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File A 2011 Tax Return

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File A 2011 Tax Return

File a 2011 tax return 5. File a 2011 tax return   Table and Worksheets for the Self-Employed Table of Contents Community property laws. File a 2011 tax return As discussed in chapters 2 and 4, if you are self-employed, you must use the rate table or rate worksheet and deduction worksheet to figure your deduction for contributions you made for yourself to a SEP-IRA or qualified plan. File a 2011 tax return First, use either the rate table or rate worksheet to find your reduced contribution rate. File a 2011 tax return Then complete the deduction worksheet to figure your deduction for contributions. File a 2011 tax return The table and the worksheets in chapter 5 apply only to self-employed individuals who have only one defined contribution plan, such as a profit-sharing plan. File a 2011 tax return A SEP plan is treated as a profit-sharing plan. File a 2011 tax return However, do not use this worksheet for SARSEPs. File a 2011 tax return Rate table for self-employed. File a 2011 tax return   If your plan's contribution rate is a whole percentage (for example, 12% rather than 12½%), you can use the table on the next page to find your reduced contribution rate. File a 2011 tax return Otherwise, use the rate worksheet provided below. File a 2011 tax return   First, find your plan contribution rate (the contribution rate stated in your plan) in Column A of the table. File a 2011 tax return Then read across to the rate under Column B. File a 2011 tax return Enter the rate from Column B in step 4 of the Deduction Worksheet for Self-Employed on this page. File a 2011 tax return    Example. File a 2011 tax return You are a sole proprietor with no employees. File a 2011 tax return If your plan's contribution rate is 10% of a participant's compensation, your rate is 0. File a 2011 tax return 090909. File a 2011 tax return Enter this rate in step 4 of the Deduction Worksheet for Self-Employed on this page. File a 2011 tax return Deduction Worksheet for Self-Employed   Step 1           Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 34, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. File a 2011 tax return For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. File a 2011 tax return       *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. File a 2011 tax return       **General partners should reduce this amount by the same additional expenses subtracted from box 14, code A to determine the amount on line 1 or 2 of Schedule SE. File a 2011 tax return     Step 2           Enter your deduction for self-employment tax from Form 1040, line 27             Step 3           Net earnings from self-employment. File a 2011 tax return Subtract step 2 from step 1     Step 4           Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed     Step 5           Multiply step 3 by step 4     Step 6           Multiply $255,000 by your plan contribution rate (not the reduced rate)     Step 7           Enter the smaller of step 5 or step 6     Step 8           Contribution dollar limit $51,000     • If you made any elective deferrals to your self-employed plan, go to step 9. File a 2011 tax return         • Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. File a 2011 tax return       Step 9           Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2013. File a 2011 tax return Do not enter more than $17,500     Step 10           Subtract step 9 from step 8     Step 11           Subtract step 9 from step 3       Step 12           Enter one-half of step 11     Step 13           Enter the smallest of step 7, 10, or 12     Step 14           Subtract step 13 from step 3     Step 15           Enter the smaller of step 9 or step 14       • If you made catch-up contributions, go to step 16. File a 2011 tax return         • Otherwise, skip steps 16 through 18 and go to step 19. File a 2011 tax return       Step 16           Subtract step 15 from step 14     Step 17           Enter your catch-up contributions (including designated Roth contributions), if any. File a 2011 tax return Do not enter more than $5,500     Step 18           Enter the smaller of step 16 or step 17     Step 19           Add steps 13, 15, and 18. File a 2011 tax return     Step 20           Enter the amount of designated Roth contributions included on lines 9 and 17. File a 2011 tax return     Step 21           Subtract step 20 from step 19. File a 2011 tax return This is your maximum deductible contribution. File a 2011 tax return                 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28. File a 2011 tax return   Rate worksheet for self-employed. File a 2011 tax return   If your plan's contribution rate is not a whole percentage (for example, 10½%), you cannot use the Rate Table for Self-Employed. File a 2011 tax return Use the following worksheet instead. File a 2011 tax return Rate Worksheet for Self-Employed 1) Plan contribution rate as a decimal (for example, 10½% = 0. File a 2011 tax return 105)   2) Rate in line 1 plus 1 (for example, 0. File a 2011 tax return 105 + 1 = 1. File a 2011 tax return 105)   3) Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0. File a 2011 tax return 105 ÷ 1. File a 2011 tax return 105 = 0. File a 2011 tax return 095)   Figuring your deduction. File a 2011 tax return   Now that you have your self-employed rate from either the rate table or rate worksheet, you can figure your maximum deduction for contributions for yourself by completing the Deduction Worksheet for Self-Employed. File a 2011 tax return Community property laws. File a 2011 tax return   If you reside in a community property state and you are married and filing a separate return, disregard community property laws for step 1 of the Deduction Worksheet for Self-Employed. File a 2011 tax return Enter on step 1 the total net profit you actually earned. File a 2011 tax return Rate Table for Self-Employed Column A  If the plan contri- bution rate is: (shown as %) Column B  Your rate is: (shown as decimal) 1 . File a 2011 tax return 009901 2 . File a 2011 tax return 019608 3 . File a 2011 tax return 029126 4 . File a 2011 tax return 038462 5 . File a 2011 tax return 047619 6 . File a 2011 tax return 056604 7 . File a 2011 tax return 065421 8 . File a 2011 tax return 074074 9 . File a 2011 tax return 082569 10 . File a 2011 tax return 090909 11 . File a 2011 tax return 099099 12 . File a 2011 tax return 107143 13 . File a 2011 tax return 115044 14 . File a 2011 tax return 122807 15 . File a 2011 tax return 130435 16 . File a 2011 tax return 137931 17 . File a 2011 tax return 145299 18 . File a 2011 tax return 152542 19 . File a 2011 tax return 159664 20 . File a 2011 tax return 166667 21 . File a 2011 tax return 173554 22 . File a 2011 tax return 180328 23 . File a 2011 tax return 186992 24 . File a 2011 tax return 193548 25* . File a 2011 tax return 200000* *The deduction for annual employer contributions (other than elective deferrals) to a SEP plan, a profit-sharing plan, or a money purchase plan cannot be more than 20% of your net earnings (figured without deducting contributions for yourself) from the business that has the plan. File a 2011 tax return Example. File a 2011 tax return You are a sole proprietor with no employees. File a 2011 tax return The terms of your plan provide that you contribute 8½% (. File a 2011 tax return 085) of your compensation to your plan. File a 2011 tax return Your net profit from line 31, Schedule C (Form 1040) is $200,000. File a 2011 tax return You have no elective deferrals or catch-up contributions. File a 2011 tax return Your self-employment tax deduction on line 27 of Form 1040 is $9,728. File a 2011 tax return See the filled-in portions of both Schedule SE (Form 1040), Self-Employment Income, and Form 1040, later. File a 2011 tax return You figure your self-employed rate and maximum deduction for employer contributions you made for yourself as follows. File a 2011 tax return Deduction Worksheet for Self-Employed   Step 1           Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 34, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. File a 2011 tax return For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. File a 2011 tax return $200,000     *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. File a 2011 tax return       **General partners should reduce this amount by the same additional expenses subtracted from box 14, code A to determine the amount on line 1 or 2 of Schedule SE. File a 2011 tax return     Step 2           Enter your deduction for self-employment tax from Form 1040, line 27 9,728           Step 3           Net earnings from self-employment. File a 2011 tax return Subtract step 2 from step 1 190,272   Step 4           Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed 0. File a 2011 tax return 078   Step 5           Multiply step 3 by step 4 14,841   Step 6           Multiply $255,000 by your plan contribution rate (not the reduced rate) 21,675   Step 7           Enter the smaller of step 5 or step 6 14,841   Step 8           Contribution dollar limit $51,000     • If you made any elective deferrals to your self-employed plan, go to step 9. File a 2011 tax return         • Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. File a 2011 tax return       Step 9           Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2013. File a 2011 tax return Do not enter more than $17,500 N/A   Step 10           Subtract step 9 from step 8     Step 11           Subtract step 9 from step 3       Step 12           Enter one-half of step 11     Step 13           Enter the smallest of step 7, 10, or 12     Step 14           Subtract step 13 from step 3     Step 15           Enter the smaller of step 9 or step 14       • If you made catch-up contributions, go to step 16. File a 2011 tax return         • Otherwise, skip steps 16 through 18 and go to step 19. File a 2011 tax return       Step 16           Subtract step 15 from step 14     Step 17           Enter your catch-up contributions (including designated Roth contributions), if any. File a 2011 tax return Do not enter more than $5,500     Step 18           Enter the smaller of step 16 or step 17     Step 19           Add steps 13, 15, and 18. File a 2011 tax return     Step 20           Enter the amount of designated Roth contributions included on lines 9 and 17     Step 21           Subtract step 20 from step 19. File a 2011 tax return This is your maximum deductible contribution $14,841                 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28. File a 2011 tax return   See the filled-in Deduction Worksheet for Self-Employed on this page. File a 2011 tax return Rate Worksheet for Self-Employed 1) Plan contribution rate as a decimal (for example, 10½% = 0. File a 2011 tax return 105) 0. File a 2011 tax return 085 2) Rate in line 1 plus 1 (for example, 0. File a 2011 tax return 105 + 1 = 1. File a 2011 tax return 105) 1. File a 2011 tax return 085 3) Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0. File a 2011 tax return 105 ÷ 1. File a 2011 tax return 105 = 0. File a 2011 tax return 095) 0. File a 2011 tax return 078 This image is too large to be displayed in the current screen. File a 2011 tax return Please click the link to view the image. File a 2011 tax return Portion of Form 1040 and Portion of Schedule SE Prev  Up  Next   Home   More Online Publications
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Buying a New Car

Whether you are buying or leasing a vehicle, these tips will help you get the best deal and avoid problems.

  • Check out different vehicles. Do your research first and compare vehicles. You can go to the website of every car manufacturer and review every model of car available. In fact, most manufacturer sites will even let you use drop down menus to “build” an electronic version of your dream car. Then, when you decide which model, colors, and accessories you want, you can hit the locate dealer button and find the closest showroom that has your car.
  • Research the dealer’s price for the car and options. It’s easier to get the best price when you know what the dealer paid for a vehicle. The dealer invoice price is available at a number of websites and in printed pricing guides. Consumer Reports provides the wholesale price; this figure factors in dealer incentives from a manufacturer and is a more accurate estimate of what a dealer is paying for a vehicle.
  • Special Discounts. Determine if you qualify for special discounts or rebates for military personnel, students or other qualifying groups.
  • Negotiate. Negotiate up from the invoice price instead of down from the inflated price to get a good deal.
  • Find out if the manufacturer is offering rebates that will lower the cost. Two websites that offer this information are Carsdirect.com and Autopedia.com.
  • Get price quotes from several dealers. Find out if the amounts quoted are the prices before or after rebates are deducted.
  • Avoid low-value extras such as credit insurance, auto club memberships, extended warranties, rust proofing and upholstery finishes. You do not have to purchase credit insurance in order to get a loan.
  • Hybrid-electric cars are becoming popular among consumers interested in fuel economy and reducing their negative impact on the environment. These cars combine the benefits of gasoline engines and electric motors and can be configured to achieve different objectives such as improved fuel economy, increased power, or additional auxiliary power.

The File A 2011 Tax Return

File a 2011 tax return 3. File a 2011 tax return   Savings Incentive Match Plans for Employees (SIMPLE) Table of Contents Introduction What Is a SIMPLE Plan?Eligible Employees How Are Contributions Made? How Much Can Be Contributed on Your Behalf?Matching contributions less than 3%. File a 2011 tax return Traditional IRA mistakenly moved to SIMPLE IRA. File a 2011 tax return When Can You Withdraw or Use Assets?Are Distributions Taxable? Introduction This chapter is for employees who need information about savings incentive match plans for employees (SIMPLE plans). File a 2011 tax return It explains what a SIMPLE plan is, contributions to a SIMPLE plan, and distributions from a SIMPLE plan. File a 2011 tax return Under a SIMPLE plan, SIMPLE retirement accounts for participating employees can be set up either as: Part of a 401(k) plan, or A plan using IRAs (SIMPLE IRA). File a 2011 tax return This chapter only discusses the SIMPLE plan rules that relate to SIMPLE IRAs. File a 2011 tax return See chapter 3 of Publication 560 for information on any special rules for SIMPLE plans that do not use IRAs. File a 2011 tax return If your employer maintains a SIMPLE plan, you must be notified, in writing, that you can choose the financial institution that will serve as trustee for your SIMPLE IRA and that you can roll over or transfer your SIMPLE IRA to another financial institution. File a 2011 tax return See Rollovers and Transfers Exception, later under When Can You Withdraw or Use Assets. File a 2011 tax return What Is a SIMPLE Plan? A SIMPLE plan is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. File a 2011 tax return See chapter 3 of Publication 560 for information on the requirements employers must satisfy to set up a SIMPLE plan. File a 2011 tax return A SIMPLE plan is a written agreement (salary reduction agreement) between you and your employer that allows you, if you are an eligible employee (including a self-employed individual), to choose to: Reduce your compensation (salary) by a certain percentage each pay period, and Have your employer contribute the salary reductions to a SIMPLE IRA on your behalf. File a 2011 tax return These contributions are called salary reduction contributions. File a 2011 tax return All contributions under a SIMPLE IRA plan must be made to SIMPLE IRAs, not to any other type of IRA. File a 2011 tax return The SIMPLE IRA can be an individual retirement account or an individual retirement annuity, described in chapter 1. File a 2011 tax return Contributions are made on behalf of eligible employees. File a 2011 tax return (See Eligible Employees below. File a 2011 tax return ) Contributions are also subject to various limits. File a 2011 tax return (See How Much Can Be Contributed on Your Behalf , later. File a 2011 tax return ) In addition to salary reduction contributions, your employer must make either matching contributions or nonelective contributions. File a 2011 tax return See How Are Contributions Made , later. File a 2011 tax return You may be able to claim a credit for contributions to your SIMPLE plan. File a 2011 tax return For more information, see chapter 4. File a 2011 tax return Eligible Employees You must be allowed to participate in your employer's SIMPLE plan if you: Received at least $5,000 in compensation from your employer during any 2 years prior to the current year, and Are reasonably expected to receive at least $5,000 in compensation during the calendar year for which contributions are made. File a 2011 tax return Self-employed individual. File a 2011 tax return   For SIMPLE plan purposes, the term employee includes a self-employed individual who received earned income. File a 2011 tax return Excludable employees. File a 2011 tax return   Your employer can exclude the following employees from participating in the SIMPLE plan. File a 2011 tax return Employees whose retirement benefits are covered by a collective bargaining agreement (union contract). File a 2011 tax return Employees who are nonresident aliens and received no earned income from sources within the United States. File a 2011 tax return Employees who would not have been eligible employees if an acquisition, disposition, or similar transaction had not occurred during the year. File a 2011 tax return Compensation. File a 2011 tax return   For purposes of the SIMPLE plan rules, your compensation for a year generally includes the following amounts. File a 2011 tax return Wages, tips, and other pay from your employer that is subject to income tax withholding. File a 2011 tax return Deferred amounts elected under any 401(k) plans, 403(b) plans, government (section 457) plans, SEP plans, and SIMPLE plans. File a 2011 tax return Self-employed individual compensation. File a 2011 tax return   For purposes of the SIMPLE plan rules, if you are self-employed, your compensation for a year is your net earnings from self-employment (Schedule SE (Form 1040), Section A, line 4, or Section B, line 6) before subtracting any contributions made to a SIMPLE IRA on your behalf. File a 2011 tax return   For these purposes, net earnings from self-employment include services performed while claiming exemption from self-employment tax as a member of a group conscientiously opposed to social security benefits. File a 2011 tax return How Are Contributions Made? Contributions under a salary reduction agreement are called salary reduction contributions. File a 2011 tax return They are made on your behalf by your employer. File a 2011 tax return Your employer must also make either matching contributions or nonelective contributions. File a 2011 tax return Salary reduction contributions. File a 2011 tax return   During the 60-day period before the beginning of any year, and during the 60-day period before you are eligible, you can choose salary reduction contributions expressed either as a percentage of compensation, or as a specific dollar amount (if your employer offers this choice). File a 2011 tax return You can choose to cancel the election at any time during the year. File a 2011 tax return   Salary reduction contributions are also referred to as “elective deferrals. File a 2011 tax return ”   Your employer cannot place restrictions on the contributions amount (such as by limiting the contributions percentage), except to comply with the salary reduction contributions limit, discussed under How Much Can Be Contributed on Your Behalf, later. File a 2011 tax return Matching contributions. File a 2011 tax return   Unless your employer chooses to make nonelective contributions, your employer must make contributions equal to the salary reduction contributions you choose (elect), but only up to certain limits. File a 2011 tax return See How Much Can Be Contributed on Your Behalf below. File a 2011 tax return These contributions are in addition to the salary reduction contributions and must be made to the SIMPLE IRAs of all eligible employees (defined earlier) who chose salary reductions. File a 2011 tax return These contributions are referred to as matching contributions. File a 2011 tax return   Matching contributions on behalf of a self-employed individual are not treated as salary reduction contributions. File a 2011 tax return Nonelective contributions. File a 2011 tax return   Instead of making matching contributions, your employer may be able to choose to make nonelective contributions on behalf of all eligible employees. File a 2011 tax return These nonelective contributions must be made on behalf of each eligible employee who has at least $5,000 of compensation from your employer, whether or not the employee chose salary reductions. File a 2011 tax return   One of the requirements your employer must satisfy is notifying the employees that the election was made. File a 2011 tax return For other requirements that your employer must satisfy, see chapter 3 of Publication 560. File a 2011 tax return How Much Can Be Contributed on Your Behalf? The limits on contributions to a SIMPLE IRA vary with the type of contribution that is made. File a 2011 tax return Salary reduction contributions limit. File a 2011 tax return   Salary reduction contributions (employee-chosen contributions or elective deferrals) that your employer can make on your behalf under a SIMPLE plan are limited to $12,000 for 2013. File a 2011 tax return The limitation remains at $12,000 for 2014. File a 2011 tax return If you are a participant in any other employer plans during 2013 and you have elective salary reductions or deferred compensation under those plans, the salary reduction contributions under the SIMPLE plan also are included in the annual limit of $17,500 for 2013 on exclusions of salary reductions and other elective deferrals. File a 2011 tax return You, not your employer, are responsible for monitoring compliance with these limits. File a 2011 tax return Additional elective deferrals can be contributed to your SIMPLE plan if: You reached age 50 by the end of 2013, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions, such as the regular annual limit. File a 2011 tax return The most that can be contributed in additional elective deferrals to your SIMPLE plan is the lesser of the following two amounts. File a 2011 tax return $2,500 for 2013, or Your compensation for the year reduced by your other elective deferrals for the year. File a 2011 tax return The additional deferrals are not subject to any other contribution limit and are not taken into account in applying other contribution limits. File a 2011 tax return The additional deferrals are not subject to the nondiscrimination rules as long as all eligible participants are allowed to make them. File a 2011 tax return Matching employer contributions limit. File a 2011 tax return   Generally, your employer must make matching contributions to your SIMPLE IRA in an amount equal to your salary reduction contributions. File a 2011 tax return These matching contributions cannot be more than 3% of your compensation for the calendar year. File a 2011 tax return See Matching contributions less than 3% below. File a 2011 tax return Example 1. File a 2011 tax return In 2013, Joshua was a participant in his employer's SIMPLE plan. File a 2011 tax return His compensation, before SIMPLE plan contributions, was $41,600 ($800 per week). File a 2011 tax return Instead of taking it all in cash, Joshua elected to have 12. File a 2011 tax return 5% of his weekly pay ($100) contributed to his SIMPLE IRA. File a 2011 tax return For the full year, Joshua's salary reduction contributions were $5,200, which is less than the $12,000 limit on these contributions. File a 2011 tax return Under the plan, Joshua's employer was required to make matching contributions to Joshua's SIMPLE IRA. File a 2011 tax return Because his employer's matching contributions must equal Joshua's salary reductions, but cannot be more than 3% of his compensation (before salary reductions) for the year, his employer's matching contribution was limited to $1,248 (3% of $41,600). File a 2011 tax return Example 2. File a 2011 tax return Assume the same facts as in Example 1 , except that Joshua's compensation for the year was $408,163 and he chose to have 2. File a 2011 tax return 94% of his weekly pay contributed to his SIMPLE IRA. File a 2011 tax return In this example, Joshua's salary reduction contributions for the year (2. File a 2011 tax return 94% × $408,163) were equal to the 2013 limit for salary reduction contributions ($12,000). File a 2011 tax return Because 3% of Joshua's compensation ($12,245) is more than the amount his employer was required to match ($12,000), his employer's matching contributions were limited to $12,000. File a 2011 tax return In this example, total contributions made on Joshua's behalf for the year were $24,000 ($12,000 (Joshua's contributions) + $12,000 (matching contributions)), the maximum contributions permitted under a SIMPLE IRA for 2013. File a 2011 tax return Matching contributions less than 3%. File a 2011 tax return   Your employer can reduce the 3% limit on matching contributions for a calendar year, but only if: The limit is not reduced below 1%, The limit is not reduced for more than 2 years out of the 5-year period that ends with (and includes) the year for which the election is effective, and Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which they can enter into salary reduction agreements. File a 2011 tax return   For purposes of applying the rule in item (2) in determining whether the limit was reduced below 3% for the year, any year before the first year in which your employer (or a former employer) maintains a SIMPLE IRA plan will be treated as a year for which the limit was 3%. File a 2011 tax return If your employer chooses to make nonelective contributions for a year, that year also will be treated as a year for which the limit was 3%. File a 2011 tax return Nonelective employer contributions limit. File a 2011 tax return   If your employer chooses to make nonelective contributions, instead of matching contributions, to each eligible employee's SIMPLE IRA, contributions must be 2% of your compensation for the entire year. File a 2011 tax return For 2013, only $255,000 of your compensation can be taken into account to figure the contribution limit. File a 2011 tax return   Your employer can substitute the 2% nonelective contribution for the matching contribution for a year if both of the following requirements are met. File a 2011 tax return Eligible employees are notified that a 2% nonelective contribution will be made instead of a matching contribution. File a 2011 tax return This notice is provided within a reasonable period during which employees can enter into salary reduction agreements. File a 2011 tax return Example 3. File a 2011 tax return Assume the same facts as in Example 2 , except that Joshua's employer chose to make nonelective contributions instead of matching contributions. File a 2011 tax return Because his employer's nonelective contributions are limited to 2% of up to $255,000 of Joshua's compensation, his employer's contribution to Joshua's SIMPLE IRA was limited to $5,100. File a 2011 tax return In this example, total contributions made on Joshua's behalf for the year were $17,100 (Joshua's salary reductions of $12,000 plus his employer's contribution of $5,100). File a 2011 tax return Traditional IRA mistakenly moved to SIMPLE IRA. File a 2011 tax return   If you mistakenly roll over or transfer an amount from a traditional IRA to a SIMPLE IRA, you can later recharacterize the amount as a contribution to another traditional IRA. File a 2011 tax return For more information, see Recharacterizations in chapter 1. File a 2011 tax return Recharacterizing employer contributions. File a 2011 tax return   You cannot recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. File a 2011 tax return SEPs are discussed in chapter 2 of Publication 560. File a 2011 tax return SIMPLE plans are discussed in this chapter. File a 2011 tax return Converting from a SIMPLE IRA. File a 2011 tax return   Generally, you can convert an amount in your SIMPLE IRA to a Roth IRA under the same rules explained in chapter 1 under Converting From Any Traditional IRA Into a Roth IRA . File a 2011 tax return    However, you cannot convert any amount distributed from the SIMPLE IRA during the 2-year period beginning on the date you first participated in any SIMPLE IRA plan maintained by your employer. File a 2011 tax return When Can You Withdraw or Use Assets? Generally, the same distribution (withdrawal) rules that apply to traditional IRAs apply to SIMPLE IRAs. File a 2011 tax return These rules are discussed in chapter 1. File a 2011 tax return Your employer cannot restrict you from taking distributions from a SIMPLE IRA. File a 2011 tax return Are Distributions Taxable? Generally, distributions from a SIMPLE IRA are fully taxable as ordinary income. File a 2011 tax return If the distribution is an early distribution (discussed in chapter 1), it may be subject to the additional tax on early distributions. File a 2011 tax return See Additional Tax on Early Distributions, later. File a 2011 tax return Rollovers and Transfers Exception Generally, rollovers and trustee-to-trustee transfers are not taxable distributions. File a 2011 tax return Two-year rule. File a 2011 tax return   To qualify as a tax-free rollover (or a tax-free trustee-to-trustee transfer), a rollover distribution (or a transfer) made from a SIMPLE IRA during the 2-year period beginning on the date on which you first participated in your employer's SIMPLE plan must be contributed (or transferred) to another SIMPLE IRA. File a 2011 tax return The 2-year period begins on the first day on which contributions made by your employer are deposited in your SIMPLE IRA. File a 2011 tax return   After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan), or deferred compensation plan of a state or local government (section 457 plan). File a 2011 tax return Additional Tax on Early Distributions The additional tax on early distributions (discussed in chapter 1) applies to SIMPLE IRAs. File a 2011 tax return If a distribution is an early distribution and occurs during the 2-year period following the date on which you first participated in your employer's SIMPLE plan, the additional tax on early distributions is increased from 10% to 25%. File a 2011 tax return If a rollover distribution (or transfer) from a SIMPLE IRA does not satisfy the 2-year rule, and is otherwise an early distribution, the additional tax imposed because of the early distribution is increased from 10% to 25% of the amount distributed. File a 2011 tax return Prev  Up  Next   Home   More Online Publications