Pete
I am doing a return for a friend. In addtion to her sch C (realestate agent) she has a part time job and has a SIMPLE-IRA where the company has a small match.
I want to verify that the W-2 is already reduced by the amount of her contributions and that nothing about the SIMPLE get enter on the tax returns.
Thanks, Bill
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Replies
Sounds like chatting with her employer's accountant would answer the question.
But, according to what I know, for SIMPLE's the employee deducts his contributions and the employer deducts his - even though they're all to the employee's account.
Therefore, I wouldn't think the W-2 has been reduced and any contributions would be seperated noted.
Reporting on Form W-2. Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation box†of Form W-2. However, salary reduction contributions must be included in the boxes for social security and Medicare wages. Also include the proper code in box 12. For more information, see the instructions for Forms W-2 and W-3.
http://www.irs.gov/publications/p560/ch03.html#d0e2129
Thanks, I saw that.Finally figured out what was going on.Yes, the W-w was reduced by the amount of the employees contribution.What was confusing was that the 1040 has a line to enter the amount of the SIMPLE as an adjustment to income.However, that is if you have a SIMPLE as a SP and is the same place that she enters the SEP-IRA from her SP..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.