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Federal Tax Ez Form 2011

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Federal Tax Ez Form 2011

Federal tax ez form 2011 Publication 51 - Main Content Table of Contents 1. Federal tax ez form 2011 Taxpayer Identification NumbersWhen you receive your EIN. Federal tax ez form 2011 Registering for SSNVS. Federal tax ez form 2011 2. Federal tax ez form 2011 Who Are Employees?Crew Leaders Business Owned and Operated by Spouses 3. Federal tax ez form 2011 Wages and Other Compensation 4. Federal tax ez form 2011 Social Security and Medicare TaxesThe $150 Test or the $2,500 Test Social Security and Medicare Tax Withholding 5. Federal tax ez form 2011 Federal Income Tax WithholdingImplementation of lock-in letter. Federal tax ez form 2011 Seasonal employees and employees not currently performing services. Federal tax ez form 2011 Termination and re-hire of employees. Federal tax ez form 2011 How To Figure Federal Income Tax Withholding 6. Federal tax ez form 2011 Required Notice to Employees About Earned Income Credit (EIC) 7. Federal tax ez form 2011 Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties Employers of Both Farm and Nonfarm Workers 8. Federal tax ez form 2011 Form 943 9. Federal tax ez form 2011 Reporting Adjustments on Form 943Current Year Adjustments Prior Year Adjustments 10. Federal tax ez form 2011 Federal Unemployment (FUTA) Tax 11. Federal tax ez form 2011 Reconciling Wage Reporting Forms 13. Federal tax ez form 2011 Federal Income Tax Withholding MethodsWage Bracket Method Percentage Method Alternative Methods of Federal Income Tax Withholding How To Get Tax Help 1. Federal tax ez form 2011 Taxpayer Identification Numbers If you are required to withhold any federal income, social security, or Medicare taxes, you will need an employer identification number (EIN) for yourself. Federal tax ez form 2011 Also, you will need the SSN of each employee and the name of each employee as shown on the employee's social security card. Federal tax ez form 2011 Employer identification number (EIN). Federal tax ez form 2011   An employer identification number (EIN) is a nine-digit number that the IRS issues. Federal tax ez form 2011 The digits are arranged as follows: 00-0000000. Federal tax ez form 2011 It is used to identify the tax accounts of employers and certain others who have no employees. Federal tax ez form 2011 Use your EIN on all of the items that you send to the IRS and SSA. Federal tax ez form 2011   If you do not have an EIN, you may apply for one online. Federal tax ez form 2011 Visit IRS. Federal tax ez form 2011 gov and click on the Apply for an EIN Online link under Tools. Federal tax ez form 2011 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. Federal tax ez form 2011 Do not use a SSN in place of an EIN. Federal tax ez form 2011   If you do not have an EIN by the time a return is due, write “Applied For” and the date you applied for it in the space shown for the number. Federal tax ez form 2011 If you took over another employer's business, do not use that employer's EIN. Federal tax ez form 2011   You should have only one EIN. Federal tax ez form 2011 If you have more than one, and are not sure which one to use, call the toll-free Business and Specialty Tax Line at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Federal tax ez form 2011 Provide the EINs that you have, the name and address to which each number was assigned, and the address of your principal place of business. Federal tax ez form 2011 The IRS will tell you which EIN to use. Federal tax ez form 2011   For more information, see Publication 1635 or Publication 583. Federal tax ez form 2011 When you receive your EIN. Federal tax ez form 2011   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in the Electronic Federal Tax Payment System (EFTPS). Federal tax ez form 2011 You will receive information in your Employer Identification Number (EIN) Package about Express Enrollment and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. Federal tax ez form 2011 Call the toll-free number located in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your employment tax deposits. Federal tax ez form 2011 If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. Federal tax ez form 2011 Social security number (SSN). Federal tax ez form 2011   An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. Federal tax ez form 2011 You must obtain each employee's name and SSN as shown on the employee's social security card because you must enter them on Form W-2. Federal tax ez form 2011 Do not accept a social security card that says “Not valid for employment. Federal tax ez form 2011 ” A social security number issued with this legend does not permit employment. Federal tax ez form 2011 You may, but are not required to, photocopy the social security card if the employee provides it. Federal tax ez form 2011 If you do not show the employee's correct name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. Federal tax ez form 2011 See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs. Federal tax ez form 2011 Applying for a social security card. Federal tax ez form 2011   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 to SSA. Federal tax ez form 2011 You can get Form SS-5 at SSA offices, by calling 1-800-772-1213 or 1-800-325-0778 (TTY), or from the SSA website at www. Federal tax ez form 2011 socialsecurity. Federal tax ez form 2011 gov/online/ss-5. Federal tax ez form 2011 html. Federal tax ez form 2011 The employee must complete and sign Form SS-5; it cannot be filed by the employer. Federal tax ez form 2011 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. Federal tax ez form 2011 Applying for a social security number. Federal tax ez form 2011   If you file Form W-2 on paper and your employee has applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. Federal tax ez form 2011 If you are filing electronically, enter all zeros (000-00-0000) in the social security number field. Federal tax ez form 2011 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. Federal tax ez form 2011 Furnish Copies B, C, and 2 of Form W-2c to the employee. Federal tax ez form 2011 Up to 25 Forms W-2c per Form W-3c, Transmittal of Corrected Wage and Tax Statements, may be filed per session over the Internet, with no limit on the number of sessions. Federal tax ez form 2011 For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www. Federal tax ez form 2011 socialsecurity. Federal tax ez form 2011 gov/employer. Federal tax ez form 2011 Advise your employee to correct the SSN on his or her original Form W-2. Federal tax ez form 2011 Correctly record the employee's name and SSN. Federal tax ez form 2011   Record the name and number of each employee as they are shown on the employee's social security card. Federal tax ez form 2011 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. Federal tax ez form 2011 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. Federal tax ez form 2011   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 on the most recently filed Form W-2. Federal tax ez form 2011 It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. Federal tax ez form 2011 IRS individual taxpayer identification numbers (ITINs) for aliens. Federal tax ez form 2011   Do not accept an ITIN in place of an SSN for employee identification or for work. Federal tax ez form 2011 An ITIN is issued for use by resident and nonresident aliens who need identification for tax purposes, but who are not eligible for U. Federal tax ez form 2011 S. Federal tax ez form 2011 employment. Federal tax ez form 2011 The ITIN is a nine-digit number formatted like an SSN (for example, NNN-NN-NNNN). Federal tax ez form 2011 However, it begins with the number “9” and has either a “7” or “8” as the fourth digit (for example, 9NN-7N-NNNN or 9NN-8N-NNNN). Federal tax ez form 2011    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. Federal tax ez form 2011 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 in this section. Federal tax ez form 2011 Do not use an ITIN in place of an SSN on Form W-2. Federal tax ez form 2011 Verification of social security numbers. Federal tax ez form 2011   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 employee names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive results the next business day. Federal tax ez form 2011 Visit www. Federal tax ez form 2011 socialsecurity. Federal tax ez form 2011 gov/employer/ssnv. Federal tax ez form 2011 htm for more information. Federal tax ez form 2011 Registering for SSNVS. Federal tax ez form 2011   You must register online and receive authorization from your employer to use SSNVS. Federal tax ez form 2011 To register, visit SSA's website at www. Federal tax ez form 2011 socialsecurity. Federal tax ez form 2011 gov/employer and click on the Business Services Online link. Federal tax ez form 2011 Follow the registration instructions to obtain a user identification (ID) and password. Federal tax ez form 2011 You will need to provide the following information about yourself and your company. Federal tax ez form 2011 Name. Federal tax ez form 2011 SSN. Federal tax ez form 2011 Date of birth. Federal tax ez form 2011 Type of employer. Federal tax ez form 2011 EIN. Federal tax ez form 2011 Company name, address, and telephone number. Federal tax ez form 2011 Email address. Federal tax ez form 2011 When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Federal tax ez form 2011 You must enter the activation code online to use SSNVS. Federal tax ez form 2011 2. Federal tax ez form 2011 Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. Federal tax ez form 2011 See Publication 15-A for details on statutory employees and nonemployees. Federal tax ez form 2011 Employee status under common law. Federal tax ez form 2011   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. Federal tax ez form 2011 This is so even when you give the employee freedom of action. Federal tax ez form 2011 What matters is that you have the right to control the details of how the services are performed. Federal tax ez form 2011 See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Federal tax ez form 2011 If an employer-employee relationship exists, it does not matter what it is called. Federal tax ez form 2011 The employee may be called an agent or independent contractor. Federal tax ez form 2011 It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Federal tax ez form 2011 You are responsible for withholding and paying employment taxes for your employees. Federal tax ez form 2011 You are also required to file employment tax returns. Federal tax ez form 2011 These requirements do not apply to amounts that you pay to independent contractors. Federal tax ez form 2011 The rules discussed in this publication apply only to workers who are your employees. Federal tax ez form 2011 In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Federal tax ez form 2011 For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. Federal tax ez form 2011 Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. Federal tax ez form 2011 The table in section 12, How Do Employment Taxes Apply to Farmwork , distinguishes between farm and nonfarm activities, and also addresses rules that apply in special situations. Federal tax ez form 2011 Crew Leaders If you are a crew leader, you are an employer of farmworkers. Federal tax ez form 2011 A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. Federal tax ez form 2011 If there is no written agreement between you and the farm operator stating that you are his or her employee and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. Federal tax ez form 2011 For FUTA tax rules, see section 10. Federal tax ez form 2011 Business Owned and Operated by Spouses If you and your spouse jointly own and operate a farm or nonfarm business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Federal tax ez form 2011 See Publication 541, Partnerships, for more details. Federal tax ez form 2011 The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Federal tax ez form 2011 Exception—Qualified joint venture. Federal tax ez form 2011   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. Federal tax ez form 2011 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). Federal tax ez form 2011   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. Federal tax ez form 2011 Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. Federal tax ez form 2011   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. Federal tax ez form 2011 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. Federal tax ez form 2011 Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. Federal tax ez form 2011 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. Federal tax ez form 2011    Note. Federal tax ez form 2011 If your spouse is your employee, not your partner, you must pay social security and Medicare taxes for him or her. Federal tax ez form 2011   For more information on qualified joint ventures, visit IRS. Federal tax ez form 2011 gov and enter “qualified joint venture” in the search box. Federal tax ez form 2011 Exception—Community income. Federal tax ez form 2011   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. Federal tax ez form 2011 S. Federal tax ez form 2011 possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. Federal tax ez form 2011 You may still make an election to be taxed as a qualified joint venture instead of a partnership. Federal tax ez form 2011 See Exception—Qualified joint venture , earlier in this section. Federal tax ez form 2011 3. Federal tax ez form 2011 Wages and Other Compensation Cash wages that you pay to employees for farmwork are generally subject to social security tax and Medicare tax. Federal tax ez form 2011 You may also be required to withhold, deposit, and report Additional Medicare Tax. Federal tax ez form 2011 See section 4 for more information. Federal tax ez form 2011 If the wages are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. Federal tax ez form 2011 You may also be liable for FUTA tax, which is not withheld by you or paid by the employee. Federal tax ez form 2011 FUTA tax is discussed in section 10. Federal tax ez form 2011 Cash wages include checks, money orders, etc. Federal tax ez form 2011 Do not count as cash wages the value of food, lodging, and other noncash items. Federal tax ez form 2011 For more information on what payments are considered taxable wages, see Publication 15 (Circular E). Federal tax ez form 2011 Commodity wages. Federal tax ez form 2011   Commodity wages are not cash and are not subject to social security and Medicare taxes or federal income tax withholding. Federal tax ez form 2011 However, noncash payments, including commodity wages, are treated as cash wages (see above) if the substance of the transaction is a cash payment. Federal tax ez form 2011 These noncash payments are subject to social security and Medicare taxes and federal income tax withholding. Federal tax ez form 2011 Other compensation. Federal tax ez form 2011   Publications 15-A and 15-B discuss other forms of compensation that may be taxable. Federal tax ez form 2011 Family members. Federal tax ez form 2011   Generally, the wages that you pay to family members who are your employees are subject to social security and Medicare taxes, federal income tax withholding, and FUTA tax. Federal tax ez form 2011 However, certain exemptions may apply for your child, spouse, or parent. Federal tax ez form 2011 See the table, How Do Employment Taxes Apply to Farmwork , in section 12. Federal tax ez form 2011 Household employees. Federal tax ez form 2011   The wages of an employee who performs household services, such as a maid, babysitter, gardener, or cook, in your home are not subject to social security and Medicare taxes if you pay that employee cash wages of less than $1,900 in 2014. Federal tax ez form 2011   Social security and Medicare taxes do not apply to cash wages for housework in your private home if it was done by your spouse or your child under age 21. Federal tax ez form 2011 Nor do the taxes apply to housework done by your parent unless: You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter, and You are a widow or widower, or divorced and not remarried, or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. Federal tax ez form 2011   For more information, see Publication 926, Household Employer's Tax Guide. Federal tax ez form 2011    Wages for household work may not be a deductible farm expense. Federal tax ez form 2011 See Publication 225, Farmer's Tax Guide. Federal tax ez form 2011 Share farmers. Federal tax ez form 2011   You do not have to withhold or pay social security and Medicare taxes on amounts paid to share farmers under share-farming arrangements. Federal tax ez form 2011 Compensation paid to H-2A visa holders. Federal tax ez form 2011   Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2 but do not report it as social security wages (box 3) or Medicare wages (box 5) on Form W-2 because compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes. Federal tax ez form 2011 On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. Federal tax ez form 2011   An employer is not required to withhold federal income tax from compensation it pays an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. Federal tax ez form 2011 In that case, the worker must give the employer a completed Form W-4. Federal tax ez form 2011 Federal income tax withheld should be reported in box 2 of Form W-2. Federal tax ez form 2011 These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. Federal tax ez form 2011 For rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. Federal tax ez form 2011 4. Federal tax ez form 2011 Social Security and Medicare Taxes Generally, you must withhold social security and Medicare taxes on all cash wage payments that you make to your employees. Federal tax ez form 2011 You may also be required to withhold Additional Medicare Tax. Federal tax ez form 2011 For more information, see Additional Medicare Tax withholding , later. Federal tax ez form 2011 The $150 Test or the $2,500 Test All cash wages that you pay to an employee during the year for farmwork are subject to social security and Medicare taxes and federal income tax withholding if either of the two tests below is met. Federal tax ez form 2011 You pay cash wages to an employee of $150 or more in a year for farmwork (count all cash wages paid on a time, piecework, or other basis). Federal tax ez form 2011 The $150 test applies separately to each farmworker that you employ. Federal tax ez form 2011 If you employ a family of workers, each member is treated separately. Federal tax ez form 2011 Do not count wages paid by other employers. Federal tax ez form 2011 The total that you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year. Federal tax ez form 2011 Exceptions. Federal tax ez form 2011   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes, or federal income tax withholding, even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. Federal tax ez form 2011   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. Federal tax ez form 2011 Social Security and Medicare Tax Withholding The social security tax rate is 6. Federal tax ez form 2011 2%, for both the employee and employer, on the first $117,000 paid to each employee. Federal tax ez form 2011 You must withhold at this rate from each employee and pay a matching amount. Federal tax ez form 2011 The Medicare tax rate is 1. Federal tax ez form 2011 45% each for the employee and employer on all wages. Federal tax ez form 2011 You must withhold at this rate from each employee and pay a matching amount. Federal tax ez form 2011 There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. Federal tax ez form 2011 Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. Federal tax ez form 2011 For details, see Publication 15-A. Federal tax ez form 2011 Additional Medicare Tax withholding. Federal tax ez form 2011   In addition to withholding Medicare tax at 1. Federal tax ez form 2011 45%, you must withhold a 0. Federal tax ez form 2011 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Federal tax ez form 2011 You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Federal tax ez form 2011 Additional Medicare Tax is only imposed on the employee. Federal tax ez form 2011 There is no employer share of Additional Medicare Tax. Federal tax ez form 2011 All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Federal tax ez form 2011   For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E). Federal tax ez form 2011 For more information on Additional Medicare Tax, visit IRS. Federal tax ez form 2011 gov and enter “Additional Medicare Tax” in the search box. Federal tax ez form 2011 Employee share paid by employer. Federal tax ez form 2011   If you would rather pay a household or agricultural employee's share of the social security and Medicare taxes without withholding them from his or her wages, you may do so. Federal tax ez form 2011 If you do not withhold the taxes, however, you must still pay them. Federal tax ez form 2011 Any employee social security and Medicare taxes that you pay is additional income to the employee. Federal tax ez form 2011 Include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages and do not include it in boxes 3 and 5. Federal tax ez form 2011 Also, do not count the additional income as wages for FUTA tax purposes. Federal tax ez form 2011 Different rules apply to employer payments of social security and Medicare taxes for non-household and non-agricultural employees. Federal tax ez form 2011 See section 7 of Publication 15-A. Federal tax ez form 2011 Withholding social security and Medicare taxes on nonresident alien employees. Federal tax ez form 2011   In general, if you pay wages to nonresident alien employees, you must withhold social security and Medicare taxes as you would for a U. Federal tax ez form 2011 S. Federal tax ez form 2011 citizen or resident alien. Federal tax ez form 2011 However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. Federal tax ez form 2011 Also see Compensation paid to H-2A visa holders in section 3. Federal tax ez form 2011 Religious exemption. Federal tax ez form 2011    An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to public insurance. Federal tax ez form 2011 This exemption is available only if both the employee and the employer are members of the sect. Federal tax ez form 2011   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Federal tax ez form 2011 5. Federal tax ez form 2011 Federal Income Tax Withholding Farmers and crew leaders must withhold federal income tax from the wages of farmworkers if the wages are subject to social security and Medicare taxes. Federal tax ez form 2011 The amount to withhold is figured on gross wages before taking out social security and Medicare taxes, union dues, insurance, etc. Federal tax ez form 2011 You may use one of several methods to determine the amount of federal income tax withholding. Federal tax ez form 2011 They are discussed in section 13. Federal tax ez form 2011 Form W-4. Federal tax ez form 2011   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. Federal tax ez form 2011 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. Federal tax ez form 2011 Advise your employees to use the IRS Withholding Calculator on the IRS website at www. Federal tax ez form 2011 irs. Federal tax ez form 2011 gov/individuals for help in determining how many withholding allowances to claim on their Form W-4. Federal tax ez form 2011   Ask each new employee to give you a signed Form W-4 when starting work. Federal tax ez form 2011 Make the form effective with the first wage payment. Federal tax ez form 2011 If a new employee does not give you a completed Form W-4, withhold tax as if he or she is single, with no withholding allowances. Federal tax ez form 2011 Forms in Spanish. Federal tax ez form 2011   You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. Federal tax ez form 2011 For more information, see Publicación 17(SP). Federal tax ez form 2011 Effective date of Form W-4. Federal tax ez form 2011   A Form W-4 remains in effect until the employee gives you a new one. Federal tax ez form 2011 When you receive a new Form W-4, do not adjust withholding for pay periods before the effective date of the new form. Federal tax ez form 2011 Do not adjust withholding retroactively. Federal tax ez form 2011 If an employee gives you a replacement 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. Federal tax ez form 2011 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. Federal tax ez form 2011 A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. Federal tax ez form 2011 Completing Form W-4. Federal tax ez form 2011   The amount of federal income tax withholding is based on marital status and withholding allowances. Federal tax ez form 2011 Your employees may not base their withholding amounts on a fixed dollar amount or percentage. Federal tax ez form 2011 However, the 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. Federal tax ez form 2011   Employees may claim fewer withholding allowances than they are entitled to claim. Federal tax ez form 2011 They may do this to ensure that they have enough withholding or to offset other sources of taxable income that are not subject to withholding. Federal tax ez form 2011   See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. Federal tax ez form 2011 Along with Form W-4, you may wish to order Publication 505 for use by your employees. Federal tax ez form 2011    Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. Federal tax ez form 2011 If an employee wants additional withholding, he or she 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. Federal tax ez form 2011 Exemption from federal income tax withholding. Federal tax ez form 2011   Generally, an employee may claim exemption from federal income tax withholding because he or she had no federal income tax liability last year and expects none this year. Federal tax ez form 2011 See the Form W-4 instructions for more information. Federal tax ez form 2011 However, the wages are still subject to social security and Medicare taxes. Federal tax ez form 2011   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. Federal tax ez form 2011 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. Federal tax ez form 2011 If the employee does not give you a new Form W-4 by February 15, withhold tax based on the last valid Form W-4 you have for the employee that did not claim an exemption from withholding or, if one does not exist, withhold as if he or she is single with zero withholding allowances. Federal tax ez form 2011 If the employee provides a new Form W-4 claiming an exemption from withholding on February 16 or later, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. Federal tax ez form 2011 Withholding income taxes on the wages of nonresident alien employees. Federal tax ez form 2011   In general, you must withhold federal income taxes on the wages of nonresident alien employees. Federal tax ez form 2011 However, see Publication 515 for exceptions to this general rule. Federal tax ez form 2011 Also see Compensation paid to H-2A visa workers in section 3. Federal tax ez form 2011 Withholding adjustment for nonresident alien employees. Federal tax ez form 2011   A special procedure applies for figuring the amount of income tax to withhold from wages of nonresident alien employees performing services within the United States for wages paid in 2014. Federal tax ez form 2011 This procedure requires a special chart to be used with the withholding tables to determine the amount to withhold from the wages of the nonresident alien employee. Federal tax ez form 2011 See Withholding adjustment for nonresident alien employees in section 9 of Publication 15 (Circular E). Federal tax ez form 2011 Nonresident alien employee's Form W-4. Federal tax ez form 2011   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 Korea, 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. Federal tax ez form 2011   If you maintain an electronic Form W-4 system, you should provide a field for nonresident alien employees to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. Federal tax ez form 2011    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. Federal tax ez form 2011 Form 8233. Federal tax ez form 2011   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. Federal tax ez form 2011 See Publication 515 for details. Federal tax ez form 2011 IRS review of requested Forms W-4. Federal tax ez form 2011   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. Federal tax ez form 2011 You may also be directed to send certain Forms W-4 to the IRS. Federal tax ez form 2011 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. Federal tax ez form 2011 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. Federal tax ez form 2011 The IRS may also require you to submit copies of Form W-4 to the IRS as directed by a revenue procedure or notice published in the Internal Revenue Bulletin. Federal tax ez form 2011 When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. Federal tax ez form 2011   After submitting a copy of the 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). Federal tax ez form 2011 However, if the IRS later notifies you in writing that the employee is not entitled to claim a complete exemption from withholding or more than the maximum number of withholding allowances specified by the IRS in the written notice, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the notice (commonly referred to as a “lock-in letter”). Federal tax ez form 2011 Initial lock-in letter. Federal tax ez form 2011   The IRS uses information reported on Form W-2 to identify employees with withholding compliance problems. Federal tax ez form 2011 In some cases, where a serious under-withholding problem is found to exist for a particular employee, the IRS may issue a lock-in letter to the employer specifying the maximum number of withholding allowances and marital status permitted for a specific employee. Federal tax ez form 2011 You will also receive a copy for the employee that identifies the maximum number of withholding allowances permitted and the process by which the employee can provide additional information to the IRS for purposes of determining the appropriate number of withholding allowances. Federal tax ez form 2011 If the employee is employed by you as of the date of the notice, you must furnish the employee copy to the employee within 10 business days of receipt. Federal tax ez form 2011 You may follow any reasonable business practice to furnish the employee copy to the employee. Federal tax ez form 2011 Implementation of lock-in letter. Federal tax ez form 2011   When you receive the notice specifying the maximum number of withholding allowances and marital status permitted, you may not withhold immediately on the basis of the notice. Federal tax ez form 2011 You must begin withholding tax on the basis of the notice for any wages paid after the date specified in the notice. Federal tax ez form 2011 The delay between your receipt of the notice and the date to begin the withholding on the basis of the notice permits the employee to contact the IRS. Federal tax ez form 2011 Seasonal employees and employees not currently performing services. Federal tax ez form 2011   If you receive a notice for an employee who is not currently performing services for you, you are still required to furnish the employee copy to the employee and withhold based on the notice if any of the following apply. Federal tax ez form 2011 You are paying wages for the employee's prior services and the wages are subject to income tax withholding on or after the date specified in the notice. Federal tax ez form 2011 You reasonably expect the employee to resume services within 12 months of the date of the notice. Federal tax ez form 2011 The employee is on a bona fide leave of absence that does not exceed 12 months or the employee has a right to reemployment after the leave of absence. Federal tax ez form 2011 Termination and re-hire of employees. Federal tax ez form 2011   If you are required to furnish and withhold based on the notice and the employment relationship is terminated after the date of the notice, you must continue to withhold based on the notice if you continue to pay any wages subject to income tax withholding. Federal tax ez form 2011 You must also withhold based on the notice or modification notice (explained next) if the employee resumes the employment relationship with you within 12 months after the termination of the employment relationship. Federal tax ez form 2011 Modification notice. Federal tax ez form 2011   After issuing the notice specifying the maximum number of withholding allowances and marital status permitted, the IRS may issue a subsequent notice (modification notice) that modifies the original notice. Federal tax ez form 2011 The modification notice may change the marital status and/or the number of withholding allowances permitted. Federal tax ez form 2011 You must withhold federal income tax based on the effective date specified in the modification notice. Federal tax ez form 2011 New Form W-4 after IRS notice. Federal tax ez form 2011   After the IRS issues a notice or modification notice, if the employee provides you with a new Form W-4 claiming complete exemption from withholding or claims a marital status, a number of withholding allowances, and any additional withholding that results in less withholding than would result under the IRS notice or modification notice, you must disregard the new Form W-4. Federal tax ez form 2011 You are required to withhold on the basis of the notice or modification notice unless the IRS subsequently notifies you to withhold based on the new Form W-4. Federal tax ez form 2011 If the employee wants to put a new Form W-4 into effect that results in less withholding than required, the employee must contact the IRS. Federal tax ez form 2011   If, after you receive an IRS notice or modification notice, your employee provides you with a new Form W-4 that does not claim exemption from federal income tax withholding and claims a marital status, a number of withholding allowances, and any additional withholding that results in more withholding than would result under the notice or modification notice, you must withhold tax on the basis of that new Form W-4. Federal tax ez form 2011 Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold based on the IRS notice or modification notice. Federal tax ez form 2011 Substitute Forms W-4. Federal tax ez form 2011   You are encouraged to have your employees use the official version of Form W-4 to claim withholding allowances or exemption from withholding. Federal tax ez form 2011 Call the IRS at 1-800-TAX-FORM (1-800-829-3676) or visit IRS. Federal tax ez form 2011 gov to obtain copies of Form W-4. Federal tax ez form 2011   You may use a substitute version of Form W-4 to meet your business needs. Federal tax ez form 2011 However, your substitute Form W-4 must contain language that is identical to the official Form W-4 and your form must meet all current IRS rules for substitute forms. Federal tax ez form 2011 At the time that you provide your substitute form to the employee, you must provide him or her with all tables, instructions, and worksheets from the current Form W-4. Federal tax ez form 2011   You cannot accept a substitute Form W-4 developed by an employee, and the employee submitting such form will be treated as failing to furnish a Form W-4. Federal tax ez form 2011 However, continue to use any valid Forms W-4 developed by your employees that you accepted before October 11, 2007. Federal tax ez form 2011 Invalid Forms W-4. Federal tax ez form 2011   Any unauthorized change or addition to Form W-4 makes it invalid. Federal tax ez form 2011 This includes taking out any language by which the employee certifies that the form is correct. Federal tax ez form 2011 A Form W-4 is also invalid if, by the date an employee gives it to you, he or she indicates in any way that it is false. Federal tax ez form 2011 An employee who submits a false Form W-4 may be subject to a $500 penalty. Federal tax ez form 2011 You may treat a Form W-4 as invalid if the employee wrote “exempt” on line 7 and also entered a number on line 5 or an amount on line 6. Federal tax ez form 2011   When you get an invalid Form W-4, do not use it to figure federal income tax withholding. Federal tax ez form 2011 Tell the employee that it is invalid and ask for another one. Federal tax ez form 2011 If the employee does not give you a valid one, withhold taxes as if the employee was single and claiming no withholding allowances. Federal tax ez form 2011 However, if you have an earlier Form W-4 for this worker that is valid, withhold as you did before. Federal tax ez form 2011   For additional information about these rules, see Treasury Decision 9337, 2007-35 I. Federal tax ez form 2011 R. Federal tax ez form 2011 B. Federal tax ez form 2011 455, available at www. Federal tax ez form 2011 irs. Federal tax ez form 2011 gov/irb/2007-35_IRB/ar10. Federal tax ez form 2011 html. Federal tax ez form 2011 Amounts exempt from levy on wages, salary, and other income. Federal tax ez form 2011   If you receive a Notice of Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), or 668-W(ICS), you must withhold amounts as described in the instructions for these forms. Federal tax ez form 2011 Publication 1494, Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), and 668-W(ICS), shows the exempt amount. Federal tax ez form 2011 If a levy issued in a prior year is still in effect and the taxpayer submits a new Statement of Exemptions and Filing Status, use the current year Publication 1494 to compute the exempt amount. Federal tax ez form 2011 How To Figure Federal Income Tax Withholding There are several ways to figure federal income tax withholding. Federal tax ez form 2011 Wage bracket tables. Federal tax ez form 2011 See section 13 for directions on how to use the tables. Federal tax ez form 2011 Percentage method. Federal tax ez form 2011 See section 13 for directions on how to use the percentage method. Federal tax ez form 2011 Alternative formula tables for percentage method withholding. Federal tax ez form 2011 See Publication 15-A. Federal tax ez form 2011 Wage bracket percentage method withholding tables. Federal tax ez form 2011 See Publication 15-A. Federal tax ez form 2011 Other alternative methods. Federal tax ez form 2011 See Publication 15-A. Federal tax ez form 2011 Employers with automated payroll systems will find the two alternative formula tables and the two alternative wage bracket percentage method tables in Publication 15-A useful. Federal tax ez form 2011 If an employee wants additional federal tax withheld, have the employee show the extra amount on Form W-4. Federal tax ez form 2011 Supplemental wages. Federal tax ez form 2011   Supplemental wages are wage payments to an employee that are not regular wages. Federal tax ez form 2011 They include, but are not limited to, bonuses, commissions, overtime pay, accumulated sick leave, severance pay, awards, prizes, back pay and retroactive pay increases for current employees, and payments for nondeductible moving expenses. Federal tax ez form 2011 Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. Federal tax ez form 2011   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total was a single payment for a regular payroll period. Federal tax ez form 2011   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 federal income tax from your employee's regular wages. Federal tax ez form 2011 If you withheld federal 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. Federal tax ez form 2011 Withhold a flat 25% (no other percentage allowed). Federal tax ez form 2011 If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. Federal tax ez form 2011 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. Federal tax ez form 2011 Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Federal tax ez form 2011 Subtract the tax withheld from the regular wages. Federal tax ez form 2011 Withhold the remaining tax from the supplemental wages. Federal tax ez form 2011 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 previous supplemental wage payments, and withhold the remaining tax from the current payment of supplemental wages. Federal tax ez form 2011 If you did not withhold federal income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b above. Federal tax ez form 2011 This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. Federal tax ez form 2011    Separate rules apply to any supplemental wages exceeding $1 million that you pay to an individual during the year. Federal tax ez form 2011 See section 7 in Publication 15 (Circular E) for details. Federal tax ez form 2011   Regardless of the method that you use to withhold federal income tax on supplemental wages, they are generally subject to social security, Medicare, and FUTA taxes. Federal tax ez form 2011 6. Federal tax ez form 2011 Required Notice to Employees About Earned Income Credit (EIC) You must notify employees who have no federal income tax withheld that they may be able to claim a tax refund because of the EIC. Federal tax ez form 2011 Although you do not have to notify employees who claim exemption from withholding on Form W-4 about the EIC, you are encouraged to notify any employees whose wages for 2013 were less than $46,227 ($51,567 if married filing jointly) that they may be eligible to claim the credit for 2013. Federal tax ez form 2011 This is because eligible employees may get a refund of the amount of EIC that is more than the tax that they owe. Federal tax ez form 2011 You will meet the notification requirement if you issue to the employee Form W-2 with the EIC notice on the back of Copy B, or a substitute Form W-2 with the same statement. Federal tax ez form 2011 You may also meet the requirement by providing Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC), or your own statement that contains the same wording. Federal tax ez form 2011 If a substitute Form W-2 is given to the employee on time but does not have the required statement, you must notify the employee within 1 week of the date that the substitute Form W-2 is given. Federal tax ez form 2011 If Form W-2 is required but is not given on time, you must give the employee Notice 797 or your written statement by the date that Form W-2 is required to be given. Federal tax ez form 2011 If Form W-2 is not required, you must notify the employee by February 7, 2014. Federal tax ez form 2011 7. Federal tax ez form 2011 Depositing Taxes Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld. Federal tax ez form 2011 You must use electronic funds transfer to make all federal tax deposits. Federal tax ez form 2011 See How To Deposit , later in this section. Federal tax ez form 2011 The credit against employment taxes for COBRA premium assistance payments is treated as a deposit of taxes on the first day of your return period. Federal tax ez form 2011 For more information, see COBRA premium assistance credit under Introduction. Federal tax ez form 2011 Payment with return. Federal tax ez form 2011   You may make payments with Forms 943 or 945 instead of depositing if one of the following applies. Federal tax ez form 2011 You report less than a $2,500 tax liability for the year (Form 943, line 11; Form 945, line 3) and you pay in full with a return that is filed on time. Federal tax ez form 2011 However, if you are unsure that you will report less than $2,500, deposit under the rules explained in this section so that you will not be subject to failure-to-deposit penalties. Federal tax ez form 2011 You are a monthly schedule depositor and make a payment in accordance with the Accuracy of Deposits Rule discussed later in this section. Federal tax ez form 2011 This payment may be $2,500 or more. Federal tax ez form 2011 Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. Federal tax ez form 2011 Semiweekly schedule depositors must timely deposit the amount. Federal tax ez form 2011 See Accuracy of Deposits Rule and How To Deposit, later in this section. Federal tax ez form 2011 When To Deposit If you employ both farm and nonfarm workers, do not combine the taxes reportable on Forms 941 or 944 with Form 943 to decide whether to make a deposit. Federal tax ez form 2011 See Employers of Both Farm and Nonfarm Workers, later in this section. Federal tax ez form 2011 The rules for determining when to deposit Form 943 taxes are discussed below. Federal tax ez form 2011 See section 10 for the separate rules that apply to FUTA tax. Federal tax ez form 2011 Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor. Federal tax ez form 2011 The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often your business pays its employees or how often you are required to make deposits. Federal tax ez form 2011 The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday). Federal tax ez form 2011 The deposit schedule that you must use for a calendar year is determined from the tax liability reported on your Form 943, line 9, for the lookback period, discussed next. Federal tax ez form 2011 If you reported $50,000 or less of Form 943 taxes for the lookback period, you are a monthly schedule depositor. Federal tax ez form 2011 If you reported more than $50,000 of Form 943 taxes for the lookback period, you are a semiweekly schedule depositor. Federal tax ez form 2011 Lookback period. Federal tax ez form 2011   The lookback period is the second calendar year preceding the current calendar year. Federal tax ez form 2011 For example, the lookback period for 2014 is 2012. Federal tax ez form 2011 Example of deposit schedule based on lookback period. Federal tax ez form 2011 Rose Co. Federal tax ez form 2011 reported taxes on Form 943 as follows. Federal tax ez form 2011 2012 — $48,000 2013 — $60,000 Rose Co. Federal tax ez form 2011 is a monthly schedule depositor for 2014 because its taxes for the lookback period ($48,000 for calendar year 2012) were not more than $50,000. Federal tax ez form 2011 However, for 2015, Rose Co. Federal tax ez form 2011 is a semiweekly schedule depositor because the total taxes before adjustment for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. Federal tax ez form 2011 Adjustments to lookback period taxes. Federal tax ez form 2011   To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). Federal tax ez form 2011 Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. Federal tax ez form 2011 Example of adjustments. Federal tax ez form 2011 An employer originally reported total tax of $45,000 for the lookback period in 2012. Federal tax ez form 2011 The employer discovered during March 2014 that the tax reported for the lookback period was understated by $10,000 and corrected this error by filing Form 943-X. Federal tax ez form 2011 The total tax reported in the lookback period is still $45,000. Federal tax ez form 2011 The $10,000 adjustment is also not treated as part of the 2014 taxes. Federal tax ez form 2011 Deposit period. Federal tax ez form 2011   The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. Federal tax ez form 2011 For monthly schedule depositors, the deposit period is a calendar month. Federal tax ez form 2011 The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. Federal tax ez form 2011 Monthly Deposit Schedule If the tax liability reported on Form 943, line 9, for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. Federal tax ez form 2011 You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month. Federal tax ez form 2011 Monthly schedule example. Federal tax ez form 2011   Red Co. Federal tax ez form 2011 is a seasonal employer and a monthly schedule depositor. Federal tax ez form 2011 It pays wages each Friday. Federal tax ez form 2011 It paid wages during August 2014, but did not pay any wages during September. Federal tax ez form 2011 Red Co. Federal tax ez form 2011 must deposit the combined tax liabilities for the August paydays by September 15. Federal tax ez form 2011 Red Co. Federal tax ez form 2011 does not have a deposit requirement for September (that is, due by October 15, 2014) because no wages were paid in September; therefore, it did not have a tax liability for September. Federal tax ez form 2011 New employers. Federal tax ez form 2011   For agricultural employers, your tax liability for any year in the lookback period before the date you started or acquired your business is considered to be zero. Federal tax ez form 2011 Therefore, you are a monthly schedule depositor for the first and second calendar years of your agricultural business (but see the $100,000 Next-Day Deposit Rule , later in this section). Federal tax ez form 2011 Semiweekly Deposit Schedule You are a semiweekly schedule depositor for a calendar year if the tax liability on Form 943, line 9, during your lookback period was more than $50,000. Federal tax ez form 2011 Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Federal tax ez form 2011 Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. Federal tax ez form 2011 Semiweekly depositors are not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule (discussed later in this section) applies. Federal tax ez form 2011 For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 by the following Wednesday. Federal tax ez form 2011 If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. Federal tax ez form 2011 Semiweekly schedule depositors must complete Form 943-A, Agricultural Employer's Record of Federal Tax Liability, and submit it with Form 943. Federal tax ez form 2011 Semiweekly Deposit Schedule IF the payday falls on a. Federal tax ez form 2011 . Federal tax ez form 2011 . Federal tax ez form 2011 THEN deposit taxes by the following. Federal tax ez form 2011 . Federal tax ez form 2011 . Federal tax ez form 2011 Wednesday, Thursday, and/or Friday Wednesday Saturday, Sunday, Monday, and/or Tuesday Friday Semiweekly schedule example. Federal tax ez form 2011   Green, Inc. Federal tax ez form 2011 , is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Federal tax ez form 2011 Green, Inc. Federal tax ez form 2011 , will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. Federal tax ez form 2011 Green, Inc. Federal tax ez form 2011 's tax liability for the April 25, 2014 (Friday), wage payment must be deposited by April 30, 2014 (Wednesday). Federal tax ez form 2011 Semiweekly deposit period spanning two quarters. Federal tax ez form 2011   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. Federal tax ez form 2011 For example, if you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. Federal tax ez form 2011 Both deposits will be due Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). Federal tax ez form 2011 Deposits on Business Days Only If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. Federal tax ez form 2011 A business day is any day other than a Saturday, Sunday, or legal holiday. Federal tax ez form 2011 For example, if a deposit is required to be made on Friday and Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). Federal tax ez form 2011 Semiweekly schedule depositors   will always have 3 business days to make a deposit. Federal tax ez form 2011 That is, if any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the deposit. Federal tax ez form 2011 For example, if a semiweekly schedule depositor accumulated taxes on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). Federal tax ez form 2011 Legal holiday. Federal tax ez form 2011   The term “legal holiday” means any legal holiday in the District of Columbia. Federal tax ez form 2011 Legal holidays for 2014 are listed below. Federal tax ez form 2011 January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. Federal tax ez form 2011 February 17— Washington's Birthday April 16— District of Columbia Emancipation Day May 26— Memorial Day July 4— Independence Day September 1— Labor Day October 13— Columbus Day November 11— Veterans' Day November 27— Thanksgiving Day December 25— Christmas Day $100,000 Next-Day Deposit Rule If you accumulate $100,000 or more of Form 943 taxes (that is, taxes reported on Form 943, line 11) on any day during a deposit period, you must deposit the tax by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. Federal tax ez form 2011 For purposes of the $100,000 rule, do not continue accumulating a tax liability after the end of a deposit period. Federal tax ez form 2011 For example, if a semiweekly schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a Saturday-through-Tuesday deposit period) and accumulated a $10,000 liability on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. Federal tax ez form 2011 Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. Federal tax ez form 2011 However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. Federal tax ez form 2011 For example, Fir Co. Federal tax ez form 2011 is a semiweekly schedule depositor. Federal tax ez form 2011 On Monday, Fir Co. Federal tax ez form 2011 accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. Federal tax ez form 2011 On Tuesday, Fir Co. Federal tax ez form 2011 accumulates additional taxes of $30,000. Federal tax ez form 2011 Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. Federal tax ez form 2011 does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). Federal tax ez form 2011 If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year. Federal tax ez form 2011 Example of the $100,000 next-day deposit rule. Federal tax ez form 2011   Elm, Inc. Federal tax ez form 2011 , started its business on May 1, 2014. Federal tax ez form 2011 Because Elm, Inc. Federal tax ez form 2011 , is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc. Federal tax ez form 2011 , is a monthly schedule depositor. Federal tax ez form 2011 On May 8, Elm, Inc. Federal tax ez form 2011 , paid wages for the first time and accumulated taxes of $50,000. Federal tax ez form 2011 On May 9 (Friday), Elm, Inc. Federal tax ez form 2011 , paid wages and accumulated taxes of $60,000, for a total of $110,000. Federal tax ez form 2011 Because Elm, Inc. Federal tax ez form 2011 , accumulated $110,000 on May 9, it must deposit $110,000 by May 12 (Monday), the next business day. Federal tax ez form 2011 Elm, Inc. Federal tax ez form 2011 , became a semiweekly schedule depositor on May 10. Federal tax ez form 2011 It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. Federal tax ez form 2011 Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. Federal tax ez form 2011 However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. Federal tax ez form 2011 Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited. Federal tax ez form 2011 The deposit shortfall is paid or deposited by the shortfall makeup date as described below. Federal tax ez form 2011 Makeup Date for Deposit Shortfall:    Monthly Schedule Depositor—Deposit the shortfall or pay it with your return by the due date of your Form 943. Federal tax ez form 2011 You may pay the shortfall with your Form 943 even if the amount is $2,500 or more. Federal tax ez form 2011 Semiweekly Schedule Depositor—Deposit by the earlier of (a) the first Wednesday or Friday (whichever comes first) that falls on or after the 15th of the month following the month in which the shortfall occurred, or (b) the due date for Form 943. Federal tax ez form 2011 For example, if a semiweekly schedule depositor has a deposit shortfall during February 2014, the shortfall makeup date is March 19, 2014 (Wednesday). Federal tax ez form 2011 How To Deposit You must deposit employment taxes by electronic funds transfer. Federal tax ez form 2011 See Payment with return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. Federal tax ez form 2011 Electronic deposit requirement. Federal tax ez form 2011   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Federal tax ez form 2011 Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). Federal tax ez form 2011 If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Federal tax ez form 2011   EFTPS is a free service provided by the Department of Treasury. Federal tax ez form 2011 To get more information or to enroll in EFTPS, call 1-800-555-4477 (business), 1-800-316-6541 (individual), or 1-800-733-4829 (TDD). Federal tax ez form 2011 You can also visit the EFTPS website at www. Federal tax ez form 2011 eftps. Federal tax ez form 2011 gov. Federal tax ez form 2011 Additional information about EFTPS is also available in Publication 966. Federal tax ez form 2011 New employers that have a federal tax obligation will be pre-enrolled in EFTPS. Federal tax ez form 2011 Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. Federal tax ez form 2011 See When you receive your EIN in section 1 for more information. Federal tax ez form 2011 Deposit record. Federal tax ez form 2011   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. Federal tax ez form 2011 The number can be used as a receipt or to trace the payment. Federal tax ez form 2011 Depositing on time. Federal tax ez form 2011   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. Federal tax ez form 2011 m. Federal tax ez form 2011 Eastern time the day before the date a deposit is due. Federal tax ez form 2011 If you use a third party to make a deposit on your behalf, they may have different cutoff times. Federal tax ez form 2011 Same-day payment option. Federal tax ez form 2011   If you fail to initiate a deposit transaction on EFTPS by 8 p. Federal tax ez form 2011 m. Federal tax ez form 2011 Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). Federal tax ez form 2011 To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. Federal tax ez form 2011 Please check with your financial institution regarding availability, deadlines, and costs. Federal tax ez form 2011 Your financial institution may charge you a fee for payments made this way. Federal tax ez form 2011 To learn more about the information you will need to provide to your financial institution to make a same-day wire payment, visit www. Federal tax ez form 2011 eftps. Federal tax ez form 2011 gov to download the Same-Day Payment Worksheet. Federal tax ez form 2011 Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits for less than the required amount. Federal tax ez form 2011 The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. Federal tax ez form 2011 IRS may also waive deposit penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. Federal tax ez form 2011 For amounts not properly deposited or not deposited on time, the penalty rates are shown next. Federal tax ez form 2011 Penalty Charged for. Federal tax ez form 2011 . Federal tax ez form 2011 . Federal tax ez form 2011 2% Deposits made 1 to 5 days late. Federal tax ez form 2011 5% Deposits made 6 to 15 days late. Federal tax ez form 2011 10% Deposits made 16 or more days late. Federal tax ez form 2011 Also applies to amounts paid within 10 days of the date of the first notice the IRS sent asking for the tax due. Federal tax ez form 2011 10% Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return. Federal tax ez form 2011 See Payment with return , earlier in this section, for exceptions. Federal tax ez form 2011 15% Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. Federal tax ez form 2011 Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. Federal tax ez form 2011 Order in which deposits are applied. Federal tax ez form 2011   Deposits generally are applied to the most recent tax liability within the year. Federal tax ez form 2011 If you receive a failure-to-deposit penalty notice, you may designate how your deposits are to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Federal tax ez form 2011 Follow the instructions on the penalty notice that you received. Federal tax ez form 2011 For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. Federal tax ez form 2011 You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. Federal tax ez form 2011 irs. Federal tax ez form 2011 gov/pub/irs-irbs/irb01-50. Federal tax ez form 2011 pdf. Federal tax ez form 2011 Example. Federal tax ez form 2011 Cedar, Inc. Federal tax ez form 2011 , is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. Federal tax ez form 2011 It does not make the deposit on July 15. Federal tax ez form 2011 On August 15, Cedar, Inc. Federal tax ez form 2011 , deposits $2,000. Federal tax ez form 2011 Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. Federal tax ez form 2011 Accordingly, $500 of the July 15 liability remains undeposited. Federal tax ez form 2011 The penalty on this underdeposit will apply as explained above. Federal tax ez form 2011 Trust fund recovery penalty. Federal tax ez form 2011   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. Federal tax ez form 2011 The penalty is the full amount of the unpaid trust fund tax. Federal tax ez form 2011 This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. Federal tax ez form 2011   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. Federal tax ez form 2011   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship. Federal tax ez form 2011 A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. Federal tax ez form 2011    Willfully means voluntarily, consciously, and intentionally. Federal tax ez form 2011 A responsible person acts willfully if the person knows that the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. Federal tax ez form 2011 “Average” failure-to-deposit penalty. Federal tax ez form 2011   IRS may assess an “averaged” failure-to-deposit penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 943, line 17, when your tax liability shown on Form 943, line 11, was $2,500 or more. Federal tax ez form 2011 IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 943, line 11, was $2,500 or more and you did any of the following. Federal tax ez form 2011 Completed Form 943, line 17, instead of Form 943-A. Federal tax ez form 2011 Failed to attach a properly completed Form 943-A. Federal tax ez form 2011 Completed Form 943-A incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. Federal tax ez form 2011   IRS figures the penalty by allocating your tax liability on Form 943, line 11, equally throughout the tax period. Federal tax ez form 2011 Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. Federal tax ez form 2011   You can avoid the penalty by reviewing your return before filing it. Federal tax ez form 2011 Follow these steps before filing your Form 943. Federal tax ez form 2011 If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 943, line 17. Federal tax ez form 2011 If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Form 943-A in the lines that represent the dates you paid your employees. Federal tax ez form 2011 Verify that your total liability shown on Form 943, line 17, or Form 943-A, line M, equals your tax liability shown on Form 943, line 11. Federal tax ez form 2011 Do not show negative amounts on Form 943, line 17, or Form 943-A. Federal tax ez form 2011 For prior period errors discovered after December 31, 2008, do not adjust your tax liabilities reported on Form 943, line 17, or on Form 943-A. Federal tax ez form 2011 Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941 and 944 taxes). Federal tax ez form 2011 Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules. Federal tax ez form 2011 If a deposit is due, deposi
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The Federal Tax Ez Form 2011

Federal tax ez form 2011 35. Federal tax ez form 2011   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. Federal tax ez form 2011 They are: The American opportunity credit, and The lifetime learning credit. Federal tax ez form 2011 The chapter will present an overview of these education credits. Federal tax ez form 2011 To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. Federal tax ez form 2011 Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. Federal tax ez form 2011 For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. Federal tax ez form 2011   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. Federal tax ez form 2011   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. Federal tax ez form 2011 This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Federal tax ez form 2011 Table 35-1. Federal tax ez form 2011 Comparison of Education Credits Caution. Federal tax ez form 2011 You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. Federal tax ez form 2011   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. Federal tax ez form 2011   There are several differences between these two credits. Federal tax ez form 2011 These differences are summarized in Table 35-1, later. Federal tax ez form 2011 Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. Federal tax ez form 2011 The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. Federal tax ez form 2011 For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 education credit(s). Federal tax ez form 2011 Academic period. Federal tax ez form 2011   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Federal tax ez form 2011 In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Federal tax ez form 2011 Eligible educational institution. Federal tax ez form 2011   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Federal tax ez form 2011 S. Federal tax ez form 2011 Department of Education. Federal tax ez form 2011 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Federal tax ez form 2011 The educational institution should be able to tell you if it is an eligible educational institution. Federal tax ez form 2011   Certain educational institutions located outside the United States also participate in the U. Federal tax ez form 2011 S. Federal tax ez form 2011 Department of Education's Federal Student Aid (FSA) programs. Federal tax ez form 2011 Who can claim a dependent's expenses. Federal tax ez form 2011   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. Federal tax ez form 2011 Therefore, only that person can claim an education credit for the student. Federal tax ez form 2011 If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. Federal tax ez form 2011 Expenses paid by a third party. Federal tax ez form 2011   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Federal tax ez form 2011 However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Federal tax ez form 2011 Therefore, you are treated as having paid expenses that were paid by the third party. Federal tax ez form 2011 For more information and an example see Who Can Claim a Dependent's Expenses in Pub. Federal tax ez form 2011 970, chapter 2 or 3. Federal tax ez form 2011 Who cannot claim a credit. Federal tax ez form 2011   You cannot take an education credit if any of the following apply. Federal tax ez form 2011 You are claimed as a dependent on another person's tax return, such as your parent's return. Federal tax ez form 2011 Your filing status is married filing separately. Federal tax ez form 2011 You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. Federal tax ez form 2011 Your MAGI is one of the following. Federal tax ez form 2011 American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). Federal tax ez form 2011 Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . Federal tax ez form 2011   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. Federal tax ez form 2011 However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. Federal tax ez form 2011 For details, see Pub. Federal tax ez form 2011 970. Federal tax ez form 2011    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. Federal tax ez form 2011 The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. Federal tax ez form 2011 However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. Federal tax ez form 2011 You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. Federal tax ez form 2011 See Pub. Federal tax ez form 2011 970 for information on other education benefits. Federal tax ez form 2011 Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. Federal tax ez form 2011 It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. Federal tax ez form 2011 For course-related books, supplies, and equipment, only certain expenses qualify. Federal tax ez form 2011 American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. Federal tax ez form 2011 Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. Federal tax ez form 2011 Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. Federal tax ez form 2011 However, fees for personal expenses (described below) are never qualified education expenses. Federal tax ez form 2011 Qualified education expenses for either credit do not include amounts paid for: Personal expenses. Federal tax ez form 2011 This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. Federal tax ez form 2011 Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. Federal tax ez form 2011 You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). Federal tax ez form 2011 However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). Federal tax ez form 2011 In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. Federal tax ez form 2011 Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Federal tax ez form 2011 Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Federal tax ez form 2011 If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. Federal tax ez form 2011 Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. Federal tax ez form 2011 See Adjustments to Qualified Education Expenses, later. Federal tax ez form 2011 Prepaid Expenses. Federal tax ez form 2011   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. Federal tax ez form 2011 See Academic period , earlier. Federal tax ez form 2011 For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). Federal tax ez form 2011    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Federal tax ez form 2011 Paid with borrowed funds. Federal tax ez form 2011   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. Federal tax ez form 2011 Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. Federal tax ez form 2011 Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Federal tax ez form 2011 Student withdraws from class(es). Federal tax ez form 2011   You can claim an education credit for qualified education expenses not refunded when a student withdraws. Federal tax ez form 2011 No Double Benefit Allowed You cannot do any of the following. Federal tax ez form 2011 Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. Federal tax ez form 2011 Claim more than one education credit based on the same qualified education expenses. Federal tax ez form 2011 Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). Federal tax ez form 2011 Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. Federal tax ez form 2011 See Adjustments to Qualified Education Expenses, next. Federal tax ez form 2011 Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. Federal tax ez form 2011 The result is the amount of adjusted qualified education expenses for each student. Federal tax ez form 2011 Tax-free educational assistance. Federal tax ez form 2011   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Federal tax ez form 2011 See Academic period , earlier. Federal tax ez form 2011      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. Federal tax ez form 2011 970), The tax-free part of Pell grants (see chapter 1 of Pub. Federal tax ez form 2011 970), The tax-free part of employer-provided educational assistance (see Pub. Federal tax ez form 2011 970), Veterans' educational assistance (see chapter 1 of Pub. Federal tax ez form 2011 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Federal tax ez form 2011 Generally, any scholarship or fellowship is treated as tax-free educational assistance. Federal tax ez form 2011 However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent the student includes it in gross income (if the student is required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Federal tax ez form 2011 970, chapter 1; or The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Federal tax ez form 2011 970, chapter 1. Federal tax ez form 2011 You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year received. Federal tax ez form 2011 For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. Federal tax ez form 2011 970. Federal tax ez form 2011 Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Federal tax ez form 2011 This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). Federal tax ez form 2011 If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. Federal tax ez form 2011 If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. Federal tax ez form 2011 Refunds. Federal tax ez form 2011   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. Federal tax ez form 2011 Some tax-free educational assistance received after 2013 may be treated as a refund. Federal tax ez form 2011 See Tax-free educational assistance, earlier. Federal tax ez form 2011 Refunds received in 2013. Federal tax ez form 2011   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Federal tax ez form 2011 Refunds received after 2013 but before your income tax return is filed. Federal tax ez form 2011   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. Federal tax ez form 2011 Refunds received after 2013 and after your income tax return is filed. Federal tax ez form 2011   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. Federal tax ez form 2011 See Credit recapture, next. Federal tax ez form 2011 Credit recapture. Federal tax ez form 2011    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Federal tax ez form 2011 You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Federal tax ez form 2011 You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). Federal tax ez form 2011 Include that amount as an additional tax for the year the refund or tax-free assistance was received. Federal tax ez form 2011 Example. Federal tax ez form 2011    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. Federal tax ez form 2011 You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . Federal tax ez form 2011 20). Federal tax ez form 2011 You claimed no other tax credits. Federal tax ez form 2011 After you filed your return, your child withdrew from two courses and you received a refund of $1,400. Federal tax ez form 2011 You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). Federal tax ez form 2011 The refigured credit is $1,320 and your tax liability increased by $280. Federal tax ez form 2011 You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. Federal tax ez form 2011 See the instructions for your 2014 income tax return to determine where to include this tax. Federal tax ez form 2011 If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Federal tax ez form 2011 Amounts that do not reduce qualified education expenses. Federal tax ez form 2011   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Federal tax ez form 2011   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. Federal tax ez form 2011 The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Chapter 1 of Pub. Federal tax ez form 2011 970. Federal tax ez form 2011 The use of the money is not restricted. Federal tax ez form 2011   For examples, see chapter 2 in Pub. Federal tax ez form 2011 970. Federal tax ez form 2011 Figure 35-A. Federal tax ez form 2011 Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. Federal tax ez form 2011 Please click the link to view the image. Federal tax ez form 2011 Figure 35-A. Federal tax ez form 2011 Can You Claim an Education Credit for 2013? Prev  Up  Next   Home   More Online Publications