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1040ez Free Efile

1040ez free efile Publication 80 - Additional Material Prev  Up  Next   Home   More Online Publications
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Forms you can use

Forms Available for Filing Season 2014 (TY 2013)
Form Number Form Name Available
Form 1040 U.S. Individual Income Tax Return

1/31/2014

Form 1040A U.S. Individual Income Tax Return

1/31/2014

Form 1040EZ Income Tax Return for Single and Joint Filers With No Dependents

1/31/2014

Form 1040V Payment Voucher

1/31/2014

Form 1040ES Estimated Tax Payments

2/13/2014

Schedule A Itemized Deductions

1/31/2014

Schedule B Interest and Ordinary Dividends

1/31/2014

Schedule C Profit or Loss From Business

1/31/2014

Schedule C-EZ Net Profit from Business

1/31/2014

Schedule D Capital Gains and Losses

1/31/2014

Schedule E Supplemental Income and Loss

1/31/2014

Schedule EIC Earned Income Credit

1/31/2014

Schedule F Profit or Loss From Farming

1/31/2014

Schedule H Household Employment Taxes

1/31/2014

Schedule J Farm Income Averaging

1/31/2014

Schedule L Standard Deduction for Certain Filers

1/31/2014

Schedule R Credit for the Elderly or the Disabled

1/31/2014

Schedule SE Self-Employment Tax

1/31/2014

Form 1116 Foreign Tax Credit

1/31/2014

Form 1310 Statement of Person Claiming Refund Due of a Deceased Taxpayer

1/31/2014

Form 2106 Employee Business Expenses

1/31/2014

Form 2106EZ Unreimbursed Employee Business Expenses

1/31/2014

Form 2120 Multiple Support Declaration

1/31/2014

Form 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts

1/31/2014

Form 2210F Underpayment of Estimated Tax by Farmers and Fishermen

2/13/2014

Form 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains

1/31/2014

Form 2441 Child and Dependent Care Expenses

1/31/2014

Form 2555 Form 2555 Foreign Earned Income

1/31/2014

Form 2555EZ Form 2555EZ Foreign Earned Income Exclusion

1/31/2014

Form 3468 Investment Credit

1/31/2014

Form 3800 General Business Credit

1/31/2014

Form 3903 Moving Expenses

1/31/2014

Form 4136 Credit for Federal Tax Paid on Fuels

1/31/2014

Form 4137 Social Security and Medicare Tax on Unreported Tip Income

1/31/2014

Form 4255 Recapture of Investment Credit

1/31/2014

Form 4562 Depreciation and Amortization (Including Information on Listed Property)

1/31/2014

Form 4684 Casualties and Thefts

1/31/2014

Form 4797 Sales of Business Property

1/31/2014

Form 4835 Farm Rental Income and Expenses

1/31/2014

Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return (Can print and mail now)

E-file on 3/5/14

Form 4952 Investment Interest Expense Deduction

1/31/2014

Form 4972 Tax on Lump Sum Distributions

1/31/2014

Form 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

1/31/2014

Form 5405 First-Time Homebuyer Credit (Only Page 2, Part IV of the Form, Repayment of Credit may be e-filed)

1/31/2014

Form 5695 Residential Energy Credits

1/31/2014

Form 5884 Work Opportunity Credit

1/31/2014

Form 6198 At-Risk Limitations

1/31/2014

Form 6251 Alternative Minimum Tax-Individuals

1/31/2014

Form 6252 Installment Sale Income

1/31/2014

Form 6478 Credit for Alcohol Used as Fuel

1/31/2014

Form 6765 Credit for Increasing Research Activities

1/31/2014

Form 6781 Gains and Losses from Section 1256 Contracts & Straddles

1/31/2014

Form 8082 Notice of Inconsistent Treatment or Administrative Adjustment Request

1/31/2014

Form 8275 Disclosure Statement

1/31/2014

Form 8275R Regulation Disclosure Statement

1/31/2014

Form 8283 Noncash Charitable Contribution

1/31/2014

Form 8379 Injured Spouse Allocation

1/31/2014

Form 8396 Mortgage Interest Credit

1/31/2014

Form 8453 U.S. Individual Income Tax Transmittal for an IRS e-file Return (This form that can't be e-filed, must be mailed in)

2/27/2014

Form 8582 Passive Activity Loss Limitations

1/31/2014

Form 8582-CR Passive Activity Credit Limitations

1/31/2014

Form 8586 Low-Income Housing Credit

1/31/2014

Form 8594 Asset Acquisition Statement

1/31/2014

Form 8606 Nondeductible IRAs

1/31/2014

Form 8609A Annual Statement for Low-Income Housing Credit

1/31/2014

Form 8611 Recapture of Low-income Housing Credit

1/31/2014

Form 8615 Tax for Children Under Age 18/24 With Investment Income of More Than $1,800

1/31/2014

Form 8689 Allocation of Individual Income Tax to the US Virgin Islands

1/31/2014

Form 8697 Interest Computation Under the Look-Back Method for Completed Long-Term Contracts

1/31/2014

Form 8801 Credit for Prior Year Minimum Tax - Individuals, Estates and Trusts

1/31/2014

Form 8812 Additional Child Tax Credit

1/31/2014

Form 8814 Parents' Election To Report Child's Interest and Dividends

1/31/2014

Form 8815 Exclusion of Interest From Series EE US Savings Bonds Issued After 1989

1/31/2014

Form 8820 Orphan Drug Credit

1/31/2014

Form 8824 Like-Kind Exchanges

1/31/2014

Form 8826 Disabled Access Credit

1/31/2014

Form 8828 Recapture of Federal Mortgage Subsidy

1/31/2014

Form 8829 Expenses for Business Use of Your Home

1/31/2014

Form 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)

1/31/2014

Form 8834 Qualified Electric Vehicle Credit

1/31/2014

Form 8839 Qualified Adoption Expense

1/31/2014

Form 8844 Empowerment Zone and Renewal Community Employment Credit

1/31/2014

Form 8845 Indian Employment Credit

1/31/2014

Form 8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips

1/31/2014

Form 8847 Credit for Contributions to Selected Community Development Corporations

1/31/2014

Form 8853 Archer MSAs and Long-Term Care Insurance Contracts

1/31/2014

Form 8859 District of Columbia First-Time Homebuyer Credit

2/13/2014

Form 8862 Information To Claim Earned Income Credit After Disallowance

1/31/2014

Form 8863 Education Credits (Hope and Lifetime Learning Credits)

1/31/2014

Form 8864 Biodiesel and Renewable Diesel Fuels Credit

1/31/2014

Form 8874 New Markets Credit

1/31/2014

Form 8880 Credit for Qualified Retirement Savings Contributions

1/31/2014

Form 8881 Credit for Small Employer Pension Plan Startup Costs

1/31/2014

Form 8882 Credit for Employer - Provided ChildCare Facilities and Services

1/31/2014

Form 8885 Health Coverage Tax Credit

1/31/2014

Form 8886 Reportable Transaction Disclosure Statement

1/31/2014

Form 8888 Direct Deposit of Refund to more than 1 account

1/31/2014

Form 8889 Health Savings Accounts (HSAs)

1/31/2014

Form 8891 US Information Return for Beneficiary of Certain Canadian Registered Retirement Plans

1/31/2014

Form 8903 Domestic Production Activities Deduction

1/31/2014

Form 8906 Distilled Spirits Credit

1/31/2014

Form 8907 Nonconventional Source Fuel Credit

1/31/2014

Form 8908 Energy Efficient Home Credit

1/31/2014

Form 8909 Energy Efficient Appliance Credit

1/31/2014

Form 8910 Alternate Motor Vehicle Credit

1/31/2014

Form 8911 Alternate Fuel Vehicle Refueling Credit

1/31/2014

Form 8915 Qualified Hurricane Katrina Retirement Plan Dists and Repayments

1/31/2014

Form 8917 Tuition and Fees Deduction

1/31/2014

Form 8919 Uncollected Social Security and Medicare Tax on Wages

1/31/2014

Form 8930 Midwestern Disaster Area Distributions

1/31/2014

Form 8931 Agricultural Chemicals Security Credit

1/31/2014

Form 8932 Credit for Employer Differential Wage Payments

1/31/2014

Form 8933 Carbon Dioxide Sequestration Credit

1/31/2014

Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit

2/13/2014

Form 8941 Credit for Small Employer Health Insurance Premiums

1/31/2014

Form 8949 Sales and other Dispositions of Capital Assets

1/31/2014

Form 8959 Additional Medicare Tax

2/13/2014

Form 8960 Net Investment Income Tax - Individuals, Estates and Trusts

2/13/2014

Form 9465 Installment Agreement Request

1/31/2014

Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (And Section 1082 Basis Adjustment)

1/31/2014

     

 

 

 

Page Last Reviewed or Updated: 04-Mar-2014

The 1040ez Free Efile

1040ez free efile Publication 51 - Main Content Table of Contents 1. 1040ez free efile Taxpayer Identification NumbersWhen you receive your EIN. 1040ez free efile Registering for SSNVS. 1040ez free efile 2. 1040ez free efile Who Are Employees?Crew Leaders Business Owned and Operated by Spouses 3. 1040ez free efile Wages and Other Compensation 4. 1040ez free efile Social Security and Medicare TaxesThe $150 Test or the $2,500 Test Social Security and Medicare Tax Withholding 5. 1040ez free efile Federal Income Tax WithholdingImplementation of lock-in letter. 1040ez free efile Seasonal employees and employees not currently performing services. 1040ez free efile Termination and re-hire of employees. 1040ez free efile How To Figure Federal Income Tax Withholding 6. 1040ez free efile Required Notice to Employees About Earned Income Credit (EIC) 7. 1040ez free efile Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties Employers of Both Farm and Nonfarm Workers 8. 1040ez free efile Form 943 9. 1040ez free efile Reporting Adjustments on Form 943Current Year Adjustments Prior Year Adjustments 10. 1040ez free efile Federal Unemployment (FUTA) Tax 11. 1040ez free efile Reconciling Wage Reporting Forms 13. 1040ez free efile Federal Income Tax Withholding MethodsWage Bracket Method Percentage Method Alternative Methods of Federal Income Tax Withholding How To Get Tax Help 1. 1040ez free efile Taxpayer Identification Numbers If you are required to withhold any federal income, social security, or Medicare taxes, you will need an employer identification number (EIN) for yourself. 1040ez free efile Also, you will need the SSN of each employee and the name of each employee as shown on the employee's social security card. 1040ez free efile Employer identification number (EIN). 1040ez free efile   An employer identification number (EIN) is a nine-digit number that the IRS issues. 1040ez free efile The digits are arranged as follows: 00-0000000. 1040ez free efile It is used to identify the tax accounts of employers and certain others who have no employees. 1040ez free efile Use your EIN on all of the items that you send to the IRS and SSA. 1040ez free efile   If you do not have an EIN, you may apply for one online. 1040ez free efile Visit IRS. 1040ez free efile gov and click on the Apply for an EIN Online link under Tools. 1040ez free efile You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. 1040ez free efile Do not use a SSN in place of an EIN. 1040ez free efile   If you do not have an EIN by the time a return is due, write “Applied For” and the date you applied for it in the space shown for the number. 1040ez free efile If you took over another employer's business, do not use that employer's EIN. 1040ez free efile   You should have only one EIN. 1040ez free efile If you have more than one, and are not sure which one to use, call the toll-free Business and Specialty Tax Line at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). 1040ez free efile Provide the EINs that you have, the name and address to which each number was assigned, and the address of your principal place of business. 1040ez free efile The IRS will tell you which EIN to use. 1040ez free efile   For more information, see Publication 1635 or Publication 583. 1040ez free efile When you receive your EIN. 1040ez free efile   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in the Electronic Federal Tax Payment System (EFTPS). 1040ez free efile You will receive information in your Employer Identification Number (EIN) Package about Express Enrollment and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. 1040ez free efile Call the toll-free number located in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your employment tax deposits. 1040ez free efile If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. 1040ez free efile Social security number (SSN). 1040ez free efile   An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. 1040ez free efile You must obtain each employee's name and SSN as shown on the employee's social security card because you must enter them on Form W-2. 1040ez free efile Do not accept a social security card that says “Not valid for employment. 1040ez free efile ” A social security number issued with this legend does not permit employment. 1040ez free efile You may, but are not required to, photocopy the social security card if the employee provides it. 1040ez free efile If you do not show the employee's correct name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. 1040ez free efile See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs. 1040ez free efile Applying for a social security card. 1040ez free efile   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation to SSA. 1040ez free efile You can get Form SS-5 at SSA offices, by calling 1-800-772-1213 or 1-800-325-0778 (TTY), or from the SSA website at www. 1040ez free efile socialsecurity. 1040ez free efile gov/online/ss-5. 1040ez free efile html. 1040ez free efile The employee must complete and sign Form SS-5; it cannot be filed by the employer. 1040ez free efile You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. 1040ez free efile Applying for a social security number. 1040ez free efile   If you file Form W-2 on paper and your employee has applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. 1040ez free efile If you are filing electronically, enter all zeros (000-00-0000) in the social security number field. 1040ez free efile When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. 1040ez free efile Furnish Copies B, C, and 2 of Form W-2c to the employee. 1040ez free efile Up to 25 Forms W-2c per Form W-3c, Transmittal of Corrected Wage and Tax Statements, may be filed per session over the Internet, with no limit on the number of sessions. 1040ez free efile For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www. 1040ez free efile socialsecurity. 1040ez free efile gov/employer. 1040ez free efile Advise your employee to correct the SSN on his or her original Form W-2. 1040ez free efile Correctly record the employee's name and SSN. 1040ez free efile   Record the name and number of each employee as they are shown on the employee's social security card. 1040ez free efile If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. 1040ez free efile Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. 1040ez free efile   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2. 1040ez free efile It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. 1040ez free efile IRS individual taxpayer identification numbers (ITINs) for aliens. 1040ez free efile   Do not accept an ITIN in place of an SSN for employee identification or for work. 1040ez free efile An ITIN is issued for use by resident and nonresident aliens who need identification for tax purposes, but who are not eligible for U. 1040ez free efile S. 1040ez free efile employment. 1040ez free efile The ITIN is a nine-digit number formatted like an SSN (for example, NNN-NN-NNNN). 1040ez free efile However, it begins with the number “9” and has either a “7” or “8” as the fourth digit (for example, 9NN-7N-NNNN or 9NN-8N-NNNN). 1040ez free efile    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. 1040ez free efile If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier in this section. 1040ez free efile Do not use an ITIN in place of an SSN on Form W-2. 1040ez free efile Verification of social security numbers. 1040ez free efile   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 employee names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive results the next business day. 1040ez free efile Visit www. 1040ez free efile socialsecurity. 1040ez free efile gov/employer/ssnv. 1040ez free efile htm for more information. 1040ez free efile Registering for SSNVS. 1040ez free efile   You must register online and receive authorization from your employer to use SSNVS. 1040ez free efile To register, visit SSA's website at www. 1040ez free efile socialsecurity. 1040ez free efile gov/employer and click on the Business Services Online link. 1040ez free efile Follow the registration instructions to obtain a user identification (ID) and password. 1040ez free efile You will need to provide the following information about yourself and your company. 1040ez free efile Name. 1040ez free efile SSN. 1040ez free efile Date of birth. 1040ez free efile Type of employer. 1040ez free efile EIN. 1040ez free efile Company name, address, and telephone number. 1040ez free efile Email address. 1040ez free efile When you have completed the online registration process, SSA will mail a one-time activation code to your employer. 1040ez free efile You must enter the activation code online to use SSNVS. 1040ez free efile 2. 1040ez free efile Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. 1040ez free efile See Publication 15-A for details on statutory employees and nonemployees. 1040ez free efile Employee status under common law. 1040ez free efile   Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. 1040ez free efile This is so even when you give the employee freedom of action. 1040ez free efile What matters is that you have the right to control the details of how the services are performed. 1040ez free efile See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. 1040ez free efile If an employer-employee relationship exists, it does not matter what it is called. 1040ez free efile The employee may be called an agent or independent contractor. 1040ez free efile It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. 1040ez free efile You are responsible for withholding and paying employment taxes for your employees. 1040ez free efile You are also required to file employment tax returns. 1040ez free efile These requirements do not apply to amounts that you pay to independent contractors. 1040ez free efile The rules discussed in this publication apply only to workers who are your employees. 1040ez free efile In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. 1040ez free efile For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. 1040ez free efile Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. 1040ez free efile The table in section 12, How Do Employment Taxes Apply to Farmwork , distinguishes between farm and nonfarm activities, and also addresses rules that apply in special situations. 1040ez free efile Crew Leaders If you are a crew leader, you are an employer of farmworkers. 1040ez free efile A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. 1040ez free efile If there is no written agreement between you and the farm operator stating that you are his or her employee and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. 1040ez free efile For FUTA tax rules, see section 10. 1040ez free efile Business Owned and Operated by Spouses If you and your spouse jointly own and operate a farm or nonfarm business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. 1040ez free efile See Publication 541, Partnerships, for more details. 1040ez free efile The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. 1040ez free efile Exception—Qualified joint venture. 1040ez free efile   For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. 1040ez free efile A qualified joint venture conducts a trade or business where: The only members of the joint venture are spouses who file a joint income tax return, Both spouses materially participate (see Material participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). 1040ez free efile   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. 1040ez free efile Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. 1040ez free efile   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. 1040ez free efile If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. 1040ez free efile Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. 1040ez free efile However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. 1040ez free efile    Note. 1040ez free efile If your spouse is your employee, not your partner, you must pay social security and Medicare taxes for him or her. 1040ez free efile   For more information on qualified joint ventures, visit IRS. 1040ez free efile gov and enter “qualified joint venture” in the search box. 1040ez free efile Exception—Community income. 1040ez free efile   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. 1040ez free efile S. 1040ez free efile possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. 1040ez free efile You may still make an election to be taxed as a qualified joint venture instead of a partnership. 1040ez free efile See Exception—Qualified joint venture , earlier in this section. 1040ez free efile 3. 1040ez free efile Wages and Other Compensation Cash wages that you pay to employees for farmwork are generally subject to social security tax and Medicare tax. 1040ez free efile You may also be required to withhold, deposit, and report Additional Medicare Tax. 1040ez free efile See section 4 for more information. 1040ez free efile If the wages are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. 1040ez free efile You may also be liable for FUTA tax, which is not withheld by you or paid by the employee. 1040ez free efile FUTA tax is discussed in section 10. 1040ez free efile Cash wages include checks, money orders, etc. 1040ez free efile Do not count as cash wages the value of food, lodging, and other noncash items. 1040ez free efile For more information on what payments are considered taxable wages, see Publication 15 (Circular E). 1040ez free efile Commodity wages. 1040ez free efile   Commodity wages are not cash and are not subject to social security and Medicare taxes or federal income tax withholding. 1040ez free efile However, noncash payments, including commodity wages, are treated as cash wages (see above) if the substance of the transaction is a cash payment. 1040ez free efile These noncash payments are subject to social security and Medicare taxes and federal income tax withholding. 1040ez free efile Other compensation. 1040ez free efile   Publications 15-A and 15-B discuss other forms of compensation that may be taxable. 1040ez free efile Family members. 1040ez free efile   Generally, the wages that you pay to family members who are your employees are subject to social security and Medicare taxes, federal income tax withholding, and FUTA tax. 1040ez free efile However, certain exemptions may apply for your child, spouse, or parent. 1040ez free efile See the table, How Do Employment Taxes Apply to Farmwork , in section 12. 1040ez free efile Household employees. 1040ez free efile   The wages of an employee who performs household services, such as a maid, babysitter, gardener, or cook, in your home are not subject to social security and Medicare taxes if you pay that employee cash wages of less than $1,900 in 2014. 1040ez free efile   Social security and Medicare taxes do not apply to cash wages for housework in your private home if it was done by your spouse or your child under age 21. 1040ez free efile Nor do the taxes apply to housework done by your parent unless: You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter, and You are a widow or widower, or divorced and not remarried, or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. 1040ez free efile   For more information, see Publication 926, Household Employer's Tax Guide. 1040ez free efile    Wages for household work may not be a deductible farm expense. 1040ez free efile See Publication 225, Farmer's Tax Guide. 1040ez free efile Share farmers. 1040ez free efile   You do not have to withhold or pay social security and Medicare taxes on amounts paid to share farmers under share-farming arrangements. 1040ez free efile Compensation paid to H-2A visa holders. 1040ez free efile   Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2 but do not report it as social security wages (box 3) or Medicare wages (box 5) on Form W-2 because compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes. 1040ez free efile On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. 1040ez free efile   An employer is not required to withhold federal income tax from compensation it pays an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. 1040ez free efile In that case, the worker must give the employer a completed Form W-4. 1040ez free efile Federal income tax withheld should be reported in box 2 of Form W-2. 1040ez free efile These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. 1040ez free efile For rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. 1040ez free efile 4. 1040ez free efile Social Security and Medicare Taxes Generally, you must withhold social security and Medicare taxes on all cash wage payments that you make to your employees. 1040ez free efile You may also be required to withhold Additional Medicare Tax. 1040ez free efile For more information, see Additional Medicare Tax withholding , later. 1040ez free efile The $150 Test or the $2,500 Test All cash wages that you pay to an employee during the year for farmwork are subject to social security and Medicare taxes and federal income tax withholding if either of the two tests below is met. 1040ez free efile You pay cash wages to an employee of $150 or more in a year for farmwork (count all cash wages paid on a time, piecework, or other basis). 1040ez free efile The $150 test applies separately to each farmworker that you employ. 1040ez free efile If you employ a family of workers, each member is treated separately. 1040ez free efile Do not count wages paid by other employers. 1040ez free efile The total that you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year. 1040ez free efile Exceptions. 1040ez free efile   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes, or federal income tax withholding, even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. 1040ez free efile   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. 1040ez free efile Social Security and Medicare Tax Withholding The social security tax rate is 6. 1040ez free efile 2%, for both the employee and employer, on the first $117,000 paid to each employee. 1040ez free efile You must withhold at this rate from each employee and pay a matching amount. 1040ez free efile The Medicare tax rate is 1. 1040ez free efile 45% each for the employee and employer on all wages. 1040ez free efile You must withhold at this rate from each employee and pay a matching amount. 1040ez free efile There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. 1040ez free efile Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. 1040ez free efile For details, see Publication 15-A. 1040ez free efile Additional Medicare Tax withholding. 1040ez free efile   In addition to withholding Medicare tax at 1. 1040ez free efile 45%, you must withhold a 0. 1040ez free efile 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 1040ez free efile You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 1040ez free efile Additional Medicare Tax is only imposed on the employee. 1040ez free efile There is no employer share of Additional Medicare Tax. 1040ez free efile All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 1040ez free efile   For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E). 1040ez free efile For more information on Additional Medicare Tax, visit IRS. 1040ez free efile gov and enter “Additional Medicare Tax” in the search box. 1040ez free efile Employee share paid by employer. 1040ez free efile   If you would rather pay a household or agricultural employee's share of the social security and Medicare taxes without withholding them from his or her wages, you may do so. 1040ez free efile If you do not withhold the taxes, however, you must still pay them. 1040ez free efile Any employee social security and Medicare taxes that you pay is additional income to the employee. 1040ez free efile Include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages and do not include it in boxes 3 and 5. 1040ez free efile Also, do not count the additional income as wages for FUTA tax purposes. 1040ez free efile Different rules apply to employer payments of social security and Medicare taxes for non-household and non-agricultural employees. 1040ez free efile See section 7 of Publication 15-A. 1040ez free efile Withholding social security and Medicare taxes on nonresident alien employees. 1040ez free efile   In general, if you pay wages to nonresident alien employees, you must withhold social security and Medicare taxes as you would for a U. 1040ez free efile S. 1040ez free efile citizen or resident alien. 1040ez free efile However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. 1040ez free efile Also see Compensation paid to H-2A visa holders in section 3. 1040ez free efile Religious exemption. 1040ez free efile    An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to public insurance. 1040ez free efile This exemption is available only if both the employee and the employer are members of the sect. 1040ez free efile   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. 1040ez free efile 5. 1040ez free efile Federal Income Tax Withholding Farmers and crew leaders must withhold federal income tax from the wages of farmworkers if the wages are subject to social security and Medicare taxes. 1040ez free efile The amount to withhold is figured on gross wages before taking out social security and Medicare taxes, union dues, insurance, etc. 1040ez free efile You may use one of several methods to determine the amount of federal income tax withholding. 1040ez free efile They are discussed in section 13. 1040ez free efile Form W-4. 1040ez free efile   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. 1040ez free efile Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. 1040ez free efile Advise your employees to use the IRS Withholding Calculator on the IRS website at www. 1040ez free efile irs. 1040ez free efile gov/individuals for help in determining how many withholding allowances to claim on their Form W-4. 1040ez free efile   Ask each new employee to give you a signed Form W-4 when starting work. 1040ez free efile Make the form effective with the first wage payment. 1040ez free efile If a new employee does not give you a completed Form W-4, withhold tax as if he or she is single, with no withholding allowances. 1040ez free efile Forms in Spanish. 1040ez free efile   You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. 1040ez free efile For more information, see Publicación 17(SP). 1040ez free efile Effective date of Form W-4. 1040ez free efile   A Form W-4 remains in effect until the employee gives you a new one. 1040ez free efile When you receive a new Form W-4, do not adjust withholding for pay periods before the effective date of the new form. 1040ez free efile Do not adjust withholding retroactively. 1040ez free efile If an employee gives you a replacement Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. 1040ez free efile For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. 1040ez free efile A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. 1040ez free efile Completing Form W-4. 1040ez free efile   The amount of federal income tax withholding is based on marital status and withholding allowances. 1040ez free efile Your employees may not base their withholding amounts on a fixed dollar amount or percentage. 1040ez free efile However, the employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. 1040ez free efile   Employees may claim fewer withholding allowances than they are entitled to claim. 1040ez free efile They may do this to ensure that they have enough withholding or to offset other sources of taxable income that are not subject to withholding. 1040ez free efile   See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. 1040ez free efile Along with Form W-4, you may wish to order Publication 505 for use by your employees. 1040ez free efile    Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. 1040ez free efile If an employee wants additional withholding, he or she should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. 1040ez free efile Exemption from federal income tax withholding. 1040ez free efile   Generally, an employee may claim exemption from federal income tax withholding because he or she had no federal income tax liability last year and expects none this year. 1040ez free efile See the Form W-4 instructions for more information. 1040ez free efile However, the wages are still subject to social security and Medicare taxes. 1040ez free efile   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. 1040ez free efile To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. 1040ez free efile If the employee does not give you a new Form W-4 by February 15, withhold tax based on the last valid Form W-4 you have for the employee that did not claim an exemption from withholding or, if one does not exist, withhold as if he or she is single with zero withholding allowances. 1040ez free efile If the employee provides a new Form W-4 claiming an exemption from withholding on February 16 or later, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. 1040ez free efile Withholding income taxes on the wages of nonresident alien employees. 1040ez free efile   In general, you must withhold federal income taxes on the wages of nonresident alien employees. 1040ez free efile However, see Publication 515 for exceptions to this general rule. 1040ez free efile Also see Compensation paid to H-2A visa workers in section 3. 1040ez free efile Withholding adjustment for nonresident alien employees. 1040ez free efile   A special procedure applies for figuring the amount of income tax to withhold from wages of nonresident alien employees performing services within the United States for wages paid in 2014. 1040ez free efile This procedure requires a special chart to be used with the withholding tables to determine the amount to withhold from the wages of the nonresident alien employee. 1040ez free efile See Withholding adjustment for nonresident alien employees in section 9 of Publication 15 (Circular E). 1040ez free efile Nonresident alien employee's Form W-4. 1040ez free efile   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding; Request withholding as if they are single, regardless of their actual marital status; Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or Korea, he or she may claim more than one allowance); and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. 1040ez free efile   If you maintain an electronic Form W-4 system, you should provide a field for nonresident alien employees to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. 1040ez free efile    A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. 1040ez free efile Form 8233. 1040ez free efile   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. 1040ez free efile See Publication 515 for details. 1040ez free efile IRS review of requested Forms W-4. 1040ez free efile   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. 1040ez free efile You may also be directed to send certain Forms W-4 to the IRS. 1040ez free efile You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. 1040ez free efile Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. 1040ez free efile The IRS may also require you to submit copies of Form W-4 to the IRS as directed by a revenue procedure or notice published in the Internal Revenue Bulletin. 1040ez free efile When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. 1040ez free efile   After submitting a copy of the requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). 1040ez free efile However, if the IRS later notifies you in writing that the employee is not entitled to claim a complete exemption from withholding or more than the maximum number of withholding allowances specified by the IRS in the written notice, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the notice (commonly referred to as a “lock-in letter”). 1040ez free efile Initial lock-in letter. 1040ez free efile   The IRS uses information reported on Form W-2 to identify employees with withholding compliance problems. 1040ez free efile In some cases, where a serious under-withholding problem is found to exist for a particular employee, the IRS may issue a lock-in letter to the employer specifying the maximum number of withholding allowances and marital status permitted for a specific employee. 1040ez free efile You will also receive a copy for the employee that identifies the maximum number of withholding allowances permitted and the process by which the employee can provide additional information to the IRS for purposes of determining the appropriate number of withholding allowances. 1040ez free efile If the employee is employed by you as of the date of the notice, you must furnish the employee copy to the employee within 10 business days of receipt. 1040ez free efile You may follow any reasonable business practice to furnish the employee copy to the employee. 1040ez free efile Implementation of lock-in letter. 1040ez free efile   When you receive the notice specifying the maximum number of withholding allowances and marital status permitted, you may not withhold immediately on the basis of the notice. 1040ez free efile You must begin withholding tax on the basis of the notice for any wages paid after the date specified in the notice. 1040ez free efile The delay between your receipt of the notice and the date to begin the withholding on the basis of the notice permits the employee to contact the IRS. 1040ez free efile Seasonal employees and employees not currently performing services. 1040ez free efile   If you receive a notice for an employee who is not currently performing services for you, you are still required to furnish the employee copy to the employee and withhold based on the notice if any of the following apply. 1040ez free efile You are paying wages for the employee's prior services and the wages are subject to income tax withholding on or after the date specified in the notice. 1040ez free efile You reasonably expect the employee to resume services within 12 months of the date of the notice. 1040ez free efile The employee is on a bona fide leave of absence that does not exceed 12 months or the employee has a right to reemployment after the leave of absence. 1040ez free efile Termination and re-hire of employees. 1040ez free efile   If you are required to furnish and withhold based on the notice and the employment relationship is terminated after the date of the notice, you must continue to withhold based on the notice if you continue to pay any wages subject to income tax withholding. 1040ez free efile You must also withhold based on the notice or modification notice (explained next) if the employee resumes the employment relationship with you within 12 months after the termination of the employment relationship. 1040ez free efile Modification notice. 1040ez free efile   After issuing the notice specifying the maximum number of withholding allowances and marital status permitted, the IRS may issue a subsequent notice (modification notice) that modifies the original notice. 1040ez free efile The modification notice may change the marital status and/or the number of withholding allowances permitted. 1040ez free efile You must withhold federal income tax based on the effective date specified in the modification notice. 1040ez free efile New Form W-4 after IRS notice. 1040ez free efile   After the IRS issues a notice or modification notice, if the employee provides you with a new Form W-4 claiming complete exemption from withholding or claims a marital status, a number of withholding allowances, and any additional withholding that results in less withholding than would result under the IRS notice or modification notice, you must disregard the new Form W-4. 1040ez free efile You are required to withhold on the basis of the notice or modification notice unless the IRS subsequently notifies you to withhold based on the new Form W-4. 1040ez free efile If the employee wants to put a new Form W-4 into effect that results in less withholding than required, the employee must contact the IRS. 1040ez free efile   If, after you receive an IRS notice or modification notice, your employee provides you with a new Form W-4 that does not claim exemption from federal income tax withholding and claims a marital status, a number of withholding allowances, and any additional withholding that results in more withholding than would result under the notice or modification notice, you must withhold tax on the basis of that new Form W-4. 1040ez free efile Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold based on the IRS notice or modification notice. 1040ez free efile Substitute Forms W-4. 1040ez free efile   You are encouraged to have your employees use the official version of Form W-4 to claim withholding allowances or exemption from withholding. 1040ez free efile Call the IRS at 1-800-TAX-FORM (1-800-829-3676) or visit IRS. 1040ez free efile gov to obtain copies of Form W-4. 1040ez free efile   You may use a substitute version of Form W-4 to meet your business needs. 1040ez free efile However, your substitute Form W-4 must contain language that is identical to the official Form W-4 and your form must meet all current IRS rules for substitute forms. 1040ez free efile At the time that you provide your substitute form to the employee, you must provide him or her with all tables, instructions, and worksheets from the current Form W-4. 1040ez free efile   You cannot accept a substitute Form W-4 developed by an employee, and the employee submitting such form will be treated as failing to furnish a Form W-4. 1040ez free efile However, continue to use any valid Forms W-4 developed by your employees that you accepted before October 11, 2007. 1040ez free efile Invalid Forms W-4. 1040ez free efile   Any unauthorized change or addition to Form W-4 makes it invalid. 1040ez free efile This includes taking out any language by which the employee certifies that the form is correct. 1040ez free efile A Form W-4 is also invalid if, by the date an employee gives it to you, he or she indicates in any way that it is false. 1040ez free efile An employee who submits a false Form W-4 may be subject to a $500 penalty. 1040ez free efile You may treat a Form W-4 as invalid if the employee wrote “exempt” on line 7 and also entered a number on line 5 or an amount on line 6. 1040ez free efile   When you get an invalid Form W-4, do not use it to figure federal income tax withholding. 1040ez free efile Tell the employee that it is invalid and ask for another one. 1040ez free efile If the employee does not give you a valid one, withhold taxes as if the employee was single and claiming no withholding allowances. 1040ez free efile However, if you have an earlier Form W-4 for this worker that is valid, withhold as you did before. 1040ez free efile   For additional information about these rules, see Treasury Decision 9337, 2007-35 I. 1040ez free efile R. 1040ez free efile B. 1040ez free efile 455, available at www. 1040ez free efile irs. 1040ez free efile gov/irb/2007-35_IRB/ar10. 1040ez free efile html. 1040ez free efile Amounts exempt from levy on wages, salary, and other income. 1040ez free efile   If you receive a Notice of Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), or 668-W(ICS), you must withhold amounts as described in the instructions for these forms. 1040ez free efile Publication 1494, Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), and 668-W(ICS), shows the exempt amount. 1040ez free efile If a levy issued in a prior year is still in effect and the taxpayer submits a new Statement of Exemptions and Filing Status, use the current year Publication 1494 to compute the exempt amount. 1040ez free efile How To Figure Federal Income Tax Withholding There are several ways to figure federal income tax withholding. 1040ez free efile Wage bracket tables. 1040ez free efile See section 13 for directions on how to use the tables. 1040ez free efile Percentage method. 1040ez free efile See section 13 for directions on how to use the percentage method. 1040ez free efile Alternative formula tables for percentage method withholding. 1040ez free efile See Publication 15-A. 1040ez free efile Wage bracket percentage method withholding tables. 1040ez free efile See Publication 15-A. 1040ez free efile Other alternative methods. 1040ez free efile See Publication 15-A. 1040ez free efile Employers with automated payroll systems will find the two alternative formula tables and the two alternative wage bracket percentage method tables in Publication 15-A useful. 1040ez free efile If an employee wants additional federal tax withheld, have the employee show the extra amount on Form W-4. 1040ez free efile Supplemental wages. 1040ez free efile   Supplemental wages are wage payments to an employee that are not regular wages. 1040ez free efile They include, but are not limited to, bonuses, commissions, overtime pay, accumulated sick leave, severance pay, awards, prizes, back pay and retroactive pay increases for current employees, and payments for nondeductible moving expenses. 1040ez free efile Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. 1040ez free efile   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total was a single payment for a regular payroll period. 1040ez free efile   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold federal income tax from your employee's regular wages. 1040ez free efile If you withheld federal income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. 1040ez free efile Withhold a flat 25% (no other percentage allowed). 1040ez free efile If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. 1040ez free efile If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. 1040ez free efile Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. 1040ez free efile Subtract the tax withheld from the regular wages. 1040ez free efile Withhold the remaining tax from the supplemental wages. 1040ez free efile If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and previous supplemental wage payments, and withhold the remaining tax from the current payment of supplemental wages. 1040ez free efile If you did not withhold federal income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b above. 1040ez free efile This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. 1040ez free efile    Separate rules apply to any supplemental wages exceeding $1 million that you pay to an individual during the year. 1040ez free efile See section 7 in Publication 15 (Circular E) for details. 1040ez free efile   Regardless of the method that you use to withhold federal income tax on supplemental wages, they are generally subject to social security, Medicare, and FUTA taxes. 1040ez free efile 6. 1040ez free efile Required Notice to Employees About Earned Income Credit (EIC) You must notify employees who have no federal income tax withheld that they may be able to claim a tax refund because of the EIC. 1040ez free efile Although you do not have to notify employees who claim exemption from withholding on Form W-4 about the EIC, you are encouraged to notify any employees whose wages for 2013 were less than $46,227 ($51,567 if married filing jointly) that they may be eligible to claim the credit for 2013. 1040ez free efile This is because eligible employees may get a refund of the amount of EIC that is more than the tax that they owe. 1040ez free efile You will meet the notification requirement if you issue to the employee Form W-2 with the EIC notice on the back of Copy B, or a substitute Form W-2 with the same statement. 1040ez free efile You may also meet the requirement by providing Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC), or your own statement that contains the same wording. 1040ez free efile If a substitute Form W-2 is given to the employee on time but does not have the required statement, you must notify the employee within 1 week of the date that the substitute Form W-2 is given. 1040ez free efile If Form W-2 is required but is not given on time, you must give the employee Notice 797 or your written statement by the date that Form W-2 is required to be given. 1040ez free efile If Form W-2 is not required, you must notify the employee by February 7, 2014. 1040ez free efile 7. 1040ez free efile Depositing Taxes Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld. 1040ez free efile You must use electronic funds transfer to make all federal tax deposits. 1040ez free efile See How To Deposit , later in this section. 1040ez free efile The credit against employment taxes for COBRA premium assistance payments is treated as a deposit of taxes on the first day of your return period. 1040ez free efile For more information, see COBRA premium assistance credit under Introduction. 1040ez free efile Payment with return. 1040ez free efile   You may make payments with Forms 943 or 945 instead of depositing if one of the following applies. 1040ez free efile You report less than a $2,500 tax liability for the year (Form 943, line 11; Form 945, line 3) and you pay in full with a return that is filed on time. 1040ez free efile However, if you are unsure that you will report less than $2,500, deposit under the rules explained in this section so that you will not be subject to failure-to-deposit penalties. 1040ez free efile You are a monthly schedule depositor and make a payment in accordance with the Accuracy of Deposits Rule discussed later in this section. 1040ez free efile This payment may be $2,500 or more. 1040ez free efile Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. 1040ez free efile Semiweekly schedule depositors must timely deposit the amount. 1040ez free efile See Accuracy of Deposits Rule and How To Deposit, later in this section. 1040ez free efile When To Deposit If you employ both farm and nonfarm workers, do not combine the taxes reportable on Forms 941 or 944 with Form 943 to decide whether to make a deposit. 1040ez free efile See Employers of Both Farm and Nonfarm Workers, later in this section. 1040ez free efile The rules for determining when to deposit Form 943 taxes are discussed below. 1040ez free efile See section 10 for the separate rules that apply to FUTA tax. 1040ez free efile Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor. 1040ez free efile The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often your business pays its employees or how often you are required to make deposits. 1040ez free efile The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday). 1040ez free efile The deposit schedule that you must use for a calendar year is determined from the tax liability reported on your Form 943, line 9, for the lookback period, discussed next. 1040ez free efile If you reported $50,000 or less of Form 943 taxes for the lookback period, you are a monthly schedule depositor. 1040ez free efile If you reported more than $50,000 of Form 943 taxes for the lookback period, you are a semiweekly schedule depositor. 1040ez free efile Lookback period. 1040ez free efile   The lookback period is the second calendar year preceding the current calendar year. 1040ez free efile For example, the lookback period for 2014 is 2012. 1040ez free efile Example of deposit schedule based on lookback period. 1040ez free efile Rose Co. 1040ez free efile reported taxes on Form 943 as follows. 1040ez free efile 2012 — $48,000 2013 — $60,000 Rose Co. 1040ez free efile is a monthly schedule depositor for 2014 because its taxes for the lookback period ($48,000 for calendar year 2012) were not more than $50,000. 1040ez free efile However, for 2015, Rose Co. 1040ez free efile is a semiweekly schedule depositor because the total taxes before adjustment for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. 1040ez free efile Adjustments to lookback period taxes. 1040ez free efile   To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). 1040ez free efile Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. 1040ez free efile Example of adjustments. 1040ez free efile An employer originally reported total tax of $45,000 for the lookback period in 2012. 1040ez free efile The employer discovered during March 2014 that the tax reported for the lookback period was understated by $10,000 and corrected this error by filing Form 943-X. 1040ez free efile The total tax reported in the lookback period is still $45,000. 1040ez free efile The $10,000 adjustment is also not treated as part of the 2014 taxes. 1040ez free efile Deposit period. 1040ez free efile   The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. 1040ez free efile For monthly schedule depositors, the deposit period is a calendar month. 1040ez free efile The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. 1040ez free efile Monthly Deposit Schedule If the tax liability reported on Form 943, line 9, for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. 1040ez free efile You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month. 1040ez free efile Monthly schedule example. 1040ez free efile   Red Co. 1040ez free efile is a seasonal employer and a monthly schedule depositor. 1040ez free efile It pays wages each Friday. 1040ez free efile It paid wages during August 2014, but did not pay any wages during September. 1040ez free efile Red Co. 1040ez free efile must deposit the combined tax liabilities for the August paydays by September 15. 1040ez free efile Red Co. 1040ez free efile does not have a deposit requirement for September (that is, due by October 15, 2014) because no wages were paid in September; therefore, it did not have a tax liability for September. 1040ez free efile New employers. 1040ez free efile   For agricultural employers, your tax liability for any year in the lookback period before the date you started or acquired your business is considered to be zero. 1040ez free efile Therefore, you are a monthly schedule depositor for the first and second calendar years of your agricultural business (but see the $100,000 Next-Day Deposit Rule , later in this section). 1040ez free efile Semiweekly Deposit Schedule You are a semiweekly schedule depositor for a calendar year if the tax liability on Form 943, line 9, during your lookback period was more than $50,000. 1040ez free efile Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. 1040ez free efile Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. 1040ez free efile Semiweekly depositors are not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule (discussed later in this section) applies. 1040ez free efile For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 by the following Wednesday. 1040ez free efile If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. 1040ez free efile Semiweekly schedule depositors must complete Form 943-A, Agricultural Employer's Record of Federal Tax Liability, and submit it with Form 943. 1040ez free efile Semiweekly Deposit Schedule IF the payday falls on a. 1040ez free efile . 1040ez free efile . 1040ez free efile THEN deposit taxes by the following. 1040ez free efile . 1040ez free efile . 1040ez free efile Wednesday, Thursday, and/or Friday Wednesday Saturday, Sunday, Monday, and/or Tuesday Friday Semiweekly schedule example. 1040ez free efile   Green, Inc. 1040ez free efile , is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. 1040ez free efile Green, Inc. 1040ez free efile , will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. 1040ez free efile Green, Inc. 1040ez free efile 's tax liability for the April 25, 2014 (Friday), wage payment must be deposited by April 30, 2014 (Wednesday). 1040ez free efile Semiweekly deposit period spanning two quarters. 1040ez free efile   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. 1040ez free efile For example, if you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. 1040ez free efile Both deposits will be due Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). 1040ez free efile Deposits on Business Days Only If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. 1040ez free efile A business day is any day other than a Saturday, Sunday, or legal holiday. 1040ez free efile For example, if a deposit is required to be made on Friday and Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). 1040ez free efile Semiweekly schedule depositors   will always have 3 business days to make a deposit. 1040ez free efile That is, if any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the deposit. 1040ez free efile For example, if a semiweekly schedule depositor accumulated taxes on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). 1040ez free efile Legal holiday. 1040ez free efile   The term “legal holiday” means any legal holiday in the District of Columbia. 1040ez free efile Legal holidays for 2014 are listed below. 1040ez free efile January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. 1040ez free efile February 17— Washington's Birthday April 16— District of Columbia Emancipation Day May 26— Memorial Day July 4— Independence Day September 1— Labor Day October 13— Columbus Day November 11— Veterans' Day November 27— Thanksgiving Day December 25— Christmas Day $100,000 Next-Day Deposit Rule If you accumulate $100,000 or more of Form 943 taxes (that is, taxes reported on Form 943, line 11) on any day during a deposit period, you must deposit the tax by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. 1040ez free efile For purposes of the $100,000 rule, do not continue accumulating a tax liability after the end of a deposit period. 1040ez free efile For example, if a semiweekly schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a Saturday-through-Tuesday deposit period) and accumulated a $10,000 liability on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. 1040ez free efile Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. 1040ez free efile However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. 1040ez free efile For example, Fir Co. 1040ez free efile is a semiweekly schedule depositor. 1040ez free efile On Monday, Fir Co. 1040ez free efile accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. 1040ez free efile On Tuesday, Fir Co. 1040ez free efile accumulates additional taxes of $30,000. 1040ez free efile Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. 1040ez free efile does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). 1040ez free efile If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year. 1040ez free efile Example of the $100,000 next-day deposit rule. 1040ez free efile   Elm, Inc. 1040ez free efile , started its business on May 1, 2014. 1040ez free efile Because Elm, Inc. 1040ez free efile , is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc. 1040ez free efile , is a monthly schedule depositor. 1040ez free efile On May 8, Elm, Inc. 1040ez free efile , paid wages for the first time and accumulated taxes of $50,000. 1040ez free efile On May 9 (Friday), Elm, Inc. 1040ez free efile , paid wages and accumulated taxes of $60,000, for a total of $110,000. 1040ez free efile Because Elm, Inc. 1040ez free efile , accumulated $110,000 on May 9, it must deposit $110,000 by May 12 (Monday), the next business day. 1040ez free efile Elm, Inc. 1040ez free efile , became a semiweekly schedule depositor on May 10. 1040ez free efile It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. 1040ez free efile Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. 1040ez free efile However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. 1040ez free efile Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited. 1040ez free efile The deposit shortfall is paid or deposited by the shortfall makeup date as described below. 1040ez free efile Makeup Date for Deposit Shortfall:    Monthly Schedule Depositor—Deposit the shortfall or pay it with your return by the due date of your Form 943. 1040ez free efile You may pay the shortfall with your Form 943 even if the amount is $2,500 or more. 1040ez free efile Semiweekly Schedule Depositor—Deposit by the earlier of (a) the first Wednesday or Friday (whichever comes first) that falls on or after the 15th of the month following the month in which the shortfall occurred, or (b) the due date for Form 943. 1040ez free efile For example, if a semiweekly schedule depositor has a deposit shortfall during February 2014, the shortfall makeup date is March 19, 2014 (Wednesday). 1040ez free efile How To Deposit You must deposit employment taxes by electronic funds transfer. 1040ez free efile See Payment with return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. 1040ez free efile Electronic deposit requirement. 1040ez free efile   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). 1040ez free efile Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). 1040ez free efile If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. 1040ez free efile   EFTPS is a free service provided by the Department of Treasury. 1040ez free efile To get more information or to enroll in EFTPS, call 1-800-555-4477 (business), 1-800-316-6541 (individual), or 1-800-733-4829 (TDD). 1040ez free efile You can also visit the EFTPS website at www. 1040ez free efile eftps. 1040ez free efile gov. 1040ez free efile Additional information about EFTPS is also available in Publication 966. 1040ez free efile New employers that have a federal tax obligation will be pre-enrolled in EFTPS. 1040ez free efile Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. 1040ez free efile See When you receive your EIN in section 1 for more information. 1040ez free efile Deposit record. 1040ez free efile   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. 1040ez free efile The number can be used as a receipt or to trace the payment. 1040ez free efile Depositing on time. 1040ez free efile   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. 1040ez free efile m. 1040ez free efile Eastern time the day before the date a deposit is due. 1040ez free efile If you use a third party to make a deposit on your behalf, they may have different cutoff times. 1040ez free efile Same-day payment option. 1040ez free efile   If you fail to initiate a deposit transaction on EFTPS by 8 p. 1040ez free efile m. 1040ez free efile Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). 1040ez free efile To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. 1040ez free efile Please check with your financial institution regarding availability, deadlines, and costs. 1040ez free efile Your financial institution may charge you a fee for payments made this way. 1040ez free efile To learn more about the information you will need to provide to your financial institution to make a same-day wire payment, visit www. 1040ez free efile eftps. 1040ez free efile gov to download the Same-Day Payment Worksheet. 1040ez free efile Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits for less than the required amount. 1040ez free efile The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. 1040ez free efile IRS may also waive deposit penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. 1040ez free efile For amounts not properly deposited or not deposited on time, the penalty rates are shown next. 1040ez free efile Penalty Charged for. 1040ez free efile . 1040ez free efile . 1040ez free efile 2% Deposits made 1 to 5 days late. 1040ez free efile 5% Deposits made 6 to 15 days late. 1040ez free efile 10% Deposits made 16 or more days late. 1040ez free efile Also applies to amounts paid within 10 days of the date of the first notice the IRS sent asking for the tax due. 1040ez free efile 10% Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return. 1040ez free efile See Payment with return , earlier in this section, for exceptions. 1040ez free efile 15% Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. 1040ez free efile Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. 1040ez free efile Order in which deposits are applied. 1040ez free efile   Deposits generally are applied to the most recent tax liability within the year. 1040ez free efile If you receive a failure-to-deposit penalty notice, you may designate how your deposits are to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. 1040ez free efile Follow the instructions on the penalty notice that you received. 1040ez free efile For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. 1040ez free efile You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. 1040ez free efile irs. 1040ez free efile gov/pub/irs-irbs/irb01-50. 1040ez free efile pdf. 1040ez free efile Example. 1040ez free efile Cedar, Inc. 1040ez free efile , is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. 1040ez free efile It does not make the deposit on July 15. 1040ez free efile On August 15, Cedar, Inc. 1040ez free efile , deposits $2,000. 1040ez free efile Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. 1040ez free efile Accordingly, $500 of the July 15 liability remains undeposited. 1040ez free efile The penalty on this underdeposit will apply as explained above. 1040ez free efile Trust fund recovery penalty. 1040ez free efile   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. 1040ez free efile The penalty is the full amount of the unpaid trust fund tax. 1040ez free efile This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. 1040ez free efile   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. 1040ez free efile   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship. 1040ez free efile A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. 1040ez free efile    Willfully means voluntarily, consciously, and intentionally. 1040ez free efile A responsible person acts willfully if the person knows that the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. 1040ez free efile “Average” failure-to-deposit penalty. 1040ez free efile   IRS may assess an “averaged” failure-to-deposit penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 943, line 17, when your tax liability shown on Form 943, line 11, was $2,500 or more. 1040ez free efile IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 943, line 11, was $2,500 or more and you did any of the following. 1040ez free efile Completed Form 943, line 17, instead of Form 943-A. 1040ez free efile Failed to attach a properly completed Form 943-A. 1040ez free efile Completed Form 943-A incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. 1040ez free efile   IRS figures the penalty by allocating your tax liability on Form 943, line 11, equally throughout the tax period. 1040ez free efile Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. 1040ez free efile   You can avoid the penalty by reviewing your return before filing it. 1040ez free efile Follow these steps before filing your Form 943. 1040ez free efile If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 943, line 17. 1040ez free efile If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Form 943-A in the lines that represent the dates you paid your employees. 1040ez free efile Verify that your total liability shown on Form 943, line 17, or Form 943-A, line M, equals your tax liability shown on Form 943, line 11. 1040ez free efile Do not show negative amounts on Form 943, line 17, or Form 943-A. 1040ez free efile For prior period errors discovered after December 31, 2008, do not adjust your tax liabilities reported on Form 943, line 17, or on Form 943-A. 1040ez free efile Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941 and 944 taxes). 1040ez free efile Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules. 1040ez free efile If a deposit is due, deposi