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How To Do Your Taxes

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How To Do Your Taxes

How to do your taxes 6. How to do your taxes   How To Figure Cost of Goods Sold Table of Contents Introduction Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42Line 35 Inventory at Beginning of Year Line 36 Purchases Less Cost of Items Withdrawn for Personal Use Line 37 Cost of Labor Line 38 Materials and Supplies Line 39 Other Costs Line 40 Add Lines 35 through 39 Line 41 Inventory at End of Year Line 42 Cost of Goods Sold Introduction If you make or buy goods to sell, you can deduct the cost of goods sold from your gross receipts on Schedule C. How to do your taxes However, to determine these costs, you must value your inventory at the beginning and end of each tax year. How to do your taxes This chapter applies to you if you are a manufacturer, wholesaler, or retailer or if you are engaged in any business that makes, buys, or sells goods to produce income. How to do your taxes This chapter does not apply to a personal service business, such as the business of a doctor, lawyer, carpenter, or painter. How to do your taxes However, if you work in a personal service business and also sell or charge for the materials and supplies normally used in your business, this chapter applies to you. How to do your taxes If you must account for an inventory in your business, you must generally use an accrual method of accounting for your purchases and sales. How to do your taxes For more information, see chapter 2. How to do your taxes Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42 Figure your cost of goods sold by filling out lines 35 through 42 of Schedule C. How to do your taxes These lines are reproduced below and are explained in the discussion that follows. How to do your taxes 35 Inventory at beginning of year. How to do your taxes If different from last year's closing inventory, attach explanation   36 Purchases less cost of items withdrawn for personal use   37 Cost of labor. How to do your taxes Do not include any amounts paid to yourself   38 Materials and supplies   39 Other costs   40 Add lines 35 through 39   41 Inventory at end of year   42 Cost of goods sold. How to do your taxes Subtract line 41 from line 40. How to do your taxes  Enter the result here and on line 4   Line 35 Inventory at Beginning of Year If you are a merchant, beginning inventory is the cost of merchandise on hand at the beginning of the year that you will sell to customers. How to do your taxes If you are a manufacturer or producer, it includes the total cost of raw materials, work in process, finished goods, and materials and supplies used in manufacturing the goods (see Inventories in chapter 2). How to do your taxes Opening inventory usually will be identical to the closing inventory of the year before. How to do your taxes You must explain any difference in a schedule attached to your return. How to do your taxes Donation of inventory. How to do your taxes   If you contribute inventory (property that you sell in the course of your business), the amount you can claim as a contribution deduction is the smaller of its fair market value on the day you contributed it or its basis. How to do your taxes The basis of donated inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. How to do your taxes You must remove the amount of your contribution deduction from your opening inventory. How to do your taxes It is not part of the cost of goods sold. How to do your taxes   If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. How to do your taxes Treat the inventory's cost as you would ordinarily treat it under your method of accounting. How to do your taxes For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. How to do your taxes   A special rule may apply to certain donations of food inventory. How to do your taxes See Publication 526, Charitable Contributions. How to do your taxes Example 1. How to do your taxes You are a calendar year taxpayer who uses an accrual method of accounting. How to do your taxes In 2013, you contributed property from inventory to a church. How to do your taxes It had a fair market value of $600. How to do your taxes The closing inventory at the end of 2012 properly included $400 of costs due to the acquisition of the property, and in 2012, you properly deducted $50 of administrative and other expenses attributable to the property as business expenses. How to do your taxes The charitable contribution allowed for 2013 is $400 ($600 − $200). How to do your taxes The $200 is the amount that would be ordinary income if you had sold the contributed inventory at fair market value on the date of the gift. How to do your taxes The cost of goods sold you use in determining gross income for 2013 must not include the $400. How to do your taxes You remove that amount from opening inventory for 2013. How to do your taxes Example 2. How to do your taxes If, in Example 1, you acquired the contributed property in 2013 at a cost of $400, you would include the $400 cost of the property in figuring the cost of goods sold for 2013 and deduct the $50 of administrative and other expenses attributable to the property for that year. How to do your taxes You would not be allowed any charitable contribution deduction for the contributed property. How to do your taxes Line 36 Purchases Less Cost of Items Withdrawn for Personal Use If you are a merchant, use the cost of all merchandise you bought for sale. How to do your taxes If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into a finished product. How to do your taxes Trade discounts. How to do your taxes   The differences between the stated prices of articles and the actual prices you pay for them are called trade discounts. How to do your taxes You must use the prices you pay (not the stated prices) in figuring your cost of purchases. How to do your taxes Do not show the discount amount separately as an item in gross income. How to do your taxes   An automobile dealer must record the cost of a car in inventory reduced by any manufacturer's rebate that represents a trade discount. How to do your taxes Cash discounts. How to do your taxes   Cash discounts are amounts your suppliers let you deduct from your purchase invoices for prompt payments. How to do your taxes There are two methods of accounting for cash discounts. How to do your taxes You can either credit them to a separate discount account or deduct them from total purchases for the year. How to do your taxes Whichever method you use, you must be consistent. How to do your taxes If you want to change your method of figuring inventory cost, you must file Form 3115, Application for Change in Accounting Method. How to do your taxes For more information, see Change in Accounting Method in chapter 2. How to do your taxes   If you credit cash discounts to a separate account, you must include this credit balance in your business income at the end of the tax year. How to do your taxes If you use this method, do not reduce your cost of goods sold by the cash discounts. How to do your taxes Purchase returns and allowances. How to do your taxes   You must deduct all returns and allowances from your total purchases during the year. How to do your taxes Merchandise withdrawn from sale. How to do your taxes   If you withdraw merchandise for your personal or family use, you must exclude this cost from the total amount of merchandise you bought for sale. How to do your taxes Do this by crediting the purchases or sales account with the cost of merchandise you withdraw for personal use. How to do your taxes You must also charge the amount to your drawing account. How to do your taxes   A drawing account is a separate account you should keep to record the business income you withdraw to pay for personal and family expenses. How to do your taxes As stated above, you also use it to record withdrawals of merchandise for personal or family use. How to do your taxes This account is also known as a “withdrawals account” or “personal account. How to do your taxes ” Line 37 Cost of Labor Labor costs are usually an element of cost of goods sold only in a manufacturing or mining business. How to do your taxes Small merchandisers (wholesalers, retailers, etc. How to do your taxes ) usually do not have labor costs that can properly be charged to cost of goods sold. How to do your taxes In a manufacturing business, labor costs properly allocable to the cost of goods sold include both the direct and indirect labor used in fabricating the raw material into a finished, saleable product. How to do your taxes Direct labor. How to do your taxes   Direct labor costs are the wages you pay to those employees who spend all their time working directly on the product being manufactured. How to do your taxes They also include a part of the wages you pay to employees who work directly on the product part time if you can determine that part of their wages. How to do your taxes Indirect labor. How to do your taxes   Indirect labor costs are the wages you pay to employees who perform a general factory function that does not have any immediate or direct connection with making the saleable product, but that is a necessary part of the manufacturing process. How to do your taxes Other labor. How to do your taxes   Other labor costs not properly chargeable to the cost of goods sold can be deducted as selling or administrative expenses. How to do your taxes Generally, the only kinds of labor costs properly chargeable to your cost of goods sold are the direct or indirect labor costs and certain other costs treated as overhead expenses properly charged to the manufacturing process, as discussed later under Line 39 Other Costs. How to do your taxes Line 38 Materials and Supplies Materials and supplies, such as hardware and chemicals, used in manufacturing goods are charged to cost of goods sold. How to do your taxes Those that are not used in the manufacturing process are treated as deferred charges. How to do your taxes You deduct them as a business expense when you use them. How to do your taxes Business expenses are discussed in chapter 8. How to do your taxes Line 39 Other Costs Examples of other costs incurred in a manufacturing or mining process that you charge to your cost of goods sold are as follows. How to do your taxes Containers. How to do your taxes   Containers and packages that are an integral part of the product manufactured are a part of your cost of goods sold. How to do your taxes If they are not an integral part of the manufactured product, their costs are shipping or selling expenses. How to do your taxes Freight-in. How to do your taxes   Freight-in, express-in, and cartage-in on raw materials, supplies you use in production, and merchandise you purchase for sale are all part of cost of goods sold. How to do your taxes Overhead expenses. How to do your taxes   Overhead expenses include expenses such as rent, heat, light, power, insurance, depreciation, taxes, maintenance, labor, and supervision. How to do your taxes The overhead expenses you have as direct and necessary expenses of the manufacturing operation are included in your cost of goods sold. How to do your taxes Line 40 Add Lines 35 through 39 The total of lines 35 through 39 equals the cost of the goods available for sale during the year. How to do your taxes Line 41 Inventory at End of Year Subtract the value of your closing inventory (including, as appropriate, the allocable parts of the cost of raw materials and supplies, direct labor, and overhead expenses) from line 40. How to do your taxes Inventory at the end of the year is also known as closing or ending inventory. How to do your taxes Your ending inventory will usually become the beginning inventory of your next tax year. How to do your taxes Line 42 Cost of Goods Sold When you subtract your closing inventory (inventory at the end of the year) from the cost of goods available for sale, the remainder is your cost of goods sold during the tax year. How to do your taxes Prev  Up  Next   Home   More Online Publications
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Art Appraisal Services

Art Advisory Panel

The Panel helps IRS review and evaluate property appraisals submitted by taxpayers in support of the fair market value claimed for works of art included in federal income, estate and gift tax cases in accordance with the Internal Revenue Code. The Panel members, up to 25 renowned art experts, serve without compensation.

Referral to the Art Advisory Panel

All taxpayer cases selected for examination that include artwork with a claimed value of $50,000 or more per item must be referred to Art Appraisal Services for possible review by the Commissioner's Art Advisory Panel (See IRM 4.48.2 and IRM 8.18.1.3). Please review the photographic requirements for referrals, and also our preferred individual appraisal item format (PDF) for works of art valued at over $50,000.

For general inquiries, contact Director, Art Appraisal Services at 202-317-8975.

Internal Revenue Service/Art Appraisal Services
1111 Constitution Ave., Suite 700
C:AP:SO:ART 
Washington, DC 20004
ATT: AAS

Annual Summary Report

The Annual Summary Report describes the closed meeting activity of the Commissioner's Art Advisory Panel for the most recent year. The report discusses the procedures of the Art Panel, provides a list of Panelists and summarizes the art items reviewed during this year by the Panel broken down by estate and charitable contribution. If you would like older Annual Summary Reports, please contact the IRS Freedom of Information Reading Room at 1111 Constitution Ave, Washington D.C. 20224.

Publications

  • Publication 526, Charitable Contributions.
  • Publication 561, Determining the Value of Donated Property. Designed to help donors and appraisers determine the value of property that is given to qualified organizations. It includes the kind of information you must have to support your decision.

Forms

  • Form 8283, Non-cash Charitable Contributions. The necessary form filed with the taxpayer's return.
  • Form 8282, Donee Information Return. Form filed by donee upon sale of property.

Revenue Procedures
Revenue Procedure 96-15 provides procedures for taxpayers to request a review of art valuations for income, estate, and gift returns. Taxpayers may obtain a Statement of Value from the Service for an advance review of art valuation claims prior to filing the return. The Statement of Value may then be used to complete the taxpayer's return.

The procedure generally applies to an item of art that has been appraised at $50,000 or more. The appraisal submitted must meet specific substantiation requirements. A user fee is charged for each request. The current fees for a Statement of Value are $5,400 for one to three items and $270 for each additional item. See Revenue Procedure 2013-01.

Send requests for a Statement of Value to:
Internal Revenue Service
Attention: Art Appraisal Services (C:AP:SO:AAS)
P.O. Box 27720
McPherson Station
Washington, DC 20038

Page Last Reviewed or Updated: 25-Feb-2014

The How To Do Your Taxes

How to do your taxes 32. How to do your taxes   Child and Dependent Care Credit Table of Contents Reminders Introduction Useful Items - You may want to see: Tests To Claim the CreditQualifying Person Test Earned Income Test Work-Related Expense Test Joint Return Test Provider Identification Test How To Figure the CreditFiguring Total Work-Related Expenses Earned Income Limit Dollar Limit Amount of Credit How To Claim the CreditTax credit not refundable. How to do your taxes Employment Taxes for Household Employers Reminders Taxpayer identification number needed for each qualifying person. How to do your taxes  You must include on line 2 of Form 2441 the name and taxpayer identification number (generally the social security number) of each qualifying person. How to do your taxes See Taxpayer identification number under Qualifying Person Test, later. How to do your taxes You may have to pay employment taxes. How to do your taxes  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. How to do your taxes Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. How to do your taxes See Employment Taxes for Household Employers , later. How to do your taxes Introduction This chapter discusses the credit for child and dependent care expenses and covers the following topics. How to do your taxes Tests you must meet to claim the credit. How to do your taxes How to figure the credit. How to do your taxes How to claim the credit. How to do your taxes Employment taxes you may have to pay as a household employer. How to do your taxes You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. How to do your taxes The credit can be up to 35% of your expenses. How to do your taxes To qualify, you must pay these expenses so you can work or look for work. How to do your taxes This credit should not be confused with the child tax credit discussed in chapter 34. How to do your taxes Dependent care benefits. How to do your taxes   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. How to do your taxes You must complete Form 2441, Part III, before you can figure the amount of your credit. How to do your taxes See Dependent Care Benefits under How To Figure the Credit, later. How to do your taxes Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 503 Child and Dependent Care Expenses 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-7 Application for IRS Individual Taxpayer Identification Number W-10 Dependent Care Provider's Identification and Certification Tests To Claim the Credit To be able to claim the credit for child and dependent care expenses, you must file Form 1040 or Form 1040A, not Form 1040EZ, and meet all the following tests. How to do your taxes The care must be for one or more qualifying persons who are identified on Form 2441. How to do your taxes (See Qualifying Person Test . How to do your taxes ) You (and your spouse if filing jointly) must have earned income during the year. How to do your taxes (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later. How to do your taxes ) You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. How to do your taxes (See Work-Related Expense Test , later. How to do your taxes ) You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. How to do your taxes If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. How to do your taxes You cannot make payments to: Your spouse, or The parent of your qualifying person if your qualifying person is your child and under age 13. How to do your taxes (See Payments to Relatives or Dependents under Work-Related Expense Test, later. How to do your taxes ) Your filing status may be single, head of household, or qualifying widow(er) with dependent child. How to do your taxes If you are married, you must file a joint return, unless an exception applies to you. How to do your taxes (See Joint Return Test , later. How to do your taxes ) You must identify the care provider on your tax return. How to do your taxes (See Provider Identification Test , later. How to do your taxes ) If you exclude or deduct dependent care benefits provided by a dependent care benefits plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). How to do your taxes (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. How to do your taxes See Reduced Dollar Limit under How To Figure the Credit, later. How to do your taxes ) These tests are presented in Figure 32-A and are also explained in detail in this chapter. How to do your taxes Figure 32-A. How to do your taxes Can You Claim the Credit? Please click here for the text description of the image. How to do your taxes Figure 32-A Can You Claim the Credit? Qualifying Person Test Your child and dependent care expenses must be for the care of one or more qualifying persons. How to do your taxes A qualifying person is: Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart, later), Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. How to do your taxes Dependent defined. How to do your taxes   A dependent is a person, other than you or your spouse, for whom you can claim an exemption. How to do your taxes To be your dependent, a person must be your qualifying child (or your qualifying relative). How to do your taxes Qualifying child. How to do your taxes   To be your qualifying child, a child must live with you for more than half the year and meet other requirements. How to do your taxes More information. How to do your taxes   For more information about who is a dependent or a qualifying child, see chapter 3. How to do your taxes Physically or mentally not able to care for oneself. How to do your taxes   Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. How to do your taxes Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves. How to do your taxes Person qualifying for part of year. How to do your taxes   You determine a person's qualifying status each day. How to do your taxes For example, if the person for whom you pay child and dependent care expenses no longer qualifies on September 16, count only those expenses through September 15. How to do your taxes Also see Yearly limit under Dollar Limit, later. How to do your taxes Birth or death of otherwise qualifying person. How to do your taxes   In determining whether a person is a qualifying person, a person who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the person's home for more than half the time he or she was alive in 2013. How to do your taxes Taxpayer identification number. How to do your taxes   You must include on your return the name and taxpayer identification number (generally the social security number) of the qualifying person(s). How to do your taxes If the correct information is not shown, the credit may be reduced or disallowed. How to do your taxes Individual taxpayer identification number (ITIN) for aliens. How to do your taxes   If your qualifying person is a nonresident or resident alien who does not have and cannot get a social security number (SSN), use that person's ITIN. How to do your taxes The ITIN is entered wherever an SSN is requested on a tax return. How to do your taxes To apply for an ITIN, see Form W-7. How to do your taxes   An ITIN is for tax use only. How to do your taxes It does not entitle the holder to social security benefits or change the holder's employment or immigration status under U. How to do your taxes S. How to do your taxes law. How to do your taxes Adoption taxpayer identification number (ATIN). How to do your taxes   If your qualifying person is a child who was placed in your home for adoption and for whom you do not have an SSN, you must get an ATIN for the child. How to do your taxes File Form W-7A, Application for Taxpayer Identification Number for Pending U. How to do your taxes S. How to do your taxes Adoptions. How to do your taxes Child of divorced or separated parents or parents living apart. How to do your taxes   Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if: The child was under age 13 or was not physically or mentally able to care for himself or herself, The child received over half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year, The child was in the custody of one or both parents for more than half the year, and You were the child's custodial parent. How to do your taxes   The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. How to do your taxes If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. How to do your taxes For details and an exception for a parent who works at night, see Pub. How to do your taxes 501. How to do your taxes   The noncustodial parent cannot treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. How to do your taxes Earned Income Test To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. How to do your taxes Earned income. How to do your taxes   Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. How to do your taxes A net loss from self-employment reduces earned income. How to do your taxes Earned income also includes strike benefits and any disability pay you report as wages. How to do your taxes   Generally, only taxable compensation is included. How to do your taxes However, you can elect to include nontaxable combat pay in earned income. How to do your taxes If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. How to do your taxes (In other words, if one of you makes the election, the other one can also make it but does not have to. How to do your taxes ) You should figure your credit both ways and make the election if it gives you a greater tax benefit. How to do your taxes Members of certain religious faiths opposed to social security. How to do your taxes   Certain income earned by persons who are members of certain religious faiths that are opposed to participation in Social Security Act programs and have an IRS-approved form that exempts certain income from social security and Medicare taxes may not be considered earned income for this purpose. How to do your taxes See Earned Income Test in Publication 503. How to do your taxes Not earned income. How to do your taxes   Earned income does not include: Pensions and annuities, Social security and railroad retirement benefits, Workers' compensation, Interest and dividends, Unemployment compensation, Scholarship or fellowship grants, except for those reported on a Form W-2 and paid to you for teaching or other services, Nontaxable workfare payments, Child support payments received by you, Income of nonresident aliens that is not effectively connected with a U. How to do your taxes S. How to do your taxes trade or business, or Any amount received for work while an inmate in a penal institution. How to do your taxes Rule for student-spouse or spouse not able to care for self. How to do your taxes   Your spouse is treated as having earned income for any month that he or she is: A full-time student, or Physically or mentally not able to care for himself or herself. How to do your taxes (Your spouse also must live with you for more than half the year. How to do your taxes )   If you are filing a joint return, this rule also applies to you. How to do your taxes You can be treated as having earned income for any month you are a full-time student or not able to care for yourself. How to do your taxes   Figure the earned income of the nonworking spouse described under (1) or (2) above as explained under Earned Income Limit , later. How to do your taxes   This rule applies to only one spouse for any one month. How to do your taxes If, in the same month, both you and your spouse do not work and are either full-time students or not physically or mentally able to care for yourselves, only one of you can be treated as having earned income in that month. How to do your taxes Full-time student. How to do your taxes   You are a full-time student if you are enrolled at a school for the number of hours or classes that the school considers full time. How to do your taxes You must have been a full-time student for some part of each of 5 calendar months during the year. How to do your taxes (The months need not be consecutive. How to do your taxes ) School. How to do your taxes   The term “school” includes high schools, colleges, universities, and technical, trade, and mechanical schools. How to do your taxes A school does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. How to do your taxes Work-Related Expense Test Child and dependent care expenses must be work-related to qualify for the credit. How to do your taxes Expenses are considered work-related only if both of the following are true. How to do your taxes They allow you (and your spouse if filing jointly) to work or look for work. How to do your taxes They are for a qualifying person's care. How to do your taxes Working or Looking for Work To be work-related, your expenses must allow you to work or look for work. How to do your taxes If you are married, generally both you and your spouse must work or look for work. How to do your taxes One spouse is treated as working during any month he or she is a full-time student or is not physically or mentally able to care for himself or herself. How to do your taxes Your work can be for others or in your own business or partnership. How to do your taxes It can be either full time or part time. How to do your taxes Work also includes actively looking for work. How to do your taxes However, if you do not find a job and have no earned income for the year, you cannot take this credit. How to do your taxes See Earned Income Test , earlier. How to do your taxes An expense is not considered work-related merely because you had it while you were working. How to do your taxes The purpose of the expense must be to allow you to work. How to do your taxes Whether your expenses allow you to work or look for work depends on the facts. How to do your taxes Example 1. How to do your taxes The cost of a babysitter while you and your spouse go out to eat is not normally a work-related expense. How to do your taxes Example 2. How to do your taxes You work during the day. How to do your taxes Your spouse works at night and sleeps during the day. How to do your taxes You pay for care of your 5-year-old child during the hours when you are working and your spouse is sleeping. How to do your taxes Your expenses are considered work-related. How to do your taxes Volunteer work. How to do your taxes    For this purpose, you are not considered to be working if you do unpaid volunteer work or volunteer work for a nominal salary. How to do your taxes Work for part of year. How to do your taxes   If you work or actively look for work during only part of the period covered by the expenses, then you must figure your expenses for each day. How to do your taxes For example, if you work all year and pay care expenses of $250 a month ($3,000 for the year), all the expenses are work-related. How to do your taxes However, if you work or look for work for only 2 months and 15 days during the year and pay expenses of $250 a month, your work-related expenses are limited to $625 (2½ months × $250). How to do your taxes Temporary absence from work. How to do your taxes   You do not have to figure your expenses for each day during a short, temporary absence from work, such as for vacation or a minor illness, if you have to pay for care anyway. How to do your taxes Instead, you can figure your credit including the expenses you paid for the period of absence. How to do your taxes   An absence of 2 weeks or less is a short, temporary absence. How to do your taxes An absence of more than 2 weeks may be considered a short, temporary absence, depending on the circumstances. How to do your taxes Example. How to do your taxes You pay a nanny to care for your 2-year-old son and 4-year-old daughter so you can work. How to do your taxes You become ill and miss 4 months of work but receive sick pay. How to do your taxes You continue to pay the nanny to care for the children while you are ill. How to do your taxes Your absence is not a short, temporary absence, and your expenses are not considered work-related. How to do your taxes Part-time work. How to do your taxes   If you work part-time, you generally must figure your expenses for each day. How to do your taxes However, if you have to pay for care weekly, monthly, or in another way that includes both days worked and days not worked, you can figure your credit including the expenses you paid for days you did not work. How to do your taxes Any day when you work at least 1 hour is a day of work. How to do your taxes Example 1. How to do your taxes You work 3 days a week. How to do your taxes While you work, your 6-year-old child attends a dependent care center, which complies with all state and local regulations. How to do your taxes You can pay the center $150 for any 3 days a week or $250 for 5 days a week. How to do your taxes Your child attends the center 5 days a week. How to do your taxes Your work-related expenses are limited to $150 a week. How to do your taxes Example 2. How to do your taxes The facts are the same as in Example 1 except the center does not offer a 3-day option. How to do your taxes The entire $250 weekly fee may be a work-related expense. How to do your taxes Care of a Qualifying Person To be work-related, your expenses must be to provide care for a qualifying person. How to do your taxes You do not have to choose the least expensive way of providing care. How to do your taxes The cost of a paid care provider may be an expense for the care of a qualifying person even if another care provider is available at no cost. How to do your taxes Expenses are for the care of a qualifying person only if their main purpose is the person's well-being and protection. How to do your taxes Expenses for household services qualify if part of the services is for the care of qualifying persons. How to do your taxes See Household services , later. How to do your taxes Expenses not for care. How to do your taxes   Expenses for care do not include amounts you pay for food, lodging, clothing, education, and entertainment. How to do your taxes However, you can include small amounts paid for these items if they are incidental to and cannot be separated from the cost of caring for the qualifying person. How to do your taxes   Child support payments are not for care and do not qualify for the credit. How to do your taxes Education. How to do your taxes   Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care. How to do your taxes Expenses to attend kindergarten or a higher grade are not expenses for care. How to do your taxes Do not use these expenses to figure your credit. How to do your taxes   However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care. How to do your taxes   Summer school and tutoring programs are not for care. How to do your taxes Example 1. How to do your taxes You take your 3-year-old child to a nursery school that provides lunch and educational activities as a part of its preschool childcare service. How to do your taxes The lunch and educational activities are incidental to the childcare, and their cost cannot be separated from the cost of care. How to do your taxes You can count the total cost when you figure the credit. How to do your taxes Example 2. How to do your taxes You place your 10-year-old child in a boarding school so you can work full time. How to do your taxes Only the part of the boarding school expense that is for the care of your child is a work-related expense. How to do your taxes You can count that part of the expense in figuring your credit if it can be separated from the cost of education. How to do your taxes You cannot count any part of the amount you pay the school for your child's education. How to do your taxes Care outside your home. How to do your taxes   You can count the cost of care provided outside your home if the care is for your dependent under age 13 or any other qualifying person who regularly spends at least 8 hours each day in your home. How to do your taxes Dependent care center. How to do your taxes   You can count care provided outside your home by a dependent care center only if the center complies with all state and local regulations that apply to these centers. How to do your taxes   A dependent care center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center is not run for profit. How to do your taxes Camp. How to do your taxes   The cost of sending your child to an overnight camp is not considered a work-related expense. How to do your taxes The cost of sending your child to a day camp may be a work-related expense, even if the camp specializes in a particular activity, such as computers or soccer. How to do your taxes Transportation. How to do your taxes   If a care provider takes a qualifying person to or from a place where care is provided, that transportation is for the care of the qualifying person. How to do your taxes This includes transportation by bus, subway, taxi, or private car. How to do your taxes However, transportation not provided by a care provider is not for the care of a qualifying person. How to do your taxes Also, if you pay the transportation cost for the care provider to come to your home, that expense is not for care of a qualifying person. How to do your taxes Fees and deposits. How to do your taxes   Fees you paid to an agency to get the services of a care provider, deposits you paid to an agency or preschool, application fees, and other indirect expenses are work-related expenses if you have to pay them to get care, even though they are not directly for care. How to do your taxes However, a forfeited deposit is not for the care of a qualifying person if care is not provided. How to do your taxes Example 1. How to do your taxes You paid a fee to an agency to get the services of the nanny who cares for your 2-year-old daughter while you work. How to do your taxes The fee you paid is a work-related expense. How to do your taxes Example 2. How to do your taxes You placed a deposit with a preschool to reserve a place for your 3-year-old child. How to do your taxes You later sent your child to a different preschool and forfeited the deposit. How to do your taxes The forfeited deposit is not for care and so is not a work-related expense. How to do your taxes Household services. How to do your taxes   Expenses you pay for household services meet the work-related expense test if they are at least partly for the well-being and protection of a qualifying person. How to do your taxes   Household services are ordinary and usual services done in and around your home that are necessary to run your home. How to do your taxes They include the services of a housekeeper, maid, or cook. How to do your taxes However, they do not include the services of a chauffeur, bartender, or gardener. How to do your taxes See Household Services in Publication 503 for more information. How to do your taxes   In this chapter, the term housekeeper refers to any household employee whose services include the care of a qualifying person. How to do your taxes Taxes paid on wages. How to do your taxes   The taxes you pay on wages for qualifying child and dependent care services are work-related expenses. How to do your taxes See Employment Taxes for Household Employers , later. How to do your taxes Payments to Relatives or Dependents You can count work-related payments you make to relatives who are not your dependents, even if they live in your home. How to do your taxes However, do not count any amounts you pay to: A dependent for whom you (or your spouse if filing jointly) can claim an exemption, Your child who was under age 19 at the end of the year, even if he or she is not your dependent, A person who was your spouse any time during the year, or The parent of your qualifying person if your qualifying person is your child and under age 13. How to do your taxes Joint Return Test Generally, married couples must file a joint return to take the credit. How to do your taxes However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. How to do your taxes Legally separated. How to do your taxes   You are not considered married if you are legally separated from your spouse under a decree of divorce or separate maintenance. How to do your taxes You may be eligible to take the credit on your return using head of household filing status. How to do your taxes Married and living apart. How to do your taxes   You are not considered married and are eligible to take the credit if all the following apply. How to do your taxes You file a return apart from your spouse. How to do your taxes Your home is the home of a qualifying person for more than half the year. How to do your taxes You pay more than half the cost of keeping up your home for the year. How to do your taxes Your spouse does not live in your home for the last 6 months of the year. How to do your taxes Costs of keeping up a home. How to do your taxes   The costs of keeping up a home normally include property taxes, mortgage interest, rent, utility charges, home repairs, insurance on the home, and food eaten at home. How to do your taxes   The costs of keeping up a home do not include payments for clothing, education, medical treatment, vacations, life insurance, transportation, or mortgage principal. How to do your taxes   They also do not include the purchase, permanent improvement, or replacement of property. How to do your taxes For example, you cannot include the cost of replacing a water heater. How to do your taxes However, you can include the cost of repairing a water heater. How to do your taxes Death of spouse. How to do your taxes   If your spouse died during the year and you do not remarry before the end of the year, you generally must file a joint return to take the credit. How to do your taxes If you do remarry before the end of the year, the credit can be claimed on your deceased spouse's return. How to do your taxes Provider Identification Test You must identify all persons or organizations that provide care for your child or dependent. How to do your taxes Use Form 2441, Part I, to show the information. How to do your taxes If you do not have any care providers and you are filing Form 2441 only to report taxable income in Part III, enter “none” in line 1, column (a). How to do your taxes Information needed. How to do your taxes   To identify the care provider, you must give the provider's: Name, Address, and Taxpayer identification number. How to do your taxes   If the care provider is an individual, the taxpayer identification number is his or her social security number or individual taxpayer identification number. How to do your taxes If the care provider is an organization, then it is the employer identification number (EIN). How to do your taxes   You do not have to show the taxpayer identification number if the care provider is a tax-exempt organization (such as a church or school). How to do your taxes In this case, enter “Tax-Exempt” in the space where Form 2441 asks for the number. How to do your taxes   If you cannot provide all of the information or if the information is incorrect, you must be able to show that you used due diligence (discussed later) in trying to furnish the necessary information. How to do your taxes Getting the information. How to do your taxes   You can use Form W-10 to request the required information from the care provider. How to do your taxes If you do not use Form W-10, you can get the information from one of the other sources listed in the instructions for Form W-10 including: A copy of the provider's social security card, A copy of the provider's completed Form W-4 if he or she is your household employee, A copy of the statement furnished by your employer if the provider is your employer's dependent care plan, or A letter or invoice from the provider if it shows the information. How to do your taxes    You should keep this information with your tax records. How to do your taxes Do not send Form W-10 (or other document containing this information) to the Internal Revenue Service. How to do your taxes Due diligence. How to do your taxes   If the care provider information you give is incorrect or incomplete, your credit may not be allowed. How to do your taxes However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit. How to do your taxes   You can show due diligence by getting and keeping the provider's completed Form W-10 or one of the other sources of information just listed. How to do your taxes Care providers can be penalized if they do not provide this information to you or if they provide incorrect information. How to do your taxes Provider refusal. How to do your taxes   If the provider refuses to give you their identifying information, you should report on Form 2441 whatever information you have (such as the name and address). How to do your taxes Enter “See Attached Statement” in the columns calling for the information you do not have. How to do your taxes Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. How to do your taxes Be sure to write your name and social security number on this statement. How to do your taxes The statement will show that you used due diligence in trying to furnish the necessary information. How to do your taxes U. How to do your taxes S. How to do your taxes citizens and resident aliens living abroad. How to do your taxes   If you are living abroad, your care provider may not have, and may not be required to get, a U. How to do your taxes S. How to do your taxes taxpayer identification number (for example, an SSN or EIN). How to do your taxes If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. How to do your taxes How To Figure the Credit Your credit is a percentage of your work-related expenses. How to do your taxes Your expenses are subject to the earned income limit and the dollar limit. How to do your taxes The percentage is based on your adjusted gross income. How to do your taxes Figuring Total Work-Related Expenses To figure the credit for 2013 work-related expenses, count only those you paid by December 31, 2013. How to do your taxes Expenses prepaid in an earlier year. How to do your taxes   If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. How to do your taxes Claim the expenses for the later year as if they were actually paid in that later year. How to do your taxes Expenses not paid until the following year. How to do your taxes   Do not count 2012 expenses that you paid in 2013 as work-related expenses for 2013. How to do your taxes You may be able to claim an additional credit for them on your 2013 return, but you must figure it separately. How to do your taxes See Payments for prior year's expenses under Amount of Credit in Publication 503. How to do your taxes    If you had expenses in 2013 that you did not pay until 2014, you cannot count them when figuring your 2013 credit. How to do your taxes You may be able to claim a credit for them on your 2014 return. How to do your taxes Expenses reimbursed. How to do your taxes   If a state social services agency pays you a nontaxable amount to reimburse you for some of your child and dependent care expenses, you cannot count the expenses that are reimbursed as work-related expenses. How to do your taxes Example. How to do your taxes You paid work-related expenses of $3,000. How to do your taxes You are reimbursed $2,000 by a state social services agency. How to do your taxes You can use only $1,000 to figure your credit. How to do your taxes Medical expenses. How to do your taxes   Some expenses for the care of qualifying persons who are not able to care for themselves may qualify as work-related expenses and also as medical expenses. How to do your taxes You can use them either way, but you cannot use the same expenses to claim both a credit and a medical expense deduction. How to do your taxes   If you use these expenses to figure the credit and they are more than the earned income limit or the dollar limit, discussed later, you can add the excess to your medical expenses. How to do your taxes However, if you use your total expenses to figure your medical expense deduction, you cannot use any part of them to figure your credit. How to do your taxes    Amounts excluded from your income under your employer's dependent care benefits plan cannot be used to claim a medical expense deduction. How to do your taxes Dependent Care Benefits If you receive dependent care benefits, your dollar limit for purposes of the credit may be reduced. How to do your taxes See Reduced Dollar Limit , later. How to do your taxes But, even if you cannot take the credit, you may be able to take an exclusion or deduction for the dependent care benefits. How to do your taxes Dependent care benefits. How to do your taxes   Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person while you work, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. How to do your taxes Your salary may have been reduced to pay for these benefits. How to do your taxes If you received benefits as an employee, they should be shown in box 10 of your Form W-2. How to do your taxes See Statement for employee , later. How to do your taxes Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O. How to do your taxes Enter the amount of these benefits on Form 2441, Part III, line 12. How to do your taxes Exclusion or deduction. How to do your taxes   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. How to do your taxes Your employer can tell you whether your benefit plan qualifies. How to do your taxes To claim the exclusion, you must complete Part III of Form 2441. How to do your taxes You cannot use Form 1040EZ. How to do your taxes   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. How to do your taxes Therefore, you would not get an exclusion from wages. How to do your taxes Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. How to do your taxes To claim the deduction, you must use Form 2441. How to do your taxes   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). How to do your taxes The definition of earned income for the exclusion or deduction is the same as the definition used when figuring the credit except that earned income for the exclusion or deduction does not include any dependent care benefits you receive. How to do your taxes See Earned Income Limit, later. How to do your taxes    You can choose to include your nontaxable combat pay in earned income when figuring your exclusion or deduction, even if you choose not to include it in earned income for the earned income credit or the credit for child and dependent care expenses. How to do your taxes Statement for employee. How to do your taxes   Your employer must give you a Form W-2 (or similar statement) showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. How to do your taxes Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. How to do your taxes Effect of exclusion on credit. How to do your taxes   If you exclude dependent care benefits from your income, the amount of the excluded benefits: Is not included in your work-related expenses, and Reduces the dollar limit, discussed later. How to do your taxes Earned Income Limit The amount of work-related expenses you use to figure your credit cannot be more than: Your earned income for the year if you are single at the end of the year, or The smaller of your or your spouse's earned income for the year if you are married at the end of the year. How to do your taxes Earned income is defined under Earned Income Test , earlier. How to do your taxes For purposes of item (2), use your spouse's earned income for the entire year, even if you were married for only part of the year. How to do your taxes Separated spouse. How to do your taxes   If you are legally separated or married and living apart from your spouse (as described under Joint Return Test , earlier), you are not considered married for purposes of the earned income limit. How to do your taxes Use only your income in figuring the earned income limit. How to do your taxes Surviving spouse. How to do your taxes   If your spouse died during the year and you file a joint return as a surviving spouse, you may, but are not required to, take into account the earned income of your spouse who died during the year. How to do your taxes Community property laws. How to do your taxes   You should disregard community property laws when you figure earned income for this credit. How to do your taxes You or your spouse is a student or not able to care for self. How to do your taxes   Your spouse who is either a full-time student or not able to care for himself or herself is treated as having earned income. How to do your taxes His or her earned income for each month is considered to be at least $250 if there is one qualifying person in your home, or at least $500 if there are two or more. How to do your taxes Spouse works. How to do your taxes   If your spouse works during that month, use the higher of $250 (or $500) or his or her actual earned income for that month. How to do your taxes Spouse qualifies for part of month. How to do your taxes    If your spouse is a full-time student or not able to care for himself or herself for only part of a month, the full $250 (or $500) still applies for that month. How to do your taxes You are a student or not able to care for self. How to do your taxes   These rules also apply if you are a student or not able to care for yourself and you are filing a joint return. How to do your taxes For each month or part of a month you are a student or not able to care for yourself, your earned income is considered to be at least $250 (or $500). How to do your taxes If you also work during that month, use the higher of $250 (or $500) or your actual earned income for that month. How to do your taxes Both spouses qualify. How to do your taxes   If, in the same month, both you and your spouse are either full-time students or not able to care for yourselves, only one spouse can be considered to have this earned income of $250 (or $500) for that month. How to do your taxes Dollar Limit There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. How to do your taxes This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons. How to do your taxes If you paid work-related expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. How to do your taxes This $6,000 limit does not need to be divided equally among them. How to do your taxes For example, if your work-related expenses for the care of one qualifying person are $3,200 and your work-related expenses for another qualifying person are $2,800, you can use the total, $6,000, when figuring the credit. How to do your taxes Yearly limit. How to do your taxes   The dollar limit is a yearly limit. How to do your taxes The amount of the dollar limit remains the same no matter how long, during the year, you have a qualifying person in your household. How to do your taxes Use the $3,000 limit if you paid work-related expenses for the care of one qualifying person at any time during the year. How to do your taxes Use $6,000 if you paid work-related expenses for the care of more than one qualifying person at any time during the year. How to do your taxes Reduced Dollar Limit If you received dependent care benefits that you exclude or deduct from your income, you must subtract that amount from the dollar limit that applies to you. How to do your taxes Your reduced dollar limit is figured on Form 2441, Part III. How to do your taxes See Dependent Care Benefits , earlier, for information on excluding or deducting these benefits. How to do your taxes Example 1. How to do your taxes George is a widower with one child and earns $24,000 a year. How to do your taxes He pays work-related expenses of $2,900 for the care of his 4-year-old child and qualifies to claim the credit for child and dependent care expenses. How to do your taxes His employer pays an additional $1,000 under a dependent care benefit plan. How to do your taxes This $1,000 is excluded from George's income. How to do your taxes Although the dollar limit for his work-related expenses is $3,000 (one qualifying person), George figures his credit on only $2,000 of the $2,900 work-related expenses he paid. How to do your taxes This is because his dollar limit is reduced as shown next. How to do your taxes   George's Reduced Dollar Limit 1) Maximum allowable expenses for one qualifying person $3,000 2) Minus: Dependent care benefits George excludes from income −1,000 3) Reduced dollar limit on expenses George can use for the credit $2,000 Example 2. How to do your taxes Randall is married and both he and his wife are employed. How to do your taxes Each has earned income in excess of $6,000. How to do your taxes They have two children, Anne and Andy, ages 2 and 4, who attend a daycare facility licensed and regulated by the state. How to do your taxes Randall's work-related expenses are $6,000 for the year. How to do your taxes Randall's employer has a dependent care assistance program as part of its cafeteria plan, which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. How to do your taxes Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. How to do your taxes Although the dollar limit for his work- related expenses is $6,000 (two or more qualifying persons), Randall figures his credit on only $1,000 of the $6,000 work-related expense paid. How to do your taxes This is because his dollar limit is reduced as shown next. How to do your taxes   Randall's Reduced Dollar Limit 1) Maximum allowable expenses for two qualifying persons $6,000 2) Minus: Dependent care benefits Randall selects from employer's cafeteria plan and excludes from income −5,000 3) Reduced dollar limit on expenses Randall can use for the credit $1,000 Amount of Credit To determine the amount of your credit, multiply your work-related expenses (after applying the earned income and dollar limits) by a percentage. How to do your taxes This percentage depends on your adjusted gross income shown on Form 1040, line 38, or Form 1040A, line 22. How to do your taxes The following table shows the percentage to use based on adjusted gross income. How to do your taxes   IF your adjusted gross income is: THEN the percentage is:       Over   But not over         $0   $15,000   35%       15,000   17,000   34%       17,000   19,000   33%       19,000   21,000   32%       21,000   23,000   31%       23,000   25,000   30%       25,000   27,000   29%       27,000   29,000   28%       29,000   31,000   27%       31,000   33,000   26%       33,000   35,000   25%       35,000   37,000   24%       37,000   39,000   23%       39,000   41,000   22%       41,000   43,000   21%       43,000   No limit   20%   How To Claim the Credit To claim the credit, you can file Form 1040 or Form 1040A. How to do your taxes You cannot claim the credit on Form 1040EZ. How to do your taxes Form 1040 or 1040A. How to do your taxes   You must complete Form 2441 and attach it to your Form 1040 or 1040A. How to do your taxes Enter the credit on Form 1040, line 48, or Form 1040A, line 29. How to do your taxes Limit on credit. How to do your taxes   The amount of credit you can claim is generally limited to the amount of your tax. How to do your taxes For more information, see the Instructions for Form 2441. How to do your taxes Tax credit not refundable. How to do your taxes   You cannot get a refund for any part of the credit that is more than this limit. How to do your taxes Recordkeeping. How to do your taxes You should keep records of your work-related expenses. How to do your taxes Also, if your dependent or spouse is not able to care for himself or herself, your records should show both the nature and the length of the disability. How to do your taxes Other records you should keep to support your claim for the credit are described earlier under Provider Identification Test . How to do your taxes Employment Taxes for Household Employers If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. How to do your taxes If you are a household employer, you will need an employer identification number (EIN) and you may have to pay employment taxes. How to do your taxes If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. How to do your taxes Self-employed persons who are in business for themselves are not household employees. How to do your taxes Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. How to do your taxes If you use a placement agency that exercises control over what work is done and how it will be done by a babysitter or companion who works in your home, the worker is not your employee. How to do your taxes This control could include providing rules of conduct and appearance and requiring regular reports. How to do your taxes In this case, you do not have to pay employment taxes. How to do your taxes But, if an agency merely gives you a list of sitters and you hire one from that list, and pay the sitter directly, the sitter may be your employee. How to do your taxes If you have a household employee, you may be subject to: Social security and Medicare taxes, Federal unemployment tax, and Federal income tax withholding. How to do your taxes Social security and Medicare taxes are generally withheld from the employee's pay and matched by the employer. How to do your taxes Federal unemployment (FUTA) tax is paid by the employer only and provides for payments of unemployment compensation to workers who have lost their jobs. How to do your taxes Federal income tax is withheld from the employee's total pay if the employee asks you to do so and you agree. How to do your taxes For more information on a household employer's tax responsibilities, see Publication 926 and Schedule H (Form 1040) and its instructions. How to do your taxes State employment tax. How to do your taxes   You may also have to pay state unemployment tax. How to do your taxes Contact your state unemployment tax office for information. How to do your taxes You should also find out whether you need to pay or collect other state employment taxes or carry workers' compensation insurance. How to do your taxes For a list of state unemployment tax agencies, visit the U. How to do your taxes S. How to do your taxes Department of Labor's website. How to do your taxes A link to that website is in Publication 926, or you can find it with an online search. How to do your taxes Prev  Up  Next   Home   More Online Publications