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Tax Forms 1040ez

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Tax Forms 1040ez

Tax forms 1040ez 4. Tax forms 1040ez   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. Tax forms 1040ez  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. Tax forms 1040ez For more information, see Publication 505. Tax forms 1040ez Reminders Estimated tax safe harbor for higher income taxpayers. Tax forms 1040ez  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. Tax forms 1040ez Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. Tax forms 1040ez In general, the federal income tax is a pay-as-you-go tax. Tax forms 1040ez There are two ways to pay as you go. Tax forms 1040ez Withholding. Tax forms 1040ez If you are an employee, your employer probably withholds income tax from your pay. Tax forms 1040ez Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. Tax forms 1040ez The amount withheld is paid to the IRS in your name. Tax forms 1040ez Estimated tax. Tax forms 1040ez If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. Tax forms 1040ez People who are in business for themselves generally will have to pay their tax this way. Tax forms 1040ez Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. Tax forms 1040ez Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Tax forms 1040ez This chapter explains these methods. Tax forms 1040ez In addition, it also explains the following. Tax forms 1040ez Credit for withholding and estimated tax. Tax forms 1040ez When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. Tax forms 1040ez , and for the estimated tax you paid for 2013. Tax forms 1040ez Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). Tax forms 1040ez Underpayment penalty. Tax forms 1040ez If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. Tax forms 1040ez In most cases, the IRS can figure this penalty for you. Tax forms 1040ez See Underpayment Penalty for 2013 at the end of this chapter. Tax forms 1040ez Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. Tax forms 1040ez This section explains the rules for withholding tax from each of these types of income. Tax forms 1040ez This section also covers backup withholding on interest, dividends, and other payments. Tax forms 1040ez Salaries and Wages Income tax is withheld from the pay of most employees. Tax forms 1040ez Your pay includes your regular pay, bonuses, commissions, and vacation allowances. Tax forms 1040ez It also includes reimbursements and other expense allowances paid under a nonaccountable plan. Tax forms 1040ez See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. Tax forms 1040ez If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. Tax forms 1040ez This is explained under Exemption From Withholding , later. Tax forms 1040ez You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. Tax forms 1040ez If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Tax forms 1040ez Military retirees. Tax forms 1040ez   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. Tax forms 1040ez Household workers. Tax forms 1040ez   If you are a household worker, you can ask your employer to withhold income tax from your pay. Tax forms 1040ez A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. Tax forms 1040ez   Tax is withheld only if you want it withheld and your employer agrees to withhold it. Tax forms 1040ez If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Tax forms 1040ez Farmworkers. Tax forms 1040ez   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. Tax forms 1040ez Differential wage payments. Tax forms 1040ez    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Tax forms 1040ez Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. Tax forms 1040ez The wages and withholding will be reported on Form W-2, Wage and Tax Statement. Tax forms 1040ez   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. Tax forms 1040ez Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. Tax forms 1040ez The amount you earn in each payroll period. Tax forms 1040ez The information you give your employer on Form W-4. Tax forms 1040ez Form W-4 includes four types of information that your employer will use to figure your withholding. Tax forms 1040ez Whether to withhold at the single rate or at the lower married rate. Tax forms 1040ez How many withholding allowances you claim (each allowance reduces the amount withheld). Tax forms 1040ez Whether you want an additional amount withheld. Tax forms 1040ez Whether you are claiming an exemption from withholding in 2014. Tax forms 1040ez See Exemption From Withholding , later. Tax forms 1040ez Note. Tax forms 1040ez You must specify a filing status and a number of withholding allowances on Form W-4. Tax forms 1040ez You cannot specify only a dollar amount of withholding. Tax forms 1040ez New Job When you start a new job, you must fill out Form W-4 and give it to your employer. Tax forms 1040ez Your employer should have copies of the form. Tax forms 1040ez If you need to change the information later, you must fill out a new form. Tax forms 1040ez If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. Tax forms 1040ez You may be able to avoid overwithholding if your employer agrees to use the part-year method. Tax forms 1040ez See Part-Year Method in chapter 1 of Publication 505 for more information. Tax forms 1040ez Employee also receiving pension income. Tax forms 1040ez   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. Tax forms 1040ez However, you can choose to split your withholding allowances between your pension and job in any manner. Tax forms 1040ez Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. Tax forms 1040ez When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. Tax forms 1040ez If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. Tax forms 1040ez Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. Tax forms 1040ez Changing your withholding for 2015. Tax forms 1040ez   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. Tax forms 1040ez If the event occurs in December 2014, submit a new Form W-4 within 10 days. Tax forms 1040ez Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. Tax forms 1040ez If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. Tax forms 1040ez You should try to have your withholding match your actual tax liability. Tax forms 1040ez If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. Tax forms 1040ez If too much tax is withheld, you will lose the use of that money until you get your refund. Tax forms 1040ez Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. Tax forms 1040ez Note. Tax forms 1040ez You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. Tax forms 1040ez Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. Tax forms 1040ez The worksheets are for your own records. Tax forms 1040ez Do not give them to your employer. Tax forms 1040ez Multiple jobs. Tax forms 1040ez   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Tax forms 1040ez Then split your allowances between the Forms W-4 for each job. Tax forms 1040ez You cannot claim the same allowances with more than one employer at the same time. Tax forms 1040ez You can claim all your allowances with one employer and none with the other(s), or divide them any other way. Tax forms 1040ez Married individuals. Tax forms 1040ez   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Tax forms 1040ez Use only one set of worksheets. Tax forms 1040ez You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. Tax forms 1040ez   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. Tax forms 1040ez Alternative method of figuring withholding allowances. Tax forms 1040ez   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. Tax forms 1040ez For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. Tax forms 1040ez Personal Allowances Worksheet. Tax forms 1040ez   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. Tax forms 1040ez Deduction and Adjustments Worksheet. Tax forms 1040ez   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. Tax forms 1040ez Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. Tax forms 1040ez Two-Earners/Multiple Jobs Worksheet. Tax forms 1040ez   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. Tax forms 1040ez Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. Tax forms 1040ez Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. Tax forms 1040ez You accurately complete all the Form W-4 worksheets that apply to you. Tax forms 1040ez You give your employer a new Form W-4 when changes occur. Tax forms 1040ez But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. Tax forms 1040ez This is most likely to happen in the following situations. Tax forms 1040ez You are married and both you and your spouse work. Tax forms 1040ez You have more than one job at a time. Tax forms 1040ez You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. Tax forms 1040ez You will owe additional amounts with your return, such as self-employment tax. Tax forms 1040ez Your withholding is based on obsolete Form W-4 information for a substantial part of the year. Tax forms 1040ez Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. Tax forms 1040ez You work only part of the year. Tax forms 1040ez You change the number of your withholding allowances during the year. Tax forms 1040ez Cumulative wage method. Tax forms 1040ez   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. Tax forms 1040ez You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. Tax forms 1040ez You must ask your employer in writing to use this method. Tax forms 1040ez   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. Tax forms 1040ez ) since the beginning of the year. Tax forms 1040ez Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. Tax forms 1040ez It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. Tax forms 1040ez It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. Tax forms 1040ez If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. Tax forms 1040ez You can use the IRS Withholding Calculator at www. Tax forms 1040ez irs. Tax forms 1040ez gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. Tax forms 1040ez Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. Tax forms 1040ez These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. Tax forms 1040ez New Form W-4. Tax forms 1040ez   When you start a new job, your employer should have you complete a Form W-4. Tax forms 1040ez Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. Tax forms 1040ez   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. Tax forms 1040ez The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. Tax forms 1040ez No Form W-4. Tax forms 1040ez   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. Tax forms 1040ez Repaying withheld tax. Tax forms 1040ez   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Tax forms 1040ez Your employer cannot repay any of the tax previously withheld. Tax forms 1040ez Instead, claim the full amount withheld when you file your tax return. Tax forms 1040ez   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Tax forms 1040ez Your employer can repay the amount that was withheld incorrectly. Tax forms 1040ez If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. Tax forms 1040ez Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. Tax forms 1040ez The exemption applies only to income tax, not to social security or Medicare tax. Tax forms 1040ez You can claim exemption from withholding for 2014 only if both of the following situations apply. Tax forms 1040ez For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. Tax forms 1040ez For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. Tax forms 1040ez Students. Tax forms 1040ez   If you are a student, you are not automatically exempt. Tax forms 1040ez See chapter 1 to find out if you must file a return. Tax forms 1040ez If you work only part time or only during the summer, you may qualify for exemption from withholding. Tax forms 1040ez Age 65 or older or blind. Tax forms 1040ez   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. Tax forms 1040ez Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. Tax forms 1040ez Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. Tax forms 1040ez Claiming exemption from withholding. Tax forms 1040ez   To claim exemption, you must give your employer a Form W-4. Tax forms 1040ez Do not complete lines 5 and 6. Tax forms 1040ez Enter “Exempt” on line 7. Tax forms 1040ez   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. Tax forms 1040ez If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. Tax forms 1040ez   Your claim of exempt status may be reviewed by the IRS. Tax forms 1040ez An exemption is good for only 1 year. Tax forms 1040ez   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. Tax forms 1040ez Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. Tax forms 1040ez The payer can figure withholding on supplemental wages using the same method used for your regular wages. Tax forms 1040ez However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. Tax forms 1040ez Expense allowances. Tax forms 1040ez   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. Tax forms 1040ez   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. Tax forms 1040ez   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. Tax forms 1040ez Penalties You may have to pay a penalty of $500 if both of the following apply. Tax forms 1040ez You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. Tax forms 1040ez You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. Tax forms 1040ez There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. Tax forms 1040ez The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. Tax forms 1040ez These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. Tax forms 1040ez A simple error or an honest mistake will not result in one of these penalties. Tax forms 1040ez For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. Tax forms 1040ez Tips The tips you receive while working on your job are considered part of your pay. Tax forms 1040ez You must include your tips on your tax return on the same line as your regular pay. Tax forms 1040ez However, tax is not withheld directly from tip income, as it is from your regular pay. Tax forms 1040ez Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. Tax forms 1040ez See chapter 6 for information on reporting your tips to your employer. Tax forms 1040ez For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. Tax forms 1040ez How employer figures amount to withhold. Tax forms 1040ez   The tips you report to your employer are counted as part of your income for the month you report them. Tax forms 1040ez Your employer can figure your withholding in either of two ways. Tax forms 1040ez By withholding at the regular rate on the sum of your pay plus your reported tips. Tax forms 1040ez By withholding at the regular rate on your pay plus a percentage of your reported tips. Tax forms 1040ez Not enough pay to cover taxes. Tax forms 1040ez   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. Tax forms 1040ez See Giving your employer money for taxes in chapter 6. Tax forms 1040ez Allocated tips. Tax forms 1040ez   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. Tax forms 1040ez Withholding is based only on your pay plus your reported tips. Tax forms 1040ez Your employer should refund to you any incorrectly withheld tax. Tax forms 1040ez See Allocated Tips in chapter 6 for more information. Tax forms 1040ez Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Tax forms 1040ez Your employer generally must withhold income tax on these benefits from your regular pay. Tax forms 1040ez For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. Tax forms 1040ez Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. Tax forms 1040ez Your employer must notify you if this choice is made. Tax forms 1040ez For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. Tax forms 1040ez Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. Tax forms 1040ez To qualify as sick pay, it must be paid under a plan to which your employer is a party. Tax forms 1040ez If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. Tax forms 1040ez An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. Tax forms 1040ez However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. Tax forms 1040ez See Form W-4S , later. Tax forms 1040ez If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. Tax forms 1040ez Union agreements. Tax forms 1040ez   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. Tax forms 1040ez See your union representative or your employer for more information. Tax forms 1040ez Form W-4S. Tax forms 1040ez   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. Tax forms 1040ez Its instructions contain a worksheet you can use to figure the amount you want withheld. Tax forms 1040ez They also explain restrictions that may apply. Tax forms 1040ez   Give the completed form to the payer of your sick pay. Tax forms 1040ez The payer must withhold according to your directions on the form. Tax forms 1040ez Estimated tax. Tax forms 1040ez   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. Tax forms 1040ez If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. Tax forms 1040ez See Underpayment Penalty for 2013 at the end of this chapter. Tax forms 1040ez Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. Tax forms 1040ez This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. Tax forms 1040ez The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). Tax forms 1040ez Income tax withholding from an ERD is mandatory. Tax forms 1040ez More information. Tax forms 1040ez   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. Tax forms 1040ez For information on IRAs, see chapter 17. Tax forms 1040ez For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. Tax forms 1040ez Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. Tax forms 1040ez Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. Tax forms 1040ez Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. Tax forms 1040ez Any other wager, if the proceeds are at least 300 times the amount of the bet. Tax forms 1040ez It does not matter whether your winnings are paid in cash, in property, or as an annuity. Tax forms 1040ez Winnings not paid in cash are taken into account at their fair market value. Tax forms 1040ez Exception. Tax forms 1040ez   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. Tax forms 1040ez However, you may need to provide the payer with a social security number to avoid withholding. Tax forms 1040ez See Backup withholding on gambling winnings in chapter 1 of Publication 505. Tax forms 1040ez If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. Tax forms 1040ez See Estimated Tax for 2014 , later. Tax forms 1040ez If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Tax forms 1040ez See Underpayment Penalty for 2013 at the end of this chapter. Tax forms 1040ez Form W-2G. Tax forms 1040ez   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. Tax forms 1040ez Report the tax withheld on line 62 of Form 1040. Tax forms 1040ez Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. Tax forms 1040ez To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Tax forms 1040ez All unemployment compensation is taxable. Tax forms 1040ez So, if you do not have income tax withheld, you may have to pay estimated tax. Tax forms 1040ez See Estimated Tax for 2014 , later. Tax forms 1040ez If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Tax forms 1040ez For information, see Underpayment Penalty for 2013 at the end of this chapter. Tax forms 1040ez Federal Payments You can choose to have income tax withheld from certain federal payments you receive. Tax forms 1040ez These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. Tax forms 1040ez S. Tax forms 1040ez C. Tax forms 1040ez 1421 et. Tax forms 1040ez seq. Tax forms 1040ez ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. Tax forms 1040ez To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Tax forms 1040ez If you do not choose to have income tax withheld, you may have to pay estimated tax. Tax forms 1040ez See Estimated Tax for 2014 , later. Tax forms 1040ez If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Tax forms 1040ez For information, see Underpayment Penalty for 2013 at the end of this chapter. Tax forms 1040ez More information. Tax forms 1040ez   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. Tax forms 1040ez Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. Tax forms 1040ez Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. Tax forms 1040ez The information return shows how much you were paid during the year. Tax forms 1040ez It also includes your name and taxpayer identification number (TIN). Tax forms 1040ez TINs are explained in chapter 1 under Social Security Number (SSN) . Tax forms 1040ez These payments generally are not subject to withholding. Tax forms 1040ez However, “backup” withholding is required in certain situations. Tax forms 1040ez Backup withholding can apply to most kinds of payments that are reported on Form 1099. Tax forms 1040ez The payer must withhold at a flat 28% rate in the following situations. Tax forms 1040ez You do not give the payer your TIN in the required manner. Tax forms 1040ez The IRS notifies the payer that the TIN you gave is incorrect. Tax forms 1040ez You are required, but fail, to certify that you are not subject to backup withholding. Tax forms 1040ez The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. Tax forms 1040ez The IRS will do this only after it has mailed you four notices over at least a 210-day period. Tax forms 1040ez See Backup Withholding in chapter 1 of Publication 505 for more information. Tax forms 1040ez Penalties. Tax forms 1040ez   There are civil and criminal penalties for giving false information to avoid backup withholding. Tax forms 1040ez The civil penalty is $500. Tax forms 1040ez The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. Tax forms 1040ez Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. Tax forms 1040ez This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Tax forms 1040ez You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Tax forms 1040ez Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. Tax forms 1040ez If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Tax forms 1040ez If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. Tax forms 1040ez For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. Tax forms 1040ez Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. Tax forms 1040ez To do this, give a new Form W-4 to your employer. Tax forms 1040ez See chapter 1 of Publication 505. Tax forms 1040ez Estimated tax not required. Tax forms 1040ez   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. Tax forms 1040ez You had no tax liability for 2013. Tax forms 1040ez You were a U. Tax forms 1040ez S. Tax forms 1040ez citizen or resident alien for the whole year. Tax forms 1040ez Your 2013 tax year covered a 12-month period. Tax forms 1040ez   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. Tax forms 1040ez For the definition of “total tax” for 2013, see Publication 505, chapter 2. Tax forms 1040ez Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. Tax forms 1040ez You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. Tax forms 1040ez General rule. Tax forms 1040ez   In most cases, you must pay estimated tax for 2014 if both of the following apply. Tax forms 1040ez You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Tax forms 1040ez You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). Tax forms 1040ez Your 2013 tax return must cover all 12 months. Tax forms 1040ez    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. Tax forms 1040ez Special rules for farmers, fishermen, and higher income taxpayers. Tax forms 1040ez   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. Tax forms 1040ez If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. Tax forms 1040ez See Figure 4-A and Publication 505, chapter 2 for more information. Tax forms 1040ez Figure 4-A. Tax forms 1040ez Do You Have To Pay Estimated Tax? Please click here for the text description of the image. Tax forms 1040ez Figure 4-A Do You Have To Pay Estimated Tax? Aliens. Tax forms 1040ez   Resident and nonresident aliens also may have to pay estimated tax. Tax forms 1040ez Resident aliens should follow the rules in this chapter unless noted otherwise. Tax forms 1040ez Nonresident aliens should get Form 1040-ES (NR), U. Tax forms 1040ez S. Tax forms 1040ez Estimated Tax for Nonresident Alien Individuals. Tax forms 1040ez   You are an alien if you are not a citizen or national of the United States. Tax forms 1040ez You are a resident alien if you either have a green card or meet the substantial presence test. Tax forms 1040ez For more information about the substantial presence test, see Publication 519, U. Tax forms 1040ez S. Tax forms 1040ez Tax Guide for Aliens. Tax forms 1040ez Married taxpayers. Tax forms 1040ez   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. Tax forms 1040ez   You and your spouse can make joint estimated tax payments even if you are not living together. Tax forms 1040ez   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). Tax forms 1040ez   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. Tax forms 1040ez Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. Tax forms 1040ez 2013 separate returns and 2014 joint return. Tax forms 1040ez   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. Tax forms 1040ez You filed a separate return if you filed as single, head of household, or married filing separately. Tax forms 1040ez 2013 joint return and 2014 separate returns. Tax forms 1040ez   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. Tax forms 1040ez You file a separate return if you file as single, head of household, or married filing separately. Tax forms 1040ez   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. Tax forms 1040ez Then multiply the tax on the joint return by the following fraction. Tax forms 1040ez     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Tax forms 1040ez Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Tax forms 1040ez Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. Tax forms 1040ez For 2014, they plan to file married filing separately. Tax forms 1040ez Joe figures his share of the tax on the 2013 joint return as follows. Tax forms 1040ez   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. Tax forms 1040ez 6%     Joe's share of tax on joint return  ($6,386 × 87. Tax forms 1040ez 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. Tax forms 1040ez When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Tax forms 1040ez Use your 2013 federal tax return as a guide. Tax forms 1040ez You can use Form 1040-ES and Publication 505 to figure your estimated tax. Tax forms 1040ez Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). Tax forms 1040ez You must make adjustments both for changes in your own situation and for recent changes in the tax law. Tax forms 1040ez For a discussion of these changes, visit IRS. Tax forms 1040ez gov. Tax forms 1040ez For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. Tax forms 1040ez When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. Tax forms 1040ez Each period has a specific payment due date. Tax forms 1040ez If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. Tax forms 1040ez The payment periods and due dates for estimated tax payments are shown next. Tax forms 1040ez   For the period: Due date:*     Jan. Tax forms 1040ez 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. Tax forms 1040ez 15     Sept. Tax forms 1040ez 1– Dec. Tax forms 1040ez 31 Jan. Tax forms 1040ez 15, next year     *See Saturday, Sunday, holiday rule and January payment . Tax forms 1040ez Saturday, Sunday, holiday rule. Tax forms 1040ez   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. Tax forms 1040ez January payment. Tax forms 1040ez   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. Tax forms 1040ez Fiscal year taxpayers. Tax forms 1040ez   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. Tax forms 1040ez When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. Tax forms 1040ez If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. Tax forms 1040ez You can pay all your estimated tax at that time, or you can pay it in installments. Tax forms 1040ez If you choose to pay in installments, make your first payment by the due date for the first payment period. Tax forms 1040ez Make your remaining installment payments by the due dates for the later periods. Tax forms 1040ez No income subject to estimated tax during first period. Tax forms 1040ez    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. Tax forms 1040ez You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Tax forms 1040ez The following chart shows when to make installment payments. Tax forms 1040ez If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. Tax forms 1040ez 15 Jan. Tax forms 1040ez 15 next year April 1–May 31 June 16 Sept. Tax forms 1040ez 15 Jan. Tax forms 1040ez 15 next year June 1–Aug. Tax forms 1040ez 31 Sept. Tax forms 1040ez 15 Jan. Tax forms 1040ez 15 next year After Aug. Tax forms 1040ez 31 Jan. Tax forms 1040ez 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . Tax forms 1040ez How much to pay to avoid a penalty. Tax forms 1040ez   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. Tax forms 1040ez How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. Tax forms 1040ez You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. Tax forms 1040ez These methods are described in chapter 2 of Publication 505. Tax forms 1040ez If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. Tax forms 1040ez If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. Tax forms 1040ez Underpayment penalty. Tax forms 1040ez   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. Tax forms 1040ez Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. Tax forms 1040ez See chapter 4 of Publication 505 for more information. Tax forms 1040ez Change in estimated tax. Tax forms 1040ez   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Tax forms 1040ez Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. Tax forms 1040ez Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. Tax forms 1040ez You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. Tax forms 1040ez How To Pay Estimated Tax There are several ways to pay estimated tax. Tax forms 1040ez Credit an overpayment on your 2013 return to your 2014 estimated tax. Tax forms 1040ez Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. Tax forms 1040ez Send in your payment (check or money order) with a payment voucher from Form 1040-ES. Tax forms 1040ez Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. Tax forms 1040ez On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Tax forms 1040ez Take the amount you have credited into account when figuring your estimated tax payments. Tax forms 1040ez You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. Tax forms 1040ez You also cannot use that overpayment in any other way. Tax forms 1040ez Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. Tax forms 1040ez You can pay using either of the following electronic payment methods. Tax forms 1040ez Direct transfer from your bank account. Tax forms 1040ez Credit or debit card. Tax forms 1040ez To pay your taxes online or for more information, go to www. Tax forms 1040ez irs. Tax forms 1040ez gov/e-pay. Tax forms 1040ez Pay by Phone Paying by phone is another safe and secure method of paying electronically. Tax forms 1040ez Use one of the following methods. Tax forms 1040ez Direct transfer from your bank account. Tax forms 1040ez Credit or debit card. Tax forms 1040ez To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). Tax forms 1040ez People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. Tax forms 1040ez To pay using a credit or debit card, you can call one of the following service providers. Tax forms 1040ez There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. Tax forms 1040ez WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. Tax forms 1040ez payUSAtax. Tax forms 1040ez com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. Tax forms 1040ez officialpayments. Tax forms 1040ez com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. Tax forms 1040ez PAY1040. Tax forms 1040ez com For the latest details on how to pay by phone, go to www. Tax forms 1040ez irs. Tax forms 1040ez gov/e-pay. Tax forms 1040ez Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. Tax forms 1040ez During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. Tax forms 1040ez The enclosed payment vouchers will be preprinted with your name, address, and social security number. Tax forms 1040ez Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. Tax forms 1040ez Use the window envelopes that came with your Form 1040-ES package. Tax forms 1040ez If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. Tax forms 1040ez Note. Tax forms 1040ez These criteria can change without notice. Tax forms 1040ez If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. Tax forms 1040ez irs. Tax forms 1040ez gov and print a copy of Form 1040-ES which includes four blank payment vouchers. Tax forms 1040ez Complete one of these and make your payment timely to avoid penalties for paying late. Tax forms 1040ez Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. Tax forms 1040ez If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. Tax forms 1040ez gov. Tax forms 1040ez Follow the instructions to make sure you use the vouchers correctly. Tax forms 1040ez Joint estimated tax payments. Tax forms 1040ez   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. Tax forms 1040ez Change of address. Tax forms 1040ez   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Tax forms 1040ez Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. Tax forms 1040ez Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Tax forms 1040ez Also take credit for the estimated tax you paid for 2013. Tax forms 1040ez These credits are subtracted from your total tax. Tax forms 1040ez Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. Tax forms 1040ez Two or more employers. Tax forms 1040ez   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. Tax forms 1040ez You may be able to claim the excess as a credit against your income tax when you file your return. Tax forms 1040ez See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. Tax forms 1040ez Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. Tax forms 1040ez Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. Tax forms 1040ez Forms W-2 and W-2G. Tax forms 1040ez   If you file a paper return, always file Form W-2 with your income tax return. Tax forms 1040ez File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. Tax forms 1040ez   You should get at least two copies of each form. Tax forms 1040ez If you file a paper return, attach one copy to the front of your federal income tax return. Tax forms 1040ez Keep one copy for your records. Tax forms 1040ez You also should receive copies to file with your state and local returns. Tax forms 1040ez Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. Tax forms 1040ez You should receive a separate Form W-2 from each employer you worked for. Tax forms 1040ez If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. Tax forms 1040ez However, your employer must provide or send it to you by January 31, 2014. Tax forms 1040ez If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. Tax forms 1040ez If you have not received your Form W-2 by January 31, you should ask your employer for it. Tax forms 1040ez If you do not receive it by February 15, call the IRS. Tax forms 1040ez Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Tax forms 1040ez Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. Tax forms 1040ez In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. Tax forms 1040ez Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. Tax forms 1040ez If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. Tax forms 1040ez Report the amounts you won on line 21 of Form 1040. Tax forms 1040ez Take credit for the tax withheld on line 62 of Form 1040. Tax forms 1040ez If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. Tax forms 1040ez The 1099 Series Most forms in the 1099 series are not filed with your return. Tax forms 1040ez These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). Tax forms 1040ez Unless instructed to file any of these forms with your return, keep them for your records. Tax forms 1040ez There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Tax forms 1040ez ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. Tax forms 1040ez If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. Tax forms 1040ez See the instructions to these forms for details. Tax forms 1040ez Form 1099-R. Tax forms 1040ez   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. Tax forms 1040ez Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. Tax forms 1040ez You cannot use Form 1040EZ if you received payments reported on Form 1099-R. Tax forms 1040ez Backup withholding. Tax forms 1040ez   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. Tax forms 1040ez Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. Tax forms 1040ez Call the telephone number or write to the address given for the payer on the form. Tax forms 1040ez The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. Tax forms 1040ez A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. Tax forms 1040ez In certain situations, you will receive two forms in place of the original incorrect form. Tax forms 1040ez This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). Tax forms 1040ez One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. Tax forms 1040ez This form will have an “X” in the “CORRECTED” box at the top of the form. Tax forms 1040ez The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). Tax forms 1040ez Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. Tax forms 1040ez S. Tax forms 1040ez Individual Income Tax Return. Tax forms 1040ez Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Tax forms 1040ez Do not include any amount withheld from your spouse's income. Tax forms 1040ez However, different rules may apply if you live in a community property state. Tax forms 1040ez Community property states are listed in chapter 2. Tax forms 1040ez For more information on these rules, and some exceptions, see Publication 555, Community Property. Tax forms 1040ez Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. Tax forms 1040ez For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. Tax forms 1040ez Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. Tax forms 1040ez Include any overpayment from 2012 that you had credited to your 2013 estimated tax. Tax forms 1040ez You must use Form 1040 or Form 1040A if you paid estimated tax. Tax forms 1040ez You cannot use Form 1040EZ. Tax forms 1040ez Name changed. Tax forms 1040ez   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. Tax forms 1040ez The statement should cover payments you made jointly with your spouse as well as any you made separately. Tax forms 1040ez   Be sure to report the change to the Social Security Administration. Tax forms 1040ez This prevents delays in processing your return and issuing any refunds. Tax forms 1040ez Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. Tax forms 1040ez If you made joint estimated tax payments, you must decide how to divide the payments between your returns. Tax forms 1040ez One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. Tax forms 1040ez If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. Tax forms 1040ez Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. Tax forms 1040ez If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. Tax forms 1040ez If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. Tax forms 1040ez If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. Tax forms 1040ez Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. Tax forms 1040ez Generally, you will not have to pay a penalty for 2013 if any of the following apply. Tax forms 1040ez The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. Tax forms 1040ez The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Tax forms 1040ez Your total 2013 tax minus your withholding and refundable credits is less than $1,000. Tax forms 1040ez You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. Tax forms 1040ez See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. Tax forms 1040ez Farmers and fishermen. Tax forms 1040ez   Special rules apply if you are a farmer or fisherman. Tax forms 1040ez See Farmers and Fishermen in chapter 4 of Publication 505 for more information. Tax forms 1040ez IRS can figure the penalty for you. Tax forms 1040ez   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. Tax forms 1040ez Generally, the IRS will figure the penalty for you and send you a bill. Tax forms 1040ez However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. Tax forms 1040ez See chapter 4 of Publication 505. Tax forms 1040ez Prev  Up  Next   Home   More Online Publications
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Understanding your CP25 Notice

We made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You're not due a refund nor do you owe an additional amount because of our changes. Your account balance is zero.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice carefully — it will explain the changes we made to your return.
  • Check the list of payments we applied to your account to see if we applied all the payments you made.
  • Correct the copy of your tax return that you kept for your records.
  • You don't need to do anything if you agree with the notice.
  • If you disagree with the notice, please contact us at the toll-free number listed on its top right-hand corner (within 60 days of the notice’s date).

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Answers to Common Questions

How can I find out what caused my tax return to change?
Please contact us at the number listed on your notice for specific information concerning your tax return.

What should I do if I find you misapplied a payment or haven't credited a payment that I made?
Contact us with your information at the toll-free number listed on your notice. Please have your documentation (such as cancelled checks, amended return, etc.) ready when you call. Our representative will discuss the issue with you and give you further instructions.

What should I do if I disagree with the changes you made?
Contact us at the toll free number listed on the top right-hand corner of your notice.

How do I adjust my estimated tax payments?
You can adjust your estimated tax payments by completing a Form 1040-ES, Estimated Tax for Individuals. See Publication 505, Tax Withholding and Estimated Tax for more information.

What should I do if I need to make another correction to my tax return?
You'll need to file Form 1040X, Amended U.S. Individual Income Tax Return.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 03-Mar-2014

The Tax Forms 1040ez

Tax forms 1040ez 22. Tax forms 1040ez   Taxes Table of Contents IntroductionIndian tribal government. Tax forms 1040ez Useful Items - You may want to see: Tests To Deduct Any Tax Income TaxesState and Local Income Taxes Foreign Income Taxes General Sales TaxesMotor vehicles. Tax forms 1040ez Real Estate TaxesReal estate taxes for prior years. Tax forms 1040ez Examples. Tax forms 1040ez Form 1099-S. Tax forms 1040ez Real Estate-Related Items You Cannot Deduct Personal Property Taxes Taxes and Fees You Cannot Deduct Where To Deduct Introduction This chapter discusses which taxes you can deduct if you itemize deductions on Schedule A (Form 1040). Tax forms 1040ez It also explains which taxes you can deduct on other schedules or forms and which taxes you cannot deduct. Tax forms 1040ez This chapter covers the following topics. Tax forms 1040ez Income taxes (federal, state, local, and foreign). Tax forms 1040ez General sales taxes (state and local). Tax forms 1040ez Real estate taxes (state, local, and foreign). Tax forms 1040ez Personal property taxes (state and local). Tax forms 1040ez Taxes and fees you cannot deduct. Tax forms 1040ez Use Table 22-1 as a guide to determine which taxes you can deduct. Tax forms 1040ez The end of the chapter contains a section that explains which forms you use to deduct different types of taxes. Tax forms 1040ez Business taxes. Tax forms 1040ez   You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. Tax forms 1040ez For information on these taxes, see Publication 535, Business Expenses. Tax forms 1040ez State or local taxes. Tax forms 1040ez   These are taxes imposed by the 50 states, U. Tax forms 1040ez S. Tax forms 1040ez possessions, or any of their political subdivisions (such as a county or city), or by the District of Columbia. Tax forms 1040ez Indian tribal government. Tax forms 1040ez   An Indian tribal government recognized by the Secretary of the Treasury as performing substantial government functions will be treated as a state for purposes of claiming a deduction for taxes. Tax forms 1040ez Income taxes, real estate taxes, and personal property taxes imposed by that Indian tribal government (or by any of its subdivisions that are treated as political subdivisions of a state) are deductible. Tax forms 1040ez General sales taxes. Tax forms 1040ez   These are taxes imposed at one rate on retail sales of a broad range of classes of items. Tax forms 1040ez Foreign taxes. Tax forms 1040ez   These are taxes imposed by a foreign country or any of its political subdivisions. Tax forms 1040ez Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 530 Tax Information for Homeowners Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule E (Form 1040) Supplemental Income and Loss 1116 Foreign Tax Credit Tests To Deduct Any Tax The following two tests must be met for you to deduct any tax. Tax forms 1040ez The tax must be imposed on you. Tax forms 1040ez You must pay the tax during your tax year. Tax forms 1040ez The tax must be imposed on you. Tax forms 1040ez   In general, you can deduct only taxes imposed on you. Tax forms 1040ez   Generally, you can deduct property taxes only if you are an owner of the property. Tax forms 1040ez If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return. Tax forms 1040ez You must pay the tax during your tax year. Tax forms 1040ez   If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. Tax forms 1040ez If you pay your taxes by check, the day you mail or deliver the check is the date of payment, provided the check is honored by the financial institution. Tax forms 1040ez If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. Tax forms 1040ez If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). Tax forms 1040ez See Publication 538, Accounting Periods and Methods, for details. Tax forms 1040ez    If you use an accrual method of accounting, see Publication 538 for more information. Tax forms 1040ez Income Taxes This section discusses the deductibility of state and local income taxes (including employee contributions to state benefit funds) and foreign income taxes. Tax forms 1040ez State and Local Income Taxes You can deduct state and local income taxes. Tax forms 1040ez However, you can elect to deduct state and local general sales taxes instead of state and local income taxes. Tax forms 1040ez See General Sales Taxes , later. Tax forms 1040ez Exception. Tax forms 1040ez    You cannot deduct state and local income taxes you pay on income that is exempt from federal income tax, unless the exempt income is interest income. Tax forms 1040ez For example, you cannot deduct the part of a state's income tax that is on a cost-of-living allowance exempt from federal income tax. Tax forms 1040ez What To Deduct Your deduction may be for withheld taxes, estimated tax payments, or other tax payments as follows. Tax forms 1040ez Withheld taxes. Tax forms 1040ez   You can deduct state and local income taxes withheld from your salary in the year they are withheld. Tax forms 1040ez Your Form(s) W-2 will show these amounts. Tax forms 1040ez Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld. Tax forms 1040ez Estimated tax payments. Tax forms 1040ez   You can deduct estimated tax payments you made during the year to a state or local government. Tax forms 1040ez However, you must have a reasonable basis for making the estimated tax payments. Tax forms 1040ez Any estimated state or local tax payments that are not made in good faith at the time of payment are not deductible. Tax forms 1040ez For example, you made an estimated state income tax payment. Tax forms 1040ez However, the estimate of your state tax liability shows that you will get a refund of the full amount of your estimated payment. Tax forms 1040ez You had no reasonable basis to believe you had any additional liability for state income taxes and you cannot deduct the estimated tax payment. Tax forms 1040ez Refund applied to taxes. Tax forms 1040ez   You can deduct any part of a refund of prior-year state or local income taxes that you chose to have credited to your 2013 estimated state or local income taxes. Tax forms 1040ez    Do not reduce your deduction by either of the following items. Tax forms 1040ez Any state or local income tax refund (or credit) you expect to receive for 2013. Tax forms 1040ez Any refund of (or credit for) prior-year state and local income taxes you actually received in 2013. Tax forms 1040ez   However, part or all of this refund (or credit) may be taxable. Tax forms 1040ez See Refund (or credit) of state or local income taxes , later. Tax forms 1040ez Separate federal returns. Tax forms 1040ez   If you and your spouse file separate state, local, and federal income tax returns, you each can deduct on your federal return only the amount of your own state and local income tax that you paid during the tax year. Tax forms 1040ez Joint state and local returns. Tax forms 1040ez   If you and your spouse file joint state and local returns and separate federal returns, each of you can deduct on your separate federal return a part of the total state and local income taxes paid during the tax year. Tax forms 1040ez You can deduct only the amount of the total taxes that is proportionate to your gross income compared to the combined gross income of you and your spouse. Tax forms 1040ez However, you cannot deduct more than the amount you actually paid during the year. Tax forms 1040ez You can avoid this calculation if you and your spouse are jointly and individually liable for the full amount of the state and local income taxes. Tax forms 1040ez If so, you and your spouse can deduct on your separate federal returns the amount you each actually paid. Tax forms 1040ez Joint federal return. Tax forms 1040ez   If you file a joint federal return, you can deduct the total of the state and local income taxes both of you paid. Tax forms 1040ez Contributions to state benefit funds. Tax forms 1040ez    As an employee, you can deduct mandatory contributions to state benefit funds withheld from your wages that provide protection against loss of wages. Tax forms 1040ez For example, certain states require employees to make contributions to state funds providing disability or unemployment insurance benefits. Tax forms 1040ez Mandatory payments made to the following state benefit funds are deductible as state income taxes on Schedule A (Form 1040), line 5. Tax forms 1040ez Alaska Unemployment Compensation Fund. Tax forms 1040ez California Nonoccupational Disability Benefit Fund. Tax forms 1040ez New Jersey Nonoccupational Disability Benefit Fund. Tax forms 1040ez New Jersey Unemployment Compensation Fund. Tax forms 1040ez New York Nonoccupational Disability Benefit Fund. Tax forms 1040ez Pennsylvania Unemployment Compensation Fund. Tax forms 1040ez Rhode Island Temporary Disability Benefit Fund. Tax forms 1040ez Washington State Supplemental Workmen's Compensation Fund. Tax forms 1040ez    Employee contributions to private or voluntary disability plans are not deductible. Tax forms 1040ez Refund (or credit) of state or local income taxes. Tax forms 1040ez   If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income on Form 1040, line 10, in the year you receive it. Tax forms 1040ez This includes refunds resulting from taxes that were overwithheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. Tax forms 1040ez If you did not itemize your deductions in the previous year, do not include the refund in income. Tax forms 1040ez If you deducted the taxes in the previous year, include all or part of the refund on Form 1040, line 10, in the year you receive the refund. Tax forms 1040ez For a discussion of how much to include, see Recoveries in chapter 12. Tax forms 1040ez Foreign Income Taxes Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. Tax forms 1040ez S. Tax forms 1040ez possession. Tax forms 1040ez However, you cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. Tax forms 1040ez S. Tax forms 1040ez tax under the foreign earned income exclusion or the foreign housing exclusion. Tax forms 1040ez For information on these exclusions, see Publication 54, Tax Guide for U. Tax forms 1040ez S. Tax forms 1040ez Citizens and Resident Aliens Abroad. Tax forms 1040ez For information on the foreign tax credit, see Publication 514. Tax forms 1040ez General Sales Taxes You can elect to deduct state and local general sales taxes, instead of state and local income taxes, as an itemized deduction on Schedule A (Form 1040), line 5b. Tax forms 1040ez You can use either your actual expenses or the state and local sales tax tables to figure your sales tax deduction. Tax forms 1040ez Actual expenses. Tax forms 1040ez   Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) if the tax rate was the same as the general sales tax rate. Tax forms 1040ez However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. Tax forms 1040ez If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. Tax forms 1040ez If you use the actual expenses method, you must have receipts to show the general sales taxes paid. Tax forms 1040ez Do not include sales taxes paid on items used in your trade or business. Tax forms 1040ez Motor vehicles. Tax forms 1040ez   For purposes of this section, motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. Tax forms 1040ez This also includes sales taxes on a leased motor vehicle, but not on vehicles used in your trade or business. Tax forms 1040ez Optional sales tax tables. Tax forms 1040ez   Instead of using your actual expenses, you can figure your state and local general sales tax deduction using the state and local sales tax tables in the Instructions for Schedule A (Form 1040). Tax forms 1040ez You may also be able to add the state and local general sales taxes paid on certain specified items. Tax forms 1040ez   Your applicable table amount is based on the state where you live, your income, and the number of exemptions claimed on your tax return. Tax forms 1040ez Your income is your adjusted gross income plus any nontaxable items such as the following. Tax forms 1040ez Tax-exempt interest. Tax forms 1040ez Veterans' benefits. Tax forms 1040ez Nontaxable combat pay. Tax forms 1040ez Workers' compensation. Tax forms 1040ez Nontaxable part of social security and railroad retirement benefits. Tax forms 1040ez Nontaxable part of IRA, pension, or annuity distributions, excluding rollovers. Tax forms 1040ez Public assistance payments. Tax forms 1040ez If you lived in different states during the same tax year, you must prorate your applicable table amount for each state based on the days you lived in each state. Tax forms 1040ez See the Instructions for Schedule A (Form 1040), line 5, for details. Tax forms 1040ez Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. Tax forms 1040ez You can deduct these taxes only if they are based on the assessed value of the real property and charged uniformly against all property under the jurisdiction of the taxing authority. Tax forms 1040ez Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. Tax forms 1040ez They also do not include itemized charges for services (such as trash collection) assessed against specific property or certain people, even if the charge is paid to the taxing authority. Tax forms 1040ez For more information about taxes and charges that are not deductible, see Real Estate-Related Items You Cannot Deduct , later. Tax forms 1040ez Tenant-shareholders in a cooperative housing corporation. Tax forms 1040ez   Generally, if you are a tenant-stockholder in a cooperative housing corporation, you can deduct the amount paid to the corporation that represents your share of the real estate taxes the corporation paid or incurred for your dwelling unit. Tax forms 1040ez The corporation should provide you with a statement showing your share of the taxes. Tax forms 1040ez For more information, see Special Rules for Cooperatives in Publication 530. Tax forms 1040ez Division of real estate taxes between buyers and sellers. Tax forms 1040ez   If you bought or sold real estate during the year, the real estate taxes must be divided between the buyer and the seller. Tax forms 1040ez   The buyer and the seller must divide the real estate taxes according to the number of days in the real property tax year (the period to which the tax is imposed relates) that each owned the property. Tax forms 1040ez The seller is treated as paying the taxes up to, but not including, the date of sale. Tax forms 1040ez The buyer is treated as paying the taxes beginning with the date of sale. Tax forms 1040ez This applies regardless of the lien dates under local law. Tax forms 1040ez Generally, this information is included on the settlement statement provided at the closing. Tax forms 1040ez    If you (the seller) cannot deduct taxes until they are paid because you use the cash method of accounting, and the buyer of your property is personally liable for the tax, you are considered to have paid your part of the tax at the time of the sale. Tax forms 1040ez This lets you deduct the part of the tax to the date of sale even though you did not actually pay it. Tax forms 1040ez However, you must also include the amount of that tax in the selling price of the property. Tax forms 1040ez The buyer must include the same amount in his or her cost of the property. Tax forms 1040ez   You figure your deduction for taxes on each property bought or sold during the real property tax year as follows. Tax forms 1040ez Worksheet 22-1. Tax forms 1040ez Figuring Your Real Estate Tax Deduction 1. Tax forms 1040ez Enter the total real estate taxes for the real property tax year   2. Tax forms 1040ez Enter the number of days in the real property tax year that you owned the property   3. Tax forms 1040ez Divide line 2 by 365 (for leap years, divide line 2 by 366) . Tax forms 1040ez 4. Tax forms 1040ez Multiply line 1 by line 3. Tax forms 1040ez This is your deduction. Tax forms 1040ez Enter it on Schedule A (Form 1040), line 6   Note. Tax forms 1040ez Repeat steps 1 through 4 for each property you bought or sold during the real property tax year. Tax forms 1040ez Your total deduction is the sum of the line 4 amounts for all of the properties. Tax forms 1040ez Real estate taxes for prior years. Tax forms 1040ez   Do not divide delinquent taxes between the buyer and seller if the taxes are for any real property tax year before the one in which the property is sold. Tax forms 1040ez Even if the buyer agrees to pay the delinquent taxes, the buyer cannot deduct them. Tax forms 1040ez The buyer must add them to the cost of the property. Tax forms 1040ez The seller can deduct these taxes paid by the buyer. Tax forms 1040ez However, the seller must include them in the selling price. Tax forms 1040ez Examples. Tax forms 1040ez   The following examples illustrate how real estate taxes are divided between buyer and seller. Tax forms 1040ez Example 1. Tax forms 1040ez Dennis and Beth White's real property tax year for both their old home and their new home is the calendar year, with payment due August 1. Tax forms 1040ez The tax on their old home, sold on May 7, was $620. Tax forms 1040ez The tax on their new home, bought on May 3, was $732. Tax forms 1040ez Dennis and Beth are considered to have paid a proportionate share of the real estate taxes on the old home even though they did not actually pay them to the taxing authority. Tax forms 1040ez On the other hand, they can claim only a proportionate share of the taxes they paid on their new property even though they paid the entire amount. Tax forms 1040ez Dennis and Beth owned their old home during the real property tax year for 126 days (January 1 to May 6, the day before the sale). Tax forms 1040ez They figure their deduction for taxes on their old home as follows. Tax forms 1040ez Worksheet 22-1. Tax forms 1040ez Figuring Your Real Estate Tax Deduction — Taxes on Old Home 1. Tax forms 1040ez Enter the total real estate taxes for the real property tax year $620 2. Tax forms 1040ez Enter the number of days in the real property tax year that you owned the property 126 3. Tax forms 1040ez Divide line 2 by 365 (for leap years, divide line 2 by 366) . Tax forms 1040ez 3452 4. Tax forms 1040ez Multiply line 1 by line 3. Tax forms 1040ez This is your deduction. Tax forms 1040ez Enter it on Schedule A (Form 1040), line 6 $214 Since the buyers of their old home paid all of the taxes, Dennis and Beth also include the $214 in the selling price of the old home. Tax forms 1040ez (The buyers add the $214 to their cost of the home. Tax forms 1040ez ) Dennis and Beth owned their new home during the real property tax year for 243 days (May 3 to December 31, including their date of purchase). Tax forms 1040ez They figure their deduction for taxes on their new home as follows. Tax forms 1040ez Worksheet 22-1. Tax forms 1040ez Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. Tax forms 1040ez Enter the total real estate taxes for the real property tax year $732 2. Tax forms 1040ez Enter the number of days in the real property tax year that you owned the property 243 3. Tax forms 1040ez Divide line 2 by 365 (for leap years, divide line 2 by 366) . Tax forms 1040ez 6658 4. Tax forms 1040ez Multiply line 1 by line 3. Tax forms 1040ez This is your deduction. Tax forms 1040ez Enter it on Schedule A (Form 1040), line 6 $487 Since Dennis and Beth paid all of the taxes on the new home, they add $245 ($732 paid less $487 deduction) to their cost of the new home. Tax forms 1040ez (The sellers add this $245 to their selling price and deduct the $245 as a real estate tax. Tax forms 1040ez ) Dennis and Beth's real estate tax deduction for their old and new homes is the sum of $214 and $487, or $701. Tax forms 1040ez They will enter this amount on Schedule A (Form 1040), line 6. Tax forms 1040ez Example 2. Tax forms 1040ez George and Helen Brown bought a new home on May 3, 2013. Tax forms 1040ez Their real property tax year for the new home is the calendar year. Tax forms 1040ez Real estate taxes for 2012 were assessed in their state on January 1, 2013. Tax forms 1040ez The taxes became due on May 31, 2013, and October 31, 2013. Tax forms 1040ez The Browns agreed to pay all taxes due after the date of purchase. Tax forms 1040ez Real estate taxes for 2012 were $680. Tax forms 1040ez They paid $340 on May 31, 2013, and $340 on October 31, 2013. Tax forms 1040ez These taxes were for the 2012 real property tax year. Tax forms 1040ez The Browns cannot deduct them since they did not own the property until 2013. Tax forms 1040ez Instead, they must add $680 to the cost of their new home. Tax forms 1040ez In January 2014, the Browns receive their 2013 property tax statement for $752, which they will pay in 2014. Tax forms 1040ez The Browns owned their new home during the 2013 real property tax year for 243 days (May 3 to December 31). Tax forms 1040ez They will figure their 2014 deduction for taxes as follows. Tax forms 1040ez Worksheet 22-1. Tax forms 1040ez Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. Tax forms 1040ez Enter the total real estate taxes for the real property tax year $752 2. Tax forms 1040ez Enter the number of days in the real property tax year that you owned the property 243 3. Tax forms 1040ez Divide line 2 by 365 (for leap years, divide line 2 by 366) . Tax forms 1040ez 6658 4. Tax forms 1040ez Multiply line 1 by line 3. Tax forms 1040ez This is your deduction. Tax forms 1040ez Claim it on Schedule A (Form 1040), line 6 $501 The remaining $251 ($752 paid less $501 deduction) of taxes paid in 2014, along with the $680 paid in 2013, is added to the cost of their new home. Tax forms 1040ez Because the taxes up to the date of sale are considered paid by the seller on the date of sale, the seller is entitled to a 2013 tax deduction of $931. Tax forms 1040ez This is the sum of the $680 for 2012 and the $251 for the 122 days the seller owned the home in 2013. Tax forms 1040ez The seller must also include the $931 in the selling price when he or she figures the gain or loss on the sale. Tax forms 1040ez The seller should contact the Browns in January 2014 to find out how much real estate tax is due for 2013. Tax forms 1040ez Form 1099-S. Tax forms 1040ez   For certain sales or exchanges of real estate, the person responsible for closing the sale (generally the settlement agent) prepares Form 1099-S, Proceeds From Real Estate Transactions, to report certain information to the IRS and to the seller of the property. Tax forms 1040ez Box 2 of Form 1099-S is for the gross proceeds from the sale and should include the portion of the seller's real estate tax liability that the buyer will pay after the date of sale. Tax forms 1040ez The buyer includes these taxes in the cost basis of the property, and the seller both deducts this amount as a tax paid and includes it in the sales price of the property. Tax forms 1040ez   For a real estate transaction that involves a home, any real estate tax the seller paid in advance but that is the liability of the buyer appears on Form 1099-S, box 5. Tax forms 1040ez The buyer deducts this amount as a real estate tax, and the seller reduces his or her real estate tax deduction (or includes it in income) by the same amount. Tax forms 1040ez See Refund (or rebate) , later. Tax forms 1040ez Taxes placed in escrow. Tax forms 1040ez   If your monthly mortgage payment includes an amount placed in escrow (put in the care of a third party) for real estate taxes, you may not be able to deduct the total amount placed in escrow. Tax forms 1040ez You can deduct only the real estate tax that the third party actually paid to the taxing authority. Tax forms 1040ez If the third party does not notify you of the amount of real estate tax that was paid for you, contact the third party or the taxing authority to find the proper amount to show on your return. Tax forms 1040ez Tenants by the entirety. Tax forms 1040ez   If you and your spouse held property as tenants by the entirety and you file separate federal returns, each of you can deduct only the taxes each of you paid on the property. Tax forms 1040ez Divorced individuals. Tax forms 1040ez   If your divorce or separation agreement states that you must pay the real estate taxes for a home owned by you and your spouse, part of your payments may be deductible as alimony and part as real estate taxes. Tax forms 1040ez See Taxes and insurance in chapter 18 for more information. Tax forms 1040ez Ministers' and military housing allowances. Tax forms 1040ez   If you are a minister or a member of the uniformed services and receive a housing allowance that you can exclude from income, you still can deduct all of the real estate taxes you pay on your home. Tax forms 1040ez Refund (or rebate). Tax forms 1040ez   If you received a refund or rebate in 2013 of real estate taxes you paid in 2013, you must reduce your deduction by the amount refunded to you. Tax forms 1040ez If you received a refund or rebate in 2013 of real estate taxes you deducted in an earlier year (either as an itemized deduction or an increase to your standard deduction), you generally must include the refund or rebate in income in the year you receive it. Tax forms 1040ez However, the amount you include in income is limited to the amount of the deduction that reduced your tax in the earlier year. Tax forms 1040ez For more information, see Recoveries in chapter 12. Tax forms 1040ez Table 22-1. Tax forms 1040ez Which Taxes Can You Deduct? Type of Tax You Can Deduct You Cannot Deduct Fees and Charges Fees and charges that are expenses of your trade or business or of producing income. Tax forms 1040ez Fees and charges that are not expenses of your trade or business or of producing income, such as fees for driver's licenses, car inspections, parking, or charges for water bills (see Taxes and Fees You Cannot Deduct ). Tax forms 1040ez     Fines and penalties. Tax forms 1040ez Income Taxes State and local income taxes. Tax forms 1040ez Federal income taxes. Tax forms 1040ez   Foreign income taxes. Tax forms 1040ez     Employee contributions to state funds listed under Contributions to state benefit funds . Tax forms 1040ez Employee contributions to private or voluntary disability plans. Tax forms 1040ez     State and local general sales taxes if you choose to deduct state and local income taxes. Tax forms 1040ez General Sales Taxes State and local general sales taxes, including compensating use taxes. Tax forms 1040ez State and local income taxes if you choose to deduct state and local general sales taxes. Tax forms 1040ez Other Taxes Taxes that are expenses of your trade or business. Tax forms 1040ez Federal excise taxes, such as tax on gasoline, that are not expenses of your trade or business or of producing income. Tax forms 1040ez   Taxes on property producing rent or royalty income. Tax forms 1040ez Per capita taxes. Tax forms 1040ez   Occupational taxes. Tax forms 1040ez See chapter 28. Tax forms 1040ez     One-half of self-employment tax paid. Tax forms 1040ez   Personal Property Taxes State and local personal property taxes. Tax forms 1040ez Customs duties that are not expenses of your trade or business or of producing income. Tax forms 1040ez Real Estate Taxes State and local real estate taxes. Tax forms 1040ez Real estate taxes that are treated as imposed on someone else (see Division of real estate taxes between buyers and sellers ). Tax forms 1040ez   Foreign real estate taxes. Tax forms 1040ez Taxes for local benefits (with exceptions). Tax forms 1040ez See Real Estate-Related Items You Cannot Deduct . Tax forms 1040ez   Tenant's share of real estate taxes paid by  cooperative housing corporation. Tax forms 1040ez Trash and garbage pickup fees (with exceptions). Tax forms 1040ez See Real Estate-Related Items You Cannot Deduct . Tax forms 1040ez     Rent increase due to higher real estate taxes. Tax forms 1040ez     Homeowners' association charges. Tax forms 1040ez Real Estate-Related Items You Cannot Deduct Payments for the following items generally are not deductible as real estate taxes. Tax forms 1040ez Taxes for local benefits. Tax forms 1040ez Itemized charges for services (such as trash and garbage pickup fees). Tax forms 1040ez Transfer taxes (or stamp taxes). Tax forms 1040ez Rent increases due to higher real estate taxes. Tax forms 1040ez Homeowners' association charges. Tax forms 1040ez Taxes for local benefits. Tax forms 1040ez   Deductible real estate taxes generally do not include taxes charged for local benefits and improvements tending to increase the value of your property. Tax forms 1040ez These include assessments for streets, sidewalks, water mains, sewer lines, public parking facilities, and similar improvements. Tax forms 1040ez You should increase the basis of your property by the amount of the assessment. Tax forms 1040ez   Local benefit taxes are deductible only if they are for maintenance, repair, or interest charges related to those benefits. Tax forms 1040ez If only a part of the taxes is for maintenance, repair, or interest, you must be able to show the amount of that part to claim the deduction. Tax forms 1040ez If you cannot determine what part of the tax is for maintenance, repair, or interest, none of it is deductible. Tax forms 1040ez    Taxes for local benefits may be included in your real estate tax bill. Tax forms 1040ez If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. Tax forms 1040ez You should use the rules above to determine if the local benefit tax is deductible. Tax forms 1040ez Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. Tax forms 1040ez Itemized charges for services. Tax forms 1040ez    An itemized charge for services assessed against specific property or certain people is not a tax, even if the charge is paid to the taxing authority. Tax forms 1040ez For example, you cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged to each homeowner for trash collection), or A flat fee charged for a single service provided by your government (such as a $30 charge for mowing your lawn because it was allowed to grow higher than permitted under your local ordinance). Tax forms 1040ez    You must look at your real estate tax bill to determine if any nondeductible itemized charges, such as those listed above, are included in the bill. Tax forms 1040ez If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. Tax forms 1040ez Exception. Tax forms 1040ez   Service charges used to maintain or improve services (such as trash collection or police and fire protection) are deductible as real estate taxes if: The fees or charges are imposed at a like rate against all property in the taxing jurisdiction, The funds collected are not earmarked; instead, they are commingled with general revenue funds, and Funds used to maintain or improve services are not limited to or determined by the amount of these fees or charges collected. Tax forms 1040ez Transfer taxes (or stamp taxes). Tax forms 1040ez   Transfer taxes and similar taxes and charges on the sale of a personal home are not deductible. Tax forms 1040ez If they are paid by the seller, they are expenses of the sale and reduce the amount realized on the sale. Tax forms 1040ez If paid by the buyer, they are included in the cost basis of the property. Tax forms 1040ez Rent increase due to higher real estate taxes. Tax forms 1040ez   If your landlord increases your rent in the form of a tax surcharge because of increased real estate taxes, you cannot deduct the increase as taxes. Tax forms 1040ez Homeowners' association charges. Tax forms 1040ez   These charges are not deductible because they are imposed by the homeowners' association, rather than the state or local government. Tax forms 1040ez Personal Property Taxes Personal property tax is deductible if it is a state or local tax that is: Charged on personal property, Based only on the value of the personal property, and Charged on a yearly basis, even if it is collected more or less than once a year. Tax forms 1040ez A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. Tax forms 1040ez For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways. Tax forms 1040ez If the tax is partly based on value and partly based on other criteria, it may qualify in part. Tax forms 1040ez Example. Tax forms 1040ez Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. Tax forms 1040ez You paid $32 based on the value ($1,500) and weight (3,400 lbs. Tax forms 1040ez ) of your car. Tax forms 1040ez You can deduct $15 (1% × $1,500) as a personal property tax because it is based on the value. Tax forms 1040ez The remaining $17 ($. Tax forms 1040ez 50 × 34), based on the weight, is not deductible. Tax forms 1040ez Taxes and Fees You Cannot Deduct Many federal, state, and local government taxes are not deductible because they do not fall within the categories discussed earlier. Tax forms 1040ez Other taxes and fees, such as federal income taxes, are not deductible because the tax law specifically prohibits a deduction for them. Tax forms 1040ez See Table 22-1. Tax forms 1040ez Taxes and fees that are generally not deductible include the following items. Tax forms 1040ez Employment taxes. Tax forms 1040ez This includes social security, Medicare, and railroad retirement taxes withheld from your pay. Tax forms 1040ez However, one-half of self-employment tax you pay is deductible. Tax forms 1040ez In addition, the social security and other employment taxes you pay on the wages of a household worker may be included in medical expenses that you can deduct or child care expenses that allow you to claim the child and dependent care credit. Tax forms 1040ez For more information, see chapters 21 and 32. Tax forms 1040ez Estate, inheritance, legacy, or succession taxes. Tax forms 1040ez However, you can deduct the estate tax attributable to income in respect of a decedent if you, as a beneficiary, must include that income in your gross income. Tax forms 1040ez In that case, deduct the estate tax as a miscellaneous deduction that is not subject to the 2%-of-adjusted-gross-income limit. Tax forms 1040ez For more information, see Publication 559, Survivors, Executors, and Administrators. Tax forms 1040ez Federal income taxes. Tax forms 1040ez This includes income taxes withheld from your pay. Tax forms 1040ez Fines and penalties. Tax forms 1040ez You cannot deduct fines and penalties paid to a government for violation of any law, including related amounts forfeited as collateral deposits. Tax forms 1040ez Gift taxes. Tax forms 1040ez License fees. Tax forms 1040ez You cannot deduct license fees for personal purposes (such as marriage, driver's, and dog license fees). Tax forms 1040ez Per capita taxes. Tax forms 1040ez You cannot deduct state or local per capita taxes. Tax forms 1040ez Many taxes and fees other than those listed above are also nondeductible, unless they are ordinary and necessary expenses of a business or income producing activity. Tax forms 1040ez For other nondeductible items, see Real Estate-Related Items You Cannot Deduct , earlier. Tax forms 1040ez Where To Deduct You deduct taxes on the following schedules. Tax forms 1040ez State and local income taxes. Tax forms 1040ez    These taxes are deducted on Schedule A (Form 1040), line 5, even if your only source of income is from business, rents, or royalties. Tax forms 1040ez Check box a on line 5. Tax forms 1040ez General sales taxes. Tax forms 1040ez   Sales taxes are deducted on Schedule A (Form 1040), line 5. Tax forms 1040ez You must check box b on line 5. Tax forms 1040ez If you elect to deduct sales taxes, you cannot deduct state and local income taxes on Schedule A (Form 1040), line 5, box a. Tax forms 1040ez Foreign income taxes. Tax forms 1040ez   Generally, income taxes you pay to a foreign country or U. Tax forms 1040ez S. Tax forms 1040ez possession can be claimed as an itemized deduction on Schedule A (Form 1040), line 8, or as a credit against your U. Tax forms 1040ez S. Tax forms 1040ez income tax on Form 1040, line 47. Tax forms 1040ez To claim the credit, you may have to complete and attach Form 1116. Tax forms 1040ez For more information, see chapter 37, the Form 1040 instructions, or Publication 514. Tax forms 1040ez Real estate taxes and personal property taxes. Tax forms 1040ez    Real estate and personal property taxes are deducted on Schedule A (Form 1040), lines 6 and 7, respectively, unless they are paid on property used in your business, in which case they are deducted on Schedule C, Schedule C-EZ, or Schedule F (Form 1040). Tax forms 1040ez Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040). Tax forms 1040ez Self-employment tax. Tax forms 1040ez    Deduct one-half of your self-employment tax on Form 1040, line 27. Tax forms 1040ez Other taxes. Tax forms 1040ez    All other deductible taxes are deducted on Schedule A (Form 1040), line 8. Tax forms 1040ez Prev  Up  Next   Home   More Online Publications