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Fill 1040x form online Publication 15-B - Main Content Table of Contents 1. Fill 1040x form online Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. Fill 1040x form online Fringe Benefit Exclusion RulesAccident and Health Benefits Achievement Awards Adoption Assistance Athletic Facilities De Minimis (Minimal) Benefits Dependent Care Assistance Educational Assistance Employee Discounts Employee Stock Options Employer-Provided Cell Phones Group-Term Life Insurance Coverage Health Savings Accounts Lodging on Your Business Premises Meals Moving Expense Reimbursements No-Additional-Cost Services Retirement Planning Services Transportation (Commuting) Benefits Tuition Reduction Working Condition Benefits 3. Fill 1040x form online Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. Fill 1040x form online Rules for Withholding, Depositing, and ReportingTransfer of property. Fill 1040x form online Amount of deposit. Fill 1040x form online Limitation. Fill 1040x form online Conformity rules. Fill 1040x form online Election not to withhold income tax. Fill 1040x form online How To Get Tax Help 1. Fill 1040x form online Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. Fill 1040x form online For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. Fill 1040x form online Performance of services. Fill 1040x form online   A person who performs services for you does not have to be your employee. Fill 1040x form online A person may perform services for you as an independent contractor, partner, or director. Fill 1040x form online Also, for fringe benefit purposes, treat a person who agrees not to perform services (such as under a covenant not to compete) as performing services. Fill 1040x form online Provider of benefit. Fill 1040x form online   You are the provider of a fringe benefit if it is provided for services performed for you. Fill 1040x form online You are considered the provider of a fringe benefit even if a third party, such as your client or customer, provides the benefit to your employee for services the employee performs for you. Fill 1040x form online For example, if, in exchange for goods or services, your customer provides day care services as a fringe benefit to your employees for services they provide for you as their employer, then you are the provider of this fringe benefit even though the customer is actually providing the day care. Fill 1040x form online Recipient of benefit. Fill 1040x form online   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. Fill 1040x form online That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. Fill 1040x form online For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. Fill 1040x form online Are Fringe Benefits Taxable? Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. Fill 1040x form online Section 2 discusses the exclusions that apply to certain fringe benefits. Fill 1040x form online Any benefit not excluded under the rules discussed in section 2 is taxable. Fill 1040x form online Including taxable benefits in pay. Fill 1040x form online   You must include in a recipient's pay the amount by which the value of a fringe benefit is more than the sum of the following amounts. Fill 1040x form online Any amount the law excludes from pay. Fill 1040x form online Any amount the recipient paid for the benefit. Fill 1040x form online The rules used to determine the value of a fringe benefit are discussed in section 3. Fill 1040x form online   If the recipient of a taxable fringe benefit is your employee, the benefit is subject to employment taxes and must be reported on Form W-2, Wage and Tax Statement. Fill 1040x form online However, you can use special rules to withhold, deposit, and report the employment taxes. Fill 1040x form online These rules are discussed in section 4. Fill 1040x form online   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. Fill 1040x form online However, you may have to report the benefit on one of the following information returns. Fill 1040x form online If the recipient receives the benefit as: Use: An independent contractor Form 1099-MISC, Miscellaneous Income A partner Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Fill 1040x form online For more information, see the instructions for the forms listed above. Fill 1040x form online Cafeteria Plans A cafeteria plan, including a flexible spending arrangement, is a written plan that allows your employees to choose between receiving cash or taxable benefits instead of certain qualified benefits for which the law provides an exclusion from wages. Fill 1040x form online If an employee chooses to receive a qualified benefit under the plan, the fact that the employee could have received cash or a taxable benefit instead will not make the qualified benefit taxable. Fill 1040x form online Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. Fill 1040x form online However, a cafeteria plan can include a qualified 401(k) plan as a benefit. Fill 1040x form online Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. Fill 1040x form online Qualified benefits. Fill 1040x form online   A cafeteria plan can include the following benefits discussed in section 2. Fill 1040x form online Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). Fill 1040x form online Adoption assistance. Fill 1040x form online Dependent care assistance. Fill 1040x form online Group-term life insurance coverage (including costs that cannot be excluded from wages). Fill 1040x form online Health savings accounts (HSAs). Fill 1040x form online Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. Fill 1040x form online Benefits not allowed. Fill 1040x form online   A cafeteria plan cannot include the following benefits discussed in section 2. Fill 1040x form online Archer MSAs. Fill 1040x form online See Accident and Health Benefits in section 2. Fill 1040x form online Athletic facilities. Fill 1040x form online De minimis (minimal) benefits. Fill 1040x form online Educational assistance. Fill 1040x form online Employee discounts. Fill 1040x form online Employer-provided cell phones. Fill 1040x form online Lodging on your business premises. Fill 1040x form online Meals. Fill 1040x form online Moving expense reimbursements. Fill 1040x form online No-additional-cost services. Fill 1040x form online Transportation (commuting) benefits. Fill 1040x form online Tuition reduction. Fill 1040x form online Working condition benefits. Fill 1040x form online It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). Fill 1040x form online $2,500 limit on a health flexible spending arrangement (FSA). Fill 1040x form online   For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. Fill 1040x form online For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. Fill 1040x form online   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). Fill 1040x form online While cafeteria plans generally must be amended on a prospective basis, an amendment that is adopted on or before December 31, 2014, may be made effective retroactively, provided that in operation the cafeteria plan meets the limit for plan years beginning after December 31, 2012. Fill 1040x form online A cafeteria plan that does not limit health FSA contributions to the dollar limit is not a cafeteria plan and all benefits offered under the plan are includible in the employee's gross income. Fill 1040x form online   For more information, see Notice 2012-40, 2012-26 I. Fill 1040x form online R. Fill 1040x form online B. Fill 1040x form online 1046, available at www. Fill 1040x form online irs. Fill 1040x form online gov/irb/2012-26_IRB/ar09. Fill 1040x form online html. Fill 1040x form online Employee. Fill 1040x form online   For these plans, treat the following individuals as employees. Fill 1040x form online A current common-law employee. Fill 1040x form online See section 2 in Publication 15 (Circular E) for more information. Fill 1040x form online A full-time life insurance agent who is a current statutory employee. Fill 1040x form online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Fill 1040x form online Exception for S corporation shareholders. Fill 1040x form online   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Fill 1040x form online A 2% shareholder for this purpose is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Fill 1040x form online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Fill 1040x form online Plans that favor highly compensated employees. Fill 1040x form online   If your plan favors highly compensated employees as to eligibility to participate, contributions, or benefits, you must include in their wages the value of taxable benefits they could have selected. Fill 1040x form online A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. Fill 1040x form online   A highly compensated employee for this purpose is any of the following employees. Fill 1040x form online An officer. Fill 1040x form online A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. Fill 1040x form online An employee who is highly compensated based on the facts and circumstances. Fill 1040x form online A spouse or dependent of a person described in (1), (2), or (3). Fill 1040x form online Plans that favor key employees. Fill 1040x form online   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. Fill 1040x form online A plan favors key employees if more than 25% of the total of the nontaxable benefits you provide for all employees under the plan go to key employees. Fill 1040x form online However, a plan you maintain under a collective bargaining agreement does not favor key employees. Fill 1040x form online   A key employee during 2014 is generally an employee who is either of the following. Fill 1040x form online An officer having annual pay of more than $170,000. Fill 1040x form online An employee who for 2014 is either of the following. Fill 1040x form online A 5% owner of your business. Fill 1040x form online A 1% owner of your business whose annual pay was more than $150,000. Fill 1040x form online Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. Fill 1040x form online Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. Fill 1040x form online Eligible employer. Fill 1040x form online   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. Fill 1040x form online If your business was not in existence throughout the preceding year, you are eligible if you reasonably expect to employ an average of 100 or fewer employees in the current year. Fill 1040x form online If you establish a simple cafeteria plan in a year that you employ an average of 100 or fewer employees, you are considered an eligible employer for any subsequent year as long as you do not employ an average of 200 or more employees in a subsequent year. Fill 1040x form online Eligibility and participation requirements. Fill 1040x form online   These requirements are met if all employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate and each employee eligible to participate in the plan may elect any benefit available under the plan. Fill 1040x form online You may elect to exclude from the plan employees who: Are under age 21 before the close of the plan year, Have less than 1 year of service with you as of any day during the plan year, Are covered under a collective bargaining agreement, or Are nonresident aliens working outside the United States whose income did not come from a U. Fill 1040x form online S. Fill 1040x form online source. Fill 1040x form online Contribution requirements. Fill 1040x form online   You must make a contribution to provide qualified benefits on behalf of each qualified employee in an amount equal to: A uniform percentage (not less than 2%) of the employee’s compensation for the plan year, or An amount which is at least 6% of the employee’s compensation for the plan year or twice the amount of the salary reduction contributions of each qualified employee, whichever is less. Fill 1040x form online If the contribution requirements are met using option (2), the rate of contribution to any salary reduction contribution of a highly compensated or key employee can not be greater than the rate of contribution to any other employee. Fill 1040x form online More information. Fill 1040x form online   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. Fill 1040x form online 2. Fill 1040x form online Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. Fill 1040x form online These rules exclude all or part of the value of certain benefits from the recipient's pay. Fill 1040x form online The excluded benefits are not subject to federal income tax withholding. Fill 1040x form online Also, in most cases, they are not subject to social security, Medicare, or federal unemployment (FUTA) tax and are not reported on Form W-2. Fill 1040x form online This section discusses the exclusion rules for the following fringe benefits. Fill 1040x form online Accident and health benefits. Fill 1040x form online Achievement awards. Fill 1040x form online Adoption assistance. Fill 1040x form online Athletic facilities. Fill 1040x form online De minimis (minimal) benefits. Fill 1040x form online Dependent care assistance. Fill 1040x form online Educational assistance. Fill 1040x form online Employee discounts. Fill 1040x form online Employee stock options. Fill 1040x form online Employer-provided cell phones. Fill 1040x form online Group-term life insurance coverage. Fill 1040x form online Health savings accounts (HSAs). Fill 1040x form online Lodging on your business premises. Fill 1040x form online Meals. Fill 1040x form online Moving expense reimbursements. Fill 1040x form online No-additional-cost services. Fill 1040x form online Retirement planning services. Fill 1040x form online Transportation (commuting) benefits. Fill 1040x form online Tuition reduction. Fill 1040x form online Working condition benefits. Fill 1040x form online See Table 2-1, later, for an overview of the employment tax treatment of these benefits. Fill 1040x form online Table 2-1. Fill 1040x form online Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. Fill 1040x form online ) Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare (including Additional Medicare Tax when wages are paid in excess of $200,000) Federal Unemployment (FUTA) Accident and health benefits Exempt1,2, except for long-term care benefits provided through a flexible spending or similar arrangement. Fill 1040x form online Exempt, except for certain payments to S corporation employees who are 2% shareholders. Fill 1040x form online Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). Fill 1040x form online Adoption assistance Exempt1,3 Taxable Taxable Athletic facilities Exempt if substantially all use during the calendar year is by employees, their spouses, and their dependent children and the facility is operated by the employer on premises owned or leased by the employer. Fill 1040x form online De minimis (minimal) benefits Exempt Exempt Exempt Dependent care assistance Exempt3 up to certain limits, $5,000 ($2,500 for married employee filing separate return). Fill 1040x form online Educational assistance Exempt up to $5,250 of benefits each year. Fill 1040x form online (See Educational Assistance , later in this section. Fill 1040x form online ) Employee discounts Exempt3 up to certain limits. Fill 1040x form online (See Employee Discounts , later in this section. Fill 1040x form online ) Employee stock options See Employee Stock Options , later in this section. Fill 1040x form online Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. Fill 1040x form online Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. Fill 1040x form online (Special rules apply to former employees. Fill 1040x form online ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. Fill 1040x form online (See Health Savings Accounts , later in this section. Fill 1040x form online ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. Fill 1040x form online Meals Exempt if furnished on your business premises for your convenience. Fill 1040x form online Exempt if de minimis. Fill 1040x form online Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. Fill 1040x form online No-additional-cost services Exempt3 Exempt3 Exempt3 Retirement planning services Exempt5 Exempt5 Exempt5 Transportation (commuting) benefits Exempt1 up to certain limits if for rides in a commuter highway vehicle and/or transit passes ($130), qualified parking ($250), or qualified bicycle commuting reimbursement6 ($20). Fill 1040x form online (See Transportation (Commuting) Benefits , later in this section. Fill 1040x form online ) Exempt if de minimis. Fill 1040x form online Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). Fill 1040x form online Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. Fill 1040x form online 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. Fill 1040x form online 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. Fill 1040x form online 4 Exemption does not apply to certain key employees under a plan that favors those employees. Fill 1040x form online 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. Fill 1040x form online 6 If the employee receives a qualified bicycle commuting reimbursement in a qualified bicycle commuting month, the employee cannot receive commuter highway vehicle, transit pass, or qualified parking benefits in that same month. Fill 1040x form online 7 You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. Fill 1040x form online Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Fill 1040x form online Also, show it in box 12 with code “C. Fill 1040x form online ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Fill 1040x form online Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. Fill 1040x form online Contributions to the cost of accident or health insurance including qualified long-term care insurance. Fill 1040x form online Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. Fill 1040x form online Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). Fill 1040x form online This exclusion also applies to payments you directly or indirectly make to an employee under an accident or health plan for employees that are either of the following. Fill 1040x form online Payments or reimbursements of medical expenses. Fill 1040x form online Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). Fill 1040x form online The payments must be figured without regard to any period of absence from work. Fill 1040x form online Accident or health plan. Fill 1040x form online   This is an arrangement that provides benefits for your employees, their spouses, their dependents, and their children (under age 27) in the event of personal injury or sickness. Fill 1040x form online The plan may be insured or noninsured and does not need to be in writing. Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat the following individuals as employees. Fill 1040x form online A current common-law employee. Fill 1040x form online A full-time life insurance agent who is a current statutory employee. Fill 1040x form online A retired employee. Fill 1040x form online A former employee you maintain coverage for based on the employment relationship. Fill 1040x form online A widow or widower of an individual who died while an employee. Fill 1040x form online A widow or widower of a retired employee. Fill 1040x form online For the exclusion of contributions to an accident or health plan, a leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Fill 1040x form online Special rule for certain government plans. Fill 1040x form online   For certain government accident and health plans, payments to a deceased plan participant's beneficiary may qualify for the exclusion from gross income if the other requirements for exclusion are met. Fill 1040x form online See section 105(j) for details. Fill 1040x form online Exception for S corporation shareholders. Fill 1040x form online   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Fill 1040x form online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Fill 1040x form online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Fill 1040x form online Exclusion from wages. Fill 1040x form online   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. Fill 1040x form online Exception for certain long-term care benefits. Fill 1040x form online   You cannot exclude contributions to the cost of long-term care insurance from an employee's wages subject to federal income tax withholding if the coverage is provided through a flexible spending or similar arrangement. Fill 1040x form online This is a benefit program that reimburses specified expenses up to a maximum amount that is reasonably available to the employee and is less than five times the total cost of the insurance. Fill 1040x form online However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Fill 1040x form online S corporation shareholders. Fill 1040x form online   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to federal income tax withholding. Fill 1040x form online However, you can exclude the value of these benefits (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. Fill 1040x form online Exception for highly compensated employees. Fill 1040x form online   If your plan is a self-insured medical reimbursement plan that favors highly compensated employees, you must include all or part of the amounts you pay to these employees in their wages subject to federal income tax withholding. Fill 1040x form online However, you can exclude these amounts (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. Fill 1040x form online   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. Fill 1040x form online   A highly compensated employee for this exception is any of the following individuals. Fill 1040x form online One of the five highest paid officers. Fill 1040x form online An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. Fill 1040x form online An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). Fill 1040x form online   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. Fill 1040x form online COBRA premiums. Fill 1040x form online   The exclusion for accident and health benefits applies to amounts you pay to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). Fill 1040x form online The exclusion applies regardless of the length of employment, whether you directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary. Fill 1040x form online Achievement Awards This exclusion applies to the value of any tangible personal property you give to an employee as an award for either length of service or safety achievement. Fill 1040x form online The exclusion does not apply to awards of cash, cash equivalents, gift certificates, or other intangible property such as vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, and other securities. Fill 1040x form online The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat the following individuals as employees. Fill 1040x form online A current employee. Fill 1040x form online A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. Fill 1040x form online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Fill 1040x form online Exception for S corporation shareholders. Fill 1040x form online   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Fill 1040x form online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Fill 1040x form online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Fill 1040x form online Exclusion from wages. Fill 1040x form online   You can generally exclude the value of achievement awards you give to an employee from the employee's wages if their cost is not more than the amount you can deduct as a business expense for the year. Fill 1040x form online The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). Fill 1040x form online See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. Fill 1040x form online    To determine for 2014 whether an achievement award is a “qualified plan award” under the deduction rules described in Publication 535, treat any employee who received more than $115,000 in pay for 2013 as a highly compensated employee. Fill 1040x form online   If the cost of awards given to an employee is more than your allowable deduction, include in the employee's wages the larger of the following amounts. Fill 1040x form online The part of the cost that is more than your allowable deduction (up to the value of the awards). Fill 1040x form online The amount by which the value of the awards exceeds your allowable deduction. Fill 1040x form online Exclude the remaining value of the awards from the employee's wages. Fill 1040x form online Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. Fill 1040x form online It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. Fill 1040x form online To determine whether your plan meets this test, do not consider employees excluded from your plan who are covered by a collective bargaining agreement, if there is evidence that adoption assistance was a subject of good-faith bargaining. Fill 1040x form online It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). Fill 1040x form online A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. Fill 1040x form online You give reasonable notice of the plan to eligible employees. Fill 1040x form online Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. Fill 1040x form online For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Fill 1040x form online The employee was a 5% owner at any time during the year or the preceding year. Fill 1040x form online The employee received more than $115,000 in pay for the preceding year. Fill 1040x form online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Fill 1040x form online You must exclude all payments or reimbursements you make under an adoption assistance program for an employee's qualified adoption expenses from the employee's wages subject to federal income tax withholding. Fill 1040x form online However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Fill 1040x form online For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. Fill 1040x form online You must report all qualifying adoption expenses you paid or reimbursed under your adoption assistance program for each employee for the year in box 12 of the employee's Form W-2. Fill 1040x form online Use code “T” to identify this amount. Fill 1040x form online Exception for S corporation shareholders. Fill 1040x form online   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Fill 1040x form online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Fill 1040x form online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, including using the benefit as a reduction in distributions to the 2% shareholder. Fill 1040x form online Athletic Facilities You can exclude the value of an employee's use of an on-premises gym or other athletic facility you operate from an employee's wages if substantially all use of the facility during the calendar year is by your employees, their spouses, and their dependent children. Fill 1040x form online For this purpose, an employee's dependent child is a child or stepchild who is the employee's dependent or who, if both parents are deceased, has not attained the age of 25. Fill 1040x form online On-premises facility. Fill 1040x form online   The athletic facility must be located on premises you own or lease. Fill 1040x form online It does not have to be located on your business premises. Fill 1040x form online However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat the following individuals as employees. Fill 1040x form online A current employee. Fill 1040x form online A former employee who retired or left on disability. Fill 1040x form online A widow or widower of an individual who died while an employee. Fill 1040x form online A widow or widower of a former employee who retired or left on disability. Fill 1040x form online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Fill 1040x form online A partner who performs services for a partnership. Fill 1040x form online De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. Fill 1040x form online A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. Fill 1040x form online Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare. Fill 1040x form online Examples of de minimis benefits include the following. Fill 1040x form online Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. Fill 1040x form online See Employer-Provided Cell Phones , later in this section, for details. Fill 1040x form online Occasional personal use of a company copying machine if you sufficiently control its use so that at least 85% of its use is for business purposes. Fill 1040x form online Holiday gifts, other than cash, with a low fair market value. Fill 1040x form online Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000. Fill 1040x form online Meals. Fill 1040x form online See Meals , later in this section, for details. Fill 1040x form online Occasional parties or picnics for employees and their guests. Fill 1040x form online Occasional tickets for theater or sporting events. Fill 1040x form online Transportation fare. Fill 1040x form online See Transportation (Commuting) Benefits , later in this section, for details. Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat any recipient of a de minimis benefit as an employee. Fill 1040x form online Dependent Care Assistance This exclusion applies to household and dependent care services you directly or indirectly pay for or provide to an employee under a dependent care assistance program that covers only your employees. Fill 1040x form online The services must be for a qualifying person's care and must be provided to allow the employee to work. Fill 1040x form online These requirements are basically the same as the tests the employee would have to meet to claim the dependent care credit if the employee paid for the services. Fill 1040x form online For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat the following individuals as employees. Fill 1040x form online A current employee. Fill 1040x form online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Fill 1040x form online Yourself (if you are a sole proprietor). Fill 1040x form online A partner who performs services for a partnership. Fill 1040x form online Exclusion from wages. Fill 1040x form online   You can exclude the value of benefits you provide to an employee under a dependent care assistance program from the employee's wages if you reasonably believe that the employee can exclude the benefits from gross income. Fill 1040x form online   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. Fill 1040x form online This limit is reduced to $2,500 for married employees filing separate returns. Fill 1040x form online   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. Fill 1040x form online Special rules apply to determine the earned income of a spouse who is either a student or not able to care for himself or herself. Fill 1040x form online For more information on the earned income limit, see Publication 503. Fill 1040x form online Exception for highly compensated employees. Fill 1040x form online   You cannot exclude dependent care assistance from the wages of a highly compensated employee unless the benefits provided under the program do not favor highly compensated employees and the program meets the requirements described in section 129(d) of the Internal Revenue Code. Fill 1040x form online   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Fill 1040x form online The employee was a 5% owner at any time during the year or the preceding year. Fill 1040x form online The employee received more than $115,000 in pay for the preceding year. Fill 1040x form online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Fill 1040x form online Form W-2. Fill 1040x form online   Report the value of all dependent care assistance you provide to an employee under a dependent care assistance program in box 10 of the employee's Form W-2. Fill 1040x form online Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. Fill 1040x form online Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. Fill 1040x form online Example. Fill 1040x form online   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. Fill 1040x form online In addition, it provides occasional on-site dependent care to its employees at no cost. Fill 1040x form online Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. Fill 1040x form online In addition, Emily used the on-site dependent care several times. Fill 1040x form online The fair market value of the on-site care was $700. Fill 1040x form online Emily's Form W-2 should report $5,200 of dependent care assistance in box 10 ($4,500 flexible spending arrangement plus $700 on-site dependent care). Fill 1040x form online Boxes 1, 3, and 5 should include $200 (the amount in excess of the nontaxable assistance), and applicable taxes should be withheld on that amount. Fill 1040x form online Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. Fill 1040x form online The exclusion also applies to graduate level courses. Fill 1040x form online Educational assistance means amounts you pay or incur for your employees' education expenses. Fill 1040x form online These expenses generally include the cost of books, equipment, fees, supplies, and tuition. Fill 1040x form online However, these expenses do not include the cost of a course or other education involving sports, games, or hobbies, unless the education: Has a reasonable relationship to your business, or Is required as part of a degree program. Fill 1040x form online Education expenses do not include the cost of tools or supplies (other than textbooks) your employee is allowed to keep at the end of the course. Fill 1040x form online Nor do they include the cost of lodging, meals, or transportation. Fill 1040x form online Educational assistance program. Fill 1040x form online   An educational assistance program is a separate written plan that provides educational assistance only to your employees. Fill 1040x form online The program qualifies only if all of the following tests are met. Fill 1040x form online The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. Fill 1040x form online To determine whether your program meets this test, do not consider employees excluded from your program who are covered by a collective bargaining agreement if there is evidence that educational assistance was a subject of good-faith bargaining. Fill 1040x form online The program does not provide more than 5% of its benefits during the year for shareholders or owners. Fill 1040x form online A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. Fill 1040x form online The program does not allow employees to choose to receive cash or other benefits that must be included in gross income instead of educational assistance. Fill 1040x form online You give reasonable notice of the program to eligible employees. Fill 1040x form online Your program can cover former employees if their employment is the reason for the coverage. Fill 1040x form online   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Fill 1040x form online The employee was a 5% owner at any time during the year or the preceding year. Fill 1040x form online The employee received more than $115,000 in pay for the preceding year. Fill 1040x form online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat the following individuals as employees. Fill 1040x form online A current employee. Fill 1040x form online A former employee who retired, left on disability, or was laid off. Fill 1040x form online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Fill 1040x form online Yourself (if you are a sole proprietor). Fill 1040x form online A partner who performs services for a partnership. Fill 1040x form online Exclusion from wages. Fill 1040x form online   You can exclude up to $5,250 of educational assistance you provide to an employee under an educational assistance program from the employee's wages each year. Fill 1040x form online Assistance over $5,250. Fill 1040x form online   If you do not have an educational assistance plan, or you provide an employee with assistance exceeding $5,250, you must include the value of these benefits as wages, unless the benefits are working condition benefits. Fill 1040x form online Working condition benefits may be excluded from wages. Fill 1040x form online Property or a service provided is a working condition benefit to the extent that if the employee paid for it, the amount paid would have been deductible as a business or depreciation expense. Fill 1040x form online See Working Condition Benefits , later, in this section. Fill 1040x form online Employee Discounts This exclusion applies to a price reduction you give an employee on property or services you offer to customers in the ordinary course of the line of business in which the employee performs substantial services. Fill 1040x form online However, it does not apply to discounts on real property or discounts on personal property of a kind commonly held for investment (such as stocks or bonds). Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat the following individuals as employees. Fill 1040x form online A current employee. Fill 1040x form online A former employee who retired or left on disability. Fill 1040x form online A widow or widower of an individual who died while an employee. Fill 1040x form online A widow or widower of an employee who retired or left on disability. Fill 1040x form online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Fill 1040x form online A partner who performs services for a partnership. Fill 1040x form online Exclusion from wages. Fill 1040x form online   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. Fill 1040x form online For a discount on services, 20% of the price you charge nonemployee customers for the service. Fill 1040x form online For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. Fill 1040x form online   Determine your gross profit percentage in the line of business based on all property you offer to customers (including employee customers) and your experience during the tax year immediately before the tax year in which the discount is available. Fill 1040x form online To figure your gross profit percentage, subtract the total cost of the property from the total sales price of the property and divide the result by the total sales price of the property. Fill 1040x form online Exception for highly compensated employees. Fill 1040x form online   You cannot exclude from the wages of a highly compensated employee any part of the value of a discount that is not available on the same terms to one of the following groups. Fill 1040x form online All of your employees. Fill 1040x form online A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. Fill 1040x form online   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Fill 1040x form online The employee was a 5% owner at any time during the year or the preceding year. Fill 1040x form online The employee received more than $115,000 in pay for the preceding year. Fill 1040x form online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Fill 1040x form online Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. Fill 1040x form online Wages for social security, Medicare, and federal unemployment (FUTA) taxes do not include remuneration resulting from the exercise, after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or from any disposition of stock acquired by exercising such an option. Fill 1040x form online The IRS will not apply these taxes to an exercise before October 23, 2004, of an incentive stock option or an employee stock purchase plan option or to a disposition of stock acquired by such exercise. Fill 1040x form online Additionally, federal income tax withholding is not required on the income resulting from a disqualifying disposition of stock acquired by the exercise after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or on income equal to the discount portion of stock acquired by the exercise, after October 22, 2004, of an employee stock purchase plan option resulting from any disposition of the stock. Fill 1040x form online The IRS will not apply federal income tax withholding upon the disposition of stock acquired by the exercise, before October 23, 2004, of an incentive stock option or an employee stock purchase plan option. Fill 1040x form online However, the employer must report as income in box 1 of Form W-2, (a) the discount portion of stock acquired by the exercise of an employee stock purchase plan option upon disposition of the stock, and (b) the spread (between the exercise price and the fair market value of the stock at the time of exercise) upon a disqualifying disposition of stock acquired by the exercise of an incentive stock option or an employee stock purchase plan option. Fill 1040x form online An employer must report the excess of the fair market value of stock received upon exercise of a nonstatutory stock option over the amount paid for the stock option on Form W-2 in boxes 1, 3 (up to the social security wage base), 5, and in box 12 using the code “V. Fill 1040x form online ” See Regulations section 1. Fill 1040x form online 83-7. Fill 1040x form online An employee who transfers his or her interest in nonstatutory stock options to the employee's former spouse incident to a divorce is not required to include an amount in gross income upon the transfer. Fill 1040x form online The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. Fill 1040x form online See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. Fill 1040x form online You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. Fill 1040x form online irs. Fill 1040x form online gov/pub/irs-irbs/irb02-19. Fill 1040x form online pdf. Fill 1040x form online See Revenue Ruling 2004-60, 2004-24 I. Fill 1040x form online R. Fill 1040x form online B. Fill 1040x form online 1051, available at www. Fill 1040x form online irs. Fill 1040x form online gov/irb/2004-24_IRB/ar13. Fill 1040x form online html. Fill 1040x form online For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. Fill 1040x form online Employer-Provided Cell Phones The value of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a working condition fringe benefit. Fill 1040x form online Personal use of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a de minimis fringe benefit. Fill 1040x form online For the rules relating to these types of benefits, see De Minimis (Minimal) Benefits , earlier in this section, and Working Condition Benefits , later in this section. Fill 1040x form online Noncompensatory business purposes. Fill 1040x form online   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. Fill 1040x form online Examples of substantial business reasons include the employer's: Need to contact the employee at all times for work-related emergencies, Requirement that the employee be available to speak with clients at times when the employee is away from the office, and Need to speak with clients located in other time zones at times outside the employee's normal workday. Fill 1040x form online Cell phones provided to promote goodwill, boost morale, or attract prospective employees. Fill 1040x form online   You cannot exclude from an employee's wages the value of a cell phone provided to promote goodwill of an employee, to attract a prospective employee, or as a means of providing additional compensation to an employee. Fill 1040x form online Additional information. Fill 1040x form online   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. Fill 1040x form online R. Fill 1040x form online B. Fill 1040x form online 407, available at  www. Fill 1040x form online irs. Fill 1040x form online gov/irb/2011-38_IRB/ar07. Fill 1040x form online html. Fill 1040x form online Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. Fill 1040x form online It provides a general death benefit that is not included in income. Fill 1040x form online You provide it to a group of employees. Fill 1040x form online See The 10-employee rule , later. Fill 1040x form online It provides an amount of insurance to each employee based on a formula that prevents individual selection. Fill 1040x form online This formula must use factors such as the employee's age, years of service, pay, or position. Fill 1040x form online You provide it under a policy you directly or indirectly carry. Fill 1040x form online Even if you do not pay any of the policy's cost, you are considered to carry it if you arrange for payment of its cost by your employees and charge at least one employee less than, and at least one other employee more than, the cost of his or her insurance. Fill 1040x form online Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. Fill 1040x form online Group-term life insurance does not include the following insurance. Fill 1040x form online Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. Fill 1040x form online Life insurance on the life of your employee's spouse or dependent. Fill 1040x form online However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. Fill 1040x form online See De Minimis (Minimal) Benefits , earlier in this section. Fill 1040x form online Insurance provided under a policy that provides a permanent benefit (an economic value that extends beyond 1 policy year, such as paid-up or cash surrender value), unless certain requirements are met. Fill 1040x form online See Regulations section 1. Fill 1040x form online 79-1 for details. Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat the following individuals as employees. Fill 1040x form online A current common-law employee. Fill 1040x form online A full-time life insurance agent who is a current statutory employee. Fill 1040x form online An individual who was formerly your employee under (1) or (2). Fill 1040x form online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction and control. Fill 1040x form online Exception for S corporation shareholders. Fill 1040x form online   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Fill 1040x form online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Fill 1040x form online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Fill 1040x form online The 10-employee rule. Fill 1040x form online   Generally, life insurance is not group-term life insurance unless you provide it to at least 10 full-time employees at some time during the year. Fill 1040x form online   For this rule, count employees who choose not to receive the insurance unless, to receive it, they must contribute to the cost of benefits other than the group-term life insurance. Fill 1040x form online For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. Fill 1040x form online However, do not count an employee who must pay part or all of the cost of permanent benefits to get insurance, unless that employee chooses to receive it. Fill 1040x form online A permanent benefit is an economic value extending beyond one policy year (for example, a paid-up or cash-surrender value) that is provided under a life insurance policy. Fill 1040x form online Exceptions. Fill 1040x form online   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. Fill 1040x form online   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. Fill 1040x form online If evidence that the employee is insurable is required, it is limited to a medical questionnaire (completed by the employee) that does not require a physical. Fill 1040x form online You provide the insurance to all your full-time employees or, if the insurer requires the evidence mentioned in (1), to all full-time employees who provide evidence the insurer accepts. Fill 1040x form online You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. Fill 1040x form online See Regulations section 1. Fill 1040x form online 79-1 for details. Fill 1040x form online   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. Fill 1040x form online You provide the insurance under a common plan covering your employees and the employees of at least one other employer who is not related to you. Fill 1040x form online The insurance is restricted to, but mandatory for, all your employees who belong to, or are represented by, an organization (such as a union) that carries on substantial activities besides obtaining insurance. Fill 1040x form online Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. Fill 1040x form online   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. Fill 1040x form online They were 65 or older. Fill 1040x form online They customarily work 20 hours or less a week or 5 months or less in a calendar year. Fill 1040x form online They have not been employed for the waiting period given in the policy. Fill 1040x form online This waiting period cannot be more than 6 months. Fill 1040x form online Exclusion from wages. Fill 1040x form online   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. Fill 1040x form online You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. Fill 1040x form online In addition, you do not have to withhold federal income tax or pay FUTA tax on any group-term life insurance you provide to an employee. Fill 1040x form online Coverage over the limit. Fill 1040x form online   You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. Fill 1040x form online Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Fill 1040x form online Also, show it in box 12 with code “C. Fill 1040x form online ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Fill 1040x form online   Figure the monthly cost of the insurance to include in the employee's wages by multiplying the number of thousands of dollars of all insurance coverage over $50,000 (figured to the nearest $100) by the cost shown in Table 2-2. Fill 1040x form online For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. Fill 1040x form online You must prorate the cost from the table if less than a full month of coverage is involved. Fill 1040x form online Table 2-2. Fill 1040x form online Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . Fill 1040x form online 05 25 through 29 . Fill 1040x form online 06 30 through 34 . Fill 1040x form online 08 35 through 39 . Fill 1040x form online 09 40 through 44 . Fill 1040x form online 10 45 through 49 . Fill 1040x form online 15 50 through 54 . Fill 1040x form online 23 55 through 59 . Fill 1040x form online 43 60 through 64 . Fill 1040x form online 66 65 through 69 1. Fill 1040x form online 27 70 and older 2. Fill 1040x form online 06 You figure the total cost to include in the employee's wages by multiplying the monthly cost by the number of full months' coverage at that cost. Fill 1040x form online Example. Fill 1040x form online Tom's employer provides him with group-term life insurance coverage of $200,000. Fill 1040x form online Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. Fill 1040x form online Tom's employer must include $170 in his wages. Fill 1040x form online The $200,000 of insurance coverage is reduced by $50,000. Fill 1040x form online The yearly cost of $150,000 of coverage is $270 ($. Fill 1040x form online 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. Fill 1040x form online The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. Fill 1040x form online The employer also enters $170 in box 12 with code “C. Fill 1040x form online ” Coverage for dependents. Fill 1040x form online   Group-term life insurance coverage paid by the employer for the spouse or dependents of an employee may be excludable from income as a de minimis fringe benefit if the face amount is not more than $2,000. Fill 1040x form online If the face amount is greater than $2,000, the entire cost of the dependent coverage must be included in income unless the amount over $2,000 is purchased with employee contributions on an after-tax basis. Fill 1040x form online The cost of the insurance is determined by using Table 2-2. Fill 1040x form online Former employees. Fill 1040x form online   When group-term life insurance over $50,000 is provided to an employee (including retirees) after his or her termination, the employee share of social security and Medicare taxes on that period of coverage is paid by the former employee with his or her tax return and is not collected by the employer. Fill 1040x form online You are not required to collect those taxes. Fill 1040x form online Use the table above to determine the amount of social security and Medicare taxes owed by the former employee for coverage provided after separation from service. Fill 1040x form online Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. Fill 1040x form online ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. Fill 1040x form online Exception for key employees. Fill 1040x form online   Generally, if your group-term life insurance plan favors key employees as to participation or benefits, you must include the entire cost of the insurance in your key employees' wages. Fill 1040x form online This exception generally does not apply to church plans. Fill 1040x form online When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. Fill 1040x form online Include the cost in boxes 1, 3, and 5 of Form W-2. Fill 1040x form online However, you do not have to withhold federal income tax or pay FUTA tax on the cost of any group-term life insurance you provide to an employee. Fill 1040x form online   For this purpose, the cost of the insurance is the greater of the following amounts. Fill 1040x form online The premiums you pay for the employee's insurance. Fill 1040x form online See Regulations section 1. Fill 1040x form online 79-4T(Q&A 6) for more information. Fill 1040x form online The cost you figure using Table 2-2. Fill 1040x form online   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. Fill 1040x form online See section 416(i) of the Internal Revenue Code for more information. Fill 1040x form online An officer having annual pay of more than $170,000. Fill 1040x form online An individual who for 2014 was either of the following. Fill 1040x form online A 5% owner of your business. Fill 1040x form online A 1% owner of your business whose annual pay was more than $150,000. Fill 1040x form online   A former employee who was a key employee upon retirement or separation from service is also a key employee. Fill 1040x form online   Your plan does not favor key employees as to participation if at least one of the following is true. Fill 1040x form online It benefits at least 70% of your employees. Fill 1040x form online At least 85% of the participating employees are not key employees. Fill 1040x form online It benefits employees who qualify under a set of rules you set up that do not favor key employees. Fill 1040x form online   Your plan meets this participation test if it is part of a cafeteria plan (discussed in section 1) and it meets the participation test for those plans. Fill 1040x form online   When applying this test, do not consider employees who: Have not completed 3 years of service, Are part-time or seasonal, Are nonresident aliens who receive no U. Fill 1040x form online S. Fill 1040x form online source earned income from you, or Are not included in the plan but are in a unit of employees covered by a collective bargaining agreement, if the benefits provided under the plan were the subject of good-faith bargaining between you and employee representatives. Fill 1040x form online   Your plan does not favor key employees as to benefits if all benefits available to participating key employees are also available to all other participating employees. Fill 1040x form online Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. Fill 1040x form online S corporation shareholders. Fill 1040x form online   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the cost of all group-term life insurance coverage you provide the 2% shareholder in his or her wages. Fill 1040x form online When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. Fill 1040x form online Include the cost in boxes 1, 3, and 5 of Form W-2. Fill 1040x form online However, you do not have to withhold federal income tax or pay federal unemployment tax on the cost of any group-term life insurance coverage you provide to the 2% shareholder. Fill 1040x form online Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. Fill 1040x form online Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. Fill 1040x form online Contributions to the account are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Fill 1040x form online The medical expenses must not be reimbursable by insurance or other sources and their payment from HSA funds (distribution) will not give rise to a medical expense deduction on the individual's federal income tax return. Fill 1040x form online For more information about HSAs, visit the Department of Treasury's website at www. Fill 1040x form online treasury. Fill 1040x form online gov and enter “HSA” in the search box. Fill 1040x form online Eligibility. Fill 1040x form online   A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance except for permitted insurance listed under section 223(c)(3) or insurance for accidents, disability, dental care, vision care, or long-term care. Fill 1040x form online For calendar year 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage and $12,700 for family coverage. Fill 1040x form online   There are no income limits that restrict an individual's eligibility to contribute to an HSA nor is there a requirement that the account owner have earned income to make a contribution. Fill 1040x form online Exceptions. Fill 1040x form online   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. Fill 1040x form online Also, an employee's participation in a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) generally disqualifies the individual (and employer) from making contributions to his or her HSA. Fill 1040x form online However, an individual may qualify to participate in an HSA if he or she is participating in only a limited-purpose FSA or HRA or a post-deductible FSA. Fill 1040x form online For more information, see Other employee health plans in Publication 969. Fill 1040x form online Employer contributions. Fill 1040x form online   Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. Fill 1040x form online For 2014, you can contribute up to $3,300 for self-only coverage or $6,550 for family coverage to a qualified individual's HSA. Fill 1040x form online   The contribution amounts listed above are increased by $1,000 for a qualified individual who is age 55 or older at any time during the year. Fill 1040x form online For two qualified individuals who are married to each other and who each are age 55 or older at any time during the year, each spouse's contribution limit is increased by $1,000 provided each spouse has a separate HSA. Fill 1040x form online No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. Fill 1040x form online Nondiscrimination rules. Fill 1040x form online    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. Fill 1040x form online Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. Fill 1040x form online   For guidance on employer comparable contributions to HSAs under section 4980G in instances where an employee has not established an HSA by December 31 and in instances where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses, see Regulations section 54. Fill 1040x form online 4980G-4. Fill 1040x form online Exception. Fill 1040x form online   The Tax Relief and Health Care Act of 2006 allows employers to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee. Fill 1040x form online A highly compensated employee for 2014 is an employee who meets either of the following tests. Fill 1040x form online The employee was a 5% owner at any time during the year or the preceding year. Fill 1040x form online The employee received more than $115,000 in pay for the preceding year. Fill 1040x form online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Fill 1040x form online Partnerships and S corporations. Fill 1040x form online   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. Fill 1040x form online Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances. Fill 1040x form online Cafeteria plans. Fill 1040x form online   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. Fill 1040x form online However, cafeteria plan nondiscrimination rules still apply. Fill 1040x form online For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. Fill 1040x form online Contributions that favor lower-paid employees are not prohibited. Fill 1040x form online Reporting requirements. Fill 1040x form online   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. Fill 1040x form online ” The trustee or custodian of the HSA, generally a bank or insurance company, reports distributions from the HSA using Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Fill 1040x form online Lodging on Your Business Premises You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. Fill 1040x form online It is furnished on your business premises. Fill 1040x form online It is furnished for your convenience. Fill 1040x form online The employee must accept it as a condition of employment. Fill 1040x form online Different tests may apply to lodging furnished by educational institutions. Fill 1040x form online See section 119(d) of the Internal Revenue Code for details. Fill 1040x form online The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. Fill 1040x form online On your business premises. Fill 1040x form online   For this exclusion, your business premises is generally your employee's place of work. Fill 1040x form online For special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the Internal Revenue Code and its regulations. Fill 1040x form online For your convenience. Fill 1040x form online   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. Fill 1040x form online You furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. Fill 1040x form online This is true even if a law or an employment contract provides that the lodging is furnished as pay. Fill 1040x form online However, a written statement that the lodging is furnished for your convenience is not sufficient. Fill 1040x form online Condition of employment. Fill 1040x form online   Lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. Fill 1040x form online Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. Fill 1040x form online   It does not matter whether you must furnish the lodging as pay under the terms of an employment contract or a law fixing the terms of employment. Fill 1040x form online Example. Fill 1040x form online A hospital gives Joan, an employee of the hospital, the choice of living at the hospital free of charge or living elsewhere and receiving a cash allowance in addition to her regular salary. Fill 1040x form online If Joan chooses to live at the hospital, the hospital cannot exclude the value of the lodging from her wages because she is not required to live at the hospital to properly perform the duties of her employment. Fill 1040x form online S corporation shareholders. Fill 1040x form online   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Fill 1040x form online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Fill 1040x form online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Fill 1040x form online Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. Fill 1040x form online De Minimis Meals You can exclude any occasional meal or meal money you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable. Fill 1040x form online The exclusion applies, for example, to the following items. Fill 1040x form online Coffee, doughnuts, or soft drinks. Fill 1040x form online Occasional meals or meal money provided to enable an employee to work overtime. Fill 1040x form online However, the exclusion does not apply to meal money figured on the basis of hours worked. Fill 1040x form online Occasional parties or picnics for employees and their guests. Fill 1040x form online This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the annual revenue from the facility equals or exceeds the direct costs of the facility. Fill 1040x form online For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises , later. Fill 1040x form online If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. Fill 1040x form online The 50% limit on deductions for the cost of meals does not apply. Fill 1040x form online The deduction limit on meals is discussed in chapter 2 of Publication 535. Fill 1040x form online Employee. Fill 1040x form online   For this exclusion, treat any recipient of a de minimis meal as
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IRS Offers Videos to Help Taxpayers Preparing to File in 2014

IR-2014-1, Jan. 3, 2014

WASHINGTON — The Internal Revenue Service is offering taxpayers a number of instructional YouTube videos to help prepare their taxes for the upcoming filing season, which begins on Jan. 31.

Several options are available to help taxpayers prepare for the 2014 tax season and get their refunds as easily as possible. Many software companies are expected to begin accepting tax returns in January and hold those returns until the IRS systems open on Jan. 31. This includes the Free File partners that offer access to their software for free at irs.gov/Free File. The IRS will not process any tax returns before Jan. 31, so there is no advantage to filing on paper before the opening date. Taxpayers will receive their tax refunds much faster by using e-file or Free File with the direct deposit option.

In addition, the IRS has short and informative YouTube videos on a number of tax-related topics in English, Spanish and American Sign Language (ASL). The channels have received nearly 6.5 million views:

Specific videos that taxpayers may view to help them get ready over the coming weeks include:

  • Do-It-Yourself Free Tax Preparation ─ Helps taxpayers find free help from certified volunteers to electronically file tax returns. Taxpayers interested in helping their own communities can also watch a video to learn about becoming involved in the Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs.
  • Do I Have to File a Tax Return? ─ Learn about the requirements for filing a tax return, including income limits and age, and why taxpayers may want to file even if they don't have to.
  • How to Get 1040 Forms ─  Provides tips on the quickest way to get the various 1040 forms on IRS.gov.
  • Tax Scams ─  Offers some tips on how to protect personal information and avoid becoming a tax scam victim.
  • Record-keeping ─  Learn which financial and tax files to keep and how long to keep them.
  • Changed Your Name After Marriage or Divorce? ─  Find out what you need to do if you have changed your name before you file your tax return.
  • Choosing a Tax Preparer ─ Hear some useful tips for choosing a reputable tax preparer.

The IRS uses social media tools and platforms to share the latest information on tax changes, initiatives, products and services. These social media platforms include the IRS2Go phone application, YouTube, Tumblr, Twitter and Facebook. To protect taxpayer privacy, the IRS only uses social media tools to share public information, not to answer personal tax or account questions. It advises taxpayers to never post confidential information, like a Social Security number, on social media sites. A listing is available on IRS.gov.

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Page Last Reviewed or Updated: 03-Jan-2014

The Fill 1040x Form Online

Fill 1040x form online Some employees may be able to deduct certain work-related expenses. The following facts from the IRS can help you determine which expenses are deductible as an employee business expense. You must be itemizing deductions on IRS Schedule A to qualify. Fill 1040x form online Expenses that qualify for an itemized deduction generally include: Fill 1040x form online Business travel away from home Fill 1040x form online Business use of your car Fill 1040x form online Business meals and entertainment Fill 1040x form online Travel Fill 1040x form online Use of your home Fill 1040x form online Education Fill 1040x form online Supplies Fill 1040x form online Tools Fill 1040x form online Miscellaneous expenses Fill 1040x form online You must keep records to prove the business expenses you deduct. For general information on recordkeeping, see IRS Publication 552, Recordkeeping for Individuals available on this website, or by calling 1-800-TAX-FORM (800-829-3676). Fill 1040x form online If your employer reimburses you under an accountable plan, you should not include the payments in your gross income, and you may not deduct any of the reimbursed amounts. Fill 1040x form online An accountable plan must meet three requirements: Fill 1040x form online You must have paid or incurred expenses that are deductible while performing services as an employee. Fill 1040x form online Fill 1040x form online You must adequately account to your employer for these expenses within a reasonable time period. Fill 1040x form online Fill 1040x form online You must return any excess reimbursement or allowance within a reasonable time period. Fill 1040x form online If the plan under which you are reimbursed by your employer is non-accountable, the payments you receive should be included in the wages shown on your Form W-2. You must report the income and itemize your deductions to deduct these expenses. Fill 1040x form online Generally, you report unreimbursed expenses on IRS Form 2106 or IRS Form 2106-EZ and attach it to Form 1040. Deductible expenses are then reported on IRS Schedule A, as a miscellaneous itemized deduction subject to a rule that limits your employee business expenses deduction to the amount that exceeds 2 percent of your adjusted gross income. Fill 1040x form online For more information see IRS Publication 529, Miscellaneous Deductions, which is available on this website, or by calling 1-800-TAX-FORM (800-829-3676). Fill 1040x form online