (section 457 plan). 1040 ez tax form Additional Tax on Early Distributions The additional tax on early distributions (discussed in chapter 1) applies to SIMPLE IRAs. 1040 ez tax form If a distribution is an early distribution and occurs during the 2-year period following the date on which you first participated in your employer's SIMPLE plan, the additional tax on early distributions is increased from 10% to 25%. 1040 ez tax form If a rollover distribution (or transfer) from a SIMPLE IRA does not satisfy the 2-year rule, and is otherwise an early distribution, the additional tax imposed because of the early distribution is increased from 10% to 25% of the amount distributed. 1040 ez tax form Prev  Up  Next   Home   More Online Publications
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Understanding Your CP284 Notice

We approved your Form 1128, Application to Adopt, Change, or Retain a Tax Year.


What you need to do

  • Timely file a short period annual return for the tax year ending that is shown on Form 1128.
  • Keep this notice for your records.

You may want to

Call 1-800-829-3676 (1-800-TAX-FORM) to order forms and publications or visit our website, www.irs.gov, to download them.


Answers to Common Questions

What is Form 1128?
When approved, this form allows a taxpayer to change the date on which they close their tax year. Partnerships, S corporations, personal service corporations (PSCs), or trusts may be required to file the form to adopt or retain a certain tax year.


Understanding your notice

Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP284, Page 1

Page Last Reviewed or Updated: 09-Dec-2013

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The 1040 Ez Tax Form

1040 ez tax form 4. 1040 ez tax form   Limit on Elective Deferrals Table of Contents Excess elective deferrals. 1040 ez tax form General Limit 15-Year RuleYears of Service Figuring the Limit on Elective DeferralsExample The second and final component of MAC is the limit on elective deferrals. 1040 ez tax form This is a limit on the amount of contributions that can be made to your account through a salary reduction agreement. 1040 ez tax form A salary reduction agreement is an agreement between you and your employer that allows for a portion of your compensation to be directly invested in a 403(b) account on your behalf. 1040 ez tax form You can enter into more than one salary reduction agreement during a year. 1040 ez tax form More than one 403(b) account. 1040 ez tax form If, for any year, elective deferrals are contributed to more than one 403(b) account for you (whether or not with the same employer), you must combine all the elective deferrals to determine whether the total is more than the limit for that year. 1040 ez tax form 403(b) plan and another retirement plan. 1040 ez tax form If, during the year, contributions in the form of elective deferrals are made to other retirement plans on your behalf, you must combine all of the elective deferrals to determine if they are more than your limit on elective deferrals. 1040 ez tax form The limit on elective deferrals applies to amounts contributed to: 401(k) plans, to the extent excluded from income, Roth contribution programs, Section 501(c)(18) plans, to the extent excluded from income, Savings incentive match plan for employees (SIMPLE plans), Simplified employee pension (SEP) plans, and All 403(b) plans. 1040 ez tax form Roth contribution program. 1040 ez tax form   Your 403(b) plan may allow you to designate all or a portion of your elective deferrals as Roth contributions. 1040 ez tax form Elective deferrals designated as Roth contributions must be maintained in a separate Roth account and are not excludable from your gross income. 1040 ez tax form   The maximum amount of contributions allowed under a Roth contribution program is your limit on elective deferrals, less your elective deferrals not designated as Roth contributions. 1040 ez tax form For more information on the Roth contribution program, see Publication 560, Retirement Plans for Small Business. 1040 ez tax form Excess elective deferrals. 1040 ez tax form   If the amount contributed is more than the allowable limit, you must include the excess that is not a Roth contribution in your gross income for the year contributed. 1040 ez tax form General Limit Under the general limit on elective deferrals, the most that can be contributed to your 403(b) account through a salary reduction agreement is $17,500 for 2013 and 2014. 1040 ez tax form This limit applies without regard to community property laws. 1040 ez tax form 15-Year Rule If you have at least 15 years of service with an educational organization (such as a public or private school), hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization), the limit on elective deferrals to your 403(b) account is increased by the least of: $3,000, $15,000, reduced by the sum of: The additional pre-tax elective deferrals made in prior years because of this rule, plus The aggregate amount of designated Roth contributions permitted for prior years because of this rule, or $5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years. 1040 ez tax form If you qualify for the 15-year rule, your elective deferrals under this limit can be as high as $20,500 for 2013 and 2014. 1040 ez tax form To determine whether you have 15 years of service with your employer, see Years of Service , next. 1040 ez tax form Years of Service To determine if you are eligible for the increased limit on elective deferrals, you will first need to figure your years of service. 1040 ez tax form How you figure your years of service depends on whether you were a full-time or a part-time employee, whether you worked for the full year or only part of the year, and whether you have worked for your employer for an entire year. 1040 ez tax form You must figure years of service for each year during which you worked for the employer who is maintaining your 403(b) account. 1040 ez tax form If more than one employer maintains a 403(b) account for you in the same year, you must figure years of service separately for each employer. 1040 ez tax form Definition Your years of service are the total number of years you have worked as a full time employee for the employer maintaining your 403(b) account as of the end of the year. 1040 ez tax form Figuring Your Years of Service Take the following rules into account when figuring your years of service. 1040 ez tax form Status of employer. 1040 ez tax form   Your years of service include only periods during which your employer was a qualified employer. 1040 ez tax form Your plan administrator can tell you whether or not your employer was qualified during all your periods of service. 1040 ez tax form Service with one employer. 1040 ez tax form   Generally, you cannot count service for any employer other than the one who maintains your 403(b) account. 1040 ez tax form Church employee. 1040 ez tax form   If you are a church employee, treat all of your years of service with related church organizations as years of service with the same employer. 1040 ez tax form For more information about church employees, see chapter 5. 1040 ez tax form Self-employed ministers. 1040 ez tax form   If you are a self-employed minister, your years of service include full and part years in which you have been treated as employed by a tax-exempt organization that is a qualified employer. 1040 ez tax form Total years of service. 1040 ez tax form   When figuring prior years of service, figure each year individually and then add the individual years of service to determine your total years of service. 1040 ez tax form Example. 1040 ez tax form The annual work period for full-time teachers employed by ABC Public Schools is September through December and February through May. 1040 ez tax form Marsha began working with ABC schools in September 2009. 1040 ez tax form She has always worked full-time for each annual work period. 1040 ez tax form At the end of 2013, Marsha had 4. 1040 ez tax form 5 years of service with ABC Public Schools, as shown in Table 4-1. 1040 ez tax form Table 4-1. 1040 ez tax form Marsha's Years of Service Note. 1040 ez tax form This table shows how Marsha figures her years of service, as explained in the previous example. 1040 ez tax form Year Period Worked Portion of Work Period Years of Service 2009 Sept. 1040 ez tax form –Dec. 1040 ez tax form . 1040 ez tax form 5 year . 1040 ez tax form 5 year 2010 Feb. 1040 ez tax form –May . 1040 ez tax form 5 year 1 year Sept. 1040 ez tax form –Dec. 1040 ez tax form . 1040 ez tax form 5 year 2011 Feb. 1040 ez tax form –May . 1040 ez tax form 5 year 1 year Sept. 1040 ez tax form –Dec. 1040 ez tax form . 1040 ez tax form 5 year 2012 Feb. 1040 ez tax form –May . 1040 ez tax form 5 year 1 year Sept. 1040 ez tax form –Dec. 1040 ez tax form . 1040 ez tax form 5 year 2013 Feb. 1040 ez tax form –May . 1040 ez tax form 5 year 1 year Sept. 1040 ez tax form –Dec. 1040 ez tax form . 1040 ez tax form 5 year Total years of service 4. 1040 ez tax form 5 years Full-time or part-time. 1040 ez tax form   To figure your years of service, you must analyze each year individually and determine whether you worked full-time for the full year or something other than full-time. 1040 ez tax form When determining whether you worked full-time or something other than full-time, use your employer's annual work period as the standard. 1040 ez tax form Employer's annual work period. 1040 ez tax form   Your employer's annual work period is the usual amount of time an individual working full-time in a specific position is required to work. 1040 ez tax form Generally, this period of time is expressed in days, weeks, months, or semesters, and can span 2 calendar years. 1040 ez tax form Note. 1040 ez tax form You cannot accumulate more than 1 year of service in a 12-month period. 1040 ez tax form Example. 1040 ez tax form All full-time teachers at ABC Public Schools are required to work both the September through December semester and the February through May semester. 1040 ez tax form Therefore, the annual work period for full-time teachers employed by ABC Public Schools is September through December and February through May. 1040 ez tax form Teachers at ABC Public Schools who work both semesters in the same calendar year are considered working a full year of service in that calendar year. 1040 ez tax form Full-Time Employee for the Full Year Count each full year during which you were employed full-time as 1 year of service. 1040 ez tax form In determining whether you were employed full-time, compare the amount of work you were required to perform with the amount of work normally required of others who held the same position with the same employer and who generally received most of their pay from the position. 1040 ez tax form How to compare. 1040 ez tax form   You can use any method that reasonably and accurately reflects the amount of work required. 1040 ez tax form For example, if you are a teacher, you can use the number of hours of classroom instruction as a measure of the amount of work required. 1040 ez tax form   In determining whether positions with the same employer are the same, consider all of the facts and circumstances concerning the positions, including the work performed, the methods by which pay is determined, and the descriptions (or titles) of the positions. 1040 ez tax form Example. 1040 ez tax form An assistant professor employed in the English department of a university will be considered a full-time employee if the amount of work that he or she is required to perform is the same as the amount of work normally required of assistant professors of English at that university who get most of their pay from that position. 1040 ez tax form   If no one else works for your employer in the same position, compare your work with the work normally required of others who held the same position with similar employers or similar positions with your employer. 1040 ez tax form Full year of service. 1040 ez tax form   A full year of service for a particular position means the usual annual work period of anyone employed full-time in that general type of work at that place of employment. 1040 ez tax form Example. 1040 ez tax form If a doctor works for a hospital 12 months of a year except for a 1-month vacation, the doctor will be considered as employed for a full year if the other doctors at that hospital also work 11 months of the year with a 1-month vacation. 1040 ez tax form Similarly, if the usual annual work period at a university consists of the fall and spring semesters, an instructor at that university who teaches these semesters will be considered as working a full year. 1040 ez tax form Other Than Full-Time for the Full Year If, during any year, you were employed full-time for only part of your employer's annual work period, part-time for the entire annual work period, or part-time for only part of the work period, your year of service for that year is a fraction of your employer's annual work period. 1040 ez tax form Full-time for part of the year. 1040 ez tax form   If, during a year, you were employed full-time for only part of your employer's annual work period, figure the fraction for that year as follows: The numerator (top number) is the number of weeks, months, or semesters you were a full-time employee. 1040 ez tax form The denominator (bottom number) is the number of weeks, months, or semesters considered the normal annual work period for the position. 1040 ez tax form Example. 1040 ez tax form Jason was employed as a full-time instructor by a local college for the 4 months of the 2013 spring semester (February 2013 through May 2013). 1040 ez tax form The annual work period for the college is 8 months (February through May and July through October). 1040 ez tax form Given these facts, Jason was employed full-time for part of the annual work period and provided ½ of a year of service. 1040 ez tax form Jason's years of service computation for 2013 is as follows: Number of months Jason worked = 4 = 1 Number of months in annual work period 8 2 Part-time for the full year. 1040 ez tax form   If, during a year, you were employed part-time for the employer's entire annual work period, you figure the fraction for that year as follows: The numerator (top number) is the number of hours or days you worked. 1040 ez tax form The denominator (bottom number) is the number of hours or days normally required of someone holding the same position who works full-time. 1040 ez tax form Example. 1040 ez tax form Vance teaches one course at a local medical school. 1040 ez tax form He teaches 3 hours per week for two semesters. 1040 ez tax form Other faculty members at the same school teach 9 hours per week for two semesters. 1040 ez tax form The annual work period of the medical school is two semesters. 1040 ez tax form An instructor teaching 9 hours a week for two semesters is considered a full-time employee. 1040 ez tax form Given these facts, Vance has worked part-time for a full annual work period. 1040 ez tax form Vance has completed 1/3 of a year of service, figured as shown below. 1040 ez tax form Number of hours per week Vance worked = 3 = 1 Number of hours per week considered full-time 9 3 Part-time for part of the year. 1040 ez tax form   If, during any year, you were employed part-time for only part of your employer's annual work period, you figure your fraction for that year by multiplying two fractions. 1040 ez tax form   Figure the first fraction as though you had worked full-time for part of the annual work period. 1040 ez tax form The fraction is as follows: The numerator (top number) is the number of weeks, months, or semesters you were a full-time employee. 1040 ez tax form The denominator (bottom number) is the number of weeks, months, or semesters considered the normal annual work period for the position. 1040 ez tax form   Figure the second fraction as though you had worked part-time for the entire annual work period. 1040 ez tax form The fraction is as follows: The numerator (top number) is the number of hours or days you worked. 1040 ez tax form The denominator (bottom number) is the number of hours or days normally required of someone holding the same position who works full-time. 1040 ez tax form   Once you have figured these two fractions, multiply them together to determine the fraction representing your partial year of service for the year. 1040 ez tax form Example. 1040 ez tax form Maria, an attorney, teaches a course for one semester at a law school. 1040 ez tax form She teaches 3 hours per week. 1040 ez tax form The annual work period for teachers at the school is two semesters. 1040 ez tax form All full-time instructors at the school are required to teach 12 hours per week. 1040 ez tax form Based on these facts, Maria is employed part-time for part of the annual work period. 1040 ez tax form Her year of service for this year is determined by multiplying two fractions. 1040 ez tax form Her computation is as follows: Maria's first fraction Number of semesters Maria worked = 1 Number of semesters in annual work period 2 Maria's second fraction Number of hours Maria worked per week = 3 = 1 Number of hours per week considered full-time 12 4 Maria would multiply these fractions to obtain the fractional year of service: 1 x 1 = 1         2 4 8         Figuring the Limit on Elective Deferrals You can use Part II of Worksheet 1 in chapter 9 to figure the limit on elective deferrals. 1040 ez tax form Example Floyd has figured his limit on annual additions. 1040 ez tax form The only other component needed before he can determine his MAC for 2014 is his limit on elective deferrals. 1040 ez tax form Figuring Floyd's limit on elective deferrals. 1040 ez tax form   Floyd has been employed with his current employer for less than 15 years. 1040 ez tax form He is not eligible for the special 15-year increase. 1040 ez tax form Therefore, his limit on elective deferrals for 2014 is $17,500 as shown in Table 4-2. 1040 ez tax form Floyd's employer will not make any nonelective contributions to his 403(b) account and Floyd will not make any after-tax contributions. 1040 ez tax form Additionally, Floyd's employer does not offer a Roth contribution program. 1040 ez tax form Figuring Floyd's MAC Floyd has determined that his limit on annual additions for 2014 is $52,000 and his limit on elective deferrals is $17,500. 1040 ez tax form Because elective deferrals are the only contributions made to Floyd's account, the maximum amount that can be contributed to a 403(b) account on Floyd's behalf in 2014 is $17,500, the lesser of both limits. 1040 ez tax form Table 4-2. 1040 ez tax form Worksheet 1. 1040 ez tax form Maximum Amount Contributable (MAC) Note. 1040 ez tax form Use this worksheet to figure your MAC. 1040 ez tax form Part I. 1040 ez tax form Limit on Annual Additions     1. 1040 ez tax form Enter your includible compensation for your most recent year of service 1. 1040 ez tax form $70,475 2. 1040 ez tax form Maximum: For 2013 enter $51,000 For 2014 enter $52,000 2. 1040 ez tax form 52,000 3. 1040 ez tax form Enter the lesser of line 1 or line 2. 1040 ez tax form This is your limit on annual additions 3. 1040 ez tax form 52,000   Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 on line 18. 1040 ez tax form     Part II. 1040 ez tax form Limit on Elective Deferrals     4. 1040 ez tax form Maximum contribution: For 2013, enter $17,500 For 2014, enter $17,500 4. 1040 ez tax form 17,500   Note. 1040 ez tax form If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. 1040 ez tax form If not, enter zero (-0-) on line 16 and go to line 17. 1040 ez tax form     5. 1040 ez tax form Amount per year of service 5. 1040 ez tax form 5,000 6. 1040 ez tax form Enter your years of service 6. 1040 ez tax form   7. 1040 ez tax form Multiply line 5 by line 6 7. 1040 ez tax form   8. 1040 ez tax form Enter the total of all elective deferrals made for you by the qualifying organization for prior years 8. 1040 ez tax form   9. 1040 ez tax form Subtract line 8 from line 7. 1040 ez tax form If zero or less, enter zero (-0-) 9. 1040 ez tax form   10. 1040 ez tax form Maximum increase in limit for long service 10. 1040 ez tax form 15,000 11. 1040 ez tax form Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year rule 11. 1040 ez tax form   12. 1040 ez tax form Enter the aggregate amount of all designated Roth contributions permitted for prior years under the 15-year rule 12. 1040 ez tax form   13. 1040 ez tax form Add lines 11 and 12 13. 1040 ez tax form   14. 1040 ez tax form Subtract line 13 from line 10 14. 1040 ez tax form   15. 1040 ez tax form Maximum additional contributions 15. 1040 ez tax form 3,000 16. 1040 ez tax form Enter the least of lines 9, 14, or 15. 1040 ez tax form This is your increase in the limit for long service 16. 1040 ez tax form -0- 17. 1040 ez tax form Add lines 4 and 16. 1040 ez tax form This is your limit on elective deferrals 17. 1040 ez tax form 17,500   Part III. 1040 ez tax form Maximum Amount Contributable     18. 1040 ez tax form If you had only nonelective contributions, enter the amount from line 3. 1040 ez tax form This is your MAC. 1040 ez tax form    If you had only elective deferrals, enter the lesser of lines 3 or 17. 1040 ez tax form This is your MAC. 1040 ez tax form    If you had both elective deferrals and nonelective contributions, enter the amount from line 3. 1040 ez tax form This is your MAC. 1040 ez tax form (Use the amount on line 17 to determine if you have excess elective deferrals as explained in chapter 7. 1040 ez tax form ) 18. 1040 ez tax form $17,500 Prev  Up  Next   Home   More Online Publications