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Where To File 2012 Form 1040

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Where To File 2012 Form 1040

Where to file 2012 form 1040 Index A Activities not for profit, Hobby Expenses Adjustments to gross income Armed forces reservists' travel expenses, Armed Forces reservists traveling more than 100 miles from home. Where to file 2012 form 1040 Performing artists, Performing Artists State or local government officials paid on fee basis, Officials Paid on a Fee Basis Unlawful discrimination claims, Unlawful discrimination claims. Where to file 2012 form 1040 Administrative fees IRA trustees, Trustee's Administrative Fees for IRA Adoption expenses, Adoption Expenses Amortizable bond premium, Amortizable Premium on Taxable Bonds, More information. Where to file 2012 form 1040 Appraisal fees, Appraisal Fees Armed forces Military uniforms, Military uniforms. Where to file 2012 form 1040 Reservists, travel expenses, Armed Forces reservists traveling more than 100 miles from home. Where to file 2012 form 1040 Assistance (see Tax help) B Bad debts, Business Bad Debt Bank accounts Check-writing fees, Check-Writing Fees on Personal Account Losses on deposits, Loss on Deposits Bonds Amortizable premium, Amortizable Premium on Taxable Bonds Breach of contract Damages, Damages for Breach of Employment Contract Bribes, List of Nondeductible Expenses Burial expenses, List of Nondeductible Expenses Business expenses (see Employee business expenses) Business gifts, Gift expenses. Where to file 2012 form 1040 C Campaign contributions, Lobbying and political activities. Where to file 2012 form 1040 , Political Contributions Campaign expenses, Campaign Expenses Capital expenditures, Capital Expenses Casualty losses, Casualty and Theft Losses, Casualty and Theft Losses of Income-Producing Property Cell phones, Depreciation on Computers Chambers of Commerce dues, Lobbying and political activities. Where to file 2012 form 1040 Check-writing fees, Check-Writing Fees on Personal Account Claim of right repayments, Repayments Under Claim of Right Clerical help, deductibility of, Clerical Help and Office Rent Clothes Protective, Protective clothing. Where to file 2012 form 1040 Work, Work Clothes and Uniforms Club dues, Club Dues Commissions, Commissions Commuting expenses, Commuting Expenses Computers Depreciation, Depreciation on Computers, Depreciation on Home Computer, Excess Deductions of an Estate Convenience fees, Credit or Debit Card Convenience Fees Criminal prosecutions Travel expenses for federal staff, Federal crime investigation and prosecution. Where to file 2012 form 1040 D Damages Breach of employment contract, Damages for Breach of Employment Contract Deposits Losses on, Loss on Deposits Depreciation Computers, Depreciation on Computers, Depreciation on Home Computer, Excess Deductions of an Estate Disabilities, persons with Work-related expenses, Impairment-Related Work Expenses Dividends Fees to collect, Fees To Collect Interest and Dividends Service charges on reinvestment plans, Service Charges on Dividend Reinvestment Plans Dues, Dues to Chambers of Commerce and Professional Societies (see also Expenses) (see also Fees) Chambers of Commerce, Dues to Chambers of Commerce and Professional Societies Club, Club Dues Lobbying, Dues used for lobbying. Where to file 2012 form 1040 Professional societies, Dues to Chambers of Commerce and Professional Societies Union, Union Dues and Expenses E Education, Educator Expenses, Education Expenses During Unemployment Education expenses, Work-Related Education, More information. Where to file 2012 form 1040 Employee business expenses Form 2106 and Form 2106-EZ, Form 2106 and Form 2106-EZ. Where to file 2012 form 1040 Performing artists, Performing Artists Unreimbursed, Unreimbursed Employee Expenses Employment Agency fees, Employment and outplacement agency fees. Where to file 2012 form 1040 Breach of contract, Damages for Breach of Employment Contract Entertainers and musicians (see Performing artists) Entertainment expenses, Meals and entertainment. Where to file 2012 form 1040 Estates Federal estate tax, Federal Estate Tax on Income in Respect of a Decedent Expenses, Dues to Chambers of Commerce and Professional Societies, Education Expenses During Unemployment (see also Dues) (see also Fees) Adoption, Adoption Expenses Campaign, Campaign Expenses Capital, Capital Expenses Commuting, Commuting Expenses Education Work-related, Work-Related Education Educator, Educator Expenses Qualified, Qualified expenses. Where to file 2012 form 1040 Educator Expenses, Eligible educator. Where to file 2012 form 1040 Employee business (see Employee business expenses) Entertainment, Meals and entertainment. Where to file 2012 form 1040 Funeral and burial, List of Nondeductible Expenses Gifts, Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging, Gift expenses. Where to file 2012 form 1040 Health spa, Health Spa Expenses Hobby, Hobby Expenses Home office, Home Office Impairment-related, Impairment-Related Work Expenses Investment, Investment Fees and Expenses, Investment-Related Seminars Job search, Job Search Expenses Legal (see Legal expenses) Local lodging, Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging Meals, Meals and entertainment. Where to file 2012 form 1040 , Lunches With Co-workers Meals and entertainment, Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging Nondeductible, Nondeductible Expenses Over limit, educator, Educator expenses over limit. Where to file 2012 form 1040 Personal, Nondeductible Expenses Production of income, Other Expenses Professional promotion, Professional Reputation Tax-exempt income, Tax-Exempt Income Expenses Travel and transportation, Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging Travel as education, Travel as education. Where to file 2012 form 1040 F Federal estate tax, Federal Estate Tax on Income in Respect of a Decedent Fees, Dues to Chambers of Commerce and Professional Societies (see also Dues) (see also Expenses) Appraisal, Appraisal Fees Check-writing, Check-Writing Fees on Personal Account Employment and outplacement agency, Employment and outplacement agency fees. Where to file 2012 form 1040 Investment, Fees To Collect Interest and Dividends, Investment Fees and Expenses IRA trustee, Trustee's Administrative Fees for IRA Legal (see Legal expenses) License, Licenses and Regulatory Fees Professional accreditation, Professional Accreditation Fees Fines, Fines or Penalties Form 2106 Employee business expenses, Form 2106 and Form 2106-EZ. Where to file 2012 form 1040 Form 2106-EZ Employee business expenses, Form 2106 and Form 2106-EZ. Where to file 2012 form 1040 Form 4562 Depreciation and amortization, Reporting your depreciation deduction. Where to file 2012 form 1040 , Depreciation. Where to file 2012 form 1040 , Computer used in a home office. Where to file 2012 form 1040 Free tax services, Free help with your tax return. Where to file 2012 form 1040 Funeral expenses, List of Nondeductible Expenses G Gambling winnings and losses, Gambling Losses Up to the Amount of Gambling Winnings Government employees Federal criminal investigation and prosecution travel expenses, Federal crime investigation and prosecution. Where to file 2012 form 1040 State or local government officials paid on fee basis, Officials Paid on a Fee Basis H Health spa, Health Spa Expenses Help (see Tax help) Hobbies, Hobby Expenses Home Security system, Home Security System Telephone service, Residential Telephone Service Home office Computers, Computer used in a home office. Where to file 2012 form 1040 Expenses, Home Office Principal place of business, Principal place of business. Where to file 2012 form 1040 Travel and transportation expenses, Home office. Where to file 2012 form 1040 I Impairment-related work expenses, Impairment-Related Work Expenses Income aid payment, Repayment of Income Aid Payment Income in respect of decedent Estate tax, Federal Estate Tax on Income in Respect of a Decedent Individual retirement arrangements (IRAs) Trustees' fees, Trustee's Administrative Fees for IRA Insurance Business liability, Business Liability Insurance Life insurance, Life Insurance Premiums Malpractice, Unreimbursed Employee Expenses Personal disability, List of Nondeductible Expenses Interest income Fees to collect, Fees To Collect Interest and Dividends Investments Annuity, unrecovered investment in, Unrecovered Investment in Annuity Deposits, losses on, Loss on Deposits Fees and expenses, Investment Fees and Expenses Seminars, Investment-Related Seminars Itemized deductions Deductions not subject to 2% limit, Deductions Not Subject to the 2% Limit Deductions subject to 2% limit, Introduction, Deductions Subject to the 2% Limit How to report, How To Report J Job search, Job Search Expenses, Travel and transportation expenses. Where to file 2012 form 1040 K Kickbacks, List of Nondeductible Expenses L Legal expenses Job-related, Legal Fees Personal, Personal Legal Expenses Political campaigns, Legal fees. Where to file 2012 form 1040 Production of income, Legal Expenses Unlawful discrimination claims, Legal Expenses Licenses Fees, Licenses and Regulatory Fees Life insurance, Life Insurance Premiums Lobbying, Lobbying and political activities. Where to file 2012 form 1040 , Lobbying Expenses, Exceptions. Where to file 2012 form 1040 Local transportation, Local transportation expenses. Where to file 2012 form 1040 Losses Casualties and thefts, Casualty and Theft Losses, Casualty and Theft Losses of Income-Producing Property Deposits, Loss on Deposits Gambling, Gambling Losses Up to the Amount of Gambling Winnings IRA, Loss on IRA Mislaid cash or property, Lost or Mislaid Cash or Property Partnership, Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 Roth IRA, Loss on IRA M Mail carriers, rural, Rural Mail Carriers' Vehicle Expenses Malpractice insurance, Unreimbursed Employee Expenses Meal and lodging expenses, Meals and entertainment. Where to file 2012 form 1040 Lunches with coworkers, Lunches With Co-workers Working late, Meals While Working Late Medical examinations, Unreimbursed Employee Expenses Mileage rate, What's New Missing children, photographs of, Reminders Mutual funds Indirect deductions, Indirect Deductions of Pass-Through Entities N Nondeductible expenses, Nondeductible Expenses, Wristwatches Not-for-profit activities, Hobby Expenses O Occupational taxes, Occupational Taxes Office Home (see Home office) Rent, Clerical Help and Office Rent Outplacement agency fees, Employment and outplacement agency fees. Where to file 2012 form 1040 P Partnerships Indirect deductions, Indirect Deductions of Pass-Through Entities Pass-through entities, Indirect Deductions of Pass-Through Entities Passport expense, Unreimbursed Employee Expenses Penalties, Fines or Penalties Performing artists, Performing Artists Work clothes, Work Clothes and Uniforms Personal expenses, Nondeductible Expenses, Wristwatches Political contributions, Lobbying and political activities. Where to file 2012 form 1040 , Political Contributions Campaign expenses, Campaign Expenses Ponzi-type investment schemes, Losses From Ponzi-type Investment Schemes Postal workers, Rural Mail Carriers' Vehicle Expenses Production of income expenses, Other Expenses, Loss on IRA Professional accreditation fees, Professional Accreditation Fees Professional journals, Unreimbursed Employee Expenses Professional reputation and marketing, Professional Reputation Professional societies dues, Lobbying and political activities. Where to file 2012 form 1040 Prosecution travel expenses, Federal crime investigation and prosecution. Where to file 2012 form 1040 Protective clothing, Protective clothing. Where to file 2012 form 1040 Publications (see Tax help) R Recordkeeping requirements Computer used for home and business, Depreciation on Computers Deductions, to verify, Introduction Gambling winnings and losses, Gambling Losses Up to the Amount of Gambling Winnings Home office, Home Office Relief fund contributions, Relief Fund Contributions Rent Office, Clerical Help and Office Rent Safe deposit box, Safe Deposit Box Rent Repayments Claim of right, Repayments Under Claim of Right Income, Repayments of Income Income aid payments, Unreimbursed Employee Expenses Social Security benefits, Repayments of Social Security Benefits Reporting requirements Armed Forces reservists, Armed Forces reservists. Where to file 2012 form 1040 Computer used in a home office, Computer used in a home office. Where to file 2012 form 1040 Depreciation, Depreciation. Where to file 2012 form 1040 Form 2106 and Form 2106-EZ, Form 2106 and Form 2106-EZ. Where to file 2012 form 1040 Impairment-related work expenses, Impairment-related work expenses. Where to file 2012 form 1040 Itemized deductions, How To Report Tax preparation fees, Tax preparation fees. Where to file 2012 form 1040 Research expenses, Research Expenses of a College Professor Résumé, Résumé. Where to file 2012 form 1040 Rural mail carriers, Rural Mail Carriers' Vehicle Expenses S S corporations Indirect deductions, Indirect Deductions of Pass-Through Entities Safe deposit box, Safe Deposit Box Rent Security systems, home, Home Security System Seminars, investment-related, Investment-Related Seminars Service charges on dividend reinvestment plans, Service Charges on Dividend Reinvestment Plans Social Security repayments, Repayments of Social Security Benefits State or local governments Officials paid on fee basis, Officials Paid on a Fee Basis Stockholders' meeting expenses, Stockholders' Meetings T Tax help, How To Get Tax Help Tax-exempt income expenses, Tax-Exempt Income Expenses Taxes Estate tax, Federal Estate Tax on Income in Respect of a Decedent Occupational, Occupational Taxes Telephones Cell phone, Depreciation on Computers Residential service, Residential Telephone Service Theft losses, Casualty and Theft Losses, Casualty and Theft Losses of Income-Producing Property Tools, Tools Used in Your Work Travel and transportation expenses, Local lodging. Where to file 2012 form 1040 , Additional information. Where to file 2012 form 1040 Another individual, paid by taxpayer, Travel Expenses for Another Individual Armed forces reservists, Armed Forces reservists traveling more than 100 miles from home. Where to file 2012 form 1040 Commuting, Commuting Expenses Criminal investigations and prosecutions, Federal crime investigation and prosecution. Where to file 2012 form 1040 Education, Travel as education. Where to file 2012 form 1040 Indefinite work assignments, Indefinite work assignment. Where to file 2012 form 1040 Job search, Travel and transportation expenses. Where to file 2012 form 1040 Local transportation, Local transportation expenses. Where to file 2012 form 1040 Research, Research Expenses of a College Professor Temporary work assignments, Temporary work assignment. Where to file 2012 form 1040 Trustees IRA administrative fees, Trustee's Administrative Fees for IRA TTY/TDD information, How To Get Tax Help U Unemployment and education expenses, Education Expenses During Unemployment Unemployment benefit fund contributions, Voluntary Unemployment Benefit Fund Contributions Uniforms, military, Military uniforms. Where to file 2012 form 1040 Union dues, Union Dues and Expenses Unreimbursed employee expenses, Unreimbursed Employee Expenses, Military uniforms. Where to file 2012 form 1040 W Wagering winnings and losses, Gambling Losses Up to the Amount of Gambling Winnings Work Clothes and uniforms, Work Clothes and Uniforms Impairment-related expenses, Impairment-Related Work Expenses Supplies, Unreimbursed Employee Expenses Tools, Unreimbursed Employee Expenses, Tools Used in Your Work Travel and transportation expenses, Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging Wristwatches, List of Nondeductible Expenses, Wristwatches Prev  Up     Home   More Online Publications
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The Where To File 2012 Form 1040

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