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Form 1040x 2010

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Form 1040x 2010

Form 1040x 2010 4. Form 1040x 2010   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. Form 1040x 2010  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. Form 1040x 2010 For more information, see Publication 505. Form 1040x 2010 Reminders Estimated tax safe harbor for higher income taxpayers. Form 1040x 2010  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. Form 1040x 2010 Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. Form 1040x 2010 In general, the federal income tax is a pay-as-you-go tax. Form 1040x 2010 There are two ways to pay as you go. Form 1040x 2010 Withholding. Form 1040x 2010 If you are an employee, your employer probably withholds income tax from your pay. Form 1040x 2010 Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. Form 1040x 2010 The amount withheld is paid to the IRS in your name. Form 1040x 2010 Estimated tax. Form 1040x 2010 If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. Form 1040x 2010 People who are in business for themselves generally will have to pay their tax this way. Form 1040x 2010 Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. Form 1040x 2010 Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Form 1040x 2010 This chapter explains these methods. Form 1040x 2010 In addition, it also explains the following. Form 1040x 2010 Credit for withholding and estimated tax. Form 1040x 2010 When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. Form 1040x 2010 , and for the estimated tax you paid for 2013. Form 1040x 2010 Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). Form 1040x 2010 Underpayment penalty. Form 1040x 2010 If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. Form 1040x 2010 In most cases, the IRS can figure this penalty for you. Form 1040x 2010 See Underpayment Penalty for 2013 at the end of this chapter. Form 1040x 2010 Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. Form 1040x 2010 This section explains the rules for withholding tax from each of these types of income. Form 1040x 2010 This section also covers backup withholding on interest, dividends, and other payments. Form 1040x 2010 Salaries and Wages Income tax is withheld from the pay of most employees. Form 1040x 2010 Your pay includes your regular pay, bonuses, commissions, and vacation allowances. Form 1040x 2010 It also includes reimbursements and other expense allowances paid under a nonaccountable plan. Form 1040x 2010 See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. Form 1040x 2010 If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. Form 1040x 2010 This is explained under Exemption From Withholding , later. Form 1040x 2010 You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. Form 1040x 2010 If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Form 1040x 2010 Military retirees. Form 1040x 2010   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. Form 1040x 2010 Household workers. Form 1040x 2010   If you are a household worker, you can ask your employer to withhold income tax from your pay. Form 1040x 2010 A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. Form 1040x 2010   Tax is withheld only if you want it withheld and your employer agrees to withhold it. Form 1040x 2010 If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Form 1040x 2010 Farmworkers. Form 1040x 2010   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. Form 1040x 2010 Differential wage payments. Form 1040x 2010    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Form 1040x 2010 Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. Form 1040x 2010 The wages and withholding will be reported on Form W-2, Wage and Tax Statement. Form 1040x 2010   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. Form 1040x 2010 Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. Form 1040x 2010 The amount you earn in each payroll period. Form 1040x 2010 The information you give your employer on Form W-4. Form 1040x 2010 Form W-4 includes four types of information that your employer will use to figure your withholding. Form 1040x 2010 Whether to withhold at the single rate or at the lower married rate. Form 1040x 2010 How many withholding allowances you claim (each allowance reduces the amount withheld). Form 1040x 2010 Whether you want an additional amount withheld. Form 1040x 2010 Whether you are claiming an exemption from withholding in 2014. Form 1040x 2010 See Exemption From Withholding , later. Form 1040x 2010 Note. Form 1040x 2010 You must specify a filing status and a number of withholding allowances on Form W-4. Form 1040x 2010 You cannot specify only a dollar amount of withholding. Form 1040x 2010 New Job When you start a new job, you must fill out Form W-4 and give it to your employer. Form 1040x 2010 Your employer should have copies of the form. Form 1040x 2010 If you need to change the information later, you must fill out a new form. Form 1040x 2010 If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. Form 1040x 2010 You may be able to avoid overwithholding if your employer agrees to use the part-year method. Form 1040x 2010 See Part-Year Method in chapter 1 of Publication 505 for more information. Form 1040x 2010 Employee also receiving pension income. Form 1040x 2010   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. Form 1040x 2010 However, you can choose to split your withholding allowances between your pension and job in any manner. Form 1040x 2010 Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. Form 1040x 2010 When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. Form 1040x 2010 If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. Form 1040x 2010 Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. Form 1040x 2010 Changing your withholding for 2015. Form 1040x 2010   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. Form 1040x 2010 If the event occurs in December 2014, submit a new Form W-4 within 10 days. Form 1040x 2010 Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. Form 1040x 2010 If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. Form 1040x 2010 You should try to have your withholding match your actual tax liability. Form 1040x 2010 If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. Form 1040x 2010 If too much tax is withheld, you will lose the use of that money until you get your refund. Form 1040x 2010 Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. Form 1040x 2010 Note. Form 1040x 2010 You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. Form 1040x 2010 Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. Form 1040x 2010 The worksheets are for your own records. Form 1040x 2010 Do not give them to your employer. Form 1040x 2010 Multiple jobs. Form 1040x 2010   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Form 1040x 2010 Then split your allowances between the Forms W-4 for each job. Form 1040x 2010 You cannot claim the same allowances with more than one employer at the same time. Form 1040x 2010 You can claim all your allowances with one employer and none with the other(s), or divide them any other way. Form 1040x 2010 Married individuals. Form 1040x 2010   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Form 1040x 2010 Use only one set of worksheets. Form 1040x 2010 You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. Form 1040x 2010   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. Form 1040x 2010 Alternative method of figuring withholding allowances. Form 1040x 2010   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. Form 1040x 2010 For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. Form 1040x 2010 Personal Allowances Worksheet. Form 1040x 2010   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. Form 1040x 2010 Deduction and Adjustments Worksheet. Form 1040x 2010   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. Form 1040x 2010 Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. Form 1040x 2010 Two-Earners/Multiple Jobs Worksheet. Form 1040x 2010   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. Form 1040x 2010 Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. Form 1040x 2010 Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. Form 1040x 2010 You accurately complete all the Form W-4 worksheets that apply to you. Form 1040x 2010 You give your employer a new Form W-4 when changes occur. Form 1040x 2010 But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. Form 1040x 2010 This is most likely to happen in the following situations. Form 1040x 2010 You are married and both you and your spouse work. Form 1040x 2010 You have more than one job at a time. Form 1040x 2010 You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. Form 1040x 2010 You will owe additional amounts with your return, such as self-employment tax. Form 1040x 2010 Your withholding is based on obsolete Form W-4 information for a substantial part of the year. Form 1040x 2010 Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. Form 1040x 2010 You work only part of the year. Form 1040x 2010 You change the number of your withholding allowances during the year. Form 1040x 2010 Cumulative wage method. Form 1040x 2010   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. Form 1040x 2010 You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. Form 1040x 2010 You must ask your employer in writing to use this method. Form 1040x 2010   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. Form 1040x 2010 ) since the beginning of the year. Form 1040x 2010 Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. Form 1040x 2010 It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. Form 1040x 2010 It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. Form 1040x 2010 If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. Form 1040x 2010 You can use the IRS Withholding Calculator at www. Form 1040x 2010 irs. Form 1040x 2010 gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. Form 1040x 2010 Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. Form 1040x 2010 These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. Form 1040x 2010 New Form W-4. Form 1040x 2010   When you start a new job, your employer should have you complete a Form W-4. Form 1040x 2010 Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. Form 1040x 2010   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. Form 1040x 2010 The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. Form 1040x 2010 No Form W-4. Form 1040x 2010   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. Form 1040x 2010 Repaying withheld tax. Form 1040x 2010   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Form 1040x 2010 Your employer cannot repay any of the tax previously withheld. Form 1040x 2010 Instead, claim the full amount withheld when you file your tax return. Form 1040x 2010   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Form 1040x 2010 Your employer can repay the amount that was withheld incorrectly. Form 1040x 2010 If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. Form 1040x 2010 Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. Form 1040x 2010 The exemption applies only to income tax, not to social security or Medicare tax. Form 1040x 2010 You can claim exemption from withholding for 2014 only if both of the following situations apply. Form 1040x 2010 For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. Form 1040x 2010 For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. Form 1040x 2010 Students. Form 1040x 2010   If you are a student, you are not automatically exempt. Form 1040x 2010 See chapter 1 to find out if you must file a return. Form 1040x 2010 If you work only part time or only during the summer, you may qualify for exemption from withholding. Form 1040x 2010 Age 65 or older or blind. Form 1040x 2010   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. Form 1040x 2010 Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. Form 1040x 2010 Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. Form 1040x 2010 Claiming exemption from withholding. Form 1040x 2010   To claim exemption, you must give your employer a Form W-4. Form 1040x 2010 Do not complete lines 5 and 6. Form 1040x 2010 Enter “Exempt” on line 7. Form 1040x 2010   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. Form 1040x 2010 If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. Form 1040x 2010   Your claim of exempt status may be reviewed by the IRS. Form 1040x 2010 An exemption is good for only 1 year. Form 1040x 2010   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. Form 1040x 2010 Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. Form 1040x 2010 The payer can figure withholding on supplemental wages using the same method used for your regular wages. Form 1040x 2010 However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. Form 1040x 2010 Expense allowances. Form 1040x 2010   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. Form 1040x 2010   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. Form 1040x 2010   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. Form 1040x 2010 Penalties You may have to pay a penalty of $500 if both of the following apply. Form 1040x 2010 You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. Form 1040x 2010 You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. Form 1040x 2010 There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. Form 1040x 2010 The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. Form 1040x 2010 These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. Form 1040x 2010 A simple error or an honest mistake will not result in one of these penalties. Form 1040x 2010 For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. Form 1040x 2010 Tips The tips you receive while working on your job are considered part of your pay. Form 1040x 2010 You must include your tips on your tax return on the same line as your regular pay. Form 1040x 2010 However, tax is not withheld directly from tip income, as it is from your regular pay. Form 1040x 2010 Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. Form 1040x 2010 See chapter 6 for information on reporting your tips to your employer. Form 1040x 2010 For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. Form 1040x 2010 How employer figures amount to withhold. Form 1040x 2010   The tips you report to your employer are counted as part of your income for the month you report them. Form 1040x 2010 Your employer can figure your withholding in either of two ways. Form 1040x 2010 By withholding at the regular rate on the sum of your pay plus your reported tips. Form 1040x 2010 By withholding at the regular rate on your pay plus a percentage of your reported tips. Form 1040x 2010 Not enough pay to cover taxes. Form 1040x 2010   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. Form 1040x 2010 See Giving your employer money for taxes in chapter 6. Form 1040x 2010 Allocated tips. Form 1040x 2010   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. Form 1040x 2010 Withholding is based only on your pay plus your reported tips. Form 1040x 2010 Your employer should refund to you any incorrectly withheld tax. Form 1040x 2010 See Allocated Tips in chapter 6 for more information. Form 1040x 2010 Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Form 1040x 2010 Your employer generally must withhold income tax on these benefits from your regular pay. Form 1040x 2010 For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. Form 1040x 2010 Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. Form 1040x 2010 Your employer must notify you if this choice is made. Form 1040x 2010 For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. Form 1040x 2010 Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. Form 1040x 2010 To qualify as sick pay, it must be paid under a plan to which your employer is a party. Form 1040x 2010 If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. Form 1040x 2010 An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. Form 1040x 2010 However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. Form 1040x 2010 See Form W-4S , later. Form 1040x 2010 If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. Form 1040x 2010 Union agreements. Form 1040x 2010   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. Form 1040x 2010 See your union representative or your employer for more information. Form 1040x 2010 Form W-4S. Form 1040x 2010   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. Form 1040x 2010 Its instructions contain a worksheet you can use to figure the amount you want withheld. Form 1040x 2010 They also explain restrictions that may apply. Form 1040x 2010   Give the completed form to the payer of your sick pay. Form 1040x 2010 The payer must withhold according to your directions on the form. Form 1040x 2010 Estimated tax. Form 1040x 2010   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. Form 1040x 2010 If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. Form 1040x 2010 See Underpayment Penalty for 2013 at the end of this chapter. Form 1040x 2010 Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. Form 1040x 2010 This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. Form 1040x 2010 The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). Form 1040x 2010 Income tax withholding from an ERD is mandatory. Form 1040x 2010 More information. Form 1040x 2010   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. Form 1040x 2010 For information on IRAs, see chapter 17. Form 1040x 2010 For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. Form 1040x 2010 Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. Form 1040x 2010 Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. Form 1040x 2010 Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. Form 1040x 2010 Any other wager, if the proceeds are at least 300 times the amount of the bet. Form 1040x 2010 It does not matter whether your winnings are paid in cash, in property, or as an annuity. Form 1040x 2010 Winnings not paid in cash are taken into account at their fair market value. Form 1040x 2010 Exception. Form 1040x 2010   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. Form 1040x 2010 However, you may need to provide the payer with a social security number to avoid withholding. Form 1040x 2010 See Backup withholding on gambling winnings in chapter 1 of Publication 505. Form 1040x 2010 If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. Form 1040x 2010 See Estimated Tax for 2014 , later. Form 1040x 2010 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Form 1040x 2010 See Underpayment Penalty for 2013 at the end of this chapter. Form 1040x 2010 Form W-2G. Form 1040x 2010   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. Form 1040x 2010 Report the tax withheld on line 62 of Form 1040. Form 1040x 2010 Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. Form 1040x 2010 To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Form 1040x 2010 All unemployment compensation is taxable. Form 1040x 2010 So, if you do not have income tax withheld, you may have to pay estimated tax. Form 1040x 2010 See Estimated Tax for 2014 , later. Form 1040x 2010 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Form 1040x 2010 For information, see Underpayment Penalty for 2013 at the end of this chapter. Form 1040x 2010 Federal Payments You can choose to have income tax withheld from certain federal payments you receive. Form 1040x 2010 These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. Form 1040x 2010 S. Form 1040x 2010 C. Form 1040x 2010 1421 et. Form 1040x 2010 seq. Form 1040x 2010 ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. Form 1040x 2010 To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Form 1040x 2010 If you do not choose to have income tax withheld, you may have to pay estimated tax. Form 1040x 2010 See Estimated Tax for 2014 , later. Form 1040x 2010 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Form 1040x 2010 For information, see Underpayment Penalty for 2013 at the end of this chapter. Form 1040x 2010 More information. Form 1040x 2010   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. Form 1040x 2010 Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. Form 1040x 2010 Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. Form 1040x 2010 The information return shows how much you were paid during the year. Form 1040x 2010 It also includes your name and taxpayer identification number (TIN). Form 1040x 2010 TINs are explained in chapter 1 under Social Security Number (SSN) . Form 1040x 2010 These payments generally are not subject to withholding. Form 1040x 2010 However, “backup” withholding is required in certain situations. Form 1040x 2010 Backup withholding can apply to most kinds of payments that are reported on Form 1099. Form 1040x 2010 The payer must withhold at a flat 28% rate in the following situations. Form 1040x 2010 You do not give the payer your TIN in the required manner. Form 1040x 2010 The IRS notifies the payer that the TIN you gave is incorrect. Form 1040x 2010 You are required, but fail, to certify that you are not subject to backup withholding. Form 1040x 2010 The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. Form 1040x 2010 The IRS will do this only after it has mailed you four notices over at least a 210-day period. Form 1040x 2010 See Backup Withholding in chapter 1 of Publication 505 for more information. Form 1040x 2010 Penalties. Form 1040x 2010   There are civil and criminal penalties for giving false information to avoid backup withholding. Form 1040x 2010 The civil penalty is $500. Form 1040x 2010 The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. Form 1040x 2010 Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. Form 1040x 2010 This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Form 1040x 2010 You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Form 1040x 2010 Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. Form 1040x 2010 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Form 1040x 2010 If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. Form 1040x 2010 For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. Form 1040x 2010 Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. Form 1040x 2010 To do this, give a new Form W-4 to your employer. Form 1040x 2010 See chapter 1 of Publication 505. Form 1040x 2010 Estimated tax not required. Form 1040x 2010   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. Form 1040x 2010 You had no tax liability for 2013. Form 1040x 2010 You were a U. Form 1040x 2010 S. Form 1040x 2010 citizen or resident alien for the whole year. Form 1040x 2010 Your 2013 tax year covered a 12-month period. Form 1040x 2010   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. Form 1040x 2010 For the definition of “total tax” for 2013, see Publication 505, chapter 2. Form 1040x 2010 Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. Form 1040x 2010 You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. Form 1040x 2010 General rule. Form 1040x 2010   In most cases, you must pay estimated tax for 2014 if both of the following apply. Form 1040x 2010 You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Form 1040x 2010 You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). Form 1040x 2010 Your 2013 tax return must cover all 12 months. Form 1040x 2010    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. Form 1040x 2010 Special rules for farmers, fishermen, and higher income taxpayers. Form 1040x 2010   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. Form 1040x 2010 If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. Form 1040x 2010 See Figure 4-A and Publication 505, chapter 2 for more information. Form 1040x 2010 Figure 4-A. Form 1040x 2010 Do You Have To Pay Estimated Tax? Please click here for the text description of the image. Form 1040x 2010 Figure 4-A Do You Have To Pay Estimated Tax? Aliens. Form 1040x 2010   Resident and nonresident aliens also may have to pay estimated tax. Form 1040x 2010 Resident aliens should follow the rules in this chapter unless noted otherwise. Form 1040x 2010 Nonresident aliens should get Form 1040-ES (NR), U. Form 1040x 2010 S. Form 1040x 2010 Estimated Tax for Nonresident Alien Individuals. Form 1040x 2010   You are an alien if you are not a citizen or national of the United States. Form 1040x 2010 You are a resident alien if you either have a green card or meet the substantial presence test. Form 1040x 2010 For more information about the substantial presence test, see Publication 519, U. Form 1040x 2010 S. Form 1040x 2010 Tax Guide for Aliens. Form 1040x 2010 Married taxpayers. Form 1040x 2010   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. Form 1040x 2010   You and your spouse can make joint estimated tax payments even if you are not living together. Form 1040x 2010   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). Form 1040x 2010   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. Form 1040x 2010 Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. Form 1040x 2010 2013 separate returns and 2014 joint return. Form 1040x 2010   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. Form 1040x 2010 You filed a separate return if you filed as single, head of household, or married filing separately. Form 1040x 2010 2013 joint return and 2014 separate returns. Form 1040x 2010   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. Form 1040x 2010 You file a separate return if you file as single, head of household, or married filing separately. Form 1040x 2010   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. Form 1040x 2010 Then multiply the tax on the joint return by the following fraction. Form 1040x 2010     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Form 1040x 2010 Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Form 1040x 2010 Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. Form 1040x 2010 For 2014, they plan to file married filing separately. Form 1040x 2010 Joe figures his share of the tax on the 2013 joint return as follows. Form 1040x 2010   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. Form 1040x 2010 6%     Joe's share of tax on joint return  ($6,386 × 87. Form 1040x 2010 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. Form 1040x 2010 When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Form 1040x 2010 Use your 2013 federal tax return as a guide. Form 1040x 2010 You can use Form 1040-ES and Publication 505 to figure your estimated tax. Form 1040x 2010 Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). Form 1040x 2010 You must make adjustments both for changes in your own situation and for recent changes in the tax law. Form 1040x 2010 For a discussion of these changes, visit IRS. Form 1040x 2010 gov. Form 1040x 2010 For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. Form 1040x 2010 When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. Form 1040x 2010 Each period has a specific payment due date. Form 1040x 2010 If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. Form 1040x 2010 The payment periods and due dates for estimated tax payments are shown next. Form 1040x 2010   For the period: Due date:*     Jan. Form 1040x 2010 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. Form 1040x 2010 15     Sept. Form 1040x 2010 1– Dec. Form 1040x 2010 31 Jan. Form 1040x 2010 15, next year     *See Saturday, Sunday, holiday rule and January payment . Form 1040x 2010 Saturday, Sunday, holiday rule. Form 1040x 2010   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. Form 1040x 2010 January payment. Form 1040x 2010   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. Form 1040x 2010 Fiscal year taxpayers. Form 1040x 2010   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. Form 1040x 2010 When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. Form 1040x 2010 If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. Form 1040x 2010 You can pay all your estimated tax at that time, or you can pay it in installments. Form 1040x 2010 If you choose to pay in installments, make your first payment by the due date for the first payment period. Form 1040x 2010 Make your remaining installment payments by the due dates for the later periods. Form 1040x 2010 No income subject to estimated tax during first period. Form 1040x 2010    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. Form 1040x 2010 You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Form 1040x 2010 The following chart shows when to make installment payments. Form 1040x 2010 If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. Form 1040x 2010 15 Jan. Form 1040x 2010 15 next year April 1–May 31 June 16 Sept. Form 1040x 2010 15 Jan. Form 1040x 2010 15 next year June 1–Aug. Form 1040x 2010 31 Sept. Form 1040x 2010 15 Jan. Form 1040x 2010 15 next year After Aug. Form 1040x 2010 31 Jan. Form 1040x 2010 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . Form 1040x 2010 How much to pay to avoid a penalty. Form 1040x 2010   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. Form 1040x 2010 How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. Form 1040x 2010 You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. Form 1040x 2010 These methods are described in chapter 2 of Publication 505. Form 1040x 2010 If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. Form 1040x 2010 If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. Form 1040x 2010 Underpayment penalty. Form 1040x 2010   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. Form 1040x 2010 Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. Form 1040x 2010 See chapter 4 of Publication 505 for more information. Form 1040x 2010 Change in estimated tax. Form 1040x 2010   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Form 1040x 2010 Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. Form 1040x 2010 Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. Form 1040x 2010 You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. Form 1040x 2010 How To Pay Estimated Tax There are several ways to pay estimated tax. Form 1040x 2010 Credit an overpayment on your 2013 return to your 2014 estimated tax. Form 1040x 2010 Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. Form 1040x 2010 Send in your payment (check or money order) with a payment voucher from Form 1040-ES. Form 1040x 2010 Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. Form 1040x 2010 On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Form 1040x 2010 Take the amount you have credited into account when figuring your estimated tax payments. Form 1040x 2010 You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. Form 1040x 2010 You also cannot use that overpayment in any other way. Form 1040x 2010 Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. Form 1040x 2010 You can pay using either of the following electronic payment methods. Form 1040x 2010 Direct transfer from your bank account. Form 1040x 2010 Credit or debit card. Form 1040x 2010 To pay your taxes online or for more information, go to www. Form 1040x 2010 irs. Form 1040x 2010 gov/e-pay. Form 1040x 2010 Pay by Phone Paying by phone is another safe and secure method of paying electronically. Form 1040x 2010 Use one of the following methods. Form 1040x 2010 Direct transfer from your bank account. Form 1040x 2010 Credit or debit card. Form 1040x 2010 To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). Form 1040x 2010 People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. Form 1040x 2010 To pay using a credit or debit card, you can call one of the following service providers. Form 1040x 2010 There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. Form 1040x 2010 WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. Form 1040x 2010 payUSAtax. Form 1040x 2010 com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. Form 1040x 2010 officialpayments. Form 1040x 2010 com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. Form 1040x 2010 PAY1040. Form 1040x 2010 com For the latest details on how to pay by phone, go to www. Form 1040x 2010 irs. Form 1040x 2010 gov/e-pay. Form 1040x 2010 Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. Form 1040x 2010 During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. Form 1040x 2010 The enclosed payment vouchers will be preprinted with your name, address, and social security number. Form 1040x 2010 Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. Form 1040x 2010 Use the window envelopes that came with your Form 1040-ES package. Form 1040x 2010 If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. Form 1040x 2010 Note. Form 1040x 2010 These criteria can change without notice. Form 1040x 2010 If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. Form 1040x 2010 irs. Form 1040x 2010 gov and print a copy of Form 1040-ES which includes four blank payment vouchers. Form 1040x 2010 Complete one of these and make your payment timely to avoid penalties for paying late. Form 1040x 2010 Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. Form 1040x 2010 If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. Form 1040x 2010 gov. Form 1040x 2010 Follow the instructions to make sure you use the vouchers correctly. Form 1040x 2010 Joint estimated tax payments. Form 1040x 2010   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. Form 1040x 2010 Change of address. Form 1040x 2010   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Form 1040x 2010 Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. Form 1040x 2010 Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Form 1040x 2010 Also take credit for the estimated tax you paid for 2013. Form 1040x 2010 These credits are subtracted from your total tax. Form 1040x 2010 Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. Form 1040x 2010 Two or more employers. Form 1040x 2010   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. Form 1040x 2010 You may be able to claim the excess as a credit against your income tax when you file your return. Form 1040x 2010 See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. Form 1040x 2010 Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. Form 1040x 2010 Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. Form 1040x 2010 Forms W-2 and W-2G. Form 1040x 2010   If you file a paper return, always file Form W-2 with your income tax return. Form 1040x 2010 File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. Form 1040x 2010   You should get at least two copies of each form. Form 1040x 2010 If you file a paper return, attach one copy to the front of your federal income tax return. Form 1040x 2010 Keep one copy for your records. Form 1040x 2010 You also should receive copies to file with your state and local returns. Form 1040x 2010 Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. Form 1040x 2010 You should receive a separate Form W-2 from each employer you worked for. Form 1040x 2010 If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. Form 1040x 2010 However, your employer must provide or send it to you by January 31, 2014. Form 1040x 2010 If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. Form 1040x 2010 If you have not received your Form W-2 by January 31, you should ask your employer for it. Form 1040x 2010 If you do not receive it by February 15, call the IRS. Form 1040x 2010 Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Form 1040x 2010 Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. Form 1040x 2010 In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. Form 1040x 2010 Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. Form 1040x 2010 If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. Form 1040x 2010 Report the amounts you won on line 21 of Form 1040. Form 1040x 2010 Take credit for the tax withheld on line 62 of Form 1040. Form 1040x 2010 If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. Form 1040x 2010 The 1099 Series Most forms in the 1099 series are not filed with your return. Form 1040x 2010 These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). Form 1040x 2010 Unless instructed to file any of these forms with your return, keep them for your records. Form 1040x 2010 There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Form 1040x 2010 ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. Form 1040x 2010 If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. Form 1040x 2010 See the instructions to these forms for details. Form 1040x 2010 Form 1099-R. Form 1040x 2010   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. Form 1040x 2010 Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. Form 1040x 2010 You cannot use Form 1040EZ if you received payments reported on Form 1099-R. Form 1040x 2010 Backup withholding. Form 1040x 2010   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. Form 1040x 2010 Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. Form 1040x 2010 Call the telephone number or write to the address given for the payer on the form. Form 1040x 2010 The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. Form 1040x 2010 A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. Form 1040x 2010 In certain situations, you will receive two forms in place of the original incorrect form. Form 1040x 2010 This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). Form 1040x 2010 One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. Form 1040x 2010 This form will have an “X” in the “CORRECTED” box at the top of the form. Form 1040x 2010 The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). Form 1040x 2010 Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. Form 1040x 2010 S. Form 1040x 2010 Individual Income Tax Return. Form 1040x 2010 Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Form 1040x 2010 Do not include any amount withheld from your spouse's income. Form 1040x 2010 However, different rules may apply if you live in a community property state. Form 1040x 2010 Community property states are listed in chapter 2. Form 1040x 2010 For more information on these rules, and some exceptions, see Publication 555, Community Property. Form 1040x 2010 Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. Form 1040x 2010 For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. Form 1040x 2010 Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. Form 1040x 2010 Include any overpayment from 2012 that you had credited to your 2013 estimated tax. Form 1040x 2010 You must use Form 1040 or Form 1040A if you paid estimated tax. Form 1040x 2010 You cannot use Form 1040EZ. Form 1040x 2010 Name changed. Form 1040x 2010   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. Form 1040x 2010 The statement should cover payments you made jointly with your spouse as well as any you made separately. Form 1040x 2010   Be sure to report the change to the Social Security Administration. Form 1040x 2010 This prevents delays in processing your return and issuing any refunds. Form 1040x 2010 Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. Form 1040x 2010 If you made joint estimated tax payments, you must decide how to divide the payments between your returns. Form 1040x 2010 One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. Form 1040x 2010 If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. Form 1040x 2010 Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. Form 1040x 2010 If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. Form 1040x 2010 If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. Form 1040x 2010 If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. Form 1040x 2010 Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. Form 1040x 2010 Generally, you will not have to pay a penalty for 2013 if any of the following apply. Form 1040x 2010 The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. Form 1040x 2010 The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Form 1040x 2010 Your total 2013 tax minus your withholding and refundable credits is less than $1,000. Form 1040x 2010 You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. Form 1040x 2010 See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. Form 1040x 2010 Farmers and fishermen. Form 1040x 2010   Special rules apply if you are a farmer or fisherman. Form 1040x 2010 See Farmers and Fishermen in chapter 4 of Publication 505 for more information. Form 1040x 2010 IRS can figure the penalty for you. Form 1040x 2010   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. Form 1040x 2010 Generally, the IRS will figure the penalty for you and send you a bill. Form 1040x 2010 However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. Form 1040x 2010 See chapter 4 of Publication 505. Form 1040x 2010 Prev  Up  Next   Home   More Online Publications
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Page Last Reviewed or Updated: 06-Mar-2014

The Form 1040x 2010

Form 1040x 2010 1. Form 1040x 2010   Scholarships, Fellowships, Grants, and Tuition Reductions Table of Contents Reminder Introduction Scholarships and FellowshipsTax-Free Scholarships and Fellowships Taxable Scholarships and Fellowships Reporting Scholarships and Fellowships Other Types of Educational AssistanceFulbright Grants Pell Grants and Other Title IV Need-Based Education Grants Payment to Service Academy Cadets Veterans' Benefits Qualified Tuition Reduction Reminder Individual retirement arrangements (IRAs). Form 1040x 2010  You can set up and make contributions to an IRA if you receive taxable compensation. Form 1040x 2010 Under this rule, a taxable scholarship or fellowship is compensation only if it is shown in box 1 of your Form W-2, Wage and Tax Statement. Form 1040x 2010 For more information about IRAs, see Publication 590. Form 1040x 2010 Introduction This chapter discusses the income tax treatment of various types of educational assistance you may receive if you are studying, teaching, or researching in the United States. Form 1040x 2010 The educational assistance can be for a primary or secondary school, a college or university, or a vocational school. Form 1040x 2010 Included are discussions of: Scholarships, Fellowships, Need-based education grants, such as a Pell Grant, and Qualified tuition reductions. Form 1040x 2010 Many types of educational assistance are tax free if they meet the requirements discussed here. Form 1040x 2010 Special rules apply to U. Form 1040x 2010 S. Form 1040x 2010 citizens and resident aliens who have received scholarships or fellowships for studying, teaching, or researching abroad. Form 1040x 2010 For information about these rules, see Publication 54, Tax Guide for U. Form 1040x 2010 S. Form 1040x 2010 Citizens and Resident Aliens Abroad. Form 1040x 2010 Scholarships and Fellowships A scholarship is generally an amount paid or allowed to, or for the benefit of, a student (whether an undergraduate or a graduate) at an educational institution to aid in the pursuit of his or her studies. Form 1040x 2010 A fellowship is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research. Form 1040x 2010 Amount of scholarship or fellowship. Form 1040x 2010   The amount of a scholarship or fellowship includes the following: The value of contributed services and accommodations. Form 1040x 2010 This includes such services and accommodations as room (lodging), board (meals), laundry service, and similar services or accommodations that are received by an individual as a part of a scholarship or fellowship. Form 1040x 2010 The amount of tuition, matriculation, and other fees that are paid or remitted to the student to aid the student in pursuing study or research. Form 1040x 2010 Any amount received in the nature of a family allowance as a part of a scholarship or fellowship. Form 1040x 2010 Tax-Free Scholarships and Fellowships A scholarship or fellowship is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution. Form 1040x 2010 A scholarship or fellowship is tax free only to the extent: It does not exceed your expenses; It is not designated or earmarked for other purposes (such as room and board), and does not require (by its terms) that it cannot be used for qualified education expenses; and It does not represent payment for teaching, research, or other services required as a condition for receiving the scholarship. Form 1040x 2010 (But for exceptions, see Payment for services,later. Form 1040x 2010 Use Worksheet 1–1 to figure the amount of a scholarship or fellowship you can exclude from gross income. Form 1040x 2010 Candidate for a degree. Form 1040x 2010   You are a candidate for a degree if you: Attend a primary or secondary school or are pursuing a degree at a college or university, or Attend an educational institution that: Provides a program that is acceptable for full credit toward a bachelor's or higher degree, or offers a program of training to prepare students for gainful employment in a recognized occupation; and Is authorized under federal or state law to provide such a program and is accredited by a nationally recognized accreditation agency. Form 1040x 2010 Eligible educational institution. Form 1040x 2010   An eligible educational institution is one whose primary function is the presentation of formal instruction and that normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. Form 1040x 2010 Qualified education expenses. Form 1040x 2010   For purposes of tax-free scholarships and fellowships, these are expenses for: Tuition and fees required to enroll at or attend an eligible educational institution, and Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. Form 1040x 2010 These items must be required of all students in your course of instruction. Form 1040x 2010 Expenses that do not qualify. Form 1040x 2010   Qualified education expenses do not include the cost of: Room and board, Travel, Research, Clerical help, or Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution. Form 1040x 2010 Payment for services. Form 1040x 2010   Generally, you cannot exclude from your gross income the part of any scholarship or fellowship that represents payment for teaching, research, or other services required as a condition for receiving the scholarship. Form 1040x 2010 This applies even if all candidates for a degree must perform the services to receive the degree. Form 1040x 2010 (See exceptions next. Form 1040x 2010 ) Exceptions. Form 1040x 2010   You do not have to treat as payment for services the part of any scholarship or fellowship that represents payment for teaching, research, or other services if you receive the amount under: The National Health Service Corps Scholarship Program, or The Armed Forces Health Professions Scholarship and Financial Assistance Program. Form 1040x 2010 Example 1. Form 1040x 2010 You received a scholarship of $2,500. Form 1040x 2010 The scholarship was not received under either of the exceptions mentioned above. Form 1040x 2010 As a condition for receiving the scholarship, you must serve as a part-time teaching assistant. Form 1040x 2010 Of the $2,500 scholarship, $1,000 represents payment for teaching. Form 1040x 2010 The provider of your scholarship gives you a Form W-2 showing $1,000 as income. Form 1040x 2010 Your qualified education expenses were at least $1,500. Form 1040x 2010 Assuming that all other conditions are met, $1,500 of your scholarship is tax free. Form 1040x 2010 The $1,000 you received for teaching is taxable. Form 1040x 2010 Example 2. Form 1040x 2010 You are a candidate for a degree at a medical school. Form 1040x 2010 You receive a scholarship (not under either of the exceptions mentioned above) for your medical education and training. Form 1040x 2010 The terms of your scholarship require you to perform future services. Form 1040x 2010 A substantial penalty applies if you do not comply. Form 1040x 2010 The entire amount of your grant is taxable as payment for services in the year it is received. Form 1040x 2010 Athletic Scholarships An athletic scholarship is tax free only if and to the extent it meets the requirements discussed later. Form 1040x 2010 Worksheet 1-1. Form 1040x 2010    You can use Worksheet 1-1, Taxable Scholarship and Fellowship Income , later, to figure the tax-free and taxable parts of your athletic scholarship. Form 1040x 2010    Worksheet 1-1. Form 1040x 2010 Taxable Scholarship and Fellowship Income 1. Form 1040x 2010 Enter the total amount of any scholarship or fellowship for 2013. Form 1040x 2010 See Amount of scholarship or fellowship, earlier. Form 1040x 2010 1. Form 1040x 2010       If you are a degree candidate at an eligible educational institution, go to line 2. Form 1040x 2010 If you are not a degree candidate at an eligible educational institution, stop here. Form 1040x 2010 The entire amount is taxable. Form 1040x 2010 For information on how to report this amount on your tax return, see Reporting Scholarships and Fellowships , earlier, in this chapter. Form 1040x 2010       2. Form 1040x 2010 Enter the amount from line 1 that was for teaching, research, or any other services required as a condition for receiving the scholarship. Form 1040x 2010 (Do not include amounts received for these items under the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance Program. Form 1040x 2010 ) 2. Form 1040x 2010     3. Form 1040x 2010 Subtract line 2 from line 1 3. Form 1040x 2010     4. Form 1040x 2010 Enter the amount from line 3 that your scholarship or fellowship required you to use for other than qualified education expenses 4. Form 1040x 2010     5. Form 1040x 2010 Subtract line 4 from line 3 5. Form 1040x 2010     6. Form 1040x 2010 Enter the amount of your qualified education expenses 6. Form 1040x 2010     7. Form 1040x 2010 Enter the smaller of line 5 or line 6. Form 1040x 2010 This amount is the most you can exclude from your gross income (the tax-free part of the scholarship or fellowship) 7. Form 1040x 2010     8. Form 1040x 2010 Subtract line 7 from line 5 8. Form 1040x 2010     9. Form 1040x 2010 Taxable part. Form 1040x 2010 Add lines 2, 4, and 8. Form 1040x 2010 See Reporting Scholarships and Fellowships , earlier, for how to report this amount on your tax return 9. Form 1040x 2010     Taxable Scholarships and Fellowships If and to the extent your scholarship or fellowship does not meet the requirements described earlier, it is taxable and must be included in gross income. Form 1040x 2010 You can use Worksheet 1–1, Taxable Scholarship and Fellowship Income, later, to figure the tax-free and taxable parts of your scholarship or fellowship. Form 1040x 2010 Reporting Scholarships and Fellowships Whether you must report your scholarship or fellowship depends on whether you must file a return and whether any part of your scholarship or fellowship is taxable. Form 1040x 2010 If your only income is a completely tax-free scholarship or fellowship, you do not have to file a tax return and no reporting is necessary. Form 1040x 2010 If all or part of your scholarship or fellowship is taxable and you are required to file a tax return, report the taxable amount as explained below. Form 1040x 2010 You must report the taxable amount whether or not you received a Form W-2. Form 1040x 2010 If you receive an incorrect Form W-2, ask the payer for a corrected one. Form 1040x 2010 For information on whether you must file a return, see Publication 501, Exemptions, Standard Deduction, and Filing Information, or your income tax form instructions. Form 1040x 2010 How To Report How you report any taxable scholarship or fellowship income depends on which return you file. Form 1040x 2010 Form 1040EZ. Form 1040x 2010   If you file Form 1040EZ, include the taxable amount in the total on line 1. Form 1040x 2010 If the taxable amount was not reported on Form W-2, also enter “SCH” and the taxable amount in the space to the left of line 1. Form 1040x 2010 Form 1040A. Form 1040x 2010   If you file Form 1040A, include the taxable amount in the total on line 7. Form 1040x 2010 If the taxable amount was not reported on Form W-2, also enter “SCH” and the taxable amount in the space to the left of line 7. Form 1040x 2010 Form 1040. Form 1040x 2010   If you file Form 1040, include the taxable amount in the total on line 7. Form 1040x 2010 If the taxable amount was not reported on Form W-2, also enter “SCH” and the taxable amount on the dotted line next to line 7. Form 1040x 2010 Schedule SE (Form 1040). Form 1040x 2010   To determine your net earnings from self-employment, include amounts you receive under a scholarship as pay for your services that are reported to you on Form 1099-MISC, Miscellaneous Income. Form 1040x 2010 If your net earnings are $400 or more, you must pay self-employment tax. Form 1040x 2010 Use Schedule SE, Self-Employment Tax, to figure this tax. Form 1040x 2010 Form 1040NR. Form 1040x 2010   If you file Form 1040NR, report the taxable amount on line 12. Form 1040x 2010 Generally, you must report the amount shown in box 2 of Form(s) 1042-S, Foreign Person's U. Form 1040x 2010 S. Form 1040x 2010 Source Income Subject to Withholding. Form 1040x 2010 See the Instructions for Form 1040NR for more information. Form 1040x 2010 Form 1040NR-EZ. Form 1040x 2010   If you file Form 1040NR-EZ, report the taxable amount on line 5. Form 1040x 2010 Generally, you must report the amount shown in box 2 of Form(s) 1042-S. Form 1040x 2010 See the Instructions for Form 1040NR-EZ for more information. Form 1040x 2010 Other Types of Educational Assistance The following discussions deal with other common types of educational assistance. Form 1040x 2010 Fulbright Grants A Fulbright grant is generally treated as a scholarship or fellowship in figuring how much of the grant is tax free. Form 1040x 2010 Pell Grants and Other Title IV Need-Based Education Grants These need-based grants are treated as scholarships for purposes of determining their tax treatment. Form 1040x 2010 They are tax free to the extent used for qualified education expenses during the period for which a grant is awarded. Form 1040x 2010 Payment to Service Academy Cadets An appointment to a United States military academy is not a scholarship or fellowship. Form 1040x 2010 Payment you receive as a cadet or midshipman at an armed services academy is pay for personal services and will be reported to you in box 1 of Form W-2. Form 1040x 2010 Include this pay in your income in the year you receive it unless one of the exceptions, discussed earlier under Payment for services , applies. Form 1040x 2010 Veterans' Benefits Payments you receive for education, training, or subsistence under any law administered by the Department of Veterans Affairs (VA) are tax free. Form 1040x 2010 Do not include these payments as income on your federal tax return. Form 1040x 2010 If you qualify for one or more of the education benefits discussed in chapters 2 through 12, you may have to reduce the amount of education expenses qualifying for a specific benefit by part or all of your VA payments. Form 1040x 2010 This applies only to the part of your VA payments that is required to be used for education expenses. Form 1040x 2010 You may want to visit the Veteran's Administration website at www. Form 1040x 2010 gibill. Form 1040x 2010 va. Form 1040x 2010 gov for specific information about the various VA benefits for education. Form 1040x 2010 Example. Form 1040x 2010 You have returned to college and are receiving two education benefits under the latest GI Bill: (1) a $1,534 monthly basic housing allowance (BHA) that is directly deposited to your checking account, and (2) $3,840 paid directly to your college for tuition. Form 1040x 2010 Neither of these benefits is taxable and you do not report them on your tax return. Form 1040x 2010 You also want to claim an American opportunity credit on your return. Form 1040x 2010 You paid $5,000 in qualified education expenses (see chapter 2, American Opportunity Credit , later). Form 1040x 2010 To figure the amount of credit, you must first subtract the $3,840 from your qualified education expenses because this payment under the GI Bill was required to be used for education expenses. Form 1040x 2010 You do not subtract any amount of the BHA because it was paid to you and its use was not restricted. Form 1040x 2010 Qualified Tuition Reduction If you are allowed to study tuition free or for a reduced rate of tuition, you may not have to pay tax on this benefit. Form 1040x 2010 This is called a “tuition reduction. Form 1040x 2010 ” You do not have to include a qualified tuition reduction in your income. Form 1040x 2010 A tuition reduction is qualified only if you receive it from, and use it at, an eligible educational institution. Form 1040x 2010 You do not have to use the tuition reduction at the eligible educational institution from which you received it. Form 1040x 2010 In other words, if you work for an eligible educational institution and the institution arranges for you to take courses at another eligible educational institution without paying any tuition, you may not have to include the value of the free courses in your income. Form 1040x 2010 The rules for determining if a tuition reduction is qualified, and therefore tax free, are different if the education provided is below the graduate level or is graduate education. Form 1040x 2010 You must include in your income any tuition reduction you receive that is payment for your services. Form 1040x 2010 Eligible educational institution. Form 1040x 2010   An eligible educational institution is one that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. Form 1040x 2010 Officers, owners, and highly compensated employees. Form 1040x 2010   Qualified tuition reductions apply to officers, owners, or highly compensated employees only if benefits are available to employees on a nondiscriminatory basis. Form 1040x 2010 This means that the tuition reduction benefits must be available on substantially the same basis to each member of a group of employees. Form 1040x 2010 The group must be defined under a reasonable classification set up by the employer. Form 1040x 2010 The classification must not discriminate in favor of owners, officers, or highly compensated employees. Form 1040x 2010 Payment for services. Form 1040x 2010   Generally, you must include in income the part of any qualified tuition reduction that represents payment for teaching, research, or other services by the student required as a condition of receiving the qualified tuition reduction. Form 1040x 2010 This applies even if all candidates for a degree must perform the services to receive the degree. Form 1040x 2010 (See below for exceptions. Form 1040x 2010 ) Exceptions. Form 1040x 2010   You do not have to include in income the part of any scholarship or fellowship that represents payment for teaching, research, or other services if you receive the amount under: The National Health Service Corps Scholarship Program, or The Armed Forces Health Professions Scholarship and Financial Assistance Program. Form 1040x 2010 Education Below the Graduate Level If you receive a tuition reduction for education below the graduate level (including primary, secondary, or high school), it is a qualified tuition reduction, and therefore tax free, only if your relationship to the educational institution providing the benefit is described below. Form 1040x 2010 You are an employee of the eligible educational institution. Form 1040x 2010 You were an employee of the eligible educational institution, but you retired or left on disability. Form 1040x 2010 You are a widow or widower of an individual who died while an employee of the eligible educational institution or who retired or left on disability. Form 1040x 2010 You are the dependent child or spouse of an individual described in (1) through (3), above. Form 1040x 2010 Child of deceased parents. Form 1040x 2010   For purposes of the qualified tuition reduction, a child is a dependent child if the child is under age 25 and both parents have died. Form 1040x 2010 Child of divorced parents. Form 1040x 2010   For purposes of the qualified tuition reduction, a dependent child of divorced parents is treated as the dependent of both parents. Form 1040x 2010 Graduate Education A tuition reduction you receive for graduate education is qualified, and therefore tax free, if both of the following requirements are met. Form 1040x 2010 It is provided by an eligible educational institution. Form 1040x 2010 You are a graduate student who performs teaching or research activities for the educational institution. Form 1040x 2010 You must include in income any other tuition reductions for graduate education that you receive. Form 1040x 2010 How To Report Any tuition reduction that is taxable should be included as wages in box 1 of your Form W-2. Form 1040x 2010 Report the amount from Form W-2, box 1, on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). Form 1040x 2010 Prev  Up  Next   Home   More Online Publications