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2010 Income Tax Forms

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2010 Income Tax Forms

2010 income tax forms Publication 600 - Main Contents Table of Contents Actual Expenses Optional Sales Tax Tables Instructions for the State and Local General Sales Tax Deduction WorksheetWhat if you lived in more than one state? What if you lived in more than one locality? What if your local general sales tax rate changed during 2006? What if you lived in more than one locality in the same state during 2006? Actual Expenses Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) you paid in 2006 if the tax rate was the same as the general sales tax rate. 2010 income tax forms However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. 2010 income tax forms If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. 2010 income tax forms Motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. 2010 income tax forms Also include any state and local general sales taxes paid for a leased motor vehicle. 2010 income tax forms Do not include sales taxes paid on items used in your trade or business. 2010 income tax forms To deduct your actual expenses, enter the amount on Schedule A, line 5, and enter “ST” on the dotted line to the left of the line 5 entry space. 2010 income tax forms You must keep your actual receipts showing general sales taxes paid to use this method. 2010 income tax forms Refund of general sales taxes. 2010 income tax forms   If you received a refund of state or local general sales taxes in 2006 for amounts paid in 2006, reduce your actual 2006 state and local general sales taxes by this amount. 2010 income tax forms If you received a refund of state or local general sales taxes in 2006 for prior year purchases, do not reduce your 2006 state and local general sales taxes by this amount. 2010 income tax forms But if you deducted your actual state and local general sales taxes in the earlier year and the deduction reduced your tax, you may have to include the refund in income on Form 1040, line 21. 2010 income tax forms See Recoveries in Pub. 2010 income tax forms 525 for details. 2010 income tax forms Optional Sales Tax Tables Instead of using your actual expenses, you can use the tables on pages 5 through 7 to figure your state and local general sales tax deduction. 2010 income tax forms You may also be able to add the state and local general sales taxes paid on certain specified items. 2010 income tax forms To figure your state and local general sales tax deduction using the tables, complete the worksheet below. 2010 income tax forms If your filing status is married filing separately, both you and your spouse elect to deduct sales taxes, and your spouse elects to use the optional sales tax tables, you also must use the tables to figure your state and local general sales tax deduction. 2010 income tax forms State and Local General Sales Tax Deduction Worksheet (See the instructions that begin on page 3. 2010 income tax forms ) Before you begin: See the instructions for line 1 on page 3 if: You lived in more than one state during 2006, or You had any nontaxable income in 2006. 2010 income tax forms   1. 2010 income tax forms Enter your state general sales taxes from the applicable table on page 5 or 6 (see page 3 of the instructions) 1. 2010 income tax forms $     Next. 2010 income tax forms If, for all of 2006, you lived only in Connecticut, the District of Columbia, Hawaii, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Rhode Island, Virginia, or West Virginia, skip lines 2 through 5, enter -0- on line 6, and go to line 7. 2010 income tax forms Otherwise, go to line 2       2. 2010 income tax forms Did you live in Alaska, Arizona, Arkansas (Texarkana only), California (Los Angeles County only), Colorado, Georgia, Illinois, Louisiana, New York State, or North Carolina in 2006?         No. 2010 income tax forms Enter -0-                   Yes. 2010 income tax forms Enter your local general sales taxes from the applicable table on page 7 (see page 3 of the instructions)     2. 2010 income tax forms $       3. 2010 income tax forms Did your locality impose a local general sales tax in 2006? Residents of California, Nevada, and Texarkana, Arkansas, see page 3 of the instructions             No. 2010 income tax forms Skip lines 3 through 5, enter -0- on line 6, and go to line 7             Yes. 2010 income tax forms Enter your local general sales tax rate, but omit the percentage sign. 2010 income tax forms For example, if your local general sales tax rate was 2. 2010 income tax forms 5%, enter 2. 2010 income tax forms 5. 2010 income tax forms If your local general sales tax rate changed or you lived in more than one locality in the same state during 2006, see page 3 of the instructions. 2010 income tax forms (If you do not know your local general sales tax rate, contact your local government. 2010 income tax forms ) 3. 2010 income tax forms . 2010 income tax forms       4. 2010 income tax forms Did you enter -0- on line 2 above?             No. 2010 income tax forms Skip lines 4 and 5 and go to line 6             Yes. 2010 income tax forms Enter your state general sales tax rate (shown in the table heading for your state), but omit the percentage sign. 2010 income tax forms For example, if your state general sales tax rate is 6%, enter 6. 2010 income tax forms 0 4. 2010 income tax forms . 2010 income tax forms       5. 2010 income tax forms Divide line 3 by line 4. 2010 income tax forms Enter the result as a decimal (rounded to at least three places) 5. 2010 income tax forms . 2010 income tax forms       6. 2010 income tax forms Did you enter -0- on line 2 above?             No. 2010 income tax forms Multiply line 2 by line 3   6. 2010 income tax forms $     Yes. 2010 income tax forms Multiply line 1 by line 5. 2010 income tax forms If you lived in more than one locality in the same state during 2006, see page 4 of the instructions           7. 2010 income tax forms Enter your state and local general sales taxes paid on specified items, if any (see page 4 of the instructions) 7. 2010 income tax forms $   8. 2010 income tax forms Deduction for general sales taxes. 2010 income tax forms Add lines 1, 6, and 7. 2010 income tax forms Enter the result here and the total from all your state and local general sales tax deduction worksheets, if you completed more than one, on Schedule A, line 5. 2010 income tax forms Be sure to enter “ST” on the dotted line to the left of the entry space 8. 2010 income tax forms $     Instructions for the State and Local General Sales Tax Deduction Worksheet Line 1. 2010 income tax forms    If you lived in the same state for all of 2006, enter the applicable amount, based on your 2006 income and exemptions, from the optional state sales tax table for your state on page 5 or 6. 2010 income tax forms Read down the “At least-But less than” columns for your state and find the line that includes your 2006 income. 2010 income tax forms If married filing separately, do not include your spouse's income. 2010 income tax forms Your 2006 income is the amount shown on your Form 1040, line 38, plus any nontaxable items, such as the following. 2010 income tax forms Tax-exempt interest. 2010 income tax forms Veterans' benefits. 2010 income tax forms Nontaxable combat pay. 2010 income tax forms Workers' compensation. 2010 income tax forms Nontaxable part of social security and railroad retirement benefits. 2010 income tax forms Nontaxable part of IRA, pension, or annuity distributions. 2010 income tax forms Do not include rollovers. 2010 income tax forms Public assistance payments. 2010 income tax forms The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d. 2010 income tax forms Do not include any additional exemptions you listed on Form 8914 for individuals displaced by Hurricane Katrina. 2010 income tax forms What if you lived in more than one state?    If you lived in more than one state during 2006, look up the table amount for each state using the above rules. 2010 income tax forms If there is no table for your state, the table amount is considered to be zero. 2010 income tax forms Multiply the table amount for each state you lived in by a fraction. 2010 income tax forms The numerator of the fraction is the number of days you lived in the state during 2006 and the denominator is the total number of days in the year (365). 2010 income tax forms Enter the total of the prorated table amounts for each state on line 1. 2010 income tax forms However, if you also lived in a locality during 2006 that imposed a local general sales tax, do not enter the total on line 1. 2010 income tax forms Instead, complete a separate worksheet for each state you lived in and enter the prorated amount for that state on line 1. 2010 income tax forms Example. 2010 income tax forms You lived in State A from January 1 through August 31, 2006 (243 days), and in State B from September 1 through December 31, 2006 (122 days). 2010 income tax forms The table amount for State A is $500. 2010 income tax forms The table amount for State B is $400. 2010 income tax forms You would figure your state general sales tax as follows. 2010 income tax forms State A: $500 x 243/365 = $333   State B: $400 x 122/365 = 134   Total = $467   If none of the localities in which you lived during 2006 imposed a local general sales tax, enter $467 on line 1 of your worksheet. 2010 income tax forms Otherwise, complete a separate worksheet for State A and State B. 2010 income tax forms Enter $333 on line 1 of the State A worksheet and $134 on line 1 of the State B worksheet. 2010 income tax forms Line 2. 2010 income tax forms   If you checked the “No” box, enter -0- on line 2, and go to line 3. 2010 income tax forms If you checked the “Yes” box and lived in the same locality for all of 2006, enter the applicable amount, based on your 2006 income and exemptions, from the optional local sales tax table for your locality on page 7. 2010 income tax forms Read down the “At least-But less than” columns for your locality and find the line that includes your 2006 income. 2010 income tax forms See the line 1 instructions on this page to figure your 2006 income. 2010 income tax forms The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d. 2010 income tax forms Do not include any additional exemptions you listed on Form 8914 for individuals displaced by Hurricane Katrina. 2010 income tax forms What if you lived in more than one locality?   If you lived in more than one locality during 2006, look up the table amount for each locality using the above rules. 2010 income tax forms If there is no table for your locality, the table amount is considered to be zero. 2010 income tax forms Multiply the table amount for each locality you lived in by a fraction. 2010 income tax forms The numerator of the fraction is the number of days you lived in the locality during 2006 and the denominator is the total number of days in the year (365). 2010 income tax forms If you lived in more than one locality in the same state and the local general sales tax rate was the same for each locality, enter the total of the prorated table amounts for each locality in that state on line 2. 2010 income tax forms Otherwise, complete a separate worksheet for lines 2 through 6 for each locality and enter each prorated table amount on line 2 of the applicable worksheet. 2010 income tax forms Example. 2010 income tax forms You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). 2010 income tax forms The table amount for Locality 1 is $100. 2010 income tax forms The table amount for Locality 2 is $150. 2010 income tax forms You would figure the amount to enter on line 2 as follows. 2010 income tax forms Note that this amount may not equal your local sales tax deduction, which is figured on line 6 of the worksheet. 2010 income tax forms Locality 1: $100 x 243/365 = $67   Locality 2: $150 x 122/365 = 50   Total = $117   Line 3. 2010 income tax forms   If you lived in California, check the “No” box if your combined state and local general sales tax rate is 7. 2010 income tax forms 25%. 2010 income tax forms Otherwise, check the “Yes” box and include on line 3 only the part of the combined rate that is more than 7. 2010 income tax forms 25%. 2010 income tax forms   If you lived in Nevada, check the “No” box if your combined state and local general sales tax rate is 6. 2010 income tax forms 5%. 2010 income tax forms Otherwise, check the “Yes” box and include on line 3 only the part of the combined rate that is more than 6. 2010 income tax forms 5%. 2010 income tax forms   If you lived in Texarkana, Arkansas, check the “Yes” box and enter “4. 2010 income tax forms 0” on line 3. 2010 income tax forms Your local general sales tax rate of 4. 2010 income tax forms 0% includes the additional 1. 2010 income tax forms 0% Arkansas state sales tax rate for Texarkana and the 1. 2010 income tax forms 5% sales tax rate for Miller County. 2010 income tax forms What if your local general sales tax rate changed during 2006?    If you checked the “Yes” box and your local general sales tax rate changed during 2006, figure the rate to enter on line 3 as follows. 2010 income tax forms Multiply each tax rate for the period it was in effect by a fraction. 2010 income tax forms The numerator of the fraction is the number of days the rate was in effect during 2006 and the denominator is the total number of days in the year (365). 2010 income tax forms Enter the total of the prorated tax rates on line 3. 2010 income tax forms Example. 2010 income tax forms Locality 1 imposed a 1% local general sales tax from January 1 through September 30, 2006 (273 days). 2010 income tax forms The rate increased to 1. 2010 income tax forms 75% for the period from October 1 through December 31, 2006 (92 days). 2010 income tax forms You would enter “1. 2010 income tax forms 189” on line 3, figured as follows. 2010 income tax forms January 1 - September 30: 1. 2010 income tax forms 00 x 273/365 = 0. 2010 income tax forms 748   October 1 - December 31: 1. 2010 income tax forms 75 x 92/365 = 0. 2010 income tax forms 441   Total = 1. 2010 income tax forms 189   What if you lived in more than one locality in the same state during 2006?    Complete a separate worksheet for lines 2 through 6 for each locality in your state if you lived in more than one locality in the same state during 2006 and either of the following applies. 2010 income tax forms Each locality did not have the same local general sales tax rate. 2010 income tax forms You lived in Texarkana, AR, or Los Angeles County, CA. 2010 income tax forms   To figure the amount to enter on line 3 of the worksheet for each locality in which you lived (except a locality for which you used the table on page 7 to figure your local general sales tax deduction), multiply the local general sales tax rate by a fraction. 2010 income tax forms The numerator of the fraction is the number of days you lived in the locality during 2006 and the denominator is the total number of days in the year (365). 2010 income tax forms Example. 2010 income tax forms You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). 2010 income tax forms The local general sales tax rate for Locality 1 is 1%. 2010 income tax forms The rate for Locality 2 is 1. 2010 income tax forms 75%. 2010 income tax forms You would enter “0. 2010 income tax forms 666” on line 3 for the Locality 1 worksheet and “0. 2010 income tax forms 585” for the Locality 2 worksheet, figured as follows. 2010 income tax forms Locality 1: 1. 2010 income tax forms 00 x 243/365 = 0. 2010 income tax forms 666   Locality 2: 1. 2010 income tax forms 75 x 122/365 = 0. 2010 income tax forms 585   Line 6. 2010 income tax forms   If you lived in more than one locality in the same state during 2006, you should have completed line 1 only on the first worksheet for that state and separate worksheets for lines 2 through 6 for any other locality within that state in which you lived during 2006. 2010 income tax forms If you checked the “Yes” box on line 6 of any of those worksheets, multiply line 5 of that worksheet by the amount that you entered on line 1 for that state on the first worksheet. 2010 income tax forms Line 7. 2010 income tax forms    Enter on line 7 any state and local general sales taxes paid on the following specified items. 2010 income tax forms If you are completing more than one worksheet, include the total for line 7 on only one of the worksheets. 2010 income tax forms A motor vehicle (including a car, motorcycle, motor home, recreational vehicle, sport utility vehicle, truck, van, and off-road vehicle). 2010 income tax forms Also include any state and local general sales taxes paid for a leased motor vehicle. 2010 income tax forms If the state sales tax rate on these items is higher than the general sales tax rate, only include the amount of tax you would have paid at the general sales tax rate. 2010 income tax forms An aircraft or boat, if the tax rate was the same as the general sales tax rate. 2010 income tax forms A home (including a mobile home or prefabricated home) or substantial addition to or major renovation of a home, but only if the tax rate was the same as the general sales tax rate and any of the following applies. 2010 income tax forms Your state or locality imposes a general sales tax directly on the sale of a home or on the cost of a substantial addition or major renovation. 2010 income tax forms You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly. 2010 income tax forms Under your state law, your contractor is considered your agent in the construction of the home or substantial addition or the performance of a major renovation. 2010 income tax forms The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions. 2010 income tax forms In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly. 2010 income tax forms   Do not include sales taxes paid on items used in your trade or business. 2010 income tax forms If you received a refund of state or local general sales taxes in 2006, see Refund of general sales taxes on page 1. 2010 income tax forms Prev  Up  Next   Home   More Online Publications
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The 2010 Income Tax Forms

2010 income tax forms 1. 2010 income tax forms   Tax Withholding for 2014 Table of Contents Introduction Useful Items - You may want to see: Salaries and WagesDetermining Amount of Tax Withheld Using Form W-4 Completing Form W-4 and Worksheets Getting the Right Amount of Tax Withheld Rules Your Employer Must Follow Exemption From Withholding Supplemental Wages Penalties Tips Taxable Fringe BenefitsSpecial rule. 2010 income tax forms Exceptions. 2010 income tax forms Sick Pay Pensions and AnnuitiesPeriodic Payments Nonperiodic Payments Eligible Rollover Distributions Choosing Not To Have Income Tax Withheld Gambling WinningsException. 2010 income tax forms Identical wagers. 2010 income tax forms Unemployment Compensation Federal Payments Backup WithholdingTaxpayer identification number. 2010 income tax forms Underreported interest or dividends. 2010 income tax forms Introduction This chapter discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. 2010 income tax forms This chapter explains in detail the rules for withholding tax from each of these types of income. 2010 income tax forms The discussion of salaries and wages includes an explanation of how to complete Form W-4. 2010 income tax forms This chapter also covers backup withholding on interest, dividends, and other payments. 2010 income tax forms Useful Items - You may want to see: Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request See chapter 5 of this publication for information about getting these publications and forms. 2010 income tax forms Salaries and Wages Income tax is withheld from the pay of most employees. 2010 income tax forms Your pay includes your regular pay, bonuses, commissions, and vacation allowances. 2010 income tax forms It also includes reimbursements and other expense allowances paid under a nonaccountable plan. 2010 income tax forms See Supplemental Wages , later, for definitions of accountable and nonaccountable plans. 2010 income tax forms If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. 2010 income tax forms This is explained under Exemption From Withholding , later. 2010 income tax forms You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. 2010 income tax forms If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed in chapter 2. 2010 income tax forms Military retirees. 2010 income tax forms   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. 2010 income tax forms Household workers. 2010 income tax forms   If you are a household worker, you can ask your employer to withhold income tax from your pay. 2010 income tax forms A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. 2010 income tax forms   Tax is withheld only if you want it withheld and your employer agrees to withhold it. 2010 income tax forms If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed in chapter 2. 2010 income tax forms Farmworkers. 2010 income tax forms   Generally, income tax is withheld from your cash wages for work on a farm unless your employer both: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. 2010 income tax forms Differential wage payments. 2010 income tax forms   When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. 2010 income tax forms Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. 2010 income tax forms The wages and withholding will be reported on Form W-2, Wage and Tax Statement. 2010 income tax forms Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. 2010 income tax forms The amount you earn in each payroll period. 2010 income tax forms The information you give your employer on Form W-4. 2010 income tax forms Form W-4 includes four types of information that your employer will use to figure your withholding. 2010 income tax forms Whether to withhold at the single rate or at the lower married rate. 2010 income tax forms How many withholding allowances you claim (each allowance reduces the amount withheld). 2010 income tax forms Whether you want an additional amount withheld. 2010 income tax forms Whether you are claiming an exemption from withholding in 2014. 2010 income tax forms See Exemption From Withholding , later. 2010 income tax forms Note. 2010 income tax forms You must specify a filing status and a number of withholding allowances on Form W-4. 2010 income tax forms You cannot specify only a dollar amount of withholding. 2010 income tax forms New Job When you start a new job, you must fill out a Form W-4 and give it to your employer. 2010 income tax forms Your employer should have copies of the form. 2010 income tax forms If you need to change the information later, you must fill out a new form. 2010 income tax forms If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. 2010 income tax forms You may be able to avoid overwithholding if your employer agrees to use the part-year method. 2010 income tax forms See Part-Year Method , later, for more information. 2010 income tax forms Employee also receiving pension income. 2010 income tax forms   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. 2010 income tax forms However, you can choose to split your withholding allowances between your pension and job in any manner. 2010 income tax forms Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. 2010 income tax forms When this happens, you may need to give your employer a new Form W-4 to change your withholding status or number of allowances. 2010 income tax forms If the changes reduce the number of allowances you are allowed to claim or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. 2010 income tax forms See Marital Status (Line 3 of Form W-4) and Withholding Allowances (Line 5 of Form W-4) , later. 2010 income tax forms Generally, you can submit a new Form W-4 whenever you wish to change your withholding allowances for any other reason. 2010 income tax forms See Table 1-1 for examples of personal and financial changes you should consider. 2010 income tax forms Table 1-1. 2010 income tax forms Personal and Financial Changes Factor Examples Lifestyle change Marriage Divorce Birth or adoption of child Loss of an exemption Purchase of a new home Retirement Filing chapter 11 bankruptcy Wage income You or your spouse start or stop working, or start or stop a second job Change in the amount of taxable income not subject to withholding Interest income Dividends Capital gains Self-employment income IRA (including certain Roth  IRA) distributions Change in the amount of adjustments to income IRA deduction Student loan interest deduction Alimony expense Change in the amount of itemized deductions or tax credits Medical expenses Taxes Interest expense Gifts to charity Job expenses Dependent care expenses Education credit Child tax credit Earned income credit If you change the number of your withholding allowances, you can request that your employer withhold using the Cumulative Wage Method , explained later. 2010 income tax forms Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too much or too little. 2010 income tax forms If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. 2010 income tax forms You can get a blank Form W-4 from your employer or print the form from IRS. 2010 income tax forms gov. 2010 income tax forms You should try to have your withholding match your actual tax liability. 2010 income tax forms If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. 2010 income tax forms If too much tax is withheld, you will lose the use of that money until you get your refund. 2010 income tax forms Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. 2010 income tax forms See Table 1-1 for examples. 2010 income tax forms Note. 2010 income tax forms You cannot give your employer a payment to cover federal income tax withholding on salaries and wages for past pay periods or a payment for estimated tax. 2010 income tax forms When Should You Check Your Withholding? The earlier in the year you check your withholding, the easier it is to get the right amount of tax withheld. 2010 income tax forms You should check your withholding when any of the following situations occur. 2010 income tax forms You receive a paycheck stub (statement) covering a full pay period in 2014, showing tax withheld based on 2014 tax rates. 2010 income tax forms You prepare your 2013 tax return and get a: Big refund, or Balance due that is: More than you can comfortably pay, or Subject to a penalty. 2010 income tax forms There are changes in your life or financial situation that affect your tax liability. 2010 income tax forms See Table 1-1. 2010 income tax forms There are changes in the tax law that affect your tax liability. 2010 income tax forms How Do You Check Your Withholding? You can use the worksheets and tables in this publication to see if you are having the right amount of tax withheld. 2010 income tax forms You can also use the IRS Withholding calculator at www. 2010 income tax forms irs. 2010 income tax forms gov/individuals. 2010 income tax forms If you use the worksheets and tables in this publication, follow these steps. 2010 income tax forms Fill out Worksheet 1-5 to project your total federal income tax liability for 2014. 2010 income tax forms Fill out Worksheet 1-7 to project your total federal withholding for 2014 and compare that with your projected tax liability from Worksheet 1-5. 2010 income tax forms If you are not having enough tax withheld, line 6 of Worksheet 1-7 will show you how much more to have withheld each payday. 2010 income tax forms For ways to increase the amount of tax withheld, see How Do You Increase Your Withholding? If line 5 of Worksheet 1-7 shows that you are having more tax withheld than necessary, see How Do You Decrease Your Withholding, for ways to decrease the amount of tax you have withheld each payday. 2010 income tax forms How Do You Increase Your Withholding? There are two ways to increase your withholding. 2010 income tax forms You can: Decrease the number of allowances you claim on Form W-4, or Enter an additional amount that you want withheld from each paycheck on Form W-4. 2010 income tax forms Requesting an additional amount withheld. 2010 income tax forms   You can request that an additional amount be withheld from each paycheck by following these steps. 2010 income tax forms Complete Worksheets 1-5 and 1-7. 2010 income tax forms Complete a new Form W-4 if the amount on Worksheet 1-7, line 5: Is more than you want to pay with your tax return or in estimated tax payments throughout the year, or Would cause you to pay a penalty when you file your tax return for 2014. 2010 income tax forms Enter on your new Form W-4, the same number of withholding allowances your employer now uses for your withholding. 2010 income tax forms This is the number of allowances you entered on the last Form W-4 you gave your employer. 2010 income tax forms Enter on your new Form W-4, the amount from Worksheet 1-7, line 6. 2010 income tax forms Give your newly completed Form W-4 to your employer. 2010 income tax forms   If you have this additional amount withheld from your pay each payday, you should avoid owing a large amount at the end of the year. 2010 income tax forms Example. 2010 income tax forms Early in 2014, Steve Miller used Worksheets 1-5, 1-6, and 1-7 to project his 2014 tax liability ($4,316) and his withholding for the year ($3,516). 2010 income tax forms Steve's tax will be underwithheld by $800 ($4,316 − $3,516). 2010 income tax forms His choices are to pay this amount when he files his 2014 tax return, make estimated tax payments, or increase his withholding now. 2010 income tax forms Steve gets a new Form W-4 from his employer, who tells him that there are 50 paydays remaining in 2014. 2010 income tax forms Steve completes the new Form W-4 as before, entering the same number of withholding allowances as before, but, in addition, entering $16 ($800 ÷ 50) on the form as the additional amount to be withheld from his pay each payday. 2010 income tax forms He gives the completed form to his employer. 2010 income tax forms What if I have more than one job or my spouse also has a job?   You are more likely to need to increase your withholding if you have more than one job or if you are married filing jointly and your spouse also works. 2010 income tax forms If this is the case, you can increase your withholding for one or more of the jobs. 2010 income tax forms   You can apply the amount on Worksheet 1-7, line 5, to only one job or divide it between the jobs any way you wish. 2010 income tax forms For each job, determine the extra amount that you want to apply to that job and divide that amount by the number of paydays remaining in 2014 for that job. 2010 income tax forms This will give you the additional amount to enter on the Form W-4 you will file for that job. 2010 income tax forms You need to give your employer a new Form W-4 for each job for which you are changing your withholding. 2010 income tax forms Example. 2010 income tax forms Meg Green works in a store and earns $46,000 a year. 2010 income tax forms Her husband, John, works full-time in manufacturing and earns $68,000 a year. 2010 income tax forms In 2014, they will also have $184 in taxable interest and $1,000 of other taxable income. 2010 income tax forms They expect to file a joint income tax return. 2010 income tax forms Meg and John complete Worksheets 1-5, 1-6, and 1-7. 2010 income tax forms Line 5 of Worksheet 1-7 shows that they will owe an additional $4,459 after subtracting their withholding for the year. 2010 income tax forms They can divide the $4,459 any way they want. 2010 income tax forms They can enter an additional amount on either of their Forms W-4, or divide it between them. 2010 income tax forms They decide to have the additional amount withheld from John's wages, so they enter $91 ($4,459 ÷ 49 remaining paydays) on his Form W-4. 2010 income tax forms Both claim the same number of allowances as before. 2010 income tax forms How Do You Decrease Your Withholding? If your completed Worksheets 1-5 and 1-7 show that you may have more tax withheld than your projected tax liability for 2014, you may be able to decrease your withholding. 2010 income tax forms There are two ways to do this. 2010 income tax forms You can: Decrease any additional amount you are having withheld, or Increase the number of allowances you claim on Form W-4. 2010 income tax forms You can claim only the number of allowances to which you are entitled. 2010 income tax forms To see if you can decrease your withholding by increasing your allowances, see the Form W-4 instructions and the rest of this publication. 2010 income tax forms Increasing the number of allowances. 2010 income tax forms   Figure and increase the number of withholding allowances you can claim as follows. 2010 income tax forms On a new Form W-4, complete the Personal Allowances Worksheet. 2010 income tax forms If you plan to itemize deductions, claim adjustments to income, or claim tax credits, complete a new Deductions and Adjustments Worksheet. 2010 income tax forms If you plan to claim tax credits, see Converting Credits to Withholding Allowances, later. 2010 income tax forms If you meet the criteria on line H of the Form W-4 Personal Allowances Worksheet, complete a new Two-Earners/Multiple Jobs Worksheet. 2010 income tax forms If the number of allowances you can claim on Form W-4, is different from the number you already are claiming, give the newly completed Form W-4 to your employer. 2010 income tax forms Converting Credits to Withholding Allowances Table 1-2 , later, shows many of the tax credits you may be able to use to decrease your withholding. 2010 income tax forms The Form W-4 Personal Allowances Worksheet provides only rough adjustments for the child and dependent care credit and the child tax credit. 2010 income tax forms Complete Worksheet 1-8 to figure these credits more accurately and also take other credits into account. 2010 income tax forms Include the amount from line 12 of Worksheet 1-8 in the total on line 5 of the Deductions and Adjustments Worksheet. 2010 income tax forms Then complete the Deductions and Adjustments Worksheet and the rest of Form W-4. 2010 income tax forms If you take the child and dependent care credit into account on Worksheet 1-8, enter -0- on line F of the Personal Allowances Worksheet. 2010 income tax forms If you take the child tax credit into account on Worksheet 1-8, enter -0- on line G of the Personal Allowances Worksheet. 2010 income tax forms Example. 2010 income tax forms Brett and Alyssa Davis are married and expect to file a joint return for 2014. 2010 income tax forms Their expected taxable income from all sources is $68,000. 2010 income tax forms They expect to have $15,900 of itemized deductions. 2010 income tax forms Their projected tax credits include a child and dependent care credit of $960 and an adoption credit of $1,500. 2010 income tax forms The Davis' complete Worksheet 1-8, as follows, to see whether they can convert their tax credits into additional withholding allowances. 2010 income tax forms Line 1, expected child and dependent care credit—$960. 2010 income tax forms Line 9, expected adoption credit—$1,500. 2010 income tax forms Line 10, total estimated tax credits—$2,460. 2010 income tax forms Line 11. 2010 income tax forms Their combined total income from all sources, $68,000, falls between $42,001 and $98,000 on the table for married filing jointly or qualifying widow(er). 2010 income tax forms The number to the right of this range is 6. 2010 income tax forms 7. 2010 income tax forms Line 12, multiply line 10 by line 11—$16,482. 2010 income tax forms Then the Davis' complete the Form W-4 worksheets. 2010 income tax forms Because they choose to account for their child and dependent care credit on the Deductions and Adjustments Worksheet, they enter -0- on line F of the Personal Allowances Worksheet and figure a new total for line H. 2010 income tax forms They take the result on line 12 of Worksheet 1-8, add it to their other adjustments on line 5 of the Form W-4 Deductions and Adjustments Worksheet, and complete the Form W-4 worksheets. 2010 income tax forms When Will Your New Form W-4 Go Into Effect? If the change is for the current year, your employer must put your new Form W-4 into effect no later than the start of the first payroll period ending on or after the 30th day after the day on which you give your employer your revised Form W-4. 2010 income tax forms If the change is for next year, your new Form W-4 will not take effect until next year. 2010 income tax forms Retirees Returning to the Workforce When you first began receiving your pension, you told the payer how much tax to withhold, if any, by completing Form W-4P, Withholding Certificate for Pension or Annuity Payments (or similar form). 2010 income tax forms However, if your retirement pay is from the military or certain deferred compensation plans, you completed Form W-4 instead of Form W-4P. 2010 income tax forms You completed either form based on your projected income at that time. 2010 income tax forms Now that you are returning to the workforce, your new Form W-4 (given to your employer) and your Form W-4 or W-4P (on file with your pension plan) must work together to determine the correct amount of withholding for your new amount of income. 2010 income tax forms The worksheets that come with Forms W-4 and W-4P are basically the same, so you can use either set of worksheets to figure out how many withholding allowances you are entitled to claim. 2010 income tax forms Start off with the Personal Allowances Worksheet. 2010 income tax forms Then, if you will be itemizing your deductions, claiming adjustments to income, or claiming tax credits when you file your tax return, complete the Deductions and Adjustments Worksheet. 2010 income tax forms The third worksheet is the most important for this situation. 2010 income tax forms Form W-4 calls it the Two-Earners/Multiple Jobs Worksheet, Form W-4P calls it the Multiple Pensions/More-Than-One-Income Worksheet—both are the same. 2010 income tax forms If you have more than one source of income, in order to have enough withholding to cover the tax on your higher income, you may need to claim fewer withholding allowances or request your employer to withhold an additional amount from each paycheck. 2010 income tax forms Once you have figured out how many allowances you are entitled to claim, look at the income from both your pension and your new job, and how often you receive payments. 2010 income tax forms It is your decision how to divide up your withholding allowances between these sources of income. 2010 income tax forms For example, you may want to “take home” most of your weekly paycheck to use as spending money and use your monthly pension to “pay the bills. 2010 income tax forms ” In that case, change your Form W-4P to zero allowances and claim all that you are entitled to on your Form W-4. 2010 income tax forms There are a couple of ways you can get a better idea of how much tax will be withheld when claiming a certain number of allowances. 2010 income tax forms Use the withholding tables in Publication 15 (Circular E), Employer's Tax Guide. 2010 income tax forms Contact your pension provider and your employer's payroll department. 2010 income tax forms And remember, this is not a final decision. 2010 income tax forms If you do not get the correct amount of withholding with the first Forms W-4 and W-4P you submit, you should refigure your allowances (or divide them differently) using the information and worksheets in this publication, or the resources mentioned above. 2010 income tax forms You should go through this same process each time your life situation changes, whether it be for personal or financial reasons. 2010 income tax forms You may need more tax withheld, or you may need less. 2010 income tax forms Table 1-2. 2010 income tax forms Tax Credits for 2014 For more information about the . 2010 income tax forms . 2010 income tax forms . 2010 income tax forms See . 2010 income tax forms . 2010 income tax forms . 2010 income tax forms Adoption credit Form 8839 instructions Child and dependent care expenses, credit for Publication 503, Child and Dependent Care Expenses Child tax credit (including the additional child tax credit) Instructions for Form 1040 or Form 1040A Earned income credit Publication 596, Earned Income Credit Education credits Publication 970, Tax Benefits for Education Elderly or the disabled, credit for the Publication 524, Credit for the Elderly or the Disabled Foreign tax credit (except any credit that applies to wages not subject to U. 2010 income tax forms S. 2010 income tax forms income tax withholding because they are subject to income tax withholding by a foreign country) Publication 514, Foreign Tax Credit for Individuals General business credit Form 3800, General Business Credit Mortgage interest credit Publication 530, Tax Information for First-Time Homeowners Qualified electric vehicle passive activity credit Form 8834 Prior year minimum tax, credit for (if you paid alternative minimum tax in an earlier year) Form 8801 instructions Retirement savings contributions credit (saver's credit) Publication 590, Individual Retirement Arrangements (IRAs) Tax credit bonds, credit to holders of Form 8912 instructions Completing Form W-4 and Worksheets When reading the following discussion, you may find it helpful to refer to Form W-4. 2010 income tax forms Marital Status There is a lower withholding rate for people who qualify to check the “Married” box on line 3 of Form W-4. 2010 income tax forms Everyone else must have tax withheld at the higher single rate. 2010 income tax forms Single. 2010 income tax forms   You must check the “Single” box if any of the following applies. 2010 income tax forms You are single. 2010 income tax forms If you are divorced, or separated from your spouse under a court decree of separate maintenance, you are considered single. 2010 income tax forms You are married, but neither you nor your spouse is a citizen or resident of the United States. 2010 income tax forms You are married, either you or your spouse is a nonresident alien, and you have not chosen to have that person treated as a resident alien for tax purposes. 2010 income tax forms For more information, see Nonresident Spouse Treated as a Resident in chapter 1 of Publication 519. 2010 income tax forms Married. 2010 income tax forms   You qualify to check the “Married” box if any of the following applies. 2010 income tax forms You are married and neither you nor your spouse is a nonresident alien. 2010 income tax forms You are considered married for the whole year even if your spouse died during the year. 2010 income tax forms You are married and either you or your spouse is a nonresident alien who has chosen to be treated as a resident alien for tax purposes. 2010 income tax forms For more information, see Nonresident Spouse Treated as a Resident in chapter 1 of Publication 519. 2010 income tax forms You expect to be able to file your return as a qualifying widow or widower. 2010 income tax forms You usually can use this filing status if your spouse died within the previous 2 years and you provide more than half the cost of keeping up a home for the entire year that was the main home for you and your child whom you can claim as a dependent. 2010 income tax forms However, you must file a new Form W-4 showing your filing status as single by December 1 of the last year you are eligible to file as a qualifying widow or widower. 2010 income tax forms For more information on this filing status, see Qualifying Widow(er) With Dependent Child under Filing Status in Publication 501, Exemptions, Standard Deduction, and Filing Information. 2010 income tax forms Married, but withhold at higher single rate. 2010 income tax forms   Some married people find that they do not have enough tax withheld at the married rate. 2010 income tax forms This can happen, for example, when both spouses work. 2010 income tax forms To avoid this, you can check the “Married, but withhold at higher Single rate” box (even if you qualify for the married rate). 2010 income tax forms Also, you may find that more tax is withheld if you fill out the Two-Earners/Multiple Jobs Worksheet, explained later. 2010 income tax forms Withholding Allowances The more allowances you claim on Form W-4, the less income tax your employer will withhold. 2010 income tax forms You will have the most tax withheld if you claim “0” allowances. 2010 income tax forms The number of allowances you can claim depends on the following factors. 2010 income tax forms How many exemptions you can take on your tax return. 2010 income tax forms Whether you have income from more than one job. 2010 income tax forms What deductions, adjustments to income, and credits you expect to have for the year. 2010 income tax forms Whether you will file as head of household. 2010 income tax forms If you are married (filing jointly), it also depends on whether your spouse also works and claims any allowances on his or her own Form W-4. 2010 income tax forms Or, if married filing separately, whether or not your spouse also works. 2010 income tax forms Form W-4 worksheets. 2010 income tax forms    Form W-4 has worksheets to help you figure how many withholding allowances you can claim. 2010 income tax forms The worksheets are for your own records. 2010 income tax forms Do not give them to your employer. 2010 income tax forms   Complete only one set of Form W-4 worksheets, no matter how many jobs you have. 2010 income tax forms If you are married and will file a joint return, complete only one set of worksheets for you and your spouse, even if you both earn wages and each must give Form W-4 to your employers. 2010 income tax forms Complete separate sets of worksheets only if you and your spouse will file separate returns. 2010 income tax forms   If you are not exempt from withholding (see Exemption From Withholding , later), complete the Personal Allowances Worksheet on page 1 of the form. 2010 income tax forms Also, use the worksheets on page 2 of the form to adjust the number of your withholding allowances for itemized deductions and adjustments to income, and for two-earner or multiple-job situations. 2010 income tax forms If you want to adjust the number of your withholding allowances for certain tax credits, use the Deductions and Adjustments Worksheet on page 2 of Form W-4, even if you do not have any deductions or adjustments. 2010 income tax forms   Complete all worksheets that apply to your situation. 2010 income tax forms The worksheets will help you figure the maximum number of withholding allowances you are entitled to claim so that the amount of income tax withheld from your wages will match, as closely as possible, the amount of income tax you will owe at the end of the year. 2010 income tax forms Multiple jobs. 2010 income tax forms   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. 2010 income tax forms Then split your allowances between the Forms W-4 for each job. 2010 income tax forms You cannot claim the same allowances with more than one employer at the same time. 2010 income tax forms You can claim all your allowances with one employer and none with the other(s), or divide them any other way. 2010 income tax forms Married individuals. 2010 income tax forms   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. 2010 income tax forms Use only one set of worksheets. 2010 income tax forms You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. 2010 income tax forms   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. 2010 income tax forms Alternative method of figuring withholding allowances. 2010 income tax forms   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. 2010 income tax forms   The method you use must be based on withholding schedules, the tax rate schedules, and the 2014 Estimated Tax Worksheet in chapter 2. 2010 income tax forms It must take into account only the items of income, adjustments to income, deductions, and tax credits that are taken into account on Form W-4. 2010 income tax forms   You can use the number of withholding allowances determined under an alternative method rather than the number determined using the Form W-4 worksheets. 2010 income tax forms You still must give your employer a Form W-4 claiming your withholding allowances. 2010 income tax forms Employees who are not citizens or residents. 2010 income tax forms   If you are neither a citizen nor a resident of the United States, you usually can claim only one withholding allowance. 2010 income tax forms However, this rule does not apply if you are a resident of Canada or Mexico, or if you are a U. 2010 income tax forms S. 2010 income tax forms national. 2010 income tax forms It also does not apply if your spouse is a U. 2010 income tax forms S. 2010 income tax forms citizen or resident and you have chosen to be treated as a resident of the United States for tax purposes. 2010 income tax forms Special rules apply to residents of South Korea and India. 2010 income tax forms For more information, see Withholding From Compensation in chapter 8 of Publication 519. 2010 income tax forms Personal Allowances Worksheet Use the Personal Allowances Worksheet on page 1 of Form W-4 to figure your withholding allowances based on all of the following that apply. 2010 income tax forms Exemptions. 2010 income tax forms Only one job. 2010 income tax forms Head of household filing status. 2010 income tax forms Child and dependent care credit. 2010 income tax forms Child tax credit. 2010 income tax forms Exemptions (worksheet lines A, C, and D). 2010 income tax forms   You can claim one withholding allowance for each exemption you expect to claim on your tax return. 2010 income tax forms Self. 2010 income tax forms   You can claim an allowance for your exemption on line A unless another person can claim an exemption for you on his or her tax return. 2010 income tax forms If another person is entitled to claim an exemption for you, you cannot claim an allowance for your exemption even if the other person will not claim your exemption. 2010 income tax forms Spouse. 2010 income tax forms   You can claim an allowance for your spouse's exemption on line C unless your spouse is claiming his or her own exemption or another person can claim an exemption for your spouse. 2010 income tax forms Do not claim this allowance if you and your spouse expect to file separate returns. 2010 income tax forms Dependents. 2010 income tax forms   You can claim one allowance on line D for each exemption you will claim for a dependent on your tax return. 2010 income tax forms Only one job (worksheet line B). 2010 income tax forms    You can claim an additional withholding allowance if any of the following apply for 2014. 2010 income tax forms You are single and you have only one job at a time. 2010 income tax forms You are married, you have only one job at a time, and your spouse does not work. 2010 income tax forms Your wages from a second job or your spouse's wages (or the total of both) are $1,500 or less. 2010 income tax forms If you qualify for this allowance, enter “1” on line B of the worksheet. 2010 income tax forms Head of household filing status (worksheet line E). 2010 income tax forms   Generally, you can file as head of household if you are unmarried and pay more than half the cost of keeping up a home that: Was the main home for all of 2014 of your parent whom you can claim as a dependent, or You lived in for more than half the year with your qualifying child or any other person you can claim as a dependent. 2010 income tax forms For more information, see Publication 501. 2010 income tax forms   If you expect to file as head of household on your 2014 tax return, enter “1” on line E of the worksheet. 2010 income tax forms Reduction of personal allowances. 2010 income tax forms   For 2014, your deduction for personal exemptions on your tax return is reduced if your adjusted gross income (AGI) is more than the AGI shown next for your filing status. 2010 income tax forms Personal Allowance Phaseout Threshold Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than the amount listed, use Worksheet 1-1 to figure your reduced number of personal allowances on lines A, C, and D of the Personal Allowances Worksheet. 2010 income tax forms Worksheet 1-1. 2010 income tax forms Personal Allowances Worksheet (Form W-4) Reduction of Personal Allowances if AGI Above Phaseout Threshold 1. 2010 income tax forms Enter the total amount of allowances on lines A, C, and D of the Personal Allowance Worksheet without regard to the phaseout rule 1. 2010 income tax forms   2. 2010 income tax forms Enter your expected AGI 2. 2010 income tax forms       3. 2010 income tax forms Enter $254,200 if single $305,050 if married filing jointly or qualifying widow(er) $152,525 if married filing separately $279,650 if head of household 3. 2010 income tax forms       4. 2010 income tax forms Subtract line 3 from line 2 4. 2010 income tax forms       5. 2010 income tax forms Divide line 4 by $125,000 ($62,500 if married filing separately). 2010 income tax forms Enter the result as a decimal 5. 2010 income tax forms   6. 2010 income tax forms Multiply line 1 by line 5. 2010 income tax forms If the result is not a whole number, increase it to the next higher whole number 6. 2010 income tax forms   7. 2010 income tax forms Subtract line 6 from line 1. 2010 income tax forms The total of the numbers you enter on A, C, and D of the Personal Allowances Worksheet can not be more than this amount 7. 2010 income tax forms     Child and dependent care credit (worksheet line F). 2010 income tax forms   Enter “1” on line F if you expect to claim a credit for at least $2,000 of qualifying child or dependent care expenses on your 2014 return. 2010 income tax forms Generally, qualifying expenses are those you pay for the care of your dependent who is your qualifying child under age 13 or for your spouse or dependent who is not able to care for himself or herself so that you can work or look for work. 2010 income tax forms For more information, see Publication 503, Child and Dependent Care Expenses. 2010 income tax forms   Instead of using line F, you can choose to take the credit into account on line 5 of the Deductions and Adjustments Worksheet, as explained under Tax credits , later. 2010 income tax forms Child tax credit (worksheet line G). 2010 income tax forms   If your total income will be less than $65,000 ($95,000 if married), enter “2” on line G for each eligible child. 2010 income tax forms Subtract “1” from that amount if you have three to six eligible children. 2010 income tax forms Subtract “2” from that amount if you have seven or more eligible children. 2010 income tax forms   If your total income will be between $65,000 and $84,000 ($95,000 and $119,000 if married), enter “1” on line G for each eligible child. 2010 income tax forms   An eligible child is any child: Who is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Who will be under age 17 at the end of 2014, Who is younger than you (or your spouse if filing jointly) or permanently and totally disabled, Who will not provide over half of his or her own support for 2014, Who will not file a joint return, unless the return is filed only as a claim for refund, Who will live with you for more than half of 2014, Who is a U. 2010 income tax forms S. 2010 income tax forms citizen, U. 2010 income tax forms S. 2010 income tax forms national, or U. 2010 income tax forms S. 2010 income tax forms resident alien, and Who will be claimed as a dependent on your return. 2010 income tax forms If you are a U. 2010 income tax forms S. 2010 income tax forms citizen or U. 2010 income tax forms S. 2010 income tax forms national and your adopted child lived with you all year as a member of your household, that child meets the citizenship test. 2010 income tax forms   Also, if any other person can claim the child as an eligible child, see Qualifying child of more than one person in the 2013 instructions for Form 1040 or 1040A, line 6c. 2010 income tax forms   For more information about the child tax credit, see the instructions for Form 1040 or Form 1040A. 2010 income tax forms   Instead of using line G, you can choose to take the credit into account on line 5 of the Deductions and Adjustments Worksheet, as explained under Tax credits , later. 2010 income tax forms Total personal allowances (worksheet line H). 2010 income tax forms    Add lines A through G and enter the total on line H. 2010 income tax forms If you do not use either of the worksheets on the back of Form W-4, enter the number from line H on line 5 of Form W-4. 2010 income tax forms Deductions and Adjustments Worksheet Use the Deductions and Adjustments Worksheet on page 2 of Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. 2010 income tax forms Also, complete this worksheet when you have changes to those items to see if you need to change your withholding. 2010 income tax forms Use the amount of each item you reasonably can expect to show on your return. 2010 income tax forms However, do not use more than: The amount shown for that item on your 2013 return (or your 2012 return if you have not yet filed your 2013 return), plus Any additional amount related to a transaction or occurrence (such as payments already made, the signing of an agreement, or the sale of property) that you can prove has happened or will happen during 2013 or 2014. 2010 income tax forms Do not include any amount shown on your last tax return that has been disallowed by the IRS. 2010 income tax forms Example. 2010 income tax forms On June 30, 2013, you bought your first home. 2010 income tax forms On your 2013 tax return, you claimed itemized deductions of $6,600, the total mortgage interest and real estate tax you paid during the 6 months you owned your home. 2010 income tax forms Based on your mortgage payment schedule and your real estate tax assessment, you reasonably can expect to claim deductions of $13,200 for those items on your 2014 return. 2010 income tax forms You can use $13,200 to figure the number of your withholding allowances for itemized deductions. 2010 income tax forms Not itemizing deductions. 2010 income tax forms   If you expect to claim the standard deduction on your tax return, skip lines 1 and 2, and enter “0” on line 3 of the worksheet. 2010 income tax forms Itemized deductions (worksheet line 1). 2010 income tax forms   Enter your estimated total itemized deductions on line 1 of the worksheet. 2010 income tax forms   Listed below are some of the deductions you can take into account when figuring additional withholding allowances for 2014. 2010 income tax forms You normally claim these deductions on Schedule A of Form 1040. 2010 income tax forms Medical and dental expenses that are more than 10% (7. 2010 income tax forms 5% if either you or your spouse was born before January 2, 1950) of your 2014 AGI (defined under AGI , later). 2010 income tax forms State and local income or property taxes. 2010 income tax forms Deductible home mortgage interest. 2010 income tax forms Investment interest up to net investment income. 2010 income tax forms Charitable contributions. 2010 income tax forms Casualty and theft losses that are more than $100 and 10% of your AGI. 2010 income tax forms Fully deductible miscellaneous itemized deductions, including: Impairment-related work expenses of persons with disabilities, Federal estate tax on income in respect of a decedent, Repayment of more than $3,000 of income held under a claim of right that you included in income in an earlier year because at the time you thought you had an unrestricted right to it, Unrecovered investments in an annuity contract under which payments have ceased because of the annuitant's death, Gambling losses up to the amount of gambling winnings reported on your return, and Casualty and theft losses from  income-producing property. 2010 income tax forms Other miscellaneous itemized deductions that are more than 2% of your AGI, including: Unreimbursed employee business expenses, such as education expenses, work clothes and uniforms, union dues and fees, and the cost of work-related small tools and supplies, Safe deposit box rental, Tax counsel and assistance, and Certain fees paid to an IRA trustee or custodian. 2010 income tax forms AGI. 2010 income tax forms   For the purpose of estimating your itemized deductions, your AGI is your estimated total income for 2014 minus any estimated adjustments to income (discussed later) that you include on line 4 of the Deductions and Adjustments Worksheet. 2010 income tax forms Phaseout of itemized deductions. 2010 income tax forms   For 2014, your total itemized deductions may be phased out (reduced) if your AGI is more than the following thresholds. 2010 income tax forms    Itemized Deduction Phaseout Threshold Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than the amount listed, use Worksheet 1–2 to figure your reduction in itemized deductions. 2010 income tax forms Worksheet 1-2. 2010 income tax forms Deductions and Adjustments Worksheet (Form W-4)—Line 1 Phaseout of Itemized Deductions 1. 2010 income tax forms Enter the estimated total of your itemized deductions 1. 2010 income tax forms   2. 2010 income tax forms Enter the amount included in line 1 for medical and dental expenses, investment interest, casualty or theft losses, and gambling losses 2. 2010 income tax forms   3. 2010 income tax forms Is the amount on line 2 less than the amount on line 1? ❑ No. 2010 income tax forms Stop here. 2010 income tax forms Your deduction is not limited. 2010 income tax forms Enter the amount from line 1 above on line 1 of the Deductions and Adjustments Worksheet. 2010 income tax forms  ❑ Yes. 2010 income tax forms Subtract line 2 from line 1. 2010 income tax forms 3. 2010 income tax forms       4. 2010 income tax forms Multiply line 3 by 80% (. 2010 income tax forms 80) 4. 2010 income tax forms       5. 2010 income tax forms Enter your expected AGI 5. 2010 income tax forms       6. 2010 income tax forms Enter $305,050 If married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately 6. 2010 income tax forms   7. 2010 income tax forms Is the amount on line 6 less than the amount on line 5? ❑ No. 2010 income tax forms Stop here. 2010 income tax forms Your deduction is not limited. 2010 income tax forms Enter the amount from line 1 above on line 1 of the Deductions and Adjustments Worksheet. 2010 income tax forms  ❑ Yes. 2010 income tax forms Subtract line 6 from line 5. 2010 income tax forms 7. 2010 income tax forms       8. 2010 income tax forms Multiply line 7 by 3% (. 2010 income tax forms 03) 8. 2010 income tax forms       9. 2010 income tax forms Enter the smaller of line 4 or line 8 9. 2010 income tax forms     10. 2010 income tax forms Subtract line 9 from line 1. 2010 income tax forms Enter the result here and on line 1 of the Deductions and Adjustments Worksheet 10. 2010 income tax forms     Adjustments to income (worksheet line 4). 2010 income tax forms   Enter your estimated total adjustments to income on line 4 of the Deductions and Adjustments Worksheet. 2010 income tax forms   You can take the following adjustments to income into account when figuring additional withholding allowances for 2014. 2010 income tax forms These adjustments appear on page 1 of your Form 1040 or 1040A. 2010 income tax forms Net losses from Schedules C, D, E, and F of Form 1040 and from Part II of Form 4797, line 18b. 2010 income tax forms Net operating loss carryovers. 2010 income tax forms Certain business expenses of reservists, performing artists, and fee-based government officials. 2010 income tax forms Health savings account or medical savings account deduction. 2010 income tax forms Certain moving expenses. 2010 income tax forms Deduction for self-employment tax. 2010 income tax forms Deduction for contributions to self-employed SEP, and qualified SIMPLE plans. 2010 income tax forms Self-employed health insurance deduction. 2010 income tax forms Penalty on early withdrawal of savings. 2010 income tax forms Alimony paid. 2010 income tax forms IRA deduction. 2010 income tax forms Student loan interest deduction. 2010 income tax forms Jury duty pay given to your employer. 2010 income tax forms Reforestation amortization and expenses. 2010 income tax forms Deductible expenses related to income reported on line 21 from the rental of personal property engaged in for profit. 2010 income tax forms Repayment of certain supplemental unemployment benefits. 2010 income tax forms Contributions to IRC 501(c)(18)(D) pension plans. 2010 income tax forms Contributions by certain chaplains to IRC 403(b) plans. 2010 income tax forms Attorney fees and court costs for certain unlawful discrimination claims. 2010 income tax forms Attorney fees and court costs for certain whistleblower awards. 2010 income tax forms Estimated amount of decrease in tax attributable to income averaging using Schedule J (Form 1040). 2010 income tax forms Tax credits (worksheet line 5). 2010 income tax forms   Although you can take most tax credits into account when figuring withholding allowances, the Personal Allowances Worksheet uses only the child and dependent care credit (line F) and the child tax credit (line G). 2010 income tax forms But you can take these credits and others into account by adding an extra amount on line 5 of the Deductions and Adjustments Worksheet. 2010 income tax forms   If you take the child and dependent care credit into account on line 5, do not use line F. 2010 income tax forms If you take the child tax credit into account on line 5, do not use line G. 2010 income tax forms   In addition to the child and dependent care credit and the child tax credit, you can generally take into account the following credits. 2010 income tax forms See the individual tax form instructions for more details. 2010 income tax forms Foreign tax credit, except any credit that applies to wages not subject to U. 2010 income tax forms S. 2010 income tax forms income tax withholding because they are subject to income tax withholding by a foreign country. 2010 income tax forms See Publication 514, Foreign Tax Credit for Individuals. 2010 income tax forms Credit for the elderly or the disabled. 2010 income tax forms See Publication 524, Credit for the Elderly or the Disabled. 2010 income tax forms Education credits. 2010 income tax forms See Publication 970, Tax Benefits for Education. 2010 income tax forms Retirement savings contributions credit (saver's credit). 2010 income tax forms See Publication 590. 2010 income tax forms Mortgage interest credit. 2010 income tax forms See Publication 530, Tax Information for Homeowners. 2010 income tax forms Adoption credit. 2010 income tax forms See the Instructions for Form 8839. 2010 income tax forms Credit for nonrefundable portion of prior year minimum tax if you paid alternative minimum tax in an earlier year. 2010 income tax forms See the Instructions for Form 8801. 2010 income tax forms General business credit. 2010 income tax forms See the Instructions for Form 3800. 2010 income tax forms Earned income credit. 2010 income tax forms See Publication 596. 2010 income tax forms Figuring line 5 entry. 2010 income tax forms   To figure the amount to add on line 5 for tax credits, multiply your estimated total credits by the appropriate number from Table 1-3 . 2010 income tax forms Example. 2010 income tax forms You are married and expect to file a joint return for 2014. 2010 income tax forms Your combined estimated wages are $68,000. 2010 income tax forms Your estimated tax credits include a child and dependent care credit of $960 and a mortgage interest credit of $1,700 (total credits = $2,660). 2010 income tax forms In Table 1-3, the number corresponding to your combined estimated wages ($42,001 – $98,000) is 6. 2010 income tax forms 7. 2010 income tax forms Multiply your total estimated tax credits of $2,660 by 6. 2010 income tax forms 7. 2010 income tax forms Add the result, $17,822, to the amount you otherwise would show on line 5 of the Deductions and Adjustments Worksheet and enter the total on line 5. 2010 income tax forms Because you choose to account for your child and dependent care credit this way, do not make an entry on line F of the Personal Allowances Worksheet. 2010 income tax forms Nonwage income (worksheet line 6). 2010 income tax forms   Enter on line 6 your estimated total nonwage income (other than tax-exempt income). 2010 income tax forms Nonwage income includes interest, dividends, net rental income, unemployment compensation, alimony, gambling winnings, prizes and awards, hobby income, capital gains, royalties, and partnership income. 2010 income tax forms   If line 6 is more than line 5, you may not have enough income tax withheld from your wages. 2010 income tax forms See Getting the Right Amount of Tax Withheld , later. 2010 income tax forms Net deductions and adjustments (worksheet line 8). 2010 income tax forms    If line 7 is less than $3,950, enter “0” on line 8. 2010 income tax forms If line 7 is $3,950 or more, divide it by $3,950, drop any fraction, and enter the result on line 8. 2010 income tax forms Example. 2010 income tax forms If line 7 is $5,200, $5,200 ÷ $3,950 = 1. 2010 income tax forms 32. 2010 income tax forms Drop the fraction (. 2010 income tax forms 32) and enter “1” on line 8. 2010 income tax forms Two-Earners/Multiple Jobs Worksheet Complete the Two-Earners/Multiple Jobs Worksheet on page 2 of Form W-4 if you have more than one job or are married and you and your spouse both work and the combined earnings from all jobs are more than $50,000 ($20,000 if married). 2010 income tax forms Reducing your allowances (worksheet lines 1-3). 2010 income tax forms   On line 1 of the worksheet, enter the number from line H of the Personal Allowances Worksheet (or line 10 of the Deductions and Adjustments Worksheet, if used). 2010 income tax forms Using Table 1 in the Two-Earners/Multiple Jobs Worksheet, find the number listed beside the amount of your estimated wages for the year from your lowest paying job (or if lower and you are filing jointly, your spouse's job). 2010 income tax forms Enter that number on line 2. 2010 income tax forms However, if you are married filing jointly and estimated wages from the highest paying job are $65,000 or less, do not enter more than “3. 2010 income tax forms ”    Table 1-3. 2010 income tax forms Deductions and Adjustments Worksheet (Form W-4)—Line 5 a. 2010 income tax forms  Married Filing Jointly or Qualifying Widow(er) If combined income from all sources is:   Multiply credits by: $0 – 42,000 10. 2010 income tax forms 0 $42,001 – 98,000 6. 2010 income tax forms 7 $98,001 – 180,000 4. 2010 income tax forms 0 $180,001 – 270,000 3. 2010 income tax forms 6 $270,001 – 440,000 3. 2010 income tax forms 0 $440,001 – 490,000. 2010 income tax forms . 2010 income tax forms . 2010 income tax forms . 2010 income tax forms 2. 2010 income tax forms 9 $490,001 and over 2. 2010 income tax forms 5 b. 2010 income tax forms  Single If combined income from all sources is:   Multiply credits by: $0 – 19,000 10. 2010 income tax forms 0 $19,001 – 47,000 6. 2010 income tax forms 7 $47,001 – 104,000 4. 2010 income tax forms 0 $104,001 – 205,000 3. 2010 income tax forms 6 $205,001 – 430,000 3. 2010 income tax forms 0 $430,001 and over 2. 2010 income tax forms 5 c. 2010 income tax forms  Head of Household If combined income from all sources is:   Multiply credits by: $0 – 30,000 10. 2010 income tax forms 0 $30,001 – 66,000 6. 2010 income tax forms 7 $66,001 – 150,000 4. 2010 income tax forms 0 $150,001 – 235,000 3. 2010 income tax forms 6 $235,001 – 430,000 3. 2010 income tax forms 0 $430,001 – 460,000 2. 2010 income tax forms 9 $460,001 and over 2. 2010 income tax forms 5 d. 2010 income tax forms  Married Filing Separately   If combined income from all sources is:   Multiply credits by: $0 – 21,000 10. 2010 income tax forms 0 $21,001 – 49,000 6. 2010 income tax forms 7 $49,001 – 90,000 4. 2010 income tax forms 0 $90,001 – 135,000 3. 2010 income tax forms 6 $135,001 – 220,000 3. 2010 income tax forms 0 $220,001 – 245,000 2. 2010 income tax forms 9 $245,001 and over 2. 2010 income tax forms 5   Subtract line 2 from line 1 and enter the result (but not less than zero) on line 3 and on Form W-4, line 5. 2010 income tax forms If line 1 is more than or equal to line 2, do not use the rest of the worksheet. 2010 income tax forms   If line 1 is less than line 2, enter “0” on Form W-4, line 5. 2010 income tax forms Then complete lines 4 through 9 of the worksheet to figure the additional withholding needed to avoid underwithholding. 2010 income tax forms Other amounts owed. 2010 income tax forms   If you expect to owe amounts other than income tax, such as self-employment tax, include them on line 8. 2010 income tax forms The total is the additional withholding needed for the year. 2010 income tax forms Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. 2010 income tax forms You accurately complete all the Form W-4 worksheets that apply to you. 2010 income tax forms You give your employer a new Form W-4 when changes occur. 2010 income tax forms But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. 2010 income tax forms This is most likely to happen in the following situations. 2010 income tax forms You are married and both you and your spouse work. 2010 income tax forms You have more than one job at a time. 2010 income tax forms You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. 2010 income tax forms You will owe additional amounts with your return, such as self-employment tax. 2010 income tax forms Your withholding is based on obsolete Form W-4 information for a substantial part of the year. 2010 income tax forms Your earnings are more than $130,000 if you are single or $180,000 if you are married. 2010 income tax forms You work only part of the year. 2010 income tax forms You change the number of your withholding allowances during the year. 2010 income tax forms You are subject to Additional Medicare Tax or Net Investment Income Tax. 2010 income tax forms If you anticipate liability for Additional Medicare Tax or Net Investment Income Tax, you may request that your employer withhold an additional amount of income tax withholding on Form W-4. 2010 income tax forms Part-Year Method If you work only part of the year and your employer agrees to use the part-year withholding method, less tax will be withheld from each wage payment than would be withheld if you worked all year. 2010 income tax forms To be eligible for the part-year method, you must meet both of the following requirements. 2010 income tax forms You must use the calendar year (the 12 months from January 1 through December 31) as your tax year. 2010 income tax forms You cannot use a fiscal year. 2010 income tax forms You must not expect to be employed for more than 245 days during the year. 2010 income tax forms To figure this limit, count all calendar days that you are employed (including weekends, vacations, and sick days) beginning with the first day you are on the job for pay and ending with your last day of work. 2010 income tax forms If you are temporarily laid off for 30 days or less, count those days too. 2010 income tax forms If you are laid off for more than 30 days, do not count those days. 2010 income tax forms You will not meet this requirement if you begin working before May 1 and expect to work for the rest of the year. 2010 income tax forms How to apply for the part-year method. 2010 income tax forms   You must ask your employer in writing to use this method. 2010 income tax forms The request must state all three of the following. 2010 income tax forms The date of your last day of work for any prior employer during the current calendar year. 2010 income tax forms That you do not expect to be employed more than 245 days during the current calendar year. 2010 income tax forms That you use the calendar year as your tax year. 2010 income tax forms Cumulative Wage Method If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. 2010 income tax forms You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. 2010 income tax forms You must ask your employer in writing to use this method. 2010 income tax forms To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. 2010 income tax forms ) since the beginning of the year. 2010 income tax forms Aids for Figuring Your Withholding IRS Withholding Calculator. 2010 income tax forms   If you had too much or too little income tax withheld from your pay, the IRS provides a withholding calculator on its website. 2010 income tax forms Go to www. 2010 income tax forms irs. 2010 income tax forms gov/Individuals/IRS-Withholding-Calculator. 2010 income tax forms It can help you determine the correct amount to be withheld any time during the year. 2010 income tax forms Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. 2010 income tax forms These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. 2010 income tax forms New Form W-4. 2010 income tax forms   When you start a new job, your employer should give you a Form W-4 to fill out. 2010 income tax forms Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. 2010 income tax forms   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. 2010 income tax forms The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. 2010 income tax forms No Form W-4. 2010 income tax forms   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. 2010 income tax forms Repaying withheld tax. 2010 income tax forms   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. 2010 income tax forms Your employer cannot repay any of the tax previously withheld. 2010 income tax forms Instead, claim the full amount withheld when you file your tax return. 2010 income tax forms   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. 2010 income tax forms Your employer can repay the amount that was withheld incorrectly. 2010 income tax forms If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. 2010 income tax forms IRS review of your withholding. 2010 income tax forms   Whether you are entitled to claim a certain number of allowances or a complete exemption from withholding is subject to review by the IRS. 2010 income tax forms Your employer may be required to send a copy of the Form W-4 to the IRS. 2010 income tax forms There is a penalty for supplying false information on Form W-4. 2010 income tax forms See Penalties , later. 2010 income tax forms   If the IRS determines that you cannot claim more than a specified number of withholding allowances or claim a complete exemption from withholding, the IRS will issue a notice of the maximum number of withholding allowances permitted (commonly referred to as a “lock-in letter”) to both you and your employer. 2010 income tax forms   The IRS will provide a period of time during which you can dispute the determination before your employer adjusts your withholding. 2010 income tax forms If you believe that you are entitled to claim complete exemption from withholding or claim more withholding allowances than the maximum number specified by the IRS in the lock-in letter, you must submit a new Form W-4 and a written statement to support your claims to the IRS. 2010 income tax forms Contact information (a toll-free number and an IRS office address) will be provided in the lock-in letter. 2010 income tax forms At the end of this period, if you have not responded or if your response is not adequate, your employer will be required to withhold based on the original lock-in letter. 2010 income tax forms   After the lock-in letter takes effect, your employer must withhold tax on the basis of the withholding rate (marital status) and maximum number of withholding allowances specified in that letter. 2010 income tax forms   If you later believe that you are entitled to claim exemption from withholding or more allowances than the IRS determined, you can complete a new Form W-4 and a written statement to support the claims made on the Form W-4 and send them directly to the IRS address shown on the lock-in letter. 2010 income tax forms Your employer must continue to figure your withholding on the basis of the number of allowances previously determined by the IRS until the IRS advises your employer otherwise. 2010 income tax forms   At any time, either before or after the lock-in letter becomes effective, you may give your employer a new Form W-4 that does not claim complete exemption from withholding and results in more income tax withheld than specified in the lock-in letter. 2010 income tax forms Your employer must then withhold tax based on this new Form W-4. 2010 income tax forms   Additional information is available at IRS. 2010 income tax forms gov. 2010 income tax forms Enter “withholding compliance questions” in the search box. 2010 income tax forms Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. 2010 income tax forms The exemption applies only to income tax, not to social security or Medicare tax. 2010 income tax forms You can claim exemption from withholding for 2014 only if both of the following situations apply. 2010 income tax forms For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. 2010 income tax forms For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. 2010 income tax forms Use Figure 1-A to help you decide whether you can claim exemption from withholding. 2010 income tax forms Do not use Figure 1-A if you: Are 65 or older, Are blind, Will itemize deductions on your 2014 return, Will claim an exemption for a dependent on your 2014 return, or Will claim any tax credits on your 2014 return. 2010 income tax forms These situations are discussed later. 2010 income tax forms Students. 2010 income tax forms   If you are a student, you are not automatically exempt. 2010 income tax forms If you work only part time or during the summer, you may qualify for exemption from withholding. 2010 income tax forms Example 1. 2010 income tax forms You are a high school student and expect to earn $2,500 from a summer job. 2010 income tax forms You do not expect to have any other income during the year, and your parents will be able to claim an exemption for you on their tax return. 2010 income tax forms You worked last summer and had $375 federal income tax withheld from your pay. 2010 income tax forms The entire $375 was refunded when you filed your 2013 return. 2010 income tax forms Using Figure 1-A, you find that you can claim exemption from withholding. 2010 income tax forms Please click here for the text description of the image. 2010 income tax forms Figure 1-A: Exemption From Withholding on Form W-4 Example 2. 2010 income tax forms The facts are the same as in Example 1, except that you also have a savings account and expect to have $400 interest income during the year. 2010 income tax forms Using Figure 1-A, you find that you cannot claim exemption from withholding because your unearned income will be more than $350 and your total income will be more than $1,000. 2010 income tax forms    You may have to file a tax return, even if you are exempt from withholding. 2010 income tax forms See Publication 501 to see whether you must file a return. 2010 income tax forms    Age 65 or older or blind. 2010 income tax forms If you are 65 or older or blind, use Worksheet 1-3 or Worksheet 1-4, to help you decide whether you can claim exemption from withholding. 2010 income tax forms Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. 2010 income tax forms Instead, see Itemizing deductions or claiming exemptions or credits, next. 2010 income tax forms Itemizing deductions or claiming exemptions or credits. 2010 income tax forms   If you had no tax liability for 2013, and you will: Itemize deductions, Claim an exemption for a dependent, or Claim a tax credit, use the 2014 Estimated Tax Worksheet (also see chapter 2), to figure your 2014 expected tax liability. 2010 income tax forms You can claim exemption from withholding only if your total expected tax liability (line 13c of the worksheet) is zero. 2010 income tax forms Claiming exemption from withholding. 2010 income tax forms   To claim exemption, you must give your employer a Form W-4. 2010 income tax forms Do not complete lines 5 and 6. 2010 income tax forms Enter “Exempt” on line 7. 2010 income tax forms   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. 2010 income tax forms If you claim exemption in 2014 but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. 2010 income tax forms   Your claim of exempt status may be reviewed by the IRS. 2010 income tax forms See IRS review of your withholding , earlier. 2010 income tax forms An exemption is good for only 1 year. 2010 income tax forms   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. 2010 income tax forms Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. 2010 income tax forms The payer can figure withholding on supplemental wages using the same method used for your regular wages. 2010 income tax forms However, if these payments are identified separately from regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. 2010 income tax forms Expense allowances. 2010 income tax forms   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. 2010 income tax forms A nonaccountable plan is a reimbursement arrangement that does not require you to account for, or prove, your business expenses to your employer or does not require you to return your employer's payments that are more than your proven expenses. 2010 income tax forms   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. 2010 income tax forms Accountable plan. 2010 income tax forms   To be an accountable plan, your employer's reimbursement or allowance arrangement must include all three of the following rules. 2010 income tax forms Your expenses must have a business connection. 2010 income tax forms That is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. 2010 income tax forms You must adequately account to your employer for these expenses within a reasonable period of time. 2010 income tax forms You must return any excess reimbursement or allowance within a reasonable period of time. 2010 income tax forms    An excess reimbursement or allowance is any amount you are paid that is more than the business-related expenses that you adequately accounted for to your employer. 2010 income tax forms   The definition of reasonable period of time depends on the facts and circumstances of your situation. 2010 income tax forms However, regardless of those facts and circumstances, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. 2010 income tax forms You receive an advance within 30 days of the time you have an expense. 2010 income tax forms You adequately account for your expenses within 60 days after they were paid or incurred. 2010 income tax forms You return any excess reimbursement within 120 days after the expense was paid or incurred. 2010 income tax forms You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement. 2010 income tax forms Nonaccountable plan. 2010 income tax forms   Any plan that does not meet the definition of an accountable plan is considered a nonaccountable plan. 2010 income tax forms For more information about accountable and nonaccountable plans, see chapter 6 of Publication 463, Travel, Entertainment, Gift, and Car Expenses. 2010 income tax forms Penalties You may have to pay a penalty of $500 if both of the following apply. 2010 income tax forms You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. 2010 income tax forms You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. 2010 income tax forms There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. 2010 income tax forms The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. 2010 income tax forms These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. 2010 income tax forms A simple error or an honest mistake will not result in one of these penalties. 2010 income tax forms For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a Form W-4 penalty. 2010 income tax forms However, see chapter 4 for information on the penalty for underpaying your tax. 2010 income tax forms Tips The tips you receive while working on your job are considered part of your pay. 2010 income tax forms You must include your tips on your tax return on the same line as your regular pay. 2010 income tax forms However, tax is not withheld directly from tip income, as it is from your regular pay. 2010 income tax forms Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. 2010 income tax forms Reporting tips to your employer. 2010 income tax forms   If you receive tips of $20 or more in a month while working for any one employer, you must report to your employer the total amount of tips you receive on the job during the month. 2010 income tax forms The report is due by the 10th day of the following month. 2010 income tax forms   If you have more than one job, make a separate report to each employer. 2010 income tax forms Report only the tips you received while working for that employer, and only if they total $20 or more for the month. 2010 income tax forms How employer figures amount to withhold. 2010 income tax forms   The tips you report to your employer are counted as part of your income for the month you report them. 2010 income tax forms Your employer can figure your withholding in either of two ways. 2010 income tax forms By withholding at the regular rate on the sum of your pay plus your reported tips. 2010 income tax forms By withholding at the regular rate on your pay plus a percentage of your reported tips. 2010 income tax forms Not enough pay to cover taxes. 2010 income tax forms   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. 2010 income tax forms   If you do not give your employer money to cover the shortage, your employer first withholds as much Medicare tax and social security or railroad retirement tax as possible, up to the proper amount, and then withholds income tax up to the full amount of your pay. 2010 income tax forms If not enough tax is withheld, you may have to pay estimated tax. 2010 income tax forms When you file your return, you also may have to pay any Medicare and social security tax or railroad retirement tax your employer could not withhold. 2010 income tax forms Tips not reported to your employer. 2010 income tax forms   On your tax return, you must report all the tips you receive during the year, even tips you do not report to your employer (this includes the value of any noncash tips you received, such as tickets, passes, or other items of value). 2010 income tax forms Make sure you are having enough tax withheld, or are paying enough estimated tax (see chapter 2), to cover all your tip income. 2010 income tax forms Allocated tips. 2010 income tax forms   If you work in a large food or beverage establishment, your employer may have to report an allocated amount of tips on your Form W-2. 2010 income tax forms   Your employer should not withhold income tax, Medicare tax, and social security or railroad retirement tax on the allocated amount. 2010 income tax forms Withholding is based only on your pay plus your reported tips. 2010 income tax forms Your employer should refund to you any incorrectly withheld tax. 2010 income tax forms More information. 2010 income tax forms   For more information on the reporting and withholding rules for tip income and on tip allocation, see Publi