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Form 1040a

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Form 1040a

Form 1040a Publication 15 - Main Content Table of Contents 1. Form 1040a Employer Identification Number (EIN) 2. Form 1040a Who Are Employees?Relief provisions. Form 1040a Business Owned and Operated by Spouses 3. Form 1040a Family Employees 4. Form 1040a Employee's Social Security Number (SSN)Registering for SSNVS. Form 1040a 5. Form 1040a Wages and Other CompensationAccountable plan. Form 1040a Nonaccountable plan. Form 1040a Per diem or other fixed allowance. Form 1040a 50% test. Form 1040a Health Savings Accounts and medical savings accounts. Form 1040a Nontaxable fringe benefits. Form 1040a When fringe benefits are treated as paid. Form 1040a Valuation of fringe benefits. Form 1040a Withholding on fringe benefits. Form 1040a Depositing taxes on fringe benefits. Form 1040a 6. Form 1040a TipsOrdering rule. Form 1040a 7. Form 1040a Supplemental Wages 8. Form 1040a Payroll Period 9. Form 1040a Withholding From Employees' WagesIncome Tax Withholding Social Security and Medicare Taxes Part-Time Workers 10. Form 1040a Required Notice to Employees About the Earned Income Credit (EIC) 11. Form 1040a Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties 12. Form 1040a Filing Form 941 or Form 944 13. Form 1040a Reporting Adjustments to Form 941 or Form 944Current Period Adjustments Prior Period Adjustments Wage Repayments 14. Form 1040a Federal Unemployment (FUTA) TaxSuccessor employer. Form 1040a Household employees. Form 1040a When to deposit. Form 1040a Household employees. Form 1040a Electronic filing by reporting agents. Form 1040a 16. Form 1040a How To Use the Income Tax Withholding TablesWage Bracket Method Percentage Method Alternative Methods of Income Tax Withholding How To Get Tax Help 1. Form 1040a Employer Identification Number (EIN) If you are required to report employment taxes or give tax statements to employees or annuitants, you need an EIN. Form 1040a The EIN is a nine-digit number the IRS issues. Form 1040a The digits are arranged as follows: 00-0000000. Form 1040a It is used to identify the tax accounts of employers and certain others who have no employees. Form 1040a Use your EIN on all of the items you send to the IRS and SSA. Form 1040a For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN. Form 1040a If you do not have an EIN, you may apply for one online. Form 1040a Go to the IRS. Form 1040a gov and click on the Apply for an EIN Online link under Tools. Form 1040a You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Form 1040a Do not use an SSN in place of an EIN. Form 1040a You should have only one EIN. Form 1040a If you have more than one and are not sure which one to use, call 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Form 1040a Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. Form 1040a The IRS will tell you which number to use. Form 1040a If you took over another employer's business (see Successor employer in section 9), do not use that employer's EIN. Form 1040a If you have applied for an EIN but do not have your EIN by the time a return is due, file a paper return and write “Applied For” and the date you applied for it in the space shown for the number. Form 1040a 2. Form 1040a Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. Form 1040a See Publication 15-A for details on statutory employees and nonemployees. Form 1040a Employee status under common law. Form 1040a   Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. Form 1040a This is so even when you give the employee freedom of action. Form 1040a What matters is that you have the right to control the details of how the services are performed. Form 1040a See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Form 1040a   Generally, people in business for themselves are not employees. Form 1040a For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. Form 1040a However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. Form 1040a   If an employer-employee relationship exists, it does not matter what it is called. Form 1040a The employee may be called an agent or independent contractor. Form 1040a It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Form 1040a Statutory employees. Form 1040a   If someone who works for you is not an employee under the common law rules discussed earlier, do not withhold federal income tax from his or her pay, unless backup withholding applies. Form 1040a Although the following persons may not be common law employees, they are considered employees by statute for social security, Medicare, and FUTA tax purposes under certain conditions. Form 1040a An agent (or commission) driver who delivers food, beverages (other than milk), laundry, or dry cleaning for someone else. Form 1040a A full-time life insurance salesperson who sells primarily for one company. Form 1040a A homeworker who works by 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. Form 1040a 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. Form 1040a The orders must be for merchandise for resale or supplies for use in the customer's business. Form 1040a The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. Form 1040a    Statutory nonemployees. Form 1040a   Direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. Form 1040a They are generally treated as self-employed for all federal tax purposes, including income and employment taxes. Form 1040a H-2A agricultural workers. Form 1040a   On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. Form 1040a Treating employees as nonemployees. Form 1040a   You will generally be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold these taxes because you treated an employee as a nonemployee. Form 1040a You may be able to calculate your liability using special section 3509 rates for the employee share of social security and Medicare taxes and the federal income tax withholding. Form 1040a The applicable rates depend on whether you filed required Forms 1099. Form 1040a You cannot recover the employee share of social security, or Medicare tax, or income tax withholding from the employee if the tax is paid under section 3509. Form 1040a You are liable for the income tax withholding regardless of whether the employee paid income tax on the wages. Form 1040a You continue to owe the full employer share of social security and Medicare taxes. Form 1040a The employee remains liable for the employee share of social security and Medicare taxes. Form 1040a See Internal Revenue Code section 3509 for details. Form 1040a Also see the Instructions for Form 941-X. Form 1040a   Section 3509 rates are not available if you intentionally disregard the requirement to withhold taxes from the employee or if you withheld income taxes but not social security or Medicare taxes. Form 1040a Section 3509 is not available for reclassifying statutory employees. Form 1040a See Statutory employees , earlier in this section. Form 1040a   If the employer issued required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. Form 1040a 2% plus 20% of the employee rate (see the Instructions for Form 941-X). Form 1040a For Medicare taxes; employer rate of 1. Form 1040a 45% plus 20% of the employee rate of 1. Form 1040a 45%, for a total rate of 1. Form 1040a 74% of wages. Form 1040a For Additional Medicare Tax; 0. Form 1040a 18% (20% of the employee rate of 0. Form 1040a 9%) of wages subject to Additional Medicare Tax. Form 1040a For income tax withholding, the rate is 1. Form 1040a 5% of wages. Form 1040a   If the employer did not issue required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. Form 1040a 2% plus 40% of the employee rate (see the Instructions for Form 941-X). Form 1040a For Medicare taxes; employer rate of 1. Form 1040a 45% plus 40% of the employee rate of 1. Form 1040a 45%, for a total rate of 2. Form 1040a 03% of wages. Form 1040a For Additional Medicare Tax; 0. Form 1040a 36% (40% of the employee rate of 0. Form 1040a 9%) of wages subject to Additional Medicare Tax. Form 1040a For income tax withholding, the rate is 3. Form 1040a 0% of wages. Form 1040a Relief provisions. Form 1040a   If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. Form 1040a To get this relief, you must file all required federal tax returns, including information returns, on a basis consistent with your treatment of the worker. Form 1040a You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. Form 1040a See Publication 1976, Do You Qualify for Relief Under Section 530. Form 1040a IRS help. Form 1040a   If you want the IRS to determine whether a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Form 1040a Voluntary Classification Settlement Program (VCSP). Form 1040a   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. Form 1040a To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). Form 1040a For more information visit IRS. Form 1040a gov and enter “VCSP” in the search box. Form 1040a 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. Form 1040a See Publication 541, Partnerships, for more details. Form 1040a The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Form 1040a Exception—Qualified joint venture. Form 1040a   For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. Form 1040a A qualified joint venture conducts a trade or business where: The only members of the joint venture are spouses who file a joint income tax return, Both spouses materially participate (see Material participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). Form 1040a   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. Form 1040a Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. Form 1040a   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. Form 1040a If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. Form 1040a Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. Form 1040a However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. Form 1040a    Note. Form 1040a If your spouse is your employee, not your partner, see One spouse employed by another in section 3. Form 1040a   For more information on qualified joint ventures, visit IRS. Form 1040a gov and enter “qualified joint venture” in the search box. Form 1040a Exception—Community income. Form 1040a   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Form 1040a S. Form 1040a possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. Form 1040a You may still make an election to be taxed as a qualified joint venture instead of a partnership. Form 1040a See Exception—Qualified joint venture , earlier. Form 1040a 3. Form 1040a Family Employees Child employed by parents. Form 1040a   Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child. Form 1040a If these payments are for work other than in a trade or business, such as domestic work in the parent's private home, they are not subject to social security and Medicare taxes until the child reaches age 21. Form 1040a However, see Covered services of a child or spouse , later in this section. Form 1040a Payments for the services of a child under age 21 who works for his or her parent, whether or not in a trade or business, are not subject to FUTA tax. Form 1040a Payments for the services of a child of any age who works for his or her parent are generally subject to income tax withholding unless the payments are for domestic work in the parent's home, or unless the payments are for work other than in a trade or business and are less than $50 in the quarter or the child is not regularly employed to do such work. Form 1040a One spouse employed by another. Form 1040a   The wages for the services of an individual who works for his or her spouse in a trade or business are subject to income tax withholding and social security and Medicare taxes, but not to FUTA tax. Form 1040a However, the payments for services of one spouse employed by another in other than a trade or business, such as domestic service in a private home, are not subject to social security, Medicare, and FUTA taxes. Form 1040a Covered services of a child or spouse. Form 1040a   The wages for the services of a child or spouse are subject to income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for: A corporation, even if it is controlled by the child's parent or the individual's spouse; A partnership, even if the child's parent is a partner, unless each partner is a parent of the child; A partnership, even if the individual's spouse is a partner; or An estate, even if it is the estate of a deceased parent. Form 1040a Parent employed by son or daughter. Form 1040a   When the employer is a son or daughter employing his or her parent the following rules apply. Form 1040a Payments for the services of a parent in the son’s or daughter’s (the employer’s) trade or business are subject to income tax withholding and social security and Medicare taxes. Form 1040a Payments for the services of a parent not in the son’s or daughter’s (the employer’s) trade or business are generally not subject to social security and Medicare taxes. Form 1040a    Social security and Medicare taxes do apply to payments made to a parent for domestic services if all of the following apply: The parent is employed by his or her son or daughter; The son or daughter (the employer) has a child or stepchild living in the home; The son or daughter (the employer) is a widow or widower, divorced, or living with a spouse who, because of a mental or physical condition, cannot care for the child or stepchild for at least 4 continuous weeks in a calendar quarter; and The child or stepchild is either under age 18 or requires the personal care of an adult for at least 4 continuous weeks in a calendar quarter due to a mental or physical condition. Form 1040a   Payments made to a parent employed by his or her child are not subject to FUTA tax, regardless of the type of services provided. Form 1040a 4. Form 1040a Employee's Social Security Number (SSN) You are required to get each employee's name and SSN and to enter them on Form W-2. Form 1040a This requirement also applies to resident and nonresident alien employees. Form 1040a You should ask your employee to show you his or her social security card. Form 1040a The employee may show the card if it is available. Form 1040a Do not accept a social security card that says “Not valid for employment. Form 1040a ” A social security number issued with this legend does not permit employment. Form 1040a You may, but are not required to, photocopy the social security card if the employee provides it. Form 1040a If you do not provide the correct employee name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. Form 1040a See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. Form 1040a Applying for a social security card. Form 1040a   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation. Form 1040a You can get Form SS-5 at SSA offices, by calling 1-800-772-1213, or from the SSA website at www. Form 1040a socialsecurity. Form 1040a gov/online/ss-5. Form 1040a html. Form 1040a The employee must complete and sign Form SS-5; it cannot be filed by the employer. Form 1040a 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. Form 1040a Applying for a social security number. Form 1040a   If you file Form W-2 on paper and your employee applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. Form 1040a If you are filing electronically, enter all zeros (000-00-000) in the social security number field. Form 1040a When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. Form 1040a Furnish copies B, C, and 2 of Form W-2c to the employee. Form 1040a Up to 25 Forms W-2c for each Form W-3c, Transmittal of Corrected Wage and Tax Statements, may now be filed per session over the Internet, with no limit on the number of sessions. Form 1040a For more information, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. Form 1040a socialsecurity. Form 1040a gov/employer. Form 1040a Advise your employee to correct the SSN on his or her original Form W-2. Form 1040a Correctly record the employee's name and SSN. Form 1040a   Record the name and number of each employee as they are shown on the employee's social security card. Form 1040a If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Form 1040a Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. Form 1040a 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 for the most recently filed Form W-2. Form 1040a It is not necessary to correct other years if the previous name and number were used for years before the most recent Form W-2. Form 1040a IRS individual taxpayer identification numbers (ITINs) for aliens. Form 1040a   Do not accept an ITIN in place of an SSN for employee identification or for work. Form 1040a An ITIN is only available to resident and nonresident aliens who are not eligible for U. Form 1040a S. Form 1040a employment and need identification for other tax purposes. Form 1040a You can identify an ITIN because it is a nine-digit number, beginning with the number “9” with either a “7” or “8” as the fourth digit and is formatted like an SSN (for example, 9NN-7N-NNNN). Form 1040a    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. Form 1040a If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier. Form 1040a Do not use an ITIN in place of an SSN on Form W-2. Form 1040a Verification of social security numbers. Form 1040a   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. Form 1040a Visit www. Form 1040a socialsecurity. Form 1040a gov/employer/ssnv. Form 1040a htm for more information. Form 1040a Registering for SSNVS. Form 1040a   You must register online and receive authorization from your employer to use SSNVS. Form 1040a To register, visit SSA's website at www. Form 1040a ssa. Form 1040a gov/employer and click on the Business Services Online link. Form 1040a Follow the registration instructions to obtain a user identification (ID) and password. Form 1040a You will need to provide the following information about yourself and your company. Form 1040a Name. Form 1040a SSN. Form 1040a Date of birth. Form 1040a Type of employer. Form 1040a EIN. Form 1040a Company name, address, and telephone number. Form 1040a Email address. Form 1040a   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Form 1040a You must enter the activation code online to use SSNVS. Form 1040a 5. Form 1040a Wages and Other Compensation Wages subject to federal employment taxes generally include all pay you give to an employee for services performed. Form 1040a The pay may be in cash or in other forms. Form 1040a It includes salaries, vacation allowances, bonuses, commissions, and fringe benefits. Form 1040a It does not matter how you measure or make the payments. Form 1040a Amounts an employer pays as a bonus for signing or ratifying a contract in connection with the establishment of an employer-employee relationship and an amount paid to an employee for cancellation of an employment contract and relinquishment of contract rights are wages subject to social security, Medicare, and FUTA taxes and income tax withholding. Form 1040a Also, compensation paid to a former employee for services performed while still employed is wages subject to employment taxes. Form 1040a More information. Form 1040a   See section 6 for a discussion of tips and section 7 for a discussion of supplemental wages. Form 1040a Also, see section 15 for exceptions to the general rules for wages. Form 1040a Publication 15-A provides additional information on wages, including nonqualified deferred compensation, and other compensation. Form 1040a Publication 15-B provides information on other forms of compensation, including: Accident 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, and Working condition benefits. Form 1040a Employee business expense reimbursements. Form 1040a   A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees' business expenses. Form 1040a How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. Form 1040a If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement. Form 1040a   These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee. Form 1040a Accountable plan. Form 1040a   To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules. Form 1040a They must have paid or incurred deductible expenses while performing services as your employees. Form 1040a The reimbursement or advance must be paid for the expense and must not be an amount that would have otherwise been paid by the employee. Form 1040a They must substantiate these expenses to you within a reasonable period of time. Form 1040a They must return any amounts in excess of substantiated expenses within a reasonable period of time. Form 1040a   Amounts paid under an accountable plan are not wages and are not subject to income, social security, Medicare, and FUTA taxes. Form 1040a   If the expenses covered by this arrangement are not substantiated (or amounts in excess of substantiated expenses are not returned within a reasonable period of time), the amount paid under the arrangement in excess of the substantiated expenses is treated as paid under a nonaccountable plan. Form 1040a This amount is subject to income, social security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time. Form 1040a   A reasonable period of time depends on the facts and circumstances. Form 1040a Generally, it is considered reasonable if your employees receive their advance within 30 days of the time they incur the expenses, adequately account for the expenses within 60 days after the expenses were paid or incurred, and return any amounts in excess of expenses within 120 days after the expenses were paid or incurred. Form 1040a Also, it is considered reasonable if you give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding amounts and they do so within 120 days. Form 1040a Nonaccountable plan. Form 1040a   Payments to your employee for travel and other necessary expenses of your business under a nonaccountable plan are wages and are treated as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. Form 1040a Your payments are treated as paid under a nonaccountable plan if: Your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, You advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount he or she does not use for business expenses, You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business, or You pay an amount as a reimbursement you would have otherwise paid as wages. Form 1040a   See section 7 for more information on supplemental wages. Form 1040a Per diem or other fixed allowance. Form 1040a   You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. Form 1040a In these cases, your employee is considered to have accounted to you if your reimbursement does not exceed rates established by the Federal Government. Form 1040a The 2013 standard mileage rate for auto expenses was 56. Form 1040a 5 cents per mile. Form 1040a The rate for 2014 is 56 cents per mile. Form 1040a   The government per diem rates for meals and lodging in the continental United States are listed in Publication 1542, Per Diem Rates. Form 1040a Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). Form 1040a   If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. Form 1040a This excess amount is subject to income tax withholding and payment of social security, Medicare, and FUTA taxes. Form 1040a Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L. Form 1040a ” Wages not paid in money. Form 1040a   If in the course of your trade or business you pay your employees in a medium that is neither cash nor a readily negotiable instrument, such as a check, you are said to pay them “in kind. Form 1040a ” Payments in kind may be in the form of goods, lodging, food, clothing, or services. Form 1040a Generally, the fair market value of such payments at the time they are provided is subject to federal income tax withholding and social security, Medicare, and FUTA taxes. Form 1040a   However, noncash payments for household work, agricultural labor, and service not in the employer's trade or business are exempt from social security, Medicare, and FUTA taxes. Form 1040a Withhold income tax on these payments only if you and the employee agree to do so. Form 1040a Nonetheless, noncash payments for agricultural labor, such as commodity wages, are treated as cash payments subject to employment taxes if the substance of the transaction is a cash payment. Form 1040a Moving expenses. Form 1040a   Reimbursed and employer-paid qualified moving expenses (those that would otherwise be deductible by the employee) paid under an accountable plan are not includible in an employee's income unless you have knowledge the employee deducted the expenses in a prior year. Form 1040a Reimbursed and employer-paid nonqualified moving expenses are includible in income and are subject to employment taxes and income tax withholding. Form 1040a For more information on moving expenses, see Publication 521, Moving Expenses. Form 1040a Meals and lodging. Form 1040a   The value of meals is not taxable income and is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the meals are furnished for the employer's convenience and on the employer's premises. Form 1040a The value of lodging is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the lodging is furnished for the employer's convenience, on the employer's premises, and as a condition of employment. Form 1040a    “For the convenience of the employer” means you have a substantial business reason for providing the meals and lodging other than to provide additional compensation to the employee. Form 1040a For example, meals you provide at the place of work so that an employee is available for emergencies during his or her lunch period are generally considered to be for your convenience. Form 1040a   However, whether meals or lodging are provided for the convenience of the employer depends on all of the facts and circumstances. Form 1040a A written statement that the meals or lodging are for your convenience is not sufficient. Form 1040a 50% test. Form 1040a   If over 50% of the employees who are provided meals on an employer's business premises receive these meals for the convenience of the employer, all meals provided on the premises are treated as furnished for the convenience of the employer. Form 1040a If this 50% test is met, the value of the meals is excludable from income for all employees and is not subject to federal income tax withholding or employment taxes. Form 1040a For more information, see Publication 15-B. Form 1040a Health insurance plans. Form 1040a   If you pay the cost of an accident or health insurance plan for your employees, including an employee's spouse and dependents, your payments are not wages and are not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. Form 1040a Generally, this exclusion also applies to qualified long-term care insurance contracts. Form 1040a However, for income tax withholding, the value of health insurance benefits must be included in the wages of S corporation employees who own more than 2% of the S corporation (2% shareholders). Form 1040a For social security, Medicare, and FUTA taxes, the health insurance benefits are excluded from the wages only for employees and their dependents or for a class or classes of employees and their dependents. Form 1040a See Announcement 92-16 for more information. Form 1040a You can find Announcement 92-16 on page 53 of Internal Revenue Bulletin 1992-5. Form 1040a Health Savings Accounts and medical savings accounts. Form 1040a   Your contributions to an employee's Health Savings Account (HSA) or Archer medical savings account (MSA) are not subject to social security, Medicare, or FUTA taxes, or federal income tax withholding if it is reasonable to believe at the time of payment of the contributions they will be excludable from the income of the employee. Form 1040a To the extent it is not reasonable to believe they will be excludable, your contributions are subject to these taxes. Form 1040a Employee contributions to their HSAs or MSAs through a payroll deduction plan must be included in wages and are subject to social security, Medicare, and FUTA taxes and income tax withholding. Form 1040a However, HSA contributions made under a salary reduction arrangement in a section 125 cafeteria plan are not wages and are not subject to employment taxes or withholding. Form 1040a For more information, see the Instructions for Form 8889, Health Savings Accounts (HSAs). Form 1040a Medical care reimbursements. Form 1040a   Generally, medical care reimbursements paid for an employee under an employer's self-insured medical reimbursement plan are not wages and are not subject to social security, Medicare, and FUTA taxes, or income tax withholding. Form 1040a See Publication 15-B for an exception for highly compensated employees. Form 1040a Differential wage payments. Form 1040a   Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and represent all or a portion of the wages the individual would have received from the employer if the individual were performing services for the employer. Form 1040a   Differential wage payments are wages for income tax withholding, but are not subject to social security, Medicare, or FUTA taxes. Form 1040a Employers should report differential wage payments in box 1 of Form W-2. Form 1040a For more information about the tax treatment of differential wage payments, visit IRS. Form 1040a gov and enter “employees in a combat zone” in the search box. Form 1040a Fringe benefits. Form 1040a   You generally must include fringe benefits in an employee's gross income (but see Nontaxable fringe benefits next). Form 1040a The benefits are subject to income tax withholding and employment taxes. Form 1040a Fringe benefits include cars you provide, flights on aircraft you provide, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. Form 1040a In general, the amount you must include is the amount by which the fair market value of the benefits is more than the sum of what the employee paid for it plus any amount the law excludes. Form 1040a There are other special rules you and your employees may use to value certain fringe benefits. Form 1040a See Publication 15-B for more information. Form 1040a Nontaxable fringe benefits. Form 1040a   Some fringe benefits are not taxable (or are minimally taxable) if certain conditions are met. Form 1040a See Publication 15-B for details. Form 1040a The following are some examples of nontaxable fringe benefits. Form 1040a Services provided to your employees at no additional cost to you. Form 1040a Qualified employee discounts. Form 1040a Working condition fringes that are property or services the employee could deduct as a business expense if he or she had paid for it. Form 1040a Examples include a company car for business use and subscriptions to business magazines. Form 1040a Certain minimal value fringes (including an occasional cab ride when an employee must work overtime and meals you provide at eating places you run for your employees if the meals are not furnished at below cost). Form 1040a Qualified transportation fringes subject to specified conditions and dollar limitations (including transportation in a commuter highway vehicle, any transit pass, and qualified parking). Form 1040a Qualified moving expense reimbursement. Form 1040a See Moving expenses , earlier in this section, for details. Form 1040a The use of on-premises athletic facilities, if substantially all of the use is by employees, their spouses, and their dependent children. Form 1040a Qualified tuition reduction an educational organization provides to its employees for education. Form 1040a For more information, see Publication 970, Tax Benefits for Education. Form 1040a Employer-provided cell phones provided primarily for a noncompensatory business reason. Form 1040a   However, do not exclude the following fringe benefits from the income of highly compensated employees unless the benefit is available to other employees on a nondiscriminatory basis. Form 1040a No-additional-cost services. Form 1040a Qualified employee discounts. Form 1040a Meals provided at an employer operated eating facility. Form 1040a Reduced tuition for education. Form 1040a  For more information, including the definition of a highly compensated employee, see Publication 15-B. Form 1040a When fringe benefits are treated as paid. Form 1040a   You may choose to treat certain noncash fringe benefits as paid by the pay period, by the quarter, or on any other basis you choose as long as you treat the benefits as paid at least once a year. Form 1040a You do not have to make a formal choice of payment dates or notify the IRS of the dates you choose. Form 1040a You do not have to make this choice for all employees. Form 1040a You may change methods as often as you like, as long as you treat all benefits provided in a calendar year as paid by December 31 of the calendar year. Form 1040a See Publication 15-B for more information, including a discussion of the special accounting rule for fringe benefits provided during November and December. Form 1040a Valuation of fringe benefits. Form 1040a   Generally, you must determine the value of fringe benefits no later than January 31 of the next year. Form 1040a Before January 31, you may reasonably estimate the value of the fringe benefits for purposes of withholding and depositing on time. Form 1040a Withholding on fringe benefits. Form 1040a   You may add the value of fringe benefits to regular wages for a payroll period and figure withholding taxes on the total, or you may withhold federal income tax on the value of the fringe benefits at the optional flat 25% supplemental wage rate. Form 1040a However, see Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages during the calendar year in section 7. Form 1040a   You may choose not to withhold income tax on the value of an employee's personal use of a vehicle you provide. Form 1040a You must, however, withhold social security and Medicare taxes on the use of the vehicle. Form 1040a See Publication 15-B for more information on this election. Form 1040a Depositing taxes on fringe benefits. Form 1040a   Once you choose when fringe benefits are paid, you must deposit taxes in the same deposit period you treat the fringe benefits as paid. Form 1040a To avoid a penalty, deposit the taxes following the general deposit rules for that deposit period. Form 1040a   If you determine by January 31 you overestimated the value of a fringe benefit at the time you withheld and deposited for it, you may claim a refund for the overpayment or have it applied to your next employment tax return. Form 1040a See Valuation of fringe benefits , earlier. Form 1040a If you underestimated the value and deposited too little, you may be subject to a failure-to-deposit penalty. Form 1040a See section 11 for information on deposit penalties. Form 1040a   If you deposited the required amount of taxes but withheld a lesser amount from the employee, you can recover from the employee the social security, Medicare, or income taxes you deposited on his or her behalf, and included in the employee's Form W-2. Form 1040a However, you must recover the income taxes before April 1 of the following year. Form 1040a Sick pay. Form 1040a   In general, sick pay is any amount you pay under a plan to an employee who is unable to work because of sickness or injury. Form 1040a These amounts are sometimes paid by a third party, such as an insurance company or an employees' trust. Form 1040a In either case, these payments are subject to social security, Medicare, and FUTA taxes. Form 1040a 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. Form 1040a The payments are always subject to federal income tax. Form 1040a See Publication 15-A for more information. Form 1040a 6. Form 1040a Tips Tips your employee receives from customers are generally subject to withholding. Form 1040a Your employee must report cash tips to you by the 10th of the month after the month the tips are received. Form 1040a 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. Form 1040a Both directly and indirectly tipped employees must report tips to you. Form 1040a No report is required for months when tips are less than $20. Form 1040a Your employee reports the tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. Form 1040a 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 the report covers, and The total of tips received during the month or period. Form 1040a Both Forms 4070 and 4070-A, Employee's Daily Record of Tips, are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer. Form 1040a You are permitted to establish a system for electronic tip reporting by employees. Form 1040a See Regulations section 31. Form 1040a 6053-1(d). Form 1040a Collecting taxes on tips. Form 1040a   You must collect income tax, employee social security tax, and employee Medicare tax on the employee's tips. Form 1040a 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. Form 1040a If an employee reports to you in writing $20 or more of tips in a month, the tips are also subject to FUTA tax. Form 1040a   You can collect these taxes from the employee's wages or from other funds he or she makes available. Form 1040a See Tips treated as supplemental wages in section 7 for more information. Form 1040a Stop collecting the employee social security tax when his or her wages and tips for tax year 2014 reach $117,000; collect the income and employee Medicare taxes for the whole year on all wages and tips. Form 1040a You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the limit. Form 1040a You are responsible for the employer Medicare tax for the whole year on all wages and tips. Form 1040a File Form 941 or Form 944 to report withholding and employment taxes on tips. Form 1040a Ordering rule. Form 1040a   If, by the 10th of the month after the month for which you received an employee's report on tips, you do not have enough employee funds available to deduct the employee tax, you no longer have to collect it. Form 1040a If there are not enough funds available, withhold taxes in the following order. Form 1040a Withhold on regular wages and other compensation. Form 1040a Withhold social security and Medicare taxes on tips. Form 1040a Withhold income tax on tips. Form 1040a Reporting tips. Form 1040a   Report tips and any collected and uncollected social security and Medicare taxes on Form W-2 and on Form 941, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). Form 1040a Report an adjustment on Form 941, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. Form 1040a Enter the amount of uncollected social security tax and Medicare tax on Form W-2, box 12, with codes “A” and “B. Form 1040a ” Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. Form 1040a See section 13 and the General Instructions for Forms W-2 and W-3. Form 1040a   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. Form 1040a See Revenue Ruling 2012-18, 2012-26 I. Form 1040a R. Form 1040a B. Form 1040a 1032, available at www. Form 1040a irs. Form 1040a gov/irb/2012-26_IRB/ar07. Form 1040a html. Form 1040a Allocated tips. Form 1040a   If you operate a large food or beverage establishment, you must report allocated tips under certain circumstances. Form 1040a However, do not withhold income, social security, or Medicare taxes on allocated tips. Form 1040a   A large food or beverage establishment is one that provides food or beverages for consumption on the premises, where tipping is customary, and where there were normally more than 10 employees on a typical business day during the preceding year. Form 1040a   The tips may be allocated by one of three methods—hours worked, gross receipts, or good faith agreement. Form 1040a For information about these allocation methods, including the requirement to file Forms 8027 electronically if 250 or more forms are filed, see the Instructions for Form 8027. Form 1040a For information on filing Form 8027 electronically with the IRS, see Publication 1239. Form 1040a Tip Rate Determination and Education Program. Form 1040a   Employers may participate in the Tip Rate Determination and Education Program. Form 1040a The program primarily consists of two voluntary agreements developed to improve tip income reporting by helping taxpayers to understand and meet their tip reporting responsibilities. Form 1040a The two agreements are the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). Form 1040a A tip agreement, the Gaming Industry Tip Compliance Agreement (GITCA), is available for the gaming (casino) industry. Form 1040a To get more information about TRDA and TRAC agreements, see Publication 3144, Tips on Tips. Form 1040a Additionally, visit IRS. Form 1040a gov and enter “MSU tips” in the search box to get more information about GITCA, TRDA, or TRAC agreements. Form 1040a 7. Form 1040a Supplemental Wages Supplemental wages are wage payments to an employee that are not regular wages. Form 1040a They include, but are not limited to, bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay increases, and payments for nondeductible moving expenses. Form 1040a Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. Form 1040a How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular wages. Form 1040a See Regulations section 31. Form 1040a 3402(g)-1 for additional guidance for wages paid after January 1, 2007. Form 1040a Also see Revenue Ruling 2008-29, 2008-24 I. Form 1040a R. Form 1040a B. Form 1040a 1149, available at www. Form 1040a irs. Form 1040a gov/irb/2008-24_IRB/ar08. Form 1040a html. Form 1040a Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. Form 1040a   Special rules apply to the extent supplemental wages paid to any one employee during the calendar year exceed $1 million. Form 1040a If a supplemental wage payment, together with other supplemental wage payments made to the employee during the calendar year, exceeds $1 million, the excess is subject to withholding at 39. Form 1040a 6% (or the highest rate of income tax for the year). Form 1040a Withhold using the 39. Form 1040a 6% rate without regard to the employee's Form W-4. Form 1040a In determining supplemental wages paid to the employee during the year, include payments from all businesses under common control. Form 1040a For more information, see Treasury Decision 9276, 2006-37 I. Form 1040a R. Form 1040a B. Form 1040a 423, available at www. Form 1040a irs. Form 1040a gov/irb/2006-37_IRB/ar09. Form 1040a html. Form 1040a Withholding on supplemental wage payments to an employee who does not receive $1 million of supplemental wages during the calendar year. Form 1040a   If the supplemental wages paid to the employee during the calendar year are less than or equal to $1 million, the following rules apply in determining the amount of income tax to be withheld. Form 1040a Supplemental wages combined with regular wages. Form 1040a   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period. Form 1040a Supplemental wages identified separately from regular wages. Form 1040a   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages. Form 1040a If you withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. Form 1040a Withhold a flat 25% (no other percentage allowed). Form 1040a If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. Form 1040a If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. Form 1040a Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Form 1040a Subtract the tax withheld from the regular wages. Form 1040a Withhold the remaining tax from the supplemental wages. Form 1040a If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and the previous supplemental wage payments, and withhold the remaining tax. Form 1040a If you did not withhold income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b. Form 1040a This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. Form 1040a Regardless of the method you use to withhold income tax on supplemental wages, they are subject to social security, Medicare, and FUTA taxes. Form 1040a Example 1. Form 1040a You pay John Peters a base salary on the 1st of each month. Form 1040a He is single and claims one withholding allowance. Form 1040a In January he is paid $1,000. Form 1040a Using the wage bracket tables, you withhold $50 from this amount. Form 1040a In February, he receives salary of $1,000 plus a commission of $2,000, which you combine with regular wages and do not separately identify. Form 1040a You figure the withholding based on the total of $3,000. Form 1040a The correct withholding from the tables is $338. Form 1040a Example 2. Form 1040a You pay Sharon Warren a base salary on the 1st of each month. Form 1040a She is single and claims one allowance. Form 1040a Her May 1 pay is $2,000. Form 1040a Using the wage bracket tables, you withhold $188. Form 1040a On May 14 she receives a bonus of $1,000. Form 1040a Electing to use supplemental wage withholding method 1-b, you: Add the bonus amount to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 = $3,000). Form 1040a Determine the amount of withholding on the combined $3,000 amount to be $338 using the wage bracket tables. Form 1040a Subtract the amount withheld from wages on the most recent base salary pay date (May 1) from the combined withholding amount ($338 – $188 = $150). Form 1040a Withhold $150 from the bonus payment. Form 1040a Example 3. Form 1040a The facts are the same as in Example 2, except you elect to use the flat rate method of withholding on the bonus. Form 1040a You withhold 25% of $1,000, or $250, from Sharon's bonus payment. Form 1040a Example 4. Form 1040a The facts are the same as in Example 2, except you elect to pay Sharon a second bonus of $2,000 on May 28. Form 1040a Using supplemental wage withholding method 1-b, you: Add the first and second bonus amounts to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 + $2,000 = $5,000). Form 1040a Determine the amount of withholding on the combined $5,000 amount to be $781 using the wage bracket tables. Form 1040a Subtract the amounts withheld from wages on the most recent base salary pay date (May 1) and the amounts withheld from the first bonus payment from the combined withholding amount ($781 – $188 – $150 = $443). Form 1040a Withhold $443 from the second bonus payment. Form 1040a Tips treated as supplemental wages. Form 1040a   Withhold income tax on tips from wages earned by the employee or from other funds the employee makes available. Form 1040a If an employee receives regular wages and reports tips, figure income tax withholding as if the tips were supplemental wages. Form 1040a If you have not withheld income tax from the regular wages, add the tips to the regular wages. Form 1040a Then withhold income tax on the total. Form 1040a If you withheld income tax from the regular wages, you can withhold on the tips by method 1-a or 1-b discussed earlier in this section under Supplemental wages identified separately from regular wages. Form 1040a Vacation pay. Form 1040a   Vacation pay is subject to withholding as if it were a regular wage payment. Form 1040a When vacation pay is in addition to regular wages for the vacation period, treat it as a supplemental wage payment. Form 1040a If the vacation pay is for a time longer than your usual payroll period, spread it over the pay periods for which you pay it. Form 1040a 8. Form 1040a Payroll Period Your payroll period is a period of service for which you usually pay wages. Form 1040a When you have a regular payroll period, withhold income tax for that time period even if your employee does not work the full period. Form 1040a No regular payroll period. Form 1040a   When you do not have a regular payroll period, withhold the tax as if you paid wages for a daily or miscellaneous payroll period. Form 1040a Figure the number of days (including Sundays and holidays) in the period covered by the wage payment. Form 1040a If the wages are unrelated to a specific length of time (for example, commissions paid on completion of a sale), count back the number of days from the payment period to the latest of: The last wage payment made during the same calendar year, The date employment began, if during the same calendar year, or January 1 of the same year. Form 1040a Employee paid for period less than 1 week. Form 1040a   When you pay an employee for a period of less than one week, and the employee signs a statement under penalties of perjury indicating he or she is not working for any other employer during the same week for wages subject to withholding, figure withholding based on a weekly payroll period. Form 1040a If the employee later begins to work for another employer for wages subject to withholding, the employee must notify you within 10 days. Form 1040a You then figure withholding based on the daily or miscellaneous period. Form 1040a 9. Form 1040a Withholding From Employees' Wages Income Tax Withholding Using Form W-4 to figure withholding. Form 1040a   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. Form 1040a Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. Form 1040a Advise your employees to use the IRS Withholding Calculator on the IRS website at www. Form 1040a irs. Form 1040a gov/individuals for help in determining how many withholding allowances to claim on their Forms W-4. Form 1040a   Ask all new employees to give you a signed Form W-4 when they start work. Form 1040a Make the form effective with the first wage payment. Form 1040a If a new employee does not give you a completed Form W-4, withhold income tax as if he or she is single, with no withholding allowances. Form 1040a Form in Spanish. Form 1040a   You can provide Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, in place of Form W-4, to your Spanish-speaking employees. Form 1040a For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). Form 1040a The rules discussed in this section that apply to Form W-4 also apply to Formulario W-4(SP). Form 1040a Electronic system to receive Form W-4. Form 1040a   You may establish a system to electronically receive Forms W-4 from your employees. Form 1040a See Regulations section 31. Form 1040a 3402(f)(5)-1(c) for more information. Form 1040a Effective date of Form W-4. Form 1040a   A Form W-4 remains in effect until the employee gives you a new one. Form 1040a When you receive a new Form W-4 from an employee, do not adjust withholding for pay periods before the effective date of the new form. Form 1040a If an employee gives you a Form W-4 that replaces an existing Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. Form 1040a For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. Form 1040a A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. Form 1040a Successor employer. Form 1040a   If you are a successor employer (see Successor employer , later in this section), secure new Forms W-4 from the transferred employees unless the “Alternative Procedure” in section 5 of Revenue Procedure 2004-53 applies. Form 1040a See Revenue Procedure 2004-53, 2004-34 I. Form 1040a R. Form 1040a B. Form 1040a 320, available at www. Form 1040a irs. Form 1040a gov/irb/2004-34_IRB/ar13. Form 1040a html. Form 1040a Completing Form W-4. Form 1040a   The amount of any federal income tax withholding must be based on marital status and withholding allowances. Form 1040a Your employees may not base their withholding amounts on a fixed dollar amount or percentage. Form 1040a However, an employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. Form 1040a Employees may claim fewer withholding allowances than they are entitled to claim. Form 1040a They may wish to claim fewer allowances to ensure they have enough withholding or to offset the tax on other sources of taxable income not subject to withholding. Form 1040a See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. Form 1040a Along with Form W-4, you may wish to order Publication 505 for use by your employees. Form 1040a Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. Form 1040a If they require additional withholding, they should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. Form 1040a Exemption from federal income tax withholding. Form 1040a   Generally, an employee may claim exemption from federal income tax withholding because he or she had no income tax liability last year and expects none this year. Form 1040a See the Form W-4 instructions for more information. Form 1040a However, the wages are still subject to social security and Medicare taxes. Form 1040a See also Invalid Forms W-4 , later in this section. Form 1040a   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. Form 1040a To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. Form 1040a If the employee does not give you a new Form W-4 by February 15, begin withholding based on the last Form W-4 for the employee that did not claim an exemption from withholding or, if one was not filed, then withhold tax as if he or she is single with zero withholding allowances. Form 1040a If the employee provides a new Form W-4 claiming exemption from withholding on February 16 or later, you may apply it to future wages but do not refund any taxes already withheld. Form 1040a Withholding income taxes on the wages of nonresident alien employees. Form 1040a   In general, you must withhold federal income taxes on the wages of nonresident alien employees. Form 1040a However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. Form 1040a Also see section 3 of Publication 51 (Circular A), Agricultural Employer's Tax Guide, for guidance on H-2A visa workers. Form 1040a Withholding adjustment for nonresident alien employees. Form 1040a   For 2014, apply the procedure discussed next to figure the amount of income tax to withhold from the wages of nonresident alien employees performing services within the United States. Form 1040a Nonresident alien students from India and business apprentices from India are not subject to this procedure. Form 1040a Instructions. Form 1040a   To figure how much income tax to withhold from the wages paid to a nonresident alien employee performing services in the United States, use the following steps. Form 1040a Step 1. Form 1040a   Add to the wages paid to the nonresident alien employee for the payroll period the amount shown in the chart below for the applicable payroll period. Form 1040a    Amount to Add to Nonresident Alien Employee's Wages for Calculating Income Tax Withholding Only   Payroll Period Add Additional     Weekly $ 43. Form 1040a 30     Biweekly 86. Form 1040a 50     Semimonthly 93. Form 1040a 80     Monthly 187. Form 1040a 50     Quarterly 562. Form 1040a 50     Semiannually 1,125. Form 1040a 00     Annually 2,250. Form 1040a 00     Daily or Miscellaneous (each day of the payroll period) 8. Form 1040a 70   Step 2. Form 1040a   Use the amount figured in Step 1 and the number of withholding allowances claimed (generally limited to one allowance) to figure income tax withholding. Form 1040a Determine the value of withholding allowances by multiplying the number of withholding allowances claimed by the appropriate amount from Table 5. Form 1040a Percentage Method—2014 Amount for One Withholding Allowance shown on page 41. Form 1040a If you are using the Percentage Method Tables for Income Tax Withholding, provided on pages 43–44, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure the income tax withholding. Form 1040a If you are using the Wage Bracket Method for Income Tax Withholding, provided on pages 45–64, use the amount figured in Step 1 and the number of withholding allowances to figure income tax withholding. Form 1040a The amounts from the chart above are added to wages solely for calculating income tax withholding on the wages of the nonresident alien employee. Form 1040a The amounts from the chart should not be included in any box on the employee's Form W-2 and do not increase the income tax liability of the employee. Form 1040a Also, the amounts from the chart do not increase the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. Form 1040a This procedure only applies to nonresident alien employees who have wages subject to income tax withholding. Form 1040a Example. Form 1040a An employer using the percentage method of withholding pays wages of $500 for a biweekly payroll period to a married nonresident alien employee. Form 1040a The nonresident alien has properly completed Form W-4, entering marital status as “single” with one withholding allowance and indicating status as a nonresident alien on Form W-4, line 6 (see Nonresident alien employee's Form W-4 , later in this section). Form 1040a The employer determines the wages to be used in the withholding tables by adding to the $500 amount of wages paid the amount of $86. Form 1040a 50 from the chart under Step 1 ($586. Form 1040a 50 total). Form 1040a The employer then applies the applicable tables to determine the income tax withholding for nonresident aliens (see Step 2 ). Form 1040a Reminder: If you use the Percentage Method Tables for Income Tax Withholding, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure income tax withholding. Form 1040a The $86. Form 1040a 50 added to wages for calculating income tax withholding is not reported on Form W-2, and does not increase the income tax liability of the employee. Form 1040a Also, the $86. Form 1040a 50 added to wages does not affect the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. Form 1040a Supplemental wage payment. Form 1040a   This procedure for determining the amount of income tax withholding does not apply to a supplemental wage payment (see section 7) if the 39. Form 1040a 6% mandatory flat rate withholding applies or if the 25% optional flat rate withholding is being used to calculate income tax withholding on the supplemental wage payment. Form 1040a Nonresident alien employee's Form W-4. Form 1040a   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding, Request withholding as if they are single, regardless of their actual marital status, Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or South Korea, or a student or business apprentice from India, he or she may claim more than one allowance), and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. Form 1040a   If you maintain an electronic Form W-4 system, you should provide a field for nonresident aliens to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. Form 1040a A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. Form 1040a Form 8233. Form 1040a   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. Form 1040a See Publication 515 for details. Form 1040a IRS review of requested Forms W-4. Form 1040a   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. Form 1040a You may also be directed to send certain Forms W-4 to the IRS. Form 1040a You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. Form 1040a Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. Form 1040a The IRS may also require you to submit copies of Form W-4 to the IRS as directed by Treasury Decision 9337, 2007-35 I. Form 1040a R. Form 1040a B. Form 1040a 455, which is available at www. Form 1040a irs. Form 1040a gov/irb/2007-35_IRB/ar10. Form 1040a html. Form 1040a When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. Form 1040a After submitting a copy of a requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). Form 1040a However, if the IRS later notifies you in writing the employee is not entitled to claim exemption from withholding or a claimed number of withholding allowances, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the IRS notice (commonly referred to as a "lock-in letter
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The Form 1040a

Form 1040a 12. Form 1040a   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Form 1040a Free help with your tax return. Form 1040a   You can get free help preparing your return nationwide from IRS-certified volunteers. Form 1040a The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Form 1040a The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Form 1040a Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Form 1040a In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Form 1040a To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Form 1040a gov, download the IRS2Go app, or call 1-800-906-9887. Form 1040a   As part of the TCE program, AARP offers the Tax-Aide counseling program. Form 1040a To find the nearest AARP Tax-Aide site, visit AARP's website at www. Form 1040a aarp. Form 1040a org/money/taxaide or call 1-888-227-7669. Form 1040a For more information on these programs, go to IRS. Form 1040a gov and enter “VITA” in the search box. Form 1040a Internet. Form 1040a    IRS. Form 1040a gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Form 1040a Download the free IRS2Go app from the iTunes app store or from Google Play. Form 1040a Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Form 1040a Check the status of your 2013 refund with the Where's My Refund? application on IRS. Form 1040a gov or download the IRS2Go app and select the Refund Status option. Form 1040a The IRS issues more than 9 out of 10 refunds in less than 21 days. Form 1040a Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Form 1040a You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Form 1040a The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Form 1040a Use the Interactive Tax Assistant (ITA) to research your tax questions. Form 1040a No need to wait on the phone or stand in line. Form 1040a The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Form 1040a When you reach the response screen, you can print the entire interview and the final response for your records. Form 1040a New subject areas are added on a regular basis. Form 1040a  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Form 1040a gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Form 1040a You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Form 1040a The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Form 1040a When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Form 1040a Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Form 1040a You can also ask the IRS to mail a return or an account transcript to you. Form 1040a Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Form 1040a gov or by calling 1-800-908-9946. Form 1040a Tax return and tax account transcripts are generally available for the current year and the past three years. Form 1040a Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Form 1040a Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Form 1040a If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Form 1040a Check the status of your amended return using Where's My Amended Return? Go to IRS. Form 1040a gov and enter Where's My Amended Return? in the search box. Form 1040a You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Form 1040a It can take up to 3 weeks from the date you mailed it to show up in our system. Form 1040a Make a payment using one of several safe and convenient electronic payment options available on IRS. Form 1040a gov. Form 1040a Select the Payment tab on the front page of IRS. Form 1040a gov for more information. Form 1040a Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Form 1040a Figure your income tax withholding with the IRS Withholding Calculator on IRS. Form 1040a gov. Form 1040a Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Form 1040a Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Form 1040a gov. Form 1040a Request an Electronic Filing PIN by going to IRS. Form 1040a gov and entering Electronic Filing PIN in the search box. Form 1040a Download forms, instructions and publications, including accessible versions for people with disabilities. Form 1040a Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Form 1040a gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Form 1040a An employee can answer questions about your tax account or help you set up a payment plan. Form 1040a Before you visit, check the Office Locator on IRS. Form 1040a gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Form 1040a If you have a special need, such as a disability, you can request an appointment. Form 1040a Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Form 1040a Apply for an Employer Identification Number (EIN). Form 1040a Go to IRS. Form 1040a gov and enter Apply for an EIN in the search box. Form 1040a Read the Internal Revenue Code, regulations, or other official guidance. Form 1040a Read Internal Revenue Bulletins. Form 1040a Sign up to receive local and national tax news and more by email. Form 1040a Just click on “subscriptions” above the search box on IRS. Form 1040a gov and choose from a variety of options. Form 1040a Phone. Form 1040a    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Form 1040a Download the free IRS2Go app from the iTunes app store or from Google Play. Form 1040a Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Form 1040a gov, or download the IRS2Go app. Form 1040a Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Form 1040a The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Form 1040a Most VITA and TCE sites offer free electronic filing. Form 1040a Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Form 1040a Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Form 1040a Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Form 1040a If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Form 1040a The IRS issues more than 9 out of 10 refunds in less than 21 days. Form 1040a Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Form 1040a Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Form 1040a The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Form 1040a Note, the above information is for our automated hotline. Form 1040a Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Form 1040a Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Form 1040a You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Form 1040a It can take up to 3 weeks from the date you mailed it to show up in our system. Form 1040a Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Form 1040a You should receive your order within 10 business days. Form 1040a Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Form 1040a If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Form 1040a Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Form 1040a The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Form 1040a These individuals can also contact the IRS through relay services such as the Federal Relay Service. Form 1040a Walk-in. Form 1040a   You can find a selection of forms, publications and services — in-person. Form 1040a Products. Form 1040a You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Form 1040a Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Form 1040a Services. Form 1040a You can walk in to your local TAC for face-to-face tax help. Form 1040a An employee can answer questions about your tax account or help you set up a payment plan. Form 1040a Before visiting, use the Office Locator tool on IRS. Form 1040a gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Form 1040a Mail. Form 1040a   You can send your order for forms, instructions, and publications to the address below. Form 1040a You should receive a response within 10 business days after your request is received. Form 1040a Internal Revenue Service 1201 N. Form 1040a Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Form 1040a The Taxpayer Advocate Service (TAS) is your voice at the IRS. Form 1040a Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Form 1040a   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Form 1040a We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Form 1040a You face (or your business is facing) an immediate threat of adverse action. Form 1040a You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Form 1040a   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Form 1040a Here's why we can help: TAS is an independent organization within the IRS. Form 1040a Our advocates know how to work with the IRS. Form 1040a Our services are free and tailored to meet your needs. Form 1040a We have offices in every state, the District of Columbia, and Puerto Rico. Form 1040a   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Form 1040a irs. Form 1040a gov/Advocate, or call us toll-free at 1-877-777-4778. Form 1040a   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Form 1040a If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Form 1040a Low Income Taxpayer Clinics. Form 1040a   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Form 1040a Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Form 1040a Visit www. Form 1040a irs. Form 1040a gov/Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Form 1040a Prev  Up  Next   Home   More Online Publications