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Can you file 1040ez online 4. Can you file 1040ez online   Qualified Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Kinds of PlansDefined Contribution Plan Defined Benefit Plan Qualification RulesEarly retirement. Can you file 1040ez online Loan secured by benefits. Can you file 1040ez online Waiver of survivor benefits. Can you file 1040ez online Waiver of 30-day waiting period before annuity starting date. Can you file 1040ez online Involuntary cash-out of benefits not more than dollar limit. Can you file 1040ez online Exception for certain loans. Can you file 1040ez online Exception for QDRO. Can you file 1040ez online SIMPLE and safe harbor 401(k) plan exception. Can you file 1040ez online Setting Up a Qualified PlanAdopting a Written Plan Investing Plan Assets Minimum Funding RequirementDue dates. Can you file 1040ez online Installment percentage. Can you file 1040ez online Extended period for making contributions. Can you file 1040ez online ContributionsEmployer Contributions Employee Contributions When Contributions Are Considered Made Employer DeductionDeduction Limits Deduction Limit for Self-Employed Individuals Where To Deduct Contributions Carryover of Excess Contributions Excise Tax for Nondeductible (Excess) Contributions Elective Deferrals (401(k) Plans)Limit on Elective Deferrals Automatic Enrollment Treatment of Excess Deferrals Qualified Roth Contribution ProgramElective Deferrals Qualified Distributions Reporting Requirements DistributionsRequired Distributions Distributions From 401(k) Plans Tax Treatment of Distributions Tax on Early Distributions Tax on Excess Benefits Excise Tax on Reversion of Plan Assets Notification of Significant Benefit Accrual Reduction Prohibited TransactionsTax on Prohibited Transactions Reporting RequirementsOne-participant plan. Can you file 1040ez online Caution: Form 5500-EZ not required. Can you file 1040ez online Form 5500. Can you file 1040ez online Electronic filing of Forms 5500 and 5500-SF. Can you file 1040ez online Topics - This chapter discusses: Kinds of plans Qualification rules Setting up a qualified plan Minimum funding requirement Contributions Employer deduction Elective deferrals (401(k) plans) Qualified Roth contribution program Distributions Prohibited transactions Reporting requirements Useful Items - You may want to see: Publications 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 3066 Have you had your Check-up this year? for Retirement Plans 3998 Choosing A Retirement Solution for Your Small Business 4222 401(k) Plans for Small Businesses 4530 Designated Roth Accounts under a 401(k), 403(b), or governmental 457(b) plans 4531 401(k) Plan Checklist 4674 Automatic Enrollment 401(k) Plans for Small Businesses 4806 Profit Sharing Plans for Small Businesses Forms (and Instructions) www. Can you file 1040ez online dol. Can you file 1040ez online gov/ebsa/pdf/2013-5500. Can you file 1040ez online pdf www. Can you file 1040ez online dol. Can you file 1040ez online gov/ebsa/pdf/2013-5500-SF. Can you file 1040ez online pdf W-2 Wage and Tax Statement Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Can you file 1040ez online 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Can you file 1040ez online 1040 U. Can you file 1040ez online S. Can you file 1040ez online Individual Income Tax Return Schedule C (Form 1040) Profit or Loss From Business Schedule F (Form 1040) Profit or Loss From Farming 5300 Application for Determination for Employee Benefit Plan 5310 Application for Determination for Terminating Plan 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 5330 Return of Excise Taxes Related to Employee Benefit Plans 5500 Annual Return/Report of Employee Benefit Plan. Can you file 1040ez online For copies of this form, go to: 5500-EZ Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan. Can you file 1040ez online For copies of this form, go to: 8717 User Fee for Employee Plan Determination Letter Request 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs 8955-SSA Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits These qualified retirement plans set up by self-employed individuals are sometimes called Keogh or H. Can you file 1040ez online R. Can you file 1040ez online 10 plans. Can you file 1040ez online A sole proprietor or a partnership can set up one of these plans. Can you file 1040ez online A common-law employee or a partner cannot set up one of these plans. Can you file 1040ez online The plans described here can also be set up and maintained by employers that are corporations. Can you file 1040ez online All the rules discussed here apply to corporations except where specifically limited to the self-employed. Can you file 1040ez online The plan must be for the exclusive benefit of employees or their beneficiaries. Can you file 1040ez online These qualified plans can include coverage for a self-employed individual. Can you file 1040ez online As an employer, you can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Can you file 1040ez online The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Can you file 1040ez online Kinds of Plans There are two basic kinds of qualified plans—defined contribution plans and defined benefit plans—and different rules apply to each. Can you file 1040ez online You can have more than one qualified plan, but your contributions to all the plans must not total more than the overall limits discussed under Contributions and Employer Deduction, later. Can you file 1040ez online Defined Contribution Plan A defined contribution plan provides an individual account for each participant in the plan. Can you file 1040ez online It provides benefits to a participant largely based on the amount contributed to that participant's account. Can you file 1040ez online Benefits are also affected by any income, expenses, gains, losses, and forfeitures of other accounts that may be allocated to an account. Can you file 1040ez online A defined contribution plan can be either a profit-sharing plan or a money purchase pension plan. Can you file 1040ez online Profit-sharing plan. Can you file 1040ez online   Although it is called a “profit-sharing plan,” you do not actually have to make a business profit for the year in order to make a contribution (except for yourself if you are self-employed as discussed under Self-employed Individual, later). Can you file 1040ez online A profit-sharing plan can be set up to allow for discretionary employer contributions, meaning the amount contributed each year to the plan is not fixed. Can you file 1040ez online An employer may even make no contribution to the plan for a given year. Can you file 1040ez online   The plan must provide a definite formula for allocating the contribution among the participants and for distributing the accumulated funds to the employees after they reach a certain age, after a fixed number of years, or upon certain other occurrences. Can you file 1040ez online   In general, you can be more flexible in making contributions to a profit-sharing plan than to a money purchase pension plan (discussed next) or a defined benefit plan (discussed later). Can you file 1040ez online Money purchase pension plan. Can you file 1040ez online   Contributions to a money purchase pension plan are fixed and are not based on your business profits. Can you file 1040ez online For example, if the plan requires that contributions be 10% of the participants' compensation without regard to whether you have profits (or the self-employed person has earned income), the plan is a money purchase pension plan. Can you file 1040ez online This applies even though the compensation of a self-employed individual as a participant is based on earned income derived from business profits. Can you file 1040ez online Defined Benefit Plan A defined benefit plan is any plan that is not a defined contribution plan. Can you file 1040ez online Contributions to a defined benefit plan are based on what is needed to provide definitely determinable benefits to plan participants. Can you file 1040ez online Actuarial assumptions and computations are required to figure these contributions. Can you file 1040ez online Generally, you will need continuing professional help to have a defined benefit plan. Can you file 1040ez online Qualification Rules To qualify for the tax benefits available to qualified plans, a plan must meet certain requirements (qualification rules) of the tax law. Can you file 1040ez online Generally, unless you write your own plan, the financial institution that provided your plan will take the continuing responsibility for meeting qualification rules that are later changed. Can you file 1040ez online The following is a brief overview of important qualification rules that generally have not yet been discussed. Can you file 1040ez online It is not intended to be all-inclusive. Can you file 1040ez online See Setting Up a Qualified Plan , later. Can you file 1040ez online Generally, the following qualification rules also apply to a SIMPLE 401(k) retirement plan. Can you file 1040ez online A SIMPLE 401(k) plan is, however, not subject to the top-heavy plan rules and nondiscrimination rules if the plan satisfies the provisions discussed in chapter 3 under SIMPLE 401(k) Plan. Can you file 1040ez online Plan assets must not be diverted. Can you file 1040ez online   Your plan must make it impossible for its assets to be used for, or diverted to, purposes other than the benefit of employees and their beneficiaries. Can you file 1040ez online As a general rule, the assets cannot be diverted to the employer. Can you file 1040ez online Minimum coverage requirement must be met. Can you file 1040ez online   To be a qualified plan, a defined benefit plan must benefit at least the lesser of the following. Can you file 1040ez online 50 employees, or The greater of: 40% of all employees, or Two employees. Can you file 1040ez online If there is only one employee, the plan must benefit that employee. Can you file 1040ez online Contributions or benefits must not discriminate. Can you file 1040ez online   Under the plan, contributions or benefits to be provided must not discriminate in favor of highly compensated employees. Can you file 1040ez online Contributions and benefits must not be more than certain limits. Can you file 1040ez online   Your plan must not provide for contributions or benefits that are more than certain limits. Can you file 1040ez online The limits apply to the annual contributions and other additions to the account of a participant in a defined contribution plan and to the annual benefit payable to a participant in a defined benefit plan. Can you file 1040ez online These limits are discussed later in this chapter under Contributions. Can you file 1040ez online Minimum vesting standard must be met. Can you file 1040ez online   Your plan must satisfy certain requirements regarding when benefits vest. Can you file 1040ez online A benefit is vested (you have a fixed right to it) when it becomes nonforfeitable. Can you file 1040ez online A benefit is nonforfeitable if it cannot be lost upon the happening, or failure to happen, of any event. Can you file 1040ez online Special rules apply to forfeited benefit amounts. Can you file 1040ez online In defined contribution plans, forfeitures can be allocated to the accounts of remaining participants in a nondiscriminatory way, or they can be used to reduce your contributions. Can you file 1040ez online   Forfeitures under a defined benefit plan cannot be used to increase the benefits any employee would otherwise receive under the plan. Can you file 1040ez online Forfeitures must be used instead to reduce employer contributions. Can you file 1040ez online Participation. Can you file 1040ez online   In general, an employee must be allowed to participate in your plan if he or she meets both the following requirements. Can you file 1040ez online Has reached age 21. Can you file 1040ez online Has at least 1 year of service (2 years if the plan is not a 401(k) plan and provides that after not more than 2 years of service the employee has a nonforfeitable right to all his or her accrued benefit). Can you file 1040ez online A plan cannot exclude an employee because he or she has reached a specified age. Can you file 1040ez online Leased employee. Can you file 1040ez online   A leased employee, defined in chapter 1, who performs services for you (recipient of the services) is treated as your employee for certain plan qualification rules. Can you file 1040ez online These rules include those in all the following areas. Can you file 1040ez online Nondiscrimination in coverage, contributions, and benefits. Can you file 1040ez online Minimum age and service requirements. Can you file 1040ez online Vesting. Can you file 1040ez online Limits on contributions and benefits. Can you file 1040ez online Top-heavy plan requirements. Can you file 1040ez online Contributions or benefits provided by the leasing organization for services performed for you are treated as provided by you. Can you file 1040ez online Benefit payment must begin when required. Can you file 1040ez online   Your plan must provide that, unless the participant chooses otherwise, the payment of benefits to the participant must begin within 60 days after the close of the latest of the following periods. Can you file 1040ez online The plan year in which the participant reaches the earlier of age 65 or the normal retirement age specified in the plan. Can you file 1040ez online The plan year in which the 10th anniversary of the year in which the participant began participating in the plan occurs. Can you file 1040ez online The plan year in which the participant separates from service. Can you file 1040ez online Early retirement. Can you file 1040ez online   Your plan can provide for payment of retirement benefits before the normal retirement age. Can you file 1040ez online If your plan offers an early retirement benefit, a participant who separates from service before satisfying the early retirement age requirement is entitled to that benefit if he or she meets both the following requirements. Can you file 1040ez online Satisfies the service requirement for the early retirement benefit. Can you file 1040ez online Separates from service with a nonforfeitable right to an accrued benefit. Can you file 1040ez online The benefit, which may be actuarially reduced, is payable when the early retirement age requirement is met. Can you file 1040ez online Required minimum distributions. Can you file 1040ez online   Special rules require minimum annual distributions from qualified plans, generally beginning after age  70½. Can you file 1040ez online See Required Distributions , under Distributions, later. Can you file 1040ez online Survivor benefits. Can you file 1040ez online   Defined benefit and money purchase pension plans must provide automatic survivor benefits in both the following forms. Can you file 1040ez online A qualified joint and survivor annuity for a vested participant who does not die before the annuity starting date. Can you file 1040ez online A qualified pre-retirement survivor annuity for a vested participant who dies before the annuity starting date and who has a surviving spouse. Can you file 1040ez online   The automatic survivor benefit also applies to any participant under a profit-sharing plan unless all the following conditions are met. Can you file 1040ez online The participant does not choose benefits in the form of a life annuity. Can you file 1040ez online The plan pays the full vested account balance to the participant's surviving spouse (or other beneficiary if the surviving spouse consents or if there is no surviving spouse) if the participant dies. Can you file 1040ez online The plan is not a direct or indirect transferee of a plan that must provide automatic survivor benefits. Can you file 1040ez online Loan secured by benefits. Can you file 1040ez online   If automatic survivor benefits are required for a spouse under a plan, he or she must consent to a loan that uses as security the accrued benefits in the plan. Can you file 1040ez online Waiver of survivor benefits. Can you file 1040ez online   Each plan participant may be permitted to waive the joint and survivor annuity or the pre-retirement survivor annuity (or both), but only if the participant has the written consent of the spouse. Can you file 1040ez online The plan also must allow the participant to withdraw the waiver. Can you file 1040ez online The spouse's consent must be witnessed by a plan representative or notary public. Can you file 1040ez online Waiver of 30-day waiting period before annuity starting date. Can you file 1040ez online    A plan may permit a participant to waive (with spousal consent) the 30-day minimum waiting period after a written explanation of the terms and conditions of a joint and survivor annuity is provided to each participant. Can you file 1040ez online   The waiver is allowed only if the distribution begins more than 7 days after the written explanation is provided. Can you file 1040ez online Involuntary cash-out of benefits not more than dollar limit. Can you file 1040ez online   A plan may provide for the immediate distribution of the participant's benefit under the plan if the present value of the benefit is not greater than $5,000. Can you file 1040ez online   However, the distribution cannot be made after the annuity starting date unless the participant and the spouse or surviving spouse of a participant who died (if automatic survivor benefits are required for a spouse under the plan) consents in writing to the distribution. Can you file 1040ez online If the present value is greater than $5,000, the plan must have the written consent of the participant and the spouse or surviving spouse (if automatic survivor benefits are required for a spouse under the plan) for any immediate distribution of the benefit. Can you file 1040ez online   Benefits attributable to rollover contributions and earnings on them can be ignored in determining the present value of these benefits. Can you file 1040ez online   A plan must provide for the automatic rollover of any cash-out distribution of more than $1,000 to an individual retirement account or annuity, unless the participant chooses otherwise. Can you file 1040ez online A section 402(f) notice must be sent prior to an involuntary cash-out of an eligible rollover distribution. Can you file 1040ez online See Section 402(f) Notice under Distributions, later, for more details. Can you file 1040ez online Consolidation, merger, or transfer of assets or liabilities. Can you file 1040ez online   Your plan must provide that, in the case of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each participant would (if the plan then terminated) receive a benefit equal to or more than the benefit he or she would have been entitled to just before the merger, etc. Can you file 1040ez online (if the plan had then terminated). Can you file 1040ez online Benefits must not be assigned or alienated. Can you file 1040ez online   Your plan must provide that a participant's or beneficiary's benefits under the plan cannot be taken away by any legal or equitable proceeding except as provided below or pursuant to certain judgements or settlements against the participant for violations of plan rules. Can you file 1040ez online Exception for certain loans. Can you file 1040ez online   A loan from the plan (not from a third party) to a participant or beneficiary is not treated as an assignment or alienation if the loan is secured by the participant's accrued nonforfeitable benefit and is exempt from the tax on prohibited transactions under section 4975(d)(1) or would be exempt if the participant were a disqualified person. Can you file 1040ez online A disqualified person is defined later in this chapter under Prohibited Transactions. Can you file 1040ez online Exception for QDRO. Can you file 1040ez online   Compliance with a QDRO (qualified domestic relations order) does not result in a prohibited assignment or alienation of benefits. Can you file 1040ez online   Payments to an alternate payee under a QDRO before the participant attains age 59½ are not subject to the 10% additional tax that would otherwise apply under certain circumstances. Can you file 1040ez online Benefits distributed to an alternate payee under a QDRO can be rolled over tax free to an individual retirement account or to an individual retirement annuity. Can you file 1040ez online No benefit reduction for social security increases. Can you file 1040ez online   Your plan must not permit a benefit reduction for a post-separation increase in the social security benefit level or wage base for any participant or beneficiary who is receiving benefits under your plan, or who is separated from service and has nonforfeitable rights to benefits. Can you file 1040ez online This rule also applies to plans supplementing the benefits provided by other federal or state laws. Can you file 1040ez online Elective deferrals must be limited. Can you file 1040ez online   If your plan provides for elective deferrals, it must limit those deferrals to the amount in effect for that particular year. Can you file 1040ez online See Limit on Elective Deferrals later in this chapter. Can you file 1040ez online Top-heavy plan requirements. Can you file 1040ez online   A top-heavy plan is one that mainly favors partners, sole proprietors, and other key employees. Can you file 1040ez online   A plan is top-heavy for a plan year if, for the preceding plan year, the total value of accrued benefits or account balances of key employees is more than 60% of the total value of accrued benefits or account balances of all employees. Can you file 1040ez online Additional requirements apply to a top-heavy plan primarily to provide minimum benefits or contributions for non-key employees covered by the plan. Can you file 1040ez online   Most qualified plans, whether or not top-heavy, must contain provisions that meet the top-heavy requirements and will take effect in plan years in which the plans are top-heavy. Can you file 1040ez online These qualification requirements for top-heavy plans are explained in section 416 and its regulations. Can you file 1040ez online SIMPLE and safe harbor 401(k) plan exception. Can you file 1040ez online   The top-heavy plan requirements do not apply to SIMPLE 401(k) plans, discussed earlier in chapter 3, or to safe harbor 401(k) plans that consist solely of safe harbor contributions, discussed later in this chapter. Can you file 1040ez online QACAs (discussed later) also are not subject to top-heavy requirements. Can you file 1040ez online Setting Up a Qualified Plan There are two basic steps in setting up a qualified plan. Can you file 1040ez online First you adopt a written plan. Can you file 1040ez online Then you invest the plan assets. Can you file 1040ez online You, the employer, are responsible for setting up and maintaining the plan. Can you file 1040ez online If you are self-employed, it is not necessary to have employees besides yourself to sponsor and set up a qualified plan. Can you file 1040ez online If you have employees, see Participation, under Qualification Rules, earlier. Can you file 1040ez online Set-up deadline. Can you file 1040ez online   To take a deduction for contributions for a tax year, your plan must be set up (adopted) by the last day of that year (December 31 for calendar-year employers). Can you file 1040ez online Credit for startup costs. Can you file 1040ez online   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a qualified plan that first became effective in 2013. Can you file 1040ez online For more information, see Credit for startup costs under Reminders, earlier. Can you file 1040ez online Adopting a Written Plan You must adopt a written plan. Can you file 1040ez online The plan can be an IRS-approved master or prototype plan offered by a sponsoring organization. Can you file 1040ez online Or it can be an individually designed plan. Can you file 1040ez online Written plan requirement. Can you file 1040ez online   To qualify, the plan you set up must be in writing and must be communicated to your employees. Can you file 1040ez online The plan's provisions must be stated in the plan. Can you file 1040ez online It is not sufficient for the plan to merely refer to a requirement of the Internal Revenue Code. Can you file 1040ez online Master or prototype plans. Can you file 1040ez online   Most qualified plans follow a standard form of plan (a master or prototype plan) approved by the IRS. Can you file 1040ez online Master and prototype plans are plans made available by plan providers for adoption by employers (including self-employed individuals). Can you file 1040ez online Under a master plan, a single trust or custodial account is established, as part of the plan, for the joint use of all adopting employers. Can you file 1040ez online Under a prototype plan, a separate trust or custodial account is established for each employer. Can you file 1040ez online Plan providers. Can you file 1040ez online   The following organizations generally can provide IRS-approved master or prototype plans. Can you file 1040ez online Banks (including some savings and loan associations and federally insured credit unions). Can you file 1040ez online Trade or professional organizations. Can you file 1040ez online Insurance companies. Can you file 1040ez online Mutual funds. Can you file 1040ez online Individually designed plan. Can you file 1040ez online   If you prefer, you can set up an individually designed plan to meet specific needs. Can you file 1040ez online Although advance IRS approval is not required, you can apply for approval by paying a fee and requesting a determination letter. Can you file 1040ez online You may need professional help for this. Can you file 1040ez online See Rev. Can you file 1040ez online Proc. Can you file 1040ez online 2014-6, 2014-1 I. Can you file 1040ez online R. Can you file 1040ez online B. Can you file 1040ez online 198, available at www. Can you file 1040ez online irs. Can you file 1040ez online gov/irb/2014-1_IRB/ar10. Can you file 1040ez online html, as annually updated, that may help you decide whether to apply for approval. Can you file 1040ez online Internal Revenue Bulletins are available on the IRS website at IRS. Can you file 1040ez online gov They are also available at most IRS offices and at certain libraries. Can you file 1040ez online User fee. Can you file 1040ez online   The fee mentioned earlier for requesting a determination letter does not apply to employers who have 100 or fewer employees who received at least $5,000 of compensation from the employer for the preceding year. Can you file 1040ez online At least one of them must be a non-highly compensated employee participating in the plan. Can you file 1040ez online The fee does not apply to requests made by the later of the following dates. Can you file 1040ez online The end of the 5th plan year the plan is in effect. Can you file 1040ez online The end of any remedial amendment period for the plan that begins within the first 5 plan years. Can you file 1040ez online The request cannot be made by the sponsor of a prototype or similar plan the sponsor intends to market to participating employers. Can you file 1040ez online   For more information about whether the user fee applies, see Rev. Can you file 1040ez online Proc. Can you file 1040ez online 2014-8, 2014-1 I. Can you file 1040ez online R. Can you file 1040ez online B. Can you file 1040ez online 242, available at www. Can you file 1040ez online irs. Can you file 1040ez online gov/irb/2014-1_IRB/ar12. Can you file 1040ez online html, as may be annually updated; Notice 2003-49, 2003-32 I. Can you file 1040ez online R. Can you file 1040ez online B. Can you file 1040ez online 294, available at www. Can you file 1040ez online irs. Can you file 1040ez online gov/irb/2003-32_IRB/ar13. Can you file 1040ez online html; and Notice 2011-86, 2011-45 I. Can you file 1040ez online R. Can you file 1040ez online B. Can you file 1040ez online 698, available at www. Can you file 1040ez online irs. Can you file 1040ez online gov/irb/2011-45_IRB/ar11. Can you file 1040ez online html. Can you file 1040ez online Investing Plan Assets In setting up a qualified plan, you arrange how the plan's funds will be used to build its assets. Can you file 1040ez online You can establish a trust or custodial account to invest the funds. Can you file 1040ez online You, the trust, or the custodial account can buy an annuity contract from an insurance company. Can you file 1040ez online Life insurance can be included only if it is incidental to the retirement benefits. Can you file 1040ez online You set up a trust by a legal instrument (written document). Can you file 1040ez online You may need professional help to do this. Can you file 1040ez online You can set up a custodial account with a bank, savings and loan association, credit union, or other person who can act as the plan trustee. Can you file 1040ez online You do not need a trust or custodial account, although you can have one, to invest the plan's funds in annuity contracts or face-amount certificates. Can you file 1040ez online If anyone other than a trustee holds them, however, the contracts or certificates must state they are not transferable. Can you file 1040ez online Other plan requirements. Can you file 1040ez online   For information on other important plan requirements, see Qualification Rules , earlier in this chapter. Can you file 1040ez online Minimum Funding Requirement In general, if your plan is a money purchase pension plan or a defined benefit plan, you must actually pay enough into the plan to satisfy the minimum funding standard for each year. Can you file 1040ez online Determining the amount needed to satisfy the minimum funding standard for a defined benefit plan is complicated, and you should seek professional help in order to meet these contribution requirements. Can you file 1040ez online For information on this funding requirement, see section 412 and its regulations. Can you file 1040ez online Quarterly installments of required contributions. Can you file 1040ez online   If your plan is a defined benefit plan subject to the minimum funding requirements, you generally must make quarterly installment payments of the required contributions. Can you file 1040ez online If you do not pay the full installments timely, you may have to pay interest on any underpayment for the period of the underpayment. Can you file 1040ez online Due dates. Can you file 1040ez online   The due dates for the installments are 15 days after the end of each quarter. Can you file 1040ez online For a calendar-year plan, the installments are due April 15, July 15, October 15, and January 15 (of the following year). Can you file 1040ez online Installment percentage. Can you file 1040ez online   Each quarterly installment must be 25% of the required annual payment. Can you file 1040ez online Extended period for making contributions. Can you file 1040ez online   Additional contributions required to satisfy the minimum funding requirement for a plan year will be considered timely if made by 8½ months after the end of that year. Can you file 1040ez online Contributions A qualified plan is generally funded by your contributions. Can you file 1040ez online However, employees participating in the plan may be permitted to make contributions, and you may be permitted to make contributions on your own behalf. Can you file 1040ez online See Employee Contributions and Elective Deferrals later. Can you file 1040ez online Contributions deadline. Can you file 1040ez online   You can make deductible contributions for a tax year up to the due date of your return (plus extensions) for that year. Can you file 1040ez online Self-employed individual. Can you file 1040ez online   You can make contributions on behalf of yourself only if you have net earnings (compensation) from self-employment in the trade or business for which the plan was set up. Can you file 1040ez online Your net earnings must be from your personal services, not from your investments. Can you file 1040ez online If you have a net loss from self-employment, you cannot make contributions for yourself for the year, even if you can contribute for common-law employees based on their compensation. Can you file 1040ez online Employer Contributions There are certain limits on the contributions and other annual additions you can make each year for plan participants. Can you file 1040ez online There are also limits on the amount you can deduct. Can you file 1040ez online See Deduction Limits , later. Can you file 1040ez online Limits on Contributions and Benefits Your plan must provide that contributions or benefits cannot exceed certain limits. Can you file 1040ez online The limits differ depending on whether your plan is a defined contribution plan or a defined benefit plan. Can you file 1040ez online Defined benefit plan. Can you file 1040ez online   For 2013, the annual benefit for a participant under a defined benefit plan cannot exceed the lesser of the following amounts. Can you file 1040ez online 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. Can you file 1040ez online $205,000 ($210,000 for 2014). Can you file 1040ez online Defined contribution plan. Can you file 1040ez online   For 2013, a defined contribution plan's annual contributions and other additions (excluding earnings) to the account of a participant cannot exceed the lesser of the following amounts. Can you file 1040ez online 100% of the participant's compensation. Can you file 1040ez online $51,000 ($52,000 for 2014). Can you file 1040ez online   Catch-up contributions (discussed later under Limit on Elective Deferrals) are not subject to the above limit. Can you file 1040ez online Employee Contributions Participants may be permitted to make nondeductible contributions to a plan in addition to your contributions. Can you file 1040ez online Even though these employee contributions are not deductible, the earnings on them are tax free until distributed in later years. Can you file 1040ez online Also, these contributions must satisfy the actual contribution percentage (ACP) test of section 401(m)(2), a nondiscrimination test that applies to employee contributions and matching contributions. Can you file 1040ez online See Regulations sections 1. Can you file 1040ez online 401(k)-2 and 1. Can you file 1040ez online 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Can you file 1040ez online When Contributions Are Considered Made You generally apply your plan contributions to the year in which you make them. Can you file 1040ez online But you can apply them to the previous year if all the following requirements are met. Can you file 1040ez online You make them by the due date of your tax return for the previous year (plus extensions). Can you file 1040ez online The plan was established by the end of the previous year. Can you file 1040ez online The plan treats the contributions as though it had received them on the last day of the previous year. Can you file 1040ez online You do either of the following. Can you file 1040ez online You specify in writing to the plan administrator or trustee that the contributions apply to the previous year. Can you file 1040ez online You deduct the contributions on your tax return for the previous year. Can you file 1040ez online A partnership shows contributions for partners on Form 1065. Can you file 1040ez online Employer's promissory note. Can you file 1040ez online   Your promissory note made out to the plan is not a payment that qualifies for the deduction. Can you file 1040ez online Also, issuing this note is a prohibited transaction subject to tax. Can you file 1040ez online See Prohibited Transactions , later. Can you file 1040ez online Employer Deduction You can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Can you file 1040ez online The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Can you file 1040ez online Deduction Limits The deduction limit for your contributions to a qualified plan depends on the kind of plan you have. Can you file 1040ez online Defined contribution plans. Can you file 1040ez online   The deduction for contributions to a defined contribution plan (profit-sharing plan or money purchase pension plan) cannot be more than 25% of the compensation paid (or accrued) during the year to your eligible employees participating in the plan. Can you file 1040ez online If you are self-employed, you must reduce this limit in figuring the deduction for contributions you make for your own account. Can you file 1040ez online See Deduction Limit for Self-Employed Individuals , later. Can you file 1040ez online   When figuring the deduction limit, the following rules apply. Can you file 1040ez online Elective deferrals (discussed later) are not subject to the limit. Can you file 1040ez online Compensation includes elective deferrals. Can you file 1040ez online The maximum compensation that can be taken into account for each employee in 2013 is $255,000 ($260,000 for 2014). Can you file 1040ez online Defined benefit plans. Can you file 1040ez online   The deduction for contributions to a defined benefit plan is based on actuarial assumptions and computations. Can you file 1040ez online Consequently, an actuary must figure your deduction limit. Can you file 1040ez online    In figuring the deduction for contributions, you cannot take into account any contributions or benefits that are more than the limits discussed earlier under Limits on Contributions and Benefits, earlier. Can you file 1040ez online Table 4–1. Can you file 1040ez online Carryover of Excess Contributions Illustrated—Profit-Sharing Plan (000's omitted) Year Participants' compensation Participants' share of required contribution (10% of annual profit) Deductible  limit for current year (25% of compensation) Contribution Excess contribution carryover used1 Total  deduction including carryovers Excess contribution carryover available at end of year 2010 $1,000 $100 $250 $100 $ 0 $100 $ 0 2011 400 165 100 165 0 100 65 2012 500 100 125 100 25 125 40 2013 600 100 150 100 40 140 0  1There were no carryovers from years before 2010. Can you file 1040ez online Deduction Limit for Self-Employed Individuals If you make contributions for yourself, you need to make a special computation to figure your maximum deduction for these contributions. Can you file 1040ez online Compensation is your net earnings from self-employment, defined in chapter 1. Can you file 1040ez online This definition takes into account both the following items. Can you file 1040ez online The deduction for the deductible part of your self-employment tax. Can you file 1040ez online The deduction for contributions on your behalf to the plan. Can you file 1040ez online The deduction for your own contributions and your net earnings depend on each other. Can you file 1040ez online For this reason, you determine the deduction for your own contributions indirectly by reducing the contribution rate called for in your plan. Can you file 1040ez online To do this, use either the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed in chapter 5. Can you file 1040ez online Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Can you file 1040ez online Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Can you file 1040ez online 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. Can you file 1040ez online Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Can you file 1040ez online (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you get from the partnership. Can you file 1040ez online ) Carryover of Excess Contributions If you contribute more to the plans than you can deduct for the year, you can carry over and deduct the difference in later years, combined with your contributions for those years. Can you file 1040ez online Your combined deduction in a later year is limited to 25% of the participating employees' compensation for that year. Can you file 1040ez online For purposes of this limit, a SEP is treated as a profit-sharing (defined contribution) plan. Can you file 1040ez online However, this percentage limit must be reduced to figure your maximum deduction for contributions you make for yourself. Can you file 1040ez online See Deduction Limit for Self-Employed Individuals, earlier. Can you file 1040ez online The amount you carry over and deduct may be subject to the excise tax discussed next. Can you file 1040ez online Table 4-1, earlier, illustrates the carryover of excess contributions to a profit-sharing plan. Can you file 1040ez online Excise Tax for Nondeductible (Excess) Contributions If you contribute more than your deduction limit to a retirement plan, you have made nondeductible contributions and you may be liable for an excise tax. Can you file 1040ez online In general, a 10% excise tax applies to nondeductible contributions made to qualified pension and profit-sharing plans and to SEPs. Can you file 1040ez online Special rule for self-employed individuals. Can you file 1040ez online   The 10% excise tax does not apply to any contribution made to meet the minimum funding requirements in a money purchase pension plan or a defined benefit plan. Can you file 1040ez online Even if that contribution is more than your earned income from the trade or business for which the plan is set up, the difference is not subject to this excise tax. Can you file 1040ez online See Minimum Funding Requirement , earlier. Can you file 1040ez online Reporting the tax. Can you file 1040ez online   You must report the tax on your nondeductible contributions on Form 5330. Can you file 1040ez online Form 5330 includes a computation of the tax. Can you file 1040ez online See the separate instructions for completing the form. Can you file 1040ez online Elective Deferrals (401(k) Plans) Your qualified plan can include a cash or deferred arrangement under which participants can choose to have you contribute part of their before-tax compensation to the plan rather than receive the compensation in cash. Can you file 1040ez online A plan with this type of arrangement is popularly known as a “401(k) plan. Can you file 1040ez online ” (As a self-employed individual participating in the plan, you can contribute part of your before-tax net earnings from the business. Can you file 1040ez online ) This contribution is called an “elective deferral” because participants choose (elect) to defer receipt of the money. Can you file 1040ez online In general, a qualified plan can include a cash or deferred arrangement only if the qualified plan is one of the following plans. Can you file 1040ez online A profit-sharing plan. Can you file 1040ez online A money purchase pension plan in existence on June 27, 1974, that included a salary reduction arrangement on that date. Can you file 1040ez online Partnership. Can you file 1040ez online   A partnership can have a 401(k) plan. Can you file 1040ez online Restriction on conditions of participation. Can you file 1040ez online   The plan cannot require, as a condition of participation, that an employee complete more than 1 year of service. Can you file 1040ez online Matching contributions. Can you file 1040ez online   If your plan permits, you can make matching contributions for an employee who makes an elective deferral to your 401(k) plan. Can you file 1040ez online For example, the plan might provide that you will contribute 50 cents for each dollar your participating employees choose to defer under your 401(k) plan. Can you file 1040ez online Matching contributions are generally subject to the ACP test discussed earlier under Employee Contributions. Can you file 1040ez online Nonelective contributions. Can you file 1040ez online   You can also make contributions (other than matching contributions) for your participating employees without giving them the choice to take cash instead. Can you file 1040ez online These are called nonelective contributions. Can you file 1040ez online Employee compensation limit. Can you file 1040ez online   No more than $255,000 of the employee's compensation can be taken into account when figuring contributions other than elective deferrals in 2013. Can you file 1040ez online This limit is $260,000 in 2014. Can you file 1040ez online SIMPLE 401(k) plan. Can you file 1040ez online   If you had 100 or fewer employees who earned $5,000 or more in compensation during the preceding year, you may be able to set up a SIMPLE 401(k) plan. Can you file 1040ez online A SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy plan requirements discussed earlier under Qualification Rules. Can you file 1040ez online For details about SIMPLE 401(k) plans, see SIMPLE 401(k) Plan in chapter 3. Can you file 1040ez online Distributions. Can you file 1040ez online   Certain rules apply to distributions from 401(k) plans. Can you file 1040ez online See Distributions From 401(k) Plans , later. Can you file 1040ez online Limit on Elective Deferrals There is a limit on the amount an employee can defer each year under these plans. Can you file 1040ez online This limit applies without regard to community property laws. Can you file 1040ez online Your plan must provide that your employees cannot defer more than the limit that applies for a particular year. Can you file 1040ez online For 2013 and 2014, the basic limit on elective deferrals is $17,500. Can you file 1040ez online This limit applies to all salary reduction contributions and elective deferrals. Can you file 1040ez online If, in conjunction with other plans, the deferral limit is exceeded, the difference is included in the employee's gross income. Can you file 1040ez online Catch-up contributions. Can you file 1040ez online   A 401(k) plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Can you file 1040ez online The catch-up contribution limit for 2013 and 2014 is $5,500. Can you file 1040ez online Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the $17,500 limit, the actual deferral percentage (ADP) test limit of section 401(k)(3), or the plan limit (if any). Can you file 1040ez online However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Can you file 1040ez online The catch-up contribution limit. Can you file 1040ez online The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Can you file 1040ez online Treatment of contributions. Can you file 1040ez online   Your contributions to your own 401(k) plan are generally deductible by you for the year they are contributed to the plan. Can you file 1040ez online Matching or nonelective contributions made to the plan are also deductible by you in the year of contribution. Can you file 1040ez online Your employees' elective deferrals other than designated Roth contributions are tax free until distributed from the plan. Can you file 1040ez online Elective deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Can you file 1040ez online Forfeiture. Can you file 1040ez online   Employees have a nonforfeitable right at all times to their accrued benefit attributable to elective deferrals. Can you file 1040ez online Reporting on Form W-2. Can you file 1040ez online   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Can you file 1040ez online You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Can you file 1040ez online You must also include them in box 12. Can you file 1040ez online Mark the “Retirement plan” checkbox in box 13. Can you file 1040ez online For more information, see the Form W-2 instructions. Can you file 1040ez online Automatic Enrollment Your 401(k) plan can have an automatic enrollment feature. Can you file 1040ez online Under this feature, you can automatically reduce an employee's pay by a fixed percentage and contribute that amount to the 401(k) plan on his or her behalf unless the employee affirmatively chooses not to have his or her pay reduced or chooses to have it reduced by a different percentage. Can you file 1040ez online These contributions are elective deferrals. Can you file 1040ez online An automatic enrollment feature will encourage employees' saving for retirement and will help your plan pass nondiscrimination testing (if applicable). Can you file 1040ez online For more information, see Publication 4674, Automatic Enrollment 401(k) Plans for Small Businesses. Can you file 1040ez online Eligible automatic contribution arrangement. Can you file 1040ez online   Under an eligible automatic contribution arrangement (EACA), a participant is treated as having elected to have the employer make contributions in an amount equal to a uniform percentage of compensation. Can you file 1040ez online This automatic election will remain in place until the participant specifically elects not to have such deferral percentage made (or elects a different percentage). Can you file 1040ez online There is no required deferral percentage. Can you file 1040ez online Withdrawals. Can you file 1040ez online   Under an EACA, you may allow participants to withdraw their automatic contributions to the plan if certain conditions are met. Can you file 1040ez online The participant must elect the withdrawal no later than 90 days after the date of the first elective contributions under the EACA. Can you file 1040ez online The participant must withdraw the entire amount of EACA default contributions, including any earnings thereon. Can you file 1040ez online   If the plan allows withdrawals under the EACA, the amount of the withdrawal other than the amount of any designated Roth contributions must be included in the employee's gross income for the tax year in which the distribution is made. Can you file 1040ez online The additional 10% tax on early distributions will not apply to the distribution. Can you file 1040ez online Notice requirement. Can you file 1040ez online   Under an EACA, employees must be given written notice of the terms of the EACA within a reasonable period of time before each plan year. Can you file 1040ez online The notice must be written in a manner calculated to be understood by the average employee and be sufficiently accurate and comprehensive in order to apprise the employee of his or her rights and obligations under the EACA. Can you file 1040ez online The notice must include an explanation of the employee's right to elect not to have elective contributions made on his or her behalf, or to elect a different percentage, and the employee must be given a reasonable period of time after receipt of the notice before the first elective contribution is made. Can you file 1040ez online The notice also must explain how contributions will be invested in the absence of an investment election by the employee. Can you file 1040ez online Qualified automatic contribution arrangement. Can you file 1040ez online    A qualified automatic contribution arrangement (QACA) is a type of safe harbor plan. Can you file 1040ez online It contains an automatic enrollment feature, and mandatory employer contributions are required. Can you file 1040ez online If your plan includes a QACA, it will not be subject to the ADP test (discussed later) nor the top-heavy requirements (discussed earlier). Can you file 1040ez online Additionally, your plan will not be subject to the actual contribution percentage (ACP) test if certain additional requirements are met. Can you file 1040ez online Under a QACA, each employee who is eligible to participate in the plan will be treated as having elected to make elective deferral contributions equal to a certain default percentage of compensation. Can you file 1040ez online In order to not have default elective deferrals made, an employee must make an affirmative election specifying a deferral percentage (including zero, if desired). Can you file 1040ez online If an employee does not make an affirmative election, the default deferral percentage must meet the following conditions. Can you file 1040ez online It must be applied uniformly. Can you file 1040ez online It must not exceed 10%. Can you file 1040ez online It must be at least 3% in the first plan year it applies to an employee and through the end of the following year. Can you file 1040ez online It must increase to at least 4% in the following plan year. Can you file 1040ez online It must increase to at least 5% in the following plan year. Can you file 1040ez online It must increase to at least 6% in subsequent plan years. Can you file 1040ez online Matching or nonelective contributions. Can you file 1040ez online   Under the terms of the QACA, you must make either matching or nonelective contributions according to the following terms. Can you file 1040ez online Matching contributions. Can you file 1040ez online You must make matching contributions on behalf of each non-highly compensated employee in the following amounts. Can you file 1040ez online An amount equal to 100% of elective deferrals, up to 1% of compensation. Can you file 1040ez online An amount equal to 50% of elective deferrals, from 1% up to 6% of compensation. Can you file 1040ez online Other formulas may be used as long as they are at least as favorable to non-highly compensated employees. Can you file 1040ez online The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Can you file 1040ez online Nonelective contributions. Can you file 1040ez online You must make nonelective contributions on behalf of every non-highly compensated employee eligible to participate in the plan, regardless of whether they elected to participate, in an amount equal to at least 3% of their compensation. Can you file 1040ez online Vesting requirements. Can you file 1040ez online   All accrued benefits attributed to matching or nonelective contributions under the QACA must be 100% vested for all employees who complete 2 years of service. Can you file 1040ez online These contributions are subject to special withdrawal restrictions, discussed later. Can you file 1040ez online Notice requirements. Can you file 1040ez online   Each employee eligible to participate in the QACA must receive written notice of their rights and obligations under the QACA, within a reasonable period before each plan year. Can you file 1040ez online The notice must be written in a manner calculated to be understood by the average employee, and it must be accurate and comprehensive. Can you file 1040ez online The notice must explain their right to elect not to have elective contributions made on their behalf, or to have contributions made at a different percentage than the default percentage. Can you file 1040ez online Additionally, the notice must explain how contributions will be invested in the absence of any investment election by the employee. Can you file 1040ez online The employee must have a reasonable period of time after receiving the notice to make such contribution and investment elections prior to the first contributions under the QACA. Can you file 1040ez online Treatment of Excess Deferrals If the total of an employee's deferrals is more than the limit for 2013, the employee can have the difference (called an excess deferral) paid out of any of the plans that permit these distributions. Can you file 1040ez online He or she must notify the plan by April 15, 2014 (or an earlier date specified in the plan), of the amount to be paid from each plan. Can you file 1040ez online The plan must then pay the employee that amount, plus earnings on the amount through the end of 2013, by April 15, 2014. Can you file 1040ez online Excess withdrawn by April 15. Can you file 1040ez online   If the employee takes out the excess deferral by April 15, 2014, it is not reported again by including it in the employee's gross income for 2014. Can you file 1040ez online However, any income earned in 2013 on the excess deferral taken out is taxable in the tax year in which it is taken out. Can you file 1040ez online The distribution is not subject to the additional 10% tax on early distributions. Can you file 1040ez online   If the employee takes out part of the excess deferral and the income on it, the distribution is treated as made proportionately from the excess deferral and the income. Can you file 1040ez online   Even if the employee takes out the excess deferral by April 15, the amount will be considered for purposes of nondiscrimination testing requirements of the plan, unless the distributed amount is for a non-highly compensated employee who participates in only one employer's 401(k) plan or plans. Can you file 1040ez online Excess not withdrawn by April 15. Can you file 1040ez online   If the employee does not take out the excess deferral by April 15, 2014, the excess, though taxable in 2013, is not included in the employee's cost basis in figuring the taxable amount of any eventual distributions under the plan. Can you file 1040ez online In effect, an excess deferral left in the plan is taxed twice, once when contributed and again when distributed. Can you file 1040ez online Also, if the employee's excess deferral is allowed to stay in the plan and the employee participates in no other employer's plan, the plan can be disqualified. Can you file 1040ez online Reporting corrective distributions on Form 1099-R. Can you file 1040ez online   Report corrective distributions of excess deferrals (including any earnings) on Form 1099-R. Can you file 1040ez online For specific information about reporting corrective distributions, see the Instructions for Forms 1099-R and 5498. Can you file 1040ez online Tax on excess contributions of highly compensated employees. Can you file 1040ez online   The law provides tests to detect discrimination in a plan. Can you file 1040ez online If tests, such as the actual deferral percentage test (ADP test) (see section 401(k)(3)) and the actual contribution percentage test (ACP test) (see section 401(m)(2)), show that contributions for highly compensated employees are more than the test limits for these contributions, the employer may have to pay a 10% excise tax. Can you file 1040ez online Report the tax on Form 5330. Can you file 1040ez online The ADP test does not apply to a safe harbor 401(k) plan (discussed next) nor to a QACA. Can you file 1040ez online Also, the ACP test does not apply to these plans if certain additional requirements are met. Can you file 1040ez online   The tax for the year is 10% of the excess contributions for the plan year ending in your tax year. Can you file 1040ez online Excess contributions are elective deferrals, employee contributions, or employer matching or nonelective contributions that are more than the amount permitted under the ADP test or the ACP test. Can you file 1040ez online   See Regulations sections 1. Can you file 1040ez online 401(k)-2 and 1. Can you file 1040ez online 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Can you file 1040ez online    If the plan fails the ADP or ACP testing, and the failure is not corrected by the end of the next plan year, the plan can be disqualified. Can you file 1040ez online Safe harbor 401(k) plan. Can you file 1040ez online If you meet the requirements for a safe harbor 401(k) plan, you do not have to satisfy the ADP test, nor the ACP test, if certain additional requirements are met. Can you file 1040ez online For your plan to be a safe harbor plan, you must meet the following conditions. Can you file 1040ez online Matching or nonelective contributions. Can you file 1040ez online You must make matching or nonelective contributions according to one of the following formulas. Can you file 1040ez online Matching contributions. Can you file 1040ez online You must make matching contributions according to the following rules. Can you file 1040ez online You must contribute an amount equal to 100% of each non-highly compensated employee's elective deferrals, up to 3% of compensation. Can you file 1040ez online You must contribute an amount equal to 50% of each non-highly compensated employee's elective deferrals, from 3% up to 5% of compensation. Can you file 1040ez online The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Can you file 1040ez online Nonelective contributions. Can you file 1040ez online You must make nonelective contributions, without regard to whether the employee made elective deferrals, on behalf of all non-highly compensated employees eligible to participate in the plan, equal to at least 3% of the employee's compensation. Can you file 1040ez online These mandatory matching and nonelective contributions must be immediately 100% vested and are subject to special withdrawal restrictions. Can you file 1040ez online Notice requirement. Can you file 1040ez online You must give eligible employees written notice of their rights and obligations with regard to contributions under the plan, within a reasonable period before the plan year. Can you file 1040ez online The other requirements for a 401(k) plan, including withdrawal and vesting rules, must also be met for your plan to qualify as a safe harbor 401(k) plan. Can you file 1040ez online Qualified Roth Contribution Program Under this program an eligible employee can designate all or a portion of his or her elective deferrals as after-tax Roth contributions. Can you file 1040ez online Elective deferrals designated as Roth contributions must be maintained in a separate Roth account. Can you file 1040ez online However, unlike other elective deferrals, designated Roth contributions are not excluded from employees' gross income, but qualified distributions from a Roth account are excluded from employees' gross income. Can you file 1040ez online Elective Deferrals Under a qualified Roth contribution program, the amount of elective deferrals that an employee may designate as a Roth contribution is limited to the maximum amount of elective deferrals excludable from gross income for the year (for 2013 and 2014, $17,500 if under age 50 and $23,000 if age 50 or over) less the total amount of the employee's elective deferrals not designated as Roth contributions. Can you file 1040ez online Designated Roth deferrals are treated the same as pre-tax elective deferrals for most purposes, including: The annual individual elective deferral limit (total of all designated Roth contributions and traditional, pre-tax elective deferrals) of $17,500 for 2013 and 2014, with an additional $5,500 if age 50 or over for 2013 and 2014, Determining the maximum employee and employer annual contributions of the lesser of 100% of compensation or $51,000 for 2013 ($52,000 for 2014), Nondiscrimination testing, Required distributions, and Elective deferrals not taken into account for purposes of deduction limits. Can you file 1040ez online Qualified Distributions A qualified distribution is a distribution that is made after the employee's nonexclusion period and: On or after the employee attains age   59½, On account of the employee's being disabled, or On or after the employee's death. Can you file 1040ez online An employee's nonexclusion period for a plan is the 5-tax-year period beginning with the earlier of the following tax years. Can you file 1040ez online The first tax year in which the employee made a contribution to his or her Roth account in the plan, or If a rollover contribution was made to the employee's designated Roth account from a designated Roth account previously established for the employee under another plan, then the first tax year the employee made a designated Roth contribution to the previously established account. Can you file 1040ez online Rollover. Can you file 1040ez online   Beginning September 28, 2010, a rollover from another account can be made to a designated Roth account in the same plan. Can you file 1040ez online For additional information on these in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. Can you file 1040ez online R. Can you file 1040ez online B. Can you file 1040ez online 872, available at www. Can you file 1040ez online irs. Can you file 1040ez online gov/irb/2010-51_IRB/ar11. Can you file 1040ez online html, and Notice 2013-74. Can you file 1040ez online A distribution from a designated Roth account can only be rolled over to another designated Roth account or a Roth IRA. Can you file 1040ez online Rollover amounts do not apply toward the annual deferral limit. Can you file 1040ez online Reporting Requirements You must report a contribution to a Roth account on Form W-2 and a distribution from a Roth account on Form 1099-R. Can you file 1040ez online See the Form W-2 and 1099-R instructions for detailed information. Can you file 1040ez online Distributions Amounts paid to plan participants from a qualified plan are called distributions. Can you file 1040ez online Distributions may be nonperiodic, such as lump-sum distributions, or periodic, such as annuity payments. Can you file 1040ez online Also, certain loans may be treated as distributions. Can you file 1040ez online See Loans Treated as Distributions in Publication 575. Can you file 1040ez online Required Distributions A qualified plan must provide that each participant will either: Receive his or her entire interest (benefits) in the plan by the required beginning date (defined later), or Begin receiving regular periodic distributions by the required beginning date in annual amounts calculated to distribute the participant's entire interest (benefits) over his or her life expectancy or over the joint life expectancy of the participant and the designated beneficiary (or over a shorter period). Can you file 1040ez online These distribution rules apply individually to each qualified plan. Can you file 1040ez online You cannot satisfy the requirement for one plan by taking a distribution from another. Can you file 1040ez online The plan must provide that these rules override any inconsistent distribution options previously offered. Can you file 1040ez online Minimum distribution. Can you file 1040ez online   If the account balance of a qualified plan participant is to be distributed (other than as an annuity), the plan administrator must figure the minimum amount required to be distributed each distribution calendar year. Can you file 1040ez online This minimum is figured by dividing the account balance by the applicable life expectancy. Can you file 1040ez online The plan administrator can use the life expectancy tables in Appendix C of Publication 590 for this purpose. Can you file 1040ez online For more information on figuring the minimum distribution, see Tax on Excess Accumulation in Publication 575. Can you file 1040ez online Required beginning date. Can you file 1040ez online   Generally, each participant must receive his or her entire benefits in the plan or begin to receive periodic distributions of benefits from the plan by the required beginning date. Can you file 1040ez online   A participant must begin to receive distributions from his or her qualified retirement plan by April 1 of the first year after the later of the following years. Can you file 1040ez online Calendar year in which he or she reaches age 70½. Can you file 1040ez online Calendar year in which he or she retires from employment with the employer maintaining the plan. Can you file 1040ez online However, the plan may require the participant to begin receiving distributions by April 1 of the year after the participant reaches age 70½ even if the participant has not retired. Can you file 1040ez online   If the participant is a 5% owner of the employer maintaining the plan, the participant must begin receiving distributions by April 1 of the first year after the calendar year in which the participant reached age 70½. Can you file 1040ez online For more information, see Tax on Excess Accumulation in Publication 575. Can you file 1040ez online Distributions after the starting year. Can you file 1040ez online   The distribution required to be made by April 1 is treated as a distribution for the starting year. Can you file 1040ez online (The starting year is the year in which the participant meets (1) or (2) above, whichever applies. Can you file 1040ez online ) After the starting year, the participant must receive the required distribution for each year by December 31 of that year. Can you file 1040ez online If no distribution is made in the starting year, required distributions for 2 years must be made in the next year (one by April 1 and one by December 31). Can you file 1040ez online Distributions after participant's death. Can you file 1040ez online   See Publication 575 for the special rules covering distributions made after the death of a participant. Can you file 1040ez online Distributions From 401(k) Plans Generally, distributions cannot be made until one of the following occurs. Can you file 1040ez online The employee retires, dies, becomes disabled, or otherwise severs employment. Can you file 1040ez online The plan ends and no other defined contribution plan is established or continued. Can you file 1040ez online In the case of a 401(k) plan that is part of a profit-sharing plan, the employee reaches age 59½ or suffers financial hardship. Can you file 1040ez online For the rules on hardship distributions, including the limits on them, see Regulations section 1. Can you file 1040ez online 401(k)-1(d). Can you file 1040ez online The employee becomes eligible for a qualified reservist distribution (defined next). Can you file 1040ez online Certain distributions listed above may be subject to the tax on early distributions discussed later. Can you file 1040ez online Qualified reservist distributions. Can you file 1040ez online   A qualified reservist distribution is a distribution from an IRA or an elective deferral account made after September 11, 2001, to a military reservist or a member of the National Guard who has been called to active duty for at least 180 days or for an indefinite period. Can you file 1040ez online All or part of a qualified reservist distribution can be recontributed to an IRA. Can you file 1040ez online The additional 10% tax on early distributions does not apply to a qualified reservist distribution. Can you file 1040ez online Tax Treatment of Distributions Distributions from a qualified plan minus a prorated part of any cost basis are subject to income tax in the year they are distributed. Can you file 1040ez online Since most recipients have no cost basis, a distribution is generally fully taxable. Can you file 1040ez online An exception is a distribution that is properly rolled over as discussed under Rollover, next. Can you file 1040ez online The tax treatment of distributions depends on whether they are made periodically over several years or life (periodic distributions) or are nonperiodic distributions. Can you file 1040ez online See Taxation of Periodic Payments and Taxation of Nonperiodic Payments in Publication 575 for a detailed description of how distributions are taxed, including the 10-year tax option or capital gain treatment of a lump-sum distribution. Can you file 1040ez online Note. Can you file 1040ez online A recipient of a distribution from a designated Roth account will have a cost basis since designated Roth contributions are made on an after-tax basis. Can you file 1040ez online Also, a distribution from a designated Roth account is entirely tax-free if certain conditions are met. Can you file 1040ez online See Qualified distributions under Qualified Roth Contribution Program, earlier. Can you file 1040ez online Rollover. Can you file 1040ez online   The recipient of an eligible rollover distribution from a qualified plan can defer the tax on it by rolling it over into a traditional IRA or another eligible retirement plan. Can you file 1040ez online However, it may be subject to withholding as discussed under Withholding requirement, later. Can you file 1040ez online A rollover can also be made to a Roth IRA, in which case, any previously untaxed amounts are includible in gross income unless the rollover is from a designated Roth account. Can you file 1040ez online Eligible rollover distribution. Can you file 1040ez online   This is a distribution of all or any part of an employee's balance in a qualified retirement plan that is not any of the following. Can you file 1040ez online A required minimum distribution. Can you file 1040ez online See Required Distributions , earlier. Can you file 1040ez online Any of a series of substantially equal payments made at least once a year over any of the following periods. Can you file 1040ez online The employee's life or life expectancy. Can you file 1040ez online The joint lives or life expectancies of the employee and beneficiary. Can you file 1040ez online A period of 10 years or longer. Can you file 1040ez online A hardship distribution. Can you file 1040ez online The portion of a distribution that represents the return of an employee's nondeductible contributions to the plan. Can you file 1040ez online See Employee Contributions , earlier, and Rollover of nontaxable amounts, next. Can you file 1040ez online Loans treated as distributions. Can you file 1040ez online Dividends on employer securities. Can you file 1040ez online The cost of any life insurance coverage provided under a qualified retirement plan. Can you file 1040ez online Similar items designated by the IRS in published guidance. Can you file 1040ez online See, for example, the Instructions for Forms 1099-R and 5498. Can you file 1040ez online Rollover of nontaxable amounts. Can you file 1040ez online   You may be able to roll over the nontaxable part of a distribution to another qualified retirement plan or a section 403(b) plan, or to an IRA. Can you file 1040ez online If the rollover is to a qualified retirement plan or a section 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover, the transfer must be made through a direct (trustee-to-trustee) rollover. Can you file 1040ez online If the rollover is to an IRA, the transfer can be made by any rollover method. Can you file 1040ez online Note. Can you file 1040ez online A distribution from a designated Roth account can be rolled over to another designated Roth account or to a Roth IRA. Can you file 1040ez online If the rollover is to a Roth IRA, it can be rolled over by any rollover method, but if the rollover is to another designated Roth account, it must be rolled over directly (trustee-to-trustee). Can you file 1040ez online More information. Can you file 1040ez online   For more information about rollovers, see Rollovers in Pubs. Can you file 1040ez online 575 and 590. Can you file 1040ez online Withholding requirement. Can you file 1040ez online   If, during a year, a qualified plan pays to a participant one or more eligible rollover distributions (defined earlier) that are reasonably expected to total $200 or more, the payor must withhold 20% of the taxable portion of each distribution for federal income tax. Can you file 1040ez online Exceptions. Can you file 1040ez online   If, instead of having the distribution paid to him or her, the participant chooses to have the plan pay it directly to an IRA or another eligible retirement plan (a direct rollover), no withholding is required. Can you file 1040ez online   If the distribution is not an eligible rollover distribution, defined earlier, the 20% withholding requirement does not apply. Can you file 1040ez online Other withholding rules apply to distributions that are not eligible rollover distributions, such as long-term periodic distributions and required distributions (periodic or nonperiodic). Can you file 1040ez online However, the participant can choose not to have tax withheld from these distributions. Can you file 1040ez online If the participant does not make this choice, the following withholding rules apply. Can you file 1040ez online For periodic distributions, withholding is based on their treatment as wages. Can you file 1040ez online For nonperiodic distributions, 10% of the taxable part is withheld. Can you file 1040ez online Estimated tax payments. Can you file 1040ez online   If no income tax is withheld or not enough tax is withheld, the recipient of a distribution may have to make estimated tax payments. Can you file 1040ez online For more information, see Withholding Tax and Estimated Tax in Publication 575. Can you file 1040ez online Section 402(f) Notice. Can you file 1040ez online   If a distribution is an eligible rollover distribution, as defined earlier, you must provide a written notice to the recipient that explains the following rules regarding such distributions. Can you file 1040ez online That the distribution may be directly transferred to an eligible retirement plan and information about which distributions are eligible for this direct transfer. Can you file 1040ez online That tax will be withheld from the distribution if it is not directly transferred to an eligible retirement plan. Can you file 1040ez online That the distribution will not be subject to tax if transferred to an eligible retirement plan within 60 days after the date the recipient receives the distribution. Can you file 1040ez online Certain other rules that may be applicable. Can you file 1040ez online   Notice 2009-68, 2009-39 I. Can you file 1040ez online R. Can you file 1040ez online B. Can you file 1040ez online 423, available at www. Can you file 1040ez online irs. Can you file 1040ez online gov/irb/2009-39_IRB/ar14. Can you file 1040ez online html, contains two updated safe harbor section 402(f) notices that plan administrators may provide recipients of eligible rollover distributions. Can you file 1040ez online If the plan allows in-plan Roth rollovers, the 402(f) notice must be amended to reflect this. Can you file 1040ez online Notice 2010-84 contains guidance on how to modify a 402(f) notice for in-plan Roth rollovers. Can you file 1040ez online Timing of notice. Can you file 1040ez online   The notice generally must be provided no less than 30 days and no more than 180 days before the date of a distribution. Can you file 1040ez online Method of notice. Can you file 1040ez online   The written notice must be provided individually to each distributee of an eligible rollover distribution. Can you file 1040ez online Posting of the notice is not sufficient. Can you file 1040ez online However, the written requirement may be satisfied through the use of electronic media if certain additional conditions are met. Can you file 1040ez online See Regulations section 1. Can you file 1040ez online 401(a)-21. Can you file 1040ez online Tax on failure to give notice. Can you file 1040ez online   Failure to give a 402(f) notice will result in a tax of $100 for each failure, with a total not exceeding $50,000 per calendar year. Can you file 1040ez online The tax will not be imposed if it is shown that such failure is due to reasonable cause and not to willful neglect. Can you file 1040ez online Tax on Early Distributions If a distribution is made to an employee under the plan before he or she reaches age 59½, the employee may have to pay a 10% additional tax on the distribution. Can you file 1040ez online This tax applies to the amount received that the employee must include in income. Can you file 1040ez online Exceptions. Can you file 1040ez online   The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances. Can you file 1040ez online Made to a beneficiary (or to the estate of the employee) on or after the death of the employee. Can you file 1040ez online Made due to the employee having a qualifying disability. Can you file 1040ez online Made as part of a series of substantially equal periodic payments beginning after separation from service and made at least annually for the life or life expectancy of the employee or the joint lives or life expectancies of the employee and his or her designated beneficiary. Can you file 1040ez online (The payments under this exception, except in the case of death or disability, must continue for at least 5 years or until the employee reaches age 59½, whichever is the longer period. Can you file 1040ez online ) Made to an employee after separation from service if the separation occurred during o
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Understanding your CP259F Notice

We're sending you this notice because our records indicate you did not file a required Form 5227, Split-Interest Trust information Return.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).
 


What you need to do

  • Disregard this notice if you have filed the return within the last four weeks using the same name and EIN listed on the notice.
  • Otherwise, file your required Form 5227 immediately according to the instructions on the notice.
    • If you don't think you need to file, complete the Response form enclosed with your notice and mail it to us using the envelope provided.
    • If you filed more than four weeks ago or used a different name or EIN, complete the Response form enclosed with your notice and mail it to us in the envelope provided along with a signed and dated copy of the return.

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Answers to Common Questions

Which organizations must file a Form 5227?
Form 5227 must be filed by all charitable remainder trusts described in section 664; all pooled income funds described in section 642(c)(5); and all other trusts such as charitable lead trusts that meet the definition of a split-interest trust under section 4947(a)(2), unless certain exceptions apply (see General Instructions of the Form 5227 Instructions).

When is Form 5227 due?
Form 5227 is due by April 15 of each year. If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. More information can be found at the Form 5227 Instructions.

Can I get help over the phone?
If you have questions and/or need help completing the form, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

Where can I go for more information about tax-exempt organizations?
For more information on tax-exempt organizations see Tax Information for Charities & Other Non-Profits.


Tips for next year

Review the tax-exempt organization resources at Form 990 Resources and Tools for Exempt Organizations.


Understanding your notice

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

Notice CP259F, Page 1

Notice CP259F, Page 2

Notice CP259F, Page 3

Notice CP259F, Page 4

Page Last Reviewed or Updated: 29-Mar-2014

The Can You File 1040ez Online

Can you file 1040ez online Publication 557 - Additional Material Table of Contents Appendix. Can you file 1040ez online Sample Articles of Organization, continued Organization Reference Chart Section of 1986 Code Description of organization General nature of activities Application  Form Annual return required to be  filed Contributions  allowable 501(c)(1) Corporations Organized under Act of Congress (including Federal Credit Unions) Instrumentalities of the  United States No Form None Yes, if made for exclusively public purposes 501(c)(2) Title Holding Corporation For Exempt Organization Holding title to property of an  exempt organization 1024 9901 or 990-EZ8 No2 501(c)(3) Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations Activities of nature implied by description of class of organization 1023 9901 or 990-EZ8, or 990-PF Yes, generally 501(c)(4) Civic Leagues, Social Welfare Organizations, and Local Associations of Employees Promotion of community welfare; charitable, educational, or recreational 1024 9901 or 990-EZ8 No, generally 2, 3 501(c)(5) Labor, Agricultural, and Horticultural Organizations Educational or instructive, the  purpose being to improve conditions of work, and to improve products of efficiency 1024 9901 or 990-EZ8 No2 501(c)(6) Business Leagues, Chambers of Commerce, Real Estate Boards, etc. Can you file 1040ez online Improvement of business  conditions of one or more lines of business 1024 9901 or 990-EZ8 No2 501(c)(7) Social and Recreational Clubs Pleasure, recreation, social activities 1024 9901 or 990-EZ8 No2 501(c)(8) Fraternal Beneficiary Societies  and Associations Lodge providing for payment of life, sickness, accident or other benefits  to members 1024 9901 or 990-EZ8 Yes, if for certain Sec. Can you file 1040ez online 501(c)(3) purposes 501(c)(9) Voluntary Employees Beneficiary Associations Providing for payment of life, sickness, accident, or other benefits to members 1024 9901 or 990-EZ8 No2 501(c)(10) Domestic Fraternal Societies  and Associations Lodge devoting its net earnings to charitable, fraternal, and other  specified purposes. Can you file 1040ez online No life, sickness, or accident benefits to members 1024 9901 or 990-EZ8 Yes, if for certain Sec. Can you file 1040ez online 501(c)(3) purposes 501(c)(11) Teachers' Retirement Fund Associations Teachers' association for payment of retirement benefits Letter6 9901 or 990-EZ8 No2 501(c)(12) Benevolent Life Insurance Associations, Mutual Ditch or  Irrigation Companies, Mutual or Cooperative Telephone Companies, etc. Can you file 1040ez online Activities of a mutually beneficial  nature similar to those implied by the description of class of organization 1024 9901 or 990-EZ8 No2 501(c)(13) Cemetery Companies Burials and incidental activities 1024 9901 or 990-EZ8 Yes, generally 501(c)(14) State-Chartered Credit Unions,  Mutual Reserve Funds Loans to members Letter6 9901 or 990-EZ8 No2 501(c)(15) Mutual Insurance Companies or Associations Providing insurance to members substantially at cost 1024 9901 or 990-EZ8 No2 501(c)(16) Cooperative Organizations to  Finance Crop Operations Financing crop operations in  conjunction with activities of a marketing  or purchasing association Form 1120-C6 9901 or 990-EZ8 No2 501(c)(17) Supplemental Unemployment  Benefit Trusts Provides for payment of  supplemental unemployment compensation benefits 1024 9901 or 990-EZ8 No2 501(c)(18) Employee Funded Pension Trust (created before June 25, 1959) Payment of benefits under a  pension plan funded by employees Letter6 9901 or 990-EZ8 No2 501(c)(19) Post or Organization of Past or  Present Members of the Armed Forces Activities implied by nature of organization 1024 9901 or 990-EZ8 No, generally7 501(c)(21) Black Lung Benefit Trusts Funded by coal mine operators to satisfy their liability for disability or  death due to black lung diseases Letter6 990-BL No4 501(c)(22) Withdrawal Liability Payment Fund To provide funds to meet the  liability of employers withdrawing from  a multi-employer pension fund Letter6 9901 or 990-EZ8 No5 501(c)(23) Veterans' Organization (created before 1880) To provide insurance and other  benefits to veterans Letter6 9901 or 990-EZ8 No, generally7 501(c)(25) Title Holding Corporations or Trusts with Multiple Parent Corporations Holding title and paying over  income from property to 35 or fewer parents or beneficiaries 1024 9901 or 990-EZ8 No 501(c)(26) State-Sponsored Organization Providing Health Coverage for High-Risk Individuals Provides health care coverage to high-risk individuals Letter6 9901 or 990-EZ8 No 501(c)(27) State-Sponsored Workers' Compensation Reinsurance Organization Reimburses members for losses  under workers' compensation acts Letter6 9901 or 990-EZ8 No 501(c)(28) National Railroad Retirement Investment Trust Manages and invests the assets of the Railroad Retirement Account No Form 99011 No11 501(c)(29) CO-OP health insurance issuers A qualified health insurance issuer which has received a loan or grant under the CO-OP program Letter and Form 871814 9901 No13 501(d) Religious and Apostolic Associations Regular business activities;  Communal religious community No Form 10659 No2 501(e) Cooperative Hospital Service Organizations Performs cooperative services for hospitals 1023 9901 or 990-EZ8 Yes 501(f) Cooperative Service Organizations  of Operating Educational Organizations Performs collective investment  services for educational organizations 1023 9901 or 990-EZ8 Yes 501(k) Child Care Organizations Provides care for children 1023 9901 or 990-EZ8 Yes 501(n) Charitable Risk Pools Pools certain insurance risks of sec. Can you file 1040ez online 501(c)(3) organizations 1023 9901 or 990-EZ8 Yes 501(q) Credit Counseling Organization Credit counseling services 1023 102312 No 521(a) Farmers' Cooperative Associations Cooperative marketing and  purchasing for agricultural procedures 1028 1120-C No 527 Political organizations A party, committee, fund,  association, etc. Can you file 1040ez online , that directly or indirectly accepts contributions or makes expenditures for political campaigns 8871 1120-POL10 9901 or 990-EZ8 No 1For exceptions to the filing requirement, see chapter 2 and the form instructions. Can you file 1040ez online Note: For annual tax periods beginning after 2006, most tax-exempt organizations, other than churches, are required to file an annual Form 990, 990-EZ, or 990-PF with the IRS or to submit an annual electronic notice, Form 990-N (e-Postcard), to the IRS. Can you file 1040ez online Tax-exempt organizations failing to file an annual return or submit an annual notice as required for 3 consecutive years will automatically lose their tax-exempt status. Can you file 1040ez online    2An organization exempt under a subsection of section 501 other than 501(c)(3) can establish a charitable fund, contributions to which are deductible. Can you file 1040ez online Such a fund must itself meet the requirements of section 501(c)(3) and the related notice requirements of section 508(a). Can you file 1040ez online    3Contributions to volunteer fire companies and similar organizations are deductible, but only if made for exclusively public purposes. Can you file 1040ez online    4Deductible as a business expense to the extent allowed by section 192. Can you file 1040ez online    5Deductible as a business expense to the extent allowed by section 194A. Can you file 1040ez online 6Application is by letter to the address shown on Form 8718. Can you file 1040ez online A copy of the organizing document should be attached and the letter should be signed by an officer. Can you file 1040ez online    7Contributions to these organizations are deductible only if 90% or more of the organization's members are war veterans. Can you file 1040ez online    8For limits on the use of Form 990-EZ, see chapter 2 and the general instructions for Form 990-EZ (or Form 990). Can you file 1040ez online    9Although the organization files a partnership return, all distributions are deemed dividends. Can you file 1040ez online The members are not entitled to pass through treatment of the organization's income or expenses. Can you file 1040ez online    10Form 1120-POL is required only if the organization has taxable income as defined in section 527(c). Can you file 1040ez online    11Only required to annually file so much of the Form 990 that relates to the names and addresses of the officers, directors, trustees, and key employees, and their titles, compensation, and hours devoted to their positions (Part VII of Form 990), and to complete Item I in the Heading of Form 990 to confirm its tax-exempt status under section 501(c)(28). Can you file 1040ez online    12See section 501(q) if the organization provides credit counseling services and seeks recognition of exemption under section 501(c)(4). Can you file 1040ez online Use Form 1024 if applying for recognition under section 501(c)(4). Can you file 1040ez online    13See section 501(c)(29) for details. Can you file 1040ez online    14See Revenue Procedure 2012-11, sec. Can you file 1040ez online 4. Can you file 1040ez online 01, 2012-7 I. Can you file 1040ez online R. Can you file 1040ez online B. Can you file 1040ez online 368, for details. Can you file 1040ez online Appendix. Can you file 1040ez online Sample Articles of Organization The following are examples of Articles of Incorporation (Draft A) and a declaration of trust (Draft B) that contain the required information as to purposes and powers of an organization and disposition of its assets upon dissolution. Can you file 1040ez online You should bear in mind that requirements for these instruments may vary under applicable state law. Can you file 1040ez online See Private Foundations and Public Charities , earlier for the special provisions required in a private foundation's governing instrument in order for it to qualify for exemption. Can you file 1040ez online DRAFT A  Articles of Incorporation of the undersigned, a majority of whom are citizens of the United States, desiring to form a Non-Profit Corporation under the Non-Profit Corporation Law of , do hereby certify: First: The name of the Corporation shall be . Can you file 1040ez online Second: The place in this state where the principal office of the Corporation is to be located is the City of , County. Can you file 1040ez online Third: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Can you file 1040ez online Fourth: The names and addresses of the persons who are the initial trustees of the corporation are as follows: Name , Address Fifth: No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article Third hereof. Can you file 1040ez online No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. Can you file 1040ez online Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Can you file 1040ez online   If reference to federal law in articles of incorporation imposes a limitation that is invalid in your state, you may wish to substitute the following for the last sentence of the preceding paragraph: “Notwithstanding any other provision of these articles, this corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes of this corporation. Can you file 1040ez online ” Sixth: Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Can you file 1040ez online Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes. Can you file 1040ez online   In witness whereof, we have hereunto subscribed our names this day of , 20. Can you file 1040ez online Appendix. Can you file 1040ez online Sample Articles of Organization, continued Draft B The Charitable Trust. Can you file 1040ez online Declaration of Trust made as of the day of , 20 , by , of , and , of , who hereby declare and agree that they have received this day from , as Donor, the sum of Ten Dollars ($10) and that they will hold and manage the same, and any additions to it, in trust, as follows: First: This trust shall be called “The Charitable Trust. Can you file 1040ez online ” Second: The trustees may receive and accept property, whether real, personal, or mixed, by way of gift, bequest, or devise, from any person, firm, trust, or corporation, to be held, administered, and disposed of in accordance with and pursuant to the provisions of this Declaration of Trust; but no gift, bequest, or devise of any such property shall be received and accepted if it is conditioned or limited in such manner as to require the disposition of the income or its principal to any person or organization other than a “charitable organization” or for other than “charitable purposes” within the meaning of such terms as defined in Article Third of this Declaration of Trust, or as shall, in the opinion of the trustees, jeopardize the federal income tax exemption of this trust pursuant to section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Can you file 1040ez online Third: a) The principal and income of all property received and accepted by the trustees to be administered under this Declaration of Trust shall be held in trust by them, and the trustees may make payments or distributions from income or principal, or both, to or for the use of such charitable organizations, within the meaning of that term as defined in paragraph C, in such amounts and for such charitable purposes of the trust as the trustees shall from time to time select and determine; and the trustees may make payments or distributions from income or principal, or both, directly for such charitable purposes, within the meaning of that term as defined in paragraph D, in such amounts as the trustees shall from time to time select and determine without making use of any other charitable organization. Can you file 1040ez online The trustees may also make payments or distributions of all or any part of the income or principal to states, territories, or possessions of the United States, any political subdivision of any of the foregoing, or to the United States or the District of Columbia but only for charitable purposes within the meaning of that term as defined in paragraph D. Can you file 1040ez online Income or principal derived from contributions by corporations shall be distributed by the trustees for use solely within the United States or its possessions. Can you file 1040ez online No part of the net earnings of this trust shall inure or be payable to or for the benefit of any private shareholder or individual, and no substantial part of the activities of this trust shall be the carrying on of propaganda, or otherwise attempting to influence legislation. Can you file 1040ez online No part of the activities of this trust shall be the participation in, or intervention in (including the publishing or distributing of statements), any political campaign on behalf of or in opposition to any candidate for public office. Can you file 1040ez online b) The trust shall continue forever unless the trustees terminate it and distribute all of the principal and income, which action may be taken by the trustees in their discretion at any time. Can you file 1040ez online On such termination, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Can you file 1040ez online The donor authorizes and empowers the trustees to form and organize a nonprofit corporation limited to the uses and purposes provided for in this Declaration of Trust, such corporation to be organized under the laws of any state or under the laws of the United States as may be determined by the trustees; such corporation when organized to have power to administer and control the affairs and property and to carry out the uses, objects, and purposes of this trust. Can you file 1040ez online Upon the creation and organization of such corporation, the trustees are authorized and empowered to convey, transfer, and deliver to such corporation all the property and assets to which this trust may be or become entitled. Can you file 1040ez online The charter, bylaws, and other provisions for the organization and management of such corporation and its affairs and property shall be such as the trustees shall determine, consistent with the provisions of this paragraph. Can you file 1040ez online c) In this Declaration of Trust and in any amendments to it, references to “charitable organizations” or “charitable organization” mean corporations, trusts, funds, foundations, or community chests created or organized in the United States or in any of its possessions, whether under the laws of the United States, any state or territory, the District of Columbia, or any possession of the United States, organized and operated exclusively for charitable purposes, no part of the net earnings of which inures or is payable to or for the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which do not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of or in opposition to any candidate for public office. Can you file 1040ez online It is intended that the organization described in this paragraph C shall be entitled to exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Can you file 1040ez online d) In this Declaration of Trust and in any amendments to it, the term “charitable purposes” shall be limited to and shall include only religious, charitable, scientific, literary, or educational purposes within the meaning of those terms as used in section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, but only such purposes as also constitute public charitable purposes under the law of trusts of the State of. Can you file 1040ez online Fourth: This Declaration of Trust may be amended at any time or times by written instrument or instruments signed and sealed by the trustees, and acknowledged by any of the trustees, provided that no amendment shall authorize the trustees to conduct the affairs of this trust in any manner or for any purpose contrary to the provisions of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Can you file 1040ez online An amendment of the provisions of this Article Fourth (or any amendment to it) shall be valid only if and to the extent that such amendment further restricts the trustees' amending power. Can you file 1040ez online All instruments amending this Declaration of Trust shall be noted upon or kept attached to the executed original of this Declaration of Trust held by the trustees. Can you file 1040ez online Fifth: Any trustee under this Declaration of Trust may, by written instrument, signed and acknowledged, resign his office. Can you file 1040ez online The number of trustees shall be at all times not less than two, and whenever for any reason the number is reduced to one, there shall be, and at any other time there may be, appointed one or more additional trustees. Can you file 1040ez online Appointments shall be made by the trustee or trustees for the time in office by written instruments signed and acknowledged. Can you file 1040ez online Any succeeding or additional trustee shall, upon his or her acceptance of the office by written instrument signed and acknowledged, have the same powers, rights, and duties, and the same title to the trust estate jointly with the surviving or remaining trustee or trustees as if originally appointed. Can you file 1040ez online  None of the trustees shall be required to furnish any bond or surety. Can you file 1040ez online None of them shall be responsible or liable for the acts or omissions of any other of the trustees or of any predecessor or of a custodian, agent, depositary, or counsel selected with reasonable care. Can you file 1040ez online  The one or more trustees, whether original or successor, for the time being in office, shall have full authority to act even though one or more vacancies may exist. Can you file 1040ez online A trustee may, by appropriate written instrument, delegate all or any part of his or her powers to another or others of the trustees for such periods and subject to such conditions as such delegating trustee may determine. Can you file 1040ez online  The trustees serving under this Declaration of Trust are authorized to pay to themselves amounts for reasonable expenses incurred and reasonable compensation for services rendered in the administration of this trust, but in no event shall any trustee who has made a contribution to this trust ever receive any compensation thereafter. Can you file 1040ez online Sixth: In extension and not in limitation of the common law and statutory powers of trustees and other powers granted in this Declaration of Trust, the trustees shall have the following discretionary powers. Can you file 1040ez online a) To invest and reinvest the principal and income of the trust in such property, real, personal, or mixed, and in such manner as they shall deem proper, and from time to time to change investments as they shall deem advisable; to invest in or retain any stocks, shares, bonds, notes, obligations, or personal or real property (including without limitation any interests in or obligations of any corporation, association, business trust, investment trust, common trust fund, or investment company) although some or all of the property so acquired or retained is of a kind or size which but for this express authority would not be considered proper and although all of the trust funds are invested in the securities of one company. Can you file 1040ez online No principal or income, however, shall be loaned, directly or indirectly, to any trustee or to anyone else, corporate or otherwise, who has at any time made a contribution to this trust, nor to anyone except on the basis of an adequate interest charge and with adequate security. Can you file 1040ez online b) To sell, lease, or exchange any personal, mixed, or real property, at public auction or by private contract, for such consideration and on such terms as to credit or otherwise, and to make such contracts and enter into such undertakings relating to the trust property, as they consider advisable, whether or not such leases or contracts may extend beyond the duration of the trust. Can you file 1040ez online c) To borrow money for such periods, at such rates of interest, and upon such terms as the trustees consider advisable, and as security for such loans to mortgage or pledge any real or personal property with or without power of sale; to acquire or hold any real or personal property, subject to any mortgage or pledge on or of property acquired or held by this trust. Can you file 1040ez online d) To execute and deliver deeds, assignments, transfers, mortgages, pledges, leases, covenants, contracts, promissory notes, releases, and other instruments, sealed or unsealed, incident to any transaction in which they engage. Can you file 1040ez online e) To vote, to give proxies, to participate in the reorganization, merger, or consolidation of any concern, or in the sale, lease, disposition, or distribution of its assets; to join with other security holders in acting through a committee, depositary, voting trustees, or otherwise, and in this connection to delegate authority to such committee, depositary, or trustees and to deposit securities with them or transfer securities to them; to pay assessments levied on securities or to exercise subscription rights in respect of securities. Can you file 1040ez online f) To employ a bank or trust company as custodian of any funds or securities and to delegate to it such powers as they deem appropriate; to hold trust property without indication of fiduciary capacity but only in the name of a registered nominee, provided the trust property is at all times identified as such on the books of the trust; to keep any or all of the trust property or funds in any place or places in the United States of America; to employ clerks, accountants, investment counsel, investment agents, and any special services, and to pay the reasonable compensation and expenses of all such services in addition to the compensation of the trustees. Can you file 1040ez online Seventh: The trustees' powers are exercisable solely in the fiduciary capacity consistent with and in furtherance of the charitable purposes of this trust as specified in Article Third and not otherwise. Can you file 1040ez online Eighth: In this Declaration of Trust and in any amendment to it, references to “trustees” mean the one or more trustees, whether original or successor, for the time being in office. Can you file 1040ez online Ninth: Any person may rely on a copy, certified by a notary public, of the executed original of this Declaration of Trust held by the trustees, and of any of the notations on it and writings attached to it, as fully as he might rely on the original documents themselves. Can you file 1040ez online Any such person may rely fully on any statements of fact certified by anyone who appears from such original documents or from such certified copy to be a trustee under this Declaration of Trust. Can you file 1040ez online No one dealing with the trustees need inquire concerning the validity of anything the trustees purport to do. Can you file 1040ez online No one dealing with the trustees need see to the application of anything paid or transferred to or upon the order of the trustees of the trust. Can you file 1040ez online Tenth: This Declaration of Trust is to be governed in all respects by the laws of the State of . Can you file 1040ez online Trustee Trustee Prev  Up  Next   Home   More Online Publications