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E File Form 1040ez

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E File Form 1040ez

E file form 1040ez 4. E file form 1040ez   Underpayment Penalty for 2013 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: General RuleFarmers and fishermen. E file form 1040ez Higher income taxpayers. E file form 1040ez Minimum required for higher income taxpayers. E file form 1040ez Estate or trust payments of estimated tax. E file form 1040ez Lowering or eliminating the penalty. E file form 1040ez ExceptionsLess Than $1,000 Due No Tax Liability Last Year Figuring Your Required Annual Payment (Part I) Short Method for Figuring the Penalty (Part III) Regular Method for Figuring the Penalty (Part IV)Figuring Your Underpayment (Part IV, Section A) Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Annualized Income Installment Method (Schedule AI) Farmers and Fishermen Waiver of PenaltyFarmers and fishermen. E file form 1040ez Introduction If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estimated tax and may have to pay a penalty. E file form 1040ez You may understand this chapter better if you can refer to a copy of your latest federal income tax return. E file form 1040ez No penalty. E file form 1040ez   Generally, you will not have to pay a penalty for 2013 if any of the following apply. E file form 1040ez The total of your withholding and timely estimated tax payments was at least as much as your 2012 tax. E file form 1040ez (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen. E file form 1040ez ) The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. E file form 1040ez Your total tax for 2013 (defined later) minus your withholding is less than $1,000. E file form 1040ez You did not have a tax liability for 2012. E file form 1040ez You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. E file form 1040ez IRS can figure the penalty for you. E file form 1040ez   If you think you owe the penalty, but you do not want to figure it yourself when you file your tax return, you may not have to. E file form 1040ez Generally, the IRS will figure the penalty for you and send you a bill. E file form 1040ez   You only need to figure your penalty in the following three situations. E file form 1040ez You are requesting a waiver of part, but not all, of the penalty. E file form 1040ez You are using the annualized income installment method to figure the penalty. E file form 1040ez You are treating the federal income tax withheld from your income as paid on the dates actually withheld. E file form 1040ez However, if these situations do not apply to you, and you think you can lower or eliminate your penalty, complete Form 2210 or Form 2210-F and attach it to your return. E file form 1040ez See Form 2210 , later. E file form 1040ez Topics - This chapter discusses: The general rule for the underpayment penalty, Special rules for certain individuals, Exceptions to the underpayment penalty, How to figure your underpayment and the amount of your penalty on Form 2210, and How to ask the IRS to waive the penalty. E file form 1040ez Useful Items - You may want to see: Form (and Instructions) 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 5 for information about getting these forms. E file form 1040ez General Rule In general, you may owe a penalty for 2013 if the total of your withholding and timely estimated tax payments did not equal at least the smaller of: 90% of your 2013 tax, or 100% of your 2012 tax. E file form 1040ez (Your 2012 tax return must cover a 12-month period. E file form 1040ez ) Your 2013 tax, for this purpose, is defined under Total tax for 2013 , later. E file form 1040ez Special rules for certain individuals. E file form 1040ez   There are special rules for farmers and fishermen and certain higher income taxpayers. E file form 1040ez Farmers and fishermen. E file form 1040ez   If at least two-thirds of your gross income for 2012 or 2013 is from farming or fishing, substitute  662/3% for 90% in (1) above. E file form 1040ez   See Farmers and Fishermen , later. E file form 1040ez Higher income taxpayers. E file form 1040ez   If your AGI for 2012 was more than $150,000 ($75,000 if your 2013 filing status is married filing a separate return), substitute 110% for 100% in (2) under General Rule . E file form 1040ez This rule does not apply to farmers or fishermen. E file form 1040ez   For 2012, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. E file form 1040ez Penalty figured separately for each period. E file form 1040ez   Because the penalty is figured separately for each payment period, you may owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. E file form 1040ez This is true even if you are due a refund when you file your income tax return. E file form 1040ez Example. E file form 1040ez You did not make estimated tax payments for 2013 because you thought you had enough tax withheld from your wages. E file form 1040ez Early in January 2014, you made an estimate of your total 2013 tax. E file form 1040ez Then you realized that your withholding was $2,000 less than the amount needed to avoid a penalty for underpayment of estimated tax. E file form 1040ez On January 10, you made an estimated tax payment of $3,000, which is the difference between your withholding and your estimate of your total tax. E file form 1040ez Your final return shows your total tax to be $50 less than your estimate, so you are due a refund. E file form 1040ez You do not owe a penalty for your payment due January 15, 2014. E file form 1040ez However, you may owe a penalty through January 10, 2014, the day you made the $3,000 payment, for your underpayments for the earlier payment periods. E file form 1040ez Minimum required each period. E file form 1040ez   You will owe a penalty for any 2013 payment period for which your estimated tax payment plus your withholding for the period and overpayments applied from previous periods was less than the smaller of: 22. E file form 1040ez 5% of your 2013 tax, or 25% of your 2012 tax. E file form 1040ez (Your 2012 tax return must cover a 12-month period. E file form 1040ez ) Minimum required for higher income taxpayers. E file form 1040ez   If you are subject to the rule for higher income taxpayers, discussed above, substitute 27. E file form 1040ez 5% for 25% in (2) under General Rule . E file form 1040ez When penalty is charged. E file form 1040ez   If you miss a payment or you paid less than the minimum required in a period, you may be charged an underpayment penalty from the date the amount was due to the date the payment is made. E file form 1040ez If a payment is mailed, the date of the U. E file form 1040ez S. E file form 1040ez postmark is considered the date of payment. E file form 1040ez   If a payment is made electronically, the date the payment is shown on your payment account (checking, savings, etc. E file form 1040ez ) is considered to be the date of payment. E file form 1040ez Estate or trust payments of estimated tax. E file form 1040ez   If you have estimated taxes credited to you from an estate or trust (Schedule K-1 (Form 1041)), treat the payment as made by you on January 15, 2014. E file form 1040ez Amended returns. E file form 1040ez    If you file an amended return by the due date of your original return, use the tax shown on your amended return to figure your required estimated tax payments. E file form 1040ez If you file an amended return after the due date of the original return, use the tax shown on the original return. E file form 1040ez   However, if you and your spouse file a joint return after the due date to replace separate returns you originally filed by the due date, use the tax shown on the joint return to figure your required estimated tax payments. E file form 1040ez This rule applies only if both original separate returns were filed on time. E file form 1040ez 2012 separate returns and 2013 joint return. E file form 1040ez    If you file a joint return with your spouse for 2013, but you filed separate returns for 2012, your 2012 tax is the total of the tax shown on your separate returns. E file form 1040ez You filed a separate return if you filed as single, head of household, or married filing separately. E file form 1040ez 2012 joint return and 2013 separate returns. E file form 1040ez    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, your 2012 tax is your share of the tax on the joint return. E file form 1040ez You are filing a separate return if you file as single, head of household, or married filing separately. E file form 1040ez   To figure your share of the taxes on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2012 using the same filing status as for 2013. E file form 1040ez Then multiply the tax on the joint return by the following fraction. E file form 1040ez   The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. E file form 1040ez Lisa and Paul filed a joint return for 2012 showing taxable income of $49,000 and a tax of $6,484. E file form 1040ez Of the $49,000 taxable income, $41,000 was Lisa's and the rest was Paul's. E file form 1040ez For 2013, they file married filing separately. E file form 1040ez Lisa figures her share of the tax on the 2012 joint return as follows. E file form 1040ez 2012 tax on $41,000 based on a separate return $ 6,286 2012 tax on $8,000 based on a  separate return 803 Total $ 7,089 Lisa's percentage of total tax  ($6,286 ÷ $ 7,089) 88. E file form 1040ez 67% Lisa's part of tax on joint return ($6,484 × 88. E file form 1040ez 67%) $ 5,749 Form 2210. E file form 1040ez   In most cases, you do not need to file Form 2210. E file form 1040ez The IRS will figure the penalty for you and send you a bill. E file form 1040ez If you want us to figure the penalty for you, leave the penalty line on your return blank. E file form 1040ez Do not file Form 2210. E file form 1040ez   To determine if you should file Form 2210, see Part II of Form 2210. E file form 1040ez If you decide to figure your penalty, complete Part I, Part II, and either Part III or Part IV of the form and the Penalty Worksheet in the Instructions for Form 2210. E file form 1040ez If you use Form 2210, you cannot file Form 1040EZ. E file form 1040ez   On Form 1040, enter the amount of your penalty on line 77. E file form 1040ez If you owe tax on line 76, add the penalty to your tax due and show your total payment on line 76. E file form 1040ez If you are due a refund, subtract the penalty from the overpayment and enter the result on line 73. E file form 1040ez   On Form 1040A, enter the amount of your penalty on line 46. E file form 1040ez If you owe tax on line 45, add the penalty to your tax due and show your total payment on line 45. E file form 1040ez If you are due a refund, subtract the penalty from the overpayment and enter the result on line 42. E file form 1040ez Lowering or eliminating the penalty. E file form 1040ez    You may be able to lower or eliminate your penalty if you file Form 2210. E file form 1040ez You must file Form 2210 with your return if any of the following applies. E file form 1040ez You request a waiver. E file form 1040ez See Waiver of Penalty , later. E file form 1040ez You use the annualized income installment method. E file form 1040ez See the explanation of this method under Annualized Income Installment Method (Schedule AI) . E file form 1040ez You use your actual withholding for each payment period for estimated tax purposes. E file form 1040ez See Actual withholding method under Figuring Your Underpayment (Part IV, Section A). E file form 1040ez You base any of your required installments on the tax shown on your 2012 return and you filed or are filing a joint return for either 2012 or 2013, but not for both years. E file form 1040ez Exceptions Generally, you do not have to pay an underpayment penalty if either: Your total tax is less than $1,000, or You had no tax liability last year. E file form 1040ez Less Than $1,000 Due You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000. E file form 1040ez Total tax for 2013. E file form 1040ez   For 2013, your total tax on Form 1040 is the amount on line 61 reduced by the following. E file form 1040ez    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). E file form 1040ez Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. E file form 1040ez The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. E file form 1040ez Any refundable credit amounts listed on lines 64a, 65, 66, 70, and any credit from Form 8885 included on line 71. E file form 1040ez   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. E file form 1040ez   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. E file form 1040ez Note. E file form 1040ez When figuring the amount on line 60, include household employment taxes only if you had federal income tax withheld from your income or you would owe the penalty even if you did not include those taxes. E file form 1040ez Paid through withholding. E file form 1040ez    For 2013, the amount you paid through withholding on Form 1040 is the amount on line 62 plus any excess social security or tier 1 RRTA tax withholding on line 69. E file form 1040ez Add to that any write-in amount on line 72 identified as “Form 8689. E file form 1040ez ” On Form 1040A, the amount you paid through withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included on line 41. E file form 1040ez On Form 1040EZ, it is the amount on line 7. E file form 1040ez No Tax Liability Last Year You do not owe a penalty if you had no tax liability last year and you were a U. E file form 1040ez S. E file form 1040ez citizen or resident for the whole year. E file form 1040ez For this rule to apply, your tax year must have included all 12 months of the year. E file form 1040ez You had no tax liability for 2012 if your total tax was zero or you were not required to file an income tax return. E file form 1040ez Example. E file form 1040ez Ray, who is single and 22 years old, was unemployed for a few months during 2012. E file form 1040ez He earned $6,700 in wages before he was laid off, and he received $1,400 in unemployment compensation afterwards. E file form 1040ez He had no other income. E file form 1040ez Even though he had gross income of $8,100, he did not have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($9,750 for 2012). E file form 1040ez He filed a return only to have his withheld income tax refunded to him. E file form 1040ez In 2013, Ray began regular work as an independent contractor. E file form 1040ez Ray made no estimated tax payments in 2013. E file form 1040ez Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2013 because he had no tax liability in 2012. E file form 1040ez Total tax for 2012. E file form 1040ez   For 2012, your total tax on Form 1040 is the amount on line 61 reduced by the following. E file form 1040ez    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). E file form 1040ez Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. E file form 1040ez The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. E file form 1040ez Any refundable credit amounts listed on lines 64a, 65, 66, 70, and credits from Forms 8801 (line 27 only), and 8885 included on line 71. E file form 1040ez   If you filed Form 1040A, your 2012 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. E file form 1040ez   If you filed Form 1040EZ, your 2012 total tax is the amount on line 11 reduced by the amount on line 8a. E file form 1040ez Figuring Your Required Annual Payment (Part I) Figure your required annual payment in Part I of Form 2210, following the line-by-line instructions. E file form 1040ez If you rounded the entries on your tax return to whole dollars, you can round on Form 2210. E file form 1040ez Example. E file form 1040ez The tax on Lori Lane's 2012 return was $12,400. E file form 1040ez Her AGI was not more than $150,000 for either 2012 or 2013. E file form 1040ez The tax on her 2013 return (Form 1040, line 55) is $13,044. E file form 1040ez Line 56 (self-employment tax) is $8,902. E file form 1040ez Her 2013 total tax is $21,946. E file form 1040ez For 2013, Lori had $1,600 income tax withheld and made four equal estimated tax payments ($1,000 each). E file form 1040ez 90% of her 2013 tax is $19,751. E file form 1040ez Because she paid less than her 2012 tax ($12,400) and less than 90% of her 2013 tax ($19,751), and does not meet an exception, Lori knows that she owes a penalty for underpayment of estimated tax. E file form 1040ez The IRS will figure the penalty for Lori, but she decides to figure it herself on Form 2210 and pay it with her taxes when she files her tax return. E file form 1040ez Lori's required annual payment is $12,400 (100% of 2012 tax) because that is smaller than 90% of her 2013 tax. E file form 1040ez Different 2012 filing status. E file form 1040ez    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, see 2012 joint return and 2013 separate returns , earlier, to figure the amount to enter as your 2012 tax on line 8 of Form 2210. E file form 1040ez Short Method for Figuring the Penalty (Part III) You may be able to use the short method in Part III of Form 2210 to figure your penalty for underpayment of estimated tax. E file form 1040ez If you qualify to use this method, it will result in the same penalty amount as the regular method. E file form 1040ez However, either the annualized income installment method or the actual withholding method, explained later, may result in a smaller penalty. E file form 1040ez You can use the short method only if you meet one of the following requirements. E file form 1040ez You made no estimated tax payments for 2013 (it does not matter whether you had income tax withholding). E file form 1040ez You paid the same amount of estimated tax on each of the four payment due dates. E file form 1040ez If you do not meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the Penalty Worksheet in the instructions. E file form 1040ez Note. E file form 1040ez If any payment was made before the due date, you can use the short method, but the penalty may be less if you use the regular method. E file form 1040ez However, if the payment was only a few days early, the difference is likely to be small. E file form 1040ez You cannot use the short method if any of the following apply. E file form 1040ez You made any estimated tax payments late. E file form 1040ez You checked box C or D in Part II of Form 2210. E file form 1040ez You are filing Form 1040NR or 1040NR-EZ and you did not receive wages as an employee subject to U. E file form 1040ez S. E file form 1040ez income tax withholding. E file form 1040ez If you use the short method, you cannot use the annualized income installment method to figure your underpayment for each payment period. E file form 1040ez Also, you cannot use your actual withholding during each period to figure your payments for each period. E file form 1040ez These methods, which may give you a smaller penalty amount, are explained under Figuring Your Underpayment (Part IV, Section A). E file form 1040ez Complete Part III of Form 2210 following the line-by-line instructions in the Instructions for Form 2210. E file form 1040ez Regular Method for Figuring the Penalty (Part IV) You can use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if you paid one or more estimated tax payments earlier than the due date. E file form 1040ez You must use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if any of the following apply to you. E file form 1040ez You paid one or more estimated tax payments on a date after the due date. E file form 1040ez You paid at least one, but less than four, installments of estimated tax. E file form 1040ez You paid estimated tax payments in un- equal amounts. E file form 1040ez You use the annualized income installment method to figure your underpayment for each payment period. E file form 1040ez You use your actual withholding during each payment period to figure your payments. E file form 1040ez Under the regular method, figure your underpayment for each payment period in Section A, then figure your penalty using the Penalty Worksheet in the Instructions for Form 2210. E file form 1040ez Enter the results on line 27 of Section B. E file form 1040ez Figuring Your Underpayment (Part IV, Section A) Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the Instructions for Form 2210. E file form 1040ez Complete lines 20 through 26 of the first column before going to line 20 of the next column. E file form 1040ez Required installments—line 18. E file form 1040ez   Your required payment for each payment period (line 18) is usually one-fourth of your required annual payment (Part I, line 9). E file form 1040ez This method—the regular method—is the one to use if you received your income evenly throughout the year. E file form 1040ez   However, if you did not receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. E file form 1040ez First complete Schedule AI (Form 2210), then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV. E file form 1040ez See Annualized Income Installment Method (Schedule AI), later. E file form 1040ez Payments made—line 19. E file form 1040ez   Enter in each column the total of: Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and One-fourth of your withholding. E file form 1040ez For special rules for figuring your payments, see Form 2210 instructions for line 19. E file form 1040ez   If you file Form 1040, your withholding is the amount on line 62, plus any excess social security or tier 1 RRTA tax withholding on line 69. E file form 1040ez If you file Form 1040A, your withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included in line 41. E file form 1040ez Actual withholding method. E file form 1040ez    Instead of using one-fourth of your withholding for each quarter, you can choose to use the amounts actually withheld by each due date. E file form 1040ez You can make this choice separately for the tax withheld from your wages and for all other withholding. E file form 1040ez This includes any excess social security and tier 1 RRTA tax withheld. E file form 1040ez   Using your actual withholding may result in a smaller penalty if most of your withholding occurred early in the year. E file form 1040ez   If you use your actual withholding, you must check box D in Form 2210, Part II. E file form 1040ez Then complete Form 2210 using the regular method (Part IV) and file it with your return. E file form 1040ez Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. E file form 1040ez The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid. E file form 1040ez For 2013, there are four rate periods—April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2014 through April 15, 2014. E file form 1040ez A 3% rate applies to all four periods. E file form 1040ez Payments. E file form 1040ez    Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. E file form 1040ez For example, if you had an underpayment for the first payment period, list your payments after April 15, 2013. E file form 1040ez You can use the table in the Form 2210 instructions to make your list. E file form 1040ez Follow those instructions for listing income tax withheld and payments made with your return. E file form 1040ez Use the list to determine when each underpayment was paid. E file form 1040ez   If you mail your estimated tax payments, use the date of the U. E file form 1040ez S. E file form 1040ez postmark as the date of payment. E file form 1040ez Line 1b. E file form 1040ez   Apply the payments listed to underpayment balance in the first column until it is fully paid. E file form 1040ez Apply payments in the order made. E file form 1040ez Figuring the penalty. E file form 1040ez   If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. E file form 1040ez On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. E file form 1040ez On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. E file form 1040ez If no payments are applied, figure the penalty on the amount on line 1a. E file form 1040ez Aid for counting days. E file form 1040ez    Table 4-1 provides a simple method for counting the number of days between a due date and a payment date. E file form 1040ez Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date. E file form 1040ez In the same manner, find the number for the date the payment was made. E file form 1040ez Subtract the due date “number” from the payment date “number. E file form 1040ez ”   For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days late. E file form 1040ez Table 4-1. E file form 1040ez Calendar To Determine the Number of Days a Payment Is Late Instructions. E file form 1040ez Use this table with Form 2210 if you are completing Part IV, Section B. E file form 1040ez First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. E file form 1040ez Then, in the same manner, find the number for the date the payment was made. E file form 1040ez Finally, subtract the due date number from the payment date number. E file form 1040ez The result is the number of days the payment is late. E file form 1040ez Example. E file form 1040ez The payment due date is June 15 (61). E file form 1040ez The payment was made on November 4 (203). E file form 1040ez The payment is 142 days late (203 – 61). E file form 1040ez Tax Year 2013 Day of 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 Month April May June July Aug. E file form 1040ez Sept. E file form 1040ez Oct. E file form 1040ez Nov. E file form 1040ez Dec. E file form 1040ez Jan. E file form 1040ez Feb. E file form 1040ez Mar. E file form 1040ez Apr. E file form 1040ez 1   16 47 77 108 139 169 200 230 261 292 320 351 2   17 48 78 109 140 170 201 231 262 293 321 352 3   18 49 79 110 141 171 202 232 263 294 322 353 4   19 50 80 111 142 172 203 233 264 295 323 354 5   20 51 81 112 143 173 204 234 265 296 324 355 6   21 52 82 113 144 174 205 235 266 297 325 356 7   22 53 83 114 145 175 206 236 267 298 326 357 8   23 54 84 115 146 176 207 237 268 299 327 358 9   24 55 85 116 147 177 208 238 269 300 328 359 10   25 56 86 117 148 178 209 239 270 301 329 360 11   26 57 87 118 149 179 210 240 271 302 330 361 12   27 58 88 119 150 180 211 241 272 303 331 362 13   28 59 89 120 151 181 212 242 273 304 332 363 14   29 60 90 121 152 182 213 243 274 305 333 364 15 0 30 61 91 122 153 183 214 244 275 306 334 365 16 1 31 62 92 123 154 184 215 245 276 307 335   17 2 32 63 93 124 155 185 216 246 277 308 336   18 3 33 64 94 125 156 186 217 247 278 309 337   19 4 34 65 95 126 157 187 218 248 279 310 338   20 5 35 66 96 127 158 188 219 249 280 311 339   21 6 36 67 97 128 159 189 220 250 281 312 340   22 7 37 68 98 129 160 190 221 251 282 313 341   23 8 38 69 99 130 161 191 222 252 283 314 342   24 9 39 70 100 131 162 192 223 253 284 315 343   25 10 40 71 101 132 163 193 224 254 285 316 344   26 11 41 72 102 133 164 194 225 255 286 317 345   27 12 42 73 103 134 165 195 226 256 287 318 346   28 13 43 74 104 135 166 196 227 257 288 319 347   29 14 44 75 105 136 167 197 228 258 289   348   30 15 45 76 106 137 168 198 229 259 290   349   31   46   107 138   199   260 291   350   Annualized Income Installment Method (Schedule AI) If you did not receive your income evenly throughout the year (for example, your income from a shop you operated at a marina was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. E file form 1040ez Under this method, your required installment (Part IV, line 18) for one or more payment periods may be less than one-fourth of your required annual payment. E file form 1040ez To figure your underpayment using this method, complete Form 2210, Schedule AI. E file form 1040ez Schedule AI annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. E file form 1040ez If you use the annualized income installment method, you must check box C in Part II of Form 2210. E file form 1040ez Also, you must attach Form 2210 and Schedule AI to your return. E file form 1040ez If you use Schedule AI for any payment due date, you must use it for all payment due dates. E file form 1040ez Completing Schedule AI. E file form 1040ez   Follow the Form 2210 instructions to complete Schedule AI. E file form 1040ez For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. E file form 1040ez If you use the cash method of accounting (used by most people), include all income actually or constructively received during the period and all deductions actually paid during the period. E file form 1040ez Note. E file form 1040ez Each period includes amounts from the previous period(s). E file form 1040ez Period (a) includes items for January 1 through March 31. E file form 1040ez Period (b) includes items for January 1 through May 31. E file form 1040ez Period (c) includes items for January 1 through August 31. E file form 1040ez Period (d) includes items for the entire year. E file form 1040ez Farmers and Fishermen If you are a farmer or fisherman, the following special rules for underpayment of estimated tax apply to you. E file form 1040ez The penalty for underpaying your 2013 estimated tax will not apply if you file your return and pay all the tax due by March 3, 2014. E file form 1040ez If you are a fiscal year taxpayer, the penalty will not apply if you file your return and pay the tax due by the first day of the third month after the end of your tax year. E file form 1040ez Any penalty you owe for underpaying your 2013 estimated tax will be figured from one payment due date, January 15, 2014. E file form 1040ez The underpayment penalty for 2013 is figured on the difference between the amount of 2013 withholding plus estimated tax paid by the due date and the smaller of: 662/3% (rather than 90%) of your 2013 tax, or 100% of the tax shown on your 2012 return. E file form 1040ez Even if these special rules apply to you, you will not owe the penalty if you meet either of the two conditions discussed under Exceptions . E file form 1040ez See Who Must Pay Estimated Tax in chapter 2 for the definition of a farmer or fisherman who is eligible for these special rules. E file form 1040ez Form 2210-F. E file form 1040ez   Use Form 2210-F to figure any underpayment penalty. E file form 1040ez Do not attach it to your return unless you check a box in Part I. E file form 1040ez However, if none of the boxes apply to you and you owe a penalty, you do not need to attach Form 2210-F. E file form 1040ez Enter the amount from line 16 on Form 1040, line 77 and add the penalty to any balance due on your return or subtract it from your refund. E file form 1040ez Keep your filled-in Form 2210-F for your records. E file form 1040ez    If none of the boxes on Form 2210-F apply to you and you owe a penalty, the IRS can figure your penalty and send you a bill. E file form 1040ez Waiver of Penalty The IRS can waive the penalty for underpayment if either of the following applies. E file form 1040ez You did not make a payment because of a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty. E file form 1040ez You retired (after reaching age 62) or became disabled in 2012 or 2013 and both the following requirements are met. E file form 1040ez You had a reasonable cause for not making the payment. E file form 1040ez Your underpayment was not due to willful neglect. E file form 1040ez How to request a waiver. E file form 1040ez   To request a waiver, see the Instructions for Form 2210. E file form 1040ez Farmers and fishermen. E file form 1040ez   To request a waiver, see the Instructions for Form 2210-F. E file form 1040ez Federally declared disaster. E file form 1040ez   Certain estimated tax payment deadlines for taxpayers who reside or have a business in a federally declared disaster area are postponed for a period during and after the disaster. E file form 1040ez During the processing of your tax return, the IRS automatically identifies taxpayers located in a covered disaster area (by county or parish) and applies the appropriate penalty relief. E file form 1040ez Do not file Form 2210 or 2210-F if your underpayment was due to a federally declared disaster. E file form 1040ez If you still owe a penalty after the automatic waiver is applied, we will send you a bill. E file form 1040ez   Individuals, estates, and trusts not in a covered disaster area but whose books, records, or tax professionals' offices are in a covered area are also entitled to relief. E file form 1040ez Also eligible are relief workers affiliated with a recognized government or charitable organization assisting in the relief activities in a covered disaster area. E file form 1040ez If you meet either of these eligibility requirements, you must call the IRS disaster hotline at 1-866-562-5227 and identify yourself as eligible for this relief. E file form 1040ez   Details on the applicable disaster postponement period can be found at IRS. E file form 1040ez gov. E file form 1040ez Enter Tax Relief in Disaster Situations. E file form 1040ez Select the federally declared disaster that affected you. E file form 1040ez    Worksheet 4-1. E file form 1040ez 2013 Form 2210, Schedule AI—Line 12 Qualified Dividends and Capital Gain Tax Worksheet Note. E file form 1040ez To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the  annualization amount on line 2 of Schedule AI for the same period. E file form 1040ez                   1. E file form 1040ez Enter line 11 of your Schedule AI, or line 3 from Worksheet 4-2 1. E file form 1040ez       2. E file form 1040ez Enter your annualized qualified dividends for the period 2. E file form 1040ez           3. E file form 1040ez Are you filing Schedule D?               □ Yes. E file form 1040ez Enter the smaller of your annualized amount from line 15 or line 16 of Schedule D. E file form 1040ez If either line 15 or line 16 is blank or a loss, enter -0-. E file form 1040ez 3. E file form 1040ez             □ No. E file form 1040ez Enter your annualized capital gain distributions from Form 1040, line 13             4. E file form 1040ez Add lines 2 and 3   4. E file form 1040ez           5. E file form 1040ez If you are claiming investment interest expense on Form 4952, enter your annualized amount from line 4g of that form. E file form 1040ez Otherwise, enter -0-   5. E file form 1040ez           6. E file form 1040ez Subtract line 5 from line 4. E file form 1040ez If zero or less, enter -0- 6. E file form 1040ez       7. E file form 1040ez Subtract line 6 from line 1. E file form 1040ez If zero or less, enter -0- 7. E file form 1040ez       8. E file form 1040ez Enter: $36,900 if single or married filing separately, $73,800 if married filing jointly or qualifying widow(er), $49,400 if head of household. E file form 1040ez 8. E file form 1040ez       9. E file form 1040ez Enter the smaller of line 1 or line 8 9. E file form 1040ez       10. E file form 1040ez Enter the smaller of line 7 or line 9 10. E file form 1040ez       11. E file form 1040ez Subtract line 10 from line 9. E file form 1040ez This amount is taxed at 0% 11. E file form 1040ez       12. E file form 1040ez Enter the smaller of line 1 or line 6 12. E file form 1040ez       13. E file form 1040ez Enter the amount from line 11 13. E file form 1040ez       14. E file form 1040ez Subtract line 13 from line 12 14. E file form 1040ez       15. E file form 1040ez Multiply line 14 by 15% (. E file form 1040ez 15) 15. E file form 1040ez   16. E file form 1040ez Figure the tax on the amount on line 7. E file form 1040ez If the amount on line 7 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. E file form 1040ez If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 16. E file form 1040ez   17. E file form 1040ez Add lines 15 and 16 17. E file form 1040ez   18. E file form 1040ez Figure the tax on the amount on line 1. E file form 1040ez If the amount on line 1 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. E file form 1040ez If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 18. E file form 1040ez   19. E file form 1040ez Tax on all taxable income. E file form 1040ez Enter the smaller of line 17 or line 18. E file form 1040ez Also enter this amount on line 12 of Schedule AI in the appropriate column. E file form 1040ez However, if you are using this worksheet to figure the tax on the amount on line 3 of Worksheet 4-2, enter the amount from line 19 on Worksheet 4-2, line 4 19. E file form 1040ez   Worksheet 4-2. E file form 1040ez 2013 Form 2210, Schedule AI—Line 12 Foreign Earned Income Tax Worksheet Before you begin:If Schedule AI, line 11, is zero for the period, do not complete this worksheet. E file form 1040ez             1. E file form 1040ez Enter the amount from line 11 of Schedule AI for the period 1. E file form 1040ez   2. E file form 1040ez Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from  Form 2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1  of Schedule AI 2. E file form 1040ez   3. E file form 1040ez Add lines 1 and 2 3. E file form 1040ez   4. E file form 1040ez Tax on the amount on line 3. E file form 1040ez Use the Tax Table, Tax Computation Worksheet, Form 8615**, Qualified Dividends and Capital Gain Tax Worksheet***, or Schedule D Tax Worksheet***, whichever applies. E file form 1040ez See the 2013 Instructions for Form 1040, line 44, to find out which tax computation method to use. E file form 1040ez (Note. E file form 1040ez You do not have to use the same method for each period on Schedule AI. E file form 1040ez ) 4. E file form 1040ez   5. E file form 1040ez Tax on the amount on line 2. E file form 1040ez If the amount on line 2 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. E file form 1040ez If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 5. E file form 1040ez   6. E file form 1040ez Subtract line 5 from line 4. E file form 1040ez Enter the result here and on line 12 of Schedule AI. E file form 1040ez If zero or less,  enter -0- 6. E file form 1040ez             * To figure the annualized amount for line 2, multiply the exclusion or deduction for the period by the annualization amount on line 2 of Schedule AI for the same period. E file form 1040ez     ** If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615. E file form 1040ez If the child's parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent's Foreign Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. E file form 1040ez Complete the rest of Form 8615 according to its instructions. E file form 1040ez Then complete lines 5 and 6 above. E file form 1040ez     *** Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on line 4 above. E file form 1040ez Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). E file form 1040ez Next, determine if you have a capital gain excess. E file form 1040ez     Figuring capital gain excess. E file form 1040ez To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). E file form 1040ez If the result is more than zero, that amount is your capital gain excess. E file form 1040ez     No capital gain excess. E file form 1040ez If you do not have a capital gain excess, complete the rest of Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet's instructions. E file form 1040ez Then complete lines 5 and 6 above. E file form 1040ez     Capital gain excess. E file form 1040ez If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. E file form 1040ez Then complete lines 5 and 6 above. E file form 1040ez     Make the modifications below only for purposes of filling out Worksheet 4-2 above. E file form 1040ez     a. E file form 1040ez Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 9 of your Schedule D Tax Worksheet by your capital gain excess. E file form 1040ez     b. E file form 1040ez Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, line 2 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (a) above. E file form 1040ez     c. E file form 1040ez Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess. E file form 1040ez     d. E file form 1040ez Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the 2013 Instructions for Schedule D (Form 1040). E file form 1040ez   Prev  Up  Next   Home   More Online Publications
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1099-K Reporting Requirements for Payment Settlement Entities

Beginning in January, 2012, payment settlement entities (PSEs) are required by the Housing Assistance Tax Act of 2008 to report on Form 1099-K the following transactions:

  • All payments made in settlement of payment card transactions (e.g., credit card);
  • Payments in settlement of third party network transactions IF:
    -Gross payments to a participating payee exceed $20,000; AND
    -There are more than 200 transactions with the participating payee.

Filing Deadlines & Procedures

Your 1099-Ks are due to merchants by January 31, 2014. Electronically filed 1099-Ks are due to the IRS April 1, 2014 (normally March 31), while paper 1099-Ks are due February 28, 2014.

File your 1099-K electronically through the FIRE (Filing Information Returns Electronically) option. For information, review Publication 1220 (PDF). If you are considering filing on paper, review General Instructions for Certain Information Returns.

Verification Processes

We verify that tax returns are correct and complete using the following processes:

More Information

You can find more about the 1099-K and other information returns at our Third Party Reporting Information Center.

You may also want to see Frequently Asked Question about Backup Withholding

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Page Last Reviewed or Updated: 20-Mar-2014

The E File Form 1040ez

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