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How To File 1040ez Online

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How To File 1040ez Online

How to file 1040ez online Publication 15-B - Main Content Table of Contents 1. How to file 1040ez online Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. How to file 1040ez online Fringe Benefit Exclusion RulesAccident and Health Benefits Achievement Awards Adoption Assistance Athletic Facilities De Minimis (Minimal) Benefits Dependent Care Assistance Educational Assistance Employee Discounts Employee Stock Options Employer-Provided Cell Phones Group-Term Life Insurance Coverage Health Savings Accounts Lodging on Your Business Premises Meals Moving Expense Reimbursements No-Additional-Cost Services Retirement Planning Services Transportation (Commuting) Benefits Tuition Reduction Working Condition Benefits 3. How to file 1040ez online Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. How to file 1040ez online Rules for Withholding, Depositing, and ReportingTransfer of property. How to file 1040ez online Amount of deposit. How to file 1040ez online Limitation. How to file 1040ez online Conformity rules. How to file 1040ez online Election not to withhold income tax. How to file 1040ez online How To Get Tax Help 1. How to file 1040ez online Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. How to file 1040ez online For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. How to file 1040ez online Performance of services. How to file 1040ez online   A person who performs services for you does not have to be your employee. How to file 1040ez online A person may perform services for you as an independent contractor, partner, or director. How to file 1040ez online Also, for fringe benefit purposes, treat a person who agrees not to perform services (such as under a covenant not to compete) as performing services. How to file 1040ez online Provider of benefit. How to file 1040ez online   You are the provider of a fringe benefit if it is provided for services performed for you. How to file 1040ez online You are considered the provider of a fringe benefit even if a third party, such as your client or customer, provides the benefit to your employee for services the employee performs for you. How to file 1040ez online For example, if, in exchange for goods or services, your customer provides day care services as a fringe benefit to your employees for services they provide for you as their employer, then you are the provider of this fringe benefit even though the customer is actually providing the day care. How to file 1040ez online Recipient of benefit. How to file 1040ez online   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. How to file 1040ez online That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. How to file 1040ez online For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. How to file 1040ez online Are Fringe Benefits Taxable? Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. How to file 1040ez online Section 2 discusses the exclusions that apply to certain fringe benefits. How to file 1040ez online Any benefit not excluded under the rules discussed in section 2 is taxable. How to file 1040ez online Including taxable benefits in pay. How to file 1040ez online   You must include in a recipient's pay the amount by which the value of a fringe benefit is more than the sum of the following amounts. How to file 1040ez online Any amount the law excludes from pay. How to file 1040ez online Any amount the recipient paid for the benefit. How to file 1040ez online The rules used to determine the value of a fringe benefit are discussed in section 3. How to file 1040ez online   If the recipient of a taxable fringe benefit is your employee, the benefit is subject to employment taxes and must be reported on Form W-2, Wage and Tax Statement. How to file 1040ez online However, you can use special rules to withhold, deposit, and report the employment taxes. How to file 1040ez online These rules are discussed in section 4. How to file 1040ez online   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. How to file 1040ez online However, you may have to report the benefit on one of the following information returns. How to file 1040ez online If the recipient receives the benefit as: Use: An independent contractor Form 1099-MISC, Miscellaneous Income A partner Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. How to file 1040ez online For more information, see the instructions for the forms listed above. How to file 1040ez online Cafeteria Plans A cafeteria plan, including a flexible spending arrangement, is a written plan that allows your employees to choose between receiving cash or taxable benefits instead of certain qualified benefits for which the law provides an exclusion from wages. How to file 1040ez online If an employee chooses to receive a qualified benefit under the plan, the fact that the employee could have received cash or a taxable benefit instead will not make the qualified benefit taxable. How to file 1040ez online Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. How to file 1040ez online However, a cafeteria plan can include a qualified 401(k) plan as a benefit. How to file 1040ez online Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. How to file 1040ez online Qualified benefits. How to file 1040ez online   A cafeteria plan can include the following benefits discussed in section 2. How to file 1040ez online Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). How to file 1040ez online Adoption assistance. How to file 1040ez online Dependent care assistance. How to file 1040ez online Group-term life insurance coverage (including costs that cannot be excluded from wages). How to file 1040ez online Health savings accounts (HSAs). How to file 1040ez online Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. How to file 1040ez online Benefits not allowed. How to file 1040ez online   A cafeteria plan cannot include the following benefits discussed in section 2. How to file 1040ez online Archer MSAs. How to file 1040ez online See Accident and Health Benefits in section 2. How to file 1040ez online Athletic facilities. How to file 1040ez online De minimis (minimal) benefits. How to file 1040ez online Educational assistance. How to file 1040ez online Employee discounts. How to file 1040ez online Employer-provided cell phones. How to file 1040ez online Lodging on your business premises. How to file 1040ez online Meals. How to file 1040ez online Moving expense reimbursements. How to file 1040ez online No-additional-cost services. How to file 1040ez online Transportation (commuting) benefits. How to file 1040ez online Tuition reduction. How to file 1040ez online Working condition benefits. How to file 1040ez online It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). How to file 1040ez online $2,500 limit on a health flexible spending arrangement (FSA). How to file 1040ez online   For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. How to file 1040ez online For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. How to file 1040ez online   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). How to file 1040ez online While cafeteria plans generally must be amended on a prospective basis, an amendment that is adopted on or before December 31, 2014, may be made effective retroactively, provided that in operation the cafeteria plan meets the limit for plan years beginning after December 31, 2012. How to file 1040ez online A cafeteria plan that does not limit health FSA contributions to the dollar limit is not a cafeteria plan and all benefits offered under the plan are includible in the employee's gross income. How to file 1040ez online   For more information, see Notice 2012-40, 2012-26 I. How to file 1040ez online R. How to file 1040ez online B. How to file 1040ez online 1046, available at www. How to file 1040ez online irs. How to file 1040ez online gov/irb/2012-26_IRB/ar09. How to file 1040ez online html. How to file 1040ez online Employee. How to file 1040ez online   For these plans, treat the following individuals as employees. How to file 1040ez online A current common-law employee. How to file 1040ez online See section 2 in Publication 15 (Circular E) for more information. How to file 1040ez online A full-time life insurance agent who is a current statutory employee. How to file 1040ez online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file 1040ez online Exception for S corporation shareholders. How to file 1040ez online   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. How to file 1040ez online A 2% shareholder for this purpose is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file 1040ez online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file 1040ez online Plans that favor highly compensated employees. How to file 1040ez online   If your plan favors highly compensated employees as to eligibility to participate, contributions, or benefits, you must include in their wages the value of taxable benefits they could have selected. How to file 1040ez online A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. How to file 1040ez online   A highly compensated employee for this purpose is any of the following employees. How to file 1040ez online An officer. How to file 1040ez online A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. How to file 1040ez online An employee who is highly compensated based on the facts and circumstances. How to file 1040ez online A spouse or dependent of a person described in (1), (2), or (3). How to file 1040ez online Plans that favor key employees. How to file 1040ez online   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. How to file 1040ez online A plan favors key employees if more than 25% of the total of the nontaxable benefits you provide for all employees under the plan go to key employees. How to file 1040ez online However, a plan you maintain under a collective bargaining agreement does not favor key employees. How to file 1040ez online   A key employee during 2014 is generally an employee who is either of the following. How to file 1040ez online An officer having annual pay of more than $170,000. How to file 1040ez online An employee who for 2014 is either of the following. How to file 1040ez online A 5% owner of your business. How to file 1040ez online A 1% owner of your business whose annual pay was more than $150,000. How to file 1040ez online Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. How to file 1040ez online Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. How to file 1040ez online Eligible employer. How to file 1040ez online   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. How to file 1040ez online If your business was not in existence throughout the preceding year, you are eligible if you reasonably expect to employ an average of 100 or fewer employees in the current year. How to file 1040ez online If you establish a simple cafeteria plan in a year that you employ an average of 100 or fewer employees, you are considered an eligible employer for any subsequent year as long as you do not employ an average of 200 or more employees in a subsequent year. How to file 1040ez online Eligibility and participation requirements. How to file 1040ez online   These requirements are met if all employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate and each employee eligible to participate in the plan may elect any benefit available under the plan. How to file 1040ez online You may elect to exclude from the plan employees who: Are under age 21 before the close of the plan year, Have less than 1 year of service with you as of any day during the plan year, Are covered under a collective bargaining agreement, or Are nonresident aliens working outside the United States whose income did not come from a U. How to file 1040ez online S. How to file 1040ez online source. How to file 1040ez online Contribution requirements. How to file 1040ez online   You must make a contribution to provide qualified benefits on behalf of each qualified employee in an amount equal to: A uniform percentage (not less than 2%) of the employee’s compensation for the plan year, or An amount which is at least 6% of the employee’s compensation for the plan year or twice the amount of the salary reduction contributions of each qualified employee, whichever is less. How to file 1040ez online If the contribution requirements are met using option (2), the rate of contribution to any salary reduction contribution of a highly compensated or key employee can not be greater than the rate of contribution to any other employee. How to file 1040ez online More information. How to file 1040ez online   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. How to file 1040ez online 2. How to file 1040ez online Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. How to file 1040ez online These rules exclude all or part of the value of certain benefits from the recipient's pay. How to file 1040ez online The excluded benefits are not subject to federal income tax withholding. How to file 1040ez online Also, in most cases, they are not subject to social security, Medicare, or federal unemployment (FUTA) tax and are not reported on Form W-2. How to file 1040ez online This section discusses the exclusion rules for the following fringe benefits. How to file 1040ez online Accident and health benefits. How to file 1040ez online Achievement awards. How to file 1040ez online Adoption assistance. How to file 1040ez online Athletic facilities. How to file 1040ez online De minimis (minimal) benefits. How to file 1040ez online Dependent care assistance. How to file 1040ez online Educational assistance. How to file 1040ez online Employee discounts. How to file 1040ez online Employee stock options. How to file 1040ez online Employer-provided cell phones. How to file 1040ez online Group-term life insurance coverage. How to file 1040ez online Health savings accounts (HSAs). How to file 1040ez online Lodging on your business premises. How to file 1040ez online Meals. How to file 1040ez online Moving expense reimbursements. How to file 1040ez online No-additional-cost services. How to file 1040ez online Retirement planning services. How to file 1040ez online Transportation (commuting) benefits. How to file 1040ez online Tuition reduction. How to file 1040ez online Working condition benefits. How to file 1040ez online See Table 2-1, later, for an overview of the employment tax treatment of these benefits. How to file 1040ez online Table 2-1. How to file 1040ez online Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. How to file 1040ez online ) Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare (including Additional Medicare Tax when wages are paid in excess of $200,000) Federal Unemployment (FUTA) Accident and health benefits Exempt1,2, except for long-term care benefits provided through a flexible spending or similar arrangement. How to file 1040ez online Exempt, except for certain payments to S corporation employees who are 2% shareholders. How to file 1040ez online Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). How to file 1040ez online Adoption assistance Exempt1,3 Taxable Taxable Athletic facilities Exempt if substantially all use during the calendar year is by employees, their spouses, and their dependent children and the facility is operated by the employer on premises owned or leased by the employer. How to file 1040ez online De minimis (minimal) benefits Exempt Exempt Exempt Dependent care assistance Exempt3 up to certain limits, $5,000 ($2,500 for married employee filing separate return). How to file 1040ez online Educational assistance Exempt up to $5,250 of benefits each year. How to file 1040ez online (See Educational Assistance , later in this section. How to file 1040ez online ) Employee discounts Exempt3 up to certain limits. How to file 1040ez online (See Employee Discounts , later in this section. How to file 1040ez online ) Employee stock options See Employee Stock Options , later in this section. How to file 1040ez online Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. How to file 1040ez online Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. How to file 1040ez online (Special rules apply to former employees. How to file 1040ez online ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. How to file 1040ez online (See Health Savings Accounts , later in this section. How to file 1040ez online ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. How to file 1040ez online Meals Exempt if furnished on your business premises for your convenience. How to file 1040ez online Exempt if de minimis. How to file 1040ez online Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. How to file 1040ez online No-additional-cost services Exempt3 Exempt3 Exempt3 Retirement planning services Exempt5 Exempt5 Exempt5 Transportation (commuting) benefits Exempt1 up to certain limits if for rides in a commuter highway vehicle and/or transit passes ($130), qualified parking ($250), or qualified bicycle commuting reimbursement6 ($20). How to file 1040ez online (See Transportation (Commuting) Benefits , later in this section. How to file 1040ez online ) Exempt if de minimis. How to file 1040ez online Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). How to file 1040ez online Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. How to file 1040ez online 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. How to file 1040ez online 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. How to file 1040ez online 4 Exemption does not apply to certain key employees under a plan that favors those employees. How to file 1040ez online 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. How to file 1040ez online 6 If the employee receives a qualified bicycle commuting reimbursement in a qualified bicycle commuting month, the employee cannot receive commuter highway vehicle, transit pass, or qualified parking benefits in that same month. How to file 1040ez online 7 You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. How to file 1040ez online Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. How to file 1040ez online Also, show it in box 12 with code “C. How to file 1040ez online ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. How to file 1040ez online Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. How to file 1040ez online Contributions to the cost of accident or health insurance including qualified long-term care insurance. How to file 1040ez online Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. How to file 1040ez online Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). How to file 1040ez online This exclusion also applies to payments you directly or indirectly make to an employee under an accident or health plan for employees that are either of the following. How to file 1040ez online Payments or reimbursements of medical expenses. How to file 1040ez online Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). How to file 1040ez online The payments must be figured without regard to any period of absence from work. How to file 1040ez online Accident or health plan. How to file 1040ez online   This is an arrangement that provides benefits for your employees, their spouses, their dependents, and their children (under age 27) in the event of personal injury or sickness. How to file 1040ez online The plan may be insured or noninsured and does not need to be in writing. How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat the following individuals as employees. How to file 1040ez online A current common-law employee. How to file 1040ez online A full-time life insurance agent who is a current statutory employee. How to file 1040ez online A retired employee. How to file 1040ez online A former employee you maintain coverage for based on the employment relationship. How to file 1040ez online A widow or widower of an individual who died while an employee. How to file 1040ez online A widow or widower of a retired employee. How to file 1040ez online For the exclusion of contributions to an accident or health plan, a leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file 1040ez online Special rule for certain government plans. How to file 1040ez online   For certain government accident and health plans, payments to a deceased plan participant's beneficiary may qualify for the exclusion from gross income if the other requirements for exclusion are met. How to file 1040ez online See section 105(j) for details. How to file 1040ez online Exception for S corporation shareholders. How to file 1040ez online   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. How to file 1040ez online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file 1040ez online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file 1040ez online Exclusion from wages. How to file 1040ez online   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. How to file 1040ez online Exception for certain long-term care benefits. How to file 1040ez online   You cannot exclude contributions to the cost of long-term care insurance from an employee's wages subject to federal income tax withholding if the coverage is provided through a flexible spending or similar arrangement. How to file 1040ez online This is a benefit program that reimburses specified expenses up to a maximum amount that is reasonably available to the employee and is less than five times the total cost of the insurance. How to file 1040ez online However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. How to file 1040ez online S corporation shareholders. How to file 1040ez online   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to federal income tax withholding. How to file 1040ez online However, you can exclude the value of these benefits (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. How to file 1040ez online Exception for highly compensated employees. How to file 1040ez online   If your plan is a self-insured medical reimbursement plan that favors highly compensated employees, you must include all or part of the amounts you pay to these employees in their wages subject to federal income tax withholding. How to file 1040ez online However, you can exclude these amounts (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. How to file 1040ez online   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. How to file 1040ez online   A highly compensated employee for this exception is any of the following individuals. How to file 1040ez online One of the five highest paid officers. How to file 1040ez online An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. How to file 1040ez online An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). How to file 1040ez online   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. How to file 1040ez online COBRA premiums. How to file 1040ez online   The exclusion for accident and health benefits applies to amounts you pay to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). How to file 1040ez online The exclusion applies regardless of the length of employment, whether you directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary. How to file 1040ez online Achievement Awards This exclusion applies to the value of any tangible personal property you give to an employee as an award for either length of service or safety achievement. How to file 1040ez online The exclusion does not apply to awards of cash, cash equivalents, gift certificates, or other intangible property such as vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, and other securities. How to file 1040ez online The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat the following individuals as employees. How to file 1040ez online A current employee. How to file 1040ez online A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. How to file 1040ez online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file 1040ez online Exception for S corporation shareholders. How to file 1040ez online   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. How to file 1040ez online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file 1040ez online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file 1040ez online Exclusion from wages. How to file 1040ez online   You can generally exclude the value of achievement awards you give to an employee from the employee's wages if their cost is not more than the amount you can deduct as a business expense for the year. How to file 1040ez online The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). How to file 1040ez online See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. How to file 1040ez online    To determine for 2014 whether an achievement award is a “qualified plan award” under the deduction rules described in Publication 535, treat any employee who received more than $115,000 in pay for 2013 as a highly compensated employee. How to file 1040ez online   If the cost of awards given to an employee is more than your allowable deduction, include in the employee's wages the larger of the following amounts. How to file 1040ez online The part of the cost that is more than your allowable deduction (up to the value of the awards). How to file 1040ez online The amount by which the value of the awards exceeds your allowable deduction. How to file 1040ez online Exclude the remaining value of the awards from the employee's wages. How to file 1040ez online Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. How to file 1040ez online It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. How to file 1040ez online To determine whether your plan meets this test, do not consider employees excluded from your plan who are covered by a collective bargaining agreement, if there is evidence that adoption assistance was a subject of good-faith bargaining. How to file 1040ez online It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). How to file 1040ez online A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. How to file 1040ez online You give reasonable notice of the plan to eligible employees. How to file 1040ez online Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. How to file 1040ez online For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. How to file 1040ez online The employee was a 5% owner at any time during the year or the preceding year. How to file 1040ez online The employee received more than $115,000 in pay for the preceding year. How to file 1040ez online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file 1040ez online You must exclude all payments or reimbursements you make under an adoption assistance program for an employee's qualified adoption expenses from the employee's wages subject to federal income tax withholding. How to file 1040ez online However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. How to file 1040ez online For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. How to file 1040ez online You must report all qualifying adoption expenses you paid or reimbursed under your adoption assistance program for each employee for the year in box 12 of the employee's Form W-2. How to file 1040ez online Use code “T” to identify this amount. How to file 1040ez online Exception for S corporation shareholders. How to file 1040ez online   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. How to file 1040ez online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file 1040ez online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, including using the benefit as a reduction in distributions to the 2% shareholder. How to file 1040ez online Athletic Facilities You can exclude the value of an employee's use of an on-premises gym or other athletic facility you operate from an employee's wages if substantially all use of the facility during the calendar year is by your employees, their spouses, and their dependent children. How to file 1040ez online For this purpose, an employee's dependent child is a child or stepchild who is the employee's dependent or who, if both parents are deceased, has not attained the age of 25. How to file 1040ez online On-premises facility. How to file 1040ez online   The athletic facility must be located on premises you own or lease. How to file 1040ez online It does not have to be located on your business premises. How to file 1040ez online However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat the following individuals as employees. How to file 1040ez online A current employee. How to file 1040ez online A former employee who retired or left on disability. How to file 1040ez online A widow or widower of an individual who died while an employee. How to file 1040ez online A widow or widower of a former employee who retired or left on disability. How to file 1040ez online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file 1040ez online A partner who performs services for a partnership. How to file 1040ez online De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. How to file 1040ez online A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. How to file 1040ez online Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare. How to file 1040ez online Examples of de minimis benefits include the following. How to file 1040ez online Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. How to file 1040ez online See Employer-Provided Cell Phones , later in this section, for details. How to file 1040ez online Occasional personal use of a company copying machine if you sufficiently control its use so that at least 85% of its use is for business purposes. How to file 1040ez online Holiday gifts, other than cash, with a low fair market value. How to file 1040ez online Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000. How to file 1040ez online Meals. How to file 1040ez online See Meals , later in this section, for details. How to file 1040ez online Occasional parties or picnics for employees and their guests. How to file 1040ez online Occasional tickets for theater or sporting events. How to file 1040ez online Transportation fare. How to file 1040ez online See Transportation (Commuting) Benefits , later in this section, for details. How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat any recipient of a de minimis benefit as an employee. How to file 1040ez online Dependent Care Assistance This exclusion applies to household and dependent care services you directly or indirectly pay for or provide to an employee under a dependent care assistance program that covers only your employees. How to file 1040ez online The services must be for a qualifying person's care and must be provided to allow the employee to work. How to file 1040ez online These requirements are basically the same as the tests the employee would have to meet to claim the dependent care credit if the employee paid for the services. How to file 1040ez online For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat the following individuals as employees. How to file 1040ez online A current employee. How to file 1040ez online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file 1040ez online Yourself (if you are a sole proprietor). How to file 1040ez online A partner who performs services for a partnership. How to file 1040ez online Exclusion from wages. How to file 1040ez online   You can exclude the value of benefits you provide to an employee under a dependent care assistance program from the employee's wages if you reasonably believe that the employee can exclude the benefits from gross income. How to file 1040ez online   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. How to file 1040ez online This limit is reduced to $2,500 for married employees filing separate returns. How to file 1040ez online   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. How to file 1040ez online Special rules apply to determine the earned income of a spouse who is either a student or not able to care for himself or herself. How to file 1040ez online For more information on the earned income limit, see Publication 503. How to file 1040ez online Exception for highly compensated employees. How to file 1040ez online   You cannot exclude dependent care assistance from the wages of a highly compensated employee unless the benefits provided under the program do not favor highly compensated employees and the program meets the requirements described in section 129(d) of the Internal Revenue Code. How to file 1040ez online   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. How to file 1040ez online The employee was a 5% owner at any time during the year or the preceding year. How to file 1040ez online The employee received more than $115,000 in pay for the preceding year. How to file 1040ez online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file 1040ez online Form W-2. How to file 1040ez online   Report the value of all dependent care assistance you provide to an employee under a dependent care assistance program in box 10 of the employee's Form W-2. How to file 1040ez online Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. How to file 1040ez online Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. How to file 1040ez online Example. How to file 1040ez online   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. How to file 1040ez online In addition, it provides occasional on-site dependent care to its employees at no cost. How to file 1040ez online Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. How to file 1040ez online In addition, Emily used the on-site dependent care several times. How to file 1040ez online The fair market value of the on-site care was $700. How to file 1040ez online Emily's Form W-2 should report $5,200 of dependent care assistance in box 10 ($4,500 flexible spending arrangement plus $700 on-site dependent care). How to file 1040ez online Boxes 1, 3, and 5 should include $200 (the amount in excess of the nontaxable assistance), and applicable taxes should be withheld on that amount. How to file 1040ez online Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. How to file 1040ez online The exclusion also applies to graduate level courses. How to file 1040ez online Educational assistance means amounts you pay or incur for your employees' education expenses. How to file 1040ez online These expenses generally include the cost of books, equipment, fees, supplies, and tuition. How to file 1040ez online However, these expenses do not include the cost of a course or other education involving sports, games, or hobbies, unless the education: Has a reasonable relationship to your business, or Is required as part of a degree program. How to file 1040ez online Education expenses do not include the cost of tools or supplies (other than textbooks) your employee is allowed to keep at the end of the course. How to file 1040ez online Nor do they include the cost of lodging, meals, or transportation. How to file 1040ez online Educational assistance program. How to file 1040ez online   An educational assistance program is a separate written plan that provides educational assistance only to your employees. How to file 1040ez online The program qualifies only if all of the following tests are met. How to file 1040ez online The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. How to file 1040ez online To determine whether your program meets this test, do not consider employees excluded from your program who are covered by a collective bargaining agreement if there is evidence that educational assistance was a subject of good-faith bargaining. How to file 1040ez online The program does not provide more than 5% of its benefits during the year for shareholders or owners. How to file 1040ez online A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. How to file 1040ez online The program does not allow employees to choose to receive cash or other benefits that must be included in gross income instead of educational assistance. How to file 1040ez online You give reasonable notice of the program to eligible employees. How to file 1040ez online Your program can cover former employees if their employment is the reason for the coverage. How to file 1040ez online   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. How to file 1040ez online The employee was a 5% owner at any time during the year or the preceding year. How to file 1040ez online The employee received more than $115,000 in pay for the preceding year. How to file 1040ez online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat the following individuals as employees. How to file 1040ez online A current employee. How to file 1040ez online A former employee who retired, left on disability, or was laid off. How to file 1040ez online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file 1040ez online Yourself (if you are a sole proprietor). How to file 1040ez online A partner who performs services for a partnership. How to file 1040ez online Exclusion from wages. How to file 1040ez online   You can exclude up to $5,250 of educational assistance you provide to an employee under an educational assistance program from the employee's wages each year. How to file 1040ez online Assistance over $5,250. How to file 1040ez online   If you do not have an educational assistance plan, or you provide an employee with assistance exceeding $5,250, you must include the value of these benefits as wages, unless the benefits are working condition benefits. How to file 1040ez online Working condition benefits may be excluded from wages. How to file 1040ez online Property or a service provided is a working condition benefit to the extent that if the employee paid for it, the amount paid would have been deductible as a business or depreciation expense. How to file 1040ez online See Working Condition Benefits , later, in this section. How to file 1040ez online Employee Discounts This exclusion applies to a price reduction you give an employee on property or services you offer to customers in the ordinary course of the line of business in which the employee performs substantial services. How to file 1040ez online However, it does not apply to discounts on real property or discounts on personal property of a kind commonly held for investment (such as stocks or bonds). How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat the following individuals as employees. How to file 1040ez online A current employee. How to file 1040ez online A former employee who retired or left on disability. How to file 1040ez online A widow or widower of an individual who died while an employee. How to file 1040ez online A widow or widower of an employee who retired or left on disability. How to file 1040ez online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. How to file 1040ez online A partner who performs services for a partnership. How to file 1040ez online Exclusion from wages. How to file 1040ez online   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. How to file 1040ez online For a discount on services, 20% of the price you charge nonemployee customers for the service. How to file 1040ez online For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. How to file 1040ez online   Determine your gross profit percentage in the line of business based on all property you offer to customers (including employee customers) and your experience during the tax year immediately before the tax year in which the discount is available. How to file 1040ez online To figure your gross profit percentage, subtract the total cost of the property from the total sales price of the property and divide the result by the total sales price of the property. How to file 1040ez online Exception for highly compensated employees. How to file 1040ez online   You cannot exclude from the wages of a highly compensated employee any part of the value of a discount that is not available on the same terms to one of the following groups. How to file 1040ez online All of your employees. How to file 1040ez online A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. How to file 1040ez online   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. How to file 1040ez online The employee was a 5% owner at any time during the year or the preceding year. How to file 1040ez online The employee received more than $115,000 in pay for the preceding year. How to file 1040ez online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file 1040ez online Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. How to file 1040ez online Wages for social security, Medicare, and federal unemployment (FUTA) taxes do not include remuneration resulting from the exercise, after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or from any disposition of stock acquired by exercising such an option. How to file 1040ez online The IRS will not apply these taxes to an exercise before October 23, 2004, of an incentive stock option or an employee stock purchase plan option or to a disposition of stock acquired by such exercise. How to file 1040ez online Additionally, federal income tax withholding is not required on the income resulting from a disqualifying disposition of stock acquired by the exercise after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or on income equal to the discount portion of stock acquired by the exercise, after October 22, 2004, of an employee stock purchase plan option resulting from any disposition of the stock. How to file 1040ez online The IRS will not apply federal income tax withholding upon the disposition of stock acquired by the exercise, before October 23, 2004, of an incentive stock option or an employee stock purchase plan option. How to file 1040ez online However, the employer must report as income in box 1 of Form W-2, (a) the discount portion of stock acquired by the exercise of an employee stock purchase plan option upon disposition of the stock, and (b) the spread (between the exercise price and the fair market value of the stock at the time of exercise) upon a disqualifying disposition of stock acquired by the exercise of an incentive stock option or an employee stock purchase plan option. How to file 1040ez online An employer must report the excess of the fair market value of stock received upon exercise of a nonstatutory stock option over the amount paid for the stock option on Form W-2 in boxes 1, 3 (up to the social security wage base), 5, and in box 12 using the code “V. How to file 1040ez online ” See Regulations section 1. How to file 1040ez online 83-7. How to file 1040ez online An employee who transfers his or her interest in nonstatutory stock options to the employee's former spouse incident to a divorce is not required to include an amount in gross income upon the transfer. How to file 1040ez online The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. How to file 1040ez online See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. How to file 1040ez online You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. How to file 1040ez online irs. How to file 1040ez online gov/pub/irs-irbs/irb02-19. How to file 1040ez online pdf. How to file 1040ez online See Revenue Ruling 2004-60, 2004-24 I. How to file 1040ez online R. How to file 1040ez online B. How to file 1040ez online 1051, available at www. How to file 1040ez online irs. How to file 1040ez online gov/irb/2004-24_IRB/ar13. How to file 1040ez online html. How to file 1040ez online For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. How to file 1040ez online Employer-Provided Cell Phones The value of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a working condition fringe benefit. How to file 1040ez online Personal use of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a de minimis fringe benefit. How to file 1040ez online For the rules relating to these types of benefits, see De Minimis (Minimal) Benefits , earlier in this section, and Working Condition Benefits , later in this section. How to file 1040ez online Noncompensatory business purposes. How to file 1040ez online   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. How to file 1040ez online Examples of substantial business reasons include the employer's: Need to contact the employee at all times for work-related emergencies, Requirement that the employee be available to speak with clients at times when the employee is away from the office, and Need to speak with clients located in other time zones at times outside the employee's normal workday. How to file 1040ez online Cell phones provided to promote goodwill, boost morale, or attract prospective employees. How to file 1040ez online   You cannot exclude from an employee's wages the value of a cell phone provided to promote goodwill of an employee, to attract a prospective employee, or as a means of providing additional compensation to an employee. How to file 1040ez online Additional information. How to file 1040ez online   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. How to file 1040ez online R. How to file 1040ez online B. How to file 1040ez online 407, available at  www. How to file 1040ez online irs. How to file 1040ez online gov/irb/2011-38_IRB/ar07. How to file 1040ez online html. How to file 1040ez online Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. How to file 1040ez online It provides a general death benefit that is not included in income. How to file 1040ez online You provide it to a group of employees. How to file 1040ez online See The 10-employee rule , later. How to file 1040ez online It provides an amount of insurance to each employee based on a formula that prevents individual selection. How to file 1040ez online This formula must use factors such as the employee's age, years of service, pay, or position. How to file 1040ez online You provide it under a policy you directly or indirectly carry. How to file 1040ez online Even if you do not pay any of the policy's cost, you are considered to carry it if you arrange for payment of its cost by your employees and charge at least one employee less than, and at least one other employee more than, the cost of his or her insurance. How to file 1040ez online Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. How to file 1040ez online Group-term life insurance does not include the following insurance. How to file 1040ez online Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. How to file 1040ez online Life insurance on the life of your employee's spouse or dependent. How to file 1040ez online However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. How to file 1040ez online See De Minimis (Minimal) Benefits , earlier in this section. How to file 1040ez online Insurance provided under a policy that provides a permanent benefit (an economic value that extends beyond 1 policy year, such as paid-up or cash surrender value), unless certain requirements are met. How to file 1040ez online See Regulations section 1. How to file 1040ez online 79-1 for details. How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat the following individuals as employees. How to file 1040ez online A current common-law employee. How to file 1040ez online A full-time life insurance agent who is a current statutory employee. How to file 1040ez online An individual who was formerly your employee under (1) or (2). How to file 1040ez online A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction and control. How to file 1040ez online Exception for S corporation shareholders. How to file 1040ez online   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. How to file 1040ez online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file 1040ez online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file 1040ez online The 10-employee rule. How to file 1040ez online   Generally, life insurance is not group-term life insurance unless you provide it to at least 10 full-time employees at some time during the year. How to file 1040ez online   For this rule, count employees who choose not to receive the insurance unless, to receive it, they must contribute to the cost of benefits other than the group-term life insurance. How to file 1040ez online For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. How to file 1040ez online However, do not count an employee who must pay part or all of the cost of permanent benefits to get insurance, unless that employee chooses to receive it. How to file 1040ez online A permanent benefit is an economic value extending beyond one policy year (for example, a paid-up or cash-surrender value) that is provided under a life insurance policy. How to file 1040ez online Exceptions. How to file 1040ez online   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. How to file 1040ez online   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. How to file 1040ez online If evidence that the employee is insurable is required, it is limited to a medical questionnaire (completed by the employee) that does not require a physical. How to file 1040ez online You provide the insurance to all your full-time employees or, if the insurer requires the evidence mentioned in (1), to all full-time employees who provide evidence the insurer accepts. How to file 1040ez online You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. How to file 1040ez online See Regulations section 1. How to file 1040ez online 79-1 for details. How to file 1040ez online   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. How to file 1040ez online You provide the insurance under a common plan covering your employees and the employees of at least one other employer who is not related to you. How to file 1040ez online The insurance is restricted to, but mandatory for, all your employees who belong to, or are represented by, an organization (such as a union) that carries on substantial activities besides obtaining insurance. How to file 1040ez online Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. How to file 1040ez online   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. How to file 1040ez online They were 65 or older. How to file 1040ez online They customarily work 20 hours or less a week or 5 months or less in a calendar year. How to file 1040ez online They have not been employed for the waiting period given in the policy. How to file 1040ez online This waiting period cannot be more than 6 months. How to file 1040ez online Exclusion from wages. How to file 1040ez online   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. How to file 1040ez online You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. How to file 1040ez online In addition, you do not have to withhold federal income tax or pay FUTA tax on any group-term life insurance you provide to an employee. How to file 1040ez online Coverage over the limit. How to file 1040ez online   You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. How to file 1040ez online Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. How to file 1040ez online Also, show it in box 12 with code “C. How to file 1040ez online ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. How to file 1040ez online   Figure the monthly cost of the insurance to include in the employee's wages by multiplying the number of thousands of dollars of all insurance coverage over $50,000 (figured to the nearest $100) by the cost shown in Table 2-2. How to file 1040ez online For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. How to file 1040ez online You must prorate the cost from the table if less than a full month of coverage is involved. How to file 1040ez online Table 2-2. How to file 1040ez online Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . How to file 1040ez online 05 25 through 29 . How to file 1040ez online 06 30 through 34 . How to file 1040ez online 08 35 through 39 . How to file 1040ez online 09 40 through 44 . How to file 1040ez online 10 45 through 49 . How to file 1040ez online 15 50 through 54 . How to file 1040ez online 23 55 through 59 . How to file 1040ez online 43 60 through 64 . How to file 1040ez online 66 65 through 69 1. How to file 1040ez online 27 70 and older 2. How to file 1040ez online 06 You figure the total cost to include in the employee's wages by multiplying the monthly cost by the number of full months' coverage at that cost. How to file 1040ez online Example. How to file 1040ez online Tom's employer provides him with group-term life insurance coverage of $200,000. How to file 1040ez online Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. How to file 1040ez online Tom's employer must include $170 in his wages. How to file 1040ez online The $200,000 of insurance coverage is reduced by $50,000. How to file 1040ez online The yearly cost of $150,000 of coverage is $270 ($. How to file 1040ez online 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. How to file 1040ez online The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. How to file 1040ez online The employer also enters $170 in box 12 with code “C. How to file 1040ez online ” Coverage for dependents. How to file 1040ez online   Group-term life insurance coverage paid by the employer for the spouse or dependents of an employee may be excludable from income as a de minimis fringe benefit if the face amount is not more than $2,000. How to file 1040ez online If the face amount is greater than $2,000, the entire cost of the dependent coverage must be included in income unless the amount over $2,000 is purchased with employee contributions on an after-tax basis. How to file 1040ez online The cost of the insurance is determined by using Table 2-2. How to file 1040ez online Former employees. How to file 1040ez online   When group-term life insurance over $50,000 is provided to an employee (including retirees) after his or her termination, the employee share of social security and Medicare taxes on that period of coverage is paid by the former employee with his or her tax return and is not collected by the employer. How to file 1040ez online You are not required to collect those taxes. How to file 1040ez online Use the table above to determine the amount of social security and Medicare taxes owed by the former employee for coverage provided after separation from service. How to file 1040ez online Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. How to file 1040ez online ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. How to file 1040ez online Exception for key employees. How to file 1040ez online   Generally, if your group-term life insurance plan favors key employees as to participation or benefits, you must include the entire cost of the insurance in your key employees' wages. How to file 1040ez online This exception generally does not apply to church plans. How to file 1040ez online When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. How to file 1040ez online Include the cost in boxes 1, 3, and 5 of Form W-2. How to file 1040ez online However, you do not have to withhold federal income tax or pay FUTA tax on the cost of any group-term life insurance you provide to an employee. How to file 1040ez online   For this purpose, the cost of the insurance is the greater of the following amounts. How to file 1040ez online The premiums you pay for the employee's insurance. How to file 1040ez online See Regulations section 1. How to file 1040ez online 79-4T(Q&A 6) for more information. How to file 1040ez online The cost you figure using Table 2-2. How to file 1040ez online   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. How to file 1040ez online See section 416(i) of the Internal Revenue Code for more information. How to file 1040ez online An officer having annual pay of more than $170,000. How to file 1040ez online An individual who for 2014 was either of the following. How to file 1040ez online A 5% owner of your business. How to file 1040ez online A 1% owner of your business whose annual pay was more than $150,000. How to file 1040ez online   A former employee who was a key employee upon retirement or separation from service is also a key employee. How to file 1040ez online   Your plan does not favor key employees as to participation if at least one of the following is true. How to file 1040ez online It benefits at least 70% of your employees. How to file 1040ez online At least 85% of the participating employees are not key employees. How to file 1040ez online It benefits employees who qualify under a set of rules you set up that do not favor key employees. How to file 1040ez online   Your plan meets this participation test if it is part of a cafeteria plan (discussed in section 1) and it meets the participation test for those plans. How to file 1040ez online   When applying this test, do not consider employees who: Have not completed 3 years of service, Are part-time or seasonal, Are nonresident aliens who receive no U. How to file 1040ez online S. How to file 1040ez online source earned income from you, or Are not included in the plan but are in a unit of employees covered by a collective bargaining agreement, if the benefits provided under the plan were the subject of good-faith bargaining between you and employee representatives. How to file 1040ez online   Your plan does not favor key employees as to benefits if all benefits available to participating key employees are also available to all other participating employees. How to file 1040ez online Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. How to file 1040ez online S corporation shareholders. How to file 1040ez online   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the cost of all group-term life insurance coverage you provide the 2% shareholder in his or her wages. How to file 1040ez online When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. How to file 1040ez online Include the cost in boxes 1, 3, and 5 of Form W-2. How to file 1040ez online However, you do not have to withhold federal income tax or pay federal unemployment tax on the cost of any group-term life insurance coverage you provide to the 2% shareholder. How to file 1040ez online Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. How to file 1040ez online Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. How to file 1040ez online Contributions to the account are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. How to file 1040ez online The medical expenses must not be reimbursable by insurance or other sources and their payment from HSA funds (distribution) will not give rise to a medical expense deduction on the individual's federal income tax return. How to file 1040ez online For more information about HSAs, visit the Department of Treasury's website at www. How to file 1040ez online treasury. How to file 1040ez online gov and enter “HSA” in the search box. How to file 1040ez online Eligibility. How to file 1040ez online   A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance except for permitted insurance listed under section 223(c)(3) or insurance for accidents, disability, dental care, vision care, or long-term care. How to file 1040ez online For calendar year 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage and $12,700 for family coverage. How to file 1040ez online   There are no income limits that restrict an individual's eligibility to contribute to an HSA nor is there a requirement that the account owner have earned income to make a contribution. How to file 1040ez online Exceptions. How to file 1040ez online   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. How to file 1040ez online Also, an employee's participation in a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) generally disqualifies the individual (and employer) from making contributions to his or her HSA. How to file 1040ez online However, an individual may qualify to participate in an HSA if he or she is participating in only a limited-purpose FSA or HRA or a post-deductible FSA. How to file 1040ez online For more information, see Other employee health plans in Publication 969. How to file 1040ez online Employer contributions. How to file 1040ez online   Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. How to file 1040ez online For 2014, you can contribute up to $3,300 for self-only coverage or $6,550 for family coverage to a qualified individual's HSA. How to file 1040ez online   The contribution amounts listed above are increased by $1,000 for a qualified individual who is age 55 or older at any time during the year. How to file 1040ez online For two qualified individuals who are married to each other and who each are age 55 or older at any time during the year, each spouse's contribution limit is increased by $1,000 provided each spouse has a separate HSA. How to file 1040ez online No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. How to file 1040ez online Nondiscrimination rules. How to file 1040ez online    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. How to file 1040ez online Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. How to file 1040ez online   For guidance on employer comparable contributions to HSAs under section 4980G in instances where an employee has not established an HSA by December 31 and in instances where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses, see Regulations section 54. How to file 1040ez online 4980G-4. How to file 1040ez online Exception. How to file 1040ez online   The Tax Relief and Health Care Act of 2006 allows employers to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee. How to file 1040ez online A highly compensated employee for 2014 is an employee who meets either of the following tests. How to file 1040ez online The employee was a 5% owner at any time during the year or the preceding year. How to file 1040ez online The employee received more than $115,000 in pay for the preceding year. How to file 1040ez online You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. How to file 1040ez online Partnerships and S corporations. How to file 1040ez online   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. How to file 1040ez online Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances. How to file 1040ez online Cafeteria plans. How to file 1040ez online   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. How to file 1040ez online However, cafeteria plan nondiscrimination rules still apply. How to file 1040ez online For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. How to file 1040ez online Contributions that favor lower-paid employees are not prohibited. How to file 1040ez online Reporting requirements. How to file 1040ez online   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. How to file 1040ez online ” The trustee or custodian of the HSA, generally a bank or insurance company, reports distributions from the HSA using Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. How to file 1040ez online Lodging on Your Business Premises You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. How to file 1040ez online It is furnished on your business premises. How to file 1040ez online It is furnished for your convenience. How to file 1040ez online The employee must accept it as a condition of employment. How to file 1040ez online Different tests may apply to lodging furnished by educational institutions. How to file 1040ez online See section 119(d) of the Internal Revenue Code for details. How to file 1040ez online The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. How to file 1040ez online On your business premises. How to file 1040ez online   For this exclusion, your business premises is generally your employee's place of work. How to file 1040ez online For special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the Internal Revenue Code and its regulations. How to file 1040ez online For your convenience. How to file 1040ez online   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. How to file 1040ez online You furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. How to file 1040ez online This is true even if a law or an employment contract provides that the lodging is furnished as pay. How to file 1040ez online However, a written statement that the lodging is furnished for your convenience is not sufficient. How to file 1040ez online Condition of employment. How to file 1040ez online   Lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. How to file 1040ez online Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. How to file 1040ez online   It does not matter whether you must furnish the lodging as pay under the terms of an employment contract or a law fixing the terms of employment. How to file 1040ez online Example. How to file 1040ez online A hospital gives Joan, an employee of the hospital, the choice of living at the hospital free of charge or living elsewhere and receiving a cash allowance in addition to her regular salary. How to file 1040ez online If Joan chooses to live at the hospital, the hospital cannot exclude the value of the lodging from her wages because she is not required to live at the hospital to properly perform the duties of her employment. How to file 1040ez online S corporation shareholders. How to file 1040ez online   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. How to file 1040ez online A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. How to file 1040ez online Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. How to file 1040ez online Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. How to file 1040ez online De Minimis Meals You can exclude any occasional meal or meal money you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable. How to file 1040ez online The exclusion applies, for example, to the following items. How to file 1040ez online Coffee, doughnuts, or soft drinks. How to file 1040ez online Occasional meals or meal money provided to enable an employee to work overtime. How to file 1040ez online However, the exclusion does not apply to meal money figured on the basis of hours worked. How to file 1040ez online Occasional parties or picnics for employees and their guests. How to file 1040ez online This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the annual revenue from the facility equals or exceeds the direct costs of the facility. How to file 1040ez online For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises , later. How to file 1040ez online If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. How to file 1040ez online The 50% limit on deductions for the cost of meals does not apply. How to file 1040ez online The deduction limit on meals is discussed in chapter 2 of Publication 535. How to file 1040ez online Employee. How to file 1040ez online   For this exclusion, treat any recipient of a de minimis meal as
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Understanding Your CP104 Notice

We made changes to your excise tax return because we believe there was a miscalculation. As a result of these changes, there is a balance due.


What you need to do

  • Read your notice carefully — it explains the changes to your tax account.
  • Compare the figures on the notice with your excise tax return.
  • If you disagree with our change(s), contact us within 10 days from the date of your notice.
  • If you agree with our change(s), correct the copy of your excise tax return that you kept for your records.
  • Make your payment by your due date.
  • If you can’t pay the amount you owe, go to the payments page to find out more about your payment options.

You may want to

  • Download copies of the following materials (if they weren’t included with your notice).

 


Answers to Common Questions

Q. How can I find out what caused my tax return to change?

A. Please contact us at the toll free number listed on the top right corner of your notice for specific information about your tax return.

Q. What should I do if I disagree with the changes you made?

A. If you disagree, contact us at the toll free number listed on the top right corner of your notice or respond in writing within 10 days from the date of the notice. If your response provides us with additional information that justifies a reversal of the change, we’ll reverse the change we made to your account. If you agree with the change, please pay any additional balance due by the date specified in the notice.

Q. What happens if I can’t pay the full amount I owe?

A. You can arrange to make a payment plan with us if you can’t pay the full amount you owe. Go to the payments page to find out more about your payment options.

Q. Am I charged interest on the money I owe?

A. Not if you pay the full amount you owe by the date specified on the notice. However, interest accrues on the unpaid balance after that date.

Q. Will I receive a penalty if I can’t pay the full amount?

A. Yes, you will receive a late payment penalty. You can contact us at the number given on your notice if you’re unable to pay the full amount shown in your specific notice because of circumstances beyond your control. Contact us by the due date of your payment and, depending on your situation, we may be able to remove the penalty.


Tips for next year

Consider filing your excise taxes electronically. Filing online can help you to avoid mistakes and find credits and deductions for which you may qualify. Learn more about e-file.

Page Last Reviewed or Updated: 23-Jan-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The How To File 1040ez Online

How to file 1040ez online Publication 529 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. How to file 1040ez online Tax questions. How to file 1040ez online Useful Items - You may want to see: What's New Standard mileage rate. How to file 1040ez online  The 2013 rate for business use of a vehicle is 56½ cents per mile. How to file 1040ez online Reminders Future developments. How to file 1040ez online  For the latest information about developments related to Publication 529, such as legislation enacted after it was published, go to www. How to file 1040ez online irs. How to file 1040ez online gov/pub529. How to file 1040ez online Photographs of missing children. How to file 1040ez online  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. How to file 1040ez online Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. How to file 1040ez online You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. How to file 1040ez online Introduction This publication explains which expenses you can claim as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). How to file 1040ez online You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. How to file 1040ez online This publication covers the following topics. How to file 1040ez online Deductions subject to the 2% limit. How to file 1040ez online Deductions not subject to the 2% limit. How to file 1040ez online Expenses you cannot deduct. How to file 1040ez online How to report your deductions. How to file 1040ez online Some of the deductions previously discussed in this publication are adjustments to income rather than miscellaneous deductions. How to file 1040ez online These include certain employee business expenses that must be listed on Form 2106 or Form 2106-EZ and some that are entered directly on Form 1040. How to file 1040ez online Those deductions, which are discussed in Publication 463, Travel, Entertainment, Gift, and Car Expenses, include employee business expenses of officials paid on a fee basis and performing artists. How to file 1040ez online Note. How to file 1040ez online Generally, nonresident aliens are allowed miscellaneous itemized deductions to the extent they are directly related to income which is effectively connected with the conduct of a trade or business within the United States. How to file 1040ez online You must keep records to verify your deductions. How to file 1040ez online You should keep receipts, canceled checks, substitute checks, financial account statements, and other documentary evidence. How to file 1040ez online For more information on recordkeeping, see Publication 552, Recordkeeping for Individuals. How to file 1040ez online Comments and suggestions. How to file 1040ez online   We welcome your comments about this publication and your suggestions for future editions. How to file 1040ez online   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. How to file 1040ez online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. How to file 1040ez online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. How to file 1040ez online   You can send your comments from www. How to file 1040ez online irs. How to file 1040ez online gov/formspubs. How to file 1040ez online Click on “More Information” and then on “Comment on Tax Forms and Publications. How to file 1040ez online ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. How to file 1040ez online Ordering forms and publications. How to file 1040ez online   Visit www. How to file 1040ez online irs. How to file 1040ez online gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. How to file 1040ez online Internal Revenue Service 1201 N. How to file 1040ez online Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. How to file 1040ez online   If you have a tax question, check the information available on IRS. How to file 1040ez online gov or call 1-800-829-1040. How to file 1040ez online We cannot answer tax questions sent to either of the above addresses. How to file 1040ez online Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses See How To Get Tax Help near the end of this publication for information about getting these publications and forms. How to file 1040ez online Prev  Up  Next   Home   More Online Publications