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Publication 17, Your Federal Income Tax

This publication covers the general rules for filing a federal income tax return. It supplements the information contained in your tax form instruction booklet. It explains the tax law to make sure you pay only the tax you owe and no more.


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Page Last Reviewed or Updated: 28-Jan-2014

The Can I Amend My Taxes Online

Can i amend my taxes online Publication 15 - Main Content Table of Contents 1. Can i amend my taxes online Employer Identification Number (EIN) 2. Can i amend my taxes online Who Are Employees?Relief provisions. Can i amend my taxes online Business Owned and Operated by Spouses 3. Can i amend my taxes online Family Employees 4. Can i amend my taxes online Employee's Social Security Number (SSN)Registering for SSNVS. Can i amend my taxes online 5. Can i amend my taxes online Wages and Other CompensationAccountable plan. Can i amend my taxes online Nonaccountable plan. Can i amend my taxes online Per diem or other fixed allowance. Can i amend my taxes online 50% test. Can i amend my taxes online Health Savings Accounts and medical savings accounts. Can i amend my taxes online Nontaxable fringe benefits. Can i amend my taxes online When fringe benefits are treated as paid. Can i amend my taxes online Valuation of fringe benefits. Can i amend my taxes online Withholding on fringe benefits. Can i amend my taxes online Depositing taxes on fringe benefits. Can i amend my taxes online 6. Can i amend my taxes online TipsOrdering rule. Can i amend my taxes online 7. Can i amend my taxes online Supplemental Wages 8. Can i amend my taxes online Payroll Period 9. Can i amend my taxes online Withholding From Employees' WagesIncome Tax Withholding Social Security and Medicare Taxes Part-Time Workers 10. Can i amend my taxes online Required Notice to Employees About the Earned Income Credit (EIC) 11. Can i amend my taxes online Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties 12. Can i amend my taxes online Filing Form 941 or Form 944 13. Can i amend my taxes online Reporting Adjustments to Form 941 or Form 944Current Period Adjustments Prior Period Adjustments Wage Repayments 14. Can i amend my taxes online Federal Unemployment (FUTA) TaxSuccessor employer. Can i amend my taxes online Household employees. Can i amend my taxes online When to deposit. Can i amend my taxes online Household employees. Can i amend my taxes online Electronic filing by reporting agents. Can i amend my taxes online 16. Can i amend my taxes online How To Use the Income Tax Withholding TablesWage Bracket Method Percentage Method Alternative Methods of Income Tax Withholding How To Get Tax Help 1. Can i amend my taxes online Employer Identification Number (EIN) If you are required to report employment taxes or give tax statements to employees or annuitants, you need an EIN. Can i amend my taxes online The EIN is a nine-digit number the IRS issues. Can i amend my taxes online The digits are arranged as follows: 00-0000000. Can i amend my taxes online It is used to identify the tax accounts of employers and certain others who have no employees. Can i amend my taxes online Use your EIN on all of the items you send to the IRS and SSA. Can i amend my taxes online For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN. Can i amend my taxes online If you do not have an EIN, you may apply for one online. Can i amend my taxes online Go to the IRS. Can i amend my taxes online gov and click on the Apply for an EIN Online link under Tools. Can i amend my taxes online You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Can i amend my taxes online Do not use an SSN in place of an EIN. Can i amend my taxes online You should have only one EIN. Can i amend my taxes online If you have more than one and are not sure which one to use, call 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Can i amend my taxes online Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. Can i amend my taxes online The IRS will tell you which number to use. Can i amend my taxes online If you took over another employer's business (see Successor employer in section 9), do not use that employer's EIN. Can i amend my taxes online If you have applied for an EIN but do not have your EIN by the time a return is due, file a paper return and write “Applied For” and the date you applied for it in the space shown for the number. Can i amend my taxes online 2. Can i amend my taxes online Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. Can i amend my taxes online See Publication 15-A for details on statutory employees and nonemployees. Can i amend my taxes online Employee status under common law. Can i amend my taxes online   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. Can i amend my taxes online This is so even when you give the employee freedom of action. Can i amend my taxes online What matters is that you have the right to control the details of how the services are performed. Can i amend my taxes online See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Can i amend my taxes online   Generally, people in business for themselves are not employees. Can i amend my taxes online For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. Can i amend my taxes online However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. Can i amend my taxes online   If an employer-employee relationship exists, it does not matter what it is called. Can i amend my taxes online The employee may be called an agent or independent contractor. Can i amend my taxes online It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Can i amend my taxes online Statutory employees. Can i amend my taxes online   If someone who works for you is not an employee under the common law rules discussed earlier, do not withhold federal income tax from his or her pay, unless backup withholding applies. Can i amend my taxes online Although the following persons may not be common law employees, they are considered employees by statute for social security, Medicare, and FUTA tax purposes under certain conditions. Can i amend my taxes online An agent (or commission) driver who delivers food, beverages (other than milk), laundry, or dry cleaning for someone else. Can i amend my taxes online A full-time life insurance salesperson who sells primarily for one company. Can i amend my taxes online A homeworker who works by guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. Can i amend my taxes online A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. Can i amend my taxes online The orders must be for merchandise for resale or supplies for use in the customer's business. Can i amend my taxes online The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. Can i amend my taxes online    Statutory nonemployees. Can i amend my taxes online   Direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. Can i amend my taxes online They are generally treated as self-employed for all federal tax purposes, including income and employment taxes. Can i amend my taxes online H-2A agricultural workers. Can i amend my taxes online   On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. Can i amend my taxes online Treating employees as nonemployees. Can i amend my taxes online   You will generally be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold these taxes because you treated an employee as a nonemployee. Can i amend my taxes online You may be able to calculate your liability using special section 3509 rates for the employee share of social security and Medicare taxes and the federal income tax withholding. Can i amend my taxes online The applicable rates depend on whether you filed required Forms 1099. Can i amend my taxes online You cannot recover the employee share of social security, or Medicare tax, or income tax withholding from the employee if the tax is paid under section 3509. Can i amend my taxes online You are liable for the income tax withholding regardless of whether the employee paid income tax on the wages. Can i amend my taxes online You continue to owe the full employer share of social security and Medicare taxes. Can i amend my taxes online The employee remains liable for the employee share of social security and Medicare taxes. Can i amend my taxes online See Internal Revenue Code section 3509 for details. Can i amend my taxes online Also see the Instructions for Form 941-X. Can i amend my taxes online   Section 3509 rates are not available if you intentionally disregard the requirement to withhold taxes from the employee or if you withheld income taxes but not social security or Medicare taxes. Can i amend my taxes online Section 3509 is not available for reclassifying statutory employees. Can i amend my taxes online See Statutory employees , earlier in this section. Can i amend my taxes online   If the employer issued required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. Can i amend my taxes online 2% plus 20% of the employee rate (see the Instructions for Form 941-X). Can i amend my taxes online For Medicare taxes; employer rate of 1. Can i amend my taxes online 45% plus 20% of the employee rate of 1. Can i amend my taxes online 45%, for a total rate of 1. Can i amend my taxes online 74% of wages. Can i amend my taxes online For Additional Medicare Tax; 0. Can i amend my taxes online 18% (20% of the employee rate of 0. Can i amend my taxes online 9%) of wages subject to Additional Medicare Tax. Can i amend my taxes online For income tax withholding, the rate is 1. Can i amend my taxes online 5% of wages. Can i amend my taxes online   If the employer did not issue required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. Can i amend my taxes online 2% plus 40% of the employee rate (see the Instructions for Form 941-X). Can i amend my taxes online For Medicare taxes; employer rate of 1. Can i amend my taxes online 45% plus 40% of the employee rate of 1. Can i amend my taxes online 45%, for a total rate of 2. Can i amend my taxes online 03% of wages. Can i amend my taxes online For Additional Medicare Tax; 0. Can i amend my taxes online 36% (40% of the employee rate of 0. Can i amend my taxes online 9%) of wages subject to Additional Medicare Tax. Can i amend my taxes online For income tax withholding, the rate is 3. Can i amend my taxes online 0% of wages. Can i amend my taxes online Relief provisions. Can i amend my taxes online   If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. Can i amend my taxes online To get this relief, you must file all required federal tax returns, including information returns, on a basis consistent with your treatment of the worker. Can i amend my taxes online You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. Can i amend my taxes online See Publication 1976, Do You Qualify for Relief Under Section 530. Can i amend my taxes online IRS help. Can i amend my taxes online   If you want the IRS to determine whether a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Can i amend my taxes online Voluntary Classification Settlement Program (VCSP). Can i amend my taxes online   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. Can i amend my taxes online To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). Can i amend my taxes online For more information visit IRS. Can i amend my taxes online gov and enter “VCSP” in the search box. Can i amend my taxes online Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Can i amend my taxes online See Publication 541, Partnerships, for more details. Can i amend my taxes online The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Can i amend my taxes online Exception—Qualified joint venture. Can i amend my taxes online   For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. Can i amend my taxes online A qualified joint venture conducts a trade or business where: The only members of the joint venture are spouses who file a joint income tax return, Both spouses materially participate (see Material participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). Can i amend my taxes online   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. Can i amend my taxes online Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. Can i amend my taxes online   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. Can i amend my taxes online If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. Can i amend my taxes online Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. Can i amend my taxes online However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. Can i amend my taxes online    Note. Can i amend my taxes online If your spouse is your employee, not your partner, see One spouse employed by another in section 3. Can i amend my taxes online   For more information on qualified joint ventures, visit IRS. Can i amend my taxes online gov and enter “qualified joint venture” in the search box. Can i amend my taxes online Exception—Community income. Can i amend my taxes online   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Can i amend my taxes online S. Can i amend my taxes online possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. Can i amend my taxes online You may still make an election to be taxed as a qualified joint venture instead of a partnership. Can i amend my taxes online See Exception—Qualified joint venture , earlier. Can i amend my taxes online 3. Can i amend my taxes online Family Employees Child employed by parents. Can i amend my taxes online   Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child. Can i amend my taxes online If these payments are for work other than in a trade or business, such as domestic work in the parent's private home, they are not subject to social security and Medicare taxes until the child reaches age 21. Can i amend my taxes online However, see Covered services of a child or spouse , later in this section. Can i amend my taxes online Payments for the services of a child under age 21 who works for his or her parent, whether or not in a trade or business, are not subject to FUTA tax. Can i amend my taxes online Payments for the services of a child of any age who works for his or her parent are generally subject to income tax withholding unless the payments are for domestic work in the parent's home, or unless the payments are for work other than in a trade or business and are less than $50 in the quarter or the child is not regularly employed to do such work. Can i amend my taxes online One spouse employed by another. Can i amend my taxes online   The wages for the services of an individual who works for his or her spouse in a trade or business are subject to income tax withholding and social security and Medicare taxes, but not to FUTA tax. Can i amend my taxes online However, the payments for services of one spouse employed by another in other than a trade or business, such as domestic service in a private home, are not subject to social security, Medicare, and FUTA taxes. Can i amend my taxes online Covered services of a child or spouse. Can i amend my taxes online   The wages for the services of a child or spouse are subject to income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for: A corporation, even if it is controlled by the child's parent or the individual's spouse; A partnership, even if the child's parent is a partner, unless each partner is a parent of the child; A partnership, even if the individual's spouse is a partner; or An estate, even if it is the estate of a deceased parent. Can i amend my taxes online Parent employed by son or daughter. Can i amend my taxes online   When the employer is a son or daughter employing his or her parent the following rules apply. Can i amend my taxes online Payments for the services of a parent in the son’s or daughter’s (the employer’s) trade or business are subject to income tax withholding and social security and Medicare taxes. Can i amend my taxes online Payments for the services of a parent not in the son’s or daughter’s (the employer’s) trade or business are generally not subject to social security and Medicare taxes. Can i amend my taxes online    Social security and Medicare taxes do apply to payments made to a parent for domestic services if all of the following apply: The parent is employed by his or her son or daughter; The son or daughter (the employer) has a child or stepchild living in the home; The son or daughter (the employer) is a widow or widower, divorced, or living with a spouse who, because of a mental or physical condition, cannot care for the child or stepchild for at least 4 continuous weeks in a calendar quarter; and The child or stepchild is either under age 18 or requires the personal care of an adult for at least 4 continuous weeks in a calendar quarter due to a mental or physical condition. Can i amend my taxes online   Payments made to a parent employed by his or her child are not subject to FUTA tax, regardless of the type of services provided. Can i amend my taxes online 4. Can i amend my taxes online Employee's Social Security Number (SSN) You are required to get each employee's name and SSN and to enter them on Form W-2. Can i amend my taxes online This requirement also applies to resident and nonresident alien employees. Can i amend my taxes online You should ask your employee to show you his or her social security card. Can i amend my taxes online The employee may show the card if it is available. Can i amend my taxes online Do not accept a social security card that says “Not valid for employment. Can i amend my taxes online ” A social security number issued with this legend does not permit employment. Can i amend my taxes online You may, but are not required to, photocopy the social security card if the employee provides it. Can i amend my taxes online If you do not provide the correct employee name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. Can i amend my taxes online See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. Can i amend my taxes online Applying for a social security card. Can i amend my taxes online   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation. Can i amend my taxes online You can get Form SS-5 at SSA offices, by calling 1-800-772-1213, or from the SSA website at www. Can i amend my taxes online socialsecurity. Can i amend my taxes online gov/online/ss-5. Can i amend my taxes online html. Can i amend my taxes online The employee must complete and sign Form SS-5; it cannot be filed by the employer. Can i amend my taxes online You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. Can i amend my taxes online Applying for a social security number. Can i amend my taxes online   If you file Form W-2 on paper and your employee applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. Can i amend my taxes online If you are filing electronically, enter all zeros (000-00-000) in the social security number field. Can i amend my taxes online When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. Can i amend my taxes online Furnish copies B, C, and 2 of Form W-2c to the employee. Can i amend my taxes online Up to 25 Forms W-2c for each Form W-3c, Transmittal of Corrected Wage and Tax Statements, may now be filed per session over the Internet, with no limit on the number of sessions. Can i amend my taxes online For more information, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. Can i amend my taxes online socialsecurity. Can i amend my taxes online gov/employer. Can i amend my taxes online Advise your employee to correct the SSN on his or her original Form W-2. Can i amend my taxes online Correctly record the employee's name and SSN. Can i amend my taxes online   Record the name and number of each employee as they are shown on the employee's social security card. Can i amend my taxes online If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Can i amend my taxes online Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. Can i amend my taxes online If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported for the most recently filed Form W-2. Can i amend my taxes online It is not necessary to correct other years if the previous name and number were used for years before the most recent Form W-2. Can i amend my taxes online IRS individual taxpayer identification numbers (ITINs) for aliens. Can i amend my taxes online   Do not accept an ITIN in place of an SSN for employee identification or for work. Can i amend my taxes online An ITIN is only available to resident and nonresident aliens who are not eligible for U. Can i amend my taxes online S. Can i amend my taxes online employment and need identification for other tax purposes. Can i amend my taxes online You can identify an ITIN because it is a nine-digit number, beginning with the number “9” with either a “7” or “8” as the fourth digit and is formatted like an SSN (for example, 9NN-7N-NNNN). Can i amend my taxes online    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. Can i amend my taxes online If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier. Can i amend my taxes online Do not use an ITIN in place of an SSN on Form W-2. Can i amend my taxes online Verification of social security numbers. Can i amend my taxes online   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. Can i amend my taxes online Visit www. Can i amend my taxes online socialsecurity. Can i amend my taxes online gov/employer/ssnv. Can i amend my taxes online htm for more information. Can i amend my taxes online Registering for SSNVS. Can i amend my taxes online   You must register online and receive authorization from your employer to use SSNVS. Can i amend my taxes online To register, visit SSA's website at www. Can i amend my taxes online ssa. Can i amend my taxes online gov/employer and click on the Business Services Online link. Can i amend my taxes online Follow the registration instructions to obtain a user identification (ID) and password. Can i amend my taxes online You will need to provide the following information about yourself and your company. Can i amend my taxes online Name. Can i amend my taxes online SSN. Can i amend my taxes online Date of birth. Can i amend my taxes online Type of employer. Can i amend my taxes online EIN. Can i amend my taxes online Company name, address, and telephone number. Can i amend my taxes online Email address. Can i amend my taxes online   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Can i amend my taxes online You must enter the activation code online to use SSNVS. Can i amend my taxes online 5. Can i amend my taxes online Wages and Other Compensation Wages subject to federal employment taxes generally include all pay you give to an employee for services performed. Can i amend my taxes online The pay may be in cash or in other forms. Can i amend my taxes online It includes salaries, vacation allowances, bonuses, commissions, and fringe benefits. Can i amend my taxes online It does not matter how you measure or make the payments. Can i amend my taxes online Amounts an employer pays as a bonus for signing or ratifying a contract in connection with the establishment of an employer-employee relationship and an amount paid to an employee for cancellation of an employment contract and relinquishment of contract rights are wages subject to social security, Medicare, and FUTA taxes and income tax withholding. Can i amend my taxes online Also, compensation paid to a former employee for services performed while still employed is wages subject to employment taxes. Can i amend my taxes online More information. Can i amend my taxes online   See section 6 for a discussion of tips and section 7 for a discussion of supplemental wages. Can i amend my taxes online Also, see section 15 for exceptions to the general rules for wages. Can i amend my taxes online Publication 15-A provides additional information on wages, including nonqualified deferred compensation, and other compensation. Can i amend my taxes online Publication 15-B provides information on other forms of compensation, including: Accident and health benefits, Achievement awards, Adoption assistance, Athletic facilities, De minimis (minimal) benefits, Dependent care assistance, Educational assistance, Employee discounts, Employee stock options, Employer-provided cell phones, Group-term life insurance coverage, Health Savings Accounts, Lodging on your business premises, Meals, Moving expense reimbursements, No-additional-cost services, Retirement planning services, Transportation (commuting) benefits, Tuition reduction, and Working condition benefits. Can i amend my taxes online Employee business expense reimbursements. Can i amend my taxes online   A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees' business expenses. Can i amend my taxes online How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. Can i amend my taxes online If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement. Can i amend my taxes online   These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee. Can i amend my taxes online Accountable plan. Can i amend my taxes online   To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules. Can i amend my taxes online They must have paid or incurred deductible expenses while performing services as your employees. Can i amend my taxes online The reimbursement or advance must be paid for the expense and must not be an amount that would have otherwise been paid by the employee. Can i amend my taxes online They must substantiate these expenses to you within a reasonable period of time. Can i amend my taxes online They must return any amounts in excess of substantiated expenses within a reasonable period of time. Can i amend my taxes online   Amounts paid under an accountable plan are not wages and are not subject to income, social security, Medicare, and FUTA taxes. Can i amend my taxes online   If the expenses covered by this arrangement are not substantiated (or amounts in excess of substantiated expenses are not returned within a reasonable period of time), the amount paid under the arrangement in excess of the substantiated expenses is treated as paid under a nonaccountable plan. Can i amend my taxes online This amount is subject to income, social security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time. Can i amend my taxes online   A reasonable period of time depends on the facts and circumstances. Can i amend my taxes online Generally, it is considered reasonable if your employees receive their advance within 30 days of the time they incur the expenses, adequately account for the expenses within 60 days after the expenses were paid or incurred, and return any amounts in excess of expenses within 120 days after the expenses were paid or incurred. Can i amend my taxes online Also, it is considered reasonable if you give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding amounts and they do so within 120 days. Can i amend my taxes online Nonaccountable plan. Can i amend my taxes online   Payments to your employee for travel and other necessary expenses of your business under a nonaccountable plan are wages and are treated as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. Can i amend my taxes online Your payments are treated as paid under a nonaccountable plan if: Your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, You advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount he or she does not use for business expenses, You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business, or You pay an amount as a reimbursement you would have otherwise paid as wages. Can i amend my taxes online   See section 7 for more information on supplemental wages. Can i amend my taxes online Per diem or other fixed allowance. Can i amend my taxes online   You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. Can i amend my taxes online In these cases, your employee is considered to have accounted to you if your reimbursement does not exceed rates established by the Federal Government. Can i amend my taxes online The 2013 standard mileage rate for auto expenses was 56. Can i amend my taxes online 5 cents per mile. Can i amend my taxes online The rate for 2014 is 56 cents per mile. Can i amend my taxes online   The government per diem rates for meals and lodging in the continental United States are listed in Publication 1542, Per Diem Rates. Can i amend my taxes online Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). Can i amend my taxes online   If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. Can i amend my taxes online This excess amount is subject to income tax withholding and payment of social security, Medicare, and FUTA taxes. Can i amend my taxes online Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L. Can i amend my taxes online ” Wages not paid in money. Can i amend my taxes online   If in the course of your trade or business you pay your employees in a medium that is neither cash nor a readily negotiable instrument, such as a check, you are said to pay them “in kind. Can i amend my taxes online ” Payments in kind may be in the form of goods, lodging, food, clothing, or services. Can i amend my taxes online Generally, the fair market value of such payments at the time they are provided is subject to federal income tax withholding and social security, Medicare, and FUTA taxes. Can i amend my taxes online   However, noncash payments for household work, agricultural labor, and service not in the employer's trade or business are exempt from social security, Medicare, and FUTA taxes. Can i amend my taxes online Withhold income tax on these payments only if you and the employee agree to do so. Can i amend my taxes online Nonetheless, noncash payments for agricultural labor, such as commodity wages, are treated as cash payments subject to employment taxes if the substance of the transaction is a cash payment. Can i amend my taxes online Moving expenses. Can i amend my taxes online   Reimbursed and employer-paid qualified moving expenses (those that would otherwise be deductible by the employee) paid under an accountable plan are not includible in an employee's income unless you have knowledge the employee deducted the expenses in a prior year. Can i amend my taxes online Reimbursed and employer-paid nonqualified moving expenses are includible in income and are subject to employment taxes and income tax withholding. Can i amend my taxes online For more information on moving expenses, see Publication 521, Moving Expenses. Can i amend my taxes online Meals and lodging. Can i amend my taxes online   The value of meals is not taxable income and is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the meals are furnished for the employer's convenience and on the employer's premises. Can i amend my taxes online The value of lodging is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the lodging is furnished for the employer's convenience, on the employer's premises, and as a condition of employment. Can i amend my taxes online    “For the convenience of the employer” means you have a substantial business reason for providing the meals and lodging other than to provide additional compensation to the employee. Can i amend my taxes online For example, meals you provide at the place of work so that an employee is available for emergencies during his or her lunch period are generally considered to be for your convenience. Can i amend my taxes online   However, whether meals or lodging are provided for the convenience of the employer depends on all of the facts and circumstances. Can i amend my taxes online A written statement that the meals or lodging are for your convenience is not sufficient. Can i amend my taxes online 50% test. Can i amend my taxes online   If over 50% of the employees who are provided meals on an employer's business premises receive these meals for the convenience of the employer, all meals provided on the premises are treated as furnished for the convenience of the employer. Can i amend my taxes online If this 50% test is met, the value of the meals is excludable from income for all employees and is not subject to federal income tax withholding or employment taxes. Can i amend my taxes online For more information, see Publication 15-B. Can i amend my taxes online Health insurance plans. Can i amend my taxes online   If you pay the cost of an accident or health insurance plan for your employees, including an employee's spouse and dependents, your payments are not wages and are not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. Can i amend my taxes online Generally, this exclusion also applies to qualified long-term care insurance contracts. Can i amend my taxes online However, for income tax withholding, the value of health insurance benefits must be included in the wages of S corporation employees who own more than 2% of the S corporation (2% shareholders). Can i amend my taxes online For social security, Medicare, and FUTA taxes, the health insurance benefits are excluded from the wages only for employees and their dependents or for a class or classes of employees and their dependents. Can i amend my taxes online See Announcement 92-16 for more information. Can i amend my taxes online You can find Announcement 92-16 on page 53 of Internal Revenue Bulletin 1992-5. Can i amend my taxes online Health Savings Accounts and medical savings accounts. Can i amend my taxes online   Your contributions to an employee's Health Savings Account (HSA) or Archer medical savings account (MSA) are not subject to social security, Medicare, or FUTA taxes, or federal income tax withholding if it is reasonable to believe at the time of payment of the contributions they will be excludable from the income of the employee. Can i amend my taxes online To the extent it is not reasonable to believe they will be excludable, your contributions are subject to these taxes. Can i amend my taxes online Employee contributions to their HSAs or MSAs through a payroll deduction plan must be included in wages and are subject to social security, Medicare, and FUTA taxes and income tax withholding. Can i amend my taxes online However, HSA contributions made under a salary reduction arrangement in a section 125 cafeteria plan are not wages and are not subject to employment taxes or withholding. Can i amend my taxes online For more information, see the Instructions for Form 8889, Health Savings Accounts (HSAs). Can i amend my taxes online Medical care reimbursements. Can i amend my taxes online   Generally, medical care reimbursements paid for an employee under an employer's self-insured medical reimbursement plan are not wages and are not subject to social security, Medicare, and FUTA taxes, or income tax withholding. Can i amend my taxes online See Publication 15-B for an exception for highly compensated employees. Can i amend my taxes online Differential wage payments. Can i amend my taxes online   Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and represent all or a portion of the wages the individual would have received from the employer if the individual were performing services for the employer. Can i amend my taxes online   Differential wage payments are wages for income tax withholding, but are not subject to social security, Medicare, or FUTA taxes. Can i amend my taxes online Employers should report differential wage payments in box 1 of Form W-2. Can i amend my taxes online For more information about the tax treatment of differential wage payments, visit IRS. Can i amend my taxes online gov and enter “employees in a combat zone” in the search box. Can i amend my taxes online Fringe benefits. Can i amend my taxes online   You generally must include fringe benefits in an employee's gross income (but see Nontaxable fringe benefits next). Can i amend my taxes online The benefits are subject to income tax withholding and employment taxes. Can i amend my taxes online Fringe benefits include cars you provide, flights on aircraft you provide, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. Can i amend my taxes online In general, the amount you must include is the amount by which the fair market value of the benefits is more than the sum of what the employee paid for it plus any amount the law excludes. Can i amend my taxes online There are other special rules you and your employees may use to value certain fringe benefits. Can i amend my taxes online See Publication 15-B for more information. Can i amend my taxes online Nontaxable fringe benefits. Can i amend my taxes online   Some fringe benefits are not taxable (or are minimally taxable) if certain conditions are met. Can i amend my taxes online See Publication 15-B for details. Can i amend my taxes online The following are some examples of nontaxable fringe benefits. Can i amend my taxes online Services provided to your employees at no additional cost to you. Can i amend my taxes online Qualified employee discounts. Can i amend my taxes online Working condition fringes that are property or services the employee could deduct as a business expense if he or she had paid for it. Can i amend my taxes online Examples include a company car for business use and subscriptions to business magazines. Can i amend my taxes online Certain minimal value fringes (including an occasional cab ride when an employee must work overtime and meals you provide at eating places you run for your employees if the meals are not furnished at below cost). Can i amend my taxes online Qualified transportation fringes subject to specified conditions and dollar limitations (including transportation in a commuter highway vehicle, any transit pass, and qualified parking). Can i amend my taxes online Qualified moving expense reimbursement. Can i amend my taxes online See Moving expenses , earlier in this section, for details. Can i amend my taxes online The use of on-premises athletic facilities, if substantially all of the use is by employees, their spouses, and their dependent children. Can i amend my taxes online Qualified tuition reduction an educational organization provides to its employees for education. Can i amend my taxes online For more information, see Publication 970, Tax Benefits for Education. Can i amend my taxes online Employer-provided cell phones provided primarily for a noncompensatory business reason. Can i amend my taxes online   However, do not exclude the following fringe benefits from the income of highly compensated employees unless the benefit is available to other employees on a nondiscriminatory basis. Can i amend my taxes online No-additional-cost services. Can i amend my taxes online Qualified employee discounts. Can i amend my taxes online Meals provided at an employer operated eating facility. Can i amend my taxes online Reduced tuition for education. Can i amend my taxes online  For more information, including the definition of a highly compensated employee, see Publication 15-B. Can i amend my taxes online When fringe benefits are treated as paid. Can i amend my taxes online   You may choose to treat certain noncash fringe benefits as paid by the pay period, by the quarter, or on any other basis you choose as long as you treat the benefits as paid at least once a year. Can i amend my taxes online You do not have to make a formal choice of payment dates or notify the IRS of the dates you choose. Can i amend my taxes online You do not have to make this choice for all employees. Can i amend my taxes online You may change methods as often as you like, as long as you treat all benefits provided in a calendar year as paid by December 31 of the calendar year. Can i amend my taxes online See Publication 15-B for more information, including a discussion of the special accounting rule for fringe benefits provided during November and December. Can i amend my taxes online Valuation of fringe benefits. Can i amend my taxes online   Generally, you must determine the value of fringe benefits no later than January 31 of the next year. Can i amend my taxes online Before January 31, you may reasonably estimate the value of the fringe benefits for purposes of withholding and depositing on time. Can i amend my taxes online Withholding on fringe benefits. Can i amend my taxes online   You may add the value of fringe benefits to regular wages for a payroll period and figure withholding taxes on the total, or you may withhold federal income tax on the value of the fringe benefits at the optional flat 25% supplemental wage rate. Can i amend my taxes online However, see Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages during the calendar year in section 7. Can i amend my taxes online   You may choose not to withhold income tax on the value of an employee's personal use of a vehicle you provide. Can i amend my taxes online You must, however, withhold social security and Medicare taxes on the use of the vehicle. Can i amend my taxes online See Publication 15-B for more information on this election. Can i amend my taxes online Depositing taxes on fringe benefits. Can i amend my taxes online   Once you choose when fringe benefits are paid, you must deposit taxes in the same deposit period you treat the fringe benefits as paid. Can i amend my taxes online To avoid a penalty, deposit the taxes following the general deposit rules for that deposit period. Can i amend my taxes online   If you determine by January 31 you overestimated the value of a fringe benefit at the time you withheld and deposited for it, you may claim a refund for the overpayment or have it applied to your next employment tax return. Can i amend my taxes online See Valuation of fringe benefits , earlier. Can i amend my taxes online If you underestimated the value and deposited too little, you may be subject to a failure-to-deposit penalty. Can i amend my taxes online See section 11 for information on deposit penalties. Can i amend my taxes online   If you deposited the required amount of taxes but withheld a lesser amount from the employee, you can recover from the employee the social security, Medicare, or income taxes you deposited on his or her behalf, and included in the employee's Form W-2. Can i amend my taxes online However, you must recover the income taxes before April 1 of the following year. Can i amend my taxes online Sick pay. Can i amend my taxes online   In general, sick pay is any amount you pay under a plan to an employee who is unable to work because of sickness or injury. Can i amend my taxes online These amounts are sometimes paid by a third party, such as an insurance company or an employees' trust. Can i amend my taxes online In either case, these payments are subject to social security, Medicare, and FUTA taxes. Can i amend my taxes online Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. Can i amend my taxes online The payments are always subject to federal income tax. Can i amend my taxes online See Publication 15-A for more information. Can i amend my taxes online 6. Can i amend my taxes online Tips Tips your employee receives from customers are generally subject to withholding. Can i amend my taxes online Your employee must report cash tips to you by the 10th of the month after the month the tips are received. Can i amend my taxes online The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. Can i amend my taxes online Both directly and indirectly tipped employees must report tips to you. Can i amend my taxes online No report is required for months when tips are less than $20. Can i amend my taxes online Your employee reports the tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. Can i amend my taxes online The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period the report covers, and The total of tips received during the month or period. Can i amend my taxes online Both Forms 4070 and 4070-A, Employee's Daily Record of Tips, are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer. Can i amend my taxes online You are permitted to establish a system for electronic tip reporting by employees. Can i amend my taxes online See Regulations section 31. Can i amend my taxes online 6053-1(d). Can i amend my taxes online Collecting taxes on tips. Can i amend my taxes online   You must collect income tax, employee social security tax, and employee Medicare tax on the employee's tips. Can i amend my taxes online The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. Can i amend my taxes online If an employee reports to you in writing $20 or more of tips in a month, the tips are also subject to FUTA tax. Can i amend my taxes online   You can collect these taxes from the employee's wages or from other funds he or she makes available. Can i amend my taxes online See Tips treated as supplemental wages in section 7 for more information. Can i amend my taxes online Stop collecting the employee social security tax when his or her wages and tips for tax year 2014 reach $117,000; collect the income and employee Medicare taxes for the whole year on all wages and tips. Can i amend my taxes online You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the limit. Can i amend my taxes online You are responsible for the employer Medicare tax for the whole year on all wages and tips. Can i amend my taxes online File Form 941 or Form 944 to report withholding and employment taxes on tips. Can i amend my taxes online Ordering rule. Can i amend my taxes online   If, by the 10th of the month after the month for which you received an employee's report on tips, you do not have enough employee funds available to deduct the employee tax, you no longer have to collect it. Can i amend my taxes online If there are not enough funds available, withhold taxes in the following order. Can i amend my taxes online Withhold on regular wages and other compensation. Can i amend my taxes online Withhold social security and Medicare taxes on tips. Can i amend my taxes online Withhold income tax on tips. Can i amend my taxes online Reporting tips. Can i amend my taxes online   Report tips and any collected and uncollected social security and Medicare taxes on Form W-2 and on Form 941, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). Can i amend my taxes online Report an adjustment on Form 941, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. Can i amend my taxes online Enter the amount of uncollected social security tax and Medicare tax on Form W-2, box 12, with codes “A” and “B. Can i amend my taxes online ” Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. Can i amend my taxes online See section 13 and the General Instructions for Forms W-2 and W-3. Can i amend my taxes online   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. Can i amend my taxes online See Revenue Ruling 2012-18, 2012-26 I. Can i amend my taxes online R. Can i amend my taxes online B. Can i amend my taxes online 1032, available at www. Can i amend my taxes online irs. Can i amend my taxes online gov/irb/2012-26_IRB/ar07. Can i amend my taxes online html. Can i amend my taxes online Allocated tips. Can i amend my taxes online   If you operate a large food or beverage establishment, you must report allocated tips under certain circumstances. Can i amend my taxes online However, do not withhold income, social security, or Medicare taxes on allocated tips. Can i amend my taxes online   A large food or beverage establishment is one that provides food or beverages for consumption on the premises, where tipping is customary, and where there were normally more than 10 employees on a typical business day during the preceding year. Can i amend my taxes online   The tips may be allocated by one of three methods—hours worked, gross receipts, or good faith agreement. Can i amend my taxes online For information about these allocation methods, including the requirement to file Forms 8027 electronically if 250 or more forms are filed, see the Instructions for Form 8027. Can i amend my taxes online For information on filing Form 8027 electronically with the IRS, see Publication 1239. Can i amend my taxes online Tip Rate Determination and Education Program. Can i amend my taxes online   Employers may participate in the Tip Rate Determination and Education Program. Can i amend my taxes online The program primarily consists of two voluntary agreements developed to improve tip income reporting by helping taxpayers to understand and meet their tip reporting responsibilities. Can i amend my taxes online The two agreements are the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). Can i amend my taxes online A tip agreement, the Gaming Industry Tip Compliance Agreement (GITCA), is available for the gaming (casino) industry. Can i amend my taxes online To get more information about TRDA and TRAC agreements, see Publication 3144, Tips on Tips. Can i amend my taxes online Additionally, visit IRS. Can i amend my taxes online gov and enter “MSU tips” in the search box to get more information about GITCA, TRDA, or TRAC agreements. Can i amend my taxes online 7. Can i amend my taxes online Supplemental Wages Supplemental wages are wage payments to an employee that are not regular wages. Can i amend my taxes online They include, but are not limited to, bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay increases, and payments for nondeductible moving expenses. Can i amend my taxes online Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. Can i amend my taxes online How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular wages. Can i amend my taxes online See Regulations section 31. Can i amend my taxes online 3402(g)-1 for additional guidance for wages paid after January 1, 2007. Can i amend my taxes online Also see Revenue Ruling 2008-29, 2008-24 I. Can i amend my taxes online R. Can i amend my taxes online B. Can i amend my taxes online 1149, available at www. Can i amend my taxes online irs. Can i amend my taxes online gov/irb/2008-24_IRB/ar08. Can i amend my taxes online html. Can i amend my taxes online Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. Can i amend my taxes online   Special rules apply to the extent supplemental wages paid to any one employee during the calendar year exceed $1 million. Can i amend my taxes online If a supplemental wage payment, together with other supplemental wage payments made to the employee during the calendar year, exceeds $1 million, the excess is subject to withholding at 39. Can i amend my taxes online 6% (or the highest rate of income tax for the year). Can i amend my taxes online Withhold using the 39. Can i amend my taxes online 6% rate without regard to the employee's Form W-4. Can i amend my taxes online In determining supplemental wages paid to the employee during the year, include payments from all businesses under common control. Can i amend my taxes online For more information, see Treasury Decision 9276, 2006-37 I. Can i amend my taxes online R. Can i amend my taxes online B. Can i amend my taxes online 423, available at www. Can i amend my taxes online irs. Can i amend my taxes online gov/irb/2006-37_IRB/ar09. Can i amend my taxes online html. Can i amend my taxes online Withholding on supplemental wage payments to an employee who does not receive $1 million of supplemental wages during the calendar year. Can i amend my taxes online   If the supplemental wages paid to the employee during the calendar year are less than or equal to $1 million, the following rules apply in determining the amount of income tax to be withheld. Can i amend my taxes online Supplemental wages combined with regular wages. Can i amend my taxes online   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period. Can i amend my taxes online Supplemental wages identified separately from regular wages. Can i amend my taxes online   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages. Can i amend my taxes online If you withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. Can i amend my taxes online Withhold a flat 25% (no other percentage allowed). Can i amend my taxes online If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. Can i amend my taxes online If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. Can i amend my taxes online Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Can i amend my taxes online Subtract the tax withheld from the regular wages. Can i amend my taxes online Withhold the remaining tax from the supplemental wages. Can i amend my taxes online If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and the previous supplemental wage payments, and withhold the remaining tax. Can i amend my taxes online If you did not withhold income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b. Can i amend my taxes online This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. Can i amend my taxes online Regardless of the method you use to withhold income tax on supplemental wages, they are subject to social security, Medicare, and FUTA taxes. Can i amend my taxes online Example 1. Can i amend my taxes online You pay John Peters a base salary on the 1st of each month. Can i amend my taxes online He is single and claims one withholding allowance. Can i amend my taxes online In January he is paid $1,000. Can i amend my taxes online Using the wage bracket tables, you withhold $50 from this amount. Can i amend my taxes online In February, he receives salary of $1,000 plus a commission of $2,000, which you combine with regular wages and do not separately identify. Can i amend my taxes online You figure the withholding based on the total of $3,000. Can i amend my taxes online The correct withholding from the tables is $338. Can i amend my taxes online Example 2. Can i amend my taxes online You pay Sharon Warren a base salary on the 1st of each month. Can i amend my taxes online She is single and claims one allowance. Can i amend my taxes online Her May 1 pay is $2,000. Can i amend my taxes online Using the wage bracket tables, you withhold $188. Can i amend my taxes online On May 14 she receives a bonus of $1,000. Can i amend my taxes online Electing to use supplemental wage withholding method 1-b, you: Add the bonus amount to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 = $3,000). Can i amend my taxes online Determine the amount of withholding on the combined $3,000 amount to be $338 using the wage bracket tables. Can i amend my taxes online Subtract the amount withheld from wages on the most recent base salary pay date (May 1) from the combined withholding amount ($338 – $188 = $150). Can i amend my taxes online Withhold $150 from the bonus payment. Can i amend my taxes online Example 3. Can i amend my taxes online The facts are the same as in Example 2, except you elect to use the flat rate method of withholding on the bonus. Can i amend my taxes online You withhold 25% of $1,000, or $250, from Sharon's bonus payment. Can i amend my taxes online Example 4. Can i amend my taxes online The facts are the same as in Example 2, except you elect to pay Sharon a second bonus of $2,000 on May 28. Can i amend my taxes online Using supplemental wage withholding method 1-b, you: Add the first and second bonus amounts to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 + $2,000 = $5,000). Can i amend my taxes online Determine the amount of withholding on the combined $5,000 amount to be $781 using the wage bracket tables. Can i amend my taxes online Subtract the amounts withheld from wages on the most recent base salary pay date (May 1) and the amounts withheld from the first bonus payment from the combined withholding amount ($781 – $188 – $150 = $443). Can i amend my taxes online Withhold $443 from the second bonus payment. Can i amend my taxes online Tips treated as supplemental wages. Can i amend my taxes online   Withhold income tax on tips from wages earned by the employee or from other funds the employee makes available. Can i amend my taxes online If an employee receives regular wages and reports tips, figure income tax withholding as if the tips were supplemental wages. Can i amend my taxes online If you have not withheld income tax from the regular wages, add the tips to the regular wages. Can i amend my taxes online Then withhold income tax on the total. Can i amend my taxes online If you withheld income tax from the regular wages, you can withhold on the tips by method 1-a or 1-b discussed earlier in this section under Supplemental wages identified separately from regular wages. Can i amend my taxes online Vacation pay. Can i amend my taxes online   Vacation pay is subject to withholding as if it were a regular wage payment. Can i amend my taxes online When vacation pay is in addition to regular wages for the vacation period, treat it as a supplemental wage payment. Can i amend my taxes online If the vacation pay is for a time longer than your usual payroll period, spread it over the pay periods for which you pay it. Can i amend my taxes online 8. Can i amend my taxes online Payroll Period Your payroll period is a period of service for which you usually pay wages. Can i amend my taxes online When you have a regular payroll period, withhold income tax for that time period even if your employee does not work the full period. Can i amend my taxes online No regular payroll period. Can i amend my taxes online   When you do not have a regular payroll period, withhold the tax as if you paid wages for a daily or miscellaneous payroll period. Can i amend my taxes online Figure the number of days (including Sundays and holidays) in the period covered by the wage payment. Can i amend my taxes online If the wages are unrelated to a specific length of time (for example, commissions paid on completion of a sale), count back the number of days from the payment period to the latest of: The last wage payment made during the same calendar year, The date employment began, if during the same calendar year, or January 1 of the same year. Can i amend my taxes online Employee paid for period less than 1 week. Can i amend my taxes online   When you pay an employee for a period of less than one week, and the employee signs a statement under penalties of perjury indicating he or she is not working for any other employer during the same week for wages subject to withholding, figure withholding based on a weekly payroll period. Can i amend my taxes online If the employee later begins to work for another employer for wages subject to withholding, the employee must notify you within 10 days. Can i amend my taxes online You then figure withholding based on the daily or miscellaneous period. Can i amend my taxes online 9. Can i amend my taxes online Withholding From Employees' Wages Income Tax Withholding Using Form W-4 to figure withholding. Can i amend my taxes online   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. Can i amend my taxes online Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. Can i amend my taxes online Advise your employees to use the IRS Withholding Calculator on the IRS website at www. Can i amend my taxes online irs. Can i amend my taxes online gov/individuals for help in determining how many withholding allowances to claim on their Forms W-4. Can i amend my taxes online   Ask all new employees to give you a signed Form W-4 when they start work. Can i amend my taxes online Make the form effective with the first wage payment. Can i amend my taxes online If a new employee does not give you a completed Form W-4, withhold income tax as if he or she is single, with no withholding allowances. Can i amend my taxes online Form in Spanish. Can i amend my taxes online   You can provide Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, in place of Form W-4, to your Spanish-speaking employees. Can i amend my taxes online For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). Can i amend my taxes online The rules discussed in this section that apply to Form W-4 also apply to Formulario W-4(SP). Can i amend my taxes online Electronic system to receive Form W-4. Can i amend my taxes online   You may establish a system to electronically receive Forms W-4 from your employees. Can i amend my taxes online See Regulations section 31. Can i amend my taxes online 3402(f)(5)-1(c) for more information. Can i amend my taxes online Effective date of Form W-4. Can i amend my taxes online   A Form W-4 remains in effect until the employee gives you a new one. Can i amend my taxes online When you receive a new Form W-4 from an employee, do not adjust withholding for pay periods before the effective date of the new form. Can i amend my taxes online If an employee gives you a Form W-4 that replaces an existing Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. Can i amend my taxes online For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. Can i amend my taxes online A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. Can i amend my taxes online Successor employer. Can i amend my taxes online   If you are a successor employer (see Successor employer , later in this section), secure new Forms W-4 from the transferred employees unless the “Alternative Procedure” in section 5 of Revenue Procedure 2004-53 applies. Can i amend my taxes online See Revenue Procedure 2004-53, 2004-34 I. Can i amend my taxes online R. Can i amend my taxes online B. Can i amend my taxes online 320, available at www. Can i amend my taxes online irs. Can i amend my taxes online gov/irb/2004-34_IRB/ar13. Can i amend my taxes online html. Can i amend my taxes online Completing Form W-4. Can i amend my taxes online   The amount of any federal income tax withholding must be based on marital status and withholding allowances. Can i amend my taxes online Your employees may not base their withholding amounts on a fixed dollar amount or percentage. Can i amend my taxes online However, an employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. Can i amend my taxes online Employees may claim fewer withholding allowances than they are entitled to claim. Can i amend my taxes online They may wish to claim fewer allowances to ensure they have enough withholding or to offset the tax on other sources of taxable income not subject to withholding. Can i amend my taxes online See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. Can i amend my taxes online Along with Form W-4, you may wish to order Publication 505 for use by your employees. Can i amend my taxes online Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. Can i amend my taxes online If they require additional withholding, they should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. Can i amend my taxes online Exemption from federal income tax withholding. Can i amend my taxes online   Generally, an employee may claim exemption from federal income tax withholding because he or she had no income tax liability last year and expects none this year. Can i amend my taxes online See the Form W-4 instructions for more information. Can i amend my taxes online However, the wages are still subject to social security and Medicare taxes. Can i amend my taxes online See also Invalid Forms W-4 , later in this section. Can i amend my taxes online   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. Can i amend my taxes online To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. Can i amend my taxes online If the employee does not give you a new Form W-4 by February 15, begin withholding based on the last Form W-4 for the employee that did not claim an exemption from withholding or, if one was not filed, then withhold tax as if he or she is single with zero withholding allowances. Can i amend my taxes online If the employee provides a new Form W-4 claiming exemption from withholding on February 16 or later, you may apply it to future wages but do not refund any taxes already withheld. Can i amend my taxes online Withholding income taxes on the wages of nonresident alien employees. Can i amend my taxes online   In general, you must withhold federal income taxes on the wages of nonresident alien employees. Can i amend my taxes online However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. Can i amend my taxes online Also see section 3 of Publication 51 (Circular A), Agricultural Employer's Tax Guide, for guidance on H-2A visa workers. Can i amend my taxes online Withholding adjustment for nonresident alien employees. Can i amend my taxes online   For 2014, apply the procedure discussed next to figure the amount of income tax to withhold from the wages of nonresident alien employees performing services within the United States. Can i amend my taxes online Nonresident alien students from India and business apprentices from India are not subject to this procedure. Can i amend my taxes online Instructions. Can i amend my taxes online   To figure how much income tax to withhold from the wages paid to a nonresident alien employee performing services in the United States, use the following steps. Can i amend my taxes online Step 1. Can i amend my taxes online   Add to the wages paid to the nonresident alien employee for the payroll period the amount shown in the chart below for the applicable payroll period. Can i amend my taxes online    Amount to Add to Nonresident Alien Employee's Wages for Calculating Income Tax Withholding Only   Payroll Period Add Additional     Weekly $ 43. Can i amend my taxes online 30     Biweekly 86. Can i amend my taxes online 50     Semimonthly 93. Can i amend my taxes online 80     Monthly 187. Can i amend my taxes online 50     Quarterly 562. Can i amend my taxes online 50     Semiannually 1,125. Can i amend my taxes online 00     Annually 2,250. Can i amend my taxes online 00     Daily or Miscellaneous (each day of the payroll period) 8. Can i amend my taxes online 70   Step 2. Can i amend my taxes online   Use the amount figured in Step 1 and the number of withholding allowances claimed (generally limited to one allowance) to figure income tax withholding. Can i amend my taxes online Determine the value of withholding allowances by multiplying the number of withholding allowances claimed by the appropriate amount from Table 5. Can i amend my taxes online Percentage Method—2014 Amount for One Withholding Allowance shown on page 41. Can i amend my taxes online If you are using the Percentage Method Tables for Income Tax Withholding, provided on pages 43–44, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure the income tax withholding. Can i amend my taxes online If you are using the Wage Bracket Method for Income Tax Withholding, provided on pages 45–64, use the amount figured in Step 1 and the number of withholding allowances to figure income tax withholding. Can i amend my taxes online The amounts from the chart above are added to wages solely for calculating income tax withholding on the wages of the nonresident alien employee. Can i amend my taxes online The amounts from the chart should not be included in any box on the employee's Form W-2 and do not increase the income tax liability of the employee. Can i amend my taxes online Also, the amounts from the chart do not increase the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. Can i amend my taxes online This procedure only applies to nonresident alien employees who have wages subject to income tax withholding. Can i amend my taxes online Example. Can i amend my taxes online An employer using the percentage method of withholding pays wages of $500 for a biweekly payroll period to a married nonresident alien employee. Can i amend my taxes online The nonresident alien has properly completed Form W-4, entering marital status as “single” with one withholding allowance and indicating status as a nonresident alien on Form W-4, line 6 (see Nonresident alien employee's Form W-4 , later in this section). Can i amend my taxes online The employer determines the wages to be used in the withholding tables by adding to the $500 amount of wages paid the amount of $86. Can i amend my taxes online 50 from the chart under Step 1 ($586. Can i amend my taxes online 50 total). Can i amend my taxes online The employer then applies the applicable tables to determine the income tax withholding for nonresident aliens (see Step 2 ). Can i amend my taxes online Reminder: If you use the Percentage Method Tables for Income Tax Withholding, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure income tax withholding. Can i amend my taxes online The $86. Can i amend my taxes online 50 added to wages for calculating income tax withholding is not reported on Form W-2, and does not increase the income tax liability of the employee. Can i amend my taxes online Also, the $86. Can i amend my taxes online 50 added to wages does not affect the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. Can i amend my taxes online Supplemental wage payment. Can i amend my taxes online   This procedure for determining the amount of income tax withholding does not apply to a supplemental wage payment (see section 7) if the 39. Can i amend my taxes online 6% mandatory flat rate withholding applies or if the 25% optional flat rate withholding is being used to calculate income tax withholding on the supplemental wage payment. Can i amend my taxes online Nonresident alien employee's Form W-4. Can i amend my taxes online   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding, Request withholding as if they are single, regardless of their actual marital status, Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or South Korea, or a student or business apprentice from India, he or she may claim more than one allowance), and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. Can i amend my taxes online   If you maintain an electronic Form W-4 system, you should provide a field for nonresident aliens to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. Can i amend my taxes online A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. Can i amend my taxes online Form 8233. Can i amend my taxes online   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. Can i amend my taxes online See Publication 515 for details. Can i amend my taxes online IRS review of requested Forms W-4. Can i amend my taxes online   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. Can i amend my taxes online You may also be directed to send certain Forms W-4 to the IRS. Can i amend my taxes online You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. Can i amend my taxes online Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. Can i amend my taxes online The IRS may also require you to submit copies of Form W-4 to the IRS as directed by Treasury Decision 9337, 2007-35 I. Can i amend my taxes online R. Can i amend my taxes online B. Can i amend my taxes online 455, which is available at www. Can i amend my taxes online irs. Can i amend my taxes online gov/irb/2007-35_IRB/ar10. Can i amend my taxes online html. Can i amend my taxes online When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. Can i amend my taxes online After submitting a copy of a requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). Can i amend my taxes online However, if the IRS later notifies you in writing the employee is not entitled to claim exemption from withholding or a claimed number of withholding allowances, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the IRS notice (commonly referred to as a "lock-in letter