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1040x Instructions Dummies

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1040x Instructions Dummies

1040x instructions dummies Publication 531 - Main Content Table of Contents Keeping a Daily Tip RecordElectronic tip record. 1040x instructions dummies Reporting Tips to Your EmployerElectronic tip statement. 1040x instructions dummies Final report. 1040x instructions dummies Tip Rate Determination and Education Program Reporting Tips on Your Tax Return Allocated Tips How To Get Tax Help Keeping a Daily Tip Record Why keep a daily tip record. 1040x instructions dummies   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. 1040x instructions dummies How to keep a daily tip record. 1040x instructions dummies   There are two ways to keep a daily tip record. 1040x instructions dummies You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. 1040x instructions dummies You should keep your daily tip record with your tax or other personal records. 1040x instructions dummies You must keep your records for as long as they are important for administration of the federal tax law. 1040x instructions dummies For information on how long to keep records, see How Long to Keep Records in chapter 1 of Publication 17, Your Federal Income Tax. 1040x instructions dummies    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. 1040x instructions dummies To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244, Employee's Daily Record of Tips and Report to Employer. 1040x instructions dummies Publication 1244 is also available at www. 1040x instructions dummies irs. 1040x instructions dummies gov/pub1244. 1040x instructions dummies Publication 1244 includes a 1-year supply of Form 4070A. 1040x instructions dummies Each day, write in the information asked for on the form. 1040x instructions dummies A filled-in Form 4070A is shown on the following page. 1040x instructions dummies   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. 1040x instructions dummies Although you do not report these tips to your employer, you must report them on your tax return. 1040x instructions dummies   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). 1040x instructions dummies Then, each workday, write the date and the following information. 1040x instructions dummies Cash tips you get directly from customers or from other employees. 1040x instructions dummies Tips from credit and debit card charge customers that your employer pays you. 1040x instructions dummies The value of any noncash tips you get, such as tickets, passes, or other items of value. 1040x instructions dummies The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. 1040x instructions dummies Please click here for the text description of the image. 1040x instructions dummies Sample Filled-in Form 4070A from Publication 1244 Electronic tip record. 1040x instructions dummies   You can use an electronic system provided by your employer to record your daily tips. 1040x instructions dummies If you do, you must receive and keep a paper copy of this record. 1040x instructions dummies Service charges. 1040x instructions dummies    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. 1040x instructions dummies This is part of your wages, not a tip. 1040x instructions dummies The following factors determine if you have a tip or service charge: The payment is made free from compulsion; The customer has the right to determine the amount of payment; The payment is not subject to negotiation or dictated by employer policy; and The customer generally has the right to determine who receives the payment. 1040x instructions dummies See examples below. 1040x instructions dummies Example 1. 1040x instructions dummies Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. 1040x instructions dummies Jane's bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. 1040x instructions dummies Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. 1040x instructions dummies Do not include the 18% charge in your tip diary. 1040x instructions dummies Service charges that are paid to you are considered wages, not tips. 1040x instructions dummies Example 2. 1040x instructions dummies Good Food Restaurant includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. 1040x instructions dummies David's bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of the charges for food and beverages at the bottom of the bill beneath the signature line. 1040x instructions dummies Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. 1040x instructions dummies Be sure to include this amount in your tip diary. 1040x instructions dummies Sample Filled-in Form 4070 from Publication 1244 Please click here for the text description of the image. 1040x instructions dummies Filled-in Form 4070 Reporting Tips to Your Employer Why report tips to your employer. 1040x instructions dummies   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). 1040x instructions dummies What tips to report. 1040x instructions dummies   Report to your employer only cash, check, and debit and credit card tips you receive. 1040x instructions dummies   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. 1040x instructions dummies   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. 1040x instructions dummies Do not report to your employer any portion of the tips you receive that you pass on to other employees. 1040x instructions dummies However, you must report tips you receive from other employees. 1040x instructions dummies   Do not report the value of any noncash tips, such as tickets or passes, to your employer. 1040x instructions dummies You do not pay social security, Medicare, Additional Medicare, or railroad retirement taxes on these tips. 1040x instructions dummies How to report. 1040x instructions dummies   If your employer does not give you any other way to report your tips, you can use Form 4070, Employee's Report of Tips to Employer. 1040x instructions dummies Fill in the information asked for on the form, sign and date the form, and give it to your employer. 1040x instructions dummies A sample filled-in Form 4070 is shown above. 1040x instructions dummies To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. 1040x instructions dummies   If you do not use Form 4070, give your employer a statement with the following information. 1040x instructions dummies Your name, address, and social security number. 1040x instructions dummies Your employer's name, address, and business name (if it is different from your employer's name). 1040x instructions dummies The month (or the dates of any shorter period) in which you received tips. 1040x instructions dummies The total tips required to be reported for that period. 1040x instructions dummies You must sign and date the statement. 1040x instructions dummies Be sure to keep a copy with your tax or other personal records. 1040x instructions dummies   Your employer may require you to report your tips more than once a month. 1040x instructions dummies However, the statement cannot cover a period of more than 1 calendar month. 1040x instructions dummies Electronic tip statement. 1040x instructions dummies   Your employer can have you furnish your tip statements electronically. 1040x instructions dummies When to report. 1040x instructions dummies   Give your report for each month to your employer by the 10th of the next month. 1040x instructions dummies If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. 1040x instructions dummies Example. 1040x instructions dummies You must report your tips received in September 2014 by October 10, 2014. 1040x instructions dummies Final report. 1040x instructions dummies   If your employment ends during the month, you can report your tips when your employment ends. 1040x instructions dummies Penalty for not reporting tips. 1040x instructions dummies   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, Additional Medicare, or railroad retirement taxes you owe on the unreported tips. 1040x instructions dummies (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. 1040x instructions dummies ) The penalty amount is in addition to the taxes you owe. 1040x instructions dummies   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. 1040x instructions dummies To do so, attach a statement to your return explaining why you did not report them. 1040x instructions dummies Giving your employer money for taxes. 1040x instructions dummies   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. 1040x instructions dummies If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. 1040x instructions dummies   If you do not give your employer enough money, your employer will apply your regular pay and any money you give to the taxes, in the following order. 1040x instructions dummies All taxes on your regular pay. 1040x instructions dummies Social security, Medicare, Additional Medicare, or railroad retirement taxes on your reported tips. 1040x instructions dummies Federal, state, and local income taxes on your reported tips. 1040x instructions dummies    Any taxes that remain unpaid can be collected by your employer from your next paycheck. 1040x instructions dummies If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. 1040x instructions dummies See Publication 505, Tax Withholding and Estimated Tax, for more information. 1040x instructions dummies    Uncollected taxes. 1040x instructions dummies You must report on your tax return any social security and Medicare taxes, or railroad retirement taxes that remained uncollected at the end of 2013. 1040x instructions dummies These uncollected taxes will be shown on your 2013 Form W-2. 1040x instructions dummies See Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. 1040x instructions dummies Tip Rate Determination and Education Program Your employer may participate in the Tip Rate Determination and Education Program. 1040x instructions dummies The program was developed to help employees and employers understand and meet their tip reporting responsibilities. 1040x instructions dummies There are two agreements under the program: the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). 1040x instructions dummies A variation of the TRAC program, the Employer Tip Reporting Alternative Commitment, (EmTRAC) was designed to allow employers in the food and beverage industry to design and receive approval for their own TRAC programs. 1040x instructions dummies For information on the EmTRAC program, see Notice 2001-1, which is on page 261 of Internal Revenue Bulletin 2001-2 at www. 1040x instructions dummies irs. 1040x instructions dummies gov/pub/irs-irbs/irb01-02. 1040x instructions dummies pdf. 1040x instructions dummies If you are employed in the gaming industry, your employer may participate in the Gaming Industry Tip Compliance Agreement Program. 1040x instructions dummies See Revenue Procedure 2007-32, 2007-22 I. 1040x instructions dummies R. 1040x instructions dummies B. 1040x instructions dummies 1322, available at www. 1040x instructions dummies irs. 1040x instructions dummies gov/pub/irs-irbs/irb07_22. 1040x instructions dummies pdf. 1040x instructions dummies Your employer can provide you with a copy of any applicable agreement. 1040x instructions dummies To find out more about these agreements, visit IRS. 1040x instructions dummies gov and enter “restaurant tip reporting” in the search box. 1040x instructions dummies You may also call 1-800-829-4933, visit www. 1040x instructions dummies irs. 1040x instructions dummies gov/localcontacts for the IRS Taxpayer Assistance Center in your area, or send an email to Tip. 1040x instructions dummies Program@irs. 1040x instructions dummies gov and request information on this program. 1040x instructions dummies Reporting Tips on Your Tax Return How to report tips. 1040x instructions dummies   Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; Form 1040EZ, line 1; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. 1040x instructions dummies What tips to report. 1040x instructions dummies   Generally, you must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. 1040x instructions dummies Any tips you reported to your employer as required in 2013 are included in the wages shown in box 1 of your Form W-2. 1040x instructions dummies Add to the amount in box 1 only the tips you did not report to your employer. 1040x instructions dummies   However, any tips you received in 2013 that you reported to your employer as required after 2013 but before January 11, 2014, are not included in the wages shown in box 1 of your 2013 Form W-2. 1040x instructions dummies Do not include the amount of these tips on your 2013 tax return. 1040x instructions dummies Instead, include them on your 2014 tax return. 1040x instructions dummies Tips you received in 2012 that you reported to your employer as required after 2012 but before January 11, 2013, are included in the wages shown in box 1 of your 2013 Form W-2. 1040x instructions dummies Although these tips were received in 2012, you must report them on your 2013 tax return. 1040x instructions dummies   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. 1040x instructions dummies Do not report on your income tax return any portion of the tips you receive that you pass on to other employees. 1040x instructions dummies However, you must report tips you receive from other employees. 1040x instructions dummies    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. 1040x instructions dummies    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. 1040x instructions dummies   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. 1040x instructions dummies Cash and charge tips you received that totaled less than $20 for any month. 1040x instructions dummies The value of noncash tips, such as tickets, passes, or other items of value. 1040x instructions dummies Example. 1040x instructions dummies Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. 1040x instructions dummies Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. 1040x instructions dummies He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. 1040x instructions dummies Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages + $7,000 reported tips) in box 1. 1040x instructions dummies He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. 1040x instructions dummies Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. 1040x instructions dummies    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. 1040x instructions dummies To report these taxes, you must file a return even if you would not otherwise have to file. 1040x instructions dummies You must use Form 1040, Form 1040NR, Form 1040NR-EZ, Form 1040-SS, or 1040-PR (as appropriate) for this purpose. 1040x instructions dummies (You cannot file Form 1040EZ or Form 1040A. 1040x instructions dummies )    Use Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to figure social security and Medicare taxes. 1040x instructions dummies Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. 1040x instructions dummies Use Form 8959 to figure Additional Medicare Tax. 1040x instructions dummies If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. 1040x instructions dummies To get railroad retirement credit, you must report tips to your employer. 1040x instructions dummies Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer. 1040x instructions dummies    You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. 1040x instructions dummies For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. 1040x instructions dummies   If your employer could not collect all the social security and Medicare taxes, or railroad retirement taxes you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). 1040x instructions dummies You must report these amounts as additional tax on your return. 1040x instructions dummies   If you worked in the U. 1040x instructions dummies S. 1040x instructions dummies possessions and received Form W-2AS, Form W-2CM, Form W-2GU, or Form W-2VI, any uncollected taxes on tips will be shown in box 12 with codes A and B. 1040x instructions dummies If you received Form 499R-2/W-2PR, any uncollected taxes will be shown in boxes 22 and 23. 1040x instructions dummies Unlike the uncollected portion of the regular (1. 1040x instructions dummies 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported on Form W-2. 1040x instructions dummies   To report these uncollected taxes, you must file a return even if you would not otherwise have to file. 1040x instructions dummies You can report these taxes on Form 1040, in the space next to line 60; Form 1040NR, line 59; Form 1040-SS, Part I, line 6; or Form 1040-PR, Part I, line 6. 1040x instructions dummies See the instructions for the appropriate form and line number indicated, and Form 8959. 1040x instructions dummies (You cannot file Form 1040A, Form 1040EZ, or Form 1040NR-EZ. 1040x instructions dummies ) Self-employed persons. 1040x instructions dummies    If you receive tips as a self-employed person, you should report these tips as income on Schedule C or C-EZ. 1040x instructions dummies See Publication 334, Tax Guide for Small Business, for more information on reporting business income. 1040x instructions dummies Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. 1040x instructions dummies They are not included in box 1 with your wages and reported tips. 1040x instructions dummies If box 8 is blank, this discussion does not apply to you. 1040x instructions dummies What are allocated tips. 1040x instructions dummies   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. 1040x instructions dummies Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. 1040x instructions dummies No income, social security, Medicare, Additional Medicare, or railroad retirement taxes are withheld on allocated tips. 1040x instructions dummies How were your allocated tips figured. 1040x instructions dummies   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). 1040x instructions dummies Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. 1040x instructions dummies For information about the exact allocation method used, ask your employer. 1040x instructions dummies Must you report your allocated tips on your tax return. 1040x instructions dummies   You must report tips you received in 2013 (including both cash and noncash tips) on your tax return as explained in What tips to report , earlier. 1040x instructions dummies Any tips you reported to your employer in 2013 as required (explained under Reporting Tips to Your Employer , earlier) are included in the wages shown in box 1 of your Form W-2. 1040x instructions dummies Add to the amount in box 1 only the tips you did not report to your employer as required. 1040x instructions dummies This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated amount. 1040x instructions dummies   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. 1040x instructions dummies How to report allocated tips. 1040x instructions dummies   If you received any tips in 2013 that you did not report to your employer as required (including allocated tips that you are required to report on your tax return), add these tips to the amount in box 1 of your Form(s) W-2 and report this amount as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. 1040x instructions dummies (You cannot file Form 1040A or Form 1040EZ). 1040x instructions dummies    Because social security, Medicare, or Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. 1040x instructions dummies Complete Form 4137 and include the allocated tips on line 1 of the form as provided in its instructions. 1040x instructions dummies See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. 1040x instructions dummies How to request an approved lower rate. 1040x instructions dummies   Your employer can use a tip rate lower than 8% (but not lower than 2%) to figure allocated tips only if the IRS approves the lower rate. 1040x instructions dummies Either the employer or the employees can request approval of a lower rate by filing a petition with the IRS. 1040x instructions dummies The petition must include specific information about the establishment that will justify the lower rate. 1040x instructions dummies A user fee must be paid with the petition. 1040x instructions dummies    An employee petition can be filed only with the consent of a majority of the directly tipped employees (waiters, bartenders, and others who receive tips directly from customers). 1040x instructions dummies The petition must state the total number of directly tipped employees and the number of employees consenting to the petition. 1040x instructions dummies Employees filing the petition must promptly notify the employer, and the employer must promptly give the IRS a copy of all Forms 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, filed for the establishment for the previous 3 years. 1040x instructions dummies   For more information about how to file a petition and what information to include, see Allocation of Tips in the Instructions for Form 8027. 1040x instructions dummies How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. 1040x instructions dummies Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. 1040x instructions dummies Free help with your tax return. 1040x instructions dummies   Free help in preparing your return is available nationwide from IRS-certified volunteers. 1040x instructions dummies The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. 1040x instructions dummies The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. 1040x instructions dummies Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1040x instructions dummies Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. 1040x instructions dummies To find the nearest VITA or TCE site, visit IRS. 1040x instructions dummies gov or call 1-800-906-9887. 1040x instructions dummies   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040x instructions dummies To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1040x instructions dummies aarp. 1040x instructions dummies org/money/taxaide or call 1-888-227-7669. 1040x instructions dummies   For more information on these programs, go to IRS. 1040x instructions dummies gov and enter “VITA” in the search box. 1040x instructions dummies Internet. 1040x instructions dummies IRS. 1040x instructions dummies gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. 1040x instructions dummies Apply for an Employer Identification Number (EIN). 1040x instructions dummies Go to IRS. 1040x instructions dummies gov and enter Apply for an EIN in the search box. 1040x instructions dummies Request an Electronic Filing PIN by going to IRS. 1040x instructions dummies gov and entering Electronic Filing PIN in the search box. 1040x instructions dummies Check the status of your 2013 refund with Where's My Refund? Go to IRS. 1040x instructions dummies gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040x instructions dummies If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 1040x instructions dummies Check the status of your amended return. 1040x instructions dummies Go to IRS. 1040x instructions dummies gov and enter Where's My Amended Return in the search box. 1040x instructions dummies Download forms, instructions, and publications, including some accessible versions. 1040x instructions dummies Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. 1040x instructions dummies gov or IRS2Go. 1040x instructions dummies Tax return and tax account transcripts are generally available for the current year and past three years. 1040x instructions dummies Figure your income tax withholding with the IRS Withholding Calculator on IRS. 1040x instructions dummies gov. 1040x instructions dummies Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 1040x instructions dummies Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 1040x instructions dummies gov. 1040x instructions dummies Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. 1040x instructions dummies gov or IRS2Go. 1040x instructions dummies Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. 1040x instructions dummies An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. 1040x instructions dummies Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. 1040x instructions dummies If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. 1040x instructions dummies Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1040x instructions dummies Locate the nearest volunteer help site with the VITA Locator Tool on IRS. 1040x instructions dummies gov. 1040x instructions dummies Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040x instructions dummies The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 1040x instructions dummies Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. 1040x instructions dummies AARP offers the Tax-Aide counseling program as part of the TCE program. 1040x instructions dummies Visit AARP's website to find the nearest Tax-Aide location. 1040x instructions dummies Research your tax questions. 1040x instructions dummies Search publications and instructions by topic or keyword. 1040x instructions dummies Read the Internal Revenue Code, regulations, or other official guidance. 1040x instructions dummies Read Internal Revenue Bulletins. 1040x instructions dummies Sign up to receive local and national tax news by email. 1040x instructions dummies Phone. 1040x instructions dummies You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1040x instructions dummies Download the free IRS2Go mobile app from the iTunes app store or from Google Play. 1040x instructions dummies Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 1040x instructions dummies Call to locate the nearest volunteer help site, 1-800-906-9887. 1040x instructions dummies Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040x instructions dummies The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 1040x instructions dummies Most VITA and TCE sites offer free electronic filing. 1040x instructions dummies Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 1040x instructions dummies Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 1040x instructions dummies Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. 1040x instructions dummies The automated Where's My Refund? information is available 24 hours a day, 7 days a week. 1040x instructions dummies If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 1040x instructions dummies Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 1040x instructions dummies Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040x instructions dummies Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. 1040x instructions dummies Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 1040x instructions dummies Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). 1040x instructions dummies You should receive your order within 10 business days. 1040x instructions dummies Call to order transcripts of your tax returns or tax account, 1-800-908-9946. 1040x instructions dummies Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. 1040x instructions dummies Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. 1040x instructions dummies Call to ask tax questions, 1-800-829-1040. 1040x instructions dummies Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 1040x instructions dummies The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 1040x instructions dummies These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. 1040x instructions dummies gsa. 1040x instructions dummies gov/fedrelay. 1040x instructions dummies Walk-in. 1040x instructions dummies You can find a selection of forms, publications and services — in-person, face-to-face. 1040x instructions dummies Products. 1040x instructions dummies You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1040x instructions dummies Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 1040x instructions dummies Services. 1040x instructions dummies You can walk in to your local TAC most business days for personal, face-to-face tax help. 1040x instructions dummies An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 1040x instructions dummies If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. 1040x instructions dummies No appointment is necessary—just walk in. 1040x instructions dummies Before visiting, check www. 1040x instructions dummies irs. 1040x instructions dummies gov/localcontacts for hours of operation and services provided. 1040x instructions dummies Mail. 1040x instructions dummies You can send your order for forms, instructions, and publications to the address below. 1040x instructions dummies You should receive a response within 10 business days after your request is received. 1040x instructions dummies  Internal Revenue Service 1201 N. 1040x instructions dummies Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. 1040x instructions dummies   The Taxpayer Advocate Service (TAS) is your voice at the IRS. 1040x instructions dummies Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 1040x instructions dummies What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. 1040x instructions dummies We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. 1040x instructions dummies You face (or your business is facing) an immediate threat of adverse action. 1040x instructions dummies You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 1040x instructions dummies   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. 1040x instructions dummies Here's why we can help: TAS is an independent organization within the IRS. 1040x instructions dummies Our advocates know how to work with the IRS. 1040x instructions dummies Our services are free and tailored to meet your needs. 1040x instructions dummies We have offices in every state, the District of Columbia, and Puerto Rico. 1040x instructions dummies How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. 1040x instructions dummies irs. 1040x instructions dummies gov/advocate, or call us toll-free at 1-877-777-4778. 1040x instructions dummies How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 1040x instructions dummies If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 1040x instructions dummies irs. 1040x instructions dummies gov/sams. 1040x instructions dummies Low Income Taxpayer Clinics. 1040x instructions dummies   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. 1040x instructions dummies Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 1040x instructions dummies Visit www. 1040x instructions dummies TaxpayerAdvocate. 1040x instructions dummies irs. 1040x instructions dummies gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. 1040x instructions dummies Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Hurricane Sandy in New York

Updated 2/4/13 The IRS announced additional tax relief, further extending certain tax deadlines until April 1 for Nassau, Queens, Richmond and Suffolk counties. 

Updated 11/13/12 to add Orange, Putnam, Sullivan and Ulster counties.

NY-2012-47, Nov. 7, 2012

NEW YORK — Victims of Hurricane Sandy that began on Oct. 27, 2012 in parts of New York may qualify for tax relief from the Internal Revenue Service.

The President has declared Bronx, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Sullivan, Suffolk, Ulster and Westchester counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Oct. 27, and on or before Feb. 1, have been postponed to Feb. 1, 2013.  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Oct. 27, and on or before Nov. 26, as long as the deposits are made by Nov. 26, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area need to call the IRS disaster hotline at 866-562-5227 to request this tax relief.

For a full description of the relief being provided by the IRS to the victims of Hurricane Sandy, visit IRS.gov.

Covered Disaster Area

The counties above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Feb. 1 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Oct. 27 and on or before Feb. 1.

The IRS also gives affected taxpayers until Feb. 1 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Oct. 27 and on or before Feb. 1.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Oct. 27 and on or before Nov. 26 provided the taxpayer makes these deposits by Nov. 26.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “New York/Hurricane Sandy” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

Related Information

Disaster Assistance and Emergency Relief for Individuals and Businesses

Recent IRS Disaster Relief Announcements

 

Page Last Reviewed or Updated: 28-Oct-2013

The 1040x Instructions Dummies

1040x instructions dummies Publication 51 - Main Content Table of Contents 1. 1040x instructions dummies Taxpayer Identification NumbersWhen you receive your EIN. 1040x instructions dummies Registering for SSNVS. 1040x instructions dummies 2. 1040x instructions dummies Who Are Employees?Crew Leaders Business Owned and Operated by Spouses 3. 1040x instructions dummies Wages and Other Compensation 4. 1040x instructions dummies Social Security and Medicare TaxesThe $150 Test or the $2,500 Test Social Security and Medicare Tax Withholding 5. 1040x instructions dummies Federal Income Tax WithholdingImplementation of lock-in letter. 1040x instructions dummies Seasonal employees and employees not currently performing services. 1040x instructions dummies Termination and re-hire of employees. 1040x instructions dummies How To Figure Federal Income Tax Withholding 6. 1040x instructions dummies Required Notice to Employees About Earned Income Credit (EIC) 7. 1040x instructions dummies Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties Employers of Both Farm and Nonfarm Workers 8. 1040x instructions dummies Form 943 9. 1040x instructions dummies Reporting Adjustments on Form 943Current Year Adjustments Prior Year Adjustments 10. 1040x instructions dummies Federal Unemployment (FUTA) Tax 11. 1040x instructions dummies Reconciling Wage Reporting Forms 13. 1040x instructions dummies Federal Income Tax Withholding MethodsWage Bracket Method Percentage Method Alternative Methods of Federal Income Tax Withholding How To Get Tax Help 1. 1040x instructions dummies Taxpayer Identification Numbers If you are required to withhold any federal income, social security, or Medicare taxes, you will need an employer identification number (EIN) for yourself. 1040x instructions dummies Also, you will need the SSN of each employee and the name of each employee as shown on the employee's social security card. 1040x instructions dummies Employer identification number (EIN). 1040x instructions dummies   An employer identification number (EIN) is a nine-digit number that the IRS issues. 1040x instructions dummies The digits are arranged as follows: 00-0000000. 1040x instructions dummies It is used to identify the tax accounts of employers and certain others who have no employees. 1040x instructions dummies Use your EIN on all of the items that you send to the IRS and SSA. 1040x instructions dummies   If you do not have an EIN, you may apply for one online. 1040x instructions dummies Visit IRS. 1040x instructions dummies gov and click on the Apply for an EIN Online link under Tools. 1040x instructions dummies You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. 1040x instructions dummies Do not use a SSN in place of an EIN. 1040x instructions dummies   If you do not have an EIN by the time a return is due, write “Applied For” and the date you applied for it in the space shown for the number. 1040x instructions dummies If you took over another employer's business, do not use that employer's EIN. 1040x instructions dummies   You should have only one EIN. 1040x instructions dummies If you have more than one, and are not sure which one to use, call the toll-free Business and Specialty Tax Line at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). 1040x instructions dummies Provide the EINs that you have, the name and address to which each number was assigned, and the address of your principal place of business. 1040x instructions dummies The IRS will tell you which EIN to use. 1040x instructions dummies   For more information, see Publication 1635 or Publication 583. 1040x instructions dummies When you receive your EIN. 1040x instructions dummies   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in the Electronic Federal Tax Payment System (EFTPS). 1040x instructions dummies You will receive information in your Employer Identification Number (EIN) Package about Express Enrollment and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. 1040x instructions dummies Call the toll-free number located in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your employment tax deposits. 1040x instructions dummies If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. 1040x instructions dummies Social security number (SSN). 1040x instructions dummies   An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. 1040x instructions dummies You must obtain each employee's name and SSN as shown on the employee's social security card because you must enter them on Form W-2. 1040x instructions dummies Do not accept a social security card that says “Not valid for employment. 1040x instructions dummies ” A social security number issued with this legend does not permit employment. 1040x instructions dummies You may, but are not required to, photocopy the social security card if the employee provides it. 1040x instructions dummies If you do not show the employee's correct name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. 1040x instructions dummies See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs. 1040x instructions dummies Applying for a social security card. 1040x instructions dummies   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation to SSA. 1040x instructions dummies You can get Form SS-5 at SSA offices, by calling 1-800-772-1213 or 1-800-325-0778 (TTY), or from the SSA website at www. 1040x instructions dummies socialsecurity. 1040x instructions dummies gov/online/ss-5. 1040x instructions dummies html. 1040x instructions dummies The employee must complete and sign Form SS-5; it cannot be filed by the employer. 1040x instructions dummies You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. 1040x instructions dummies Applying for a social security number. 1040x instructions dummies   If you file Form W-2 on paper and your employee has applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. 1040x instructions dummies If you are filing electronically, enter all zeros (000-00-0000) in the social security number field. 1040x instructions dummies When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. 1040x instructions dummies Furnish Copies B, C, and 2 of Form W-2c to the employee. 1040x instructions dummies Up to 25 Forms W-2c per Form W-3c, Transmittal of Corrected Wage and Tax Statements, may be filed per session over the Internet, with no limit on the number of sessions. 1040x instructions dummies For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www. 1040x instructions dummies socialsecurity. 1040x instructions dummies gov/employer. 1040x instructions dummies Advise your employee to correct the SSN on his or her original Form W-2. 1040x instructions dummies Correctly record the employee's name and SSN. 1040x instructions dummies   Record the name and number of each employee as they are shown on the employee's social security card. 1040x instructions dummies If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. 1040x instructions dummies Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. 1040x instructions dummies   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2. 1040x instructions dummies It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. 1040x instructions dummies IRS individual taxpayer identification numbers (ITINs) for aliens. 1040x instructions dummies   Do not accept an ITIN in place of an SSN for employee identification or for work. 1040x instructions dummies An ITIN is issued for use by resident and nonresident aliens who need identification for tax purposes, but who are not eligible for U. 1040x instructions dummies S. 1040x instructions dummies employment. 1040x instructions dummies The ITIN is a nine-digit number formatted like an SSN (for example, NNN-NN-NNNN). 1040x instructions dummies However, it begins with the number “9” and has either a “7” or “8” as the fourth digit (for example, 9NN-7N-NNNN or 9NN-8N-NNNN). 1040x instructions dummies    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. 1040x instructions dummies If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier in this section. 1040x instructions dummies Do not use an ITIN in place of an SSN on Form W-2. 1040x instructions dummies Verification of social security numbers. 1040x instructions dummies   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 employee names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive results the next business day. 1040x instructions dummies Visit www. 1040x instructions dummies socialsecurity. 1040x instructions dummies gov/employer/ssnv. 1040x instructions dummies htm for more information. 1040x instructions dummies Registering for SSNVS. 1040x instructions dummies   You must register online and receive authorization from your employer to use SSNVS. 1040x instructions dummies To register, visit SSA's website at www. 1040x instructions dummies socialsecurity. 1040x instructions dummies gov/employer and click on the Business Services Online link. 1040x instructions dummies Follow the registration instructions to obtain a user identification (ID) and password. 1040x instructions dummies You will need to provide the following information about yourself and your company. 1040x instructions dummies Name. 1040x instructions dummies SSN. 1040x instructions dummies Date of birth. 1040x instructions dummies Type of employer. 1040x instructions dummies EIN. 1040x instructions dummies Company name, address, and telephone number. 1040x instructions dummies Email address. 1040x instructions dummies When you have completed the online registration process, SSA will mail a one-time activation code to your employer. 1040x instructions dummies You must enter the activation code online to use SSNVS. 1040x instructions dummies 2. 1040x instructions dummies Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. 1040x instructions dummies See Publication 15-A for details on statutory employees and nonemployees. 1040x instructions dummies Employee status under common law. 1040x instructions dummies   Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. 1040x instructions dummies This is so even when you give the employee freedom of action. 1040x instructions dummies What matters is that you have the right to control the details of how the services are performed. 1040x instructions dummies See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. 1040x instructions dummies If an employer-employee relationship exists, it does not matter what it is called. 1040x instructions dummies The employee may be called an agent or independent contractor. 1040x instructions dummies It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. 1040x instructions dummies You are responsible for withholding and paying employment taxes for your employees. 1040x instructions dummies You are also required to file employment tax returns. 1040x instructions dummies These requirements do not apply to amounts that you pay to independent contractors. 1040x instructions dummies The rules discussed in this publication apply only to workers who are your employees. 1040x instructions dummies In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. 1040x instructions dummies For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. 1040x instructions dummies Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. 1040x instructions dummies The table in section 12, How Do Employment Taxes Apply to Farmwork , distinguishes between farm and nonfarm activities, and also addresses rules that apply in special situations. 1040x instructions dummies Crew Leaders If you are a crew leader, you are an employer of farmworkers. 1040x instructions dummies A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. 1040x instructions dummies If there is no written agreement between you and the farm operator stating that you are his or her employee and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. 1040x instructions dummies For FUTA tax rules, see section 10. 1040x instructions dummies Business Owned and Operated by Spouses If you and your spouse jointly own and operate a farm or nonfarm business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. 1040x instructions dummies See Publication 541, Partnerships, for more details. 1040x instructions dummies The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. 1040x instructions dummies Exception—Qualified joint venture. 1040x instructions dummies   For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. 1040x instructions dummies A qualified joint venture conducts a trade or business where: The only members of the joint venture are spouses who file a joint income tax return, Both spouses materially participate (see Material participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). 1040x instructions dummies   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. 1040x instructions dummies Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. 1040x instructions dummies   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. 1040x instructions dummies If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. 1040x instructions dummies Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. 1040x instructions dummies However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. 1040x instructions dummies    Note. 1040x instructions dummies If your spouse is your employee, not your partner, you must pay social security and Medicare taxes for him or her. 1040x instructions dummies   For more information on qualified joint ventures, visit IRS. 1040x instructions dummies gov and enter “qualified joint venture” in the search box. 1040x instructions dummies Exception—Community income. 1040x instructions dummies   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. 1040x instructions dummies S. 1040x instructions dummies possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. 1040x instructions dummies You may still make an election to be taxed as a qualified joint venture instead of a partnership. 1040x instructions dummies See Exception—Qualified joint venture , earlier in this section. 1040x instructions dummies 3. 1040x instructions dummies Wages and Other Compensation Cash wages that you pay to employees for farmwork are generally subject to social security tax and Medicare tax. 1040x instructions dummies You may also be required to withhold, deposit, and report Additional Medicare Tax. 1040x instructions dummies See section 4 for more information. 1040x instructions dummies If the wages are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. 1040x instructions dummies You may also be liable for FUTA tax, which is not withheld by you or paid by the employee. 1040x instructions dummies FUTA tax is discussed in section 10. 1040x instructions dummies Cash wages include checks, money orders, etc. 1040x instructions dummies Do not count as cash wages the value of food, lodging, and other noncash items. 1040x instructions dummies For more information on what payments are considered taxable wages, see Publication 15 (Circular E). 1040x instructions dummies Commodity wages. 1040x instructions dummies   Commodity wages are not cash and are not subject to social security and Medicare taxes or federal income tax withholding. 1040x instructions dummies However, noncash payments, including commodity wages, are treated as cash wages (see above) if the substance of the transaction is a cash payment. 1040x instructions dummies These noncash payments are subject to social security and Medicare taxes and federal income tax withholding. 1040x instructions dummies Other compensation. 1040x instructions dummies   Publications 15-A and 15-B discuss other forms of compensation that may be taxable. 1040x instructions dummies Family members. 1040x instructions dummies   Generally, the wages that you pay to family members who are your employees are subject to social security and Medicare taxes, federal income tax withholding, and FUTA tax. 1040x instructions dummies However, certain exemptions may apply for your child, spouse, or parent. 1040x instructions dummies See the table, How Do Employment Taxes Apply to Farmwork , in section 12. 1040x instructions dummies Household employees. 1040x instructions dummies   The wages of an employee who performs household services, such as a maid, babysitter, gardener, or cook, in your home are not subject to social security and Medicare taxes if you pay that employee cash wages of less than $1,900 in 2014. 1040x instructions dummies   Social security and Medicare taxes do not apply to cash wages for housework in your private home if it was done by your spouse or your child under age 21. 1040x instructions dummies Nor do the taxes apply to housework done by your parent unless: You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter, and You are a widow or widower, or divorced and not remarried, or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. 1040x instructions dummies   For more information, see Publication 926, Household Employer's Tax Guide. 1040x instructions dummies    Wages for household work may not be a deductible farm expense. 1040x instructions dummies See Publication 225, Farmer's Tax Guide. 1040x instructions dummies Share farmers. 1040x instructions dummies   You do not have to withhold or pay social security and Medicare taxes on amounts paid to share farmers under share-farming arrangements. 1040x instructions dummies Compensation paid to H-2A visa holders. 1040x instructions dummies   Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2 but do not report it as social security wages (box 3) or Medicare wages (box 5) on Form W-2 because compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes. 1040x instructions dummies On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. 1040x instructions dummies   An employer is not required to withhold federal income tax from compensation it pays an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. 1040x instructions dummies In that case, the worker must give the employer a completed Form W-4. 1040x instructions dummies Federal income tax withheld should be reported in box 2 of Form W-2. 1040x instructions dummies These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. 1040x instructions dummies For rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. 1040x instructions dummies 4. 1040x instructions dummies Social Security and Medicare Taxes Generally, you must withhold social security and Medicare taxes on all cash wage payments that you make to your employees. 1040x instructions dummies You may also be required to withhold Additional Medicare Tax. 1040x instructions dummies For more information, see Additional Medicare Tax withholding , later. 1040x instructions dummies The $150 Test or the $2,500 Test All cash wages that you pay to an employee during the year for farmwork are subject to social security and Medicare taxes and federal income tax withholding if either of the two tests below is met. 1040x instructions dummies You pay cash wages to an employee of $150 or more in a year for farmwork (count all cash wages paid on a time, piecework, or other basis). 1040x instructions dummies The $150 test applies separately to each farmworker that you employ. 1040x instructions dummies If you employ a family of workers, each member is treated separately. 1040x instructions dummies Do not count wages paid by other employers. 1040x instructions dummies The total that you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year. 1040x instructions dummies Exceptions. 1040x instructions dummies   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes, or federal income tax withholding, even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. 1040x instructions dummies   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. 1040x instructions dummies Social Security and Medicare Tax Withholding The social security tax rate is 6. 1040x instructions dummies 2%, for both the employee and employer, on the first $117,000 paid to each employee. 1040x instructions dummies You must withhold at this rate from each employee and pay a matching amount. 1040x instructions dummies The Medicare tax rate is 1. 1040x instructions dummies 45% each for the employee and employer on all wages. 1040x instructions dummies You must withhold at this rate from each employee and pay a matching amount. 1040x instructions dummies There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. 1040x instructions dummies Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. 1040x instructions dummies For details, see Publication 15-A. 1040x instructions dummies Additional Medicare Tax withholding. 1040x instructions dummies   In addition to withholding Medicare tax at 1. 1040x instructions dummies 45%, you must withhold a 0. 1040x instructions dummies 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 1040x instructions dummies 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. 1040x instructions dummies Additional Medicare Tax is only imposed on the employee. 1040x instructions dummies There is no employer share of Additional Medicare Tax. 1040x instructions dummies 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. 1040x instructions dummies   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). 1040x instructions dummies For more information on Additional Medicare Tax, visit IRS. 1040x instructions dummies gov and enter “Additional Medicare Tax” in the search box. 1040x instructions dummies Employee share paid by employer. 1040x instructions dummies   If you would rather pay a household or agricultural employee's share of the social security and Medicare taxes without withholding them from his or her wages, you may do so. 1040x instructions dummies If you do not withhold the taxes, however, you must still pay them. 1040x instructions dummies Any employee social security and Medicare taxes that you pay is additional income to the employee. 1040x instructions dummies Include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages and do not include it in boxes 3 and 5. 1040x instructions dummies Also, do not count the additional income as wages for FUTA tax purposes. 1040x instructions dummies Different rules apply to employer payments of social security and Medicare taxes for non-household and non-agricultural employees. 1040x instructions dummies See section 7 of Publication 15-A. 1040x instructions dummies Withholding social security and Medicare taxes on nonresident alien employees. 1040x instructions dummies   In general, if you pay wages to nonresident alien employees, you must withhold social security and Medicare taxes as you would for a U. 1040x instructions dummies S. 1040x instructions dummies citizen or resident alien. 1040x instructions dummies However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. 1040x instructions dummies Also see Compensation paid to H-2A visa holders in section 3. 1040x instructions dummies Religious exemption. 1040x instructions dummies    An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to public insurance. 1040x instructions dummies This exemption is available only if both the employee and the employer are members of the sect. 1040x instructions dummies   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. 1040x instructions dummies 5. 1040x instructions dummies Federal Income Tax Withholding Farmers and crew leaders must withhold federal income tax from the wages of farmworkers if the wages are subject to social security and Medicare taxes. 1040x instructions dummies The amount to withhold is figured on gross wages before taking out social security and Medicare taxes, union dues, insurance, etc. 1040x instructions dummies You may use one of several methods to determine the amount of federal income tax withholding. 1040x instructions dummies They are discussed in section 13. 1040x instructions dummies Form W-4. 1040x instructions dummies   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. 1040x instructions dummies Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. 1040x instructions dummies Advise your employees to use the IRS Withholding Calculator on the IRS website at www. 1040x instructions dummies irs. 1040x instructions dummies gov/individuals for help in determining how many withholding allowances to claim on their Form W-4. 1040x instructions dummies   Ask each new employee to give you a signed Form W-4 when starting work. 1040x instructions dummies Make the form effective with the first wage payment. 1040x instructions dummies If a new employee does not give you a completed Form W-4, withhold tax as if he or she is single, with no withholding allowances. 1040x instructions dummies Forms in Spanish. 1040x instructions dummies   You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. 1040x instructions dummies For more information, see Publicación 17(SP). 1040x instructions dummies Effective date of Form W-4. 1040x instructions dummies   A Form W-4 remains in effect until the employee gives you a new one. 1040x instructions dummies When you receive a new Form W-4, do not adjust withholding for pay periods before the effective date of the new form. 1040x instructions dummies Do not adjust withholding retroactively. 1040x instructions dummies If an employee gives you a replacement Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. 1040x instructions dummies For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. 1040x instructions dummies A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. 1040x instructions dummies Completing Form W-4. 1040x instructions dummies   The amount of federal income tax withholding is based on marital status and withholding allowances. 1040x instructions dummies Your employees may not base their withholding amounts on a fixed dollar amount or percentage. 1040x instructions dummies However, the employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. 1040x instructions dummies   Employees may claim fewer withholding allowances than they are entitled to claim. 1040x instructions dummies They may do this to ensure that they have enough withholding or to offset other sources of taxable income that are not subject to withholding. 1040x instructions dummies   See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. 1040x instructions dummies Along with Form W-4, you may wish to order Publication 505 for use by your employees. 1040x instructions dummies    Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. 1040x instructions dummies If an employee wants additional withholding, he or she should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. 1040x instructions dummies Exemption from federal income tax withholding. 1040x instructions dummies   Generally, an employee may claim exemption from federal income tax withholding because he or she had no federal income tax liability last year and expects none this year. 1040x instructions dummies See the Form W-4 instructions for more information. 1040x instructions dummies However, the wages are still subject to social security and Medicare taxes. 1040x instructions dummies   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. 1040x instructions dummies To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. 1040x instructions dummies If the employee does not give you a new Form W-4 by February 15, withhold tax based on the last valid Form W-4 you have for the employee that did not claim an exemption from withholding or, if one does not exist, withhold as if he or she is single with zero withholding allowances. 1040x instructions dummies If the employee provides a new Form W-4 claiming an exemption from withholding on February 16 or later, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. 1040x instructions dummies Withholding income taxes on the wages of nonresident alien employees. 1040x instructions dummies   In general, you must withhold federal income taxes on the wages of nonresident alien employees. 1040x instructions dummies However, see Publication 515 for exceptions to this general rule. 1040x instructions dummies Also see Compensation paid to H-2A visa workers in section 3. 1040x instructions dummies Withholding adjustment for nonresident alien employees. 1040x instructions dummies   A special procedure applies for figuring the amount of income tax to withhold from wages of nonresident alien employees performing services within the United States for wages paid in 2014. 1040x instructions dummies This procedure requires a special chart to be used with the withholding tables to determine the amount to withhold from the wages of the nonresident alien employee. 1040x instructions dummies See Withholding adjustment for nonresident alien employees in section 9 of Publication 15 (Circular E). 1040x instructions dummies Nonresident alien employee's Form W-4. 1040x instructions dummies   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding; Request withholding as if they are single, regardless of their actual marital status; Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or Korea, he or she may claim more than one allowance); and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. 1040x instructions dummies   If you maintain an electronic Form W-4 system, you should provide a field for nonresident alien employees to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. 1040x instructions dummies    A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. 1040x instructions dummies Form 8233. 1040x instructions dummies   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. 1040x instructions dummies See Publication 515 for details. 1040x instructions dummies IRS review of requested Forms W-4. 1040x instructions dummies   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. 1040x instructions dummies You may also be directed to send certain Forms W-4 to the IRS. 1040x instructions dummies You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. 1040x instructions dummies Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. 1040x instructions dummies The IRS may also require you to submit copies of Form W-4 to the IRS as directed by a revenue procedure or notice published in the Internal Revenue Bulletin. 1040x instructions dummies When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. 1040x instructions dummies   After submitting a copy of the requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). 1040x instructions dummies However, if the IRS later notifies you in writing that the employee is not entitled to claim a complete exemption from withholding or more than the maximum number of withholding allowances specified by the IRS in the written notice, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the notice (commonly referred to as a “lock-in letter”). 1040x instructions dummies Initial lock-in letter. 1040x instructions dummies   The IRS uses information reported on Form W-2 to identify employees with withholding compliance problems. 1040x instructions dummies In some cases, where a serious under-withholding problem is found to exist for a particular employee, the IRS may issue a lock-in letter to the employer specifying the maximum number of withholding allowances and marital status permitted for a specific employee. 1040x instructions dummies You will also receive a copy for the employee that identifies the maximum number of withholding allowances permitted and the process by which the employee can provide additional information to the IRS for purposes of determining the appropriate number of withholding allowances. 1040x instructions dummies If the employee is employed by you as of the date of the notice, you must furnish the employee copy to the employee within 10 business days of receipt. 1040x instructions dummies You may follow any reasonable business practice to furnish the employee copy to the employee. 1040x instructions dummies Implementation of lock-in letter. 1040x instructions dummies   When you receive the notice specifying the maximum number of withholding allowances and marital status permitted, you may not withhold immediately on the basis of the notice. 1040x instructions dummies You must begin withholding tax on the basis of the notice for any wages paid after the date specified in the notice. 1040x instructions dummies The delay between your receipt of the notice and the date to begin the withholding on the basis of the notice permits the employee to contact the IRS. 1040x instructions dummies Seasonal employees and employees not currently performing services. 1040x instructions dummies   If you receive a notice for an employee who is not currently performing services for you, you are still required to furnish the employee copy to the employee and withhold based on the notice if any of the following apply. 1040x instructions dummies You are paying wages for the employee's prior services and the wages are subject to income tax withholding on or after the date specified in the notice. 1040x instructions dummies You reasonably expect the employee to resume services within 12 months of the date of the notice. 1040x instructions dummies The employee is on a bona fide leave of absence that does not exceed 12 months or the employee has a right to reemployment after the leave of absence. 1040x instructions dummies Termination and re-hire of employees. 1040x instructions dummies   If you are required to furnish and withhold based on the notice and the employment relationship is terminated after the date of the notice, you must continue to withhold based on the notice if you continue to pay any wages subject to income tax withholding. 1040x instructions dummies You must also withhold based on the notice or modification notice (explained next) if the employee resumes the employment relationship with you within 12 months after the termination of the employment relationship. 1040x instructions dummies Modification notice. 1040x instructions dummies   After issuing the notice specifying the maximum number of withholding allowances and marital status permitted, the IRS may issue a subsequent notice (modification notice) that modifies the original notice. 1040x instructions dummies The modification notice may change the marital status and/or the number of withholding allowances permitted. 1040x instructions dummies You must withhold federal income tax based on the effective date specified in the modification notice. 1040x instructions dummies New Form W-4 after IRS notice. 1040x instructions dummies   After the IRS issues a notice or modification notice, if the employee provides you with a new Form W-4 claiming complete exemption from withholding or claims a marital status, a number of withholding allowances, and any additional withholding that results in less withholding than would result under the IRS notice or modification notice, you must disregard the new Form W-4. 1040x instructions dummies You are required to withhold on the basis of the notice or modification notice unless the IRS subsequently notifies you to withhold based on the new Form W-4. 1040x instructions dummies If the employee wants to put a new Form W-4 into effect that results in less withholding than required, the employee must contact the IRS. 1040x instructions dummies   If, after you receive an IRS notice or modification notice, your employee provides you with a new Form W-4 that does not claim exemption from federal income tax withholding and claims a marital status, a number of withholding allowances, and any additional withholding that results in more withholding than would result under the notice or modification notice, you must withhold tax on the basis of that new Form W-4. 1040x instructions dummies Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold based on the IRS notice or modification notice. 1040x instructions dummies Substitute Forms W-4. 1040x instructions dummies   You are encouraged to have your employees use the official version of Form W-4 to claim withholding allowances or exemption from withholding. 1040x instructions dummies Call the IRS at 1-800-TAX-FORM (1-800-829-3676) or visit IRS. 1040x instructions dummies gov to obtain copies of Form W-4. 1040x instructions dummies   You may use a substitute version of Form W-4 to meet your business needs. 1040x instructions dummies However, your substitute Form W-4 must contain language that is identical to the official Form W-4 and your form must meet all current IRS rules for substitute forms. 1040x instructions dummies At the time that you provide your substitute form to the employee, you must provide him or her with all tables, instructions, and worksheets from the current Form W-4. 1040x instructions dummies   You cannot accept a substitute Form W-4 developed by an employee, and the employee submitting such form will be treated as failing to furnish a Form W-4. 1040x instructions dummies However, continue to use any valid Forms W-4 developed by your employees that you accepted before October 11, 2007. 1040x instructions dummies Invalid Forms W-4. 1040x instructions dummies   Any unauthorized change or addition to Form W-4 makes it invalid. 1040x instructions dummies This includes taking out any language by which the employee certifies that the form is correct. 1040x instructions dummies A Form W-4 is also invalid if, by the date an employee gives it to you, he or she indicates in any way that it is false. 1040x instructions dummies An employee who submits a false Form W-4 may be subject to a $500 penalty. 1040x instructions dummies You may treat a Form W-4 as invalid if the employee wrote “exempt” on line 7 and also entered a number on line 5 or an amount on line 6. 1040x instructions dummies   When you get an invalid Form W-4, do not use it to figure federal income tax withholding. 1040x instructions dummies Tell the employee that it is invalid and ask for another one. 1040x instructions dummies If the employee does not give you a valid one, withhold taxes as if the employee was single and claiming no withholding allowances. 1040x instructions dummies However, if you have an earlier Form W-4 for this worker that is valid, withhold as you did before. 1040x instructions dummies   For additional information about these rules, see Treasury Decision 9337, 2007-35 I. 1040x instructions dummies R. 1040x instructions dummies B. 1040x instructions dummies 455, available at www. 1040x instructions dummies irs. 1040x instructions dummies gov/irb/2007-35_IRB/ar10. 1040x instructions dummies html. 1040x instructions dummies Amounts exempt from levy on wages, salary, and other income. 1040x instructions dummies   If you receive a Notice of Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), or 668-W(ICS), you must withhold amounts as described in the instructions for these forms. 1040x instructions dummies Publication 1494, Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), and 668-W(ICS), shows the exempt amount. 1040x instructions dummies If a levy issued in a prior year is still in effect and the taxpayer submits a new Statement of Exemptions and Filing Status, use the current year Publication 1494 to compute the exempt amount. 1040x instructions dummies How To Figure Federal Income Tax Withholding There are several ways to figure federal income tax withholding. 1040x instructions dummies Wage bracket tables. 1040x instructions dummies See section 13 for directions on how to use the tables. 1040x instructions dummies Percentage method. 1040x instructions dummies See section 13 for directions on how to use the percentage method. 1040x instructions dummies Alternative formula tables for percentage method withholding. 1040x instructions dummies See Publication 15-A. 1040x instructions dummies Wage bracket percentage method withholding tables. 1040x instructions dummies See Publication 15-A. 1040x instructions dummies Other alternative methods. 1040x instructions dummies See Publication 15-A. 1040x instructions dummies Employers with automated payroll systems will find the two alternative formula tables and the two alternative wage bracket percentage method tables in Publication 15-A useful. 1040x instructions dummies If an employee wants additional federal tax withheld, have the employee show the extra amount on Form W-4. 1040x instructions dummies Supplemental wages. 1040x instructions dummies   Supplemental wages are wage payments to an employee that are not regular wages. 1040x instructions dummies They include, but are not limited to, bonuses, commissions, overtime pay, accumulated sick leave, severance pay, awards, prizes, back pay and retroactive pay increases for current employees, and payments for nondeductible moving expenses. 1040x instructions dummies Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. 1040x instructions dummies   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total was a single payment for a regular payroll period. 1040x instructions dummies   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold federal income tax from your employee's regular wages. 1040x instructions dummies If you withheld federal income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. 1040x instructions dummies Withhold a flat 25% (no other percentage allowed). 1040x instructions dummies If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. 1040x instructions dummies If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. 1040x instructions dummies Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. 1040x instructions dummies Subtract the tax withheld from the regular wages. 1040x instructions dummies Withhold the remaining tax from the supplemental wages. 1040x instructions dummies If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and previous supplemental wage payments, and withhold the remaining tax from the current payment of supplemental wages. 1040x instructions dummies If you did not withhold federal income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b above. 1040x instructions dummies This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. 1040x instructions dummies    Separate rules apply to any supplemental wages exceeding $1 million that you pay to an individual during the year. 1040x instructions dummies See section 7 in Publication 15 (Circular E) for details. 1040x instructions dummies   Regardless of the method that you use to withhold federal income tax on supplemental wages, they are generally subject to social security, Medicare, and FUTA taxes. 1040x instructions dummies 6. 1040x instructions dummies Required Notice to Employees About Earned Income Credit (EIC) You must notify employees who have no federal income tax withheld that they may be able to claim a tax refund because of the EIC. 1040x instructions dummies Although you do not have to notify employees who claim exemption from withholding on Form W-4 about the EIC, you are encouraged to notify any employees whose wages for 2013 were less than $46,227 ($51,567 if married filing jointly) that they may be eligible to claim the credit for 2013. 1040x instructions dummies This is because eligible employees may get a refund of the amount of EIC that is more than the tax that they owe. 1040x instructions dummies You will meet the notification requirement if you issue to the employee Form W-2 with the EIC notice on the back of Copy B, or a substitute Form W-2 with the same statement. 1040x instructions dummies You may also meet the requirement by providing Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC), or your own statement that contains the same wording. 1040x instructions dummies If a substitute Form W-2 is given to the employee on time but does not have the required statement, you must notify the employee within 1 week of the date that the substitute Form W-2 is given. 1040x instructions dummies If Form W-2 is required but is not given on time, you must give the employee Notice 797 or your written statement by the date that Form W-2 is required to be given. 1040x instructions dummies If Form W-2 is not required, you must notify the employee by February 7, 2014. 1040x instructions dummies 7. 1040x instructions dummies Depositing Taxes Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld. 1040x instructions dummies You must use electronic funds transfer to make all federal tax deposits. 1040x instructions dummies See How To Deposit , later in this section. 1040x instructions dummies The credit against employment taxes for COBRA premium assistance payments is treated as a deposit of taxes on the first day of your return period. 1040x instructions dummies For more information, see COBRA premium assistance credit under Introduction. 1040x instructions dummies Payment with return. 1040x instructions dummies   You may make payments with Forms 943 or 945 instead of depositing if one of the following applies. 1040x instructions dummies You report less than a $2,500 tax liability for the year (Form 943, line 11; Form 945, line 3) and you pay in full with a return that is filed on time. 1040x instructions dummies However, if you are unsure that you will report less than $2,500, deposit under the rules explained in this section so that you will not be subject to failure-to-deposit penalties. 1040x instructions dummies You are a monthly schedule depositor and make a payment in accordance with the Accuracy of Deposits Rule discussed later in this section. 1040x instructions dummies This payment may be $2,500 or more. 1040x instructions dummies Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. 1040x instructions dummies Semiweekly schedule depositors must timely deposit the amount. 1040x instructions dummies See Accuracy of Deposits Rule and How To Deposit, later in this section. 1040x instructions dummies When To Deposit If you employ both farm and nonfarm workers, do not combine the taxes reportable on Forms 941 or 944 with Form 943 to decide whether to make a deposit. 1040x instructions dummies See Employers of Both Farm and Nonfarm Workers, later in this section. 1040x instructions dummies The rules for determining when to deposit Form 943 taxes are discussed below. 1040x instructions dummies See section 10 for the separate rules that apply to FUTA tax. 1040x instructions dummies Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor. 1040x instructions dummies The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often your business pays its employees or how often you are required to make deposits. 1040x instructions dummies The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday). 1040x instructions dummies The deposit schedule that you must use for a calendar year is determined from the tax liability reported on your Form 943, line 9, for the lookback period, discussed next. 1040x instructions dummies If you reported $50,000 or less of Form 943 taxes for the lookback period, you are a monthly schedule depositor. 1040x instructions dummies If you reported more than $50,000 of Form 943 taxes for the lookback period, you are a semiweekly schedule depositor. 1040x instructions dummies Lookback period. 1040x instructions dummies   The lookback period is the second calendar year preceding the current calendar year. 1040x instructions dummies For example, the lookback period for 2014 is 2012. 1040x instructions dummies Example of deposit schedule based on lookback period. 1040x instructions dummies Rose Co. 1040x instructions dummies reported taxes on Form 943 as follows. 1040x instructions dummies 2012 — $48,000 2013 — $60,000 Rose Co. 1040x instructions dummies is a monthly schedule depositor for 2014 because its taxes for the lookback period ($48,000 for calendar year 2012) were not more than $50,000. 1040x instructions dummies However, for 2015, Rose Co. 1040x instructions dummies is a semiweekly schedule depositor because the total taxes before adjustment for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. 1040x instructions dummies Adjustments to lookback period taxes. 1040x instructions dummies   To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). 1040x instructions dummies Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. 1040x instructions dummies Example of adjustments. 1040x instructions dummies An employer originally reported total tax of $45,000 for the lookback period in 2012. 1040x instructions dummies The employer discovered during March 2014 that the tax reported for the lookback period was understated by $10,000 and corrected this error by filing Form 943-X. 1040x instructions dummies The total tax reported in the lookback period is still $45,000. 1040x instructions dummies The $10,000 adjustment is also not treated as part of the 2014 taxes. 1040x instructions dummies Deposit period. 1040x instructions dummies   The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. 1040x instructions dummies For monthly schedule depositors, the deposit period is a calendar month. 1040x instructions dummies The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. 1040x instructions dummies Monthly Deposit Schedule If the tax liability reported on Form 943, line 9, for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. 1040x instructions dummies You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month. 1040x instructions dummies Monthly schedule example. 1040x instructions dummies   Red Co. 1040x instructions dummies is a seasonal employer and a monthly schedule depositor. 1040x instructions dummies It pays wages each Friday. 1040x instructions dummies It paid wages during August 2014, but did not pay any wages during September. 1040x instructions dummies Red Co. 1040x instructions dummies must deposit the combined tax liabilities for the August paydays by September 15. 1040x instructions dummies Red Co. 1040x instructions dummies does not have a deposit requirement for September (that is, due by October 15, 2014) because no wages were paid in September; therefore, it did not have a tax liability for September. 1040x instructions dummies New employers. 1040x instructions dummies   For agricultural employers, your tax liability for any year in the lookback period before the date you started or acquired your business is considered to be zero. 1040x instructions dummies Therefore, you are a monthly schedule depositor for the first and second calendar years of your agricultural business (but see the $100,000 Next-Day Deposit Rule , later in this section). 1040x instructions dummies Semiweekly Deposit Schedule You are a semiweekly schedule depositor for a calendar year if the tax liability on Form 943, line 9, during your lookback period was more than $50,000. 1040x instructions dummies Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. 1040x instructions dummies Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. 1040x instructions dummies Semiweekly depositors are not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule (discussed later in this section) applies. 1040x instructions dummies For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 by the following Wednesday. 1040x instructions dummies If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. 1040x instructions dummies Semiweekly schedule depositors must complete Form 943-A, Agricultural Employer's Record of Federal Tax Liability, and submit it with Form 943. 1040x instructions dummies Semiweekly Deposit Schedule IF the payday falls on a. 1040x instructions dummies . 1040x instructions dummies . 1040x instructions dummies THEN deposit taxes by the following. 1040x instructions dummies . 1040x instructions dummies . 1040x instructions dummies Wednesday, Thursday, and/or Friday Wednesday Saturday, Sunday, Monday, and/or Tuesday Friday Semiweekly schedule example. 1040x instructions dummies   Green, Inc. 1040x instructions dummies , is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. 1040x instructions dummies Green, Inc. 1040x instructions dummies , will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. 1040x instructions dummies Green, Inc. 1040x instructions dummies 's tax liability for the April 25, 2014 (Friday), wage payment must be deposited by April 30, 2014 (Wednesday). 1040x instructions dummies Semiweekly deposit period spanning two quarters. 1040x instructions dummies   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. 1040x instructions dummies For example, if you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. 1040x instructions dummies Both deposits will be due Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). 1040x instructions dummies Deposits on Business Days Only If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. 1040x instructions dummies A business day is any day other than a Saturday, Sunday, or legal holiday. 1040x instructions dummies For example, if a deposit is required to be made on Friday and Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). 1040x instructions dummies Semiweekly schedule depositors   will always have 3 business days to make a deposit. 1040x instructions dummies That is, if any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the deposit. 1040x instructions dummies For example, if a semiweekly schedule depositor accumulated taxes on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). 1040x instructions dummies Legal holiday. 1040x instructions dummies   The term “legal holiday” means any legal holiday in the District of Columbia. 1040x instructions dummies Legal holidays for 2014 are listed below. 1040x instructions dummies January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. 1040x instructions dummies February 17— Washington's Birthday April 16— District of Columbia Emancipation Day May 26— Memorial Day July 4— Independence Day September 1— Labor Day October 13— Columbus Day November 11— Veterans' Day November 27— Thanksgiving Day December 25— Christmas Day $100,000 Next-Day Deposit Rule If you accumulate $100,000 or more of Form 943 taxes (that is, taxes reported on Form 943, line 11) on any day during a deposit period, you must deposit the tax by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. 1040x instructions dummies For purposes of the $100,000 rule, do not continue accumulating a tax liability after the end of a deposit period. 1040x instructions dummies For example, if a semiweekly schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a Saturday-through-Tuesday deposit period) and accumulated a $10,000 liability on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. 1040x instructions dummies Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. 1040x instructions dummies However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. 1040x instructions dummies For example, Fir Co. 1040x instructions dummies is a semiweekly schedule depositor. 1040x instructions dummies On Monday, Fir Co. 1040x instructions dummies accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. 1040x instructions dummies On Tuesday, Fir Co. 1040x instructions dummies accumulates additional taxes of $30,000. 1040x instructions dummies Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. 1040x instructions dummies does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). 1040x instructions dummies If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year. 1040x instructions dummies Example of the $100,000 next-day deposit rule. 1040x instructions dummies   Elm, Inc. 1040x instructions dummies , started its business on May 1, 2014. 1040x instructions dummies Because Elm, Inc. 1040x instructions dummies , is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc. 1040x instructions dummies , is a monthly schedule depositor. 1040x instructions dummies On May 8, Elm, Inc. 1040x instructions dummies , paid wages for the first time and accumulated taxes of $50,000. 1040x instructions dummies On May 9 (Friday), Elm, Inc. 1040x instructions dummies , paid wages and accumulated taxes of $60,000, for a total of $110,000. 1040x instructions dummies Because Elm, Inc. 1040x instructions dummies , accumulated $110,000 on May 9, it must deposit $110,000 by May 12 (Monday), the next business day. 1040x instructions dummies Elm, Inc. 1040x instructions dummies , became a semiweekly schedule depositor on May 10. 1040x instructions dummies It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. 1040x instructions dummies Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. 1040x instructions dummies However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. 1040x instructions dummies Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited. 1040x instructions dummies The deposit shortfall is paid or deposited by the shortfall makeup date as described below. 1040x instructions dummies Makeup Date for Deposit Shortfall:    Monthly Schedule Depositor—Deposit the shortfall or pay it with your return by the due date of your Form 943. 1040x instructions dummies You may pay the shortfall with your Form 943 even if the amount is $2,500 or more. 1040x instructions dummies Semiweekly Schedule Depositor—Deposit by the earlier of (a) the first Wednesday or Friday (whichever comes first) that falls on or after the 15th of the month following the month in which the shortfall occurred, or (b) the due date for Form 943. 1040x instructions dummies For example, if a semiweekly schedule depositor has a deposit shortfall during February 2014, the shortfall makeup date is March 19, 2014 (Wednesday). 1040x instructions dummies How To Deposit You must deposit employment taxes by electronic funds transfer. 1040x instructions dummies See Payment with return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. 1040x instructions dummies Electronic deposit requirement. 1040x instructions dummies   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). 1040x instructions dummies Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). 1040x instructions dummies 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. 1040x instructions dummies   EFTPS is a free service provided by the Department of Treasury. 1040x instructions dummies To get more information or to enroll in EFTPS, call 1-800-555-4477 (business), 1-800-316-6541 (individual), or 1-800-733-4829 (TDD). 1040x instructions dummies You can also visit the EFTPS website at www. 1040x instructions dummies eftps. 1040x instructions dummies gov. 1040x instructions dummies Additional information about EFTPS is also available in Publication 966. 1040x instructions dummies New employers that have a federal tax obligation will be pre-enrolled in EFTPS. 1040x instructions dummies Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. 1040x instructions dummies See When you receive your EIN in section 1 for more information. 1040x instructions dummies Deposit record. 1040x instructions dummies   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. 1040x instructions dummies The number can be used as a receipt or to trace the payment. 1040x instructions dummies Depositing on time. 1040x instructions dummies   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. 1040x instructions dummies m. 1040x instructions dummies Eastern time the day before the date a deposit is due. 1040x instructions dummies If you use a third party to make a deposit on your behalf, they may have different cutoff times. 1040x instructions dummies Same-day payment option. 1040x instructions dummies   If you fail to initiate a deposit transaction on EFTPS by 8 p. 1040x instructions dummies m. 1040x instructions dummies Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). 1040x instructions dummies To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. 1040x instructions dummies Please check with your financial institution regarding availability, deadlines, and costs. 1040x instructions dummies Your financial institution may charge you a fee for payments made this way. 1040x instructions dummies To learn more about the information you will need to provide to your financial institution to make a same-day wire payment, visit www. 1040x instructions dummies eftps. 1040x instructions dummies gov to download the Same-Day Payment Worksheet. 1040x instructions dummies Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits for less than the required amount. 1040x instructions dummies The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. 1040x instructions dummies IRS may also waive deposit penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. 1040x instructions dummies For amounts not properly deposited or not deposited on time, the penalty rates are shown next. 1040x instructions dummies Penalty Charged for. 1040x instructions dummies . 1040x instructions dummies . 1040x instructions dummies 2% Deposits made 1 to 5 days late. 1040x instructions dummies 5% Deposits made 6 to 15 days late. 1040x instructions dummies 10% Deposits made 16 or more days late. 1040x instructions dummies Also applies to amounts paid within 10 days of the date of the first notice the IRS sent asking for the tax due. 1040x instructions dummies 10% Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return. 1040x instructions dummies See Payment with return , earlier in this section, for exceptions. 1040x instructions dummies 15% Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. 1040x instructions dummies Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. 1040x instructions dummies Order in which deposits are applied. 1040x instructions dummies   Deposits generally are applied to the most recent tax liability within the year. 1040x instructions dummies If you receive a failure-to-deposit penalty notice, you may designate how your deposits are to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. 1040x instructions dummies Follow the instructions on the penalty notice that you received. 1040x instructions dummies For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. 1040x instructions dummies You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. 1040x instructions dummies irs. 1040x instructions dummies gov/pub/irs-irbs/irb01-50. 1040x instructions dummies pdf. 1040x instructions dummies Example. 1040x instructions dummies Cedar, Inc. 1040x instructions dummies , is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. 1040x instructions dummies It does not make the deposit on July 15. 1040x instructions dummies On August 15, Cedar, Inc. 1040x instructions dummies , deposits $2,000. 1040x instructions dummies Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. 1040x instructions dummies Accordingly, $500 of the July 15 liability remains undeposited. 1040x instructions dummies The penalty on this underdeposit will apply as explained above. 1040x instructions dummies Trust fund recovery penalty. 1040x instructions dummies   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. 1040x instructions dummies The penalty is the full amount of the unpaid trust fund tax. 1040x instructions dummies This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. 1040x instructions dummies   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. 1040x instructions dummies   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship. 1040x instructions dummies A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. 1040x instructions dummies    Willfully means voluntarily, consciously, and intentionally. 1040x instructions dummies A responsible person acts willfully if the person knows that the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. 1040x instructions dummies “Average” failure-to-deposit penalty. 1040x instructions dummies   IRS may assess an “averaged” failure-to-deposit penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 943, line 17, when your tax liability shown on Form 943, line 11, was $2,500 or more. 1040x instructions dummies IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 943, line 11, was $2,500 or more and you did any of the following. 1040x instructions dummies Completed Form 943, line 17, instead of Form 943-A. 1040x instructions dummies Failed to attach a properly completed Form 943-A. 1040x instructions dummies Completed Form 943-A incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. 1040x instructions dummies   IRS figures the penalty by allocating your tax liability on Form 943, line 11, equally throughout the tax period. 1040x instructions dummies Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. 1040x instructions dummies   You can avoid the penalty by reviewing your return before filing it. 1040x instructions dummies Follow these steps before filing your Form 943. 1040x instructions dummies If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 943, line 17. 1040x instructions dummies If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Form 943-A in the lines that represent the dates you paid your employees. 1040x instructions dummies Verify that your total liability shown on Form 943, line 17, or Form 943-A, line M, equals your tax liability shown on Form 943, line 11. 1040x instructions dummies Do not show negative amounts on Form 943, line 17, or Form 943-A. 1040x instructions dummies For prior period errors discovered after December 31, 2008, do not adjust your tax liabilities reported on Form 943, line 17, or on Form 943-A. 1040x instructions dummies Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941 and 944 taxes). 1040x instructions dummies Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules. 1040x instructions dummies If a deposit is due, deposi