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Federal Tax Software

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Federal Tax Software

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

Federal tax software Publication 542 - Introductory Material Table of Contents Introduction Useful Items - You may want to see: Photographs of missing children. Federal tax software  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Federal tax software Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Federal tax software You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Federal tax software Introduction This publication discusses the general tax laws that apply to ordinary domestic corporations. Federal tax software It explains the tax law in plain language so it will be easier to understand. Federal tax software However, the information given does not cover every situation and is not intended to replace the law or change its meaning. Federal tax software Note. Federal tax software This publication is not revised on an annual basis. Federal tax software To find changes that may affect current year returns, see the instructions for your income tax return for the current year; and Changes to Current Forms and Publications at www. Federal tax software irs. Federal tax software gov/formspubs. Federal tax software Comments and suggestions. Federal tax software   We welcome your comments about this publication and your suggestions for future editions. Federal tax software   You can write to us at the following address: Internal Revenue Service Business, Exempt Organizations and International Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. Federal tax software NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Federal tax software Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Federal tax software   You can email us at *taxforms@irs. Federal tax software gov (The asterisk must be included in the address). Federal tax software Please put “Publications Comment” on the subject line. Federal tax software You can also send us comments at www. Federal tax software irs. Federal tax software gov/formspubs/. Federal tax software Select “Comment on Tax Forms and Publications” under “Information about. Federal tax software ” Although we cannot respond individually to each comment, we do appreciate your feedback and will consider your comments as we revise our tax products. Federal tax software Tax questions. Federal tax software   If you have a tax question, visit IRS. Federal tax software gov or call 1-800-829-1040. Federal tax software We cannot answer tax questions at either of the addresses listed above. Federal tax software Ordering forms and publications. Federal tax software   Visit www. Federal tax software irs. Federal tax software gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the National Distribution Center at the address shown under How to Get Tax Help, later in this publication. Federal tax software Additional forms. Federal tax software   A list of other forms and statements that a corporation may need to file is included at the end of this publication. Federal tax software Useful Items - You may want to see: Publication 510 Excise Taxes (Including Fuel Tax Credits and Refunds) 535 Business Expenses 538 Accounting Periods and Methods 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 925 Passive Activity and At-Risk Rules 946 How to Depreciate Property Prev  Up  Next   Home   More Online Publications