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File 1040nr Ez

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File 1040nr ez Publication 80 - Main Content Table of Contents Introduction 1. File 1040nr ez Employer Identification Number (EIN) 2. File 1040nr ez Who Are Employees?Tests. File 1040nr ez Business Owned and Operated by Spouses Farm Crew Leaders 3. File 1040nr ez Employee's Social Security Number (SSN)Registering for SSNVS. File 1040nr ez 4. File 1040nr ez Wages and Other CompensationFringe Benefits 5. File 1040nr ez TipsOrdering rule. File 1040nr ez 6. File 1040nr ez Social Security and Medicare Taxes for FarmworkersThe $150 Test or the $2,500 Test 7. File 1040nr ez How To Figure Social Security and Medicare TaxesHousehold and agricultural employers. File 1040nr ez 8. File 1040nr ez Depositing TaxesPayment with Return When To Deposit How To Deposit Deposit Penalties 9. File 1040nr ez Employer's ReturnsReporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Prior Period Adjustments 10. File 1040nr ez Wage and Tax StatementsWaiver. File 1040nr ez 11. File 1040nr ez Federal Unemployment (FUTA) Tax—U. File 1040nr ez S. File 1040nr ez Virgin Islands Employers Only How To Get Tax Help Introduction This publication is for employers whose principal place of business is in the U. File 1040nr ez S. File 1040nr ez Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, or who have employees who are subject to income tax withholding for any of these jurisdictions. File 1040nr ez Employers and employees in these areas are generally subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA). File 1040nr ez See section 6 and section 7 for more information. File 1040nr ez This publication summarizes employer responsibilities to collect, pay, and report these taxes. File 1040nr ez Whenever the term “United States” is used in this publication, it includes U. File 1040nr ez S. File 1040nr ez Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. File 1040nr ez This publication also provides employers in the U. File 1040nr ez S. File 1040nr ez Virgin Islands with a summary of their responsibilities in connection with the tax under the Federal Unemployment Tax Act, known as FUTA tax. File 1040nr ez See section 11 for more information. File 1040nr ez Except as shown in the table in section 12, social security, Medicare, and FUTA taxes apply to every employer who pays taxable wages to employees or who has employees who report tips. File 1040nr ez This publication does not include information relating to the self-employment tax (for social security and Medicare of self-employed persons). File 1040nr ez See Publication 570, Tax Guide for Individuals With Income From U. File 1040nr ez S. File 1040nr ez Possessions, if you need this information. File 1040nr ez This publication also does not include information relating to income tax withholding. File 1040nr ez In U. File 1040nr ez S. File 1040nr ez Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, contact your local tax department for information about income tax withholding. File 1040nr ez See Publication 15 (Circular E), for information on U. File 1040nr ez S. File 1040nr ez federal income tax withholding. File 1040nr ez Comments and suggestions. File 1040nr ez   We welcome your comments about this publication and your suggestions for future editions. File 1040nr ez   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. File 1040nr ez NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File 1040nr ez Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File 1040nr ez    You can also send us comments from www. File 1040nr ez irs. File 1040nr ez gov/formspubs. File 1040nr ez Click on More Information and then click on Comment on Tax Forms and Publications. File 1040nr ez   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. File 1040nr ez 1. File 1040nr ez Employer Identification Number (EIN) An employer identification number (EIN) is a nine-digit number that the IRS issues. File 1040nr ez Its format is 00-0000000. File 1040nr ez It is used to identify the tax accounts of employers and certain other organizations and entities that have no employees. File 1040nr ez Use your EIN on all of the items that you send to the IRS and SSA for your business. File 1040nr ez If you do not have an EIN, you may apply for one online. File 1040nr ez Go to IRS. File 1040nr ez gov and click on the Apply for an EIN Online link under Tools. File 1040nr ez You may also apply for an EIN by calling 1-800-829-4933, (U. File 1040nr ez S. File 1040nr ez Virgin Islands only) or 267-941-1099 (toll call), or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. File 1040nr ez Do not use a social security number (SSN) in place of an EIN. File 1040nr ez If you do not have an EIN by the time a return is due, file a paper return and enter “Applied For” and the date that you applied for it in the space shown for the number. File 1040nr ez If you took over another employer's business, do not use that employer's EIN. File 1040nr ez You should have only one EIN. File 1040nr ez If you have more than one, write to the IRS office where you file your returns using the “without a payment” address in the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943. File 1040nr ez Or call the IRS Business & Specialty Tax Line at 1-800-829-4933 (U. File 1040nr ez S. File 1040nr ez Virgin Islands only) or 267-941-1000 (toll call). File 1040nr ez Persons who are deaf, hard of hearing, or have a speech disability (TDD/TTY users) in the U. File 1040nr ez S. File 1040nr ez Virgin Islands may call 1-800-829-4059. File 1040nr ez The IRS will tell you which EIN to use. File 1040nr ez For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records. File 1040nr ez 2. File 1040nr ez Who Are Employees? Generally, employees are defined either under common law or under special statutes for certain situations. File 1040nr ez See Publication 15-A, Employer's Supplemental Tax Guide, for details on statutory employees and nonemployees. File 1040nr ez Employee status under common law. File 1040nr ez   Generally, a worker who performs services for you is your employee if you can control what will be done and how it will be done. File 1040nr ez This is so even when you give the employee freedom of action. File 1040nr ez What matters is that you have the right to control the details of how the services are performed. File 1040nr ez See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. File 1040nr ez    Generally, people in business for themselves are not employees. File 1040nr ez For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. File 1040nr ez However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. File 1040nr ez   If an employer-employee relationship exists, it does not matter what it is called. File 1040nr ez The employee may be called an agent or independent contractor. File 1040nr ez It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. File 1040nr ez Statutory employees. File 1040nr ez   There are also some special definitions of employees for social security, Medicare, and FUTA taxes. File 1040nr ez   While the following persons may not be common law employees, they are considered employees for social security and Medicare purposes if the conditions under Tests , discussed later, are met. File 1040nr ez a. File 1040nr ez   An agent (or commission) driver who delivers food or beverages (other than milk) or picks up and delivers laundry or dry cleaning for someone else. File 1040nr ez b. File 1040nr ez   A full-time life insurance salesperson who sells primarily for one company. File 1040nr ez c. File 1040nr ez   A homeworker who works by the guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. File 1040nr ez d. File 1040nr ez   A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. File 1040nr ez The orders must be for merchandise for resale or supplies for use in the customer's business. File 1040nr ez The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. File 1040nr ez Tests. File 1040nr ez   Withhold social security and Medicare taxes from statutory employees' wages if all three of the following tests apply. File 1040nr ez The service contract states or implies that almost all of the services are to be performed personally by them. File 1040nr ez They have little or no investment in the equipment and property used to perform the services (other than an investment in transportation facilities). File 1040nr ez The services are performed on a continuing basis for the same payer. File 1040nr ez Persons in a or d, earlier, are also employees for FUTA tax purposes if tests 1 through 3 are met (U. File 1040nr ez S. File 1040nr ez Virgin Islands only). File 1040nr ez   Publication 15-A gives examples of the employer-employee relationship. File 1040nr ez Statutory nonemployees. File 1040nr ez   Certain direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. File 1040nr ez They are generally treated as self-employed for employment tax purposes. File 1040nr ez See Publication 15-A for details. File 1040nr ez H-2A agricultural workers. File 1040nr ez   On Form W-2, do not check box 13 (Statutory employee) as H-2A workers are not statutory employees. File 1040nr ez Treating employees as nonemployees. File 1040nr ez   If you incorrectly treated an employee as a nonemployee and did not withhold social security and Medicare taxes, you will be liable for the taxes. File 1040nr ez See Treating employees as nonemployees in section 2 of Publication 15 (Circular E), for details on Internal Revenue Code section 3509, which may apply. File 1040nr ez IRS help. File 1040nr ez   If you want the IRS to determine if a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. File 1040nr ez Voluntary Classification Settlement Program (VCSP). File 1040nr ez   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. File 1040nr ez To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). File 1040nr ez For more information, visit IRS. File 1040nr ez gov and enter “VCSP” in the search box. File 1040nr ez Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. File 1040nr ez See Publication 541, Partnerships, for more details. File 1040nr ez The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. File 1040nr ez Exception—Qualified Joint Venture. File 1040nr ez   If you and your spouse materially participate as the only members of a jointly owned and operated business, and you file a joint Form 1040, U. File 1040nr ez S. File 1040nr ez Individual Income Tax Return, or joint Form 1040-SS, U. File 1040nr ez S. File 1040nr ez Self-Employment Tax Return—U. File 1040nr ez S. File 1040nr ez Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or Puerto Rico, you can make a joint election to be taxed as a qualified joint venture instead of a partnership. File 1040nr ez See the Instructions for Schedule C (Form 1040) or the Instructions for Form 1040-SS. File 1040nr ez Spouses electing qualified joint venture status are treated as sole proprietors for federal tax purposes. File 1040nr ez Either of the sole proprietor spouses may report and pay the employment taxes due on wages paid to the employees, using the EIN of that spouse’s sole proprietorship. File 1040nr ez For more information on qualified joint ventures, visit IRS. File 1040nr ez gov and enter “qualified joint venture” in the search box. File 1040nr ez Farm Crew Leaders You are an employer of farmworkers if you are a crew leader. File 1040nr ez 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. File 1040nr ez 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. File 1040nr ez 3. File 1040nr ez Employee's Social Security Number (SSN) An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. File 1040nr ez You must get each employee's name and SSN and enter them on Form W-2AS, W-2CM, W-2GU, or W-2VI. File 1040nr ez If you do not report the employee's correct name and SSN, you may owe a penalty unless you have reasonable cause. File 1040nr ez See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. File 1040nr ez Employee's social security card. File 1040nr ez   You should ask the employee to show you his or her social security card. File 1040nr ez The employee may show the card if it is available. File 1040nr ez Do not accept a social security card that says “Not valid for employment. File 1040nr ez ” A social security number issued with this legend does not permit employment. File 1040nr ez You may, but you are not required to, photocopy the social security card if the employee provides it. File 1040nr ez If an employee does not have a social security card or needs a new one, the employee should apply for one on Form SS-5 and submit the necessary documentation. File 1040nr ez The employee must complete and sign Form SS-5; it cannot be filed by the employer. File 1040nr ez 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. File 1040nr ez If your employee has applied for an SSN but has not received the card before you must file your Form W-2 reports, and you are filing your reports on paper, enter “Applied For” in box d. File 1040nr ez Enter all zeroes in the SSN field if filing electronically. File 1040nr ez When the employee receives the SSN, file Copy A of Form W-2c with SSA to show the employee's SSN. File 1040nr ez Correctly record the employee's name and SSN. File 1040nr ez   Record the name and number of each employee as they appear on his or her social security card. File 1040nr ez If the 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. File 1040nr ez Continue to use the old name until the employee shows you the replacement social security card with the corrected name. File 1040nr ez   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-2AS, W-2CM, W-2GU, or W-2VI. File 1040nr ez 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. File 1040nr ez Where to get and file social security number application forms. File 1040nr ez    U. File 1040nr ez S. File 1040nr ez Virgin Islands—U. File 1040nr ez S. File 1040nr ez Social Security Administration, 8000 Nisky Center, First Floor, Suite 2, St. File 1040nr ez Thomas, VI 00802. File 1040nr ez  Guam—U. File 1040nr ez S. File 1040nr ez Social Security Administration, 655 Harmon Loop Road, Suite 300, Dededo, GU 96929. File 1040nr ez  American Samoa—U. File 1040nr ez S. File 1040nr ez Social Security Administration, Pago Plaza, Suite 117, Pago Pago, AS 96799. File 1040nr ez  Commonwealth of the Northern Mariana Islands—U. File 1040nr ez S. File 1040nr ez Social Security Administration, MH Building, Suite 201, Saipan, MP 96950. File 1040nr ez Verification of social security numbers. File 1040nr ez   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. File 1040nr ez Visit www. File 1040nr ez socialsecurity. File 1040nr ez gov/employer/ssnv. File 1040nr ez htm for more information. File 1040nr ez Registering for SSNVS. File 1040nr ez   You must register online and receive authorization from your employer to use SSNVS. File 1040nr ez To register, visit SSA's website at www. File 1040nr ez ssa. File 1040nr ez gov/employer and click on the Business Services Online link. File 1040nr ez Follow the registration instructions to obtain a user identification (ID) and password. File 1040nr ez You will need to provide the following information about yourself and your company. File 1040nr ez Name. File 1040nr ez SSN. File 1040nr ez Date of birth. File 1040nr ez Type of employer. File 1040nr ez EIN. File 1040nr ez Company name, address, and telephone number. File 1040nr ez Email address. File 1040nr ez   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. File 1040nr ez You must enter the activation code online to use SSNVS. File 1040nr ez 4. File 1040nr ez Wages and Other Compensation Generally, all wages are subject to social security and Medicare tax (and FUTA tax for U. File 1040nr ez S. File 1040nr ez Virgin Islands employers). File 1040nr ez However, wages subject to social security tax and FUTA tax are limited by a wage base amount that you pay to each employee for the year. File 1040nr ez The wage base for social security tax is $117,000 for 2014. File 1040nr ez After you pay $117,000 to an employee in 2014, including tips, do not withhold social security tax on any amount that you later pay to the employee for the year. File 1040nr ez The wage base for FUTA tax is $7,000 for 2014. File 1040nr ez All wages are subject to Medicare tax. File 1040nr ez The wages may be in cash or in other forms, such as an automobile for personal use. File 1040nr ez Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. File 1040nr ez It does not matter how payments are measured or paid. File 1040nr ez See the table in section 12 for exceptions to social security, Medicare, and FUTA taxes on wages. File 1040nr ez See section 5 and section 6 for a discussion of how the rules apply to tips and farmworkers. File 1040nr ez Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies. File 1040nr ez Special rules apply to the reporting of third-party sick pay. File 1040nr ez For details, see Publication 15-A. File 1040nr ez Determine the value of noncash pay (such as goods, lodging, and meals) by its fair market value. File 1040nr ez However, see Fringe Benefits , later in this section. File 1040nr ez Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes. File 1040nr ez Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is taxed as ordinary wages in the year paid. File 1040nr ez For information on reporting back pay to the Social Security Administration, see Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration. File 1040nr ez Travel and business expenses. File 1040nr ez   Payments to your employee for travel and other necessary expenses of your business generally are included in taxable wages if (a) your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, or (b) you advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount that he or she does not substantiate. File 1040nr ez Sick pay. File 1040nr ez   In general, sick pay is any amount that you pay, under a plan that you take part in, to an employee because of sickness or injury. File 1040nr ez These amounts are sometimes paid by a third party, such as an insurance company. File 1040nr ez In either case, these payments are subject to social security and Medicare taxes (and FUTA tax for U. File 1040nr ez S. File 1040nr ez Virgin Islands employers). File 1040nr ez Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. File 1040nr ez Publication 15-A explains the employment tax rules that apply to sick pay, disability benefits, and similar payments to employees. File 1040nr ez Fringe Benefits Generally, fringe benefits are includible in the gross income of an employee and are subject to employment taxes. File 1040nr ez Examples of fringe benefits include the use of an automobile, aircraft flights that you provide, free or discounted commercial airline flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. File 1040nr ez In general, the amount included in the employee's income is the excess of the fair market value of the benefit over the sum of any amount paid for it by the employee and any amount excluded by law. File 1040nr ez For more information, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. File 1040nr ez When fringe benefits are treated as paid. File 1040nr ez   You can choose to treat certain noncash fringe benefits (including personal use of an automobile provided by you) as paid by the pay period, quarter, or on any other basis that you choose, but they must be treated as paid at least annually. File 1040nr ez You do not have to make a formal choice of payment dates or notify the IRS. File 1040nr ez You do not have to use the same basis for all employees. File 1040nr ez You may change methods as often as you like, as long as all benefits provided in a calendar year are treated as paid no later than December 31 of the calendar year. File 1040nr ez However, see Special accounting rule for fringe benefits provided during November and December , later in this section. File 1040nr ez   You can treat the value of a single taxable noncash fringe benefit as paid on one or more dates in the same calendar year, even if the employee gets the entire benefit at one time. File 1040nr ez However, once you elect the payment dates, you must report the taxes on your return in the same tax period in which you treated them as paid. File 1040nr ez This election does not apply to a fringe benefit where real property or investment personal property is transferred. File 1040nr ez Withholding social security and Medicare taxes on fringe benefits. File 1040nr ez   You add the value of fringe benefits to regular wages for a payroll period and figure social security and Medicare taxes on the total. File 1040nr ez   If you withhold less than the required amount of social security and Medicare taxes from the employee in a calendar year but report and pay the proper amount, you may recover the taxes from the employee. File 1040nr ez Depositing taxes on fringe benefits. File 1040nr ez   Once you choose payment dates for taxable noncash fringe benefits, you must deposit taxes in the same deposit period that you treat the fringe benefits as paid. File 1040nr ez You may make a reasonable estimate of the value of the fringe benefits. File 1040nr ez In general, the value of taxable noncash fringe benefits provided in a calendar year must be determined by January 31 of the following year. File 1040nr ez   You may claim a refund of overpayments or elect to have any overpayment applied to the next employment tax return. File 1040nr ez If deposits are underpaid, see Deposit Penalties in section 8. File 1040nr ez Valuation of vehicles provided to employees. File 1040nr ez    If you provide a vehicle to your employees, you may either determine the actual value of the benefit for the entire calendar year, taking into account the business use of the vehicle, or consider the entire use for the calendar year as personal and include 100% of the value of the vehicle in the employee's income. File 1040nr ez For reporting information to employees, see the box 14 instructions in the General Instructions for Forms W-2 and W-3. File 1040nr ez Special accounting rule for fringe benefits provided during November and December. File 1040nr ez   You may choose to treat the value of taxable noncash fringe benefits provided during November and December as paid in the next year. File 1040nr ez However, this applies only to those benefits that you actually provided during November and December, not to those you merely treated as paid during those months. File 1040nr ez   If you use this rule, you must notify each affected employee between the time of the employee's last paycheck of the calendar year and at or near the time that you give the employee Form W-2AS, W-2CM, W-2GU, or W-2VI. File 1040nr ez If you use the special accounting rule, your employee must also use it for the same period that you use it. File 1040nr ez You cannot use this rule for a fringe benefit of real property or tangible or intangible real property of a kind normally held for investment that is transferred to your employee. File 1040nr ez 5. File 1040nr ez Tips Tips that your employee receives from customers are generally subject to social security and Medicare withholding. File 1040nr ez Your employee must report cash tips to you by the 10th of the month after the month that the tips are received. File 1040nr ez The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. File 1040nr ez Both directly and indirectly tipped employees must report tips to you. File 1040nr ez The report should not include tips that the employee paid out to other employees. File 1040nr ez No report is required for months when tips are less than $20. File 1040nr ez Your employees report tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. File 1040nr ez They may also use Form 4070A, Employee's Daily Record of Tips, to keep a record of their tips. File 1040nr ez Both forms are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer, available at IRS. File 1040nr ez gov. File 1040nr ez The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period that the report covers, and The total tips received during the month or period. File 1040nr ez You are permitted to establish a system for electronic tip reporting by employees. File 1040nr ez See Regulations section 31. File 1040nr ez 6053-1(d). File 1040nr ez Collecting taxes on tips. File 1040nr ez   You must collect the employee social security and Medicare taxes on the employee's tips. File 1040nr ez You can also collect these taxes from the employee's wages or from other funds that he or she makes available. File 1040nr ez Stop collecting the employee social security tax when his or her total wages and tips for 2014 reach $117,000. File 1040nr ez Collect the employee Medicare tax for the whole year on all wages and tips. File 1040nr ez   You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the wage base limit. File 1040nr ez You are responsible for the employer Medicare tax for the whole year on all wages and tips. File 1040nr ez File Form 941-SS (or Form 944) to report withholding and employer taxes on tips. File 1040nr ez The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. File 1040nr ez Ordering rule. File 1040nr ez   If, by the 10th of the month after the month you received an employee's report on tips, you do not have enough employee funds available to deduct the employee social security and Medicare tax on tips, you no longer have to collect it and are not liable for it. File 1040nr ez Reporting tips. File 1040nr ez   Report tips and any collected and uncollected social security in boxes 1, 5, 7, and 12 on Forms W-2AS, W-2CM, W-2GU, or W-2VI and on Form 941-SS, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). File 1040nr ez Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. File 1040nr ez Report an adjustment on Form 941-SS, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. File 1040nr ez The table in section 12 shows how tips are treated for FUTA tax purposes. File 1040nr ez   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. File 1040nr ez See Revenue Ruling 2012-18, 2012-26 I. File 1040nr ez R. File 1040nr ez B. File 1040nr ez 1032, available at www. File 1040nr ez irs. File 1040nr ez gov/irb/2012-26_IRB/ar07. File 1040nr ez html. File 1040nr ez 6. File 1040nr ez Social Security and Medicare Taxes for Farmworkers The tests described below apply only to services that are defined as agricultural labor (farmwork). File 1040nr ez 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. File 1040nr ez 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. File 1040nr ez 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. File 1040nr ez A “share farmer” working for you is not your employee. File 1040nr ez However, the share farmer may be subject to self-employment tax. File 1040nr ez In general, share farming is an arrangement in which certain commodity products are shared between the farmer and the owner (or tenant) of the land. File 1040nr ez For details, see Regulations section 31. File 1040nr ez 3121(b)(16)-1. File 1040nr ez The $150 Test or the $2,500 Test All cash wages that you pay to any employee for farmwork are subject to social security and Medicare taxes if either of the following two tests is met. File 1040nr ez You pay cash wages to the employee of $150 or more in a year (count all cash wages paid on a time, piecework, or other basis) for farmwork. File 1040nr ez The $150 test applies separately to each farmworker that you employ. File 1040nr ez If you employ a family of workers, each member is treated separately. File 1040nr ez Do not count wages paid by other employers. File 1040nr ez The total that you pay for farmwork (cash and noncash) to all of your employees is $2,500 or more during the year. File 1040nr ez Exceptions. File 1040nr ez   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 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 home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. File 1040nr ez   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. File 1040nr ez 7. File 1040nr ez How To Figure Social Security and Medicare Taxes The tax rate for social security is 6. File 1040nr ez 2% (amount withheld) each for the employer and employee (12. File 1040nr ez 4% total). File 1040nr ez The social security wage base limit is $117,000. File 1040nr ez The tax rate for Medicare is 1. File 1040nr ez 45% (amount withheld) each for the employee and employer (2. File 1040nr ez 9% total). File 1040nr ez There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. File 1040nr ez Multiply each wage payment by these percentages to figure the tax to withhold from employees. File 1040nr ez Employers report both the employee and employer shares on Forms 941-SS, 944, or Form 943 (farm employment). File 1040nr ez See section 5 for information on tips. File 1040nr ez Additional Medicare Tax withholding. File 1040nr ez   In addition to withholding Medicare tax at 1. File 1040nr ez 45%, you must withhold a 0. File 1040nr ez 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. File 1040nr ez 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. File 1040nr ez Additional Medicare Tax is only imposed on the employee. File 1040nr ez There is no employer share of Additional Medicare Tax. File 1040nr ez 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. File 1040nr ez   For more information on what wages are subject to Medicare tax, see the chart Special Rules for Various Types of Employment and Payments in section 12. File 1040nr ez For more information on Additional Medicare Tax, visit IRS. File 1040nr ez gov and enter “Additional Medicare Tax” in the search box. File 1040nr ez Deducting the tax. File 1040nr ez   Deduct the employee tax from each wage payment. File 1040nr ez If you are not sure that the wages that you pay to a farmworker during the year will be taxable, you may either deduct the tax when you make the payments or wait until the $2,500 test or the $150 test explained in section 6 has been met. File 1040nr ez Employee's portion of taxes paid by employer. File 1040nr ez   If you pay your employee's social security and Medicare taxes without deducting them from the employee's pay, you must include the amount of the payments in the employee's wages for social security and Medicare taxes. File 1040nr ez This increase in the employee's wage payment for your payment of the employee's social security and Medicare taxes is also subject to employee social security and Medicare taxes. File 1040nr ez This again increases the amount of the additional taxes that you must pay. File 1040nr ez Household and agricultural employers. File 1040nr ez   This discussion does not apply to household and agricultural employers. File 1040nr ez If you pay a household or agricultural employee's social security and Medicare taxes, these payments must be included in the employee's wages. File 1040nr ez However, this wage increase due to the tax payments is not subject to social security or Medicare taxes as discussed in this section. File 1040nr ez See Publication 15-A for details. File 1040nr ez Sick pay payments. File 1040nr ez   Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. File 1040nr ez For details on third-party payers of sick pay, see Publication 15-A. File 1040nr ez 8. File 1040nr ez Depositing Taxes You must deposit social security and Medicare taxes if your tax liability (Form 941-SS, line 10; Form 944, line 7; or Form 943, line 11) is $2,500 or more for the tax return period. File 1040nr ez You must make the deposit by electronic funds transfer. File 1040nr ez For more information about electronic funds transfers, see How To Deposit , later in this section. File 1040nr ez Payment with Return $2,500 rule. File 1040nr ez   Instead of making deposits during the current quarter, you can pay your total Form 941-SS tax liability when you timely file Form 941-SS if: Your total Form 941-SS tax liability for either the current quarter or the preceding quarter is less than $2,500 and You do not incur a $100,000 next-day deposit obligation during the current quarter. File 1040nr ez   If you are not sure your total liability for the current quarter will be less than $2,500, (and your liability for the preceding quarter was not less than $2,500), make deposits using the semiweekly or monthly rules so you won't be subject to failure to deposit penalties. File 1040nr ez Employers who have been notified to file Form 944 can pay their tax liability due for the fourth quarter with Form 944, if their fourth quarter tax liability is less than $2,500. File 1040nr ez Employers must have deposited any tax liability due for the first, second, and third quarters, according to the deposit rules, in order to avoid failure-to-deposit penalties for deposits due during those quarters. File 1040nr ez Only monthly schedule depositors are allowed to make an Accuracy of Deposits Rule payment with the return. File 1040nr ez Semiweekly schedule depositors must timely deposit the amount. File 1040nr ez See Accuracy of Deposits Rule and How To Deposit, later in this section. File 1040nr ez When To Deposit Under the rules discussed below, the only difference between farm and nonfarm workers' employment tax deposit rules is the lookback period. File 1040nr ez Therefore, farm and nonfarm workers are discussed together except where noted. File 1040nr ez Depending on your total taxes reported during a lookback period (discussed later), you are either a monthly schedule depositor or a semiweekly schedule depositor. File 1040nr ez The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often you pay your employees or how often you are required to make deposits. File 1040nr ez The terms identify which set of rules that you must follow when a tax liability arises (for example, when you have a payday). File 1040nr ez You will need to determine your deposit schedule for a calendar year based on the total employment taxes reported on Forms 941-SS, line 10; Form 944, line 7; or Form 943, line 9, for your lookback period (defined below). File 1040nr ez If you filed both Forms 941-SS and 941 during the lookback period, combine the tax liabilities for these returns for purposes of determining your deposit schedule. File 1040nr ez Determine your deposit schedule for Form 943 separately from Forms 941-SS and 941. File 1040nr ez Lookback period for employers of nonfarm workers. File 1040nr ez   The lookback period for Form 941-SS (or Form 941) consists of four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. File 1040nr ez These four quarters are your lookback period even if you did not report any taxes for any of the quarters. File 1040nr ez For 2014, the lookback period is July 1, 2012, through June 30, 2013. File 1040nr ez    Table 1. File 1040nr ez Lookback Period for Calendar Year 2014 Lookback Period July 1, 2012 Oct. File 1040nr ez 1, 2012 Jan. File 1040nr ez 1, 2013 Apr. File 1040nr ez 1, 2013 through through through through Sep. File 1040nr ez 30, 2012 Dec. File 1040nr ez 31, 2012 Mar. File 1040nr ez 31, 2013 June 30, 2013    The lookback period for Form 944 is the second calendar year preceding the current calendar year. File 1040nr ez For example, the lookback period for calendar year 2014 is calendar year 2012. File 1040nr ez In addition, for employers who filed Form 944 for 2012 or for 2013 and will file Form 941-SS (or Form 941) for 2014, the lookback period for 2014 is the second calendar year preceding the current calendar year, that is, 2012. File 1040nr ez Lookback period for employers of farmworkers. File 1040nr ez   The lookback period for Form 943 is the second calendar year preceding the current calendar year. File 1040nr ez The lookback period for calendar year 2014 is calendar year 2012. File 1040nr ez Adjustments to lookback period taxes. File 1040nr ez   To determine your taxes for the lookback period, use only the tax that you reported on the original returns (Forms 941-SS, 943, or 944). File 1040nr ez Do not include any adjustments shown on Form 941-X, 943-X, or 944-X. File 1040nr ez Example. File 1040nr ez   An employer originally reported total taxes of $45,000 for the lookback period. File 1040nr ez The employer discovered during January 2014 that the tax reported during the lookback period was understated by $10,000 and corrected this error by filing Form 941-X. File 1040nr ez The employer is a monthly schedule depositor for 2014 because the lookback period tax liabilities are based on the amounts originally reported, and they were $50,000 or less. File 1040nr ez Deposit Period The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. File 1040nr ez For monthly schedule depositors, the deposit period is a calendar month. File 1040nr ez The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. File 1040nr ez Monthly Deposit Schedule If your total tax reported for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. File 1040nr ez You must deposit taxes on wage payments made during a calendar month by the 15th day of the following month. File 1040nr ez New employers. File 1040nr ez   Your tax liability for any quarter in the lookback period before the date you started or acquired your business is considered to be zero. File 1040nr ez Therefore, you are a monthly schedule depositor for the first calendar year of your business (but see the $100,000 Next-Day Deposit Rule , later in this section). File 1040nr ez Semiweekly Deposit Schedule If your total tax reported for the lookback period is more than $50,000, you are a semiweekly schedule depositor for the current year. File 1040nr ez If you are a semiweekly schedule depositor, you must deposit on Wednesday and/or Friday, depending on what day of the week that you make wage payments, as follows. File 1040nr ez Deposit taxes on wage payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. File 1040nr ez Deposit taxes on wage payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. File 1040nr ez Semiweekly depositors are generally 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. File 1040nr ez 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 on the following Wednesday. File 1040nr ez If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. File 1040nr ez Semiweekly deposit period spanning two quarters. File 1040nr ez   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. File 1040nr ez Example. File 1040nr ez   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. File 1040nr ez Both deposits will be due on Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). File 1040nr ez Examples of Monthly and Semiweekly Schedules Employers of nonfarm workers. File 1040nr ez   Rose Co. File 1040nr ez reported Form 941-SS taxes as follows: 2013 Lookback Period 3rd Quarter 2011 $12,000 4th Quarter 2011 12,000 1st Quarter 2012 12,000 2nd Quarter 2012 12,000   $48,000 2014 Lookback Period 3rd Quarter 2012 $12,000 4th Quarter 2012 12,000 1st Quarter 2013 12,000 2nd Quarter 2013 15,000   $51,000 Rose Co. File 1040nr ez is a monthly schedule depositor for 2013 because its taxes for the four quarters in its lookback period ($48,000 for the 3rd quarter of 2011 through the 2nd quarter of 2012) were not more than $50,000. File 1040nr ez However, for 2014, Rose Co. File 1040nr ez is a semiweekly schedule depositor because the total taxes for the four quarters in its lookback period ($51,000 for the 3rd quarter of 2012 through the 2nd quarter of 2013) exceeded $50,000. File 1040nr ez Employers of farmworkers. File 1040nr ez   Red Co. File 1040nr ez reported taxes on its 2012 Form 943, line 9, of $48,000. File 1040nr ez On its 2013 Form 943, line 11, it reported taxes of $60,000. File 1040nr ez   Red Co. File 1040nr ez is a monthly schedule depositor for 2014 because its taxes for its lookback period ($48,000 for calendar year 2012) were not more than $50,000. File 1040nr ez However, for 2015, Red Co. File 1040nr ez is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. File 1040nr ez New agricultural employers. File 1040nr ez   New agricultural employers filing Form 943 are monthly schedule depositors for the first and second calendar years of their business because their taxes for the lookback period (2 years) are considered to be zero. File 1040nr ez However, see the $100,000 Next-Day Deposit Rule , later in this section. File 1040nr ez Deposits on Business Days Only If a deposit due date falls 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. File 1040nr ez A business day is any day other than a Saturday, Sunday, or legal holiday. File 1040nr ez For example, if a deposit is required to be made on Friday, but Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). File 1040nr ez Semiweekly schedule depositors have at least 3 business days to make a deposit. File 1040nr ez 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 required deposit. File 1040nr ez For example, if a semiweekly schedule depositor accumulated taxes for payments made 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). File 1040nr ez Legal holiday. File 1040nr ez   The term “legal holiday” means any legal holiday in the District of Columbia. File 1040nr ez Legal holidays for 2014 are listed below. File 1040nr ez January 1—New Year's Day January 20—Birthday of Martin Luther King, Jr. File 1040nr ez 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 Application of Monthly and Semiweekly Schedules The following examples illustrate the procedure for determining the deposit date under the two different deposit schedules. File 1040nr ez Monthly schedule example. File 1040nr ez   Spruce Co. File 1040nr ez is a monthly schedule depositor with seasonal employees. File 1040nr ez It paid wages each Friday during August but did not pay any wages during September. File 1040nr ez Under the monthly deposit schedule, Spruce Co. File 1040nr ez must deposit the combined tax liabilities for the four August paydays by September 15. File 1040nr ez Spruce Co. File 1040nr ez does not have a deposit requirement for September (due by October 15) because no wages were paid and, therefore, it did not have a tax liability for September. File 1040nr ez Semiweekly schedule example. File 1040nr ez   Green, Inc. File 1040nr ez is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. File 1040nr ez Although Green, Inc. File 1040nr ez , has a semiweekly deposit schedule, it will deposit just once a month because it pays wages only once a month. File 1040nr ez The deposit, however, will be made under the semiweekly deposit schedule as follows: Green, Inc. File 1040nr ez ’s tax liability for the April 25, 2014 (Friday), payday must be deposited by April 30, 2014 (Wednesday). File 1040nr ez Under the semiweekly deposit schedule, liabilities for wages paid on Wednesday through Friday must be deposited by the following Wednesday. File 1040nr ez $100,000 Next-Day Deposit Rule If you accumulate taxes of $100,000 or more on any day during a deposit period, you must deposit by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. File 1040nr ez For purposes of the $100,000 rule, do not continue accumulating taxes after the end of a deposit period. File 1040nr ez For example, if a semiweekly schedule depositor has accumulated taxes of $95,000 on Tuesday and $10,000 on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. File 1040nr ez Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. File 1040nr ez 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. File 1040nr ez For example, Fir Co. File 1040nr ez is a semiweekly schedule depositor. File 1040nr ez On Monday, Fir Co. File 1040nr ez accumulates taxes of $110,000 and must deposit on Tuesday, the next business day. File 1040nr ez On Tuesday, Fir Co. File 1040nr ez accumulates additional taxes of $30,000. File 1040nr ez Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. File 1040nr ez does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). File 1040nr ez If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day during a month, you become a semiweekly schedule depositor on the next day and remain so for the remainder of the calendar year and for the following calendar year. File 1040nr ez Example. File 1040nr ez   Elm, Inc. File 1040nr ez started its business on May 1, 2014. File 1040nr ez On May 8, it paid wages for the first time and accumulated a tax liability of $40,000. File 1040nr ez On Friday, May 9, Elm, Inc. File 1040nr ez paid wages and accumulated a liability of $60,000, making its accumulated Form 941-SS tax liability total $100,000. File 1040nr ez Elm, Inc. File 1040nr ez must deposit $100,000 by Monday, May 12, the next business day. File 1040nr ez Because this was the first year of its business, the tax liability for its lookback period is considered to be zero, and it would be a monthly schedule depositor based on the lookback rules. File 1040nr ez However, because Elm, Inc. File 1040nr ez accumulated $100,000 on May 9, it became a semiweekly schedule depositor on May 10. File 1040nr ez It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. File 1040nr ez Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. File 1040nr ez However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. File 1040nr ez Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited, and The deposit shortfall is paid or deposited by the shortfall makeup date as described below. File 1040nr ez Makeup date for deposit shortfall: Monthly schedule depositor. File 1040nr ez Deposit or pay the shortfall by the due date of your Form 941-SS, 944, or 943 for the period in which the shortfall occurred. File 1040nr ez You may pay the shortfall with your return even if the amount is $2,500 or more. File 1040nr ez Semiweekly schedule depositor. File 1040nr ez Deposit by the earlier of: The first Wednesday or Friday (whichever comes first) that comes on or after the 15th of the month following the month in which the shortfall occurred, or The return due date for the period in which the shortfall occurred. File 1040nr ez For example, if a semiweekly schedule depositor filing Form 941-SS has a deposit shortfall during July 2014, the shortfall makeup date is August 15, 2014 (Friday). File 1040nr ez However, if the shortfall occurred on the required April 2 (Wednesday), deposit date for a March 28 (Friday) pay date, the return due date for the March 28 pay date (April 30) would come before the May 16 (Friday) shortfall makeup date. File 1040nr ez In this case, the shortfall must be deposited by April 30, 2014. File 1040nr ez 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-SS or 944 taxes). File 1040nr ez Form 943 taxes and Form 941-SS (or Form 944) taxes are not combined for purposes of applying any of the deposit rules. File 1040nr ez If a deposit is due, deposit the Form 941-SS (or Form 944) taxes and Form 943 taxes separately, as discussed next. File 1040nr ez How To Deposit You must deposit employment taxes by electronic funds transfer. File 1040nr ez See Payment with Return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. File 1040nr ez Electronic deposit requirement. File 1040nr ez   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). File 1040nr ez Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). File 1040nr ez 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. File 1040nr ez   EFTPS is a free service provided by the Department of the Treasury. File 1040nr ez To get more information or to enroll in EFTPS, call 1-800-555-4477 (U. File 1040nr ez S. File 1040nr ez Virgin Islands only) or 303-967-5916 (toll call). File 1040nr ez You can also visit the EFTPS website at www. File 1040nr ez eftps. File 1040nr ez gov. File 1040nr ez Additional information about EFTPS is also available in Publication 966. File 1040nr ez When you receive your EIN. File 1040nr ez   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in EFTPS. File 1040nr ez You will receive information about Express Enrollment in your Employer Identification Number (EIN) Package and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. File 1040nr ez Follow the steps in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your payroll tax deposits. File 1040nr ez 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. File 1040nr ez Deposit record. File 1040nr ez   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. File 1040nr ez The number can be used as a receipt or to trace the payment. File 1040nr ez Depositing on time. File 1040nr ez   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. File 1040nr ez m. File 1040nr ez Eastern time the day before the date the deposit is due. File 1040nr ez If you use a third party to make deposits on your behalf, they may have different cutoff times. File 1040nr ez Same-day payment option. File 1040nr ez   If you fail to initiate a deposit transaction on EFTPS by 8 p. File 1040nr ez m. File 1040nr ez 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). File 1040nr ez To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. File 1040nr ez Please check with your financial institution regarding availability, deadlines, and costs. File 1040nr ez Your financial institution may charge you a fee for payments made this way. File 1040nr ez To learn more about the information you will need to provide your financial institution to make a same-day wire payment, please visit www. File 1040nr ez eftps. File 1040nr ez gov to download the Same-Day Payment Worksheet. File 1040nr ez How to claim credit for overpayments. File 1040nr ez   If you deposited more than the right amount of taxes for a tax period, you can choose on Form 941-SS, 941, 944, or 943 for that tax period to have the overpayment refunded or applied as a credit to your next return. File 1040nr ez Do not ask EFTPS to request a refund from the IRS for you. File 1040nr ez Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits of less than the required amount. File 1040nr ez 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. File 1040nr ez The IRS may also waive 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. File 1040nr ez For amounts not properly or timely deposited, the penalty rates are as follows. File 1040nr ez 2% - Deposits made 1 to 5 days late. File 1040nr ez 5% - Deposits made 6 to 15 days late. File 1040nr ez 10% - Deposits made 16 or more days late. File 1040nr ez Also applies to amounts paid within 10 days of the date of the first notice that the IRS sent asking for the tax due. File 1040nr ez 10% - Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return (but see Payment with Return , earlier in this section, for exceptions). File 1040nr ez 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. File 1040nr ez Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. File 1040nr ez Special rule for former Form 944 filers. File 1040nr ez    If you filed Form 944 for the prior year and must file Forms 941-SS for the current year because your employment tax liability for the prior year exceeded the Form 944 eligibility requirement ($1,000 or less), the failure-to-deposit penalty will not apply to a late deposit of employment taxes for the first month of the current year if the taxes are deposited in full by March 15 of the current year. File 1040nr ez Order in which deposits are applied. File 1040nr ez   Deposits generally are applied to the most recent tax liability within the return period (quarter or year). File 1040nr ez However, if you receive a failure-to-deposit penalty notice, you may designate how your payment is 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. File 1040nr ez Follow the instructions on the penalty notice that you received. File 1040nr ez For more information on designating deposits, see Revenue Procedure 2001-58. File 1040nr ez You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. File 1040nr ez irs. File 1040nr ez gov/pub/irs-irbs/irb01-50. File 1040nr ez pdf. File 1040nr ez Example. File 1040nr ez Cedar, Inc. File 1040nr ez is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. File 1040nr ez It does not make the deposit on July 15. File 1040nr ez On August 15, Cedar, Inc. File 1040nr ez deposits $2,000. File 1040nr ez 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. File 1040nr ez Accordingly, $500 of the July 15 liability remains undeposited. File 1040nr ez The penalty on this underdeposit will apply as explained earlier. File 1040nr ez Trust fund recovery penalty. File 1040nr ez   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. File 1040nr ez The penalty is the full amount of the unpaid trust fund tax. File 1040nr ez This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. File 1040nr ez   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. File 1040nr ez   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, or any other person or entity that is responsible for collecting, accounting for, and paying over trust fund taxes. File 1040nr ez A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. File 1040nr ez    Willfully means voluntarily, consciously, and intentionally. File 1040nr ez A responsible person acts willfully if the person knows 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. File 1040nr ez “Averaged” failure-to-deposit penalty. File 1040nr ez   The IRS may assess an “averaged” failure-to-deposit (FTD) penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 941-SS, line 14, when your tax liability shown on Form 941-SS, line 10, was $2,500 or more. File 1040nr ez IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 941-SS, line 10, was $2,500 or more and you did any of the following. File 1040nr ez Completed Form 941-SS, line 14, instead of Schedule B (Form 941). File 1040nr ez Failed to attach a properly completed Schedule B (Form 941). File 1040nr ez Completed Schedule B (Form 941) incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. File 1040nr ez   The IRS figures the penalty by allocating your total tax liability shown on Form 941-SS, line 10, equally throughout the tax period. File 1040nr ez Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. File 1040nr ez   You can avoid the penalty by reviewing your return before filing it. File 1040nr ez Follow these steps before filing your Form 941-SS. File 1040nr ez If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 941-SS, line 14. File 1040nr ez If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Schedule B (Form 941) in the lines that represent the dates you paid your employees. File 1040nr ez Verify that your total liability shown on Form 941-SS, line 14, or the bottom of Schedule B (Form 941) equals your tax liability shown on Form 941-SS,  line 10. File 1040nr ez Do not show negative amounts on Form 941-SS, line 14, or Schedule B (Form 941). File 1040nr ez For prior period errors, do not adjust your tax liabilities reported on your current Form 941-SS, line 14, or on Schedule B (Form 941). File 1040nr ez Instead, file an adjusted return (Form 941-X (if you are adjusting a previously filed Form 941-SS) or Form 944-X (if you are adjusting a previously filed Form 944-SS or 944)) if you are also adjusting your tax liability. File 1040nr ez If you are only adjusting your deposits in response to a failure-to-deposit penalty notice, see the Instructions for Schedule B (Form 941) (if you previously filed Form 941-SS) or the Instructions for Form 944-X (if you previously filed Form 944-SS or 944). File 1040nr ez If you filed Form 944 for 2013 and line 7 was $2,500 or more, you were required to complete Form 944, lines 13a–13m, or attach Form 945-A, Annual Record of Federal Tax Liability. File 1040nr ez If you failed to complete lines 13a–13m, or failed to attach Form 945-A, whichever was required, IRS may assess an “averaged” failure-to-deposit (FTD) penalty. File 1040nr ez 9. File 1040nr ez Employer's Returns General instructions. File 1040nr ez   File Forms 941-SS (or Form 944) for nonfarm workers and Form 943 for farmworkers. File 1040nr ez (U. File 1040nr ez S. File 1040nr ez Virgin Islands employers may be required to file Form 940 for the combined wages of nonfarm workers and farmworkers. File 1040nr ez ) Employers with employees subject to U. File 1040nr ez S. File 1040nr ez income tax withholding. File 1040nr ez   If you have both employees who are subject to U. File 1040nr ez S. File 1040nr ez income tax withholding and employees who are not subject to U. File 1040nr ez S. File 1040nr ez income tax withholding, you must file only Form 941 (or Form 944) and include all your employees’ wages on that form. File 1040nr ez Nonfarm employers. File 1040nr ez   File Form 941-SS for the calendar quarter in which you first pay wages for nonfarm workers and for each quarter thereafter unless you are a seasonal employer or file a final return. File 1040nr ez Due dates for each quarter of the calendar year are as follows. File 1040nr ez Quarter Due Jan. File 1040nr ez , Feb. File 1040nr ez , Mar. File 1040nr ez Apr. File 1040nr ez 30 Apr. File 1040nr ez , May, June July 31 July, Aug. File 1040nr ez , Sept. File 1040nr ez Oct. File 1040nr ez 31 Oct. File 1040nr ez , Nov. File 1040nr ez , Dec. File 1040nr ez Jan. File 1040nr ez 31   However, if you deposited all taxes when due for the quarter, you have 10 additional days from the due dates to file the return. File 1040nr ez If the due date for filing your return falls on a Saturday, Sunday, or legal holiday, you may file on the next business day. File 1040nr ez   If you closed your business or stopped paying wages and do not have to file returns in the future, check the box on line 15 of your final Form 941-SS and show the date final wages were paid. File 1040nr ez Form 944. File 1040nr ez   If IRS notified you to file Form 944, file your 2013 Form 944 by January 31, 2014, or by February 10, 2014 (if you deposited all taxes when due). File 1040nr ez Household employers reporting social security and Medicare taxes. File 1040nr ez   If you are a sole proprietor and file Forms 941-SS (or Form 944) for business employees, you may include taxes for household employees on your Forms 941-SS (or Form 944). File 1040nr ez Otherwise, report social security and Medicare taxes for household employees on Schedule H (Form 1040), Household Employment Taxes. File 1040nr ez See Publication 926, Household Employer's Tax Guide, for more information. File 1040nr ez Employers of farmworkers. File 1040nr ez   Every employer of farmworkers must file a Form 943 for each calendar year beginning with the first year the employer pays $2,500 or more for farmwork or employs a farmworker who meets the $150 test described in section 6. File 1040nr ez   File a Form 943 each year for all taxable wages paid for farmwork. File 1040nr ez You may report household workers in a private home on a farm operated for profit on Form 943. File 1040nr ez Do not report wages for farmworkers on Form 941-SS or 944. File 1040nr ez   Send Form 943 to the IRS by January 31 of the following year. File 1040nr ez Send it with payment of any taxes due that you are not required to deposit. File 1040nr ez If you deposited all taxes when due, you have 10 additional days to file. File 1040nr ez Penalties. File 1040nr ez   For each whole or part month that a return is not filed when required (disregarding any extensions of the filing deadline), there is a failure-to-file penalty of 5% of the unpaid tax due with that return. File 1040nr ez The maximum penalty is generally 25% of the tax due. File 1040nr ez Also, for each whole or part month that the tax is paid late (disregarding any extensions of the payment deadline), there is a failure-to-pay penalty of 0. File 1040nr ez 5% per month of the amount of tax. File 1040nr ez For individual filers only, the failure-to-pay penalty is reduced from 0. File 1040nr ez 5% per month to 0. File 1040nr ez 25% per month if an installment agreement is in effect. File 1040nr ez You must have filed your return on or before the due date of the return to qualify for the reduced penalty. File 1040nr ez The maximum amount of the failure-to-pay penalty is also 25% of the tax due. File 1040nr ez If both penalties apply in any month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty. File 1040nr ez The penalties will not be charged if you have a reasonable cause for failing to file or pay. File 1040nr ez If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists. File 1040nr ez Reporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Make current period adjustments for fractions of cents, sick pay, tips, and group-term life insurance on your Form 941-SS, 944, or 943. File 1040nr ez See the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943 for information on how to report these adjustments. File 1040nr ez Prior Period Adjustments Forms for prior period adjustments. File 1040nr ez   Use Form 941-X or Form 944-X to make a correction after you discover an error on a previously filed Form 941 or Form 944. File 1040nr ez There are also Forms 943-X, 945-X, and CT-1X to report corrections on the corresponding returns. File 1040nr ez Form 941-X and Form 944-X also replace Form 843, Claim for Refund and Request for Abatement, for employers to request a refund or abatement of overreported employment taxes. File 1040nr ez Continue to use Form 843 when requesting a refund or abatement of assessed interest or penalties. File 1040nr ez See Revenue Ruling 2009-39, 2009-52 I. File 1040nr ez R. File 1040nr ez B. File 1040nr ez 951, for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. File 1040nr ez You can find Revenue Ruling 2009-39, at www. File 1040nr ez irs. File 1040nr ez gov/irb/2009-52_IRB/ar14. File 1040nr ez html. File 1040nr ez Background. File 1040nr ez   Treasury Decision 9405 changed the process for making interest-free adjustments to employment taxes reported on Forms 941-SS, 943, 944-SS, and 944, and for filing a claim for refund of employment taxes. File 1040nr ez Treasury Decision 9405, 2008-32 I. File 1040nr ez R. File 1040nr ez B. File 1040nr ez 293, is available at www. File 1040nr ez irs. File 1040nr ez gov/irb/2008-32_IRB/ar13. File 1040nr ez html. File 1040nr ez You will use the adjustment process if you underreported employment taxes and are making a payment, or if you overreported employment taxes and will be applying the credit to the Form 941-SS, 943, or 944 period during which you file Forms 941-X, 943-X, or 944-X, respectively. File 1040nr ez You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. File 1040nr ez We use the terms “correct” and “corrections” to include interest-free adjustments under sections 6205 and 6413, and claims for refund and abatement under sections 6402, 6414, and 6404 of the Internal Revenue Code. File 1040nr ez Correcting employment taxes. File 1040nr ez   When you discover an error on a previously filed Form 941-SS, 943, 944-SS, or 944, you must: Correct that error using Form 941-X, Form 943-X, or Form 944-X, File a separate Form 941-X, Form 943-X, or Form 944-X for
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Office of the Attorney General

Website: Office of the Attorney General

Address: Office of the Attorney General
Consumer Services Division
1400 Bremer Tower
445 Minnesota St.
St. Paul, MN 55101

Phone Number: 651-296-3353

Toll-free: 1-800-657-3787 (MN)

TTY: 651-297-7206 or 1-800-366-4812

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City Consumer Protection Offices

Minneapolis Department of Regulatory Services

Website: Minneapolis Department of Regulatory Services

Address: Minneapolis Department of Regulatory Services
Business Licenses & Consumer Services
City Hall, Room 1C
350 S. 5th St.
Minneapolis, MN 55415

Phone Number: 612-673-2080

TTY: 612-673-2157

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Commerce

Website: Department of Commerce

Address: Department of Commerce
Financial Institutions Division
85 7th Pl. E, Suite 500
St. Paul, MN 55101

Phone Number: 651-296-2488

Toll-free: 1-800-657-3602

TTY: 651-296-2860

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Commerce

Website: Department of Commerce

Address: Department of Commerce
Insurance Division
85 7th Place E
Suite 500
St. Paul, MN 55101

Phone Number: 651-296-4026

Toll-free: 1-800-657-3602 (MN)

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Department of Commerce

Website: Department of Commerce

Address: Department of Commerce
Securities Unit
Consumer Protection and Education

85 7th Pl. E, Suite 500
St. Paul, MN 55101

Phone Number: 651-296-4973 (Securities) 651-296-2488 (Consumer Protection)

Toll-free: 1-800-657-3602 (MN)

TTY: 651-296-2860

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Public Utilities Commission

Website: Public Utilities Commission

Address: Public Utilities Commission
Consumer Affairs Office
121 7th Pl. E, Suite 350
St. Paul, MN 55101-2147

Phone Number: 651-296-0406

Toll-free: 1-800-657-3782

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The File 1040nr Ez

File 1040nr ez Publication 946 - Additional Material Table of Contents Appendix B — Table of Class Lives and Recovery PeriodsHow To Use the Tables This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Appendix A Please click here for the text description of the image. File 1040nr ez Table A-1 and A-2 Please click here for the text description of the image. File 1040nr ez Table A-3 and A-4 Please click here for the text description of the image. File 1040nr ez Table A-5 and A-6 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-7 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-8 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-8 (continued) This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-9 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-9 (continued) This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-10 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A–10 (continued) This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-11 Please click here for the text description of the image. File 1040nr ez Table A-11 (continued) This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-12 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-12 (continued) This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-13, A-14 and A-14 (continued. File 1040nr ez 1) Please click here for the text description of the image. File 1040nr ez Table A-14 (continued. File 1040nr ez 2) Please click here for the text description of the image. File 1040nr ez Table A-15 Please click here for the text description of the image. File 1040nr ez Table A-15 (continued) Please click here for the text description of the image. File 1040nr ez Table A-16 Please click here for the text description of the image. File 1040nr ez Table A-16 (continued) This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-17 Please click here for the text description of the image. File 1040nr ez Table A-17 (continued) Please click here for the text description of the image. File 1040nr ez Table A-18 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-18 (continued) This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table A-19 and Table A-20 Please click here for the text description of the image. File 1040nr ez Quality Indian Reservation Property Tables Please click here for the text description of the image. File 1040nr ez Qualified Indian Reservation Property Tables 2 Appendix B — Table of Class Lives and Recovery Periods The Table of Class Lives and Recovery Periods has two sections. File 1040nr ez The first section, Specific Depreciable Assets Used In All Business Activities, Except As Noted, generally lists assets used in all business activities. File 1040nr ez It is shown as Table B-1. File 1040nr ez The second section, Depreciable Assets Used In The Following Activities, describes assets used only in certain activities. File 1040nr ez It is shown as Table B-2. File 1040nr ez How To Use the Tables You will need to look at both Table B-1 and B-2 to find the correct recovery period. File 1040nr ez Generally, if the property is listed in Table B-1 you use the recovery period shown in that table. File 1040nr ez However, if the property is specifically listed in Table B-2 under the type of activity in which it is used, you use the recovery period listed under the activity in that table. File 1040nr ez Use the tables in the order shown below to determine the recovery period of your depreciable property. File 1040nr ez Table B-1. File 1040nr ez   Check Table B-1 for a description of the property. File 1040nr ez If it is described in Table B-1, also check Table B-2 to find the activity in which the property is being used. File 1040nr ez If the activity is described in Table B-2, read the text (if any) under the title to determine if the property is specifically included in that asset class. File 1040nr ez If it is, use the recovery period shown in the appropriate column of Table B-2 following the description of the activity. File 1040nr ez If the activity is not described in Table B-2 or if the activity is described but the property either is not specifically included in or is specifically excluded from that asset class, then use the recovery period shown in the appropriate column following the description of the property in Table B-1. File 1040nr ez Tax-exempt use property subject to a lease. File 1040nr ez   The recovery period for ADS cannot be less than 125 percent of the lease term for any property leased under a leasing arrangement to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership). File 1040nr ez Table B-2. File 1040nr ez   If the property is not listed in Table B-1, check Table B-2 to find the activity in which the property is being used and use the recovery period shown in the appropriate column following the description. File 1040nr ez Property not in either table. File 1040nr ez   If the activity or the property is not included in either table, check the end of Table B-2 to find Certain Property for Which Recovery Periods Assigned. File 1040nr ez This property generally has a recovery period of 7 years for GDS or 12 years for ADS. File 1040nr ez See Which Property Class Applies Under GDS and Which Recovery Period Applies in chapter 4 for the class lives or the recovery periods for GDS and ADS for the following. File 1040nr ez Residential rental property and nonresidential real property (also see Appendix A, Chart 2). File 1040nr ez Qualified rent-to-own property. File 1040nr ez A motorsport entertainment complex placed in service before January 1, 2014. File 1040nr ez Any retail motor fuels outlet. File 1040nr ez Any qualified leasehold improvement property placed in service before January 1, 2014. File 1040nr ez Any qualified restaurant property placed in service before January 1, 2014. File 1040nr ez Initial clearing and grading land improvements for gas utility property and electric utility transmission and distribution plants. File 1040nr ez Any water utility property. File 1040nr ez Certain electric transmission property used in the transmission at 69 or more kilovolts of electricity for sale and placed in service after April 11, 2005. File 1040nr ez Natural gas gathering and distribution lines placed in service after April 11, 2005. File 1040nr ez Example 1. File 1040nr ez Richard Green is a paper manufacturer. File 1040nr ez During the year, he made substantial improvements to the land on which his paper plant is located. File 1040nr ez He checks Table B-1 and finds land improvements under asset class 00. File 1040nr ez 3. File 1040nr ez He then checks Table B-2 and finds his activity, paper manufacturing, under asset class 26. File 1040nr ez 1, Manufacture of Pulp and Paper. File 1040nr ez He uses the recovery period under this asset class because it specifically includes land improvements. File 1040nr ez The land improvements have a 13-year class life and a 7-year recovery period for GDS. File 1040nr ez If he elects to use ADS, the recovery period is 13 years. File 1040nr ez If Richard only looked at Table B-1, he would select asset class 00. File 1040nr ez 3, Land Improvements, and incorrectly use a recovery period of 15 years for GDS or 20 years for ADS. File 1040nr ez Example 2. File 1040nr ez Sam Plower produces rubber products. File 1040nr ez During the year, he made substantial improvements to the land on which his rubber plant is located. File 1040nr ez He checks Table B-1 and finds land improvements under asset class 00. File 1040nr ez 3. File 1040nr ez He then checks Table B-2 and finds his activity, producing rubber products, under asset class 30. File 1040nr ez 1, Manufacture of Rubber Products. File 1040nr ez Reading the headings and descriptions under asset class 30. File 1040nr ez 1, Sam finds that it does not include land improvements. File 1040nr ez Therefore, Sam uses the recovery period under asset class 00. File 1040nr ez 3. File 1040nr ez The land improvements have a 20-year class life and a 15-year recovery period for GDS. File 1040nr ez If he elects to use ADS, the recovery period is 20 years. File 1040nr ez Example 3. File 1040nr ez Pam Martin owns a retail clothing store. File 1040nr ez During the year, she purchased a desk and a cash register for use in her business. File 1040nr ez She checks Table B-1 and finds office furniture under asset class 00. File 1040nr ez 11. File 1040nr ez Cash registers are not listed in any of the asset classes in Table B-1. File 1040nr ez She then checks Table B-2 and finds her activity, retail store, under asset class 57. File 1040nr ez 0, Distributive Trades and Services, which includes assets used in wholesale and retail trade. File 1040nr ez This asset class does not specifically list office furniture or a cash register. File 1040nr ez She looks back at Table B-1 and uses asset class 00. File 1040nr ez 11 for the desk. File 1040nr ez The desk has a 10-year class life and a 7-year recovery period for GDS. File 1040nr ez If she elects to use ADS, the recovery period is 10 years. File 1040nr ez For the cash register, she uses asset class 57. File 1040nr ez 0 because cash registers are not listed in Table B-1 but it is an asset used in her retail business. File 1040nr ez The cash register has a 9-year class life and a 5-year recovery period for GDS. File 1040nr ez If she elects to use the ADS method, the recovery period is 9 years. File 1040nr ez This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-1 Please click here for the text description of the image. File 1040nr ez Table B-2 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-2 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-2 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-2 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-2 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-2 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-2 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-2 This image is too large to be displayed in the current screen. File 1040nr ez Please click the link to view the image. File 1040nr ez Table B-2 Tax Publications for Business Taxpayers Prev  Up  Next   Home   More Online Publications