Important Tax Information for 2005

Do you plan to E-File? 
 
If you plan to file your 2005 taxes online this filing season, the IRS has revised their free e-filing restrictions. The IRS free e-filing service is offered to taxpayers with an Adjusted Gross Income (AGI) of $50,000 or less. If you're interested in this service through the IRS, log on to their Web page for more information.
 
More Information from the IRS 
 
By the year 2011 the IRS hopes to receive 80 percent of tax returns electronically. Last year nearly half of all federal returns were filed in this manner.
 
Answers to Your NEAP Tax Questions 
 
Our annual federal tax withholding election form mailing was a success! As a reminder, please do not return the form if you plan to keep your current withholding. We will not change your withholding amount unless you specifically make a request.
 
 
Does NEAP withhold state income tax? 
 
NEAP does not currently withhold State Income Tax. 
 
Do I have to withhold federal income tax? 
 
If you elect a five year payout we are required to withhold twenty percent for federal income tax from your monthly benefit. Nevertheless, you may choose not to have federal income tax withheld if you elect a ten, fifteen or twenty year monthly benefit. 
 
Will I owe federal income tax on my benefit this year? 
 
You may owe federal income tax this year if you receive a distribution from us in monthly benefits. For further information please consult a professional tax advisor or contact your local Internal Revenue Service (IRS) office to determine if you owe federal income tax. 
 
You may be responsible for payment of estimated federal income tax if you choose not to withhold federal income tax or do not have enough federal income tax withheld from your pension payments. Under the estimated tax rules you may be penalized if your withholding and estimated tax payments are insufficient.  
 

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