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Ez form online Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. Ez form online S. Ez form online Taxpayer Identification NumbersUnexpected payment. Ez form online Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Ez form online Electronic reporting. Ez form online Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Ez form online S. Ez form online Real Property InterestForeign corporations. Ez form online Domestic corporations. Ez form online U. Ez form online S. Ez form online real property holding corporations. Ez form online Partnerships. Ez form online Trusts and estates. Ez form online Domestically controlled QIE. Ez form online Late filing of certifications or notices. Ez form online Certifications. Ez form online Liability of agent or qualified substitute. Ez form online Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Ez form online Withholding of Tax In most cases, a foreign person is subject to U. Ez form online S. Ez form online tax on its U. Ez form online S. Ez form online source income. Ez form online Most types of U. Ez form online S. Ez form online source income received by a foreign person are subject to U. Ez form online S. Ez form online tax of 30%. Ez form online A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. Ez form online The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Ez form online The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. Ez form online In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Ez form online S. Ez form online source income. Ez form online Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Ez form online NRA withholding does not include withholding under section 1445 of the Code (see U. Ez form online S. Ez form online Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Ez form online A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Ez form online However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Ez form online S. Ez form online person is not required to withhold. Ez form online In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. Ez form online Withholding Agent You are a withholding agent if you are a U. Ez form online S. Ez form online or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. Ez form online A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. Ez form online S. Ez form online branch of certain foreign banks and insurance companies. Ez form online You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. Ez form online Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Ez form online In most cases, the U. Ez form online S. Ez form online person who pays an amount subject to NRA withholding is the person responsible for withholding. Ez form online However, other persons may be required to withhold. Ez form online For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. Ez form online In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. Ez form online Liability for tax. Ez form online   As a withholding agent, you are personally liable for any tax required to be withheld. Ez form online This liability is independent of the tax liability of the foreign person to whom the payment is made. Ez form online If you fail to withhold and the foreign payee fails to satisfy its U. Ez form online S. Ez form online tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Ez form online   The applicable tax will be collected only once. Ez form online If the foreign person satisfies its U. Ez form online S. Ez form online tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Ez form online Determination of amount to withhold. Ez form online   You must withhold on the gross amount subject to NRA withholding. Ez form online You cannot reduce the gross amount by any deductions. Ez form online However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. Ez form online   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. Ez form online In no case, however, should you withhold more than 30% of the total amount paid. Ez form online Or, you may make a reasonable estimate of the amount from U. Ez form online S. Ez form online sources and put a corresponding part of the amount due in escrow until the amount from U. Ez form online S. Ez form online sources can be determined, at which time withholding becomes due. Ez form online When to withhold. Ez form online   Withholding is required at the time you make a payment of an amount subject to withholding. Ez form online A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. Ez form online A payment is considered made to a person if it is paid for that person's benefit. Ez form online For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. Ez form online A payment also is considered made to a person if it is made to that person's agent. Ez form online   A U. Ez form online S. Ez form online partnership should withhold when any distributions that include amounts subject to withholding are made. Ez form online However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Ez form online S. Ez form online partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. Ez form online If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Ez form online A U. Ez form online S. Ez form online trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. Ez form online To the extent a U. Ez form online S. Ez form online trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. Ez form online Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. Ez form online (See Returns Required , later. Ez form online ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. Ez form online Form 1099 reporting and backup withholding. Ez form online    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Ez form online S. Ez form online person. Ez form online You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Ez form online S. Ez form online person that is subject to Form 1099 reporting if any of the following apply. Ez form online The U. Ez form online S. Ez form online person has not provided its taxpayer identification number (TIN) in the manner required. Ez form online The IRS notifies you that the TIN furnished by the payee is incorrect. Ez form online There has been a notified payee underreporting. Ez form online There has been a payee certification failure. Ez form online In most cases, a TIN must be provided by a U. Ez form online S. Ez form online non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Ez form online A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Ez form online You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. Ez form online S. Ez form online person. Ez form online For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Ez form online S. Ez form online person subject to Form 1099 reporting. Ez form online See Identifying the Payee , later, for more information. Ez form online Also see Section S. Ez form online Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. Ez form online Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. Ez form online Wages paid to employees. Ez form online   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Ez form online See Pay for Personal Services Performed , later. Ez form online Effectively connected income by partnerships. Ez form online   A withholding agent that is a partnership (whether U. Ez form online S. Ez form online or foreign) is also responsible for withholding on its income effectively connected with a U. Ez form online S. Ez form online trade or business that is allocable to foreign partners. Ez form online See Partnership Withholding on Effectively Connected Income , later, for more information. Ez form online U. Ez form online S. Ez form online real property interest. Ez form online   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Ez form online S. Ez form online real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Ez form online S. Ez form online real property interest to a shareholder, partner, or beneficiary that is a foreign person. Ez form online See U. Ez form online S. Ez form online Real Property Interest , later. Ez form online Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Ez form online It does not apply to payments made to U. Ez form online S. Ez form online persons. Ez form online Usually, you determine the payee's status as a U. Ez form online S. Ez form online or foreign person based on the documentation that person provides. Ez form online See Documentation , later. Ez form online However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. Ez form online Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. Ez form online However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Ez form online U. Ez form online S. Ez form online agent of foreign person. Ez form online   If you make a payment to a U. Ez form online S. Ez form online person and you have actual knowledge that the U. Ez form online S. Ez form online person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. Ez form online However, if the U. Ez form online S. Ez form online person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. Ez form online   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. Ez form online S. Ez form online person and not as a payment to a foreign person. Ez form online You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Ez form online Disregarded entities. Ez form online   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. Ez form online The payee of a payment made to a disregarded entity is the owner of the entity. Ez form online   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. Ez form online   If the owner is a U. Ez form online S. Ez form online person, you do not apply NRA withholding. Ez form online However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Ez form online You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. Ez form online Flow-Through Entities The payees of payments (other than income effectively connected with a U. Ez form online S. Ez form online trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Ez form online This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Ez form online Income that is, or is deemed to be, effectively connected with the conduct of a U. Ez form online S. Ez form online trade or business of a flow-through entity is treated as paid to the entity. Ez form online All of the following are flow-through entities. Ez form online A foreign partnership (other than a withholding foreign partnership). Ez form online A foreign simple or foreign grantor trust (other than a withholding foreign trust). Ez form online A fiscally transparent entity receiving income for which treaty benefits are claimed. Ez form online See Fiscally transparent entity , later. Ez form online In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. Ez form online You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Ez form online You must determine whether the owners or beneficiaries of a flow-through entity are U. Ez form online S. Ez form online or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. Ez form online You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. Ez form online If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. Ez form online See Documentation and Presumption Rules , later. Ez form online Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Ez form online Foreign partnerships. Ez form online    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. Ez form online If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. Ez form online However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Ez form online If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. Ez form online Example 1. Ez form online A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Ez form online S. Ez form online citizen. Ez form online You make a payment of U. Ez form online S. Ez form online source interest to the partnership. Ez form online It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. Ez form online S. Ez form online citizen. Ez form online The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. Ez form online You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Ez form online Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Ez form online Report the payment to the U. Ez form online S. Ez form online citizen on Form 1099-INT. Ez form online Example 2. Ez form online A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Ez form online The second partnership has two partners, both nonresident alien individuals. Ez form online You make a payment of U. Ez form online S. Ez form online source interest to the first partnership. Ez form online It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. Ez form online In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Ez form online The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Ez form online Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. Ez form online Example 3. Ez form online You make a payment of U. Ez form online S. Ez form online source dividends to a withholding foreign partnership. Ez form online The partnership has two partners, both foreign corporations. Ez form online You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. Ez form online You must treat the partnership as the payee of the dividends. Ez form online Foreign simple and grantor trust. Ez form online   A trust is foreign unless it meets both of the following tests. Ez form online A court within the United States is able to exercise primary supervision over the administration of the trust. Ez form online One or more U. Ez form online S. Ez form online persons have the authority to control all substantial decisions of the trust. Ez form online   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Ez form online A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. Ez form online   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Ez form online The payees of a payment made to a foreign grantor trust are the owners of the trust. Ez form online However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Ez form online If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. Ez form online Example. Ez form online A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Ez form online S. Ez form online citizen. Ez form online You make a payment of interest to the foreign trust. Ez form online It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. Ez form online S. Ez form online citizen. Ez form online The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. Ez form online You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Ez form online Report the payment to the nonresident aliens on Forms 1042-S. Ez form online Report the payment to the U. Ez form online S. Ez form online citizen on Form 1099-INT. Ez form online Fiscally transparent entity. Ez form online   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. Ez form online The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. Ez form online ). Ez form online The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. Ez form online An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. Ez form online Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. Ez form online   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Ez form online Example. Ez form online Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. Ez form online A has two interest holders, B and C. Ez form online B is a corporation organized under the laws of country Y. Ez form online C is a corporation organized under the laws of country Z. Ez form online Both countries Y and Z have an income tax treaty in force with the United States. Ez form online A receives royalty income from U. Ez form online S. Ez form online sources that is not effectively connected with the conduct of a trade or business in the United States. Ez form online For U. Ez form online S. Ez form online income tax purposes, A is treated as a partnership. Ez form online Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. Ez form online The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. Ez form online Accordingly, A is fiscally transparent in its jurisdiction, country X. Ez form online B and C are not fiscally transparent under the laws of their respective countries of incorporation. Ez form online Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. Ez form online Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. Ez form online S. Ez form online source royalty income for purposes of the U. Ez form online S. Ez form online -Y income tax treaty. Ez form online Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. Ez form online Therefore, A is not treated as fiscally transparent under the laws of country Z. Ez form online Accordingly, C is not treated as deriving its share of the U. Ez form online S. Ez form online source royalty income for purposes of the U. Ez form online S. Ez form online -Z income tax treaty. Ez form online Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. Ez form online This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Ez form online You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. Ez form online An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Ez form online A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Ez form online In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. Ez form online You must determine whether the customers or account holders of a foreign intermediary are U. Ez form online S. Ez form online or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Ez form online You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Ez form online If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. Ez form online See Documentation and Presumption Rules , later. Ez form online Nonqualified intermediary. Ez form online   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Ez form online The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Ez form online Example. Ez form online You make a payment of interest to a foreign bank that is a nonqualified intermediary. Ez form online The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. Ez form online S. Ez form online person for whom the bank is collecting the payments. Ez form online The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. Ez form online The account holders are the payees of the interest payment. Ez form online You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. Ez form online S. Ez form online person on Form 1099-INT. Ez form online Qualified intermediary. Ez form online   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Ez form online S. Ez form online intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Ez form online You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. Ez form online In this situation, the QI is required to withhold the tax. Ez form online You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Ez form online   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. Ez form online If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. Ez form online S. Ez form online person. Ez form online Branches of financial institutions. Ez form online   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. Ez form online The countries with approved KYC rules are listed on IRS. Ez form online gov. Ez form online QI withholding agreement. Ez form online   Foreign financial institutions and foreign branches of U. Ez form online S. Ez form online financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Ez form online   A QI is entitled to certain simplified withholding and reporting rules. Ez form online In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Ez form online   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Ez form online These forms, and the procedures required to obtain a QI withholding agreement are available at www. Ez form online irs. Ez form online gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Ez form online Documentation. Ez form online   A QI is not required to forward documentation obtained from foreign account holders to the U. Ez form online S. Ez form online withholding agent from whom the QI receives a payment of U. Ez form online S. Ez form online source income. Ez form online The QI maintains such documentation at its location and provides the U. Ez form online S. Ez form online withholding agent with withholding rate pools. Ez form online A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Ez form online   A QI is required to provide the U. Ez form online S. Ez form online withholding agent with information regarding U. Ez form online S. Ez form online persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Ez form online   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. Ez form online This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. Ez form online Form 1042-S reporting. Ez form online   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. Ez form online Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). Ez form online Collective refund procedures. Ez form online   A QI may seek a refund on behalf of its direct account holders. Ez form online The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. Ez form online U. Ez form online S. Ez form online branches of foreign banks and foreign insurance companies. Ez form online   Special rules apply to a U. Ez form online S. Ez form online branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Ez form online If you agree to treat the branch as a U. Ez form online S. Ez form online person, you may treat the branch as a U. Ez form online S. Ez form online payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Ez form online S. Ez form online branch on which the agreement is evidenced. Ez form online If you treat the branch as a U. Ez form online S. Ez form online payee, you are not required to withhold. Ez form online Even though you agree to treat the branch as a U. Ez form online S. Ez form online person, you must report the payment on Form 1042-S. Ez form online   A financial institution organized in a U. Ez form online S. Ez form online possession is treated as a U. Ez form online S. Ez form online branch. Ez form online The special rules discussed in this section apply to a possessions financial institution. Ez form online   If you are paying a U. Ez form online S. Ez form online branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. Ez form online S. Ez form online person for amounts subject to NRA withholding. Ez form online Consequently, amounts not subject to NRA withholding that are paid to a U. Ez form online S. Ez form online branch are not subject to Form 1099 reporting or backup withholding. Ez form online   Alternatively, a U. Ez form online S. Ez form online branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. Ez form online In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. Ez form online See Nonqualified Intermediaries under  Documentation, later. Ez form online   If the U. Ez form online S. Ez form online branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. Ez form online Withholding foreign partnership and foreign trust. Ez form online   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. Ez form online A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. Ez form online   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. Ez form online A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Ez form online You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. Ez form online WP and WT withholding agreements. Ez form online   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Ez form online Also see the following items. Ez form online Revenue Procedure 2004-21. Ez form online Revenue Procedure 2005-77. Ez form online Employer identification number (EIN). Ez form online   A completed Form SS-4 must be submitted with the application for being a WP or WT. Ez form online The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Ez form online Documentation. Ez form online   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. Ez form online The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. Ez form online The Form W-8IMY must contain the WP-EIN or WT-EIN. Ez form online Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Ez form online A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. Ez form online S. Ez form online person. Ez form online It also includes a foreign branch of a U. Ez form online S. Ez form online financial institution if the foreign branch is a qualified intermediary. Ez form online In most cases, the U. Ez form online S. Ez form online branch of a foreign corporation or partnership is treated as a foreign person. Ez form online Nonresident alien. Ez form online   A nonresident alien is an individual who is not a U. Ez form online S. Ez form online citizen or a resident alien. Ez form online A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. Ez form online Married to U. Ez form online S. Ez form online citizen or resident alien. Ez form online   Nonresident alien individuals married to U. Ez form online S. Ez form online citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Ez form online However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Ez form online Wages paid to these individuals are subject to graduated withholding. Ez form online See Wages Paid to Employees—Graduated Withholding . Ez form online Resident alien. Ez form online   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. Ez form online Green card test. Ez form online An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. Ez form online This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Ez form online Substantial presence test. Ez form online An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Ez form online Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. Ez form online   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. Ez form online This exception is for a limited period of time. Ez form online   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Ez form online Note. Ez form online   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. Ez form online For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Ez form online Resident of a U. Ez form online S. Ez form online possession. Ez form online   A bona fide resident of Puerto Rico, the U. Ez form online S. Ez form online Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Ez form online S. Ez form online citizen or a U. Ez form online S. Ez form online national is treated as a nonresident alien for the withholding rules explained here. Ez form online A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. Ez form online   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Ez form online S. Ez form online Possessions. Ez form online Foreign corporations. Ez form online   A foreign corporation is one that does not fit the definition of a domestic corporation. Ez form online A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. Ez form online Guam or Northern Mariana Islands corporations. Ez form online   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). Ez form online Note. Ez form online   The provisions discussed below under U. Ez form online S. Ez form online Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. Ez form online U. Ez form online S. Ez form online Virgin Islands and American Samoa corporations. Ez form online   A corporation created or organized in, or under the laws of, the U. Ez form online S. Ez form online Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. Ez form online S. Ez form online Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. Ez form online S. Ez form online Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Ez form online Foreign private foundations. Ez form online   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Ez form online Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. Ez form online Other foreign organizations, associations, and charitable institutions. Ez form online   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. Ez form online In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. Ez form online   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Ez form online   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. Ez form online U. Ez form online S. Ez form online branches of foreign persons. Ez form online   In most cases, a payment to a U. Ez form online S. Ez form online branch of a foreign person is a payment made to the foreign person. Ez form online However, you may treat payments to U. Ez form online S. Ez form online branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Ez form online S. Ez form online regulatory supervision as payments made to a U. Ez form online S. Ez form online person, if you and the U. Ez form online S. Ez form online branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Ez form online For this purpose, a financial institution organized under the laws of a U. Ez form online S. Ez form online possession is treated as a U. Ez form online S. Ez form online branch. Ez form online Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. Ez form online The payee is a U. Ez form online S. Ez form online person. Ez form online The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. Ez form online In most cases, you must get the documentation before you make the payment. Ez form online The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Ez form online See Standards of Knowledge , later. Ez form online If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Ez form online For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. Ez form online The specific types of documentation are discussed in this section. Ez form online However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Ez form online As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. Ez form online Section 1446 withholding. Ez form online   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Ez form online In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. Ez form online This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. Ez form online Joint owners. Ez form online    If you make a payment to joint owners, you need to get documentation from each owner. Ez form online Form W-9. Ez form online   In most cases, you can treat the payee as a U. Ez form online S. Ez form online person if the payee gives you a Form W-9. Ez form online The Form W-9 can be used only by a U. Ez form online S. Ez form online person and must contain the payee's taxpayer identification number (TIN). Ez form online If there is more than one owner, you may treat the total amount as paid to a U. Ez form online S. Ez form online person if any one of the owners gives you a Form W-9. Ez form online See U. Ez form online S. Ez form online Taxpayer Identification Numbers , later. Ez form online U. Ez form online S. Ez form online persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Ez form online Form W-8. Ez form online   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Ez form online Until further notice, you can rely upon Forms W-8 that contain a P. Ez form online O. Ez form online box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. Ez form online S. Ez form online person and that a street address is available. Ez form online You may rely on Forms W-8 for which there is a U. Ez form online S. Ez form online mailing address provided you received the form prior to December 31, 2001. Ez form online   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Ez form online You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Ez form online S. Ez form online possession. Ez form online Other documentation. Ez form online   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Ez form online The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Ez form online These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Ez form online Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. Ez form online Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Ez form online   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. Ez form online   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. Ez form online For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. Ez form online Claiming treaty benefits. Ez form online   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. Ez form online S. Ez form online TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. Ez form online   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. Ez form online   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. Ez form online See Fiscally transparent entity discussed earlier under Flow-Through Entities. Ez form online   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Ez form online For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. Ez form online   The exemptions from, or reduced rates of, U. Ez form online S. Ez form online tax vary under each treaty. Ez form online You must check the provisions of the tax treaty that apply. Ez form online Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. Ez form online   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. Ez form online You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. Ez form online Exceptions to TIN requirement. Ez form online   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. Ez form online Income from marketable securities (discussed next). Ez form online Unexpected payments to an individual (discussed under U. Ez form online S. Ez form online Taxpayer Identification Numbers ). Ez form online Marketable securities. Ez form online   A Form W-8BEN provided to claim treaty benefits does not need a U. Ez form online S. Ez form online TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Ez form online For this purpose, income from a marketable security consists of the following items. Ez form online Dividends and interest from stocks and debt obligations that are actively traded. Ez form online Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Ez form online Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. Ez form online Income related to loans of any of the above securities. Ez form online Offshore accounts. Ez form online   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. Ez form online   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. Ez form online However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. Ez form online An offshore account is an account maintained at an office or branch of a U. Ez form online S. Ez form online or foreign bank or other financial institution at any location outside the United States. Ez form online   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. Ez form online This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Ez form online In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. Ez form online Documentary evidence. Ez form online   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. Ez form online To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. Ez form online Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. Ez form online Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. Ez form online In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. Ez form online Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Ez form online   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. Ez form online (See Effectively Connected Income , later. Ez form online )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Ez form online   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Ez form online S. Ez form online trade or business is subject to withholding under section 1446. Ez form online If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. Ez form online    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. Ez form online Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Ez form online   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. Ez form online S. Ez form online possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. Ez form online   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. Ez form online   See Foreign Governments and Certain Other Foreign Organizations , later. Ez form online Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. Ez form online The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. Ez form online The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. Ez form online Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Ez form online S. Ez form online Branches for United States Tax Withholding. Ez form online   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Ez form online S. Ez form online branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. Ez form online S. Ez form online branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Ez form online S. Ez form online person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. Ez form online For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Ez form online 1446-5. Ez form online Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. Ez form online A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. Ez form online The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Ez form online The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. Ez form online Responsibilities. Ez form online   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Ez form online However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Ez form online Instead, it provides you with a withholding statement that contains withholding rate pool information. Ez form online A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. Ez form online A qualified intermediary is required to provide you with information regarding U. Ez form online S. Ez form online persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Ez form online S. Ez form online person unless it has assumed Form 1099 reporting and backup withholding responsibility. Ez form online For the alternative procedure for providing rate pool information for U. Ez form online S. Ez form online non-exempt persons, see the Form W-8IMY instructions. Ez form online   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. Ez form online   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Ez form online Primary responsibility not assumed. Ez form online   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. Ez form online Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Ez form online S. Ez form online person subject to Form 1099 reporting and/or backup withholding. Ez form online The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Ez form online Primary NRA withholding responsibility assumed. Ez form online   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. Ez form online S. Ez form online person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Ez form online The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Ez form online Primary NRA and Form 1099 responsibility assumed. Ez form online   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. Ez form online It is not necessary to associate the payment with withholding rate pools. Ez form online Example. Ez form online You make a payment of dividends to a QI. Ez form online It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. Ez form online S. Ez form online individual who provides it with a Form W-9. Ez form online Each customer is entitled to 20% of the dividend payment. Ez form online The QI does not assume any primary withholding responsibility. Ez form online The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. Ez form online S. Ez form online individual. Ez form online You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. Ez form online The part of the payment allocable to the U. Ez form online S. Ez form online individual (20%) is reportable on Form 1099-DIV. Ez form online Smaller partnerships and trusts. Ez form online   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. Ez form online It is a foreign partnership or foreign simple or grantor trust. Ez form online It is a direct account holder of the QI. Ez form online It does not have any partner, beneficiary, or owner that is a U. Ez form online S. Ez form online person or a pass- through partner, beneficiary, or owner. Ez form online   For information on these rules, see section 4A. Ez form online 01 of the QI agreement. Ez form online This is found in Appendix 3 of Revenue Procedure 2003-64. Ez form online Also see Revenue Procedure 2004-21. Ez form online Related partnerships and trusts. Ez form online    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Ez form online It is a foreign partnership or foreign simple or grantor trust. Ez form online It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. Ez form online For information on these rules, see section 4A. Ez form online 02 of the QI agreement. Ez form online This is found in Appendix 3 of Revenue Procedure 2003-64. Ez form online Also see Revenue Procedure 2005-77. Ez form online Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Ez form online S. Ez form online branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. Ez form online S. Ez form online branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Ez form online The NQI, flow-through entity, or U. Ez form online S. Ez form online branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Ez form online A withholding statement must be updated to keep the information accurate prior to each payment. Ez form online Withholding statement. Ez form online   In most cases, a withholding statement must contain the following information. Ez form online The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Ez form online The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Ez form online The status of the person for whom the documentation has been provided, such as whether the person is a U. Ez form online S. Ez form online exempt recipient (U. Ez form online S. Ez form online person exempt from Form 1099 reporting), U. Ez form online S. Ez form online non-exempt recipient (U. Ez form online S. Ez form online person subject to Form 1099 reporting), or a foreign person. Ez form online For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. Ez form online S. Ez form online branch. Ez form online The type of recipient the person is, based on the recipient codes used on Form 1042-S. Ez form online Information allocating each payment, by income type, to each payee (including U. Ez form online S. Ez form online exempt and U. Ez form online S. Ez form online non-exempt recipients) for whom documentation has been provided. Ez form online The rate of withholding that applies to each foreign person to whom a payment is allocated. Ez form online A foreign payee's country of residence. Ez form online If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. Ez form online ). Ez form online In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. Ez form online The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Ez form online S. Ez form online branch from which the payee will directly receive a payment. Ez form online Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Ez form online Alternative procedure. Ez form online   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Ez form online S. Ez form online exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Ez form online To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. Ez form online You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Ez form online    This alternative procedure cannot be used for payments to U. Ez form online S. Ez form online non-exempt recipients. Ez form online Therefore, an NQI must always provide you with allocation information for all U. Ez form online S. Ez form online non-exempt recipients prior to a payment being made. Ez form online Pooled withholding information. Ez form online   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. Ez form online A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. Ez form online For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). Ez form online The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. Ez form online Failure to provide allocation information. Ez form online   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. Ez form online You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Ez form online An NQI is deemed to have f
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CP 297 - Notice of Intent to Levy and Notice of Your Right to a Hearing

Details About This Notice:
Sample Content: Page 1, Page 2
Purpose:   We send CP 297 to notify the recipient of our intent to levy and of the their right to a hearing.
Reason for Issuance:   There is a balance due on the recipient's account we've previously asked them to pay. We're sending the notice to inform them the account is still unpaid and to notify them of our intent to levy and of their right to receive appeals consideration.
Account Balance:   Balance due
Possible Enclosures:  

Frequently Asked Questions About This Notice

Page Last Reviewed or Updated: 20-May-2013

The Ez Form Online

Ez form online 1. Ez form online   Filing and Paying Business Taxes Table of Contents Introduction Useful Items - You may want to see: Identification NumbersNew EIN. Ez form online Employee. Ez form online Other payee. Ez form online Income TaxDo I Have To File an Income Tax Return? How Do I File? IRS e-file (Electronic Filing) When Is My Tax Return Due? How Do I Pay Income Tax? Self-Employment (SE) TaxHow to become insured under social security. Ez form online Earning credits in 2013 and 2014. Ez form online Employment Taxes Excise Taxes Information ReturnsWaiver of penalties. Ez form online Penalties. Ez form online Introduction This chapter explains the business taxes you may have to pay and the forms you may have to file. Ez form online It also discusses taxpayer identification numbers. Ez form online Table 1-1 lists the benefits of filing electronically. Ez form online Table 1-2 lists the federal taxes you may have to pay, their due dates, and the forms you use to report them. Ez form online Table 1-3 provides checklists that highlight the typical forms and schedules you may need to file if you ever go out of business. Ez form online You may want to get Publication 509, Tax Calendars. Ez form online It has tax calendars that tell you when to file returns and make tax payments. Ez form online Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 1040 U. Ez form online S. Ez form online Individual Income Tax Return 1040-ES Estimated Tax for Individuals Sch C (Form 1040) Profit or Loss From Business Sch C-EZ (Form 1040) Net Profit From Business Sch SE (Form 1040) Self-Employment Tax See chapter 12 for information about getting publications and forms. Ez form online Identification Numbers This section explains three types of taxpayer identification numbers, who needs them, when to use them, and how to get them. Ez form online Social security number (SSN). Ez form online   Generally, use your SSN as your taxpayer identification number. Ez form online You must put this number on each of your individual income tax forms, such as Form 1040 and its schedules. Ez form online   To apply for an SSN, use Form SS-5, Application for a Social Security Card. Ez form online This form is available at Social Security Administration (SSA) offices or by calling 1-800-772-1213. Ez form online It is also available from the SSA website at www. Ez form online socialsecurity. Ez form online gov. Ez form online Individual taxpayer identification number (ITIN). Ez form online   The IRS will issue an ITIN if you are a nonresident or resident alien and you do not have and are not eligible to get an SSN. Ez form online In general, if you need to obtain an ITIN, you must attach Form W-7, Application for IRS Individual Taxpayer Identification Number, with your signed, original, completed tax return and any other required documentation and mail them to the following address. Ez form online  Internal Revenue Service ITIN Operation P. Ez form online O. Ez form online Box 149342 Austin, TX 78714-9342 The exceptions are covered in detail in the instructions for Form W-7. Ez form online If you must include another person's SSN on your return and that person does not have and cannot get an SSN, enter that person's ITIN. Ez form online The application is also available in Spanish. Ez form online The form is available at IRS. Ez form online gov or you can call 1-800-829-3676 to order the form. Ez form online    An ITIN is for tax use only. Ez form online It does not entitle the holder to social security benefits or change the holder's employment or immigration status. Ez form online Employer identification number (EIN). Ez form online   You must also have an EIN to use as a taxpayer identification number if you do either of the following. Ez form online Pay wages to one or more employees. Ez form online File pension or excise tax returns. Ez form online   If you must have an EIN, include it along with your SSN on your Schedule C or C-EZ. Ez form online   You can apply for an EIN: Online by clicking on the Employer ID Numbers (EINs) link at www. Ez form online irs. Ez form online gov/businesses/small. Ez form online The EIN is issued immediately once the application information is validated. Ez form online By telephone at 1-800-829-4933. Ez form online By mailing or faxing Form SS-4, Application for Employer Identification Number. Ez form online New EIN. Ez form online   You may need to get a new EIN if either the form or the ownership of your business changes. Ez form online For more information, see Publication 1635, Understanding Your EIN. Ez form online When you need identification numbers of other persons. Ez form online   In operating your business, you will probably make certain payments you must report on information returns. Ez form online These payments are discussed under Information Returns, later in this chapter. Ez form online You must give the recipient of these payments (the payee) a statement showing the total amount paid during the year. Ez form online You must include the payee's identification number and your identification number on the returns and statements. Ez form online Employee. Ez form online   If you have employees, you must get an SSN from each of them. Ez form online Record the name and SSN of each employee exactly as they are shown on the employee's social security card. Ez form online If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. Ez form online This may occur if the employee's name was changed due to marriage or divorce. Ez form online   Form W-4, Employee's Withholding Allowance Certificate, is completed by each employee so the correct federal income tax can be withheld from their pay. Ez form online   If your employee does not have an SSN, he or she should file Form SS-5 with the SSA. Ez form online Other payee. Ez form online   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. Ez form online If you must report payments to an organization, such as a corporation or partnership, you must get its EIN. Ez form online   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. Ez form online   A payee who does not provide you with an identification number may be subject to backup withholding. Ez form online For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. Ez form online Income Tax This part explains whether you have to file an income tax return and when you file it. Ez form online It also explains how you pay the tax. Ez form online Do I Have To File an Income Tax Return? You have to file an income tax return for 2013 if your net earnings from self-employment were $400 or more. Ez form online If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions. Ez form online How Do I File? File your income tax return on Form 1040 and attach Schedule C or Schedule C-EZ. Ez form online Enter the net profit or loss from Schedule C or Schedule C-EZ on page 1 of Form 1040. Ez form online Use Schedule C to figure your net profit or loss from your business. Ez form online If you operated more than one business as a sole proprietorship, you must attach a separate Schedule C for each business. Ez form online You can use the simpler Schedule C-EZ if you operated only one business as a sole proprietorship, you did not have a net loss, and you meet the other requirements listed in Part I of the schedule. Ez form online IRS e-file (Electronic Filing) Please click here for the text description of the image. Ez form online E-file logo You may be able to file your tax returns electronically using an IRS e-file option. Ez form online Table 1-1 lists the benefits of IRS e-file. Ez form online IRS e-file uses automation to replace most of the manual steps needed to process paper returns. Ez form online As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. Ez form online As with a paper return, you are responsible for making sure your return contains accurate information and is filed on time. Ez form online Using e-file does not affect your chances of an IRS examination of your return. Ez form online You can file most commonly used business forms using IRS e-file. Ez form online For more information, visit IRS. Ez form online gov. Ez form online Electronic signatures. Ez form online   Paperless filing is easier than you think and it's available to most taxpayers who file electronically—including those first-time filers who were 16 or older at the end of 2013. Ez form online If you file electronically using tax preparation software or a tax professional, you will participate in the Self-Select PIN (personal identification number) program. Ez form online If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures. Ez form online    To create a PIN, you must know your adjusted gross income (AGI) from your originally filed 2012 income tax return (not from an amended return, Form 1040X, or any math error notice from the IRS). Ez form online You will also need to provide your date of birth (DOB). Ez form online Make sure your DOB is accurate and matches the information on record with the Social Security Administration before you e-file. Ez form online To do this, check your annual Social Security Statement. Ez form online   With a Self-Select PIN, there is nothing to sign and nothing to mail—not even your Forms W-2. Ez form online For more details on the Self-Select PIN program, visit IRS. Ez form online gov. Ez form online State returns. Ez form online   In most states, you can file an electronic state return simultaneously with your federal return. Ez form online For more information, check with your local IRS office, state tax agency, tax professional, or IRS. Ez form online gov. Ez form online Refunds. Ez form online   You can have your refund check mailed to you, or you can have your refund deposited directly to your checking or savings account. Ez form online   With e-file, your refund will be issued in half the time as when filing on paper. Ez form online Most refunds are issued within 3 weeks. Ez form online If you choose Direct Deposit, you can receive your refund in as few as 10 days. Ez form online Offset against debts. Ez form online   As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. Ez form online You will be notified if the refund you claimed has been offset against your debts. Ez form online Refund inquiries. Ez form online   You can check the status of your refund if it has been at least 24 hours (4 weeks if you mailed a paper return) from the date you filed your return. Ez form online Be sure to have a copy of your tax return available because you will need to know the filing status, the first social security number shown on the return, and the exact whole-dollar amount of the refund. Ez form online To check on your refund, do one of the following. Ez form online Go to IRS. Ez form online gov and click on Where's My Refund. Ez form online Call 1-800-829-4477 for automated refund information, and follow the recorded instructions. Ez form online Call 1-800-829-1954 during the hours shown in your form instructions. Ez form online Balance due. Ez form online   If you owe tax, you must pay it by April 15, 2014, to avoid late-payment penalties and interest. Ez form online You can make your payment electronically by scheduling an electronic funds withdrawal from your checking or savings account or by credit card. Ez form online Using an Authorized IRS e-file Provider Many tax professionals can electronically file paperless returns for their clients. Ez form online You have two options. Ez form online You can prepare your return, take it to an authorized IRS e-file provider, and have the provider transmit it electronically to the IRS. Ez form online You can have an authorized IRS e-file provider prepare your return and transmit it for you electronically. Ez form online You will be asked to complete Form 8879, IRS e-file Signature Authorization, to authorize the provider to enter your self-selected PIN on your return. Ez form online Depending on the provider and the specific services requested, a fee may be charged. Ez form online To find an authorized IRS e-file provider near you, go to IRS. Ez form online gov or look for an “Authorized IRS e-file Provider” sign. Ez form online Using Your Personal Computer A computer with Internet access is all you need to file your tax return using IRS e-file. Ez form online When you use your personal computer, you can e-file your return from your home any time of the day or night. Ez form online Sign your return electronically using a self-selected PIN to complete the process. Ez form online There is no signature form to submit or Forms W-2 to send in. Ez form online Free Internet filing options. Ez form online   More taxpayers can now prepare and e-file their individual income tax returns free using commercial tax preparation software accessible through IRS. Ez form online gov or www. Ez form online usa. Ez form online gov. Ez form online The IRS is partnering with the tax software industry to offer free preparation and filing services to a significant number of taxpayers. Ez form online Security and privacy certificate programs will assure tax data is safe and secure. Ez form online To see if you qualify for these services, visit the Return Preparation and Filing Options page at IRS. Ez form online gov. Ez form online   If you cannot use the free services, you can buy tax preparation software at various electronics stores or computer and office supply stores. Ez form online You can also download software from the Internet or prepare and file your return completely online by using tax preparation software available on the Internet. Ez form online Filing Through Employers and Financial Institutions Some businesses offer free e-file to their employees, members, or customers. Ez form online Others offer it for a fee. Ez form online Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit. Ez form online Free Help With Your Return Free help in preparing your return is available nationwide from IRS-trained volunteers. Ez form online The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers, and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. Ez form online Some locations offer free electronic filing. Ez form online Table 1-1. Ez form online Benefits of IRS e-file Accuracy • Your chance of getting an error notice from the IRS is significantly reduced. Ez form online Security • Your privacy and security are assured. Ez form online Electronic signatures • Create your own personal identification number (PIN) and file a completely paperless return through your tax preparation software or tax professional. Ez form online There is nothing to mail. Ez form online Proof of acceptance • You receive an electronic acknowledgment within 48 hours that the IRS has accepted your return for processing. Ez form online Fast refunds • You get your refund faster with Direct Deposit—in as few as 10 days. Ez form online Free Internet filing options • Use IRS. Ez form online gov to access commercial tax preparation and e-file services available at no cost to eligible taxpayers. Ez form online Electronic payment options • Convenient, safe, and secure electronic payment options are available. Ez form online E-file and pay your taxes in a single step. Ez form online Schedule an electronic funds withdrawal from your checking or savings account (up to and including April 15, 2014) or pay by credit card. Ez form online Federal/State filing • Prepare and file your federal and state tax returns together and double the benefits you get from e-file. Ez form online When Is My Tax Return Due? Form 1040 for calendar year 2013 is due by April 15, 2014. Ez form online If you use a fiscal year (explained in chapter 2), your return is due by the 15th day of the 4th month after the end of your fiscal year. Ez form online If you file late, you may have to pay penalties and interest. Ez form online If you cannot file your return on time, use Form 4868, Application for Automatic Extension of Time To File U. Ez form online S. Ez form online Individual Income Tax Return, to request an automatic 6-month extension. Ez form online For calendar year taxpayers, this will extend the tax filing due date until October 15. Ez form online Filing an extension does not extend the time to pay your taxes, only the time to file the tax return. Ez form online How Do I Pay Income Tax? Federal income tax is a pay-as-you-go tax. Ez form online You must pay it as you earn or receive income during the year. Ez form online An employee usually has income tax withheld from his or her pay. Ez form online If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Ez form online You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax (discussed later), of $1,000 or more when you file your return. Ez form online Use Form 1040-ES to figure and pay the tax. Ez form online If you do not have to make estimated tax payments, you can pay any tax due when you file your return. Ez form online For more information on estimated tax, see Publication 505, Tax Withholding and Estimated Tax. Ez form online What are my payment options?   You can pay your estimated tax electronically using various options. Ez form online If you pay electronically, there is no need to mail in Form 1040-ES payment vouchers. Ez form online These options include: Paying electronically through the Electronic Federal Tax Payment System (EFTPS). Ez form online Paying by authorizing an electronic funds withdrawal when you file Form 1040 electronically. Ez form online Paying by credit or debit card over the phone or by Internet. Ez form online Other options include crediting an overpayment from your 2013 return to your 2014 estimated tax, or mailing a check or money order with a Form 1040-ES payment voucher. Ez form online EFTPS    To enroll in EFTPS, go to www. Ez form online eftps. Ez form online gov or call 1-800-555-4477. Ez form online When you request a new EIN and you will have a tax obligation, you are automatically enrolled in EFTPS. Ez form online Benefits of EFTPS: The chance of an error in making your payments is reduced. Ez form online You receive immediate confirmation of every transaction. Ez form online Penalty for underpayment of tax. Ez form online   If you did not pay enough income tax and self-employment tax for 2013 by withholding or by making estimated tax payments, you may have to pay a penalty on the amount not paid. Ez form online The IRS will figure the penalty for you and send you a bill. Ez form online Or you can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you have to pay a penalty and to figure the penalty amount. Ez form online For more information, see Publication 505. Ez form online Self-Employment (SE) Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Ez form online It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. Ez form online If you earned income as a statutory employee, you do not pay SE tax on that income. Ez form online Social security coverage. Ez form online   Social security benefits are available to self-employed persons just as they are to wage earners. Ez form online Your payments of SE tax contribute to your coverage under the social security system. Ez form online Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Ez form online By not reporting all of your self-employment income, you could cause your social security benefits to be lower when you retire. Ez form online How to become insured under social security. Ez form online   You must be insured under the social security system before you begin receiving social security benefits. Ez form online You are insured if you have the required number of credits (also called quarters of coverage), discussed next. Ez form online Earning credits in 2013 and 2014. Ez form online   For 2013, you received one credit, up to a maximum of four credits, for each $1,160 ($1,200 for 2014) of income subject to social security taxes. Ez form online Therefore, for 2013, if you had income (self-employment and wages) of $4,640 that was subject to social security taxes, you receive four credits ($4,640 ÷ $1,160). Ez form online   For an explanation of the number of credits you must have to be insured and the benefits available to you and your family under the social security program, consult your nearest Social Security Administration (SSA) office. Ez form online    Making false statements to get or to increase social security benefits may subject you to penalties. Ez form online The Social Security Administration (SSA) time limit for posting self-employment income. Ez form online   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Ez form online If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. Ez form online The SSA will not change its records to increase your self-employment income. Ez form online Who must pay self-employment tax. Ez form online   You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. Ez form online Your net earnings from self-employment (excluding church employee income) were $400 or more. Ez form online You had church employee income of $108. Ez form online 28 or more. Ez form online The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. Ez form online SE tax rate. Ez form online   For 2013, the SE tax rate on net earnings is 15. Ez form online 3% (12. Ez form online 4% social security tax plus 2. Ez form online 9% Medicare tax). Ez form online Maximum earnings subject to SE tax. Ez form online   Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. Ez form online 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. Ez form online   All your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. Ez form online 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. Ez form online   If wages and tips you receive as an employee are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. Ez form online 4% social security part of the SE tax on any of your net earnings. Ez form online However, you must pay the 2. Ez form online 9% Medicare part of the SE tax on all your net earnings. Ez form online Deduct one-half of your SE tax as an adjustment to income on line 27 of Form 1040. Ez form online   More information. Ez form online   For information on methods of calculating SE tax, see Chapter 10, Self-Employment Tax. Ez form online Table 1-2. Ez form online Which Forms Must I File? IF you are liable for: THEN use Form: DUE by:1 Income tax 1040 and Schedule C or C-EZ2 15th day of 4th month after end of  tax year. Ez form online Self-employment tax Schedule SE File with Form 1040. Ez form online Estimated tax 1040-ES 15th day of 4th, 6th, and 9th months of tax year, and 15th day of 1st month after the end of tax year. Ez form online Social security and Medicare taxes and income tax withholding 941 or 944 April 30, July 31, October 31, and January 313. Ez form online     See Publication 15. Ez form online Providing information on social security and Medicare taxes and income tax withholding W-2 (to employee)  W-2 and W-3 (to the Social Security Administration) January 313. Ez form online   Last day of February (March 31 if filing electronically)3. Ez form online Federal unemployment (FUTA) tax 940 January 313. Ez form online     April 30, July 31, October 31, and January 31, but only if the liability for unpaid tax is more than $500. Ez form online Filing information returns for payments to nonemployees and transactions with other persons See Information Returns Forms 1099 – to the recipient by January 31 and to the IRS by February 28 (March 31 if filing electronically). Ez form online     Other forms – see the General Instructions for Certain Information Returns. Ez form online Excise tax See Excise Taxes See the instructions to the forms. Ez form online 1 If a due date falls on a Saturday, Sunday, or legal holiday, file by the next day that is not a Saturday, Sunday, or legal holiday. Ez form online For more information, see Publication 509, Tax Calendars. Ez form online 2 File a separate schedule for each business. Ez form online 3 See the form instructions if you go out of business, change the form of your business, or stop paying wages. Ez form online     Employment Taxes If you have employees, you will need to file forms to report employment taxes. Ez form online Employment taxes include the following items. Ez form online Social security and Medicare taxes. Ez form online Federal income tax withholding. Ez form online Federal unemployment (FUTA) tax. Ez form online For more information, see Publication 15 (Circular E), Employer's Tax Guide. Ez form online That publication explains your tax responsibilities as an employer. Ez form online To help you determine whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. Ez form online That publication has information to help you determine whether an individual is an independent contractor or an employee. Ez form online If you incorrectly classify an employee as an independent contractor, you may be held liable for employment taxes for that worker plus a penalty. Ez form online An independent contractor is someone who is self-employed. Ez form online You do not generally have to withhold or pay any taxes on payments made to an independent contractor. Ez form online Excise Taxes This section identifies some of the excise taxes you may have to pay and the forms you have to file if you do any of the following. Ez form online Manufacture or sell certain products. Ez form online Operate certain kinds of businesses. Ez form online Use various kinds of equipment, facilities, or products. Ez form online Receive payment for certain services. Ez form online For more information on excise taxes, see Publication 510, Excise Taxes. Ez form online Form 720. Ez form online   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. Ez form online Environmental taxes on the sale or use of ozone-depleting chemicals and imported products containing or manufactured with these chemicals. Ez form online Communications and air transportation taxes. Ez form online Fuel taxes. Ez form online Tax on the first retail sale of heavy trucks, trailers, and tractors. Ez form online Manufacturers taxes on the sale or use of a variety of different articles. Ez form online Tax on indoor tanning services. Ez form online Form 2290. Ez form online   There is a federal excise tax on the use of certain trucks, truck tractors, and buses on public highways. Ez form online The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Ez form online Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. Ez form online For more information, see the Instructions for Form 2290. Ez form online Depositing excise taxes. Ez form online   If you have to file a quarterly excise tax return on Form 720, you may have to deposit your excise taxes before the return is due. Ez form online For details on depositing excise taxes, see the Instructions for Form 720. Ez form online Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. Ez form online The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. Ez form online You must give a copy of each information return you are required to file to the recipient or payer. Ez form online In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. Ez form online For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. Ez form online Form 1099-MISC. Ez form online   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your business. Ez form online These payments include the following items. Ez form online Payments of $600 or more for services performed for your business by people not treated as your employees, such as fees to subcontractors, attorneys, accountants, or directors. Ez form online Rent payments of $600 or more, other than rents paid to real estate agents. Ez form online Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. Ez form online Royalty payments of $10 or more. Ez form online Payments to certain crew members by operators of fishing boats. Ez form online You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. Ez form online Form W-2. Ez form online   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. Ez form online You can file Form W-2 online. Ez form online For more information about Form W-2, see the General Instructions for Forms W-2 and W-3. Ez form online Penalties. Ez form online   The law provides for the following penalties if you do not file Form 1099-MISC or Form W-2 or do not correctly report the information. Ez form online For more information, see the General Instructions for Certain Information Returns. Ez form online Failure to file information returns. Ez form online This penalty applies if you do not file information returns by the due date, do not include all required information, or report incorrect information. Ez form online Failure to furnish correct payee statements. Ez form online This penalty applies if you do not furnish a required statement to a payee by the required date, do not include all required information, or report incorrect information. Ez form online Waiver of penalties. Ez form online   These penalties will not apply if you can show that the failure was due to reasonable cause and not willful neglect. Ez form online   In addition, there is no penalty for failure to include all required information, or for including incorrect information, on a de minimis (small) number of information returns if you correct the errors by August 1 of the year the returns are due. Ez form online (A de minimis number of returns is the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. Ez form online ) Form 8300. Ez form online   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction, or two or more related business transactions. Ez form online Cash includes U. Ez form online S. Ez form online and foreign coin and currency. Ez form online It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. Ez form online Cash does not include a check drawn on an individual's personal account (personal check). Ez form online For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). Ez form online Penalties. Ez form online   There are civil and criminal penalties, including up to 5 years in prison, for not filing Form 8300, filing (or causing the filing of) a false or fraudulent Form 8300, or structuring a transaction to evade reporting requirements. Ez form online Table 1-3. Ez form online Going Out of Business Checklists (Note. Ez form online The following checklists highlight the typical final forms and schedules you may need to file if you ever go out of business. Ez form online For more information, see the instructions for the listed forms. Ez form online ) IF you are liable for:   THEN you may need to: Income tax □ File Schedule C or C-EZ with your Form 1040 for the year in which you go out of business. Ez form online   □ File Form 4797 with your Form 1040 for each year in which you sell or exchange property used in your business or in which the business use of certain section 179 or listed property drops to 50% or less. Ez form online   □ File Form 8594 with your Form 1040 if you sold your business. Ez form online Self-employment tax □ File Schedule SE with your Form 1040 for the year in which you go out of business. Ez form online Employment taxes □ File Form 941 (or Form 944) for the calendar quarter in which you make final wage payments. Ez form online Note. Ez form online Do not forget to check the box and enter the date final wages were paid on line 15 of Form 941 or line 14 of Form 944. Ez form online   □ File Form 940 for the calendar year in which final wages were paid. Ez form online Note. Ez form online Do not forget to check box d, Final: Business closed or stopped paying wages, under Type of Return. Ez form online Information returns □ Provide Forms W-2 to your employees for the calendar year in which you make final wage payments. Ez form online Note. Ez form online These forms are generally due by the due date of your final Form 941 or Form 944. Ez form online   □ File Form W-3 to file Forms W-2. Ez form online Note. Ez form online These forms are generally due within 1 month after the due date of your final Form 941 or Form 944. Ez form online   □ Provide Forms 1099-MISC to each person to whom you have paid at least $600 for services (including parts and materials) during the calendar year in which you go out of business. Ez form online   □ File Form 1096 to file Forms 1099-MISC. Ez form online Prev  Up  Next   Home   More Online Publications