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1040 Ez Form

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1040 Ez Form

1040 ez form Index A Acknowledgment of contributions, Acknowledgment of Charitable Contributions of $250 or More Adverse determination, Adverse determination. 1040 ez form Affordable Care Act Hospitals, What's New, New Requirements for section 501(c)(3) Hospitals Under the Affordable Care Act. 1040 ez form Aged, home for, Home for the aged. 1040 ez form Agricultural organization, Agricultural and Horticultural Organizations Airport, Other organizations. 1040 ez form Alumni association, Alumni association. 1040 ez form Amateur athletic organizations, Amateur Athletic Organizations Animals, prevention of cruelty to, Prevention of Cruelty to Children or Animals Appeal procedures, Appeal Procedures Application procedures, Application Procedures, Required Inclusions Bylaws, Bylaws. 1040 ez form Conformed copy, Conformed copy. 1040 ez form Description of activities, Description of activities. 1040 ez form Employer identification number, Required Inclusions Financial data, Financial data. 1040 ez form Organizing documents, Organizing documents. 1040 ez form Aquatic resources, Agricultural and Horticultural Organizations Articles of organization, Articles of Organization Assistance (see Tax help) Athletic organization, Athletic organization. 1040 ez form , Amateur Athletic Organizations Attorney's fees, Acceptance of attorneys' fees. 1040 ez form Attribution, special rules, Special rules of attribution. 1040 ez form B Black lung benefit trust, 501(c)(21) - Black Lung Benefit Trusts Board of trade, Board of trade. 1040 ez form Bureau defined, Bureau defined. 1040 ez form Burial benefit insurance, Burial and funeral benefit insurance organization. 1040 ez form Business income, unrelated, Unrelated Business Income Tax Return Business league, 501(c)(6) - Business Leagues, etc. 1040 ez form C Cemetery company, 501(c)(13) - Cemetery Companies Chamber of commerce, Chamber of commerce. 1040 ez form Change in legal structure, Organizational Changes and Exempt Status Charitable contributions, Acknowledgment of Charitable Contributions of $250 or More, Contributions to 501(c)(3) Organizations Charitable organization, Section 501(c)(3) Organizations, Charitable Organizations Charitable risk pools, Charitable Risk Pools Child care organization, Child care organizations. 1040 ez form Children, prevention of cruelty to, Prevention of Cruelty to Children or Animals Church, Churches. 1040 ez form Integrated auxiliaries, Integrated auxiliaries. 1040 ez form Civic leagues, 501(c)(4) - Civic Leagues and Social Welfare Organizations Clinic, Clinic. 1040 ez form CO-OP Health Insurance Issuers, 501(c)(29) - CO-OP Health Insurance Issuers College bookstore, restaurant, College book stores, cafeterias, restaurants, etc. 1040 ez form Comments, Comments and suggestions. 1040 ez form Community association, Other organizations. 1040 ez form Community nursing bureau, Community nursing bureau. 1040 ez form Community trust, Community Trusts Contributions, charitable, Acknowledgment of Charitable Contributions of $250 or More, Contributions to 501(c)(3) Organizations Court appeals, Appeal to Courts Credit union, 501(c)(14) - Credit Unions and Other Mutual Financial Organizations D Determination letter, Rulings and Determination Letters Disclosures, required, Disclosure of Quid Pro Quo Contributions Dues used for lobbying, Dues Used for Lobbying or Political Activities Nondeductible contributions, Solicitation of Nondeductible Contributions Quid pro quo contributions, Disclosure of Quid Pro Quo Contributions Services available from government, Penalties. 1040 ez form Dispositions of donated property, Donee Information Return Disqualified persons, Disqualified persons. 1040 ez form Domestic fraternal society, Domestic Fraternal Societies (501(c)(10)) Donor advised funds Excess benefit transaction, Donor advised fund transactions occurring after August 17, 2006. 1040 ez form Dues used for political or legislative activities, Dues Used for Lobbying or Political Activities, Deduction not allowed for dues used for political or legislative activities. 1040 ez form E Educational organizations, Educational Organizations, Educational organizations. 1040 ez form Employees' association, 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' Associations Employment taxes, Employment Tax Returns Endowment fund, Endowment funds. 1040 ez form Estimated tax, Estimated tax. 1040 ez form Excess benefit transaction, Excess Benefit Transaction, Supporting organization transactions occurring after July 25, 2006. 1040 ez form Disqualified person, Tax on Disqualified Persons, Disqualified Person Controlled entity, 35%, 35% controlled entity. 1040 ez form Family members, Family members. 1040 ez form Substantial influence, Persons not considered to have substantial influence. 1040 ez form Disregarded benefits, Disregarded benefits. 1040 ez form Donor advised funds, Donor advised fund transactions occurring after August 17, 2006. 1040 ez form , Exception. 1040 ez form Excise tax, Excise tax on excess benefit transactions. 1040 ez form Initial contracts, Special Exception for Initial Contracts Reasonable compensation, Reasonable Compensation. 1040 ez form Rebuttable presumption, Rebuttable presumption that a transaction is not an excess benefit transaction. 1040 ez form Excise tax Black lung benefit trust, Excise taxes. 1040 ez form Lobbying expenditures, Tax on excess expenditures to influence legislation. 1040 ez form , Tax on disqualifying lobbying expenditures. 1040 ez form Political expenditures, Excise taxes on political expenditures. 1040 ez form Private foundations, Excise taxes on private foundations. 1040 ez form , Excise Taxes on Private Foundations Exempt function, Political Organization Income Tax Return Exempt purposes, Section 501(c)(3) Organizations Exemption for terrorist organization, Non-exemption for terrorist organizations. 1040 ez form Extensions of time, Extensions of time for filing. 1040 ez form F Facts and circumstances test, Facts and circumstances test. 1040 ez form Fair market value, estimate of, Good faith estimate of fair market value (FMV). 1040 ez form Filing requirements, Annual Information Returns Annual information returns, Annual Information Returns Donee information return, Donee Information Return Due date, Political Organization Income Tax Return Employment tax, Employment Tax Returns Excise tax, Excise taxes on private foundations. 1040 ez form , Excise Taxes on Private Foundations Political organization, Political Organization Income Tax Return Private foundations, Form 990-PF Unrelated business income, Unrelated Business Income Tax Return Form 990-N, Annual Electronic Filing Requirement for Small Tax-Exempt Organizations Forms, Forms Required 1023, Forms Required, Administrative Remedies, 270-day period. 1040 ez form , Information required for subordinate organizations. 1040 ez form , Annual Information Return, Form 1023. 1040 ez form , Organizations Not Required To File Form 1023, Private Schools, When to file application. 1040 ez form , Lobbying Expenditures, Volunteer fire companies. 1040 ez form 1024, Forms Required, Application made under wrong paragraph of section 501(c). 1040 ez form , Annual Information Return, 501(c)(4) - Civic Leagues and Social Welfare Organizations, 501(c)(6) - Business Leagues, etc. 1040 ez form , 501(c)(7) - Social and Recreation Clubs, 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal Societies, Fraternal Beneficiary Societies (501(c)(8)), Domestic Fraternal Societies (501(c)(10)), Local Employees' Associations (501(c)(4)), Voluntary Employees' Beneficiary Associations (501(c)(9)), Supplemental Unemployment Benefit Trusts (501(c)(17)), 501(c)(13) - Cemetery Companies, 501(c)(19) - Veterans' Organizations, 501(c)(20) - Group Legal Services Plan Organizations, 501(c)(2) - Title-Holding Corporations for Single Parent Corporations, 501(c)(25) - Title-Holding Corporations or Trusts for Multiple Parent Corporations 1040, Effect on employees. 1040 ez form 1065, Annual Information Returns 1120–POL, Political Organization Income Tax Return 1128, Central organizations. 1040 ez form 2848, Power of attorney. 1040 ez form , Representation. 1040 ez form 4720, Tax on excess expenditures to influence legislation. 1040 ez form 5578, Certification. 1040 ez form 5768, Making the election. 1040 ez form 6069, Tax treatment of donations. 1040 ez form 8274, FICA tax exemption election. 1040 ez form 8282, Dispositions of donated property. 1040 ez form 8283, Form 8283. 1040 ez form 8300, Report of Cash Received 8718, Forms Required, Power of attorney. 1040 ez form 8821, Representation. 1040 ez form 8871, Reporting Requirements for a Political Organization, Annual Information Return 8872, Reporting Requirements for a Political Organization, Annual Information Return 990, Keeping the Group Exemption Letter in Force, Forms 990 and 990-EZ, Annual Information Return, Making the election. 1040 ez form 990-BL, Annual Information Returns, 990-EZ, Forms 990 and 990-EZ, Form 990-EZ. 1040 ez form 990-PF, Form 990-PF, Excise taxes on private foundations. 1040 ez form , Excise Taxes on Private Foundations 990-T, Unrelated Business Income Tax Return SS-4, Required Inclusions, Employer identification number. 1040 ez form W–2, Revoking the election. 1040 ez form Fraternal beneficiary society, Fraternal Beneficiary Societies (501(c)(8)) Fraternal societies, Organizations subject to requirements. 1040 ez form , 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal Societies Free tax services, Free help with your tax return. 1040 ez form Funeral benefit insurance, Burial and funeral benefit insurance organization. 1040 ez form G Gifts and contributions, public charity, Gifts, contributions, and grants distinguished from gross receipts. 1040 ez form Good faith determinations, What's New, New organization. 1040 ez form Governmental unit, Governmental units. 1040 ez form Grant Distinguished from gross receipts, Grants. 1040 ez form Exclusion for unusual grant, Unusual grants. 1040 ez form , Unusual grants. 1040 ez form From public charity, Grants from public charities. 1040 ez form , Grants from public charities. 1040 ez form Grantor and contributor, reliance on ruling, Reliance by grantors and contributors. 1040 ez form Gross receipts from nonmembership sources, Gross receipts from nonmembership sources. 1040 ez form Group exemption letter, Group Exemption Letter H Health coverage organization, 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations Help (see Tax help) High-risk health coverage organization, 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations Home for the aged, Home for the aged. 1040 ez form Homeowners' association, Homeowners' associations. 1040 ez form Horticultural organization, Agricultural and Horticultural Organizations Hospital, Hospital. 1040 ez form , Hospitals and medical research organizations. 1040 ez form I Inactive organization, Organizational Changes and Exempt Status Industrial development, Other organizations. 1040 ez form Instrumentalities, Instrumentalities. 1040 ez form Insurance, organizations providing, Organizations Providing Insurance L Labor organization, Organizations subject to requirements. 1040 ez form , Labor Organizations Law, public interest, Public-interest law firms. 1040 ez form Legislative activity, Lobbying Expenditures, Legislative activity. 1040 ez form Listed transaction, Prohibited tax shelter transaction. 1040 ez form Literary organizations, Literary Organizations Loans, organizations providing, Organization providing loans. 1040 ez form Lobbying expenditures, Lobbying Expenditures Local benevolent life insurance associations, Local Life Insurance Associations Local employees' association, Local Employees' Associations (501(c)(4)) Lodge system, Lodge system. 1040 ez form M Medical research organization, Medical research organization. 1040 ez form Medicare and Medicaid payments, Medicare and Medicaid payments. 1040 ez form Membership fee, Membership fees. 1040 ez form , Membership fees distinguished from gross receipts. 1040 ez form Modification of exemption, Revocation or Modification of Exemption Mutual financial organization, 501(c)(14) - Credit Unions and Other Mutual Financial Organizations Mutual or cooperative association, Mutual or Cooperative Associations N Nursing bureau, Community nursing bureau. 1040 ez form O One-third support test, One-third support test. 1040 ez form Organization assets, Dedication and Distribution of Assets Dedication, Dedication. 1040 ez form Distribution, Distribution. 1040 ez form Organizational changes, Organizational Changes and Exempt Status P Penalties, Penalties for failure to file. 1040 ez form Failure to allow public inspection, Penalties Failure to disclose, Penalty for failure to disclose. 1040 ez form , Penalties. 1040 ez form , Penalty. 1040 ez form Failure to file, Penalties for failure to file. 1040 ez form Perpetual care organization, Perpetual care organization. 1040 ez form Political activity, Dues Used for Lobbying or Political Activities, Political activity. 1040 ez form , Political activity. 1040 ez form Political organization Income tax return, Political Organization Income Tax Return Taxable income, Political Organization Income Tax Return Power of attorney, Power of attorney. 1040 ez form Preferred stock, Common and preferred stock. 1040 ez form Prevention of cruelty to children or animals, Prevention of Cruelty to Children or Animals Private delivery service, Private delivery service. 1040 ez form Private foundations, Private Foundations Private operating foundation, Private Operating Foundations Private school, Private Schools, Racially Nondiscriminatory Policy Prohibited tax shelter transactions Entity managers, Entity manager. 1040 ez form Entity managers excise tax, Manager Level Tax Listed transaction, Prohibited tax shelter transaction. 1040 ez form Prohibited reportable transactions, Prohibited tax shelter transaction. 1040 ez form Subsequently listed transaction, Subsequently listed transaction. 1040 ez form Tax-exempt entities, Tax-exempt entities. 1040 ez form Public charity Gifts and contributions, Gifts, contributions, and grants distinguished from gross receipts. 1040 ez form Grant from, Grants from public charities. 1040 ez form Section 509(a)(1), Section 509(a)(1) Organizations Section 509(a)(2), Section 509(a)(2) Organizations Section 509(a)(3), Section 509(a)(3) Organizations Section 509(a)(4), Section 509(a)(4) Organizations Support test, One-third support test. 1040 ez form , One-third support test. 1040 ez form Public inspection Annual return, Annual Information Return Exemption applications, Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms Forms 8871 and 8872, Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms Public-interest law firm, Public-interest law firms. 1040 ez form Publications (see Tax help) Publicly supported organization, Publicly supported organizations. 1040 ez form , Qualifying as Publicly Supported Attraction of public support, Attraction of public support requirement. 1040 ez form Ten-percent-of-support, Ten-percent-of-support requirement. 1040 ez form R Racial composition, How to determine racial composition. 1040 ez form Racially nondiscriminatory policy, Racially Nondiscriminatory Policy Real estate board, Real estate board. 1040 ez form Recognition of exemption, application, Application for Recognition of Exemption Religious organizations, Religious Organizations Requests other than applications, Miscellaneous Procedures Responsiveness test, Responsiveness test. 1040 ez form Revocation of exemption, Revocation or Modification of Exemption Ruling letter, Rulings and Determination Letters S Scholarship Private school, Scholarship and loan programs. 1040 ez form Scholarships, Scholarships. 1040 ez form School, private, Private Schools Scientific organizations, Scientific Organizations Section 501(c)(3) organizations Amateur athletic, Amateur Athletic Organizations Literary, Literary Organizations Prevention of cruelty, Prevention of Cruelty to Children or Animals Private foundations, Private Foundations and Public Charities Public charities, Public Charities Qualifications, Section 501(c)(3) Organizations Religious, Religious Organizations Scientific, Scientific Organizations Section 501(c)(3) Organizations Charitable, Charitable Organizations Educational, Educational Organizations and Private Schools Single entity, Single entity. 1040 ez form Social clubs, Organizations subject to requirements. 1040 ez form , 501(c)(7) - Social and Recreation Clubs Social welfare organization, Organizations subject to requirements. 1040 ez form , 501(c)(4) - Civic Leagues and Social Welfare Organizations Specified organizations, Specified organizations. 1040 ez form Sports organization, amateur, Qualified amateur sports organization. 1040 ez form State-sponsored, 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations High-risk health coverage organization, 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations Workers' compensation reinsurance organization, 501(c)(27) - Qualified State-Sponsored Workers' Compensation Organizations Stock or commodity exchange, Stock or commodity exchange. 1040 ez form Suggestions, Comments and suggestions. 1040 ez form Supplemental unemployment benefit trust, Supplemental Unemployment Benefit Trusts (501(c)(17)) Support, Support. 1040 ez form , Support from a governmental unit. 1040 ez form , Support from the general public. 1040 ez form Support test, One-third support test. 1040 ez form Facts and circumstances, Facts and circumstances test. 1040 ez form One-third, One-third support test. 1040 ez form Public charity, One-third support test. 1040 ez form Supporting organization, Supporting organization transactions occurring after July 25, 2006. 1040 ez form T Tax help, Technical advice, Appeals Office Consideration Testing for public safety, Section 509(a)(4) Organizations Title-holding corporation, 501(c)(2) - Title-Holding Corporations for Single Parent Corporations U Unemployment benefit trust, Supplemental Unemployment Benefit Trusts (501(c)(17)) Unrelated business income, Unrelated Business Income Tax Return Unusual grants, Unusual grants. 1040 ez form , Unusual grants. 1040 ez form User fee, Power of attorney. 1040 ez form , User fee. 1040 ez form V Veterans' organization, 501(c)(19) - Veterans' Organizations Voluntary employees' beneficiary association, Voluntary Employees' Beneficiary Associations (501(c)(9)) Volunteer fire company, Volunteer fire companies. 1040 ez form W War veterans' organization, 501(c)(19) - Veterans' Organizations Withdrawal of application, Withdrawal of application. 1040 ez form Withholding information from public, Requests for withholding of information from the public. 1040 ez form Work Opportunity Tax Credit, Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. 1040 ez form Workers' compensation reinsurance organization, 501(c)(27) - Qualified State-Sponsored Workers' Compensation Organizations Prev  Up     Home   More Online Publications
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The 1040 Ez Form

1040 ez form 2. 1040 ez form   Employees' Pay Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tests for Deducting PayTest 1—Reasonableness Test 2—For Services Performed Kinds of PayAwards Bonuses Education Expenses Fringe Benefits Loans or Advances Property Reimbursements for Business Expenses Sick and Vacation Pay Introduction You can generally deduct the amount you pay your employees for the services they perform. 1040 ez form The pay may be in cash, property, or services. 1040 ez form It may include wages, salaries, bonuses, commissions, or other non-cash compensation such as vacation allowances and fringe benefits. 1040 ez form For information about deducting employment taxes, see chapter 5. 1040 ez form You can claim employment credits, such as the following, if you hire individuals who meet certain requirements. 1040 ez form Empowerment zone employment credit (Form 8844). 1040 ez form Indian employment credit (Form 8845). 1040 ez form Work opportunity credit (Form 5884). 1040 ez form Credit for employer differential wage payments (Form 8932). 1040 ez form Reduce your deduction for employee wages by the amount of employment credits you claim. 1040 ez form For more information about these credits, see the form on which the credit is claimed. 1040 ez form Topics - This chapter discusses: Tests for deducting pay Kinds of pay Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits See chapter 12 for information about getting publications and forms. 1040 ez form Tests for Deducting Pay To be deductible, your employees' pay must be an ordinary and necessary business expense and you must pay or incur it. 1040 ez form These and other requirements that apply to all business expenses are explained in chapter 1. 1040 ez form In addition, the pay must meet both of the following tests. 1040 ez form Test 1. 1040 ez form It must be reasonable. 1040 ez form Test 2. 1040 ez form It must be for services performed. 1040 ez form The form or method of figuring the pay does not affect its deductibility. 1040 ez form For example, bonuses and commissions based on sales or earnings, and paid under an agreement made before the services were performed, are both deductible. 1040 ez form Test 1—Reasonableness You must be able to prove that the pay is reasonable. 1040 ez form Whether the pay is reasonable depends on the circumstances that existed when you contracted for the services, not those that exist when reasonableness is questioned. 1040 ez form If the pay is excessive, the excess pay is disallowed as a deduction. 1040 ez form Factors to consider. 1040 ez form   Determine the reasonableness of pay by the facts and circumstances. 1040 ez form Generally, reasonable pay is the amount that a similar business would pay for the same or similar services. 1040 ez form   To determine if pay is reasonable, also consider the following items and any other pertinent facts. 1040 ez form The duties performed by the employee. 1040 ez form The volume of business handled. 1040 ez form The character and amount of responsibility. 1040 ez form The complexities of your business. 1040 ez form The amount of time required. 1040 ez form The cost of living in the locality. 1040 ez form The ability and achievements of the individual employee performing the service. 1040 ez form The pay compared with the gross and net income of the business, as well as with distributions to shareholders if the business is a corporation. 1040 ez form Your policy regarding pay for all your employees. 1040 ez form The history of pay for each employee. 1040 ez form Test 2—For Services Performed You must be able to prove the payment was made for services actually performed. 1040 ez form Employee-shareholder salaries. 1040 ez form   If a corporation pays an employee who is also a shareholder a salary that is unreasonably high considering the services actually performed, the excessive part of the salary may be treated as a constructive dividend to the employee-shareholder. 1040 ez form The excessive part of the salary would not be allowed as a salary deduction by the corporation. 1040 ez form For more information on corporate distributions to shareholders, see Publication 542, Corporations. 1040 ez form Kinds of Pay Some of the ways you may provide pay to your employees in addition to regular wages or salaries are discussed next. 1040 ez form For specialized and detailed information on employees' pay and the employment tax treatment of employees' pay, see Publications 15, 15-A, and 15-B. 1040 ez form Awards You can generally deduct amounts you pay to your employees as awards, whether paid in cash or property. 1040 ez form If you give property to an employee as an employee achievement award, your deduction may be limited. 1040 ez form Achievement awards. 1040 ez form   An achievement award is an item of tangible personal property that meets all the following requirements. 1040 ez form It is given to an employee for length of service or safety achievement. 1040 ez form It is awarded as part of a meaningful presentation. 1040 ez form It is awarded under conditions and circumstances that do not create a significant likelihood of disguised pay. 1040 ez form Length-of-service award. 1040 ez form    An award will qualify as a length-of-service award only if either of the following applies. 1040 ez form The employee receives the award after his or her first 5 years of employment. 1040 ez form The employee did not receive another length-of-service award (other than one of very small value) during the same year or in any of the prior 4 years. 1040 ez form Safety achievement award. 1040 ez form    An award for safety achievement will qualify as an achievement award unless one of the following applies. 1040 ez form It is given to a manager, administrator, clerical employee, or other professional employee. 1040 ez form During the tax year, more than 10% of your employees, excluding those listed in (1), have already received a safety achievement award (other than one of very small value). 1040 ez form Deduction limit. 1040 ez form   Your deduction for the cost of employee achievement awards given to any one employee during the tax year is limited to the following. 1040 ez form $400 for awards that are not qualified plan awards. 1040 ez form $1,600 for all awards, whether or not qualified plan awards. 1040 ez form   A qualified plan award is an achievement award given as part of an established written plan or program that does not favor highly compensated employees as to eligibility or benefits. 1040 ez form   A highly compensated employee is an employee who meets either of the following tests. 1040 ez form The employee was a 5% owner at any time during the year or the preceding year. 1040 ez form The employee received more than $115,000 in pay for the preceding year. 1040 ez form You can choose to ignore test (2) if the employee was not also in the top 20% of employees ranked by pay for the preceding year. 1040 ez form   An award is not a qualified plan award if the average cost of all the employee achievement awards given during the tax year (that would be qualified plan awards except for this limit) is more than $400. 1040 ez form To figure this average cost, ignore awards of nominal value. 1040 ez form Deduct achievement awards as a nonwage business expense on your return or business schedule. 1040 ez form You may not owe employment taxes on the value of some achievement awards you provide to an employee. 1040 ez form See Publication 15-B. 1040 ez form Bonuses You can generally deduct a bonus paid to an employee if you intended the bonus as additional pay for services, not as a gift, and the services were performed. 1040 ez form However, the total bonuses, salaries, and other pay must be reasonable for the services performed. 1040 ez form If the bonus is paid in property, see Property , later. 1040 ez form Gifts of nominal value. 1040 ez form    If, to promote employee goodwill, you distribute food or merchandise of nominal value to your employees at holidays, you can deduct the cost of these items as a nonwage business expense. 1040 ez form Your deduction for de minimis gifts of food or drink are not subject to the 50% deduction limit that generally applies to meals. 1040 ez form For more information on this deduction limit, see Meals and lodging , later. 1040 ez form Education Expenses If you pay or reimburse education expenses for an employee, you can deduct the payments if they are part of a qualified educational assistance program. 1040 ez form Deduct them on the “Employee benefit programs” or other appropriate line of your tax return. 1040 ez form For information on educational assistance programs, see Educational Assistance in section 2 of Publication 15-B. 1040 ez form Fringe Benefits A fringe benefit is a form of pay for the performance of services. 1040 ez form You can generally deduct the cost of fringe benefits. 1040 ez form You may be able to exclude all or part of the value of some fringe benefits from your employees' pay. 1040 ez form You also may not owe employment taxes on the value of the fringe benefits. 1040 ez form See Table 2-1, Special Rules for Various Types of Fringe Benefits, in Publication 15-B for details. 1040 ez form Your deduction for the cost of fringe benefits for activities generally considered entertainment, amusement, or recreation, or for a facility used in connection with such an activity (for example, a company aircraft) for certain officers, directors, and more-than-10% shareholders is limited. 1040 ez form Certain fringe benefits are discussed next. 1040 ez form See Publication 15-B for more details on these and other fringe benefits. 1040 ez form Meals and lodging. 1040 ez form   You can usually deduct the cost of furnishing meals and lodging to your employees. 1040 ez form Deduct the cost in whatever category the expense falls. 1040 ez form For example, if you operate a restaurant, deduct the cost of the meals you furnish to employees as part of the cost of goods sold. 1040 ez form If you operate a nursing home, motel, or rental property, deduct the cost of furnishing lodging to an employee as expenses for utilities, linen service, salaries, depreciation, etc. 1040 ez form Deduction limit on meals. 1040 ez form   You can generally deduct only 50% of the cost of furnishing meals to your employees. 1040 ez form However, you can deduct the full cost of the following meals. 1040 ez form Meals whose value you include in an employee's wages. 1040 ez form Meals that qualify as a de minimis fringe benefit as discussed in section 2 of Publication 15-B. 1040 ez form This generally includes meals you furnish to employees at your place of business if more than half of these employees are provided the meals for your convenience. 1040 ez form Meals you furnish to your employees at the work site when you operate a restaurant or catering service. 1040 ez form Meals you furnish to your employees as part of the expense of providing recreational or social activities, such as a company picnic. 1040 ez form Meals you are required by federal law to furnish to crew members of certain commercial vessels (or would be required to furnish if the vessels were operated at sea). 1040 ez form This does not include meals you furnish on vessels primarily providing luxury water transportation. 1040 ez form Meals you furnish on an oil or gas platform or drilling rig located offshore or in Alaska. 1040 ez form This includes meals you furnish at a support camp that is near and integral to an oil or gas drilling rig located in Alaska. 1040 ez form Employee benefit programs. 1040 ez form   Employee benefit programs include the following. 1040 ez form Accident and health plans. 1040 ez form Adoption assistance. 1040 ez form Cafeteria plans. 1040 ez form Dependent care assistance. 1040 ez form Education assistance. 1040 ez form Life insurance coverage. 1040 ez form Welfare benefit funds. 1040 ez form   You can generally deduct amounts you spend on employee benefit programs on the applicable line of your tax return. 1040 ez form For example, if you provide dependent care by operating a dependent care facility for your employees, deduct your costs in whatever categories they fall (utilities, salaries, etc. 1040 ez form ). 1040 ez form Life insurance coverage. 1040 ez form   You cannot deduct the cost of life insurance coverage for you, an employee, or any person with a financial interest in your business, if you are directly or indirectly the beneficiary of the policy. 1040 ez form See Regulations section 1. 1040 ez form 264-1 for more information. 1040 ez form Welfare benefit funds. 1040 ez form   A welfare benefit fund is a funded plan (or a funded arrangement having the effect of a plan) that provides welfare benefits to your employees, independent contractors, or their beneficiaries. 1040 ez form Welfare benefits are any benefits other than deferred compensation or transfers of restricted property. 1040 ez form   Your deduction for contributions to a welfare benefit fund is limited to the fund's qualified cost for the tax year. 1040 ez form If your contributions to the fund are more than its qualified cost, carry the excess over to the next tax year. 1040 ez form   Generally, the fund's “qualified cost” is the total of the following amounts, reduced by the after-tax income of the fund. 1040 ez form The cost you would have been able to deduct using the cash method of accounting if you had paid for the benefits directly. 1040 ez form The contributions added to a reserve account that are needed to fund claims incurred but not paid as of the end of the year. 1040 ez form These claims can be for supplemental unemployment benefits, severance pay, or disability, medical, or life insurance benefits. 1040 ez form   For more information, see sections 419(c) and 419A of the Internal Revenue Code and the related regulations. 1040 ez form Loans or Advances You generally can deduct as wages an advance you make to an employee for services performed if you do not expect the employee to repay the advance. 1040 ez form However, if the employee performs no services, treat the amount you advanced as a loan. 1040 ez form If the employee does not repay the loan, treat it as income to the employee. 1040 ez form Below-market interest rate loans. 1040 ez form   On certain loans you make to an employee or shareholder, you are treated as having received interest income and as having paid compensation or dividends equal to that interest. 1040 ez form See Below-Market Loans in chapter 4. 1040 ez form Property If you transfer property (including your company's stock) to an employee as payment for services, you can generally deduct it as wages. 1040 ez form The amount you can deduct is the property's fair market value on the date of the transfer less any amount the employee paid for the property. 1040 ez form You can claim the deduction only for the tax year in which your employee includes the property's value in income. 1040 ez form Your employee is deemed to have included the value in income if you report it on Form W-2, Wage and Tax Statement, in a timely manner. 1040 ez form You treat the deductible amount as received in exchange for the property, and you must recognize any gain or loss realized on the transfer, unless it is the company's stock transferred as payment for services. 1040 ez form Your gain or loss is the difference between the fair market value of the property and its adjusted basis on the date of transfer. 1040 ez form These rules also apply to property transferred to an independent contractor for services, generally reported on Form 1099-MISC, Miscellaneous Income. 1040 ez form Restricted property. 1040 ez form   If the property you transfer for services is subject to restrictions that affect its value, you generally cannot deduct it and do not report gain or loss until it is substantially vested in the recipient. 1040 ez form However, if the recipient pays for the property, you must report any gain at the time of the transfer up to the amount paid. 1040 ez form    “Substantially vested” means the property is not subject to a substantial risk of forfeiture. 1040 ez form This means that the recipient is not likely to have to give up his or her rights in the property in the future. 1040 ez form Reimbursements for Business Expenses You can generally deduct the amount you pay or reimburse employees for business expenses incurred for your business. 1040 ez form However, your deduction may be limited. 1040 ez form If you make the payment under an accountable plan, deduct it in the category of the expense paid. 1040 ez form For example, if you pay an employee for travel expenses incurred on your behalf, deduct this payment as a travel expense. 1040 ez form If you make the payment under a nonaccountable plan, deduct it as wages and include it in the employee's Form W-2. 1040 ez form See Reimbursement of Travel, Meals, and Entertainment in chapter 11 for more information about deducting reimbursements and an explanation of accountable and nonaccountable plans. 1040 ez form Sick and Vacation Pay Sick pay. 1040 ez form   You can deduct amounts you pay to your employees for sickness and injury, including lump-sum amounts, as wages. 1040 ez form However, your deduction is limited to amounts not compensated by insurance or other means. 1040 ez form Vacation pay. 1040 ez form   Vacation pay is an employee benefit. 1040 ez form It includes amounts paid for unused vacation leave. 1040 ez form You can deduct vacation pay only in the tax year in which the employee actually receives it. 1040 ez form This rule applies regardless of whether you use the cash or accrual method of accounting. 1040 ez form Prev  Up  Next   Home   More Online Publications