Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

2012 1040 Income Tax Form

1040ez FreeFree State Tax ReturnsAmend 2011 TaxesFiling State Tax FreeE File Tax ReturnsHow Do I File 2011 Taxes OnlineFile Federal Taxes Free2012 Tax Amendment FormForm 1040ez 20121040a Tax FormTaxes Online2014 Federal Tax Forms 1040ezIrs Amendment Form1040 Ez Tax Form 2012H&r Block State Tax ReturnHow To File Tax ExtentionIrs Ez Form 2011Irs Gov FreefileWhere Can I File My 2011 Taxes OnlineCan I Still File 2012 TaxesPenalties For Filing Taxes Late2011 1040How Can I File My 2012 State Taxes For Free2009 Amended Tax ReturnTaxactAmendmentsCan I Still E File My 2012 Tax ReturnE-file 2012 TaxesTax Act 20091040nr 20121040Irs Amended TaxesE File 2011 Taxes LateMypay Dfas MilTax Forms For 20102011 Federal Tax Form 1040ezHow Can I File My 2009 Taxes Online For FreeFederal Tax Forms 2009File 1040ez FormTurbotax 1040ez

2012 1040 Income Tax Form

2012 1040 income tax form Publication 970 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionComparison table. 2012 1040 income tax form Ordering forms and publications. 2012 1040 income tax form Tax questions. 2012 1040 income tax form Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 970, such as legislation enacted after it was published, go to www. 2012 1040 income tax form irs. 2012 1040 income tax form gov/pub970. 2012 1040 income tax form What's New Lifetime learning credit. 2012 1040 income tax form  For 2013, the amount of your lifetime learning credit is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $53,000 and $63,000 ($107,000 and $127,000 if you file a joint return). 2012 1040 income tax form You cannot claim a credit if your MAGI is $63,000 or more ($127,000 or more if you file a joint return). 2012 1040 income tax form This is an increase from the 2012 limits of $52,000 and $62,000 ($104,000 and $124,000 if filing a joint return). 2012 1040 income tax form For more information, see chapter 3, Lifetime Learning Credit . 2012 1040 income tax form Business deduction for work-related education. 2012 1040 income tax form  For 2013, if you drive your car to and from school and qualify to deduct transportation expenses, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013 is 56. 2012 1040 income tax form 5 cents per mile. 2012 1040 income tax form See chapter 12, Business Deduction for Work-Related Education , for more information. 2012 1040 income tax form Reminders Form 1098-T, Tuition Statement. 2012 1040 income tax form  When figuring an education credit or the tuition and fees deduction, use only the amounts you paid and are deemed to have paid during the tax year for qualified education expenses. 2012 1040 income tax form In most cases, the student should receive Form 1098-T from the eligible educational institution by January 31, 2014. 2012 1040 income tax form An institution my choose to report either payments received during calendar year 2013 (box 1), or amounts billed during the calendar year 2013 (box 2), for qualified education expenses. 2012 1040 income tax form However, the amounts in boxes 1 and 2 of Form 1098-T might be different than the amount you actually paid and are deemed to have paid. 2012 1040 income tax form In addition, the Form 1098-T should give you other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements, or refunds, and whether the student was enrolled at least half-time or was a graduate student. 2012 1040 income tax form The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number. 2012 1040 income tax form Hope Scholarship Credit. 2012 1040 income tax form  For 2013, the Hope Scholarship Credit is not available. 2012 1040 income tax form However, you may be able to claim an American opportunity or lifetime learning credit. 2012 1040 income tax form See chapter 2, American Opportunity Credit , and chapter 3, Lifetime Learning Credit , for more information. 2012 1040 income tax form Estimated tax payments. 2012 1040 income tax form  If you have taxable income from any of your education benefits and the payer does not withhold enough income tax, you may need to make estimated tax payments. 2012 1040 income tax form For more information, see Publication 505, Tax Withholding and Estimated Tax. 2012 1040 income tax form Photographs of missing children. 2012 1040 income tax form  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 2012 1040 income tax form Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2012 1040 income tax form 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. 2012 1040 income tax form Introduction This publication explains tax benefits that may be available to you if you are saving for or paying education costs for yourself or, in many cases, another student who is a member of your immediate family. 2012 1040 income tax form Most benefits apply only to higher education. 2012 1040 income tax form What is in this publication. 2012 1040 income tax form    Chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions , explains the tax treatment of various types of educational assistance, including scholarships, fellowships, and tuition reductions. 2012 1040 income tax form   Two tax credits for which you may be eligible are explained in chapter 2, American Opportunity Credit , and chapter 3, Lifetime Learning Credit . 2012 1040 income tax form These benefits, which reduce the amount of income tax you may have to pay, are: The American opportunity credit, and The lifetime learning credit. 2012 1040 income tax form    Ten other types of benefits are explained in chapters 4 through 12. 2012 1040 income tax form These benefits, which reduce the amount of income tax you may have to pay, are: Deduct student loan interest; Receive tax-free treatment of a canceled student loan; Receive tax-free student loan repayment assistance; Deduct tuition and fees for education; Establish and contribute to a Coverdell education savings account (ESA), which features tax-free earnings; Participate in a qualified tuition program (QTP), which features tax-free earnings; Take early distributions from any type of individual retirement arrangement (IRA) for education costs without paying the 10% additional tax on early distributions; Cash in savings bonds for education costs without having to pay tax on the interest; Receive tax-free educational benefits from your employer; and Take a business deduction for work-related education. 2012 1040 income tax form Note. 2012 1040 income tax form You generally cannot claim more than one of the benefits described in the list above for the same qualifying education expense. 2012 1040 income tax form Comparison table. 2012 1040 income tax form   Some of the features of these benefits are highlighted in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 , later, in this publication. 2012 1040 income tax form This general comparison table may guide you in determining which benefits you may be eligible for and which chapters you may want to read. 2012 1040 income tax form When you figure your taxes, you may want to compare these tax benefits so you can choose the method(s) that gives you the lowest tax liability. 2012 1040 income tax form If you qualify, you may find that a combination of credit(s) and deduction(s) gives you the lowest tax. 2012 1040 income tax form Analyzing your tax withholding. 2012 1040 income tax form   After you estimate your education tax benefits for the year, you may be able to reduce the amount of your federal income tax withholding. 2012 1040 income tax form Also, you may want to recheck your withholding during the year if your personal or financial situation changes. 2012 1040 income tax form See Publication 919, How Do I Adjust My Tax Withholding, for more information. 2012 1040 income tax form Glossary. 2012 1040 income tax form   In this publication, wherever appropriate, we have tried to use the same or similar terminology when referring to the basic components of each education benefit. 2012 1040 income tax form Some of the terms used are: Qualified education expenses, Eligible educational institution, and Modified adjusted gross income. 2012 1040 income tax form   Even though the same term, such as qualified education expenses, is used to label a basic component of many of the education benefits, the same expenses are not necessarily allowed for each benefit. 2012 1040 income tax form For example, the cost of room and board is a qualified education expense for the qualified tuition program, but not for the education savings bond program. 2012 1040 income tax form   Many of the terms used in the publication are defined in the glossary near the end of the publication. 2012 1040 income tax form The glossary is not intended to be a substitute for reading the chapter on a particular education benefit, but it will give you an overview of how certain terms are used in discussing the different benefits. 2012 1040 income tax form Comments and suggestions. 2012 1040 income tax form   We welcome your comments about this publication and your suggestions for future editions. 2012 1040 income tax form   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2012 1040 income tax form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2012 1040 income tax form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2012 1040 income tax form   You can send your comments from www. 2012 1040 income tax form irs. 2012 1040 income tax form gov/formspubs/. 2012 1040 income tax form Click on “More Information” and then on “Comment on Tax Forms and Publications”. 2012 1040 income tax form   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. 2012 1040 income tax form Ordering forms and publications. 2012 1040 income tax form   Visit www. 2012 1040 income tax form irs. 2012 1040 income tax form 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. 2012 1040 income tax form Internal Revenue Service 1201 N. 2012 1040 income tax form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 2012 1040 income tax form   If you have a tax question, check the information available on IRS. 2012 1040 income tax form gov or call 1-800-829-1040. 2012 1040 income tax form We cannot answer tax questions sent to either of the above addresses. 2012 1040 income tax form Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 1040 U. 2012 1040 income tax form S. 2012 1040 income tax form Individual Income Tax Return 1040A U. 2012 1040 income tax form S. 2012 1040 income tax form Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. 2012 1040 income tax form S. 2012 1040 income tax form Nonresident Alien Income Tax Return 1040NR-EZ U. 2012 1040 income tax form S. 2012 1040 income tax form Income Tax Return for Certain Nonresident Aliens With No Dependents 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 5329 Additional Taxes on Qualified Plans and Other Tax-Favored Accounts 8815 Exclusion of Interest From Series EE and I U. 2012 1040 income tax form S. 2012 1040 income tax form Savings Bonds Issued After 1989 8863 Education Credits 8917 Tuition and Fees Deduction Schedule A (Form 1040) Itemized Deductions  See chapter 13, How To Get Tax Help , for information about getting these publications and forms. 2012 1040 income tax form Prev  Up  Next   Home   More Online Publications
Español

  • Possible Phone Scam Targets Local Chinese Residents
    A possible telemarketing scam is targeting local Chinese residents. It has been reported to BBB that people have been receiving phone calls from a female Cantonese caller claiming to represent a Chinese company says that they are conducting "survey", and seeking personal information. After survey, the caller provides a code to remember for future prize claim.
  • Telemarketing Fraud
    Many legitimate companies and charities solicit consumers by phone. Unfortunately, con artists use the phone, too. They rob people every day, with phones as their weapons.
  • Unauthorized Fees: What's Hiding in Your Phone Bill?
    If you're a savvy consumer, you know how small charges can add up over time. You may regularly scrutinize your bank statement for overdraft fees, scan your credit card bill for hidden charges, and pay careful attention to shipping and handling every time you order something online. But you may not realize that unauthorized mystery fees can also hide in your phone bill.

The 2012 1040 Income Tax Form

2012 1040 income tax form 3. 2012 1040 income tax form   SIMPLE Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: SIMPLE IRA PlanWho Can Set Up a SIMPLE IRA Plan? Who Can Participate in a SIMPLE IRA Plan? How To Set Up a SIMPLE IRA Plan Notification Requirement Contribution Limits When To Deduct Contributions Where To Deduct Contributions Tax Treatment of Contributions Distributions (Withdrawals) More Information on SIMPLE IRA Plans SIMPLE 401(k) Plan Topics - This chapter discusses: SIMPLE IRA plan SIMPLE 401(k) plan Useful Items - You may want to see: Publications 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4284 SIMPLE IRA Plan Checklist 4334 SIMPLE IRA Plans for Small Businesses Forms (and Instructions) W-2 Wage and Tax Statement 5304-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–Not for Use With a Designated Financial Institution 5305-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–for Use With a Designated Financial Institution 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A savings incentive match plan for employees (SIMPLE plan) is a written arrangement that provides you and your employees with a simplified way to make contributions to provide retirement income. 2012 1040 income tax form Under a SIMPLE plan, employees can choose to make salary reduction contributions to the plan rather than receiving these amounts as part of their regular pay. 2012 1040 income tax form In addition, you will contribute matching or nonelective contributions. 2012 1040 income tax form SIMPLE plans can only be maintained on a calendar-year basis. 2012 1040 income tax form A SIMPLE plan can be set up in either of the following ways. 2012 1040 income tax form Using SIMPLE IRAs (SIMPLE IRA plan). 2012 1040 income tax form As part of a 401(k) plan (SIMPLE 401(k) plan). 2012 1040 income tax form Many financial institutions will help you set up a SIMPLE plan. 2012 1040 income tax form SIMPLE IRA Plan A SIMPLE IRA plan is a retirement plan that uses SIMPLE IRAs for each eligible employee. 2012 1040 income tax form Under a SIMPLE IRA plan, a SIMPLE IRA must be set up for each eligible employee. 2012 1040 income tax form For the definition of an eligible employee, see Who Can Participate in a SIMPLE IRA Plan , later. 2012 1040 income tax form Who Can Set Up a SIMPLE IRA Plan? You can set up a SIMPLE IRA plan if you meet both the following requirements. 2012 1040 income tax form You meet the employee limit. 2012 1040 income tax form You do not maintain another qualified plan unless the other plan is for collective bargaining employees. 2012 1040 income tax form Employee limit. 2012 1040 income tax form   You can set up a SIMPLE IRA plan only if you had 100 or fewer employees who received $5,000 or more in compensation from you for the preceding year. 2012 1040 income tax form Under this rule, you must take into account all employees employed at any time during the calendar year regardless of whether they are eligible to participate. 2012 1040 income tax form Employees include self-employed individuals who received earned income and leased employees (defined in chapter 1). 2012 1040 income tax form   Once you set up a SIMPLE IRA plan, you must continue to meet the 100-employee limit each year you maintain the plan. 2012 1040 income tax form Grace period for employers who cease to meet the 100-employee limit. 2012 1040 income tax form   If you maintain the SIMPLE IRA plan for at least 1 year and you cease to meet the 100-employee limit in a later year, you will be treated as meeting it for the 2 calendar years immediately following the calendar year for which you last met it. 2012 1040 income tax form   A different rule applies if you do not meet the 100-employee limit because of an acquisition, disposition, or similar transaction. 2012 1040 income tax form Under this rule, the SIMPLE IRA plan will be treated as meeting the 100-employee limit for the year of the transaction and the 2 following years if both the following conditions are satisfied. 2012 1040 income tax form Coverage under the plan has not significantly changed during the grace period. 2012 1040 income tax form The SIMPLE IRA plan would have continued to qualify after the transaction if you had remained a separate employer. 2012 1040 income tax form    The grace period for acquisitions, dispositions, and similar transactions also applies if, because of these types of transactions, you do not meet the rules explained under Other qualified plan or Who Can Participate in a SIMPLE IRA Plan, below. 2012 1040 income tax form Other qualified plan. 2012 1040 income tax form   The SIMPLE IRA plan generally must be the only retirement plan to which you make contributions, or to which benefits accrue, for service in any year beginning with the year the SIMPLE IRA plan becomes effective. 2012 1040 income tax form Exception. 2012 1040 income tax form   If you maintain a qualified plan for collective bargaining employees, you are permitted to maintain a SIMPLE IRA plan for other employees. 2012 1040 income tax form Who Can Participate in a SIMPLE IRA Plan? Eligible employee. 2012 1040 income tax form   Any employee who received at least $5,000 in compensation during any 2 years preceding the current calendar year and is reasonably expected to receive at least $5,000 during the current calendar year is eligible to participate. 2012 1040 income tax form The term “employee” includes a self-employed individual who received earned income. 2012 1040 income tax form   You can use less restrictive eligibility requirements (but not more restrictive ones) by eliminating or reducing the prior year compensation requirements, the current year compensation requirements, or both. 2012 1040 income tax form For example, you can allow participation for employees who received at least $3,000 in compensation during any preceding calendar year. 2012 1040 income tax form However, you cannot impose any other conditions for participating in a SIMPLE IRA plan. 2012 1040 income tax form Excludable employees. 2012 1040 income tax form   The following employees do not need to be covered under a SIMPLE IRA plan. 2012 1040 income tax form Employees who are covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. 2012 1040 income tax form Nonresident alien employees who have received no U. 2012 1040 income tax form S. 2012 1040 income tax form source wages, salaries, or other personal services compensation from you. 2012 1040 income tax form Compensation. 2012 1040 income tax form   Compensation for employees is the total wages, tips, and other compensation from the employer subject to federal income tax withholding and the amounts paid for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority. 2012 1040 income tax form Compensation also includes the employee's salary reduction contributions made under this plan and, if applicable, elective deferrals under a section 401(k) plan, a SARSEP, or a section 403(b) annuity contract and compensation deferred under a section 457 plan required to be reported by the employer on Form W-2. 2012 1040 income tax form If you are self-employed, compensation is your net earnings from self-employment (line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040)) before subtracting any contributions made to the SIMPLE IRA plan for yourself. 2012 1040 income tax form How To Set Up a SIMPLE IRA Plan You can use Form 5304-SIMPLE or Form 5305-SIMPLE to set up a SIMPLE IRA plan. 2012 1040 income tax form Each form is a model savings incentive match plan for employees (SIMPLE) plan document. 2012 1040 income tax form Which form you use depends on whether you select a financial institution or your employees select the institution that will receive the contributions. 2012 1040 income tax form Use Form 5304-SIMPLE if you allow each plan participant to select the financial institution for receiving his or her SIMPLE IRA plan contributions. 2012 1040 income tax form Use Form 5305-SIMPLE if you require that all contributions under the SIMPLE IRA plan be deposited initially at a designated financial institution. 2012 1040 income tax form The SIMPLE IRA plan is adopted when you have completed all appropriate boxes and blanks on the form and you (and the designated financial institution, if any) have signed it. 2012 1040 income tax form Keep the original form. 2012 1040 income tax form Do not file it with the IRS. 2012 1040 income tax form Other uses of the forms. 2012 1040 income tax form   If you set up a SIMPLE IRA plan using Form 5304-SIMPLE or Form 5305-SIMPLE, you can use the form to satisfy other requirements, including the following. 2012 1040 income tax form Meeting employer notification requirements for the SIMPLE IRA plan. 2012 1040 income tax form Form 5304-SIMPLE and Form 5305-SIMPLE contain a Model Notification to Eligible Employees that provides the necessary information to the employee. 2012 1040 income tax form Maintaining the SIMPLE IRA plan records and proving you set up a SIMPLE IRA plan for employees. 2012 1040 income tax form Deadline for setting up a SIMPLE IRA plan. 2012 1040 income tax form   You can set up a SIMPLE IRA plan effective on any date from January 1 through October 1 of a year, provided you did not previously maintain a SIMPLE IRA plan. 2012 1040 income tax form This requirement does not apply if you are a new employer that comes into existence after October 1 of the year the SIMPLE IRA plan is set up and you set up a SIMPLE IRA plan as soon as administratively feasible after your business comes into existence. 2012 1040 income tax form If you previously maintained a SIMPLE IRA plan, you can set up a SIMPLE IRA plan effective only on January 1 of a year. 2012 1040 income tax form A SIMPLE IRA plan cannot have an effective date that is before the date you actually adopt the plan. 2012 1040 income tax form Setting up a SIMPLE IRA. 2012 1040 income tax form   SIMPLE IRAs are the individual retirement accounts or annuities into which the contributions are deposited. 2012 1040 income tax form A SIMPLE IRA must be set up for each eligible employee. 2012 1040 income tax form Forms 5305-S, SIMPLE Individual Retirement Trust Account, and 5305-SA, SIMPLE Individual Retirement Custodial Account, are model trust and custodial account documents the participant and the trustee (or custodian) can use for this purpose. 2012 1040 income tax form   A SIMPLE IRA cannot be a Roth IRA. 2012 1040 income tax form Contributions to a SIMPLE IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. 2012 1040 income tax form Deadline for setting up a SIMPLE IRA. 2012 1040 income tax form   A SIMPLE IRA must be set up for an employee before the first date by which a contribution is required to be deposited into the employee's IRA. 2012 1040 income tax form See Time limits for contributing funds , later, under Contribution Limits. 2012 1040 income tax form Credit for startup costs. 2012 1040 income tax form   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE IRA plan that first became effective in 2013. 2012 1040 income tax form For more information, see Credit for startup costs under Reminders, earlier. 2012 1040 income tax form Notification Requirement If you adopt a SIMPLE IRA plan, you must notify each employee of the following information before the beginning of the election period. 2012 1040 income tax form The employee's opportunity to make or change a salary reduction choice under a SIMPLE IRA plan. 2012 1040 income tax form Your decision to make either matching contributions or nonelective contributions (discussed later). 2012 1040 income tax form A summary description provided by the financial institution. 2012 1040 income tax form Written notice that his or her balance can be transferred without cost or penalty if they use a designated financial institution. 2012 1040 income tax form Election period. 2012 1040 income tax form   The election period is generally the 60-day period immediately preceding January 1 of a calendar year (November 2 to December 31 of the preceding calendar year). 2012 1040 income tax form However, the dates of this period are modified if you set up a SIMPLE IRA plan in mid-year (for example, on July 1) or if the 60-day period falls before the first day an employee becomes eligible to participate in the SIMPLE IRA plan. 2012 1040 income tax form   A SIMPLE IRA plan can provide longer periods for permitting employees to enter into salary reduction agreements or to modify prior agreements. 2012 1040 income tax form For example, a SIMPLE IRA plan can provide a 90-day election period instead of the 60-day period. 2012 1040 income tax form Similarly, in addition to the 60-day period, a SIMPLE IRA plan can provide quarterly election periods during the 30 days before each calendar quarter, other than the first quarter of each year. 2012 1040 income tax form Contribution Limits Contributions are made up of salary reduction contributions and employer contributions. 2012 1040 income tax form You, as the employer, must make either matching contributions or nonelective contributions, defined later. 2012 1040 income tax form No other contributions can be made to the SIMPLE IRA plan. 2012 1040 income tax form These contributions, which you can deduct, must be made timely. 2012 1040 income tax form See Time limits for contributing funds , later. 2012 1040 income tax form Salary reduction contributions. 2012 1040 income tax form   The amount the employee chooses to have you contribute to a SIMPLE IRA on his or her behalf cannot be more than $12,000 for 2013 and 2014. 2012 1040 income tax form These contributions must be expressed as a percentage of the employee's compensation unless you permit the employee to express them as a specific dollar amount. 2012 1040 income tax form You cannot place restrictions on the contribution amount (such as limiting the contribution percentage), except to comply with the $12,000 limit. 2012 1040 income tax form   If you or an employee participates in any other qualified plan during the year and you or your employee have salary reduction contributions (elective deferrals) under those plans, the salary reduction contributions under a SIMPLE IRA plan also count toward the overall annual limit ($17,500 for 2013 and 2014) on exclusion of salary reduction contributions and other elective deferrals. 2012 1040 income tax form Catch-up contributions. 2012 1040 income tax form   A SIMPLE IRA plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. 2012 1040 income tax form The catch-up contribution limit for 2013 and 2014 for SIMPLE IRA plans is $2,500. 2012 1040 income tax form Salary reduction contributions are not treated as catch-up contributions for 2013 or 2014 until they exceed $12,000. 2012 1040 income tax form However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. 2012 1040 income tax form The catch-up contribution limit. 2012 1040 income tax form The excess of the participant's compensation over the salary reduction contributions that are not catch-up contributions. 2012 1040 income tax form Employer matching contributions. 2012 1040 income tax form   You are generally required to match each employee's salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee's compensation. 2012 1040 income tax form This requirement does not apply if you make nonelective contributions as discussed later. 2012 1040 income tax form Example. 2012 1040 income tax form In 2013, your employee, John Rose, earned $25,000 and chose to defer 5% of his salary. 2012 1040 income tax form Your net earnings from self-employment are $40,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. 2012 1040 income tax form You make 3% matching contributions. 2012 1040 income tax form The total contribution you make for John is $2,000, figured as follows. 2012 1040 income tax form Salary reduction contributions ($25,000 × . 2012 1040 income tax form 05) $1,250 Employer matching contribution ($25,000 × . 2012 1040 income tax form 03) 750 Total contributions $2,000     The total contribution you make for yourself is $5,200, figured as follows. 2012 1040 income tax form Salary reduction contributions ($40,000 × . 2012 1040 income tax form 10) $4,000 Employer matching contribution ($40,000 × . 2012 1040 income tax form 03) 1,200 Total contributions $5,200 Lower percentage. 2012 1040 income tax form   If you choose a matching contribution less than 3%, the percentage must be at least 1%. 2012 1040 income tax form You must notify the employees of the lower match within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. 2012 1040 income tax form You cannot choose a percentage less than 3% for more than 2 years during the 5-year period that ends with (and includes) the year for which the choice is effective. 2012 1040 income tax form Nonelective contributions. 2012 1040 income tax form   Instead of matching contributions, you can choose to make nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 (or some lower amount you select) of compensation from you for the year. 2012 1040 income tax form If you make this choice, you must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. 2012 1040 income tax form Only $255,000 of the employee's compensation can be taken into account to figure the contribution limit in 2013 ($260,000 in 2014). 2012 1040 income tax form   If you choose this 2% contribution formula, you must notify the employees within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. 2012 1040 income tax form Example 1. 2012 1040 income tax form In 2013, your employee, Jane Wood, earned $36,000 and chose to have you contribute 10% of her salary. 2012 1040 income tax form Your net earnings from self-employment are $50,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. 2012 1040 income tax form You make a 2% nonelective contribution. 2012 1040 income tax form Both of you are under age 50. 2012 1040 income tax form The total contribution you make for Jane is $4,320, figured as follows. 2012 1040 income tax form Salary reduction contributions ($36,000 × . 2012 1040 income tax form 10) $3,600 2% nonelective contributions ($36,000 × . 2012 1040 income tax form 02) 720 Total contributions $4,320     The total contribution you make for yourself is $6,000, figured as follows. 2012 1040 income tax form Salary reduction contributions ($50,000 × . 2012 1040 income tax form 10) $5,000 2% nonelective contributions ($50,000 × . 2012 1040 income tax form 02) 1,000 Total contributions $6,000 Example 2. 2012 1040 income tax form Using the same facts as in Example 1, above, the maximum contribution you make for Jane or for yourself if you each earned $75,000 is $13,500, figured as follows. 2012 1040 income tax form Salary reduction contributions (maximum amount allowed) $12,000 2% nonelective contributions ($75,000 × . 2012 1040 income tax form 02) 1,500 Total contributions $13,500 Time limits for contributing funds. 2012 1040 income tax form   You must make the salary reduction contributions to the SIMPLE IRA within 30 days after the end of the month in which the amounts would otherwise have been payable to the employee in cash. 2012 1040 income tax form You must make matching contributions or nonelective contributions by the due date (including extensions) for filing your federal income tax return for the year. 2012 1040 income tax form Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions. 2012 1040 income tax form When To Deduct Contributions You can deduct SIMPLE IRA contributions in the tax year within which the calendar year for which contributions were made ends. 2012 1040 income tax form You can deduct contributions for a particular tax year if they are made for that tax year and are made by the due date (including extensions) of your federal income tax return for that year. 2012 1040 income tax form Example 1. 2012 1040 income tax form Your tax year is the fiscal year ending June 30. 2012 1040 income tax form Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2013 before July 1, 2013) are deductible in the tax year ending June 30, 2014. 2012 1040 income tax form Example 2. 2012 1040 income tax form You are a sole proprietor whose tax year is the calendar year. 2012 1040 income tax form Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2014 by April 15, 2014) are deductible in the 2013 tax year. 2012 1040 income tax form Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. 2012 1040 income tax form For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040); partnerships deduct them on Form 1065; and corporations deduct them on Form 1120 or Form 1120S. 2012 1040 income tax form Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. 2012 1040 income tax form (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you receive from the partnership. 2012 1040 income tax form ) Tax Treatment of Contributions You can deduct your contributions and your employees can exclude these contributions from their gross income. 2012 1040 income tax form SIMPLE IRA plan contributions are not subject to federal income tax withholding. 2012 1040 income tax form However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. 2012 1040 income tax form Matching and nonelective contributions are not subject to these taxes. 2012 1040 income tax form Reporting on Form W-2. 2012 1040 income tax form   Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation” box of Form W-2. 2012 1040 income tax form You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. 2012 1040 income tax form You must also include them in box 12. 2012 1040 income tax form Mark the “Retirement plan” checkbox in box 13. 2012 1040 income tax form For more information, see the Form W-2 instructions. 2012 1040 income tax form Distributions (Withdrawals) Distributions from a SIMPLE IRA are subject to IRA rules and generally are includible in income for the year received. 2012 1040 income tax form Tax-free rollovers can be made from one SIMPLE IRA into another SIMPLE IRA. 2012 1040 income tax form However, a rollover from a SIMPLE IRA to a non-SIMPLE IRA can be made tax free only after a 2-year participation in the SIMPLE IRA plan. 2012 1040 income tax form Generally, you or your employee must begin to receive distributions from a SIMPLE IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. 2012 1040 income tax form Early withdrawals generally are subject to a 10% additional tax. 2012 1040 income tax form However, the additional tax is increased to 25% if funds are withdrawn within 2 years of beginning participation. 2012 1040 income tax form More information. 2012 1040 income tax form   See Publication 590 for information about IRA rules, including those on the tax treatment of distributions, rollovers, required distributions, and income tax withholding. 2012 1040 income tax form More Information on SIMPLE IRA Plans If you need help to set up or maintain a SIMPLE IRA plan, go to the IRS website and search SIMPLE IRA Plan. 2012 1040 income tax form SIMPLE 401(k) Plan You can adopt a SIMPLE plan as part of a 401(k) plan if you meet the 100-employee limit as discussed earlier under SIMPLE IRA Plan. 2012 1040 income tax form A SIMPLE 401(k) plan is a qualified retirement plan and generally must satisfy the rules discussed under Qualification Rules in chapter 4, including the required distribution rules. 2012 1040 income tax form However, a SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy rules discussed in chapter 4 if the plan meets the conditions listed below. 2012 1040 income tax form Under the plan, an employee can choose to have you make salary reduction contributions for the year to a trust in an amount expressed as a percentage of the employee's compensation, but not more than $12,000 for 2013 and 2014. 2012 1040 income tax form If permitted under the plan, an employee who is age 50 or over can also make a catch-up contribution of up to $2,500 for 2013 and 2014. 2012 1040 income tax form See Catch-up contributions , earlier under Contribution Limits. 2012 1040 income tax form You must make either: Matching contributions up to 3% of compensation for the year, or Nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 of compensation from you for the year. 2012 1040 income tax form No other contributions can be made to the trust. 2012 1040 income tax form No contributions are made, and no benefits accrue, for services during the year under any other qualified retirement plan sponsored by you on behalf of any employee eligible to participate in the SIMPLE 401(k) plan. 2012 1040 income tax form The employee's rights to any contributions are nonforfeitable. 2012 1040 income tax form No more than $255,000 of the employee's compensation can be taken into account in figuring matching contributions and nonelective contributions in 2013 ($260,000 in 2014). 2012 1040 income tax form Compensation is defined earlier in this chapter. 2012 1040 income tax form Employee notification. 2012 1040 income tax form   The notification requirement that applies to SIMPLE IRA plans also applies to SIMPLE 401(k) plans. 2012 1040 income tax form See Notification Requirement in this chapter. 2012 1040 income tax form Credit for startup costs. 2012 1040 income tax form   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE 401(k) plan that first became effective in 2013. 2012 1040 income tax form For more information, see Credit for startup costs under Reminders, earlier. 2012 1040 income tax form Note on Forms. 2012 1040 income tax form   Please note that Forms 5304-SIMPLE and 5305-SIMPLE can not be used to establish a SIMPLE 401(k) plan. 2012 1040 income tax form To set up a SIMPLE 401(k) plan, see Adopting a Written Plan in chapter 4. 2012 1040 income tax form Prev  Up  Next   Home   More Online Publications