File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

40 Ez Form

Amended Tax Return Form 2013Free Federal & State Tax FilingFiling Back Taxes Online FreeDo State Taxes1040ez Tax Form 20111040ez Irs GovHow To Fill Out 1040 EzFree Tax PreparationForm 1040x InstructionsFree Online TaxCan I Still File My 2011 State TaxesFile A Free Tax Extension Online1040a Tax Form For 2012How To File 2006 Taxes Online FreeH & R Block Free TaxFile Tax ReturnFederal Tax Amendment FormFree Tax Filing 2011Irs Amendment Forms1040ez Tax TableFree Fillable Forms1040x IrsTax Extension Online1040ez 2013 InstructionsFiling 2012 Taxes Online1040ez Fill In Form1040exI Need A 1040x FormHelp Filling Out 1040xH And R Block Free TaxFree Amended Tax Return Online2012 Tax Returns1040x OnlineEz Form 10402010 Amended Tax FormFree Amended Tax Return1040 Ez OnlineFile Free State Tax Return1040 Ez Efile2012 1040

40 Ez Form

40 ez form Publication 15 - Main Content Table of Contents 1. 40 ez form Employer Identification Number (EIN) 2. 40 ez form Who Are Employees?Relief provisions. 40 ez form Business Owned and Operated by Spouses 3. 40 ez form Family Employees 4. 40 ez form Employee's Social Security Number (SSN)Registering for SSNVS. 40 ez form 5. 40 ez form Wages and Other CompensationAccountable plan. 40 ez form Nonaccountable plan. 40 ez form Per diem or other fixed allowance. 40 ez form 50% test. 40 ez form Health Savings Accounts and medical savings accounts. 40 ez form Nontaxable fringe benefits. 40 ez form When fringe benefits are treated as paid. 40 ez form Valuation of fringe benefits. 40 ez form Withholding on fringe benefits. 40 ez form Depositing taxes on fringe benefits. 40 ez form 6. 40 ez form TipsOrdering rule. 40 ez form 7. 40 ez form Supplemental Wages 8. 40 ez form Payroll Period 9. 40 ez form Withholding From Employees' WagesIncome Tax Withholding Social Security and Medicare Taxes Part-Time Workers 10. 40 ez form Required Notice to Employees About the Earned Income Credit (EIC) 11. 40 ez form Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties 12. 40 ez form Filing Form 941 or Form 944 13. 40 ez form Reporting Adjustments to Form 941 or Form 944Current Period Adjustments Prior Period Adjustments Wage Repayments 14. 40 ez form Federal Unemployment (FUTA) TaxSuccessor employer. 40 ez form Household employees. 40 ez form When to deposit. 40 ez form Household employees. 40 ez form Electronic filing by reporting agents. 40 ez form 16. 40 ez form How To Use the Income Tax Withholding TablesWage Bracket Method Percentage Method Alternative Methods of Income Tax Withholding How To Get Tax Help 1. 40 ez form Employer Identification Number (EIN) If you are required to report employment taxes or give tax statements to employees or annuitants, you need an EIN. 40 ez form The EIN is a nine-digit number the IRS issues. 40 ez form The digits are arranged as follows: 00-0000000. 40 ez form It is used to identify the tax accounts of employers and certain others who have no employees. 40 ez form Use your EIN on all of the items you send to the IRS and SSA. 40 ez form For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN. 40 ez form If you do not have an EIN, you may apply for one online. 40 ez form Go to the IRS. 40 ez form gov and click on the Apply for an EIN Online link under Tools. 40 ez form 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. 40 ez form Do not use an SSN in place of an EIN. 40 ez form You should have only one EIN. 40 ez form 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). 40 ez form Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. 40 ez form The IRS will tell you which number to use. 40 ez form If you took over another employer's business (see Successor employer in section 9), do not use that employer's EIN. 40 ez form 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. 40 ez form 2. 40 ez form Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. 40 ez form See Publication 15-A for details on statutory employees and nonemployees. 40 ez form Employee status under common law. 40 ez form   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. 40 ez form This is so even when you give the employee freedom of action. 40 ez form What matters is that you have the right to control the details of how the services are performed. 40 ez form See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. 40 ez form   Generally, people in business for themselves are not employees. 40 ez form For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. 40 ez form However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. 40 ez form   If an employer-employee relationship exists, it does not matter what it is called. 40 ez form The employee may be called an agent or independent contractor. 40 ez form It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. 40 ez form Statutory employees. 40 ez form   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. 40 ez form 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. 40 ez form An agent (or commission) driver who delivers food, beverages (other than milk), laundry, or dry cleaning for someone else. 40 ez form A full-time life insurance salesperson who sells primarily for one company. 40 ez form 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. 40 ez form 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. 40 ez form The orders must be for merchandise for resale or supplies for use in the customer's business. 40 ez form The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. 40 ez form    Statutory nonemployees. 40 ez form   Direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. 40 ez form They are generally treated as self-employed for all federal tax purposes, including income and employment taxes. 40 ez form H-2A agricultural workers. 40 ez form   On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. 40 ez form Treating employees as nonemployees. 40 ez form   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. 40 ez form 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. 40 ez form The applicable rates depend on whether you filed required Forms 1099. 40 ez form 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. 40 ez form You are liable for the income tax withholding regardless of whether the employee paid income tax on the wages. 40 ez form You continue to owe the full employer share of social security and Medicare taxes. 40 ez form The employee remains liable for the employee share of social security and Medicare taxes. 40 ez form See Internal Revenue Code section 3509 for details. 40 ez form Also see the Instructions for Form 941-X. 40 ez form   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. 40 ez form Section 3509 is not available for reclassifying statutory employees. 40 ez form See Statutory employees , earlier in this section. 40 ez form   If the employer issued required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. 40 ez form 2% plus 20% of the employee rate (see the Instructions for Form 941-X). 40 ez form For Medicare taxes; employer rate of 1. 40 ez form 45% plus 20% of the employee rate of 1. 40 ez form 45%, for a total rate of 1. 40 ez form 74% of wages. 40 ez form For Additional Medicare Tax; 0. 40 ez form 18% (20% of the employee rate of 0. 40 ez form 9%) of wages subject to Additional Medicare Tax. 40 ez form For income tax withholding, the rate is 1. 40 ez form 5% of wages. 40 ez form   If the employer did not issue required information returns, the section 3509 rates are: For social security taxes; employer rate of 6. 40 ez form 2% plus 40% of the employee rate (see the Instructions for Form 941-X). 40 ez form For Medicare taxes; employer rate of 1. 40 ez form 45% plus 40% of the employee rate of 1. 40 ez form 45%, for a total rate of 2. 40 ez form 03% of wages. 40 ez form For Additional Medicare Tax; 0. 40 ez form 36% (40% of the employee rate of 0. 40 ez form 9%) of wages subject to Additional Medicare Tax. 40 ez form For income tax withholding, the rate is 3. 40 ez form 0% of wages. 40 ez form Relief provisions. 40 ez form   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. 40 ez form 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. 40 ez form You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. 40 ez form See Publication 1976, Do You Qualify for Relief Under Section 530. 40 ez form IRS help. 40 ez form   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. 40 ez form Voluntary Classification Settlement Program (VCSP). 40 ez form   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. 40 ez form To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). 40 ez form For more information visit IRS. 40 ez form gov and enter “VCSP” in the search box. 40 ez form 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. 40 ez form See Publication 541, Partnerships, for more details. 40 ez form The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. 40 ez form Exception—Qualified joint venture. 40 ez form   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. 40 ez form 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). 40 ez form   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. 40 ez form Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. 40 ez form   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. 40 ez form 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. 40 ez form Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. 40 ez form 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. 40 ez form    Note. 40 ez form If your spouse is your employee, not your partner, see One spouse employed by another in section 3. 40 ez form   For more information on qualified joint ventures, visit IRS. 40 ez form gov and enter “qualified joint venture” in the search box. 40 ez form Exception—Community income. 40 ez form   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. 40 ez form S. 40 ez form possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. 40 ez form You may still make an election to be taxed as a qualified joint venture instead of a partnership. 40 ez form See Exception—Qualified joint venture , earlier. 40 ez form 3. 40 ez form Family Employees Child employed by parents. 40 ez form   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. 40 ez form 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. 40 ez form However, see Covered services of a child or spouse , later in this section. 40 ez form 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. 40 ez form 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. 40 ez form One spouse employed by another. 40 ez form   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. 40 ez form 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. 40 ez form Covered services of a child or spouse. 40 ez form   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. 40 ez form Parent employed by son or daughter. 40 ez form   When the employer is a son or daughter employing his or her parent the following rules apply. 40 ez form 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. 40 ez form 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. 40 ez form    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. 40 ez form   Payments made to a parent employed by his or her child are not subject to FUTA tax, regardless of the type of services provided. 40 ez form 4. 40 ez form 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. 40 ez form This requirement also applies to resident and nonresident alien employees. 40 ez form You should ask your employee to show you his or her social security card. 40 ez form The employee may show the card if it is available. 40 ez form Do not accept a social security card that says “Not valid for employment. 40 ez form ” A social security number issued with this legend does not permit employment. 40 ez form You may, but are not required to, photocopy the social security card if the employee provides it. 40 ez form 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. 40 ez form See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. 40 ez form Applying for a social security card. 40 ez form   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. 40 ez form You can get Form SS-5 at SSA offices, by calling 1-800-772-1213, or from the SSA website at www. 40 ez form socialsecurity. 40 ez form gov/online/ss-5. 40 ez form html. 40 ez form The employee must complete and sign Form SS-5; it cannot be filed by the employer. 40 ez form 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. 40 ez form Applying for a social security number. 40 ez form   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. 40 ez form If you are filing electronically, enter all zeros (000-00-000) in the social security number field. 40 ez form 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. 40 ez form Furnish copies B, C, and 2 of Form W-2c to the employee. 40 ez form 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. 40 ez form For more information, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. 40 ez form socialsecurity. 40 ez form gov/employer. 40 ez form Advise your employee to correct the SSN on his or her original Form W-2. 40 ez form Correctly record the employee's name and SSN. 40 ez form   Record the name and number of each employee as they are shown on the employee's social security card. 40 ez form 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. 40 ez form 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. 40 ez form 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. 40 ez form 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. 40 ez form IRS individual taxpayer identification numbers (ITINs) for aliens. 40 ez form   Do not accept an ITIN in place of an SSN for employee identification or for work. 40 ez form An ITIN is only available to resident and nonresident aliens who are not eligible for U. 40 ez form S. 40 ez form employment and need identification for other tax purposes. 40 ez form 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). 40 ez form    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. 40 ez form 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. 40 ez form Do not use an ITIN in place of an SSN on Form W-2. 40 ez form Verification of social security numbers. 40 ez form   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. 40 ez form Visit www. 40 ez form socialsecurity. 40 ez form gov/employer/ssnv. 40 ez form htm for more information. 40 ez form Registering for SSNVS. 40 ez form   You must register online and receive authorization from your employer to use SSNVS. 40 ez form To register, visit SSA's website at www. 40 ez form ssa. 40 ez form gov/employer and click on the Business Services Online link. 40 ez form Follow the registration instructions to obtain a user identification (ID) and password. 40 ez form You will need to provide the following information about yourself and your company. 40 ez form Name. 40 ez form SSN. 40 ez form Date of birth. 40 ez form Type of employer. 40 ez form EIN. 40 ez form Company name, address, and telephone number. 40 ez form Email address. 40 ez form   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. 40 ez form You must enter the activation code online to use SSNVS. 40 ez form 5. 40 ez form Wages and Other Compensation Wages subject to federal employment taxes generally include all pay you give to an employee for services performed. 40 ez form The pay may be in cash or in other forms. 40 ez form It includes salaries, vacation allowances, bonuses, commissions, and fringe benefits. 40 ez form It does not matter how you measure or make the payments. 40 ez form 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. 40 ez form Also, compensation paid to a former employee for services performed while still employed is wages subject to employment taxes. 40 ez form More information. 40 ez form   See section 6 for a discussion of tips and section 7 for a discussion of supplemental wages. 40 ez form Also, see section 15 for exceptions to the general rules for wages. 40 ez form Publication 15-A provides additional information on wages, including nonqualified deferred compensation, and other compensation. 40 ez form 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. 40 ez form Employee business expense reimbursements. 40 ez form   A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees' business expenses. 40 ez form How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. 40 ez form If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement. 40 ez form   These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee. 40 ez form Accountable plan. 40 ez form   To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules. 40 ez form They must have paid or incurred deductible expenses while performing services as your employees. 40 ez form 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. 40 ez form They must substantiate these expenses to you within a reasonable period of time. 40 ez form They must return any amounts in excess of substantiated expenses within a reasonable period of time. 40 ez form   Amounts paid under an accountable plan are not wages and are not subject to income, social security, Medicare, and FUTA taxes. 40 ez form   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. 40 ez form 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. 40 ez form   A reasonable period of time depends on the facts and circumstances. 40 ez form 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. 40 ez form 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. 40 ez form Nonaccountable plan. 40 ez form   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. 40 ez form 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. 40 ez form   See section 7 for more information on supplemental wages. 40 ez form Per diem or other fixed allowance. 40 ez form   You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. 40 ez form In these cases, your employee is considered to have accounted to you if your reimbursement does not exceed rates established by the Federal Government. 40 ez form The 2013 standard mileage rate for auto expenses was 56. 40 ez form 5 cents per mile. 40 ez form The rate for 2014 is 56 cents per mile. 40 ez form   The government per diem rates for meals and lodging in the continental United States are listed in Publication 1542, Per Diem Rates. 40 ez form 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). 40 ez form   If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. 40 ez form This excess amount is subject to income tax withholding and payment of social security, Medicare, and FUTA taxes. 40 ez form Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L. 40 ez form ” Wages not paid in money. 40 ez form   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. 40 ez form ” Payments in kind may be in the form of goods, lodging, food, clothing, or services. 40 ez form 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. 40 ez form   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. 40 ez form Withhold income tax on these payments only if you and the employee agree to do so. 40 ez form 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. 40 ez form Moving expenses. 40 ez form   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. 40 ez form Reimbursed and employer-paid nonqualified moving expenses are includible in income and are subject to employment taxes and income tax withholding. 40 ez form For more information on moving expenses, see Publication 521, Moving Expenses. 40 ez form Meals and lodging. 40 ez form   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. 40 ez form 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. 40 ez form    “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. 40 ez form 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. 40 ez form   However, whether meals or lodging are provided for the convenience of the employer depends on all of the facts and circumstances. 40 ez form A written statement that the meals or lodging are for your convenience is not sufficient. 40 ez form 50% test. 40 ez form   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. 40 ez form 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. 40 ez form For more information, see Publication 15-B. 40 ez form Health insurance plans. 40 ez form   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. 40 ez form Generally, this exclusion also applies to qualified long-term care insurance contracts. 40 ez form 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). 40 ez form 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. 40 ez form See Announcement 92-16 for more information. 40 ez form You can find Announcement 92-16 on page 53 of Internal Revenue Bulletin 1992-5. 40 ez form Health Savings Accounts and medical savings accounts. 40 ez form   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. 40 ez form To the extent it is not reasonable to believe they will be excludable, your contributions are subject to these taxes. 40 ez form 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. 40 ez form 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. 40 ez form For more information, see the Instructions for Form 8889, Health Savings Accounts (HSAs). 40 ez form Medical care reimbursements. 40 ez form   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. 40 ez form See Publication 15-B for an exception for highly compensated employees. 40 ez form Differential wage payments. 40 ez form   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. 40 ez form   Differential wage payments are wages for income tax withholding, but are not subject to social security, Medicare, or FUTA taxes. 40 ez form Employers should report differential wage payments in box 1 of Form W-2. 40 ez form For more information about the tax treatment of differential wage payments, visit IRS. 40 ez form gov and enter “employees in a combat zone” in the search box. 40 ez form Fringe benefits. 40 ez form   You generally must include fringe benefits in an employee's gross income (but see Nontaxable fringe benefits next). 40 ez form The benefits are subject to income tax withholding and employment taxes. 40 ez form 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. 40 ez form 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. 40 ez form There are other special rules you and your employees may use to value certain fringe benefits. 40 ez form See Publication 15-B for more information. 40 ez form Nontaxable fringe benefits. 40 ez form   Some fringe benefits are not taxable (or are minimally taxable) if certain conditions are met. 40 ez form See Publication 15-B for details. 40 ez form The following are some examples of nontaxable fringe benefits. 40 ez form Services provided to your employees at no additional cost to you. 40 ez form Qualified employee discounts. 40 ez form Working condition fringes that are property or services the employee could deduct as a business expense if he or she had paid for it. 40 ez form Examples include a company car for business use and subscriptions to business magazines. 40 ez form 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). 40 ez form Qualified transportation fringes subject to specified conditions and dollar limitations (including transportation in a commuter highway vehicle, any transit pass, and qualified parking). 40 ez form Qualified moving expense reimbursement. 40 ez form See Moving expenses , earlier in this section, for details. 40 ez form The use of on-premises athletic facilities, if substantially all of the use is by employees, their spouses, and their dependent children. 40 ez form Qualified tuition reduction an educational organization provides to its employees for education. 40 ez form For more information, see Publication 970, Tax Benefits for Education. 40 ez form Employer-provided cell phones provided primarily for a noncompensatory business reason. 40 ez form   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. 40 ez form No-additional-cost services. 40 ez form Qualified employee discounts. 40 ez form Meals provided at an employer operated eating facility. 40 ez form Reduced tuition for education. 40 ez form  For more information, including the definition of a highly compensated employee, see Publication 15-B. 40 ez form When fringe benefits are treated as paid. 40 ez form   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. 40 ez form You do not have to make a formal choice of payment dates or notify the IRS of the dates you choose. 40 ez form You do not have to make this choice for all employees. 40 ez form 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. 40 ez form See Publication 15-B for more information, including a discussion of the special accounting rule for fringe benefits provided during November and December. 40 ez form Valuation of fringe benefits. 40 ez form   Generally, you must determine the value of fringe benefits no later than January 31 of the next year. 40 ez form Before January 31, you may reasonably estimate the value of the fringe benefits for purposes of withholding and depositing on time. 40 ez form Withholding on fringe benefits. 40 ez form   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. 40 ez form However, see Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages during the calendar year in section 7. 40 ez form   You may choose not to withhold income tax on the value of an employee's personal use of a vehicle you provide. 40 ez form You must, however, withhold social security and Medicare taxes on the use of the vehicle. 40 ez form See Publication 15-B for more information on this election. 40 ez form Depositing taxes on fringe benefits. 40 ez form   Once you choose when fringe benefits are paid, you must deposit taxes in the same deposit period you treat the fringe benefits as paid. 40 ez form To avoid a penalty, deposit the taxes following the general deposit rules for that deposit period. 40 ez form   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. 40 ez form See Valuation of fringe benefits , earlier. 40 ez form If you underestimated the value and deposited too little, you may be subject to a failure-to-deposit penalty. 40 ez form See section 11 for information on deposit penalties. 40 ez form   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. 40 ez form However, you must recover the income taxes before April 1 of the following year. 40 ez form Sick pay. 40 ez form   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. 40 ez form These amounts are sometimes paid by a third party, such as an insurance company or an employees' trust. 40 ez form In either case, these payments are subject to social security, Medicare, and FUTA taxes. 40 ez form 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. 40 ez form The payments are always subject to federal income tax. 40 ez form See Publication 15-A for more information. 40 ez form 6. 40 ez form Tips Tips your employee receives from customers are generally subject to withholding. 40 ez form Your employee must report cash tips to you by the 10th of the month after the month the tips are received. 40 ez form 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. 40 ez form Both directly and indirectly tipped employees must report tips to you. 40 ez form No report is required for months when tips are less than $20. 40 ez form Your employee reports the tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. 40 ez form 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. 40 ez form 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. 40 ez form You are permitted to establish a system for electronic tip reporting by employees. 40 ez form See Regulations section 31. 40 ez form 6053-1(d). 40 ez form Collecting taxes on tips. 40 ez form   You must collect income tax, employee social security tax, and employee Medicare tax on the employee's tips. 40 ez form 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. 40 ez form If an employee reports to you in writing $20 or more of tips in a month, the tips are also subject to FUTA tax. 40 ez form   You can collect these taxes from the employee's wages or from other funds he or she makes available. 40 ez form See Tips treated as supplemental wages in section 7 for more information. 40 ez form 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. 40 ez form You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the limit. 40 ez form You are responsible for the employer Medicare tax for the whole year on all wages and tips. 40 ez form File Form 941 or Form 944 to report withholding and employment taxes on tips. 40 ez form Ordering rule. 40 ez form   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. 40 ez form If there are not enough funds available, withhold taxes in the following order. 40 ez form Withhold on regular wages and other compensation. 40 ez form Withhold social security and Medicare taxes on tips. 40 ez form Withhold income tax on tips. 40 ez form Reporting tips. 40 ez form   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). 40 ez form Report an adjustment on Form 941, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. 40 ez form Enter the amount of uncollected social security tax and Medicare tax on Form W-2, box 12, with codes “A” and “B. 40 ez form ” Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. 40 ez form See section 13 and the General Instructions for Forms W-2 and W-3. 40 ez form   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. 40 ez form See Revenue Ruling 2012-18, 2012-26 I. 40 ez form R. 40 ez form B. 40 ez form 1032, available at www. 40 ez form irs. 40 ez form gov/irb/2012-26_IRB/ar07. 40 ez form html. 40 ez form Allocated tips. 40 ez form   If you operate a large food or beverage establishment, you must report allocated tips under certain circumstances. 40 ez form However, do not withhold income, social security, or Medicare taxes on allocated tips. 40 ez form   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. 40 ez form   The tips may be allocated by one of three methods—hours worked, gross receipts, or good faith agreement. 40 ez form 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. 40 ez form For information on filing Form 8027 electronically with the IRS, see Publication 1239. 40 ez form Tip Rate Determination and Education Program. 40 ez form   Employers may participate in the Tip Rate Determination and Education Program. 40 ez form 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. 40 ez form The two agreements are the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). 40 ez form A tip agreement, the Gaming Industry Tip Compliance Agreement (GITCA), is available for the gaming (casino) industry. 40 ez form To get more information about TRDA and TRAC agreements, see Publication 3144, Tips on Tips. 40 ez form Additionally, visit IRS. 40 ez form gov and enter “MSU tips” in the search box to get more information about GITCA, TRDA, or TRAC agreements. 40 ez form 7. 40 ez form Supplemental Wages Supplemental wages are wage payments to an employee that are not regular wages. 40 ez form 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. 40 ez form Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. 40 ez form How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular wages. 40 ez form See Regulations section 31. 40 ez form 3402(g)-1 for additional guidance for wages paid after January 1, 2007. 40 ez form Also see Revenue Ruling 2008-29, 2008-24 I. 40 ez form R. 40 ez form B. 40 ez form 1149, available at www. 40 ez form irs. 40 ez form gov/irb/2008-24_IRB/ar08. 40 ez form html. 40 ez form Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. 40 ez form   Special rules apply to the extent supplemental wages paid to any one employee during the calendar year exceed $1 million. 40 ez form 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. 40 ez form 6% (or the highest rate of income tax for the year). 40 ez form Withhold using the 39. 40 ez form 6% rate without regard to the employee's Form W-4. 40 ez form In determining supplemental wages paid to the employee during the year, include payments from all businesses under common control. 40 ez form For more information, see Treasury Decision 9276, 2006-37 I. 40 ez form R. 40 ez form B. 40 ez form 423, available at www. 40 ez form irs. 40 ez form gov/irb/2006-37_IRB/ar09. 40 ez form html. 40 ez form Withholding on supplemental wage payments to an employee who does not receive $1 million of supplemental wages during the calendar year. 40 ez form   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. 40 ez form Supplemental wages combined with regular wages. 40 ez form   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. 40 ez form Supplemental wages identified separately from regular wages. 40 ez form   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. 40 ez form 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. 40 ez form Withhold a flat 25% (no other percentage allowed). 40 ez form If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. 40 ez form 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. 40 ez form Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. 40 ez form Subtract the tax withheld from the regular wages. 40 ez form Withhold the remaining tax from the supplemental wages. 40 ez form 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. 40 ez form 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. 40 ez form This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. 40 ez form Regardless of the method you use to withhold income tax on supplemental wages, they are subject to social security, Medicare, and FUTA taxes. 40 ez form Example 1. 40 ez form You pay John Peters a base salary on the 1st of each month. 40 ez form He is single and claims one withholding allowance. 40 ez form In January he is paid $1,000. 40 ez form Using the wage bracket tables, you withhold $50 from this amount. 40 ez form 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. 40 ez form You figure the withholding based on the total of $3,000. 40 ez form The correct withholding from the tables is $338. 40 ez form Example 2. 40 ez form You pay Sharon Warren a base salary on the 1st of each month. 40 ez form She is single and claims one allowance. 40 ez form Her May 1 pay is $2,000. 40 ez form Using the wage bracket tables, you withhold $188. 40 ez form On May 14 she receives a bonus of $1,000. 40 ez form 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). 40 ez form Determine the amount of withholding on the combined $3,000 amount to be $338 using the wage bracket tables. 40 ez form Subtract the amount withheld from wages on the most recent base salary pay date (May 1) from the combined withholding amount ($338 – $188 = $150). 40 ez form Withhold $150 from the bonus payment. 40 ez form Example 3. 40 ez form The facts are the same as in Example 2, except you elect to use the flat rate method of withholding on the bonus. 40 ez form You withhold 25% of $1,000, or $250, from Sharon's bonus payment. 40 ez form Example 4. 40 ez form The facts are the same as in Example 2, except you elect to pay Sharon a second bonus of $2,000 on May 28. 40 ez form 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). 40 ez form Determine the amount of withholding on the combined $5,000 amount to be $781 using the wage bracket tables. 40 ez form 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). 40 ez form Withhold $443 from the second bonus payment. 40 ez form Tips treated as supplemental wages. 40 ez form   Withhold income tax on tips from wages earned by the employee or from other funds the employee makes available. 40 ez form If an employee receives regular wages and reports tips, figure income tax withholding as if the tips were supplemental wages. 40 ez form If you have not withheld income tax from the regular wages, add the tips to the regular wages. 40 ez form Then withhold income tax on the total. 40 ez form 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. 40 ez form Vacation pay. 40 ez form   Vacation pay is subject to withholding as if it were a regular wage payment. 40 ez form When vacation pay is in addition to regular wages for the vacation period, treat it as a supplemental wage payment. 40 ez form 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. 40 ez form 8. 40 ez form Payroll Period Your payroll period is a period of service for which you usually pay wages. 40 ez form When you have a regular payroll period, withhold income tax for that time period even if your employee does not work the full period. 40 ez form No regular payroll period. 40 ez form   When you do not have a regular payroll period, withhold the tax as if you paid wages for a daily or miscellaneous payroll period. 40 ez form Figure the number of days (including Sundays and holidays) in the period covered by the wage payment. 40 ez form 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. 40 ez form Employee paid for period less than 1 week. 40 ez form   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. 40 ez form If the employee later begins to work for another employer for wages subject to withholding, the employee must notify you within 10 days. 40 ez form You then figure withholding based on the daily or miscellaneous period. 40 ez form 9. 40 ez form Withholding From Employees' Wages Income Tax Withholding Using Form W-4 to figure withholding. 40 ez form   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. 40 ez form 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. 40 ez form Advise your employees to use the IRS Withholding Calculator on the IRS website at www. 40 ez form irs. 40 ez form gov/individuals for help in determining how many withholding allowances to claim on their Forms W-4. 40 ez form   Ask all new employees to give you a signed Form W-4 when they start work. 40 ez form Make the form effective with the first wage payment. 40 ez form 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. 40 ez form Form in Spanish. 40 ez form   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. 40 ez form For more information, see Publicación 17(SP), El Impuesto Federal sobre los Ingresos (Para Personas Físicas). 40 ez form The rules discussed in this section that apply to Form W-4 also apply to Formulario W-4(SP). 40 ez form Electronic system to receive Form W-4. 40 ez form   You may establish a system to electronically receive Forms W-4 from your employees. 40 ez form See Regulations section 31. 40 ez form 3402(f)(5)-1(c) for more information. 40 ez form Effective date of Form W-4. 40 ez form   A Form W-4 remains in effect until the employee gives you a new one. 40 ez form 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. 40 ez form 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. 40 ez form 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. 40 ez form A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. 40 ez form Successor employer. 40 ez form   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. 40 ez form See Revenue Procedure 2004-53, 2004-34 I. 40 ez form R. 40 ez form B. 40 ez form 320, available at www. 40 ez form irs. 40 ez form gov/irb/2004-34_IRB/ar13. 40 ez form html. 40 ez form Completing Form W-4. 40 ez form   The amount of any federal income tax withholding must be based on marital status and withholding allowances. 40 ez form Your employees may not base their withholding amounts on a fixed dollar amount or percentage. 40 ez form 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. 40 ez form Employees may claim fewer withholding allowances than they are entitled to claim. 40 ez form 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. 40 ez form See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. 40 ez form Along with Form W-4, you may wish to order Publication 505 for use by your employees. 40 ez form Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. 40 ez form 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. 40 ez form Exemption from federal income tax withholding. 40 ez form   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. 40 ez form See the Form W-4 instructions for more information. 40 ez form However, the wages are still subject to social security and Medicare taxes. 40 ez form See also Invalid Forms W-4 , later in this section. 40 ez form   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. 40 ez form 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. 40 ez form 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. 40 ez form 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. 40 ez form Withholding income taxes on the wages of nonresident alien employees. 40 ez form   In general, you must withhold federal income taxes on the wages of nonresident alien employees. 40 ez form However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. 40 ez form Also see section 3 of Publication 51 (Circular A), Agricultural Employer's Tax Guide, for guidance on H-2A visa workers. 40 ez form Withholding adjustment for nonresident alien employees. 40 ez form   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. 40 ez form Nonresident alien students from India and business apprentices from India are not subject to this procedure. 40 ez form Instructions. 40 ez form   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. 40 ez form Step 1. 40 ez form   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. 40 ez form    Amount to Add to Nonresident Alien Employee's Wages for Calculating Income Tax Withholding Only   Payroll Period Add Additional     Weekly $ 43. 40 ez form 30     Biweekly 86. 40 ez form 50     Semimonthly 93. 40 ez form 80     Monthly 187. 40 ez form 50     Quarterly 562. 40 ez form 50     Semiannually 1,125. 40 ez form 00     Annually 2,250. 40 ez form 00     Daily or Miscellaneous (each day of the payroll period) 8. 40 ez form 70   Step 2. 40 ez form   Use the amount figured in Step 1 and the number of withholding allowances claimed (generally limited to one allowance) to figure income tax withholding. 40 ez form Determine the value of withholding allowances by multiplying the number of withholding allowances claimed by the appropriate amount from Table 5. 40 ez form Percentage Method—2014 Amount for One Withholding Allowance shown on page 41. 40 ez form 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. 40 ez form 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. 40 ez form The amounts from the chart above are added to wages solely for calculating income tax withholding on the wages of the nonresident alien employee. 40 ez form 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. 40 ez form 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. 40 ez form This procedure only applies to nonresident alien employees who have wages subject to income tax withholding. 40 ez form Example. 40 ez form An employer using the percentage method of withholding pays wages of $500 for a biweekly payroll period to a married nonresident alien employee. 40 ez form 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). 40 ez form 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. 40 ez form 50 from the chart under Step 1 ($586. 40 ez form 50 total). 40 ez form The employer then applies the applicable tables to determine the income tax withholding for nonresident aliens (see Step 2 ). 40 ez form 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. 40 ez form The $86. 40 ez form 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. 40 ez form Also, the $86. 40 ez form 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. 40 ez form Supplemental wage payment. 40 ez form   This procedure for determining the amount of income tax withholding does not apply to a supplemental wage payment (see section 7) if the 39. 40 ez form 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. 40 ez form Nonresident alien employee's Form W-4. 40 ez form   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. 40 ez form   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. 40 ez form 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. 40 ez form Form 8233. 40 ez form   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. 40 ez form See Publication 515 for details. 40 ez form IRS review of requested Forms W-4. 40 ez form   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. 40 ez form You may also be directed to send certain Forms W-4 to the IRS. 40 ez form 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. 40 ez form 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. 40 ez form 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. 40 ez form R. 40 ez form B. 40 ez form 455, which is available at www. 40 ez form irs. 40 ez form gov/irb/2007-35_IRB/ar10. 40 ez form html. 40 ez form When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. 40 ez form 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). 40 ez form 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
Print - Click this link to Print this page

Understanding your CP71 Notice

You received this notice to remind you of the amount you owe in tax, penalty and interest.

Looking for information for CP71A Notice, CP71C Notice, or CP71D Notice?

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice carefully — it will explain how much money you owe on your taxes.

You may want to...


Answers to Common Questions

Am I charged interest on the money I owe?
Yes, interest accrues on your unpaid balance until you pay it in full.

Do I receive a penalty if I cannot pay the full amount?
Yes, you receive a late payment penalty.

What happens if I cannot pay the full amount I owe?
You can arrange to make a payment plan with us if you cannot pay the full amount you owe.

How can I set up a payment plan?
Call the toll-free number listed on the top right corner of your notice to discuss payment options or learn more about payment arrangements.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 06-Mar-2014

The 40 Ez Form

40 ez form Part Two -   Income The eight chapters in this part discuss many kinds of income. 40 ez form They explain which income is and is not taxed. 40 ez form See Part Three for information on gains and losses you report on Form 8949 and Schedule D (Form 1040) and for information on selling your home. 40 ez form Table of Contents 5. 40 ez form   Wages, Salaries, and Other EarningsReminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. 40 ez form Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits 6. 40 ez form   Tip IncomeIntroduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. 40 ez form Reporting Tips to Your EmployerElectronic tip statement. 40 ez form Final report. 40 ez form Reporting Tips on Your Tax Return Allocated Tips 7. 40 ez form   Interest IncomeReminder Introduction Useful Items - You may want to see: General InformationSSN for joint account. 40 ez form Custodian account for your child. 40 ez form Penalty for failure to supply SSN. 40 ez form Reporting backup withholding. 40 ez form Savings account with parent as trustee. 40 ez form Interest not reported on Form 1099-INT. 40 ez form Nominees. 40 ez form Incorrect amount. 40 ez form Information reporting requirement. 40 ez form Taxable InterestInterest subject to penalty for early withdrawal. 40 ez form Money borrowed to invest in certificate of deposit. 40 ez form U. 40 ez form S. 40 ez form Savings Bonds Education Savings Bond Program U. 40 ez form S. 40 ez form Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Original Issue Discount (OID) When To Report Interest IncomeConstructive receipt. 40 ez form How To Report Interest IncomeSchedule B (Form 1040A or 1040). 40 ez form Reporting tax-exempt interest. 40 ez form U. 40 ez form S. 40 ez form savings bond interest previously reported. 40 ez form 8. 40 ez form   Dividends and Other DistributionsReminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. 40 ez form Reporting tax withheld. 40 ez form Nominees. 40 ez form Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. 40 ez form Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. 40 ez form Alternative minimum tax treatment. 40 ez form How To Report Dividend IncomeInvestment interest deducted. 40 ez form 9. 40 ez form   Rental Income and ExpensesIntroduction Useful Items - You may want to see: Rental Income Rental ExpensesVacant while listed for sale. 40 ez form Repairs and Improvements Other Expenses Property Changed to Rental Use Renting Part of Property Not Rented for Profit Personal Use of Dwelling Unit (Including Vacation Home)Example. 40 ez form Dividing Expenses Dwelling Unit Used as a Home Reporting Income and Deductions DepreciationChanging your accounting method to deduct unclaimed depreciation. 40 ez form Limits on Rental LossesAt-Risk Rules Passive Activity Limits How To Report Rental Income and ExpensesSchedule E (Form 1040) 10. 40 ez form   Retirement Plans, Pensions, and AnnuitiesWhat's New Reminder IntroductionThe General Rule. 40 ez form Individual retirement arrangements (IRAs). 40 ez form Civil service retirement benefits. 40 ez form Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. 40 ez form How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. 40 ez form Exclusion not limited to cost. 40 ez form Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. 40 ez form Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries 11. 40 ez form   Social Security and Equivalent Railroad Retirement BenefitsIntroduction Useful Items - You may want to see: Are Any of Your Benefits Taxable? How To Report Your BenefitsHow Much Is Taxable? Examples Deductions Related to Your BenefitsRepayments More Than Gross Benefits 12. 40 ez form   Other IncomeIntroduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. 40 ez form Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. 40 ez form Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. 40 ez form Method 2. 40 ez form RoyaltiesDepletion. 40 ez form Coal and iron ore. 40 ez form Sale of property interest. 40 ez form Part of future production sold. 40 ez form Unemployment BenefitsTypes of unemployment compensation. 40 ez form Governmental program. 40 ez form Repayment of unemployment compensation. 40 ez form Tax withholding. 40 ez form Repayment of benefits. 40 ez form Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. 40 ez form Deduction for costs involved in unlawful discrimination suits. 40 ez form Energy conservation measure. 40 ez form Dwelling unit. 40 ez form Current income required to be distributed. 40 ez form Current income not required to be distributed. 40 ez form How to report. 40 ez form Losses. 40 ez form Grantor trust. 40 ez form Nonemployee compensation. 40 ez form Corporate director. 40 ez form Personal representatives. 40 ez form Manager of trade or business for bankruptcy estate. 40 ez form Notary public. 40 ez form Election precinct official. 40 ez form Difficulty-of-care payments. 40 ez form Maintaining space in home. 40 ez form Reporting taxable payments. 40 ez form Lotteries and raffles. 40 ez form Form W-2G. 40 ez form Reporting winnings and recordkeeping. 40 ez form Inherited pension or IRA. 40 ez form Employee awards or bonuses. 40 ez form Pulitzer, Nobel, and similar prizes. 40 ez form Payment for services. 40 ez form VA payments. 40 ez form Prizes. 40 ez form Strike and lockout benefits. 40 ez form Prev  Up  Next   Home   More Online Publications