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2010 1040ez Tax Form

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2010 1040ez Tax Form

2010 1040ez tax form 10. 2010 1040ez tax form   Self-Employment (SE) Tax Table of Contents Who Must Pay SE Tax?Special Rules and Exceptions Figuring Earnings Subject to SE Tax Farm Optional Method Using Both Optional Methods Reporting Self-Employment Tax The SE tax rules apply no matter how old you are and even if you are already receiving social security and Medicare benefits. 2010 1040ez tax form Who Must Pay SE Tax? Generally, you must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. 2010 1040ez tax form Use Schedule SE to figure net earnings from self-employment. 2010 1040ez tax form Sole proprietor or independent contractor. 2010 1040ez tax form   If you are self-employed as a sole proprietor or independent contractor, you generally use Schedule C or C-EZ (Form 1040) to figure your earnings subject to SE tax. 2010 1040ez tax form SE tax rate. 2010 1040ez tax form    For 2013, the SE tax rate on net earnings is 15. 2010 1040ez tax form 3% (12. 2010 1040ez tax form 4% social security tax plus 2. 2010 1040ez tax form 9% Medicare tax). 2010 1040ez tax form Maximum earnings subject to self-employment tax. 2010 1040ez tax form    Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. 2010 1040ez tax form 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. 2010 1040ez tax form   All of your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. 2010 1040ez tax form 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. 2010 1040ez tax form   If your wages and tips 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. 2010 1040ez tax form 4% social security part of the SE tax on any of your net earnings. 2010 1040ez tax form However, you must pay the 2. 2010 1040ez tax form 9% Medicare part of the SE tax on all your net earnings. 2010 1040ez tax form Special Rules and Exceptions Aliens. 2010 1040ez tax form   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. 2010 1040ez tax form S. 2010 1040ez tax form citizens. 2010 1040ez tax form Nonresident aliens are not subject to SE tax unless an international social security agreement in effect determines that they are covered under the U. 2010 1040ez tax form S. 2010 1040ez tax form social security system. 2010 1040ez tax form However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. 2010 1040ez tax form S. 2010 1040ez tax form residents for self-employment tax purposes. 2010 1040ez tax form For more information on aliens, see Publication 519, U. 2010 1040ez tax form S. 2010 1040ez tax form Tax Guide for Aliens. 2010 1040ez tax form Child employed by parent. 2010 1040ez tax form   You are not subject to SE tax if you are under age 18 and you are working for your father or mother. 2010 1040ez tax form Church employee. 2010 1040ez tax form    If you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108. 2010 1040ez tax form 28 or more in wages from the church or organization. 2010 1040ez tax form For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. 2010 1040ez tax form Fishing crew member. 2010 1040ez tax form   If you are a member of the crew on a boat that catches fish or other water life, your earnings are subject to SE tax if all the following conditions apply. 2010 1040ez tax form You do not get any pay for the work except your share of the catch or a share of the proceeds from the sale of the catch, unless the pay meets all the following conditions. 2010 1040ez tax form The pay is not more than $100 per trip. 2010 1040ez tax form The pay is received only if there is a minimum catch. 2010 1040ez tax form The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. 2010 1040ez tax form You get a share of the catch or a share of the proceeds from the sale of the catch. 2010 1040ez tax form Your share depends on the amount of the catch. 2010 1040ez tax form The boat's operating crew normally numbers fewer than 10 individuals. 2010 1040ez tax form (An operating crew is considered as normally made up of fewer than 10 if the average size of the crew on trips made during the last four calendar quarters is fewer than 10. 2010 1040ez tax form ) Notary public. 2010 1040ez tax form   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ but are not subject to self-employment tax (see the Instructions for Schedule SE (Form 1040)). 2010 1040ez tax form State or local government employee. 2010 1040ez tax form   You are subject to SE tax if you are an employee of a state or local government, are paid solely on a fee basis, and your services are not covered under a federal-state social security agreement. 2010 1040ez tax form Foreign government or international organization employee. 2010 1040ez tax form   You are subject to SE tax if both the following conditions are true. 2010 1040ez tax form You are a U. 2010 1040ez tax form S. 2010 1040ez tax form citizen employed in the United States, Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Virgin Islands by: A foreign government, A wholly-owned agency of a foreign government, or An international organization. 2010 1040ez tax form Your employer is not required to withhold social security and Medicare taxes from your wages. 2010 1040ez tax form U. 2010 1040ez tax form S. 2010 1040ez tax form citizen or resident alien residing abroad. 2010 1040ez tax form    If you are a self-employed U. 2010 1040ez tax form S. 2010 1040ez tax form citizen or resident alien living outside the United States, in most cases you must pay SE tax. 2010 1040ez tax form Do not reduce your foreign earnings from self-employment by your foreign earned income exclusion. 2010 1040ez tax form Exception. 2010 1040ez tax form    The United States has social security agreements with many countries to eliminate double taxation under two social security systems. 2010 1040ez tax form Under these agreements, you generally must only pay social security and Medicare taxes to the country in which you live. 2010 1040ez tax form The country to which you must pay the tax will issue a certificate which serves as proof of exemption from social security tax in the other country. 2010 1040ez tax form   For more information, see the Instructions for Schedule SE (Form 1040). 2010 1040ez tax form More Than One Business If you have earnings subject to SE tax from more than one trade, business, or profession, you must combine the net profit (or loss) from each to determine your total earnings subject to SE tax. 2010 1040ez tax form A loss from one business reduces your profit from another business. 2010 1040ez tax form Community Property Income If any of the income from a trade or business, other than a partnership, is community property income under state law, it is included in the earnings subject to SE tax of the spouse carrying on the trade or business. 2010 1040ez tax form Gain or Loss Do not include in earnings subject to SE tax a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. 2010 1040ez tax form It does not matter whether the disposition is a sale, exchange, or an involuntary conversion. 2010 1040ez tax form Lost Income Payments If you are self-employed and reduce or stop your business activities, any payment you receive from insurance or other sources for the lost business income is included in earnings subject to SE tax. 2010 1040ez tax form If you are not working when you receive the payment, it still relates to your business and is included in earnings subject to SE tax, even though your business is temporarily inactive. 2010 1040ez tax form Figuring Earnings Subject to SE Tax Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. 2010 1040ez tax form The regular method. 2010 1040ez tax form The nonfarm optional method. 2010 1040ez tax form The farm optional method. 2010 1040ez tax form You must use the regular method unless you are eligible to use one or both of the optional methods. 2010 1040ez tax form Why use an optional method?    You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. 2010 1040ez tax form You want to receive credit for social security benefit coverage. 2010 1040ez tax form You incurred child or dependent care expenses for which you could claim a credit. 2010 1040ez tax form (An optional method may increase your earned income, which could increase your credit. 2010 1040ez tax form ) You are entitled to the earned income credit. 2010 1040ez tax form (An optional method may increase your earned income, which could increase your credit. 2010 1040ez tax form ) You are entitled to the additional child tax credit. 2010 1040ez tax form (An optional method may increase your earned income, which could increase your credit. 2010 1040ez tax form ) Effects of using an optional method. 2010 1040ez tax form   Using an optional method could increase your SE tax. 2010 1040ez tax form Paying more SE tax could result in your getting higher benefits when you retire. 2010 1040ez tax form   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller tax or no tax using the regular method. 2010 1040ez tax form   The optional methods may be used only to figure your SE tax. 2010 1040ez tax form To figure your income tax, include your actual earnings in gross income, regardless of which method you use to determine SE tax. 2010 1040ez tax form Regular Method Multiply your total earnings subject to SE tax by 92. 2010 1040ez tax form 35% (. 2010 1040ez tax form 9235) to get your net earnings under the regular method. 2010 1040ez tax form See Short Schedule SE, line 4, or Long Schedule SE, line 4a. 2010 1040ez tax form Net earnings figured using the regular method are also called actual net earnings. 2010 1040ez tax form Nonfarm Optional Method Use the nonfarm optional method only for earnings that do not come from farming. 2010 1040ez tax form You may use this method if you meet all the following tests. 2010 1040ez tax form You are self-employed on a regular basis. 2010 1040ez tax form This means that your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. 2010 1040ez tax form The net earnings can be from either farm or nonfarm earnings or both. 2010 1040ez tax form You have used this method less than 5 years. 2010 1040ez tax form (There is a 5-year lifetime limit. 2010 1040ez tax form ) The years do not have to be one after another. 2010 1040ez tax form Your net nonfarm profits were: Less than $5,024, and Less than 72. 2010 1040ez tax form 189% of your gross nonfarm income. 2010 1040ez tax form Net nonfarm profits. 2010 1040ez tax form   Net nonfarm profit generally is the total of the amounts from: Line 31, Schedule C (Form 1040), Line 3, Schedule C-EZ (Form 1040), Box 14, code A, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J1, Schedule K-1 (Form 1065-B). 2010 1040ez tax form   However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. 2010 1040ez tax form Gross nonfarm income. 2010 1040ez tax form   Your gross nonfarm income generally is the total of the amounts from: Line 7, Schedule C (Form 1040), Line 1, Schedule C-EZ (Form 1040), Box 14, code C, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J2, Schedule K-1 (Form 1065-B). 2010 1040ez tax form Figuring Nonfarm Net Earnings If you meet the three tests explained earlier, use the following table to figure your net earnings from self-employment under the nonfarm optional method. 2010 1040ez tax form Table 10-1. 2010 1040ez tax form Figuring Nonfarm Net Earnings IF your gross nonfarm income is. 2010 1040ez tax form . 2010 1040ez tax form . 2010 1040ez tax form THEN your net earnings are equal to. 2010 1040ez tax form . 2010 1040ez tax form . 2010 1040ez tax form $6,960 or less Two-thirds of your gross nonfarm income. 2010 1040ez tax form More than $6,960 $4,640 Actual net earnings. 2010 1040ez tax form   Your actual net earnings are 92. 2010 1040ez tax form 35% of your total earnings subject to SE tax (that is, multiply total earnings subject to SE tax by 92. 2010 1040ez tax form 35% (. 2010 1040ez tax form 9235) to get actual net earnings). 2010 1040ez tax form Actual net earnings are equivalent to net earnings figured using the regular method. 2010 1040ez tax form Optional net earnings less than actual net earnings. 2010 1040ez tax form   You cannot use this method to report an amount less than your actual net earnings from self-employment. 2010 1040ez tax form Gross nonfarm income of $6,960 or less. 2010 1040ez tax form   The following examples illustrate how to figure net earnings when gross nonfarm income is $6,960 or less. 2010 1040ez tax form Example 1. 2010 1040ez tax form Net nonfarm profit less than $5,024 and less than 72. 2010 1040ez tax form 189% of gross nonfarm income. 2010 1040ez tax form Ann Green runs a craft business. 2010 1040ez tax form Her actual net earnings from self-employment were $800 in 2011 and $900 in 2012. 2010 1040ez tax form She meets the test for being self-employed on a regular basis. 2010 1040ez tax form She has used the nonfarm optional method less than 5 years. 2010 1040ez tax form Her gross income and net profit in 2013 are as follows: Gross nonfarm income $5,400 Net nonfarm profit $1,200 Ann's actual net earnings for 2013 are $1,108 ($1,200 × . 2010 1040ez tax form 9235). 2010 1040ez tax form Because her net profit is less than $5,024 and less than 72. 2010 1040ez tax form 189% of her gross income, she can use the nonfarm optional method to figure net earnings of $3,600 (2/3 × $5,400). 2010 1040ez tax form Because these net earnings are higher than her actual net earnings, she can report net earnings of $3,600 for 2013. 2010 1040ez tax form Example 2. 2010 1040ez tax form Net nonfarm profit less than $5,024 but not less than 72. 2010 1040ez tax form 189% of gross nonfarm income. 2010 1040ez tax form Assume that in Example 1 Ann's gross income is $1,000 and her net profit is $800. 2010 1040ez tax form She must use the regular method to figure her net earnings. 2010 1040ez tax form She cannot use the nonfarm optional method because her net profit is not less than 72. 2010 1040ez tax form 189% of her gross income. 2010 1040ez tax form Example 3. 2010 1040ez tax form Net loss from a nonfarm business. 2010 1040ez tax form Assume that in Example 1 Ann has a net loss of $700. 2010 1040ez tax form She can use the nonfarm optional method and report $3,600 (2/3 × $5,400) as her net earnings. 2010 1040ez tax form Example 4. 2010 1040ez tax form Nonfarm net earnings less than $400. 2010 1040ez tax form Assume that in Example 1 Ann has gross income of $525 and a net profit of $175. 2010 1040ez tax form In this situation, she would not pay any SE tax under either the regular method or the nonfarm optional method because her net earnings under both methods are less than $400. 2010 1040ez tax form Gross nonfarm income of more than $6,960. 2010 1040ez tax form   The following examples illustrate how to figure net earnings when gross nonfarm income is more than $6,960. 2010 1040ez tax form Example 1. 2010 1040ez tax form Net nonfarm profit less than $5,024 and less than 72. 2010 1040ez tax form 189% of gross nonfarm income. 2010 1040ez tax form John White runs an appliance repair shop. 2010 1040ez tax form His actual net earnings from self-employment were $10,500 in 2011 and $9,500 in 2012. 2010 1040ez tax form He meets the test for being self-employed on a regular basis. 2010 1040ez tax form He has used the nonfarm optional method less than 5 years. 2010 1040ez tax form His gross income and net profit in 2013 are as follows: Gross nonfarm income $12,000 Net nonfarm profit $1,200 John's actual net earnings for 2013 are $1,108 ($1,200 × . 2010 1040ez tax form 9235). 2010 1040ez tax form Because his net profit is less than $5,024 and less than 72. 2010 1040ez tax form 189% of his gross income, he can use the nonfarm optional method to figure net earnings of $4,640. 2010 1040ez tax form Because these net earnings are higher than his actual net earnings, he can report net earnings of $4,640 for 2013. 2010 1040ez tax form Example 2. 2010 1040ez tax form Net nonfarm profit not less than $5,024. 2010 1040ez tax form Assume that in Example 1 John's net profit is $5,400. 2010 1040ez tax form He must use the regular method. 2010 1040ez tax form He cannot use the nonfarm optional method because his net nonfarm profit is not less than $5,024. 2010 1040ez tax form Example 3. 2010 1040ez tax form Net loss from a nonfarm business. 2010 1040ez tax form Assume that in Example 1 John has a net loss of $700. 2010 1040ez tax form He can use the nonfarm optional method and report $4,640 as his net earnings from self-employment. 2010 1040ez tax form Farm Optional Method Use the farm optional method only for earnings from a farming business. 2010 1040ez tax form See Publication 225 for information about this method. 2010 1040ez tax form Using Both Optional Methods If you have both farm and nonfarm earnings, you may be able to use both optional methods to determine your net earnings from self-employment. 2010 1040ez tax form To figure your net earnings using both optional methods, you must: Figure your farm and nonfarm net earnings separately under each method. 2010 1040ez tax form Do not combine farm earnings with nonfarm earnings to figure your net earnings under either method. 2010 1040ez tax form Add the net earnings figured under each method to arrive at your total net earnings from self-employment. 2010 1040ez tax form You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. 2010 1040ez tax form If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. 2010 1040ez tax form Example. 2010 1040ez tax form You are a self-employed farmer. 2010 1040ez tax form You also operate a retail grocery store. 2010 1040ez tax form Your gross income, actual net earnings from self-employment, and optional farm and optional nonfarm net earnings from self-employment are shown in Table 10-2. 2010 1040ez tax form Table 10-2. 2010 1040ez tax form Example—Farm and Nonfarm Earnings Income and Earnings Farm Nonfarm Gross income $3,000 $6,000 Actual net earnings $900 $500 Optional net earnings (2/3 of gross income) $2,000 $4,000 Table 10-3 shows four methods or combinations of methods you can use to figure net earnings from self-employment using the farm and nonfarm gross income and actual net earnings shown in Table 10-2. 2010 1040ez tax form Method 1. 2010 1040ez tax form Using the regular method for both farm and nonfarm income. 2010 1040ez tax form Method 2. 2010 1040ez tax form Using the optional method for farm income and the regular method for nonfarm income. 2010 1040ez tax form Method 3. 2010 1040ez tax form Using the regular method for farm income and the optional method for nonfarm income. 2010 1040ez tax form Method 4. 2010 1040ez tax form Using the optional method for both farm and nonfarm income. 2010 1040ez tax form Note. 2010 1040ez tax form Actual net earnings is the same as net earnings figured using the regular method. 2010 1040ez tax form Table 10-3. 2010 1040ez tax form Example—Net Earnings Net Earnings 1 2 3 4 Actual  farm $ 900   $ 900   Optional  farm   $ 2,000   $ 2,000 Actual nonfarm $ 500 $ 500     Optional nonfarm     $4,000 $4,000 Amount you can report: $1,400 $2,500 $4,900 $4,640* *Limited to $4,640 because you used both optional methods. 2010 1040ez tax form Fiscal Year Filer If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. 2010 1040ez tax form Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year. 2010 1040ez tax form Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. 2010 1040ez tax form Then enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. 2010 1040ez tax form Most taxpayers can use Section A—Short Schedule SE to figure their SE tax. 2010 1040ez tax form However, certain taxpayers must use Section B—Long Schedule SE. 2010 1040ez tax form If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. 2010 1040ez tax form Joint return. 2010 1040ez tax form   Even if you file a joint return, you cannot file a joint Schedule SE. 2010 1040ez tax form This is true whether one spouse or both spouses have earnings subject to SE tax. 2010 1040ez tax form If both of you have earnings subject to SE tax, each of you must complete a separate Schedule SE. 2010 1040ez tax form However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. 2010 1040ez tax form Attach both schedules to the joint return. 2010 1040ez tax form More than one business. 2010 1040ez tax form   If you have more than one trade or business, you must combine the net profit (or loss) from each business to figure your SE tax. 2010 1040ez tax form A loss from one business will reduce your profit from another business. 2010 1040ez tax form File one Schedule SE showing the earnings from self-employment, but file a separate Schedule C, C-EZ, or F for each business. 2010 1040ez tax form Example. 2010 1040ez tax form You are the sole proprietor of two separate businesses. 2010 1040ez tax form You operate a restaurant that made a net profit of $25,000. 2010 1040ez tax form You also have a cabinetmaking business that had a net loss of $500. 2010 1040ez tax form You must file a Schedule C for the restaurant showing your net profit of $25,000 and another Schedule C for the cabinetmaking business showing your net loss of $500. 2010 1040ez tax form You file Schedule SE showing total earnings subject to SE tax of $24,500. 2010 1040ez tax form Prev  Up  Next   Home   More Online Publications
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Federal Payment Levy Program

In July 2000, the IRS, in conjunction with the Department of the Treasury, Financial Management Service (FMS), started the Federal Payment Levy Program (FPLP) which is authorized by Internal Revenue Code Section 6331 (h), as prescribed by the Taxpayer Relief Act of 1997 Section 1024. Through this program, we can collect your overdue taxes through a continuous levy on certain federal payments disbursed by FMS. The following is a list of federal payments that can be levied through the FPLP:

  • federal employee retirement annuities,
  • federal payments made to you as a contractor/vendor doing business with the government (including Defense contracts),
  • federal employee travel advances or reimbursements,
  • certain Social Security benefits paid to you,
  • some federal salaries, 
  • Medicare provider and supplier payments.
  • Railroad Retirement Board benefits paid to you.

In the future, the program will expand to include additional federal employee salaries and other types of federal payments.

Federal payments to a delinquent taxpayer will not be included in the program in certain circumstances. These circumstances include, when you are in bankruptcy, have applied for relief as an innocent or injured spouse, made alternative arrangements to pay, or the IRS has determined you are in a hardship situation.

As part of this program, a file of delinquent accounts is transmitted to FMS to be matched against pending federal payments you are due. When a match is found, we send you a Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing, CP 90 or CP 297, if another Final Notice has not already been issued. See Tax Information for Appeals for additional information about your right to a hearing.

If we don't hear from you within 30 days from the date of the Final Notice, we will transmit the levy electronically to FMS. This applies to all federal payments that can be levied except for certain Social Security benefits. See Publication 594, The IRS Collection Process, and Publication 1, Your Rights as a Taxpayer , for additional information.

A levy may be transmitted to FMS without issuing a Final Notice if you previously requested a Collection Due Process (CDP) hearing on employment taxes. The Small Business and Work Opportunity Tax Act of 2007 amended I.R.C. Section 6330(f) and permits such a levy. If you requested a CDP hearing on previous employment taxes NO MORE THAN 2 years prior to the employment taxes being levied, we will send you a Notice of Levy and Notice of Your Right to a Hearing, CP 297A.

A levy may be transmitted to FMS without issuing a Final Notice if you or your predecessor is a Federal contractor.The Small Business Jobs Act of 2010 amended IRC Section 6330(f) and permits the IRS to issue such a levy.  We will send you a post levy notice, Notice of Levy and Notice of Your Right to a Hearing, CP 90C or CP 297C.

From that point on, FMS may reduce any federal payments subject to the levy by 15 percent, or the exact amount of tax owed if it is less than 15 percent of the payment.  Some contract/vendor payments, however, will be reduced by 100 percent, or the exact amount of tax owed. The levy is continuous until your overdue taxes are paid in full, or other arrangements are made to satisfy the debt. Each time your federal payment is levied, FMS will send you a letter of explanation, including information on which federal payment was levied, and advise you to contact us for resolution.

Contact us toll-free at 1-800-829-7650 or 1-800-829-3903 to resolve the issue by paying the tax bill, entering into an installment agreement, or proposing an Offer in Compromise. Please do not contact the FMS, OPM, SSA, or any other federal agency. See Topic 202, What to Do if You Can't Pay Your Tax, and Topic 204, Offers In Compromise, for additional information.

 

Page Last Reviewed or Updated: 07-Jan-2014

The 2010 1040ez Tax Form

2010 1040ez tax form Publication 556 - Additional Material Prev  Up  Next   Home   More Online Publications