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Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 556
Experience:  MTax, EA, QuickBooks Proadvisor. Over 15 years accounting and tax experience specializing in individual and small business.
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I am not an active participant in my

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I am not an 'active participant' in my employer's deferred comp plan for this year, 2012, because my employer is not making any contributions to the company plan this year nor am I. My employer tells me that this means I can make a tax deductible contribution to an IRA account. Assuming this is true, how do I document the fact in my tax return that I am indeed not an 'active participant' in any other kind of deferred comp program for 2012? I know that if I get audited it will probably be two, three, or 4 years from now. It is a lot easier to make sure I've taken care of documenting this now than scrambling to document it several year's from now - or maybe not being able to at all. Thanks. XXXX X.

Thank you for your question.
The proof of not being an active participant in a deferred compensation plan is the fact that no contributions were made to the plan by you or your employer for the year. You can easily obtain the annual statement on your plan that shows the contributions, which should be zero, for 2012. In addition, your W-2 from your employer should not have the "retirement plan" box in Line 13 marked. If it is marked, you should request your employer to correct it as this can trigger an issue with the IRS if you report a deductible IRA contribution.
Please let me know if you need further clarification.
I look forward to your response.
Customer: replied 3 years ago.

Thank you, ***** ***** This answers my question. XXXX X.

You are very welcome!
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