Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

2012 Tax Software

H&block ComFree State Filing TaxesTax Act 2010 DownloadFree File State ReturnPrint 1040ezHow To File Taxes As A College StudentGov Forms 1040Military Tax CreditCan I Refile My TaxesFile 2010 Taxes Late Online FreeTurbo Tax Amendment 2013Free State Tax Return FormsFree Online 1040ezFree Tax Filing 20112011 1040 Tax FormFile Free 1040ez2011 Ez Tax FormFree Online Federal And State Tax Filing 2013Irs 1040ez Form 2012State Amended FormE-file State Return For FreeEfile State Tax FreeIrs Tax Form 1040ez 2011Hnrblock ComHow To Do An Amended Tax ReturnTax Act 1040xHow To Amend Income Tax ReturnFree State E File TaxesAmend 2009 Tax ReturnStudent Tax FormFile 2011 Tax Return LateE File Back TaxesPrintable 2011 Tax FormsHr Block Free Online Filing1040ez Form InstructionsAmendment FormFile 2009 Taxes Online Free State And FederalTax Calculator 2012Efile H&r BlockPrint Free 2010 1040ez Tax Form

2012 Tax Software

2012 tax software Publication 560 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionSEP plans. 2012 tax software SIMPLE plans. 2012 tax software Qualified plans. 2012 tax software Ordering forms and publications. 2012 tax software Tax questions. 2012 tax software Future Developments For the latest information about developments related to Publication 560, such as legislation enacted after we release it, go to www. 2012 tax software irs. 2012 tax software gov/pub560. 2012 tax software What's New Compensation limit increased for 2013 and 2014. 2012 tax software  For 2013 the maximum compensation used for figuring contributions and benefits increases to $255,000. 2012 tax software This limit increases to $260,000 for 2014. 2012 tax software Elective deferral limit for 2013 and 2014. 2012 tax software  The limit on elective deferrals, other than catch-up contributions, increases to $17,500 for 2013 and remains at $17,500 for 2014. 2012 tax software These limits apply for participants in SARSEPs, 401(k) plans (excluding SIMPLE plans), section 403(b) plans and section 457(b) plans. 2012 tax software Defined contribution limit increased for 2013 and 2014. 2012 tax software  The limit on contributions, other than catch-up contributions, for a participant in a defined contribution plan increases to $51,000 for 2013. 2012 tax software This limit increases to $52,000 for 2014. 2012 tax software SIMPLE plan salary reduction contribution limit for 2013 and 2014. 2012 tax software  The limit on salary reduction contributions, other than catch-up contributions, increases to $12,000 for 2013 and remains at $12,000 for 2014. 2012 tax software Catch-up contribution limit remains unchanged for 2013 and 2014. 2012 tax software  A plan can permit participants who are age 50 or over at the end of the calendar year to make catch-up contributions in addition to elective deferrals and SIMPLE plan salary reduction contributions. 2012 tax software The catch-up contribution limitation for defined contribution plans other than SIMPLE plans remains unchanged at $5,500 for 2013 and 2014. 2012 tax software The catch-up contribution limitation for SIMPLE plans remains unchanged at $2,500 for 2013 and 2014. 2012 tax software The catch-up contributions a participant can make for a year cannot exceed the lesser of the following amounts. 2012 tax software The catch-up contribution limit. 2012 tax software The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. 2012 tax software See “Catch-up contributions” under Contribution Limits and Limit on Elective Deferrals in chapters 3 and 4, respectively, for more information. 2012 tax software All section references are to the Internal Revenue Code, unless otherwise stated. 2012 tax software Reminders In-plan Roth rollovers. 2012 tax software  Section 402A(c)(4) provides for a distribution from an individual's account in a 401(k) plan, other than from a designated Roth account, that is rolled over to the individual's designated Roth account in the same plan. 2012 tax software An in-plan Roth rollover is not treated as a distribution for most purposes. 2012 tax software Section 402A(c)(4) was added by the Small Business Jobs Act of 2010 and applies to distributions made after September 27, 2010. 2012 tax software For additional guidance on in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. 2012 tax software R. 2012 tax software B. 2012 tax software 872, available at  www. 2012 tax software irs. 2012 tax software gov/irb/2010-51_IRB/ar11. 2012 tax software html. 2012 tax software In-plan Roth rollovers expanded. 2012 tax software  Beginning in 2013, a plan with designated Roth accounts can permit a participant to roll over amounts into a designated Roth account from his or her other accounts in the same plan, regardless of whether the participant is eligible for a distribution from the other accounts. 2012 tax software Section 402A(c)(4) was amended by the American Taxpayer Relief Act of 2012. 2012 tax software For more information, see Notice 2013-74, 2013-52 I. 2012 tax software R. 2012 tax software B. 2012 tax software 819, available at www. 2012 tax software irs. 2012 tax software gov/irb/2013-52_IRB/ar11. 2012 tax software html. 2012 tax software Credit for startup costs. 2012 tax software  You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP, SIMPLE, or qualified plan. 2012 tax software The credit equals 50% of the cost to set up and administer the plan and educate employees about the plan, up to a maximum of $500 per year for each of the first 3 years of the plan. 2012 tax software You can choose to start claiming the credit in the tax year before the tax year in which the plan becomes effective. 2012 tax software You must have had 100 or fewer employees who received at least $5,000 in compensation from you for the preceding year. 2012 tax software At least one participant must be a non-highly compensated employee. 2012 tax software The employees generally cannot be substantially the same employees for whom contributions were made or benefits accrued under a plan of any of the following employers in the 3-tax-year period immediately before the first year to which the credit applies. 2012 tax software You. 2012 tax software A member of a controlled group that includes you. 2012 tax software A predecessor of (1) or (2). 2012 tax software The credit is part of the general business credit, which can be carried back or forward to other tax years if it cannot be used in the current year. 2012 tax software However, the part of the general business credit attributable to the small employer pension plan startup cost credit cannot be carried back to a tax year beginning before January 1, 2002. 2012 tax software You cannot deduct the part of the startup costs equal to the credit claimed for a tax year, but you can choose not to claim the allowable credit for a tax year. 2012 tax software To take the credit, use Form 8881, Credit for Small Employer Pension Plan Startup Costs. 2012 tax software Retirement savings contributions credit. 2012 tax software  Retirement plan participants (including self-employed individuals) who make contributions to their plan may qualify for the retirement savings contribution credit. 2012 tax software The maximum contribution eligible for the credit is $2,000. 2012 tax software To take the credit, use Form 8880, Credit for Qualified Retirement Savings Contributions. 2012 tax software For more information on who is eligible for the credit, retirement plan contributions eligible for the credit and how to figure the credit, see Form 8880 and its instructions or go to the IRS website and search Retirement Topics-Retirement Savings Contributions Credit (Saver's Credit). 2012 tax software Photographs of missing children. 2012 tax software  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 2012 tax software Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2012 tax software You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 2012 tax software Introduction This publication discusses retirement plans you can set up and maintain for yourself and your employees. 2012 tax software In this publication, “you” refers to the employer. 2012 tax software See chapter 1 for the definition of the term employer and the definitions of other terms used in this publication. 2012 tax software This publication covers the following types of retirement plans. 2012 tax software SEP (simplified employee pension) plans. 2012 tax software SIMPLE (savings incentive match plan for employees) plans. 2012 tax software Qualified plans (also called H. 2012 tax software R. 2012 tax software 10 plans or Keogh plans when covering self-employed individuals), including 401(k) plans. 2012 tax software SEP, SIMPLE, and qualified plans offer you and your employees a tax-favored way to save for retirement. 2012 tax software You can deduct contributions you make to the plan for your employees. 2012 tax software If you are a sole proprietor, you can deduct contributions you make to the plan for yourself. 2012 tax software You can also deduct trustees' fees if contributions to the plan do not cover them. 2012 tax software Earnings on the contributions are generally tax free until you or your employees receive distributions from the plan. 2012 tax software Under a 401(k) plan, employees can have you contribute limited amounts of their before-tax (after-tax, in the case of a qualified Roth contribution program) pay to the plan. 2012 tax software These amounts (and the earnings on them) are generally tax free until your employees receive distributions from the plan or, in the case of a qualified distribution from a designated Roth account, completely tax free. 2012 tax software What this publication covers. 2012 tax software   This publication contains the information you need to understand the following topics. 2012 tax software What type of plan to set up. 2012 tax software How to set up a plan. 2012 tax software How much you can contribute to a plan. 2012 tax software How much of your contribution is deductible. 2012 tax software How to treat certain distributions. 2012 tax software How to report information about the plan to the IRS and your employees. 2012 tax software Basic features of SEP, SIMPLE, and qualified plans. 2012 tax software The key rules for SEP, SIMPLE, and qualified plans are outlined in Table 1. 2012 tax software SEP plans. 2012 tax software   SEPs provide a simplified method for you to make contributions to a retirement plan for yourself and your employees. 2012 tax software Instead of setting up a profit-sharing or money purchase plan with a trust, you can adopt a SEP agreement and make contributions directly to a traditional individual retirement account or a traditional individual retirement annuity (SEP-IRA) set up for yourself and each eligible employee. 2012 tax software SIMPLE plans. 2012 tax software   Generally, if you had 100 or fewer employees who received at least $5,000 in compensation last year, you can set up a SIMPLE plan. 2012 tax software Under a SIMPLE plan, employees can choose to make salary reduction contributions rather than receiving these amounts as part of their regular pay. 2012 tax software In addition, you will contribute matching or nonelective contributions. 2012 tax software The two types of SIMPLE plans are the SIMPLE IRA plan and the SIMPLE 401(k) plan. 2012 tax software Qualified plans. 2012 tax software   The qualified plan rules are more complex than the SEP plan and SIMPLE plan rules. 2012 tax software However, there are advantages to qualified plans, such as increased flexibility in designing plans and increased contribution and deduction limits in some cases. 2012 tax software Table 1. 2012 tax software Key Retirement Plan Rules for 2013 Type  of  Plan Last Date for Contribution Maximum Contribution Maximum Deduction When To Set Up Plan SEP Due date of employer's return (including extensions). 2012 tax software Smaller of $51,000 or 25%1 of participant's compensation. 2012 tax software 2 25%1 of all participants' compensation. 2012 tax software 2 Any time up to the due date of employer's return (including extensions). 2012 tax software SIMPLE IRA and SIMPLE 401(k) Salary reduction contributions: 30 days after the end of the month for which the contributions are to be made. 2012 tax software 4  Matching or nonelective contributions: Due date of employer's return (including extensions). 2012 tax software Employee contribution: Salary reduction contribution up to $12,000, $14,500 if age 50 or over. 2012 tax software   Employer contribution:  Either dollar-for-dollar matching contributions, up to 3% of employee's compensation,3 or fixed nonelective contributions of 2% of compensation. 2012 tax software 2 Same as maximum contribution. 2012 tax software Any time between 1/1 and 10/1 of the calendar year. 2012 tax software   For a new employer coming into existence after 10/1, as soon as administratively feasible. 2012 tax software Qualified Plan: Defined Contribution Plan  Elective deferral: Due date of employer's return (including extensions). 2012 tax software 4   Employer contribution: Money Purchase or Profit-Sharing: Due date of employer's return (including extensions). 2012 tax software  Employee contribution: Elective deferral up to $17,500, $23,000 if age 50 or over. 2012 tax software   Employer contribution: Money Purchase: Smaller of $51,000 or 100%1 of participant's compensation. 2012 tax software 2  Profit-Sharing: Smaller of $51,000 or 100%1 of participant's compensation. 2012 tax software 2  25%1 of all participants' compensation2, plus amount of elective deferrals made. 2012 tax software   By the end of the tax year. 2012 tax software Qualified Plan: Defined Benefit Plan Contributions generally must be paid in quarterly installments, due 15 days after the end of each quarter. 2012 tax software See Minimum Funding Requirement in chapter 4. 2012 tax software Amount needed to provide an annual benefit no larger than the smaller of $205,000 or 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. 2012 tax software Based on actuarial assumptions and computations. 2012 tax software By the end of the tax year. 2012 tax software 1Net earnings from self-employment must take the contribution into account. 2012 tax software See Deduction Limit for Self-Employed Individuals in chapters 2 and 4 . 2012 tax software  2Compensation is generally limited to $255,000 in 2013. 2012 tax software  3Under a SIMPLE 401(k) plan, compensation is generally limited to $255,000 in 2013. 2012 tax software  4Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions and elective deferrals. 2012 tax software What this publication does not cover. 2012 tax software   Although the purpose of this publication is to provide general information about retirement plans you can set up for your employees, it does not contain all the rules and exceptions that apply to these plans. 2012 tax software You may also need professional help and guidance. 2012 tax software   Also, this publication does not cover all the rules that may be of interest to employees. 2012 tax software For example, it does not cover the following topics. 2012 tax software The comprehensive IRA rules an employee needs to know. 2012 tax software These rules are covered in Publication 590, Individual Retirement Arrangements (IRAs). 2012 tax software The comprehensive rules that apply to distributions from retirement plans. 2012 tax software These rules are covered in Publication 575, Pension and Annuity Income. 2012 tax software The comprehensive rules that apply to section 403(b) plans. 2012 tax software These rules are covered in Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). 2012 tax software Comments and suggestions. 2012 tax software   We welcome your comments about this publication and your suggestions for future editions. 2012 tax software   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2012 tax software NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2012 tax software Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2012 tax software   You can send your comments from www. 2012 tax software irs. 2012 tax software gov/formspubs. 2012 tax software Click on “More Information” and then on “Give us feedback. 2012 tax software ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 2012 tax software Ordering forms and publications. 2012 tax software   Visit www. 2012 tax software irs. 2012 tax software gov/formspubs to download forms  and publications, call 1-800-TAX-FORM  (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 2012 tax software Internal Revenue Service 1201 N. 2012 tax software Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 2012 tax software   If you have a tax question, check the information available on IRS. 2012 tax software gov or call 1-800-829-1040. 2012 tax software We cannot answer tax questions sent to either of the above addresses. 2012 tax software Note. 2012 tax software Forms filed electronically with the Department of Labor are not available on the IRS website. 2012 tax software Instead, see www. 2012 tax software efast. 2012 tax software dol. 2012 tax software gov. 2012 tax software Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Understanding your CP24 Notice

We made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You have a potential overpayment credit because of these changes.

Looking for information for CP24E Notice?

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice carefully — it will explain the changes we made to your return.
  • Check the list of payments we applied to your account to see if we applied all the payments you made.
  • Correct the copy of your tax return that you kept for your records.
  • You don't need to do anything if you agree with the notice.
  • If you disagree with the notice, please contact us at the toll-free number listed on its top right-hand corner (within 60 days of the notice’s date).

You may want to...


Answers to Common Questions

Is an overpayment credit different from a refund?
You get an overpayment credit when your tax payments exceed what you owe. You will receive the overpayment credit as a refund automatically. You also, however, can ask us to apply the credit as an advance payment towards your next year's taxes instead of sending it to you as a refund.

When can I expect to receive my refund?
You will receive it in four to six weeks if you owe no other taxes or debts we’re required to collect.

What can I do if I don't receive my refund in four to six weeks?
Call us at the toll-free number listed on the top right-hand corner of your notice.

How can I find out what caused my tax return to change?
Please contact us at the number listed on your notice for specific information concerning your tax return.

What should I do if I find you misapplied a payment or haven't credited a payment that I made?
Contact us with your information at the toll-free number listed on your notice. Please have your documentation (such as cancelled checks, amended return, etc.) ready when you call. Our representative will discuss the issue with you and give you further instructions.

What should I do if I disagree with the changes you made?
Contact us at the toll free number listed on the top right-hand corner of your notice.

How do I adjust my estimated tax payments?
You can adjust your estimated tax payments by completing a Form 1040-ES, Estimated Tax for Individuals. See Publication 505, Tax Withholding and Estimated Tax for more information.

What should I do if I need to make another correction to my tax return?
You'll need to file Form 1040X, Amended U.S. Individual Income Tax Return.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

You can receive your refund quickly with a direct deposit to your bank account by completing the banking information in the refund section of your tax return.

Page Last Reviewed or Updated: 03-Mar-2014

The 2012 Tax Software

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