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Turbotax Free State Filing

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Turbotax Free State Filing

Turbotax free state filing 33. Turbotax free state filing   Credit for the Elderly or the Disabled Table of Contents Introduction Useful Items - You may want to see: Are You Eligible for the Credit?Qualified Individual Income Limits How to Claim the CreditCredit Figured for You Credit Figured by You Introduction If you qualify, you may be able to reduce the tax you owe by taking the credit for the elderly or the disabled which is figured on Schedule R (Form 1040A or 1040). Turbotax free state filing This chapter explains the following. Turbotax free state filing Who qualifies for the credit for the elderly or the disabled. Turbotax free state filing How to claim the credit. Turbotax free state filing You may be able to take the credit for the elderly or the disabled if: You are age 65 or older at the end of 2013, or You retired on permanent and total disability and have taxable disability income. Turbotax free state filing Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 554 Tax Guide for Seniors Form (and Instruction) Schedule R (Form 1040A or 1040) Credit for the Elderly or the Disabled Are You Eligible for the Credit? You can take the credit for the elderly or the disabled if you meet both of the following requirements. Turbotax free state filing You are a qualified individual. Turbotax free state filing Your income is not more than certain limits. Turbotax free state filing You can use Figure 33-A and Table 33-1 as guides to see if you are eligible for the credit. Turbotax free state filing Use Figure 33-A first to see if you are a qualified individual. Turbotax free state filing If you are, go to Table 33-1 to make sure your income is not too high to take the credit. Turbotax free state filing You can take the credit only if you file Form 1040 or Form 1040A. Turbotax free state filing You cannot take the credit if you file Form 1040EZ. Turbotax free state filing Qualified Individual You are a qualified individual for this credit if you are a U. Turbotax free state filing S. Turbotax free state filing citizen or resident alien, and either of the following applies. Turbotax free state filing You were age 65 or older at the end of 2013. Turbotax free state filing You were under age 65 at the end of 2013 and all three of the following statements are true. Turbotax free state filing You retired on permanent and total disability (explained later). Turbotax free state filing You received taxable disability income for 2013. Turbotax free state filing On January 1, 2013, you had not reached mandatory retirement age (defined later under Disability income ). Turbotax free state filing Age 65. Turbotax free state filing   You are considered to be age 65 on the day before your 65th birthday. Turbotax free state filing Therefore, if you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Turbotax free state filing U. Turbotax free state filing S. Turbotax free state filing Citizen or Resident Alien You must be a U. Turbotax free state filing S. Turbotax free state filing citizen or resident alien (or be treated as a resident alien) to take the credit. Turbotax free state filing Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year. Turbotax free state filing Exceptions. Turbotax free state filing   You may be able to take the credit if you are a nonresident alien who is married to a U. Turbotax free state filing S. Turbotax free state filing citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U. Turbotax free state filing S. Turbotax free state filing resident alien. Turbotax free state filing If you make that choice, both you and your spouse are taxed on your worldwide incomes. Turbotax free state filing If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U. Turbotax free state filing S. Turbotax free state filing citizen or resident alien at the end of the year, you may be able to choose to be treated as a U. Turbotax free state filing S. Turbotax free state filing resident alien for the entire year. Turbotax free state filing In that case, you may be allowed to take the credit. Turbotax free state filing For information on these choices, see chapter 1 of Publication 519, U. Turbotax free state filing S. Turbotax free state filing Tax Guide for Aliens. Turbotax free state filing Married Persons Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. Turbotax free state filing However, if you and your spouse did not live in the same household at any time during the tax year, you can file either a joint return or separate returns and still take the credit. Turbotax free state filing Head of household. Turbotax free state filing   You can file as head of household and qualify to take the credit, even if your spouse lived with you during the first 6 months of the year, if you meet certain tests. Turbotax free state filing See Head of Household in chapter 2 for the tests you must meet. Turbotax free state filing Under Age 65 If you are under age 65 at the end of 2013, you can qualify for the credit only if you are retired on permanent and total disability (discussed next) and have taxable disability income (discussed later under Disability income ). Turbotax free state filing You are retired on permanent and total disability if: You were permanently and totally disabled when you retired, and You retired on disability before the close of the tax year. Turbotax free state filing Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability. Turbotax free state filing If you retired on disability before 1977, and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977. Turbotax free state filing Permanent and total disability. Turbotax free state filing    You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. Turbotax free state filing A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. Turbotax free state filing See Physician's statement , later. Turbotax free state filing Substantial gainful activity. Turbotax free state filing   Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Turbotax free state filing Full-time work (or part-time work done at your employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity. Turbotax free state filing   Substantial gainful activity is not work you do to take care of yourself or your home. Turbotax free state filing It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. Turbotax free state filing However, doing this kind of work may show that you are able to engage in substantial gainful activity. Turbotax free state filing    The fact that you have not worked for some time is not, of itself, conclusive evidence that you cannot engage in substantial gainful activity. Turbotax free state filing Sheltered employment. Turbotax free state filing   Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. Turbotax free state filing These qualified locations are in sheltered workshops, hospitals, and similar institutions, homebound programs, and Department of Veterans Affairs (VA) sponsored homes. Turbotax free state filing   Compared to commercial employment, pay is lower for sheltered employment. Turbotax free state filing Therefore, one usually does not look for sheltered employment if he or she can get other employment. Turbotax free state filing The fact that one has accepted sheltered employment is not proof of the person's ability to engage in substantial gainful activity. Turbotax free state filing Physician's statement. Turbotax free state filing   If you are under age 65, you must have your physician complete a statement certifying that you were permanently and totally disabled on the date you retired. Turbotax free state filing You can use the statement in the Instructions for Schedule R. Turbotax free state filing    Figure 33-A. Turbotax free state filing Are You a Qualified Individual? This image is too large to be displayed in the current screen. Turbotax free state filing Please click the link to view the image. Turbotax free state filing Figure 33-A Are You a Qualified Individual?   You do not have to file this statement with your Form 1040 or Form 1040A, but you must keep it for your records. Turbotax free state filing Veterans. Turbotax free state filing   If the Department of Veterans Affairs (VA) certifies that you are permanently and totally disabled, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. Turbotax free state filing VA Form 21-0172 must be signed by a person authorized by the VA to do so. Turbotax free state filing You can get this form from your local VA regional office. Turbotax free state filing Physician's statement obtained in earlier year. Turbotax free state filing   If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2013, you may not need to get another physician's statement for 2013. Turbotax free state filing For a detailed explanation of the conditions you must meet, see the instructions for Schedule R, Part II. Turbotax free state filing If you meet the required conditions, check the box on your Schedule R, Part II, line 2. Turbotax free state filing   If you checked box 4, 5, or 6 in Part I of Schedule R, enter in the space above the box on line 2 in Part II the first name(s) of the spouse(s) for whom the box is checked. Turbotax free state filing Table 33-1. Turbotax free state filing Income Limits IF your filing status is . Turbotax free state filing . Turbotax free state filing . Turbotax free state filing THEN, even if you qualify (see Figure 33-A ), you CANNOT take the credit if. Turbotax free state filing . Turbotax free state filing . Turbotax free state filing   Your adjusted gross income (AGI)* is equal to or more than. Turbotax free state filing . Turbotax free state filing . Turbotax free state filing     OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than. Turbotax free state filing . Turbotax free state filing . Turbotax free state filing   single, head of household, or qualifying widow(er) with dependent child   $17,500     $5,000   married filing jointly and only one spouse qualifies in Figure 33-A   $20,000     $5,000   married filing jointly and both spouses qualify in Figure 33-A   $25,000     $7,500   married filing separately and you lived apart from your spouse for all of 2013   $12,500     $3,750   * AGI is the amount on Form 1040A, line 22, or Form 1040, line 38. Turbotax free state filing Disability income. Turbotax free state filing   If you are under age 65, you must also have taxable disability income to qualify for the credit. Turbotax free state filing Disability income must meet both of the following requirements. Turbotax free state filing It must be paid under your employer's accident or health plan or pension plan. Turbotax free state filing It must be included in your income as wages (or payments instead of wages) for the time you are absent from work because of permanent and total disability. Turbotax free state filing Payments that are not disability income. Turbotax free state filing   Any payment you receive from a plan that does not provide for disability retirement is not disability income. Turbotax free state filing Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and is not disability income. Turbotax free state filing   For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive after you reach mandatory retirement age. Turbotax free state filing Mandatory retirement age is the age set by your employer at which you would have had to retire, had you not become disabled. Turbotax free state filing Income Limits To determine if you can claim the credit, you must consider two income limits. Turbotax free state filing The first limit is the amount of your adjusted gross income (AGI). Turbotax free state filing The second limit is the amount of nontaxable social security and other nontaxable pensions, annuities, or disability income you received. Turbotax free state filing The limits are shown in Table 33-1. Turbotax free state filing If your AGI and nontaxable pensions, annuities, or disability income are less than the income limits, you may be able to claim the credit. Turbotax free state filing See How to Claim the Credit , later. Turbotax free state filing If either your AGI or your nontaxable pensions, annuities, or disability income are equal to or more than the income limits, you cannot take the credit. Turbotax free state filing How to Claim the Credit You can figure the credit yourself or the Internal Revenue Service will figure it for you. Turbotax free state filing Credit Figured for You If you choose to have the IRS figure the credit for you, read the following discussion for the form you will file (Form 1040 or 1040A). Turbotax free state filing If you want the IRS to figure your tax, see chapter 30. Turbotax free state filing Form 1040. Turbotax free state filing   If you want the IRS to figure your credit, see Form 1040 Line Entries under Tax Figured by IRS in chapter 30. Turbotax free state filing Form 1040A. Turbotax free state filing   If you want the IRS to figure your credit, see Form 1040A Line Entries under Tax Figured by IRS in chapter 30. Turbotax free state filing Credit Figured by You If you choose to figure the credit yourself, fill out the front of Schedule R. Turbotax free state filing Next, fill out Schedule R, Part III. Turbotax free state filing If you file Form 1040A, enter the amount from Schedule R, line 22, on Form 1040A, line 30. Turbotax free state filing If you file Form 1040, include the amount from Schedule R, line 22, on line 53; check box c, and enter “Sch R” on the line next to that box. Turbotax free state filing For a step-by-step discussion about filling out Part III of Schedule R, see Figuring the Credit Yourself in Publication 524. Turbotax free state filing Limit on credit. Turbotax free state filing   The amount of the credit you can claim is generally limited to the amount of your tax. Turbotax free state filing Use the Credit Limit Worksheet in the Instructions for Schedule R to determine if your credit is limited. Turbotax free state filing Prev  Up  Next   Home   More Online Publications
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Tax Information For Businesses

Small Business and Self-Employed Tax Center
Access to tax information useful to small businesses with assets of $10 million or less.

Large Business and International Tax Center
This page provides links which are helpful for large to mid-size businesses with assets greater than $10 million

Work Opportunity Tax Credit Extended
Businesses, including tax-exempt employers, may qualify for the Work Opportunity Tax Credit for qualified veterans hired before January 1, 2014.

Self-Employed Individuals Tax Center
The basics on your tax responsibilities if you are self-employed or an independent contractor.

Qualifying Advanced Energy Project Credit (section 48C)
Notice 2013-12, issued February 7, 2013, announced the availability of $150,228,397 in section 48C tax credits in the Phase II allocation round in 2013. Application procedures are different than in the first allocation round.

IRS Video Portal
The IRS Video portal contains video and audio presentations on topics of interest to small businesses, individuals and tax professionals. You will find video clips of tax topics, and archived versions of live panel discussions and webinars.

Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations
The Balanced Budget and Emergency Deficit Reduction Act of 1985, as amended, requires certain spending cuts during Fiscal Year 2013 due to the sequester triggered earlier this year.

Alternative Motor Vehicle Credit
The Alternative Fuel Motor Vehicle Credit was enacted by the Energy Policy Act of 2005 and includes separate credits for four distinct categories of vehicles: Hybrid vehicles, Fuel Cell vehicles, Qualified Alternative Fuel Motor vehicles (QAFMV) and Advanced Lean Burn Technology vehicles. The amount of the potential credit varies by type of vehicle and which of the four credits applies.

Coordinated Issue Papers - LB&I
Effective January 21, 2014, all LB&I coordinated issue papers are decoordinated.  See 1/21/14 Directive from LB&I Commissioner Maloy for details.

HIRE Act: Questions and Answers for Employers
General information about the provisions of the Hiring Individuals to Restore Employment Act.

Employment Taxes
Federal income tax, Social Security and Medicare taxes, FUTA, self-employment tax and more.

Disaster Assistance and Emergency Relief for Individuals and Businesses
Special tax law provisions may help taxpayers and businesses recover financially from a disaster.

Small Business Forms and Publications
Download multiple small business and self-employed forms and publications.

e-file for Large Business and International (LB&I)
Certain large business and International (LB&I) corporations are required to electronically file their Forms 1120 and 1120S. Other corporations may do so voluntarily. This site provides e-file information for corporations that prepare and transmit their own electronic corporate income tax returns and those that use the services of third party tax professionals.

Employer ID Numbers (EINs)
Find out more on EINs or apply for one online.

Employee Tool & Equipment Plans
The Internal Revenue Service has established a compliance team to address the marketing and mistreatment of employee tool and equipment plans as tax-favored accountable plans.

Deducting Business Expenses
Find out what qualifies as a deductible business expense, including depreciation.

IRS Tax Calendar for Businesses and Self-Employed
The tax calendar is available for downloading and printing, or you can view it online.

U.S. Citizens and Resident Aliens Abroad
This section covers tax topics for U.S. citizens or resident aliens living overseas.

HCTC: Information for Health Plan Administrators (HPAs)
Health Plan Administrators are key to the success of the HCTC by providing health insurance to eligible individuals. Find information specific to health plan administrators here, including how to get involved and participate with the HCTC Program.

Excise Tax
Information about the various programs, databases, and activities within Excise Tax.

Industry Issue Resolution Program
The Industry Issue Resolution (IIR) Program resolves frequently disputed or burdensome tax issues. IRS solicits suggestions for issues for the program from taxpayers, representatives and associations.

Estate and Gift Taxes
General information on when these taxes apply and when they do not.

Filing Past Due Tax Returns
Understand how to file past due returns.

Information Returns Processing
The Information Reporting Program Website is designed to help you meet your Information Reporting Requirements. Included are help-line telephone numbers and direct links to aid you in reporting information returns. You will also find information about how to file returns electronically or magnetically.

LB&I Directives
LB&I Directives provide industry-related and administrative guidance to LB&I examiners to ensure consistent tax administration. The Directives do not establish Service position on legal issues and are not legal guidance.

Online Ordering for Information Returns and Employer Returns
Order information returns and employer returns online.

Manufacturers' Energy Efficient Appliance Credit
Act Section 305 - Modifications of Energy Efficient Appliance Credit for Appliances Produced After 2007

Audit Techniques Guides (ATGs)
These guides contain examination techniques to assist examiners in performing examinations.

1099-K Reporting Requirements for Payment Settlement Entities
Describes responsibilities of 1099-K filers and provides links to forms and publications.

Plug-In Electric Drive Vehicle Credit (IRC 30D)
Plug-In Electric Drive Vehicle Credit (IRC 30D) - Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks.

Your Guide to an IRS Small Business Audit
Video series shows small business owners steps of an audit and answers questions about the process

Income from Abroad is Taxable
There have been recent reports about the interest of the Internal Revenue Service (IRS) in taxpayers with bank accounts in Liechtenstein. The IRS' interest, however, extends beyond bank accounts in Liechtenstein to financial accounts anywhere in the world. The IRS reminds you to report your worldwide income on your U.S. tax return and lists the possible consequences of hiding income overseas.

Quality Examination Process
The Quality Examination Process (QEP) is a systematic approach for engaging and involving Large Business and International (LB&I) taxpayers in the tax examination process, from the earliest planning stages through resolution of all issues and completion of the case.

Market Segment Understandings (MSU)
The IRS and taxpayers in particular market segments, work together to improve tax compliance.

Railroad Retirement Tax Act (RRTA) Desk Guide (January 2009)
This Desk Reference Guide is intended as a resource tool to assist Revenue Agents who are assigned the examination of a railroad employer. The Guide was prepared presuming that the reader has already received employment tax training.

Federal Payment Levy Program
Certain federal payments (OPM, SSA, federal employee salaries, and federal employee travel) disbursed by the Department of the Treasury, Financial Management Service (FMS) may be subject to a 15 percent levy through the Federal Payment Levy Program (FPLP) to pay your delinquent tax debt. Find out your appeal rights and how to resolve any dispute.

Research Credit
Guidelines and audit technique guide are provided for field examiners on the examination of Research Credit cases.

The International Tax Gap
Find resources on this page pertaining to the international tax gap — the difference between the amount of tax that taxpayers should pay and the amount that is paid voluntarily and on time. The tax gap can also be thought of as the sum of non-compliance with the tax law.

Uncertain Tax Positions - Schedule UTP
IRS finalized Schedule UTP & instructions for reporting uncertain tax positions by certain corporations.

IRS Non-Retaliation Policy
IRS has a zero-tolerance policy for retaliation and has had one in place since 1998.

Page Last Reviewed or Updated: 30-Mar-2014

The Turbotax Free State Filing

Turbotax free state filing 1. Turbotax free state filing   Definitions You Need To Know Table of Contents Other options. Turbotax free state filing Exception. Turbotax free state filing Certain terms used in this publication are defined below. Turbotax free state filing The same term used in another publication may have a slightly different meaning. Turbotax free state filing Annual additions. Turbotax free state filing   Annual additions are the total of all your contributions in a year, employee contributions (not including rollovers), and forfeitures allocated to a participant's account. Turbotax free state filing Annual benefits. Turbotax free state filing   Annual benefits are the benefits to be paid yearly in the form of a straight life annuity (with no extra benefits) under a plan to which employees do not contribute and under which no rollover contributions are made. Turbotax free state filing Business. Turbotax free state filing   A business is an activity in which a profit motive is present and economic activity is involved. Turbotax free state filing Service as a newspaper carrier under age 18 or as a public official is not a business. Turbotax free state filing Common-law employee. Turbotax free state filing   A common-law employee is any individual who, under common law, would have the status of an employee. Turbotax free state filing A leased employee can also be a common-law employee. Turbotax free state filing   A common-law employee is a person who performs services for an employer who has the right to control and direct the results of the work and the way in which it is done. Turbotax free state filing For example, the employer: Provides the employee's tools, materials, and workplace, and Can fire the employee. Turbotax free state filing   Common-law employees are not self-employed and cannot set up retirement plans for income from their work, even if that income is self-employment income for social security tax purposes. Turbotax free state filing For example, common-law employees who are ministers, members of religious orders, full-time insurance salespeople, and U. Turbotax free state filing S. Turbotax free state filing citizens employed in the United States by foreign governments cannot set up retirement plans for their earnings from those employments, even though their earnings are treated as self-employment income. Turbotax free state filing   However, an individual may be a common-law employee and a self-employed person as well. Turbotax free state filing For example, an attorney can be a corporate common-law employee during regular working hours and also practice law in the evening as a self-employed person. Turbotax free state filing In another example, a minister employed by a congregation for a salary is a common-law employee even though the salary is treated as self-employment income for social security tax purposes. Turbotax free state filing However, fees reported on Schedule C (Form 1040), Profit or Loss From Business, for performing marriages, baptisms, and other personal services are self-employment earnings for qualified plan purposes. Turbotax free state filing Compensation. Turbotax free state filing   Compensation for plan allocations is the pay a participant received from you for personal services for a year. Turbotax free state filing You can generally define compensation as including all the following payments. Turbotax free state filing Wages and salaries. Turbotax free state filing Fees for professional services. Turbotax free state filing Other amounts received (cash or noncash) for personal services actually rendered by an employee, including, but not limited to, the following items. Turbotax free state filing Commissions and tips. Turbotax free state filing Fringe benefits. Turbotax free state filing Bonuses. Turbotax free state filing   For a self-employed individual, compensation means the earned income, discussed later, of that individual. Turbotax free state filing   Compensation generally includes amounts deferred in the following employee benefit plans. Turbotax free state filing These amounts are elective deferrals. Turbotax free state filing Qualified cash or deferred arrangement (section 401(k) plan). Turbotax free state filing Salary reduction agreement to contribute to a tax-sheltered annuity (section 403(b) plan), a SIMPLE IRA plan, or a SARSEP. Turbotax free state filing Section 457 nonqualified deferred compensation plan. Turbotax free state filing Section 125 cafeteria plan. Turbotax free state filing   However, an employer can choose to exclude elective deferrals under the above plans from the definition of compensation. Turbotax free state filing The limit on elective deferrals is discussed in chapter 2 under Salary Reduction Simplified Employee Pension (SARSEP) and in chapter 4. Turbotax free state filing Other options. Turbotax free state filing   In figuring the compensation of a participant, you can treat any of the following amounts as the employee's compensation. Turbotax free state filing The employee's wages as defined for income tax withholding purposes. Turbotax free state filing The employee's wages you report in box 1 of Form W-2, Wage and Tax Statement. Turbotax free state filing The employee's social security wages (including elective deferrals). Turbotax free state filing   Compensation generally cannot include either of the following items. Turbotax free state filing Nontaxable reimbursements or other expense allowances. Turbotax free state filing Deferred compensation (other than elective deferrals). Turbotax free state filing SIMPLE plans. Turbotax free state filing   A special definition of compensation applies for SIMPLE plans. Turbotax free state filing See chapter 3. Turbotax free state filing Contribution. Turbotax free state filing   A contribution is an amount you pay into a plan for all those participating in the plan, including self-employed individuals. Turbotax free state filing Limits apply to how much, under the contribution formula of the plan, can be contributed each year for a participant. Turbotax free state filing Deduction. Turbotax free state filing   A deduction is the plan contributions you can subtract from gross income on your federal income tax return. Turbotax free state filing Limits apply to the amount deductible. Turbotax free state filing Earned income. Turbotax free state filing   Earned income is net earnings from self-employment, discussed later, from a business in which your services materially helped to produce the income. Turbotax free state filing   You can also have earned income from property your personal efforts helped create, such as royalties from your books or inventions. Turbotax free state filing Earned income includes net earnings from selling or otherwise disposing of the property, but it does not include capital gains. Turbotax free state filing It includes income from licensing the use of property other than goodwill. Turbotax free state filing   Earned income includes amounts received for services by self-employed members of recognized religious sects opposed to social security benefits who are exempt from self-employment tax. Turbotax free state filing   If you have more than one business, but only one has a retirement plan, only the earned income from that business is considered for that plan. Turbotax free state filing Employer. Turbotax free state filing   An employer is generally any person for whom an individual performs or did perform any service, of whatever nature, as an employee. Turbotax free state filing A sole proprietor is treated as his or her own employer for retirement plan purposes. Turbotax free state filing However, a partner is not an employer for retirement plan purposes. Turbotax free state filing Instead, the partnership is treated as the employer of each partner. Turbotax free state filing Highly compensated employee. Turbotax free state filing   A highly compensated employee is an individual who: Owned more than 5% of the interest in your business at any time during the year or the preceding year, regardless of how much compensation that person earned or received, or For the preceding year, received compensation from you of more than $115,000 (if the preceding year is 2012, 2013, or 2014) and, if you so choose, was in the top 20% of employees when ranked by compensation. Turbotax free state filing Leased employee. Turbotax free state filing   A leased employee who is not your common-law employee must generally be treated as your employee for retirement plan purposes if he or she does all the following. Turbotax free state filing Provides services to you under an agreement between you and a leasing organization. Turbotax free state filing Has performed services for you (or for you and related persons) substantially full time for at least 1 year. Turbotax free state filing Performs services under your primary direction or control. Turbotax free state filing Exception. Turbotax free state filing   A leased employee is not treated as your employee if all the following conditions are met. Turbotax free state filing Leased employees are not more than 20% of your non-highly compensated work force. Turbotax free state filing The employee is covered under the leasing organization's qualified pension plan. Turbotax free state filing The leasing organization's plan is a money purchase pension plan that has all the following provisions. Turbotax free state filing Immediate participation. Turbotax free state filing (This requirement does not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000. Turbotax free state filing ) Full and immediate vesting. Turbotax free state filing A nonintegrated employer contribution rate of at least 10% of compensation for each participant. Turbotax free state filing However, if the leased employee is your common-law employee, that employee will be your employee for all purposes, regardless of any pension plan of the leasing organization. Turbotax free state filing Net earnings from self-employment. Turbotax free state filing   For SEP and qualified plans, net earnings from self-employment is your gross income from your trade or business (provided your personal services are a material income-producing factor) minus allowable business deductions. Turbotax free state filing Allowable deductions include contributions to SEP and qualified plans for common-law employees and the deduction allowed for the deductible part of your self-employment tax. Turbotax free state filing   Net earnings from self-employment does not include items excluded from gross income (or their related deductions) other than foreign earned income and foreign housing cost amounts. Turbotax free state filing   For the deduction limits, earned income is net earnings for personal services actually rendered to the business. Turbotax free state filing You take into account the income tax deduction for the deductible part of self-employment tax and the deduction for contributions to the plan made on your behalf when figuring net earnings. Turbotax free state filing   Net earnings include a partner's distributive share of partnership income or loss (other than separately stated items, such as capital gains and losses). Turbotax free state filing It does not include income passed through to shareholders of S corporations. Turbotax free state filing Guaranteed payments to limited partners are net earnings from self-employment if they are paid for services to or for the partnership. Turbotax free state filing Distributions of other income or loss to limited partners are not net earnings from self-employment. Turbotax free state filing   For SIMPLE plans, net earnings from self-employment is the amount on line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040), Self-Employment Tax, before subtracting any contributions made to the SIMPLE plan for yourself. Turbotax free state filing Qualified plan. Turbotax free state filing   A qualified plan is a retirement plan that offers a tax-favored way to save for retirement. Turbotax free state filing You can deduct contributions made to the plan for your employees. Turbotax free state filing Earnings on these contributions are generally tax free until distributed at retirement. Turbotax free state filing Profit-sharing, money purchase, and defined benefit plans are qualified plans. Turbotax free state filing A 401(k) plan is also a qualified plan. Turbotax free state filing Participant. Turbotax free state filing   A participant is an eligible employee who is covered by your retirement plan. Turbotax free state filing See the discussions of the different types of plans for the definition of an employee eligible to participate in each type of plan. Turbotax free state filing Partner. Turbotax free state filing   A partner is an individual who shares ownership of an unincorporated trade or business with one or more persons. Turbotax free state filing For retirement plans, a partner is treated as an employee of the partnership. Turbotax free state filing Self-employed individual. Turbotax free state filing   An individual in business for himself or herself, and whose business is not incorporated, is self-employed. Turbotax free state filing Sole proprietors and partners are self-employed. Turbotax free state filing Self-employment can include part-time work. Turbotax free state filing   Not everyone who has net earnings from self-employment for social security tax purposes is self-employed for qualified plan purposes. Turbotax free state filing See Common-law employee and Net earnings from self-employment , earlier. Turbotax free state filing   In addition, certain fishermen may be considered self-employed for setting up a qualified plan. Turbotax free state filing See Publication 595, Capital Construction Fund for Commercial Fishermen, for the special rules used to determine whether fishermen are self-employed. Turbotax free state filing Sole proprietor. Turbotax free state filing   A sole proprietor is an individual who owns an unincorporated business by himself or herself, including a single member limited liability company that is treated as a disregarded entity for tax purposes. Turbotax free state filing For retirement plans, a sole proprietor is treated as both an employer and an employee. Turbotax free state filing Prev  Up  Next   Home   More Online Publications