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2005 Tax Forms

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2005 Tax Forms

2005 tax forms 5. 2005 tax forms   Ministers and Church Employees Table of Contents Alternative Limit for Church Employees Changes to Includible Compensation for Most Recent Year of ServiceChanges to Includible Compensation Changes to Years of Service Self-employed ministers and church employees who participate in 403(b) plans generally follow the same rules as other 403(b) plan participants. 2005 tax forms This means that if you are a self-employed minister or a church employee, your MAC generally is the lesser of: Your limit on annual additions, or Your limit on elective deferrals. 2005 tax forms For most ministers and church employees, the limit on annual additions is figured without any changes. 2005 tax forms This means that if you are a minister or church employee, your limit on annual additions generally is the lesser of: $51,000 for 2013 and $52,000 for 2014, or Your includible compensation for your most recent year of service. 2005 tax forms Although, in general, the same limit applies, church employees can choose an alternative limit and there are changes in how church employees, foreign missionaries, and self-employed ministers figure includible compensation for the most recent year of service. 2005 tax forms This chapter will explain the alternative limit and the changes. 2005 tax forms Who is a church employee?   A church employee is anyone who is an employee of a church or a convention or association of churches, including an employee of a tax-exempt organization controlled by or associated with a church or a convention or association of churches. 2005 tax forms Alternative Limit for Church Employees If you are a church employee, you can choose to use $10,000 a year as your limit on annual additions, even if your annual additions computed under the general rule is less. 2005 tax forms Total contributions over your lifetime under this choice cannot be more than $40,000. 2005 tax forms Changes to Includible Compensation for Most Recent Year of Service There are two types of changes in determining includible compensation for the most recent year of service. 2005 tax forms They are: Changes in how the includible compensation of foreign missionaries and self-employed ministers is figured, and A change to the years that are counted when figuring the most recent year of service for church employees and self-employed ministers. 2005 tax forms Changes to Includible Compensation Includible compensation is figured differently for foreign missionaries and self-employed ministers. 2005 tax forms Foreign missionary. 2005 tax forms   If you are a foreign missionary, your includible compensation includes foreign earned income that may otherwise be excludable from your gross income under section 911. 2005 tax forms   If you are a foreign missionary, and your adjusted gross income is $17,000 or less, contributions to your 403(b) account will not be treated as exceeding the limit on annual additions if the contributions are not in excess of $3,000. 2005 tax forms   You are a foreign missionary if you are either a layperson or a duly ordained, commissioned, or licensed minister of a church and you meet both of the following requirements. 2005 tax forms You are an employee of a church or convention or association of churches. 2005 tax forms You are performing services for the church outside the United States. 2005 tax forms Self-employed minister. 2005 tax forms   If you are a self-employed minister, you are treated as an employee of a tax-exempt organization that is a qualified employer. 2005 tax forms Your includible compensation is your net earnings from your ministry minus the contributions made to the retirement plan on your behalf and the deductible portion of your self-employment tax. 2005 tax forms Changes to Years of Service Generally, only service with the employer who maintains your 403(b) account can be counted when figuring your limit on annual additions. 2005 tax forms Church employees. 2005 tax forms   If you are a church employee, treat all of your years of service as an employee of a church or a convention or association of churches as years of service with one employer. 2005 tax forms Self-employed minister. 2005 tax forms   If you are a self-employed minister, your years of service include full and part years during which you were self-employed. 2005 tax forms Prev  Up  Next   Home   More Online Publications
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A-Z Index for Business
Find it Fast! Know what you're looking for and want to find it fast? Select business topics using our A-Z listing, or by business type such as sole proprietor, corporation, etc. We also provide links to major business subjects, such as Business Expenses, which provides a gateway to all related information on that subject.

Affordable Care Act Tax Provisions
Health coverage legislation enacted this year and future changes.

Business Tax Credits
A list of forms for claiming business tax credits, and a complete explanation about when carryovers, credits and deductions cease.

Filing and Payments
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Filing Past Due Tax Returns
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Información y Recursos para Pequeñas Empresas
Información y recursos para dueños de pequeños negocios. Infórmese sobre sus obligaciones tributarias.

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Report of Foreign Bank and Financial Accounts (FBAR)
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

Small Business Taxes: The Virtual Workshop
This workshop helps business owners understand federal tax obligations.

State Government Websites
A collection of links to State government Web sites with useful information for businesses.

Struggling with Paying Your Taxes? Let IRS Help You Get a Fresh Start.
Help from the IRS for individuals and small businesses struggling to meet their tax obligations. On February 24, 2011, the Internal Revenue Service Commissioner announced an initiative to help people get a fresh start with their tax liabilities. The initiative centers on changes to IRS collection practices that will lessen the negative impact on taxpayers.

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The 2005 Tax Forms

2005 tax forms Publication 80 - Main Content Table of Contents Introduction 1. 2005 tax forms Employer Identification Number (EIN) 2. 2005 tax forms Who Are Employees?Tests. 2005 tax forms Business Owned and Operated by Spouses Farm Crew Leaders 3. 2005 tax forms Employee's Social Security Number (SSN)Registering for SSNVS. 2005 tax forms 4. 2005 tax forms Wages and Other CompensationFringe Benefits 5. 2005 tax forms TipsOrdering rule. 2005 tax forms 6. 2005 tax forms Social Security and Medicare Taxes for FarmworkersThe $150 Test or the $2,500 Test 7. 2005 tax forms How To Figure Social Security and Medicare TaxesHousehold and agricultural employers. 2005 tax forms 8. 2005 tax forms Depositing TaxesPayment with Return When To Deposit How To Deposit Deposit Penalties 9. 2005 tax forms Employer's ReturnsReporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Prior Period Adjustments 10. 2005 tax forms Wage and Tax StatementsWaiver. 2005 tax forms 11. 2005 tax forms Federal Unemployment (FUTA) Tax—U. 2005 tax forms S. 2005 tax forms Virgin Islands Employers Only How To Get Tax Help Introduction This publication is for employers whose principal place of business is in the U. 2005 tax forms S. 2005 tax forms 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. 2005 tax forms Employers and employees in these areas are generally subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA). 2005 tax forms See section 6 and section 7 for more information. 2005 tax forms This publication summarizes employer responsibilities to collect, pay, and report these taxes. 2005 tax forms Whenever the term “United States” is used in this publication, it includes U. 2005 tax forms S. 2005 tax forms Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. 2005 tax forms This publication also provides employers in the U. 2005 tax forms S. 2005 tax forms Virgin Islands with a summary of their responsibilities in connection with the tax under the Federal Unemployment Tax Act, known as FUTA tax. 2005 tax forms See section 11 for more information. 2005 tax forms 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. 2005 tax forms This publication does not include information relating to the self-employment tax (for social security and Medicare of self-employed persons). 2005 tax forms See Publication 570, Tax Guide for Individuals With Income From U. 2005 tax forms S. 2005 tax forms Possessions, if you need this information. 2005 tax forms This publication also does not include information relating to income tax withholding. 2005 tax forms In U. 2005 tax forms S. 2005 tax forms Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, contact your local tax department for information about income tax withholding. 2005 tax forms See Publication 15 (Circular E), for information on U. 2005 tax forms S. 2005 tax forms federal income tax withholding. 2005 tax forms Comments and suggestions. 2005 tax forms   We welcome your comments about this publication and your suggestions for future editions. 2005 tax forms   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2005 tax forms NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2005 tax forms Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2005 tax forms    You can also send us comments from www. 2005 tax forms irs. 2005 tax forms gov/formspubs. 2005 tax forms Click on More Information and then click on Comment on Tax Forms and Publications. 2005 tax forms   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. 2005 tax forms 1. 2005 tax forms Employer Identification Number (EIN) An employer identification number (EIN) is a nine-digit number that the IRS issues. 2005 tax forms Its format is 00-0000000. 2005 tax forms It is used to identify the tax accounts of employers and certain other organizations and entities that have no employees. 2005 tax forms Use your EIN on all of the items that you send to the IRS and SSA for your business. 2005 tax forms If you do not have an EIN, you may apply for one online. 2005 tax forms Go to IRS. 2005 tax forms gov and click on the Apply for an EIN Online link under Tools. 2005 tax forms You may also apply for an EIN by calling 1-800-829-4933, (U. 2005 tax forms S. 2005 tax forms 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. 2005 tax forms Do not use a social security number (SSN) in place of an EIN. 2005 tax forms 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. 2005 tax forms If you took over another employer's business, do not use that employer's EIN. 2005 tax forms You should have only one EIN. 2005 tax forms 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. 2005 tax forms Or call the IRS Business & Specialty Tax Line at 1-800-829-4933 (U. 2005 tax forms S. 2005 tax forms Virgin Islands only) or 267-941-1000 (toll call). 2005 tax forms Persons who are deaf, hard of hearing, or have a speech disability (TDD/TTY users) in the U. 2005 tax forms S. 2005 tax forms Virgin Islands may call 1-800-829-4059. 2005 tax forms The IRS will tell you which EIN to use. 2005 tax forms For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records. 2005 tax forms 2. 2005 tax forms Who Are Employees? Generally, employees are defined either under common law or under special statutes for certain situations. 2005 tax forms See Publication 15-A, Employer's Supplemental Tax Guide, for details on statutory employees and nonemployees. 2005 tax forms Employee status under common law. 2005 tax forms   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. 2005 tax forms This is so even when you give the employee freedom of action. 2005 tax forms What matters is that you have the right to control the details of how the services are performed. 2005 tax forms See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. 2005 tax forms    Generally, people in business for themselves are not employees. 2005 tax forms For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. 2005 tax forms However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. 2005 tax forms   If an employer-employee relationship exists, it does not matter what it is called. 2005 tax forms The employee may be called an agent or independent contractor. 2005 tax forms It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. 2005 tax forms Statutory employees. 2005 tax forms   There are also some special definitions of employees for social security, Medicare, and FUTA taxes. 2005 tax forms   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. 2005 tax forms a. 2005 tax forms   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. 2005 tax forms b. 2005 tax forms   A full-time life insurance salesperson who sells primarily for one company. 2005 tax forms c. 2005 tax forms   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. 2005 tax forms d. 2005 tax forms   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. 2005 tax forms The orders must be for merchandise for resale or supplies for use in the customer's business. 2005 tax forms The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. 2005 tax forms Tests. 2005 tax forms   Withhold social security and Medicare taxes from statutory employees' wages if all three of the following tests apply. 2005 tax forms The service contract states or implies that almost all of the services are to be performed personally by them. 2005 tax forms They have little or no investment in the equipment and property used to perform the services (other than an investment in transportation facilities). 2005 tax forms The services are performed on a continuing basis for the same payer. 2005 tax forms Persons in a or d, earlier, are also employees for FUTA tax purposes if tests 1 through 3 are met (U. 2005 tax forms S. 2005 tax forms Virgin Islands only). 2005 tax forms   Publication 15-A gives examples of the employer-employee relationship. 2005 tax forms Statutory nonemployees. 2005 tax forms   Certain direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. 2005 tax forms They are generally treated as self-employed for employment tax purposes. 2005 tax forms See Publication 15-A for details. 2005 tax forms H-2A agricultural workers. 2005 tax forms   On Form W-2, do not check box 13 (Statutory employee) as H-2A workers are not statutory employees. 2005 tax forms Treating employees as nonemployees. 2005 tax forms   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. 2005 tax forms See Treating employees as nonemployees in section 2 of Publication 15 (Circular E), for details on Internal Revenue Code section 3509, which may apply. 2005 tax forms IRS help. 2005 tax forms   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. 2005 tax forms Voluntary Classification Settlement Program (VCSP). 2005 tax forms   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. 2005 tax forms To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). 2005 tax forms For more information, visit IRS. 2005 tax forms gov and enter “VCSP” in the search box. 2005 tax forms 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. 2005 tax forms See Publication 541, Partnerships, for more details. 2005 tax forms The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. 2005 tax forms Exception—Qualified Joint Venture. 2005 tax forms   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. 2005 tax forms S. 2005 tax forms Individual Income Tax Return, or joint Form 1040-SS, U. 2005 tax forms S. 2005 tax forms Self-Employment Tax Return—U. 2005 tax forms S. 2005 tax forms 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. 2005 tax forms See the Instructions for Schedule C (Form 1040) or the Instructions for Form 1040-SS. 2005 tax forms Spouses electing qualified joint venture status are treated as sole proprietors for federal tax purposes. 2005 tax forms 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. 2005 tax forms For more information on qualified joint ventures, visit IRS. 2005 tax forms gov and enter “qualified joint venture” in the search box. 2005 tax forms Farm Crew Leaders You are an employer of farmworkers if you are a crew leader. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms 3. 2005 tax forms Employee's Social Security Number (SSN) An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. 2005 tax forms You must get each employee's name and SSN and enter them on Form W-2AS, W-2CM, W-2GU, or W-2VI. 2005 tax forms If you do not report the employee's correct name and SSN, you may owe a penalty unless you have reasonable cause. 2005 tax forms 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. 2005 tax forms Employee's social security card. 2005 tax forms   You should ask the employee to show you his or her social security card. 2005 tax forms The employee may show the card if it is available. 2005 tax forms Do not accept a social security card that says “Not valid for employment. 2005 tax forms ” A social security number issued with this legend does not permit employment. 2005 tax forms You may, but you are not required to, photocopy the social security card if the employee provides it. 2005 tax forms 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. 2005 tax forms The employee must complete and sign Form SS-5; it cannot be filed by the employer. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms Enter all zeroes in the SSN field if filing electronically. 2005 tax forms When the employee receives the SSN, file Copy A of Form W-2c with SSA to show the employee's SSN. 2005 tax forms Correctly record the employee's name and SSN. 2005 tax forms   Record the name and number of each employee as they appear on his or her social security card. 2005 tax forms 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. 2005 tax forms Continue to use the old name until the employee shows you the replacement social security card with the corrected name. 2005 tax forms   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. 2005 tax forms 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. 2005 tax forms Where to get and file social security number application forms. 2005 tax forms    U. 2005 tax forms S. 2005 tax forms Virgin Islands—U. 2005 tax forms S. 2005 tax forms Social Security Administration, 8000 Nisky Center, First Floor, Suite 2, St. 2005 tax forms Thomas, VI 00802. 2005 tax forms  Guam—U. 2005 tax forms S. 2005 tax forms Social Security Administration, 655 Harmon Loop Road, Suite 300, Dededo, GU 96929. 2005 tax forms  American Samoa—U. 2005 tax forms S. 2005 tax forms Social Security Administration, Pago Plaza, Suite 117, Pago Pago, AS 96799. 2005 tax forms  Commonwealth of the Northern Mariana Islands—U. 2005 tax forms S. 2005 tax forms Social Security Administration, MH Building, Suite 201, Saipan, MP 96950. 2005 tax forms Verification of social security numbers. 2005 tax forms   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. 2005 tax forms Visit www. 2005 tax forms socialsecurity. 2005 tax forms gov/employer/ssnv. 2005 tax forms htm for more information. 2005 tax forms Registering for SSNVS. 2005 tax forms   You must register online and receive authorization from your employer to use SSNVS. 2005 tax forms To register, visit SSA's website at www. 2005 tax forms ssa. 2005 tax forms gov/employer and click on the Business Services Online link. 2005 tax forms Follow the registration instructions to obtain a user identification (ID) and password. 2005 tax forms You will need to provide the following information about yourself and your company. 2005 tax forms Name. 2005 tax forms SSN. 2005 tax forms Date of birth. 2005 tax forms Type of employer. 2005 tax forms EIN. 2005 tax forms Company name, address, and telephone number. 2005 tax forms Email address. 2005 tax forms   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. 2005 tax forms You must enter the activation code online to use SSNVS. 2005 tax forms 4. 2005 tax forms Wages and Other Compensation Generally, all wages are subject to social security and Medicare tax (and FUTA tax for U. 2005 tax forms S. 2005 tax forms Virgin Islands employers). 2005 tax forms 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. 2005 tax forms The wage base for social security tax is $117,000 for 2014. 2005 tax forms 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. 2005 tax forms The wage base for FUTA tax is $7,000 for 2014. 2005 tax forms All wages are subject to Medicare tax. 2005 tax forms The wages may be in cash or in other forms, such as an automobile for personal use. 2005 tax forms Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. 2005 tax forms It does not matter how payments are measured or paid. 2005 tax forms See the table in section 12 for exceptions to social security, Medicare, and FUTA taxes on wages. 2005 tax forms See section 5 and section 6 for a discussion of how the rules apply to tips and farmworkers. 2005 tax forms Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies. 2005 tax forms Special rules apply to the reporting of third-party sick pay. 2005 tax forms For details, see Publication 15-A. 2005 tax forms Determine the value of noncash pay (such as goods, lodging, and meals) by its fair market value. 2005 tax forms However, see Fringe Benefits , later in this section. 2005 tax forms Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes. 2005 tax forms Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is taxed as ordinary wages in the year paid. 2005 tax forms 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. 2005 tax forms Travel and business expenses. 2005 tax forms   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. 2005 tax forms Sick pay. 2005 tax forms   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. 2005 tax forms These amounts are sometimes paid by a third party, such as an insurance company. 2005 tax forms In either case, these payments are subject to social security and Medicare taxes (and FUTA tax for U. 2005 tax forms S. 2005 tax forms Virgin Islands employers). 2005 tax forms 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. 2005 tax forms Publication 15-A explains the employment tax rules that apply to sick pay, disability benefits, and similar payments to employees. 2005 tax forms Fringe Benefits Generally, fringe benefits are includible in the gross income of an employee and are subject to employment taxes. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms For more information, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. 2005 tax forms When fringe benefits are treated as paid. 2005 tax forms   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. 2005 tax forms You do not have to make a formal choice of payment dates or notify the IRS. 2005 tax forms You do not have to use the same basis for all employees. 2005 tax forms 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. 2005 tax forms However, see Special accounting rule for fringe benefits provided during November and December , later in this section. 2005 tax forms   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. 2005 tax forms 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. 2005 tax forms This election does not apply to a fringe benefit where real property or investment personal property is transferred. 2005 tax forms Withholding social security and Medicare taxes on fringe benefits. 2005 tax forms   You add the value of fringe benefits to regular wages for a payroll period and figure social security and Medicare taxes on the total. 2005 tax forms   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. 2005 tax forms Depositing taxes on fringe benefits. 2005 tax forms   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. 2005 tax forms You may make a reasonable estimate of the value of the fringe benefits. 2005 tax forms In general, the value of taxable noncash fringe benefits provided in a calendar year must be determined by January 31 of the following year. 2005 tax forms   You may claim a refund of overpayments or elect to have any overpayment applied to the next employment tax return. 2005 tax forms If deposits are underpaid, see Deposit Penalties in section 8. 2005 tax forms Valuation of vehicles provided to employees. 2005 tax forms    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. 2005 tax forms For reporting information to employees, see the box 14 instructions in the General Instructions for Forms W-2 and W-3. 2005 tax forms Special accounting rule for fringe benefits provided during November and December. 2005 tax forms   You may choose to treat the value of taxable noncash fringe benefits provided during November and December as paid in the next year. 2005 tax forms 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. 2005 tax forms   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. 2005 tax forms If you use the special accounting rule, your employee must also use it for the same period that you use it. 2005 tax forms 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. 2005 tax forms 5. 2005 tax forms Tips Tips that your employee receives from customers are generally subject to social security and Medicare withholding. 2005 tax forms Your employee must report cash tips to you by the 10th of the month after the month that the tips are received. 2005 tax forms 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. 2005 tax forms Both directly and indirectly tipped employees must report tips to you. 2005 tax forms The report should not include tips that the employee paid out to other employees. 2005 tax forms No report is required for months when tips are less than $20. 2005 tax forms Your employees report tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. 2005 tax forms They may also use Form 4070A, Employee's Daily Record of Tips, to keep a record of their tips. 2005 tax forms Both forms are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer, available at IRS. 2005 tax forms gov. 2005 tax forms 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. 2005 tax forms You are permitted to establish a system for electronic tip reporting by employees. 2005 tax forms See Regulations section 31. 2005 tax forms 6053-1(d). 2005 tax forms Collecting taxes on tips. 2005 tax forms   You must collect the employee social security and Medicare taxes on the employee's tips. 2005 tax forms You can also collect these taxes from the employee's wages or from other funds that he or she makes available. 2005 tax forms Stop collecting the employee social security tax when his or her total wages and tips for 2014 reach $117,000. 2005 tax forms Collect the employee Medicare tax for the whole year on all wages and tips. 2005 tax forms   You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the wage base limit. 2005 tax forms You are responsible for the employer Medicare tax for the whole year on all wages and tips. 2005 tax forms File Form 941-SS (or Form 944) to report withholding and employer taxes on tips. 2005 tax forms 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. 2005 tax forms Ordering rule. 2005 tax forms   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. 2005 tax forms Reporting tips. 2005 tax forms   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). 2005 tax forms Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. 2005 tax forms Report an adjustment on Form 941-SS, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. 2005 tax forms The table in section 12 shows how tips are treated for FUTA tax purposes. 2005 tax forms   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. 2005 tax forms See Revenue Ruling 2012-18, 2012-26 I. 2005 tax forms R. 2005 tax forms B. 2005 tax forms 1032, available at www. 2005 tax forms irs. 2005 tax forms gov/irb/2012-26_IRB/ar07. 2005 tax forms html. 2005 tax forms 6. 2005 tax forms Social Security and Medicare Taxes for Farmworkers The tests described below apply only to services that are defined as agricultural labor (farmwork). 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms A “share farmer” working for you is not your employee. 2005 tax forms However, the share farmer may be subject to self-employment tax. 2005 tax forms 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. 2005 tax forms For details, see Regulations section 31. 2005 tax forms 3121(b)(16)-1. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms The $150 test applies separately to each farmworker that you employ. 2005 tax forms If you employ a family of workers, each member is treated separately. 2005 tax forms Do not count wages paid by other employers. 2005 tax forms The total that you pay for farmwork (cash and noncash) to all of your employees is $2,500 or more during the year. 2005 tax forms Exceptions. 2005 tax forms   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. 2005 tax forms   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. 2005 tax forms 7. 2005 tax forms How To Figure Social Security and Medicare Taxes The tax rate for social security is 6. 2005 tax forms 2% (amount withheld) each for the employer and employee (12. 2005 tax forms 4% total). 2005 tax forms The social security wage base limit is $117,000. 2005 tax forms The tax rate for Medicare is 1. 2005 tax forms 45% (amount withheld) each for the employee and employer (2. 2005 tax forms 9% total). 2005 tax forms There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. 2005 tax forms Multiply each wage payment by these percentages to figure the tax to withhold from employees. 2005 tax forms Employers report both the employee and employer shares on Forms 941-SS, 944, or Form 943 (farm employment). 2005 tax forms See section 5 for information on tips. 2005 tax forms Additional Medicare Tax withholding. 2005 tax forms   In addition to withholding Medicare tax at 1. 2005 tax forms 45%, you must withhold a 0. 2005 tax forms 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 2005 tax forms 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. 2005 tax forms Additional Medicare Tax is only imposed on the employee. 2005 tax forms There is no employer share of Additional Medicare Tax. 2005 tax forms 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. 2005 tax forms   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. 2005 tax forms For more information on Additional Medicare Tax, visit IRS. 2005 tax forms gov and enter “Additional Medicare Tax” in the search box. 2005 tax forms Deducting the tax. 2005 tax forms   Deduct the employee tax from each wage payment. 2005 tax forms 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. 2005 tax forms Employee's portion of taxes paid by employer. 2005 tax forms   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. 2005 tax forms 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. 2005 tax forms This again increases the amount of the additional taxes that you must pay. 2005 tax forms Household and agricultural employers. 2005 tax forms   This discussion does not apply to household and agricultural employers. 2005 tax forms If you pay a household or agricultural employee's social security and Medicare taxes, these payments must be included in the employee's wages. 2005 tax forms However, this wage increase due to the tax payments is not subject to social security or Medicare taxes as discussed in this section. 2005 tax forms See Publication 15-A for details. 2005 tax forms Sick pay payments. 2005 tax forms   Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. 2005 tax forms For details on third-party payers of sick pay, see Publication 15-A. 2005 tax forms 8. 2005 tax forms 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. 2005 tax forms You must make the deposit by electronic funds transfer. 2005 tax forms For more information about electronic funds transfers, see How To Deposit , later in this section. 2005 tax forms Payment with Return $2,500 rule. 2005 tax forms   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. 2005 tax forms   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. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms Only monthly schedule depositors are allowed to make an Accuracy of Deposits Rule payment with the return. 2005 tax forms Semiweekly schedule depositors must timely deposit the amount. 2005 tax forms See Accuracy of Deposits Rule and How To Deposit, later in this section. 2005 tax forms When To Deposit Under the rules discussed below, the only difference between farm and nonfarm workers' employment tax deposit rules is the lookback period. 2005 tax forms Therefore, farm and nonfarm workers are discussed together except where noted. 2005 tax forms Depending on your total taxes reported during a lookback period (discussed later), you are either a monthly schedule depositor or a semiweekly schedule depositor. 2005 tax forms 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. 2005 tax forms The terms identify which set of rules that you must follow when a tax liability arises (for example, when you have a payday). 2005 tax forms 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). 2005 tax forms 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. 2005 tax forms Determine your deposit schedule for Form 943 separately from Forms 941-SS and 941. 2005 tax forms Lookback period for employers of nonfarm workers. 2005 tax forms   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. 2005 tax forms These four quarters are your lookback period even if you did not report any taxes for any of the quarters. 2005 tax forms For 2014, the lookback period is July 1, 2012, through June 30, 2013. 2005 tax forms    Table 1. 2005 tax forms Lookback Period for Calendar Year 2014 Lookback Period July 1, 2012 Oct. 2005 tax forms 1, 2012 Jan. 2005 tax forms 1, 2013 Apr. 2005 tax forms 1, 2013 through through through through Sep. 2005 tax forms 30, 2012 Dec. 2005 tax forms 31, 2012 Mar. 2005 tax forms 31, 2013 June 30, 2013    The lookback period for Form 944 is the second calendar year preceding the current calendar year. 2005 tax forms For example, the lookback period for calendar year 2014 is calendar year 2012. 2005 tax forms 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. 2005 tax forms Lookback period for employers of farmworkers. 2005 tax forms   The lookback period for Form 943 is the second calendar year preceding the current calendar year. 2005 tax forms The lookback period for calendar year 2014 is calendar year 2012. 2005 tax forms Adjustments to lookback period taxes. 2005 tax forms   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). 2005 tax forms Do not include any adjustments shown on Form 941-X, 943-X, or 944-X. 2005 tax forms Example. 2005 tax forms   An employer originally reported total taxes of $45,000 for the lookback period. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms Deposit Period The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. 2005 tax forms For monthly schedule depositors, the deposit period is a calendar month. 2005 tax forms The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. 2005 tax forms 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. 2005 tax forms You must deposit taxes on wage payments made during a calendar month by the 15th day of the following month. 2005 tax forms New employers. 2005 tax forms   Your tax liability for any quarter in the lookback period before the date you started or acquired your business is considered to be zero. 2005 tax forms 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). 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms Deposit taxes on wage payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. 2005 tax forms Deposit taxes on wage payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. 2005 tax forms Semiweekly deposit period spanning two quarters. 2005 tax forms   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. 2005 tax forms Example. 2005 tax forms   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. 2005 tax forms Both deposits will be due on Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). 2005 tax forms Examples of Monthly and Semiweekly Schedules Employers of nonfarm workers. 2005 tax forms   Rose Co. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms However, for 2014, Rose Co. 2005 tax forms 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. 2005 tax forms Employers of farmworkers. 2005 tax forms   Red Co. 2005 tax forms reported taxes on its 2012 Form 943, line 9, of $48,000. 2005 tax forms On its 2013 Form 943, line 11, it reported taxes of $60,000. 2005 tax forms   Red Co. 2005 tax forms 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. 2005 tax forms However, for 2015, Red Co. 2005 tax forms is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. 2005 tax forms New agricultural employers. 2005 tax forms   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. 2005 tax forms However, see the $100,000 Next-Day Deposit Rule , later in this section. 2005 tax forms 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. 2005 tax forms A business day is any day other than a Saturday, Sunday, or legal holiday. 2005 tax forms 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). 2005 tax forms Semiweekly schedule depositors have at least 3 business days to make a deposit. 2005 tax forms 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. 2005 tax forms 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). 2005 tax forms Legal holiday. 2005 tax forms   The term “legal holiday” means any legal holiday in the District of Columbia. 2005 tax forms Legal holidays for 2014 are listed below. 2005 tax forms January 1—New Year's Day January 20—Birthday of Martin Luther King, Jr. 2005 tax forms 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. 2005 tax forms Monthly schedule example. 2005 tax forms   Spruce Co. 2005 tax forms is a monthly schedule depositor with seasonal employees. 2005 tax forms It paid wages each Friday during August but did not pay any wages during September. 2005 tax forms Under the monthly deposit schedule, Spruce Co. 2005 tax forms must deposit the combined tax liabilities for the four August paydays by September 15. 2005 tax forms Spruce Co. 2005 tax forms 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. 2005 tax forms Semiweekly schedule example. 2005 tax forms   Green, Inc. 2005 tax forms is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. 2005 tax forms Although Green, Inc. 2005 tax forms , has a semiweekly deposit schedule, it will deposit just once a month because it pays wages only once a month. 2005 tax forms The deposit, however, will be made under the semiweekly deposit schedule as follows: Green, Inc. 2005 tax forms ’s tax liability for the April 25, 2014 (Friday), payday must be deposited by April 30, 2014 (Wednesday). 2005 tax forms Under the semiweekly deposit schedule, liabilities for wages paid on Wednesday through Friday must be deposited by the following Wednesday. 2005 tax forms $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. 2005 tax forms For purposes of the $100,000 rule, do not continue accumulating taxes after the end of a deposit period. 2005 tax forms 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. 2005 tax forms Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. 2005 tax forms 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. 2005 tax forms For example, Fir Co. 2005 tax forms is a semiweekly schedule depositor. 2005 tax forms On Monday, Fir Co. 2005 tax forms accumulates taxes of $110,000 and must deposit on Tuesday, the next business day. 2005 tax forms On Tuesday, Fir Co. 2005 tax forms accumulates additional taxes of $30,000. 2005 tax forms Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. 2005 tax forms does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). 2005 tax forms 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. 2005 tax forms Example. 2005 tax forms   Elm, Inc. 2005 tax forms started its business on May 1, 2014. 2005 tax forms On May 8, it paid wages for the first time and accumulated a tax liability of $40,000. 2005 tax forms On Friday, May 9, Elm, Inc. 2005 tax forms paid wages and accumulated a liability of $60,000, making its accumulated Form 941-SS tax liability total $100,000. 2005 tax forms Elm, Inc. 2005 tax forms must deposit $100,000 by Monday, May 12, the next business day. 2005 tax forms 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. 2005 tax forms However, because Elm, Inc. 2005 tax forms accumulated $100,000 on May 9, it became a semiweekly schedule depositor on May 10. 2005 tax forms It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. 2005 tax forms Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. 2005 tax forms However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. 2005 tax forms 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. 2005 tax forms Makeup date for deposit shortfall: Monthly schedule depositor. 2005 tax forms 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. 2005 tax forms You may pay the shortfall with your return even if the amount is $2,500 or more. 2005 tax forms Semiweekly schedule depositor. 2005 tax forms 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. 2005 tax forms 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). 2005 tax forms 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. 2005 tax forms In this case, the shortfall must be deposited by April 30, 2014. 2005 tax forms 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). 2005 tax forms Form 943 taxes and Form 941-SS (or Form 944) taxes are not combined for purposes of applying any of the deposit rules. 2005 tax forms If a deposit is due, deposit the Form 941-SS (or Form 944) taxes and Form 943 taxes separately, as discussed next. 2005 tax forms How To Deposit You must deposit employment taxes by electronic funds transfer. 2005 tax forms See Payment with Return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. 2005 tax forms Electronic deposit requirement. 2005 tax forms   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). 2005 tax forms Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). 2005 tax forms 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. 2005 tax forms   EFTPS is a free service provided by the Department of the Treasury. 2005 tax forms To get more information or to enroll in EFTPS, call 1-800-555-4477 (U. 2005 tax forms S. 2005 tax forms Virgin Islands only) or 303-967-5916 (toll call). 2005 tax forms You can also visit the EFTPS website at www. 2005 tax forms eftps. 2005 tax forms gov. 2005 tax forms Additional information about EFTPS is also available in Publication 966. 2005 tax forms When you receive your EIN. 2005 tax forms   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in EFTPS. 2005 tax forms 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. 2005 tax forms Follow the steps in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your payroll tax deposits. 2005 tax forms 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. 2005 tax forms Deposit record. 2005 tax forms   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. 2005 tax forms The number can be used as a receipt or to trace the payment. 2005 tax forms Depositing on time. 2005 tax forms   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. 2005 tax forms m. 2005 tax forms Eastern time the day before the date the deposit is due. 2005 tax forms If you use a third party to make deposits on your behalf, they may have different cutoff times. 2005 tax forms Same-day payment option. 2005 tax forms   If you fail to initiate a deposit transaction on EFTPS by 8 p. 2005 tax forms m. 2005 tax forms 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). 2005 tax forms To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. 2005 tax forms Please check with your financial institution regarding availability, deadlines, and costs. 2005 tax forms Your financial institution may charge you a fee for payments made this way. 2005 tax forms To learn more about the information you will need to provide your financial institution to make a same-day wire payment, please visit www. 2005 tax forms eftps. 2005 tax forms gov to download the Same-Day Payment Worksheet. 2005 tax forms How to claim credit for overpayments. 2005 tax forms   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. 2005 tax forms Do not ask EFTPS to request a refund from the IRS for you. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms For amounts not properly or timely deposited, the penalty rates are as follows. 2005 tax forms 2% - Deposits made 1 to 5 days late. 2005 tax forms 5% - Deposits made 6 to 15 days late. 2005 tax forms 10% - Deposits made 16 or more days late. 2005 tax forms Also applies to amounts paid within 10 days of the date of the first notice that the IRS sent asking for the tax due. 2005 tax forms 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). 2005 tax forms 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. 2005 tax forms Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. 2005 tax forms Special rule for former Form 944 filers. 2005 tax forms    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. 2005 tax forms Order in which deposits are applied. 2005 tax forms   Deposits generally are applied to the most recent tax liability within the return period (quarter or year). 2005 tax forms 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. 2005 tax forms Follow the instructions on the penalty notice that you received. 2005 tax forms For more information on designating deposits, see Revenue Procedure 2001-58. 2005 tax forms You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. 2005 tax forms irs. 2005 tax forms gov/pub/irs-irbs/irb01-50. 2005 tax forms pdf. 2005 tax forms Example. 2005 tax forms Cedar, Inc. 2005 tax forms is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. 2005 tax forms It does not make the deposit on July 15. 2005 tax forms On August 15, Cedar, Inc. 2005 tax forms deposits $2,000. 2005 tax forms 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. 2005 tax forms Accordingly, $500 of the July 15 liability remains undeposited. 2005 tax forms The penalty on this underdeposit will apply as explained earlier. 2005 tax forms Trust fund recovery penalty. 2005 tax forms   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. 2005 tax forms The penalty is the full amount of the unpaid trust fund tax. 2005 tax forms This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. 2005 tax forms   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. 2005 tax forms   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. 2005 tax forms A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. 2005 tax forms    Willfully means voluntarily, consciously, and intentionally. 2005 tax forms 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. 2005 tax forms “Averaged” failure-to-deposit penalty. 2005 tax forms   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. 2005 tax forms 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. 2005 tax forms Completed Form 941-SS, line 14, instead of Schedule B (Form 941). 2005 tax forms Failed to attach a properly completed Schedule B (Form 941). 2005 tax forms Completed Schedule B (Form 941) incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. 2005 tax forms   The IRS figures the penalty by allocating your total tax liability shown on Form 941-SS, line 10, equally throughout the tax period. 2005 tax forms Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. 2005 tax forms   You can avoid the penalty by reviewing your return before filing it. 2005 tax forms Follow these steps before filing your Form 941-SS. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms Do not show negative amounts on Form 941-SS, line 14, or Schedule B (Form 941). 2005 tax forms 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). 2005 tax forms 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. 2005 tax forms 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). 2005 tax forms 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. 2005 tax forms 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. 2005 tax forms 9. 2005 tax forms Employer's Returns General instructions. 2005 tax forms   File Forms 941-SS (or Form 944) for nonfarm workers and Form 943 for farmworkers. 2005 tax forms (U. 2005 tax forms S. 2005 tax forms Virgin Islands employers may be required to file Form 940 for the combined wages of nonfarm workers and farmworkers. 2005 tax forms ) Employers with employees subject to U. 2005 tax forms S. 2005 tax forms income tax withholding. 2005 tax forms   If you have both employees who are subject to U. 2005 tax forms S. 2005 tax forms income tax withholding and employees who are not subject to U. 2005 tax forms S. 2005 tax forms income tax withholding, you must file only Form 941 (or Form 944) and include all your employees’ wages on that form. 2005 tax forms Nonfarm employers. 2005 tax forms   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. 2005 tax forms Due dates for each quarter of the calendar year are as follows. 2005 tax forms Quarter Due Jan. 2005 tax forms , Feb. 2005 tax forms , Mar. 2005 tax forms Apr. 2005 tax forms 30 Apr. 2005 tax forms , May, June July 31 July, Aug. 2005 tax forms , Sept. 2005 tax forms Oct. 2005 tax forms 31 Oct. 2005 tax forms , Nov. 2005 tax forms , Dec. 2005 tax forms Jan. 2005 tax forms 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. 2005 tax forms If the due date for filing your return falls on a Saturday, Sunday, or legal holiday, you may file on the next business day. 2005 tax forms   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. 2005 tax forms Form 944. 2005 tax forms   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). 2005 tax forms Household employers reporting social security and Medicare taxes. 2005 tax forms   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). 2005 tax forms Otherwise, report social security and Medicare taxes for household employees on Schedule H (Form 1040), Household Employment Taxes. 2005 tax forms See Publication 926, Household Employer's Tax Guide, for more information. 2005 tax forms Employers of farmworkers. 2005 tax forms   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. 2005 tax forms   File a Form 943 each year for all taxable wages paid for farmwork. 2005 tax forms You may report household workers in a private home on a farm operated for profit on Form 943. 2005 tax forms Do not report wages for farmworkers on Form 941-SS or 944. 2005 tax forms   Send Form 943 to the IRS by January 31 of the following year. 2005 tax forms Send it with payment of any taxes due that you are not required to deposit. 2005 tax forms If you deposited all taxes when due, you have 10 additional days to file. 2005 tax forms Penalties. 2005 tax forms   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. 2005 tax forms The maximum penalty is generally 25% of the tax due. 2005 tax forms 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. 2005 tax forms 5% per month of the amount of tax. 2005 tax forms For individual filers only, the failure-to-pay penalty is reduced from 0. 2005 tax forms 5% per month to 0. 2005 tax forms 25% per month if an installment agreement is in effect. 2005 tax forms You must have filed your return on or before the due date of the return to qualify for the reduced penalty. 2005 tax forms The maximum amount of the failure-to-pay penalty is also 25% of the tax due. 2005 tax forms If both penalties apply in any month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty. 2005 tax forms The penalties will not be charged if you have a reasonable cause for failing to file or pay. 2005 tax forms If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists. 2005 tax forms 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. 2005 tax forms See the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943 for information on how to report these adjustments. 2005 tax forms Prior Period Adjustments Forms for prior period adjustments. 2005 tax forms   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. 2005 tax forms There are also Forms 943-X, 945-X, and CT-1X to report corrections on the corresponding returns. 2005 tax forms 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. 2005 tax forms Continue to use Form 843 when requesting a refund or abatement of assessed interest or penalties. 2005 tax forms See Revenue Ruling 2009-39, 2009-52 I. 2005 tax forms R. 2005 tax forms B. 2005 tax forms 951, for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. 2005 tax forms You can find Revenue Ruling 2009-39, at www. 2005 tax forms irs. 2005 tax forms gov/irb/2009-52_IRB/ar14. 2005 tax forms html. 2005 tax forms Background. 2005 tax forms   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. 2005 tax forms Treasury Decision 9405, 2008-32 I. 2005 tax forms R. 2005 tax forms B. 2005 tax forms 293, is available at www. 2005 tax forms irs. 2005 tax forms gov/irb/2008-32_IRB/ar13. 2005 tax forms html. 2005 tax forms 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. 2005 tax forms You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. 2005 tax forms 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. 2005 tax forms Correcting employment taxes. 2005 tax forms   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