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A Software With 1040x

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A Software With 1040x

A software with 1040x Internal Revenue Bulletin:  2010-9  March 1, 2010  Rev. A software with 1040x Proc. A software with 1040x 2010-18 Table of Contents SECTION 1. A software with 1040x PURPOSE SECTION 2. A software with 1040x BACKGROUND SECTION 3. A software with 1040x SCOPE SECTION 4. A software with 1040x APPLICATION SECTION 5. A software with 1040x EFFECTIVE DATE SECTION 6. A software with 1040x DRAFTING INFORMATION SECTION 1. A software with 1040x PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2010, including a separate table of limitations on depreciation deductions for trucks and vans; and (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2010, including a separate table of inclusion amounts for lessees of trucks and vans. A software with 1040x The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. A software with 1040x SECTION 2. A software with 1040x BACKGROUND . A software with 1040x 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. A software with 1040x Section 280F(d)(7) requires the amounts allowable as depreciation deductions to be increased by a price inflation adjustment amount for passenger automobiles placed in service after 1988. A software with 1040x The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. A software with 1040x This change reflects the higher rate of price inflation for trucks and vans since 1988. A software with 1040x . A software with 1040x 02 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. A software with 1040x The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. A software with 1040x Under § 1. A software with 1040x 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. A software with 1040x One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. A software with 1040x Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. A software with 1040x SECTION 3. A software with 1040x SCOPE . A software with 1040x 01 The limitations on depreciation deductions in section 4. A software with 1040x 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2010, and continue to apply for each taxable year that the passenger automobile remains in service. A software with 1040x . A software with 1040x 02 The tables in section 4. A software with 1040x 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2010. A software with 1040x Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. A software with 1040x See Rev. A software with 1040x Proc. A software with 1040x 2005-13, 2005-1 C. A software with 1040x B. A software with 1040x 759, for passenger automobiles first leased before calendar year 2006; Rev. A software with 1040x Proc. A software with 1040x 2006-18, 2006-1 C. A software with 1040x B. A software with 1040x 645, for passenger automobiles first leased during calendar year 2006; Rev. A software with 1040x Proc. A software with 1040x 2007-30, 2007-1 C. A software with 1040x B. A software with 1040x 1104, for passenger automobiles first leased during calendar year 2007; Rev. A software with 1040x Proc. A software with 1040x 2008-22, 2008-12 I. A software with 1040x R. A software with 1040x B. A software with 1040x 658, for passenger automobiles first leased during calendar year 2008; and Rev. A software with 1040x Proc. A software with 1040x 2009-24, 2009-17 I. A software with 1040x R. A software with 1040x B. A software with 1040x 885, for passenger automobiles first leased during calendar year 2009. A software with 1040x SECTION 4. A software with 1040x APPLICATION . A software with 1040x 01 Limitations on Depreciation Deductions for Certain Automobiles. A software with 1040x (1) Amount of the inflation adjustment. A software with 1040x (a) Passenger automobiles (other than trucks or vans). A software with 1040x Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. A software with 1040x The term “CPI automobile component” is defined in § 280F(d)(7)(B)(ii) as the “automobile component” of the Consumer Price Index for all Urban Consumers published by the Department of Labor. A software with 1040x The new car component of the CPI was 115. A software with 1040x 2 for October 1987 and 137. A software with 1040x 851 for October 2009. A software with 1040x The October 2009 index exceeded the October 1987 index by 22. A software with 1040x 651. A software with 1040x Therefore, the automobile price inflation adjustment for 2010 for passenger automobiles (other than trucks and vans) is 19. A software with 1040x 66 percent (22. A software with 1040x 651/115. A software with 1040x 2 x 100%). A software with 1040x The dollar limitations in § 280F(a) are multiplied by a factor of 0. A software with 1040x 1966, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2010. A software with 1040x This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2010. A software with 1040x (b) Trucks and vans. A software with 1040x To determine the dollar limitations for trucks and vans first placed in service during calendar year 2010, the new truck component of the CPI is used instead of the new car component. A software with 1040x The new truck component of the CPI was 112. A software with 1040x 4 for October 1987 and 140. A software with 1040x 897 for October 2009. A software with 1040x The October 2009 index exceeded the October 1987 index by 28. A software with 1040x 497. A software with 1040x Therefore, the automobile price inflation adjustment for 2010 for trucks and vans is 25. A software with 1040x 35 percent (28. A software with 1040x 497/112. A software with 1040x 4 x 100%). A software with 1040x The dollar limitations in § 280F(a) are multiplied by a factor of 0. A software with 1040x 2535, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. A software with 1040x This adjustment applies to all trucks and vans that are first placed in service in calendar year 2010. A software with 1040x (2) Amount of the limitation. A software with 1040x Tables 1 and 2 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2010. A software with 1040x Use Table 1 for a passenger automobile (other than a truck or van) and Table 2 for a truck or van placed in service in calendar year 2010. A software with 1040x REV. A software with 1040x PROC. A software with 1040x 2010-18 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2010 Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. A software with 1040x PROC. A software with 1040x 2010-18 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2010 Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 . A software with 1040x 02 Inclusions in Income of Lessees of Passenger Automobiles. A software with 1040x A taxpayer must follow the procedures in § 1. A software with 1040x 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2010. A software with 1040x In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 3 of this revenue procedure, while lessees of trucks and vans should use Table 4 of this revenue procedure. A software with 1040x REV. A software with 1040x PROC. A software with 1040x 2010-18 TABLE 3 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2010 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $16,700 $17,000 3 7 10 11 14 17,000 17,500 4 8 13 15 16 17,500 18,000 5 10 16 19 21 18,000 18,500 6 13 18 23 26 18,500 19,000 7 15 22 26 31 19,000 19,500 8 17 25 30 35 19,500 20,000 9 19 29 34 39 20,000 20,500 10 21 32 38 44 20,500 21,000 11 23 35 42 48 21,000 21,500 12 26 38 45 53 21,500 22,000 13 28 41 50 57 22,000 23,000 14 31 46 56 63 23,000 24,000 16 36 52 63 73 24,000 25,000 18 40 59 71 81 25,000 26,000 20 44 66 78 90 26,000 27,000 22 49 71 86 100 27,000 28,000 24 53 78 94 108 28,000 29,000 26 57 85 101 118 29,000 30,000 28 61 92 109 126 30,000 31,000 30 66 97 117 135 31,000 32,000 32 70 104 125 144 32,000 33,000 34 74 111 132 153 33,000 34,000 36 79 117 140 161 34,000 35,000 38 83 123 148 171 35,000 36,000 40 87 130 156 179 36,000 37,000 42 92 136 163 188 37,000 38,000 44 96 143 170 198 38,000 39,000 46 100 149 179 206 39,000 40,000 48 105 155 186 215 40,000 41,000 50 109 162 194 224 41,000 42,000 52 113 169 201 233 42,000 43,000 54 118 174 210 241 43,000 44,000 56 122 181 217 251 44,000 45,000 58 126 188 225 259 45,000 46,000 60 131 194 232 269 46,000 47,000 61 135 201 240 277 47,000 48,000 63 140 207 248 286 48,000 49,000 65 144 213 256 295 49,000 50,000 67 148 220 263 304 50,000 51,000 69 153 226 271 313 51,000 52,000 71 157 232 279 322 52,000 53,000 73 161 239 287 331 53,000 54,000 75 166 245 294 340 54,000 55,000 77 170 252 302 348 55,000 56,000 79 174 258 310 358 56,000 57,000 81 178 265 318 366 57,000 58,000 83 183 271 325 375 58,000 59,000 85 187 278 333 384 59,000 60,000 87 191 284 341 393 60,000 62,000 90 198 294 352 406 62,000 64,000 94 207 306 368 424 64,000 66,000 98 215 320 382 443 66,000 68,000 102 224 332 398 460 68,000 70,000 106 232 346 413 478 70,000 72,000 110 241 358 429 496 72,000 74,000 114 250 371 444 513 74,000 76,000 118 258 384 460 531 76,000 78,000 122 267 396 476 549 78,000 80,000 126 276 409 491 566 80,000 85,000 132 291 432 518 598 85,000 90,000 142 313 464 556 643 90,000 95,000 152 334 497 594 687 95,000 100,000 162 356 528 634 731 100,000 110,000 177 388 577 691 798 110,000 120,000 196 432 641 768 887 120,000 130,000 216 475 705 846 976 130,000 140,000 236 518 770 922 1,065 140,000 150,000 256 561 834 1,000 1,154 150,000 160,000 275 605 898 1,077 1,243 160,000 170,000 295 648 963 1,153 1,333 170,000 180,000 315 691 1,027 1,231 1,421 180,000 190,000 334 735 1,091 1,308 1,510 190,000 200,000 354 778 1,155 1,386 1,599 200,000 210,000 374 821 1,220 1,462 1,688 210,000 220,000 393 865 1,284 1,539 1,777 220,000 230,000 413 908 1,348 1,617 1,866 230,000 240,000 433 951 1,413 1,693 1,956 240,000 and up 453 995 1,476 1,771 2,044 REV. A software with 1040x PROC. A software with 1040x 2010-18 TABLE 4 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2010 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later 17,000 17,500 3 6 9 10 11 17,500 18,000 4 8 12 14 16 18,000 18,500 5 10 15 18 21 18,500 19,000 6 12 19 22 24 19,000 19,500 7 15 21 26 29 19,500 20,000 8 17 25 29 34 20,000 20,500 9 19 28 33 38 20,500 21,000 10 21 31 37 43 21,000 21,500 11 23 35 41 47 21,500 22,000 12 25 38 45 51 22,000 23,000 13 29 42 51 58 23,000 24,000 15 33 49 58 67 24,000 25,000 17 37 56 66 76 25,000 26,000 19 42 62 73 85 26,000 27,000 21 46 68 82 93 27,000 28,000 23 50 75 89 103 28,000 29,000 25 55 81 97 111 29,000 30,000 27 59 88 104 121 30,000 31,000 29 63 94 113 129 31,000 32,000 31 68 100 120 138 32,000 33,000 33 72 107 127 148 33,000 34,000 35 76 114 135 156 34,000 35,000 37 81 119 143 165 35,000 36,000 39 85 126 151 174 36,000 37,000 41 89 133 158 183 37,000 38,000 43 94 139 166 191 38,000 39,000 45 98 145 174 201 39,000 40,000 47 102 152 182 209 40,000 41,000 49 106 159 189 218 41,000 42,000 51 111 164 198 227 42,000 43,000 53 115 171 205 236 43,000 44,000 55 119 178 213 245 44,000 45,000 57 124 184 220 254 45,000 46,000 59 128 190 228 263 46,000 47,000 60 133 197 235 272 47,000 48,000 62 137 203 244 280 48,000 49,000 64 142 209 251 290 49,000 50,000 66 146 216 259 298 50,000 51,000 68 150 223 266 308 51,000 52,000 70 154 229 275 316 52,000 53,000 72 159 235 282 325 53,000 54,000 74 163 242 290 334 54,000 55,000 76 167 249 297 343 55,000 56,000 78 172 254 305 352 56,000 57,000 80 176 261 313 361 57,000 58,000 82 180 268 320 370 58,000 59,000 84 185 274 328 378 59,000 60,000 86 189 280 336 388 60,000 62,000 89 195 291 347 401 62,000 64,000 93 204 303 363 418 64,000 66,000 97 213 315 379 436 66,000 68,000 101 221 329 394 454 68,000 70,000 105 230 341 410 472 70,000 72,000 109 239 354 424 490 72,000 74,000 113 247 367 440 508 74,000 76,000 117 256 380 455 526 76,000 78,000 121 264 393 471 543 78,000 80,000 125 273 406 486 561 80,000 85,000 131 289 428 513 592 85,000 90,000 141 310 461 552 636 90,000 95,000 151 332 492 591 681 95,000 100,000 161 353 525 629 726 100,000 110,000 176 386 573 686 793 110,000 120,000 195 430 637 763 882 120,000 130,000 215 473 701 841 971 130,000 140,000 235 516 766 918 1,059 140,000 150,000 255 559 830 995 1,149 150,000 160,000 274 603 894 1,072 1,238 160,000 170,000 294 646 958 1,150 1,326 170,000 180,000 314 689 1,023 1,226 1,416 180,000 190,000 333 733 1,087 1,303 1,505 190,000 200,000 353 776 1,151 1,381 1,594 200,000 210,000 373 819 1,216 1,457 1,683 210,000 220,000 392 863 1,280 1,534 1,772 220,000 230,000 412 906 1,344 1,612 1,861 230,000 240,000 432 949 1,409 1,689 1,949 240,000 and up 452 992 1,473 1,766 2,039 SECTION 5. A software with 1040x EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2010. A software with 1040x SECTION 6. A software with 1040x DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. A software with 1040x Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). A software with 1040x For further information regarding this revenue procedure, contact Mr. A software with 1040x Harvey at (202) 622-4930 (not a toll-free call). A software with 1040x Prev  Up  Next   Home   More Internal Revenue Bulletins
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Updated IRS Smartphone App IRS2Go Version 4.0 Now Available

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IR-2014-11, Feb. 4, 2014

WASHINGTON — The Internal Revenue Service today announced the release of IRS2Go 4.0, an update to its smartphone application featuring new added features available in both English and Spanish.

The redesigned IRS2Go provides new features for taxpayers to access the latest information to help them in the preparation of their tax returns. In this version, IRS2Go highlights the addition of an innovative new refund status tracker, providing taxpayers an easy-to-use feature to follow their tax return throughout the process.

 “The new version of IRS2Go provides taxpayers another way to quickly get information and help around the clock,” said IRS Commissioner John Koskinen. “The IRS is focused on providing taxpayers with convenient self-service tools like IRS2Go, which provides details on everything from tax refunds to free tax assistance.”

There have been about 3.5 million downloads of IRS2Go since its inception in 2011. iPhone and iPod Touch users can update or download the free IRS2Go application by visiting the iTunes App Store. Android users can visit Google Play to download the free IRS2Go app.

The newest version of the free mobile app offers a number of safe and secure ways for taxpayers to access other popular tools and the most up-to-date tax information, including:

  • Refund Status. Taxpayers can check the status of their federal tax refund through IRS2Go. People simply enter their Social Security number, which will be masked and encrypted for security purposes, then select their filing status and enter the amount of their anticipated refund for their 2013 tax return. A new refund status tracker has been added so that taxpayers can follow their tax return throughout the process. Users can check their refund status 24 hours after the IRS acknowledges receipt of an e-filed return, or four weeks after mailing a paper return. The IRS reminds taxpayers the tool is updated just once a day, usually overnight, so there is no reason to check more than once a day.

  • Free Tax Prep Providers. The IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify. This brand new tool on IRS2Go will help taxpayers find the nearest VITA site to their home by simply entering their zip code and selecting a mileage range. By clicking on the directions button within the results, the maps application on the device will load with the address, making it easy to navigate to your desired location.

  • Tax Records. Taxpayers can request their tax account or tax return transcript from IRS2Go. The transcript will be delivered via the U.S. Postal Service to their address of record.

  • Stay Connected. Taxpayers can interact with the IRS by following the IRS on Twitter, @IRSnews or @IRSenEspanol, watching helpful videos on YouTube, signing up for email updates or by using the Contact Us feature.

For more information on IRS2Go, products and services through social media channels and other media products, visit www.IRS.gov.

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Page Last Reviewed or Updated: 04-Feb-2014

The A Software With 1040x

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