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Amend Federal Tax Return

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Amend Federal Tax Return

Amend federal tax return Publication 971 - Main Content Table of Contents How To Request ReliefException for agreements relating to TEFRA partnership proceedings. Amend federal tax return The IRS Must Contact Your Spouse or Former Spouse Tax Court Review of Request Community Property LawsRelief for Married Persons Who Did Not File Joint Returns Innocent Spouse ReliefUnderstated Tax Erroneous Items Actual Knowledge or Reason To Know Indications of Unfairness for Innocent Spouse Relief Separation of Liability ReliefLimitations on Relief Equitable ReliefConditions for Getting Equitable Relief Factors for Determining Whether To Grant Equitable Relief RefundsProof Required Refunds Under Equitable Relief Limit on Amount of Refund Filled-in Form 8857 Flowcharts How To Request Relief File Form 8857 to ask the IRS for the types of relief discussed in this publication. Amend federal tax return If you are requesting relief for more than three tax years, you must file an additional Form 8857. Amend federal tax return The IRS will review your Form 8857 and let you know if you qualify. Amend federal tax return A completed Form 8857 is shown later. Amend federal tax return When to file Form 8857. Amend federal tax return   You should file Form 8857 as soon as you become aware of a tax liability for which you believe only your spouse or former spouse should be held responsible. Amend federal tax return The following are some of the ways you may become aware of such a liability. Amend federal tax return The IRS is examining your tax return and proposing to increase your tax liability. Amend federal tax return The IRS sends you a notice. Amend federal tax return   You must file Form 8857 no later than two years after the date on which the IRS first attempted to collect the tax from you that occurs after July 22, 1998. Amend federal tax return (But see the exceptions below for different filing deadlines that apply. Amend federal tax return ) For this reason, do not delay filing because you do not have all the documentation. Amend federal tax return   Collection activities that may start the 2-year period are: The IRS offset your income tax refund against an amount you owed on a joint return for another year and the IRS informed you about your right to file Form 8857. Amend federal tax return The filing of a claim by the IRS in a court proceeding in which you were a party or the filing of a claim in a proceeding that involves your property. Amend federal tax return This includes the filing of a proof of claim in a bankruptcy proceeding. Amend federal tax return The filing of a suit by the United States against you to collect the joint liability. Amend federal tax return The issuance of a section 6330 notice, which notifies you of the IRS' intent to levy and your right to a collection due process (CDP) hearing. Amend federal tax return The collection-related notices include, but are not limited to, Letter 11 and Letter 1058. Amend federal tax return Exception for equitable relief. Amend federal tax return   On July 25, 2011, the IRS issued Notice 2011-70 (available at www. Amend federal tax return irs. Amend federal tax return gov/irb/2011-32_IRB/ar11. Amend federal tax return html) expanding the amount of time to request equitable relief. Amend federal tax return The amount of time to request equitable relief depends on whether you are seeking relief from a balance due, seeking a credit or refund, or both: Balance Due – Generally, you must file your request within the time period the IRS has to collect the tax. Amend federal tax return Generally, the IRS has 10 years from the date the tax liability was assessed to collect the tax. Amend federal tax return In certain cases, the 10-year period is suspended. Amend federal tax return The amount of time the suspension is in effect will extend the time the IRS has to collect the tax. Amend federal tax return See Pub. Amend federal tax return 594, The IRS Collection Process, for details. Amend federal tax return Credit or Refund – Generally, you must file your request within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. Amend federal tax return But you may have more time to file if you live in a federally declared disaster area or you are physically or mentally unable to manage your financial affairs. Amend federal tax return See Pub. Amend federal tax return 556, Examination of Returns, Appeal Rights, and Claims for Refund, for details. Amend federal tax return Both a Balance Due and a Credit or Refund – If you are seeking a refund of amounts you paid and relief from a balance due over and above what you have paid, the time period for credit or refund will apply to any payments you have made, and the time period for collection of a balance due amount will apply to any unpaid liability. Amend federal tax return Exception for relief based on community property laws. Amend federal tax return   If you are requesting relief based on community property laws, a different filing deadline applies. Amend federal tax return See Relief from liability arising from community property law discussed later under Community Property Laws . Amend federal tax return Form 8857 filed by or on behalf of a decedent. Amend federal tax return   An executor (including any other duly appointed representative) may pursue a Form 8857 filed during the decedent's lifetime. Amend federal tax return An executor (including any other duly appointed representative) may also file Form 8857 as long as the decedent satisfied the eligibility requirements while alive. Amend federal tax return For purposes of separation of liability relief (discussed later), the decedent's marital status is determined on the earlier of the date relief was requested or the date of death. Amend federal tax return Situations in which you are not entitled to relief. Amend federal tax return   You are not entitled to innocent spouse relief for any tax year to which the following situations apply. Amend federal tax return In a final decision dated after July 22, 1998, a court considered whether to grant you relief from joint liability and decided not to do so. Amend federal tax return In a final decision dated after July 22, 1998, a court did not consider whether to grant you relief from joint liability, but you meaningfully participated in the proceeding and could have asked for relief. Amend federal tax return You entered into an offer in compromise with the IRS. Amend federal tax return You entered into a closing agreement with the IRS that disposed of the same liability for which you want to seek relief. Amend federal tax return Exception for agreements relating to TEFRA partnership proceedings. Amend federal tax return   You may be entitled to relief, discussed in (4) earlier, if you entered into a closing agreement for both partnership items and nonpartnership items, while you were a party to a pending TEFRA partnership proceeding. Amend federal tax return (TEFRA is an acronym that refers to the “Tax Equity and Fiscal Responsibility Act of 1982” that prescribed the tax treatment of partnership items. Amend federal tax return ) You are not entitled to relief for the nonpartnership items, but you will be entitled to relief for the partnership items (if you otherwise qualify). Amend federal tax return Transferee liability not affected by innocent spouse relief provisions. Amend federal tax return   The innocent spouse relief provisions do not affect tax liabilities that arise under federal or state transferee liability or property laws. Amend federal tax return Therefore, even if you are relieved of the tax liability under the innocent spouse relief provisions, you may remain liable for the unpaid tax, interest, and penalties to the extent provided by these laws. Amend federal tax return Example. Amend federal tax return Herb and Wanda timely filed their 2008 joint income tax return on April 15, 2009. Amend federal tax return Herb died in March 2010, and the executor of Herb's will transferred all of the estate's assets to Wanda. Amend federal tax return In August 2010, the IRS assessed a deficiency for the 2008 return. Amend federal tax return The items causing the deficiency belong to Herb. Amend federal tax return Wanda is relieved of the deficiency under the innocent spouse relief provisions, and Herb's estate remains solely liable for it. Amend federal tax return However, the IRS may collect the deficiency from Wanda to the extent permitted under federal or state transferee liability or property laws. Amend federal tax return The IRS Must Contact Your Spouse or Former Spouse By law, the IRS must contact your spouse or former spouse. Amend federal tax return There are no exceptions, even for victims of spousal abuse or domestic violence. Amend federal tax return We will inform your spouse or former spouse that you filed Form 8857 and will allow him or her to participate in the process. Amend federal tax return If you are requesting relief from joint and several liability on a joint return, the IRS must also inform him or her of its preliminary and final determinations regarding your request for relief. Amend federal tax return However, to protect your privacy, the IRS will not disclose your personal information (for example, your current name, address, phone number(s), information about your employer, your income or assets) or any other information that does not relate to making a determination about your request for relief from liability. Amend federal tax return If you petition the Tax Court (explained below), your spouse or former spouse may see your personal information. Amend federal tax return Tax Court Review of Request After you file Form 8857, you may be able to petition (ask) the United States Tax Court to review your request for relief in the following two situations. Amend federal tax return The IRS sends you a final determination letter regarding your request for relief. Amend federal tax return You do not receive a final determination letter from the IRS within six months from the date you filed Form 8857. Amend federal tax return If you seek equitable relief for an underpaid tax, you will be able to get a Tax Court review of your request only if the tax arose or remained unpaid on or after December 20, 2006. Amend federal tax return The United States Tax Court is an independent judicial body and is not part of the IRS. Amend federal tax return You must file a petition with the United States Tax Court in order for it to review your request for relief. Amend federal tax return You must file the petition no later than the 90th day after the date the IRS mails its final determination notice to you. Amend federal tax return If you do not file a petition, or you file it late, the Tax Court cannot review your request for relief. Amend federal tax return You can get a copy of the rules for filing a petition by writing to the Tax Court at the following address:    United States Tax Court 400 Second Street, NW Washington, DC 20217 Or you can visit the Tax Court's website at www. Amend federal tax return ustaxcourt. Amend federal tax return gov Community Property Laws You must generally follow community property laws when filing a tax return if you are married and live in a community property state. Amend federal tax return Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend federal tax return Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend federal tax return However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend federal tax return Relief for Married Persons Who Did Not File Joint Returns Married persons who live in community property states, but who did not file joint returns, have two ways to get relief. Amend federal tax return Relief From Liability Arising From Community Property Law You are not responsible for the tax relating to an item of community income if all the following conditions exist. Amend federal tax return You did not file a joint return for the tax year. Amend federal tax return You did not include the item of community income in gross income. Amend federal tax return The item of community income you did not include is one of the following: Wages, salaries, and other compensation your spouse (or former spouse) received for services he or she performed as an employee. Amend federal tax return Income your spouse (or former spouse) derived from a trade or business he or she operated as a sole proprietor. Amend federal tax return Your spouse's (or former spouse's) distributive share of partnership income. Amend federal tax return Income from your spouse's (or former spouse's) separate property (other than income described in (a), (b), or (c)). Amend federal tax return Use the appropriate community property law to determine what is separate property. Amend federal tax return Any other income that belongs to your spouse (or former spouse) under community property law. Amend federal tax return You establish that you did not know of, and had no reason to know of, that community income. Amend federal tax return See  Actual Knowledge or Reason To Know , below. Amend federal tax return Under all facts and circumstances, it would not be fair to include the item of community income in your gross income. Amend federal tax return See Indications of unfairness for liability arising from community property law, later. Amend federal tax return Actual knowledge or reason to know. Amend federal tax return   You knew or had reason to know of an item of community income if: You actually knew of the item of community income, or A reasonable person in similar circumstances would have known of the item of community income. Amend federal tax return Amount of community income unknown. Amend federal tax return   If you are aware of the source of the item of community income or the income-producing activity, but are unaware of the specific amount, you are considered to know or have reason to know of the item of community income. Amend federal tax return Not knowing the specific amount is not a basis for relief. Amend federal tax return Reason to know. Amend federal tax return   The IRS will consider all facts and circumstances in determining whether you had reason to know of an item of community income. Amend federal tax return The facts and circumstances include: The nature of the item of community income and the amount of the item relative to other income items. Amend federal tax return The financial situation of you and your spouse (or former spouse). Amend federal tax return Your educational background and business experience. Amend federal tax return Whether the item of community income represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). Amend federal tax return Indications of unfairness for liability arising from community property law. Amend federal tax return   The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax due to the item of community income. Amend federal tax return   The following are examples of factors the IRS will consider. Amend federal tax return Whether you received a benefit, either directly or indirectly, from the omitted item of community income (defined below). Amend federal tax return Whether your spouse (or former spouse) deserted you. Amend federal tax return Whether you and your spouse have been divorced or separated. Amend federal tax return  For other factors see Factors for Determining Whether To Grant Equitable Relief later. Amend federal tax return Benefit from omitted item of community income. Amend federal tax return   A benefit includes normal support, but does not include de minimis (small) amounts. Amend federal tax return Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers received several years after the filing of the return. Amend federal tax return   For example, if you receive property, including life insurance proceeds, from your spouse (or former spouse) and the property is traceable to omitted items of community income attributable to your spouse (or former spouse), you are considered to have benefitted from those omitted items of community income. Amend federal tax return Equitable Relief If you do not qualify for the relief described above and are now liable for an underpaid or understated tax you believe should be paid only by your spouse (or former spouse), you may request equitable relief (discussed later). Amend federal tax return How and When To Request Relief You request relief by filing Form 8857, as discussed earlier. Amend federal tax return Fill in Form 8857 according to the instructions. Amend federal tax return For relief from liability arising from community property law, you must file Form 8857 no later than 6 months before the expiration of the period of limitations on assessment (including extensions) against your spouse for the tax year for which you are requesting relief. Amend federal tax return However, if the IRS begins an examination of your return during that 6-month period, the latest time for requesting relief is 30 days after the date the IRS' initial contact letter to you. Amend federal tax return The period of limitation on assessment is the amount of time, generally three years, that the IRS has from the date you filed the return to assess taxes that you owe. Amend federal tax return Innocent Spouse Relief By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Amend federal tax return Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). Amend federal tax return However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. Amend federal tax return The IRS can collect these amounts from either you or your spouse (or former spouse). Amend federal tax return You must meet all of the following conditions to qualify for innocent spouse relief. Amend federal tax return You filed a joint return. Amend federal tax return There is an understated tax on the return that is due to erroneous items (defined later) of your spouse (or former spouse). Amend federal tax return You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed (or the extent to which the understated tax existed). Amend federal tax return See Actual Knowledge or Reason To Know, later. Amend federal tax return Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax. Amend federal tax return See Indications of Unfairness for Innocent Spouse Relief , later. Amend federal tax return Innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. Amend federal tax return A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Amend federal tax return Understated Tax You have an understated tax if the IRS determined that your total tax should be more than the amount that was actually shown on your return. Amend federal tax return Erroneous Items Erroneous items are either of the following. Amend federal tax return Unreported income. Amend federal tax return This is any gross income item received by your spouse (or former spouse) that is not reported. Amend federal tax return Incorrect deduction, credit, or basis. Amend federal tax return This is any improper deduction, credit, or property basis claimed by your spouse (or former spouse). Amend federal tax return The following are examples of erroneous items. Amend federal tax return The expense for which the deduction is taken was never paid or incurred. Amend federal tax return For example, your spouse, a cash-basis taxpayer, deducted $10,000 of advertising expenses on Schedule C of your joint Form 1040, but never paid for any advertising. Amend federal tax return The expense does not qualify as a deductible expense. Amend federal tax return For example, your spouse claimed a business fee deduction of $10,000 that was for the payment of state fines. Amend federal tax return Fines are not deductible. Amend federal tax return No factual argument can be made to support the deductibility of the expense. Amend federal tax return For example, your spouse claimed $4,000 for security costs related to a home office, which were actually veterinary and food costs for your family's two dogs. Amend federal tax return Actual Knowledge or Reason To Know You knew or had reason to know of an understated tax if: You actually knew of the understated tax, or A reasonable person in similar circumstances would have known of the understated tax. Amend federal tax return Actual knowledge. Amend federal tax return   If you actually knew about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. Amend federal tax return You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. Amend federal tax return For information about the criteria for determining whether you actually knew about an erroneous item, see Actual Knowledge later under Separation of Liability Relief. Amend federal tax return Reason to know. Amend federal tax return   If you had reason to know about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. Amend federal tax return You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. Amend federal tax return   The IRS will consider all facts and circumstances in determining whether you had reason to know of an understated tax due to an erroneous item. Amend federal tax return The facts and circumstances include: The nature of the erroneous item and the amount of the erroneous item relative to other items. Amend federal tax return The financial situation of you and your spouse (or former spouse). Amend federal tax return Your educational background and business experience. Amend federal tax return The extent of your participation in the activity that resulted in the erroneous item. Amend federal tax return Whether you failed to ask, at or before the time the return was signed, about items on the return or omitted from the return that a reasonable person would question. Amend federal tax return Whether the erroneous item represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). Amend federal tax return Partial relief when a portion of erroneous item is unknown. Amend federal tax return   You may qualify for partial relief if, at the time you filed your return, you had no knowledge or reason to know of only a portion of an erroneous item. Amend federal tax return You will be relieved of the understated tax due to that portion of the item if all other requirements are met for that portion. Amend federal tax return Example. Amend federal tax return At the time you signed your joint return, you knew that your spouse did not report $5,000 of gambling winnings. Amend federal tax return The IRS examined your tax return several months after you filed it and determined that your spouse's unreported gambling winnings were actually $25,000. Amend federal tax return You established that you did not know about, and had no reason to know about, the additional $20,000 because of the way your spouse handled gambling winnings. Amend federal tax return The understated tax due to the $20,000 will qualify for innocent spouse relief if you meet the other requirements. Amend federal tax return The understated tax due to the $5,000 of gambling winnings you knew about will not qualify for relief. Amend federal tax return Indications of Unfairness for Innocent Spouse Relief The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax. Amend federal tax return The following are examples of factors the IRS will consider. Amend federal tax return Whether you received a significant benefit (defined below), either directly or indirectly, from the understated tax. Amend federal tax return Whether your spouse (or former spouse) deserted you. Amend federal tax return Whether you and your spouse have been divorced or separated. Amend federal tax return Whether you received a benefit on the return from the understated tax. Amend federal tax return For other factors, see Factors for Determining Whether To Grant Equitable Relief later under Equitable Relief. Amend federal tax return Significant benefit. Amend federal tax return   A significant benefit is any benefit in excess of normal support. Amend federal tax return Normal support depends on your particular circumstances. Amend federal tax return Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers that may be received several years after the year of the understated tax. Amend federal tax return Example. Amend federal tax return You receive money from your spouse that is beyond normal support. Amend federal tax return The money can be traced to your spouse's lottery winnings that were not reported on your joint return. Amend federal tax return You will be considered to have received a significant benefit from that income. Amend federal tax return This is true even if your spouse gives you the money several years after he or she received it. Amend federal tax return Separation of Liability Relief Under this type of relief, the understated tax (plus interest and penalties) on your joint return is allocated between you and your spouse (or former spouse). Amend federal tax return The understated tax allocated to you is generally the amount you are responsible for. Amend federal tax return This type of relief is available only for unpaid liabilities resulting from the understated tax. Amend federal tax return Refunds are not allowed. Amend federal tax return To request separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Amend federal tax return You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Amend federal tax return (Under this rule, you are no longer married if you are widowed. Amend federal tax return ) You were not a member of the same household (explained below) as the spouse with whom you filed the joint return at any time during the 12-month per- iod ending on the date you file Form 8857. Amend federal tax return Members of the same household. Amend federal tax return   You and your spouse are not members of the same household if you are living apart and are estranged. Amend federal tax return However, you and your spouse are considered members of the same household if any of the following conditions are met. Amend federal tax return You and your spouse reside in the same dwelling. Amend federal tax return You and your spouse reside in separate dwellings but are not estranged, and one of you is temporarily absent from the other's household as explained in (3) below. Amend federal tax return Either spouse is temporarily absent from the household and it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. Amend federal tax return Examples of temporary absences include absence due to imprisonment, illness, business, vacation, military service, or education. Amend federal tax return Burden of proof. Amend federal tax return   You must be able to prove that you meet all of the requirements for separation of liability relief (except actual knowledge) and that you did not transfer property to avoid tax (discussed later). Amend federal tax return You must also establish the basis for allocating the erroneous items. Amend federal tax return Limitations on Relief Even if you meet the requirements discussed previously, separation of liability relief will not be granted in the following situations. Amend federal tax return The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend federal tax return A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Amend federal tax return The IRS proves that at the time you signed your joint return, you had actual knowledge (explained below) of any erroneous items giving rise to the deficiency that were allocable to your spouse (or former spouse). Amend federal tax return For the definition of erroneous items, see Erroneous Items earlier under Innocent Spouse Relief. Amend federal tax return Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend federal tax return See Transfers of Property To Avoid Tax , later. Amend federal tax return Actual Knowledge The relief discussed here does not apply to any part of the understated tax due to your spouse's (or former spouse's) erroneous items of which you had actual knowledge. Amend federal tax return You and your spouse (or former spouse) remain jointly and severally liable for this part of the understated tax. Amend federal tax return If you had actual knowledge of only a portion of an erroneous item, the IRS will not grant relief for that portion of the item. Amend federal tax return You had actual knowledge of an erroneous item if: You knew that an item of unreported income was received. Amend federal tax return (This rule applies whether or not there was a receipt of cash. Amend federal tax return ) You knew of the facts that made an incorrect deduction or credit unallowable. Amend federal tax return For a false or inflated deduction, you knew that the expense was not incurred, or not incurred to the extent shown on the tax return. Amend federal tax return Knowledge of the source of an erroneous item is not sufficient to establish actual knowledge. Amend federal tax return Also, your actual knowledge may not be inferred when you merely had a reason to know of the erroneous item. Amend federal tax return Similarly, the IRS does not have to establish that you knew of the source of an erroneous item in order to establish that you had actual knowledge of the item itself. Amend federal tax return Your actual knowledge of the proper tax treatment of an erroneous item is not relevant for purposes of demonstrating that you had actual knowledge of that item. Amend federal tax return Neither is your actual knowledge of how the erroneous item was treated on the tax return. Amend federal tax return For example, if you knew that your spouse received dividend income, relief is not available for that income even if you did not know it was taxable. Amend federal tax return Example. Amend federal tax return Bill and Karen Green filed a joint return showing Karen's wages of $50,000 and Bill's self-employment income of $10,000. Amend federal tax return The IRS audited their return and found that Bill did not report $20,000 of self-employment income. Amend federal tax return The additional income resulted in a $6,000 understated tax, plus interest and penalties. Amend federal tax return After obtaining a legal separation from Bill, Karen filed Form 8857 to request separation of liability relief. Amend federal tax return The IRS proved that Karen actually knew about the $20,000 of additional income at the time she signed the joint return. Amend federal tax return Bill is liable for all of the understated tax, interest, and penalties because all of it was due to his unreported income. Amend federal tax return Karen is also liable for the understated tax, interest, and penalties due to the $20,000 of unreported income because she actually knew of the item. Amend federal tax return The IRS can collect the entire $6,000 plus interest and penalties from either Karen or Bill because they are jointly and individually liable for it. Amend federal tax return Factors supporting actual knowledge. Amend federal tax return   The IRS may rely on all facts and circumstances in determining whether you actually knew of an erroneous item at the time you signed the return. Amend federal tax return The following are examples of factors the IRS may use. Amend federal tax return Whether you made a deliberate effort to avoid learning about the item in order to be shielded from liability. Amend federal tax return Whether you and your spouse (or former spouse) jointly owned the property that resulted in the erroneous item. Amend federal tax return Exception for spousal abuse or domestic violence. Amend federal tax return   Even if you had actual knowledge, you may still qualify for relief if you establish that: You were the victim of spousal abuse or domestic violence before signing the return, and Because of that abuse, you did not challenge the treatment of any items on the return because you were afraid your spouse (or former spouse) would retaliate against you. Amend federal tax return   If you establish that you signed your joint return under duress (threat of harm or other form of coercion), then it is not a joint return, and you are not liable for any tax shown on that return or any tax deficiency for that return. Amend federal tax return However, you may be required to file a separate return for that tax year. Amend federal tax return For more information about duress, see the instructions for Form 8857. Amend federal tax return Transfers of Property To Avoid Tax If your spouse (or former spouse) transfers property (or the right to property) to you for the main purpose of avoiding tax or payment of tax, the tax liability allocated to you will be increased by the fair market value of the property on the date of the transfer. Amend federal tax return The increase may not be more than the entire amount of the liability. Amend federal tax return A transfer will be presumed to have as its main purpose the avoidance of tax or payment of tax if the transfer is made after the date that is 1 year before the date on which the IRS sent its first letter of proposed deficiency. Amend federal tax return This presumption will not apply if: The transfer was made under a divorce decree, separate maintenance agreement, or a written instrument incident to such an agreement, or You establish that the transfer did not have as its main purpose the avoidance of tax or payment of tax. Amend federal tax return If the presumption does not apply, but the IRS can establish that the purpose of the transfer was the avoidance of tax or payment of tax, the tax liability allocated to you will be increased as explained above. Amend federal tax return Equitable Relief If you do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law, you may still be relieved of responsibility for tax, interest, and penalties through equitable relief. Amend federal tax return Unlike innocent spouse relief or separation of liability relief, you can get equitable relief from an understated tax (defined earlier under Innocent Spouse Relief ) or an underpaid tax. Amend federal tax return An underpaid tax is an amount of tax you properly reported on your return but you have not paid. Amend federal tax return For example, your joint 2009 return shows that you and your spouse owed $5,000. Amend federal tax return You paid $2,000 with the return. Amend federal tax return You have an underpaid tax of $3,000. Amend federal tax return Conditions for Getting Equitable Relief You may qualify for equitable relief if you meet all of the following conditions. Amend federal tax return You are not eligible for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend federal tax return You have an understated tax or an underpaid tax. Amend federal tax return You did not pay the tax. Amend federal tax return However, see Refunds , later, for situations in which you are entitled to a refund of payments you made. Amend federal tax return You establish that, taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated or underpaid tax. Amend federal tax return See Factors for Determining Whether To Grant Equitable Relief, later. Amend federal tax return You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend federal tax return A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Amend federal tax return Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend federal tax return See Transfers of Property To Avoid Tax, earlier, under Separation of Liability Relief. Amend federal tax return You did not file or fail to file your return with the intent to commit fraud. Amend federal tax return The income tax liability from which you seek relief must be attributable to an item of the spouse (or former spouse) with whom you filed the joint return, unless one of the following exceptions applies: The item is attributable or partially attributable to you solely due to the operation of community property law. Amend federal tax return If you meet this exception, that item will be considered attributable to your spouse (or former spouse) for purposes of equitable relief. Amend federal tax return If the item is titled in your name, the item is presumed to be attributable to you. Amend federal tax return However, you can rebut this presumption based on the facts and circumstances. Amend federal tax return You did not know, and had no reason to know, that funds intended for the payment of tax were misappropriated by your spouse (or former spouse) for his or her benefit. Amend federal tax return If you meet this exception, the IRS will consider granting equitable relief although the underpaid tax may be attributable in part or in full to your item, and only to the extent the funds intended for payment were taken by your spouse (or former spouse). Amend federal tax return You establish that you were the victim of spousal abuse or domestic violence before signing the return, and that, as a result of the prior abuse, you did not challenge the treatment of any items on the return for fear of your spouse's (or former spouse's) retaliation. Amend federal tax return If you meet this exception, relief will be considered although the understated tax or underpaid tax may be attributable in part or in full to your item. Amend federal tax return Factors for Determining Whether To Grant Equitable Relief The IRS will consider all of the facts and circumstances in order to determine whether it is unfair to hold you responsible for the understated or underpaid tax. Amend federal tax return The following are examples of factors that the IRS will consider to determine whether to grant equitable relief. Amend federal tax return The IRS will consider all factors and weigh them appropriately. Amend federal tax return Relevant Factors The following are examples of factors that may be relevant to whether the IRS will grant equitable relief. Amend federal tax return Whether you are separated (whether legally or not) or divorced from your spouse. Amend federal tax return A temporary absence, such as an absence due to imprisonment, illness, business, vacation, military service, or education, is not considered separation for this purpose. Amend federal tax return A temporary absence is one where it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. Amend federal tax return Whether you would suffer a significant economic hardship if relief is not granted. Amend federal tax return (In other words, you would not be able to pay your reasonable basic living expenses. Amend federal tax return ) Whether you have a legal obligation under a divorce decree or agreement to pay the tax. Amend federal tax return This factor will not weigh in favor of relief if you knew or had reason to know, when entering into the divorce decree or agreement, that your former spouse would not pay the income tax liability. Amend federal tax return Whether you received a significant benefit (beyond normal support) from the underpaid tax or item causing the understated tax. Amend federal tax return (For a definition of significant benefit, see Indications of Unfairness for Innocent Spouse Relief earlier. Amend federal tax return ) Whether you have made a good faith effort to comply with federal income tax laws for the tax year for which you are requesting relief or the following years. Amend federal tax return Whether you knew or had reason to know about the items causing the understated tax or that the tax would not be paid, as explained next. Amend federal tax return Knowledge or reason to know. Amend federal tax return   In the case of an underpaid tax, the IRS will consider whether you did not know and had no reason to know that your spouse (or former spouse) would not pay the income tax liability. Amend federal tax return   In the case of an income tax liability that arose from an understated tax, the IRS will consider whether you did not know and had no reason to know of the item causing the understated tax. Amend federal tax return Reason to know of the item giving rise to the understated tax will not be weighed more heavily than other factors. Amend federal tax return Actual knowledge of the item giving rise to the understated tax, however, is a strong factor weighing against relief. Amend federal tax return This strong factor may be overcome if the factors in favor of equitable relief are particularly compelling. Amend federal tax return Reason to know. Amend federal tax return   In determining whether you had reason to know, the IRS will consider your level of education, any deceit or evasiveness of your spouse (or former spouse), your degree of involvement in the activity generating the income tax liability, your involvement in business and household financial matters, your business or financial expertise, and any lavish or unusual expenditures compared with past spending levels. Amend federal tax return Example. Amend federal tax return You and your spouse filed a joint 2009 return. Amend federal tax return That return showed you owed $10,000. Amend federal tax return You had $5,000 of your own money and you took out a loan to pay the other $5,000. Amend federal tax return You gave 2 checks for $5,000 each to your spouse to pay the $10,000 liability. Amend federal tax return Without telling you, your spouse took the $5,000 loan and spent it on himself. Amend federal tax return You and your spouse were divorced in 2010. Amend federal tax return In addition, you had no knowledge or reason to know at the time you signed the return that the tax would not be paid. Amend federal tax return These facts indicate to the IRS that it may be unfair to hold you liable for the $5,000 underpaid tax. Amend federal tax return The IRS will consider these facts, together with all of the other facts and circumstances, to determine whether to grant you equitable relief from the $5,000 underpaid tax. Amend federal tax return Factors Weighing in Favor of Equitable Relief The following are examples of factors that will weigh in favor of equitable relief, but will not weigh against equitable relief. Amend federal tax return Whether your spouse (or former spouse) abused you. Amend federal tax return Whether you were in poor mental or physical health on the date you signed the return or at the time you requested relief. Amend federal tax return Refunds If you are granted relief, refunds are: Permitted under innocent spouse relief as explained later under Limit on Amount of Refund . Amend federal tax return Not permitted under separation of liability relief. Amend federal tax return Permitted in limited circumstances under equitable relief, as explained under Refunds Under Equitable Relief. Amend federal tax return Proof Required The IRS will only refund payments you made with your own money. Amend federal tax return However, you must provide proof that you made the payments with your own money. Amend federal tax return Examples of proof are a copy of your bank statement or a canceled check. Amend federal tax return No proof is required if your individual refund was used by the IRS to pay a tax you owed on a joint tax return for another year. Amend federal tax return Refunds Under Equitable Relief In the following situations, you are eligible to receive a refund of certain payments you made. Amend federal tax return Underpaid tax. Amend federal tax return   If you are granted relief for an underpaid tax, you are eligible for a refund of separate payments that you made after July 22, 1998. Amend federal tax return However, you are not eligible for refunds of payments made with the joint return, joint payments, or payments that your spouse (or former spouse) made. Amend federal tax return For example, withholding tax and estimated tax payments cannot be refunded because they are considered made with the joint return. Amend federal tax return   The amount of the refund is subject to the limit discussed later under Limit on Amount of Refund. Amend federal tax return Understated tax. Amend federal tax return   If you are granted relief for an understated tax, you are eligible for a refund of certain payments made under an installment agreement that you entered into with the IRS, if you have not defaulted on the installment agreement. Amend federal tax return You are not in default if the IRS did not issue you a notice of default or take any action to end the installment agreement. Amend federal tax return Only installment payments made after the date you filed Form 8857 are eligible for a refund. Amend federal tax return   The amount of the refund is subject to the limit discussed next. Amend federal tax return Limit on Amount of Refund The amount of your refund is limited. Amend federal tax return Read the following chart to find out the limit. Amend federal tax return IF you file Form 8857. Amend federal tax return . Amend federal tax return . Amend federal tax return THEN the refund cannot be more than. Amend federal tax return . Amend federal tax return . Amend federal tax return Within 3 years after filing your return The part of the tax paid within 3 years (plus any extension of time for filing your return) before you filed Form 8857. Amend federal tax return After the 3-year period, but within 2 years from the time you paid the tax The tax you paid within 2 years immediately before you filed Form 8857. Amend federal tax return Filled-in Form 8857 This part explains how Janie Boulder fills out Form 8857 to request innocent spouse relief. Amend federal tax return Janie and Joe Boulder filed a joint tax return for 2007. Amend federal tax return They claimed one dependency exemption for their son Michael. Amend federal tax return Their return was adjusted by the IRS because Joe did not report a $5,000 award he won that year. Amend federal tax return Janie did not know about the award when the return was filed. Amend federal tax return They agreed to the adjustment but could not pay the additional amount due of $815 ($650 tax + $165 penalty and interest). Amend federal tax return Janie and Joe were divorced on May 13, 2009. Amend federal tax return In February 2010, Janie filed her 2009 federal income tax return as head of household. Amend federal tax return She expected a refund of $1,203. Amend federal tax return In May 2010, she received a notice informing her that the IRS had offset her refund against the $815 owed on her joint 2007 income tax return and that she had a right to file Form 8857. Amend federal tax return Janie applies the conditions listed earlier under Innocent Spouse Relief to see if she qualifies for relief. Amend federal tax return Janie meets the first and second conditions because the joint tax return they filed has an understated tax due to Joe's erroneous item. Amend federal tax return Janie believes she meets the third condition. Amend federal tax return She did not know about the award and had no reason to know about it because of the secretive way Joe conducted his financial affairs. Amend federal tax return Janie believes she meets the fourth condition. Amend federal tax return She believes it would be unfair to be held liable for the tax because she did not benefit from the award. Amend federal tax return Joe spent it on personal items for his use only. Amend federal tax return Because Janie believes she qualifies for innocent spouse relief, she first completes Part I of Form 8857 to determine if she should file the form. Amend federal tax return In Part I, she makes all entries under the Tax Year 1 column because she is requesting relief for only one year. Amend federal tax return Part I Line 1. Amend federal tax return   She enters “2007” on line 1 because this is the tax year for which she is requesting relief. Amend federal tax return Line 2. Amend federal tax return   She checks the box because she wants a refund. Amend federal tax return Note. Amend federal tax return Because the IRS used her individual refund to pay the tax owed on the joint tax return, she does not need to provide proof of payment. Amend federal tax return Line 3. Amend federal tax return   She checks the “No” box because the IRS did not use her share of a joint refund to pay Joe's past-due debts. Amend federal tax return Line 4. Amend federal tax return   She checks the “Yes” box because she filed a joint tax return for tax year 2007. Amend federal tax return Line 5. Amend federal tax return   She skips this line because she checked the “Yes” box on line 4. Amend federal tax return Part II Line 6. Amend federal tax return   She enters her name, address, social security number, county, and best daytime phone number. Amend federal tax return Part III Line 7. Amend federal tax return   She enters Joe's name, address, social security number, and best daytime phone number. Amend federal tax return Line 8. Amend federal tax return   She checks the “divorced since” box and enters the date she was divorced as “05/13/2009. Amend federal tax return ” She attaches a copy of her entire divorce decree (not Illustrated) to the form. Amend federal tax return Line 9. Amend federal tax return   She checks the box for “High school diploma, equivalent, or less,” because she had completed high school when her 2007 joint tax return was filed. Amend federal tax return Line 10. Amend federal tax return   She checks the “No” box because she was not a victim of spousal abuse or domestic violence. Amend federal tax return Line 11. Amend federal tax return   She checks the “No” box because neither she nor Joe incurred any large expenses during the year for which she wants relief. Amend federal tax return Line 12. Amend federal tax return   She checks the “Yes” box because she signed the 2007 joint tax return. Amend federal tax return Line 13. Amend federal tax return   She checks the “No” box because she did not have a mental or physical condition when the return was filed and does not have one now. Amend federal tax return Part IV Line 14. Amend federal tax return   Because she was not involved in preparing the return, she checks the box, “You were not involved in preparing the returns. Amend federal tax return ” Line 15. Amend federal tax return   She checks the box, “You did not know anything was incorrect or missing” because she did not know that Joe had received a $5,000 award. Amend federal tax return She explains this in the space provided. Amend federal tax return Line 16. Amend federal tax return   She checks the box, “You knew that person had income” because she knew Joe had income from wages. Amend federal tax return She also lists Joe's income. Amend federal tax return Under “Type of Income” she enters “wages. Amend federal tax return ” Under “Who paid it to that person,” she enters the name of Joe's employer, “Allied. Amend federal tax return ” Under “Tax Year 1” she enters the amount of Joe's wages, “$40,000. Amend federal tax return ” Because she is only requesting relief for one tax year, she leaves the entry spaces for “Tax Year 2” and “Tax Year 3” blank. Amend federal tax return Line 17. Amend federal tax return   She checks the “No” box because she did not know any amount was owed to the IRS when the 2007 return was signed. Amend federal tax return Line 18. Amend federal tax return   She checks the “No” box because, when the return was signed, she was not having financial problems. Amend federal tax return Line 19. Amend federal tax return   She checks the box, “You were not involved in handling money for the household” because Joe handled all the money for the household. Amend federal tax return She provides additional information in the space provided. Amend federal tax return Line 20. Amend federal tax return   She checks the “No” box because Joe has never transferred money or property to her. Amend federal tax return Part V Line 21. Amend federal tax return   She enters the number “1” on both the line for “Adults” and the line for “Children” because her current household consists of herself and her son. Amend federal tax return Line 22. Amend federal tax return   She enters her average monthly income for her entire household. Amend federal tax return Line 23. Amend federal tax return   She lists her assets, which are $500 for the fair market value of a car, $450 in her checking account, and $100 in her savings account. Amend federal tax return Signing and mailing Form 8857. Amend federal tax return    Janie signs and dates the form. Amend federal tax return She attaches the copy of her divorce decree (not illustrated) required by line 8. Amend federal tax return Finally, she sends the form to the IRS address or fax number shown in the instructions for Form 8857. Amend federal tax return This image is too large to be displayed in the current screen. Amend federal tax return Please click the link to view the image. Amend federal tax return Boulder's filled-in Form 8857 page 1 This image is too large to be displayed in the current screen. Amend federal tax return Please click the link to view the image. Amend federal tax return Boulder's filled-in Form 8857 page 2 This image is too large to be displayed in the current screen. Amend federal tax return Please click the link to view the image. Amend federal tax return Boulder's filled-in Form 8857 page 3 This image is too large to be displayed in the current screen. Amend federal tax return Please click the link to view the image. Amend federal tax return Boulder's filled-in Form 8857 page 4 Flowcharts The following flowcharts provide a quick way for determining whether you may qualify for relief. Amend federal tax return But do not rely on these flowcharts alone. Amend federal tax return Also read the earlier discussions. Amend federal tax return Figure A. Amend federal tax return Do You Qualify for Innocent Spouse Relief? Please click here for the text description of the image. Amend federal tax return "Do You Qualify for Innocent Spouse Relief?" Figure B. Amend federal tax return Do You Qualify for Separation of Liability Relief? Please click here for the text description of the image. Amend federal tax return "Do You Qualify for Separation of Liability Relief?" Figure C. Amend federal tax return Do You Qualify for Equitable Relief? This image is too large to be displayed in the current screen. Amend federal tax return Please click the link to view the image. Amend federal tax return "Do You Qualify for Equitable Relief?" Prev  Up  Next   Home   More Online Publications
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IRS Bars Appraisers from Valuing Facade Easements for Federal Tax Purposes for Five Years

IR-2014-31, March 19, 2014

WASHINGTON — The Internal Revenue Service today announced its Office of Professional Responsibility (OPR) has entered into a settlement agreement with a group of appraisers from the same firm accused of aiding in the understatement of federal tax liabilities by overvaluing facade easements for charitable donation purposes.

Under the settlement agreement, the appraisers admitted to violating relevant sections of Circular 230 related to due diligence and submitting accurate documents to the government.

The appraisers agreed to a five-year suspension of valuing facade easements and undertaking any appraisal services that could subject them to penalties under the Internal Revenue Code. The appraisers also agreed to abide by all applicable provisions of Circular 230.

“Appraisers need to understand that they are subject to Circular 230, and must exercise due diligence in the preparation of documents relating to federal tax matters,” said Karen L. Hawkins, Director of OPR. “Taxpayers expect advice rendered with competence and diligence that goes beyond the mere mechanical application of a rule of thumb based on conjecture and unsupported conclusions.”

Failure to comply with terms of the settlement would result in the appraiser’s disqualification, which would include a ban from presenting any evidence or testimony in administrative proceedings before the Department of the Treasury, and renders any appraisal given after disqualification without probative effect.

The appraisers prepared reports valuing facade easements donated over several tax years. On behalf of each donating taxpayer, an appraiser completed Part III, Declaration of Appraiser, of Form 8283, Noncash Charitable Contributions, certifying that the appraiser did not fraudulently or falsely overstate the value of such facade easement. In valuing the facade easements, the appraisers applied a flat percentage diminution, generally 15 percent, to the fair market values of the underlying properties prior to the easement’s donation.

Specifically, the appraisers admitted violating Circular 230, Section 10.22(a)(1), for failing to exercise due diligence in the preparation of documents relating to IRS matters, and Section 10.22(a)(2) for failing to determine the correctness of written representations made to the Department of the Treasury.

OPR’s settlement agreement with the appraisers includes a disclosure authorization that allows this press release.

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Page Last Reviewed or Updated: 19-Mar-2014

The Amend Federal Tax Return

Amend federal tax return 13. Amend federal tax return   Employment Taxes Table of Contents What's New for 2013 What's New for 2014 Reminders Important Dates for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Farm Employment Family Employees Crew Leaders Social Security and Medicare TaxesReligious exemption. Amend federal tax return Wage limit. Amend federal tax return Federal Income Tax WithholdingNew Form W-4 for 2014. Amend federal tax return Required Notice to Employees About Earned Income Credit (EIC) Reporting and Paying Social Security, Medicare, and Withheld Federal Income TaxesElectronic deposit requirement. Amend federal tax return Federal Unemployment (FUTA) TaxReporting and Paying FUTA Tax What's New for 2013 Social security and Medicare tax for 2013. Amend federal tax return  The employee tax rate for social security is 6. Amend federal tax return 2%. Amend federal tax return Previously, the employee tax rate for social security was 4. Amend federal tax return 2%. Amend federal tax return The employer tax rate for social security remains unchanged at 6. Amend federal tax return 2%. Amend federal tax return The social security wage base limit is $113,700. Amend federal tax return The Medicare tax rate is 1. Amend federal tax return 45% each for the employee and employer, unchanged from 2012. Amend federal tax return There is no wage base limit for Medicare tax. Amend federal tax return Additional Medicare Tax. Amend federal tax return  In addition to withholding Medicare tax at 1. Amend federal tax return 45%, you must withhold a 0. Amend federal tax return 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Amend federal tax return 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. Amend federal tax return Additional Medicare Tax is only imposed on the employee. Amend federal tax return There is no employer share of Additional Medicare Tax. Amend federal tax return All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. Amend federal tax return For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E), Employer's Tax Guide. Amend federal tax return For more information on Additional Medicare Tax, visit IRS. Amend federal tax return gov and enter “Additional Medicare Tax” in the search box. Amend federal tax return Leave-based donation programs to aid victims of Hurricane Sandy. Amend federal tax return  Under these programs, employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2014, to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy. Amend federal tax return The donated leave will not be included in the income or wages of the employee. Amend federal tax return The employer may deduct the cash payments as business expenses or charitable contributions. Amend federal tax return For more information, see Notice 2012-69, 2012-51 I. Amend federal tax return R. Amend federal tax return B. Amend federal tax return 712, available at www. Amend federal tax return irs. Amend federal tax return gov/irb/2012-51_IRB/ar09. Amend federal tax return html. Amend federal tax return Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans extended. Amend federal tax return  The work opportunity tax credit is now available for eligible unemployed veterans who begin work before January 1, 2014. Amend federal tax return Previously, the credit was available for unemployed veterans who began work on or after November 22, 2011, and before January 1, 2013. Amend federal tax return Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Amend federal tax return For more information, visit IRS. Amend federal tax return gov and enter “work opportunity credit” in the search box. Amend federal tax return What's New for 2014 Social security and Medicare tax for 2014. Amend federal tax return  The employee and employer tax rates for social security and the maximum amount of wages subject to social security tax for 2014 will be discussed in Publication 51 (Circular A), Agricultural Employer's Tax Guide (For use in 2014). Amend federal tax return The Medicare tax rate for 2014 will also be discussed in Publication 51 (Circular A) (For use in 2014). Amend federal tax return There is no limit on the amount of wages subject to Medicare tax. Amend federal tax return Reminders Additional employment tax information for farmers. Amend federal tax return  See Publication 51 (Circular A) for more detailed guidance on employment taxes. Amend federal tax return For the latest information about employment tax developments impacting farmers, go to www. Amend federal tax return irs. Amend federal tax return gov/pub51. Amend federal tax return Correcting a previously filed Form 943. Amend federal tax return  If you discover an error on a previously filed Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, make the correction using Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. Amend federal tax return Form 943-X is filed separately from Form 943. Amend federal tax return For more information on correcting Form 943, see the Instructions for Form 943-X. Amend federal tax return Federal tax deposits must be made by electronic funds transfer. Amend federal tax return  You must use electronic funds transfer to make all federal tax deposits. Amend federal tax return Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). Amend federal tax return 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. Amend federal tax return Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Amend federal tax return EFTPS is a free service provided by the Department of Treasury. Amend federal tax return Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Amend federal tax return For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Amend federal tax return To get more information about EFTPS or to enroll in EFTPS, visit www. Amend federal tax return eftps. Amend federal tax return gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Amend federal tax return Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Amend federal tax return Important Dates for 2014 You should take the action indicated by the dates listed. Amend federal tax return See By February 15 and On February 16 for Form W-4, Employee's Withholding Allowance Certificate, information. Amend federal tax return Due dates for deposits of withheld federal income taxes, social security taxes, and Medicare taxes are not listed here. Amend federal tax return For these dates, see Publication 509, Tax Calendars (For use in 2014). Amend federal tax return Note. Amend federal tax return  If any date shown below for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. Amend federal tax return A statewide legal holiday delays a filing or furnishing due date only if the IRS office where you are required to file a return or furnish a form is located in that state. Amend federal tax return For any due date, you will meet the “file” or “furnish” date requirement if the envelope containing the tax return or form is properly addressed, contains sufficient postage, and is postmarked by the U. Amend federal tax return S. Amend federal tax return Postal Service by the due date, or sent by an IRS-designated delivery service by the due date. Amend federal tax return See Private delivery services in Publication 51 (Circular A). Amend federal tax return Federal tax deposits can only be made by electronic funds transfer and are governed by legal holidays in the District of Columbia. Amend federal tax return Statewide holidays no longer apply. Amend federal tax return For a list of legal holidays that delay the due date of a federal tax deposit, see section 7 of Publication 51 (Circular A). Amend federal tax return Fiscal year taxpayers. Amend federal tax return  The due dates listed below apply whether you use a calendar or a fiscal year. Amend federal tax return By January 31. Amend federal tax return   File Form 943 with the IRS. Amend federal tax return If you deposited all Form 943 taxes when due, you have 10 additional days to file. Amend federal tax return Furnish each employee with a completed Form W-2, Wage and Tax Statement. Amend federal tax return Furnish each recipient to whom you paid $600 or more in nonemployee compensation with a completed Form 1099 (for example, Form 1099-MISC). Amend federal tax return File Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. Amend federal tax return If you deposited all the FUTA tax when due, you have 10 additional days to file. Amend federal tax return File Form 945, Annual Return of Withheld Federal Income Tax, with the IRS to report any nonpayroll income tax withheld during 2013. Amend federal tax return If you deposited all Form 945 taxes when due, you have 10 additional days to file. Amend federal tax return By February 15. Amend federal tax return  Ask for a new Form W-4 or Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, from each employee who claimed exemption from federal income tax withholding last year. Amend federal tax return On February 16. Amend federal tax return  Any Form W-4 claiming exemption from withholding for the previous year has now expired. Amend federal tax return Begin withholding for any employee who previously claimed exemption from withholding but has not given you a new Form W-4 for the current year. Amend federal tax return If the employee does not give you a new Form W-4, withhold taxes based on the last valid Form W-4 you have for the employee that does not claim exemption from withholding or, if one does not exist, as if he or she is single with zero withholding allowances. Amend federal tax return If the employee furnishes a new Form W-4 claiming exemption from withholding after February 15, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. Amend federal tax return By February 28. Amend federal tax return   File paper Forms 1099 and 1096. Amend federal tax return File Copy A of all paper Forms 1099 with Form 1096, Annual Summary and Transmittal of U. Amend federal tax return S. Amend federal tax return Information Returns, with the IRS. Amend federal tax return For electronically filed returns, see By March 31 below. Amend federal tax return File paper Forms W-2 and W-3. Amend federal tax return File Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration (SSA). Amend federal tax return For electronically filed returns, see By March 31 below. Amend federal tax return By March 31. Amend federal tax return   File electronic Forms W-2 and 1099. Amend federal tax return File electronic Forms W-2 with the SSA and Forms 1099 with the IRS. Amend federal tax return For more information on reporting Form W-2 information to the SSA electronically, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. Amend federal tax return socialsecurity. Amend federal tax return gov/employer. Amend federal tax return For information on filing information returns electronically with the IRS, see Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. Amend federal tax return By April 30, July 31, October 31, and January 31. Amend federal tax return   Deposit FUTA taxes. Amend federal tax return Deposit FUTA tax due if it is more than $500. Amend federal tax return Before December 1. Amend federal tax return  Remind employees to submit a new Form W-4 if their withholding allowances have changed or will change for the next year. Amend federal tax return Introduction You are generally required to withhold federal income tax from the wages of your employees. Amend federal tax return You may also be subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA) and federal unemployment tax under the Federal Unemployment Tax Act (FUTA). Amend federal tax return You must also withhold Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Amend federal tax return This chapter includes information about these taxes. Amend federal tax return You must also pay self-employment tax on your net earnings from farming. Amend federal tax return See chapter 12 for information on self-employment tax. Amend federal tax return Topics - This chapter discusses: Farm employment, Family employees, Crew leaders, Social security and Medicare taxes, Additional Medicare Tax withholding, Federal income tax withholding, Reporting and paying social security, Medicare, and withheld federal income taxes, and FUTA tax. Amend federal tax return Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 51 (Circular A), Agricultural Employer's Tax Guide 926 Household Employer's Tax Guide Form (and Instructions) W-2 Wage and Tax Statement W-4 Employee's Withholding Allowance Certificate W-9 Request for Taxpayer Identification Number and Certification 940 Employer's Annual Federal Unemployment (FUTA) Tax Return 943 Employer's Annual Federal Tax Return for Agricultural Employees 943-X Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund See chapter 16 for information about getting publications and forms. Amend federal tax return Farm Employment In general, you are an employer of farmworkers if your employees do any of the following types of work. Amend federal tax return Raising or harvesting agricultural or horticultural products on a farm, including raising and feeding of livestock. Amend federal tax return Operating, managing, conserving, improving, or maintaining your farm and its tools and equipment. Amend federal tax return Services performed in salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor). Amend federal tax return Handling, processing, or packaging any agricultural or horticultural commodity if you produced more than half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity). Amend federal tax return Work related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Amend federal tax return For more information, see Publication 51 (Circular A). Amend federal tax return 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. Amend federal tax return This is so even when you give the employee freedom of action. Amend federal tax return What matters is that you have the right to control the details of how the services are performed. Amend federal tax return You are responsible for withholding and paying employment taxes for your employees. Amend federal tax return You are also required to file employment tax returns. Amend federal tax return These requirements do not apply to amounts that you pay to independent contractors. Amend federal tax return See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Amend federal tax return If you employ a family of workers, each worker subject to your control (not just the head of the family) is an employee. Amend federal tax return Special rules apply to crew leaders. Amend federal tax return See Crew Leaders , later. Amend federal tax return Employer identification number (EIN). Amend federal tax return   If you have employees, you must have an EIN. Amend federal tax return If you do not have an EIN, you may apply for one online. Amend federal tax return Go to IRS. Amend federal tax return gov and click on the Apply for an EIN Online link under Tools. Amend federal tax return You may also apply for an EIN by calling 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Amend federal tax return The hours of operation for both numbers are Monday–Friday form 7:00 a. Amend federal tax return m. Amend federal tax return –7:00 p. Amend federal tax return m. Amend federal tax return local time (Alaska and Hawaii follow Pacific time). Amend federal tax return You can also fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Amend federal tax return Employee's social security number (SSN). Amend federal tax return   An employee who does not have an SSN should submit Form SS-5, Application for a Social Security Card, to the Social Security Administration (SSA). Amend federal tax return Form SS-5 is available from any SSA office or by calling 1-800-772-1213 (operates 24 hours per day). Amend federal tax return It is also available from the SSA's website at www. Amend federal tax return socialsecurity. Amend federal tax return gov. Amend federal tax return   The employee must furnish evidence of age, identity, and U. Amend federal tax return S. Amend federal tax return citizenship or lawful immigration status permitting employment with the Form SS-5. Amend federal tax return An employee who is age 18 or older must appear in person with this evidence at an SSA office. Amend federal tax return Form I-9. Amend federal tax return    You must verify that each new employee is legally eligible to work in the United States. Amend federal tax return This includes completing the Form I-9, Employment Eligibility Verification. Amend federal tax return Form I-9 is available from the U. Amend federal tax return S. Amend federal tax return Citizenship and Immigration Services (USCIS) offices or by calling the Bureau of Citizenship and Immigration Services Forms Request Line at 1-800-870-3676. Amend federal tax return Form I-9 is also available from the USCIS website at www. Amend federal tax return uscis. Amend federal tax return gov. Amend federal tax return You can also contact the USCIS at 1-800-375-5283 for more information. Amend federal tax return New hire reporting. Amend federal tax return   You are required to report any new employee to a designated state new hire registry. Amend federal tax return Many states accept a copy of Form W-4 with employer information added. Amend federal tax return Visit the Office of Child Support Enforcement website at www. Amend federal tax return acf. Amend federal tax return hhs. Amend federal tax return gov/programs/cse/newhire for more information. Amend federal tax return Family Employees Generally, the wages you pay to family members who are your employees are subject to employment taxes. Amend federal tax return However, certain exemptions may apply to wages paid to your child, spouse, or parent. Amend federal tax return Exemptions for your child. Amend federal tax return   Payments for the services of your child under age 18 who works for you in your trade or business (including a farm) are not subject to social security and Medicare taxes. Amend federal tax return However, see Nonexempt services of a child or spouse , later. Amend federal tax return Payments for the services of your child under age 21 employed by you in other than a trade or business, such as payments for household services in your home, are also not subject to social security or Medicare taxes. Amend federal tax return Payments for the services of your child under age 21 employed by you, whether or not in your trade or business, are not subject to FUTA tax. Amend federal tax return Although not subject to social security, Medicare, or FUTA tax, the child's wages still may be subject to federal income tax withholding. Amend federal tax return Exemptions for your spouse. Amend federal tax return   Payments for the services of your spouse who works for you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes, but not FUTA tax. Amend federal tax return   Payments for the services of your spouse employed by you in other than a trade or business, such as payments for household services in your home, are not subject to social security, Medicare, or FUTA taxes. Amend federal tax return Nonexempt services of a child or spouse. Amend federal tax return   Payments for the services of your child or spouse are subject to federal income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for any of the following entities. Amend federal tax return A corporation, even if it is controlled by you. Amend federal tax return A partnership, even if you are a partner. Amend federal tax return This does not apply to wages paid to your child if each partner is a parent of the child. Amend federal tax return An estate or trust, even if it is the estate of a deceased parent. Amend federal tax return In these situations, the child or spouse is considered to work for the corporation, partnership, or estate, not you. Amend federal tax return Exemptions for your parent. Amend federal tax return   Payments for the services of your parent employed by you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes. Amend federal tax return Social security and Medicare taxes do not apply to wages paid to your parent for services not in your trade or business, but they do apply to payments for household services in your home if both the following conditions are satisfied. Amend federal tax return 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. Amend federal tax return 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. Amend federal tax return   Wages you pay to your parent are not subject to FUTA tax, regardless of the type of services provided. Amend federal tax return Qualified joint venture. Amend federal tax return   If spouses elect to be treated as a qualified joint venture instead of a partnership, either spouse may report and pay the employment taxes due on the wages paid to employees using the EIN of that spouse's sole proprietorship. Amend federal tax return For more information about qualified joint ventures, see chapter 12. Amend federal tax return Crew Leaders If farmworkers are provided by a crew leader, the crew leader may be the employer of the workers. Amend federal tax return Social security and Medicare taxes. Amend federal tax return   For social security and Medicare tax purposes, the crew leader is the employer of the workers if both of the following requirements are met. Amend federal tax return The crew leader pays (either on his or her own behalf or on behalf of the farmer) the workers for their farm labor. Amend federal tax return The crew leader has not entered into a written agreement with the farmer under which the crew leader is designated as an employee of the farmer. Amend federal tax return Federal income tax withholding. Amend federal tax return   If the crew leader is the employer for social security and Medicare tax purposes, the crew leader is the employer for federal income tax withholding purposes. Amend federal tax return Federal unemployment (FUTA) tax. Amend federal tax return   For FUTA tax purposes, the crew leader is the employer of the workers if, in addition to the earlier requirements, either of the following requirements are met. Amend federal tax return The crew leader is registered under the Migrant and Seasonal Agricultural Worker Protection Act. Amend federal tax return Substantially all crew members operate or maintain mechanized equipment provided by the crew leader as part of the service to the farmer. Amend federal tax return   The farmer is the employer of workers furnished by a crew leader in all other situations. Amend federal tax return In addition, the farmer is the employer of workers furnished by a registered crew leader if the workers are the employees of the farmer under the common-law test. Amend federal tax return For example, some farmers employ individuals to recruit farmworkers exclusively for them. Amend federal tax return Although these individuals may be required to register under the Migrant and Seasonal Agricultural Worker Protection Act, the workers are employed directly by the farmer. Amend federal tax return The farmer is the employer in these cases. Amend federal tax return For information about common-law employees, see section 1 of Publication 15-A. Amend federal tax return For information about crew leaders, see the Department of Labor website at www. Amend federal tax return dol. Amend federal tax return gov/whd/regs/compliance/whdfs49. Amend federal tax return htm. Amend federal tax return Social Security and Medicare Taxes All cash wages you pay to an employee during the year for farmwork are subject to social security and Medicare taxes if you meet either of the following tests. Amend federal tax return You pay the employee $150 or more in cash wages (count all wages paid on a time, piecework, or other basis) during the year for farmwork (the $150 test). Amend federal tax return The $150 test applies separately to each farmworker that you employ. Amend federal tax return If you employ a family of workers, each member is treated separately. Amend federal tax return Do not count wages paid by other employers. Amend federal tax return You pay cash and noncash wages of $2,500 or more during the year to all your employees for farmwork (the $2,500 test). Amend federal tax return If the $2,500 test for the group is not met, the $150 test for an employee still applies. Amend federal tax return Exceptions. Amend federal tax return   Annual cash wages of less than $150 you pay to a seasonal farmworker are not subject to social security and Medicare taxes, even if you pay $2,500 or more to all your farmworkers. Amend federal tax return However, these wages count toward the $2,500 test for determining whether other farmworkers' wages are subject to social security and Medicare taxes. Amend federal tax return   A seasonal farmworker is a worker who: Works as a hand-harvest laborer, Is paid piece rates in an operation usually paid on this basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Worked in agriculture less than 13 weeks in the preceding calendar year. Amend federal tax return   See Family Employees , earlier, for certain exemptions from social security and Medicare taxes that apply to your child, spouse, and parent. Amend federal tax return Religious exemption. Amend federal tax return   An exemption from social security and Medicare taxes is available to members of a recognized religious group or division opposed to public insurance. Amend federal tax return This exemption is available only if both the employee and the employer are members of the group or division. Amend federal tax return   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Amend federal tax return Cash wages. Amend federal tax return   Only cash wages paid to farmworkers are subject to social security and Medicare taxes. Amend federal tax return Cash wages include checks, money orders, and any kind of money or cash. Amend federal tax return   Only cash wages subject to social security and Medicare taxes are credited to your employees for social security benefit purposes. Amend federal tax return Payments not subject to these taxes, such as commodity wages, do not contribute to your employees' social security coverage. Amend federal tax return For information about social security benefits, contact the SSA at 1-800-772-1213 or online at www. Amend federal tax return socialsecurity. Amend federal tax return gov. Amend federal tax return Noncash wages. Amend federal tax return    Noncash wages include food, lodging, clothing, transportation passes, and other goods and services. Amend federal tax return Noncash wages paid to farmworkers, including commodity wages, are not subject to social security and Medicare taxes. Amend federal tax return However, they are subject to these taxes if the substance of the transaction is a cash payment. Amend federal tax return For information on lodging provided as a condition of employment, see Publication 15-B. Amend federal tax return   Report the value of noncash wages in box 1 of Form W-2 together with cash wages. Amend federal tax return Do not show noncash wages in box 3 or in box 5, (unless the substance of the transaction is a cash payment). Amend federal tax return Tax rates and social security wage limit. Amend federal tax return   For 2013, the employer and the employee will pay the following taxes. Amend federal tax return The employer and employee each pay 6. Amend federal tax return 2% of cash wages for social security tax (old-age, survivors, and disability insurance). Amend federal tax return The employer and employee each pay 1. Amend federal tax return 45% of cash wages for Medicare tax (hospital insurance). Amend federal tax return The employee pays 0. Amend federal tax return 9% of cash wages in excess of $200,000 for Additional Medicare Tax. Amend federal tax return Wage limit. Amend federal tax return   The limit on wages subject to the social security tax for 2013 is $113,700. Amend federal tax return There is no limit on wages subject to the Medicare tax. Amend federal tax return All covered wages are subject to the Medicare tax. Amend federal tax return Additionally, all wages in excess of $200,000 are subject to Additional Medicare Tax withholding. Amend federal tax return Paying employee's share. Amend federal tax return   If you would rather pay the employee's share of social security and Medicare taxes without deducting it from his or her wages, you may do so. Amend federal tax return It is additional income to the employee. Amend federal tax return You must include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages (boxes 3 and 5 on Form W-2) or as wages for federal unemployment (FUTA) tax purposes. Amend federal tax return Example. Amend federal tax return Jane operates a small family fruit farm. Amend federal tax return She employs day laborers in the picking season to enable her to timely get her crop to market. Amend federal tax return She does not deduct the employees' share of social security and Medicare taxes from their pay; instead, she pays it on their behalf. Amend federal tax return When her accountant, Susan, prepares the employees' Forms W-2, she adds each employee's share of social security and Medicare taxes paid by Jane to the employee's wage income (box 1 of Form W-2), but does not include it in box 3 (social security wages) or box 5 (Medicare wages and tips). Amend federal tax return For 2013, Jane paid Mary $1,000 during the year. Amend federal tax return Susan enters $1,076. Amend federal tax return 50 in box 1 of Mary's Form W-2 ($1,000 wages plus $76. Amend federal tax return 50 social security and Medicare taxes paid for Mary). Amend federal tax return She enters $1,000 in boxes 3 and 5 of Mary's Form W-2. Amend federal tax return Additional Medicare Tax. Amend federal tax return   In addition to withholding Medicare tax at 1. Amend federal tax return 45%, you must withhold a 0. Amend federal tax return 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Amend federal tax return 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. Amend federal tax return Additional Medicare Tax is only imposed on the employee. Amend federal tax return There is no employer share of Additional Medicare Tax. Amend federal tax return All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. Amend federal tax return   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). Amend federal tax return For more information on Additional Medicare Tax, visit IRS. Amend federal tax return gov and enter “Additional Medicare Tax” in the search box. Amend federal tax return Federal Income Tax Withholding If the cash wages you pay to farmworkers are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. Amend federal tax return Although noncash wages are subject to federal income tax, withhold income tax only if you and the employee agree to do so. Amend federal tax return The amount to withhold is figured on gross wages without taking out social security and Medicare taxes, union dues, insurance, etc. Amend federal tax return Form W-4. Amend federal tax return   Generally, the amount of federal income tax you withhold is based on the employee's marital status and withholding allowances claimed on the employee's Form W-4. Amend federal tax return In general, an employee can claim withholding allowances on Form W-4 equal to the number of exemptions the employee will be entitled to claim on his or her tax return. Amend federal tax return An employee may also be able to claim a special withholding allowance and allowances for estimated deductions and credits. Amend federal tax return   Do not withhold federal income tax from the wages of an employee who, by filing Form W-4, certifies that he or she had no federal income tax liability last year and anticipates no liability for the current year. Amend federal tax return   You should give each new employee a Form W-4 as soon as you hire the employee. Amend federal tax return For Spanish-speaking employees, you may use Formulario W-4(SP) which is the Spanish translation of Form W-4. Amend federal tax return Have the employee complete and return the form to you before the first payday. Amend federal tax return If the employee does not return the completed form, you must withhold federal income tax as if the employee is single and claims no withholding allowances. Amend federal tax return New Form W-4 for 2014. Amend federal tax return   You should make the 2014 Form W-4 available to your employees and encourage them to check their income tax withholding for 2014. Amend federal tax return Those employees who owed a large amount of tax or received a large refund for 2013 may want to submit a new Form W-4. Amend federal tax return You cannot accept substitute Forms W-4 developed by employees. Amend federal tax return How to figure withholding. Amend federal tax return   You can use one of several methods to determine the amount to withhold. Amend federal tax return The methods are described in Publication 51 (Circular A), which contains tables showing the correct amount of federal income tax you should withhold. Amend federal tax return Publication 51 (Circular A) also contains additional information about federal income tax withholding. Amend federal tax return Nonemployee compensation. Amend federal tax return   Generally, you do not have to withhold federal income tax on payments for services to individuals who are not your employees. Amend federal tax return However, you may be required to report these payments on Form 1099-MISC, Miscellaneous Income, and to withhold under the backup withholding rules. Amend federal tax return For more information, see the Instructions for Form 1099-MISC. Amend federal tax return Required Notice to Employees About Earned Income Credit (EIC) You must provide notification about EIC to each employee who worked for you at any time during the year and from whom you did not withhold any federal income tax. Amend federal tax return However, you do not have to notify employees who claim exemption from federal income tax withholding on Form W-4. Amend federal tax return You meet the notification requirement by giving each employee any of the following. Amend federal tax return Form W-2, which contains EIC notification on the back of Copy B. Amend federal tax return A substitute Form W-2 with the exact EIC wording shown on the back of copy B of Form W-2. Amend federal tax return Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). Amend federal tax return Your own written statement with the exact wording of Notice 797. Amend federal tax return For more information, see Publication 51 (Circular A). Amend federal tax return Reporting and Paying Social Security, Medicare, and Withheld Federal Income Taxes You must withhold federal income, social security, and Medicare taxes required to be withheld from the salaries and wages of your employees. Amend federal tax return You are liable for the payment of these taxes to the federal government whether or not you collect them from your employees. Amend federal tax return If, for example, you withhold less than the correct tax from an employee's wages, you are still liable for the full amount. Amend federal tax return You must also pay the employer's share of social security and Medicare taxes. Amend federal tax return There is no employer share of Additional Medicare Tax. Amend federal tax return Form 943. Amend federal tax return   Report withheld federal income tax, social security tax, and Medicare tax on Form 943. Amend federal tax return Your 2013 Form 943 is due by January 31, 2014 (or February 10, 2014, if you made deposits on time in full payment of the taxes due for the year). Amend federal tax return Deposits. Amend federal tax return   Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld during the year. Amend federal tax return However, you may make payments with Form 943 instead of depositing them if you accumulate less than a $2,500 tax liability (“Total taxes after adjustments” line on Form 943) during the year and you pay in full with a timely filed return. Amend federal tax return   For more information on deposit rules, see Publication 51 (Circular A). Amend federal tax return Electronic deposit requirement. Amend federal tax return   You must use electronic funds transfer to make all federal tax deposits. Amend federal tax return Generally, electronic funds transfers are made using EFTPS. Amend federal tax return 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. Amend federal tax return Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Amend federal tax return EFTPS is a free service provided by the Department of Treasury. Amend federal tax return Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Amend federal tax return   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Amend federal tax return To get more information about EFTPS or to enroll in EFTPS, visit www. Amend federal tax return eftps. Amend federal tax return gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Amend federal tax return Additional information about EFTPS is also available in Publication 966. Amend federal tax return Form W-2. Amend federal tax return   By January 31, you must furnish each employee a Form W-2 showing total wages for the previous year and total federal income tax, social security tax, and Medicare tax withheld. Amend federal tax return However, if an employee stops working for you and requests the form earlier, you must give it to the employee within 30 days of the later of the following dates. Amend federal tax return The date the employee requests the form. Amend federal tax return The date you make your final payment of wages to the employee. Amend federal tax return Compensation paid to H-2A visa holders. Amend federal tax return   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. Amend federal tax return Compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes, and therefore should not be reported as wages subject to social security tax (line 2), Medicare tax (line 4), or Additional Medicare Tax (line 6) on Form 943, and should not be reported as social security wages (box 3) or Medicare wages (box 5) on Form W-2. Amend federal tax return   An employer is not required to withhold federal income tax from compensation it pays to an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. Amend federal tax return In this case, the worker must give the employer a completed Form W-4. Amend federal tax return Federal income tax withheld should be reported on Form 943, line 8, and in box 2 of Form W-2. Amend federal tax return   These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. Amend federal tax return For the 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. Amend federal tax return Trust fund recovery penalty. Amend federal tax return   If you are responsible for withholding, accounting for, depositing, or paying federal withholding taxes and willfully fail to do so, you can be held liable for a penalty equal to the withheld tax not paid. Amend federal tax return A responsible person can be an officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. Amend federal tax return A trustee or agent with authority over the funds of the business can also be held responsible for the penalty. Amend federal tax return   Willfully means voluntarily, consciously, and intentionally. Amend federal tax return Paying other expenses of the business instead of the taxes due is acting willfully. Amend federal tax return Consequences of treating an employee as an independent contractor. Amend federal tax return   If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker. Amend federal tax return See Publication 15-A for more information. Amend federal tax return Federal Unemployment (FUTA) Tax You must pay FUTA tax if you meet either of the following tests. Amend federal tax return You paid cash wages of $20,000 or more to farmworkers in any calendar quarter during the current or preceding calendar year. Amend federal tax return You employed 10 or more farmworkers for some part of at least 1 day during any 20 or more different calendar weeks during the current or preceding calendar year. Amend federal tax return These rules do not apply to exempt services of your spouse, your parents, or your children under age 21. Amend federal tax return See Family Employees , earlier. Amend federal tax return Alien farmworkers. Amend federal tax return   Wages paid to aliens admitted on a temporary basis to the United States to perform farmwork (also known as “H-2A visa workers”) are exempt from FUTA tax. Amend federal tax return However, include your employment of these workers and the wages you paid them to determine whether you meet either of the above tests. Amend federal tax return Commodity wages. Amend federal tax return   Payments in kind for farm labor are not cash wages. Amend federal tax return Do not count them to figure whether you are subject to FUTA tax or to figure how much tax you owe. Amend federal tax return Tax rate and credit. Amend federal tax return   The gross FUTA tax rate is 6. Amend federal tax return 0% of the first $7,000 cash wages you pay to each employee during the year. Amend federal tax return However, you are given a credit of up to 5. Amend federal tax return 4% of the first $7,000 cash wages you pay to each employee for the state unemployment tax you pay. Amend federal tax return If your state tax rate (experience rate) is less than 5. Amend federal tax return 4%, you may still be allowed the full 5. Amend federal tax return 4% credit. Amend federal tax return   If you do not pay the state tax, you cannot take the credit. Amend federal tax return If you are exempt from state unemployment tax for any reason, the full 6. Amend federal tax return 0% rate applies. Amend federal tax return See the Instructions for Form 940 for additional information. Amend federal tax return More information. Amend federal tax return   For more information on FUTA tax, see Publication 51 (Circular A). Amend federal tax return Reporting and Paying FUTA Tax The FUTA tax is imposed on you as the employer. Amend federal tax return It must not be collected or deducted from the wages of your employees. Amend federal tax return Form 940. Amend federal tax return   Report FUTA tax on Form 940. Amend federal tax return The 2013 Form 940 is due January 31, 2014 (or February 10, 2014, if you timely deposited the full amount of your 2013 FUTA tax). Amend federal tax return Deposits. Amend federal tax return   If at the end of any calendar quarter you owe, but have not yet deposited, more than $500 in FUTA tax for the year, you must make a deposit by the end of the following month. Amend federal tax return If the undeposited tax is $500 or less at the end of a quarter, you do not have to deposit it. Amend federal tax return You can add it to the tax for the next quarter. Amend federal tax return If the total undeposited tax is more than $500 at the end of the next quarter, a deposit will be required. Amend federal tax return If the total undeposited tax at the end of the 4th quarter is $500 or less, you can either make a deposit or pay it with your return by the January 31, 2014, due date. Amend federal tax return Electronic deposit requirement. Amend federal tax return   You must use electronic funds transfer to make all federal tax deposits. Amend federal tax return Generally, electronic funds transfers are made using EFTPS. Amend federal tax return 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. Amend federal tax return Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Amend federal tax return EFTPS is a free service provided by the Department of Treasury. Amend federal tax return Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Amend federal tax return   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Amend federal tax return To get more information about EFTPS or to enroll in EFTPS, visit www. Amend federal tax return eftps. Amend federal tax return gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Amend federal tax return Additional information about EFTPS is also available in Publication 966. Amend federal tax return Prev  Up  Next   Home   More Online Publications