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Tax Software 2011

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Tax Software 2011

Tax software 2011 11. Tax software 2011   Departing Aliens and the Sailing or Departure Permit Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Aliens Not Required To Obtain Sailing or Departure Permits Aliens Required To Obtain Sailing or Departure PermitsGetting a Sailing or Departure Permit Forms To File Paying Taxes and Obtaining Refunds Bond To Ensure Payment Filing Annual U. Tax software 2011 S. Tax software 2011 Income Tax Returns Introduction Before leaving the United States, all aliens (except those listed under Aliens Not Required To Obtain Sailing or Departure Permits must obtain a certificate of compliance. Tax software 2011 This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Tax software 2011 You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Tax software 2011 These forms are discussed in this chapter. Tax software 2011 To find out if you need a sailing or departure permit, first read Aliens Not Required To Obtain Sailing or Departure Permits . Tax software 2011 If you do not fall into one of the categories in that discussion, you must obtain a sailing or departure permit. Tax software 2011 Read Aliens Required To Obtain Sailing or Departure Permits . Tax software 2011 Topics - This chapter discusses: Who needs a sailing permit, How to get a sailing permit, and Forms you file to get a sailing permit. Tax software 2011 Useful Items - You may want to see: Form (and Instructions) 1040-C U. Tax software 2011 S. Tax software 2011 Departing Alien Income Tax Return 2063 U. Tax software 2011 S. Tax software 2011 Departing Alien Income Tax Statement See chapter 12 for information about getting these forms. Tax software 2011 Aliens Not Required To Obtain Sailing or Departure Permits If you are included in one of the following categories, you do not have to get a sailing or departure permit before leaving the United States. Tax software 2011 If you are in one of these categories and do not have to get a sailing or departure permit, you must be able to support your claim for exemption with proper identification or give the authority for the exemption. Tax software 2011 Category 1. Tax software 2011   Representatives of foreign governments with diplomatic passports, whether accredited to the United States or other countries, members of their households, and servants accompanying them. Tax software 2011 Servants who are leaving, but not with a person with a diplomatic passport, must get a sailing or departure permit. Tax software 2011 However, they can get a sailing or departure permit on Form 2063 without examination of their income tax liability by presenting a letter from the chief of their diplomatic mission certifying that: Their name appears on the “White List” (a list of employees of diplomatic missions), and They do not owe to the United States any income tax, and will not owe any tax up to and including the intended date of departure. Tax software 2011   The statement must be presented to an IRS office. Tax software 2011 Category 2. Tax software 2011    Employees of international organizations and foreign governments (other than diplomatic representatives exempt under category 1) and members of their households: Whose compensation for official services is exempt from U. Tax software 2011 S. Tax software 2011 tax under U. Tax software 2011 S. Tax software 2011 tax laws (described in chapter 10), and Who receive no other income from U. Tax software 2011 S. Tax software 2011 sources. Tax software 2011 If you are an alien in category (1) or (2), above, who filed the waiver under section 247(b) of the Immigration and Nationality Act, you must get a sailing or departure permit. Tax software 2011 This is true even if your income is exempt from U. Tax software 2011 S. Tax software 2011 tax because of an income tax treaty, consular agreement, or international agreement. Tax software 2011 Category 3. Tax software 2011   Alien students, industrial trainees, and exchange visitors, including their spouses and children, who enter on an “F-1,” “F-2,” “H-3,” “H-4,” “J-1,” “J-2,” or “Q” visa only and who receive no income from U. Tax software 2011 S. Tax software 2011 sources while in the United States under those visas other than: Allowances to cover expenses incident to study or training in the United States, such as expenses for travel, maintenance, and tuition, The value of any services or food and lodging connected with this study or training, Income from employment authorized by the U. Tax software 2011 S. Tax software 2011 Citizenship and Immigration Services (USCIS), or Interest income on deposits that is not effectively connected with a U. Tax software 2011 S. Tax software 2011 trade or business. Tax software 2011 (See Interest Income in chapter 3. Tax software 2011 ) Category 4. Tax software 2011   Alien students, including their spouses and children, who enter on an “M-1” or “M-2” visa only and who receive no income from U. Tax software 2011 S. Tax software 2011 sources while in the United States under those visas, other than: Income from employment authorized by the U. Tax software 2011 S. Tax software 2011 Citizenship and Immigration Services (USCIS) or Interest income on deposits that is not effectively connected with a U. Tax software 2011 S. Tax software 2011 trade or business. Tax software 2011 (See Interest Income in chapter 3. Tax software 2011 ) Category 5. Tax software 2011   Certain other aliens temporarily in the United States who have received no taxable income during the tax year up to and including the date of departure or during the preceding tax year. Tax software 2011 If the IRS has reason to believe that an alien has received income subject to tax and that the collection of income tax is jeopardized by departure, it may then require the alien to obtain a sailing or departure permit. Tax software 2011 Aliens in this category are: Alien military trainees who enter the United States for training under the sponsorship of the Department of Defense and who leave the United States on official military travel orders, Alien visitors for business on a “B-1” visa, or on both a “B-1” visa and a “B-2” visa, who do not remain in the United States or a U. Tax software 2011 S. Tax software 2011 possession for more than 90 days during the tax year, Alien visitors for pleasure on a “B-2” visa, Aliens in transit through the United States or any of its possessions on a “C-1” visa, or under a contract, such as a bond agreement, between a transportation line and the Attorney General, and Aliens who enter the United States on a border-crossing identification card or for whom passports, visas, and border-crossing identification cards are not required, if they are: Visitors for pleasure, Visitors for business who do not remain in the United States or a U. Tax software 2011 S. Tax software 2011 possession for more than 90 days during the tax year, or In transit through the United States or any of its possessions. Tax software 2011 Category 6. Tax software 2011   Alien residents of Canada or Mexico who frequently commute between that country and the United States for employment, and whose wages are subject to the withholding of U. Tax software 2011 S. Tax software 2011 tax. Tax software 2011 Aliens Required To Obtain Sailing or Departure Permits If you do not fall into one of the categories listed under Aliens Not Required To Obtain Sailing or Departure Permits, you must obtain a sailing or departure permit. Tax software 2011 To obtain a permit, file Form 1040-C or Form 2063 (whichever applies) with your local IRS office before you leave the United States. Tax software 2011 See Forms To File , later. Tax software 2011 You must also pay all the tax shown as due on Form 1040-C and any taxes due for past years. Tax software 2011 See Paying Taxes and Obtaining Refunds , later. Tax software 2011 Getting a Sailing or Departure Permit The following discussion covers when and where to get your sailing permit. Tax software 2011 Where to get a sailing or departure permit. Tax software 2011   If you have been working in the United States, you should get the permit from an IRS office in the area of your employment, or you may obtain one from an IRS office in the area of your departure. Tax software 2011 When to get a sailing or departure permit. Tax software 2011   You should get your sailing or departure permit at least 2 weeks before you plan to leave. Tax software 2011 You cannot apply earlier than 30 days before your planned departure date. Tax software 2011 Do not wait until the last minute in case there are unexpected problems. Tax software 2011 Papers to submit. Tax software 2011   Getting your sailing or departure permit will go faster if you bring to the IRS office papers and documents related to your income and your stay in the United States. Tax software 2011 Bring the following records with you if they apply. Tax software 2011 Your passport and alien registration card or visa. Tax software 2011 Copies of your U. Tax software 2011 S. Tax software 2011 income tax returns filed for the past 2 years. Tax software 2011 If you were in the United States for less than 2 years, bring the income tax returns you filed for that period. Tax software 2011 Receipts for income taxes paid on these returns. Tax software 2011 Receipts, bank records, canceled checks, and other documents that prove your deductions, business expenses, and dependents claimed on your returns. Tax software 2011 A statement from each employer showing wages paid and tax withheld from January 1 of the current year to the date of departure if you were an employee. Tax software 2011 If you were self-employed, you must bring a statement of income and expenses up to the date you plan to leave. Tax software 2011 Proof of estimated tax payments for the past year and this year. Tax software 2011 Documents showing any gain or loss from the sale of personal property and/or real property, including capital assets and merchandise. Tax software 2011 Documents relating to scholarship or fellowship grants including: Verification of the grantor, source, and purpose of the grant. Tax software 2011 Copies of the application for, and approval of, the grant. Tax software 2011 A statement of the amount paid, and your duties and obligations under the grant. Tax software 2011 A list of any previous grants. Tax software 2011 Documents indicating you qualify for any special tax treaty benefits claimed. Tax software 2011 Document verifying your date of departure from the United States, such as an airline ticket. Tax software 2011 Document verifying your U. Tax software 2011 S. Tax software 2011 taxpayer identification number, such as a social security card or an IRS issued Notice CP 565 showing your individual taxpayer identification number (ITIN). Tax software 2011 Note. Tax software 2011   If you are married and reside in a community property state, also bring the above-listed documents for your spouse. Tax software 2011 This applies whether or not your spouse requires a permit. Tax software 2011 Forms To File If you must get a sailing or departure permit, you must file Form 2063 or Form 1040-C. Tax software 2011 Employees in the IRS office can assist in filing these forms. Tax software 2011 Both forms have a “certificate of compliance” section. Tax software 2011 When the certificate of compliance is signed by an agent of the Field Assistance Area Director, it certifies that your U. Tax software 2011 S. Tax software 2011 tax obligations have been satisfied according to available information. Tax software 2011 Your Form 1040-C copy of the signed certificate, or the one detached from Form 2063, is your sailing or departure permit. Tax software 2011 Form 2063 This is a short form that asks for certain information but does not include a tax computation. Tax software 2011 The following departing aliens can get their sailing or departure permits by filing Form 2063. Tax software 2011 Aliens, whether resident or nonresident, who have had no taxable income for the tax year up to and including the date of departure and for the preceding year, if the period for filing the income tax return for that year has not expired. Tax software 2011 Resident aliens who have received taxable income during the tax year or preceding year and whose departure will not hinder the collection of any tax. Tax software 2011 However, if the IRS has information indicating that the aliens are leaving to avoid paying their income tax, they must file a Form 1040-C. Tax software 2011 Aliens in either of these categories who have not filed an income tax return or paid income tax for any tax year must file the return and pay the income tax before they can be issued a sailing or departure permit on Form 2063. Tax software 2011 The sailing or departure permit detached from Form 2063 can be used for all departures during the current year. Tax software 2011 However, the IRS may cancel the sailing or departure permit for any later departure if it believes the collection of income tax is jeopardized by that later departure. Tax software 2011 Form 1040-C If you must get a sailing or departure permit and you do not qualify to file Form 2063, you must file Form 1040-C. Tax software 2011 Ordinarily, all income received or reasonably expected to be received during the tax year up to and including the date of departure must be reported on Form 1040-C and the tax on it must be paid. Tax software 2011 When you pay any tax shown as due on the Form 1040-C, and you file all returns and pay all tax due for previous years, you will receive a sailing or departure permit. Tax software 2011 However, the IRS may permit you to furnish a bond guaranteeing payment instead of paying the taxes for certain years. Tax software 2011 See Bond To Ensure Payment , discussed later. Tax software 2011 The sailing or departure permit issued under the conditions in this paragraph is only for the specific departure for which it is issued. Tax software 2011 Returning to the United States. Tax software 2011   If you furnish the IRS with information showing, to the satisfaction of the IRS, that you intend to return to the United States and that your departure does not jeopardize the collection of income tax, you can get a sailing or departure permit by filing Form 1040-C without having to pay the tax shown on it. Tax software 2011 You must, however, file all income tax returns that have not yet been filed as required, and pay all income tax that is due on these returns. Tax software 2011   Your Form 1040-C must include all income received and reasonably expected to be received during the entire year of departure. Tax software 2011 The sailing or departure permit issued with this Form 1040-C can be used for all departures during the current year. Tax software 2011 However, the Service may cancel the sailing or departure permit for any later departure if the payment of income tax appears to be in jeopardy. Tax software 2011 Joint return on Form 1040-C. Tax software 2011   Departing husbands and wives who are nonresident aliens cannot file joint returns. Tax software 2011 However, if both spouses are resident aliens, they can file a joint return on Form 1040-C if: Both spouses can reasonably be expected to qualify to file a joint return at the normal close of their tax year, and The tax years of the spouses end at the same time. Tax software 2011 Paying Taxes and Obtaining Refunds You must pay all tax shown as due on the Form 1040-C at the time of filing it, except when a bond is furnished, or the IRS is satisfied that your departure does not jeopardize the collection of income tax. Tax software 2011 You must also pay any taxes due for past years. Tax software 2011 If the tax computation on Form 1040-C results in an overpayment, there is no tax to pay at the time you file that return. Tax software 2011 However, the IRS cannot provide a refund at the time of departure. Tax software 2011 If you are due a refund, you must file either Form 1040NR or Form 1040NR-EZ at the end of the tax year. Tax software 2011 Bond To Ensure Payment Usually, you must pay the tax shown as due on Form 1040-C when you file it. Tax software 2011 However, if you pay all taxes due that you owe for prior years, you can furnish a bond guaranteeing payment instead of paying the income taxes shown as due on the Form 1040-C or the tax return for the preceding year if the period for filing that return has not expired. Tax software 2011 The bond must equal the tax due plus interest to the date of payment as figured by the IRS. Tax software 2011 Information about the form of bond and security on it can be obtained from your IRS office. Tax software 2011 Filing Annual U. Tax software 2011 S. Tax software 2011 Income Tax Returns Form 1040-C is not an annual U. Tax software 2011 S. Tax software 2011 income tax return. Tax software 2011 If an income tax return is required by law, that return must be filed even though a Form 1040-C has already been filed. Tax software 2011 Chapters 5 and 7 discuss filing an annual U. Tax software 2011 S. Tax software 2011 income tax return. Tax software 2011 The tax paid with Form 1040-C should be taken as a credit against the tax liability for the entire tax year on your annual U. Tax software 2011 S. Tax software 2011 income tax return. Tax software 2011 Prev  Up  Next   Home   More Online Publications
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The Tax Software 2011

Tax software 2011 4. Tax software 2011   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. Tax software 2011  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. Tax software 2011 For more information, see Publication 505. Tax software 2011 Reminders Estimated tax safe harbor for higher income taxpayers. Tax software 2011  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. Tax software 2011 Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. Tax software 2011 In general, the federal income tax is a pay-as-you-go tax. Tax software 2011 There are two ways to pay as you go. Tax software 2011 Withholding. Tax software 2011 If you are an employee, your employer probably withholds income tax from your pay. Tax software 2011 Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. Tax software 2011 The amount withheld is paid to the IRS in your name. Tax software 2011 Estimated tax. Tax software 2011 If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. Tax software 2011 People who are in business for themselves generally will have to pay their tax this way. Tax software 2011 Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. Tax software 2011 Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Tax software 2011 This chapter explains these methods. Tax software 2011 In addition, it also explains the following. Tax software 2011 Credit for withholding and estimated tax. Tax software 2011 When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. Tax software 2011 , and for the estimated tax you paid for 2013. Tax software 2011 Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). Tax software 2011 Underpayment penalty. Tax software 2011 If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. Tax software 2011 In most cases, the IRS can figure this penalty for you. Tax software 2011 See Underpayment Penalty for 2013 at the end of this chapter. Tax software 2011 Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. Tax software 2011 This section explains the rules for withholding tax from each of these types of income. Tax software 2011 This section also covers backup withholding on interest, dividends, and other payments. Tax software 2011 Salaries and Wages Income tax is withheld from the pay of most employees. Tax software 2011 Your pay includes your regular pay, bonuses, commissions, and vacation allowances. Tax software 2011 It also includes reimbursements and other expense allowances paid under a nonaccountable plan. Tax software 2011 See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. Tax software 2011 If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. Tax software 2011 This is explained under Exemption From Withholding , later. Tax software 2011 You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. Tax software 2011 If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Tax software 2011 Military retirees. Tax software 2011   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. Tax software 2011 Household workers. Tax software 2011   If you are a household worker, you can ask your employer to withhold income tax from your pay. Tax software 2011 A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. Tax software 2011   Tax is withheld only if you want it withheld and your employer agrees to withhold it. Tax software 2011 If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Tax software 2011 Farmworkers. Tax software 2011   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. Tax software 2011 Differential wage payments. Tax software 2011    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Tax software 2011 Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. Tax software 2011 The wages and withholding will be reported on Form W-2, Wage and Tax Statement. Tax software 2011   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. Tax software 2011 Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. Tax software 2011 The amount you earn in each payroll period. Tax software 2011 The information you give your employer on Form W-4. Tax software 2011 Form W-4 includes four types of information that your employer will use to figure your withholding. Tax software 2011 Whether to withhold at the single rate or at the lower married rate. Tax software 2011 How many withholding allowances you claim (each allowance reduces the amount withheld). Tax software 2011 Whether you want an additional amount withheld. Tax software 2011 Whether you are claiming an exemption from withholding in 2014. Tax software 2011 See Exemption From Withholding , later. Tax software 2011 Note. Tax software 2011 You must specify a filing status and a number of withholding allowances on Form W-4. Tax software 2011 You cannot specify only a dollar amount of withholding. Tax software 2011 New Job When you start a new job, you must fill out Form W-4 and give it to your employer. Tax software 2011 Your employer should have copies of the form. Tax software 2011 If you need to change the information later, you must fill out a new form. Tax software 2011 If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. Tax software 2011 You may be able to avoid overwithholding if your employer agrees to use the part-year method. Tax software 2011 See Part-Year Method in chapter 1 of Publication 505 for more information. Tax software 2011 Employee also receiving pension income. Tax software 2011   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. Tax software 2011 However, you can choose to split your withholding allowances between your pension and job in any manner. Tax software 2011 Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. Tax software 2011 When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. Tax software 2011 If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. Tax software 2011 Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. Tax software 2011 Changing your withholding for 2015. Tax software 2011   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. Tax software 2011 If the event occurs in December 2014, submit a new Form W-4 within 10 days. Tax software 2011 Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. Tax software 2011 If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. Tax software 2011 You should try to have your withholding match your actual tax liability. Tax software 2011 If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. Tax software 2011 If too much tax is withheld, you will lose the use of that money until you get your refund. Tax software 2011 Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. Tax software 2011 Note. Tax software 2011 You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. Tax software 2011 Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. Tax software 2011 The worksheets are for your own records. Tax software 2011 Do not give them to your employer. Tax software 2011 Multiple jobs. Tax software 2011   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Tax software 2011 Then split your allowances between the Forms W-4 for each job. Tax software 2011 You cannot claim the same allowances with more than one employer at the same time. Tax software 2011 You can claim all your allowances with one employer and none with the other(s), or divide them any other way. Tax software 2011 Married individuals. Tax software 2011   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Tax software 2011 Use only one set of worksheets. Tax software 2011 You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. Tax software 2011   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. Tax software 2011 Alternative method of figuring withholding allowances. Tax software 2011   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. Tax software 2011 For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. Tax software 2011 Personal Allowances Worksheet. Tax software 2011   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. Tax software 2011 Deduction and Adjustments Worksheet. Tax software 2011   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. Tax software 2011 Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. Tax software 2011 Two-Earners/Multiple Jobs Worksheet. Tax software 2011   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. Tax software 2011 Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. Tax software 2011 Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. Tax software 2011 You accurately complete all the Form W-4 worksheets that apply to you. Tax software 2011 You give your employer a new Form W-4 when changes occur. Tax software 2011 But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. Tax software 2011 This is most likely to happen in the following situations. Tax software 2011 You are married and both you and your spouse work. Tax software 2011 You have more than one job at a time. Tax software 2011 You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. Tax software 2011 You will owe additional amounts with your return, such as self-employment tax. Tax software 2011 Your withholding is based on obsolete Form W-4 information for a substantial part of the year. Tax software 2011 Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. Tax software 2011 You work only part of the year. Tax software 2011 You change the number of your withholding allowances during the year. Tax software 2011 Cumulative wage method. Tax software 2011   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. Tax software 2011 You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. Tax software 2011 You must ask your employer in writing to use this method. Tax software 2011   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. Tax software 2011 ) since the beginning of the year. Tax software 2011 Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. Tax software 2011 It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. Tax software 2011 It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. Tax software 2011 If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. Tax software 2011 You can use the IRS Withholding Calculator at www. Tax software 2011 irs. Tax software 2011 gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. Tax software 2011 Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. Tax software 2011 These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. Tax software 2011 New Form W-4. Tax software 2011   When you start a new job, your employer should have you complete a Form W-4. Tax software 2011 Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. Tax software 2011   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. Tax software 2011 The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. Tax software 2011 No Form W-4. Tax software 2011   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. Tax software 2011 Repaying withheld tax. Tax software 2011   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Tax software 2011 Your employer cannot repay any of the tax previously withheld. Tax software 2011 Instead, claim the full amount withheld when you file your tax return. Tax software 2011   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Tax software 2011 Your employer can repay the amount that was withheld incorrectly. Tax software 2011 If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. Tax software 2011 Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. Tax software 2011 The exemption applies only to income tax, not to social security or Medicare tax. Tax software 2011 You can claim exemption from withholding for 2014 only if both of the following situations apply. Tax software 2011 For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. Tax software 2011 For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. Tax software 2011 Students. Tax software 2011   If you are a student, you are not automatically exempt. Tax software 2011 See chapter 1 to find out if you must file a return. Tax software 2011 If you work only part time or only during the summer, you may qualify for exemption from withholding. Tax software 2011 Age 65 or older or blind. Tax software 2011   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. Tax software 2011 Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. Tax software 2011 Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. Tax software 2011 Claiming exemption from withholding. Tax software 2011   To claim exemption, you must give your employer a Form W-4. Tax software 2011 Do not complete lines 5 and 6. Tax software 2011 Enter “Exempt” on line 7. Tax software 2011   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. Tax software 2011 If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. Tax software 2011   Your claim of exempt status may be reviewed by the IRS. Tax software 2011 An exemption is good for only 1 year. Tax software 2011   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. Tax software 2011 Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. Tax software 2011 The payer can figure withholding on supplemental wages using the same method used for your regular wages. Tax software 2011 However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. Tax software 2011 Expense allowances. Tax software 2011   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. Tax software 2011   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. Tax software 2011   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. Tax software 2011 Penalties You may have to pay a penalty of $500 if both of the following apply. Tax software 2011 You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. Tax software 2011 You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. Tax software 2011 There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. Tax software 2011 The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. Tax software 2011 These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. Tax software 2011 A simple error or an honest mistake will not result in one of these penalties. Tax software 2011 For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. Tax software 2011 Tips The tips you receive while working on your job are considered part of your pay. Tax software 2011 You must include your tips on your tax return on the same line as your regular pay. Tax software 2011 However, tax is not withheld directly from tip income, as it is from your regular pay. Tax software 2011 Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. Tax software 2011 See chapter 6 for information on reporting your tips to your employer. Tax software 2011 For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. Tax software 2011 How employer figures amount to withhold. Tax software 2011   The tips you report to your employer are counted as part of your income for the month you report them. Tax software 2011 Your employer can figure your withholding in either of two ways. Tax software 2011 By withholding at the regular rate on the sum of your pay plus your reported tips. Tax software 2011 By withholding at the regular rate on your pay plus a percentage of your reported tips. Tax software 2011 Not enough pay to cover taxes. Tax software 2011   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. Tax software 2011 See Giving your employer money for taxes in chapter 6. Tax software 2011 Allocated tips. Tax software 2011   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. Tax software 2011 Withholding is based only on your pay plus your reported tips. Tax software 2011 Your employer should refund to you any incorrectly withheld tax. Tax software 2011 See Allocated Tips in chapter 6 for more information. Tax software 2011 Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Tax software 2011 Your employer generally must withhold income tax on these benefits from your regular pay. Tax software 2011 For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. Tax software 2011 Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. Tax software 2011 Your employer must notify you if this choice is made. Tax software 2011 For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. Tax software 2011 Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. Tax software 2011 To qualify as sick pay, it must be paid under a plan to which your employer is a party. Tax software 2011 If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. Tax software 2011 An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. Tax software 2011 However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. Tax software 2011 See Form W-4S , later. Tax software 2011 If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. Tax software 2011 Union agreements. Tax software 2011   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. Tax software 2011 See your union representative or your employer for more information. Tax software 2011 Form W-4S. Tax software 2011   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. Tax software 2011 Its instructions contain a worksheet you can use to figure the amount you want withheld. Tax software 2011 They also explain restrictions that may apply. Tax software 2011   Give the completed form to the payer of your sick pay. Tax software 2011 The payer must withhold according to your directions on the form. Tax software 2011 Estimated tax. Tax software 2011   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. Tax software 2011 If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. Tax software 2011 See Underpayment Penalty for 2013 at the end of this chapter. Tax software 2011 Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. Tax software 2011 This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. Tax software 2011 The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). Tax software 2011 Income tax withholding from an ERD is mandatory. Tax software 2011 More information. Tax software 2011   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. Tax software 2011 For information on IRAs, see chapter 17. Tax software 2011 For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. Tax software 2011 Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. Tax software 2011 Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. Tax software 2011 Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. Tax software 2011 Any other wager, if the proceeds are at least 300 times the amount of the bet. Tax software 2011 It does not matter whether your winnings are paid in cash, in property, or as an annuity. Tax software 2011 Winnings not paid in cash are taken into account at their fair market value. Tax software 2011 Exception. Tax software 2011   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. Tax software 2011 However, you may need to provide the payer with a social security number to avoid withholding. Tax software 2011 See Backup withholding on gambling winnings in chapter 1 of Publication 505. Tax software 2011 If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. Tax software 2011 See Estimated Tax for 2014 , later. Tax software 2011 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Tax software 2011 See Underpayment Penalty for 2013 at the end of this chapter. Tax software 2011 Form W-2G. Tax software 2011   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. Tax software 2011 Report the tax withheld on line 62 of Form 1040. Tax software 2011 Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. Tax software 2011 To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Tax software 2011 All unemployment compensation is taxable. Tax software 2011 So, if you do not have income tax withheld, you may have to pay estimated tax. Tax software 2011 See Estimated Tax for 2014 , later. Tax software 2011 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Tax software 2011 For information, see Underpayment Penalty for 2013 at the end of this chapter. Tax software 2011 Federal Payments You can choose to have income tax withheld from certain federal payments you receive. Tax software 2011 These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. Tax software 2011 S. Tax software 2011 C. Tax software 2011 1421 et. Tax software 2011 seq. Tax software 2011 ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. Tax software 2011 To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Tax software 2011 If you do not choose to have income tax withheld, you may have to pay estimated tax. Tax software 2011 See Estimated Tax for 2014 , later. Tax software 2011 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Tax software 2011 For information, see Underpayment Penalty for 2013 at the end of this chapter. Tax software 2011 More information. Tax software 2011   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. Tax software 2011 Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. Tax software 2011 Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. Tax software 2011 The information return shows how much you were paid during the year. Tax software 2011 It also includes your name and taxpayer identification number (TIN). Tax software 2011 TINs are explained in chapter 1 under Social Security Number (SSN) . Tax software 2011 These payments generally are not subject to withholding. Tax software 2011 However, “backup” withholding is required in certain situations. Tax software 2011 Backup withholding can apply to most kinds of payments that are reported on Form 1099. Tax software 2011 The payer must withhold at a flat 28% rate in the following situations. Tax software 2011 You do not give the payer your TIN in the required manner. Tax software 2011 The IRS notifies the payer that the TIN you gave is incorrect. Tax software 2011 You are required, but fail, to certify that you are not subject to backup withholding. Tax software 2011 The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. Tax software 2011 The IRS will do this only after it has mailed you four notices over at least a 210-day period. Tax software 2011 See Backup Withholding in chapter 1 of Publication 505 for more information. Tax software 2011 Penalties. Tax software 2011   There are civil and criminal penalties for giving false information to avoid backup withholding. Tax software 2011 The civil penalty is $500. Tax software 2011 The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. Tax software 2011 Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. Tax software 2011 This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Tax software 2011 You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Tax software 2011 Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. Tax software 2011 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Tax software 2011 If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. Tax software 2011 For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. Tax software 2011 Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. Tax software 2011 To do this, give a new Form W-4 to your employer. Tax software 2011 See chapter 1 of Publication 505. Tax software 2011 Estimated tax not required. Tax software 2011   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. Tax software 2011 You had no tax liability for 2013. Tax software 2011 You were a U. Tax software 2011 S. Tax software 2011 citizen or resident alien for the whole year. Tax software 2011 Your 2013 tax year covered a 12-month period. Tax software 2011   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. Tax software 2011 For the definition of “total tax” for 2013, see Publication 505, chapter 2. Tax software 2011 Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. Tax software 2011 You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. Tax software 2011 General rule. Tax software 2011   In most cases, you must pay estimated tax for 2014 if both of the following apply. Tax software 2011 You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Tax software 2011 You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). Tax software 2011 Your 2013 tax return must cover all 12 months. Tax software 2011    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. Tax software 2011 Special rules for farmers, fishermen, and higher income taxpayers. Tax software 2011   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. Tax software 2011 If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. Tax software 2011 See Figure 4-A and Publication 505, chapter 2 for more information. Tax software 2011 Figure 4-A. Tax software 2011 Do You Have To Pay Estimated Tax? Please click here for the text description of the image. Tax software 2011 Figure 4-A Do You Have To Pay Estimated Tax? Aliens. Tax software 2011   Resident and nonresident aliens also may have to pay estimated tax. Tax software 2011 Resident aliens should follow the rules in this chapter unless noted otherwise. Tax software 2011 Nonresident aliens should get Form 1040-ES (NR), U. Tax software 2011 S. Tax software 2011 Estimated Tax for Nonresident Alien Individuals. Tax software 2011   You are an alien if you are not a citizen or national of the United States. Tax software 2011 You are a resident alien if you either have a green card or meet the substantial presence test. Tax software 2011 For more information about the substantial presence test, see Publication 519, U. Tax software 2011 S. Tax software 2011 Tax Guide for Aliens. Tax software 2011 Married taxpayers. Tax software 2011   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. Tax software 2011   You and your spouse can make joint estimated tax payments even if you are not living together. Tax software 2011   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). Tax software 2011   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. Tax software 2011 Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. Tax software 2011 2013 separate returns and 2014 joint return. Tax software 2011   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. Tax software 2011 You filed a separate return if you filed as single, head of household, or married filing separately. Tax software 2011 2013 joint return and 2014 separate returns. Tax software 2011   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. Tax software 2011 You file a separate return if you file as single, head of household, or married filing separately. Tax software 2011   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. Tax software 2011 Then multiply the tax on the joint return by the following fraction. Tax software 2011     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Tax software 2011 Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Tax software 2011 Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. Tax software 2011 For 2014, they plan to file married filing separately. Tax software 2011 Joe figures his share of the tax on the 2013 joint return as follows. Tax software 2011   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. Tax software 2011 6%     Joe's share of tax on joint return  ($6,386 × 87. Tax software 2011 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. Tax software 2011 When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Tax software 2011 Use your 2013 federal tax return as a guide. Tax software 2011 You can use Form 1040-ES and Publication 505 to figure your estimated tax. Tax software 2011 Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). Tax software 2011 You must make adjustments both for changes in your own situation and for recent changes in the tax law. Tax software 2011 For a discussion of these changes, visit IRS. Tax software 2011 gov. Tax software 2011 For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. Tax software 2011 When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. Tax software 2011 Each period has a specific payment due date. Tax software 2011 If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. Tax software 2011 The payment periods and due dates for estimated tax payments are shown next. Tax software 2011   For the period: Due date:*     Jan. Tax software 2011 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. Tax software 2011 15     Sept. Tax software 2011 1– Dec. Tax software 2011 31 Jan. Tax software 2011 15, next year     *See Saturday, Sunday, holiday rule and January payment . Tax software 2011 Saturday, Sunday, holiday rule. Tax software 2011   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. Tax software 2011 January payment. Tax software 2011   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. Tax software 2011 Fiscal year taxpayers. Tax software 2011   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. Tax software 2011 When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. Tax software 2011 If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. Tax software 2011 You can pay all your estimated tax at that time, or you can pay it in installments. Tax software 2011 If you choose to pay in installments, make your first payment by the due date for the first payment period. Tax software 2011 Make your remaining installment payments by the due dates for the later periods. Tax software 2011 No income subject to estimated tax during first period. Tax software 2011    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. Tax software 2011 You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Tax software 2011 The following chart shows when to make installment payments. Tax software 2011 If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. Tax software 2011 15 Jan. Tax software 2011 15 next year April 1–May 31 June 16 Sept. Tax software 2011 15 Jan. Tax software 2011 15 next year June 1–Aug. Tax software 2011 31 Sept. Tax software 2011 15 Jan. Tax software 2011 15 next year After Aug. Tax software 2011 31 Jan. Tax software 2011 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . Tax software 2011 How much to pay to avoid a penalty. Tax software 2011   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. Tax software 2011 How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. Tax software 2011 You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. Tax software 2011 These methods are described in chapter 2 of Publication 505. Tax software 2011 If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. Tax software 2011 If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. Tax software 2011 Underpayment penalty. Tax software 2011   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. Tax software 2011 Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. Tax software 2011 See chapter 4 of Publication 505 for more information. Tax software 2011 Change in estimated tax. Tax software 2011   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Tax software 2011 Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. Tax software 2011 Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. Tax software 2011 You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. Tax software 2011 How To Pay Estimated Tax There are several ways to pay estimated tax. Tax software 2011 Credit an overpayment on your 2013 return to your 2014 estimated tax. Tax software 2011 Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. Tax software 2011 Send in your payment (check or money order) with a payment voucher from Form 1040-ES. Tax software 2011 Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. Tax software 2011 On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Tax software 2011 Take the amount you have credited into account when figuring your estimated tax payments. Tax software 2011 You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. Tax software 2011 You also cannot use that overpayment in any other way. Tax software 2011 Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. Tax software 2011 You can pay using either of the following electronic payment methods. Tax software 2011 Direct transfer from your bank account. Tax software 2011 Credit or debit card. Tax software 2011 To pay your taxes online or for more information, go to www. Tax software 2011 irs. Tax software 2011 gov/e-pay. Tax software 2011 Pay by Phone Paying by phone is another safe and secure method of paying electronically. Tax software 2011 Use one of the following methods. Tax software 2011 Direct transfer from your bank account. Tax software 2011 Credit or debit card. Tax software 2011 To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). Tax software 2011 People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. Tax software 2011 To pay using a credit or debit card, you can call one of the following service providers. Tax software 2011 There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. Tax software 2011 WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. Tax software 2011 payUSAtax. Tax software 2011 com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. Tax software 2011 officialpayments. Tax software 2011 com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. Tax software 2011 PAY1040. Tax software 2011 com For the latest details on how to pay by phone, go to www. Tax software 2011 irs. Tax software 2011 gov/e-pay. Tax software 2011 Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. Tax software 2011 During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. Tax software 2011 The enclosed payment vouchers will be preprinted with your name, address, and social security number. Tax software 2011 Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. Tax software 2011 Use the window envelopes that came with your Form 1040-ES package. Tax software 2011 If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. Tax software 2011 Note. Tax software 2011 These criteria can change without notice. Tax software 2011 If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. Tax software 2011 irs. Tax software 2011 gov and print a copy of Form 1040-ES which includes four blank payment vouchers. Tax software 2011 Complete one of these and make your payment timely to avoid penalties for paying late. Tax software 2011 Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. Tax software 2011 If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. Tax software 2011 gov. Tax software 2011 Follow the instructions to make sure you use the vouchers correctly. Tax software 2011 Joint estimated tax payments. Tax software 2011   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. Tax software 2011 Change of address. Tax software 2011   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Tax software 2011 Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. Tax software 2011 Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Tax software 2011 Also take credit for the estimated tax you paid for 2013. Tax software 2011 These credits are subtracted from your total tax. Tax software 2011 Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. Tax software 2011 Two or more employers. Tax software 2011   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. Tax software 2011 You may be able to claim the excess as a credit against your income tax when you file your return. Tax software 2011 See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. Tax software 2011 Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. Tax software 2011 Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. Tax software 2011 Forms W-2 and W-2G. Tax software 2011   If you file a paper return, always file Form W-2 with your income tax return. Tax software 2011 File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. Tax software 2011   You should get at least two copies of each form. Tax software 2011 If you file a paper return, attach one copy to the front of your federal income tax return. Tax software 2011 Keep one copy for your records. Tax software 2011 You also should receive copies to file with your state and local returns. Tax software 2011 Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. Tax software 2011 You should receive a separate Form W-2 from each employer you worked for. Tax software 2011 If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. Tax software 2011 However, your employer must provide or send it to you by January 31, 2014. Tax software 2011 If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. Tax software 2011 If you have not received your Form W-2 by January 31, you should ask your employer for it. Tax software 2011 If you do not receive it by February 15, call the IRS. Tax software 2011 Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Tax software 2011 Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. Tax software 2011 In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. Tax software 2011 Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. Tax software 2011 If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. Tax software 2011 Report the amounts you won on line 21 of Form 1040. Tax software 2011 Take credit for the tax withheld on line 62 of Form 1040. Tax software 2011 If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. Tax software 2011 The 1099 Series Most forms in the 1099 series are not filed with your return. Tax software 2011 These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). Tax software 2011 Unless instructed to file any of these forms with your return, keep them for your records. Tax software 2011 There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Tax software 2011 ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. Tax software 2011 If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. Tax software 2011 See the instructions to these forms for details. Tax software 2011 Form 1099-R. Tax software 2011   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. Tax software 2011 Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. Tax software 2011 You cannot use Form 1040EZ if you received payments reported on Form 1099-R. Tax software 2011 Backup withholding. Tax software 2011   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. Tax software 2011 Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. Tax software 2011 Call the telephone number or write to the address given for the payer on the form. Tax software 2011 The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. Tax software 2011 A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. Tax software 2011 In certain situations, you will receive two forms in place of the original incorrect form. Tax software 2011 This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). Tax software 2011 One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. Tax software 2011 This form will have an “X” in the “CORRECTED” box at the top of the form. Tax software 2011 The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). Tax software 2011 Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. Tax software 2011 S. Tax software 2011 Individual Income Tax Return. Tax software 2011 Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Tax software 2011 Do not include any amount withheld from your spouse's income. Tax software 2011 However, different rules may apply if you live in a community property state. Tax software 2011 Community property states are listed in chapter 2. Tax software 2011 For more information on these rules, and some exceptions, see Publication 555, Community Property. Tax software 2011 Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. Tax software 2011 For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. Tax software 2011 Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. Tax software 2011 Include any overpayment from 2012 that you had credited to your 2013 estimated tax. Tax software 2011 You must use Form 1040 or Form 1040A if you paid estimated tax. Tax software 2011 You cannot use Form 1040EZ. Tax software 2011 Name changed. Tax software 2011   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. Tax software 2011 The statement should cover payments you made jointly with your spouse as well as any you made separately. Tax software 2011   Be sure to report the change to the Social Security Administration. Tax software 2011 This prevents delays in processing your return and issuing any refunds. Tax software 2011 Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. Tax software 2011 If you made joint estimated tax payments, you must decide how to divide the payments between your returns. Tax software 2011 One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. Tax software 2011 If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. Tax software 2011 Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. Tax software 2011 If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. Tax software 2011 If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. Tax software 2011 If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. Tax software 2011 Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. Tax software 2011 Generally, you will not have to pay a penalty for 2013 if any of the following apply. Tax software 2011 The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. Tax software 2011 The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Tax software 2011 Your total 2013 tax minus your withholding and refundable credits is less than $1,000. Tax software 2011 You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. Tax software 2011 See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. Tax software 2011 Farmers and fishermen. Tax software 2011   Special rules apply if you are a farmer or fisherman. Tax software 2011 See Farmers and Fishermen in chapter 4 of Publication 505 for more information. Tax software 2011 IRS can figure the penalty for you. Tax software 2011   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. Tax software 2011 Generally, the IRS will figure the penalty for you and send you a bill. Tax software 2011 However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. Tax software 2011 See chapter 4 of Publication 505. Tax software 2011 Prev  Up  Next   Home   More Online Publications