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Frequently Asked Tax Questions

Pensions/Annuities/Retirement Plans (i.e., 401(k), etc.) - Plan Operations


Rev. date: 1/1/2011


Am I considered covered by an employer sponsored retirement plan for the year if I do not participate in the plan or if I did not work long enough to be vested?

previous topic occurrence Contributions (IRAs & Pension Plans) next topic occurrence
previous topic occurrence Covered by an Employer Retirement Plan next topic occurrence
previous topic occurrence Individual Retirement Arrangement next topic occurrence
previous topic occurrence Nondeductible Contributions (IRA) next topic occurrence
previous topic occurrence Plan next topic occurrence
previous topic occurrence Profit Sharing Plan next topic occurrence
previous topic occurrence Qualified Plan next topic occurrence
previous topic occurrence Retirement Plan next topic occurrence
previous topic occurrence Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans) next topic occurrence
previous topic occurrence Tax Sheltered Annuity next topic occurrence
previous topic occurrence Traditional IRA next topic occurrence

The answer to this question depends on the type of retirement plan.
Generally, if your employer's plan has a separate account for each employee, it is a defined contribution plan.
In the other type of plan, a defined benefit plan:
The Form W-2 (PDF) you receive from your employer has a box used to indicate whether you were covered for the year. The "Retirement Plan" box should be checked if you were covered in a plan sponsored by the employer.

Rev. date: 12/16/2010


What is the maximum amount that I can contribute to my 401(k) plan?

previous topic occurrence Annual Return of One Participant (Owners and Their Spouses) Retirement Plan next topic occurrence
previous topic occurrence Annual Return/Report of Employee Benefit Plan (Info Copy Only) next topic occurrence
previous topic occurrence Contributions (IRAs & Pension Plans) next topic occurrence
previous topic occurrence Pension and Annuity Income next topic occurrence
previous topic occurrence Plan next topic occurrence
previous topic occurrence Profit Sharing Plan next topic occurrence
previous topic occurrence Qualified Plan next topic occurrence
previous topic occurrence Retirement Plan next topic occurrence
previous topic occurrence Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans) next topic occurrence

The rules for retirement plans are complex. Your plan administrator should have written information about your particular plan that explains the limitations imposed by law as well as other limitations that apply under the plan:

Rev. date: 8/31/2010


My understanding is that the 10% additional tax on early distributions is forgiven if I am over age 55 and default on a loan through my 401(k) plan when I have a separation from service with my employer. Can you confirm that for me?

previous topic occurrence Additional Tax on Other Early Distributions next topic occurrence
previous topic occurrence Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts next topic occurrence
previous topic occurrence Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. (Info Copy Only) next topic occurrence
previous topic occurrence Lump-sum Distribution next topic occurrence
previous topic occurrence Penalty, Early Distributions from IRAs and Plans next topic occurrence
previous topic occurrence Pension and Annuity Income next topic occurrence
previous topic occurrence Profit Sharing Plan next topic occurrence
previous topic occurrence Qualified Plan next topic occurrence
previous topic occurrence Qualified Withdrawals next topic occurrence
previous topic occurrence Retirement Plan next topic occurrence

If you default on a loan from your 401(k) plan:
For example, the 10% additional tax on early distributions does not apply if all the following apply to you:
There are a number of exceptions to the 10% additional tax on early distributions. You may wish to refer to Instructions for Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts Publication 575, Pension and Annuity Income, and Publication 560, Retirement Plans for Small Business, for additional information.

Rev. date: 8/25/2010


Where can I find additional information on tax-favored retirement plans?

previous topic occurrence Annual Return of One Participant (Owners and Their Spouses) Retirement Plan next topic occurrence
previous topic occurrence Annual Return/Report of Employee Benefit Plan (Info Copy Only) next topic occurrence
previous topic occurrence Application for Determination for Employee Benefit Plan (Info Copy Only) next topic occurrence
previous topic occurrence Contributions (IRAs & Pension Plans) next topic occurrence
previous topic occurrence Coverdell Education Savings Account next topic occurrence
previous topic occurrence Distributions, Minimum Required next topic occurrence
previous topic occurrence Individual Retirement Arrangement next topic occurrence
previous topic occurrence Nondeductible Contributions (IRA) next topic occurrence
previous topic occurrence Penalty, Early Distributions from IRAs and Plans next topic occurrence
previous topic occurrence Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans) next topic occurrence
previous topic occurrence Roth IRA next topic occurrence
previous topic occurrence SEP-IRA next topic occurrence
previous topic occurrence SIMPLE IRA next topic occurrence
previous topic occurrence Tax Shelter next topic occurrence
previous topic occurrence The IRS Will Figure Your Tax next topic occurrence

The following IRS publications include additional information on retirement plans:
You may find additional information on the IRS website.
Additional Information