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

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

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

3. E-File for FREE

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

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

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

Free Tax Filing 2012

1040x Amendment FormWhere To File Federal Tax Return 2011Free State Tax Return OnlyFiling 1040 EzTurbotax Free State Return1040x Tax FormFederal Tax Form 1040Amend Tax Return OnlineTax Forms 2012 FederalWhere Can I Get A 1040x Tax FormTax Preparation SoftwareDo Students Need To File A Tax ReturnFree EfileHow To File An AmendmentAmend Return2010 1040Best Tax Preparation Software2010 1040 Tax FormFree Tax Filing Online StateWww Irs GovFree Online 1040ez FilingFiling Tax Return 2012How To Amend 2010 Taxes1040nr Ez Software1040nr2011 1040aWhere To Mail 1040xEz 1040Free State Tax Forms IncomeForm 1040 Ez2011 1040Income Tax For UnemployedIrs Tax Form 10401040ez 2013 Tax FormTurbo Tax AmmendFile An Amended Tax ReturnState Income Taxes 2012Amended Federal Income Tax ReturnIrs Forms 1040ez 2011Irs Tax Forms 2012 1040a

Free Tax Filing 2012

Free tax filing 2012 Publication 590 - Introductory Material Table of Contents What's New for 2013 What's New for 2014 Reminders IntroductionOrdering forms and publications. Free tax filing 2012 Tax questions. Free tax filing 2012 Useful Items - You may want to see: Note. Free tax filing 2012 After 2013, Publication 590 will be split into two separate publications as follows. Free tax filing 2012 Publication 590-A, will focus on contributions to traditional IRAs as well as Roth IRAs. Free tax filing 2012 This publication will include the rules for rollover and conversion contributions. Free tax filing 2012 Publication 590-B, will focus on distributions from traditional IRAs as well as Roth IRAs. Free tax filing 2012 This publication will include the rules for required minimum distributions and IRA beneficiaries. Free tax filing 2012 What's New for 2013 Traditional IRA contribution and deduction limit. Free tax filing 2012  The contribution limit to your traditional IRA for 2013 will be increased to the smaller of the following amounts: $5,500, or Your taxable compensation for the year. Free tax filing 2012 If you were age 50 or older before 2014, the most that can be contributed to your traditional IRA for 2013 will be the smaller of the following amounts: $6,500, or Your taxable compensation for the year. Free tax filing 2012 For more information, see How Much Can Be Contributed? in chapter 1. Free tax filing 2012 Roth IRA contribution limit. Free tax filing 2012  If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $5,500, or Your taxable compensation for the year. Free tax filing 2012 If you were age 50 or older before 2014 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $6,500, or Your taxable compensation for the year. Free tax filing 2012 However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. Free tax filing 2012 For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in chapter 2. Free tax filing 2012 Modified AGI limit for traditional IRA contributions increased. Free tax filing 2012  For 2013, if you were covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $95,000 but less than $115,000 for a married couple filing a joint return or a qualifying widow(er), More than $59,000 but less than $69,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Free tax filing 2012 If you either lived with your spouse or file a joint return, and your spouse was covered by a retirement plan at work, but you were not, your deduction is phased out if your modified AGI is more than $178,000 but less than $188,000. Free tax filing 2012 If your modified AGI is $188,000 or more, you cannot take a deduction for contributions to a traditional IRA. Free tax filing 2012 See How Much Can You Deduct? in chapter 1. Free tax filing 2012 Modified AGI limit for Roth IRA contributions increased. Free tax filing 2012  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. Free tax filing 2012 Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. Free tax filing 2012 You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. Free tax filing 2012 Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2013 and your modified AGI is at least $112,000. Free tax filing 2012 You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. Free tax filing 2012 Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. Free tax filing 2012 You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Free tax filing 2012 See Can You Contribute to a Roth IRA? in chapter 2. Free tax filing 2012 Net Investment Income Tax. Free tax filing 2012  For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 457(b) plans, and IRAs). Free tax filing 2012 However, these distributions are taken into account when determining the modified adjusted gross income threshold. Free tax filing 2012 Distributions from a nonqualified retirement plan are included in net investment income. Free tax filing 2012 See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. Free tax filing 2012 Kay Bailey Hutchison Spousal IRA. Free tax filing 2012 . Free tax filing 2012  In 2013, spousal IRAs were renamed to Kay Bailey Hutchison Spousal IRAs. Free tax filing 2012 There are no changes to the rules regarding these IRAs. Free tax filing 2012 See Kay Bailey Hutchison Spousal IRA Limit in chapter 1 for more information. Free tax filing 2012 What's New for 2014 Modified AGI limit for traditional IRA contributions increased. Free tax filing 2012  For 2014, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is: More than $96,000 but less than $116,000 for a married couple filing a joint return or a qualifying widow(er), More than $60,000 but less than $70,000 for a single individual or head of household, or Less than $10,000 for a married individual filing a separate return. Free tax filing 2012 If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $181,000 but less than $191,000. Free tax filing 2012 If your modified AGI is $191,000 or more, you cannot take a deduction for contributions to a traditional IRA. Free tax filing 2012 Modified AGI limit for Roth IRA contributions increased. Free tax filing 2012  For 2014, your Roth IRA contribution limit is reduced (phased out) in the following situations. Free tax filing 2012 Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $181,000. Free tax filing 2012 You cannot make a Roth IRA contribution if your modified AGI is $191,000 or more. Free tax filing 2012 Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2014 and your modified AGI is at least $114,000. Free tax filing 2012 You cannot make a Roth IRA contribution if your modified AGI is $129,000 or more. Free tax filing 2012 Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. Free tax filing 2012 You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. Free tax filing 2012 Reminders Future developments. Free tax filing 2012  For the latest information about developments related to Publication 590, such as legislation enacted after it was published, go to www. Free tax filing 2012 irs. Free tax filing 2012 gov/pub590. Free tax filing 2012 Simplified employee pension (SEP). Free tax filing 2012  SEP IRAs are not covered in this publication. Free tax filing 2012 They are covered in Publication 560, Retirement Plans for Small Business. Free tax filing 2012 Deemed IRAs. Free tax filing 2012  A qualified employer plan (retirement plan) can maintain a separate account or annuity under the plan (a deemed IRA) to receive voluntary employee contributions. Free tax filing 2012 If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. Free tax filing 2012 An employee's account can be treated as a traditional IRA or a Roth IRA. Free tax filing 2012 For this purpose, a “qualified employer plan” includes: A qualified pension, profit-sharing, or stock bonus plan (section 401(a) plan), A qualified employee annuity plan (section 403(a) plan), A tax-sheltered annuity plan (section 403(b) plan), and A deferred compensation plan (section 457 plan) maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state. Free tax filing 2012 Contributions to both traditional and Roth IRAs. Free tax filing 2012  For information on your combined contribution limit if you contribute to both traditional and Roth IRAs, see Roth IRAs and traditional IRAs under How Much Can Be Contributed? in chapter 2. Free tax filing 2012 Statement of required minimum distribution (RMD). Free tax filing 2012  If an RMD is required from your IRA, the trustee, custodian, or issuer that held the IRA at the end of the preceding year must either report the amount of the RMD to you, or offer to calculate it for you. Free tax filing 2012 The report or offer must include the date by which the amount must be distributed. Free tax filing 2012 The report is due January 31 of the year in which the minimum distribution is required. Free tax filing 2012 It can be provided with the year-end fair market value statement that you normally get each year. Free tax filing 2012 No report is required for section 403(b) contracts (generally tax-sheltered annuities) or for IRAs of owners who have died. Free tax filing 2012 IRA interest. Free tax filing 2012  Although interest earned from your IRA is generally not taxed in the year earned, it is not tax-exempt interest. Free tax filing 2012 Tax on your traditional IRA is generally deferred until you take a distribution. Free tax filing 2012 Do not report this interest on your return as tax-exempt interest. Free tax filing 2012 For more information on tax-exempt interest, see the instructions for your tax return. Free tax filing 2012 Photographs of missing children. Free tax filing 2012  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free tax filing 2012 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free tax filing 2012 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Free tax filing 2012 Introduction This publication discusses individual retirement arrangements (IRAs). Free tax filing 2012 An IRA is a personal savings plan that gives you tax advantages for setting aside money for retirement. Free tax filing 2012 What are some tax advantages of an IRA?   Two tax advantages of an IRA are that: Contributions you make to an IRA may be fully or partially deductible, depending on which type of IRA you have and on your circumstances, and Generally, amounts in your IRA (including earnings and gains) are not taxed until distributed. Free tax filing 2012 In some cases, amounts are not taxed at all if distributed according to the rules. Free tax filing 2012 What's in this publication?   This publication discusses traditional, Roth, and SIMPLE IRAs. Free tax filing 2012 It explains the rules for: Setting up an IRA, Contributing to an IRA, Transferring money or property to and from an IRA, Handling an inherited IRA, Receiving distributions (making withdrawals) from an IRA, and Taking a credit for contributions to an IRA. Free tax filing 2012   It also explains the penalties and additional taxes that apply when the rules are not followed. Free tax filing 2012 To assist you in complying with the tax rules for IRAs, this publication contains worksheets, sample forms, and tables, which can be found throughout the publication and in the appendices at the back of the publication. Free tax filing 2012 How to use this publication. Free tax filing 2012   The rules that you must follow depend on which type of IRA you have. Free tax filing 2012 Use Table I-1 to help you determine which parts of this publication to read. Free tax filing 2012 Also use Table I-1 if you were referred to this publication from instructions to a form. Free tax filing 2012 Comments and suggestions. Free tax filing 2012   We welcome your comments about this publication and your suggestions for future editions. Free tax filing 2012   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Free tax filing 2012 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Free tax filing 2012 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free tax filing 2012   You can send your comments from www. Free tax filing 2012 irs. Free tax filing 2012 gov/formspubs/. Free tax filing 2012 Click on “More Information” and then on “Comment on Tax Forms and Publications”. Free tax filing 2012   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Free tax filing 2012 Ordering forms and publications. Free tax filing 2012   Visit www. Free tax filing 2012 irs. Free tax filing 2012 gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Free tax filing 2012 Internal Revenue Service 1201 N. Free tax filing 2012 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Free tax filing 2012   If you have a tax question, check the information available on IRS. Free tax filing 2012 gov or call 1-800-829-1040. Free tax filing 2012 We cannot answer tax questions sent to either of the above addresses. Free tax filing 2012 Useful Items - You may want to see: Publications 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) 571 Tax-Sheltered Annuity Plans (403(b) Plans) 575 Pension and Annuity Income 939 General Rule for Pensions and Annuities Forms (and instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Free tax filing 2012 5304-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–Not for Use With a Designated Financial Institution 5305-S SIMPLE Individual Retirement Trust Account 5305-SA SIMPLE Individual Retirement Custodial Account 5305-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–for Use With a Designated Financial Institution 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 5498 IRA Contribution Information 8606 Nondeductible IRAs 8815 Exclusion of Interest From Series EE and I U. Free tax filing 2012 S. Free tax filing 2012 Savings Bonds Issued After 1989 8839 Qualified Adoption Expenses 8880 Credit for Qualified Retirement Savings Contributions See chapter 5 for information about getting these publications and forms. Free tax filing 2012 Table I-1. Free tax filing 2012 Using This Publication IF you need information on . Free tax filing 2012 . Free tax filing 2012 . Free tax filing 2012 THEN see . Free tax filing 2012 . Free tax filing 2012 . Free tax filing 2012 traditional IRAs chapter 1. Free tax filing 2012 Roth IRAs chapter 2, and parts of  chapter 1. Free tax filing 2012 SIMPLE IRAs chapter 3. Free tax filing 2012 the credit for qualified retirement savings contributions (the saver's credit) chapter 4. Free tax filing 2012 how to keep a record of your contributions to, and distributions from, your traditional IRA(s) appendix A. Free tax filing 2012 SEP IRAs and 401(k) plans Publication 560. Free tax filing 2012 Coverdell education savings accounts (formerly called education IRAs) Publication 970. Free tax filing 2012 IF for 2013, you received social security benefits, had taxable compensation, contributed to a traditional IRA, and you or your spouse was covered by an employer retirement plan, and you want to. Free tax filing 2012 . Free tax filing 2012 . Free tax filing 2012 THEN see . Free tax filing 2012 . Free tax filing 2012 . Free tax filing 2012 first figure your modified adjusted gross income (AGI) appendix B, worksheet 1. Free tax filing 2012 then figure how much of your traditional IRA contribution you can deduct appendix B, worksheet 2. Free tax filing 2012 and finally figure how much of your social security is taxable appendix B, worksheet 3. Free tax filing 2012 Table I-2. Free tax filing 2012 How Are a Traditional IRA and a Roth IRA Different? This table shows the differences between traditional and Roth IRAs. Free tax filing 2012 Answers in the middle column apply to traditional IRAs. Free tax filing 2012 Answers in the right column apply to Roth IRAs. Free tax filing 2012 Question Answer   Traditional IRA? Roth IRA? Is there an age limit on when I can open and contribute to a Yes. Free tax filing 2012 You must not have reached age  70½ by the end of the year. Free tax filing 2012 See Who Can Open a Traditional IRA? in chapter 1. Free tax filing 2012 No. Free tax filing 2012 You can be any age. Free tax filing 2012 See Can You Contribute to a Roth IRA? in chapter 2. Free tax filing 2012 If I earned more than $5,500 in 2013 ($6,500 if I was 50 or older by the end of 2013), is there a limit on how much I can contribute to a Yes. Free tax filing 2012 For 2013, you can contribute to a traditional IRA up to: $5,500, or $6,500 if you were age 50 or older by the end of 2013. Free tax filing 2012  There is no upper limit on how much you can earn and still contribute. Free tax filing 2012 See How Much Can Be Contributed? in chapter 1. Free tax filing 2012 Yes. Free tax filing 2012 For 2013, you may be able to contribute to a Roth IRA up to: $5,500, or $6,500 if you were age 50 or older by the end of 2013,  but the amount you can contribute may be less than that depending on your income, filing status, and if you contribute to another IRA. Free tax filing 2012 See How Much Can Be Contributed? and Table 2-1 in chapter 2. Free tax filing 2012 Can I deduct contributions to a Yes. Free tax filing 2012 You may be able to deduct your contributions to a traditional IRA depending on your income, filing status, whether you are covered by a retirement plan at work, and whether you receive social security benefits. Free tax filing 2012 See How Much Can You Deduct? in chapter 1. Free tax filing 2012 No. Free tax filing 2012 You can never deduct contributions to a Roth IRA. Free tax filing 2012 See What Is a Roth IRA? in chapter 2. Free tax filing 2012 Do I have to file a form just because I contribute to a Not unless you make nondeductible contributions to your traditional IRA. Free tax filing 2012 In that case, you must file Form 8606. Free tax filing 2012 See Nondeductible Contributions in chapter 1. Free tax filing 2012 No. Free tax filing 2012 You do not have to file a form if you contribute to a Roth IRA. Free tax filing 2012 See Contributions not reported in chapter 2. Free tax filing 2012 Do I have to start taking distributions when I reach a certain age from a Yes. Free tax filing 2012 You must begin receiving required minimum distributions by April 1 of the year following the year you reach age 70½. Free tax filing 2012 See When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1. Free tax filing 2012 No. Free tax filing 2012 If you are the original owner of a Roth IRA, you do not have to take distributions regardless of your age. Free tax filing 2012 See Are Distributions Taxable? in chapter 2. Free tax filing 2012 However, if you are the beneficiary of a Roth IRA, you may have to take distributions. Free tax filing 2012 See Distributions After Owner's Death in chapter 2. Free tax filing 2012 How are distributions taxed from a Distributions from a traditional IRA are taxed as ordinary income, but if you made nondeductible contributions, not all of the distribution is taxable. Free tax filing 2012 See Are Distributions Taxable? in chapter 1. Free tax filing 2012 Distributions from a Roth IRA are not taxed as long as you meet certain criteria. Free tax filing 2012 See Are Distributions Taxable? in chapter 2. Free tax filing 2012 Do I have to file a form just because I receive distributions from a Not unless you have ever made a nondeductible contribution to a traditional IRA. Free tax filing 2012 If you have, file Form 8606. Free tax filing 2012 See Nondeductible Contributions in chapter 1. Free tax filing 2012 Yes. Free tax filing 2012 File Form 8606 if you received distributions from a Roth IRA (other than a rollover, qualified charitable distribution, one-time distribution to fund an HSA, recharacterization, certain qualified distributions, or a return of certain contributions). Free tax filing 2012 Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Where's My Refund? - It's Quick, Easy and Secure.

En Español

Get up-to-date refund information using Where's My Refund? or the IRS2GO mobile app. Where's My Refund? is updated once every 24 hours, usually overnight. Refunds are generally issued within 21 days after we receive your tax return. You should only call if it has been longer.
 

   

When to check status...
 

  • Within 24 hours after we've received your e-filed tax return
  • 4 weeks after you mail your paper return
  • "Where's My Refund?" is updated once every 24 hours

 

 

What you need...
 

  • Social Security Number
  • Filing status
  • Exact refund amount
 

How...
 

 

 

 

 

Page Last Reviewed or Updated: 28-Feb-2014

The Free Tax Filing 2012

Free tax filing 2012 2. Free tax filing 2012   Simplified Employee Pensions (SEPs) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Setting Up a SEPWhen not to use Form 5305-SEP. Free tax filing 2012 How Much Can I Contribute?Contribution Limits Deducting ContributionsDeduction Limit for Contributions for Participants Deduction Limit for Self-Employed Individuals Carryover of Excess SEP Contributions When To Deduct Contributions Where To Deduct Contributions Salary Reduction Simplified Employee Pensions (SARSEPs)SARSEP ADP test. Free tax filing 2012 Deferral percentage. Free tax filing 2012 Employee compensation. Free tax filing 2012 Compensation of self-employed individuals. Free tax filing 2012 Choice not to treat deferrals as compensation. Free tax filing 2012 Limit on Elective Deferrals Tax Treatment of Deferrals Distributions (Withdrawals) Additional TaxesEffects on employee. Free tax filing 2012 Reporting and Disclosure Requirements Topics - This chapter discusses: Setting up a SEP How much can I contribute Deducting contributions Salary reduction simplified employee pensions (SARSEPs) Distributions (withdrawals) Additional taxes Reporting and disclosure requirements Useful Items - You may want to see: Publication 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4285 SEP Checklist 4286 SARSEP Checklist 4333 SEP Retirement Plans for Small Businesses 4336 SARSEP for Small Businesses 4407 SARSEP—Key Issues and Assistance Forms (and Instructions) W-2 Wage and Tax Statement 1040 U. Free tax filing 2012 S. Free tax filing 2012 Individual Income Tax Return 5305-SEP Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 5305A-SEP Salary Reduction Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A SEP is a written plan that allows you to make contributions toward your own retirement and your employees' retirement without getting involved in a more complex qualified plan. Free tax filing 2012 Under a SEP, you make contributions to a traditional individual retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. Free tax filing 2012 A SEP-IRA is owned and controlled by the employee, and you make contributions to the financial institution where the SEP-IRA is maintained. Free tax filing 2012 SEP-IRAs are set up for, at a minimum, each eligible employee (defined below). Free tax filing 2012 A SEP-IRA may have to be set up for a leased employee (defined in chapter 1), but does not need to be set up for excludable employees (defined later). Free tax filing 2012 Eligible employee. Free tax filing 2012   An eligible employee is an individual who meets all the following requirements. Free tax filing 2012 Has reached age 21. Free tax filing 2012 Has worked for you in at least 3 of the last 5 years. Free tax filing 2012 Has received at least $550 in compensation from you in 2013. Free tax filing 2012 This amount remains the same in 2014. Free tax filing 2012    You can use less restrictive participation requirements than those listed, but not more restrictive ones. Free tax filing 2012 Excludable employees. Free tax filing 2012   The following employees can be excluded from coverage under a SEP. Free tax filing 2012 Employees covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Free tax filing 2012 Nonresident alien employees who have received no U. Free tax filing 2012 S. Free tax filing 2012 source wages, salaries, or other personal services compensation from you. Free tax filing 2012 For more information about nonresident aliens, see Publication 519, U. Free tax filing 2012 S. Free tax filing 2012 Tax Guide for Aliens. Free tax filing 2012 Setting Up a SEP There are three basic steps in setting up a SEP. Free tax filing 2012 You must execute a formal written agreement to provide benefits to all eligible employees. Free tax filing 2012 You must give each eligible employee certain information about the SEP. Free tax filing 2012 A SEP-IRA must be set up by or for each eligible employee. Free tax filing 2012 Many financial institutions will help you set up a SEP. Free tax filing 2012 Formal written agreement. Free tax filing 2012   You must execute a formal written agreement to provide benefits to all eligible employees under a SEP. Free tax filing 2012 You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP. Free tax filing 2012 However, see When not to use Form 5305-SEP, below. Free tax filing 2012   If you adopt an IRS model SEP using Form 5305-SEP, no prior IRS approval or determination letter is required. Free tax filing 2012 Keep the original form. Free tax filing 2012 Do not file it with the IRS. Free tax filing 2012 Also, using Form 5305-SEP will usually relieve you from filing annual retirement plan information returns with the IRS and the Department of Labor. Free tax filing 2012 See the Form 5305-SEP instructions for details. Free tax filing 2012 If you choose not to use Form 5305-SEP, you should seek professional advice in adopting a SEP. Free tax filing 2012 When not to use Form 5305-SEP. Free tax filing 2012   You cannot use Form 5305-SEP if any of the following apply. Free tax filing 2012 You currently maintain any other qualified retirement plan other than another SEP. Free tax filing 2012 You have any eligible employees for whom IRAs have not been set up. Free tax filing 2012 You use the services of leased employees, who are not your common-law employees (as described in chapter 1). Free tax filing 2012 You are a member of any of the following unless all eligible employees of all the members of these groups, trades, or businesses participate under the SEP. Free tax filing 2012 An affiliated service group described in section 414(m). Free tax filing 2012 A controlled group of corporations described in section 414(b). Free tax filing 2012 Trades or businesses under common control described in section 414(c). Free tax filing 2012 You do not pay the cost of the SEP contributions. Free tax filing 2012 Information you must give to employees. Free tax filing 2012   You must give each eligible employee a copy of Form 5305-SEP, its instructions, and the other information listed in the Form 5305-SEP instructions. Free tax filing 2012 An IRS model SEP is not considered adopted until you give each employee this information. Free tax filing 2012 Setting up the employee's SEP-IRA. Free tax filing 2012   A SEP-IRA must be set up by or for each eligible employee. Free tax filing 2012 SEP-IRAs can be set up with banks, insurance companies, or other qualified financial institutions. Free tax filing 2012 You send SEP contributions to the financial institution where the SEP-IRA is maintained. Free tax filing 2012 Deadline for setting up a SEP. Free tax filing 2012   You can set up a SEP for any year as late as the due date (including extensions) of your income tax return for that year. Free tax filing 2012 Credit for startup costs. Free tax filing 2012   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP that first became effective in 2013. Free tax filing 2012 For more information, see Credit for startup costs under Reminders, earlier. Free tax filing 2012 How Much Can I Contribute? The SEP rules permit you to contribute a limited amount of money each year to each employee's SEP-IRA. Free tax filing 2012 If you are self-employed, you can contribute to your own SEP-IRA. Free tax filing 2012 Contributions must be in the form of money (cash, check, or money order). Free tax filing 2012 You cannot contribute property. Free tax filing 2012 However, participants may be able to transfer or roll over certain property from one retirement plan to another. Free tax filing 2012 See Publication 590 for more information about rollovers. Free tax filing 2012 You do not have to make contributions every year. Free tax filing 2012 But if you make contributions, they must be based on a written allocation formula and must not discriminate in favor of highly compensated employees (defined in chapter 1). Free tax filing 2012 When you contribute, you must contribute to the SEP-IRAs of all participants who actually performed personal services during the year for which the contributions are made, including employees who die or terminate employment before the contributions are made. Free tax filing 2012 Contributions are deductible within limits, as discussed later, and generally are not taxable to the plan participants. Free tax filing 2012 A SEP-IRA cannot be a Roth IRA. Free tax filing 2012 Employer contributions to a SEP-IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Free tax filing 2012 Unlike regular contributions to a traditional IRA, contributions under a SEP can be made to participants over age 70½. Free tax filing 2012 If you are self-employed, you can also make contributions under the SEP for yourself even if you are over 70½. Free tax filing 2012 Participants age 70½ or over must take required minimum distributions. Free tax filing 2012 Time limit for making contributions. Free tax filing 2012   To deduct contributions for a year, you must make the contributions by the due date (including extensions) of your tax return for the year. Free tax filing 2012 Contribution Limits Contributions you make for 2013 to a common-law employee's SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000. Free tax filing 2012 Compensation generally does not include your contributions to the SEP. Free tax filing 2012 The SEP plan document will specify how the employer contribution is determined and how it will be allocated to participants. Free tax filing 2012 Example. Free tax filing 2012 Your employee, Mary Plant, earned $21,000 for 2013. Free tax filing 2012 The maximum contribution you can make to her SEP-IRA is $5,250 (25% x $21,000). Free tax filing 2012 Contributions for yourself. Free tax filing 2012   The annual limits on your contributions to a common-law employee's SEP-IRA also apply to contributions you make to your own SEP-IRA. Free tax filing 2012 However, special rules apply when figuring your maximum deductible contribution. Free tax filing 2012 See Deduction Limit for Self-Employed Individuals , later. Free tax filing 2012 Annual compensation limit. Free tax filing 2012   You cannot consider the part of an employee's compensation over $255,000 when figuring your contribution limit for that employee. Free tax filing 2012 However, $51,000 is the maximum contribution for an eligible employee. Free tax filing 2012 These limits are $260,000 and $52,000, respectively, in 2014. Free tax filing 2012 Example. Free tax filing 2012 Your employee, Susan Green, earned $210,000 for 2013. Free tax filing 2012 Because of the maximum contribution limit for 2013, you can only contribute $51,000 to her SEP-IRA. Free tax filing 2012 More than one plan. Free tax filing 2012   If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $51,000 or 100% of the participant's compensation. Free tax filing 2012 When you figure this limit, you must add your contributions to all defined contribution plans maintained by you. Free tax filing 2012 Because a SEP is considered a defined contribution plan for this limit, your contributions to a SEP must be added to your contributions to other defined contribution plans you maintain. Free tax filing 2012 Tax treatment of excess contributions. Free tax filing 2012   Excess contributions are your contributions to an employee's SEP-IRA (or to your own SEP-IRA) for 2013 that exceed the lesser of the following amounts. Free tax filing 2012 25% of the employee's compensation (or, for you, 20% of your net earnings from self-employment). Free tax filing 2012 $51,000. Free tax filing 2012 Excess contributions are included in the employee's income for the year and are treated as contributions by the employee to his or her SEP-IRA. Free tax filing 2012 For more information on employee tax treatment of excess contributions, see chapter 1 in Publication 590. Free tax filing 2012 Reporting on Form W-2. Free tax filing 2012   Do not include SEP contributions on your employee's Form W-2 unless contributions were made under a salary reduction arrangement (discussed later). Free tax filing 2012 Deducting Contributions Generally, you can deduct the contributions you make each year to each employee's SEP-IRA. Free tax filing 2012 If you are self-employed, you can deduct the contributions you make each year to your own SEP-IRA. Free tax filing 2012 Deduction Limit for Contributions for Participants The most you can deduct for your contributions to you or your employee's SEP-IRA is the lesser of the following amounts. Free tax filing 2012 Your contributions (including any excess contributions carryover). Free tax filing 2012 25% of the compensation (limited to $255,000 per participant) paid to the participants during 2013 from the business that has the plan, not to exceed $51,000 per participant. Free tax filing 2012 In 2014, the amounts in (2) above are $260,000 and $52,000, respectively. Free tax filing 2012 Deduction Limit for Self-Employed Individuals If you contribute to your own SEP-IRA, you must make a special computation to figure your maximum deduction for these contributions. Free tax filing 2012 When figuring the deduction for contributions made to your own SEP-IRA, compensation is your net earnings from self-employment (defined in chapter 1), which takes into account both the following deductions. Free tax filing 2012 The deduction for the deductible part of your self-employment tax. Free tax filing 2012 The deduction for contributions to your own SEP-IRA. Free tax filing 2012 The deduction for contributions to your own SEP-IRA and your net earnings depend on each other. Free tax filing 2012 For this reason, you determine the deduction for contributions to your own SEP-IRA indirectly by reducing the contribution rate called for in your plan. Free tax filing 2012 To do this, use the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed, whichever is appropriate for your plan's contribution rate, in chapter 5. Free tax filing 2012 Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Free tax filing 2012 Carryover of Excess SEP Contributions If you made SEP contributions that are more than the deduction limit (nondeductible contributions), you can carry over and deduct the difference in later years. Free tax filing 2012 However, the carryover, when combined with the contribution for the later year, is subject to the deduction limit for that year. Free tax filing 2012 If you also contributed to a defined benefit plan or defined contribution plan, see Carryover of Excess Contributions under Employer Deduction in chapter 4 for the carryover limit. Free tax filing 2012 Excise tax. Free tax filing 2012   If you made nondeductible (excess) contributions to a SEP, you may be subject to a 10% excise tax. Free tax filing 2012 For information about the excise tax, see Excise Tax for Nondeductible (Excess) Contributions under Employer Deduction in chapter 4. Free tax filing 2012 When To Deduct Contributions When you can deduct contributions made for a year depends on the tax year on which the SEP is maintained. Free tax filing 2012 If the SEP is maintained on a calendar year basis, you deduct the yearly contributions on your tax return for the year within which the calendar year ends. Free tax filing 2012 If you file your tax return and maintain the SEP using a fiscal year or short tax year, you deduct contributions made for a year on your tax return for that year. Free tax filing 2012 Example. Free tax filing 2012 You are a fiscal year taxpayer whose tax year ends June 30. Free tax filing 2012 You maintain a SEP on a calendar year basis. Free tax filing 2012 You deduct SEP contributions made for calendar year 2013 on your tax return for your tax year ending June 30, 2014. Free tax filing 2012 Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Free tax filing 2012 For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040), Profit or Loss From Farming; partnerships deduct them on Form 1065, U. Free tax filing 2012 S. Free tax filing 2012 Return of Partnership Income; and corporations deduct them on Form 1120, U. Free tax filing 2012 S. Free tax filing 2012 Corporation Income Tax Return, or Form 1120S, U. Free tax filing 2012 S. Free tax filing 2012 Income Tax Return for an S Corporation. Free tax filing 2012 Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Free tax filing 2012 (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Free tax filing 2012 , you receive from the partnership. Free tax filing 2012 ) Remember that sole proprietors and partners can't deduct as a business expense contributions made to a SEP for themselves, only those made for their common-law employees. Free tax filing 2012 Salary Reduction Simplified Employee Pensions (SARSEPs) A SARSEP is a SEP set up before 1997 that includes a salary reduction arrangement. Free tax filing 2012 (See the Caution, next. Free tax filing 2012 ) Under a SARSEP, your employees can choose to have you contribute part of their pay to their SEP-IRAs rather than receive it in cash. Free tax filing 2012 This contribution is called an “elective deferral” because employees choose (elect) to set aside the money, and they defer the tax on the money until it is distributed to them. Free tax filing 2012 You are not allowed to set up a SARSEP after 1996. Free tax filing 2012 However, participants (including employees hired after 1996) in a SARSEP set up before 1997 can continue to have you contribute part of their pay to the plan. Free tax filing 2012 If you are interested in setting up a retirement plan that includes a salary reduction arrangement, see chapter 3. Free tax filing 2012 Who can have a SARSEP?   A SARSEP set up before 1997 is available to you and your eligible employees only if all the following requirements are met. Free tax filing 2012 At least 50% of your employees eligible to participate choose to make elective deferrals. Free tax filing 2012 You have 25 or fewer employees who were eligible to participate in the SEP at any time during the preceding year. Free tax filing 2012 The elective deferrals of your highly compensated employees meet the SARSEP ADP test. Free tax filing 2012 SARSEP ADP test. Free tax filing 2012   Under the SARSEP ADP test, the amount deferred each year by each eligible highly compensated employee as a percentage of pay (the deferral percentage) cannot be more than 125% of the average deferral percentage (ADP) of all non-highly compensated employees eligible to participate. Free tax filing 2012 A highly compensated employee is defined in chapter 1. Free tax filing 2012 Deferral percentage. Free tax filing 2012   The deferral percentage for an employee for a year is figured as follows. Free tax filing 2012   The elective employer contributions (excluding certain catch-up contributions)  paid to the SEP for the employee for the year     The employee's compensation (limited to $255,000 in 2013)   The instructions for Form 5305A-SEP have a worksheet you can use to determine whether the elective deferrals of your highly compensated employees meet the SARSEP ADP test. Free tax filing 2012 Employee compensation. Free tax filing 2012   For figuring the deferral percentage, compensation is generally the amount you pay to the employee for the year. Free tax filing 2012 Compensation includes the elective deferral and other amounts deferred in certain employee benefit plans. Free tax filing 2012 See Compensation in chapter 1. Free tax filing 2012 Elective deferrals under the SARSEP are included in figuring your employees' deferral percentage even though they are not included in the income of your employees for income tax purposes. Free tax filing 2012 Compensation of self-employed individuals. Free tax filing 2012   If you are self-employed, compensation is your net earnings from self-employment as defined in chapter 1. Free tax filing 2012   Compensation does not include tax-free items (or deductions related to them) other than foreign earned income and housing cost amounts. Free tax filing 2012 Choice not to treat deferrals as compensation. Free tax filing 2012   You can choose not to treat elective deferrals (and other amounts deferred in certain employee benefit plans) for a year as compensation under your SARSEP. Free tax filing 2012 Limit on Elective Deferrals The most a participant can choose to defer for calendar year 2013 is the lesser of the following amounts. Free tax filing 2012 25% of the participant's compensation (limited to $255,000 of the participant's compensation). Free tax filing 2012 $17,500. Free tax filing 2012 The $17,500 limit applies to the total elective deferrals the employee makes for the year to a SEP and any of the following. Free tax filing 2012 Cash or deferred arrangement (section 401(k) plan). Free tax filing 2012 Salary reduction arrangement under a tax-sheltered annuity plan (section 403(b) plan). Free tax filing 2012 SIMPLE IRA plan. Free tax filing 2012 In 2014, the $255,000 limit increases to $260,000 and the $17,500 limit remains at $17,500. Free tax filing 2012 Catch-up contributions. Free tax filing 2012   A SARSEP can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Free tax filing 2012 The catch-up contribution limit for 2013 is $5,500 and remains at $5,500 for 2014. Free tax filing 2012 Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the elective deferral limit (the lesser of 25% of compensation or $17,500), the SARSEP ADP test limit discussed earlier, or the plan limit (if any). Free tax filing 2012 However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Free tax filing 2012 The catch-up contribution limit. Free tax filing 2012 The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Free tax filing 2012   Catch-up contributions are not subject to the elective deferral limit (the lesser of 25% of compensation or $17,500 in 2013 and in 2014). Free tax filing 2012 Overall limit on SEP contributions. Free tax filing 2012   If you also make nonelective contributions to a SEP-IRA, the total of the nonelective and elective contributions to that SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000 for 2013 ($52,000 for 2014). Free tax filing 2012 The same rule applies to contributions you make to your own SEP-IRA. Free tax filing 2012 See Contribution Limits , earlier. Free tax filing 2012 Figuring the elective deferral. Free tax filing 2012   For figuring the 25% limit on elective deferrals, compensation does not include SEP contributions, including elective deferrals or other amounts deferred in certain employee benefit plans. Free tax filing 2012 Tax Treatment of Deferrals Elective deferrals that are not more than the limits discussed earlier under Limit on Elective Deferrals are excluded from your employees' wages subject to federal income tax in the year of deferral. Free tax filing 2012 However, these deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Free tax filing 2012 Excess deferrals. Free tax filing 2012   For 2013, excess deferrals are the elective deferrals for the year that are more than the $17,500 limit discussed earlier. Free tax filing 2012 For a participant who is eligible to make catch-up contributions, excess deferrals are the elective deferrals that are more than $23,000. Free tax filing 2012 The treatment of excess deferrals made under a SARSEP is similar to the treatment of excess deferrals made under a qualified plan. Free tax filing 2012 See Treatment of Excess Deferrals under Elective Deferrals (401(k) Plans) in chapter 4. Free tax filing 2012 Excess SEP contributions. Free tax filing 2012   Excess SEP contributions are elective deferrals of highly compensated employees that are more than the amount permitted under the SARSEP ADP test. Free tax filing 2012 You must notify your highly compensated employees within 2½ months after the end of the plan year of their excess SEP contributions. Free tax filing 2012 If you do not notify them within this time period, you must pay a 10% tax on the excess. Free tax filing 2012 For an explanation of the notification requirements, see Rev. Free tax filing 2012 Proc. Free tax filing 2012 91-44, 1991-2 C. Free tax filing 2012 B. Free tax filing 2012 733. Free tax filing 2012 If you adopted a SARSEP using Form 5305A-SEP, the notification requirements are explained in the instructions for that form. Free tax filing 2012 Reporting on Form W-2. Free tax filing 2012   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Free tax filing 2012 You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Free tax filing 2012 You must also include them in box 12. Free tax filing 2012 Mark the “Retirement plan” checkbox in box 13. Free tax filing 2012 For more information, see the Form W-2 instructions. Free tax filing 2012 Distributions (Withdrawals) As an employer, you cannot prohibit distributions from a SEP-IRA. Free tax filing 2012 Also, you cannot make your contributions on the condition that any part of them must be kept in the account after you have made your contributions to the employee's accounts. Free tax filing 2012 Distributions are subject to IRA rules. Free tax filing 2012 Generally, you or your employee must begin to receive distributions from a SEP-IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. Free tax filing 2012 For more information about IRA rules, including the tax treatment of distributions, rollovers, required distributions, and income tax withholding, see Publication 590. Free tax filing 2012 Additional Taxes The tax advantages of using SEP-IRAs for retirement savings can be offset by additional taxes that may be imposed for all the following actions. Free tax filing 2012 Making excess contributions. Free tax filing 2012 Making early withdrawals. Free tax filing 2012 Not making required withdrawals. Free tax filing 2012 For information about these taxes, see chapter 1 in Publication 590. Free tax filing 2012 Also, a SEP-IRA may be disqualified, or an excise tax may apply, if the account is involved in a prohibited transaction, discussed next. Free tax filing 2012 Prohibited transaction. Free tax filing 2012   If an employee improperly uses his or her SEP-IRA, such as by borrowing money from it, the employee has engaged in a prohibited transaction. Free tax filing 2012 In that case, the SEP-IRA will no longer qualify as an IRA. Free tax filing 2012 For a list of prohibited transactions, see Prohibited Transactions in chapter 4. Free tax filing 2012 Effects on employee. Free tax filing 2012   If a SEP-IRA is disqualified because of a prohibited transaction, the assets in the account will be treated as having been distributed to the employee on the first day of the year in which the transaction occurred. Free tax filing 2012 The employee must include in income the fair market value of the assets (on the first day of the year) that is more than any cost basis in the account. Free tax filing 2012 Also, the employee may have to pay the additional tax for making early withdrawals. Free tax filing 2012 Reporting and Disclosure Requirements If you set up a SEP using Form 5305-SEP, you must give your eligible employees certain information about the SEP when you set it up. Free tax filing 2012 See Setting Up a SEP , earlier. Free tax filing 2012 Also, you must give your eligible employees a statement each year showing any contributions to their SEP-IRAs. Free tax filing 2012 You must also give them notice of any excess contributions. Free tax filing 2012 For details about other information you must give them, see the instructions for Form 5305-SEP or Form 5305A-SEP (for a salary reduction SEP). Free tax filing 2012 Even if you did not use Form 5305-SEP or Form 5305A-SEP to set up your SEP, you must give your employees information similar to that described above. Free tax filing 2012 For more information, see the instructions for either Form 5305-SEP or Form 5305A-SEP. Free tax filing 2012 Prev  Up  Next   Home   More Online Publications