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1040 ex 8. 1040 ex Foreign Insurance Taxes Table of Contents Premium. 1040 ex Tax is imposed on insurance policies issued by foreign insurers. 1040 ex Any person who makes, signs, issues, or sells any of the documents and instruments subject to the tax, or for whose use or benefit they are made, signed, issued, or sold, is liable for the tax. 1040 ex The following tax rates apply to each dollar (or fraction thereof) of the premium paid. 1040 ex Casualty insurance and indemnity, fidelity, and surety bonds: 4 cents. 1040 ex For example, on a premium payment of $10. 1040 ex 10, the tax is 44 cents. 1040 ex Life, sickness, and accident insurance, and annuity contracts: 1 cent. 1040 ex For example, on a premium payment of $10. 1040 ex 10, the tax is 11 cents. 1040 ex Reinsurance policies covering any of the taxable contracts described in items (1) and (2): 1 cent. 1040 ex However, the tax does not apply to casualty insurance premiums paid to foreign insurers for coverage of export goods in transit to foreign destinations. 1040 ex Premium. 1040 ex Premium means the agreed price or consideration for assuming and carrying the risk or obligation. 1040 ex It includes any additional charge or assessment payable under the contract, whether in one sum or installments. 1040 ex If premiums are refunded, claim the tax paid on those premiums as an overpayment against tax due on other premiums paid or file a claim for refund. 1040 ex When liability attaches. 1040 ex The liability for this tax attaches when the premium payment is transferred to the foreign insurer or reinsurer (including transfers to any bank, trust fund, or similar recipient designated by the foreign insurer or reinsurer) or to any nonresident agent, solicitor, or broker. 1040 ex A person can pay the tax before the liability attaches if the person keeps records consistent with that practice. 1040 ex Who must file. 1040 ex The person who pays the premium to the foreign insurer (or to any nonresident person such as a foreign broker) must pay the tax and file the return. 1040 ex Otherwise, any person who issued or sold the policy, or who is insured under the policy, is required to pay the tax and file the return. 1040 ex The person liable for this tax must keep accurate records that identify each policy or instrument subject to tax. 1040 ex These records must clearly establish the type of policy or instrument, the gross premium paid, the identity of the insured and insurer, and the total premium charged. 1040 ex If the premium is to be paid in installments, the records must also establish the amount and anniversary date of each installment. 1040 ex The records must be kept at the place of business or other convenient location for at least 3 years after the later of the date any part of the tax became due, or the date any part of the tax was paid. 1040 ex During this period, the records must be readily accessible to the IRS. 1040 ex The person having control or possession of a policy or instrument subject to this tax must keep the policy for at least 3 years after the date any part of the tax on it was paid. 1040 ex For information on reinsurance premiums paid from one foreign insurer to another foreign insurer, see Rev. 1040 ex Rul. 1040 ex 2008-15. 1040 ex You can find Rev. 1040 ex Rul. 1040 ex 2008-15 on page 633 of I. 1040 ex R. 1040 ex B. 1040 ex 2008-12 at www. 1040 ex irs. 1040 ex gov/pub/irs-irbs/irb08-12. 1040 ex pdf. 1040 ex Treaty-based positions under IRC 6114. 1040 ex You may have to file an annual report disclosing the amount of premiums exempt from United States excise tax as a result of the application of a treaty with the United States that overrides (or otherwise modifies) any provision of the Internal Revenue Code. 1040 ex Attach any disclosure statement to the first quarter Form 720. 1040 ex You may be able to use Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), as a disclosure statement. 1040 ex See the Instructions for Form 720 for information on how and where to file. 1040 ex See Revenue Procedure 92-14 in Cumulative Bulletin 1992-1 for procedures you can use to claim a refund of this tax under certain U. 1040 ex S. 1040 ex treaties. 1040 ex Prev Up Next Home More Online Publications
Offshore Voluntary Disclosure Initiative: Passive Foreign Income Company Investment Computations
A significant number of Offshore Voluntary Disclosure Practice (VDP) cases involve Passive Foreign Investment Company (PFIC) investments. A lack of historical information on the cost basis and holding period of many PFIC investments makes it difficult for taxpayers to prepare statutory PFIC computations and for the Service to verify them. As a result, resolution of many VDP cases is being unduly delayed. Therefore, for purposes of this initiative, the Service is offering taxpayers an alternative to the statutory PFIC computation that will resolve PFIC issues on a basis that is consistent with the Mark to Market (MTM) methodology authorized in Internal Revenue Code section 1296 but will not require complete reconstruction of historical data.
The terms of this alternative resolution are as follows:
- If elected, the alternative resolution will apply to all PFIC investments in cases that have been accepted into the VDP and that qualify for the special civil penalty framework announced by the IRS on March 23, 2009. The initial MTM computation of gain or loss under this methodology will be for the first year of the VDP application but could be made after 2003 depending on when the first PFIC investment was made. Generally, under the terms of the March 23, 2009 framework, the first year of the VDP application will be for the calendar year ending December 31, 2003. This will require a determination of the basis for every PFIC investment, which should be agreed between the taxpayer and the Service based on the best available evidence.
- A tax rate of 20% will be applied to the MTM gain(s), MTM net gain(s) and gains from all PFIC dispositions during the VDP period, in lieu of the rate contained in section 1291(a)(1)(B) for the amount allocable to the current year and section 1291(c)(2) for the deferred tax amount(s) allocable to any other taxable year.
- A rate of 7% of the tax computed for PFIC investments marked to market in the first year of the VDP application will be added to the tax for that year, in lieu of the interest charge mechanism described in sections 1291(c) and 1296(j).
- MTM losses will be limited to unreversed inclusions (generally, previously reported MTM gains less allowed MTM losses) on an investment-by-investment basis in the same manner as section 1296. During the VDP period, these MTM losses will be treated as ordinary losses (IRC 1296[c][B]) and the tax benefit is limited to the tax rate applicable to the MTM gains derived during the VDP period (20%). This limitation is accomplished by multiplying the MTM loss by 20% and applying the result as a credit against the tax liability for the year.
- Regular and Alternative Minimum Tax are both to be computed without the PFIC dispositions or MTM gains and losses. The tax from the PFIC transactions (20% plus the 7% for 2003, if applicable) is added to (or subtracted from) the applicable total tax (either regular or AMT, whichever is higher). The tax and interest (i.e., the 7% for the first year of the VDP) computed under the VDP alternative MTM can be added to the applicable total tax (either regular or AMT, whichever is higher) and placed on the amended return in the margin, with a supporting schedule.
- Underpayment interest and penalties on the deficiency are computed in accordance with the Internal Revenue Code and the terms of the VDP.
- For any PFIC investment retained beyond 12/31/2008, the taxpayer must continue using the MTM method, but will apply the normal statutory rules of section 1296 as well as the provisions of sections 1291-1298, as applicable.
Taxpayers should direct questions regarding PFICs and how the alternative resolution will affect their cases to the examiners assigned to their cases. Before electing the alternative PFIC resolution, taxpayers with PFIC investments should consult their tax advisors to ensure that the issue is material in their cases and that the alternative is in fact preferable to the statutory computation in their situation. If the taxpayer does not elect to use the alternative PFIC computation, then the PFIC provisions of section 1291-1298 apply.
Page Last Reviewed or Updated: 09-Jan-2014
The 1040 Ex
1040 ex 1. 1040 ex Filing and Paying Business Taxes Table of Contents Introduction Useful Items - You may want to see: Identification NumbersNew EIN. 1040 ex Employee. 1040 ex Other payee. 1040 ex Income TaxDo I Have To File an Income Tax Return? How Do I File? IRS e-file (Electronic Filing) When Is My Tax Return Due? How Do I Pay Income Tax? Self-Employment (SE) TaxHow to become insured under social security. 1040 ex Earning credits in 2013 and 2014. 1040 ex Employment Taxes Excise Taxes Information ReturnsWaiver of penalties. 1040 ex Penalties. 1040 ex Introduction This chapter explains the business taxes you may have to pay and the forms you may have to file. 1040 ex It also discusses taxpayer identification numbers. 1040 ex Table 1-1 lists the benefits of filing electronically. 1040 ex Table 1-2 lists the federal taxes you may have to pay, their due dates, and the forms you use to report them. 1040 ex Table 1-3 provides checklists that highlight the typical forms and schedules you may need to file if you ever go out of business. 1040 ex You may want to get Publication 509, Tax Calendars. 1040 ex It has tax calendars that tell you when to file returns and make tax payments. 1040 ex Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 1040 U. 1040 ex S. 1040 ex Individual Income Tax Return 1040-ES Estimated Tax for Individuals Sch C (Form 1040) Profit or Loss From Business Sch C-EZ (Form 1040) Net Profit From Business Sch SE (Form 1040) Self-Employment Tax See chapter 12 for information about getting publications and forms. 1040 ex Identification Numbers This section explains three types of taxpayer identification numbers, who needs them, when to use them, and how to get them. 1040 ex Social security number (SSN). 1040 ex Generally, use your SSN as your taxpayer identification number. 1040 ex You must put this number on each of your individual income tax forms, such as Form 1040 and its schedules. 1040 ex To apply for an SSN, use Form SS-5, Application for a Social Security Card. 1040 ex This form is available at Social Security Administration (SSA) offices or by calling 1-800-772-1213. 1040 ex It is also available from the SSA website at www. 1040 ex socialsecurity. 1040 ex gov. 1040 ex Individual taxpayer identification number (ITIN). 1040 ex The IRS will issue an ITIN if you are a nonresident or resident alien and you do not have and are not eligible to get an SSN. 1040 ex In general, if you need to obtain an ITIN, you must attach Form W-7, Application for IRS Individual Taxpayer Identification Number, with your signed, original, completed tax return and any other required documentation and mail them to the following address. 1040 ex Internal Revenue Service ITIN Operation P. 1040 ex O. 1040 ex Box 149342 Austin, TX 78714-9342 The exceptions are covered in detail in the instructions for Form W-7. 1040 ex If you must include another person's SSN on your return and that person does not have and cannot get an SSN, enter that person's ITIN. 1040 ex The application is also available in Spanish. 1040 ex The form is available at IRS. 1040 ex gov or you can call 1-800-829-3676 to order the form. 1040 ex An ITIN is for tax use only. 1040 ex It does not entitle the holder to social security benefits or change the holder's employment or immigration status. 1040 ex Employer identification number (EIN). 1040 ex You must also have an EIN to use as a taxpayer identification number if you do either of the following. 1040 ex Pay wages to one or more employees. 1040 ex File pension or excise tax returns. 1040 ex If you must have an EIN, include it along with your SSN on your Schedule C or C-EZ. 1040 ex You can apply for an EIN: Online by clicking on the Employer ID Numbers (EINs) link at www. 1040 ex irs. 1040 ex gov/businesses/small. 1040 ex The EIN is issued immediately once the application information is validated. 1040 ex By telephone at 1-800-829-4933. 1040 ex By mailing or faxing Form SS-4, Application for Employer Identification Number. 1040 ex New EIN. 1040 ex You may need to get a new EIN if either the form or the ownership of your business changes. 1040 ex For more information, see Publication 1635, Understanding Your EIN. 1040 ex When you need identification numbers of other persons. 1040 ex In operating your business, you will probably make certain payments you must report on information returns. 1040 ex These payments are discussed under Information Returns, later in this chapter. 1040 ex You must give the recipient of these payments (the payee) a statement showing the total amount paid during the year. 1040 ex You must include the payee's identification number and your identification number on the returns and statements. 1040 ex Employee. 1040 ex If you have employees, you must get an SSN from each of them. 1040 ex Record the name and SSN of each employee exactly as they are shown on the employee's social security card. 1040 ex If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. 1040 ex This may occur if the employee's name was changed due to marriage or divorce. 1040 ex Form W-4, Employee's Withholding Allowance Certificate, is completed by each employee so the correct federal income tax can be withheld from their pay. 1040 ex If your employee does not have an SSN, he or she should file Form SS-5 with the SSA. 1040 ex Other payee. 1040 ex If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. 1040 ex If you must report payments to an organization, such as a corporation or partnership, you must get its EIN. 1040 ex To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. 1040 ex A payee who does not provide you with an identification number may be subject to backup withholding. 1040 ex For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. 1040 ex Income Tax This part explains whether you have to file an income tax return and when you file it. 1040 ex It also explains how you pay the tax. 1040 ex Do I Have To File an Income Tax Return? You have to file an income tax return for 2013 if your net earnings from self-employment were $400 or more. 1040 ex If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions. 1040 ex How Do I File? File your income tax return on Form 1040 and attach Schedule C or Schedule C-EZ. 1040 ex Enter the net profit or loss from Schedule C or Schedule C-EZ on page 1 of Form 1040. 1040 ex Use Schedule C to figure your net profit or loss from your business. 1040 ex If you operated more than one business as a sole proprietorship, you must attach a separate Schedule C for each business. 1040 ex You can use the simpler Schedule C-EZ if you operated only one business as a sole proprietorship, you did not have a net loss, and you meet the other requirements listed in Part I of the schedule. 1040 ex IRS e-file (Electronic Filing) Please click here for the text description of the image. 1040 ex E-file logo You may be able to file your tax returns electronically using an IRS e-file option. 1040 ex Table 1-1 lists the benefits of IRS e-file. 1040 ex IRS e-file uses automation to replace most of the manual steps needed to process paper returns. 1040 ex As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. 1040 ex As with a paper return, you are responsible for making sure your return contains accurate information and is filed on time. 1040 ex Using e-file does not affect your chances of an IRS examination of your return. 1040 ex You can file most commonly used business forms using IRS e-file. 1040 ex For more information, visit IRS. 1040 ex gov. 1040 ex Electronic signatures. 1040 ex Paperless filing is easier than you think and it's available to most taxpayers who file electronically—including those first-time filers who were 16 or older at the end of 2013. 1040 ex If you file electronically using tax preparation software or a tax professional, you will participate in the Self-Select PIN (personal identification number) program. 1040 ex If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures. 1040 ex To create a PIN, you must know your adjusted gross income (AGI) from your originally filed 2012 income tax return (not from an amended return, Form 1040X, or any math error notice from the IRS). 1040 ex You will also need to provide your date of birth (DOB). 1040 ex Make sure your DOB is accurate and matches the information on record with the Social Security Administration before you e-file. 1040 ex To do this, check your annual Social Security Statement. 1040 ex With a Self-Select PIN, there is nothing to sign and nothing to mail—not even your Forms W-2. 1040 ex For more details on the Self-Select PIN program, visit IRS. 1040 ex gov. 1040 ex State returns. 1040 ex In most states, you can file an electronic state return simultaneously with your federal return. 1040 ex For more information, check with your local IRS office, state tax agency, tax professional, or IRS. 1040 ex gov. 1040 ex Refunds. 1040 ex You can have your refund check mailed to you, or you can have your refund deposited directly to your checking or savings account. 1040 ex With e-file, your refund will be issued in half the time as when filing on paper. 1040 ex Most refunds are issued within 3 weeks. 1040 ex If you choose Direct Deposit, you can receive your refund in as few as 10 days. 1040 ex Offset against debts. 1040 ex As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. 1040 ex You will be notified if the refund you claimed has been offset against your debts. 1040 ex Refund inquiries. 1040 ex You can check the status of your refund if it has been at least 24 hours (4 weeks if you mailed a paper return) from the date you filed your return. 1040 ex Be sure to have a copy of your tax return available because you will need to know the filing status, the first social security number shown on the return, and the exact whole-dollar amount of the refund. 1040 ex To check on your refund, do one of the following. 1040 ex Go to IRS. 1040 ex gov and click on Where's My Refund. 1040 ex Call 1-800-829-4477 for automated refund information, and follow the recorded instructions. 1040 ex Call 1-800-829-1954 during the hours shown in your form instructions. 1040 ex Balance due. 1040 ex If you owe tax, you must pay it by April 15, 2014, to avoid late-payment penalties and interest. 1040 ex You can make your payment electronically by scheduling an electronic funds withdrawal from your checking or savings account or by credit card. 1040 ex Using an Authorized IRS e-file Provider Many tax professionals can electronically file paperless returns for their clients. 1040 ex You have two options. 1040 ex You can prepare your return, take it to an authorized IRS e-file provider, and have the provider transmit it electronically to the IRS. 1040 ex You can have an authorized IRS e-file provider prepare your return and transmit it for you electronically. 1040 ex You will be asked to complete Form 8879, IRS e-file Signature Authorization, to authorize the provider to enter your self-selected PIN on your return. 1040 ex Depending on the provider and the specific services requested, a fee may be charged. 1040 ex To find an authorized IRS e-file provider near you, go to IRS. 1040 ex gov or look for an “Authorized IRS e-file Provider” sign. 1040 ex Using Your Personal Computer A computer with Internet access is all you need to file your tax return using IRS e-file. 1040 ex When you use your personal computer, you can e-file your return from your home any time of the day or night. 1040 ex Sign your return electronically using a self-selected PIN to complete the process. 1040 ex There is no signature form to submit or Forms W-2 to send in. 1040 ex Free Internet filing options. 1040 ex More taxpayers can now prepare and e-file their individual income tax returns free using commercial tax preparation software accessible through IRS. 1040 ex gov or www. 1040 ex usa. 1040 ex gov. 1040 ex The IRS is partnering with the tax software industry to offer free preparation and filing services to a significant number of taxpayers. 1040 ex Security and privacy certificate programs will assure tax data is safe and secure. 1040 ex To see if you qualify for these services, visit the Return Preparation and Filing Options page at IRS. 1040 ex gov. 1040 ex If you cannot use the free services, you can buy tax preparation software at various electronics stores or computer and office supply stores. 1040 ex You can also download software from the Internet or prepare and file your return completely online by using tax preparation software available on the Internet. 1040 ex Filing Through Employers and Financial Institutions Some businesses offer free e-file to their employees, members, or customers. 1040 ex Others offer it for a fee. 1040 ex Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit. 1040 ex Free Help With Your Return Free help in preparing your return is available nationwide from IRS-trained volunteers. 1040 ex The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers, and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. 1040 ex Some locations offer free electronic filing. 1040 ex Table 1-1. 1040 ex Benefits of IRS e-file Accuracy • Your chance of getting an error notice from the IRS is significantly reduced. 1040 ex Security • Your privacy and security are assured. 1040 ex Electronic signatures • Create your own personal identification number (PIN) and file a completely paperless return through your tax preparation software or tax professional. 1040 ex There is nothing to mail. 1040 ex Proof of acceptance • You receive an electronic acknowledgment within 48 hours that the IRS has accepted your return for processing. 1040 ex Fast refunds • You get your refund faster with Direct Deposit—in as few as 10 days. 1040 ex Free Internet filing options • Use IRS. 1040 ex gov to access commercial tax preparation and e-file services available at no cost to eligible taxpayers. 1040 ex Electronic payment options • Convenient, safe, and secure electronic payment options are available. 1040 ex E-file and pay your taxes in a single step. 1040 ex Schedule an electronic funds withdrawal from your checking or savings account (up to and including April 15, 2014) or pay by credit card. 1040 ex Federal/State filing • Prepare and file your federal and state tax returns together and double the benefits you get from e-file. 1040 ex When Is My Tax Return Due? Form 1040 for calendar year 2013 is due by April 15, 2014. 1040 ex If you use a fiscal year (explained in chapter 2), your return is due by the 15th day of the 4th month after the end of your fiscal year. 1040 ex If you file late, you may have to pay penalties and interest. 1040 ex If you cannot file your return on time, use Form 4868, Application for Automatic Extension of Time To File U. 1040 ex S. 1040 ex Individual Income Tax Return, to request an automatic 6-month extension. 1040 ex For calendar year taxpayers, this will extend the tax filing due date until October 15. 1040 ex Filing an extension does not extend the time to pay your taxes, only the time to file the tax return. 1040 ex How Do I Pay Income Tax? Federal income tax is a pay-as-you-go tax. 1040 ex You must pay it as you earn or receive income during the year. 1040 ex An employee usually has income tax withheld from his or her pay. 1040 ex If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. 1040 ex You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax (discussed later), of $1,000 or more when you file your return. 1040 ex Use Form 1040-ES to figure and pay the tax. 1040 ex If you do not have to make estimated tax payments, you can pay any tax due when you file your return. 1040 ex For more information on estimated tax, see Publication 505, Tax Withholding and Estimated Tax. 1040 ex What are my payment options? You can pay your estimated tax electronically using various options. 1040 ex If you pay electronically, there is no need to mail in Form 1040-ES payment vouchers. 1040 ex These options include: Paying electronically through the Electronic Federal Tax Payment System (EFTPS). 1040 ex Paying by authorizing an electronic funds withdrawal when you file Form 1040 electronically. 1040 ex Paying by credit or debit card over the phone or by Internet. 1040 ex Other options include crediting an overpayment from your 2013 return to your 2014 estimated tax, or mailing a check or money order with a Form 1040-ES payment voucher. 1040 ex EFTPS To enroll in EFTPS, go to www. 1040 ex eftps. 1040 ex gov or call 1-800-555-4477. 1040 ex When you request a new EIN and you will have a tax obligation, you are automatically enrolled in EFTPS. 1040 ex Benefits of EFTPS: The chance of an error in making your payments is reduced. 1040 ex You receive immediate confirmation of every transaction. 1040 ex Penalty for underpayment of tax. 1040 ex If you did not pay enough income tax and self-employment tax for 2013 by withholding or by making estimated tax payments, you may have to pay a penalty on the amount not paid. 1040 ex The IRS will figure the penalty for you and send you a bill. 1040 ex Or you can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you have to pay a penalty and to figure the penalty amount. 1040 ex For more information, see Publication 505. 1040 ex Self-Employment (SE) Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. 1040 ex It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. 1040 ex If you earned income as a statutory employee, you do not pay SE tax on that income. 1040 ex Social security coverage. 1040 ex Social security benefits are available to self-employed persons just as they are to wage earners. 1040 ex Your payments of SE tax contribute to your coverage under the social security system. 1040 ex Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. 1040 ex By not reporting all of your self-employment income, you could cause your social security benefits to be lower when you retire. 1040 ex How to become insured under social security. 1040 ex You must be insured under the social security system before you begin receiving social security benefits. 1040 ex You are insured if you have the required number of credits (also called quarters of coverage), discussed next. 1040 ex Earning credits in 2013 and 2014. 1040 ex For 2013, you received one credit, up to a maximum of four credits, for each $1,160 ($1,200 for 2014) of income subject to social security taxes. 1040 ex Therefore, for 2013, if you had income (self-employment and wages) of $4,640 that was subject to social security taxes, you receive four credits ($4,640 ÷ $1,160). 1040 ex For an explanation of the number of credits you must have to be insured and the benefits available to you and your family under the social security program, consult your nearest Social Security Administration (SSA) office. 1040 ex Making false statements to get or to increase social security benefits may subject you to penalties. 1040 ex The Social Security Administration (SSA) time limit for posting self-employment income. 1040 ex Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. 1040 ex If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. 1040 ex The SSA will not change its records to increase your self-employment income. 1040 ex Who must pay self-employment tax. 1040 ex You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. 1040 ex Your net earnings from self-employment (excluding church employee income) were $400 or more. 1040 ex You had church employee income of $108. 1040 ex 28 or more. 1040 ex The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. 1040 ex SE tax rate. 1040 ex For 2013, the SE tax rate on net earnings is 15. 1040 ex 3% (12. 1040 ex 4% social security tax plus 2. 1040 ex 9% Medicare tax). 1040 ex Maximum earnings subject to SE tax. 1040 ex Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. 1040 ex 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. 1040 ex All your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. 1040 ex 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. 1040 ex If wages and tips you receive as an employee are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. 1040 ex 4% social security part of the SE tax on any of your net earnings. 1040 ex However, you must pay the 2. 1040 ex 9% Medicare part of the SE tax on all your net earnings. 1040 ex Deduct one-half of your SE tax as an adjustment to income on line 27 of Form 1040. 1040 ex More information. 1040 ex For information on methods of calculating SE tax, see Chapter 10, Self-Employment Tax. 1040 ex Table 1-2. 1040 ex Which Forms Must I File? IF you are liable for: THEN use Form: DUE by:1 Income tax 1040 and Schedule C or C-EZ2 15th day of 4th month after end of tax year. 1040 ex Self-employment tax Schedule SE File with Form 1040. 1040 ex Estimated tax 1040-ES 15th day of 4th, 6th, and 9th months of tax year, and 15th day of 1st month after the end of tax year. 1040 ex Social security and Medicare taxes and income tax withholding 941 or 944 April 30, July 31, October 31, and January 313. 1040 ex See Publication 15. 1040 ex Providing information on social security and Medicare taxes and income tax withholding W-2 (to employee) W-2 and W-3 (to the Social Security Administration) January 313. 1040 ex Last day of February (March 31 if filing electronically)3. 1040 ex Federal unemployment (FUTA) tax 940 January 313. 1040 ex April 30, July 31, October 31, and January 31, but only if the liability for unpaid tax is more than $500. 1040 ex Filing information returns for payments to nonemployees and transactions with other persons See Information Returns Forms 1099 – to the recipient by January 31 and to the IRS by February 28 (March 31 if filing electronically). 1040 ex Other forms – see the General Instructions for Certain Information Returns. 1040 ex Excise tax See Excise Taxes See the instructions to the forms. 1040 ex 1 If a due date falls on a Saturday, Sunday, or legal holiday, file by the next day that is not a Saturday, Sunday, or legal holiday. 1040 ex For more information, see Publication 509, Tax Calendars. 1040 ex 2 File a separate schedule for each business. 1040 ex 3 See the form instructions if you go out of business, change the form of your business, or stop paying wages. 1040 ex Employment Taxes If you have employees, you will need to file forms to report employment taxes. 1040 ex Employment taxes include the following items. 1040 ex Social security and Medicare taxes. 1040 ex Federal income tax withholding. 1040 ex Federal unemployment (FUTA) tax. 1040 ex For more information, see Publication 15 (Circular E), Employer's Tax Guide. 1040 ex That publication explains your tax responsibilities as an employer. 1040 ex To help you determine whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. 1040 ex That publication has information to help you determine whether an individual is an independent contractor or an employee. 1040 ex If you incorrectly classify an employee as an independent contractor, you may be held liable for employment taxes for that worker plus a penalty. 1040 ex An independent contractor is someone who is self-employed. 1040 ex You do not generally have to withhold or pay any taxes on payments made to an independent contractor. 1040 ex Excise Taxes This section identifies some of the excise taxes you may have to pay and the forms you have to file if you do any of the following. 1040 ex Manufacture or sell certain products. 1040 ex Operate certain kinds of businesses. 1040 ex Use various kinds of equipment, facilities, or products. 1040 ex Receive payment for certain services. 1040 ex For more information on excise taxes, see Publication 510, Excise Taxes. 1040 ex Form 720. 1040 ex The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. 1040 ex Environmental taxes on the sale or use of ozone-depleting chemicals and imported products containing or manufactured with these chemicals. 1040 ex Communications and air transportation taxes. 1040 ex Fuel taxes. 1040 ex Tax on the first retail sale of heavy trucks, trailers, and tractors. 1040 ex Manufacturers taxes on the sale or use of a variety of different articles. 1040 ex Tax on indoor tanning services. 1040 ex Form 2290. 1040 ex There is a federal excise tax on the use of certain trucks, truck tractors, and buses on public highways. 1040 ex The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. 1040 ex Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. 1040 ex For more information, see the Instructions for Form 2290. 1040 ex Depositing excise taxes. 1040 ex If you have to file a quarterly excise tax return on Form 720, you may have to deposit your excise taxes before the return is due. 1040 ex For details on depositing excise taxes, see the Instructions for Form 720. 1040 ex Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. 1040 ex The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. 1040 ex You must give a copy of each information return you are required to file to the recipient or payer. 1040 ex In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. 1040 ex For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. 1040 ex Form 1099-MISC. 1040 ex Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your business. 1040 ex These payments include the following items. 1040 ex Payments of $600 or more for services performed for your business by people not treated as your employees, such as fees to subcontractors, attorneys, accountants, or directors. 1040 ex Rent payments of $600 or more, other than rents paid to real estate agents. 1040 ex Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. 1040 ex Royalty payments of $10 or more. 1040 ex Payments to certain crew members by operators of fishing boats. 1040 ex You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. 1040 ex Form W-2. 1040 ex You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. 1040 ex You can file Form W-2 online. 1040 ex For more information about Form W-2, see the General Instructions for Forms W-2 and W-3. 1040 ex Penalties. 1040 ex The law provides for the following penalties if you do not file Form 1099-MISC or Form W-2 or do not correctly report the information. 1040 ex For more information, see the General Instructions for Certain Information Returns. 1040 ex Failure to file information returns. 1040 ex This penalty applies if you do not file information returns by the due date, do not include all required information, or report incorrect information. 1040 ex Failure to furnish correct payee statements. 1040 ex This penalty applies if you do not furnish a required statement to a payee by the required date, do not include all required information, or report incorrect information. 1040 ex Waiver of penalties. 1040 ex These penalties will not apply if you can show that the failure was due to reasonable cause and not willful neglect. 1040 ex In addition, there is no penalty for failure to include all required information, or for including incorrect information, on a de minimis (small) number of information returns if you correct the errors by August 1 of the year the returns are due. 1040 ex (A de minimis number of returns is the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. 1040 ex ) Form 8300. 1040 ex You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction, or two or more related business transactions. 1040 ex Cash includes U. 1040 ex S. 1040 ex and foreign coin and currency. 1040 ex It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. 1040 ex Cash does not include a check drawn on an individual's personal account (personal check). 1040 ex For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). 1040 ex Penalties. 1040 ex There are civil and criminal penalties, including up to 5 years in prison, for not filing Form 8300, filing (or causing the filing of) a false or fraudulent Form 8300, or structuring a transaction to evade reporting requirements. 1040 ex Table 1-3. 1040 ex Going Out of Business Checklists (Note. 1040 ex The following checklists highlight the typical final forms and schedules you may need to file if you ever go out of business. 1040 ex For more information, see the instructions for the listed forms. 1040 ex ) IF you are liable for: THEN you may need to: Income tax □ File Schedule C or C-EZ with your Form 1040 for the year in which you go out of business. 1040 ex □ File Form 4797 with your Form 1040 for each year in which you sell or exchange property used in your business or in which the business use of certain section 179 or listed property drops to 50% or less. 1040 ex □ File Form 8594 with your Form 1040 if you sold your business. 1040 ex Self-employment tax □ File Schedule SE with your Form 1040 for the year in which you go out of business. 1040 ex Employment taxes □ File Form 941 (or Form 944) for the calendar quarter in which you make final wage payments. 1040 ex Note. 1040 ex Do not forget to check the box and enter the date final wages were paid on line 15 of Form 941 or line 14 of Form 944. 1040 ex □ File Form 940 for the calendar year in which final wages were paid. 1040 ex Note. 1040 ex Do not forget to check box d, Final: Business closed or stopped paying wages, under Type of Return. 1040 ex Information returns □ Provide Forms W-2 to your employees for the calendar year in which you make final wage payments. 1040 ex Note. 1040 ex These forms are generally due by the due date of your final Form 941 or Form 944. 1040 ex □ File Form W-3 to file Forms W-2. 1040 ex Note. 1040 ex These forms are generally due within 1 month after the due date of your final Form 941 or Form 944. 1040 ex □ Provide Forms 1099-MISC to each person to whom you have paid at least $600 for services (including parts and materials) during the calendar year in which you go out of business. 1040 ex □ File Form 1096 to file Forms 1099-MISC. 1040 ex Prev Up Next Home More Online Publications