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

Vita Tax Locations

Ez40E File State Taxes Only FreeTax Forms1040ez Form 2012 Online2011 Federal Tax Form 1040Free Tax FormsAmended Returns1040aFree Income Tax Return1040x IrsFree State Returns Taxes FilingFree Federal Tax FilingWww Mifastfile Org1040nr Ez InstructionsFile An Amended Tax Return104ez1040 Ez 2012Express 10402011 Income Tax Forms IndividualH&r Block Income TaxFree Tax Services OnlineIrs Form EzTax Information For StudentsCan I File 1040nr Online1040x Instructions 2012Download 2010 Tax Forms1040ez 2010printable Tax FormsFile Taxes Online Free 20111040ez Instructions 2012File My State Taxes Online FreeHow Do I File My 2011 Tax ReturnHow To File State Taxes For FreeFile Amended 2012 Tax ReturnAmend A 2011 Tax ReturnIrs Gov Free FileFederal Tax Forms 1040ezDo My State Tax For FreeEz 1040 OnlineFile Amended ReturnFiling Taxes Unemployed

Vita Tax Locations

Vita tax locations Publication 531 - Main Content Table of Contents Keeping a Daily Tip RecordElectronic tip record. Vita tax locations Reporting Tips to Your EmployerElectronic tip statement. Vita tax locations Final report. Vita tax locations Tip Rate Determination and Education Program Reporting Tips on Your Tax Return Allocated Tips How To Get Tax Help Keeping a Daily Tip Record Why keep a daily tip record. Vita tax locations   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. Vita tax locations How to keep a daily tip record. Vita tax locations   There are two ways to keep a daily tip record. Vita tax locations You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. Vita tax locations You should keep your daily tip record with your tax or other personal records. Vita tax locations You must keep your records for as long as they are important for administration of the federal tax law. Vita tax locations For information on how long to keep records, see How Long to Keep Records in chapter 1 of Publication 17, Your Federal Income Tax. Vita tax locations    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. Vita tax locations To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244, Employee's Daily Record of Tips and Report to Employer. Vita tax locations Publication 1244 is also available at www. Vita tax locations irs. Vita tax locations gov/pub1244. Vita tax locations Publication 1244 includes a 1-year supply of Form 4070A. Vita tax locations Each day, write in the information asked for on the form. Vita tax locations A filled-in Form 4070A is shown on the following page. Vita tax locations   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. Vita tax locations Although you do not report these tips to your employer, you must report them on your tax return. Vita tax locations   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). Vita tax locations Then, each workday, write the date and the following information. Vita tax locations Cash tips you get directly from customers or from other employees. Vita tax locations Tips from credit and debit card charge customers that your employer pays you. Vita tax locations The value of any noncash tips you get, such as tickets, passes, or other items of value. Vita tax locations The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. Vita tax locations Please click here for the text description of the image. Vita tax locations Sample Filled-in Form 4070A from Publication 1244 Electronic tip record. Vita tax locations   You can use an electronic system provided by your employer to record your daily tips. Vita tax locations If you do, you must receive and keep a paper copy of this record. Vita tax locations Service charges. Vita tax locations    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. Vita tax locations This is part of your wages, not a tip. Vita tax locations The following factors determine if you have a tip or service charge: The payment is made free from compulsion; The customer has the right to determine the amount of payment; The payment is not subject to negotiation or dictated by employer policy; and The customer generally has the right to determine who receives the payment. Vita tax locations See examples below. Vita tax locations Example 1. Vita tax locations Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. Vita tax locations Jane's bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. Vita tax locations Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. Vita tax locations Do not include the 18% charge in your tip diary. Vita tax locations Service charges that are paid to you are considered wages, not tips. Vita tax locations Example 2. Vita tax locations Good Food Restaurant includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. Vita tax locations David's bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of the charges for food and beverages at the bottom of the bill beneath the signature line. Vita tax locations Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. Vita tax locations Be sure to include this amount in your tip diary. Vita tax locations Sample Filled-in Form 4070 from Publication 1244 Please click here for the text description of the image. Vita tax locations Filled-in Form 4070 Reporting Tips to Your Employer Why report tips to your employer. Vita tax locations   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). Vita tax locations What tips to report. Vita tax locations   Report to your employer only cash, check, and debit and credit card tips you receive. Vita tax locations   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. Vita tax locations   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Vita tax locations Do not report to your employer any portion of the tips you receive that you pass on to other employees. Vita tax locations However, you must report tips you receive from other employees. Vita tax locations   Do not report the value of any noncash tips, such as tickets or passes, to your employer. Vita tax locations You do not pay social security, Medicare, Additional Medicare, or railroad retirement taxes on these tips. Vita tax locations How to report. Vita tax locations   If your employer does not give you any other way to report your tips, you can use Form 4070, Employee's Report of Tips to Employer. Vita tax locations Fill in the information asked for on the form, sign and date the form, and give it to your employer. Vita tax locations A sample filled-in Form 4070 is shown above. Vita tax locations To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. Vita tax locations   If you do not use Form 4070, give your employer a statement with the following information. Vita tax locations Your name, address, and social security number. Vita tax locations Your employer's name, address, and business name (if it is different from your employer's name). Vita tax locations The month (or the dates of any shorter period) in which you received tips. Vita tax locations The total tips required to be reported for that period. Vita tax locations You must sign and date the statement. Vita tax locations Be sure to keep a copy with your tax or other personal records. Vita tax locations   Your employer may require you to report your tips more than once a month. Vita tax locations However, the statement cannot cover a period of more than 1 calendar month. Vita tax locations Electronic tip statement. Vita tax locations   Your employer can have you furnish your tip statements electronically. Vita tax locations When to report. Vita tax locations   Give your report for each month to your employer by the 10th of the next month. Vita tax locations If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. Vita tax locations Example. Vita tax locations You must report your tips received in September 2014 by October 10, 2014. Vita tax locations Final report. Vita tax locations   If your employment ends during the month, you can report your tips when your employment ends. Vita tax locations Penalty for not reporting tips. Vita tax locations   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, Additional Medicare, or railroad retirement taxes you owe on the unreported tips. Vita tax locations (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. Vita tax locations ) The penalty amount is in addition to the taxes you owe. Vita tax locations   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. Vita tax locations To do so, attach a statement to your return explaining why you did not report them. Vita tax locations Giving your employer money for taxes. Vita tax locations   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. Vita tax locations If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. Vita tax locations   If you do not give your employer enough money, your employer will apply your regular pay and any money you give to the taxes, in the following order. Vita tax locations All taxes on your regular pay. Vita tax locations Social security, Medicare, Additional Medicare, or railroad retirement taxes on your reported tips. Vita tax locations Federal, state, and local income taxes on your reported tips. Vita tax locations    Any taxes that remain unpaid can be collected by your employer from your next paycheck. Vita tax locations If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. Vita tax locations See Publication 505, Tax Withholding and Estimated Tax, for more information. Vita tax locations    Uncollected taxes. Vita tax locations You must report on your tax return any social security and Medicare taxes, or railroad retirement taxes that remained uncollected at the end of 2013. Vita tax locations These uncollected taxes will be shown on your 2013 Form W-2. Vita tax locations See Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. Vita tax locations Tip Rate Determination and Education Program Your employer may participate in the Tip Rate Determination and Education Program. Vita tax locations The program was developed to help employees and employers understand and meet their tip reporting responsibilities. Vita tax locations There are two agreements under the program: the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). Vita tax locations A variation of the TRAC program, the Employer Tip Reporting Alternative Commitment, (EmTRAC) was designed to allow employers in the food and beverage industry to design and receive approval for their own TRAC programs. Vita tax locations For information on the EmTRAC program, see Notice 2001-1, which is on page 261 of Internal Revenue Bulletin 2001-2 at www. Vita tax locations irs. Vita tax locations gov/pub/irs-irbs/irb01-02. Vita tax locations pdf. Vita tax locations If you are employed in the gaming industry, your employer may participate in the Gaming Industry Tip Compliance Agreement Program. Vita tax locations See Revenue Procedure 2007-32, 2007-22 I. Vita tax locations R. Vita tax locations B. Vita tax locations 1322, available at www. Vita tax locations irs. Vita tax locations gov/pub/irs-irbs/irb07_22. Vita tax locations pdf. Vita tax locations Your employer can provide you with a copy of any applicable agreement. Vita tax locations To find out more about these agreements, visit IRS. Vita tax locations gov and enter “restaurant tip reporting” in the search box. Vita tax locations You may also call 1-800-829-4933, visit www. Vita tax locations irs. Vita tax locations gov/localcontacts for the IRS Taxpayer Assistance Center in your area, or send an email to Tip. Vita tax locations Program@irs. Vita tax locations gov and request information on this program. Vita tax locations Reporting Tips on Your Tax Return How to report tips. Vita tax locations   Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; Form 1040EZ, line 1; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Vita tax locations What tips to report. Vita tax locations   Generally, you must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Vita tax locations Any tips you reported to your employer as required in 2013 are included in the wages shown in box 1 of your Form W-2. Vita tax locations Add to the amount in box 1 only the tips you did not report to your employer. Vita tax locations   However, any tips you received in 2013 that you reported to your employer as required after 2013 but before January 11, 2014, are not included in the wages shown in box 1 of your 2013 Form W-2. Vita tax locations Do not include the amount of these tips on your 2013 tax return. Vita tax locations Instead, include them on your 2014 tax return. Vita tax locations Tips you received in 2012 that you reported to your employer as required after 2012 but before January 11, 2013, are included in the wages shown in box 1 of your 2013 Form W-2. Vita tax locations Although these tips were received in 2012, you must report them on your 2013 tax return. Vita tax locations   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Vita tax locations Do not report on your income tax return any portion of the tips you receive that you pass on to other employees. Vita tax locations However, you must report tips you receive from other employees. Vita tax locations    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. Vita tax locations    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. Vita tax locations   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. Vita tax locations Cash and charge tips you received that totaled less than $20 for any month. Vita tax locations The value of noncash tips, such as tickets, passes, or other items of value. Vita tax locations Example. Vita tax locations Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. Vita tax locations Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. Vita tax locations He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. Vita tax locations Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages + $7,000 reported tips) in box 1. Vita tax locations He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. Vita tax locations Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Vita tax locations    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. Vita tax locations To report these taxes, you must file a return even if you would not otherwise have to file. Vita tax locations You must use Form 1040, Form 1040NR, Form 1040NR-EZ, Form 1040-SS, or 1040-PR (as appropriate) for this purpose. Vita tax locations (You cannot file Form 1040EZ or Form 1040A. Vita tax locations )    Use Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to figure social security and Medicare taxes. Vita tax locations Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. Vita tax locations Use Form 8959 to figure Additional Medicare Tax. Vita tax locations If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. Vita tax locations To get railroad retirement credit, you must report tips to your employer. Vita tax locations Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer. Vita tax locations    You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. Vita tax locations For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. Vita tax locations   If your employer could not collect all the social security and Medicare taxes, or railroad retirement taxes you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). Vita tax locations You must report these amounts as additional tax on your return. Vita tax locations   If you worked in the U. Vita tax locations S. Vita tax locations possessions and received Form W-2AS, Form W-2CM, Form W-2GU, or Form W-2VI, any uncollected taxes on tips will be shown in box 12 with codes A and B. Vita tax locations If you received Form 499R-2/W-2PR, any uncollected taxes will be shown in boxes 22 and 23. Vita tax locations Unlike the uncollected portion of the regular (1. Vita tax locations 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported on Form W-2. Vita tax locations   To report these uncollected taxes, you must file a return even if you would not otherwise have to file. Vita tax locations You can report these taxes on Form 1040, in the space next to line 60; Form 1040NR, line 59; Form 1040-SS, Part I, line 6; or Form 1040-PR, Part I, line 6. Vita tax locations See the instructions for the appropriate form and line number indicated, and Form 8959. Vita tax locations (You cannot file Form 1040A, Form 1040EZ, or Form 1040NR-EZ. Vita tax locations ) Self-employed persons. Vita tax locations    If you receive tips as a self-employed person, you should report these tips as income on Schedule C or C-EZ. Vita tax locations See Publication 334, Tax Guide for Small Business, for more information on reporting business income. Vita tax locations Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. Vita tax locations They are not included in box 1 with your wages and reported tips. Vita tax locations If box 8 is blank, this discussion does not apply to you. Vita tax locations What are allocated tips. Vita tax locations   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. Vita tax locations Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. Vita tax locations No income, social security, Medicare, Additional Medicare, or railroad retirement taxes are withheld on allocated tips. Vita tax locations How were your allocated tips figured. Vita tax locations   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). Vita tax locations Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. Vita tax locations For information about the exact allocation method used, ask your employer. Vita tax locations Must you report your allocated tips on your tax return. Vita tax locations   You must report tips you received in 2013 (including both cash and noncash tips) on your tax return as explained in What tips to report , earlier. Vita tax locations Any tips you reported to your employer in 2013 as required (explained under Reporting Tips to Your Employer , earlier) are included in the wages shown in box 1 of your Form W-2. Vita tax locations Add to the amount in box 1 only the tips you did not report to your employer as required. Vita tax locations This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated amount. Vita tax locations   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. Vita tax locations How to report allocated tips. Vita tax locations   If you received any tips in 2013 that you did not report to your employer as required (including allocated tips that you are required to report on your tax return), add these tips to the amount in box 1 of your Form(s) W-2 and report this amount as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Vita tax locations (You cannot file Form 1040A or Form 1040EZ). Vita tax locations    Because social security, Medicare, or Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Vita tax locations Complete Form 4137 and include the allocated tips on line 1 of the form as provided in its instructions. Vita tax locations See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. Vita tax locations How to request an approved lower rate. Vita tax locations   Your employer can use a tip rate lower than 8% (but not lower than 2%) to figure allocated tips only if the IRS approves the lower rate. Vita tax locations Either the employer or the employees can request approval of a lower rate by filing a petition with the IRS. Vita tax locations The petition must include specific information about the establishment that will justify the lower rate. Vita tax locations A user fee must be paid with the petition. Vita tax locations    An employee petition can be filed only with the consent of a majority of the directly tipped employees (waiters, bartenders, and others who receive tips directly from customers). Vita tax locations The petition must state the total number of directly tipped employees and the number of employees consenting to the petition. Vita tax locations Employees filing the petition must promptly notify the employer, and the employer must promptly give the IRS a copy of all Forms 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, filed for the establishment for the previous 3 years. Vita tax locations   For more information about how to file a petition and what information to include, see Allocation of Tips in the Instructions for Form 8027. Vita tax locations How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. Vita tax locations Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. Vita tax locations Free help with your tax return. Vita tax locations   Free help in preparing your return is available nationwide from IRS-certified volunteers. Vita tax locations The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. Vita tax locations The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Vita tax locations Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Vita tax locations Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Vita tax locations To find the nearest VITA or TCE site, visit IRS. Vita tax locations gov or call 1-800-906-9887. Vita tax locations   As part of the TCE program, AARP offers the Tax-Aide counseling program. Vita tax locations To find the nearest AARP Tax-Aide site, visit AARP's website at www. Vita tax locations aarp. Vita tax locations org/money/taxaide or call 1-888-227-7669. Vita tax locations   For more information on these programs, go to IRS. Vita tax locations gov and enter “VITA” in the search box. Vita tax locations Internet. Vita tax locations IRS. Vita tax locations gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. Vita tax locations Apply for an Employer Identification Number (EIN). Vita tax locations Go to IRS. Vita tax locations gov and enter Apply for an EIN in the search box. Vita tax locations Request an Electronic Filing PIN by going to IRS. Vita tax locations gov and entering Electronic Filing PIN in the search box. Vita tax locations Check the status of your 2013 refund with Where's My Refund? Go to IRS. Vita tax locations gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. Vita tax locations If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Vita tax locations Check the status of your amended return. Vita tax locations Go to IRS. Vita tax locations gov and enter Where's My Amended Return in the search box. Vita tax locations Download forms, instructions, and publications, including some accessible versions. Vita tax locations Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. Vita tax locations gov or IRS2Go. Vita tax locations Tax return and tax account transcripts are generally available for the current year and past three years. Vita tax locations Figure your income tax withholding with the IRS Withholding Calculator on IRS. Vita tax locations gov. Vita tax locations Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Vita tax locations Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Vita tax locations gov. Vita tax locations Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. Vita tax locations gov or IRS2Go. Vita tax locations Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. Vita tax locations An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. Vita tax locations Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. Vita tax locations If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. Vita tax locations Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Vita tax locations Locate the nearest volunteer help site with the VITA Locator Tool on IRS. Vita tax locations gov. Vita tax locations Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Vita tax locations The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Vita tax locations Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. Vita tax locations AARP offers the Tax-Aide counseling program as part of the TCE program. Vita tax locations Visit AARP's website to find the nearest Tax-Aide location. Vita tax locations Research your tax questions. Vita tax locations Search publications and instructions by topic or keyword. Vita tax locations Read the Internal Revenue Code, regulations, or other official guidance. Vita tax locations Read Internal Revenue Bulletins. Vita tax locations Sign up to receive local and national tax news by email. Vita tax locations Phone. Vita tax locations You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Vita tax locations Download the free IRS2Go mobile app from the iTunes app store or from Google Play. Vita tax locations Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Vita tax locations Call to locate the nearest volunteer help site, 1-800-906-9887. Vita tax locations Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Vita tax locations The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Vita tax locations Most VITA and TCE sites offer free electronic filing. Vita tax locations Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Vita tax locations Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Vita tax locations Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. Vita tax locations The automated Where's My Refund? information is available 24 hours a day, 7 days a week. Vita tax locations If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Vita tax locations Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Vita tax locations Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Vita tax locations Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Vita tax locations Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Vita tax locations Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). Vita tax locations You should receive your order within 10 business days. Vita tax locations Call to order transcripts of your tax returns or tax account, 1-800-908-9946. Vita tax locations Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. Vita tax locations Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. Vita tax locations Call to ask tax questions, 1-800-829-1040. Vita tax locations Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Vita tax locations The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Vita tax locations These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. Vita tax locations gsa. Vita tax locations gov/fedrelay. Vita tax locations Walk-in. Vita tax locations You can find a selection of forms, publications and services — in-person, face-to-face. Vita tax locations Products. Vita tax locations You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Vita tax locations Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Vita tax locations Services. Vita tax locations You can walk in to your local TAC most business days for personal, face-to-face tax help. Vita tax locations An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Vita tax locations If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Vita tax locations No appointment is necessary—just walk in. Vita tax locations Before visiting, check www. Vita tax locations irs. Vita tax locations gov/localcontacts for hours of operation and services provided. Vita tax locations Mail. Vita tax locations You can send your order for forms, instructions, and publications to the address below. Vita tax locations You should receive a response within 10 business days after your request is received. Vita tax locations  Internal Revenue Service 1201 N. Vita tax locations Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. Vita tax locations   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Vita tax locations Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Vita tax locations What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. Vita tax locations We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Vita tax locations You face (or your business is facing) an immediate threat of adverse action. Vita tax locations You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Vita tax locations   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Vita tax locations Here's why we can help: TAS is an independent organization within the IRS. Vita tax locations Our advocates know how to work with the IRS. Vita tax locations Our services are free and tailored to meet your needs. Vita tax locations We have offices in every state, the District of Columbia, and Puerto Rico. Vita tax locations How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Vita tax locations irs. Vita tax locations gov/advocate, or call us toll-free at 1-877-777-4778. Vita tax locations How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Vita tax locations If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Vita tax locations irs. Vita tax locations gov/sams. Vita tax locations Low Income Taxpayer Clinics. Vita tax locations   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Vita tax locations Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Vita tax locations Visit www. Vita tax locations TaxpayerAdvocate. Vita tax locations irs. Vita tax locations gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. Vita tax locations Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Understanding your CP88 Notice

We are holding your refund because you have not filed one or more tax returns and we believe you will owe tax.


What you need to do

  • File your personal tax return immediately or explain to us why you don't need to file.
  • Use the response form on your notice to explain:
    • why you're filing late
    • why you don't have to file
    • that you've already filed

You may want to...

 

Page Last Reviewed or Updated: 07-Mar-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Vita Tax Locations

Vita tax locations 3. Vita tax locations   SIMPLE Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: SIMPLE IRA PlanWho Can Set Up a SIMPLE IRA Plan? Who Can Participate in a SIMPLE IRA Plan? How To Set Up a SIMPLE IRA Plan Notification Requirement Contribution Limits When To Deduct Contributions Where To Deduct Contributions Tax Treatment of Contributions Distributions (Withdrawals) More Information on SIMPLE IRA Plans SIMPLE 401(k) Plan Topics - This chapter discusses: SIMPLE IRA plan SIMPLE 401(k) plan Useful Items - You may want to see: Publications 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4284 SIMPLE IRA Plan Checklist 4334 SIMPLE IRA Plans for Small Businesses Forms (and Instructions) W-2 Wage and Tax Statement 5304-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–Not for Use With a Designated Financial Institution 5305-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–for Use With a Designated Financial Institution 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A savings incentive match plan for employees (SIMPLE plan) is a written arrangement that provides you and your employees with a simplified way to make contributions to provide retirement income. Vita tax locations Under a SIMPLE plan, employees can choose to make salary reduction contributions to the plan rather than receiving these amounts as part of their regular pay. Vita tax locations In addition, you will contribute matching or nonelective contributions. Vita tax locations SIMPLE plans can only be maintained on a calendar-year basis. Vita tax locations A SIMPLE plan can be set up in either of the following ways. Vita tax locations Using SIMPLE IRAs (SIMPLE IRA plan). Vita tax locations As part of a 401(k) plan (SIMPLE 401(k) plan). Vita tax locations Many financial institutions will help you set up a SIMPLE plan. Vita tax locations SIMPLE IRA Plan A SIMPLE IRA plan is a retirement plan that uses SIMPLE IRAs for each eligible employee. Vita tax locations Under a SIMPLE IRA plan, a SIMPLE IRA must be set up for each eligible employee. Vita tax locations For the definition of an eligible employee, see Who Can Participate in a SIMPLE IRA Plan , later. Vita tax locations Who Can Set Up a SIMPLE IRA Plan? You can set up a SIMPLE IRA plan if you meet both the following requirements. Vita tax locations You meet the employee limit. Vita tax locations You do not maintain another qualified plan unless the other plan is for collective bargaining employees. Vita tax locations Employee limit. Vita tax locations   You can set up a SIMPLE IRA plan only if you had 100 or fewer employees who received $5,000 or more in compensation from you for the preceding year. Vita tax locations Under this rule, you must take into account all employees employed at any time during the calendar year regardless of whether they are eligible to participate. Vita tax locations Employees include self-employed individuals who received earned income and leased employees (defined in chapter 1). Vita tax locations   Once you set up a SIMPLE IRA plan, you must continue to meet the 100-employee limit each year you maintain the plan. Vita tax locations Grace period for employers who cease to meet the 100-employee limit. Vita tax locations   If you maintain the SIMPLE IRA plan for at least 1 year and you cease to meet the 100-employee limit in a later year, you will be treated as meeting it for the 2 calendar years immediately following the calendar year for which you last met it. Vita tax locations   A different rule applies if you do not meet the 100-employee limit because of an acquisition, disposition, or similar transaction. Vita tax locations Under this rule, the SIMPLE IRA plan will be treated as meeting the 100-employee limit for the year of the transaction and the 2 following years if both the following conditions are satisfied. Vita tax locations Coverage under the plan has not significantly changed during the grace period. Vita tax locations The SIMPLE IRA plan would have continued to qualify after the transaction if you had remained a separate employer. Vita tax locations    The grace period for acquisitions, dispositions, and similar transactions also applies if, because of these types of transactions, you do not meet the rules explained under Other qualified plan or Who Can Participate in a SIMPLE IRA Plan, below. Vita tax locations Other qualified plan. Vita tax locations   The SIMPLE IRA plan generally must be the only retirement plan to which you make contributions, or to which benefits accrue, for service in any year beginning with the year the SIMPLE IRA plan becomes effective. Vita tax locations Exception. Vita tax locations   If you maintain a qualified plan for collective bargaining employees, you are permitted to maintain a SIMPLE IRA plan for other employees. Vita tax locations Who Can Participate in a SIMPLE IRA Plan? Eligible employee. Vita tax locations   Any employee who received at least $5,000 in compensation during any 2 years preceding the current calendar year and is reasonably expected to receive at least $5,000 during the current calendar year is eligible to participate. Vita tax locations The term “employee” includes a self-employed individual who received earned income. Vita tax locations   You can use less restrictive eligibility requirements (but not more restrictive ones) by eliminating or reducing the prior year compensation requirements, the current year compensation requirements, or both. Vita tax locations For example, you can allow participation for employees who received at least $3,000 in compensation during any preceding calendar year. Vita tax locations However, you cannot impose any other conditions for participating in a SIMPLE IRA plan. Vita tax locations Excludable employees. Vita tax locations   The following employees do not need to be covered under a SIMPLE IRA plan. Vita tax locations Employees who are covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Vita tax locations Nonresident alien employees who have received no U. Vita tax locations S. Vita tax locations source wages, salaries, or other personal services compensation from you. Vita tax locations Compensation. Vita tax locations   Compensation for employees is the total wages, tips, and other compensation from the employer subject to federal income tax withholding and the amounts paid for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority. Vita tax locations Compensation also includes the employee's salary reduction contributions made under this plan and, if applicable, elective deferrals under a section 401(k) plan, a SARSEP, or a section 403(b) annuity contract and compensation deferred under a section 457 plan required to be reported by the employer on Form W-2. Vita tax locations If you are self-employed, compensation is your net earnings from self-employment (line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040)) before subtracting any contributions made to the SIMPLE IRA plan for yourself. Vita tax locations How To Set Up a SIMPLE IRA Plan You can use Form 5304-SIMPLE or Form 5305-SIMPLE to set up a SIMPLE IRA plan. Vita tax locations Each form is a model savings incentive match plan for employees (SIMPLE) plan document. Vita tax locations Which form you use depends on whether you select a financial institution or your employees select the institution that will receive the contributions. Vita tax locations Use Form 5304-SIMPLE if you allow each plan participant to select the financial institution for receiving his or her SIMPLE IRA plan contributions. Vita tax locations Use Form 5305-SIMPLE if you require that all contributions under the SIMPLE IRA plan be deposited initially at a designated financial institution. Vita tax locations The SIMPLE IRA plan is adopted when you have completed all appropriate boxes and blanks on the form and you (and the designated financial institution, if any) have signed it. Vita tax locations Keep the original form. Vita tax locations Do not file it with the IRS. Vita tax locations Other uses of the forms. Vita tax locations   If you set up a SIMPLE IRA plan using Form 5304-SIMPLE or Form 5305-SIMPLE, you can use the form to satisfy other requirements, including the following. Vita tax locations Meeting employer notification requirements for the SIMPLE IRA plan. Vita tax locations Form 5304-SIMPLE and Form 5305-SIMPLE contain a Model Notification to Eligible Employees that provides the necessary information to the employee. Vita tax locations Maintaining the SIMPLE IRA plan records and proving you set up a SIMPLE IRA plan for employees. Vita tax locations Deadline for setting up a SIMPLE IRA plan. Vita tax locations   You can set up a SIMPLE IRA plan effective on any date from January 1 through October 1 of a year, provided you did not previously maintain a SIMPLE IRA plan. Vita tax locations This requirement does not apply if you are a new employer that comes into existence after October 1 of the year the SIMPLE IRA plan is set up and you set up a SIMPLE IRA plan as soon as administratively feasible after your business comes into existence. Vita tax locations If you previously maintained a SIMPLE IRA plan, you can set up a SIMPLE IRA plan effective only on January 1 of a year. Vita tax locations A SIMPLE IRA plan cannot have an effective date that is before the date you actually adopt the plan. Vita tax locations Setting up a SIMPLE IRA. Vita tax locations   SIMPLE IRAs are the individual retirement accounts or annuities into which the contributions are deposited. Vita tax locations A SIMPLE IRA must be set up for each eligible employee. Vita tax locations Forms 5305-S, SIMPLE Individual Retirement Trust Account, and 5305-SA, SIMPLE Individual Retirement Custodial Account, are model trust and custodial account documents the participant and the trustee (or custodian) can use for this purpose. Vita tax locations   A SIMPLE IRA cannot be a Roth IRA. Vita tax locations Contributions to a SIMPLE IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Vita tax locations Deadline for setting up a SIMPLE IRA. Vita tax locations   A SIMPLE IRA must be set up for an employee before the first date by which a contribution is required to be deposited into the employee's IRA. Vita tax locations See Time limits for contributing funds , later, under Contribution Limits. Vita tax locations Credit for startup costs. Vita tax locations   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE IRA plan that first became effective in 2013. Vita tax locations For more information, see Credit for startup costs under Reminders, earlier. Vita tax locations Notification Requirement If you adopt a SIMPLE IRA plan, you must notify each employee of the following information before the beginning of the election period. Vita tax locations The employee's opportunity to make or change a salary reduction choice under a SIMPLE IRA plan. Vita tax locations Your decision to make either matching contributions or nonelective contributions (discussed later). Vita tax locations A summary description provided by the financial institution. Vita tax locations Written notice that his or her balance can be transferred without cost or penalty if they use a designated financial institution. Vita tax locations Election period. Vita tax locations   The election period is generally the 60-day period immediately preceding January 1 of a calendar year (November 2 to December 31 of the preceding calendar year). Vita tax locations However, the dates of this period are modified if you set up a SIMPLE IRA plan in mid-year (for example, on July 1) or if the 60-day period falls before the first day an employee becomes eligible to participate in the SIMPLE IRA plan. Vita tax locations   A SIMPLE IRA plan can provide longer periods for permitting employees to enter into salary reduction agreements or to modify prior agreements. Vita tax locations For example, a SIMPLE IRA plan can provide a 90-day election period instead of the 60-day period. Vita tax locations Similarly, in addition to the 60-day period, a SIMPLE IRA plan can provide quarterly election periods during the 30 days before each calendar quarter, other than the first quarter of each year. Vita tax locations Contribution Limits Contributions are made up of salary reduction contributions and employer contributions. Vita tax locations You, as the employer, must make either matching contributions or nonelective contributions, defined later. Vita tax locations No other contributions can be made to the SIMPLE IRA plan. Vita tax locations These contributions, which you can deduct, must be made timely. Vita tax locations See Time limits for contributing funds , later. Vita tax locations Salary reduction contributions. Vita tax locations   The amount the employee chooses to have you contribute to a SIMPLE IRA on his or her behalf cannot be more than $12,000 for 2013 and 2014. Vita tax locations These contributions must be expressed as a percentage of the employee's compensation unless you permit the employee to express them as a specific dollar amount. Vita tax locations You cannot place restrictions on the contribution amount (such as limiting the contribution percentage), except to comply with the $12,000 limit. Vita tax locations   If you or an employee participates in any other qualified plan during the year and you or your employee have salary reduction contributions (elective deferrals) under those plans, the salary reduction contributions under a SIMPLE IRA plan also count toward the overall annual limit ($17,500 for 2013 and 2014) on exclusion of salary reduction contributions and other elective deferrals. Vita tax locations Catch-up contributions. Vita tax locations   A SIMPLE IRA plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Vita tax locations The catch-up contribution limit for 2013 and 2014 for SIMPLE IRA plans is $2,500. Vita tax locations Salary reduction contributions are not treated as catch-up contributions for 2013 or 2014 until they exceed $12,000. Vita tax locations However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Vita tax locations The catch-up contribution limit. Vita tax locations The excess of the participant's compensation over the salary reduction contributions that are not catch-up contributions. Vita tax locations Employer matching contributions. Vita tax locations   You are generally required to match each employee's salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee's compensation. Vita tax locations This requirement does not apply if you make nonelective contributions as discussed later. Vita tax locations Example. Vita tax locations In 2013, your employee, John Rose, earned $25,000 and chose to defer 5% of his salary. Vita tax locations Your net earnings from self-employment are $40,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Vita tax locations You make 3% matching contributions. Vita tax locations The total contribution you make for John is $2,000, figured as follows. Vita tax locations Salary reduction contributions ($25,000 × . Vita tax locations 05) $1,250 Employer matching contribution ($25,000 × . Vita tax locations 03) 750 Total contributions $2,000     The total contribution you make for yourself is $5,200, figured as follows. Vita tax locations Salary reduction contributions ($40,000 × . Vita tax locations 10) $4,000 Employer matching contribution ($40,000 × . Vita tax locations 03) 1,200 Total contributions $5,200 Lower percentage. Vita tax locations   If you choose a matching contribution less than 3%, the percentage must be at least 1%. Vita tax locations You must notify the employees of the lower match within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. Vita tax locations You cannot choose a percentage less than 3% for more than 2 years during the 5-year period that ends with (and includes) the year for which the choice is effective. Vita tax locations Nonelective contributions. Vita tax locations   Instead of matching contributions, you can choose to make nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 (or some lower amount you select) of compensation from you for the year. Vita tax locations If you make this choice, you must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. Vita tax locations Only $255,000 of the employee's compensation can be taken into account to figure the contribution limit in 2013 ($260,000 in 2014). Vita tax locations   If you choose this 2% contribution formula, you must notify the employees within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. Vita tax locations Example 1. Vita tax locations In 2013, your employee, Jane Wood, earned $36,000 and chose to have you contribute 10% of her salary. Vita tax locations Your net earnings from self-employment are $50,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. Vita tax locations You make a 2% nonelective contribution. Vita tax locations Both of you are under age 50. Vita tax locations The total contribution you make for Jane is $4,320, figured as follows. Vita tax locations Salary reduction contributions ($36,000 × . Vita tax locations 10) $3,600 2% nonelective contributions ($36,000 × . Vita tax locations 02) 720 Total contributions $4,320     The total contribution you make for yourself is $6,000, figured as follows. Vita tax locations Salary reduction contributions ($50,000 × . Vita tax locations 10) $5,000 2% nonelective contributions ($50,000 × . Vita tax locations 02) 1,000 Total contributions $6,000 Example 2. Vita tax locations Using the same facts as in Example 1, above, the maximum contribution you make for Jane or for yourself if you each earned $75,000 is $13,500, figured as follows. Vita tax locations Salary reduction contributions (maximum amount allowed) $12,000 2% nonelective contributions ($75,000 × . Vita tax locations 02) 1,500 Total contributions $13,500 Time limits for contributing funds. Vita tax locations   You must make the salary reduction contributions to the SIMPLE IRA within 30 days after the end of the month in which the amounts would otherwise have been payable to the employee in cash. Vita tax locations You must make matching contributions or nonelective contributions by the due date (including extensions) for filing your federal income tax return for the year. Vita tax locations Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions. Vita tax locations When To Deduct Contributions You can deduct SIMPLE IRA contributions in the tax year within which the calendar year for which contributions were made ends. Vita tax locations You can deduct contributions for a particular tax year if they are made for that tax year and are made by the due date (including extensions) of your federal income tax return for that year. Vita tax locations Example 1. Vita tax locations Your tax year is the fiscal year ending June 30. Vita tax locations Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2013 before July 1, 2013) are deductible in the tax year ending June 30, 2014. Vita tax locations Example 2. Vita tax locations You are a sole proprietor whose tax year is the calendar year. Vita tax locations Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2014 by April 15, 2014) are deductible in the 2013 tax year. Vita tax locations Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Vita tax locations For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040); partnerships deduct them on Form 1065; and corporations deduct them on Form 1120 or Form 1120S. Vita tax locations Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Vita tax locations (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you receive from the partnership. Vita tax locations ) Tax Treatment of Contributions You can deduct your contributions and your employees can exclude these contributions from their gross income. Vita tax locations SIMPLE IRA plan contributions are not subject to federal income tax withholding. Vita tax locations However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. Vita tax locations Matching and nonelective contributions are not subject to these taxes. Vita tax locations Reporting on Form W-2. Vita tax locations   Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation” box of Form W-2. Vita tax locations You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Vita tax locations You must also include them in box 12. Vita tax locations Mark the “Retirement plan” checkbox in box 13. Vita tax locations For more information, see the Form W-2 instructions. Vita tax locations Distributions (Withdrawals) Distributions from a SIMPLE IRA are subject to IRA rules and generally are includible in income for the year received. Vita tax locations Tax-free rollovers can be made from one SIMPLE IRA into another SIMPLE IRA. Vita tax locations However, a rollover from a SIMPLE IRA to a non-SIMPLE IRA can be made tax free only after a 2-year participation in the SIMPLE IRA plan. Vita tax locations Generally, you or your employee must begin to receive distributions from a SIMPLE IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. Vita tax locations Early withdrawals generally are subject to a 10% additional tax. Vita tax locations However, the additional tax is increased to 25% if funds are withdrawn within 2 years of beginning participation. Vita tax locations More information. Vita tax locations   See Publication 590 for information about IRA rules, including those on the tax treatment of distributions, rollovers, required distributions, and income tax withholding. Vita tax locations More Information on SIMPLE IRA Plans If you need help to set up or maintain a SIMPLE IRA plan, go to the IRS website and search SIMPLE IRA Plan. Vita tax locations SIMPLE 401(k) Plan You can adopt a SIMPLE plan as part of a 401(k) plan if you meet the 100-employee limit as discussed earlier under SIMPLE IRA Plan. Vita tax locations A SIMPLE 401(k) plan is a qualified retirement plan and generally must satisfy the rules discussed under Qualification Rules in chapter 4, including the required distribution rules. Vita tax locations However, a SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy rules discussed in chapter 4 if the plan meets the conditions listed below. Vita tax locations Under the plan, an employee can choose to have you make salary reduction contributions for the year to a trust in an amount expressed as a percentage of the employee's compensation, but not more than $12,000 for 2013 and 2014. Vita tax locations If permitted under the plan, an employee who is age 50 or over can also make a catch-up contribution of up to $2,500 for 2013 and 2014. Vita tax locations See Catch-up contributions , earlier under Contribution Limits. Vita tax locations You must make either: Matching contributions up to 3% of compensation for the year, or Nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 of compensation from you for the year. Vita tax locations No other contributions can be made to the trust. Vita tax locations No contributions are made, and no benefits accrue, for services during the year under any other qualified retirement plan sponsored by you on behalf of any employee eligible to participate in the SIMPLE 401(k) plan. Vita tax locations The employee's rights to any contributions are nonforfeitable. Vita tax locations No more than $255,000 of the employee's compensation can be taken into account in figuring matching contributions and nonelective contributions in 2013 ($260,000 in 2014). Vita tax locations Compensation is defined earlier in this chapter. Vita tax locations Employee notification. Vita tax locations   The notification requirement that applies to SIMPLE IRA plans also applies to SIMPLE 401(k) plans. Vita tax locations See Notification Requirement in this chapter. Vita tax locations Credit for startup costs. Vita tax locations   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE 401(k) plan that first became effective in 2013. Vita tax locations For more information, see Credit for startup costs under Reminders, earlier. Vita tax locations Note on Forms. Vita tax locations   Please note that Forms 5304-SIMPLE and 5305-SIMPLE can not be used to establish a SIMPLE 401(k) plan. Vita tax locations To set up a SIMPLE 401(k) plan, see Adopting a Written Plan in chapter 4. Vita tax locations Prev  Up  Next   Home   More Online Publications