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Tax Act Online

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Tax Act Online

Tax act online 10. Tax act online   Indoor Tanning Services Tax Table of Contents The tax on indoor tanning service is 10% of the amount paid for that service. Tax act online The tax is paid by the person paying for the services and is collected by the person receiving payment for the indoor tanning services. Tax act online Definition of indoor tanning services. Tax act online   Indoor tanning service means a service employing any electronic product designed to incorporate one or more ultraviolet lamps and intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning. Tax act online The term does not include phototherapy service performed by, and on the premises of, a licensed medical professional (such as a dermatologist, psychologist, or registered nurse). Tax act online See regulations section 49. Tax act online 5000B-1 for more information, and special rules for qualified physical fitness facilities, undesignated payment cards, and bundled payments. Tax act online File Form 720. Tax act online   The person receiving the payment for indoor tanning services (collector) must collect and remit the tax and file the return. Tax act online If the tax is not collected for any reason, the collector is liable for the tax. Tax act online The collector is not required to make semimonthly deposits of the tax. Tax act online Prev  Up  Next   Home   More Online Publications
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Not all work-at-home opportunities deliver on their promises. Some classic work-at-home schemes are medical billing, envelope stuffing and assembly or craftwork. Ads for these businesses say: "Be part of one of America's fastest growing industries. Earn thousands of dollars a month from home!" Legitimate work-at-home program promoters should tell you, in writing, what's involved in the program they are selling. Here are some questions you might ask a promoter:

  • What tasks will I have to perform? (Ask the program sponsor to list every step of the job.)
  • Will I be paid a salary or will my pay be based on commission?
  • Who will pay me?
  • When will I get my first paycheck?
  • What is the total cost of the work-at home program, including supplies, equipment and membership fees? What will I get for my money?

The answers to these questions may help you determine whether a work-at-home program is appropriate for your circumstances, and whether it is legitimate.

Multi-Level Marketing

Some multilevel marketing plans are legitimate. However, others are illegal pyramid schemes. In pyramids, commissions are based on the number of distributors recruited.

Most of the product sales are made to these distributors, not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate. Most people end up with nothing to show for their money except the expensive products or marketing materials they were pressured to buy.

If you're thinking about joining what appears to be a legitimate multilevel marketing plan, take time to learn about the plan.

  • What is the company's track record?
  • What products does it sell?
  • Does it sell products to the public-at-large?
  • Does it have evidence to back up the claims it makes about its product?
  • Is the product competitively priced?
  • Is it likely to appeal to a large customer base?
  • How much does it cost to join the plan?
  • Are minimum monthly sales required to earn a commission?
  • Will you be required to recruit new distributors to earn your commission?

Net Based Business Opportunities

The Federal Trade Commission's Work-at-Home Schemes publication says that many Internet business opportunities are schemes that promise more than they can deliver. The companies lure would-be entrepreneurs with false promises of big earnings for little effort. Some tips to finding a legitimate opportunity:

  • Consider the promotion carefully.
  • Get earnings claims in writing and compare them with the experience of previous franchise and business opportunity owners.
  • Study the business opportunity's franchise disclosure document.
  • Visit previous franchise and business opportunity owners in person, preferably at their place of business.
  • Check out the company with the local consumer protection agency and Better Business Bureau. See if there is any record of unresolved complaints.
  • If the business opportunity involves selling products from well-known companies, verify the relationship with the legal department of the company whose merchandise would be promoted.
  • Consult an attorney, accountant or other business advisor before you put any money down or sign any papers.
  • Take your time. Promoters of fraudulent business opportunities are likely to use high-pressure sales tactics to get you to buy in. If the business opportunity is legitimate, it'll still be around when you're ready to decide.

Mystery Shopper Jobs

Mystery shopper jobs may seem easy and lucrative, but they may be fraudulent. According to the FTC, some scams require you to pay a fee for the privilege of working for the company. Other companies send you a fake cashier's check to deposit; then they instruct you to send most of the money to another address and use only a small amount for the shopping trip. When the bank discovers that the check is not legal, you will be liable for repaying the money. For more information on mystery shopping, check your local bookstore, library or the Mystery Shopping Providers Association.

The Tax Act Online

Tax act online Publication 80 - Main Content Table of Contents Introduction 1. Tax act online Employer Identification Number (EIN) 2. Tax act online Who Are Employees?Tests. Tax act online Business Owned and Operated by Spouses Farm Crew Leaders 3. Tax act online Employee's Social Security Number (SSN)Registering for SSNVS. Tax act online 4. Tax act online Wages and Other CompensationFringe Benefits 5. Tax act online TipsOrdering rule. Tax act online 6. Tax act online Social Security and Medicare Taxes for FarmworkersThe $150 Test or the $2,500 Test 7. Tax act online How To Figure Social Security and Medicare TaxesHousehold and agricultural employers. Tax act online 8. Tax act online Depositing TaxesPayment with Return When To Deposit How To Deposit Deposit Penalties 9. Tax act online Employer's ReturnsReporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Prior Period Adjustments 10. Tax act online Wage and Tax StatementsWaiver. Tax act online 11. Tax act online Federal Unemployment (FUTA) Tax—U. Tax act online S. Tax act online Virgin Islands Employers Only How To Get Tax Help Introduction This publication is for employers whose principal place of business is in the U. Tax act online S. Tax act online Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, or who have employees who are subject to income tax withholding for any of these jurisdictions. Tax act online Employers and employees in these areas are generally subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA). Tax act online See section 6 and section 7 for more information. Tax act online This publication summarizes employer responsibilities to collect, pay, and report these taxes. Tax act online Whenever the term “United States” is used in this publication, it includes U. Tax act online S. Tax act online Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. Tax act online This publication also provides employers in the U. Tax act online S. Tax act online Virgin Islands with a summary of their responsibilities in connection with the tax under the Federal Unemployment Tax Act, known as FUTA tax. Tax act online See section 11 for more information. Tax act online Except as shown in the table in section 12, social security, Medicare, and FUTA taxes apply to every employer who pays taxable wages to employees or who has employees who report tips. Tax act online This publication does not include information relating to the self-employment tax (for social security and Medicare of self-employed persons). Tax act online See Publication 570, Tax Guide for Individuals With Income From U. Tax act online S. Tax act online Possessions, if you need this information. Tax act online This publication also does not include information relating to income tax withholding. Tax act online In U. Tax act online S. Tax act online Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, contact your local tax department for information about income tax withholding. Tax act online See Publication 15 (Circular E), for information on U. Tax act online S. Tax act online federal income tax withholding. Tax act online Comments and suggestions. Tax act online   We welcome your comments about this publication and your suggestions for future editions. Tax act online   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Tax act online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Tax act online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Tax act online    You can also send us comments from www. Tax act online irs. Tax act online gov/formspubs. Tax act online Click on More Information and then click on Comment on Tax Forms and Publications. Tax act online   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. Tax act online 1. Tax act online Employer Identification Number (EIN) An employer identification number (EIN) is a nine-digit number that the IRS issues. Tax act online Its format is 00-0000000. Tax act online It is used to identify the tax accounts of employers and certain other organizations and entities that have no employees. Tax act online Use your EIN on all of the items that you send to the IRS and SSA for your business. Tax act online If you do not have an EIN, you may apply for one online. Tax act online Go to IRS. Tax act online gov and click on the Apply for an EIN Online link under Tools. Tax act online You may also apply for an EIN by calling 1-800-829-4933, (U. Tax act online S. Tax act online Virgin Islands only) or 267-941-1099 (toll call), or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Tax act online Do not use a social security number (SSN) in place of an EIN. Tax act online If you do not have an EIN by the time a return is due, file a paper return and enter “Applied For” and the date that you applied for it in the space shown for the number. Tax act online If you took over another employer's business, do not use that employer's EIN. Tax act online You should have only one EIN. Tax act online If you have more than one, write to the IRS office where you file your returns using the “without a payment” address in the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943. Tax act online Or call the IRS Business & Specialty Tax Line at 1-800-829-4933 (U. Tax act online S. Tax act online Virgin Islands only) or 267-941-1000 (toll call). Tax act online Persons who are deaf, hard of hearing, or have a speech disability (TDD/TTY users) in the U. Tax act online S. Tax act online Virgin Islands may call 1-800-829-4059. Tax act online The IRS will tell you which EIN to use. Tax act online For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records. Tax act online 2. Tax act online Who Are Employees? Generally, employees are defined either under common law or under special statutes for certain situations. Tax act online See Publication 15-A, Employer's Supplemental Tax Guide, for details on statutory employees and nonemployees. Tax act online Employee status under common law. Tax act online   Generally, a worker who performs services for you is your employee if you can control what will be done and how it will be done. Tax act online This is so even when you give the employee freedom of action. Tax act online What matters is that you have the right to control the details of how the services are performed. Tax act online See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Tax act online    Generally, people in business for themselves are not employees. Tax act online For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. Tax act online However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. Tax act online   If an employer-employee relationship exists, it does not matter what it is called. Tax act online The employee may be called an agent or independent contractor. Tax act online It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Tax act online Statutory employees. Tax act online   There are also some special definitions of employees for social security, Medicare, and FUTA taxes. Tax act online   While the following persons may not be common law employees, they are considered employees for social security and Medicare purposes if the conditions under Tests , discussed later, are met. Tax act online a. Tax act online   An agent (or commission) driver who delivers food or beverages (other than milk) or picks up and delivers laundry or dry cleaning for someone else. Tax act online b. Tax act online   A full-time life insurance salesperson who sells primarily for one company. Tax act online c. Tax act online   A homeworker who works by the guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. Tax act online d. Tax act online   A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. Tax act online The orders must be for merchandise for resale or supplies for use in the customer's business. Tax act online The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. Tax act online Tests. Tax act online   Withhold social security and Medicare taxes from statutory employees' wages if all three of the following tests apply. Tax act online The service contract states or implies that almost all of the services are to be performed personally by them. Tax act online They have little or no investment in the equipment and property used to perform the services (other than an investment in transportation facilities). Tax act online The services are performed on a continuing basis for the same payer. Tax act online Persons in a or d, earlier, are also employees for FUTA tax purposes if tests 1 through 3 are met (U. Tax act online S. Tax act online Virgin Islands only). Tax act online   Publication 15-A gives examples of the employer-employee relationship. Tax act online Statutory nonemployees. Tax act online   Certain direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. Tax act online They are generally treated as self-employed for employment tax purposes. Tax act online See Publication 15-A for details. Tax act online H-2A agricultural workers. Tax act online   On Form W-2, do not check box 13 (Statutory employee) as H-2A workers are not statutory employees. Tax act online Treating employees as nonemployees. Tax act online   If you incorrectly treated an employee as a nonemployee and did not withhold social security and Medicare taxes, you will be liable for the taxes. Tax act online See Treating employees as nonemployees in section 2 of Publication 15 (Circular E), for details on Internal Revenue Code section 3509, which may apply. Tax act online IRS help. Tax act online   If you want the IRS to determine if a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Tax act online Voluntary Classification Settlement Program (VCSP). Tax act online   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. Tax act online To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). Tax act online For more information, visit IRS. Tax act online gov and enter “VCSP” in the search box. Tax act online Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Tax act online See Publication 541, Partnerships, for more details. Tax act online The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Tax act online Exception—Qualified Joint Venture. Tax act online   If you and your spouse materially participate as the only members of a jointly owned and operated business, and you file a joint Form 1040, U. Tax act online S. Tax act online Individual Income Tax Return, or joint Form 1040-SS, U. Tax act online S. Tax act online Self-Employment Tax Return—U. Tax act online S. Tax act online Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or Puerto Rico, you can make a joint election to be taxed as a qualified joint venture instead of a partnership. Tax act online See the Instructions for Schedule C (Form 1040) or the Instructions for Form 1040-SS. Tax act online Spouses electing qualified joint venture status are treated as sole proprietors for federal tax purposes. Tax act online Either of the sole proprietor spouses may report and pay the employment taxes due on wages paid to the employees, using the EIN of that spouse’s sole proprietorship. Tax act online For more information on qualified joint ventures, visit IRS. Tax act online gov and enter “qualified joint venture” in the search box. Tax act online Farm Crew Leaders You are an employer of farmworkers if you are a crew leader. Tax act online A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. Tax act online If there is no written agreement between you and the farm operator stating that you are his or her employee, and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. Tax act online 3. Tax act online Employee's Social Security Number (SSN) An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. Tax act online You must get each employee's name and SSN and enter them on Form W-2AS, W-2CM, W-2GU, or W-2VI. Tax act online If you do not report the employee's correct name and SSN, you may owe a penalty unless you have reasonable cause. Tax act online See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. Tax act online Employee's social security card. Tax act online   You should ask the employee to show you his or her social security card. Tax act online The employee may show the card if it is available. Tax act online Do not accept a social security card that says “Not valid for employment. Tax act online ” A social security number issued with this legend does not permit employment. Tax act online You may, but you are not required to, photocopy the social security card if the employee provides it. Tax act online If an employee does not have a social security card or needs a new one, the employee should apply for one on Form SS-5 and submit the necessary documentation. Tax act online The employee must complete and sign Form SS-5; it cannot be filed by the employer. Tax act online You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. Tax act online If your employee has applied for an SSN but has not received the card before you must file your Form W-2 reports, and you are filing your reports on paper, enter “Applied For” in box d. Tax act online Enter all zeroes in the SSN field if filing electronically. Tax act online When the employee receives the SSN, file Copy A of Form W-2c with SSA to show the employee's SSN. Tax act online Correctly record the employee's name and SSN. Tax act online   Record the name and number of each employee as they appear on his or her social security card. Tax act online If the name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Tax act online Continue to use the old name until the employee shows you the replacement social security card with the corrected name. Tax act online   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2AS, W-2CM, W-2GU, or W-2VI. Tax act online It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. Tax act online Where to get and file social security number application forms. Tax act online    U. Tax act online S. Tax act online Virgin Islands—U. Tax act online S. Tax act online Social Security Administration, 8000 Nisky Center, First Floor, Suite 2, St. Tax act online Thomas, VI 00802. Tax act online  Guam—U. Tax act online S. Tax act online Social Security Administration, 655 Harmon Loop Road, Suite 300, Dededo, GU 96929. Tax act online  American Samoa—U. Tax act online S. Tax act online Social Security Administration, Pago Plaza, Suite 117, Pago Pago, AS 96799. Tax act online  Commonwealth of the Northern Mariana Islands—U. Tax act online S. Tax act online Social Security Administration, MH Building, Suite 201, Saipan, MP 96950. Tax act online Verification of social security numbers. Tax act online   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. Tax act online Visit www. Tax act online socialsecurity. Tax act online gov/employer/ssnv. Tax act online htm for more information. Tax act online Registering for SSNVS. Tax act online   You must register online and receive authorization from your employer to use SSNVS. Tax act online To register, visit SSA's website at www. Tax act online ssa. Tax act online gov/employer and click on the Business Services Online link. Tax act online Follow the registration instructions to obtain a user identification (ID) and password. Tax act online You will need to provide the following information about yourself and your company. Tax act online Name. Tax act online SSN. Tax act online Date of birth. Tax act online Type of employer. Tax act online EIN. Tax act online Company name, address, and telephone number. Tax act online Email address. Tax act online   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Tax act online You must enter the activation code online to use SSNVS. Tax act online 4. Tax act online Wages and Other Compensation Generally, all wages are subject to social security and Medicare tax (and FUTA tax for U. Tax act online S. Tax act online Virgin Islands employers). Tax act online However, wages subject to social security tax and FUTA tax are limited by a wage base amount that you pay to each employee for the year. Tax act online The wage base for social security tax is $117,000 for 2014. Tax act online After you pay $117,000 to an employee in 2014, including tips, do not withhold social security tax on any amount that you later pay to the employee for the year. Tax act online The wage base for FUTA tax is $7,000 for 2014. Tax act online All wages are subject to Medicare tax. Tax act online The wages may be in cash or in other forms, such as an automobile for personal use. Tax act online Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. Tax act online It does not matter how payments are measured or paid. Tax act online See the table in section 12 for exceptions to social security, Medicare, and FUTA taxes on wages. Tax act online See section 5 and section 6 for a discussion of how the rules apply to tips and farmworkers. Tax act online Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies. Tax act online Special rules apply to the reporting of third-party sick pay. Tax act online For details, see Publication 15-A. Tax act online Determine the value of noncash pay (such as goods, lodging, and meals) by its fair market value. Tax act online However, see Fringe Benefits , later in this section. Tax act online Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes. Tax act online Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is taxed as ordinary wages in the year paid. Tax act online For information on reporting back pay to the Social Security Administration, see Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration. Tax act online Travel and business expenses. Tax act online   Payments to your employee for travel and other necessary expenses of your business generally are included in taxable wages if (a) your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, or (b) you advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount that he or she does not substantiate. Tax act online Sick pay. Tax act online   In general, sick pay is any amount that you pay, under a plan that you take part in, to an employee because of sickness or injury. Tax act online These amounts are sometimes paid by a third party, such as an insurance company. Tax act online In either case, these payments are subject to social security and Medicare taxes (and FUTA tax for U. Tax act online S. Tax act online Virgin Islands employers). Tax act online Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. Tax act online Publication 15-A explains the employment tax rules that apply to sick pay, disability benefits, and similar payments to employees. Tax act online Fringe Benefits Generally, fringe benefits are includible in the gross income of an employee and are subject to employment taxes. Tax act online Examples of fringe benefits include the use of an automobile, aircraft flights that you provide, free or discounted commercial airline flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. Tax act online In general, the amount included in the employee's income is the excess of the fair market value of the benefit over the sum of any amount paid for it by the employee and any amount excluded by law. Tax act online For more information, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. Tax act online When fringe benefits are treated as paid. Tax act online   You can choose to treat certain noncash fringe benefits (including personal use of an automobile provided by you) as paid by the pay period, quarter, or on any other basis that you choose, but they must be treated as paid at least annually. Tax act online You do not have to make a formal choice of payment dates or notify the IRS. Tax act online You do not have to use the same basis for all employees. Tax act online You may change methods as often as you like, as long as all benefits provided in a calendar year are treated as paid no later than December 31 of the calendar year. Tax act online However, see Special accounting rule for fringe benefits provided during November and December , later in this section. Tax act online   You can treat the value of a single taxable noncash fringe benefit as paid on one or more dates in the same calendar year, even if the employee gets the entire benefit at one time. Tax act online However, once you elect the payment dates, you must report the taxes on your return in the same tax period in which you treated them as paid. Tax act online This election does not apply to a fringe benefit where real property or investment personal property is transferred. Tax act online Withholding social security and Medicare taxes on fringe benefits. Tax act online   You add the value of fringe benefits to regular wages for a payroll period and figure social security and Medicare taxes on the total. Tax act online   If you withhold less than the required amount of social security and Medicare taxes from the employee in a calendar year but report and pay the proper amount, you may recover the taxes from the employee. Tax act online Depositing taxes on fringe benefits. Tax act online   Once you choose payment dates for taxable noncash fringe benefits, you must deposit taxes in the same deposit period that you treat the fringe benefits as paid. Tax act online You may make a reasonable estimate of the value of the fringe benefits. Tax act online In general, the value of taxable noncash fringe benefits provided in a calendar year must be determined by January 31 of the following year. Tax act online   You may claim a refund of overpayments or elect to have any overpayment applied to the next employment tax return. Tax act online If deposits are underpaid, see Deposit Penalties in section 8. Tax act online Valuation of vehicles provided to employees. Tax act online    If you provide a vehicle to your employees, you may either determine the actual value of the benefit for the entire calendar year, taking into account the business use of the vehicle, or consider the entire use for the calendar year as personal and include 100% of the value of the vehicle in the employee's income. Tax act online For reporting information to employees, see the box 14 instructions in the General Instructions for Forms W-2 and W-3. Tax act online Special accounting rule for fringe benefits provided during November and December. Tax act online   You may choose to treat the value of taxable noncash fringe benefits provided during November and December as paid in the next year. Tax act online However, this applies only to those benefits that you actually provided during November and December, not to those you merely treated as paid during those months. Tax act online   If you use this rule, you must notify each affected employee between the time of the employee's last paycheck of the calendar year and at or near the time that you give the employee Form W-2AS, W-2CM, W-2GU, or W-2VI. Tax act online If you use the special accounting rule, your employee must also use it for the same period that you use it. Tax act online You cannot use this rule for a fringe benefit of real property or tangible or intangible real property of a kind normally held for investment that is transferred to your employee. Tax act online 5. Tax act online Tips Tips that your employee receives from customers are generally subject to social security and Medicare withholding. Tax act online Your employee must report cash tips to you by the 10th of the month after the month that the tips are received. Tax act online The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. Tax act online Both directly and indirectly tipped employees must report tips to you. Tax act online The report should not include tips that the employee paid out to other employees. Tax act online No report is required for months when tips are less than $20. Tax act online Your employees report tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. Tax act online They may also use Form 4070A, Employee's Daily Record of Tips, to keep a record of their tips. Tax act online Both forms are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer, available at IRS. Tax act online gov. Tax act online The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period that the report covers, and The total tips received during the month or period. Tax act online You are permitted to establish a system for electronic tip reporting by employees. Tax act online See Regulations section 31. Tax act online 6053-1(d). Tax act online Collecting taxes on tips. Tax act online   You must collect the employee social security and Medicare taxes on the employee's tips. Tax act online You can also collect these taxes from the employee's wages or from other funds that he or she makes available. Tax act online Stop collecting the employee social security tax when his or her total wages and tips for 2014 reach $117,000. Tax act online Collect the employee Medicare tax for the whole year on all wages and tips. Tax act online   You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the wage base limit. Tax act online You are responsible for the employer Medicare tax for the whole year on all wages and tips. Tax act online File Form 941-SS (or Form 944) to report withholding and employer taxes on tips. Tax act online The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. Tax act online Ordering rule. Tax act online   If, by the 10th of the month after the month you received an employee's report on tips, you do not have enough employee funds available to deduct the employee social security and Medicare tax on tips, you no longer have to collect it and are not liable for it. Tax act online Reporting tips. Tax act online   Report tips and any collected and uncollected social security in boxes 1, 5, 7, and 12 on Forms W-2AS, W-2CM, W-2GU, or W-2VI and on Form 941-SS, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). Tax act online Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. Tax act online Report an adjustment on Form 941-SS, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. Tax act online The table in section 12 shows how tips are treated for FUTA tax purposes. Tax act online   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. Tax act online See Revenue Ruling 2012-18, 2012-26 I. Tax act online R. Tax act online B. Tax act online 1032, available at www. Tax act online irs. Tax act online gov/irb/2012-26_IRB/ar07. Tax act online html. Tax act online 6. Tax act online Social Security and Medicare Taxes for Farmworkers The tests described below apply only to services that are defined as agricultural labor (farmwork). Tax act online In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Tax act online For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. Tax act online Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. Tax act online A “share farmer” working for you is not your employee. Tax act online However, the share farmer may be subject to self-employment tax. Tax act online In general, share farming is an arrangement in which certain commodity products are shared between the farmer and the owner (or tenant) of the land. Tax act online For details, see Regulations section 31. Tax act online 3121(b)(16)-1. Tax act online The $150 Test or the $2,500 Test All cash wages that you pay to any employee for farmwork are subject to social security and Medicare taxes if either of the following two tests is met. Tax act online You pay cash wages to the employee of $150 or more in a year (count all cash wages paid on a time, piecework, or other basis) for farmwork. Tax act online The $150 test applies separately to each farmworker that you employ. Tax act online If you employ a family of workers, each member is treated separately. Tax act online Do not count wages paid by other employers. Tax act online The total that you pay for farmwork (cash and noncash) to all of your employees is $2,500 or more during the year. Tax act online Exceptions. Tax act online   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. Tax act online   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. Tax act online 7. Tax act online How To Figure Social Security and Medicare Taxes The tax rate for social security is 6. Tax act online 2% (amount withheld) each for the employer and employee (12. Tax act online 4% total). Tax act online The social security wage base limit is $117,000. Tax act online The tax rate for Medicare is 1. Tax act online 45% (amount withheld) each for the employee and employer (2. Tax act online 9% total). Tax act online There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. Tax act online Multiply each wage payment by these percentages to figure the tax to withhold from employees. Tax act online Employers report both the employee and employer shares on Forms 941-SS, 944, or Form 943 (farm employment). Tax act online See section 5 for information on tips. Tax act online Additional Medicare Tax withholding. Tax act online   In addition to withholding Medicare tax at 1. Tax act online 45%, you must withhold a 0. Tax act online 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Tax act online You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Tax act online Additional Medicare Tax is only imposed on the employee. Tax act online There is no employer share of Additional Medicare Tax. Tax act online All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Tax act online   For more information on what wages are subject to Medicare tax, see the chart Special Rules for Various Types of Employment and Payments in section 12. Tax act online For more information on Additional Medicare Tax, visit IRS. Tax act online gov and enter “Additional Medicare Tax” in the search box. Tax act online Deducting the tax. Tax act online   Deduct the employee tax from each wage payment. Tax act online If you are not sure that the wages that you pay to a farmworker during the year will be taxable, you may either deduct the tax when you make the payments or wait until the $2,500 test or the $150 test explained in section 6 has been met. Tax act online Employee's portion of taxes paid by employer. Tax act online   If you pay your employee's social security and Medicare taxes without deducting them from the employee's pay, you must include the amount of the payments in the employee's wages for social security and Medicare taxes. Tax act online This increase in the employee's wage payment for your payment of the employee's social security and Medicare taxes is also subject to employee social security and Medicare taxes. Tax act online This again increases the amount of the additional taxes that you must pay. Tax act online Household and agricultural employers. Tax act online   This discussion does not apply to household and agricultural employers. Tax act online If you pay a household or agricultural employee's social security and Medicare taxes, these payments must be included in the employee's wages. Tax act online However, this wage increase due to the tax payments is not subject to social security or Medicare taxes as discussed in this section. Tax act online See Publication 15-A for details. Tax act online Sick pay payments. Tax act online   Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. Tax act online For details on third-party payers of sick pay, see Publication 15-A. Tax act online 8. Tax act online Depositing Taxes You must deposit social security and Medicare taxes if your tax liability (Form 941-SS, line 10; Form 944, line 7; or Form 943, line 11) is $2,500 or more for the tax return period. Tax act online You must make the deposit by electronic funds transfer. Tax act online For more information about electronic funds transfers, see How To Deposit , later in this section. Tax act online Payment with Return $2,500 rule. Tax act online   Instead of making deposits during the current quarter, you can pay your total Form 941-SS tax liability when you timely file Form 941-SS if: Your total Form 941-SS tax liability for either the current quarter or the preceding quarter is less than $2,500 and You do not incur a $100,000 next-day deposit obligation during the current quarter. Tax act online   If you are not sure your total liability for the current quarter will be less than $2,500, (and your liability for the preceding quarter was not less than $2,500), make deposits using the semiweekly or monthly rules so you won't be subject to failure to deposit penalties. Tax act online Employers who have been notified to file Form 944 can pay their tax liability due for the fourth quarter with Form 944, if their fourth quarter tax liability is less than $2,500. Tax act online Employers must have deposited any tax liability due for the first, second, and third quarters, according to the deposit rules, in order to avoid failure-to-deposit penalties for deposits due during those quarters. Tax act online Only monthly schedule depositors are allowed to make an Accuracy of Deposits Rule payment with the return. Tax act online Semiweekly schedule depositors must timely deposit the amount. Tax act online See Accuracy of Deposits Rule and How To Deposit, later in this section. Tax act online When To Deposit Under the rules discussed below, the only difference between farm and nonfarm workers' employment tax deposit rules is the lookback period. Tax act online Therefore, farm and nonfarm workers are discussed together except where noted. Tax act online Depending on your total taxes reported during a lookback period (discussed later), you are either a monthly schedule depositor or a semiweekly schedule depositor. Tax act online The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often you pay your employees or how often you are required to make deposits. Tax act online The terms identify which set of rules that you must follow when a tax liability arises (for example, when you have a payday). Tax act online You will need to determine your deposit schedule for a calendar year based on the total employment taxes reported on Forms 941-SS, line 10; Form 944, line 7; or Form 943, line 9, for your lookback period (defined below). Tax act online If you filed both Forms 941-SS and 941 during the lookback period, combine the tax liabilities for these returns for purposes of determining your deposit schedule. Tax act online Determine your deposit schedule for Form 943 separately from Forms 941-SS and 941. Tax act online Lookback period for employers of nonfarm workers. Tax act online   The lookback period for Form 941-SS (or Form 941) consists of four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. Tax act online These four quarters are your lookback period even if you did not report any taxes for any of the quarters. Tax act online For 2014, the lookback period is July 1, 2012, through June 30, 2013. Tax act online    Table 1. Tax act online Lookback Period for Calendar Year 2014 Lookback Period July 1, 2012 Oct. Tax act online 1, 2012 Jan. Tax act online 1, 2013 Apr. Tax act online 1, 2013 through through through through Sep. Tax act online 30, 2012 Dec. Tax act online 31, 2012 Mar. Tax act online 31, 2013 June 30, 2013    The lookback period for Form 944 is the second calendar year preceding the current calendar year. Tax act online For example, the lookback period for calendar year 2014 is calendar year 2012. Tax act online In addition, for employers who filed Form 944 for 2012 or for 2013 and will file Form 941-SS (or Form 941) for 2014, the lookback period for 2014 is the second calendar year preceding the current calendar year, that is, 2012. Tax act online Lookback period for employers of farmworkers. Tax act online   The lookback period for Form 943 is the second calendar year preceding the current calendar year. Tax act online The lookback period for calendar year 2014 is calendar year 2012. Tax act online Adjustments to lookback period taxes. Tax act online   To determine your taxes for the lookback period, use only the tax that you reported on the original returns (Forms 941-SS, 943, or 944). Tax act online Do not include any adjustments shown on Form 941-X, 943-X, or 944-X. Tax act online Example. Tax act online   An employer originally reported total taxes of $45,000 for the lookback period. Tax act online The employer discovered during January 2014 that the tax reported during the lookback period was understated by $10,000 and corrected this error by filing Form 941-X. Tax act online The employer is a monthly schedule depositor for 2014 because the lookback period tax liabilities are based on the amounts originally reported, and they were $50,000 or less. Tax act online Deposit Period The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. Tax act online For monthly schedule depositors, the deposit period is a calendar month. Tax act online The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. Tax act online Monthly Deposit Schedule If your total tax reported for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. Tax act online You must deposit taxes on wage payments made during a calendar month by the 15th day of the following month. Tax act online New employers. Tax act online   Your tax liability for any quarter in the lookback period before the date you started or acquired your business is considered to be zero. Tax act online Therefore, you are a monthly schedule depositor for the first calendar year of your business (but see the $100,000 Next-Day Deposit Rule , later in this section). Tax act online Semiweekly Deposit Schedule If your total tax reported for the lookback period is more than $50,000, you are a semiweekly schedule depositor for the current year. Tax act online If you are a semiweekly schedule depositor, you must deposit on Wednesday and/or Friday, depending on what day of the week that you make wage payments, as follows. Tax act online Deposit taxes on wage payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Tax act online Deposit taxes on wage payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. Tax act online Semiweekly depositors are generally not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule , discussed later in this section, applies. Tax act online For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 on the following Wednesday. Tax act online If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. Tax act online Semiweekly deposit period spanning two quarters. Tax act online   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. Tax act online Example. Tax act online   If you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. Tax act online Both deposits will be due on Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). Tax act online Examples of Monthly and Semiweekly Schedules Employers of nonfarm workers. Tax act online   Rose Co. Tax act online reported Form 941-SS taxes as follows: 2013 Lookback Period 3rd Quarter 2011 $12,000 4th Quarter 2011 12,000 1st Quarter 2012 12,000 2nd Quarter 2012 12,000   $48,000 2014 Lookback Period 3rd Quarter 2012 $12,000 4th Quarter 2012 12,000 1st Quarter 2013 12,000 2nd Quarter 2013 15,000   $51,000 Rose Co. Tax act online is a monthly schedule depositor for 2013 because its taxes for the four quarters in its lookback period ($48,000 for the 3rd quarter of 2011 through the 2nd quarter of 2012) were not more than $50,000. Tax act online However, for 2014, Rose Co. Tax act online is a semiweekly schedule depositor because the total taxes for the four quarters in its lookback period ($51,000 for the 3rd quarter of 2012 through the 2nd quarter of 2013) exceeded $50,000. Tax act online Employers of farmworkers. Tax act online   Red Co. Tax act online reported taxes on its 2012 Form 943, line 9, of $48,000. Tax act online On its 2013 Form 943, line 11, it reported taxes of $60,000. Tax act online   Red Co. Tax act online is a monthly schedule depositor for 2014 because its taxes for its lookback period ($48,000 for calendar year 2012) were not more than $50,000. Tax act online However, for 2015, Red Co. Tax act online is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. Tax act online New agricultural employers. Tax act online   New agricultural employers filing Form 943 are monthly schedule depositors for the first and second calendar years of their business because their taxes for the lookback period (2 years) are considered to be zero. Tax act online However, see the $100,000 Next-Day Deposit Rule , later in this section. Tax act online Deposits on Business Days Only If a deposit due date falls on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. Tax act online A business day is any day other than a Saturday, Sunday, or legal holiday. Tax act online For example, if a deposit is required to be made on Friday, but Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). Tax act online Semiweekly schedule depositors have at least 3 business days to make a deposit. Tax act online If any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the required deposit. Tax act online For example, if a semiweekly schedule depositor accumulated taxes for payments made on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). Tax act online Legal holiday. Tax act online   The term “legal holiday” means any legal holiday in the District of Columbia. Tax act online Legal holidays for 2014 are listed below. Tax act online January 1—New Year's Day January 20—Birthday of Martin Luther King, Jr. Tax act online February 17—Washington's Birthday April 16—District of Columbia Emancipation Day May 26—Memorial Day July 4—Independence Day September 1—Labor Day October 13—Columbus Day November 11—Veterans Day November 27—Thanksgiving Day December 25—Christmas Day Application of Monthly and Semiweekly Schedules The following examples illustrate the procedure for determining the deposit date under the two different deposit schedules. Tax act online Monthly schedule example. Tax act online   Spruce Co. Tax act online is a monthly schedule depositor with seasonal employees. Tax act online It paid wages each Friday during August but did not pay any wages during September. Tax act online Under the monthly deposit schedule, Spruce Co. Tax act online must deposit the combined tax liabilities for the four August paydays by September 15. Tax act online Spruce Co. Tax act online does not have a deposit requirement for September (due by October 15) because no wages were paid and, therefore, it did not have a tax liability for September. Tax act online Semiweekly schedule example. Tax act online   Green, Inc. Tax act online is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Tax act online Although Green, Inc. Tax act online , has a semiweekly deposit schedule, it will deposit just once a month because it pays wages only once a month. Tax act online The deposit, however, will be made under the semiweekly deposit schedule as follows: Green, Inc. Tax act online ’s tax liability for the April 25, 2014 (Friday), payday must be deposited by April 30, 2014 (Wednesday). Tax act online Under the semiweekly deposit schedule, liabilities for wages paid on Wednesday through Friday must be deposited by the following Wednesday. Tax act online $100,000 Next-Day Deposit Rule If you accumulate taxes of $100,000 or more on any day during a deposit period, you must deposit by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. Tax act online For purposes of the $100,000 rule, do not continue accumulating taxes after the end of a deposit period. Tax act online For example, if a semiweekly schedule depositor has accumulated taxes of $95,000 on Tuesday and $10,000 on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. Tax act online Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. Tax act online However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. Tax act online For example, Fir Co. Tax act online is a semiweekly schedule depositor. Tax act online On Monday, Fir Co. Tax act online accumulates taxes of $110,000 and must deposit on Tuesday, the next business day. Tax act online On Tuesday, Fir Co. Tax act online accumulates additional taxes of $30,000. Tax act online Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. Tax act online does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). Tax act online If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day during a month, you become a semiweekly schedule depositor on the next day and remain so for the remainder of the calendar year and for the following calendar year. Tax act online Example. Tax act online   Elm, Inc. Tax act online started its business on May 1, 2014. Tax act online On May 8, it paid wages for the first time and accumulated a tax liability of $40,000. Tax act online On Friday, May 9, Elm, Inc. Tax act online paid wages and accumulated a liability of $60,000, making its accumulated Form 941-SS tax liability total $100,000. Tax act online Elm, Inc. Tax act online must deposit $100,000 by Monday, May 12, the next business day. Tax act online Because this was the first year of its business, the tax liability for its lookback period is considered to be zero, and it would be a monthly schedule depositor based on the lookback rules. Tax act online However, because Elm, Inc. Tax act online accumulated $100,000 on May 9, it became a semiweekly schedule depositor on May 10. Tax act online It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. Tax act online Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. Tax act online However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. Tax act online Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited, and The deposit shortfall is paid or deposited by the shortfall makeup date as described below. Tax act online Makeup date for deposit shortfall: Monthly schedule depositor. Tax act online Deposit or pay the shortfall by the due date of your Form 941-SS, 944, or 943 for the period in which the shortfall occurred. Tax act online You may pay the shortfall with your return even if the amount is $2,500 or more. Tax act online Semiweekly schedule depositor. Tax act online Deposit by the earlier of: The first Wednesday or Friday (whichever comes first) that comes on or after the 15th of the month following the month in which the shortfall occurred, or The return due date for the period in which the shortfall occurred. Tax act online For example, if a semiweekly schedule depositor filing Form 941-SS has a deposit shortfall during July 2014, the shortfall makeup date is August 15, 2014 (Friday). Tax act online However, if the shortfall occurred on the required April 2 (Wednesday), deposit date for a March 28 (Friday) pay date, the return due date for the March 28 pay date (April 30) would come before the May 16 (Friday) shortfall makeup date. Tax act online In this case, the shortfall must be deposited by April 30, 2014. Tax act online Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941-SS or 944 taxes). Tax act online Form 943 taxes and Form 941-SS (or Form 944) taxes are not combined for purposes of applying any of the deposit rules. Tax act online If a deposit is due, deposit the Form 941-SS (or Form 944) taxes and Form 943 taxes separately, as discussed next. Tax act online How To Deposit You must deposit employment taxes by electronic funds transfer. Tax act online See Payment with Return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. Tax act online Electronic deposit requirement. Tax act online   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Tax act online Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Tax act online If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Tax act online   EFTPS is a free service provided by the Department of the Treasury. Tax act online To get more information or to enroll in EFTPS, call 1-800-555-4477 (U. Tax act online S. Tax act online Virgin Islands only) or 303-967-5916 (toll call). Tax act online You can also visit the EFTPS website at www. Tax act online eftps. Tax act online gov. Tax act online Additional information about EFTPS is also available in Publication 966. Tax act online When you receive your EIN. Tax act online   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in EFTPS. Tax act online You will receive information about Express Enrollment in your Employer Identification Number (EIN) Package and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. Tax act online Follow the steps in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your payroll tax deposits. Tax act online If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. Tax act online Deposit record. Tax act online   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. Tax act online The number can be used as a receipt or to trace the payment. Tax act online Depositing on time. Tax act online   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. Tax act online m. Tax act online Eastern time the day before the date the deposit is due. Tax act online If you use a third party to make deposits on your behalf, they may have different cutoff times. Tax act online Same-day payment option. Tax act online   If you fail to initiate a deposit transaction on EFTPS by 8 p. Tax act online m. Tax act online Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). Tax act online To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. Tax act online Please check with your financial institution regarding availability, deadlines, and costs. Tax act online Your financial institution may charge you a fee for payments made this way. Tax act online To learn more about the information you will need to provide your financial institution to make a same-day wire payment, please visit www. Tax act online eftps. Tax act online gov to download the Same-Day Payment Worksheet. Tax act online How to claim credit for overpayments. Tax act online   If you deposited more than the right amount of taxes for a tax period, you can choose on Form 941-SS, 941, 944, or 943 for that tax period to have the overpayment refunded or applied as a credit to your next return. Tax act online Do not ask EFTPS to request a refund from the IRS for you. Tax act online Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits of less than the required amount. Tax act online The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. Tax act online The IRS may also waive penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. Tax act online For amounts not properly or timely deposited, the penalty rates are as follows. Tax act online 2% - Deposits made 1 to 5 days late. Tax act online 5% - Deposits made 6 to 15 days late. Tax act online 10% - Deposits made 16 or more days late. Tax act online Also applies to amounts paid within 10 days of the date of the first notice that the IRS sent asking for the tax due. Tax act online 10% - Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return (but see Payment with Return , earlier in this section, for exceptions). Tax act online 15% - Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. Tax act online Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. Tax act online Special rule for former Form 944 filers. Tax act online    If you filed Form 944 for the prior year and must file Forms 941-SS for the current year because your employment tax liability for the prior year exceeded the Form 944 eligibility requirement ($1,000 or less), the failure-to-deposit penalty will not apply to a late deposit of employment taxes for the first month of the current year if the taxes are deposited in full by March 15 of the current year. Tax act online Order in which deposits are applied. Tax act online   Deposits generally are applied to the most recent tax liability within the return period (quarter or year). Tax act online However, if you receive a failure-to-deposit penalty notice, you may designate how your payment is to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Tax act online Follow the instructions on the penalty notice that you received. Tax act online For more information on designating deposits, see Revenue Procedure 2001-58. Tax act online You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. Tax act online irs. Tax act online gov/pub/irs-irbs/irb01-50. Tax act online pdf. Tax act online Example. Tax act online Cedar, Inc. Tax act online is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. Tax act online It does not make the deposit on July 15. Tax act online On August 15, Cedar, Inc. Tax act online deposits $2,000. Tax act online Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. Tax act online Accordingly, $500 of the July 15 liability remains undeposited. Tax act online The penalty on this underdeposit will apply as explained earlier. Tax act online Trust fund recovery penalty. Tax act online   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. Tax act online The penalty is the full amount of the unpaid trust fund tax. Tax act online This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. Tax act online   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. Tax act online   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship, or any other person or entity that is responsible for collecting, accounting for, and paying over trust fund taxes. Tax act online A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. Tax act online    Willfully means voluntarily, consciously, and intentionally. Tax act online A responsible person acts willfully if the person knows the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. Tax act online “Averaged” failure-to-deposit penalty. Tax act online   The IRS may assess an “averaged” failure-to-deposit (FTD) penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 941-SS, line 14, when your tax liability shown on Form 941-SS, line 10, was $2,500 or more. Tax act online IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 941-SS, line 10, was $2,500 or more and you did any of the following. Tax act online Completed Form 941-SS, line 14, instead of Schedule B (Form 941). Tax act online Failed to attach a properly completed Schedule B (Form 941). Tax act online Completed Schedule B (Form 941) incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. Tax act online   The IRS figures the penalty by allocating your total tax liability shown on Form 941-SS, line 10, equally throughout the tax period. Tax act online Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. Tax act online   You can avoid the penalty by reviewing your return before filing it. Tax act online Follow these steps before filing your Form 941-SS. Tax act online If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 941-SS, line 14. Tax act online If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Schedule B (Form 941) in the lines that represent the dates you paid your employees. Tax act online Verify that your total liability shown on Form 941-SS, line 14, or the bottom of Schedule B (Form 941) equals your tax liability shown on Form 941-SS,  line 10. Tax act online Do not show negative amounts on Form 941-SS, line 14, or Schedule B (Form 941). Tax act online For prior period errors, do not adjust your tax liabilities reported on your current Form 941-SS, line 14, or on Schedule B (Form 941). Tax act online Instead, file an adjusted return (Form 941-X (if you are adjusting a previously filed Form 941-SS) or Form 944-X (if you are adjusting a previously filed Form 944-SS or 944)) if you are also adjusting your tax liability. Tax act online If you are only adjusting your deposits in response to a failure-to-deposit penalty notice, see the Instructions for Schedule B (Form 941) (if you previously filed Form 941-SS) or the Instructions for Form 944-X (if you previously filed Form 944-SS or 944). Tax act online If you filed Form 944 for 2013 and line 7 was $2,500 or more, you were required to complete Form 944, lines 13a–13m, or attach Form 945-A, Annual Record of Federal Tax Liability. Tax act online If you failed to complete lines 13a–13m, or failed to attach Form 945-A, whichever was required, IRS may assess an “averaged” failure-to-deposit (FTD) penalty. Tax act online 9. Tax act online Employer's Returns General instructions. Tax act online   File Forms 941-SS (or Form 944) for nonfarm workers and Form 943 for farmworkers. Tax act online (U. Tax act online S. Tax act online Virgin Islands employers may be required to file Form 940 for the combined wages of nonfarm workers and farmworkers. Tax act online ) Employers with employees subject to U. Tax act online S. Tax act online income tax withholding. Tax act online   If you have both employees who are subject to U. Tax act online S. Tax act online income tax withholding and employees who are not subject to U. Tax act online S. Tax act online income tax withholding, you must file only Form 941 (or Form 944) and include all your employees’ wages on that form. Tax act online Nonfarm employers. Tax act online   File Form 941-SS for the calendar quarter in which you first pay wages for nonfarm workers and for each quarter thereafter unless you are a seasonal employer or file a final return. Tax act online Due dates for each quarter of the calendar year are as follows. Tax act online Quarter Due Jan. Tax act online , Feb. Tax act online , Mar. Tax act online Apr. Tax act online 30 Apr. Tax act online , May, June July 31 July, Aug. Tax act online , Sept. Tax act online Oct. Tax act online 31 Oct. Tax act online , Nov. Tax act online , Dec. Tax act online Jan. Tax act online 31   However, if you deposited all taxes when due for the quarter, you have 10 additional days from the due dates to file the return. Tax act online If the due date for filing your return falls on a Saturday, Sunday, or legal holiday, you may file on the next business day. Tax act online   If you closed your business or stopped paying wages and do not have to file returns in the future, check the box on line 15 of your final Form 941-SS and show the date final wages were paid. Tax act online Form 944. Tax act online   If IRS notified you to file Form 944, file your 2013 Form 944 by January 31, 2014, or by February 10, 2014 (if you deposited all taxes when due). Tax act online Household employers reporting social security and Medicare taxes. Tax act online   If you are a sole proprietor and file Forms 941-SS (or Form 944) for business employees, you may include taxes for household employees on your Forms 941-SS (or Form 944). Tax act online Otherwise, report social security and Medicare taxes for household employees on Schedule H (Form 1040), Household Employment Taxes. Tax act online See Publication 926, Household Employer's Tax Guide, for more information. Tax act online Employers of farmworkers. Tax act online   Every employer of farmworkers must file a Form 943 for each calendar year beginning with the first year the employer pays $2,500 or more for farmwork or employs a farmworker who meets the $150 test described in section 6. Tax act online   File a Form 943 each year for all taxable wages paid for farmwork. Tax act online You may report household workers in a private home on a farm operated for profit on Form 943. Tax act online Do not report wages for farmworkers on Form 941-SS or 944. Tax act online   Send Form 943 to the IRS by January 31 of the following year. Tax act online Send it with payment of any taxes due that you are not required to deposit. Tax act online If you deposited all taxes when due, you have 10 additional days to file. Tax act online Penalties. Tax act online   For each whole or part month that a return is not filed when required (disregarding any extensions of the filing deadline), there is a failure-to-file penalty of 5% of the unpaid tax due with that return. Tax act online The maximum penalty is generally 25% of the tax due. Tax act online Also, for each whole or part month that the tax is paid late (disregarding any extensions of the payment deadline), there is a failure-to-pay penalty of 0. Tax act online 5% per month of the amount of tax. Tax act online For individual filers only, the failure-to-pay penalty is reduced from 0. Tax act online 5% per month to 0. Tax act online 25% per month if an installment agreement is in effect. Tax act online You must have filed your return on or before the due date of the return to qualify for the reduced penalty. Tax act online The maximum amount of the failure-to-pay penalty is also 25% of the tax due. Tax act online If both penalties apply in any month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty. Tax act online The penalties will not be charged if you have a reasonable cause for failing to file or pay. Tax act online If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists. Tax act online Reporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Make current period adjustments for fractions of cents, sick pay, tips, and group-term life insurance on your Form 941-SS, 944, or 943. Tax act online See the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943 for information on how to report these adjustments. Tax act online Prior Period Adjustments Forms for prior period adjustments. Tax act online   Use Form 941-X or Form 944-X to make a correction after you discover an error on a previously filed Form 941 or Form 944. Tax act online There are also Forms 943-X, 945-X, and CT-1X to report corrections on the corresponding returns. Tax act online Form 941-X and Form 944-X also replace Form 843, Claim for Refund and Request for Abatement, for employers to request a refund or abatement of overreported employment taxes. Tax act online Continue to use Form 843 when requesting a refund or abatement of assessed interest or penalties. Tax act online See Revenue Ruling 2009-39, 2009-52 I. Tax act online R. Tax act online B. Tax act online 951, for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. Tax act online You can find Revenue Ruling 2009-39, at www. Tax act online irs. Tax act online gov/irb/2009-52_IRB/ar14. Tax act online html. Tax act online Background. Tax act online   Treasury Decision 9405 changed the process for making interest-free adjustments to employment taxes reported on Forms 941-SS, 943, 944-SS, and 944, and for filing a claim for refund of employment taxes. Tax act online Treasury Decision 9405, 2008-32 I. Tax act online R. Tax act online B. Tax act online 293, is available at www. Tax act online irs. Tax act online gov/irb/2008-32_IRB/ar13. Tax act online html. Tax act online You will use the adjustment process if you underreported employment taxes and are making a payment, or if you overreported employment taxes and will be applying the credit to the Form 941-SS, 943, or 944 period during which you file Forms 941-X, 943-X, or 944-X, respectively. Tax act online You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. Tax act online We use the terms “correct” and “corrections” to include interest-free adjustments under sections 6205 and 6413, and claims for refund and abatement under sections 6402, 6414, and 6404 of the Internal Revenue Code. Tax act online Correcting employment taxes. Tax act online   When you discover an error on a previously filed Form 941-SS, 943, 944-SS, or 944, you must: Correct that error using Form 941-X, Form 943-X, or Form 944-X, File a separate Form 941-X, Form 943-X, or Form 944-X for