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Irs Tax Forms For 2009

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Irs Tax Forms For 2009

Irs tax forms for 2009 6. Irs tax forms for 2009   Tip Income Table of Contents Introduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. Irs tax forms for 2009 Reporting Tips to Your EmployerElectronic tip statement. Irs tax forms for 2009 Final report. Irs tax forms for 2009 Reporting Tips on Your Tax Return Allocated Tips Introduction This chapter is for employees who receive tips. Irs tax forms for 2009 All tips you receive are income and are subject to federal income tax. Irs tax forms for 2009 You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. Irs tax forms for 2009 The value of noncash tips, such as tickets, passes, or other items of value, is also income and subject to tax. Irs tax forms for 2009 Reporting your tip income correctly is not difficult. Irs tax forms for 2009 You must do three things. Irs tax forms for 2009 Keep a daily tip record. Irs tax forms for 2009 Report tips to your employer. Irs tax forms for 2009 Report all your tips on your income tax return. Irs tax forms for 2009  This chapter will explain these three things and show you what to do on your tax return if you have not done the first two. Irs tax forms for 2009 This chapter will also show you how to treat allocated tips. Irs tax forms for 2009 For information on special tip programs and agreements, see Publication 531. Irs tax forms for 2009 Useful Items - You may want to see: Publication 531 Reporting Tip Income 1244 Employee's Daily Record of Tips and Report to Employer Form (and Instructions) 4137 Social Security and Medicare Tax on Unreported Tip Income 4070 Employee's Report of Tips to Employer Keeping a Daily Tip Record Why keep a daily tip record. Irs tax forms for 2009   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. Irs tax forms for 2009 How to keep a daily tip record. Irs tax forms for 2009   There are two ways to keep a daily tip record. Irs tax forms for 2009 You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. Irs tax forms for 2009 You should keep your daily tip record with your tax or other personal records. Irs tax forms for 2009 You must keep your records for as long as they are important for administration of the federal tax law. Irs tax forms for 2009 For information on how long to keep records, see How long to keep records in chapter 1. Irs tax forms for 2009    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. Irs tax forms for 2009 To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244. Irs tax forms for 2009 Also, Publication 1244 is available online at www. Irs tax forms for 2009 irs. Irs tax forms for 2009 gov/pub/irs-pdf/p1244. Irs tax forms for 2009 pdf. Irs tax forms for 2009 Publication 1244 includes a 1-year supply of Form 4070A. Irs tax forms for 2009 Each day, write in the information asked for on the form. Irs tax forms for 2009   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. Irs tax forms for 2009 Although you do not report these tips to your employer, you must report them on your tax return. Irs tax forms for 2009   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). Irs tax forms for 2009 Then, each workday, write the date and the following information. Irs tax forms for 2009 Cash tips you get directly from customers or from other employees. Irs tax forms for 2009 Tips from credit and debit card charge customers that your employer pays you. Irs tax forms for 2009 The value of any noncash tips you get, such as tickets, passes, or other items of value. Irs tax forms for 2009 The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. Irs tax forms for 2009 Electronic tip record. Irs tax forms for 2009   You can use an electronic system provided by your employer to record your daily tips. Irs tax forms for 2009 If you do, you must receive and keep a paper copy of this record. Irs tax forms for 2009 Service charges. Irs tax forms for 2009    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. Irs tax forms for 2009 This is part of your wages, not a tip. Irs tax forms for 2009 See examples below. Irs tax forms for 2009 Example 1. Irs tax forms for 2009 Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. Irs tax forms for 2009 Jane’s bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. Irs tax forms for 2009 Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. Irs tax forms for 2009 Do not include the 18% charge in your tip diary. Irs tax forms for 2009 Service charges that are paid to you are considered wages, not tips. Irs tax forms for 2009 Example 2. Irs tax forms for 2009 Good Food Restaurant also includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. Irs tax forms for 2009 David’s bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of his charges for food and beverages at the bottom of the bill beneath the signature line. Irs tax forms for 2009 Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. Irs tax forms for 2009 Be sure to include this amount in your tip diary. Irs tax forms for 2009 Reporting Tips to Your Employer Why report tips to your employer. Irs tax forms for 2009   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). Irs tax forms for 2009 What tips to report. Irs tax forms for 2009   Report to your employer only cash, check, and debit and credit card tips you receive. Irs tax forms for 2009   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. Irs tax forms for 2009   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Irs tax forms for 2009 Do not report to your employer any portion of the tips you receive that you pass on to other employees. Irs tax forms for 2009 However, you must report tips you receive from other employees. Irs tax forms for 2009    Do not report the value of any noncash tips, such as tickets or passes, to your employer. Irs tax forms for 2009 You do not pay social security, Medicare, Additional Medicare or railroad retirement taxes on these tips. Irs tax forms for 2009 How to report. Irs tax forms for 2009    If your employer does not give you any other way to report tips, you can use Form 4070. Irs tax forms for 2009 Fill in the information asked for on the form, sign and date the form, and give it to your employer. Irs tax forms for 2009 To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. Irs tax forms for 2009   If you do not use Form 4070, give your employer a statement with the following information. Irs tax forms for 2009 Your name, address, and social security number. Irs tax forms for 2009 Your employer's name, address, and business name (if it is different from your employer's name). Irs tax forms for 2009 The month (or the dates of any shorter period) in which you received tips. Irs tax forms for 2009 The total tips required to be reported for that period. Irs tax forms for 2009 You must sign and date the statement. Irs tax forms for 2009 Be sure to keep a copy with your tax or other personal records. Irs tax forms for 2009   Your employer may require you to report your tips more than once a month. Irs tax forms for 2009 However, the statement cannot cover a period of more than 1 calendar month. Irs tax forms for 2009 Electronic tip statement. Irs tax forms for 2009   Your employer can have you furnish your tip statements electronically. Irs tax forms for 2009 When to report. Irs tax forms for 2009   Give your report for each month to your employer by the 10th of the next month. Irs tax forms for 2009 If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. Irs tax forms for 2009 Example. Irs tax forms for 2009 You must report your tips received in September 2014 by October 10, 2014. Irs tax forms for 2009 Final report. Irs tax forms for 2009   If your employment ends during the month, you can report your tips when your employment ends. Irs tax forms for 2009 Penalty for not reporting tips. Irs tax forms for 2009   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, and Additional Medicare taxes or railroad retirement tax you owe on the unreported tips. Irs tax forms for 2009 (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. Irs tax forms for 2009 ) The penalty amount is in addition to the taxes you owe. Irs tax forms for 2009   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. Irs tax forms for 2009 To do so, attach a statement to your return explaining why you did not report them. Irs tax forms for 2009 Giving your employer money for taxes. Irs tax forms for 2009   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. Irs tax forms for 2009 If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. Irs tax forms for 2009   If you do not give your employer enough money, your employer will apply your regular pay and any money you give in the following order. Irs tax forms for 2009 All taxes on your regular pay. Irs tax forms for 2009 Social security, Medicare, and Additional Medicare taxes or railroad retirement taxes on your reported tips. Irs tax forms for 2009 Federal, state, and local income taxes on your reported tips. Irs tax forms for 2009    Any taxes that remain unpaid can be collected by your employer from your next paycheck. Irs tax forms for 2009 If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. Irs tax forms for 2009 See Publication 505, Tax Withholding and Estimated Tax, for more information. Irs tax forms for 2009    Uncollected taxes. Irs tax forms for 2009 You must report on your tax return any social security and Medicare taxes or railroad retirement tax that remained uncollected at the end of 2013. Irs tax forms for 2009 These uncollected taxes will be shown on your 2013 Form W-2. Irs tax forms for 2009 See Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. Irs tax forms for 2009 Reporting Tips on Your Tax Return How to report tips. Irs tax forms for 2009    Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1. Irs tax forms for 2009 What tips to report. Irs tax forms for 2009   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Irs tax forms for 2009 Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. Irs tax forms for 2009 Add to the amount in box 1 only the tips you did not report to your employer. Irs tax forms for 2009    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. Irs tax forms for 2009    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. Irs tax forms for 2009   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. Irs tax forms for 2009 Cash and charge tips you received that totaled less than $20 for any month. Irs tax forms for 2009 The value of noncash tips, such as tickets, passes, or other items of value. Irs tax forms for 2009 Example. Irs tax forms for 2009 Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. Irs tax forms for 2009 Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. Irs tax forms for 2009 He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. Irs tax forms for 2009 Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages plus $7,000 reported tips) in box 1. Irs tax forms for 2009 He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. Irs tax forms for 2009 Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Irs tax forms for 2009    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. Irs tax forms for 2009 To report these taxes, you must file a return even if you would not otherwise have to file. Irs tax forms for 2009 You must use Form 1040. Irs tax forms for 2009 (You cannot file Form 1040EZ or Form 1040A. Irs tax forms for 2009 )    Use Form 4137 to figure social security and Medicare taxes. Irs tax forms for 2009 Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. Irs tax forms for 2009 Use Form 8959 to figure Additional Medicare Tax. Irs tax forms for 2009    If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. Irs tax forms for 2009 To get railroad retirement credit, you must report tips to your employer. Irs tax forms for 2009 Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer. Irs tax forms for 2009   You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. Irs tax forms for 2009 For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. Irs tax forms for 2009   If your employer could not collect all the social security and Medicare taxes or railroad retirement tax you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). Irs tax forms for 2009 You must report these amounts as additional tax on your return. Irs tax forms for 2009 Unlike the uncollected portion of the regular (1. Irs tax forms for 2009 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported in box 12 of Form W-2 with code B. Irs tax forms for 2009    To report these uncollected taxes, you must file a return even if you would not otherwise have to file. Irs tax forms for 2009 You must report these taxes on Form 1040, line 60. Irs tax forms for 2009 See the instructions for Form 1040, line 60. Irs tax forms for 2009 (You cannot file Form 1040EZ or Form 1040A. Irs tax forms for 2009 ) Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. Irs tax forms for 2009 They are not included in box 1 with your wages and reported tips. Irs tax forms for 2009 If box 8 is blank, this discussion does not apply to you. Irs tax forms for 2009 What are allocated tips. Irs tax forms for 2009   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. Irs tax forms for 2009 Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. Irs tax forms for 2009 No income, social security, Medicare, Additional Medicare or railroad retirement taxes are withheld on allocated tips. Irs tax forms for 2009 How were your allocated tips figured. Irs tax forms for 2009   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). Irs tax forms for 2009 Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. Irs tax forms for 2009 For information about the exact allocation method used, ask your employer. Irs tax forms for 2009 Must you report your allocated tips on your tax return. Irs tax forms for 2009   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Irs tax forms for 2009 Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. Irs tax forms for 2009 Add to the amount in box 1 only the tips you did not report to your employer. Irs tax forms for 2009 This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated figures. Irs tax forms for 2009   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. Irs tax forms for 2009 How to report allocated tips. Irs tax forms for 2009   Report the amount in box 1 and the allocated tips in box 8 of your Form(s) W-2 as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Irs tax forms for 2009 (You cannot file Form 1040A or Form 1040EZ when you have allocated tips. Irs tax forms for 2009 )    Because social security, Medicare, and Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Irs tax forms for 2009 Complete Form 4137, and include the allocated tips on line 1 of the form. Irs tax forms for 2009 See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. Irs tax forms for 2009 Prev  Up  Next   Home   More Online Publications
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The Irs Tax Forms For 2009

Irs tax forms for 2009 Publication 15-B - Main Content Table of Contents 1. Irs tax forms for 2009 Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. Irs tax forms for 2009 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. Irs tax forms for 2009 Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. Irs tax forms for 2009 Rules for Withholding, Depositing, and ReportingTransfer of property. Irs tax forms for 2009 Amount of deposit. Irs tax forms for 2009 Limitation. Irs tax forms for 2009 Conformity rules. Irs tax forms for 2009 Election not to withhold income tax. Irs tax forms for 2009 How To Get Tax Help 1. Irs tax forms for 2009 Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. Irs tax forms for 2009 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. Irs tax forms for 2009 Performance of services. Irs tax forms for 2009   A person who performs services for you does not have to be your employee. Irs tax forms for 2009 A person may perform services for you as an independent contractor, partner, or director. Irs tax forms for 2009 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. Irs tax forms for 2009 Provider of benefit. Irs tax forms for 2009   You are the provider of a fringe benefit if it is provided for services performed for you. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Recipient of benefit. Irs tax forms for 2009   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. Irs tax forms for 2009 That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. Irs tax forms for 2009 For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. Irs tax forms for 2009 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. Irs tax forms for 2009 Section 2 discusses the exclusions that apply to certain fringe benefits. Irs tax forms for 2009 Any benefit not excluded under the rules discussed in section 2 is taxable. Irs tax forms for 2009 Including taxable benefits in pay. Irs tax forms for 2009   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. Irs tax forms for 2009 Any amount the law excludes from pay. Irs tax forms for 2009 Any amount the recipient paid for the benefit. Irs tax forms for 2009 The rules used to determine the value of a fringe benefit are discussed in section 3. Irs tax forms for 2009   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. Irs tax forms for 2009 However, you can use special rules to withhold, deposit, and report the employment taxes. Irs tax forms for 2009 These rules are discussed in section 4. Irs tax forms for 2009   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. Irs tax forms for 2009 However, you may have to report the benefit on one of the following information returns. Irs tax forms for 2009 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. Irs tax forms for 2009 For more information, see the instructions for the forms listed above. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. Irs tax forms for 2009 However, a cafeteria plan can include a qualified 401(k) plan as a benefit. Irs tax forms for 2009 Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. Irs tax forms for 2009 Qualified benefits. Irs tax forms for 2009   A cafeteria plan can include the following benefits discussed in section 2. Irs tax forms for 2009 Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). Irs tax forms for 2009 Adoption assistance. Irs tax forms for 2009 Dependent care assistance. Irs tax forms for 2009 Group-term life insurance coverage (including costs that cannot be excluded from wages). Irs tax forms for 2009 Health savings accounts (HSAs). Irs tax forms for 2009 Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. Irs tax forms for 2009 Benefits not allowed. Irs tax forms for 2009   A cafeteria plan cannot include the following benefits discussed in section 2. Irs tax forms for 2009 Archer MSAs. Irs tax forms for 2009 See Accident and Health Benefits in section 2. Irs tax forms for 2009 Athletic facilities. Irs tax forms for 2009 De minimis (minimal) benefits. Irs tax forms for 2009 Educational assistance. Irs tax forms for 2009 Employee discounts. Irs tax forms for 2009 Employer-provided cell phones. Irs tax forms for 2009 Lodging on your business premises. Irs tax forms for 2009 Meals. Irs tax forms for 2009 Moving expense reimbursements. Irs tax forms for 2009 No-additional-cost services. Irs tax forms for 2009 Transportation (commuting) benefits. Irs tax forms for 2009 Tuition reduction. Irs tax forms for 2009 Working condition benefits. Irs tax forms for 2009 It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). Irs tax forms for 2009 $2,500 limit on a health flexible spending arrangement (FSA). Irs tax forms for 2009   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. Irs tax forms for 2009 For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. Irs tax forms for 2009   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009   For more information, see Notice 2012-40, 2012-26 I. Irs tax forms for 2009 R. Irs tax forms for 2009 B. Irs tax forms for 2009 1046, available at www. Irs tax forms for 2009 irs. Irs tax forms for 2009 gov/irb/2012-26_IRB/ar09. Irs tax forms for 2009 html. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For these plans, treat the following individuals as employees. Irs tax forms for 2009 A current common-law employee. Irs tax forms for 2009 See section 2 in Publication 15 (Circular E) for more information. Irs tax forms for 2009 A full-time life insurance agent who is a current statutory employee. Irs tax forms for 2009 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. Irs tax forms for 2009 Exception for S corporation shareholders. Irs tax forms for 2009   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Plans that favor highly compensated employees. Irs tax forms for 2009   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. Irs tax forms for 2009 A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. Irs tax forms for 2009   A highly compensated employee for this purpose is any of the following employees. Irs tax forms for 2009 An officer. Irs tax forms for 2009 A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. Irs tax forms for 2009 An employee who is highly compensated based on the facts and circumstances. Irs tax forms for 2009 A spouse or dependent of a person described in (1), (2), or (3). Irs tax forms for 2009 Plans that favor key employees. Irs tax forms for 2009   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. Irs tax forms for 2009 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. Irs tax forms for 2009 However, a plan you maintain under a collective bargaining agreement does not favor key employees. Irs tax forms for 2009   A key employee during 2014 is generally an employee who is either of the following. Irs tax forms for 2009 An officer having annual pay of more than $170,000. Irs tax forms for 2009 An employee who for 2014 is either of the following. Irs tax forms for 2009 A 5% owner of your business. Irs tax forms for 2009 A 1% owner of your business whose annual pay was more than $150,000. Irs tax forms for 2009 Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. Irs tax forms for 2009 Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. Irs tax forms for 2009 Eligible employer. Irs tax forms for 2009   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Eligibility and participation requirements. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009 S. Irs tax forms for 2009 source. Irs tax forms for 2009 Contribution requirements. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009 More information. Irs tax forms for 2009   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. Irs tax forms for 2009 2. Irs tax forms for 2009 Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. Irs tax forms for 2009 These rules exclude all or part of the value of certain benefits from the recipient's pay. Irs tax forms for 2009 The excluded benefits are not subject to federal income tax withholding. Irs tax forms for 2009 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. Irs tax forms for 2009 This section discusses the exclusion rules for the following fringe benefits. Irs tax forms for 2009 Accident and health benefits. Irs tax forms for 2009 Achievement awards. Irs tax forms for 2009 Adoption assistance. Irs tax forms for 2009 Athletic facilities. Irs tax forms for 2009 De minimis (minimal) benefits. Irs tax forms for 2009 Dependent care assistance. Irs tax forms for 2009 Educational assistance. Irs tax forms for 2009 Employee discounts. Irs tax forms for 2009 Employee stock options. Irs tax forms for 2009 Employer-provided cell phones. Irs tax forms for 2009 Group-term life insurance coverage. Irs tax forms for 2009 Health savings accounts (HSAs). Irs tax forms for 2009 Lodging on your business premises. Irs tax forms for 2009 Meals. Irs tax forms for 2009 Moving expense reimbursements. Irs tax forms for 2009 No-additional-cost services. Irs tax forms for 2009 Retirement planning services. Irs tax forms for 2009 Transportation (commuting) benefits. Irs tax forms for 2009 Tuition reduction. Irs tax forms for 2009 Working condition benefits. Irs tax forms for 2009 See Table 2-1, later, for an overview of the employment tax treatment of these benefits. Irs tax forms for 2009 Table 2-1. Irs tax forms for 2009 Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. Irs tax forms for 2009 ) 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. Irs tax forms for 2009 Exempt, except for certain payments to S corporation employees who are 2% shareholders. Irs tax forms for 2009 Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). Irs tax forms for 2009 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. Irs tax forms for 2009 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). Irs tax forms for 2009 Educational assistance Exempt up to $5,250 of benefits each year. Irs tax forms for 2009 (See Educational Assistance , later in this section. Irs tax forms for 2009 ) Employee discounts Exempt3 up to certain limits. Irs tax forms for 2009 (See Employee Discounts , later in this section. Irs tax forms for 2009 ) Employee stock options See Employee Stock Options , later in this section. Irs tax forms for 2009 Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. Irs tax forms for 2009 Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. Irs tax forms for 2009 (Special rules apply to former employees. Irs tax forms for 2009 ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. Irs tax forms for 2009 (See Health Savings Accounts , later in this section. Irs tax forms for 2009 ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. Irs tax forms for 2009 Meals Exempt if furnished on your business premises for your convenience. Irs tax forms for 2009 Exempt if de minimis. Irs tax forms for 2009 Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. Irs tax forms for 2009 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). Irs tax forms for 2009 (See Transportation (Commuting) Benefits , later in this section. Irs tax forms for 2009 ) Exempt if de minimis. Irs tax forms for 2009 Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). Irs tax forms for 2009 Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. Irs tax forms for 2009 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. Irs tax forms for 2009 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. Irs tax forms for 2009 4 Exemption does not apply to certain key employees under a plan that favors those employees. Irs tax forms for 2009 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Irs tax forms for 2009 Also, show it in box 12 with code “C. Irs tax forms for 2009 ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Irs tax forms for 2009 Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. Irs tax forms for 2009 Contributions to the cost of accident or health insurance including qualified long-term care insurance. Irs tax forms for 2009 Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. Irs tax forms for 2009 Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). Irs tax forms for 2009 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. Irs tax forms for 2009 Payments or reimbursements of medical expenses. Irs tax forms for 2009 Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). Irs tax forms for 2009 The payments must be figured without regard to any period of absence from work. Irs tax forms for 2009 Accident or health plan. Irs tax forms for 2009   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. Irs tax forms for 2009 The plan may be insured or noninsured and does not need to be in writing. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat the following individuals as employees. Irs tax forms for 2009 A current common-law employee. Irs tax forms for 2009 A full-time life insurance agent who is a current statutory employee. Irs tax forms for 2009 A retired employee. Irs tax forms for 2009 A former employee you maintain coverage for based on the employment relationship. Irs tax forms for 2009 A widow or widower of an individual who died while an employee. Irs tax forms for 2009 A widow or widower of a retired employee. Irs tax forms for 2009 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. Irs tax forms for 2009 Special rule for certain government plans. Irs tax forms for 2009   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. Irs tax forms for 2009 See section 105(j) for details. Irs tax forms for 2009 Exception for S corporation shareholders. Irs tax forms for 2009   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Exclusion from wages. Irs tax forms for 2009   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. Irs tax forms for 2009 Exception for certain long-term care benefits. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009 However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Irs tax forms for 2009 S corporation shareholders. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009 Exception for highly compensated employees. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. Irs tax forms for 2009   A highly compensated employee for this exception is any of the following individuals. Irs tax forms for 2009 One of the five highest paid officers. Irs tax forms for 2009 An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. Irs tax forms for 2009 An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). Irs tax forms for 2009   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. Irs tax forms for 2009 COBRA premiums. Irs tax forms for 2009   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). Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat the following individuals as employees. Irs tax forms for 2009 A current employee. Irs tax forms for 2009 A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. Irs tax forms for 2009 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. Irs tax forms for 2009 Exception for S corporation shareholders. Irs tax forms for 2009   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Exclusion from wages. Irs tax forms for 2009   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. Irs tax forms for 2009 The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). Irs tax forms for 2009 See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. Irs tax forms for 2009    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. Irs tax forms for 2009   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. Irs tax forms for 2009 The part of the cost that is more than your allowable deduction (up to the value of the awards). Irs tax forms for 2009 The amount by which the value of the awards exceeds your allowable deduction. Irs tax forms for 2009 Exclude the remaining value of the awards from the employee's wages. Irs tax forms for 2009 Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. Irs tax forms for 2009 It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. Irs tax forms for 2009 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. Irs tax forms for 2009 It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). Irs tax forms for 2009 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. Irs tax forms for 2009 You give reasonable notice of the plan to eligible employees. Irs tax forms for 2009 Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. Irs tax forms for 2009 For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Irs tax forms for 2009 The employee was a 5% owner at any time during the year or the preceding year. Irs tax forms for 2009 The employee received more than $115,000 in pay for the preceding year. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Irs tax forms for 2009 For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. Irs tax forms for 2009 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. Irs tax forms for 2009 Use code “T” to identify this amount. Irs tax forms for 2009 Exception for S corporation shareholders. Irs tax forms for 2009   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 On-premises facility. Irs tax forms for 2009   The athletic facility must be located on premises you own or lease. Irs tax forms for 2009 It does not have to be located on your business premises. Irs tax forms for 2009 However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat the following individuals as employees. Irs tax forms for 2009 A current employee. Irs tax forms for 2009 A former employee who retired or left on disability. Irs tax forms for 2009 A widow or widower of an individual who died while an employee. Irs tax forms for 2009 A widow or widower of a former employee who retired or left on disability. Irs tax forms for 2009 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. Irs tax forms for 2009 A partner who performs services for a partnership. Irs tax forms for 2009 De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Examples of de minimis benefits include the following. Irs tax forms for 2009 Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. Irs tax forms for 2009 See Employer-Provided Cell Phones , later in this section, for details. Irs tax forms for 2009 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. Irs tax forms for 2009 Holiday gifts, other than cash, with a low fair market value. Irs tax forms for 2009 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. Irs tax forms for 2009 Meals. Irs tax forms for 2009 See Meals , later in this section, for details. Irs tax forms for 2009 Occasional parties or picnics for employees and their guests. Irs tax forms for 2009 Occasional tickets for theater or sporting events. Irs tax forms for 2009 Transportation fare. Irs tax forms for 2009 See Transportation (Commuting) Benefits , later in this section, for details. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat any recipient of a de minimis benefit as an employee. Irs tax forms for 2009 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. Irs tax forms for 2009 The services must be for a qualifying person's care and must be provided to allow the employee to work. Irs tax forms for 2009 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. Irs tax forms for 2009 For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat the following individuals as employees. Irs tax forms for 2009 A current employee. Irs tax forms for 2009 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. Irs tax forms for 2009 Yourself (if you are a sole proprietor). Irs tax forms for 2009 A partner who performs services for a partnership. Irs tax forms for 2009 Exclusion from wages. Irs tax forms for 2009   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. Irs tax forms for 2009   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. Irs tax forms for 2009 This limit is reduced to $2,500 for married employees filing separate returns. Irs tax forms for 2009   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. Irs tax forms for 2009 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. Irs tax forms for 2009 For more information on the earned income limit, see Publication 503. Irs tax forms for 2009 Exception for highly compensated employees. Irs tax forms for 2009   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. Irs tax forms for 2009   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Irs tax forms for 2009 The employee was a 5% owner at any time during the year or the preceding year. Irs tax forms for 2009 The employee received more than $115,000 in pay for the preceding year. Irs tax forms for 2009 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. Irs tax forms for 2009 Form W-2. Irs tax forms for 2009   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. Irs tax forms for 2009 Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. Irs tax forms for 2009 Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. Irs tax forms for 2009 Example. Irs tax forms for 2009   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. Irs tax forms for 2009 In addition, it provides occasional on-site dependent care to its employees at no cost. Irs tax forms for 2009 Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. Irs tax forms for 2009 In addition, Emily used the on-site dependent care several times. Irs tax forms for 2009 The fair market value of the on-site care was $700. Irs tax forms for 2009 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). Irs tax forms for 2009 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. Irs tax forms for 2009 Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. Irs tax forms for 2009 The exclusion also applies to graduate level courses. Irs tax forms for 2009 Educational assistance means amounts you pay or incur for your employees' education expenses. Irs tax forms for 2009 These expenses generally include the cost of books, equipment, fees, supplies, and tuition. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Nor do they include the cost of lodging, meals, or transportation. Irs tax forms for 2009 Educational assistance program. Irs tax forms for 2009   An educational assistance program is a separate written plan that provides educational assistance only to your employees. Irs tax forms for 2009 The program qualifies only if all of the following tests are met. Irs tax forms for 2009 The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. Irs tax forms for 2009 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. Irs tax forms for 2009 The program does not provide more than 5% of its benefits during the year for shareholders or owners. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 You give reasonable notice of the program to eligible employees. Irs tax forms for 2009 Your program can cover former employees if their employment is the reason for the coverage. Irs tax forms for 2009   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Irs tax forms for 2009 The employee was a 5% owner at any time during the year or the preceding year. Irs tax forms for 2009 The employee received more than $115,000 in pay for the preceding year. Irs tax forms for 2009 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. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat the following individuals as employees. Irs tax forms for 2009 A current employee. Irs tax forms for 2009 A former employee who retired, left on disability, or was laid off. Irs tax forms for 2009 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. Irs tax forms for 2009 Yourself (if you are a sole proprietor). Irs tax forms for 2009 A partner who performs services for a partnership. Irs tax forms for 2009 Exclusion from wages. Irs tax forms for 2009   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. Irs tax forms for 2009 Assistance over $5,250. Irs tax forms for 2009   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. Irs tax forms for 2009 Working condition benefits may be excluded from wages. Irs tax forms for 2009 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. Irs tax forms for 2009 See Working Condition Benefits , later, in this section. Irs tax forms for 2009 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. Irs tax forms for 2009 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). Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat the following individuals as employees. Irs tax forms for 2009 A current employee. Irs tax forms for 2009 A former employee who retired or left on disability. Irs tax forms for 2009 A widow or widower of an individual who died while an employee. Irs tax forms for 2009 A widow or widower of an employee who retired or left on disability. Irs tax forms for 2009 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. Irs tax forms for 2009 A partner who performs services for a partnership. Irs tax forms for 2009 Exclusion from wages. Irs tax forms for 2009   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. Irs tax forms for 2009 For a discount on services, 20% of the price you charge nonemployee customers for the service. Irs tax forms for 2009 For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009 Exception for highly compensated employees. Irs tax forms for 2009   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. Irs tax forms for 2009 All of your employees. Irs tax forms for 2009 A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. Irs tax forms for 2009   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Irs tax forms for 2009 The employee was a 5% owner at any time during the year or the preceding year. Irs tax forms for 2009 The employee received more than $115,000 in pay for the preceding year. Irs tax forms for 2009 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. Irs tax forms for 2009 Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 ” See Regulations section 1. Irs tax forms for 2009 83-7. Irs tax forms for 2009 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. Irs tax forms for 2009 The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. Irs tax forms for 2009 See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. Irs tax forms for 2009 You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. Irs tax forms for 2009 irs. Irs tax forms for 2009 gov/pub/irs-irbs/irb02-19. Irs tax forms for 2009 pdf. Irs tax forms for 2009 See Revenue Ruling 2004-60, 2004-24 I. Irs tax forms for 2009 R. Irs tax forms for 2009 B. Irs tax forms for 2009 1051, available at www. Irs tax forms for 2009 irs. Irs tax forms for 2009 gov/irb/2004-24_IRB/ar13. Irs tax forms for 2009 html. Irs tax forms for 2009 For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Noncompensatory business purposes. Irs tax forms for 2009   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. Irs tax forms for 2009 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. Irs tax forms for 2009 Cell phones provided to promote goodwill, boost morale, or attract prospective employees. Irs tax forms for 2009   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. Irs tax forms for 2009 Additional information. Irs tax forms for 2009   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. Irs tax forms for 2009 R. Irs tax forms for 2009 B. Irs tax forms for 2009 407, available at  www. Irs tax forms for 2009 irs. Irs tax forms for 2009 gov/irb/2011-38_IRB/ar07. Irs tax forms for 2009 html. Irs tax forms for 2009 Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. Irs tax forms for 2009 It provides a general death benefit that is not included in income. Irs tax forms for 2009 You provide it to a group of employees. Irs tax forms for 2009 See The 10-employee rule , later. Irs tax forms for 2009 It provides an amount of insurance to each employee based on a formula that prevents individual selection. Irs tax forms for 2009 This formula must use factors such as the employee's age, years of service, pay, or position. Irs tax forms for 2009 You provide it under a policy you directly or indirectly carry. Irs tax forms for 2009 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. Irs tax forms for 2009 Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. Irs tax forms for 2009 Group-term life insurance does not include the following insurance. Irs tax forms for 2009 Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. Irs tax forms for 2009 Life insurance on the life of your employee's spouse or dependent. Irs tax forms for 2009 However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. Irs tax forms for 2009 See De Minimis (Minimal) Benefits , earlier in this section. Irs tax forms for 2009 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. Irs tax forms for 2009 See Regulations section 1. Irs tax forms for 2009 79-1 for details. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat the following individuals as employees. Irs tax forms for 2009 A current common-law employee. Irs tax forms for 2009 A full-time life insurance agent who is a current statutory employee. Irs tax forms for 2009 An individual who was formerly your employee under (1) or (2). Irs tax forms for 2009 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. Irs tax forms for 2009 Exception for S corporation shareholders. Irs tax forms for 2009   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 The 10-employee rule. Irs tax forms for 2009   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. Irs tax forms for 2009   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. Irs tax forms for 2009 For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Exceptions. Irs tax forms for 2009   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. Irs tax forms for 2009   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. Irs tax forms for 2009 See Regulations section 1. Irs tax forms for 2009 79-1 for details. Irs tax forms for 2009   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. Irs tax forms for 2009   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. Irs tax forms for 2009 They were 65 or older. Irs tax forms for 2009 They customarily work 20 hours or less a week or 5 months or less in a calendar year. Irs tax forms for 2009 They have not been employed for the waiting period given in the policy. Irs tax forms for 2009 This waiting period cannot be more than 6 months. Irs tax forms for 2009 Exclusion from wages. Irs tax forms for 2009   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. Irs tax forms for 2009 You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. Irs tax forms for 2009 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. Irs tax forms for 2009 Coverage over the limit. Irs tax forms for 2009   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. Irs tax forms for 2009 Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Irs tax forms for 2009 Also, show it in box 12 with code “C. Irs tax forms for 2009 ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Irs tax forms for 2009   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. Irs tax forms for 2009 For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. Irs tax forms for 2009 You must prorate the cost from the table if less than a full month of coverage is involved. Irs tax forms for 2009 Table 2-2. Irs tax forms for 2009 Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . Irs tax forms for 2009 05 25 through 29 . Irs tax forms for 2009 06 30 through 34 . Irs tax forms for 2009 08 35 through 39 . Irs tax forms for 2009 09 40 through 44 . Irs tax forms for 2009 10 45 through 49 . Irs tax forms for 2009 15 50 through 54 . Irs tax forms for 2009 23 55 through 59 . Irs tax forms for 2009 43 60 through 64 . Irs tax forms for 2009 66 65 through 69 1. Irs tax forms for 2009 27 70 and older 2. Irs tax forms for 2009 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. Irs tax forms for 2009 Example. Irs tax forms for 2009 Tom's employer provides him with group-term life insurance coverage of $200,000. Irs tax forms for 2009 Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. Irs tax forms for 2009 Tom's employer must include $170 in his wages. Irs tax forms for 2009 The $200,000 of insurance coverage is reduced by $50,000. Irs tax forms for 2009 The yearly cost of $150,000 of coverage is $270 ($. Irs tax forms for 2009 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. Irs tax forms for 2009 The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. Irs tax forms for 2009 The employer also enters $170 in box 12 with code “C. Irs tax forms for 2009 ” Coverage for dependents. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009 The cost of the insurance is determined by using Table 2-2. Irs tax forms for 2009 Former employees. Irs tax forms for 2009   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. Irs tax forms for 2009 You are not required to collect those taxes. Irs tax forms for 2009 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. Irs tax forms for 2009 Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. Irs tax forms for 2009 ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. Irs tax forms for 2009 Exception for key employees. Irs tax forms for 2009   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. Irs tax forms for 2009 This exception generally does not apply to church plans. Irs tax forms for 2009 When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. Irs tax forms for 2009 Include the cost in boxes 1, 3, and 5 of Form W-2. Irs tax forms for 2009 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. Irs tax forms for 2009   For this purpose, the cost of the insurance is the greater of the following amounts. Irs tax forms for 2009 The premiums you pay for the employee's insurance. Irs tax forms for 2009 See Regulations section 1. Irs tax forms for 2009 79-4T(Q&A 6) for more information. Irs tax forms for 2009 The cost you figure using Table 2-2. Irs tax forms for 2009   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. Irs tax forms for 2009 See section 416(i) of the Internal Revenue Code for more information. Irs tax forms for 2009 An officer having annual pay of more than $170,000. Irs tax forms for 2009 An individual who for 2014 was either of the following. Irs tax forms for 2009 A 5% owner of your business. Irs tax forms for 2009 A 1% owner of your business whose annual pay was more than $150,000. Irs tax forms for 2009   A former employee who was a key employee upon retirement or separation from service is also a key employee. Irs tax forms for 2009   Your plan does not favor key employees as to participation if at least one of the following is true. Irs tax forms for 2009 It benefits at least 70% of your employees. Irs tax forms for 2009 At least 85% of the participating employees are not key employees. Irs tax forms for 2009 It benefits employees who qualify under a set of rules you set up that do not favor key employees. Irs tax forms for 2009   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. Irs tax forms for 2009   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. Irs tax forms for 2009 S. Irs tax forms for 2009 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. Irs tax forms for 2009   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. Irs tax forms for 2009 Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. Irs tax forms for 2009 S corporation shareholders. Irs tax forms for 2009   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. Irs tax forms for 2009 When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. Irs tax forms for 2009 Include the cost in boxes 1, 3, and 5 of Form W-2. Irs tax forms for 2009 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. Irs tax forms for 2009 Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. Irs tax forms for 2009 Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 For more information about HSAs, visit the Department of Treasury's website at www. Irs tax forms for 2009 treasury. Irs tax forms for 2009 gov and enter “HSA” in the search box. Irs tax forms for 2009 Eligibility. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009   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. Irs tax forms for 2009 Exceptions. Irs tax forms for 2009   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 For more information, see Other employee health plans in Publication 969. Irs tax forms for 2009 Employer contributions. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009   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. Irs tax forms for 2009 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. Irs tax forms for 2009 No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. Irs tax forms for 2009 Nondiscrimination rules. Irs tax forms for 2009    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. Irs tax forms for 2009 Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. Irs tax forms for 2009   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. Irs tax forms for 2009 4980G-4. Irs tax forms for 2009 Exception. Irs tax forms for 2009   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. Irs tax forms for 2009 A highly compensated employee for 2014 is an employee who meets either of the following tests. Irs tax forms for 2009 The employee was a 5% owner at any time during the year or the preceding year. Irs tax forms for 2009 The employee received more than $115,000 in pay for the preceding year. Irs tax forms for 2009 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. Irs tax forms for 2009 Partnerships and S corporations. Irs tax forms for 2009   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. Irs tax forms for 2009 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. Irs tax forms for 2009 Cafeteria plans. Irs tax forms for 2009   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. Irs tax forms for 2009 However, cafeteria plan nondiscrimination rules still apply. Irs tax forms for 2009 For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. Irs tax forms for 2009 Contributions that favor lower-paid employees are not prohibited. Irs tax forms for 2009 Reporting requirements. Irs tax forms for 2009   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. Irs tax forms for 2009 ” 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. Irs tax forms for 2009 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. Irs tax forms for 2009 It is furnished on your business premises. Irs tax forms for 2009 It is furnished for your convenience. Irs tax forms for 2009 The employee must accept it as a condition of employment. Irs tax forms for 2009 Different tests may apply to lodging furnished by educational institutions. Irs tax forms for 2009 See section 119(d) of the Internal Revenue Code for details. Irs tax forms for 2009 The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. Irs tax forms for 2009 On your business premises. Irs tax forms for 2009   For this exclusion, your business premises is generally your employee's place of work. Irs tax forms for 2009 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. Irs tax forms for 2009 For your convenience. Irs tax forms for 2009   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. Irs tax forms for 2009 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. Irs tax forms for 2009 This is true even if a law or an employment contract provides that the lodging is furnished as pay. Irs tax forms for 2009 However, a written statement that the lodging is furnished for your convenience is not sufficient. Irs tax forms for 2009 Condition of employment. Irs tax forms for 2009   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. Irs tax forms for 2009 Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. Irs tax forms for 2009   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. Irs tax forms for 2009 Example. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 S corporation shareholders. Irs tax forms for 2009   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. Irs tax forms for 2009 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. Irs tax forms for 2009 The exclusion applies, for example, to the following items. Irs tax forms for 2009 Coffee, doughnuts, or soft drinks. Irs tax forms for 2009 Occasional meals or meal money provided to enable an employee to work overtime. Irs tax forms for 2009 However, the exclusion does not apply to meal money figured on the basis of hours worked. Irs tax forms for 2009 Occasional parties or picnics for employees and their guests. Irs tax forms for 2009 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. Irs tax forms for 2009 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. Irs tax forms for 2009 If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. Irs tax forms for 2009 The 50% limit on deductions for the cost of meals does not apply. Irs tax forms for 2009 The deduction limit on meals is discussed in chapter 2 of Publication 535. Irs tax forms for 2009 Employee. Irs tax forms for 2009   For this exclusion, treat any recipient of a de minimis meal as