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File An Amended Tax Return For 2010

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File An Amended Tax Return For 2010

File an amended tax return for 2010 Publication 51 - Main Content Table of Contents 1. File an amended tax return for 2010 Taxpayer Identification NumbersWhen you receive your EIN. File an amended tax return for 2010 Registering for SSNVS. File an amended tax return for 2010 2. File an amended tax return for 2010 Who Are Employees?Crew Leaders Business Owned and Operated by Spouses 3. File an amended tax return for 2010 Wages and Other Compensation 4. File an amended tax return for 2010 Social Security and Medicare TaxesThe $150 Test or the $2,500 Test Social Security and Medicare Tax Withholding 5. File an amended tax return for 2010 Federal Income Tax WithholdingImplementation of lock-in letter. File an amended tax return for 2010 Seasonal employees and employees not currently performing services. File an amended tax return for 2010 Termination and re-hire of employees. File an amended tax return for 2010 How To Figure Federal Income Tax Withholding 6. File an amended tax return for 2010 Required Notice to Employees About Earned Income Credit (EIC) 7. File an amended tax return for 2010 Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties Employers of Both Farm and Nonfarm Workers 8. File an amended tax return for 2010 Form 943 9. File an amended tax return for 2010 Reporting Adjustments on Form 943Current Year Adjustments Prior Year Adjustments 10. File an amended tax return for 2010 Federal Unemployment (FUTA) Tax 11. File an amended tax return for 2010 Reconciling Wage Reporting Forms 13. File an amended tax return for 2010 Federal Income Tax Withholding MethodsWage Bracket Method Percentage Method Alternative Methods of Federal Income Tax Withholding How To Get Tax Help 1. File an amended tax return for 2010 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. File an amended tax return for 2010 Also, you will need the SSN of each employee and the name of each employee as shown on the employee's social security card. File an amended tax return for 2010 Employer identification number (EIN). File an amended tax return for 2010   An employer identification number (EIN) is a nine-digit number that the IRS issues. File an amended tax return for 2010 The digits are arranged as follows: 00-0000000. File an amended tax return for 2010 It is used to identify the tax accounts of employers and certain others who have no employees. File an amended tax return for 2010 Use your EIN on all of the items that you send to the IRS and SSA. File an amended tax return for 2010   If you do not have an EIN, you may apply for one online. File an amended tax return for 2010 Visit IRS. File an amended tax return for 2010 gov and click on the Apply for an EIN Online link under Tools. File an amended tax return for 2010 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. File an amended tax return for 2010 Do not use a SSN in place of an EIN. File an amended tax return for 2010   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. File an amended tax return for 2010 If you took over another employer's business, do not use that employer's EIN. File an amended tax return for 2010   You should have only one EIN. File an amended tax return for 2010 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). File an amended tax return for 2010 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. File an amended tax return for 2010 The IRS will tell you which EIN to use. File an amended tax return for 2010   For more information, see Publication 1635 or Publication 583. File an amended tax return for 2010 When you receive your EIN. File an amended tax return for 2010   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). File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 Social security number (SSN). File an amended tax return for 2010   An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. File an amended tax return for 2010 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. File an amended tax return for 2010 Do not accept a social security card that says “Not valid for employment. File an amended tax return for 2010 ” A social security number issued with this legend does not permit employment. File an amended tax return for 2010 You may, but are not required to, photocopy the social security card if the employee provides it. File an amended tax return for 2010 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. File an amended tax return for 2010 See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs. File an amended tax return for 2010 Applying for a social security card. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 socialsecurity. File an amended tax return for 2010 gov/online/ss-5. File an amended tax return for 2010 html. File an amended tax return for 2010 The employee must complete and sign Form SS-5; it cannot be filed by the employer. File an amended tax return for 2010 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. File an amended tax return for 2010 Applying for a social security number. File an amended tax return for 2010   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. File an amended tax return for 2010 If you are filing electronically, enter all zeros (000-00-0000) in the social security number field. File an amended tax return for 2010 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. File an amended tax return for 2010 Furnish Copies B, C, and 2 of Form W-2c to the employee. File an amended tax return for 2010 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. File an amended tax return for 2010 For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www. File an amended tax return for 2010 socialsecurity. File an amended tax return for 2010 gov/employer. File an amended tax return for 2010 Advise your employee to correct the SSN on his or her original Form W-2. File an amended tax return for 2010 Correctly record the employee's name and SSN. File an amended tax return for 2010   Record the name and number of each employee as they are shown on the employee's social security card. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 IRS individual taxpayer identification numbers (ITINs) for aliens. File an amended tax return for 2010   Do not accept an ITIN in place of an SSN for employee identification or for work. File an amended tax return for 2010 An ITIN is issued for use by resident and nonresident aliens who need identification for tax purposes, but who are not eligible for U. File an amended tax return for 2010 S. File an amended tax return for 2010 employment. File an amended tax return for 2010 The ITIN is a nine-digit number formatted like an SSN (for example, NNN-NN-NNNN). File an amended tax return for 2010 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). File an amended tax return for 2010    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. File an amended tax return for 2010 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. File an amended tax return for 2010 Do not use an ITIN in place of an SSN on Form W-2. File an amended tax return for 2010 Verification of social security numbers. File an amended tax return for 2010   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. File an amended tax return for 2010 Visit www. File an amended tax return for 2010 socialsecurity. File an amended tax return for 2010 gov/employer/ssnv. File an amended tax return for 2010 htm for more information. File an amended tax return for 2010 Registering for SSNVS. File an amended tax return for 2010   You must register online and receive authorization from your employer to use SSNVS. File an amended tax return for 2010 To register, visit SSA's website at www. File an amended tax return for 2010 socialsecurity. File an amended tax return for 2010 gov/employer and click on the Business Services Online link. File an amended tax return for 2010 Follow the registration instructions to obtain a user identification (ID) and password. File an amended tax return for 2010 You will need to provide the following information about yourself and your company. File an amended tax return for 2010 Name. File an amended tax return for 2010 SSN. File an amended tax return for 2010 Date of birth. File an amended tax return for 2010 Type of employer. File an amended tax return for 2010 EIN. File an amended tax return for 2010 Company name, address, and telephone number. File an amended tax return for 2010 Email address. File an amended tax return for 2010 When you have completed the online registration process, SSA will mail a one-time activation code to your employer. File an amended tax return for 2010 You must enter the activation code online to use SSNVS. File an amended tax return for 2010 2. File an amended tax return for 2010 Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. File an amended tax return for 2010 See Publication 15-A for details on statutory employees and nonemployees. File an amended tax return for 2010 Employee status under common law. File an amended tax return for 2010   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. File an amended tax return for 2010 This is so even when you give the employee freedom of action. File an amended tax return for 2010 What matters is that you have the right to control the details of how the services are performed. File an amended tax return for 2010 See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. File an amended tax return for 2010 If an employer-employee relationship exists, it does not matter what it is called. File an amended tax return for 2010 The employee may be called an agent or independent contractor. File an amended tax return for 2010 It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. File an amended tax return for 2010 You are responsible for withholding and paying employment taxes for your employees. File an amended tax return for 2010 You are also required to file employment tax returns. File an amended tax return for 2010 These requirements do not apply to amounts that you pay to independent contractors. File an amended tax return for 2010 The rules discussed in this publication apply only to workers who are your employees. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 Crew Leaders If you are a crew leader, you are an employer of farmworkers. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 For FUTA tax rules, see section 10. File an amended tax return for 2010 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. File an amended tax return for 2010 See Publication 541, Partnerships, for more details. File an amended tax return for 2010 The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. File an amended tax return for 2010 Exception—Qualified joint venture. File an amended tax return for 2010   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. File an amended tax return for 2010 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). File an amended tax return for 2010   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. File an amended tax return for 2010 Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. File an amended tax return for 2010   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. File an amended tax return for 2010 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. File an amended tax return for 2010 Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. File an amended tax return for 2010 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. File an amended tax return for 2010    Note. File an amended tax return for 2010 If your spouse is your employee, not your partner, you must pay social security and Medicare taxes for him or her. File an amended tax return for 2010   For more information on qualified joint ventures, visit IRS. File an amended tax return for 2010 gov and enter “qualified joint venture” in the search box. File an amended tax return for 2010 Exception—Community income. File an amended tax return for 2010   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. File an amended tax return for 2010 S. File an amended tax return for 2010 possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. File an amended tax return for 2010 You may still make an election to be taxed as a qualified joint venture instead of a partnership. File an amended tax return for 2010 See Exception—Qualified joint venture , earlier in this section. File an amended tax return for 2010 3. File an amended tax return for 2010 Wages and Other Compensation Cash wages that you pay to employees for farmwork are generally subject to social security tax and Medicare tax. File an amended tax return for 2010 You may also be required to withhold, deposit, and report Additional Medicare Tax. File an amended tax return for 2010 See section 4 for more information. File an amended tax return for 2010 If the wages are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. File an amended tax return for 2010 You may also be liable for FUTA tax, which is not withheld by you or paid by the employee. File an amended tax return for 2010 FUTA tax is discussed in section 10. File an amended tax return for 2010 Cash wages include checks, money orders, etc. File an amended tax return for 2010 Do not count as cash wages the value of food, lodging, and other noncash items. File an amended tax return for 2010 For more information on what payments are considered taxable wages, see Publication 15 (Circular E). File an amended tax return for 2010 Commodity wages. File an amended tax return for 2010   Commodity wages are not cash and are not subject to social security and Medicare taxes or federal income tax withholding. File an amended tax return for 2010 However, noncash payments, including commodity wages, are treated as cash wages (see above) if the substance of the transaction is a cash payment. File an amended tax return for 2010 These noncash payments are subject to social security and Medicare taxes and federal income tax withholding. File an amended tax return for 2010 Other compensation. File an amended tax return for 2010   Publications 15-A and 15-B discuss other forms of compensation that may be taxable. File an amended tax return for 2010 Family members. File an amended tax return for 2010   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. File an amended tax return for 2010 However, certain exemptions may apply for your child, spouse, or parent. File an amended tax return for 2010 See the table, How Do Employment Taxes Apply to Farmwork , in section 12. File an amended tax return for 2010 Household employees. File an amended tax return for 2010   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. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010   For more information, see Publication 926, Household Employer's Tax Guide. File an amended tax return for 2010    Wages for household work may not be a deductible farm expense. File an amended tax return for 2010 See Publication 225, Farmer's Tax Guide. File an amended tax return for 2010 Share farmers. File an amended tax return for 2010   You do not have to withhold or pay social security and Medicare taxes on amounts paid to share farmers under share-farming arrangements. File an amended tax return for 2010 Compensation paid to H-2A visa holders. File an amended tax return for 2010   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. File an amended tax return for 2010 On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. File an amended tax return for 2010   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. File an amended tax return for 2010 In that case, the worker must give the employer a completed Form W-4. File an amended tax return for 2010 Federal income tax withheld should be reported in box 2 of Form W-2. File an amended tax return for 2010 These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. File an amended tax return for 2010 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. File an amended tax return for 2010 4. File an amended tax return for 2010 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. File an amended tax return for 2010 You may also be required to withhold Additional Medicare Tax. File an amended tax return for 2010 For more information, see Additional Medicare Tax withholding , later. File an amended tax return for 2010 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. File an amended tax return for 2010 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). File an amended tax return for 2010 The $150 test applies separately to each farmworker that you employ. File an amended tax return for 2010 If you employ a family of workers, each member is treated separately. File an amended tax return for 2010 Do not count wages paid by other employers. File an amended tax return for 2010 The total that you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year. File an amended tax return for 2010 Exceptions. File an amended tax return for 2010   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. File an amended tax return for 2010   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. File an amended tax return for 2010 Social Security and Medicare Tax Withholding The social security tax rate is 6. File an amended tax return for 2010 2%, for both the employee and employer, on the first $117,000 paid to each employee. File an amended tax return for 2010 You must withhold at this rate from each employee and pay a matching amount. File an amended tax return for 2010 The Medicare tax rate is 1. File an amended tax return for 2010 45% each for the employee and employer on all wages. File an amended tax return for 2010 You must withhold at this rate from each employee and pay a matching amount. File an amended tax return for 2010 There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. File an amended tax return for 2010 Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. File an amended tax return for 2010 For details, see Publication 15-A. File an amended tax return for 2010 Additional Medicare Tax withholding. File an amended tax return for 2010   In addition to withholding Medicare tax at 1. File an amended tax return for 2010 45%, you must withhold a 0. File an amended tax return for 2010 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. File an amended tax return for 2010 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. File an amended tax return for 2010 Additional Medicare Tax is only imposed on the employee. File an amended tax return for 2010 There is no employer share of Additional Medicare Tax. File an amended tax return for 2010 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. File an amended tax return for 2010   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). File an amended tax return for 2010 For more information on Additional Medicare Tax, visit IRS. File an amended tax return for 2010 gov and enter “Additional Medicare Tax” in the search box. File an amended tax return for 2010 Employee share paid by employer. File an amended tax return for 2010   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. File an amended tax return for 2010 If you do not withhold the taxes, however, you must still pay them. File an amended tax return for 2010 Any employee social security and Medicare taxes that you pay is additional income to the employee. File an amended tax return for 2010 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. File an amended tax return for 2010 Also, do not count the additional income as wages for FUTA tax purposes. File an amended tax return for 2010 Different rules apply to employer payments of social security and Medicare taxes for non-household and non-agricultural employees. File an amended tax return for 2010 See section 7 of Publication 15-A. File an amended tax return for 2010 Withholding social security and Medicare taxes on nonresident alien employees. File an amended tax return for 2010   In general, if you pay wages to nonresident alien employees, you must withhold social security and Medicare taxes as you would for a U. File an amended tax return for 2010 S. File an amended tax return for 2010 citizen or resident alien. File an amended tax return for 2010 However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. File an amended tax return for 2010 Also see Compensation paid to H-2A visa holders in section 3. File an amended tax return for 2010 Religious exemption. File an amended tax return for 2010    An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to public insurance. File an amended tax return for 2010 This exemption is available only if both the employee and the employer are members of the sect. File an amended tax return for 2010   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. File an amended tax return for 2010 5. File an amended tax return for 2010 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. File an amended tax return for 2010 The amount to withhold is figured on gross wages before taking out social security and Medicare taxes, union dues, insurance, etc. File an amended tax return for 2010 You may use one of several methods to determine the amount of federal income tax withholding. File an amended tax return for 2010 They are discussed in section 13. File an amended tax return for 2010 Form W-4. File an amended tax return for 2010   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. File an amended tax return for 2010 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. File an amended tax return for 2010 Advise your employees to use the IRS Withholding Calculator on the IRS website at www. File an amended tax return for 2010 irs. File an amended tax return for 2010 gov/individuals for help in determining how many withholding allowances to claim on their Form W-4. File an amended tax return for 2010   Ask each new employee to give you a signed Form W-4 when starting work. File an amended tax return for 2010 Make the form effective with the first wage payment. File an amended tax return for 2010 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. File an amended tax return for 2010 Forms in Spanish. File an amended tax return for 2010   You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. File an amended tax return for 2010 For more information, see Publicación 17(SP). File an amended tax return for 2010 Effective date of Form W-4. File an amended tax return for 2010   A Form W-4 remains in effect until the employee gives you a new one. File an amended tax return for 2010 When you receive a new Form W-4, do not adjust withholding for pay periods before the effective date of the new form. File an amended tax return for 2010 Do not adjust withholding retroactively. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. File an amended tax return for 2010 Completing Form W-4. File an amended tax return for 2010   The amount of federal income tax withholding is based on marital status and withholding allowances. File an amended tax return for 2010 Your employees may not base their withholding amounts on a fixed dollar amount or percentage. File an amended tax return for 2010 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. File an amended tax return for 2010   Employees may claim fewer withholding allowances than they are entitled to claim. File an amended tax return for 2010 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. File an amended tax return for 2010   See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. File an amended tax return for 2010 Along with Form W-4, you may wish to order Publication 505 for use by your employees. File an amended tax return for 2010    Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. File an amended tax return for 2010 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. File an amended tax return for 2010 Exemption from federal income tax withholding. File an amended tax return for 2010   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. File an amended tax return for 2010 See the Form W-4 instructions for more information. File an amended tax return for 2010 However, the wages are still subject to social security and Medicare taxes. File an amended tax return for 2010   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 Withholding income taxes on the wages of nonresident alien employees. File an amended tax return for 2010   In general, you must withhold federal income taxes on the wages of nonresident alien employees. File an amended tax return for 2010 However, see Publication 515 for exceptions to this general rule. File an amended tax return for 2010 Also see Compensation paid to H-2A visa workers in section 3. File an amended tax return for 2010 Withholding adjustment for nonresident alien employees. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 See Withholding adjustment for nonresident alien employees in section 9 of Publication 15 (Circular E). File an amended tax return for 2010 Nonresident alien employee's Form W-4. File an amended tax return for 2010   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. File an amended tax return for 2010   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. File an amended tax return for 2010    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. File an amended tax return for 2010 Form 8233. File an amended tax return for 2010   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. File an amended tax return for 2010 See Publication 515 for details. File an amended tax return for 2010 IRS review of requested Forms W-4. File an amended tax return for 2010   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. File an amended tax return for 2010 You may also be directed to send certain Forms W-4 to the IRS. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. File an amended tax return for 2010   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). File an amended tax return for 2010 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”). File an amended tax return for 2010 Initial lock-in letter. File an amended tax return for 2010   The IRS uses information reported on Form W-2 to identify employees with withholding compliance problems. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 You may follow any reasonable business practice to furnish the employee copy to the employee. File an amended tax return for 2010 Implementation of lock-in letter. File an amended tax return for 2010   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. File an amended tax return for 2010 You must begin withholding tax on the basis of the notice for any wages paid after the date specified in the notice. File an amended tax return for 2010 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. File an amended tax return for 2010 Seasonal employees and employees not currently performing services. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 You reasonably expect the employee to resume services within 12 months of the date of the notice. File an amended tax return for 2010 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. File an amended tax return for 2010 Termination and re-hire of employees. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 Modification notice. File an amended tax return for 2010   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. File an amended tax return for 2010 The modification notice may change the marital status and/or the number of withholding allowances permitted. File an amended tax return for 2010 You must withhold federal income tax based on the effective date specified in the modification notice. File an amended tax return for 2010 New Form W-4 after IRS notice. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010   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. File an amended tax return for 2010 Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold based on the IRS notice or modification notice. File an amended tax return for 2010 Substitute Forms W-4. File an amended tax return for 2010   You are encouraged to have your employees use the official version of Form W-4 to claim withholding allowances or exemption from withholding. File an amended tax return for 2010 Call the IRS at 1-800-TAX-FORM (1-800-829-3676) or visit IRS. File an amended tax return for 2010 gov to obtain copies of Form W-4. File an amended tax return for 2010   You may use a substitute version of Form W-4 to meet your business needs. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010   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. File an amended tax return for 2010 However, continue to use any valid Forms W-4 developed by your employees that you accepted before October 11, 2007. File an amended tax return for 2010 Invalid Forms W-4. File an amended tax return for 2010   Any unauthorized change or addition to Form W-4 makes it invalid. File an amended tax return for 2010 This includes taking out any language by which the employee certifies that the form is correct. File an amended tax return for 2010 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. File an amended tax return for 2010 An employee who submits a false Form W-4 may be subject to a $500 penalty. File an amended tax return for 2010 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. File an amended tax return for 2010   When you get an invalid Form W-4, do not use it to figure federal income tax withholding. File an amended tax return for 2010 Tell the employee that it is invalid and ask for another one. File an amended tax return for 2010 If the employee does not give you a valid one, withhold taxes as if the employee was single and claiming no withholding allowances. File an amended tax return for 2010 However, if you have an earlier Form W-4 for this worker that is valid, withhold as you did before. File an amended tax return for 2010   For additional information about these rules, see Treasury Decision 9337, 2007-35 I. File an amended tax return for 2010 R. File an amended tax return for 2010 B. File an amended tax return for 2010 455, available at www. File an amended tax return for 2010 irs. File an amended tax return for 2010 gov/irb/2007-35_IRB/ar10. File an amended tax return for 2010 html. File an amended tax return for 2010 Amounts exempt from levy on wages, salary, and other income. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 How To Figure Federal Income Tax Withholding There are several ways to figure federal income tax withholding. File an amended tax return for 2010 Wage bracket tables. File an amended tax return for 2010 See section 13 for directions on how to use the tables. File an amended tax return for 2010 Percentage method. File an amended tax return for 2010 See section 13 for directions on how to use the percentage method. File an amended tax return for 2010 Alternative formula tables for percentage method withholding. File an amended tax return for 2010 See Publication 15-A. File an amended tax return for 2010 Wage bracket percentage method withholding tables. File an amended tax return for 2010 See Publication 15-A. File an amended tax return for 2010 Other alternative methods. File an amended tax return for 2010 See Publication 15-A. File an amended tax return for 2010 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. File an amended tax return for 2010 If an employee wants additional federal tax withheld, have the employee show the extra amount on Form W-4. File an amended tax return for 2010 Supplemental wages. File an amended tax return for 2010   Supplemental wages are wage payments to an employee that are not regular wages. File an amended tax return for 2010 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. File an amended tax return for 2010 Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. File an amended tax return for 2010   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. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 Withhold a flat 25% (no other percentage allowed). File an amended tax return for 2010 If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. File an amended tax return for 2010 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. File an amended tax return for 2010 Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. File an amended tax return for 2010 Subtract the tax withheld from the regular wages. File an amended tax return for 2010 Withhold the remaining tax from the supplemental wages. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. File an amended tax return for 2010    Separate rules apply to any supplemental wages exceeding $1 million that you pay to an individual during the year. File an amended tax return for 2010 See section 7 in Publication 15 (Circular E) for details. File an amended tax return for 2010   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. File an amended tax return for 2010 6. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 This is because eligible employees may get a refund of the amount of EIC that is more than the tax that they owe. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 If Form W-2 is not required, you must notify the employee by February 7, 2014. File an amended tax return for 2010 7. File an amended tax return for 2010 Depositing Taxes Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld. File an amended tax return for 2010 You must use electronic funds transfer to make all federal tax deposits. File an amended tax return for 2010 See How To Deposit , later in this section. File an amended tax return for 2010 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. File an amended tax return for 2010 For more information, see COBRA premium assistance credit under Introduction. File an amended tax return for 2010 Payment with return. File an amended tax return for 2010   You may make payments with Forms 943 or 945 instead of depositing if one of the following applies. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 You are a monthly schedule depositor and make a payment in accordance with the Accuracy of Deposits Rule discussed later in this section. File an amended tax return for 2010 This payment may be $2,500 or more. File an amended tax return for 2010 Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. File an amended tax return for 2010 Semiweekly schedule depositors must timely deposit the amount. File an amended tax return for 2010 See Accuracy of Deposits Rule and How To Deposit, later in this section. File an amended tax return for 2010 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. File an amended tax return for 2010 See Employers of Both Farm and Nonfarm Workers, later in this section. File an amended tax return for 2010 The rules for determining when to deposit Form 943 taxes are discussed below. File an amended tax return for 2010 See section 10 for the separate rules that apply to FUTA tax. File an amended tax return for 2010 Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor. File an amended tax return for 2010 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. File an amended tax return for 2010 The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday). File an amended tax return for 2010 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. File an amended tax return for 2010 If you reported $50,000 or less of Form 943 taxes for the lookback period, you are a monthly schedule depositor. File an amended tax return for 2010 If you reported more than $50,000 of Form 943 taxes for the lookback period, you are a semiweekly schedule depositor. File an amended tax return for 2010 Lookback period. File an amended tax return for 2010   The lookback period is the second calendar year preceding the current calendar year. File an amended tax return for 2010 For example, the lookback period for 2014 is 2012. File an amended tax return for 2010 Example of deposit schedule based on lookback period. File an amended tax return for 2010 Rose Co. File an amended tax return for 2010 reported taxes on Form 943 as follows. File an amended tax return for 2010 2012 — $48,000 2013 — $60,000 Rose Co. File an amended tax return for 2010 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. File an amended tax return for 2010 However, for 2015, Rose Co. File an amended tax return for 2010 is a semiweekly schedule depositor because the total taxes before adjustment for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. File an amended tax return for 2010 Adjustments to lookback period taxes. File an amended tax return for 2010   To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). File an amended tax return for 2010 Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. File an amended tax return for 2010 Example of adjustments. File an amended tax return for 2010 An employer originally reported total tax of $45,000 for the lookback period in 2012. File an amended tax return for 2010 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. File an amended tax return for 2010 The total tax reported in the lookback period is still $45,000. File an amended tax return for 2010 The $10,000 adjustment is also not treated as part of the 2014 taxes. File an amended tax return for 2010 Deposit period. File an amended tax return for 2010   The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. File an amended tax return for 2010 For monthly schedule depositors, the deposit period is a calendar month. File an amended tax return for 2010 The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. File an amended tax return for 2010 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. File an amended tax return for 2010 You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month. File an amended tax return for 2010 Monthly schedule example. File an amended tax return for 2010   Red Co. File an amended tax return for 2010 is a seasonal employer and a monthly schedule depositor. File an amended tax return for 2010 It pays wages each Friday. File an amended tax return for 2010 It paid wages during August 2014, but did not pay any wages during September. File an amended tax return for 2010 Red Co. File an amended tax return for 2010 must deposit the combined tax liabilities for the August paydays by September 15. File an amended tax return for 2010 Red Co. File an amended tax return for 2010 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. File an amended tax return for 2010 New employers. File an amended tax return for 2010   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. File an amended tax return for 2010 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). File an amended tax return for 2010 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. File an amended tax return for 2010 Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. File an amended tax return for 2010 Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. File an amended tax return for 2010 Semiweekly schedule depositors must complete Form 943-A, Agricultural Employer's Record of Federal Tax Liability, and submit it with Form 943. File an amended tax return for 2010 Semiweekly Deposit Schedule IF the payday falls on a. File an amended tax return for 2010 . File an amended tax return for 2010 . File an amended tax return for 2010 THEN deposit taxes by the following. File an amended tax return for 2010 . File an amended tax return for 2010 . File an amended tax return for 2010 Wednesday, Thursday, and/or Friday Wednesday Saturday, Sunday, Monday, and/or Tuesday Friday Semiweekly schedule example. File an amended tax return for 2010   Green, Inc. File an amended tax return for 2010 , is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. File an amended tax return for 2010 Green, Inc. File an amended tax return for 2010 , will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. File an amended tax return for 2010 Green, Inc. File an amended tax return for 2010 's tax liability for the April 25, 2014 (Friday), wage payment must be deposited by April 30, 2014 (Wednesday). File an amended tax return for 2010 Semiweekly deposit period spanning two quarters. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 Both deposits will be due Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). File an amended tax return for 2010 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. File an amended tax return for 2010 A business day is any day other than a Saturday, Sunday, or legal holiday. File an amended tax return for 2010 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). File an amended tax return for 2010 Semiweekly schedule depositors   will always have 3 business days to make a deposit. File an amended tax return for 2010 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. File an amended tax return for 2010 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). File an amended tax return for 2010 Legal holiday. File an amended tax return for 2010   The term “legal holiday” means any legal holiday in the District of Columbia. File an amended tax return for 2010 Legal holidays for 2014 are listed below. File an amended tax return for 2010 January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. File an amended tax return for 2010 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. File an amended tax return for 2010 For purposes of the $100,000 rule, do not continue accumulating a tax liability after the end of a deposit period. File an amended tax return for 2010 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. File an amended tax return for 2010 Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. File an amended tax return for 2010 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. File an amended tax return for 2010 For example, Fir Co. File an amended tax return for 2010 is a semiweekly schedule depositor. File an amended tax return for 2010 On Monday, Fir Co. File an amended tax return for 2010 accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. File an amended tax return for 2010 On Tuesday, Fir Co. File an amended tax return for 2010 accumulates additional taxes of $30,000. File an amended tax return for 2010 Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. File an amended tax return for 2010 does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). File an amended tax return for 2010 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. File an amended tax return for 2010 Example of the $100,000 next-day deposit rule. File an amended tax return for 2010   Elm, Inc. File an amended tax return for 2010 , started its business on May 1, 2014. File an amended tax return for 2010 Because Elm, Inc. File an amended tax return for 2010 , is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc. File an amended tax return for 2010 , is a monthly schedule depositor. File an amended tax return for 2010 On May 8, Elm, Inc. File an amended tax return for 2010 , paid wages for the first time and accumulated taxes of $50,000. File an amended tax return for 2010 On May 9 (Friday), Elm, Inc. File an amended tax return for 2010 , paid wages and accumulated taxes of $60,000, for a total of $110,000. File an amended tax return for 2010 Because Elm, Inc. File an amended tax return for 2010 , accumulated $110,000 on May 9, it must deposit $110,000 by May 12 (Monday), the next business day. File an amended tax return for 2010 Elm, Inc. File an amended tax return for 2010 , became a semiweekly schedule depositor on May 10. File an amended tax return for 2010 It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. File an amended tax return for 2010 Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. File an amended tax return for 2010 However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. File an amended tax return for 2010 Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited. File an amended tax return for 2010 The deposit shortfall is paid or deposited by the shortfall makeup date as described below. File an amended tax return for 2010 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. File an amended tax return for 2010 You may pay the shortfall with your Form 943 even if the amount is $2,500 or more. File an amended tax return for 2010 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. File an amended tax return for 2010 For example, if a semiweekly schedule depositor has a deposit shortfall during February 2014, the shortfall makeup date is March 19, 2014 (Wednesday). File an amended tax return for 2010 How To Deposit You must deposit employment taxes by electronic funds transfer. File an amended tax return for 2010 See Payment with return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. File an amended tax return for 2010 Electronic deposit requirement. File an amended tax return for 2010   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). File an amended tax return for 2010 Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). File an amended tax return for 2010 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. File an amended tax return for 2010   EFTPS is a free service provided by the Department of Treasury. File an amended tax return for 2010 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). File an amended tax return for 2010 You can also visit the EFTPS website at www. File an amended tax return for 2010 eftps. File an amended tax return for 2010 gov. File an amended tax return for 2010 Additional information about EFTPS is also available in Publication 966. File an amended tax return for 2010 New employers that have a federal tax obligation will be pre-enrolled in EFTPS. File an amended tax return for 2010 Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. File an amended tax return for 2010 See When you receive your EIN in section 1 for more information. File an amended tax return for 2010 Deposit record. File an amended tax return for 2010   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. File an amended tax return for 2010 The number can be used as a receipt or to trace the payment. File an amended tax return for 2010 Depositing on time. File an amended tax return for 2010   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. File an amended tax return for 2010 m. File an amended tax return for 2010 Eastern time the day before the date a deposit is due. File an amended tax return for 2010 If you use a third party to make a deposit on your behalf, they may have different cutoff times. File an amended tax return for 2010 Same-day payment option. File an amended tax return for 2010   If you fail to initiate a deposit transaction on EFTPS by 8 p. File an amended tax return for 2010 m. File an amended tax return for 2010 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). File an amended tax return for 2010 To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. File an amended tax return for 2010 Please check with your financial institution regarding availability, deadlines, and costs. File an amended tax return for 2010 Your financial institution may charge you a fee for payments made this way. File an amended tax return for 2010 To learn more about the information you will need to provide to your financial institution to make a same-day wire payment, visit www. File an amended tax return for 2010 eftps. File an amended tax return for 2010 gov to download the Same-Day Payment Worksheet. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 For amounts not properly deposited or not deposited on time, the penalty rates are shown next. File an amended tax return for 2010 Penalty Charged for. File an amended tax return for 2010 . File an amended tax return for 2010 . File an amended tax return for 2010 2% Deposits made 1 to 5 days late. File an amended tax return for 2010 5% Deposits made 6 to 15 days late. File an amended tax return for 2010 10% Deposits made 16 or more days late. File an amended tax return for 2010 Also applies to amounts paid within 10 days of the date of the first notice the IRS sent asking for the tax due. File an amended tax return for 2010 10% Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return. File an amended tax return for 2010 See Payment with return , earlier in this section, for exceptions. File an amended tax return for 2010 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. File an amended tax return for 2010 Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. File an amended tax return for 2010 Order in which deposits are applied. File an amended tax return for 2010   Deposits generally are applied to the most recent tax liability within the year. File an amended tax return for 2010 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. File an amended tax return for 2010 Follow the instructions on the penalty notice that you received. File an amended tax return for 2010 For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. File an amended tax return for 2010 You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. File an amended tax return for 2010 irs. File an amended tax return for 2010 gov/pub/irs-irbs/irb01-50. File an amended tax return for 2010 pdf. File an amended tax return for 2010 Example. File an amended tax return for 2010 Cedar, Inc. File an amended tax return for 2010 , is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. File an amended tax return for 2010 It does not make the deposit on July 15. File an amended tax return for 2010 On August 15, Cedar, Inc. File an amended tax return for 2010 , deposits $2,000. File an amended tax return for 2010 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. File an amended tax return for 2010 Accordingly, $500 of the July 15 liability remains undeposited. File an amended tax return for 2010 The penalty on this underdeposit will apply as explained above. File an amended tax return for 2010 Trust fund recovery penalty. File an amended tax return for 2010   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. File an amended tax return for 2010 The penalty is the full amount of the unpaid trust fund tax. File an amended tax return for 2010 This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. File an amended tax return for 2010   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. File an amended tax return for 2010   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. File an amended tax return for 2010 A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. File an amended tax return for 2010    Willfully means voluntarily, consciously, and intentionally. File an amended tax return for 2010 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. File an amended tax return for 2010 “Average” failure-to-deposit penalty. File an amended tax return for 2010   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. File an amended tax return for 2010 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. File an amended tax return for 2010 Completed Form 943, line 17, instead of Form 943-A. File an amended tax return for 2010 Failed to attach a properly completed Form 943-A. File an amended tax return for 2010 Completed Form 943-A incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. File an amended tax return for 2010   IRS figures the penalty by allocating your tax liability on Form 943, line 11, equally throughout the tax period. File an amended tax return for 2010 Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. File an amended tax return for 2010   You can avoid the penalty by reviewing your return before filing it. File an amended tax return for 2010 Follow these steps before filing your Form 943. File an amended tax return for 2010 If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 943, line 17. File an amended tax return for 2010 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. File an amended tax return for 2010 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. File an amended tax return for 2010 Do not show negative amounts on Form 943, line 17, or Form 943-A. File an amended tax return for 2010 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. File an amended tax return for 2010 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). File an amended tax return for 2010 Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules. File an amended tax return for 2010 If a deposit is due, deposi
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The File An Amended Tax Return For 2010

File an amended tax return for 2010 Internal Revenue Bulletin:  2011-12  March 21, 2011  Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2011-21 Table of Contents SECTION 1. File an amended tax return for 2010 PURPOSE SECTION 2. File an amended tax return for 2010 BACKGROUND SECTION 3. File an amended tax return for 2010 SCOPE SECTION 4. File an amended tax return for 2010 APPLICATION SECTION 5. File an amended tax return for 2010 EFFECTIVE DATE SECTION 6. File an amended tax return for 2010 EFFECT ON OTHER DOCUMENTS SECTION 7. File an amended tax return for 2010 DRAFTING INFORMATION SECTION 1. File an amended tax return for 2010 PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2011, including separate tables of limitations on depreciation deductions for trucks and vans; (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2011, including a separate table of inclusion amounts for lessees of trucks and vans; and (3) revised tables of depreciation limitations and lessee inclusion amounts for passenger automobiles that were first placed in service or first leased by the taxpayer, respectively, during 2010 and to which the 50 percent additional first year depreciation deduction under § 168(k)(1)(A) of the Internal Revenue Code or the 100 percent additional first year depreciation deduction under § 168(k)(5) applies. File an amended tax return for 2010 The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7). File an amended tax return for 2010 SECTION 2. File an amended tax return for 2010 BACKGROUND . File an amended tax return for 2010 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. File an amended tax return for 2010 For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. File an amended tax return for 2010 The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. File an amended tax return for 2010 This change reflects the higher rate of price inflation for trucks and vans since 1988. File an amended tax return for 2010 . File an amended tax return for 2010 02 Section 2022(a) of the Small Business Jobs Act of 2010, Pub. File an amended tax return for 2010 L. File an amended tax return for 2010 No. File an amended tax return for 2010 111-240, 124 Stat. File an amended tax return for 2010 2504 (September 27, 2010), extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property (as defined in § 168(k)(2)) acquired by the taxpayer after December 31, 2007, and before January 1, 2011, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2011. File an amended tax return for 2010 Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. File an amended tax return for 2010 L. File an amended tax return for 2010 No. File an amended tax return for 2010 111-312, 124 Stat. File an amended tax return for 2010 3296 (Dec. File an amended tax return for 2010 17, 2010) (the “Act”) further extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2013, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2013. File an amended tax return for 2010 Section 401(b) of the Act further amended § 168(k) by adding § 168(k)(5). File an amended tax return for 2010 It allows a 100 percent additional first year depreciation deduction for qualified property acquired by a taxpayer after September 8, 2010, and before January 1, 2012, if the taxpayer places the property in service generally before January 1, 2012. File an amended tax return for 2010 Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. File an amended tax return for 2010 . File an amended tax return for 2010 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). File an amended tax return for 2010 Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. File an amended tax return for 2010 Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2010, that is round 2 extension property (as defined in § 168(k)(4)(I)(iv). File an amended tax return for 2010 Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. File an amended tax return for 2010 This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2011 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. File an amended tax return for 2010 . File an amended tax return for 2010 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. File an amended tax return for 2010 The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. File an amended tax return for 2010 Under § 1. File an amended tax return for 2010 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. File an amended tax return for 2010 One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. File an amended tax return for 2010 Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. File an amended tax return for 2010 SECTION 3. File an amended tax return for 2010 SCOPE . File an amended tax return for 2010 01 The limitations on depreciation deductions in section 4. File an amended tax return for 2010 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2011, and continue to apply for each taxable year that the passenger automobile remains in service. File an amended tax return for 2010 . File an amended tax return for 2010 02 The tables in section 4. File an amended tax return for 2010 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2011. File an amended tax return for 2010 Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. File an amended tax return for 2010 See Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2006-18, 2006-1 C. File an amended tax return for 2010 B. File an amended tax return for 2010 645, for passenger automobiles first leased during calendar year 2006; Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2007-30, 2007-1 C. File an amended tax return for 2010 B. File an amended tax return for 2010 1104, for passenger automobiles first leased during calendar year 2007; Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2008-22, 2008-1 C. File an amended tax return for 2010 B. File an amended tax return for 2010 658, for passenger automobiles first leased during calendar year 2008; Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2009-24, 2009-1 C. File an amended tax return for 2010 B. File an amended tax return for 2010 885, for passenger automobiles first leased during calendar year 2009; and Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2010-18, 2010-1 C. File an amended tax return for 2010 B. File an amended tax return for 2010 427, as amplified and modified by section 4. File an amended tax return for 2010 03 of this revenue procedure, for passenger automobiles first leased during calendar year 2010. File an amended tax return for 2010 SECTION 4. File an amended tax return for 2010 APPLICATION . File an amended tax return for 2010 01 Limitations on Depreciation Deductions for Certain Automobiles. File an amended tax return for 2010 (1) Amount of the inflation adjustment. File an amended tax return for 2010 (a) Passenger automobiles (other than trucks or vans). File an amended tax return for 2010 Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. File an amended tax return for 2010 Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. File an amended tax return for 2010 The new car component of the CPI was 115. File an amended tax return for 2010 2 for October 1987 and 137. File an amended tax return for 2010 880 for October 2010. File an amended tax return for 2010 The October 2010 index exceeded the October 1987 index by 22. File an amended tax return for 2010 680. File an amended tax return for 2010 Therefore, the automobile price inflation adjustment for 2011 for passenger automobiles (other than trucks and vans) is 19. File an amended tax return for 2010 69 percent (22. File an amended tax return for 2010 680/115. File an amended tax return for 2010 2 x 100%). File an amended tax return for 2010 The dollar limitations in § 280F(a) are multiplied by a factor of 0. File an amended tax return for 2010 1969, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2011. File an amended tax return for 2010 This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2011. File an amended tax return for 2010 (b) Trucks and vans. File an amended tax return for 2010 To determine the dollar limitations for trucks and vans first placed in service during calendar year 2011, the Service uses the new truck component of the CPI instead of the new car component. File an amended tax return for 2010 The new truck component of the CPI was 112. File an amended tax return for 2010 4 for October 1987 and 142. File an amended tax return for 2010 556 for October 2010. File an amended tax return for 2010 The October 2010 index exceeded the October 1987 index by 30. File an amended tax return for 2010 156. File an amended tax return for 2010 Therefore, the automobile price inflation adjustment for 2011 for trucks and vans is 26. File an amended tax return for 2010 83 percent (30. File an amended tax return for 2010 156/112. File an amended tax return for 2010 4 x 100%). File an amended tax return for 2010 The dollar limitations in § 280F(a) are multiplied by a factor of 0. File an amended tax return for 2010 2683, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. File an amended tax return for 2010 This adjustment applies to all trucks and vans that are first placed in service in calendar year 2011. File an amended tax return for 2010 (2) Amount of the limitation. File an amended tax return for 2010 Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2011. File an amended tax return for 2010 Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2011 for which the § 168(k) additional first year depreciation deduction applies. File an amended tax return for 2010 Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2011 for which the § 168(k) additional first year depreciation deduction does not apply. File an amended tax return for 2010 The Service intends to issue additional guidance addressing the interaction between the 100 percent additional first year depreciation deduction and § 280F(a) for the taxable years subsequent to the first taxable year. File an amended tax return for 2010 REV. File an amended tax return for 2010 PROC. File an amended tax return for 2010 2011-21 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. File an amended tax return for 2010 PROC. File an amended tax return for 2010 2011-21 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,260 2nd Tax Year $5,200 3rd Tax Year $3,150 Each Succeeding Year $1,875 REV. File an amended tax return for 2010 PROC. File an amended tax return for 2010 2011-21 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. File an amended tax return for 2010 PROC. File an amended tax return for 2010 2011-21 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2011 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,260 2nd Tax Year $5,200 3rd Tax Year $3,150 Each Succeeding Year $1,875 . File an amended tax return for 2010 02 Inclusions in Income of Lessees of Passenger Automobiles. File an amended tax return for 2010 A taxpayer must follow the procedures in § 1. File an amended tax return for 2010 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2011. File an amended tax return for 2010 In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. File an amended tax return for 2010 REV. File an amended tax return for 2010 PROC. File an amended tax return for 2010 2011-21 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2011 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $18,500 $19,000 3 8 11 13 16 19,000 19,500 4 9 13 15 18 19,500 20,000 4 10 15 17 20 20,000 20,500 5 11 16 19 23 20,500 21,000 5 12 18 21 25 21,000 21,500 6 13 19 24 26 21,500 22,000 6 14 21 26 29 22,000 23,000 7 16 23 29 32 23,000 24,000 8 18 27 32 37 24,000 25,000 9 20 30 36 42 25,000 26,000 10 23 33 40 46 26,000 27,000 11 25 36 44 51 27,000 28,000 12 27 40 48 55 28,000 29,000 13 29 43 52 60 29,000 30,000 14 31 47 55 65 30,000 31,000 15 34 49 60 69 31,000 32,000 16 36 53 63 73 32,000 33,000 17 38 56 68 77 33,000 34,000 18 40 60 71 82 34,000 35,000 19 42 63 75 87 35,000 36,000 20 45 66 79 91 36,000 37,000 21 47 69 83 96 37,000 38,000 22 49 73 87 100 38,000 39,000 23 51 76 91 105 39,000 40,000 24 53 80 94 110 40,000 41,000 25 56 82 99 114 41,000 42,000 26 58 86 102 119 42,000 43,000 27 60 89 107 123 43,000 44,000 28 62 93 110 128 44,000 45,000 29 64 96 114 133 45,000 46,000 30 67 98 119 137 46,000 47,000 31 69 102 122 141 47,000 48,000 32 71 105 127 145 48,000 49,000 33 73 109 130 150 49,000 50,000 34 76 111 134 155 50,000 51,000 35 78 115 138 159 51,000 52,000 36 80 118 142 164 52,000 53,000 37 82 122 146 168 53,000 54,000 38 84 125 150 173 54,000 55,000 39 87 128 153 178 55,000 56,000 40 89 131 158 182 56,000 57,000 41 91 135 161 187 57,000 58,000 42 93 138 166 191 58,000 59,000 43 95 142 169 196 59,000 60,000 44 98 144 174 200 60,000 62,000 46 101 149 179 207 62,000 64,000 48 105 156 187 216 64,000 66,000 50 109 163 195 225 66,000 68,000 52 114 169 203 234 68,000 70,000 54 118 176 211 243 70,000 72,000 56 123 182 218 253 72,000 74,000 58 127 189 226 262 74,000 76,000 60 132 195 234 270 76,000 78,000 62 136 202 242 279 78,000 80,000 64 140 209 250 288 80,000 85,000 67 148 220 264 304 85,000 90,000 72 159 237 283 327 90,000 95,000 77 170 253 303 350 95,000 100,000 82 181 269 323 372 100,000 110,000 90 198 293 352 406 110,000 120,000 100 220 326 391 452 120,000 130,000 110 242 359 430 497 130,000 140,000 120 264 392 469 543 140,000 150,000 130 286 424 509 588 150,000 160,000 140 308 457 548 633 160,000 170,000 150 330 490 587 679 170,000 180,000 160 352 523 626 724 180,000 190,000 170 374 555 666 769 190,000 200,000 180 396 588 705 815 200,000 210,000 190 418 621 744 860 210,000 220,000 200 440 654 784 904 220,000 230,000 210 462 687 823 950 230,000 240,000 220 484 719 863 995 240,000 And up 230 506 752 902 1,040 REV. File an amended tax return for 2010 PROC. File an amended tax return for 2010 2011-21 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2011 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $19,000 $19,500 3 7 9 12 13 19,500 20,000 3 8 11 14 15 20,000 20,500 4 9 13 15 18 20,500 21,000 4 10 15 17 20 21,000 21,500 5 11 16 20 22 21,500 22,000 5 12 18 22 24 22,000 23,000 6 14 20 24 29 23,000 24,000 7 16 24 28 32 24,000 25,000 8 18 27 32 37 25,000 26,000 9 20 31 36 41 26,000 27,000 10 23 33 40 46 27,000 28,000 11 25 37 43 51 28,000 29,000 12 27 40 48 55 29,000 30,000 13 29 43 52 60 30,000 31,000 14 31 47 56 64 31,000 32,000 15 34 49 60 69 32,000 33,000 16 36 53 63 74 33,000 34,000 17 38 56 68 78 34,000 35,000 18 40 60 71 83 35,000 36,000 19 43 62 76 87 36,000 37,000 20 45 66 79 92 37,000 38,000 21 47 69 83 97 38,000 39,000 22 49 73 87 101 39,000 40,000 23 51 76 91 105 40,000 41,000 24 54 79 95 109 41,000 42,000 25 56 82 99 114 42,000 43,000 26 58 86 103 118 43,000 44,000 27 60 89 107 123 44,000 45,000 28 62 93 110 128 45,000 46,000 29 65 95 115 132 46,000 47,000 30 67 99 118 137 47,000 48,000 31 69 102 123 141 48,000 49,000 32 71 106 126 146 49,000 50,000 33 73 109 130 151 50,000 51,000 34 76 112 134 155 51,000 52,000 35 78 115 138 160 52,000 53,000 36 80 118 143 164 53,000 54,000 37 82 122 146 169 54,000 55,000 38 84 125 150 173 55,000 56,000 39 87 128 154 177 56,000 57,000 40 89 131 158 182 57,000 58,000 41 91 135 162 186 58,000 59,000 42 93 138 166 191 59,000 60,000 43 95 142 169 196 60,000 62,000 45 99 146 175 203 62,000 64,000 47 103 153 183 212 64,000 66,000 49 107 160 191 221 66,000 68,000 51 112 166 199 229 68,000 70,000 53 116 173 206 239 70,000 72,000 55 121 179 214 248 72,000 74,000 57 125 186 222 257 74,000 76,000 59 129 192 231 266 76,000 78,000 61 134 198 239 275 78,000 80,000 63 138 205 246 285 80,000 85,000 66 146 217 260 300 85,000 90,000 71 157 233 280 322 90,000 95,000 76 168 250 299 345 95,000 100,000 81 179 266 319 368 100,000 110,000 89 196 290 348 402 110,000 120,000 99 218 323 387 447 120,000 130,000 109 240 355 427 493 130,000 140,000 119 262 388 466 538 140,000 150,000 129 284 421 505 583 150,000 160,000 139 306 454 544 629 160,000 170,000 149 328 487 583 674 170,000 180,000 159 350 519 623 719 180,000 190,000 169 372 552 662 765 190,000 200,000 179 394 585 701 810 200,000 210,000 189 416 618 740 856 210,000 220,000 199 438 651 779 901 220,000 230,000 209 460 683 819 946 230,000 240,000 219 482 716 858 992 240,000 And up 229 504 749 897 1,037 . File an amended tax return for 2010 03 Revised Amounts for Passenger Automobiles Placed in Service During 2010. File an amended tax return for 2010 (1) Calculation of the Revised Amount. File an amended tax return for 2010 The revised depreciation limits provided in this section 4. File an amended tax return for 2010 03 were calculated by increasing the existing limitations on the first year allowance in Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2010-18 by $8,000 as provided in § 168(k)(2)(F)(i). File an amended tax return for 2010 (2) Amount of the Revised Limitation. File an amended tax return for 2010 For passenger automobiles (that are not trucks or vans) placed in service by the taxpayer in calendar year 2010 for which the § 168(k) additional first year depreciation deduction applies, Table 7 of this revenue procedure contains the revised dollar amount of the depreciation limitations for each taxable year. File an amended tax return for 2010 For trucks or vans placed in service by the taxpayer in calendar year 2010 for which the § 168(k) additional first year depreciation deduction applies, Table 8 of this revenue procedure contains the revised dollar amount of the depreciation limitations for each taxable year. File an amended tax return for 2010 If the § 168(k) additional first year depreciation deduction does not apply to a passenger automobile placed in service by the taxpayer in calendar year 2010, the depreciation limitations for each taxable year in Tables 1 and 2 of Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2010-18 apply. File an amended tax return for 2010 REV. File an amended tax return for 2010 PROC. File an amended tax return for 2010 2011-21 TABLE 7 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2010 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. File an amended tax return for 2010 PROC. File an amended tax return for 2010 2011-21 TABLE 8 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2010 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 (3) Modification to lease inclusion amounts for 2010. File an amended tax return for 2010 The lease inclusion amounts in Tables 3 and 4 of Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2010-18 are modified by striking the first four lines of the inclusion amounts in each table. File an amended tax return for 2010 Consequently, Table 3 of Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2010-18 applies to passenger automobiles (other than trucks and vans) that are first leased by the taxpayer in calendar year 2010 with a fair market value over $18,500, and Table 4 of Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2010-18 applies to trucks and vans that are first leased by the taxpayer in calendar year 2010 with a fair market value over $19,000. File an amended tax return for 2010 SECTION 5. File an amended tax return for 2010 EFFECTIVE DATE This revenue procedure, with the exception of section 4. File an amended tax return for 2010 03, applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2011. File an amended tax return for 2010 Section 4. File an amended tax return for 2010 03 of this revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2010. File an amended tax return for 2010 SECTION 6. File an amended tax return for 2010 EFFECT ON OTHER DOCUMENTS Rev. File an amended tax return for 2010 Proc. File an amended tax return for 2010 2010-18 is amplified and modified. File an amended tax return for 2010 SECTION 7. File an amended tax return for 2010 DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. File an amended tax return for 2010 Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). File an amended tax return for 2010 For further information regarding this revenue procedure, contact Mr. File an amended tax return for 2010 Harvey at (202) 622-4930 (not a toll-free call). 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