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1040x Form

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1040x Form

1040x form Publication 51 - Main Content Table of Contents 1. 1040x form Taxpayer Identification NumbersWhen you receive your EIN. 1040x form Registering for SSNVS. 1040x form 2. 1040x form Who Are Employees?Crew Leaders Business Owned and Operated by Spouses 3. 1040x form Wages and Other Compensation 4. 1040x form Social Security and Medicare TaxesThe $150 Test or the $2,500 Test Social Security and Medicare Tax Withholding 5. 1040x form Federal Income Tax WithholdingImplementation of lock-in letter. 1040x form Seasonal employees and employees not currently performing services. 1040x form Termination and re-hire of employees. 1040x form How To Figure Federal Income Tax Withholding 6. 1040x form Required Notice to Employees About Earned Income Credit (EIC) 7. 1040x form Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties Employers of Both Farm and Nonfarm Workers 8. 1040x form Form 943 9. 1040x form Reporting Adjustments on Form 943Current Year Adjustments Prior Year Adjustments 10. 1040x form Federal Unemployment (FUTA) Tax 11. 1040x form Reconciling Wage Reporting Forms 13. 1040x form Federal Income Tax Withholding MethodsWage Bracket Method Percentage Method Alternative Methods of Federal Income Tax Withholding How To Get Tax Help 1. 1040x form 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. 1040x form Also, you will need the SSN of each employee and the name of each employee as shown on the employee's social security card. 1040x form Employer identification number (EIN). 1040x form   An employer identification number (EIN) is a nine-digit number that the IRS issues. 1040x form The digits are arranged as follows: 00-0000000. 1040x form It is used to identify the tax accounts of employers and certain others who have no employees. 1040x form Use your EIN on all of the items that you send to the IRS and SSA. 1040x form   If you do not have an EIN, you may apply for one online. 1040x form Visit IRS. 1040x form gov and click on the Apply for an EIN Online link under Tools. 1040x form 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. 1040x form Do not use a SSN in place of an EIN. 1040x form   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. 1040x form If you took over another employer's business, do not use that employer's EIN. 1040x form   You should have only one EIN. 1040x form 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). 1040x form 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. 1040x form The IRS will tell you which EIN to use. 1040x form   For more information, see Publication 1635 or Publication 583. 1040x form When you receive your EIN. 1040x form   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). 1040x form 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. 1040x form 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. 1040x form 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. 1040x form Social security number (SSN). 1040x form   An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. 1040x form 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. 1040x form Do not accept a social security card that says “Not valid for employment. 1040x form ” A social security number issued with this legend does not permit employment. 1040x form You may, but are not required to, photocopy the social security card if the employee provides it. 1040x form 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. 1040x form See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs. 1040x form Applying for a social security card. 1040x form   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. 1040x form 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. 1040x form socialsecurity. 1040x form gov/online/ss-5. 1040x form html. 1040x form The employee must complete and sign Form SS-5; it cannot be filed by the employer. 1040x form 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. 1040x form Applying for a social security number. 1040x form   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. 1040x form If you are filing electronically, enter all zeros (000-00-0000) in the social security number field. 1040x form 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. 1040x form Furnish Copies B, C, and 2 of Form W-2c to the employee. 1040x form 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. 1040x form For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www. 1040x form socialsecurity. 1040x form gov/employer. 1040x form Advise your employee to correct the SSN on his or her original Form W-2. 1040x form Correctly record the employee's name and SSN. 1040x form   Record the name and number of each employee as they are shown on the employee's social security card. 1040x form 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. 1040x form 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. 1040x form   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. 1040x form 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. 1040x form IRS individual taxpayer identification numbers (ITINs) for aliens. 1040x form   Do not accept an ITIN in place of an SSN for employee identification or for work. 1040x form An ITIN is issued for use by resident and nonresident aliens who need identification for tax purposes, but who are not eligible for U. 1040x form S. 1040x form employment. 1040x form The ITIN is a nine-digit number formatted like an SSN (for example, NNN-NN-NNNN). 1040x form 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). 1040x form    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. 1040x form 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. 1040x form Do not use an ITIN in place of an SSN on Form W-2. 1040x form Verification of social security numbers. 1040x form   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. 1040x form Visit www. 1040x form socialsecurity. 1040x form gov/employer/ssnv. 1040x form htm for more information. 1040x form Registering for SSNVS. 1040x form   You must register online and receive authorization from your employer to use SSNVS. 1040x form To register, visit SSA's website at www. 1040x form socialsecurity. 1040x form gov/employer and click on the Business Services Online link. 1040x form Follow the registration instructions to obtain a user identification (ID) and password. 1040x form You will need to provide the following information about yourself and your company. 1040x form Name. 1040x form SSN. 1040x form Date of birth. 1040x form Type of employer. 1040x form EIN. 1040x form Company name, address, and telephone number. 1040x form Email address. 1040x form When you have completed the online registration process, SSA will mail a one-time activation code to your employer. 1040x form You must enter the activation code online to use SSNVS. 1040x form 2. 1040x form Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. 1040x form See Publication 15-A for details on statutory employees and nonemployees. 1040x form Employee status under common law. 1040x form   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. 1040x form This is so even when you give the employee freedom of action. 1040x form What matters is that you have the right to control the details of how the services are performed. 1040x form See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. 1040x form If an employer-employee relationship exists, it does not matter what it is called. 1040x form The employee may be called an agent or independent contractor. 1040x form It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. 1040x form You are responsible for withholding and paying employment taxes for your employees. 1040x form You are also required to file employment tax returns. 1040x form These requirements do not apply to amounts that you pay to independent contractors. 1040x form The rules discussed in this publication apply only to workers who are your employees. 1040x form 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. 1040x form 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. 1040x form 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. 1040x form 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. 1040x form Crew Leaders If you are a crew leader, you are an employer of farmworkers. 1040x form 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. 1040x form 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. 1040x form For FUTA tax rules, see section 10. 1040x form 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. 1040x form See Publication 541, Partnerships, for more details. 1040x form The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. 1040x form Exception—Qualified joint venture. 1040x form   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. 1040x form 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). 1040x form   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. 1040x form Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. 1040x form   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. 1040x form 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. 1040x form Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. 1040x form 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. 1040x form    Note. 1040x form If your spouse is your employee, not your partner, you must pay social security and Medicare taxes for him or her. 1040x form   For more information on qualified joint ventures, visit IRS. 1040x form gov and enter “qualified joint venture” in the search box. 1040x form Exception—Community income. 1040x form   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. 1040x form S. 1040x form possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. 1040x form You may still make an election to be taxed as a qualified joint venture instead of a partnership. 1040x form See Exception—Qualified joint venture , earlier in this section. 1040x form 3. 1040x form Wages and Other Compensation Cash wages that you pay to employees for farmwork are generally subject to social security tax and Medicare tax. 1040x form You may also be required to withhold, deposit, and report Additional Medicare Tax. 1040x form See section 4 for more information. 1040x form If the wages are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. 1040x form You may also be liable for FUTA tax, which is not withheld by you or paid by the employee. 1040x form FUTA tax is discussed in section 10. 1040x form Cash wages include checks, money orders, etc. 1040x form Do not count as cash wages the value of food, lodging, and other noncash items. 1040x form For more information on what payments are considered taxable wages, see Publication 15 (Circular E). 1040x form Commodity wages. 1040x form   Commodity wages are not cash and are not subject to social security and Medicare taxes or federal income tax withholding. 1040x form However, noncash payments, including commodity wages, are treated as cash wages (see above) if the substance of the transaction is a cash payment. 1040x form These noncash payments are subject to social security and Medicare taxes and federal income tax withholding. 1040x form Other compensation. 1040x form   Publications 15-A and 15-B discuss other forms of compensation that may be taxable. 1040x form Family members. 1040x form   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. 1040x form However, certain exemptions may apply for your child, spouse, or parent. 1040x form See the table, How Do Employment Taxes Apply to Farmwork , in section 12. 1040x form Household employees. 1040x form   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. 1040x form   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. 1040x form 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. 1040x form   For more information, see Publication 926, Household Employer's Tax Guide. 1040x form    Wages for household work may not be a deductible farm expense. 1040x form See Publication 225, Farmer's Tax Guide. 1040x form Share farmers. 1040x form   You do not have to withhold or pay social security and Medicare taxes on amounts paid to share farmers under share-farming arrangements. 1040x form Compensation paid to H-2A visa holders. 1040x form   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. 1040x form On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. 1040x form   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. 1040x form In that case, the worker must give the employer a completed Form W-4. 1040x form Federal income tax withheld should be reported in box 2 of Form W-2. 1040x form These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. 1040x form 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. 1040x form 4. 1040x form 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. 1040x form You may also be required to withhold Additional Medicare Tax. 1040x form For more information, see Additional Medicare Tax withholding , later. 1040x form 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. 1040x form 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). 1040x form The $150 test applies separately to each farmworker that you employ. 1040x form If you employ a family of workers, each member is treated separately. 1040x form Do not count wages paid by other employers. 1040x form The total that you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year. 1040x form Exceptions. 1040x form   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. 1040x form   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. 1040x form Social Security and Medicare Tax Withholding The social security tax rate is 6. 1040x form 2%, for both the employee and employer, on the first $117,000 paid to each employee. 1040x form You must withhold at this rate from each employee and pay a matching amount. 1040x form The Medicare tax rate is 1. 1040x form 45% each for the employee and employer on all wages. 1040x form You must withhold at this rate from each employee and pay a matching amount. 1040x form There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. 1040x form Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. 1040x form For details, see Publication 15-A. 1040x form Additional Medicare Tax withholding. 1040x form   In addition to withholding Medicare tax at 1. 1040x form 45%, you must withhold a 0. 1040x form 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 1040x form 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. 1040x form Additional Medicare Tax is only imposed on the employee. 1040x form There is no employer share of Additional Medicare Tax. 1040x form 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. 1040x form   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). 1040x form For more information on Additional Medicare Tax, visit IRS. 1040x form gov and enter “Additional Medicare Tax” in the search box. 1040x form Employee share paid by employer. 1040x form   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. 1040x form If you do not withhold the taxes, however, you must still pay them. 1040x form Any employee social security and Medicare taxes that you pay is additional income to the employee. 1040x form 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. 1040x form Also, do not count the additional income as wages for FUTA tax purposes. 1040x form Different rules apply to employer payments of social security and Medicare taxes for non-household and non-agricultural employees. 1040x form See section 7 of Publication 15-A. 1040x form Withholding social security and Medicare taxes on nonresident alien employees. 1040x form   In general, if you pay wages to nonresident alien employees, you must withhold social security and Medicare taxes as you would for a U. 1040x form S. 1040x form citizen or resident alien. 1040x form However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. 1040x form Also see Compensation paid to H-2A visa holders in section 3. 1040x form Religious exemption. 1040x form    An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to public insurance. 1040x form This exemption is available only if both the employee and the employer are members of the sect. 1040x form   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. 1040x form 5. 1040x form 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. 1040x form The amount to withhold is figured on gross wages before taking out social security and Medicare taxes, union dues, insurance, etc. 1040x form You may use one of several methods to determine the amount of federal income tax withholding. 1040x form They are discussed in section 13. 1040x form Form W-4. 1040x form   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. 1040x form 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. 1040x form Advise your employees to use the IRS Withholding Calculator on the IRS website at www. 1040x form irs. 1040x form gov/individuals for help in determining how many withholding allowances to claim on their Form W-4. 1040x form   Ask each new employee to give you a signed Form W-4 when starting work. 1040x form Make the form effective with the first wage payment. 1040x form 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. 1040x form Forms in Spanish. 1040x form   You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. 1040x form For more information, see Publicación 17(SP). 1040x form Effective date of Form W-4. 1040x form   A Form W-4 remains in effect until the employee gives you a new one. 1040x form When you receive a new Form W-4, do not adjust withholding for pay periods before the effective date of the new form. 1040x form Do not adjust withholding retroactively. 1040x form 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. 1040x form 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. 1040x form A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. 1040x form Completing Form W-4. 1040x form   The amount of federal income tax withholding is based on marital status and withholding allowances. 1040x form Your employees may not base their withholding amounts on a fixed dollar amount or percentage. 1040x form 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. 1040x form   Employees may claim fewer withholding allowances than they are entitled to claim. 1040x form 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. 1040x form   See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. 1040x form Along with Form W-4, you may wish to order Publication 505 for use by your employees. 1040x form    Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. 1040x form 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. 1040x form Exemption from federal income tax withholding. 1040x form   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. 1040x form See the Form W-4 instructions for more information. 1040x form However, the wages are still subject to social security and Medicare taxes. 1040x form   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. 1040x form 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. 1040x form 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. 1040x form 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. 1040x form Withholding income taxes on the wages of nonresident alien employees. 1040x form   In general, you must withhold federal income taxes on the wages of nonresident alien employees. 1040x form However, see Publication 515 for exceptions to this general rule. 1040x form Also see Compensation paid to H-2A visa workers in section 3. 1040x form Withholding adjustment for nonresident alien employees. 1040x form   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. 1040x form 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. 1040x form See Withholding adjustment for nonresident alien employees in section 9 of Publication 15 (Circular E). 1040x form Nonresident alien employee's Form W-4. 1040x form   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. 1040x form   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. 1040x form    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. 1040x form Form 8233. 1040x form   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. 1040x form See Publication 515 for details. 1040x form IRS review of requested Forms W-4. 1040x form   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. 1040x form You may also be directed to send certain Forms W-4 to the IRS. 1040x form 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. 1040x form 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. 1040x form 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. 1040x form When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. 1040x form   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). 1040x form 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”). 1040x form Initial lock-in letter. 1040x form   The IRS uses information reported on Form W-2 to identify employees with withholding compliance problems. 1040x form 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. 1040x form 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. 1040x form 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. 1040x form You may follow any reasonable business practice to furnish the employee copy to the employee. 1040x form Implementation of lock-in letter. 1040x form   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. 1040x form You must begin withholding tax on the basis of the notice for any wages paid after the date specified in the notice. 1040x form 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. 1040x form Seasonal employees and employees not currently performing services. 1040x form   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. 1040x form 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. 1040x form You reasonably expect the employee to resume services within 12 months of the date of the notice. 1040x form 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. 1040x form Termination and re-hire of employees. 1040x form   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. 1040x form 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. 1040x form Modification notice. 1040x form   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. 1040x form The modification notice may change the marital status and/or the number of withholding allowances permitted. 1040x form You must withhold federal income tax based on the effective date specified in the modification notice. 1040x form New Form W-4 after IRS notice. 1040x form   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. 1040x form 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. 1040x form 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. 1040x form   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. 1040x form Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold based on the IRS notice or modification notice. 1040x form Substitute Forms W-4. 1040x form   You are encouraged to have your employees use the official version of Form W-4 to claim withholding allowances or exemption from withholding. 1040x form Call the IRS at 1-800-TAX-FORM (1-800-829-3676) or visit IRS. 1040x form gov to obtain copies of Form W-4. 1040x form   You may use a substitute version of Form W-4 to meet your business needs. 1040x form 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. 1040x form 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. 1040x form   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. 1040x form However, continue to use any valid Forms W-4 developed by your employees that you accepted before October 11, 2007. 1040x form Invalid Forms W-4. 1040x form   Any unauthorized change or addition to Form W-4 makes it invalid. 1040x form This includes taking out any language by which the employee certifies that the form is correct. 1040x form 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. 1040x form An employee who submits a false Form W-4 may be subject to a $500 penalty. 1040x form 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. 1040x form   When you get an invalid Form W-4, do not use it to figure federal income tax withholding. 1040x form Tell the employee that it is invalid and ask for another one. 1040x form If the employee does not give you a valid one, withhold taxes as if the employee was single and claiming no withholding allowances. 1040x form However, if you have an earlier Form W-4 for this worker that is valid, withhold as you did before. 1040x form   For additional information about these rules, see Treasury Decision 9337, 2007-35 I. 1040x form R. 1040x form B. 1040x form 455, available at www. 1040x form irs. 1040x form gov/irb/2007-35_IRB/ar10. 1040x form html. 1040x form Amounts exempt from levy on wages, salary, and other income. 1040x form   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. 1040x form 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. 1040x form 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. 1040x form How To Figure Federal Income Tax Withholding There are several ways to figure federal income tax withholding. 1040x form Wage bracket tables. 1040x form See section 13 for directions on how to use the tables. 1040x form Percentage method. 1040x form See section 13 for directions on how to use the percentage method. 1040x form Alternative formula tables for percentage method withholding. 1040x form See Publication 15-A. 1040x form Wage bracket percentage method withholding tables. 1040x form See Publication 15-A. 1040x form Other alternative methods. 1040x form See Publication 15-A. 1040x form 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. 1040x form If an employee wants additional federal tax withheld, have the employee show the extra amount on Form W-4. 1040x form Supplemental wages. 1040x form   Supplemental wages are wage payments to an employee that are not regular wages. 1040x form 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. 1040x form Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. 1040x form   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. 1040x form   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. 1040x form 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. 1040x form Withhold a flat 25% (no other percentage allowed). 1040x form If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. 1040x form 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. 1040x form Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. 1040x form Subtract the tax withheld from the regular wages. 1040x form Withhold the remaining tax from the supplemental wages. 1040x form 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. 1040x form 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. 1040x form This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. 1040x form    Separate rules apply to any supplemental wages exceeding $1 million that you pay to an individual during the year. 1040x form See section 7 in Publication 15 (Circular E) for details. 1040x form   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. 1040x form 6. 1040x form 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. 1040x form 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. 1040x form This is because eligible employees may get a refund of the amount of EIC that is more than the tax that they owe. 1040x form 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. 1040x form 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. 1040x form 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. 1040x form 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. 1040x form If Form W-2 is not required, you must notify the employee by February 7, 2014. 1040x form 7. 1040x form Depositing Taxes Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld. 1040x form You must use electronic funds transfer to make all federal tax deposits. 1040x form See How To Deposit , later in this section. 1040x form 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. 1040x form For more information, see COBRA premium assistance credit under Introduction. 1040x form Payment with return. 1040x form   You may make payments with Forms 943 or 945 instead of depositing if one of the following applies. 1040x form 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. 1040x form 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. 1040x form You are a monthly schedule depositor and make a payment in accordance with the Accuracy of Deposits Rule discussed later in this section. 1040x form This payment may be $2,500 or more. 1040x form Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. 1040x form Semiweekly schedule depositors must timely deposit the amount. 1040x form See Accuracy of Deposits Rule and How To Deposit, later in this section. 1040x form 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. 1040x form See Employers of Both Farm and Nonfarm Workers, later in this section. 1040x form The rules for determining when to deposit Form 943 taxes are discussed below. 1040x form See section 10 for the separate rules that apply to FUTA tax. 1040x form Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor. 1040x form 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. 1040x form The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday). 1040x form 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. 1040x form If you reported $50,000 or less of Form 943 taxes for the lookback period, you are a monthly schedule depositor. 1040x form If you reported more than $50,000 of Form 943 taxes for the lookback period, you are a semiweekly schedule depositor. 1040x form Lookback period. 1040x form   The lookback period is the second calendar year preceding the current calendar year. 1040x form For example, the lookback period for 2014 is 2012. 1040x form Example of deposit schedule based on lookback period. 1040x form Rose Co. 1040x form reported taxes on Form 943 as follows. 1040x form 2012 — $48,000 2013 — $60,000 Rose Co. 1040x form 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. 1040x form However, for 2015, Rose Co. 1040x form is a semiweekly schedule depositor because the total taxes before adjustment for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. 1040x form Adjustments to lookback period taxes. 1040x form   To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). 1040x form Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. 1040x form Example of adjustments. 1040x form An employer originally reported total tax of $45,000 for the lookback period in 2012. 1040x form 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. 1040x form The total tax reported in the lookback period is still $45,000. 1040x form The $10,000 adjustment is also not treated as part of the 2014 taxes. 1040x form Deposit period. 1040x form   The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. 1040x form For monthly schedule depositors, the deposit period is a calendar month. 1040x form The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. 1040x form 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. 1040x form You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month. 1040x form Monthly schedule example. 1040x form   Red Co. 1040x form is a seasonal employer and a monthly schedule depositor. 1040x form It pays wages each Friday. 1040x form It paid wages during August 2014, but did not pay any wages during September. 1040x form Red Co. 1040x form must deposit the combined tax liabilities for the August paydays by September 15. 1040x form Red Co. 1040x form 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. 1040x form New employers. 1040x form   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. 1040x form 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). 1040x form 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. 1040x form Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. 1040x form Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. 1040x form 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. 1040x form 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. 1040x form If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. 1040x form Semiweekly schedule depositors must complete Form 943-A, Agricultural Employer's Record of Federal Tax Liability, and submit it with Form 943. 1040x form Semiweekly Deposit Schedule IF the payday falls on a. 1040x form . 1040x form . 1040x form THEN deposit taxes by the following. 1040x form . 1040x form . 1040x form Wednesday, Thursday, and/or Friday Wednesday Saturday, Sunday, Monday, and/or Tuesday Friday Semiweekly schedule example. 1040x form   Green, Inc. 1040x form , is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. 1040x form Green, Inc. 1040x form , will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. 1040x form Green, Inc. 1040x form 's tax liability for the April 25, 2014 (Friday), wage payment must be deposited by April 30, 2014 (Wednesday). 1040x form Semiweekly deposit period spanning two quarters. 1040x form   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. 1040x form 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. 1040x form Both deposits will be due Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). 1040x form 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. 1040x form A business day is any day other than a Saturday, Sunday, or legal holiday. 1040x form 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). 1040x form Semiweekly schedule depositors   will always have 3 business days to make a deposit. 1040x form 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. 1040x form 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). 1040x form Legal holiday. 1040x form   The term “legal holiday” means any legal holiday in the District of Columbia. 1040x form Legal holidays for 2014 are listed below. 1040x form January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. 1040x form 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. 1040x form For purposes of the $100,000 rule, do not continue accumulating a tax liability after the end of a deposit period. 1040x form 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. 1040x form Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. 1040x form 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. 1040x form For example, Fir Co. 1040x form is a semiweekly schedule depositor. 1040x form On Monday, Fir Co. 1040x form accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. 1040x form On Tuesday, Fir Co. 1040x form accumulates additional taxes of $30,000. 1040x form Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. 1040x form does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). 1040x form 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. 1040x form Example of the $100,000 next-day deposit rule. 1040x form   Elm, Inc. 1040x form , started its business on May 1, 2014. 1040x form Because Elm, Inc. 1040x form , is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc. 1040x form , is a monthly schedule depositor. 1040x form On May 8, Elm, Inc. 1040x form , paid wages for the first time and accumulated taxes of $50,000. 1040x form On May 9 (Friday), Elm, Inc. 1040x form , paid wages and accumulated taxes of $60,000, for a total of $110,000. 1040x form Because Elm, Inc. 1040x form , accumulated $110,000 on May 9, it must deposit $110,000 by May 12 (Monday), the next business day. 1040x form Elm, Inc. 1040x form , became a semiweekly schedule depositor on May 10. 1040x form It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. 1040x form Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. 1040x form However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. 1040x form Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited. 1040x form The deposit shortfall is paid or deposited by the shortfall makeup date as described below. 1040x form 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. 1040x form You may pay the shortfall with your Form 943 even if the amount is $2,500 or more. 1040x form 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. 1040x form For example, if a semiweekly schedule depositor has a deposit shortfall during February 2014, the shortfall makeup date is March 19, 2014 (Wednesday). 1040x form How To Deposit You must deposit employment taxes by electronic funds transfer. 1040x form See Payment with return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. 1040x form Electronic deposit requirement. 1040x form   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). 1040x form Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). 1040x form 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. 1040x form   EFTPS is a free service provided by the Department of Treasury. 1040x form 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). 1040x form You can also visit the EFTPS website at www. 1040x form eftps. 1040x form gov. 1040x form Additional information about EFTPS is also available in Publication 966. 1040x form New employers that have a federal tax obligation will be pre-enrolled in EFTPS. 1040x form Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. 1040x form See When you receive your EIN in section 1 for more information. 1040x form Deposit record. 1040x form   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. 1040x form The number can be used as a receipt or to trace the payment. 1040x form Depositing on time. 1040x form   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. 1040x form m. 1040x form Eastern time the day before the date a deposit is due. 1040x form If you use a third party to make a deposit on your behalf, they may have different cutoff times. 1040x form Same-day payment option. 1040x form   If you fail to initiate a deposit transaction on EFTPS by 8 p. 1040x form m. 1040x form 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). 1040x form To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. 1040x form Please check with your financial institution regarding availability, deadlines, and costs. 1040x form Your financial institution may charge you a fee for payments made this way. 1040x form To learn more about the information you will need to provide to your financial institution to make a same-day wire payment, visit www. 1040x form eftps. 1040x form gov to download the Same-Day Payment Worksheet. 1040x form 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. 1040x form 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. 1040x form 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. 1040x form For amounts not properly deposited or not deposited on time, the penalty rates are shown next. 1040x form Penalty Charged for. 1040x form . 1040x form . 1040x form 2% Deposits made 1 to 5 days late. 1040x form 5% Deposits made 6 to 15 days late. 1040x form 10% Deposits made 16 or more days late. 1040x form Also applies to amounts paid within 10 days of the date of the first notice the IRS sent asking for the tax due. 1040x form 10% Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return. 1040x form See Payment with return , earlier in this section, for exceptions. 1040x form 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. 1040x form Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. 1040x form Order in which deposits are applied. 1040x form   Deposits generally are applied to the most recent tax liability within the year. 1040x form 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. 1040x form Follow the instructions on the penalty notice that you received. 1040x form For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. 1040x form You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. 1040x form irs. 1040x form gov/pub/irs-irbs/irb01-50. 1040x form pdf. 1040x form Example. 1040x form Cedar, Inc. 1040x form , is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. 1040x form It does not make the deposit on July 15. 1040x form On August 15, Cedar, Inc. 1040x form , deposits $2,000. 1040x form 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. 1040x form Accordingly, $500 of the July 15 liability remains undeposited. 1040x form The penalty on this underdeposit will apply as explained above. 1040x form Trust fund recovery penalty. 1040x form   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. 1040x form The penalty is the full amount of the unpaid trust fund tax. 1040x form This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. 1040x form   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. 1040x form   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. 1040x form A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. 1040x form    Willfully means voluntarily, consciously, and intentionally. 1040x form 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. 1040x form “Average” failure-to-deposit penalty. 1040x form   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. 1040x form 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. 1040x form Completed Form 943, line 17, instead of Form 943-A. 1040x form Failed to attach a properly completed Form 943-A. 1040x form Completed Form 943-A incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. 1040x form   IRS figures the penalty by allocating your tax liability on Form 943, line 11, equally throughout the tax period. 1040x form Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. 1040x form   You can avoid the penalty by reviewing your return before filing it. 1040x form Follow these steps before filing your Form 943. 1040x form If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 943, line 17. 1040x form 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. 1040x form 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. 1040x form Do not show negative amounts on Form 943, line 17, or Form 943-A. 1040x form 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. 1040x form 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). 1040x form Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules. 1040x form If a deposit is due, deposi
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The 1040x Form

1040x form Publication 550 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionOrdering forms and publications. 1040x form Tax questions. 1040x form Future Developments For the latest information about developments related to Publication 550, such as legislation enacted after it was published, go to www. 1040x form irs. 1040x form gov/pub550. 1040x form What's New Net investment income tax (NIIT). 1040x form  Beginning in 2013, you may be subject to the NIIT. 1040x form The NIIT applies at a rate of 3. 1040x form 8% to certain net investment income of individuals, estates, and trusts that have income above statutory threshold amounts. 1040x form See Net investment income tax (NIIT) , later. 1040x form Maximum capital gain rates. 1040x form  For 2013, the maximum capital gain rates are 0%, 15%, 20%, 25%, and 28%. 1040x form See Capital Gain Tax Rates , later, for more information. 1040x form Gift tax exclusion amount increased. 1040x form  For calendar year 2013, the first $14,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts. 1040x form See Property Received as a Gift , later. 1040x form Reminders Mutual fund distributions. 1040x form  Publication 564, Mutual Fund Distributions, has been incorporated into this publication. 1040x form Foreign source income. 1040x form  If you are a U. 1040x form S. 1040x form citizen with investment income from sources outside the United States (foreign income), you must report that income on your tax return unless it is exempt by U. 1040x form S. 1040x form law. 1040x form This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. 1040x form Employee stock options. 1040x form  If you received an option to buy or sell stock or other property as payment for your services, see Publication 525, Taxable and Nontaxable Income, for the special tax rules that apply. 1040x form Photographs of missing children. 1040x form  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 1040x form Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040x form You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040x form Introduction This publication provides information on the tax treatment of investment income and expenses. 1040x form It includes information on the tax treatment of investment income and expenses for individual shareholders of mutual funds or other regulated investment companies, such as money market funds. 1040x form It explains what investment income is taxable and what investment expenses are deductible. 1040x form It explains when and how to show these items on your tax return. 1040x form It also explains how to determine and report gains and losses on the disposition of investment property and provides information on property trades and tax shelters. 1040x form The glossary at the end of this publication defines many of the terms used. 1040x form Investment income. 1040x form   This generally includes interest, dividends, capital gains, and other types of distributions including mutual fund distributions. 1040x form Investment expenses. 1040x form   These include interest paid or incurred to acquire investment property and expenses to manage or collect income from investment property. 1040x form Qualified retirement plans and IRAs. 1040x form   The rules in this publication do not apply to mutual fund shares held in individual retirement arrangements (IRAs), section 401(k) plans, and other qualified retirement plans. 1040x form The value of the mutual fund shares and earnings allocated to you are included in your retirement plan assets and stay tax free generally until the plan distributes them to you. 1040x form The tax rules that apply to retirement plan distributions are explained in the following publications. 1040x form Publication 560, Retirement Plans for Small Business. 1040x form Publication 571, Tax-Sheltered Annuity Plans. 1040x form Publication 575, Pension and Annuity Income. 1040x form Publication 590, Individual Retirement Arrangements (IRAs). 1040x form Publication 721, Tax Guide to U. 1040x form S. 1040x form Civil Service Retirement Benefits. 1040x form    Comments and suggestions. 1040x form   We welcome your comments about this publication and your suggestions for future editions. 1040x form   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 1040x form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040x form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040x form   You can send your comments from www. 1040x form irs. 1040x form gov/formspubs/. 1040x form Click on “More Information” and then on “Comment on Tax Forms and Publications. 1040x form ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040x form Ordering forms and publications. 1040x form   Visit www. 1040x form irs. 1040x form gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 1040x form Internal Revenue Service 1201 N. 1040x form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040x form   If you have a tax question, check the information available on IRS. 1040x form gov or call 1-800-829-1040. 1040x form We cannot answer tax questions sent to either of the above addresses. 1040x form Prev  Up 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