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Past Years Taxes

Past years taxes 8. Past years taxes   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. Past years taxes Reporting tax withheld. Past years taxes Nominees. Past years taxes Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. Past years taxes Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. Past years taxes Alternative minimum tax treatment. Past years taxes How To Report Dividend IncomeInvestment interest deducted. Past years taxes Reminder Foreign-source income. Past years taxes  If you are a U. Past years taxes S. Past years taxes citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. Past years taxes S. Past years taxes law. Past years taxes This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Past years taxes Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. Past years taxes This chapter also explains how to report dividend income on your tax return. Past years taxes Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. Past years taxes You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. Past years taxes However, some amounts you receive that are called dividends are actually interest income. Past years taxes (See Dividends that are actually interest under Taxable Interest in chapter 7. Past years taxes ) Most distributions are paid in cash (or check). Past years taxes However, distributions can consist of more stock, stock rights, other property, or services. Past years taxes Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. Past years taxes Tax on unearned income of certain children. Past years taxes   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Past years taxes If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. Past years taxes If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Past years taxes    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Past years taxes Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. Past years taxes   For more information about the tax on unearned income of children and the parents' election, see chapter 31. Past years taxes Beneficiary of an estate or trust. Past years taxes    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. Past years taxes You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Past years taxes , from the fiduciary. Past years taxes Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Past years taxes Social security number (SSN) or individual taxpayer identification number (ITIN). Past years taxes    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. Past years taxes This includes payers of dividends. Past years taxes If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. Past years taxes For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. Past years taxes Backup withholding. Past years taxes   Your dividend income is generally not subject to regular withholding. Past years taxes However, it may be subject to backup withholding to ensure that income tax is collected on the income. Past years taxes Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Past years taxes   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. Past years taxes For more information, see Backup Withholding in chapter 4. Past years taxes Stock certificate in two or more names. Past years taxes   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. Past years taxes Form 1099-DIV. Past years taxes   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. Past years taxes Keep this form with your records. Past years taxes You do not have to attach it to your tax return. Past years taxes Dividends not reported on Form 1099-DIV. Past years taxes   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. Past years taxes For example, you may receive distributive shares of dividends from partnerships or S corporations. Past years taxes These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Past years taxes , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Past years taxes Reporting tax withheld. Past years taxes   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. Past years taxes Nominees. Past years taxes   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. Past years taxes Form 1099-MISC. Past years taxes   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. Past years taxes See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. Past years taxes Incorrect amount shown on a Form 1099. Past years taxes   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Past years taxes The new Form 1099 you receive will be marked “Corrected. Past years taxes ” Dividends on stock sold. Past years taxes   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. Past years taxes Dividends received in January. Past years taxes   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. Past years taxes You report the dividend in the year it was declared. Past years taxes Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. Past years taxes They are paid out of earnings and profits and are ordinary income to you. Past years taxes This means they are not capital gains. Past years taxes You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Past years taxes Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Past years taxes Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. Past years taxes They should be shown in box 1b of the Form 1099-DIV you receive. Past years taxes The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. Past years taxes 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. Past years taxes 6%. Past years taxes 20% on any amount that otherwise would be taxed at a 39. Past years taxes 6% rate. Past years taxes To qualify for the maximum rate, all of the following requirements must be met. Past years taxes The dividends must have been paid by a U. Past years taxes S. Past years taxes corporation or a qualified foreign corporation. Past years taxes (See Qualified foreign corporation , later. Past years taxes ) The dividends are not of the type listed later under Dividends that are not qualified dividends . Past years taxes You meet the holding period (discussed next). Past years taxes Holding period. Past years taxes   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Past years taxes The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. Past years taxes Instead, the seller will get the dividend. Past years taxes   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. Past years taxes See the examples later. Past years taxes Exception for preferred stock. Past years taxes   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. Past years taxes If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. Past years taxes Example 1. Past years taxes You bought 5,000 shares of XYZ Corp. Past years taxes common stock on July 9, 2013. Past years taxes XYZ Corp. Past years taxes paid a cash dividend of 10 cents per share. Past years taxes The ex-dividend date was July 16, 2013. Past years taxes Your Form 1099-DIV from XYZ Corp. Past years taxes shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). Past years taxes However, you sold the 5,000 shares on August 12, 2013. Past years taxes You held your shares of XYZ Corp. Past years taxes for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). Past years taxes The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. Past years taxes You have no qualified dividends from XYZ Corp. Past years taxes because you held the XYZ stock for less than 61 days. Past years taxes Example 2. Past years taxes Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. Past years taxes You held the stock for 63 days (from July 16, 2013, through September 16, 2013). Past years taxes The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). Past years taxes Example 3. Past years taxes You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. Past years taxes ABC Mutual Fund paid a cash dividend of 10 cents a share. Past years taxes The ex-dividend date was July 16, 2013. Past years taxes The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Past years taxes Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. Past years taxes However, you sold the 10,000 shares on August 12, 2013. Past years taxes You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. Past years taxes Holding period reduced where risk of loss is diminished. Past years taxes   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. Past years taxes You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. Past years taxes You were grantor (writer) of an option to buy substantially identical stock or securities. Past years taxes Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. Past years taxes   For information about how to apply condition (3), see Regulations section 1. Past years taxes 246-5. Past years taxes Qualified foreign corporation. Past years taxes   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. Past years taxes The corporation is incorporated in a U. Past years taxes S. Past years taxes possession. Past years taxes The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. Past years taxes For a list of those treaties, see Table 8-1. Past years taxes The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. Past years taxes See Readily tradable stock , later. Past years taxes Exception. Past years taxes   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. Past years taxes Readily tradable stock. Past years taxes   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. Past years taxes For a list of the exchanges that meet these requirements, see www. Past years taxes sec. Past years taxes gov/divisions/marketreg/mrexchanges. Past years taxes shtml. Past years taxes Dividends that are not qualified dividends. Past years taxes   The following dividends are not qualified dividends. Past years taxes They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. Past years taxes Capital gain distributions. Past years taxes Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. Past years taxes S. Past years taxes building and loan associations, U. Past years taxes S. Past years taxes savings and loan associations, federal savings and loan associations, and similar financial institutions. Past years taxes (Report these amounts as interest income. Past years taxes ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. Past years taxes Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. Past years taxes Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Past years taxes Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Past years taxes Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Past years taxes Table 8-1. Past years taxes Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. Past years taxes Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. Past years taxes This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. Past years taxes Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. Past years taxes If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. Past years taxes If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. Past years taxes You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. Past years taxes But you may be able to deduct the service charge. Past years taxes See chapter 28 for more information about deducting expenses of producing income. Past years taxes In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. Past years taxes If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. Past years taxes When figuring this amount, use the fair market value of the stock on the dividend payment date. Past years taxes Money Market Funds Report amounts you receive from money market funds as dividend income. Past years taxes Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. Past years taxes Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). Past years taxes They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. Past years taxes Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. Past years taxes Undistributed capital gains of mutual funds and REITs. Past years taxes    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. Past years taxes You must treat your share of these gains as distributions, even though you did not actually receive them. Past years taxes However, they are not included on Form 1099-DIV. Past years taxes Instead, they are reported to you in box 1a of Form 2439. Past years taxes   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. Past years taxes   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. Past years taxes You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. Past years taxes Attach Copy B of Form 2439 to your return, and keep Copy C for your records. Past years taxes Basis adjustment. Past years taxes   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. Past years taxes Additional information. Past years taxes   For more information on the treatment of distributions from mutual funds, see Publication 550. Past years taxes Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. Past years taxes You should receive a Form 1099-DIV or other statement showing the nondividend distribution. Past years taxes On Form 1099-DIV, a nondividend distribution will be shown in box 3. Past years taxes If you do not receive such a statement, you report the distribution as an ordinary dividend. Past years taxes Basis adjustment. Past years taxes   A nondividend distribution reduces the basis of your stock. Past years taxes It is not taxed until your basis in the stock is fully recovered. Past years taxes This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. Past years taxes If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. Past years taxes   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. Past years taxes Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. Past years taxes See Holding Period in chapter 14. Past years taxes Example. Past years taxes You bought stock in 2000 for $100. Past years taxes In 2003, you received a nondividend distribution of $80. Past years taxes You did not include this amount in your income, but you reduced the basis of your stock to $20. Past years taxes You received a nondividend distribution of $30 in 2013. Past years taxes The first $20 of this amount reduced your basis to zero. Past years taxes You report the other $10 as a long-term capital gain for 2013. Past years taxes You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. Past years taxes Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. Past years taxes These distributions are, at least in part, one form of a return of capital. Past years taxes They may be paid in one or more installments. Past years taxes You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. Past years taxes For more information on liquidating distributions, see chapter 1 of Publication 550. Past years taxes Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. Past years taxes Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. Past years taxes Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. Past years taxes Taxable stock dividends and stock rights. Past years taxes   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. Past years taxes You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. Past years taxes The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. Past years taxes The distribution is in convertible preferred stock and has the same result as in (2). Past years taxes The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. Past years taxes The distribution is on preferred stock. Past years taxes (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. Past years taxes )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. Past years taxes If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. Past years taxes Preferred stock redeemable at a premium. Past years taxes   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. Past years taxes For more information, see chapter 1 of Publication 550. Past years taxes Basis. Past years taxes   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. Past years taxes If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. Past years taxes Fractional shares. Past years taxes    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. Past years taxes However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Past years taxes Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Past years taxes Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. Past years taxes Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. Past years taxes    Report these transactions on Form 8949 with the correct box checked. Past years taxes   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. Past years taxes Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Past years taxes Example. Past years taxes You own one share of common stock that you bought on January 3, 2004, for $100. Past years taxes The corporation declared a common stock dividend of 5% on June 29, 2013. Past years taxes The fair market value of the stock at the time the stock dividend was declared was $200. Past years taxes You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. Past years taxes You figure your gain or loss as follows: Fair market value of old stock $200. Past years taxes 00 Fair market value of stock dividend (cash received) +10. Past years taxes 00 Fair market value of old stock and stock dividend $210. Past years taxes 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. Past years taxes 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. Past years taxes 76 Total $100. Past years taxes 00 Cash received $10. Past years taxes 00 Basis (cost) of stock dividend − 4. Past years taxes 76 Gain $5. Past years taxes 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. Past years taxes Scrip dividends. Past years taxes   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. Past years taxes The certificate is generally nontaxable when you receive it. Past years taxes If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. Past years taxes   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. Past years taxes You must include its fair market value in income on the date you receive it. Past years taxes Other Distributions You may receive any of the following distributions during the year. Past years taxes Exempt-interest dividends. Past years taxes   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Past years taxes Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Past years taxes Information reporting requirement. Past years taxes   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. Past years taxes This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. Past years taxes Alternative minimum tax treatment. Past years taxes   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Past years taxes See Alternative Minimum Tax (AMT) in chapter 30 for more information. Past years taxes Dividends on insurance policies. Past years taxes    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. Past years taxes However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. Past years taxes    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. Past years taxes Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. Past years taxes Report any taxable distributions on insurance policies on Form 1040, line 21. Past years taxes Dividends on veterans' insurance. Past years taxes   Dividends you receive on veterans' insurance policies are not taxable. Past years taxes In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. Past years taxes Patronage dividends. Past years taxes   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. Past years taxes   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. Past years taxes But you must reduce the basis (cost) of the items bought. Past years taxes If the dividend is more than the adjusted basis of the assets, you must report the excess as income. Past years taxes   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. Past years taxes Alaska Permanent Fund dividends. Past years taxes    Do not report these amounts as dividends. Past years taxes Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. Past years taxes How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. Past years taxes Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. Past years taxes Report qualified dividends on line 9b of Form 1040 or Form 1040A. Past years taxes If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. Past years taxes See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. Past years taxes If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. Past years taxes You cannot use Form 1040EZ if you receive any dividend income. Past years taxes Form 1099-DIV. Past years taxes   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Past years taxes Even if you do not receive Form 1099-DIV, you must report all your dividend income. Past years taxes   See Form 1099-DIV for more information on how to report dividend income. Past years taxes Form 1040A or 1040. Past years taxes    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. Past years taxes If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. Past years taxes   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. Past years taxes If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. Past years taxes If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. Past years taxes   Enter on line 6 the total of the amounts listed on line 5. Past years taxes Also enter this total on line 9a of Form 1040A or 1040. Past years taxes Qualified dividends. Past years taxes   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. Past years taxes The amount in box 1b is already included in box 1a. Past years taxes Do not add the amount in box 1b to, or substract it from, the amount in box 1a. Past years taxes   Do not include any of the following on line 9b. Past years taxes Qualified dividends you received as a nominee. Past years taxes See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. Past years taxes Dividends on stock for which you did not meet the holding period. Past years taxes See Holding period , earlier under Qualified Dividends. Past years taxes Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Past years taxes Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Past years taxes Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Past years taxes   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. Past years taxes Enter qualified dividends on line 2 of the worksheet. Past years taxes Investment interest deducted. Past years taxes   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Past years taxes Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. Past years taxes This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. Past years taxes For more information about the limit on investment interest, see Investment expenses in chapter 23. Past years taxes Expenses related to dividend income. Past years taxes   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). Past years taxes See chapter 28 for general information about deducting expenses of producing income. Past years taxes More information. Past years taxes    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. Past years taxes Prev  Up  Next   Home   More Online Publications
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Past years taxes Publication 80 - Main Content Table of Contents Introduction 1. Past years taxes Employer Identification Number (EIN) 2. Past years taxes Who Are Employees?Tests. Past years taxes Business Owned and Operated by Spouses Farm Crew Leaders 3. Past years taxes Employee's Social Security Number (SSN)Registering for SSNVS. Past years taxes 4. Past years taxes Wages and Other CompensationFringe Benefits 5. Past years taxes TipsOrdering rule. Past years taxes 6. Past years taxes Social Security and Medicare Taxes for FarmworkersThe $150 Test or the $2,500 Test 7. Past years taxes How To Figure Social Security and Medicare TaxesHousehold and agricultural employers. Past years taxes 8. Past years taxes Depositing TaxesPayment with Return When To Deposit How To Deposit Deposit Penalties 9. Past years taxes Employer's ReturnsReporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Prior Period Adjustments 10. Past years taxes Wage and Tax StatementsWaiver. Past years taxes 11. Past years taxes Federal Unemployment (FUTA) Tax—U. Past years taxes S. Past years taxes Virgin Islands Employers Only How To Get Tax Help Introduction This publication is for employers whose principal place of business is in the U. Past years taxes S. Past years taxes Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, or who have employees who are subject to income tax withholding for any of these jurisdictions. Past years taxes Employers and employees in these areas are generally subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA). Past years taxes See section 6 and section 7 for more information. Past years taxes This publication summarizes employer responsibilities to collect, pay, and report these taxes. Past years taxes Whenever the term “United States” is used in this publication, it includes U. Past years taxes S. Past years taxes Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. Past years taxes This publication also provides employers in the U. Past years taxes S. Past years taxes Virgin Islands with a summary of their responsibilities in connection with the tax under the Federal Unemployment Tax Act, known as FUTA tax. Past years taxes See section 11 for more information. Past years taxes Except as shown in the table in section 12, social security, Medicare, and FUTA taxes apply to every employer who pays taxable wages to employees or who has employees who report tips. Past years taxes This publication does not include information relating to the self-employment tax (for social security and Medicare of self-employed persons). Past years taxes See Publication 570, Tax Guide for Individuals With Income From U. Past years taxes S. Past years taxes Possessions, if you need this information. Past years taxes This publication also does not include information relating to income tax withholding. Past years taxes In U. Past years taxes S. Past years taxes Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, contact your local tax department for information about income tax withholding. Past years taxes See Publication 15 (Circular E), for information on U. Past years taxes S. Past years taxes federal income tax withholding. Past years taxes Comments and suggestions. Past years taxes   We welcome your comments about this publication and your suggestions for future editions. Past years taxes   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Past years taxes NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Past years taxes Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Past years taxes    You can also send us comments from www. Past years taxes irs. Past years taxes gov/formspubs. Past years taxes Click on More Information and then click on Comment on Tax Forms and Publications. Past years taxes   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. Past years taxes 1. Past years taxes Employer Identification Number (EIN) An employer identification number (EIN) is a nine-digit number that the IRS issues. Past years taxes Its format is 00-0000000. Past years taxes It is used to identify the tax accounts of employers and certain other organizations and entities that have no employees. Past years taxes Use your EIN on all of the items that you send to the IRS and SSA for your business. Past years taxes If you do not have an EIN, you may apply for one online. Past years taxes Go to IRS. Past years taxes gov and click on the Apply for an EIN Online link under Tools. Past years taxes You may also apply for an EIN by calling 1-800-829-4933, (U. Past years taxes S. Past years taxes Virgin Islands only) or 267-941-1099 (toll call), or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Past years taxes Do not use a social security number (SSN) in place of an EIN. Past years taxes If you do not have an EIN by the time a return is due, file a paper return and enter “Applied For” and the date that you applied for it in the space shown for the number. Past years taxes If you took over another employer's business, do not use that employer's EIN. Past years taxes You should have only one EIN. Past years taxes If you have more than one, write to the IRS office where you file your returns using the “without a payment” address in the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943. Past years taxes Or call the IRS Business & Specialty Tax Line at 1-800-829-4933 (U. Past years taxes S. Past years taxes Virgin Islands only) or 267-941-1000 (toll call). Past years taxes Persons who are deaf, hard of hearing, or have a speech disability (TDD/TTY users) in the U. Past years taxes S. Past years taxes Virgin Islands may call 1-800-829-4059. Past years taxes The IRS will tell you which EIN to use. Past years taxes For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records. Past years taxes 2. Past years taxes Who Are Employees? Generally, employees are defined either under common law or under special statutes for certain situations. Past years taxes See Publication 15-A, Employer's Supplemental Tax Guide, for details on statutory employees and nonemployees. Past years taxes Employee status under common law. Past years taxes   Generally, a worker who performs services for you is your employee if you can control what will be done and how it will be done. Past years taxes This is so even when you give the employee freedom of action. Past years taxes What matters is that you have the right to control the details of how the services are performed. Past years taxes See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Past years taxes    Generally, people in business for themselves are not employees. Past years taxes For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. Past years taxes However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. Past years taxes   If an employer-employee relationship exists, it does not matter what it is called. Past years taxes The employee may be called an agent or independent contractor. Past years taxes It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Past years taxes Statutory employees. Past years taxes   There are also some special definitions of employees for social security, Medicare, and FUTA taxes. Past years taxes   While the following persons may not be common law employees, they are considered employees for social security and Medicare purposes if the conditions under Tests , discussed later, are met. Past years taxes a. Past years taxes   An agent (or commission) driver who delivers food or beverages (other than milk) or picks up and delivers laundry or dry cleaning for someone else. Past years taxes b. Past years taxes   A full-time life insurance salesperson who sells primarily for one company. Past years taxes c. Past years taxes   A homeworker who works by the guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. Past years taxes d. Past years taxes   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. Past years taxes The orders must be for merchandise for resale or supplies for use in the customer's business. Past years taxes The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. Past years taxes Tests. Past years taxes   Withhold social security and Medicare taxes from statutory employees' wages if all three of the following tests apply. Past years taxes The service contract states or implies that almost all of the services are to be performed personally by them. Past years taxes They have little or no investment in the equipment and property used to perform the services (other than an investment in transportation facilities). Past years taxes The services are performed on a continuing basis for the same payer. Past years taxes Persons in a or d, earlier, are also employees for FUTA tax purposes if tests 1 through 3 are met (U. Past years taxes S. Past years taxes Virgin Islands only). Past years taxes   Publication 15-A gives examples of the employer-employee relationship. Past years taxes Statutory nonemployees. Past years taxes   Certain direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. Past years taxes They are generally treated as self-employed for employment tax purposes. Past years taxes See Publication 15-A for details. Past years taxes H-2A agricultural workers. Past years taxes   On Form W-2, do not check box 13 (Statutory employee) as H-2A workers are not statutory employees. Past years taxes Treating employees as nonemployees. Past years taxes   If you incorrectly treated an employee as a nonemployee and did not withhold social security and Medicare taxes, you will be liable for the taxes. Past years taxes See Treating employees as nonemployees in section 2 of Publication 15 (Circular E), for details on Internal Revenue Code section 3509, which may apply. Past years taxes IRS help. Past years taxes   If you want the IRS to determine if a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Past years taxes Voluntary Classification Settlement Program (VCSP). Past years taxes   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. Past years taxes To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). Past years taxes For more information, visit IRS. Past years taxes gov and enter “VCSP” in the search box. Past years taxes 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. Past years taxes See Publication 541, Partnerships, for more details. Past years taxes The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Past years taxes Exception—Qualified Joint Venture. Past years taxes   If you and your spouse materially participate as the only members of a jointly owned and operated business, and you file a joint Form 1040, U. Past years taxes S. Past years taxes Individual Income Tax Return, or joint Form 1040-SS, U. Past years taxes S. Past years taxes Self-Employment Tax Return—U. Past years taxes S. Past years taxes Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or Puerto Rico, you can make a joint election to be taxed as a qualified joint venture instead of a partnership. Past years taxes See the Instructions for Schedule C (Form 1040) or the Instructions for Form 1040-SS. Past years taxes Spouses electing qualified joint venture status are treated as sole proprietors for federal tax purposes. Past years taxes Either of the sole proprietor spouses may report and pay the employment taxes due on wages paid to the employees, using the EIN of that spouse’s sole proprietorship. Past years taxes For more information on qualified joint ventures, visit IRS. Past years taxes gov and enter “qualified joint venture” in the search box. Past years taxes Farm Crew Leaders You are an employer of farmworkers if you are a crew leader. Past years taxes A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. Past years taxes If there is no written agreement between you and the farm operator stating that you are his or her employee, and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. Past years taxes 3. Past years taxes Employee's Social Security Number (SSN) An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. Past years taxes You must get each employee's name and SSN and enter them on Form W-2AS, W-2CM, W-2GU, or W-2VI. Past years taxes If you do not report the employee's correct name and SSN, you may owe a penalty unless you have reasonable cause. Past years taxes See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. Past years taxes Employee's social security card. Past years taxes   You should ask the employee to show you his or her social security card. Past years taxes The employee may show the card if it is available. Past years taxes Do not accept a social security card that says “Not valid for employment. Past years taxes ” A social security number issued with this legend does not permit employment. Past years taxes You may, but you are not required to, photocopy the social security card if the employee provides it. Past years taxes If an employee does not have a social security card or needs a new one, the employee should apply for one on Form SS-5 and submit the necessary documentation. Past years taxes The employee must complete and sign Form SS-5; it cannot be filed by the employer. Past years taxes 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. Past years taxes If your employee has applied for an SSN but has not received the card before you must file your Form W-2 reports, and you are filing your reports on paper, enter “Applied For” in box d. Past years taxes Enter all zeroes in the SSN field if filing electronically. Past years taxes When the employee receives the SSN, file Copy A of Form W-2c with SSA to show the employee's SSN. Past years taxes Correctly record the employee's name and SSN. Past years taxes   Record the name and number of each employee as they appear on his or her social security card. Past years taxes If the name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Past years taxes Continue to use the old name until the employee shows you the replacement social security card with the corrected name. Past years taxes   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2AS, W-2CM, W-2GU, or W-2VI. Past years taxes It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. Past years taxes Where to get and file social security number application forms. Past years taxes    U. Past years taxes S. Past years taxes Virgin Islands—U. Past years taxes S. Past years taxes Social Security Administration, 8000 Nisky Center, First Floor, Suite 2, St. Past years taxes Thomas, VI 00802. Past years taxes  Guam—U. Past years taxes S. Past years taxes Social Security Administration, 655 Harmon Loop Road, Suite 300, Dededo, GU 96929. Past years taxes  American Samoa—U. Past years taxes S. Past years taxes Social Security Administration, Pago Plaza, Suite 117, Pago Pago, AS 96799. Past years taxes  Commonwealth of the Northern Mariana Islands—U. Past years taxes S. Past years taxes Social Security Administration, MH Building, Suite 201, Saipan, MP 96950. Past years taxes Verification of social security numbers. Past years taxes   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. Past years taxes Visit www. Past years taxes socialsecurity. Past years taxes gov/employer/ssnv. Past years taxes htm for more information. Past years taxes Registering for SSNVS. Past years taxes   You must register online and receive authorization from your employer to use SSNVS. Past years taxes To register, visit SSA's website at www. Past years taxes ssa. Past years taxes gov/employer and click on the Business Services Online link. Past years taxes Follow the registration instructions to obtain a user identification (ID) and password. Past years taxes You will need to provide the following information about yourself and your company. Past years taxes Name. Past years taxes SSN. Past years taxes Date of birth. Past years taxes Type of employer. Past years taxes EIN. Past years taxes Company name, address, and telephone number. Past years taxes Email address. Past years taxes   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Past years taxes You must enter the activation code online to use SSNVS. Past years taxes 4. Past years taxes Wages and Other Compensation Generally, all wages are subject to social security and Medicare tax (and FUTA tax for U. Past years taxes S. Past years taxes Virgin Islands employers). Past years taxes However, wages subject to social security tax and FUTA tax are limited by a wage base amount that you pay to each employee for the year. Past years taxes The wage base for social security tax is $117,000 for 2014. Past years taxes After you pay $117,000 to an employee in 2014, including tips, do not withhold social security tax on any amount that you later pay to the employee for the year. Past years taxes The wage base for FUTA tax is $7,000 for 2014. Past years taxes All wages are subject to Medicare tax. Past years taxes The wages may be in cash or in other forms, such as an automobile for personal use. Past years taxes Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. Past years taxes It does not matter how payments are measured or paid. Past years taxes See the table in section 12 for exceptions to social security, Medicare, and FUTA taxes on wages. Past years taxes See section 5 and section 6 for a discussion of how the rules apply to tips and farmworkers. Past years taxes Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies. Past years taxes Special rules apply to the reporting of third-party sick pay. Past years taxes For details, see Publication 15-A. Past years taxes Determine the value of noncash pay (such as goods, lodging, and meals) by its fair market value. Past years taxes However, see Fringe Benefits , later in this section. Past years taxes Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes. Past years taxes Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is taxed as ordinary wages in the year paid. Past years taxes For information on reporting back pay to the Social Security Administration, see Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration. Past years taxes Travel and business expenses. Past years taxes   Payments to your employee for travel and other necessary expenses of your business generally are included in taxable wages if (a) your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, or (b) you advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount that he or she does not substantiate. Past years taxes Sick pay. Past years taxes   In general, sick pay is any amount that you pay, under a plan that you take part in, to an employee because of sickness or injury. Past years taxes These amounts are sometimes paid by a third party, such as an insurance company. Past years taxes In either case, these payments are subject to social security and Medicare taxes (and FUTA tax for U. Past years taxes S. Past years taxes Virgin Islands employers). Past years taxes 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. Past years taxes Publication 15-A explains the employment tax rules that apply to sick pay, disability benefits, and similar payments to employees. Past years taxes Fringe Benefits Generally, fringe benefits are includible in the gross income of an employee and are subject to employment taxes. Past years taxes Examples of fringe benefits include the use of an automobile, aircraft flights that you provide, free or discounted commercial airline flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. Past years taxes In general, the amount included in the employee's income is the excess of the fair market value of the benefit over the sum of any amount paid for it by the employee and any amount excluded by law. Past years taxes For more information, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. Past years taxes When fringe benefits are treated as paid. Past years taxes   You can choose to treat certain noncash fringe benefits (including personal use of an automobile provided by you) as paid by the pay period, quarter, or on any other basis that you choose, but they must be treated as paid at least annually. Past years taxes You do not have to make a formal choice of payment dates or notify the IRS. Past years taxes You do not have to use the same basis for all employees. Past years taxes You may change methods as often as you like, as long as all benefits provided in a calendar year are treated as paid no later than December 31 of the calendar year. Past years taxes However, see Special accounting rule for fringe benefits provided during November and December , later in this section. Past years taxes   You can treat the value of a single taxable noncash fringe benefit as paid on one or more dates in the same calendar year, even if the employee gets the entire benefit at one time. Past years taxes However, once you elect the payment dates, you must report the taxes on your return in the same tax period in which you treated them as paid. Past years taxes This election does not apply to a fringe benefit where real property or investment personal property is transferred. Past years taxes Withholding social security and Medicare taxes on fringe benefits. Past years taxes   You add the value of fringe benefits to regular wages for a payroll period and figure social security and Medicare taxes on the total. Past years taxes   If you withhold less than the required amount of social security and Medicare taxes from the employee in a calendar year but report and pay the proper amount, you may recover the taxes from the employee. Past years taxes Depositing taxes on fringe benefits. Past years taxes   Once you choose payment dates for taxable noncash fringe benefits, you must deposit taxes in the same deposit period that you treat the fringe benefits as paid. Past years taxes You may make a reasonable estimate of the value of the fringe benefits. Past years taxes In general, the value of taxable noncash fringe benefits provided in a calendar year must be determined by January 31 of the following year. Past years taxes   You may claim a refund of overpayments or elect to have any overpayment applied to the next employment tax return. Past years taxes If deposits are underpaid, see Deposit Penalties in section 8. Past years taxes Valuation of vehicles provided to employees. Past years taxes    If you provide a vehicle to your employees, you may either determine the actual value of the benefit for the entire calendar year, taking into account the business use of the vehicle, or consider the entire use for the calendar year as personal and include 100% of the value of the vehicle in the employee's income. Past years taxes For reporting information to employees, see the box 14 instructions in the General Instructions for Forms W-2 and W-3. Past years taxes Special accounting rule for fringe benefits provided during November and December. Past years taxes   You may choose to treat the value of taxable noncash fringe benefits provided during November and December as paid in the next year. Past years taxes However, this applies only to those benefits that you actually provided during November and December, not to those you merely treated as paid during those months. Past years taxes   If you use this rule, you must notify each affected employee between the time of the employee's last paycheck of the calendar year and at or near the time that you give the employee Form W-2AS, W-2CM, W-2GU, or W-2VI. Past years taxes If you use the special accounting rule, your employee must also use it for the same period that you use it. Past years taxes You cannot use this rule for a fringe benefit of real property or tangible or intangible real property of a kind normally held for investment that is transferred to your employee. Past years taxes 5. Past years taxes Tips Tips that your employee receives from customers are generally subject to social security and Medicare withholding. Past years taxes Your employee must report cash tips to you by the 10th of the month after the month that the tips are received. Past years taxes 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. Past years taxes Both directly and indirectly tipped employees must report tips to you. Past years taxes The report should not include tips that the employee paid out to other employees. Past years taxes No report is required for months when tips are less than $20. Past years taxes Your employees report tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. Past years taxes They may also use Form 4070A, Employee's Daily Record of Tips, to keep a record of their tips. Past years taxes Both forms are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer, available at IRS. Past years taxes gov. Past years taxes The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period that the report covers, and The total tips received during the month or period. Past years taxes You are permitted to establish a system for electronic tip reporting by employees. Past years taxes See Regulations section 31. Past years taxes 6053-1(d). Past years taxes Collecting taxes on tips. Past years taxes   You must collect the employee social security and Medicare taxes on the employee's tips. Past years taxes You can also collect these taxes from the employee's wages or from other funds that he or she makes available. Past years taxes Stop collecting the employee social security tax when his or her total wages and tips for 2014 reach $117,000. Past years taxes Collect the employee Medicare tax for the whole year on all wages and tips. Past years taxes   You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the wage base limit. Past years taxes You are responsible for the employer Medicare tax for the whole year on all wages and tips. Past years taxes File Form 941-SS (or Form 944) to report withholding and employer taxes on tips. Past years taxes 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. Past years taxes Ordering rule. Past years taxes   If, by the 10th of the month after the month you received an employee's report on tips, you do not have enough employee funds available to deduct the employee social security and Medicare tax on tips, you no longer have to collect it and are not liable for it. Past years taxes Reporting tips. Past years taxes   Report tips and any collected and uncollected social security in boxes 1, 5, 7, and 12 on Forms W-2AS, W-2CM, W-2GU, or W-2VI and on Form 941-SS, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). Past years taxes Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. Past years taxes Report an adjustment on Form 941-SS, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. Past years taxes The table in section 12 shows how tips are treated for FUTA tax purposes. Past years taxes   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. Past years taxes See Revenue Ruling 2012-18, 2012-26 I. Past years taxes R. Past years taxes B. Past years taxes 1032, available at www. Past years taxes irs. Past years taxes gov/irb/2012-26_IRB/ar07. Past years taxes html. Past years taxes 6. Past years taxes Social Security and Medicare Taxes for Farmworkers The tests described below apply only to services that are defined as agricultural labor (farmwork). Past years taxes In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Past years taxes For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. Past years taxes Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. Past years taxes A “share farmer” working for you is not your employee. Past years taxes However, the share farmer may be subject to self-employment tax. Past years taxes In general, share farming is an arrangement in which certain commodity products are shared between the farmer and the owner (or tenant) of the land. Past years taxes For details, see Regulations section 31. Past years taxes 3121(b)(16)-1. Past years taxes The $150 Test or the $2,500 Test All cash wages that you pay to any employee for farmwork are subject to social security and Medicare taxes if either of the following two tests is met. Past years taxes You pay cash wages to the employee of $150 or more in a year (count all cash wages paid on a time, piecework, or other basis) for farmwork. Past years taxes The $150 test applies separately to each farmworker that you employ. Past years taxes If you employ a family of workers, each member is treated separately. Past years taxes Do not count wages paid by other employers. Past years taxes The total that you pay for farmwork (cash and noncash) to all of your employees is $2,500 or more during the year. Past years taxes Exceptions. Past years taxes   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. Past years taxes   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. Past years taxes 7. Past years taxes How To Figure Social Security and Medicare Taxes The tax rate for social security is 6. Past years taxes 2% (amount withheld) each for the employer and employee (12. Past years taxes 4% total). Past years taxes The social security wage base limit is $117,000. Past years taxes The tax rate for Medicare is 1. Past years taxes 45% (amount withheld) each for the employee and employer (2. Past years taxes 9% total). Past years taxes There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. Past years taxes Multiply each wage payment by these percentages to figure the tax to withhold from employees. Past years taxes Employers report both the employee and employer shares on Forms 941-SS, 944, or Form 943 (farm employment). Past years taxes See section 5 for information on tips. Past years taxes Additional Medicare Tax withholding. Past years taxes   In addition to withholding Medicare tax at 1. Past years taxes 45%, you must withhold a 0. Past years taxes 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Past years taxes You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Past years taxes Additional Medicare Tax is only imposed on the employee. Past years taxes There is no employer share of Additional Medicare Tax. Past years taxes All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Past years taxes   For more information on what wages are subject to Medicare tax, see the chart Special Rules for Various Types of Employment and Payments in section 12. Past years taxes For more information on Additional Medicare Tax, visit IRS. Past years taxes gov and enter “Additional Medicare Tax” in the search box. Past years taxes Deducting the tax. Past years taxes   Deduct the employee tax from each wage payment. Past years taxes If you are not sure that the wages that you pay to a farmworker during the year will be taxable, you may either deduct the tax when you make the payments or wait until the $2,500 test or the $150 test explained in section 6 has been met. Past years taxes Employee's portion of taxes paid by employer. Past years taxes   If you pay your employee's social security and Medicare taxes without deducting them from the employee's pay, you must include the amount of the payments in the employee's wages for social security and Medicare taxes. Past years taxes This increase in the employee's wage payment for your payment of the employee's social security and Medicare taxes is also subject to employee social security and Medicare taxes. Past years taxes This again increases the amount of the additional taxes that you must pay. Past years taxes Household and agricultural employers. Past years taxes   This discussion does not apply to household and agricultural employers. Past years taxes If you pay a household or agricultural employee's social security and Medicare taxes, these payments must be included in the employee's wages. Past years taxes However, this wage increase due to the tax payments is not subject to social security or Medicare taxes as discussed in this section. Past years taxes See Publication 15-A for details. Past years taxes Sick pay payments. Past years taxes   Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. Past years taxes For details on third-party payers of sick pay, see Publication 15-A. Past years taxes 8. Past years taxes Depositing Taxes You must deposit social security and Medicare taxes if your tax liability (Form 941-SS, line 10; Form 944, line 7; or Form 943, line 11) is $2,500 or more for the tax return period. Past years taxes You must make the deposit by electronic funds transfer. Past years taxes For more information about electronic funds transfers, see How To Deposit , later in this section. Past years taxes Payment with Return $2,500 rule. Past years taxes   Instead of making deposits during the current quarter, you can pay your total Form 941-SS tax liability when you timely file Form 941-SS if: Your total Form 941-SS tax liability for either the current quarter or the preceding quarter is less than $2,500 and You do not incur a $100,000 next-day deposit obligation during the current quarter. Past years taxes   If you are not sure your total liability for the current quarter will be less than $2,500, (and your liability for the preceding quarter was not less than $2,500), make deposits using the semiweekly or monthly rules so you won't be subject to failure to deposit penalties. Past years taxes Employers who have been notified to file Form 944 can pay their tax liability due for the fourth quarter with Form 944, if their fourth quarter tax liability is less than $2,500. Past years taxes Employers must have deposited any tax liability due for the first, second, and third quarters, according to the deposit rules, in order to avoid failure-to-deposit penalties for deposits due during those quarters. Past years taxes Only monthly schedule depositors are allowed to make an Accuracy of Deposits Rule payment with the return. Past years taxes Semiweekly schedule depositors must timely deposit the amount. Past years taxes See Accuracy of Deposits Rule and How To Deposit, later in this section. Past years taxes When To Deposit Under the rules discussed below, the only difference between farm and nonfarm workers' employment tax deposit rules is the lookback period. Past years taxes Therefore, farm and nonfarm workers are discussed together except where noted. Past years taxes Depending on your total taxes reported during a lookback period (discussed later), you are either a monthly schedule depositor or a semiweekly schedule depositor. Past years taxes The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often you pay your employees or how often you are required to make deposits. Past years taxes The terms identify which set of rules that you must follow when a tax liability arises (for example, when you have a payday). Past years taxes You will need to determine your deposit schedule for a calendar year based on the total employment taxes reported on Forms 941-SS, line 10; Form 944, line 7; or Form 943, line 9, for your lookback period (defined below). Past years taxes If you filed both Forms 941-SS and 941 during the lookback period, combine the tax liabilities for these returns for purposes of determining your deposit schedule. Past years taxes Determine your deposit schedule for Form 943 separately from Forms 941-SS and 941. Past years taxes Lookback period for employers of nonfarm workers. Past years taxes   The lookback period for Form 941-SS (or Form 941) consists of four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. Past years taxes These four quarters are your lookback period even if you did not report any taxes for any of the quarters. Past years taxes For 2014, the lookback period is July 1, 2012, through June 30, 2013. Past years taxes    Table 1. Past years taxes Lookback Period for Calendar Year 2014 Lookback Period July 1, 2012 Oct. Past years taxes 1, 2012 Jan. Past years taxes 1, 2013 Apr. Past years taxes 1, 2013 through through through through Sep. Past years taxes 30, 2012 Dec. Past years taxes 31, 2012 Mar. Past years taxes 31, 2013 June 30, 2013    The lookback period for Form 944 is the second calendar year preceding the current calendar year. Past years taxes For example, the lookback period for calendar year 2014 is calendar year 2012. Past years taxes In addition, for employers who filed Form 944 for 2012 or for 2013 and will file Form 941-SS (or Form 941) for 2014, the lookback period for 2014 is the second calendar year preceding the current calendar year, that is, 2012. Past years taxes Lookback period for employers of farmworkers. Past years taxes   The lookback period for Form 943 is the second calendar year preceding the current calendar year. Past years taxes The lookback period for calendar year 2014 is calendar year 2012. Past years taxes Adjustments to lookback period taxes. Past years taxes   To determine your taxes for the lookback period, use only the tax that you reported on the original returns (Forms 941-SS, 943, or 944). Past years taxes Do not include any adjustments shown on Form 941-X, 943-X, or 944-X. Past years taxes Example. Past years taxes   An employer originally reported total taxes of $45,000 for the lookback period. Past years taxes The employer discovered during January 2014 that the tax reported during the lookback period was understated by $10,000 and corrected this error by filing Form 941-X. Past years taxes The employer is a monthly schedule depositor for 2014 because the lookback period tax liabilities are based on the amounts originally reported, and they were $50,000 or less. Past years taxes Deposit Period The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. Past years taxes For monthly schedule depositors, the deposit period is a calendar month. Past years taxes The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. Past years taxes Monthly Deposit Schedule If your total tax reported for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. Past years taxes You must deposit taxes on wage payments made during a calendar month by the 15th day of the following month. Past years taxes New employers. Past years taxes   Your tax liability for any quarter in the lookback period before the date you started or acquired your business is considered to be zero. Past years taxes Therefore, you are a monthly schedule depositor for the first calendar year of your business (but see the $100,000 Next-Day Deposit Rule , later in this section). Past years taxes Semiweekly Deposit Schedule If your total tax reported for the lookback period is more than $50,000, you are a semiweekly schedule depositor for the current year. Past years taxes If you are a semiweekly schedule depositor, you must deposit on Wednesday and/or Friday, depending on what day of the week that you make wage payments, as follows. Past years taxes Deposit taxes on wage payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Past years taxes Deposit taxes on wage payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. Past years taxes Semiweekly depositors are generally not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule , discussed later in this section, applies. Past years taxes For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 on the following Wednesday. Past years taxes If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. Past years taxes Semiweekly deposit period spanning two quarters. Past years taxes   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. Past years taxes Example. Past years taxes   If you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. Past years taxes Both deposits will be due on Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). Past years taxes Examples of Monthly and Semiweekly Schedules Employers of nonfarm workers. Past years taxes   Rose Co. Past years taxes reported Form 941-SS taxes as follows: 2013 Lookback Period 3rd Quarter 2011 $12,000 4th Quarter 2011 12,000 1st Quarter 2012 12,000 2nd Quarter 2012 12,000   $48,000 2014 Lookback Period 3rd Quarter 2012 $12,000 4th Quarter 2012 12,000 1st Quarter 2013 12,000 2nd Quarter 2013 15,000   $51,000 Rose Co. Past years taxes is a monthly schedule depositor for 2013 because its taxes for the four quarters in its lookback period ($48,000 for the 3rd quarter of 2011 through the 2nd quarter of 2012) were not more than $50,000. Past years taxes However, for 2014, Rose Co. Past years taxes is a semiweekly schedule depositor because the total taxes for the four quarters in its lookback period ($51,000 for the 3rd quarter of 2012 through the 2nd quarter of 2013) exceeded $50,000. Past years taxes Employers of farmworkers. Past years taxes   Red Co. Past years taxes reported taxes on its 2012 Form 943, line 9, of $48,000. Past years taxes On its 2013 Form 943, line 11, it reported taxes of $60,000. Past years taxes   Red Co. Past years taxes is a monthly schedule depositor for 2014 because its taxes for its lookback period ($48,000 for calendar year 2012) were not more than $50,000. Past years taxes However, for 2015, Red Co. Past years taxes is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. Past years taxes New agricultural employers. Past years taxes   New agricultural employers filing Form 943 are monthly schedule depositors for the first and second calendar years of their business because their taxes for the lookback period (2 years) are considered to be zero. Past years taxes However, see the $100,000 Next-Day Deposit Rule , later in this section. Past years taxes Deposits on Business Days Only If a deposit due date falls on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. Past years taxes A business day is any day other than a Saturday, Sunday, or legal holiday. Past years taxes For example, if a deposit is required to be made on Friday, but Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). Past years taxes Semiweekly schedule depositors have at least 3 business days to make a deposit. Past years taxes If any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the required deposit. Past years taxes For example, if a semiweekly schedule depositor accumulated taxes for payments made on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). Past years taxes Legal holiday. Past years taxes   The term “legal holiday” means any legal holiday in the District of Columbia. Past years taxes Legal holidays for 2014 are listed below. Past years taxes January 1—New Year's Day January 20—Birthday of Martin Luther King, Jr. Past years taxes February 17—Washington's Birthday April 16—District of Columbia Emancipation Day May 26—Memorial Day July 4—Independence Day September 1—Labor Day October 13—Columbus Day November 11—Veterans Day November 27—Thanksgiving Day December 25—Christmas Day Application of Monthly and Semiweekly Schedules The following examples illustrate the procedure for determining the deposit date under the two different deposit schedules. Past years taxes Monthly schedule example. Past years taxes   Spruce Co. Past years taxes is a monthly schedule depositor with seasonal employees. Past years taxes It paid wages each Friday during August but did not pay any wages during September. Past years taxes Under the monthly deposit schedule, Spruce Co. Past years taxes must deposit the combined tax liabilities for the four August paydays by September 15. Past years taxes Spruce Co. Past years taxes does not have a deposit requirement for September (due by October 15) because no wages were paid and, therefore, it did not have a tax liability for September. Past years taxes Semiweekly schedule example. Past years taxes   Green, Inc. Past years taxes is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Past years taxes Although Green, Inc. Past years taxes , has a semiweekly deposit schedule, it will deposit just once a month because it pays wages only once a month. Past years taxes The deposit, however, will be made under the semiweekly deposit schedule as follows: Green, Inc. Past years taxes ’s tax liability for the April 25, 2014 (Friday), payday must be deposited by April 30, 2014 (Wednesday). Past years taxes Under the semiweekly deposit schedule, liabilities for wages paid on Wednesday through Friday must be deposited by the following Wednesday. Past years taxes $100,000 Next-Day Deposit Rule If you accumulate taxes of $100,000 or more on any day during a deposit period, you must deposit by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. Past years taxes For purposes of the $100,000 rule, do not continue accumulating taxes after the end of a deposit period. Past years taxes For example, if a semiweekly schedule depositor has accumulated taxes of $95,000 on Tuesday and $10,000 on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. Past years taxes Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. Past years taxes However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. Past years taxes For example, Fir Co. Past years taxes is a semiweekly schedule depositor. Past years taxes On Monday, Fir Co. Past years taxes accumulates taxes of $110,000 and must deposit on Tuesday, the next business day. Past years taxes On Tuesday, Fir Co. Past years taxes accumulates additional taxes of $30,000. Past years taxes Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. Past years taxes does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). Past years taxes If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day during a month, you become a semiweekly schedule depositor on the next day and remain so for the remainder of the calendar year and for the following calendar year. Past years taxes Example. Past years taxes   Elm, Inc. Past years taxes started its business on May 1, 2014. Past years taxes On May 8, it paid wages for the first time and accumulated a tax liability of $40,000. Past years taxes On Friday, May 9, Elm, Inc. Past years taxes paid wages and accumulated a liability of $60,000, making its accumulated Form 941-SS tax liability total $100,000. Past years taxes Elm, Inc. Past years taxes must deposit $100,000 by Monday, May 12, the next business day. Past years taxes Because this was the first year of its business, the tax liability for its lookback period is considered to be zero, and it would be a monthly schedule depositor based on the lookback rules. Past years taxes However, because Elm, Inc. Past years taxes accumulated $100,000 on May 9, it became a semiweekly schedule depositor on May 10. Past years taxes It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. Past years taxes Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. Past years taxes However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. Past years taxes Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited, and The deposit shortfall is paid or deposited by the shortfall makeup date as described below. Past years taxes Makeup date for deposit shortfall: Monthly schedule depositor. Past years taxes Deposit or pay the shortfall by the due date of your Form 941-SS, 944, or 943 for the period in which the shortfall occurred. Past years taxes You may pay the shortfall with your return even if the amount is $2,500 or more. Past years taxes Semiweekly schedule depositor. Past years taxes Deposit by the earlier of: The first Wednesday or Friday (whichever comes first) that comes on or after the 15th of the month following the month in which the shortfall occurred, or The return due date for the period in which the shortfall occurred. Past years taxes For example, if a semiweekly schedule depositor filing Form 941-SS has a deposit shortfall during July 2014, the shortfall makeup date is August 15, 2014 (Friday). Past years taxes However, if the shortfall occurred on the required April 2 (Wednesday), deposit date for a March 28 (Friday) pay date, the return due date for the March 28 pay date (April 30) would come before the May 16 (Friday) shortfall makeup date. Past years taxes In this case, the shortfall must be deposited by April 30, 2014. Past years taxes Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941-SS or 944 taxes). Past years taxes Form 943 taxes and Form 941-SS (or Form 944) taxes are not combined for purposes of applying any of the deposit rules. Past years taxes If a deposit is due, deposit the Form 941-SS (or Form 944) taxes and Form 943 taxes separately, as discussed next. Past years taxes How To Deposit You must deposit employment taxes by electronic funds transfer. Past years taxes See Payment with Return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. Past years taxes Electronic deposit requirement. Past years taxes   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Past years taxes Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Past years taxes If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Past years taxes   EFTPS is a free service provided by the Department of the Treasury. Past years taxes To get more information or to enroll in EFTPS, call 1-800-555-4477 (U. Past years taxes S. Past years taxes Virgin Islands only) or 303-967-5916 (toll call). Past years taxes You can also visit the EFTPS website at www. Past years taxes eftps. Past years taxes gov. Past years taxes Additional information about EFTPS is also available in Publication 966. Past years taxes When you receive your EIN. Past years taxes   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in EFTPS. Past years taxes You will receive information about Express Enrollment in your Employer Identification Number (EIN) Package and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. Past years taxes Follow the steps in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your payroll tax deposits. Past years taxes If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. Past years taxes Deposit record. Past years taxes   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. Past years taxes The number can be used as a receipt or to trace the payment. Past years taxes Depositing on time. Past years taxes   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. Past years taxes m. Past years taxes Eastern time the day before the date the deposit is due. Past years taxes If you use a third party to make deposits on your behalf, they may have different cutoff times. Past years taxes Same-day payment option. Past years taxes   If you fail to initiate a deposit transaction on EFTPS by 8 p. Past years taxes m. Past years taxes Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). Past years taxes To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. Past years taxes Please check with your financial institution regarding availability, deadlines, and costs. Past years taxes Your financial institution may charge you a fee for payments made this way. Past years taxes To learn more about the information you will need to provide your financial institution to make a same-day wire payment, please visit www. Past years taxes eftps. Past years taxes gov to download the Same-Day Payment Worksheet. Past years taxes How to claim credit for overpayments. Past years taxes   If you deposited more than the right amount of taxes for a tax period, you can choose on Form 941-SS, 941, 944, or 943 for that tax period to have the overpayment refunded or applied as a credit to your next return. Past years taxes Do not ask EFTPS to request a refund from the IRS for you. Past years taxes Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits of less than the required amount. Past years taxes The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. Past years taxes The IRS may also waive penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. Past years taxes For amounts not properly or timely deposited, the penalty rates are as follows. Past years taxes 2% - Deposits made 1 to 5 days late. Past years taxes 5% - Deposits made 6 to 15 days late. Past years taxes 10% - Deposits made 16 or more days late. Past years taxes Also applies to amounts paid within 10 days of the date of the first notice that the IRS sent asking for the tax due. Past years taxes 10% - Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return (but see Payment with Return , earlier in this section, for exceptions). Past years taxes 15% - Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. Past years taxes Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. Past years taxes Special rule for former Form 944 filers. Past years taxes    If you filed Form 944 for the prior year and must file Forms 941-SS for the current year because your employment tax liability for the prior year exceeded the Form 944 eligibility requirement ($1,000 or less), the failure-to-deposit penalty will not apply to a late deposit of employment taxes for the first month of the current year if the taxes are deposited in full by March 15 of the current year. Past years taxes Order in which deposits are applied. Past years taxes   Deposits generally are applied to the most recent tax liability within the return period (quarter or year). Past years taxes However, if you receive a failure-to-deposit penalty notice, you may designate how your payment is to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Past years taxes Follow the instructions on the penalty notice that you received. Past years taxes For more information on designating deposits, see Revenue Procedure 2001-58. Past years taxes You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. Past years taxes irs. Past years taxes gov/pub/irs-irbs/irb01-50. Past years taxes pdf. Past years taxes Example. Past years taxes Cedar, Inc. Past years taxes is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. Past years taxes It does not make the deposit on July 15. Past years taxes On August 15, Cedar, Inc. Past years taxes deposits $2,000. Past years taxes Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. Past years taxes Accordingly, $500 of the July 15 liability remains undeposited. Past years taxes The penalty on this underdeposit will apply as explained earlier. Past years taxes Trust fund recovery penalty. Past years taxes   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. Past years taxes The penalty is the full amount of the unpaid trust fund tax. Past years taxes This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. Past years taxes   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. Past years taxes   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship, or any other person or entity that is responsible for collecting, accounting for, and paying over trust fund taxes. Past years taxes A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. Past years taxes    Willfully means voluntarily, consciously, and intentionally. Past years taxes A responsible person acts willfully if the person knows the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. Past years taxes “Averaged” failure-to-deposit penalty. Past years taxes   The IRS may assess an “averaged” failure-to-deposit (FTD) penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 941-SS, line 14, when your tax liability shown on Form 941-SS, line 10, was $2,500 or more. Past years taxes IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 941-SS, line 10, was $2,500 or more and you did any of the following. Past years taxes Completed Form 941-SS, line 14, instead of Schedule B (Form 941). Past years taxes Failed to attach a properly completed Schedule B (Form 941). Past years taxes Completed Schedule B (Form 941) incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. Past years taxes   The IRS figures the penalty by allocating your total tax liability shown on Form 941-SS, line 10, equally throughout the tax period. Past years taxes Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. Past years taxes   You can avoid the penalty by reviewing your return before filing it. Past years taxes Follow these steps before filing your Form 941-SS. Past years taxes If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 941-SS, line 14. Past years taxes If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Schedule B (Form 941) in the lines that represent the dates you paid your employees. Past years taxes Verify that your total liability shown on Form 941-SS, line 14, or the bottom of Schedule B (Form 941) equals your tax liability shown on Form 941-SS,  line 10. Past years taxes Do not show negative amounts on Form 941-SS, line 14, or Schedule B (Form 941). Past years taxes For prior period errors, do not adjust your tax liabilities reported on your current Form 941-SS, line 14, or on Schedule B (Form 941). Past years taxes Instead, file an adjusted return (Form 941-X (if you are adjusting a previously filed Form 941-SS) or Form 944-X (if you are adjusting a previously filed Form 944-SS or 944)) if you are also adjusting your tax liability. Past years taxes If you are only adjusting your deposits in response to a failure-to-deposit penalty notice, see the Instructions for Schedule B (Form 941) (if you previously filed Form 941-SS) or the Instructions for Form 944-X (if you previously filed Form 944-SS or 944). Past years taxes If you filed Form 944 for 2013 and line 7 was $2,500 or more, you were required to complete Form 944, lines 13a–13m, or attach Form 945-A, Annual Record of Federal Tax Liability. Past years taxes If you failed to complete lines 13a–13m, or failed to attach Form 945-A, whichever was required, IRS may assess an “averaged” failure-to-deposit (FTD) penalty. Past years taxes 9. Past years taxes Employer's Returns General instructions. Past years taxes   File Forms 941-SS (or Form 944) for nonfarm workers and Form 943 for farmworkers. Past years taxes (U. Past years taxes S. Past years taxes Virgin Islands employers may be required to file Form 940 for the combined wages of nonfarm workers and farmworkers. Past years taxes ) Employers with employees subject to U. Past years taxes S. Past years taxes income tax withholding. Past years taxes   If you have both employees who are subject to U. Past years taxes S. Past years taxes income tax withholding and employees who are not subject to U. Past years taxes S. Past years taxes income tax withholding, you must file only Form 941 (or Form 944) and include all your employees’ wages on that form. Past years taxes Nonfarm employers. Past years taxes   File Form 941-SS for the calendar quarter in which you first pay wages for nonfarm workers and for each quarter thereafter unless you are a seasonal employer or file a final return. Past years taxes Due dates for each quarter of the calendar year are as follows. Past years taxes Quarter Due Jan. Past years taxes , Feb. Past years taxes , Mar. Past years taxes Apr. Past years taxes 30 Apr. Past years taxes , May, June July 31 July, Aug. Past years taxes , Sept. Past years taxes Oct. Past years taxes 31 Oct. Past years taxes , Nov. Past years taxes , Dec. Past years taxes Jan. Past years taxes 31   However, if you deposited all taxes when due for the quarter, you have 10 additional days from the due dates to file the return. Past years taxes If the due date for filing your return falls on a Saturday, Sunday, or legal holiday, you may file on the next business day. Past years taxes   If you closed your business or stopped paying wages and do not have to file returns in the future, check the box on line 15 of your final Form 941-SS and show the date final wages were paid. Past years taxes Form 944. Past years taxes   If IRS notified you to file Form 944, file your 2013 Form 944 by January 31, 2014, or by February 10, 2014 (if you deposited all taxes when due). Past years taxes Household employers reporting social security and Medicare taxes. Past years taxes   If you are a sole proprietor and file Forms 941-SS (or Form 944) for business employees, you may include taxes for household employees on your Forms 941-SS (or Form 944). Past years taxes Otherwise, report social security and Medicare taxes for household employees on Schedule H (Form 1040), Household Employment Taxes. Past years taxes See Publication 926, Household Employer's Tax Guide, for more information. Past years taxes Employers of farmworkers. Past years taxes   Every employer of farmworkers must file a Form 943 for each calendar year beginning with the first year the employer pays $2,500 or more for farmwork or employs a farmworker who meets the $150 test described in section 6. Past years taxes   File a Form 943 each year for all taxable wages paid for farmwork. Past years taxes You may report household workers in a private home on a farm operated for profit on Form 943. Past years taxes Do not report wages for farmworkers on Form 941-SS or 944. Past years taxes   Send Form 943 to the IRS by January 31 of the following year. Past years taxes Send it with payment of any taxes due that you are not required to deposit. Past years taxes If you deposited all taxes when due, you have 10 additional days to file. Past years taxes Penalties. Past years taxes   For each whole or part month that a return is not filed when required (disregarding any extensions of the filing deadline), there is a failure-to-file penalty of 5% of the unpaid tax due with that return. Past years taxes The maximum penalty is generally 25% of the tax due. Past years taxes Also, for each whole or part month that the tax is paid late (disregarding any extensions of the payment deadline), there is a failure-to-pay penalty of 0. Past years taxes 5% per month of the amount of tax. Past years taxes For individual filers only, the failure-to-pay penalty is reduced from 0. Past years taxes 5% per month to 0. Past years taxes 25% per month if an installment agreement is in effect. Past years taxes You must have filed your return on or before the due date of the return to qualify for the reduced penalty. Past years taxes The maximum amount of the failure-to-pay penalty is also 25% of the tax due. Past years taxes If both penalties apply in any month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty. Past years taxes The penalties will not be charged if you have a reasonable cause for failing to file or pay. Past years taxes If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists. Past years taxes Reporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Make current period adjustments for fractions of cents, sick pay, tips, and group-term life insurance on your Form 941-SS, 944, or 943. Past years taxes See the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943 for information on how to report these adjustments. Past years taxes Prior Period Adjustments Forms for prior period adjustments. Past years taxes   Use Form 941-X or Form 944-X to make a correction after you discover an error on a previously filed Form 941 or Form 944. Past years taxes There are also Forms 943-X, 945-X, and CT-1X to report corrections on the corresponding returns. Past years taxes Form 941-X and Form 944-X also replace Form 843, Claim for Refund and Request for Abatement, for employers to request a refund or abatement of overreported employment taxes. Past years taxes Continue to use Form 843 when requesting a refund or abatement of assessed interest or penalties. Past years taxes See Revenue Ruling 2009-39, 2009-52 I. Past years taxes R. Past years taxes B. Past years taxes 951, for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. Past years taxes You can find Revenue Ruling 2009-39, at www. Past years taxes irs. Past years taxes gov/irb/2009-52_IRB/ar14. Past years taxes html. Past years taxes Background. Past years taxes   Treasury Decision 9405 changed the process for making interest-free adjustments to employment taxes reported on Forms 941-SS, 943, 944-SS, and 944, and for filing a claim for refund of employment taxes. Past years taxes Treasury Decision 9405, 2008-32 I. Past years taxes R. Past years taxes B. Past years taxes 293, is available at www. Past years taxes irs. Past years taxes gov/irb/2008-32_IRB/ar13. Past years taxes html. Past years taxes You will use the adjustment process if you underreported employment taxes and are making a payment, or if you overreported employment taxes and will be applying the credit to the Form 941-SS, 943, or 944 period during which you file Forms 941-X, 943-X, or 944-X, respectively. Past years taxes You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. Past years taxes We use the terms “correct” and “corrections” to include interest-free adjustments under sections 6205 and 6413, and claims for refund and abatement under sections 6402, 6414, and 6404 of the Internal Revenue Code. Past years taxes Correcting employment taxes. Past years taxes   When you discover an error on a previously filed Form 941-SS, 943, 944-SS, or 944, you must: Correct that error using Form 941-X, Form 943-X, or Form 944-X, File a separate Form 941-X, Form 943-X, or Form 944-X for