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Need Some Deductions for 2011?
Don't overlook these!
Updated for 2011
SIMPLE Plans
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Deducting Matching and Nonelective Contributions
Employer matching or nonelective contributions:
Employees:
Contributions made by the employer for employees (matching or nonelective contributions) are deducted directly from business income on the appropriate business return.
- Sole proprietors use Schedule C (or Schedule F for farming)
- Partnerships use Form 1065
- C-corporations use Form 1120
- S-corporations use Form 1120S
Self-Employed Persons:
If your self-employed, you deduct contributions to your own SIMPLE IRA on Form 1040, line 28 (tax year 2011) in arriving at your adjusted gross income. In other words, contributions for yourself are not deducted as a business deduction on Schedule C.
Timing Deductions for Contributions
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.
For example, if you're a sole proprietor on a calendar year, your 2011 return is due on April 17, 2012, plus extensions.
Contributions to your SIMPLE IRA made in 2011 or by April 17, 2012, plus extensions, are deductible for tax year 2011.
Next:
SIMPLE Plans: Setting Up A SIMPLE Plan
Related Links
- What is a SIMPLE Plan?
- Who Can Participate in a SIMPLE Plan?
- Setting Up a SIMPLE Plan
- SIMPE IRAs
- Eligible Employees
- When to Set Up a SIMPLE Plan
- SIMPLE Plan Salary Reduction Contribution Limits
- Who Contributes to a SIMPLE IRA?
- Matching and Nonelective Contributions
- Choosing a Lower Matching Percentage
- Nonelective Contributions
- How Much Can a Nonelective Contribution Be?
- Maximum Compensation
- Time Limit for Employer to Deposit Salary Reduction Contributions
- Form W-2 Reporting for SIMPLE IRA Contributions
- After the SIMPLE Plan is Set Up
- What is an Eligible Employee?
- What is an Excludible Employee?
- When To Set Up a SIMPLE IRA Plan
- Notification Requirement
- Election Period
- SIMPLE 401 (k) Plans
- Distributions, Rollovers, and Withdrawals
- Credit for Small Employer Pension Plan Startup Costs
- Credit for Qualified Retirement Savings Contributions
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