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Taxact.com 2012

Taxact. Taxact.com 2012 com 2012 Index A Actual knowledge Innocent spouse relief, Actual Knowledge or Reason To Know Separation of liability relief, Actual Knowledge Assistance (see Tax help) B Burden of proof, separation of liability, Burden of proof. Taxact.com 2012 C Comments on publication, Comments and suggestions. Taxact.com 2012 Community property law, relief from liability arising from, Community Property Laws Community property laws, Community Property Laws D Decedent, Form 8857 filed by or on behalf of a decedent. Taxact.com 2012 Domestic violence (separation of liability), Exception for spousal abuse or domestic violence. Taxact.com 2012 E Equitable relief Conditions for getting, Conditions for Getting Equitable Relief Factors for determining whether to grant, Factors for Determining Whether To Grant Equitable Relief Refunds, Refunds Under Equitable Relief Erroneous items, Erroneous Items Executors (see Decedent) F Flowcharts, Flowcharts Form 8857 Filled-in example, Filled-in Form 8857 For decedent, Form 8857 filed by or on behalf of a decedent. Taxact.com 2012 Tax Court review, Tax Court Review of Request When to file, When to file Form 8857. Taxact.com 2012 Free tax services, How To Get Tax Help H Help (see Tax help) How to request relief, How To Request Relief I Indications of unfairness Innocent spouse relief, Indications of Unfairness for Innocent Spouse Relief Injured spouse relief, Publication 971 - Additional Material Innocent spouse relief, Innocent Spouse Relief J Joint and several liability, Publication 971 - Additional Material L Limitations on Relief, Limitations on Relief M More information (see Tax help) N No joint return filed, Relief for Married Persons Who Did Not File Joint Returns P Partial relief, innocent spouse relief, Partial relief when a portion of erroneous item is unknown. Taxact.com 2012 Publications (see Tax help) Q Questions & Answers, Publication 971 - Additional Material R Reason to know, Actual Knowledge or Reason To Know Refunds, Refunds Limit on amount of refund, Limit on Amount of Refund Proof required, Proof Required Under equitable relief, Refunds Under Equitable Relief S Separation of liability relief, Separation of Liability Relief Spousal abuse, The IRS Must Contact Your Spouse or Former Spouse, Exception for spousal abuse or domestic violence. Taxact.com 2012 Spousal notification, The IRS Must Contact Your Spouse or Former Spouse, Publication 971 - Additional Material Suggestions for publication, Comments and suggestions. Taxact.com 2012 T Tax Court review, Tax Court Review of Request Tax help, How To Get Tax Help Taxpayer Advocate, Taxpayer Advocate Service. Taxact.com 2012 TEFRA partnership proceedings, Exception for agreements relating to TEFRA partnership proceedings. Taxact.com 2012 Transferee liability, Transferee liability not affected by innocent spouse relief provisions. Taxact.com 2012 Transfers of property to avoid tax, Transfers of Property To Avoid Tax TTY/TDD information, How To Get Tax Help U Underpaid tax, Equitable Relief Understated tax, Understated Tax United States Tax Court, Tax Court Review of Request W When to file Form 8857, When to file Form 8857. Taxact.com 2012 Prev  Up     Home   More Online Publications
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Taxact. Taxact.com 2012 com 2012 1. Taxact.com 2012   403(b) Plan Basics Table of Contents What Is a 403(b) Plan? What Are the Benefits of Contributing to a 403(b) Plan?Excluded. Taxact.com 2012 Deducted. Taxact.com 2012 Who Can Participate in a 403(b) Plan?Ministers. Taxact.com 2012 Who Can Set Up a 403(b) Account? How Can Contributions Be Made to My 403(b) Account? Do I Report Contributions on My Tax Return? How Much Can Be Contributed to My 403(b) Account? This chapter introduces you to 403(b) plans and accounts. Taxact.com 2012 Specifically, the chapter answers the following questions. Taxact.com 2012 What is a 403(b) plan? What are the benefits of contributing to a 403(b) plan? Who can participate in a 403(b) plan? Who can set up a 403(b) account? How can contributions be made to my 403(b) account? Do I report contributions on my tax return? How much can be contributed to my 403(b) account? What Is a 403(b) Plan? A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. Taxact.com 2012 Individual accounts in a 403(b) plan can be any of the following types. Taxact.com 2012 An annuity contract, which is a contract provided through an insurance company, A custodial account, which is an account invested in mutual funds, or A retirement income account set up for church employees. Taxact.com 2012 Generally, retirement income accounts can invest in either annuities or mutual funds. Taxact.com 2012 We use the term “403(b) account” to refer to any one of these funding arrangements throughout this publication, unless otherwise specified. Taxact.com 2012 What Are the Benefits of Contributing to a 403(b) Plan?  There are three benefits to contributing to a 403(b) plan. Taxact.com 2012 The first benefit is that you do not pay income tax on allowable contributions until you begin making withdrawals from the plan, usually after you retire. Taxact.com 2012 Allowable contributions to a 403(b) plan are either excluded or deducted from your income. Taxact.com 2012 However, if your contributions are made to a Roth contribution program, this benefit does not apply. Taxact.com 2012 Instead, you pay income tax on the contributions to the plan but distributions from the plan (if certain requirements are met) are tax free. Taxact.com 2012 Note. Taxact.com 2012 Generally, employees must pay social security and Medicare tax on their contributions to a 403(b) plan, including those made under a salary reduction agreement. Taxact.com 2012 See chapter 4, Limit on Elective Deferrals , for more information. Taxact.com 2012 The second benefit is that earnings and gains on amounts in your 403(b) account are not taxed until you withdraw them. Taxact.com 2012 Earnings and gains on amounts in a Roth contribution program are not taxed if your withdrawals are qualified distributions. Taxact.com 2012 Otherwise, they are taxed when you withdraw them. Taxact.com 2012 The third benefit is that you may be eligible to take a credit for elective deferrals contributed to your 403(b) account. Taxact.com 2012 See chapter 10, Retirement Savings Contributions Credit (Saver's Credit) . Taxact.com 2012 Excluded. Taxact.com 2012   If an amount is excluded from your income, it is not included in your total wages on your Form W-2. Taxact.com 2012 This means that you do not report the excluded amount on your tax return. Taxact.com 2012 Deducted. Taxact.com 2012   If an amount is deducted from your income, it is included with your other wages on your Form W-2. Taxact.com 2012 You report this amount on your tax return, but you are allowed to subtract it when figuring the amount of income on which you must pay tax. Taxact.com 2012 Who Can Participate in a 403(b) Plan? Any eligible employee can participate in a 403(b) plan. Taxact.com 2012 Eligible employees. Taxact.com 2012   The following employees are eligible to participate in a 403(b) plan. Taxact.com 2012 Employees of tax-exempt organizations established under section 501(c)(3). Taxact.com 2012 These organizations are usually referred to as section 501(c)(3) organizations or simply 501(c)(3) organizations. Taxact.com 2012 Employees of public school systems who are involved in the day-to-day operations of a school. Taxact.com 2012 Employees of cooperative hospital service organizations. Taxact.com 2012 Civilian faculty and staff of the Uniformed Services University of the Health Sciences. Taxact.com 2012 Employees of public school systems organized by Indian tribal governments. Taxact.com 2012 Certain ministers (explained next). Taxact.com 2012 Ministers. Taxact.com 2012   The following ministers are eligible employees for whom a 403(b) account can be established. Taxact.com 2012 Ministers employed by section 501(c)(3) organizations. Taxact.com 2012 Self-employed ministers. Taxact.com 2012 A self-employed minister is treated as employed by a tax-exempt organization that is a qualified employer. Taxact.com 2012 Ministers (chaplains) who meet both of the following requirements. Taxact.com 2012 They are employed by organizations that are not section 501(c)(3) organizations. Taxact.com 2012 They function as ministers in their day-to-day professional responsibilities with their employers. Taxact.com 2012   Throughout this publication, the term chaplain will be used to mean ministers described in the third category in the list above. Taxact.com 2012 Example. Taxact.com 2012 A minister employed as a chaplain by a state-run prison and a chaplain in the United States Armed Forces are eligible employees because their employers are not section 501(c)(3) organizations and they are employed as ministers. Taxact.com 2012 Who Can Set Up a 403(b) Account? You cannot set up your own 403(b) account. Taxact.com 2012 Only employers can set up 403(b) accounts. Taxact.com 2012 A self-employed minister cannot set up a 403(b) account for his or her benefit. Taxact.com 2012 If you are a self-employed minister, only the organization (denomination) with which you are associated can set up an account for your benefit. Taxact.com 2012 How Can Contributions Be Made to My 403(b) Account? Generally, only your employer can make contributions to your 403(b) account. Taxact.com 2012 However, some plans will allow you to make after-tax contributions (defined below). Taxact.com 2012 The following types of contributions can be made to 403(b) accounts. Taxact.com 2012 Elective deferrals . Taxact.com 2012 These are contributions made under a salary reduction agreement. Taxact.com 2012 This agreement allows your employer to withhold money from your paycheck to be contributed directly into a 403(b) account for your benefit. Taxact.com 2012 Except for Roth contributions, you do not pay income tax on these contributions until you withdraw them from the account. Taxact.com 2012 If your contributions are Roth contributions, you pay taxes on your contributions but any qualified distributions from your Roth account are tax free. Taxact.com 2012 Nonelective contributions . Taxact.com 2012 These are employer contributions that are not made under a salary reduction agreement. Taxact.com 2012 Nonelective contributions include matching contributions, discretionary contributions, and mandatory contributions from your employer. Taxact.com 2012 You do not pay income tax on these contributions until you withdraw them from the account. Taxact.com 2012 After-tax contributions . Taxact.com 2012 These are contributions (that are not Roth contributions) you make with funds that you must include in income on your tax return. Taxact.com 2012 A salary payment on which income tax has been withheld is a source of these contributions. Taxact.com 2012 If your plan allows you to make after-tax contributions, they are not excluded from income and you cannot deduct them on your tax return. Taxact.com 2012 A combination of any of the three contribution types listed above. Taxact.com 2012 Self-employed minister. Taxact.com 2012   If you are a self-employed minister, you are considered both an employee and an employer, and you can contribute to a retirement income account for your own benefit. Taxact.com 2012 Do I Report Contributions on My Tax Return? Generally, you do not report contributions to your 403(b) account (except Roth contributions) on your tax return. Taxact.com 2012 Your employer will report contributions on your 2013 Form W-2. Taxact.com 2012 Elective deferrals will be shown in box 12 and the Retirement plan box will be checked in box 13. Taxact.com 2012 If you are a self-employed minister or chaplain, see the discussions next. Taxact.com 2012 Self-employed ministers. Taxact.com 2012   If you are a self-employed minister, you must report the total contributions as a deduction on your tax return. Taxact.com 2012 Deduct your contributions on line 28 of the 2013 Form 1040. Taxact.com 2012 Chaplains. Taxact.com 2012   If you are a chaplain and your employer does not exclude contributions made to your 403(b) account from your earned income, you may be able to take a deduction for those contributions on your tax return. Taxact.com 2012    However, if your employer has agreed to exclude the contributions from your earned income, you will not be allowed a deduction on your tax return. Taxact.com 2012   If you can take a deduction, include your contributions on line 36 of the 2013 Form 1040. Taxact.com 2012 Enter the amount of your deduction and write “403(b)” on the dotted line next to line 36. Taxact.com 2012 How Much Can Be Contributed to My 403(b) Account? There are limits on the amount of contributions that can be made to your 403(b) account each year. Taxact.com 2012 If contributions made to your 403(b) account are more than these contribution limits, penalties may apply. Taxact.com 2012 Chapters 2 through 6 provide information on how to determine the amount that can be contributed to your 403(b) account. Taxact.com 2012 Worksheets are provided in Chapter 9 to help you determine the maximum amount that can be contributed to your 403(b) account each year. Taxact.com 2012 Chapter 7, Excess Contributions , describes how to prevent excess contributions and how to get an excess contribution corrected. Taxact.com 2012 Prev  Up  Next   Home   More Online Publications