Publication 571
Tax-Sheltered Annuity Plans (403(b) Plans)
(Revised: 12/2002)

For Employees of Public Schools and Certain Tax-Exempt Organizations

Table of Contents

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Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans)

• Important Changes for 2002
• Important Changes for 2003
• Important Reminder
• 1. 403(b) Plan Basics
  • What is a 403(b) Plan?
    • What are the Benefits of Contributing to a 403(b) Plan?
  • Who Can Participate in a 403(b) Plan?
  • Who Can Set Up a 403(b) Account?
  • How Can Contributions Be Made to My 403(b) Account?
  • Do I Report Contributions on My Tax Return?
  • How Much Can Be Contributed to My 403(b) Account?
• 2. Maximum Amount Contributable (MAC)
  • Components of Your MAC
  • How Do I Figure My MAC?
  • When Should I Figure My MAC?
• 3. Limit on Annual Additions
  • Includible Compensation for Your Most Recent Year of Service
    • Most Recent Year of Service
      • Figuring Your Most Recent Year of Service
    • Includible Compensation
      • Cost of Incidental Life Insurance
      • Figuring Includible Compensation for Your Most Recent Year of Service
• 4. Limit on Elective Deferrals
  • General Limit
  • 15-Year Rule
    • Years of Service
      • Definition
      • Figuring Your Years of Service
      • Full-Time Employee for the Full Year
      • Other Than Full Time for the Full Year
  • Figuring the Limit on Elective Deferrals
    • Example
      • Figuring Floyd's MAC
• 5. Ministers and Church Employees
  • Alternative Limit for Church Employees
  • Changes to Includible Compensation for Most Recent Year of Service
    • Changes to Includible Compensation
    • Changes to Years of Service
• 6. Catch-Up Contributions
• 7. Excess Contributions
  • Preventing Excess Contributions
  • How Do I Know If I Have Excess Contributions?
  • What Happens If I Have Excess Contributions?
    • Excess Annual Addition
      • Excise Tax
    • Excess Elective Deferral
• 8. Distributions and Rollovers
  • Distributions
    • Minimum Required Distributions
    • No Special 10-Year Tax Option
  • Transfer of Interest in 403(b) Contract
  • Tax-Free Rollovers
  • Gift Tax
• 9. Worksheets
  • When Should I Figure MAC?
    • Figuring MAC for the Current Year
    • Checking the Previous Year's Contributions
    • Available Worksheets
• 10. Retirement Savings Contributions Credit
• 11. How To Get Tax Help

Index

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4

• 403(b) account
• 403(b) plans, Basics
• 403(b) plans, Participation

A

• After-tax contributions

B

• Benefits

C

• Church employees
• Church employees, Years of service
• Contributions
• Contributions, Catch-up
• Contributions, Reporting
• Correcting excess contributions
• Credit, for retirement savings contributions

D

• Distributions
• Distributions
• Distributions , Deceased employees
• Distributions , Direct rollover
• Distributions , Eligible retirement plans
• Distributions , Frozen deposit
• Distributions , Rollovers
• Distributions , Second rollover
• Distributions , Withholding
• Distributions, 10-year tax option
• Distributions, Rollovers
• Distributions, Transfers

E

• Elective deferrals
• Elective deferrals
• Eligible employees
• Eligible employees
• Employer's annual work period
• Excess contributions
• Excess contributions, Determining
• Excess contributions, Excess deferrals, Excess amounts
• Excess contributions, Excess elective deferral
• Excise tax, Excess contributions
• Excise tax, Form 5330

F

• Full time or part time

G

• Gift tax

I

• Incidental life insurance
• Includible compensation
• Includible compensation, Figuring
• Includible compensation, General
• Includible compensation, Self-employed ministers, 403(b) plan, Foreign missionaries

L

• Limit on annual additions
• Limit on elective deferrals
• Limit on elective deferrals, 15-year rule
• Limit on elective deferrals, Figuring
• Limit on elective deferrals, General limit

M

• Maximum amount contributable
• Maximum amount contributable, Components
• Maximum amount contributable, How to figure MAC
• Maximum amount contributable, When to figure MAC
• Most recent year of service
• Most recent year of service, figuring

N

• Nonelective contributions
• Nonelective contributions

P

• Preventing excess contributions

Q

• Qualified domestic relations order

R

• Reporting contributions, Chaplains
• Reporting Contributions, Self-employed ministers
• Required distributions

S

• Salary reduction agreement
• Self-employed ministers
• Self-employed ministers
• Self-employed ministers
• Self-employed ministers
• Self-employed ministers
• Suggestions

T

• Taxpayer Advocate
• Transfers , Direct-trustee-to-trustee
• Transfers , Permissive service credit
• TTY/TDD information

V

• Voluntary deductible contributions

W

• What is a 403(b) plan?

Y

• Years of service
• Years of service , Definition
• Years of service , Less than one year of total service
• Years of service , Part time for the full year
• Years of service , Part time for the part of the year
• Years of service , Total years of service
• Years of service, Full time for part of the year
• Years of service, Full year of service
• Years of service, Full-time employee for the full year
• Years of service, Other than full time for the full year