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1040ez book Publication 15 - Introductory Material Table of Contents Future Developments What's New Reminders Electronic Filing and Payment Forms in Spanish Hiring New Employees Paying Wages, Pensions, or Annuities Information Returns Nonpayroll Income Tax Withholding Recordkeeping Change of Business Address or Responsible Party Private Delivery Services Telephone Help Ordering Employer Tax Forms and Publications Filing Addresses Dishonored Payments Photographs of Missing Children Calendar Introduction Future Developments For the latest information about developments related to Publication 15 (Circular E), such as legislation enacted after it was published, go to www. 1040ez book irs. 1040ez book gov/pub15. 1040ez book What's New Social security and Medicare tax for 2014. 1040ez book The social security tax rate is 6. 1040ez book 2% each for the employee and employer, unchanged from 2013. 1040ez book The social security wage base limit is $117,000. 1040ez book The Medicare tax rate is 1. 1040ez book 45% each for the employee and employer, unchanged from 2013. 1040ez book There is no wage base limit for Medicare tax. 1040ez book Social security and Medicare taxes apply to the wages of household workers you pay $1,900 or more in cash or an equivalent form of compensation. 1040ez book Social security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation. 1040ez book 2014 withholdng tables. 1040ez book This publication includes the 2014 Percentage Method Tables and Wage Bracket Tables for Income Tax Withholding. 1040ez book Withholding allowance. 1040ez book The 2014 amount for one withholding allowance on an annual basis is $3,950. 1040ez book Voluntary withholding on dividends and other distributions by an Alaska Native Corporation (ANC). 1040ez book A shareholder of an ANC may now request voluntary income tax withholding on dividends and other distributions paid by an ANC. 1040ez book A shareholder may request voluntary withholding by giving the ANC a completed Form W-4V, Voluntary Withholding Request. 1040ez book For more information see Notice 2013-77, 2013-50 I. 1040ez book R. 1040ez book B. 1040ez book 632, available at www. 1040ez book irs. 1040ez book gov/irb/2013-50_IRB/ar10. 1040ez book html. 1040ez book Change of responsible party. 1040ez book Beginning January 1, 2014, any entity with an employer identification number (EIN) must file Form 8822-B, Change of Address or Responsible Party — Business, to report the latest change to its responsible party. 1040ez book Form 8822-B must be filed within 60 days of the change. 1040ez book If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change. 1040ez book For a definition of “responsible party,” see the Form 8822-B instructions. 1040ez book Same-sex marriage. 1040ez book For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. 1040ez book For more information, see Revenue Ruling 2013-17, 2013-38 I. 1040ez book R. 1040ez book B. 1040ez book 201, available at www. 1040ez book irs. 1040ez book gov/irb/2013-38_IRB/ar07. 1040ez book html. 1040ez book Notice 2013-61 provides special administrative procedures for employers to make claims for refunds or adjustments of overpayments of social security and Medicare taxes with respect to certain same-sex spouse benefits before expiration of the period of limitations. 1040ez book Notice 2013-61, 2013-44 I. 1040ez book R. 1040ez book B. 1040ez book 432, is available at www. 1040ez book irs. 1040ez book gov/irb/2013-44_IRB/ar10. 1040ez book html. 1040ez book Reminders Additional Medicare Tax withholding. 1040ez book In addition to withholding Medicare tax at 1. 1040ez book 45%, you must withhold a 0. 1040ez book 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 1040ez book You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 1040ez book Additional Medicare Tax is only imposed on the employee. 1040ez book There is no employer share of Additional Medicare Tax. 1040ez book All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 1040ez book For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments , in section 15. 1040ez book For more information on Additional Medicare Tax, visit IRS. 1040ez book gov and enter “Additional Medicare Tax” in the search box. 1040ez book Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans. 1040ez book The work opportunity tax credit is available for eligible unemployed veterans who began work on or after November 22, 2011, and before January 1, 2014. 1040ez book Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. 1040ez book For more information, visit IRS. 1040ez book gov and enter “work opportunity tax credit” in the search box. 1040ez book Outsourcing payroll duties. 1040ez book Employers are responsible to ensure that tax returns are filed and deposits and payments are made, even if the employer contracts with a third party to perform these acts. 1040ez book The employer remains responsible if the third party fails to perform any required action. 1040ez book If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer such as a payroll service provider or reporting agent, visit IRS. 1040ez book gov and enter “outsourcing payroll duties” in the search box for helpful information on this topic. 1040ez book COBRA premium assistance credit. 1040ez book The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months. 1040ez book See COBRA premium assistance credit under Introduction. 1040ez book Federal tax deposits must be made by electronic funds transfer. 1040ez book You must use electronic funds transfer to make all federal tax deposits. 1040ez book Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). 1040ez book If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. 1040ez book Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. 1040ez book EFTPS is a free service provided by the Department of Treasury. 1040ez book Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. 1040ez book For more information on making federal tax deposits, see How To Deposit in section 11. 1040ez book To get more information about EFTPS or to enroll in EFTPS, visit www. 1040ez book eftps. 1040ez book gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). 1040ez book Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. 1040ez book You must receive written notice from the IRS to file Form 944. 1040ez book If you have been filing Forms 941, Employer's QUARTERLY Federal Tax Return (or Forms 941-SS, Employer's QUARTERLY Federal Tax Return—American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U. 1040ez book S. 1040ez book Virgin Islands, or Formularios 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono), and believe your employment taxes for the calendar year will be $1,000 or less, and you would like to file Form 944, Employer's ANNUAL Federal Tax Return, instead of Forms 941, you must contact the IRS to request to file Form 944. 1040ez book You must receive written notice from the IRS to file Form 944 instead of Forms 941 before you may file this form. 1040ez book For more information on requesting to file Form 944, visit IRS. 1040ez book gov and enter “file employment taxes annually” in the search box. 1040ez book Employers can request to file Forms 941 instead of Form 944. 1040ez book If you received notice from the IRS and have been filing Form 944 but would like to file Forms 941 instead, you must contact the IRS to request to file Forms 941. 1040ez book You must receive written notice from the IRS to file Forms 941 instead of Form 944 before you may file these forms. 1040ez book For more information on requesting to file Form 944, visit IRS. 1040ez book gov and enter “file employment taxes annually” in the search box. 1040ez book Aggregate Form 941 filers. 1040ez book Agents must complete Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, when filing an aggregate Form 941. 1040ez book Aggregate Forms 941 may only be filed by agents approved by the IRS under section 3504 of the Internal Revenue Code. 1040ez book To request approval to act as an agent for an employer, the agent files Form 2678, Employer/Payer Appointment of Agent, with the IRS. 1040ez book Aggregate Form 940 filers. 1040ez book Agents must complete Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, when filing an aggregate Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. 1040ez book Aggregate Forms 940 can be filed by agents acting on behalf of home care service recipients who receive home care services through a program administered by a federal, state, or local government. 1040ez book To request approval to act as an agent on behalf of home care service recipients, the agent files Form 2678 with the IRS. 1040ez book Electronic Filing and Payment Now, more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. 1040ez book Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and payment easier. 1040ez book Spend less time and worry about taxes and more time running your business. 1040ez book Use e-file and the Electronic Federal Tax Payment System (EFTPS) to your benefit. 1040ez book For e-file, visit www. 1040ez book irs. 1040ez book gov/efile for additional information. 1040ez book For EFTPS, visit www. 1040ez book eftps. 1040ez book gov or call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829 (TDD). 1040ez book For electronic filing of Forms W-2, Wage and Tax Statement, visit www. 1040ez book socialsecurity. 1040ez book gov/employer. 1040ez book If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required. 1040ez book If a valid EIN is not provided, the return or payment will not be processed. 1040ez book This may result in penalties and delays in processing your return or payment. 1040ez book Electronic funds withdrawal (EFW). 1040ez book If you file Form 940, Form 941, Form 944, or Form 945 electronically, you can e-file and e-pay (electronic funds withdrawal) the balance due in a single step using tax preparation software or through a tax professional. 1040ez book However, do not use EFW to make federal tax deposits. 1040ez book For more information on paying your taxes using EFW, visit the IRS website at www. 1040ez book irs. 1040ez book gov/e-pay. 1040ez book A fee may be charged to file electronically. 1040ez book Credit or debit card payments. 1040ez book For information on paying your taxes with a credit or debit card, visit the IRS website at www. 1040ez book irs. 1040ez book gov/e-pay. 1040ez book However, do not use credit or debit cards to make federal tax deposits. 1040ez book Forms in Spanish You can provide Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, in place of Form W-4, Employee's Withholding Allowance Certificate, to your Spanish-speaking employees. 1040ez book For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). 1040ez book For nonemployees, Formulario W-9(SP), Solicitud y Certificación del Número de Identificación del Contribuyente, may be used in place of Form W-9, Request for Taxpayer Identification Number and Certification. 1040ez book Hiring New Employees Eligibility for employment. 1040ez book You must verify that each new employee is legally eligible to work in the United States. 1040ez book This includes completing the U. 1040ez book S. 1040ez book Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. 1040ez book You can get the form from USCIS offices or by calling 1-800-870-3676. 1040ez book Contact the USCIS at 1-800-375-5283, or visit the USCIS website at www. 1040ez book uscis. 1040ez book gov for more information. 1040ez book New hire reporting. 1040ez book You are required to report any new employee to a designated state new hire registry. 1040ez book A new employee is an employee who has not previously been employed by you or was previously employed by you but has been separated from such prior employment for at least 60 consecutive days. 1040ez book Many states accept a copy of Form W-4 with employer information added. 1040ez book Visit the Office of Child Support Enforcement website at www. 1040ez book acf. 1040ez book hhs. 1040ez book gov/programs/cse/newhire for more information. 1040ez book W-4 request. 1040ez book Ask each new employee to complete the 2014 Form W-4. 1040ez book See section 9. 1040ez book Name and social security number. 1040ez book Record each new employee's name and number from his or her social security card. 1040ez book Any employee without a social security card should apply for one. 1040ez book See section 4. 1040ez book Paying Wages, Pensions, or Annuities Correcting Form 941 or Form 944. 1040ez book If you discover an error on a previously filed Form 941 or Form 944, make the correction using Form 941-X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund, or Form 944-X, Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund. 1040ez book Forms 941-X and 944-X are stand-alone forms, meaning taxpayers can file them when an error is discovered. 1040ez book Forms 941-X and 944-X are used by employers to claim refunds or abatements of employment taxes, rather than Form 843, Claim for Refund and Request for Abatement. 1040ez book See section 13 for more information. 1040ez book Income tax withholding. 1040ez book Withhold federal income tax from each wage payment or supplemental unemployment compensation plan benefit payment according to the employee's Form W-4 and the correct withholding table. 1040ez book If you have nonresident alien employees, see Withholding income taxes on the wages of nonresident alien employees in section 9. 1040ez book Withhold from periodic pension and annuity payments as if the recipient is married claiming three withholding allowances, unless he or she has provided Form W-4P, Withholding Certificate for Pension or Annuity Payments, either electing no withholding or giving a different number of allowances, marital status, or an additional amount to be withheld. 1040ez book Do not withhold on direct rollovers from qualified plans or governmental section 457(b) plans. 1040ez book See section 9 and Publication 15-A, Employer's Supplemental Tax Guide. 1040ez book Publication 15-A includes information about withholding on pensions and annuities. 1040ez book Zero wage return. 1040ez book If you have not filed a “final” Form 941 or Form 944, or are not a “seasonal” employer, you must continue to file a Form 941 or Form 944 even for periods during which you paid no wages. 1040ez book The IRS encourages you to file your “Zero Wage” Forms 941 or 944 electronically using IRS e-file at www. 1040ez book irs. 1040ez book gov/efile. 1040ez book Employer Responsibilities Employer Responsibilities: The following list provides a brief summary of your basic responsibilities. 1040ez book Because the individual circumstances for each employer can vary greatly, responsibilities for withholding, depositing, and reporting employment taxes can differ. 1040ez book Each item in this list has a page reference to a more detailed discussion in this publication. 1040ez book New Employees: Page Annually (By January 31 of the current year, Page □ Verify work eligibility of new employees 3 for the prior year): □ Record employees' names and SSNs from □ File Form 944 if required (pay tax with return if social security cards 4 not required to deposit) 29 □ Ask employees for Form W-4 3 Annually (see Calendar for due dates): Each Payday: □ Remind employees to submit a new Form W-4 □ Withhold federal income tax based on each if they need to change their withholding 20 employee's Form W-4 20 □ Ask for a new Form W-4 from employees □ Withhold employee's share of social security claiming exemption from income tax and Medicare taxes 23 withholding 20 □ Deposit: □ Reconcile Forms 941 (or Form 944) with Forms • Withheld income tax W-2 and W-3 31 • Withheld and employer social security taxes □ Furnish each employee a Form W-2 7 • Withheld and employer Medicare taxes 24 □ File Copy A of Forms W-2 and the transmittal Note:Due date of deposit generally depends Form W-3 with the SSA 8 on your deposit schedule (monthly or semiweekly) □ Furnish each other payee a Form 1099 (for example, Form 1099-MISC, Miscellaneous Income) 7 Quarterly (By April 30, July 31, October 31, and January 31): □ File Forms 1099 and the transmittal Form □ Deposit FUTA tax if undeposited amount 1096 8 is over $500 35 □ File Form 940 7 □ File Form 941 (pay tax with return if not □ File Form 945 for any nonpayroll income tax required to deposit) 29 withholding 8 Information Returns You may be required to file information returns to report certain types of payments made during the year. 1040ez book For example, you must file Form 1099-MISC, Miscellaneous Income, to report payments of $600 or more to persons not treated as employees (for example, independent contractors) for services performed for your trade or business. 1040ez book For details about filing Forms 1099 and for information about required electronic filing, see the General Instructions for Certain Information Returns for general information and the separate, specific instructions for each information return you file (for example, Instructions for Form 1099-MISC). 1040ez book Generally, do not use Forms 1099 to report wages and other compensation you paid to employees; report these on Form W-2. 1040ez book See the General Instructions for Forms W-2 and W-3 for details about filing Form W-2 and for information about required electronic filing. 1040ez book If you file 250 or more Forms 1099, you must file them electronically. 1040ez book If you file 250 or more Forms W-2, you must file them electronically. 1040ez book SSA will not accept Forms W-2 and W-3 filed on magnetic media. 1040ez book Information reporting customer service site. 1040ez book The IRS operates the Enterprise Computing Center—Martinsburg, a centralized customer service site, to answer questions about reporting on Forms W-2, W-3, 1099, and other information returns. 1040ez book If you have questions related to reporting on information returns, call 1-866-455-7438 (toll free), 304-263-8700 (toll call), or 304-267-3367 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). 1040ez book The center can also be reached by email at mccirp@irs. 1040ez book gov. 1040ez book Do not include tax identification numbers (TINs) or attachments in email correspondence because electronic mail is not secure. 1040ez book Nonpayroll Income Tax Withholding Nonpayroll federal income tax withholding (reported on Forms 1099 and Form W-2G) must be reported on Form 945, Annual Return of Withheld Federal Income Tax. 1040ez book Separate deposits are required for payroll (Form 941 or Form 944) and nonpayroll (Form 945) withholding. 1040ez book Nonpayroll items include: Pensions (including distributions from tax-favored retirement plans, for example, section 401(k), section 403(b), and governmental section 457(b) plans) and annuities. 1040ez book Military retirement. 1040ez book Gambling winnings. 1040ez book Indian gaming profits. 1040ez book Certain government payments, such as unemployment compensation, social security, and Tier 1 railroad retirement benefits, subject to voluntary withholding. 1040ez book Payments subject to backup withholding. 1040ez book For details on depositing and reporting nonpayroll income tax withholding, see the Instructions for Form 945. 1040ez book All income tax withholding reported on Form W-2 must be reported on Form 941, Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, Form 944, or Schedule H (Form 1040), Household Employment Taxes. 1040ez book Distributions from nonqualified pension plans and deferred compensation plans. 1040ez book Because distributions to participants from some nonqualified pension plans and deferred compensation plans (including section 457(b) plans of tax-exempt organizations) are treated as wages and are reported on Form W-2, income tax withheld must be reported on Form 941 or Form 944, not on Form 945. 1040ez book However, distributions from such plans to a beneficiary or estate of a deceased employee are not wages and are reported on Forms 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040ez book ; income tax withheld must be reported on Form 945. 1040ez book Backup withholding. 1040ez book You generally must withhold 28% of certain taxable payments if the payee fails to furnish you with his or her correct taxpayer identification number (TIN). 1040ez book This withholding is referred to as “backup withholding. 1040ez book ” Payments subject to backup withholding include interest, dividends, patronage dividends, rents, royalties, commissions, nonemployee compensation, and certain other payments you make in the course of your trade or business. 1040ez book In addition, transactions by brokers and barter exchanges and certain payments made by fishing boat operators are subject to backup withholding. 1040ez book Backup withholding does not apply to wages, pensions, annuities, IRAs (including simplified employee pension (SEP) and SIMPLE retirement plans), section 404(k) distributions from an employee stock ownership plan (ESOP), medical savings accounts, health savings accounts, long-term-care benefits, or real estate transactions. 1040ez book You can use Form W-9 or Formulario W-9(SP) to request payees to furnish a TIN and to certify the number furnished is correct. 1040ez book You can also use Form W-9 or Formulario W-9(SP) to get certifications from payees that they are not subject to backup withholding or that they are exempt from backup withholding. 1040ez book The Instructions for the Requester of Form W-9 or Formulario W-9(SP) includes a list of types of payees who are exempt from backup withholding. 1040ez book For more information, see Publication 1281, Backup Withholding for Missing and Incorrect Name/TIN(s). 1040ez book Recordkeeping Keep all records of employment taxes for at least 4 years. 1040ez book These should be available for IRS review. 1040ez book Your records should include the following information. 1040ez book Your EIN. 1040ez book Amounts and dates of all wage, annuity, and pension payments. 1040ez book Amounts of tips reported to you by your employees. 1040ez book Records of allocated tips. 1040ez book The fair market value of in-kind wages paid. 1040ez book Names, addresses, social security numbers, and occupations of employees and recipients. 1040ez book Any employee copies of Forms W-2 and W-2c returned to you as undeliverable. 1040ez book Dates of employment for each employee. 1040ez book Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third party payors made to them. 1040ez book Copies of employees' and recipients' income tax withholding allowance certificates (Forms W-4, W-4P, W-4(SP), W-4S, and W-4V). 1040ez book Copies of employees' Earned Income Credit Advance Payment Certificates (Forms W-5 and W-5(SP)). 1040ez book Dates and amounts of tax deposits you made and acknowledgment numbers for deposits made by EFTPS. 1040ez book Copies of returns filed and confirmation numbers. 1040ez book Records of fringe benefits and expense reimbursements provided to your employees, including substantiation. 1040ez book Change of Business Address or Responsible Party To notify the IRS of a change in business address or responsible party, file Form 8822-B. 1040ez book Do not mail Form 8822-B with your employment tax return. 1040ez book Private Delivery Services You can use certain private delivery services designated by the IRS to mail tax returns and payments. 1040ez book The list includes only the following: DHL Express (DHL): DHL Same Day Service. 1040ez book Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First. 1040ez book United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. 1040ez book M. 1040ez book , UPS Worldwide Express Plus, and UPS Worldwide Express. 1040ez book For the IRS mailing address to use if you are using a private delivery service, go to IRS. 1040ez book gov and enter “private delivery service” in the search box. 1040ez book Your private delivery service can tell you how to get written proof of the mailing date. 1040ez book Private delivery services cannot deliver items to P. 1040ez book O. 1040ez book boxes. 1040ez book You must use the U. 1040ez book S. 1040ez book Postal Service to mail any item to an IRS P. 1040ez book O. 1040ez book box address. 1040ez book Telephone Help Tax questions. 1040ez book You can call the IRS Business and Specialty Tax Line with your employment tax questions at 1-800-829-4933. 1040ez book Help for people with disabilities. 1040ez book You may call 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability) with any tax question or to order forms and publications. 1040ez book You may also use this number for assistance with unresolved tax problems. 1040ez book Recorded tax information (TeleTax). 1040ez book The IRS TeleTax service provides recorded tax information on topics that answer many individual and business federal tax questions. 1040ez book You can listen to up to three topics on each call you make. 1040ez book Touch-Tone service is available 24 hours a day, 7 days a week. 1040ez book TeleTax topics are also available on the IRS website at www. 1040ez book irs. 1040ez book gov/taxtopics. 1040ez book Most tax topics listed below are also available in Spanish. 1040ez book For a complete list of TeleTax topics in Spanish, visit the IRS website at www. 1040ez book irs. 1040ez book gov/Spanish/Índice-de-Temas-Tributarios-Año-2013. 1040ez book A list of employment tax topics is provided next. 1040ez book Select, by number, the topic you want to hear and call 1-800-829-4477. 1040ez book For the directory of all topics, select Topic 123. 1040ez book Teletax Topics Topic No. 1040ez book Subject 751 Social Security and Medicare Withholding Rates 752 Form W-2—Where, When, and How to File 753 Form W-4—Employee's Withholding Allowance Certificate 755 Employer Identification Number (EIN)—How to Apply 756 Employment Taxes for Household Employees 757 Form 941 and Form 944—Deposit Requirements 758 Form 941—Employer's QUARTERLY Federal Tax Return and Form 944—Employer's ANNUAL Federal Tax Return 759 Form 940—Employer's Annual Federal Unemployment (FUTA) Tax Return—Filing and Deposit Requirements 760 Reporting and Deposit Requirements for Agricultural Employers 761 Tips—Withholding and Reporting 762 Independent Contractor vs. 1040ez book Employee 763 The “Affordable Care Act” of 2010 Offers Employers New Tax Deductions and Credits Additional employment tax information. 1040ez book Visit the IRS website at www. 1040ez book irs. 1040ez book gov/businesses and click on the Employment Taxes link under Businesses Topics. 1040ez book Ordering Employer Tax Forms and Publications You can order employer tax forms and publications and information returns online at www. 1040ez book irs. 1040ez book gov/businesses. 1040ez book To order 2013 and 2014 forms, click on the Online Ordering for Information Returns and Employer Returns link. 1040ez book You may also order employer tax forms and publications and information returns by calling 1-800-TAX-FORM (1-800-829-3676). 1040ez book Instead of ordering paper Forms W-2 and W-3, consider filing them electronically using the Social Security Administration's (SSA) free e-file service. 1040ez book Visit the SSA's Employer W-2 Filing Instructions & Information website at www. 1040ez book socialsecurity. 1040ez book gov/employer to register for Business Services Online. 1040ez book You will be able to create Forms W-2 online and submit them to the SSA by typing your wage information into easy-to-use fill-in fields. 1040ez book In addition, you can print out completed copies of Forms W-2 to file with state or local governments, distribute to your employees, and keep for your records. 1040ez book Form W-3 will be created for you based on your Forms W-2. 1040ez book Filing Addresses Generally, your filing address for Forms 940, 941, 943, 944, 945, and CT-1 depends on the location of your residence or principal place of business and whether or not you are including a payment with your return. 1040ez book There are separate filing addresses for these returns if you are a tax-exempt organization or government entity. 1040ez book See the separate instructions for Forms 940, 941, 943, 944, 945, or CT-1 for the filing addresses. 1040ez book Dishonored Payments Any form of payment that is dishonored and returned from a financial institution is subject to a penalty. 1040ez book The penalty is $25 or 2% of the payment, whichever is more. 1040ez book However, the penalty on dishonored payments of $24. 1040ez book 99 or less is an amount equal to the payment. 1040ez book For example, a dishonored payment of $18 is charged a penalty of $18. 1040ez book Photographs of Missing Children The IRS is a proud partner with the National Center for Missing and Exploited Children. 1040ez book Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040ez book You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040ez book Calendar The following is a list of important dates. 1040ez book Also see Publication 509, Tax Calendars. 1040ez book If any date shown below for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, use the next business day. 1040ez book A statewide legal holiday delays a filing due date only if the IRS office where you are required to file is located in that state. 1040ez book However, a statewide legal holiday does not delay the due date of federal tax deposits. 1040ez book See Deposits on Business Days Only in section 11. 1040ez book For any filing due date, you will meet the “file” or “furnish” requirement if the envelope containing the return or form is properly addressed, contains sufficient postage, and is postmarked by the U. 1040ez book S. 1040ez book Postal Service on or before the due date, or sent by an IRS-designated private delivery service on or before the due date. 1040ez book See Private Delivery Services under Reminders for more information. 1040ez book Introduction This publication explains your tax responsibilities as an employer. 1040ez book It explains the requirements for withholding, depositing, reporting, paying, and correcting employment taxes. 1040ez book It explains the forms you must give to your employees, those your employees must give to you, and those you must send to the IRS and SSA. 1040ez book This guide also has tax tables you need to figure the taxes to withhold from each employee for 2014. 1040ez book References to “income tax” in this guide apply only to “federal” income tax. 1040ez book Contact your state or local tax department to determine if their rules are different. 1040ez book Additional employment tax information is available in Publication 15-A. 1040ez book Publication 15-A includes specialized information supplementing the basic employment tax information provided in this publication. 1040ez book Publication 15-B, Employer's Tax Guide to Fringe Benefits, contains information about the employment tax treatment and valuation of various types of noncash compensation. 1040ez book Most employers must withhold (except FUTA), deposit, report, and pay the following employment taxes. 1040ez book Income tax. 1040ez book Social security tax. 1040ez book Medicare tax. 1040ez book FUTA tax. 1040ez book There are exceptions to these requirements. 1040ez book See section 15 for guidance. 1040ez book Railroad retirement taxes are explained in the Instructions for Form CT-1. 1040ez book Comments and suggestions. 1040ez book We welcome your comments about this publication and your suggestions for future editions. 1040ez book You can write to us at the following address: Internal Revenue Service Tax Forms & Publications Division 1111 Constitution Ave. 1040ez book NW, IR-6526 Washington, DC 20224 We respond to many letters by telephone. 1040ez book Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040ez book You can also send us comments from www. 1040ez book irs. 1040ez book gov/formspubs. 1040ez book Click on More Information and then click on Comment on Tax Forms and Publications. 1040ez book Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. 1040ez book Federal Government employers. 1040ez book The information in this publication, including the rules for making federal tax deposits, applies to federal agencies. 1040ez book State and local government employers. 1040ez book Payments to employees for services in the employ of state and local government employers are generally subject to federal income tax withholding but not FUTA tax. 1040ez book Most elected and appointed public officials of state or local governments are employees under common law rules. 1040ez book See chapter 3 of Publication 963, Federal-State Reference Guide. 1040ez book In addition, wages, with certain exceptions, are subject to social security and Medicare taxes. 1040ez book See section 15 for more information on the exceptions. 1040ez book If an election worker is employed in another capacity with the same government entity, see Revenue Ruling 2000-6 on page 512 of Internal Revenue Bulletin 2000-6 at www. 1040ez book irs. 1040ez book gov/pub/irs-irbs/irb00-06. 1040ez book pdf. 1040ez book You can get information on reporting and social security coverage from your local IRS office. 1040ez book If you have any questions about coverage under a section 218 (Social Security Act) agreement, contact the appropriate state official. 1040ez book To find your State Social Security Administrator, visit the National Conference of State Social Security Administrators website at www. 1040ez book ncsssa. 1040ez book org. 1040ez book Disregarded entities and qualified subchapter S subsidiaries (QSubs). 1040ez book Eligible single-owner disregarded entities and QSubs are treated as separate entities for employment tax purposes. 1040ez book Eligible single-member entities that have not elected to be taxed as corporations must report and pay employment taxes on wages paid to their employees using the entities' own names and EINs. 1040ez book See Regulations sections 1. 1040ez book 1361-4(a)(7) and 301. 1040ez book 7701-2(c)(2)(iv). 1040ez book COBRA premium assistance credit. 1040ez book The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. 1040ez book COBRA generally covers multiemployer health plans and health plans maintained by private-sector employers (other than churches) with 20 or more full and part-time employees. 1040ez book Parallel requirements apply to these plans under the Employee Retirement Income Security Act of 1974 (ERISA). 1040ez book Under the Public Health Service Act, COBRA requirements apply also to health plans covering state or local government employees. 1040ez book Similar requirements apply under the Federal Employees Health Benefits Program and under some state laws. 1040ez book For the premium assistance (or subsidy) discussed below, these requirements are all referred to as COBRA requirements. 1040ez book Under the American Recovery and Reinvestment Act of 2009 (ARRA), employers are allowed a credit against “payroll taxes” (referred to in this publication as “employment taxes”) for providing COBRA premium assistance to assistance eligible individuals. 1040ez book For periods of COBRA continuation coverage beginning after February 16, 2009, a group health plan must treat an assistance eligible individual as having paid the required COBRA continuation coverage premium if the individual elects COBRA coverage and pays 35% of the amount of the premium. 1040ez book An assistance eligible individual is a qualified beneficiary of an employer's group health plan who is eligible for COBRA continuation coverage during the period beginning September 1, 2008, and ending May 31, 2010, due to the involuntarily termination from employment of a covered employee during the period and elects continuation COBRA coverage. 1040ez book The assistance for the coverage can last up to 15 months. 1040ez book Employees terminated during the period beginning September 1, 2008, and ending May 31, 2010, who received a severance package that delayed the start of the COBRA continuation coverage, may still be eligible for premium assistance for COBRA continuation coverage. 1040ez book For more information see Notice 2009-27, 2009-16 I. 1040ez book R. 1040ez book B. 1040ez book 838, available at www. 1040ez book irs. 1040ez book gov/irb/2009-16_irb/ar09. 1040ez book html. 1040ez book Administrators of the group health plans (or other entities) that provide or administer COBRA continuation coverage must provide notice to assistance eligible individuals of the COBRA premium assistance. 1040ez book The 65% of the premium not paid by the assistance eligible individuals is reimbursed to the employer maintaining the group health plan. 1040ez book The reimbursement is made through a credit against the employer's employment tax liabilities. 1040ez book For information on how to claim the credit, see the Instructions for Form 941 or the Instructions for Form 944. 1040ez book The credit is treated as a deposit made on the first day of the return period (quarter or year). 1040ez book In the case of a multiemployer plan, the credit is claimed by the plan, rather than the employer. 1040ez book In the case of an insured plan subject to state law continuation coverage requirements, the credit is claimed by the insurance company, rather than the employer. 1040ez book Anyone claiming the credit for COBRA premium assistance payments must maintain the following information to support their claim, including the following. 1040ez book Information on the receipt of the assistance eligible individuals' 35% share of the premium, including dates and amounts. 1040ez book In the case of an insurance plan, a copy of invoice or other supporting statement from the insurance carrier and proof of timely payment of the full premium to the insurance carrier required under COBRA. 1040ez book In the case of a self-insured plan, proof of the premium amount and proof of the coverage provided to the assistance eligible individuals. 1040ez book Attestation of involuntary termination, including the date of the involuntary termination for each covered employee whose involuntary termination is the basis for eligibility for the subsidy. 1040ez book Proof of each assistance eligible individual's eligibility for COBRA coverage and the election of COBRA coverage. 1040ez book A record of the SSNs of all covered employees, the amount of the subsidy reimbursed with respect to each covered employee, and whether the subsidy was for one individual or two or more individuals. 1040ez book For more information, visit IRS. 1040ez book gov and enter “COBRA” in the search box. 1040ez book Prev Up Next Home More Online Publications
Fact Sheets 2014
IRS Offers Advice on How to Choose a Tax Preparer
FS-2014-5, February 2014 — Many people hire a professional when it’s time to file their tax return. If you pay someone to prepare your federal income tax return, the IRS urges you to choose that person wisely. Even if you don’t prepare your own return, you’re still legally responsible for what is on it.
Earned Income Tax Credit; Do I Qualify?
FS-2014-4, January 2014 — The Earned Income Tax Credit (EITC) is a financial boost for people working hard to make ends meet. Millions of workers may qualify for the first time this year due to changes in their marital, parental or financial status.
IRS Criminal Investigation Combats Identity Theft Refund Fraud
FS-2014-3, January 2014 — The IRS has seen a significant increase in refund fraud that involves identity thieves who file false claims for refunds by stealing and using someone's Social Security number. The investigative work done by Criminal Investigation is a major component of the IRS’s efforts to combat tax-related identity theft.
Tips for Taxpayers, Victims about Identity Theft and Tax Returns
FS-2014-2, January 2014 — Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS. In 2014, the IRS continues to take new steps and strong actions to protect taxpayers and help victims of identity theft and refund fraud.
IRS Combats Identity Theft and Refund Fraud on Many Fronts
FS-2014-1, January 2014 — Stopping identity theft and refund fraud is a top priority for the IRS. The agency’s work on identity theft and refund fraud continues to grow, touching nearly every part of the organization. For the 2014 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.
News Release and Fact Sheet Archive
News releases and fact sheets from November 2002 forward and an archive of news releases and fact sheets in PDF format back to 1997.
Page Last Reviewed or Updated: 05-Mar-2014
The 1040ez Book
1040ez book 1. 1040ez book Canceled Debts Table of Contents General RulesForm 1099-C Discounts and loan modifications Sales or other dispositions (such as foreclosures and repossessions) Abandonments Stockholder debt This chapter discusses the tax treatment of canceled debts. 1040ez book General Rules Generally, if a debt for which you are personally liable is forgiven or discharged for less than the full amount owed, the debt is considered canceled in whatever amount it remained unpaid. 1040ez book There are exceptions to this rule, discussed under Exceptions , later. 1040ez book Generally, you must include the canceled debt in your income. 1040ez book However, you may be able to exclude the canceled debt. 1040ez book See Exclusions , later. 1040ez book Example. 1040ez book John owed $1,000 to Mary. 1040ez book Mary agreed to accept and John paid $400 in satisfaction of the entire debt. 1040ez book John has canceled debt of $600. 1040ez book Example. 1040ez book Margaret owed $1,000 to Henry. 1040ez book Henry and Margaret agreed that Margaret would provide Henry with services (instead of money) in full satisfaction of the debt. 1040ez book Margaret does not have canceled debt. 1040ez book Instead, she has income from services. 1040ez book A debt includes any indebtedness: For which you are liable, or Subject to which you hold property. 1040ez book Debt for which you are personally liable is recourse debt. 1040ez book All other debt is nonrecourse debt. 1040ez book If you are not personally liable for the debt, you do not have ordinary income from the cancellation of debt unless you retain the collateral and either: The lender offers a discount for the early payment of the debt, or The lender agrees to a loan modification that results in the reduction of the principal balance of the debt. 1040ez book See Discounts and loan modifications , later. 1040ez book However, upon the disposition of the property securing a nonrecourse debt, the amount realized includes the entire unpaid amount of the debt, not just the FMV of the property. 1040ez book As a result, you may realize a gain or loss if the outstanding debt immediately before the disposition is more or less than your adjusted basis in the property. 1040ez book For more details on figuring your gain or loss, see chapter 2 of this publication or see Publication 544. 1040ez book There are several exceptions and exclusions that may result in part or all of a canceled debt being nontaxable. 1040ez book See Exceptions and Exclusions, later. 1040ez book You must report any taxable canceled debt as ordinary income on: Form 1040 or Form 1040NR, line 21, if the debt is a nonbusiness debt; Schedule C (Form 1040), line 6 (or Schedule C-EZ (Form 1040), line 1), if the debt is related to a nonfarm sole proprietorship; Schedule E (Form 1040), line 3, if the debt is related to nonfarm rental of real property; Form 4835, line 6, if the debt is related to a farm rental activity for which you use Form 4835 to report farm rental income based on crops or livestock produced by a tenant; or Schedule F (Form 1040), line 8, if the debt is farm debt and you are a farmer. 1040ez book Form 1099-C If you receive a Form 1099-C, that means an applicable entity has reported an identifiable event to the IRS regarding a debt you owe. 1040ez book The identifiable event may be an actual cancellation of the debt or it may be an event the applicable entity is required, solely for purposes of reporting to the IRS, to treat as a cancellation of debt. 1040ez book For information on the reasons an applicable entity files Form 1099-C, see Identifiable event codes, later. 1040ez book Unless you meet one of the exceptions or exclusions discussed later, this canceled debt is ordinary income and must be reported on the appropriate form discussed above. 1040ez book An applicable entity includes: A federal government agency, A financial institution, A credit union, and Any organization a significant trade or business of which is lending money. 1040ez book Identifiable event codes. 1040ez book Box 6 of Form 1099-C should indicate the reason the creditor filed this form. 1040ez book The codes shown in box 6 are explained below. 1040ez book Also see the chart after the explanation for a quick reference guide for the codes used in Box 6. 1040ez book Note. 1040ez book Codes A through G and I identify specific occurrences resulting from an actual discharge of indebtedness. 1040ez book However, Code H, Expiration of nonpayment testing period, does not necessarily identify an actual discharge of indebtedness. 1040ez book Code A — Bankruptcy. 1040ez book Code A is used to identify cancellation of debt as a result of a title 11 bankruptcy case. 1040ez book See Bankruptcy , later. 1040ez book Code B — Other judicial debt relief. 1040ez book Code B is used to identify cancellation of debt as a result of a receivership, foreclosure, or similar federal or state court proceeding other than bankruptcy. 1040ez book Code C — Statute of limitations or expiration of deficiency period. 1040ez book Code C is used to identify cancellation of debt either when the statute of limitations for collecting the debt expires or when the statutory period for filing a claim or beginning a deficiency judgment proceeding expires. 1040ez book In the case of the expiration of a statute of limitations, an identifiable event occurs only if and when your affirmative defense of the statute of limitations is upheld in a final judgment or decision in a judicial proceeding, and the period for appealing the judgment or decision has expired. 1040ez book Code D — Foreclosure election. 1040ez book Code D is used to identify cancellation of debt when the creditor elects foreclosure remedies that statutorily end or bar the creditor's right to pursue collection of the debt. 1040ez book This event applies to a mortgage lender or holder who is barred from pursuing debt collection after a power of sale in the mortgage or deed of trust is exercised. 1040ez book Code E — Debt relief from probate or similar proceeding. 1040ez book Code E is used to identify cancellation of debt as a result of a probate court or similar legal proceeding. 1040ez book Code F — By agreement. 1040ez book Code F is used to identify cancellation of debt as a result of an agreement between the creditor and the debtor to cancel the debt at less than full consideration. 1040ez book Code G — Decision or policy to discontinue collection. 1040ez book Code G is used to identify cancellation of debt as a result of a decision or a defined policy of the creditor to discontinue collection activity and cancel the debt. 1040ez book For purposes of this identifiable event, a defined policy includes both a written policy and the creditor's established business practice. 1040ez book Code H — Expiration of nonpayment testing period. 1040ez book Code H is used to indicate that the creditor has not received a payment on the debt during a testing period ending on December 31, 2013. 1040ez book The testing period is a 36-month period increased by the number of months the creditor was prevented from engaging in collection activity by a stay in bankruptcy or similar bar under state or local law. 1040ez book This identifiable event applies only for a creditor that is a financial institution or credit union (and certain of their subsidiaries), the Federal Deposit Insurance Corporation (FDIC), Resolution Trust Corporation (RTC), National Credit Union Administration (NCUA), and other Federal executive agencies. 1040ez book Expiration of the nonpayment testing period does not necessarily result from an actual discharge of indebtedness. 1040ez book Code I — Other actual discharge before identifiable event. 1040ez book Code I is used to identify an actual cancellation of debt that occurs before any of the identifiable events described in codes A through H. 1040ez book Form 1099-C Reference Guide for Box 6 Identifiable Event Codes A Bankruptcy B Other judicial debt relief C Statute of limitations or expiration of deficiency period D Foreclosure election E Debt relief from probate or similar proceeding F By agreement G Decision or policy to discontinue collection H Expiration of nonpayment testing period I Other actual discharge before identifiable event Even if you did not receive a Form 1099-C, you must report canceled debt as gross income on your tax return unless one of the exceptions or exclusions described later applies. 1040ez book Amount of canceled debt. 1040ez book The amount in box 2 of Form 1099-C may represent some or all of the debt that has been canceled or treated as canceled. 1040ez book The amount in box 2 will include principal and may include interest and other nonprincipal amounts (such as fees or penalties). 1040ez book Unless you meet one of the exceptions or exclusions discussed later, the amount of the debt that has been canceled is ordinary income and must be reported on the appropriate form as discussed earlier. 1040ez book Interest included in canceled debt. 1040ez book If any interest is included in the amount of canceled debt in box 2, it will be shown in box 3. 1040ez book Whether the interest portion of the canceled debt must be included in your income depends on whether the interest would be deductible if you paid it. 1040ez book See Deductible Debt under Exceptions, later. 1040ez book Persons who each receive a Form 1099-C showing the full amount of debt. 1040ez book If you and another person were jointly and severally liable for a canceled debt, each of you may get a Form 1099-C showing the entire amount of the canceled debt. 1040ez book However, you may not have to report that entire amount as income. 1040ez book The amount, if any, you must report depends on all the facts and circumstances, including: State law, The amount of debt proceeds each person received, How much of any interest deduction from the debt was claimed by each person, How much of the basis of any co-owned property bought with the debt proceeds was allocated to each co-owner, and Whether the canceled debt qualifies for any of the exceptions or exclusions described in this publication. 1040ez book See Example 3 under Insolvency, later. 1040ez book Discounts and loan modifications If a lender discounts (reduces) the principal balance of a loan because you pay it off early, or agrees to a loan modification (a “workout”) that includes a reduction in the principal balance of a loan, the amount of the discount or the amount of principal reduction is canceled debt. 1040ez book However, if the debt is nonrecourse and you did not retain the collateral, you do not have cancellation of the debt income. 1040ez book The amount of the canceled debt must be included in income unless one of the exceptions or exclusions described later applies. 1040ez book For more details, see Exceptions and Exclusions, later. 1040ez book Sales or other dispositions (such as foreclosures and repossessions) Recourse debt. 1040ez book If you owned property that was subject to a recourse debt in excess of the FMV of the property, the lender's foreclosure or repossession of the property is treated as a sale or disposition of the property by you and may result in your realization of gain or loss. 1040ez book The gain or loss on the disposition of the property is measured by the difference between the FMV of the property at the time of the disposition and your adjusted basis (usually your cost) in the property. 1040ez book The character of the gain or loss (such as ordinary or capital) is determined by the character of the property. 1040ez book If the lender forgives all or part of the amount of the debt in excess of the FMV of the property, the cancellation of the excess debt may result in ordinary income. 1040ez book The ordinary income from the cancellation of debt (the excess of the canceled debt over the FMV of the property) must be included in your gross income reported on your tax return unless one of the exceptions or exclusions described later applies. 1040ez book For more details, see Exceptions and Exclusions, later. 1040ez book Nonrecourse debt. 1040ez book If you owned property that was subject to a nonrecourse debt in excess of the FMV of the property, the lender's foreclosure on the property does not result in ordinary income from the cancellation of debt. 1040ez book The entire amount of the nonrecourse debt is treated as an amount realized on the disposition of the property. 1040ez book The gain or loss on the disposition of the property is measured by the difference between the total amount realized (the entire amount of the nonrecourse debt plus the amount of cash and the FMV of any property received) and your adjusted basis in the property. 1040ez book The character of the gain or loss is determined by the character of the property. 1040ez book More information. 1040ez book See Publications 523, 544, and 551, and chapter 2 of this publication for more details. 1040ez book Abandonments Recourse debt. 1040ez book If you abandon property that secures a debt for which you are personally liable (recourse debt) and the debt is canceled, you will realize ordinary income equal to the canceled debt. 1040ez book You must report this income on your tax return unless one of the exceptions or exclusions described later applies. 1040ez book For more details, see Exceptions and Exclusions, later. 1040ez book This income is separate from any amount realized from the abandonment of the property. 1040ez book For more details, see chapter 3. 1040ez book Nonrecourse debt. 1040ez book If you abandon property that secures a debt for which you are not personally liable (nonrecourse debt), you may realize gain or loss but will not have cancellation of indebtedness income. 1040ez book Stockholder debt If you are a stockholder in a corporation and the corporation cancels or forgives your debt to it, the canceled debt is a constructive distribution. 1040ez book For more information, see Publication 542, Corporations. 1040ez book Prev Up Next Home More Online Publications