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Tax Amendment

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Tax Amendment

Tax amendment 13. Tax amendment   Employment Taxes Table of Contents What's New for 2013 What's New for 2014 Reminders Important Dates for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Farm Employment Family Employees Crew Leaders Social Security and Medicare TaxesReligious exemption. Tax amendment Wage limit. Tax amendment Federal Income Tax WithholdingNew Form W-4 for 2014. Tax amendment Required Notice to Employees About Earned Income Credit (EIC) Reporting and Paying Social Security, Medicare, and Withheld Federal Income TaxesElectronic deposit requirement. Tax amendment Federal Unemployment (FUTA) TaxReporting and Paying FUTA Tax What's New for 2013 Social security and Medicare tax for 2013. Tax amendment  The employee tax rate for social security is 6. Tax amendment 2%. Tax amendment Previously, the employee tax rate for social security was 4. Tax amendment 2%. Tax amendment The employer tax rate for social security remains unchanged at 6. Tax amendment 2%. Tax amendment The social security wage base limit is $113,700. Tax amendment The Medicare tax rate is 1. Tax amendment 45% each for the employee and employer, unchanged from 2012. Tax amendment There is no wage base limit for Medicare tax. Tax amendment Additional Medicare Tax. Tax amendment  In addition to withholding Medicare tax at 1. Tax amendment 45%, you must withhold a 0. Tax amendment 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Tax amendment 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 amendment Additional Medicare Tax is only imposed on the employee. Tax amendment There is no employer share of Additional Medicare Tax. Tax amendment All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. Tax amendment For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E), Employer's Tax Guide. Tax amendment For more information on Additional Medicare Tax, visit IRS. Tax amendment gov and enter “Additional Medicare Tax” in the search box. Tax amendment Leave-based donation programs to aid victims of Hurricane Sandy. Tax amendment  Under these programs, employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2014, to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy. Tax amendment The donated leave will not be included in the income or wages of the employee. Tax amendment The employer may deduct the cash payments as business expenses or charitable contributions. Tax amendment For more information, see Notice 2012-69, 2012-51 I. Tax amendment R. Tax amendment B. Tax amendment 712, available at www. Tax amendment irs. Tax amendment gov/irb/2012-51_IRB/ar09. Tax amendment html. Tax amendment Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans extended. Tax amendment  The work opportunity tax credit is now available for eligible unemployed veterans who begin work before January 1, 2014. Tax amendment Previously, the credit was available for unemployed veterans who began work on or after November 22, 2011, and before January 1, 2013. Tax amendment Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Tax amendment For more information, visit IRS. Tax amendment gov and enter “work opportunity credit” in the search box. Tax amendment What's New for 2014 Social security and Medicare tax for 2014. Tax amendment  The employee and employer tax rates for social security and the maximum amount of wages subject to social security tax for 2014 will be discussed in Publication 51 (Circular A), Agricultural Employer's Tax Guide (For use in 2014). Tax amendment The Medicare tax rate for 2014 will also be discussed in Publication 51 (Circular A) (For use in 2014). Tax amendment There is no limit on the amount of wages subject to Medicare tax. Tax amendment Reminders Additional employment tax information for farmers. Tax amendment  See Publication 51 (Circular A) for more detailed guidance on employment taxes. Tax amendment For the latest information about employment tax developments impacting farmers, go to www. Tax amendment irs. Tax amendment gov/pub51. Tax amendment Correcting a previously filed Form 943. Tax amendment  If you discover an error on a previously filed Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, make the correction using Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. Tax amendment Form 943-X is filed separately from Form 943. Tax amendment For more information on correcting Form 943, see the Instructions for Form 943-X. Tax amendment Federal tax deposits must be made by electronic funds transfer. Tax amendment  You must use electronic funds transfer to make all federal tax deposits. Tax amendment Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). Tax amendment 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 amendment Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Tax amendment EFTPS is a free service provided by the Department of Treasury. Tax amendment Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Tax amendment For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Tax amendment To get more information about EFTPS or to enroll in EFTPS, visit www. Tax amendment eftps. Tax amendment gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Tax amendment Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. Tax amendment Important Dates for 2014 You should take the action indicated by the dates listed. Tax amendment See By February 15 and On February 16 for Form W-4, Employee's Withholding Allowance Certificate, information. Tax amendment Due dates for deposits of withheld federal income taxes, social security taxes, and Medicare taxes are not listed here. Tax amendment For these dates, see Publication 509, Tax Calendars (For use in 2014). Tax amendment Note. Tax amendment  If any date shown below for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. Tax amendment A statewide legal holiday delays a filing or furnishing due date only if the IRS office where you are required to file a return or furnish a form is located in that state. Tax amendment For any due date, you will meet the “file” or “furnish” date requirement if the envelope containing the tax return or form is properly addressed, contains sufficient postage, and is postmarked by the U. Tax amendment S. Tax amendment Postal Service by the due date, or sent by an IRS-designated delivery service by the due date. Tax amendment See Private delivery services in Publication 51 (Circular A). Tax amendment Federal tax deposits can only be made by electronic funds transfer and are governed by legal holidays in the District of Columbia. Tax amendment Statewide holidays no longer apply. Tax amendment For a list of legal holidays that delay the due date of a federal tax deposit, see section 7 of Publication 51 (Circular A). Tax amendment Fiscal year taxpayers. Tax amendment  The due dates listed below apply whether you use a calendar or a fiscal year. Tax amendment By January 31. Tax amendment   File Form 943 with the IRS. Tax amendment If you deposited all Form 943 taxes when due, you have 10 additional days to file. Tax amendment Furnish each employee with a completed Form W-2, Wage and Tax Statement. Tax amendment Furnish each recipient to whom you paid $600 or more in nonemployee compensation with a completed Form 1099 (for example, Form 1099-MISC). Tax amendment File Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. Tax amendment If you deposited all the FUTA tax when due, you have 10 additional days to file. Tax amendment File Form 945, Annual Return of Withheld Federal Income Tax, with the IRS to report any nonpayroll income tax withheld during 2013. Tax amendment If you deposited all Form 945 taxes when due, you have 10 additional days to file. Tax amendment By February 15. Tax amendment  Ask for a new Form W-4 or Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, from each employee who claimed exemption from federal income tax withholding last year. Tax amendment On February 16. Tax amendment  Any Form W-4 claiming exemption from withholding for the previous year has now expired. Tax amendment Begin withholding for any employee who previously claimed exemption from withholding but has not given you a new Form W-4 for the current year. Tax amendment If the employee does not give you a new Form W-4, withhold taxes based on the last valid Form W-4 you have for the employee that does not claim exemption from withholding or, if one does not exist, as if he or she is single with zero withholding allowances. Tax amendment If the employee furnishes a new Form W-4 claiming exemption from withholding after February 15, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. Tax amendment By February 28. Tax amendment   File paper Forms 1099 and 1096. Tax amendment File Copy A of all paper Forms 1099 with Form 1096, Annual Summary and Transmittal of U. Tax amendment S. Tax amendment Information Returns, with the IRS. Tax amendment For electronically filed returns, see By March 31 below. Tax amendment File paper Forms W-2 and W-3. Tax amendment File Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration (SSA). Tax amendment For electronically filed returns, see By March 31 below. Tax amendment By March 31. Tax amendment   File electronic Forms W-2 and 1099. Tax amendment File electronic Forms W-2 with the SSA and Forms 1099 with the IRS. Tax amendment For more information on reporting Form W-2 information to the SSA electronically, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. Tax amendment socialsecurity. Tax amendment gov/employer. Tax amendment For information on filing information returns electronically with the IRS, see Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. Tax amendment By April 30, July 31, October 31, and January 31. Tax amendment   Deposit FUTA taxes. Tax amendment Deposit FUTA tax due if it is more than $500. Tax amendment Before December 1. Tax amendment  Remind employees to submit a new Form W-4 if their withholding allowances have changed or will change for the next year. Tax amendment Introduction You are generally required to withhold federal income tax from the wages of your employees. Tax amendment You may also be subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA) and federal unemployment tax under the Federal Unemployment Tax Act (FUTA). Tax amendment You must also withhold Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Tax amendment This chapter includes information about these taxes. Tax amendment You must also pay self-employment tax on your net earnings from farming. Tax amendment See chapter 12 for information on self-employment tax. Tax amendment Topics - This chapter discusses: Farm employment, Family employees, Crew leaders, Social security and Medicare taxes, Additional Medicare Tax withholding, Federal income tax withholding, Reporting and paying social security, Medicare, and withheld federal income taxes, and FUTA tax. Tax amendment Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 51 (Circular A), Agricultural Employer's Tax Guide 926 Household Employer's Tax Guide Form (and Instructions) W-2 Wage and Tax Statement W-4 Employee's Withholding Allowance Certificate W-9 Request for Taxpayer Identification Number and Certification 940 Employer's Annual Federal Unemployment (FUTA) Tax Return 943 Employer's Annual Federal Tax Return for Agricultural Employees 943-X Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund See chapter 16 for information about getting publications and forms. Tax amendment Farm Employment In general, you are an employer of farmworkers if your employees do any of the following types of work. Tax amendment Raising or harvesting agricultural or horticultural products on a farm, including raising and feeding of livestock. Tax amendment Operating, managing, conserving, improving, or maintaining your farm and its tools and equipment. Tax amendment Services performed in salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor). Tax amendment Handling, processing, or packaging any agricultural or horticultural commodity if you produced more than half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity). Tax amendment Work related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Tax amendment For more information, see Publication 51 (Circular A). Tax amendment Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. Tax amendment This is so even when you give the employee freedom of action. Tax amendment What matters is that you have the right to control the details of how the services are performed. Tax amendment You are responsible for withholding and paying employment taxes for your employees. Tax amendment You are also required to file employment tax returns. Tax amendment These requirements do not apply to amounts that you pay to independent contractors. Tax amendment See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Tax amendment If you employ a family of workers, each worker subject to your control (not just the head of the family) is an employee. Tax amendment Special rules apply to crew leaders. Tax amendment See Crew Leaders , later. Tax amendment Employer identification number (EIN). Tax amendment   If you have employees, you must have an EIN. Tax amendment If you do not have an EIN, you may apply for one online. Tax amendment Go to IRS. Tax amendment gov and click on the Apply for an EIN Online link under Tools. Tax amendment You may also apply for an EIN by calling 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Tax amendment The hours of operation for both numbers are Monday–Friday form 7:00 a. Tax amendment m. Tax amendment –7:00 p. Tax amendment m. Tax amendment local time (Alaska and Hawaii follow Pacific time). Tax amendment You can also fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Tax amendment Employee's social security number (SSN). Tax amendment   An employee who does not have an SSN should submit Form SS-5, Application for a Social Security Card, to the Social Security Administration (SSA). Tax amendment Form SS-5 is available from any SSA office or by calling 1-800-772-1213 (operates 24 hours per day). Tax amendment It is also available from the SSA's website at www. Tax amendment socialsecurity. Tax amendment gov. Tax amendment   The employee must furnish evidence of age, identity, and U. Tax amendment S. Tax amendment citizenship or lawful immigration status permitting employment with the Form SS-5. Tax amendment An employee who is age 18 or older must appear in person with this evidence at an SSA office. Tax amendment Form I-9. Tax amendment    You must verify that each new employee is legally eligible to work in the United States. Tax amendment This includes completing the Form I-9, Employment Eligibility Verification. Tax amendment Form I-9 is available from the U. Tax amendment S. Tax amendment Citizenship and Immigration Services (USCIS) offices or by calling the Bureau of Citizenship and Immigration Services Forms Request Line at 1-800-870-3676. Tax amendment Form I-9 is also available from the USCIS website at www. Tax amendment uscis. Tax amendment gov. Tax amendment You can also contact the USCIS at 1-800-375-5283 for more information. Tax amendment New hire reporting. Tax amendment   You are required to report any new employee to a designated state new hire registry. Tax amendment Many states accept a copy of Form W-4 with employer information added. Tax amendment Visit the Office of Child Support Enforcement website at www. Tax amendment acf. Tax amendment hhs. Tax amendment gov/programs/cse/newhire for more information. Tax amendment Family Employees Generally, the wages you pay to family members who are your employees are subject to employment taxes. Tax amendment However, certain exemptions may apply to wages paid to your child, spouse, or parent. Tax amendment Exemptions for your child. Tax amendment   Payments for the services of your child under age 18 who works for you in your trade or business (including a farm) are not subject to social security and Medicare taxes. Tax amendment However, see Nonexempt services of a child or spouse , later. Tax amendment Payments for the services of your child under age 21 employed by you in other than a trade or business, such as payments for household services in your home, are also not subject to social security or Medicare taxes. Tax amendment Payments for the services of your child under age 21 employed by you, whether or not in your trade or business, are not subject to FUTA tax. Tax amendment Although not subject to social security, Medicare, or FUTA tax, the child's wages still may be subject to federal income tax withholding. Tax amendment Exemptions for your spouse. Tax amendment   Payments for the services of your spouse who works for you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes, but not FUTA tax. Tax amendment   Payments for the services of your spouse employed by you in other than a trade or business, such as payments for household services in your home, are not subject to social security, Medicare, or FUTA taxes. Tax amendment Nonexempt services of a child or spouse. Tax amendment   Payments for the services of your child or spouse are subject to federal income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for any of the following entities. Tax amendment A corporation, even if it is controlled by you. Tax amendment A partnership, even if you are a partner. Tax amendment This does not apply to wages paid to your child if each partner is a parent of the child. Tax amendment An estate or trust, even if it is the estate of a deceased parent. Tax amendment In these situations, the child or spouse is considered to work for the corporation, partnership, or estate, not you. Tax amendment Exemptions for your parent. Tax amendment   Payments for the services of your parent employed by you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes. Tax amendment Social security and Medicare taxes do not apply to wages paid to your parent for services not in your trade or business, but they do apply to payments for household services in your home if both the following conditions are satisfied. Tax amendment You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter. Tax amendment You are a widow or widower; or divorced and not remarried; or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. Tax amendment   Wages you pay to your parent are not subject to FUTA tax, regardless of the type of services provided. Tax amendment Qualified joint venture. Tax amendment   If spouses elect to be treated as a qualified joint venture instead of a partnership, either spouse may report and pay the employment taxes due on the wages paid to employees using the EIN of that spouse's sole proprietorship. Tax amendment For more information about qualified joint ventures, see chapter 12. Tax amendment Crew Leaders If farmworkers are provided by a crew leader, the crew leader may be the employer of the workers. Tax amendment Social security and Medicare taxes. Tax amendment   For social security and Medicare tax purposes, the crew leader is the employer of the workers if both of the following requirements are met. Tax amendment The crew leader pays (either on his or her own behalf or on behalf of the farmer) the workers for their farm labor. Tax amendment The crew leader has not entered into a written agreement with the farmer under which the crew leader is designated as an employee of the farmer. Tax amendment Federal income tax withholding. Tax amendment   If the crew leader is the employer for social security and Medicare tax purposes, the crew leader is the employer for federal income tax withholding purposes. Tax amendment Federal unemployment (FUTA) tax. Tax amendment   For FUTA tax purposes, the crew leader is the employer of the workers if, in addition to the earlier requirements, either of the following requirements are met. Tax amendment The crew leader is registered under the Migrant and Seasonal Agricultural Worker Protection Act. Tax amendment Substantially all crew members operate or maintain mechanized equipment provided by the crew leader as part of the service to the farmer. Tax amendment   The farmer is the employer of workers furnished by a crew leader in all other situations. Tax amendment In addition, the farmer is the employer of workers furnished by a registered crew leader if the workers are the employees of the farmer under the common-law test. Tax amendment For example, some farmers employ individuals to recruit farmworkers exclusively for them. Tax amendment Although these individuals may be required to register under the Migrant and Seasonal Agricultural Worker Protection Act, the workers are employed directly by the farmer. Tax amendment The farmer is the employer in these cases. Tax amendment For information about common-law employees, see section 1 of Publication 15-A. Tax amendment For information about crew leaders, see the Department of Labor website at www. Tax amendment dol. Tax amendment gov/whd/regs/compliance/whdfs49. Tax amendment htm. Tax amendment Social Security and Medicare Taxes All cash wages you pay to an employee during the year for farmwork are subject to social security and Medicare taxes if you meet either of the following tests. Tax amendment You pay the employee $150 or more in cash wages (count all wages paid on a time, piecework, or other basis) during the year for farmwork (the $150 test). Tax amendment The $150 test applies separately to each farmworker that you employ. Tax amendment If you employ a family of workers, each member is treated separately. Tax amendment Do not count wages paid by other employers. Tax amendment You pay cash and noncash wages of $2,500 or more during the year to all your employees for farmwork (the $2,500 test). Tax amendment If the $2,500 test for the group is not met, the $150 test for an employee still applies. Tax amendment Exceptions. Tax amendment   Annual cash wages of less than $150 you pay to a seasonal farmworker are not subject to social security and Medicare taxes, even if you pay $2,500 or more to all your farmworkers. Tax amendment However, these wages count toward the $2,500 test for determining whether other farmworkers' wages are subject to social security and Medicare taxes. Tax amendment   A seasonal farmworker is a worker who: Works as a hand-harvest laborer, Is paid piece rates in an operation usually paid on this basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Worked in agriculture less than 13 weeks in the preceding calendar year. Tax amendment   See Family Employees , earlier, for certain exemptions from social security and Medicare taxes that apply to your child, spouse, and parent. Tax amendment Religious exemption. Tax amendment   An exemption from social security and Medicare taxes is available to members of a recognized religious group or division opposed to public insurance. Tax amendment This exemption is available only if both the employee and the employer are members of the group or division. Tax amendment   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Tax amendment Cash wages. Tax amendment   Only cash wages paid to farmworkers are subject to social security and Medicare taxes. Tax amendment Cash wages include checks, money orders, and any kind of money or cash. Tax amendment   Only cash wages subject to social security and Medicare taxes are credited to your employees for social security benefit purposes. Tax amendment Payments not subject to these taxes, such as commodity wages, do not contribute to your employees' social security coverage. Tax amendment For information about social security benefits, contact the SSA at 1-800-772-1213 or online at www. Tax amendment socialsecurity. Tax amendment gov. Tax amendment Noncash wages. Tax amendment    Noncash wages include food, lodging, clothing, transportation passes, and other goods and services. Tax amendment Noncash wages paid to farmworkers, including commodity wages, are not subject to social security and Medicare taxes. Tax amendment However, they are subject to these taxes if the substance of the transaction is a cash payment. Tax amendment For information on lodging provided as a condition of employment, see Publication 15-B. Tax amendment   Report the value of noncash wages in box 1 of Form W-2 together with cash wages. Tax amendment Do not show noncash wages in box 3 or in box 5, (unless the substance of the transaction is a cash payment). Tax amendment Tax rates and social security wage limit. Tax amendment   For 2013, the employer and the employee will pay the following taxes. Tax amendment The employer and employee each pay 6. Tax amendment 2% of cash wages for social security tax (old-age, survivors, and disability insurance). Tax amendment The employer and employee each pay 1. Tax amendment 45% of cash wages for Medicare tax (hospital insurance). Tax amendment The employee pays 0. Tax amendment 9% of cash wages in excess of $200,000 for Additional Medicare Tax. Tax amendment Wage limit. Tax amendment   The limit on wages subject to the social security tax for 2013 is $113,700. Tax amendment There is no limit on wages subject to the Medicare tax. Tax amendment All covered wages are subject to the Medicare tax. Tax amendment Additionally, all wages in excess of $200,000 are subject to Additional Medicare Tax withholding. Tax amendment Paying employee's share. Tax amendment   If you would rather pay the employee's share of social security and Medicare taxes without deducting it from his or her wages, you may do so. Tax amendment It is additional income to the employee. Tax amendment You must include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages (boxes 3 and 5 on Form W-2) or as wages for federal unemployment (FUTA) tax purposes. Tax amendment Example. Tax amendment Jane operates a small family fruit farm. Tax amendment She employs day laborers in the picking season to enable her to timely get her crop to market. Tax amendment She does not deduct the employees' share of social security and Medicare taxes from their pay; instead, she pays it on their behalf. Tax amendment When her accountant, Susan, prepares the employees' Forms W-2, she adds each employee's share of social security and Medicare taxes paid by Jane to the employee's wage income (box 1 of Form W-2), but does not include it in box 3 (social security wages) or box 5 (Medicare wages and tips). Tax amendment For 2013, Jane paid Mary $1,000 during the year. Tax amendment Susan enters $1,076. Tax amendment 50 in box 1 of Mary's Form W-2 ($1,000 wages plus $76. Tax amendment 50 social security and Medicare taxes paid for Mary). Tax amendment She enters $1,000 in boxes 3 and 5 of Mary's Form W-2. Tax amendment Additional Medicare Tax. Tax amendment   In addition to withholding Medicare tax at 1. Tax amendment 45%, you must withhold a 0. Tax amendment 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Tax amendment 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 amendment Additional Medicare Tax is only imposed on the employee. Tax amendment There is no employer share of Additional Medicare Tax. Tax amendment All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. Tax amendment   For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E). Tax amendment For more information on Additional Medicare Tax, visit IRS. Tax amendment gov and enter “Additional Medicare Tax” in the search box. Tax amendment Federal Income Tax Withholding If the cash wages you pay to farmworkers are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. Tax amendment Although noncash wages are subject to federal income tax, withhold income tax only if you and the employee agree to do so. Tax amendment The amount to withhold is figured on gross wages without taking out social security and Medicare taxes, union dues, insurance, etc. Tax amendment Form W-4. Tax amendment   Generally, the amount of federal income tax you withhold is based on the employee's marital status and withholding allowances claimed on the employee's Form W-4. Tax amendment In general, an employee can claim withholding allowances on Form W-4 equal to the number of exemptions the employee will be entitled to claim on his or her tax return. Tax amendment An employee may also be able to claim a special withholding allowance and allowances for estimated deductions and credits. Tax amendment   Do not withhold federal income tax from the wages of an employee who, by filing Form W-4, certifies that he or she had no federal income tax liability last year and anticipates no liability for the current year. Tax amendment   You should give each new employee a Form W-4 as soon as you hire the employee. Tax amendment For Spanish-speaking employees, you may use Formulario W-4(SP) which is the Spanish translation of Form W-4. Tax amendment Have the employee complete and return the form to you before the first payday. Tax amendment If the employee does not return the completed form, you must withhold federal income tax as if the employee is single and claims no withholding allowances. Tax amendment New Form W-4 for 2014. Tax amendment   You should make the 2014 Form W-4 available to your employees and encourage them to check their income tax withholding for 2014. Tax amendment Those employees who owed a large amount of tax or received a large refund for 2013 may want to submit a new Form W-4. Tax amendment You cannot accept substitute Forms W-4 developed by employees. Tax amendment How to figure withholding. Tax amendment   You can use one of several methods to determine the amount to withhold. Tax amendment The methods are described in Publication 51 (Circular A), which contains tables showing the correct amount of federal income tax you should withhold. Tax amendment Publication 51 (Circular A) also contains additional information about federal income tax withholding. Tax amendment Nonemployee compensation. Tax amendment   Generally, you do not have to withhold federal income tax on payments for services to individuals who are not your employees. Tax amendment However, you may be required to report these payments on Form 1099-MISC, Miscellaneous Income, and to withhold under the backup withholding rules. Tax amendment For more information, see the Instructions for Form 1099-MISC. Tax amendment Required Notice to Employees About Earned Income Credit (EIC) You must provide notification about EIC to each employee who worked for you at any time during the year and from whom you did not withhold any federal income tax. Tax amendment However, you do not have to notify employees who claim exemption from federal income tax withholding on Form W-4. Tax amendment You meet the notification requirement by giving each employee any of the following. Tax amendment Form W-2, which contains EIC notification on the back of Copy B. Tax amendment A substitute Form W-2 with the exact EIC wording shown on the back of copy B of Form W-2. Tax amendment Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). Tax amendment Your own written statement with the exact wording of Notice 797. Tax amendment For more information, see Publication 51 (Circular A). Tax amendment Reporting and Paying Social Security, Medicare, and Withheld Federal Income Taxes You must withhold federal income, social security, and Medicare taxes required to be withheld from the salaries and wages of your employees. Tax amendment You are liable for the payment of these taxes to the federal government whether or not you collect them from your employees. Tax amendment If, for example, you withhold less than the correct tax from an employee's wages, you are still liable for the full amount. Tax amendment You must also pay the employer's share of social security and Medicare taxes. Tax amendment There is no employer share of Additional Medicare Tax. Tax amendment Form 943. Tax amendment   Report withheld federal income tax, social security tax, and Medicare tax on Form 943. Tax amendment Your 2013 Form 943 is due by January 31, 2014 (or February 10, 2014, if you made deposits on time in full payment of the taxes due for the year). Tax amendment Deposits. Tax amendment   Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld during the year. Tax amendment However, you may make payments with Form 943 instead of depositing them if you accumulate less than a $2,500 tax liability (“Total taxes after adjustments” line on Form 943) during the year and you pay in full with a timely filed return. Tax amendment   For more information on deposit rules, see Publication 51 (Circular A). Tax amendment Electronic deposit requirement. Tax amendment   You must use electronic funds transfer to make all federal tax deposits. Tax amendment Generally, electronic funds transfers are made using EFTPS. Tax amendment 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 amendment Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Tax amendment EFTPS is a free service provided by the Department of Treasury. Tax amendment Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Tax amendment   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Tax amendment To get more information about EFTPS or to enroll in EFTPS, visit www. Tax amendment eftps. Tax amendment gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Tax amendment Additional information about EFTPS is also available in Publication 966. Tax amendment Form W-2. Tax amendment   By January 31, you must furnish each employee a Form W-2 showing total wages for the previous year and total federal income tax, social security tax, and Medicare tax withheld. Tax amendment However, if an employee stops working for you and requests the form earlier, you must give it to the employee within 30 days of the later of the following dates. Tax amendment The date the employee requests the form. Tax amendment The date you make your final payment of wages to the employee. Tax amendment Compensation paid to H-2A visa holders. Tax amendment   Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2. Tax amendment Compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes, and therefore should not be reported as wages subject to social security tax (line 2), Medicare tax (line 4), or Additional Medicare Tax (line 6) on Form 943, and should not be reported as social security wages (box 3) or Medicare wages (box 5) on Form W-2. Tax amendment   An employer is not required to withhold federal income tax from compensation it pays to an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. Tax amendment In this case, the worker must give the employer a completed Form W-4. Tax amendment Federal income tax withheld should be reported on Form 943, line 8, and in box 2 of Form W-2. Tax amendment   These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. Tax amendment For the rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. Tax amendment Trust fund recovery penalty. Tax amendment   If you are responsible for withholding, accounting for, depositing, or paying federal withholding taxes and willfully fail to do so, you can be held liable for a penalty equal to the withheld tax not paid. Tax amendment A responsible person can be an officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. Tax amendment A trustee or agent with authority over the funds of the business can also be held responsible for the penalty. Tax amendment   Willfully means voluntarily, consciously, and intentionally. Tax amendment Paying other expenses of the business instead of the taxes due is acting willfully. Tax amendment Consequences of treating an employee as an independent contractor. Tax amendment   If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker. Tax amendment See Publication 15-A for more information. Tax amendment Federal Unemployment (FUTA) Tax You must pay FUTA tax if you meet either of the following tests. Tax amendment You paid cash wages of $20,000 or more to farmworkers in any calendar quarter during the current or preceding calendar year. Tax amendment You employed 10 or more farmworkers for some part of at least 1 day during any 20 or more different calendar weeks during the current or preceding calendar year. Tax amendment These rules do not apply to exempt services of your spouse, your parents, or your children under age 21. Tax amendment See Family Employees , earlier. Tax amendment Alien farmworkers. Tax amendment   Wages paid to aliens admitted on a temporary basis to the United States to perform farmwork (also known as “H-2A visa workers”) are exempt from FUTA tax. Tax amendment However, include your employment of these workers and the wages you paid them to determine whether you meet either of the above tests. Tax amendment Commodity wages. Tax amendment   Payments in kind for farm labor are not cash wages. Tax amendment Do not count them to figure whether you are subject to FUTA tax or to figure how much tax you owe. Tax amendment Tax rate and credit. Tax amendment   The gross FUTA tax rate is 6. Tax amendment 0% of the first $7,000 cash wages you pay to each employee during the year. Tax amendment However, you are given a credit of up to 5. Tax amendment 4% of the first $7,000 cash wages you pay to each employee for the state unemployment tax you pay. Tax amendment If your state tax rate (experience rate) is less than 5. Tax amendment 4%, you may still be allowed the full 5. Tax amendment 4% credit. Tax amendment   If you do not pay the state tax, you cannot take the credit. Tax amendment If you are exempt from state unemployment tax for any reason, the full 6. Tax amendment 0% rate applies. Tax amendment See the Instructions for Form 940 for additional information. Tax amendment More information. Tax amendment   For more information on FUTA tax, see Publication 51 (Circular A). Tax amendment Reporting and Paying FUTA Tax The FUTA tax is imposed on you as the employer. Tax amendment It must not be collected or deducted from the wages of your employees. Tax amendment Form 940. Tax amendment   Report FUTA tax on Form 940. Tax amendment The 2013 Form 940 is due January 31, 2014 (or February 10, 2014, if you timely deposited the full amount of your 2013 FUTA tax). Tax amendment Deposits. Tax amendment   If at the end of any calendar quarter you owe, but have not yet deposited, more than $500 in FUTA tax for the year, you must make a deposit by the end of the following month. Tax amendment If the undeposited tax is $500 or less at the end of a quarter, you do not have to deposit it. Tax amendment You can add it to the tax for the next quarter. Tax amendment If the total undeposited tax is more than $500 at the end of the next quarter, a deposit will be required. Tax amendment If the total undeposited tax at the end of the 4th quarter is $500 or less, you can either make a deposit or pay it with your return by the January 31, 2014, due date. Tax amendment Electronic deposit requirement. Tax amendment   You must use electronic funds transfer to make all federal tax deposits. Tax amendment Generally, electronic funds transfers are made using EFTPS. Tax amendment 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 amendment Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Tax amendment EFTPS is a free service provided by the Department of Treasury. Tax amendment Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Tax amendment   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). Tax amendment To get more information about EFTPS or to enroll in EFTPS, visit www. Tax amendment eftps. Tax amendment gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). Tax amendment Additional information about EFTPS is also available in Publication 966. Tax amendment Prev  Up  Next   Home   More Online Publications
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How to Apply for an EIN

Applying for an EIN is a free service offered by the Internal Revenue Service. Beware of Web sites on the Internet that charge for this free service.

If you are a home-care service recipient who has a previously assigned EIN either as a sole proprietor or as a household employer, do not apply for a new EIN. Use the EIN previously provided. If you can not locate your EIN for any reason, follow the instructions on the Lost or Misplaced Your EIN? Web page.

Apply Online
The Internet EIN application is the preferred method for customers to apply for and obtain an EIN. Once the application is completed, the information is validated during the online session, and an EIN is issued immediately. The online application process is available for all entities whose principal business, office or agency, or legal residence (in the case of an individual), is located in the United States or U.S. Territories. The principal officer, general partner, grantor, owner, trustor etc. must have a valid Taxpayer Identification Number (Social Security Number, Employer Identification Number, or Individual Taxpayer Identification Number) in order to use the online application.

Apply By FAX
Taxpayers can FAX the completed Form SS-4 (PDF) application to their state FAX number (see Where to File - Business Forms and Filing Addresses), after ensuring that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type. If the taxpayer's fax number is provided, a fax will be sent back with the EIN within four (4) business days.

Apply By Mail
The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4 (PDF) contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type and mailed to the taxpayer. Find out where to mail Form SS-4 on the "Where to File Your Taxes" (for Form SS-4) page.

Apply by Telephone – International Applicants
International applicants may call 267-941-1099 (not a toll-free number) 6:00 a.m. to 11:00 p.m. (Eastern Time) Monday through Friday to obtain their EIN. The person making the call must be authorized to receive the EIN and answer questions concerning the Form SS-4 (PDF), Application for Employer Identification Number. Complete the Third Party Designee section only if you want to authorize the named individual to receive the entity’s EIN and answer questions about the completion of Form SS-4. The designee’s authority terminates at the time the EIN is assigned and released to the designee. You must complete the signature area for the authorization to be valid.

Other Important Information

Daily Limitation of an Employer Identification Number
Effective May 21, 2012, to ensure fair and equitable treatment for all taxpayers, the Internal Revenue Service will limit Employer Identification Number (EIN) issuance to one per responsible party per day. This limitation is applicable to all requests for EINs whether online or by fax or mail. We apologize for any inconvenience this may cause.

Responsible Party
In order to identify the correct individuals and entities applying for EINs, language changes have been made to the EIN process. Refer to Responsible Parties and Nominees to learn about these important changes before applying for an EIN.

Third Party Authorization
The Third Party Designee section must be completed at the bottom of the Form SS-4. The Form SS-4 must also be signed by the taxpayer for the third party designee authorization to be valid. The Form SS-4 must be mailed or faxed to the appropriate service center. The third party designee's authority terminates at the time the EIN is assigned and released to the designee.

Page Last Reviewed or Updated: 03-Jan-2014

The Tax Amendment

Tax amendment Publication 510 - Additional Material Prev  Up  Next   Home   More Online Publications