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Tax act online free Publication 15-A - Introductory Material Table of Contents Future Developments What's New Reminders Introduction Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 15-A, such as legislation enacted after it was published, go to www. Tax act online free irs. Tax act online free gov/pub15a. Tax act online free What's New Social security and Medicare tax for 2014. Tax act online free  The social security tax rate is 6. Tax act online free 2% each for the employee and employer, unchanged from 2013. Tax act online free The social security wage base limit is $117,000. Tax act online free The Medicare tax rate is 1. Tax act online free 45% each for the employee and employer, unchanged from 2013. Tax act online free There is no wage base limit for Medicare tax. Tax act online free Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. Tax act online free Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. Tax act online free Withholding allowance. Tax act online free  The 2014 amount for one withholding allowance on an annual basis is $3,950. Tax act online free Same-sex marriage. Tax act online free  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Tax act online free For more information, see Revenue Ruling 2013-17, 2013-38 I. Tax act online free R. Tax act online free B. Tax act online free 201, available at www. Tax act online free irs. Tax act online free gov/irb/2013-38_IRB/ar07. Tax act online free html. Tax act online free Notice 2013-61 provides special administrative procedures for employers to make claims for refunds or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. Tax act online free Notice 2013-61, 2013-44 I. Tax act online free R. Tax act online free B. Tax act online free 432, is available at www. Tax act online free irs. Tax act online free gov/irb/2013-44_IRB/ar10. Tax act online free html. Tax act online free Reminders Additional Medicare Tax withholding. Tax act online free . Tax act online free  In addition to withholding Medicare tax at 1. Tax act online free 45%, you must withhold a 0. Tax act online free 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Tax act online free 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. Tax act online free Additional Medicare Tax is only imposed on the employee. Tax act online free There is no employer share of Additional Medicare Tax. Tax act online free 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. Tax act online free For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E), Employer's Tax Guide. Tax act online free For more information on Additional Medicare Tax, visit IRS. Tax act online free gov and enter “Additional Medicare Tax” in the search box. Tax act online free Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. Tax act online free  The work opportunity tax credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2014. Tax act online free Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Tax act online free For more information, visit IRS. Tax act online free gov and enter “work opportunity tax credit” in the search box. Tax act online free COBRA premium assistance credit. Tax act online free  The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. Tax act online free For more information, see COBRA premium assistance credit in Publication 15 (Circular E). Tax act online free Federal tax deposits must be made by electronic funds transfer. Tax act online free  You must use electronic funds transfer to make all federal tax deposits. Tax act online free Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Tax act online free 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. Tax act online free Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Tax act online free EFTPS is a free service provided by the Department of Treasury. Tax act online free Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Tax act online free For more information on making federal tax deposits, see How To Deposit in Publication 15 (Circular E). Tax act online free To get more information about EFTPS or to enroll in EFTPS, visit www. Tax act online free eftps. Tax act online free gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Tax act online free Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Tax act online free You must receive written notice from the IRS to file Form 944. Tax act online free  If you have been filing Forms 941, Employer's QUARTERLY Federal Tax Return (or Forms 941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U. Tax act online free S. Tax act online free Virgin Islands, or Formularios 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono), and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941, you must contact the IRS to request to file Form 944. Tax act online free You must receive written notice from the IRS to file Form 944 instead of Forms 941 before you may file this form. Tax act online free For more information on requesting to file Form 944, visit IRS. Tax act online free gov and enter “file employment taxes annually” in the search box. Tax act online free Employers can request to file Forms 941 instead of Form 944. Tax act online free  If you received notice from the IRS and have been filing Form 944 but would like to file Forms 941 instead, you must contact the IRS to request to file Forms 941. Tax act online free You must receive written notice from the IRS to file Forms 941 instead of Form 944 before you may file these forms. Tax act online free For more information on requesting to file Form 944, visit IRS. Tax act online free gov and enter “file employment taxes annually” in the search box. Tax act online free Aggregate Form 941 filers. Tax act online free  Agents must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when filing an aggregate Form 941. Tax act online free Aggregate Forms 941 can only be filed by agents approved by the IRS under section 3504 of the Internal Revenue Code. Tax act online free To request approval to act as an agent for an employer, the agent must file Form 2678, Employer/Payer Appointment of Agent, with the IRS. Tax act online free Aggregate Form 940 filers. Tax act online free  Agents must complete Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, when filing an aggregate Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Tax act online free Aggregate Forms 940 may only be filed by agents acting on behalf of home care service recipients who receive home care services through a program administered by a federal, state, or local government. Tax act online free To request approval to act as an agent on behalf of home care service recipients, the agent must file Form 2678 with the IRS. Tax act online free Electronic filing and payment. Tax act online free  Now, more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Tax act online free Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and payment easier. Tax act online free Spend less time and worry about taxes and more time running your business. Tax act online free Use e-file and the Electronic Federal Tax Payment System (EFTPS) to your benefit. Tax act online free For e-file, visit www. Tax act online free irs. Tax act online free gov/efile for additional information. Tax act online free For EFTPS, visit www. Tax act online free eftps. Tax act online free gov or call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829 (TDD). Tax act online free Electronic submission of Forms W-4, W-4P, W-4S and W-4V. Tax act online free  You may set up a system to electronically receive any or all of the following forms (and their Spanish versions, if available) from an employee or payee. Tax act online free Form W-4, Employee's Withholding Allowance Certificate. Tax act online free Form W-4P, Withholding Certificate for Pension or Annuity Payments. Tax act online free Form W-4S, Request for Federal Income Tax Withholding From Sick Pay. Tax act online free Form W-4V, Voluntary Withholding Request. Tax act online free For each form that you establish an electronic submission system for, you must meet each of the following five requirements. Tax act online free The electronic system must ensure that the information received by the payer is the information sent by the payee. Tax act online free The system must document all occasions of user access that result in a submission. Tax act online free In addition, the design and operation of the electronic system, including access procedures, must make it reasonably certain that the person accessing the system and submitting the form is the person identified on the form. Tax act online free The electronic system must provide exactly the same information as the paper form. Tax act online free The electronic submission must be signed with an electronic signature by the payee whose name is on the form. Tax act online free The electronic signature must be the final entry in the submission. Tax act online free Upon request, you must furnish a hard copy of any completed electronic form to the IRS and a statement that, to the best of the payer's knowledge, the electronic form was submitted by the named payee. Tax act online free The hard copy of the electronic form must provide exactly the same information as, but need not be a facsimile of, the paper form. Tax act online free For Form W-4, the signature must be under penalty of perjury, and must contain the same language that appears on the paper version of the form. Tax act online free The electronic system must inform the employee that he or she must make a declaration contained in the perjury statement and that the declaration is made by signing the Form W-4. Tax act online free You must also meet all recordkeeping requirements that apply to the paper forms. Tax act online free For more information, see: Regulations sections 31. Tax act online free 3402(f)(5)-1(c) (for Form W-4), and Announcement 99-6 (for Forms W-4P, W-4S, and W-4V). Tax act online free You can find Announcement 99-6 on page 24 of Internal Revenue Bulletin 1999-4 at www. Tax act online free irs. Tax act online free gov/pub/irs-irbs/irb99-04. Tax act online free pdf. Tax act online free Additional employment tax information. Tax act online free  Visit the IRS website at www. Tax act online free irs. Tax act online free gov/businesses and click on the Employment Taxes link under Businesses Topics. Tax act online free Telephone help. Tax act online free  You can call the IRS Business and Specialty Tax Line with your employment tax questions at 1-800-829-4933. Tax act online free Help for people with disabilities. Tax act online free  You may call 1-800-829-4059 (TDD/TTY for persons who are deaf, heard of hearing, or have a speech disability) with any tax question or to order forms and publications. Tax act online free You may also use this number for assistance with unresolved tax problems. Tax act online free Furnishing Form W-2 to employees electronically. Tax act online free  You may set up a system to furnish Form W-2, Wage and Tax Statement, electronically. Tax act online free Each employee participating must consent (either electronically or by paper document) to receive his or her Form W-2 electronically, and you must notify the employee of all hardware and software requirements to receive the form. Tax act online free You may not send a Form W-2 electronically to any employee who does not consent or who has revoked consent previously provided. Tax act online free To furnish Forms W-2 electronically, you must meet the following disclosure requirements and provide a clear and conspicuous statement of each requirement to your employees. Tax act online free The employee must be informed that he or she will receive a paper Form W-2 if consent is not given to receive it electronically. Tax act online free The employee must be informed of the scope and duration of the consent. Tax act online free The employee must be informed of any procedure for obtaining a paper copy of his or her Form W-2 and whether or not the request for a paper statement is treated as a withdrawal of his or her consent to receiving his or her Form W-2 electronically. Tax act online free The employee must be notified about how to withdraw a consent and the effective date and manner by which the employer will confirm the withdrawn consent. Tax act online free The employee must also be notified that the withdrawn consent does not apply to the previously issued Forms W-2. Tax act online free The employee must be informed about any conditions under which electronic Forms W-2 will no longer be furnished (for example, termination of employment). Tax act online free The employee must be informed of any procedures for updating his or her contact information that enables the employer to provide electronic Forms W-2. Tax act online free The employer must notify the employee of any changes to the employer's contact information. Tax act online free You must furnish electronic Forms W-2 by the same due date as the paper Forms W-2. Tax act online free For more information on furnishing Form W-2 to employees electronically, see Regulations section 31. Tax act online free 6051-1(j). Tax act online free Photographs of missing children. Tax act online free  The IRS is a proud partner with the National Center for Missing and Exploited Children. Tax act online free Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Tax act online free You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Tax act online free Introduction This publication supplements Publication 15 (Circular E). Tax act online free It contains specialized and detailed employment tax information supplementing the basic information provided in Publication 15 (Circular E). Tax act online free This publication also contains tables for withholding on distributions of Indian gaming profits to tribal members. Tax act online free Publication 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment of various types of noncash compensation. Tax act online free Ordering publications and forms. Tax act online free   See Ordering Employer Tax Forms and Publications in Publication 15 (Circular E) and How To Get Tax Help , later, for more information on how to obtain forms and publications. Tax act online free Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 505 Tax Withholding and Estimated Tax 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 583 Starting a Business and Keeping Records 1635 Employer Identification Number: Understanding Your EIN Comments and suggestions. Tax act online free   We welcome your comments about this publication and your suggestions for future editions. Tax act online free    You can write to us at the following address: Internal Revenue Service Tax Forms & Publications Division 1111 Constitution Ave. Tax act online free NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Tax act online free Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Tax act online free   You can also send us comments from www. Tax act online free irs. Tax act online free gov/formspubs. Tax act online free Click on More Information and then click on Comment on Tax Forms and Publications. Tax act online free   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. Tax act online free Prev  Up  Next   Home   More Online Publications
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Tax act online free 4. Tax act online free   Communications and Air Transportation Taxes Table of Contents Uncollected Tax Report Communications TaxLocal-only service. Tax act online free Private communication service. Tax act online free Exemptions Credits or Refunds Air Transportation TaxesTransportation of Persons by Air International Air Travel Facilities Transportation of Property by Air Special Rules on Transportation Taxes Excise taxes are imposed on amounts paid for certain facilities and services. Tax act online free If you receive any payment on which tax is imposed, you are required to collect the tax, file returns, and pay the tax over to the government. Tax act online free If you fail to collect and pay over the taxes, you may be liable for the trust fund recovery penalty. Tax act online free See chapter 14, later. Tax act online free Uncollected Tax Report A separate report is required to be filed by collecting agents of communications services and air transportation taxes if the person from whom the facilities or services tax (the tax) is required to be collected (the taxpayer) refuses to pay the tax, or it is impossible for the collecting agent to collect the tax. Tax act online free The report must contain the name and address of the taxpayer, the type of facility provided or service rendered, the amount paid for the facility or service (the amount on which the tax is based), and the date paid. Tax act online free Regular method taxpayers. Tax act online free   For regular method taxpayers, the report must be filed by the due date of the Form 720 on which the tax would have been reported. Tax act online free Alternative method taxpayers. Tax act online free   For alternative method taxpayers, the report must be filed by the due date of the Form 720 that includes an adjustment to the separate account for the uncollected tax. Tax act online free See Alternative method in  chapter 11. Tax act online free Where to file. Tax act online free    Do not file the uncollected tax report with Form 720. Tax act online free Instead, mail the report to: Internal Revenue Service Excise Tax Program SE:S:SP:EX MS C9-109 5000 Ellin Rd. Tax act online free  Lanham, MD 20706 Communications Tax A 3% tax is imposed on amounts paid for local telephone service and teletypewriter exchange service. Tax act online free Local telephone service. Tax act online free   This includes access to a local telephone system and the privilege of telephonic quality communication with most people who are part of the system. Tax act online free Local telephone service also includes any facility or services provided in connection with this service. Tax act online free The tax applies to lease payments for certain customer premises equipment (CPE) even though the lessor does not also provide access to a local telecommunications system. Tax act online free Local-only service. Tax act online free   Local-only service is local telephone service as described above, provided under a plan that does not include long distance telephone service or that separately states the charge for local service on the bill to customers. Tax act online free Local-only service also includes any facility or services provided in connection with this service, even though these services and facilities may also be used with long-distance service. Tax act online free Private communication service. Tax act online free   Private communication service is not local telephone service. Tax act online free Private communication service includes accessory-type services provided in connection with a Centrex, PBX, or other similar system for dual use accessory equipment. Tax act online free However, the charge for the service must be stated separately from the charge for the basic system, and the accessory must function, in whole or in part, in connection with intercommunication among the subscriber's stations. Tax act online free Teletypewriter exchange service. Tax act online free   This includes access from a teletypewriter or other data station to a teletypewriter exchange system and the privilege of intercommunication by that station with most persons having teletypewriter or other data stations in the same exchange system. Tax act online free Figuring the tax. Tax act online free   The tax is based on the sum of all charges for local telephone service included in the bill. Tax act online free However, if the bill groups individual items for billing and tax purposes, the tax is based on the sum of the individual items within that group. Tax act online free The tax on the remaining items not included in any group is based on the charge for each item separately. Tax act online free Do not include in the tax base state or local sales or use taxes that are separately stated on the taxpayer's bill. Tax act online free Exemptions Payments for certain services or payments from certain users are exempt from the communications tax. Tax act online free Nontaxable service. Tax act online free   Nontaxable service means bundled service and long distance service. Tax act online free Nontaxable service also includes pre-paid telephone cards and pre-paid cellular service. Tax act online free Bundled service. Tax act online free   Bundled service is local and long distance service provided under a plan that does not separately state the charge for the local telephone service. Tax act online free Bundled service includes plans that provide both local and long distance service for either a flat monthly fee or a charge that varies with the elapsed transmission time for which the service is used. Tax act online free Telecommunications companies provide bundled service for both landlines and wireless (cellular) service. Tax act online free If Voice over Internet Protocol service provides both local and long distance service and the charges are not separately stated, such service is bundled service. Tax act online free   The method for sending or receiving a call, such as on a landline telephone, wireless (cellular), or some other method, does not affect whether a service is local-only or bundled. Tax act online free Long distance service. Tax act online free   Long distance service is telephonic quality communication with persons whose telephones are outside the local telephone system of the caller. Tax act online free Pre-paid telephone cards (PTC). Tax act online free   A PTC will be treated as bundled service unless a PTC expressly states it is for local-only service. Tax act online free Generally, the person responsible for collecting the tax is the carrier who transfers the PTC to the transferee. Tax act online free The transferee is the first person that is not a carrier to whom a PTC is transferred by the carrier. Tax act online free The transferee is the person liable for the tax and is eligible to request a credit or refund. Tax act online free For more information, see Regulations section 49. Tax act online free 4251-4. Tax act online free   The holder is the person that purchases a PTC to use and not to resell. Tax act online free Holders are not liable for the tax and cannot request a credit or refund. Tax act online free Pre-paid cellular telephones. Tax act online free   Rules similar to the PTC rules described above apply to pre-paid cellular telephones. Tax act online free The transferee is the person eligible to request the credit or refund. Tax act online free Installation charges. Tax act online free   The tax does not apply to payments received for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment. Tax act online free However, the tax does apply to payments for the repair or replacement of those items incidental to ordinary maintenance. Tax act online free Answering services. Tax act online free   The tax does not apply to amounts paid for a private line, an answering service, and a one-way paging or message service if they do not provide access to a local telephone system and the privilege of telephonic communication as part of the local telephone system. Tax act online free Mobile radio telephone service. Tax act online free   The tax does not apply to payments for a two-way radio service that does not provide access to a local telephone system. Tax act online free Coin-operated telephones. Tax act online free   The tax for local telephone service does not apply to payments made for services by inserting coins in public coin-operated telephones. Tax act online free But the tax applies if the coin-operated telephone service is furnished for a guaranteed amount. Tax act online free Figure the tax on the amount paid under the guarantee plus any fixed monthly or other periodic charge. Tax act online free Telephone-operated security systems. Tax act online free   The tax does not apply to amounts paid for telephones used only to originate calls to a limited number of telephone stations for security entry into a building. Tax act online free In addition, the tax does not apply to any amounts paid for rented communication equipment used in the security system. Tax act online free News services. Tax act online free   The tax on teletypewriter exchange service does not apply to charges for the following news services. Tax act online free Services dealing exclusively with the collection or dissemination of news for or through the public press or radio or television broadcasting. Tax act online free Services used exclusively in the collection or dissemination of news by a news ticker service furnishing a general news service similar to that of the public press. Tax act online free This exemption applies to payments received for messages from one member of the news media to another member (or to or from their bona fide correspondents). Tax act online free For the exemption to apply, the charge for these services must be billed in writing to the person paying for the service and that person must certify in writing that the services are used for an exempt purpose. Tax act online free Services not exempted. Tax act online free   The tax applies to amounts paid by members of the news media for local telephone service. Tax act online free International organizations and the American Red Cross. Tax act online free   The tax does not apply to communication services furnished to an international organization or to the American National Red Cross. Tax act online free Nonprofit hospitals. Tax act online free   The tax does not apply to telephone services furnished to income tax-exempt nonprofit hospitals for their use. Tax act online free Also, the tax does not apply to amounts paid by these hospitals to provide local telephone service in the homes of their personnel who must be reached during their off-duty hours. Tax act online free Nonprofit educational organizations. Tax act online free   The tax does not apply to payments received for services and facilities furnished to a nonprofit educational organization for its use. Tax act online free A nonprofit educational organization is one that satisfies all the following requirements. Tax act online free It normally maintains a regular faculty and curriculum. Tax act online free It normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Tax act online free It is exempt from income tax under section 501(a). Tax act online free This includes a school operated by an organization exempt under section 501(c)(3) if the school meets the above qualifications. Tax act online free Qualified blood collector organizations. Tax act online free   The tax does not apply to telephone services furnished to qualified blood collector organizations for their use. Tax act online free A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered with the IRS, and Registered by the Food and Drug Administration to collect blood. Tax act online free Federal, state, and local government. Tax act online free   The tax does not apply to communication services provided to the government of the United States, the government of any state or its political subdivisions, the District of Columbia, or the United Nations. Tax act online free Treat an Indian tribal government as a state for the exemption from the communications tax only if the services involve the exercise of an essential tribal government function. Tax act online free Exemption certificate. Tax act online free   Any form of exemption certificate will be acceptable if it includes all the information required by the Internal Revenue Code and Regulations. Tax act online free See Regulations section 49. Tax act online free 4253-11. Tax act online free File the certificate with the provider of the communication services. Tax act online free An exemption certificate is not required for nontaxable services. Tax act online free   The following users that are exempt from the communications tax do not have to file an annual exemption certificate after they have filed the initial certificate to claim an exemption from the communications tax. Tax act online free The American National Red Cross and other international organizations. Tax act online free Nonprofit hospitals. Tax act online free Nonprofit educational organizations. Tax act online free Qualified blood collector organizations. Tax act online free State and local governments. Tax act online free   The federal government does not have to file any exemption certificate. Tax act online free   All other organizations must furnish exemption certificates when required. Tax act online free Credits or Refunds If tax is collected and paid over for nontaxable services, or for certain services or users exempt from the communications tax, the collector or taxpayer may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. Tax act online free Alternatively, the person who paid the tax may claim a refund. Tax act online free For more information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Tax act online free Collectors. Tax act online free   The collector may request a credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Tax act online free These requirements also apply to nontaxable service refunds. Tax act online free Collectors using the regular method for deposits. Tax act online free   Collectors using the regular method for deposits must use Form 720X to request a credit or refund if the collector has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Tax act online free Collectors using the alternative method for deposits. Tax act online free   Collectors using the alternative method for deposits must adjust their separate accounts for the credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Tax act online free For more information, see the Instructions for Form 720. Tax act online free Air Transportation Taxes Taxes are imposed on amounts paid for: Transportation of persons by air, Use of international air travel facilities, and Transportation of property by air. Tax act online free Transportation of Persons by Air The tax on transportation of persons by air is made up of the: Percentage tax, and Domestic-segment tax. Tax act online free Percentage tax. Tax act online free   A tax of 7. Tax act online free 5% applies to amounts paid for taxable transportation of persons by air. Tax act online free Amounts paid for transportation include charges for layover or waiting time and movement of aircraft in deadhead service. Tax act online free Mileage awards. Tax act online free   The percentage tax may apply to an amount paid (in cash or in kind) to an air carrier (or any related person) for the right to provide mileage awards for, or other reductions in the cost of, any transportation of persons by air. Tax act online free For example, this applies to mileage awards purchased by credit card companies, telephone companies, restaurants, hotels, and other businesses. Tax act online free   Generally, the percentage tax does not apply to amounts paid for mileage awards where the mileage awards cannot, under any circumstances, be redeemed for air transportation that is subject to the tax. Tax act online free Until regulations are issued, the following rules apply to mileage awards. Tax act online free Amounts paid for mileage awards that cannot be redeemed for taxable transportation beginning and ending in the United States are not subject to the tax. Tax act online free For this rule, mileage awards issued by a foreign air carrier are considered to be usable only on that foreign air carrier and thus not redeemable for taxable transportation beginning and ending in the United States. Tax act online free Therefore, amounts paid to a foreign air carrier for mileage awards are not subject to the tax. Tax act online free Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are not subject to the tax to the extent those miles will be awarded in connection with the purchase of taxable transportation. Tax act online free Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are subject to the tax to the extent those miles will not be awarded in connection with the purchase of taxable transportation. Tax act online free Domestic-segment tax. Tax act online free   The domestic-segment tax is a flat dollar amount for each segment of taxable transportation for which an amount is paid. Tax act online free However, see Rural airports, later. Tax act online free A segment is a single takeoff and a single landing. Tax act online free The amount of the domestic-segment tax is in the Instructions for Form 720. Tax act online free Charter flights. Tax act online free    If an aircraft is chartered, the domestic-segment tax for each segment of taxable transportation is figured by multiplying the tax by the number of passengers transported on the aircraft. Tax act online free Rural airports. Tax act online free   The domestic-segment tax does not apply to a segment to or from a rural airport. Tax act online free An airport is a rural airport for a calendar year if fewer than 100,000 commercial passengers departed from the airport by air during the second preceding calendar year (the 100,000 passenger rule), and one of the following is true: The airport is not located within 75 miles of another airport from which 100,000 or more commercial passengers departed during the second preceding calendar year, The airport was receiving essential air service subsidies as of August 5, 1997, or The airport is not connected by paved roads to another airport. Tax act online free   To apply the 100,000 passenger rule to any airport described in (3) above, only count commercial passengers departing from the airport by air on flight segments of at least 100 miles. Tax act online free   An updated list of rural airports can be found on the Department of Transportation website at www. Tax act online free dot. Tax act online free gov and enter the phrase “Essential Air Service” in the search box. Tax act online free Taxable transportation. Tax act online free   Taxable transportation is transportation by air that meets either of the following tests. Tax act online free It begins and ends either in the United States or at any place in Canada or Mexico not more than 225 miles from the nearest point on the continental United States boundary (this is the 225-mile zone). Tax act online free It is directly or indirectly from one port or station in the United States to another port or station in the United States, but only if it is not a part of uninterrupted international air transportation, discussed later. Tax act online free Round trip. Tax act online free   A round trip is considered two separate trips. Tax act online free The first trip is from the point of departure to the destination. Tax act online free The second trip is the return trip from that destination. Tax act online free Uninterrupted international air transportation. Tax act online free   This means transportation entirely by air that does not begin and end in the United States or in the 225-mile zone if there is not more than a 12-hour scheduled interval between arrival and departure at any station in the United States. Tax act online free For a special rule that applies to military personnel, see Exemptions, later. Tax act online free Transportation between the continental U. Tax act online free S. Tax act online free and Alaska or Hawaii. Tax act online free   This transportation is partially exempt from the tax on transportation of persons by air. Tax act online free The tax does not apply to the part of the trip between the point at which the route of transportation leaves or enters the continental United States (or a port or station in the 225-mile zone) and the point at which it enters or leaves Hawaii or Alaska. Tax act online free Leaving or entering occurs when the route of the transportation passes over either the United States border or a point 3 nautical miles (3. Tax act online free 45 statute miles) from low tide on the coast line, or when it leaves a port or station in the 225-mile zone. Tax act online free Therefore, this transportation is subject to the percentage tax on the part of the trip in U. Tax act online free S. Tax act online free airspace, the domestic-segment tax for each domestic segment, and the tax on the use of international air travel facilities, discussed later. Tax act online free Transportation within Alaska or Hawaii. Tax act online free   The tax on transportation of persons by air applies to the entire fare paid in the case of flights between any of the Hawaiian Islands, and between any ports or stations in the Aleutian Islands or other ports or stations elsewhere in Alaska. Tax act online free The tax applies even though parts of the flights may be over international waters or over Canada, if no point on the direct line of transportation between the ports or stations is more than 225 miles from the United States (Hawaii or Alaska). Tax act online free Package tours. Tax act online free   The air transportation taxes apply to “complimentary” air transportation furnished solely to participants in package holiday tours. Tax act online free The amount paid for these package tours includes a charge for air transportation even though it may be advertised as “free. Tax act online free ” This rule also applies to the tax on the use of international air travel facilities, discussed later. Tax act online free Liability for tax. Tax act online free   The person paying for taxable transportation is liable for the tax and, ordinarily, the person receiving the payment collects the tax, files the returns, and pays the tax over to the government. Tax act online free However, if payment is made outside the United States for a prepaid order, exchange order, or similar order, the person furnishing the initial transportation provided for under that order must collect the tax. Tax act online free    A travel agency that is an independent broker and sells tours on aircraft that it charters must collect the transportation tax, file the returns, and pay the tax over to the government. Tax act online free However, a travel agency that sells tours as the agent of an airline must collect the tax and remit it to the airline for the filing of returns and for the payment of the tax over to the government. Tax act online free An independent third party that is not under the airline's supervision or control, but is acting on behalf of, and receiving compensation from, a passenger, is not required to collect the tax and pay it to the government. Tax act online free For more information on resellers of air transportation, see Revenue Ruling 2006-52. Tax act online free You can find Revenue Ruling 2006-52 on page 761 of I. Tax act online free R. Tax act online free B. Tax act online free 2006-43 at www. Tax act online free irs. Tax act online free gov/pub/irs-irbs/irb06-43. Tax act online free pdf. Tax act online free   The fact that the aircraft does not use public or commercial airports in taking off and landing has no effect on the tax. Tax act online free But see Certain helicopter uses, later. Tax act online free   For taxable transportation that begins and ends in the United States, the tax applies regardless of whether the payment is made in or outside the United States. Tax act online free   If the tax is not paid when payment for the transportation is made, the air carrier providing the initial segment of the transportation that begins or ends in the United States becomes liable for the tax. Tax act online free Exemptions. Tax act online free   The tax on transportation of persons by air does not apply in the following situations. Tax act online free See also Special Rules on Transportation Taxes, later. Tax act online free Military personnel on international trips. Tax act online free   When traveling in uniform at their own expense, United States military personnel on authorized leave are deemed to be traveling in uninterrupted international air transportation (defined earlier) even if the scheduled interval between arrival and departure at any station in the United States is actually more than 12 hours. Tax act online free However, such personnel must buy their tickets within 12 hours after landing at the first domestic airport and accept the first available accommodation of the type called for by their tickets. Tax act online free The trip must begin or end outside the United States and the 225-mile zone. Tax act online free Certain helicopter uses. Tax act online free   The tax does not apply to air transportation by helicopter if the helicopter is used for any of the following purposes. Tax act online free Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. Tax act online free Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Tax act online free Providing emergency medical transportation. Tax act online free   However, during a use described in items (1) or (2), the tax applies if the helicopter takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Tax act online free For item (1), treat each flight segment as a separate flight. Tax act online free Fixed-wing aircraft uses. Tax act online free   The tax does not apply to air transportation by fixed-wing aircraft if the fixed-wing aircraft is used for any of the following purposes. Tax act online free Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Tax act online free Providing emergency medical transportation. Tax act online free The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Tax act online free   However, during a use described in item (1), the tax applies if the fixed-wing aircraft takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Tax act online free Skydiving. Tax act online free   The tax does not apply to any air transportation exclusively for the purpose of skydiving. Tax act online free Seaplanes. Tax act online free   The tax does not apply to any air transportation by seaplane for any segment consisting of a takeoff from, and a landing on, water if the places where the takeoff and landing occur are not receiving financial assistance from the Airport and Airways Trust Fund. Tax act online free Bonus tickets. Tax act online free   The tax does not apply to free bonus tickets issued by an airline company to its customers who have satisfied all requirements to qualify for the bonus tickets. Tax act online free However, the tax applies to amounts paid by customers for advance bonus tickets when customers have traveled insufficient mileage to fully qualify for the free advance bonus tickets. Tax act online free International Air Travel Facilities A tax per person is imposed (whether in or outside the United States) for international flights that begin or end in the United States. Tax act online free However, for a domestic segment that begins or ends in Alaska or Hawaii, a reduced tax per person applies only to departures. Tax act online free This tax does not apply if all the transportation is subject to the percentage tax, discussed earlier. Tax act online free It also doesn't apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. Tax act online free See the Instructions for Form 720 for the tax rates. Tax act online free Transportation of Property by Air A tax of 6. Tax act online free 25% is imposed on amounts paid (whether in or outside the United States) for transportation of property by air. Tax act online free The fact that the aircraft may not use public or commercial airports in taking off and landing has no effect on the tax. Tax act online free The tax applies only to amounts paid to a person engaged in the business of transporting property by air for hire. Tax act online free The tax applies only to transportation (including layover time and movement of aircraft in deadhead service) that begins and ends in the United States. Tax act online free Thus, the tax does not apply to transportation of property by air that begins or ends outside the United States. Tax act online free Exemptions. Tax act online free   The tax on transportation of property by air does not apply in the following situations. Tax act online free See also Special Rules on Transportation Taxes, later. Tax act online free Cropdusting and firefighting service. Tax act online free   The tax does not apply to amounts paid for cropdusting or aerial firefighting service. Tax act online free Exportation. Tax act online free    The tax does not apply to payments for transportation of property by air in the course of exportation (including to United States possessions) by continuous movement, as evidenced by the execution of Form 1363, Export Exemption Certificate. Tax act online free See Form 1363 for more information. Tax act online free Certain helicopter and fixed-wing air ambulance uses. Tax act online free   The tax does not apply to amounts paid for the use of helicopters in construction to set heating and air conditioning units on roofs of buildings, to dismantle tower cranes, and to aid in construction of power lines and ski lifts. Tax act online free   The tax also does not apply to air transportation by helicopter or fixed-wing aircraft for the purpose of providing emergency medical services. Tax act online free The fixed-wing aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Tax act online free Skydiving. Tax act online free   The tax does not apply to any air transportation exclusively for the purpose of skydiving. Tax act online free Excess baggage. Tax act online free    The tax does not apply to excess baggage accompanying a passenger on an aircraft operated on an established line. Tax act online free Surtax on fuel used in a fractional ownership program aircraft. Tax act online free   The tax does not apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. Tax act online free Alaska and Hawaii. Tax act online free   For transportation of property to and from Alaska and Hawaii, the tax in general does not apply to the portion of the transportation that is entirely outside the continental United States (or the 225-mile zone if the aircraft departs from or arrives at an airport in the 225-mile zone). Tax act online free But the tax applies to flights between ports or stations in Alaska and the Aleutian Islands, as well as between ports or stations in Hawaii. Tax act online free The tax applies even though parts of the flights may be over international waters or over Canada, if no point on a line drawn from where the route of transportation leaves the United States (Alaska) to where it reenters the United States (Alaska) is more than 225 miles from the United States. Tax act online free Liability for tax. Tax act online free   The person paying for taxable transportation is liable for the tax and, ordinarily, the person engaged in the business of transporting property by air for hire receives the payment, collects the tax, files the returns, and pays the tax over to the government. Tax act online free   If tax is not paid when a payment is made outside the United States, the person furnishing the last segment of taxable transportation collects the tax from the person to whom the property is delivered in the United States. Tax act online free Special Rules on Transportation Taxes In certain circumstances, special rules apply to the taxes on transportation of persons and property by air. Tax act online free Aircraft used by affiliated corporations. Tax act online free   The taxes do not apply to payments received by one member of an affiliated group of corporations from another member for services furnished in connection with the use of an aircraft. Tax act online free However, the aircraft must be owned or leased by a member of the affiliated group and cannot be available for hire by a nonmember of the affiliated group. Tax act online free Determine whether an aircraft is available for hire by a nonmember of an affiliated group on a flight-by-flight basis. Tax act online free   For this rule, an affiliated group of corporations is any group of corporations connected with a common parent corporation through 80% or more of stock ownership. Tax act online free Small aircraft. Tax act online free   The taxes do not apply to transportation furnished by an aircraft having a maximum certificated takeoff weight of 6,000 pounds or less. Tax act online free However, the taxes do apply if the aircraft is operated on an established line. Tax act online free “Operated on an established line” means the aircraft operates with some degree of regularity between definite points. Tax act online free However, it does not include any time an aircraft is being operated on a flight that is solely for sightseeing. Tax act online free   Consider an aircraft to be operated on an established line if it is operated on a charter basis between two cities also served by that carrier on a regularly scheduled basis. Tax act online free   Also, the taxes apply if the aircraft is jet-powered, regardless of its maximum certificated takeoff weight or whether or not it is operated on an established line. Tax act online free Mixed load of persons and property. Tax act online free   If a single amount is paid for air transportation of persons and property, the payment must be allocated between the amount subject to the tax on transportation of persons and the amount subject to the tax on transportation of property. Tax act online free The allocation must be reasonable and supported by adequate records. Tax act online free Credits or refunds. Tax act online free   If tax is collected and paid over for air transportation that is not taxable air transportation, the collector may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. Tax act online free Alternatively, the person who paid the tax may claim a refund. Tax act online free For information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Tax act online free Prev  Up  Next   Home   More Online Publications