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Free federal tax forms It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors. Free federal tax forms Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. Free federal tax forms Select the Scenario that Applies to You: Free federal tax forms I am an independent contractor or in business for myself Free federal tax forms If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. For more information on your tax obligations if you are self-employed (an independent contractor), see our Self-Employed Tax Center. Free federal tax forms I hire or contract with individuals to provide services to my business Free federal tax forms If you are a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or independent contractors. Follow the rest of this page to find out more about this topic and what your responsibilities are. Free federal tax forms Determining Whether the Individuals Providing Services are Employees or Independent Contractors Free federal tax forms Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be - Free federal tax forms An independent contractor Free federal tax forms An employee (common-law employee) Free federal tax forms A statutory employee Free federal tax forms A statutory nonemployee Free federal tax forms In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered. Free federal tax forms Common Law Rules Free federal tax forms Facts that provide evidence of the degree of control and independence fall into three categories: Free federal tax forms Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job? Free federal tax forms Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) Free federal tax forms Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business? Free federal tax forms Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another. Free federal tax forms The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination. Free federal tax forms Form SS-8 Free federal tax forms If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status. Free federal tax forms Be aware that it can take at least six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form SS-8 (PDF).
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Page Last Reviewed or Updated: 14-Mar-2014

The Free Federal Tax Forms

Free federal tax forms 14. Free federal tax forms   Excise Taxes Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Fuels Used in FarmingBuyer of fuel, including undyed diesel fuel or undyed kerosene. Free federal tax forms Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). Free federal tax forms Custom application of fertilizer and pesticide. Free federal tax forms Fuel not used for farming. Free federal tax forms Dyed Diesel Fuel and Dyed Kerosene Fuels Used in Off-Highway Business Use Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines How To Claim a Credit or RefundCredit only. Free federal tax forms Claiming a Credit Claiming a Refund Including the Credit or Refund in Income Introduction You may be eligible to claim a credit on your income tax return for the federal excise tax on certain fuels. Free federal tax forms You may also be eligible to claim a quarterly refund of the fuel taxes during the year, instead of waiting to claim a credit on your income tax return. Free federal tax forms Whether you can claim a credit or refund depends on whether the fuel was taxed and the purpose (nontaxable use) for which you used the fuel. Free federal tax forms The nontaxable uses of fuel for which a farmer may claim a credit or refund are generally the following. Free federal tax forms Use on a farm for farming purposes. Free federal tax forms Off-highway business use. Free federal tax forms Uses other than as a fuel in a propulsion engine, such as home use. Free federal tax forms Table 14-1 presents an overview of credits and refunds that may be claimed for fuels used for the nontaxable uses listed above. Free federal tax forms See Publication 510, Excise Taxes, for more information. Free federal tax forms Topics - This chapter discusses: Fuels used in farming Dyed diesel fuel and dyed kerosene Fuels used in off-highway business use Fuels used for household purposes How to claim a credit or refund Including the credit or refund in income Useful Items - You may want to see: Publication 510 Excise Taxes Form (and Instructions) 720 Quarterly Federal Excise Tax Return 4136 Credit for Federal Tax Paid on Fuels 8849 Claim for Refund of Excise Taxes See chapter 16 for information about getting publications and forms. Free federal tax forms Fuels Used in Farming Owners, operators, and tenants of farms and certain other persons may be eligible to claim a credit or refund of excise taxes on fuel used in the trade or business of farming, when used on a farm in the United States for farming purposes. Free federal tax forms See Table 14-1 for a list of available fuel tax credits and refunds. Free federal tax forms Fuel is used on a farm for farming purposes only if used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. Free federal tax forms Farm. Free federal tax forms   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms, orchards, plantations, ranches, nurseries, ranges, and feed yards for finishing cattle. Free federal tax forms It also includes structures such as greenhouses used primarily for raising agricultural or horticultural commodities. Free federal tax forms A fish farm is an area where fish are grown or raised and not merely caught or harvested. Free federal tax forms Table 14-1. Free federal tax forms Fuel Tax Credits and Refunds at a Glance Use this table to see if you can take a credit or refund for a nontaxable use of the fuel listed. Free federal tax forms Fuel Used On a Farm for Farming Purposes Off-Highway Business Use Household Use or Use Other Than as a Fuel1 Gasoline Credit only Credit or refund None Aviation gasoline Credit only None None Undyed diesel fuel and undyed kerosene Credit or refund Credit or refund2 Credit or refund2 Kerosene for use in aviation Credit or refund None None Dyed diesel fuel and dyed kerosene None None None Other Fuels (including alternative fuels)3 Credit or refund Credit or refund None 1For a use other than as fuel in a propulsion engine. Free federal tax forms 2Applies to undyed kerosene not sold from a blocked pump or, under certain circumstances, for blending with undyed diesel fuel to be used for heating purposes. Free federal tax forms See Reg. Free federal tax forms 48. Free federal tax forms 6427-10 (b)(1) for the definition of a blocked pump. Free federal tax forms 3Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under Internal Revenue Code section 4081. Free federal tax forms It includes the alternative fuels: liquefied petroleum gas (LPG),“P” Series fuels, compressed natural gas (CNG), liquefied hydrogen, any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, liquid fuel derived from biomass, liquid natural gas (LNG), liquefied gas derived from biomass, and compressed gas derived from biomass. Free federal tax forms Farming purposes. Free federal tax forms   As the owner, tenant, or operator and the ultimate purchaser of fuel that you purchased, you use the fuel on a farm for farming purposes if you use it in any of the following ways. Free federal tax forms To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. Free federal tax forms To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. Free federal tax forms To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. Free federal tax forms To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. Free federal tax forms For this use to qualify, you must have produced more than half the commodity so treated during the tax year. Free federal tax forms The more-than-one-half test applies separately to each commodity. Free federal tax forms Commodity means a single raw product. Free federal tax forms For example, apples and peaches are two separate commodities. Free federal tax forms To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if these activities are incidental to your farming operations. Free federal tax forms Your tree operations are incidental only if they are minor in nature when compared to the total farming operations. Free federal tax forms   If any other person, such as a neighbor or custom operator (independent contractor), performs a service for you on your farm for any of the purposes included in list items (1) or (2), above, you are considered to be the ultimate purchaser who used the fuel on a farm for farming purposes. Free federal tax forms Therefore, you can still claim the credit or refund for the fuel so used. Free federal tax forms However, see Custom application of fertilizer and pesticide, later. Free federal tax forms If the other person performs any other services for you on your farm for purposes not included in list items (1) or (2) above, no one can claim the credit or refund for fuel used on your farm for those other services. Free federal tax forms Buyer of fuel, including undyed diesel fuel or undyed kerosene. Free federal tax forms   If doubt exists whether the owner, tenant, or operator of the farm bought the fuel, determine who actually bore the cost of the fuel. Free federal tax forms For example, if the owner of a farm and his or her tenant equally share the cost of gasoline used on the farm, each can claim a credit for the tax on half the fuel used. Free federal tax forms Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). Free federal tax forms   Usually, the farmer is the only person who can make a claim for credit or refund for the tax on undyed diesel fuel, undyed kerosene, or other fuels (including alternative fuel) used for farming purposes. Free federal tax forms However, see Custom application of fertilizer and pesticide, next. Free federal tax forms Also see Dyed Diesel Fuel and Dyed Kerosene, later. Free federal tax forms Example. Free federal tax forms Farm owner Haleigh Blue hired custom operator Tyler Steele to cultivate the soil on her farm. Free federal tax forms Tyler used 200 gallons of undyed diesel fuel that he purchased to perform the work on Haleigh's farm. Free federal tax forms In addition, Haleigh hired contractor Lee Brown to pack and store her apple crop. Free federal tax forms Lee bought 25 gallons of undyed diesel fuel to use in packing the apples. Free federal tax forms Haleigh can claim the credit for the 200 gallons of undyed diesel fuel used by Tyler on her farm because it qualifies as fuel used on the farm for farming purposes. Free federal tax forms No one can claim a credit for the 25 gallons used by Lee because that fuel was not used for a farming purpose included in list items (1) or (2), above. Free federal tax forms In the above example, both Tyler Steele and Lee Brown could have purchased dyed (untaxed) diesel fuel for their tasks. Free federal tax forms Custom application of fertilizer and pesticide. Free federal tax forms   Fuel used on a farm for farming purposes includes fuel used in the application (including aerial application) of fertilizer, pesticides, or other substances. Free federal tax forms Generally, the applicator is treated as having used the fuel on a farm for farming purposes. Free federal tax forms For applicators using highway vehicles, only the fuel used on the farm is exempt. Free federal tax forms Fuel used traveling on the highway to and from the farm is taxable. Free federal tax forms Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as used for a farming purpose. Free federal tax forms For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. Free federal tax forms For kerosene used in aviation, the ultimate purchaser may make the claim or waive the right to make the claim to the registered ultimate vendor. Free federal tax forms A sample waiver is included as Model Waiver L in the appendix of Publication 510. Free federal tax forms A registered ultimate vendor is the person who sells undyed diesel fuel, undyed kerosene, or kerosene for use in aviation to the user (ultimate purchaser) of the fuel for use on a farm for farming purposes. Free federal tax forms To claim a credit or refund of tax, the ultimate vendor must be registered with the Internal Revenue Service at the time the claim is made. Free federal tax forms However, registered ultimate vendors cannot make claims for undyed diesel fuel and undyed kerosene sold for use on a farm for farming purposes. Free federal tax forms Fuel not used for farming. Free federal tax forms   You do not use fuel on a farm for farming purposes when you use it in any of the following ways. Free federal tax forms Off the farm, such as on the highway or in noncommercial aviation, even if the fuel is used in transporting livestock, feed, crops, or equipment. Free federal tax forms For personal use, such as lawn mowing. Free federal tax forms In processing, packaging, freezing, or canning operations. Free federal tax forms In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. Free federal tax forms All-terrain vehicles (ATVs). Free federal tax forms   Fuel used in ATVs on a farm for farming purposes, discussed earlier, is eligible for a credit or refund of excise taxes on the fuel. Free federal tax forms Fuel used in ATVs for nonfarming purposes is not eligible for a credit or refund of the taxes. Free federal tax forms If ATVs are used both for farming and nonfarming purposes, only that portion of the fuel used for farming purposes is eligible for the credit or refund. Free federal tax forms Dyed Diesel Fuel and Dyed Kerosene If you purchase dyed diesel fuel or dyed kerosene for a nontaxable use, you must use it only on a farm for farming purposes or for other nontaxable purposes. Free federal tax forms For example, you should not use dyed diesel fuel in a truck that is used both on the farm for farming purposes and on the highway, even though the highway use is in connection with farm business. Free federal tax forms Excise tax applies to the fuel used by the truck on the highways. Free federal tax forms In this situation, undyed (taxed) fuel should be purchased for the truck. Free federal tax forms You should keep fuel records of the use of the truck on the farm for farming purposes, and for other uses. Free federal tax forms You may be eligible for a credit or refund for the excise tax on fuel used on the farm for farming purposes. Free federal tax forms Penalty. Free federal tax forms   A penalty is imposed on any person who knowingly uses, sells, or alters dyed diesel fuel or dyed kerosene for any purpose other than a nontaxable use. Free federal tax forms The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Free federal tax forms After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Free federal tax forms For more information on this penalty, see Publication 510. Free federal tax forms Fuels Used in Off-Highway Business Use You may be eligible to claim a credit or refund for the excise tax on fuel used in an off-highway business use. Free federal tax forms Off-highway business use. Free federal tax forms   This is any use of fuel in a trade or business or in an income-producing activity. Free federal tax forms The use must not be in a highway vehicle registered or required to be registered for use on public highways. Free federal tax forms Off-highway business use generally does not include any use in a recreational motorboat. Free federal tax forms Examples. Free federal tax forms   Off-highway business use includes the use of fuels in a trade or business in any of the following ways. Free federal tax forms In stationary machines such as generators, compressors, power saws, and similar equipment; For cleaning ; and In forklift trucks, bulldozers, and earthmovers. Free federal tax forms   Off-highway nonbusiness (taxable) use of fuel includes: use in minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. Free federal tax forms For more information, see Publication 510. Free federal tax forms Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines You may be eligible to claim a credit or refund for the excise tax on undyed diesel fuel or kerosene used for home heating, lighting, and cooking. Free federal tax forms This also applies to diesel fuel and kerosene used in a home generator to produce electricity for home use. Free federal tax forms Home use of a fuel does not include use in a propulsion engine and it is not considered an off-highway business use. Free federal tax forms How To Claim a Credit or Refund You may be able to claim a credit or refund of the excise tax on fuels you use for nontaxable uses. Free federal tax forms The basic rules for claiming credits and refunds are listed in Table 14-2 . Free federal tax forms Table 14-2. Free federal tax forms Claiming a Credit or Refund of Excise Taxes This table gives the basic rules for claiming a credit or refund of excise taxes on fuels used for a nontaxable use. Free federal tax forms   Credit Refund Which form to use Form 4136, Credit for Federal Tax Paid on Fuels Form 8849, Claim for Refund of Excise Taxes, and Schedule 1 (Form 8849), Nontaxable Use of Fuels Type of form Annual Quarterly When to file With your income tax return By the last day of the quarter following the last quarter included in the claim Amount of tax Any amount $750 or more1 1You may carry over an amount less than $750 to the next quarter. Free federal tax forms Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. Free federal tax forms You do not have to use any special form, but the records should establish the following information. Free federal tax forms The total number of gallons bought and used during the period covered by your claim. Free federal tax forms The dates of the purchases. Free federal tax forms The names and addresses of suppliers and amounts bought from each during the period covered by your claim. Free federal tax forms The nontaxable use for which you used the fuel. Free federal tax forms The number of gallons used for each nontaxable use. Free federal tax forms It is important that your records separately show the number of gallons used for each nontaxable use that qualifies as a claim. Free federal tax forms For more information about recordkeeping, see Publication 583, Starting a Business and Keeping Records. Free federal tax forms Credit or refund. Free federal tax forms   A credit is an amount that reduces the tax on your income tax return when you file it at the end of the year. Free federal tax forms If you meet certain requirements, you may claim a refund during the year instead of waiting until you file your income tax return. Free federal tax forms Credit only. Free federal tax forms   You can claim the following taxes only as a credit on your income tax return. Free federal tax forms Tax on gasoline and aviation gasoline you used on a farm for farming purposes. Free federal tax forms Tax on fuels (including undyed diesel fuel or undyed kerosene) you used for nontaxable uses if the total for the tax year is less than $750. Free federal tax forms Tax on fuel you did not include in any claim for refund previously filed for any quarter of the tax year. Free federal tax forms Claiming a Credit You make a claim for a fuel tax credit on Form 4136 and attach it to your income tax return. Free federal tax forms Do not claim a credit for any excise tax for which you have filed a refund claim. Free federal tax forms How to claim a credit. Free federal tax forms   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, trust, or farmers' cooperative association. Free federal tax forms Individuals. Free federal tax forms   You claim the credit on the “Credit for federal tax on fuels” line of your Form 1040. Free federal tax forms If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. Free federal tax forms Partnership. Free federal tax forms   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Free federal tax forms , showing each partner's share of the number of gallons of each fuel sold or used for a nontaxable use, the type of use, and the applicable credit per gallon. Free federal tax forms Each partner claims the credit on his or her income tax return for the partner's share of the fuel used by the partnership. Free federal tax forms An electing large partnership can claim the credit on the “Other payments” line of Form 1065-B, U. Free federal tax forms S. Free federal tax forms Return of Income for Electing Large Partnerships. Free federal tax forms Other entities. Free federal tax forms   Corporations, S corporations, farmers' cooperative associations, and trusts make the claim on the appropriate line of their income tax return. Free federal tax forms When to claim a credit. Free federal tax forms   You can claim a fuel tax credit on your income tax return for the year you used the fuel. Free federal tax forms You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. Free federal tax forms A claim for credit or refund of an overpayment must generally be filed within the later of: Three years from the date the original return was filed, or Two years from the date the tax was paid. Free federal tax forms Claiming a Refund Generally, you may claim a refund of excise taxes on Form 8849. Free federal tax forms Complete and attach to Form 8849 the appropriate Form 8849 schedule(s). Free federal tax forms The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. Free federal tax forms If you file Form 720, you can use its Schedule C for your refund claims for the quarter. Free federal tax forms See the Instructions for Form 720. Free federal tax forms Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Form 720 or Form 4136. Free federal tax forms You may file a claim for refund for any quarter of your tax year for which you can claim $750 or more. Free federal tax forms This amount is the excise tax on all fuels used for a nontaxable use during that quarter or any prior quarter (for which no other claim has been filed) during the tax year. Free federal tax forms If you cannot claim at least $750 at the end of a quarter, you carry the amount over to the next quarter of your tax year to determine if you can claim at least $750 for that quarter. Free federal tax forms If you cannot claim at least $750 at the end of the fourth quarter of your tax year, you must claim a credit on your income tax return using Form 4136. Free federal tax forms Only one claim can be filed for a quarter. Free federal tax forms You cannot claim a refund for excise tax on gasoline and aviation gasoline used on a farm for farming purposes. Free federal tax forms You must claim a credit on your income tax return for the tax. Free federal tax forms How to file a quarterly claim. Free federal tax forms   File the claim for refund by filling out Schedule 1 (Form 8849) and attaching it to Form 8849. Free federal tax forms Send it to the address shown in the instructions. Free federal tax forms If you file Form 720, you can use its Schedule C for your refund claims. Free federal tax forms See the Instructions for Form 720. Free federal tax forms When to file a quarterly claim. Free federal tax forms   You must file a quarterly claim by the last day of the first quarter following the last quarter included in the claim. Free federal tax forms If you do not file a timely refund claim for the fourth quarter of your tax year, you will have to claim a credit for that amount on your income tax return, as discussed earlier. Free federal tax forms    In most situations, the amount claimed as a credit or refund will be less than the amount deducted as fuel tax expense because the Leaking Underground Storage Tank (LUST) tax of $0. Free federal tax forms 001 per gallon is generally not subject to credit or refund. Free federal tax forms Including the Credit or Refund in Income Include any credit or refund of excise taxes on fuels in your gross income if you claimed the total cost of the fuel (including the excise taxes) as an expense deduction that reduced your income tax liability. Free federal tax forms Which year you include a credit or refund in gross income depends on whether you use the cash or an accrual method of accounting. Free federal tax forms Cash method. Free federal tax forms   If you use the cash method and file a claim for refund, include the refund amount in gross income for the tax year in which you receive the refund. Free federal tax forms If you claim a credit on your income tax return, include the credit amount in gross income for the tax year in which you file Form 4136. Free federal tax forms If you file an amended return and claim a credit, include the credit amount in gross income for the tax year in which you receive the credit. Free federal tax forms Example. Free federal tax forms Sharon Brown, a farmer who uses the cash method, filed her 2012 Form 1040 on March 3, 2013. Free federal tax forms On her Schedule F, she deducted the total cost of gasoline (including $110 of excise taxes) used on the farm for farming purposes. Free federal tax forms Then, on Form 4136, she claimed the $110 as a credit. Free federal tax forms Sharon reports the $110 as other income on line 8b of her 2013 Schedule F. Free federal tax forms Accrual method. Free federal tax forms   If you use an accrual method, include the amount of credit or refund in gross income for the tax year in which you used the fuels. Free federal tax forms It does not matter whether you filed for a quarterly refund or claimed the entire amount as a credit. Free federal tax forms Example. Free federal tax forms Patty Green, a farmer who uses the accrual method, files her 2012 Form 1040 on April 15, 2013. Free federal tax forms On Schedule F, she deducts the total cost of gasoline (including $155 of excise taxes) she used on the farm for farming purposes during 2012. Free federal tax forms On Form 4136, Patty claims the $155 as a credit. Free federal tax forms She reports the $155 as other income on line 8b of her 2012 Schedule F. Free federal tax forms Prev  Up  Next   Home   More Online Publications