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2012 Tax Forms Irs

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2012 Tax Forms Irs

2012 tax forms irs Publication 15 - Main Content Table of Contents 1. 2012 tax forms irs Employer Identification Number (EIN) 2. 2012 tax forms irs Who Are Employees?Relief provisions. 2012 tax forms irs Business Owned and Operated by Spouses 3. 2012 tax forms irs Family Employees 4. 2012 tax forms irs Employee's Social Security Number (SSN)Registering for SSNVS. 2012 tax forms irs 5. 2012 tax forms irs Wages and Other CompensationAccountable plan. 2012 tax forms irs Nonaccountable plan. 2012 tax forms irs Per diem or other fixed allowance. 2012 tax forms irs 50% test. 2012 tax forms irs Health Savings Accounts and medical savings accounts. 2012 tax forms irs Nontaxable fringe benefits. 2012 tax forms irs When fringe benefits are treated as paid. 2012 tax forms irs Valuation of fringe benefits. 2012 tax forms irs Withholding on fringe benefits. 2012 tax forms irs Depositing taxes on fringe benefits. 2012 tax forms irs 6. 2012 tax forms irs TipsOrdering rule. 2012 tax forms irs 7. 2012 tax forms irs Supplemental Wages 8. 2012 tax forms irs Payroll Period 9. 2012 tax forms irs Withholding From Employees' WagesIncome Tax Withholding Social Security and Medicare Taxes Part-Time Workers 10. 2012 tax forms irs Required Notice to Employees About the Earned Income Credit (EIC) 11. 2012 tax forms irs Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties 12. 2012 tax forms irs Filing Form 941 or Form 944 13. 2012 tax forms irs Reporting Adjustments to Form 941 or Form 944Current Period Adjustments Prior Period Adjustments Wage Repayments 14. 2012 tax forms irs Federal Unemployment (FUTA) TaxSuccessor employer. 2012 tax forms irs Household employees. 2012 tax forms irs When to deposit. 2012 tax forms irs Household employees. 2012 tax forms irs Electronic filing by reporting agents. 2012 tax forms irs 16. 2012 tax forms irs How To Use the Income Tax Withholding TablesWage Bracket Method Percentage Method Alternative Methods of Income Tax Withholding How To Get Tax Help 1. 2012 tax forms irs Employer Identification Number (EIN) If you are required to report employment taxes or give tax statements to employees or annuitants, you need an EIN. 2012 tax forms irs The EIN is a nine-digit number the IRS issues. 2012 tax forms irs The digits are arranged as follows: 00-0000000. 2012 tax forms irs It is used to identify the tax accounts of employers and certain others who have no employees. 2012 tax forms irs Use your EIN on all of the items you send to the IRS and SSA. 2012 tax forms irs For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN. 2012 tax forms irs If you do not have an EIN, you may apply for one online. 2012 tax forms irs Go to the IRS. 2012 tax forms irs gov and click on the Apply for an EIN Online link under Tools. 2012 tax forms irs You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. 2012 tax forms irs Do not use an SSN in place of an EIN. 2012 tax forms irs You should have only one EIN. 2012 tax forms irs If you have more than one and are not sure which one to use, call 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). 2012 tax forms irs Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. 2012 tax forms irs The IRS will tell you which number to use. 2012 tax forms irs If you took over another employer's business (see Successor employer in section 9), do not use that employer's EIN. 2012 tax forms irs If you have applied for an EIN but do not have your EIN by the time a return is due, file a paper return and write “Applied For” and the date you applied for it in the space shown for the number. 2012 tax forms irs 2. 2012 tax forms irs Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. 2012 tax forms irs See Publication 15-A for details on statutory employees and nonemployees. 2012 tax forms irs Employee status under common law. 2012 tax forms irs   Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. 2012 tax forms irs This is so even when you give the employee freedom of action. 2012 tax forms irs What matters is that you have the right to control the details of how the services are performed. 2012 tax forms irs See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. 2012 tax forms irs   Generally, people in business for themselves are not employees. 2012 tax forms irs For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. 2012 tax forms irs However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. 2012 tax forms irs   If an employer-employee relationship exists, it does not matter what it is called. 2012 tax forms irs The employee may be called an agent or independent contractor. 2012 tax forms irs It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. 2012 tax forms irs Statutory employees. 2012 tax forms irs   If someone who works for you is not an employee under the common law rules discussed earlier, do not withhold federal income tax from his or her pay, unless backup withholding applies. 2012 tax forms irs Although the following persons may not be common law employees, they are considered employees by statute for social security, Medicare, and FUTA tax purposes under certain conditions. 2012 tax forms irs An agent (or commission) driver who delivers food, beverages (other than milk), laundry, or dry cleaning for someone else. 2012 tax forms irs A full-time life insurance salesperson who sells primarily for one company. 2012 tax forms irs A homeworker who works by guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. 2012 tax forms irs A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. 2012 tax forms irs The orders must be for merchandise for resale or supplies for use in the customer's business. 2012 tax forms irs The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. 2012 tax forms irs    Statutory nonemployees. 2012 tax forms irs   Direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. 2012 tax forms irs They are generally treated as self-employed for all federal tax purposes, including income and employment taxes. 2012 tax forms irs H-2A agricultural workers. 2012 tax forms irs   On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. 2012 tax forms irs Treating employees as nonemployees. 2012 tax forms irs   You will generally be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold these taxes because you treated an employee as a nonemployee. 2012 tax forms irs You may be able to calculate your liability using special section 3509 rates for the employee share of social security and Medicare taxes and the federal income tax withholding. 2012 tax forms irs The applicable rates depend on whether you filed required Forms 1099. 2012 tax forms irs You cannot recover the employee share of social security, or Medicare tax, or income tax withholding from the employee if the tax is paid under section 3509. 2012 tax forms irs You are liable for the income tax withholding regardless of whether the employee paid income tax on the wages. 2012 tax forms irs You continue to owe the full employer share of social security and Medicare taxes. 2012 tax forms irs The employee remains liable for the employee share of social security and Medicare taxes. 2012 tax forms irs See Internal Revenue Code section 3509 for details. 2012 tax forms irs Also see the Instructions for Form 941-X. 2012 tax forms irs   Section 3509 rates are not available if you intentionally disregard the requirement to withhold taxes from the employee or if you withheld income taxes but not social security or Medicare taxes. 2012 tax forms irs Section 3509 is not available for reclassifying statutory employees. 2012 tax forms irs See Statutory employees , earlier in this section. 2012 tax forms irs   If the employer issued required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. 2012 tax forms irs 2% plus 20% of the employee rate (see the Instructions for Form 941-X). 2012 tax forms irs For Medicare taxes; employer rate of 1. 2012 tax forms irs 45% plus 20% of the employee rate of 1. 2012 tax forms irs 45%, for a total rate of 1. 2012 tax forms irs 74% of wages. 2012 tax forms irs For Additional Medicare Tax; 0. 2012 tax forms irs 18% (20% of the employee rate of 0. 2012 tax forms irs 9%) of wages subject to Additional Medicare Tax. 2012 tax forms irs For income tax withholding, the rate is 1. 2012 tax forms irs 5% of wages. 2012 tax forms irs   If the employer did not issue required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. 2012 tax forms irs 2% plus 40% of the employee rate (see the Instructions for Form 941-X). 2012 tax forms irs For Medicare taxes; employer rate of 1. 2012 tax forms irs 45% plus 40% of the employee rate of 1. 2012 tax forms irs 45%, for a total rate of 2. 2012 tax forms irs 03% of wages. 2012 tax forms irs For Additional Medicare Tax; 0. 2012 tax forms irs 36% (40% of the employee rate of 0. 2012 tax forms irs 9%) of wages subject to Additional Medicare Tax. 2012 tax forms irs For income tax withholding, the rate is 3. 2012 tax forms irs 0% of wages. 2012 tax forms irs Relief provisions. 2012 tax forms irs   If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. 2012 tax forms irs To get this relief, you must file all required federal tax returns, including information returns, on a basis consistent with your treatment of the worker. 2012 tax forms irs You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. 2012 tax forms irs See Publication 1976, Do You Qualify for Relief Under Section 530. 2012 tax forms irs IRS help. 2012 tax forms irs   If you want the IRS to determine whether a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. 2012 tax forms irs Voluntary Classification Settlement Program (VCSP). 2012 tax forms irs   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. 2012 tax forms irs To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). 2012 tax forms irs For more information visit IRS. 2012 tax forms irs gov and enter “VCSP” in the search box. 2012 tax forms irs Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. 2012 tax forms irs See Publication 541, Partnerships, for more details. 2012 tax forms irs The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. 2012 tax forms irs Exception—Qualified joint venture. 2012 tax forms irs   For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. 2012 tax forms irs A qualified joint venture conducts a trade or business where: The only members of the joint venture are spouses who file a joint income tax return, Both spouses materially participate (see Material participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). 2012 tax forms irs   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. 2012 tax forms irs Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. 2012 tax forms irs   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. 2012 tax forms irs If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. 2012 tax forms irs Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. 2012 tax forms irs However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. 2012 tax forms irs    Note. 2012 tax forms irs If your spouse is your employee, not your partner, see One spouse employed by another in section 3. 2012 tax forms irs   For more information on qualified joint ventures, visit IRS. 2012 tax forms irs gov and enter “qualified joint venture” in the search box. 2012 tax forms irs Exception—Community income. 2012 tax forms irs   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. 2012 tax forms irs S. 2012 tax forms irs possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. 2012 tax forms irs You may still make an election to be taxed as a qualified joint venture instead of a partnership. 2012 tax forms irs See Exception—Qualified joint venture , earlier. 2012 tax forms irs 3. 2012 tax forms irs Family Employees Child employed by parents. 2012 tax forms irs   Payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the trade or business is a sole proprietorship or a partnership in which each partner is a parent of the child. 2012 tax forms irs If these payments are for work other than in a trade or business, such as domestic work in the parent's private home, they are not subject to social security and Medicare taxes until the child reaches age 21. 2012 tax forms irs However, see Covered services of a child or spouse , later in this section. 2012 tax forms irs Payments for the services of a child under age 21 who works for his or her parent, whether or not in a trade or business, are not subject to FUTA tax. 2012 tax forms irs Payments for the services of a child of any age who works for his or her parent are generally subject to income tax withholding unless the payments are for domestic work in the parent's home, or unless the payments are for work other than in a trade or business and are less than $50 in the quarter or the child is not regularly employed to do such work. 2012 tax forms irs One spouse employed by another. 2012 tax forms irs   The wages for the services of an individual who works for his or her spouse in a trade or business are subject to income tax withholding and social security and Medicare taxes, but not to FUTA tax. 2012 tax forms irs However, the payments for services of one spouse employed by another in other than a trade or business, such as domestic service in a private home, are not subject to social security, Medicare, and FUTA taxes. 2012 tax forms irs Covered services of a child or spouse. 2012 tax forms irs   The wages for the services of a child or spouse are subject to income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for: A corporation, even if it is controlled by the child's parent or the individual's spouse; A partnership, even if the child's parent is a partner, unless each partner is a parent of the child; A partnership, even if the individual's spouse is a partner; or An estate, even if it is the estate of a deceased parent. 2012 tax forms irs Parent employed by son or daughter. 2012 tax forms irs   When the employer is a son or daughter employing his or her parent the following rules apply. 2012 tax forms irs Payments for the services of a parent in the son’s or daughter’s (the employer’s) trade or business are subject to income tax withholding and social security and Medicare taxes. 2012 tax forms irs Payments for the services of a parent not in the son’s or daughter’s (the employer’s) trade or business are generally not subject to social security and Medicare taxes. 2012 tax forms irs    Social security and Medicare taxes do apply to payments made to a parent for domestic services if all of the following apply: The parent is employed by his or her son or daughter; The son or daughter (the employer) has a child or stepchild living in the home; The son or daughter (the employer) is a widow or widower, divorced, or living with a spouse who, because of a mental or physical condition, cannot care for the child or stepchild for at least 4 continuous weeks in a calendar quarter; and The child or stepchild is either under age 18 or requires the personal care of an adult for at least 4 continuous weeks in a calendar quarter due to a mental or physical condition. 2012 tax forms irs   Payments made to a parent employed by his or her child are not subject to FUTA tax, regardless of the type of services provided. 2012 tax forms irs 4. 2012 tax forms irs Employee's Social Security Number (SSN) You are required to get each employee's name and SSN and to enter them on Form W-2. 2012 tax forms irs This requirement also applies to resident and nonresident alien employees. 2012 tax forms irs You should ask your employee to show you his or her social security card. 2012 tax forms irs The employee may show the card if it is available. 2012 tax forms irs Do not accept a social security card that says “Not valid for employment. 2012 tax forms irs ” A social security number issued with this legend does not permit employment. 2012 tax forms irs You may, but are not required to, photocopy the social security card if the employee provides it. 2012 tax forms irs If you do not provide the correct employee name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. 2012 tax forms irs See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. 2012 tax forms irs Applying for a social security card. 2012 tax forms irs   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation. 2012 tax forms irs You can get Form SS-5 at SSA offices, by calling 1-800-772-1213, or from the SSA website at www. 2012 tax forms irs socialsecurity. 2012 tax forms irs gov/online/ss-5. 2012 tax forms irs html. 2012 tax forms irs The employee must complete and sign Form SS-5; it cannot be filed by the employer. 2012 tax forms irs You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. 2012 tax forms irs Applying for a social security number. 2012 tax forms irs   If you file Form W-2 on paper and your employee applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. 2012 tax forms irs If you are filing electronically, enter all zeros (000-00-000) in the social security number field. 2012 tax forms irs When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. 2012 tax forms irs Furnish copies B, C, and 2 of Form W-2c to the employee. 2012 tax forms irs Up to 25 Forms W-2c for each Form W-3c, Transmittal of Corrected Wage and Tax Statements, may now be filed per session over the Internet, with no limit on the number of sessions. 2012 tax forms irs For more information, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. 2012 tax forms irs socialsecurity. 2012 tax forms irs gov/employer. 2012 tax forms irs Advise your employee to correct the SSN on his or her original Form W-2. 2012 tax forms irs Correctly record the employee's name and SSN. 2012 tax forms irs   Record the name and number of each employee as they are shown on the employee's social security card. 2012 tax forms irs If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. 2012 tax forms irs Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. 2012 tax forms irs If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported for the most recently filed Form W-2. 2012 tax forms irs It is not necessary to correct other years if the previous name and number were used for years before the most recent Form W-2. 2012 tax forms irs IRS individual taxpayer identification numbers (ITINs) for aliens. 2012 tax forms irs   Do not accept an ITIN in place of an SSN for employee identification or for work. 2012 tax forms irs An ITIN is only available to resident and nonresident aliens who are not eligible for U. 2012 tax forms irs S. 2012 tax forms irs employment and need identification for other tax purposes. 2012 tax forms irs You can identify an ITIN because it is a nine-digit number, beginning with the number “9” with either a “7” or “8” as the fourth digit and is formatted like an SSN (for example, 9NN-7N-NNNN). 2012 tax forms irs    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. 2012 tax forms irs If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier. 2012 tax forms irs Do not use an ITIN in place of an SSN on Form W-2. 2012 tax forms irs Verification of social security numbers. 2012 tax forms irs   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. 2012 tax forms irs Visit www. 2012 tax forms irs socialsecurity. 2012 tax forms irs gov/employer/ssnv. 2012 tax forms irs htm for more information. 2012 tax forms irs Registering for SSNVS. 2012 tax forms irs   You must register online and receive authorization from your employer to use SSNVS. 2012 tax forms irs To register, visit SSA's website at www. 2012 tax forms irs ssa. 2012 tax forms irs gov/employer and click on the Business Services Online link. 2012 tax forms irs Follow the registration instructions to obtain a user identification (ID) and password. 2012 tax forms irs You will need to provide the following information about yourself and your company. 2012 tax forms irs Name. 2012 tax forms irs SSN. 2012 tax forms irs Date of birth. 2012 tax forms irs Type of employer. 2012 tax forms irs EIN. 2012 tax forms irs Company name, address, and telephone number. 2012 tax forms irs Email address. 2012 tax forms irs   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. 2012 tax forms irs You must enter the activation code online to use SSNVS. 2012 tax forms irs 5. 2012 tax forms irs Wages and Other Compensation Wages subject to federal employment taxes generally include all pay you give to an employee for services performed. 2012 tax forms irs The pay may be in cash or in other forms. 2012 tax forms irs It includes salaries, vacation allowances, bonuses, commissions, and fringe benefits. 2012 tax forms irs It does not matter how you measure or make the payments. 2012 tax forms irs Amounts an employer pays as a bonus for signing or ratifying a contract in connection with the establishment of an employer-employee relationship and an amount paid to an employee for cancellation of an employment contract and relinquishment of contract rights are wages subject to social security, Medicare, and FUTA taxes and income tax withholding. 2012 tax forms irs Also, compensation paid to a former employee for services performed while still employed is wages subject to employment taxes. 2012 tax forms irs More information. 2012 tax forms irs   See section 6 for a discussion of tips and section 7 for a discussion of supplemental wages. 2012 tax forms irs Also, see section 15 for exceptions to the general rules for wages. 2012 tax forms irs Publication 15-A provides additional information on wages, including nonqualified deferred compensation, and other compensation. 2012 tax forms irs Publication 15-B provides information on other forms of compensation, including: Accident and health benefits, Achievement awards, Adoption assistance, Athletic facilities, De minimis (minimal) benefits, Dependent care assistance, Educational assistance, Employee discounts, Employee stock options, Employer-provided cell phones, Group-term life insurance coverage, Health Savings Accounts, Lodging on your business premises, Meals, Moving expense reimbursements, No-additional-cost services, Retirement planning services, Transportation (commuting) benefits, Tuition reduction, and Working condition benefits. 2012 tax forms irs Employee business expense reimbursements. 2012 tax forms irs   A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees' business expenses. 2012 tax forms irs How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. 2012 tax forms irs If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement. 2012 tax forms irs   These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee. 2012 tax forms irs Accountable plan. 2012 tax forms irs   To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules. 2012 tax forms irs They must have paid or incurred deductible expenses while performing services as your employees. 2012 tax forms irs The reimbursement or advance must be paid for the expense and must not be an amount that would have otherwise been paid by the employee. 2012 tax forms irs They must substantiate these expenses to you within a reasonable period of time. 2012 tax forms irs They must return any amounts in excess of substantiated expenses within a reasonable period of time. 2012 tax forms irs   Amounts paid under an accountable plan are not wages and are not subject to income, social security, Medicare, and FUTA taxes. 2012 tax forms irs   If the expenses covered by this arrangement are not substantiated (or amounts in excess of substantiated expenses are not returned within a reasonable period of time), the amount paid under the arrangement in excess of the substantiated expenses is treated as paid under a nonaccountable plan. 2012 tax forms irs This amount is subject to income, social security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time. 2012 tax forms irs   A reasonable period of time depends on the facts and circumstances. 2012 tax forms irs Generally, it is considered reasonable if your employees receive their advance within 30 days of the time they incur the expenses, adequately account for the expenses within 60 days after the expenses were paid or incurred, and return any amounts in excess of expenses within 120 days after the expenses were paid or incurred. 2012 tax forms irs Also, it is considered reasonable if you give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding amounts and they do so within 120 days. 2012 tax forms irs Nonaccountable plan. 2012 tax forms irs   Payments to your employee for travel and other necessary expenses of your business under a nonaccountable plan are wages and are treated as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. 2012 tax forms irs Your payments are treated as paid under a nonaccountable plan if: Your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, You advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount he or she does not use for business expenses, You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business, or You pay an amount as a reimbursement you would have otherwise paid as wages. 2012 tax forms irs   See section 7 for more information on supplemental wages. 2012 tax forms irs Per diem or other fixed allowance. 2012 tax forms irs   You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. 2012 tax forms irs In these cases, your employee is considered to have accounted to you if your reimbursement does not exceed rates established by the Federal Government. 2012 tax forms irs The 2013 standard mileage rate for auto expenses was 56. 2012 tax forms irs 5 cents per mile. 2012 tax forms irs The rate for 2014 is 56 cents per mile. 2012 tax forms irs   The government per diem rates for meals and lodging in the continental United States are listed in Publication 1542, Per Diem Rates. 2012 tax forms irs Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). 2012 tax forms irs   If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. 2012 tax forms irs This excess amount is subject to income tax withholding and payment of social security, Medicare, and FUTA taxes. 2012 tax forms irs Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L. 2012 tax forms irs ” Wages not paid in money. 2012 tax forms irs   If in the course of your trade or business you pay your employees in a medium that is neither cash nor a readily negotiable instrument, such as a check, you are said to pay them “in kind. 2012 tax forms irs ” Payments in kind may be in the form of goods, lodging, food, clothing, or services. 2012 tax forms irs Generally, the fair market value of such payments at the time they are provided is subject to federal income tax withholding and social security, Medicare, and FUTA taxes. 2012 tax forms irs   However, noncash payments for household work, agricultural labor, and service not in the employer's trade or business are exempt from social security, Medicare, and FUTA taxes. 2012 tax forms irs Withhold income tax on these payments only if you and the employee agree to do so. 2012 tax forms irs Nonetheless, noncash payments for agricultural labor, such as commodity wages, are treated as cash payments subject to employment taxes if the substance of the transaction is a cash payment. 2012 tax forms irs Moving expenses. 2012 tax forms irs   Reimbursed and employer-paid qualified moving expenses (those that would otherwise be deductible by the employee) paid under an accountable plan are not includible in an employee's income unless you have knowledge the employee deducted the expenses in a prior year. 2012 tax forms irs Reimbursed and employer-paid nonqualified moving expenses are includible in income and are subject to employment taxes and income tax withholding. 2012 tax forms irs For more information on moving expenses, see Publication 521, Moving Expenses. 2012 tax forms irs Meals and lodging. 2012 tax forms irs   The value of meals is not taxable income and is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the meals are furnished for the employer's convenience and on the employer's premises. 2012 tax forms irs The value of lodging is not subject to income tax withholding and social security, Medicare, and FUTA taxes if the lodging is furnished for the employer's convenience, on the employer's premises, and as a condition of employment. 2012 tax forms irs    “For the convenience of the employer” means you have a substantial business reason for providing the meals and lodging other than to provide additional compensation to the employee. 2012 tax forms irs For example, meals you provide at the place of work so that an employee is available for emergencies during his or her lunch period are generally considered to be for your convenience. 2012 tax forms irs   However, whether meals or lodging are provided for the convenience of the employer depends on all of the facts and circumstances. 2012 tax forms irs A written statement that the meals or lodging are for your convenience is not sufficient. 2012 tax forms irs 50% test. 2012 tax forms irs   If over 50% of the employees who are provided meals on an employer's business premises receive these meals for the convenience of the employer, all meals provided on the premises are treated as furnished for the convenience of the employer. 2012 tax forms irs If this 50% test is met, the value of the meals is excludable from income for all employees and is not subject to federal income tax withholding or employment taxes. 2012 tax forms irs For more information, see Publication 15-B. 2012 tax forms irs Health insurance plans. 2012 tax forms irs   If you pay the cost of an accident or health insurance plan for your employees, including an employee's spouse and dependents, your payments are not wages and are not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. 2012 tax forms irs Generally, this exclusion also applies to qualified long-term care insurance contracts. 2012 tax forms irs However, for income tax withholding, the value of health insurance benefits must be included in the wages of S corporation employees who own more than 2% of the S corporation (2% shareholders). 2012 tax forms irs For social security, Medicare, and FUTA taxes, the health insurance benefits are excluded from the wages only for employees and their dependents or for a class or classes of employees and their dependents. 2012 tax forms irs See Announcement 92-16 for more information. 2012 tax forms irs You can find Announcement 92-16 on page 53 of Internal Revenue Bulletin 1992-5. 2012 tax forms irs Health Savings Accounts and medical savings accounts. 2012 tax forms irs   Your contributions to an employee's Health Savings Account (HSA) or Archer medical savings account (MSA) are not subject to social security, Medicare, or FUTA taxes, or federal income tax withholding if it is reasonable to believe at the time of payment of the contributions they will be excludable from the income of the employee. 2012 tax forms irs To the extent it is not reasonable to believe they will be excludable, your contributions are subject to these taxes. 2012 tax forms irs Employee contributions to their HSAs or MSAs through a payroll deduction plan must be included in wages and are subject to social security, Medicare, and FUTA taxes and income tax withholding. 2012 tax forms irs However, HSA contributions made under a salary reduction arrangement in a section 125 cafeteria plan are not wages and are not subject to employment taxes or withholding. 2012 tax forms irs For more information, see the Instructions for Form 8889, Health Savings Accounts (HSAs). 2012 tax forms irs Medical care reimbursements. 2012 tax forms irs   Generally, medical care reimbursements paid for an employee under an employer's self-insured medical reimbursement plan are not wages and are not subject to social security, Medicare, and FUTA taxes, or income tax withholding. 2012 tax forms irs See Publication 15-B for an exception for highly compensated employees. 2012 tax forms irs Differential wage payments. 2012 tax forms irs   Differential wage payments are any payments made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and represent all or a portion of the wages the individual would have received from the employer if the individual were performing services for the employer. 2012 tax forms irs   Differential wage payments are wages for income tax withholding, but are not subject to social security, Medicare, or FUTA taxes. 2012 tax forms irs Employers should report differential wage payments in box 1 of Form W-2. 2012 tax forms irs For more information about the tax treatment of differential wage payments, visit IRS. 2012 tax forms irs gov and enter “employees in a combat zone” in the search box. 2012 tax forms irs Fringe benefits. 2012 tax forms irs   You generally must include fringe benefits in an employee's gross income (but see Nontaxable fringe benefits next). 2012 tax forms irs The benefits are subject to income tax withholding and employment taxes. 2012 tax forms irs Fringe benefits include cars you provide, flights on aircraft you provide, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. 2012 tax forms irs In general, the amount you must include is the amount by which the fair market value of the benefits is more than the sum of what the employee paid for it plus any amount the law excludes. 2012 tax forms irs There are other special rules you and your employees may use to value certain fringe benefits. 2012 tax forms irs See Publication 15-B for more information. 2012 tax forms irs Nontaxable fringe benefits. 2012 tax forms irs   Some fringe benefits are not taxable (or are minimally taxable) if certain conditions are met. 2012 tax forms irs See Publication 15-B for details. 2012 tax forms irs The following are some examples of nontaxable fringe benefits. 2012 tax forms irs Services provided to your employees at no additional cost to you. 2012 tax forms irs Qualified employee discounts. 2012 tax forms irs Working condition fringes that are property or services the employee could deduct as a business expense if he or she had paid for it. 2012 tax forms irs Examples include a company car for business use and subscriptions to business magazines. 2012 tax forms irs Certain minimal value fringes (including an occasional cab ride when an employee must work overtime and meals you provide at eating places you run for your employees if the meals are not furnished at below cost). 2012 tax forms irs Qualified transportation fringes subject to specified conditions and dollar limitations (including transportation in a commuter highway vehicle, any transit pass, and qualified parking). 2012 tax forms irs Qualified moving expense reimbursement. 2012 tax forms irs See Moving expenses , earlier in this section, for details. 2012 tax forms irs The use of on-premises athletic facilities, if substantially all of the use is by employees, their spouses, and their dependent children. 2012 tax forms irs Qualified tuition reduction an educational organization provides to its employees for education. 2012 tax forms irs For more information, see Publication 970, Tax Benefits for Education. 2012 tax forms irs Employer-provided cell phones provided primarily for a noncompensatory business reason. 2012 tax forms irs   However, do not exclude the following fringe benefits from the income of highly compensated employees unless the benefit is available to other employees on a nondiscriminatory basis. 2012 tax forms irs No-additional-cost services. 2012 tax forms irs Qualified employee discounts. 2012 tax forms irs Meals provided at an employer operated eating facility. 2012 tax forms irs Reduced tuition for education. 2012 tax forms irs  For more information, including the definition of a highly compensated employee, see Publication 15-B. 2012 tax forms irs When fringe benefits are treated as paid. 2012 tax forms irs   You may choose to treat certain noncash fringe benefits as paid by the pay period, by the quarter, or on any other basis you choose as long as you treat the benefits as paid at least once a year. 2012 tax forms irs You do not have to make a formal choice of payment dates or notify the IRS of the dates you choose. 2012 tax forms irs You do not have to make this choice for all employees. 2012 tax forms irs You may change methods as often as you like, as long as you treat all benefits provided in a calendar year as paid by December 31 of the calendar year. 2012 tax forms irs See Publication 15-B for more information, including a discussion of the special accounting rule for fringe benefits provided during November and December. 2012 tax forms irs Valuation of fringe benefits. 2012 tax forms irs   Generally, you must determine the value of fringe benefits no later than January 31 of the next year. 2012 tax forms irs Before January 31, you may reasonably estimate the value of the fringe benefits for purposes of withholding and depositing on time. 2012 tax forms irs Withholding on fringe benefits. 2012 tax forms irs   You may add the value of fringe benefits to regular wages for a payroll period and figure withholding taxes on the total, or you may withhold federal income tax on the value of the fringe benefits at the optional flat 25% supplemental wage rate. 2012 tax forms irs However, see Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages during the calendar year in section 7. 2012 tax forms irs   You may choose not to withhold income tax on the value of an employee's personal use of a vehicle you provide. 2012 tax forms irs You must, however, withhold social security and Medicare taxes on the use of the vehicle. 2012 tax forms irs See Publication 15-B for more information on this election. 2012 tax forms irs Depositing taxes on fringe benefits. 2012 tax forms irs   Once you choose when fringe benefits are paid, you must deposit taxes in the same deposit period you treat the fringe benefits as paid. 2012 tax forms irs To avoid a penalty, deposit the taxes following the general deposit rules for that deposit period. 2012 tax forms irs   If you determine by January 31 you overestimated the value of a fringe benefit at the time you withheld and deposited for it, you may claim a refund for the overpayment or have it applied to your next employment tax return. 2012 tax forms irs See Valuation of fringe benefits , earlier. 2012 tax forms irs If you underestimated the value and deposited too little, you may be subject to a failure-to-deposit penalty. 2012 tax forms irs See section 11 for information on deposit penalties. 2012 tax forms irs   If you deposited the required amount of taxes but withheld a lesser amount from the employee, you can recover from the employee the social security, Medicare, or income taxes you deposited on his or her behalf, and included in the employee's Form W-2. 2012 tax forms irs However, you must recover the income taxes before April 1 of the following year. 2012 tax forms irs Sick pay. 2012 tax forms irs   In general, sick pay is any amount you pay under a plan to an employee who is unable to work because of sickness or injury. 2012 tax forms irs These amounts are sometimes paid by a third party, such as an insurance company or an employees' trust. 2012 tax forms irs In either case, these payments are subject to social security, Medicare, and FUTA taxes. 2012 tax forms irs Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. 2012 tax forms irs The payments are always subject to federal income tax. 2012 tax forms irs See Publication 15-A for more information. 2012 tax forms irs 6. 2012 tax forms irs Tips Tips your employee receives from customers are generally subject to withholding. 2012 tax forms irs Your employee must report cash tips to you by the 10th of the month after the month the tips are received. 2012 tax forms irs The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. 2012 tax forms irs Both directly and indirectly tipped employees must report tips to you. 2012 tax forms irs No report is required for months when tips are less than $20. 2012 tax forms irs Your employee reports the tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. 2012 tax forms irs The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period the report covers, and The total of tips received during the month or period. 2012 tax forms irs Both Forms 4070 and 4070-A, Employee's Daily Record of Tips, are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer. 2012 tax forms irs You are permitted to establish a system for electronic tip reporting by employees. 2012 tax forms irs See Regulations section 31. 2012 tax forms irs 6053-1(d). 2012 tax forms irs Collecting taxes on tips. 2012 tax forms irs   You must collect income tax, employee social security tax, and employee Medicare tax on the employee's tips. 2012 tax forms irs The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. 2012 tax forms irs If an employee reports to you in writing $20 or more of tips in a month, the tips are also subject to FUTA tax. 2012 tax forms irs   You can collect these taxes from the employee's wages or from other funds he or she makes available. 2012 tax forms irs See Tips treated as supplemental wages in section 7 for more information. 2012 tax forms irs Stop collecting the employee social security tax when his or her wages and tips for tax year 2014 reach $117,000; collect the income and employee Medicare taxes for the whole year on all wages and tips. 2012 tax forms irs You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the limit. 2012 tax forms irs You are responsible for the employer Medicare tax for the whole year on all wages and tips. 2012 tax forms irs File Form 941 or Form 944 to report withholding and employment taxes on tips. 2012 tax forms irs Ordering rule. 2012 tax forms irs   If, by the 10th of the month after the month for which you received an employee's report on tips, you do not have enough employee funds available to deduct the employee tax, you no longer have to collect it. 2012 tax forms irs If there are not enough funds available, withhold taxes in the following order. 2012 tax forms irs Withhold on regular wages and other compensation. 2012 tax forms irs Withhold social security and Medicare taxes on tips. 2012 tax forms irs Withhold income tax on tips. 2012 tax forms irs Reporting tips. 2012 tax forms irs   Report tips and any collected and uncollected social security and Medicare taxes on Form W-2 and on Form 941, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). 2012 tax forms irs Report an adjustment on Form 941, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. 2012 tax forms irs Enter the amount of uncollected social security tax and Medicare tax on Form W-2, box 12, with codes “A” and “B. 2012 tax forms irs ” Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. 2012 tax forms irs See section 13 and the General Instructions for Forms W-2 and W-3. 2012 tax forms irs   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. 2012 tax forms irs See Revenue Ruling 2012-18, 2012-26 I. 2012 tax forms irs R. 2012 tax forms irs B. 2012 tax forms irs 1032, available at www. 2012 tax forms irs irs. 2012 tax forms irs gov/irb/2012-26_IRB/ar07. 2012 tax forms irs html. 2012 tax forms irs Allocated tips. 2012 tax forms irs   If you operate a large food or beverage establishment, you must report allocated tips under certain circumstances. 2012 tax forms irs However, do not withhold income, social security, or Medicare taxes on allocated tips. 2012 tax forms irs   A large food or beverage establishment is one that provides food or beverages for consumption on the premises, where tipping is customary, and where there were normally more than 10 employees on a typical business day during the preceding year. 2012 tax forms irs   The tips may be allocated by one of three methods—hours worked, gross receipts, or good faith agreement. 2012 tax forms irs For information about these allocation methods, including the requirement to file Forms 8027 electronically if 250 or more forms are filed, see the Instructions for Form 8027. 2012 tax forms irs For information on filing Form 8027 electronically with the IRS, see Publication 1239. 2012 tax forms irs Tip Rate Determination and Education Program. 2012 tax forms irs   Employers may participate in the Tip Rate Determination and Education Program. 2012 tax forms irs The program primarily consists of two voluntary agreements developed to improve tip income reporting by helping taxpayers to understand and meet their tip reporting responsibilities. 2012 tax forms irs The two agreements are the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). 2012 tax forms irs A tip agreement, the Gaming Industry Tip Compliance Agreement (GITCA), is available for the gaming (casino) industry. 2012 tax forms irs To get more information about TRDA and TRAC agreements, see Publication 3144, Tips on Tips. 2012 tax forms irs Additionally, visit IRS. 2012 tax forms irs gov and enter “MSU tips” in the search box to get more information about GITCA, TRDA, or TRAC agreements. 2012 tax forms irs 7. 2012 tax forms irs Supplemental Wages Supplemental wages are wage payments to an employee that are not regular wages. 2012 tax forms irs They include, but are not limited to, bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay increases, and payments for nondeductible moving expenses. 2012 tax forms irs Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. 2012 tax forms irs How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular wages. 2012 tax forms irs See Regulations section 31. 2012 tax forms irs 3402(g)-1 for additional guidance for wages paid after January 1, 2007. 2012 tax forms irs Also see Revenue Ruling 2008-29, 2008-24 I. 2012 tax forms irs R. 2012 tax forms irs B. 2012 tax forms irs 1149, available at www. 2012 tax forms irs irs. 2012 tax forms irs gov/irb/2008-24_IRB/ar08. 2012 tax forms irs html. 2012 tax forms irs Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. 2012 tax forms irs   Special rules apply to the extent supplemental wages paid to any one employee during the calendar year exceed $1 million. 2012 tax forms irs If a supplemental wage payment, together with other supplemental wage payments made to the employee during the calendar year, exceeds $1 million, the excess is subject to withholding at 39. 2012 tax forms irs 6% (or the highest rate of income tax for the year). 2012 tax forms irs Withhold using the 39. 2012 tax forms irs 6% rate without regard to the employee's Form W-4. 2012 tax forms irs In determining supplemental wages paid to the employee during the year, include payments from all businesses under common control. 2012 tax forms irs For more information, see Treasury Decision 9276, 2006-37 I. 2012 tax forms irs R. 2012 tax forms irs B. 2012 tax forms irs 423, available at www. 2012 tax forms irs irs. 2012 tax forms irs gov/irb/2006-37_IRB/ar09. 2012 tax forms irs html. 2012 tax forms irs Withholding on supplemental wage payments to an employee who does not receive $1 million of supplemental wages during the calendar year. 2012 tax forms irs   If the supplemental wages paid to the employee during the calendar year are less than or equal to $1 million, the following rules apply in determining the amount of income tax to be withheld. 2012 tax forms irs Supplemental wages combined with regular wages. 2012 tax forms irs   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period. 2012 tax forms irs Supplemental wages identified separately from regular wages. 2012 tax forms irs   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages. 2012 tax forms irs If you withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. 2012 tax forms irs Withhold a flat 25% (no other percentage allowed). 2012 tax forms irs If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. 2012 tax forms irs If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. 2012 tax forms irs Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. 2012 tax forms irs Subtract the tax withheld from the regular wages. 2012 tax forms irs Withhold the remaining tax from the supplemental wages. 2012 tax forms irs If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and the previous supplemental wage payments, and withhold the remaining tax. 2012 tax forms irs If you did not withhold income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b. 2012 tax forms irs This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. 2012 tax forms irs Regardless of the method you use to withhold income tax on supplemental wages, they are subject to social security, Medicare, and FUTA taxes. 2012 tax forms irs Example 1. 2012 tax forms irs You pay John Peters a base salary on the 1st of each month. 2012 tax forms irs He is single and claims one withholding allowance. 2012 tax forms irs In January he is paid $1,000. 2012 tax forms irs Using the wage bracket tables, you withhold $50 from this amount. 2012 tax forms irs In February, he receives salary of $1,000 plus a commission of $2,000, which you combine with regular wages and do not separately identify. 2012 tax forms irs You figure the withholding based on the total of $3,000. 2012 tax forms irs The correct withholding from the tables is $338. 2012 tax forms irs Example 2. 2012 tax forms irs You pay Sharon Warren a base salary on the 1st of each month. 2012 tax forms irs She is single and claims one allowance. 2012 tax forms irs Her May 1 pay is $2,000. 2012 tax forms irs Using the wage bracket tables, you withhold $188. 2012 tax forms irs On May 14 she receives a bonus of $1,000. 2012 tax forms irs Electing to use supplemental wage withholding method 1-b, you: Add the bonus amount to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 = $3,000). 2012 tax forms irs Determine the amount of withholding on the combined $3,000 amount to be $338 using the wage bracket tables. 2012 tax forms irs Subtract the amount withheld from wages on the most recent base salary pay date (May 1) from the combined withholding amount ($338 – $188 = $150). 2012 tax forms irs Withhold $150 from the bonus payment. 2012 tax forms irs Example 3. 2012 tax forms irs The facts are the same as in Example 2, except you elect to use the flat rate method of withholding on the bonus. 2012 tax forms irs You withhold 25% of $1,000, or $250, from Sharon's bonus payment. 2012 tax forms irs Example 4. 2012 tax forms irs The facts are the same as in Example 2, except you elect to pay Sharon a second bonus of $2,000 on May 28. 2012 tax forms irs Using supplemental wage withholding method 1-b, you: Add the first and second bonus amounts to the amount of wages from the most recent base salary pay date (May 1) ($2,000 + $1,000 + $2,000 = $5,000). 2012 tax forms irs Determine the amount of withholding on the combined $5,000 amount to be $781 using the wage bracket tables. 2012 tax forms irs Subtract the amounts withheld from wages on the most recent base salary pay date (May 1) and the amounts withheld from the first bonus payment from the combined withholding amount ($781 – $188 – $150 = $443). 2012 tax forms irs Withhold $443 from the second bonus payment. 2012 tax forms irs Tips treated as supplemental wages. 2012 tax forms irs   Withhold income tax on tips from wages earned by the employee or from other funds the employee makes available. 2012 tax forms irs If an employee receives regular wages and reports tips, figure income tax withholding as if the tips were supplemental wages. 2012 tax forms irs If you have not withheld income tax from the regular wages, add the tips to the regular wages. 2012 tax forms irs Then withhold income tax on the total. 2012 tax forms irs If you withheld income tax from the regular wages, you can withhold on the tips by method 1-a or 1-b discussed earlier in this section under Supplemental wages identified separately from regular wages. 2012 tax forms irs Vacation pay. 2012 tax forms irs   Vacation pay is subject to withholding as if it were a regular wage payment. 2012 tax forms irs When vacation pay is in addition to regular wages for the vacation period, treat it as a supplemental wage payment. 2012 tax forms irs If the vacation pay is for a time longer than your usual payroll period, spread it over the pay periods for which you pay it. 2012 tax forms irs 8. 2012 tax forms irs Payroll Period Your payroll period is a period of service for which you usually pay wages. 2012 tax forms irs When you have a regular payroll period, withhold income tax for that time period even if your employee does not work the full period. 2012 tax forms irs No regular payroll period. 2012 tax forms irs   When you do not have a regular payroll period, withhold the tax as if you paid wages for a daily or miscellaneous payroll period. 2012 tax forms irs Figure the number of days (including Sundays and holidays) in the period covered by the wage payment. 2012 tax forms irs If the wages are unrelated to a specific length of time (for example, commissions paid on completion of a sale), count back the number of days from the payment period to the latest of: The last wage payment made during the same calendar year, The date employment began, if during the same calendar year, or January 1 of the same year. 2012 tax forms irs Employee paid for period less than 1 week. 2012 tax forms irs   When you pay an employee for a period of less than one week, and the employee signs a statement under penalties of perjury indicating he or she is not working for any other employer during the same week for wages subject to withholding, figure withholding based on a weekly payroll period. 2012 tax forms irs If the employee later begins to work for another employer for wages subject to withholding, the employee must notify you within 10 days. 2012 tax forms irs You then figure withholding based on the daily or miscellaneous period. 2012 tax forms irs 9. 2012 tax forms irs Withholding From Employees' Wages Income Tax Withholding Using Form W-4 to figure withholding. 2012 tax forms irs   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. 2012 tax forms irs Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. 2012 tax forms irs Advise your employees to use the IRS Withholding Calculator on the IRS website at www. 2012 tax forms irs irs. 2012 tax forms irs gov/individuals for help in determining how many withholding allowances to claim on their Forms W-4. 2012 tax forms irs   Ask all new employees to give you a signed Form W-4 when they start work. 2012 tax forms irs Make the form effective with the first wage payment. 2012 tax forms irs If a new employee does not give you a completed Form W-4, withhold income tax as if he or she is single, with no withholding allowances. 2012 tax forms irs Form in Spanish. 2012 tax forms irs   You can provide Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, in place of Form W-4, to your Spanish-speaking employees. 2012 tax forms irs For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). 2012 tax forms irs The rules discussed in this section that apply to Form W-4 also apply to Formulario W-4(SP). 2012 tax forms irs Electronic system to receive Form W-4. 2012 tax forms irs   You may establish a system to electronically receive Forms W-4 from your employees. 2012 tax forms irs See Regulations section 31. 2012 tax forms irs 3402(f)(5)-1(c) for more information. 2012 tax forms irs Effective date of Form W-4. 2012 tax forms irs   A Form W-4 remains in effect until the employee gives you a new one. 2012 tax forms irs When you receive a new Form W-4 from an employee, do not adjust withholding for pay periods before the effective date of the new form. 2012 tax forms irs If an employee gives you a Form W-4 that replaces an existing Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. 2012 tax forms irs For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. 2012 tax forms irs A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. 2012 tax forms irs Successor employer. 2012 tax forms irs   If you are a successor employer (see Successor employer , later in this section), secure new Forms W-4 from the transferred employees unless the “Alternative Procedure” in section 5 of Revenue Procedure 2004-53 applies. 2012 tax forms irs See Revenue Procedure 2004-53, 2004-34 I. 2012 tax forms irs R. 2012 tax forms irs B. 2012 tax forms irs 320, available at www. 2012 tax forms irs irs. 2012 tax forms irs gov/irb/2004-34_IRB/ar13. 2012 tax forms irs html. 2012 tax forms irs Completing Form W-4. 2012 tax forms irs   The amount of any federal income tax withholding must be based on marital status and withholding allowances. 2012 tax forms irs Your employees may not base their withholding amounts on a fixed dollar amount or percentage. 2012 tax forms irs However, an employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. 2012 tax forms irs Employees may claim fewer withholding allowances than they are entitled to claim. 2012 tax forms irs They may wish to claim fewer allowances to ensure they have enough withholding or to offset the tax on other sources of taxable income not subject to withholding. 2012 tax forms irs See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. 2012 tax forms irs Along with Form W-4, you may wish to order Publication 505 for use by your employees. 2012 tax forms irs Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. 2012 tax forms irs If they require additional withholding, they should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. 2012 tax forms irs Exemption from federal income tax withholding. 2012 tax forms irs   Generally, an employee may claim exemption from federal income tax withholding because he or she had no income tax liability last year and expects none this year. 2012 tax forms irs See the Form W-4 instructions for more information. 2012 tax forms irs However, the wages are still subject to social security and Medicare taxes. 2012 tax forms irs See also Invalid Forms W-4 , later in this section. 2012 tax forms irs   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. 2012 tax forms irs To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. 2012 tax forms irs If the employee does not give you a new Form W-4 by February 15, begin withholding based on the last Form W-4 for the employee that did not claim an exemption from withholding or, if one was not filed, then withhold tax as if he or she is single with zero withholding allowances. 2012 tax forms irs If the employee provides a new Form W-4 claiming exemption from withholding on February 16 or later, you may apply it to future wages but do not refund any taxes already withheld. 2012 tax forms irs Withholding income taxes on the wages of nonresident alien employees. 2012 tax forms irs   In general, you must withhold federal income taxes on the wages of nonresident alien employees. 2012 tax forms irs However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. 2012 tax forms irs Also see section 3 of Publication 51 (Circular A), Agricultural Employer's Tax Guide, for guidance on H-2A visa workers. 2012 tax forms irs Withholding adjustment for nonresident alien employees. 2012 tax forms irs   For 2014, apply the procedure discussed next to figure the amount of income tax to withhold from the wages of nonresident alien employees performing services within the United States. 2012 tax forms irs Nonresident alien students from India and business apprentices from India are not subject to this procedure. 2012 tax forms irs Instructions. 2012 tax forms irs   To figure how much income tax to withhold from the wages paid to a nonresident alien employee performing services in the United States, use the following steps. 2012 tax forms irs Step 1. 2012 tax forms irs   Add to the wages paid to the nonresident alien employee for the payroll period the amount shown in the chart below for the applicable payroll period. 2012 tax forms irs    Amount to Add to Nonresident Alien Employee's Wages for Calculating Income Tax Withholding Only   Payroll Period Add Additional     Weekly $ 43. 2012 tax forms irs 30     Biweekly 86. 2012 tax forms irs 50     Semimonthly 93. 2012 tax forms irs 80     Monthly 187. 2012 tax forms irs 50     Quarterly 562. 2012 tax forms irs 50     Semiannually 1,125. 2012 tax forms irs 00     Annually 2,250. 2012 tax forms irs 00     Daily or Miscellaneous (each day of the payroll period) 8. 2012 tax forms irs 70   Step 2. 2012 tax forms irs   Use the amount figured in Step 1 and the number of withholding allowances claimed (generally limited to one allowance) to figure income tax withholding. 2012 tax forms irs Determine the value of withholding allowances by multiplying the number of withholding allowances claimed by the appropriate amount from Table 5. 2012 tax forms irs Percentage Method—2014 Amount for One Withholding Allowance shown on page 41. 2012 tax forms irs If you are using the Percentage Method Tables for Income Tax Withholding, provided on pages 43–44, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure the income tax withholding. 2012 tax forms irs If you are using the Wage Bracket Method for Income Tax Withholding, provided on pages 45–64, use the amount figured in Step 1 and the number of withholding allowances to figure income tax withholding. 2012 tax forms irs The amounts from the chart above are added to wages solely for calculating income tax withholding on the wages of the nonresident alien employee. 2012 tax forms irs The amounts from the chart should not be included in any box on the employee's Form W-2 and do not increase the income tax liability of the employee. 2012 tax forms irs Also, the amounts from the chart do not increase the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. 2012 tax forms irs This procedure only applies to nonresident alien employees who have wages subject to income tax withholding. 2012 tax forms irs Example. 2012 tax forms irs An employer using the percentage method of withholding pays wages of $500 for a biweekly payroll period to a married nonresident alien employee. 2012 tax forms irs The nonresident alien has properly completed Form W-4, entering marital status as “single” with one withholding allowance and indicating status as a nonresident alien on Form W-4, line 6 (see Nonresident alien employee's Form W-4 , later in this section). 2012 tax forms irs The employer determines the wages to be used in the withholding tables by adding to the $500 amount of wages paid the amount of $86. 2012 tax forms irs 50 from the chart under Step 1 ($586. 2012 tax forms irs 50 total). 2012 tax forms irs The employer then applies the applicable tables to determine the income tax withholding for nonresident aliens (see Step 2 ). 2012 tax forms irs Reminder: If you use the Percentage Method Tables for Income Tax Withholding, reduce the amount figured in Step 1 by the value of withholding allowances and use that reduced amount to figure income tax withholding. 2012 tax forms irs The $86. 2012 tax forms irs 50 added to wages for calculating income tax withholding is not reported on Form W-2, and does not increase the income tax liability of the employee. 2012 tax forms irs Also, the $86. 2012 tax forms irs 50 added to wages does not affect the social security tax or Medicare tax liability of the employer or the employee, or the FUTA tax liability of the employer. 2012 tax forms irs Supplemental wage payment. 2012 tax forms irs   This procedure for determining the amount of income tax withholding does not apply to a supplemental wage payment (see section 7) if the 39. 2012 tax forms irs 6% mandatory flat rate withholding applies or if the 25% optional flat rate withholding is being used to calculate income tax withholding on the supplemental wage payment. 2012 tax forms irs Nonresident alien employee's Form W-4. 2012 tax forms irs   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding, Request withholding as if they are single, regardless of their actual marital status, Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or South Korea, or a student or business apprentice from India, he or she may claim more than one allowance), and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. 2012 tax forms irs   If you maintain an electronic Form W-4 system, you should provide a field for nonresident aliens to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. 2012 tax forms irs A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. 2012 tax forms irs Form 8233. 2012 tax forms irs   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. 2012 tax forms irs See Publication 515 for details. 2012 tax forms irs IRS review of requested Forms W-4. 2012 tax forms irs   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. 2012 tax forms irs You may also be directed to send certain Forms W-4 to the IRS. 2012 tax forms irs You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. 2012 tax forms irs Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. 2012 tax forms irs The IRS may also require you to submit copies of Form W-4 to the IRS as directed by Treasury Decision 9337, 2007-35 I. 2012 tax forms irs R. 2012 tax forms irs B. 2012 tax forms irs 455, which is available at www. 2012 tax forms irs irs. 2012 tax forms irs gov/irb/2007-35_IRB/ar10. 2012 tax forms irs html. 2012 tax forms irs When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. 2012 tax forms irs After submitting a copy of a requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). 2012 tax forms irs However, if the IRS later notifies you in writing the employee is not entitled to claim exemption from withholding or a claimed number of withholding allowances, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the IRS notice (commonly referred to as a "lock-in letter
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Phone Forums - Retirement Plans

Free phone forums featuring IRS employees discussing retirement plan topics.

Upcoming Phone Forums

Check back for upcoming phone forums.


Continuing Education (CE) Credits

  • Enrolled Agents and Enrolled Retirement Plan Agents may earn CE credit for attending the entire phone forum. The forum is also intended to meet the CE requirements for Enrolled Actuaries, but the final decision rests with the Joint Board for the Enrollment of Actuaries. Other professional groups should consult with their licensing agencies regarding CE credit.
  • Participants must register individually and use their own assigned User ID to receive CE credit.
  • Each participant must use an individual phone line to establish attendance and the length of time attending the forum.
  • A Certificate of Completion will be emailed to the participants who meet the attendance requirement about a week after the forum.
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If you have question(s), please contact us at ep.phoneforum@irs.gov.



Recently Held Phone Forums

An Overview of the 2013 Cumulative List of Changes in Plan Qualification- March 13, 2014 - Discussed the list of changes plan sponsors and practitioners must make to a plan before submitting determination letter applications beginning February 1, 2014 (Notice 2013-84). 
Handouts: An Overview of the 2013 Cumulative List of Changes in Plan Qualification presentation and Notice 2013-84

Upcoming Employee Plans Guidance Phone Forum - February 26, 2014 (scheduled previously for October 29, 2013) - Reviewed retirement benefit items on the 2013-2014 Priority Guidance Plan released on August 9 and other projects in EP Technical Guidance.
Handout: Employee Plans Technical Guidance

Ethical Standards of Employee Benefits Practice – What to Ask and Say to Clients, and What to Tell the IRS - January 29, 2014 (rebroadcast February 6, 2014) - Discussed an employee benefits practitioner’s ethical standards of conduct under Circular 230 for communications with clients and the IRS. 
Handout: Ethical Standards for Employee Benefits Practitioners

The Employee Plans Team Audit Program - November 21, 2013 -(transcript) - Discussed EPTA, our large case audit program. 
Handout: The Employee Plans Team Audit Program Presentation

How to prepare for an IRS Employee Plans Audit - August 29, 2013 - Two Sessions - Discussed latest information about the Employee Plans Examinations process.
Handout: Tools to Prepare for an Audit presentation

The Importance of Good Internal Controls - August 8, 2013 - (transcript) - Discussed how effective internal controls are essential to preventing costly mistakes that could jeopardize a retirement plan’s tax-favored status.
Handout: The Importance of Good Internal Controls presentation

EPCRS: Correcting 401(k) Plan Mistakes – Two Sessions - July 25, 2013 - (transcript) - Discussed correcting common 401(k) plan mistakes under EPCRS Revenue Procedure 2013-12, and how to find, fix and avoid them.
Handout: EPCRS: Correcting 401(k) Plan Mistakes presentation

What You Need to Know about the 403(b) Pre-Approved Plan Program - June 25, 2013 - (audio) - Discussed the upcoming 403(b) Pre-Approved Plan Program outlined in Revenue Procedure 2013-22.
Handout: 403(b) Pre-Approved Plan Program Presentation

403(b) Corrections and Examination Trends - May 23, 2013 - (audio) Discussed Revenue Procedure 2013-12 including guidance on correcting 403(b) plan failures and updates to the Employee Plans Compliance Resolution System.
Handout: 403(b) Plan Correction Issues Presentation

What You Need to Know About the IRS Final 401(k) Questionnaire Report and Next Steps - May 13, 2013 - Discussed significant findings and next steps (including outreach, guidance and compliance projects) and a new self-audit tool to help 401(k) plan sponsors avoid costly mistakes. 
Handout: Final 401(k) Questionnaire Report Presentation (Updated)

Defined Benefit Plan Update - April 23, 2013 - (transcript) - Discussed recent developments affecting defined benefit plans.
Handout: Defined Benefit Plan Update Presentation

International Issues Involving Retirement Plans in U.S. Territories  - March 21, 2013 - Discussed audit results and recurring issues of retirement plans in U.S. Territories, and Employee Plans’ 2013 fiscal year strategies and operating priorities.
Handout: International Issues Involving Retirement Plans in U.S. Territories Presentation

Overview of the 2012 Cumulative List of Plan Qualification Changes - February 28, 2013 - (audio) - Discussed the list of plan changes to by plan sponsors and practitioners submitting determination letter applications during the period beginning February 1, 2013 (Notice 2012-76).
Handout: Overview of the 2012 Cumulative List of Plan Qualification Changes Presentation

Employee Plans Compliance Resolution System Changes - February 21, 2013 - Session #1 & 2 - (audio) - Discussed Revenue Procedure 2013-12 and the various changes to the IRS correction programs.
Handout: EPCRS Changes Presentation

Ethical Standards for and Accountability of Practitioners Offering Tax Advice Relating to Employee Benefit Plans - February 13, 2013 (audio) - Discussed professional standards of conduct applicable to, and the accountability of, individuals that provide tax advice relating to employee benefit plans.  
Handout: Ethical Standards Presentation

Retirement plans can make loans, hardship distributions to Sandy victims - December 11, 2012 (audio)- Discussed Announcement 2012-44 and the options available to employees their families and plan sponsors.
Handout: Hurricane Sandy Relief Presentation

MAP-21: Changes to Segment Rates - September 27, 2012 - (audio) - Discussed the Moving Ahead for Progress in the 21st Century Act (MAP-21) and recently released related guidance.
Handout: MAP-21 Presentation

EPCRS: Correction of 401(k) Plan Mistakes (September 7, 2012) - (audio) - How to correct common mistakes in 401(k) plans.
Handouts: Correction Methods for 401(k) Failures Presentation

Lifetime Annuity Guidance (August 28, 2012) (Audio and Transcript) - Guidance designed to encourage lifetime annuity options for retirees. The presentation included Revenue Ruling 2012-3, Revenue Ruling 2012-4, and proposed regulations under sections 401(a)(9) and 417(e)(3) of the Code.
Handout: Lifetime Annuity Guidance Presentation

Operating Under the Written Plan Requirements and Common Issues Identified in 403(b) Plans (June 12, 2012) (transcript)- Frequent questions pertaining to the 403(b) written plan requirements and how the IRS is approaching the written plan requirement under audit.
Handouts: Operating Under the Written Plan Requirements and Common Issues Identified in 403(b) Plans Presentation

Governmental Plan Proposed Guidance (May 15, 2012) (transcript) - Proposed drafts of the general guidance on possible standards for determining if a retirement plan is a governmental plan under IRC section 414(d).

Indian Tribal Government Retirement Plans (April 24, 2012) - Possible standards for determining whether a plan of an Indian Tribal Government is a governmental plan within the meaning of section 414(d) of the Code.

EP Determination Letter Program Update (March 30, 2012) (transcript) - Important changes to the Employee Plans determination letter program.
Handout: EP Determination Letter Program Update Presentation

401(k) Questionnaire Interim Report IRS Phone Forum (March 6, 2012) (transcript) - 401(k) Questionnaire Interim Report, its next steps, and current issues.
Handout: 401(k) Questionnaire Interim Report Presentation

Funding-Based Benefit Restrictions - (February 23, 2012) (transcript)- funding-based benefit restrictions under IRC section 436.
Handout: Funding-Based Benefit Restrictions Presentation

Self Correction Program (SCP) and Closing Agreement Program (CAP) (November 30, 2011) (transcript) - current EPCRS issues, procedures and CAP sanctions
Handout: SCP and CAP Presentation

Determination Letter Issues Regarding Employee Stock Ownership Plans (October 28, 2011) (transcript) - technical issues affecting ESOPs and recurring issues noted in ESOP determination letter submissions
Handout: Determination Letter Issues Regarding Employee Stock Ownership Plans Presentation

Current Developments and Issues from the office of Employee Plans Rulings and Agreements (September 21, 2011) (transcript) - technical guidance hot topics and voluntary compliance applications
Handout: Current Developments and Issues Presentation

Participant Loans (September 12, 2011) (transcript) - treatment of loans as distributions, taxability and IRC §4975
Handout: Participants Loans Presentation
Helpful Links: The Fix Is In: Common Plan Mistakes - Participant Loans in 401(k) Plans; The Fix Is In: Common Plan Mistakes - Plan Loan Failures and Deemed Distributions;  Retirement Plans FAQs regarding Loans

EPCRS: Plan Correction Issues (August 25, 2011)  (transcript) - recurring issues found in EPCRS and tips to avoid common mistakes
Handout: EPCRS: Plan Correction Issues Presentation

Ethics for Employee Plans Practitioners (July 29, 2011) (transcript)- ethical standards of practice before the IRS applicable to employee benefits practitioners
Handout: Ethics for Employee Plans Practitioners Presentation

Funding Standards and Relief for Single and Multiemployer Plans (April 28, 2011) (transcript) - funding standards applicable to single and multiemployer pension plans
Handout: Funding Standards Presentation

Form 5330 - Completion and Processing Tidbits (March 24, 2011) (transcript) - proper completion and processing of the Form 5330, along with ways to avoid common mistakes
Handouts:

EP Technical Guidance (March 4, 2011) (transcript) - recent published guidance and updates on current IRS initiatives
Handout: EP Technical Guidance Presentation

In-Plan Roth Rollover Phone Forum (December 20, 2010) (Transcript) - recent guidance on in-plan Roth rollovers for 401(k) and 403(b) plans
Handout: In-Plan Roth Rollover Phone Forum Presentation

Hybrid Plans (November 23, 2010) (Transcript) - new hybrid plan regulations
Handouts:

Page Last Reviewed or Updated: 14-Mar-2014

The 2012 Tax Forms Irs

2012 tax forms irs 15. 2012 tax forms irs   Estimated Tax Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Special Estimated Tax Rules for Qualified FarmersQualified Farmer Special Rules for Qualified Farmers Estimated Tax Penalty for 2013 What's New Net Investment Income Tax. 2012 tax forms irs . 2012 tax forms irs  For tax years beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). 2012 tax forms irs NIIT is a 3. 2012 tax forms irs 8% tax on the lesser of net investment income or the excess of your modified adjusted gross income (MAGI) over the threshold amount. 2012 tax forms irs NIIT may need to be included when calculating your estimated tax. 2012 tax forms irs For more information, see Publication 505,Tax Withholding and Estimated Tax. 2012 tax forms irs Additional Medicare Tax. 2012 tax forms irs  For tax years beginning in 2013, a 0. 2012 tax forms irs 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income over a threshold amount based on your filing status. 2012 tax forms irs You may need to include this amount when figuring your estimated tax. 2012 tax forms irs For more information, see Publication 505. 2012 tax forms irs Introduction Estimated tax is the method used to pay tax on income that is not subject to withholding. 2012 tax forms irs See Publication 505 for the general rules and requirements for paying estimated tax. 2012 tax forms irs If you are a qualified farmer, defined below, you are subject to the special rules covered in this chapter for paying estimated tax. 2012 tax forms irs Topics - This chapter discusses: Special estimated tax rules for qualified farmers Estimated tax penalty Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 1040 U. 2012 tax forms irs S. 2012 tax forms irs Individual Income Tax Return 1040-ES Estimated Tax for Individuals 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 16 for information about getting publications and forms. 2012 tax forms irs Special Estimated Tax Rules for Qualified Farmers Special rules apply to the payment of estimated tax by individuals who are qualified farmers. 2012 tax forms irs If you are not a qualified farmer as defined next, see Publication 505 for the estimated tax rules that apply. 2012 tax forms irs Qualified Farmer An individual is a qualified farmer for 2013 if at least two-thirds of his or her gross income from all sources for 2012 or 2013 was from farming. 2012 tax forms irs See Gross Income , next, for information on how to figure your gross income from all sources and see Gross Income From Farming , later, for information on how to figure your gross income from farming. 2012 tax forms irs See also Percentage From Farming , later, for information on how to determine the percentage of your gross income from farming. 2012 tax forms irs Gross Income Gross income is all income you receive in the form of money, goods, property, and services that is not exempt from income tax. 2012 tax forms irs On a joint return, you must add your spouse's gross income to your gross income. 2012 tax forms irs To decide whether two-thirds of your gross income was from farming, use as your gross income the total of the following income (not loss) amounts from your tax return. 2012 tax forms irs Wages, salaries, tips, etc. 2012 tax forms irs Taxable interest. 2012 tax forms irs Ordinary dividends. 2012 tax forms irs Taxable refunds, credits, or offsets of state and local income taxes. 2012 tax forms irs Alimony. 2012 tax forms irs Gross business income from Schedule C (Form 1040). 2012 tax forms irs Gross business receipts from Schedule C-EZ (Form 1040). 2012 tax forms irs Capital gains from Schedule D (Form 1040). 2012 tax forms irs Losses are not netted against gains. 2012 tax forms irs Gains on sales of business property. 2012 tax forms irs Taxable IRA distributions, pensions, annuities, and social security benefits. 2012 tax forms irs Gross rental income from Schedule E (Form 1040). 2012 tax forms irs Gross royalty income from Schedule E (Form 1040). 2012 tax forms irs Taxable net income from an estate or trust reported on Schedule E (Form 1040). 2012 tax forms irs Income from a Real Estate Mortgage Investment Conduit reported on Schedule E (Form 1040). 2012 tax forms irs Gross farm rental income from Form 4835. 2012 tax forms irs Gross farm income from Schedule F (Form 1040). 2012 tax forms irs Your distributive share of gross income from a partnership, or limited liability company treated as a partnership, from Schedule K-1 (Form 1065). 2012 tax forms irs Your pro rata share of gross income from an S corporation, from Schedule K-1 (Form 1120S). 2012 tax forms irs Unemployment compensation. 2012 tax forms irs Other income not included with any of the items listed above. 2012 tax forms irs Gross Income From Farming Gross income from farming is income from cultivating the soil or raising agricultural commodities. 2012 tax forms irs It includes the following amounts. 2012 tax forms irs Income from operating a stock, dairy, poultry, bee, fruit, or truck farm. 2012 tax forms irs Income from a plantation, ranch, nursery, range, orchard, or oyster bed. 2012 tax forms irs Crop shares for the use of your land. 2012 tax forms irs Gains from sales of draft, breeding, dairy, or sporting livestock. 2012 tax forms irs Gross income from farming is the total of the following amounts from your tax return. 2012 tax forms irs Gross farm income from Schedule F (Form 1040). 2012 tax forms irs Gross farm rental income from Form 4835. 2012 tax forms irs Gross farm income from Schedule E (Form 1040), Parts II and III. 2012 tax forms irs Gains from the sale of livestock used for draft, breeding, sport, or dairy purposes reported on Form 4797. 2012 tax forms irs For more information about income from farming, see chapter 3. 2012 tax forms irs Farm income does not include any of the following: Wages you receive as a farm employee. 2012 tax forms irs Income you receive from contract grain harvesting and hauling with workers and machines you furnish. 2012 tax forms irs Gains you receive from the sale of farm land and depreciable farm equipment. 2012 tax forms irs Percentage From Farming Figure your gross income from all sources, discussed earlier. 2012 tax forms irs Then figure your gross income from farming, discussed earlier. 2012 tax forms irs Divide your farm gross income by your total gross income to determine the percentage of gross income from farming. 2012 tax forms irs Example 1. 2012 tax forms irs Jane Smith had the following total gross income and farm gross income amounts in 2013. 2012 tax forms irs Gross Income   Total Farm Taxable interest $3,000   Dividends 500   Rental income (Sch E) 41,500   Farm income (Sch F) 75,000 $75,000 Gain (Form 4797) 5,000 5,000 Total $125,000 $80,000 Schedule D showed gain from the sale of dairy cows carried over from Form 4797 ($5,000) in addition to a loss from the sale of corporate stock ($2,000). 2012 tax forms irs However, that loss is not netted against the gain to figure Ms. 2012 tax forms irs Smith's total gross income or her gross farm income. 2012 tax forms irs Her gross farm income is 64% of her total gross income ($80,000 ÷ $125,000 = 0. 2012 tax forms irs 64). 2012 tax forms irs Special Rules for Qualified Farmers The following special estimated tax rules apply if you are a qualified farmer for 2013. 2012 tax forms irs You do not have to pay estimated tax if you file your 2013 tax return and pay all the tax due by March 3, 2014. 2012 tax forms irs You do not have to pay estimated tax if your 2013 income tax withholding (including any amount applied to your 2013 estimated tax from your 2012 return) will be at least 662/3% (. 2012 tax forms irs 6667) of the total tax shown on your 2013 tax return or 100% of the total tax shown on your 2012 return. 2012 tax forms irs If you must pay estimated tax, you are required to make only one estimated tax payment (your required annual payment) by January 15, 2014, using special rules to figure the amount of the payment. 2012 tax forms irs See Required Annual Payment , next, for details. 2012 tax forms irs Figure 15-1 presents an overview of the special estimated tax rules that apply to qualified farmers. 2012 tax forms irs Example 2. 2012 tax forms irs Assume the same fact as in Example 1. 2012 tax forms irs Ms. 2012 tax forms irs Smith's gross farm income is only 64% of her total income. 2012 tax forms irs Therefore, based on her 2013 income, she does not qualify to use the special estimated tax rules for qualified farmers. 2012 tax forms irs However, she does qualify if at least two-thirds of her 2012 gross income was from farming. 2012 tax forms irs Example 3. 2012 tax forms irs Assume the same facts as in Example 1 except that Ms. 2012 tax forms irs Smith's farm income from Schedule F was $90,000 instead of $75,000. 2012 tax forms irs This made her total gross income $140,000 ($3,000 + $500 + $41,500 + $90,000 + $5,000) and her farm gross income $95,000 ($90,000 + $5,000). 2012 tax forms irs She qualifies to use the special estimated tax rules for qualified farmers, since 67. 2012 tax forms irs 9% (at least two-thirds) of her gross income is from farming ($95,000 ÷ $140,000 = . 2012 tax forms irs 679). 2012 tax forms irs Required Annual Payment If you are a qualified farmer and must pay estimated tax for 2013, use the worksheet on Form 1040-ES to figure the amount of your required annual payment. 2012 tax forms irs Apply the following special rules for qualified farmers to the worksheet. 2012 tax forms irs On line 14a, multiply line 13c by 662/3% (. 2012 tax forms irs 6667). 2012 tax forms irs On line 14b, enter 100% of the tax shown on your 2012 tax return regardless of the amount of your adjusted gross income. 2012 tax forms irs For this purpose, the “tax shown on your 2012 tax return” is the amount on line 61 of your 2012 return modified by certain adjustments. 2012 tax forms irs For more information, see chapter 4 of Publication 505. 2012 tax forms irs Estimated Tax Penalty for 2013 If you do not pay all your required estimated tax for 2013 by January 15, 2014, or file your 2013 return and pay any tax due by March 3, 2014, you may owe a penalty. 2012 tax forms irs Use Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen, to determine if you owe a penalty. 2012 tax forms irs See the instructions for Form 2210-F. 2012 tax forms irs Figure 15-1. 2012 tax forms irs Estimated Tax for Farmers Please click here for the text description of the image. 2012 tax forms irs Figure 2–A If you receive a penalty notice, do not ignore it, even if you think it is in error. 2012 tax forms irs You may get a penalty notice even though you filed your return on time, attached Form 2210-F, and met the gross-income-from-farming requirement. 2012 tax forms irs If you receive a penalty notice for underpaying estimated tax and you think it is in error, write to the address on the notice and explain why you think the notice is in error. 2012 tax forms irs Include a computation similar to the one in Example 1 (earlier), showing that you met the gross income from farming requirement. 2012 tax forms irs Prev  Up  Next   Home   More Online Publications