Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

2009 1040

Military PayTax Forms For College Students1040 ADo Military Pay State TaxesAmending TaxWhere To File 2012 Taxes1040 Ez For 2012Can I Efile 1040xState Taxes For MilitaryFile Back Tax Returns OnlineFree State Tax Forms IncomeInstructions On How To Fill Out 1040ezHow To File An Amended ReturnIrs Gov Free FileFree State Tax Filing 2012Free 1040x Filing OnlineIrs Tax Form 940 For 2012Electronic 1040xWww Irs GovlefileHr Block 2012 Tax SoftwarePrior Year Tax ReturnH&r Block Amended Return 2013Irs Gov 1040ezFree Tax Software1040x FormFile Past Year TaxesVita Income TaxIrs Tax Forms 20102014 Federal Tax Form 1040ezFederal Tax Forms 1040ez1040x 2012Www Irs Gov FreefileHow Do I File State Taxes For FreeForm 1040ez 2014Tax Amend FormIrs Amended Tax Return 2011File Tax 1040ez Free OnlineIrs Form 1040Free Tax2012 Tax Amendment Form

2009 1040

2009 1040 Publication 598 - Introductory Material Table of Contents What's New Introduction Useful Items - You may want to see: What's New Federal tax deposits must be made by electronic funds transfer. 2009 1040 Beginning January 1, 2011, you must use electronic funds transfer to make all federal tax deposits. 2009 1040 Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after 2010. 2009 1040 See Federal Tax Deposits Must be Made by Electronic Funds Transfer on page 3. 2009 1040 For large corporations, special rules apply for estimated tax payments that are required to be made for the period that includes July, August, or September of 2012, and the period that immediately follows these months. 2009 1040 See the instructions for line 12 on the 2012 Form 990-W (Worksheet), Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations. 2009 1040 The maximum cost of a low-cost article, for organizations eligible to receive charitable contributions, was increased to $9. 2009 1040 70 for 2011. 2009 1040 See Distribution of low-cost articles on page 8. 2009 1040 The annual limit on associate member dues received by an agricultural or horticultural organization not treated as gross income was increased to $148 for 2011. 2009 1040 See Exception under Dues of Agricultural Organizations and Business Leagues on page 10. 2009 1040 The IRS has created a page on IRS. 2009 1040 gov that includes information about Pub. 2009 1040 598 at www. 2009 1040 irs. 2009 1040 gov/pub598. 2009 1040 Introduction An exempt organization is not taxed on its income from an activity substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. 2009 1040 Such income is exempt even if the activity is a trade or business. 2009 1040 However, if an exempt organization regularly carries on a trade or business not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business. 2009 1040 This publication covers the rules for the tax on unrelated business income of exempt organizations. 2009 1040 It explains: Which organizations are subject to the tax (chapter 1), What the requirements are for filing a tax return (chapter 2), What an unrelated trade or business is (chapter 3), and How to figure unrelated business taxable income (chapter 4). 2009 1040 All section references in this publication are to the Internal Revenue Code. 2009 1040 Useful Items - You may want to see: Publication 557 Tax-Exempt Status for Your Organization Form (and Instructions) 990-T Exempt Organization Business Income Tax Return See chapter 5 for information about getting these publications and forms. 2009 1040 Comments and suggestions. 2009 1040   We welcome your comments about this publication and your suggestions for future editions. 2009 1040   You can write to us at: Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. 2009 1040 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2009 1040 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2009 1040   You can email us at taxforms@irs. 2009 1040 gov. 2009 1040 Please put “publications Comment” on the subject line. 2009 1040 You can also send us comments from www. 2009 1040 irs. 2009 1040 gov/formspubs/, select “Comment on Tax Forms and Publications” under “Information about. 2009 1040 ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 2009 1040 Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Law Enforcement Assistance Pilot Program on Identity Theft Activity Involving the IRS

As part of its comprehensive identity theft strategy, the IRS is expanding the law enforcement assistance pilot program designed to help law enforcement obtain tax return data vital to their local efforts in investigating and prosecuting specific cases of identity theft. In addition to the initial State of Florida, this pilot program is expanding to work with law enforcement in eight additional states: Alabama, California, Georgia, New Jersey, New York, Oklahoma, Pennsylvania and Texas.

The IRS launched the initial pilot in Florida in April of 2012.  Over 750 waiver requests have been received through October from roughly 50 state and local law enforcement agencies in Florida participating in the pilot. 

Under the pilot program, state and local law enforcement officials with evidence of identity theft involving fraudulently filed federal tax returns will be able to have identity theft victims complete a special IRS disclosure form. Taxpayers must give their permission for the IRS to provide law enforcement with the returns submitted using their Social Security number. Law enforcement officials will need to contact the identity theft victims in order to request and secure the victims' consent for disclosure of the records. In certain instances, the IRS will assist law enforcement in locating taxpayers and soliciting their consent.

Law enforcement would then submit a disclosure authorization form, which the IRS created solely for use by victims of identity theft for this pilot program, to the Criminal Investigation (CI) Division of the IRS, along with a copy of the police report and the IRS Identity Theft Affidavit if available. It is important that identity theft victims still submit the original copy of the IRS Identity Theft Affidavit to the IRS according to the instructions on the back of the form that fit their specific circumstances.

Federal law imposes restrictions on sharing of taxpayer information, including information that can be shared with state and local law enforcement.  This program allows taxpayers the option to permit information to be shared with state and local law enforcement specifically to assist law enforcement officials with their efforts in pursuing identity theft perpetrators.  During this expanded pilot program, the IRS will process the disclosure forms received and forward the documentation to the law enforcement officer who requested the documents. The documents will not be sent directly to the taxpayer. However, the IRS will continue to work directly with taxpayers to resolve their tax accounts as quickly as possible.

Law enforcement in the nine states in this pilot program who are interested in working with the IRS should contact their local IRS Criminal Investigation field office.

Following the pilot, the IRS will carefully assess the results and performance before deciding on how to proceed with the program.

The IRS comprehensive identity theft strategy comprises a dual effort, focusing both on fraud prevention and victim assistance. On the prevention side, this includes implementing new processes for handling returns, new filters to detect fraud, new initiatives to partner with stakeholders and a continued commitment to investigate the criminals who perpetrate these crimes. As for victim assistance, the IRS is working to accelerate case resolution, provide more training for our employees who assist victims of identity theft, and increase outreach to and education of taxpayers so they can prevent and resolve tax-related identity theft issues quickly.

Taxpayers looking for additional information can consult the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS website.

Page Last Reviewed or Updated: 06-Dec-2013

The 2009 1040

2009 1040 1. 2009 1040   Tax Withholding for 2014 Table of Contents Introduction Useful Items - You may want to see: Salaries and WagesDetermining Amount of Tax Withheld Using Form W-4 Completing Form W-4 and Worksheets Getting the Right Amount of Tax Withheld Rules Your Employer Must Follow Exemption From Withholding Supplemental Wages Penalties Tips Taxable Fringe BenefitsSpecial rule. 2009 1040 Exceptions. 2009 1040 Sick Pay Pensions and AnnuitiesPeriodic Payments Nonperiodic Payments Eligible Rollover Distributions Choosing Not To Have Income Tax Withheld Gambling WinningsException. 2009 1040 Identical wagers. 2009 1040 Unemployment Compensation Federal Payments Backup WithholdingTaxpayer identification number. 2009 1040 Underreported interest or dividends. 2009 1040 Introduction This chapter discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. 2009 1040 This chapter explains in detail the rules for withholding tax from each of these types of income. 2009 1040 The discussion of salaries and wages includes an explanation of how to complete Form W-4. 2009 1040 This chapter also covers backup withholding on interest, dividends, and other payments. 2009 1040 Useful Items - You may want to see: Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request See chapter 5 of this publication for information about getting these publications and forms. 2009 1040 Salaries and Wages Income tax is withheld from the pay of most employees. 2009 1040 Your pay includes your regular pay, bonuses, commissions, and vacation allowances. 2009 1040 It also includes reimbursements and other expense allowances paid under a nonaccountable plan. 2009 1040 See Supplemental Wages , later, for definitions of accountable and nonaccountable plans. 2009 1040 If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. 2009 1040 This is explained under Exemption From Withholding , later. 2009 1040 You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. 2009 1040 If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed in chapter 2. 2009 1040 Military retirees. 2009 1040   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. 2009 1040 Household workers. 2009 1040   If you are a household worker, you can ask your employer to withhold income tax from your pay. 2009 1040 A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. 2009 1040   Tax is withheld only if you want it withheld and your employer agrees to withhold it. 2009 1040 If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed in chapter 2. 2009 1040 Farmworkers. 2009 1040   Generally, income tax is withheld from your cash wages for work on a farm unless your employer both: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. 2009 1040 Differential wage payments. 2009 1040   When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. 2009 1040 Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. 2009 1040 The wages and withholding will be reported on Form W-2, Wage and Tax Statement. 2009 1040 Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. 2009 1040 The amount you earn in each payroll period. 2009 1040 The information you give your employer on Form W-4. 2009 1040 Form W-4 includes four types of information that your employer will use to figure your withholding. 2009 1040 Whether to withhold at the single rate or at the lower married rate. 2009 1040 How many withholding allowances you claim (each allowance reduces the amount withheld). 2009 1040 Whether you want an additional amount withheld. 2009 1040 Whether you are claiming an exemption from withholding in 2014. 2009 1040 See Exemption From Withholding , later. 2009 1040 Note. 2009 1040 You must specify a filing status and a number of withholding allowances on Form W-4. 2009 1040 You cannot specify only a dollar amount of withholding. 2009 1040 New Job When you start a new job, you must fill out a Form W-4 and give it to your employer. 2009 1040 Your employer should have copies of the form. 2009 1040 If you need to change the information later, you must fill out a new form. 2009 1040 If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. 2009 1040 You may be able to avoid overwithholding if your employer agrees to use the part-year method. 2009 1040 See Part-Year Method , later, for more information. 2009 1040 Employee also receiving pension income. 2009 1040   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. 2009 1040 However, you can choose to split your withholding allowances between your pension and job in any manner. 2009 1040 Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. 2009 1040 When this happens, you may need to give your employer a new Form W-4 to change your withholding status or number of allowances. 2009 1040 If the changes reduce the number of allowances you are allowed to claim or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. 2009 1040 See Marital Status (Line 3 of Form W-4) and Withholding Allowances (Line 5 of Form W-4) , later. 2009 1040 Generally, you can submit a new Form W-4 whenever you wish to change your withholding allowances for any other reason. 2009 1040 See Table 1-1 for examples of personal and financial changes you should consider. 2009 1040 Table 1-1. 2009 1040 Personal and Financial Changes Factor Examples Lifestyle change Marriage Divorce Birth or adoption of child Loss of an exemption Purchase of a new home Retirement Filing chapter 11 bankruptcy Wage income You or your spouse start or stop working, or start or stop a second job Change in the amount of taxable income not subject to withholding Interest income Dividends Capital gains Self-employment income IRA (including certain Roth  IRA) distributions Change in the amount of adjustments to income IRA deduction Student loan interest deduction Alimony expense Change in the amount of itemized deductions or tax credits Medical expenses Taxes Interest expense Gifts to charity Job expenses Dependent care expenses Education credit Child tax credit Earned income credit If you change the number of your withholding allowances, you can request that your employer withhold using the Cumulative Wage Method , explained later. 2009 1040 Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too much or too little. 2009 1040 If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. 2009 1040 You can get a blank Form W-4 from your employer or print the form from IRS. 2009 1040 gov. 2009 1040 You should try to have your withholding match your actual tax liability. 2009 1040 If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. 2009 1040 If too much tax is withheld, you will lose the use of that money until you get your refund. 2009 1040 Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. 2009 1040 See Table 1-1 for examples. 2009 1040 Note. 2009 1040 You cannot give your employer a payment to cover federal income tax withholding on salaries and wages for past pay periods or a payment for estimated tax. 2009 1040 When Should You Check Your Withholding? The earlier in the year you check your withholding, the easier it is to get the right amount of tax withheld. 2009 1040 You should check your withholding when any of the following situations occur. 2009 1040 You receive a paycheck stub (statement) covering a full pay period in 2014, showing tax withheld based on 2014 tax rates. 2009 1040 You prepare your 2013 tax return and get a: Big refund, or Balance due that is: More than you can comfortably pay, or Subject to a penalty. 2009 1040 There are changes in your life or financial situation that affect your tax liability. 2009 1040 See Table 1-1. 2009 1040 There are changes in the tax law that affect your tax liability. 2009 1040 How Do You Check Your Withholding? You can use the worksheets and tables in this publication to see if you are having the right amount of tax withheld. 2009 1040 You can also use the IRS Withholding calculator at www. 2009 1040 irs. 2009 1040 gov/individuals. 2009 1040 If you use the worksheets and tables in this publication, follow these steps. 2009 1040 Fill out Worksheet 1-5 to project your total federal income tax liability for 2014. 2009 1040 Fill out Worksheet 1-7 to project your total federal withholding for 2014 and compare that with your projected tax liability from Worksheet 1-5. 2009 1040 If you are not having enough tax withheld, line 6 of Worksheet 1-7 will show you how much more to have withheld each payday. 2009 1040 For ways to increase the amount of tax withheld, see How Do You Increase Your Withholding? If line 5 of Worksheet 1-7 shows that you are having more tax withheld than necessary, see How Do You Decrease Your Withholding, for ways to decrease the amount of tax you have withheld each payday. 2009 1040 How Do You Increase Your Withholding? There are two ways to increase your withholding. 2009 1040 You can: Decrease the number of allowances you claim on Form W-4, or Enter an additional amount that you want withheld from each paycheck on Form W-4. 2009 1040 Requesting an additional amount withheld. 2009 1040   You can request that an additional amount be withheld from each paycheck by following these steps. 2009 1040 Complete Worksheets 1-5 and 1-7. 2009 1040 Complete a new Form W-4 if the amount on Worksheet 1-7, line 5: Is more than you want to pay with your tax return or in estimated tax payments throughout the year, or Would cause you to pay a penalty when you file your tax return for 2014. 2009 1040 Enter on your new Form W-4, the same number of withholding allowances your employer now uses for your withholding. 2009 1040 This is the number of allowances you entered on the last Form W-4 you gave your employer. 2009 1040 Enter on your new Form W-4, the amount from Worksheet 1-7, line 6. 2009 1040 Give your newly completed Form W-4 to your employer. 2009 1040   If you have this additional amount withheld from your pay each payday, you should avoid owing a large amount at the end of the year. 2009 1040 Example. 2009 1040 Early in 2014, Steve Miller used Worksheets 1-5, 1-6, and 1-7 to project his 2014 tax liability ($4,316) and his withholding for the year ($3,516). 2009 1040 Steve's tax will be underwithheld by $800 ($4,316 − $3,516). 2009 1040 His choices are to pay this amount when he files his 2014 tax return, make estimated tax payments, or increase his withholding now. 2009 1040 Steve gets a new Form W-4 from his employer, who tells him that there are 50 paydays remaining in 2014. 2009 1040 Steve completes the new Form W-4 as before, entering the same number of withholding allowances as before, but, in addition, entering $16 ($800 ÷ 50) on the form as the additional amount to be withheld from his pay each payday. 2009 1040 He gives the completed form to his employer. 2009 1040 What if I have more than one job or my spouse also has a job?   You are more likely to need to increase your withholding if you have more than one job or if you are married filing jointly and your spouse also works. 2009 1040 If this is the case, you can increase your withholding for one or more of the jobs. 2009 1040   You can apply the amount on Worksheet 1-7, line 5, to only one job or divide it between the jobs any way you wish. 2009 1040 For each job, determine the extra amount that you want to apply to that job and divide that amount by the number of paydays remaining in 2014 for that job. 2009 1040 This will give you the additional amount to enter on the Form W-4 you will file for that job. 2009 1040 You need to give your employer a new Form W-4 for each job for which you are changing your withholding. 2009 1040 Example. 2009 1040 Meg Green works in a store and earns $46,000 a year. 2009 1040 Her husband, John, works full-time in manufacturing and earns $68,000 a year. 2009 1040 In 2014, they will also have $184 in taxable interest and $1,000 of other taxable income. 2009 1040 They expect to file a joint income tax return. 2009 1040 Meg and John complete Worksheets 1-5, 1-6, and 1-7. 2009 1040 Line 5 of Worksheet 1-7 shows that they will owe an additional $4,459 after subtracting their withholding for the year. 2009 1040 They can divide the $4,459 any way they want. 2009 1040 They can enter an additional amount on either of their Forms W-4, or divide it between them. 2009 1040 They decide to have the additional amount withheld from John's wages, so they enter $91 ($4,459 ÷ 49 remaining paydays) on his Form W-4. 2009 1040 Both claim the same number of allowances as before. 2009 1040 How Do You Decrease Your Withholding? If your completed Worksheets 1-5 and 1-7 show that you may have more tax withheld than your projected tax liability for 2014, you may be able to decrease your withholding. 2009 1040 There are two ways to do this. 2009 1040 You can: Decrease any additional amount you are having withheld, or Increase the number of allowances you claim on Form W-4. 2009 1040 You can claim only the number of allowances to which you are entitled. 2009 1040 To see if you can decrease your withholding by increasing your allowances, see the Form W-4 instructions and the rest of this publication. 2009 1040 Increasing the number of allowances. 2009 1040   Figure and increase the number of withholding allowances you can claim as follows. 2009 1040 On a new Form W-4, complete the Personal Allowances Worksheet. 2009 1040 If you plan to itemize deductions, claim adjustments to income, or claim tax credits, complete a new Deductions and Adjustments Worksheet. 2009 1040 If you plan to claim tax credits, see Converting Credits to Withholding Allowances, later. 2009 1040 If you meet the criteria on line H of the Form W-4 Personal Allowances Worksheet, complete a new Two-Earners/Multiple Jobs Worksheet. 2009 1040 If the number of allowances you can claim on Form W-4, is different from the number you already are claiming, give the newly completed Form W-4 to your employer. 2009 1040 Converting Credits to Withholding Allowances Table 1-2 , later, shows many of the tax credits you may be able to use to decrease your withholding. 2009 1040 The Form W-4 Personal Allowances Worksheet provides only rough adjustments for the child and dependent care credit and the child tax credit. 2009 1040 Complete Worksheet 1-8 to figure these credits more accurately and also take other credits into account. 2009 1040 Include the amount from line 12 of Worksheet 1-8 in the total on line 5 of the Deductions and Adjustments Worksheet. 2009 1040 Then complete the Deductions and Adjustments Worksheet and the rest of Form W-4. 2009 1040 If you take the child and dependent care credit into account on Worksheet 1-8, enter -0- on line F of the Personal Allowances Worksheet. 2009 1040 If you take the child tax credit into account on Worksheet 1-8, enter -0- on line G of the Personal Allowances Worksheet. 2009 1040 Example. 2009 1040 Brett and Alyssa Davis are married and expect to file a joint return for 2014. 2009 1040 Their expected taxable income from all sources is $68,000. 2009 1040 They expect to have $15,900 of itemized deductions. 2009 1040 Their projected tax credits include a child and dependent care credit of $960 and an adoption credit of $1,500. 2009 1040 The Davis' complete Worksheet 1-8, as follows, to see whether they can convert their tax credits into additional withholding allowances. 2009 1040 Line 1, expected child and dependent care credit—$960. 2009 1040 Line 9, expected adoption credit—$1,500. 2009 1040 Line 10, total estimated tax credits—$2,460. 2009 1040 Line 11. 2009 1040 Their combined total income from all sources, $68,000, falls between $42,001 and $98,000 on the table for married filing jointly or qualifying widow(er). 2009 1040 The number to the right of this range is 6. 2009 1040 7. 2009 1040 Line 12, multiply line 10 by line 11—$16,482. 2009 1040 Then the Davis' complete the Form W-4 worksheets. 2009 1040 Because they choose to account for their child and dependent care credit on the Deductions and Adjustments Worksheet, they enter -0- on line F of the Personal Allowances Worksheet and figure a new total for line H. 2009 1040 They take the result on line 12 of Worksheet 1-8, add it to their other adjustments on line 5 of the Form W-4 Deductions and Adjustments Worksheet, and complete the Form W-4 worksheets. 2009 1040 When Will Your New Form W-4 Go Into Effect? If the change is for the current year, your employer must put your new Form W-4 into effect no later than the start of the first payroll period ending on or after the 30th day after the day on which you give your employer your revised Form W-4. 2009 1040 If the change is for next year, your new Form W-4 will not take effect until next year. 2009 1040 Retirees Returning to the Workforce When you first began receiving your pension, you told the payer how much tax to withhold, if any, by completing Form W-4P, Withholding Certificate for Pension or Annuity Payments (or similar form). 2009 1040 However, if your retirement pay is from the military or certain deferred compensation plans, you completed Form W-4 instead of Form W-4P. 2009 1040 You completed either form based on your projected income at that time. 2009 1040 Now that you are returning to the workforce, your new Form W-4 (given to your employer) and your Form W-4 or W-4P (on file with your pension plan) must work together to determine the correct amount of withholding for your new amount of income. 2009 1040 The worksheets that come with Forms W-4 and W-4P are basically the same, so you can use either set of worksheets to figure out how many withholding allowances you are entitled to claim. 2009 1040 Start off with the Personal Allowances Worksheet. 2009 1040 Then, if you will be itemizing your deductions, claiming adjustments to income, or claiming tax credits when you file your tax return, complete the Deductions and Adjustments Worksheet. 2009 1040 The third worksheet is the most important for this situation. 2009 1040 Form W-4 calls it the Two-Earners/Multiple Jobs Worksheet, Form W-4P calls it the Multiple Pensions/More-Than-One-Income Worksheet—both are the same. 2009 1040 If you have more than one source of income, in order to have enough withholding to cover the tax on your higher income, you may need to claim fewer withholding allowances or request your employer to withhold an additional amount from each paycheck. 2009 1040 Once you have figured out how many allowances you are entitled to claim, look at the income from both your pension and your new job, and how often you receive payments. 2009 1040 It is your decision how to divide up your withholding allowances between these sources of income. 2009 1040 For example, you may want to “take home” most of your weekly paycheck to use as spending money and use your monthly pension to “pay the bills. 2009 1040 ” In that case, change your Form W-4P to zero allowances and claim all that you are entitled to on your Form W-4. 2009 1040 There are a couple of ways you can get a better idea of how much tax will be withheld when claiming a certain number of allowances. 2009 1040 Use the withholding tables in Publication 15 (Circular E), Employer's Tax Guide. 2009 1040 Contact your pension provider and your employer's payroll department. 2009 1040 And remember, this is not a final decision. 2009 1040 If you do not get the correct amount of withholding with the first Forms W-4 and W-4P you submit, you should refigure your allowances (or divide them differently) using the information and worksheets in this publication, or the resources mentioned above. 2009 1040 You should go through this same process each time your life situation changes, whether it be for personal or financial reasons. 2009 1040 You may need more tax withheld, or you may need less. 2009 1040 Table 1-2. 2009 1040 Tax Credits for 2014 For more information about the . 2009 1040 . 2009 1040 . 2009 1040 See . 2009 1040 . 2009 1040 . 2009 1040 Adoption credit Form 8839 instructions Child and dependent care expenses, credit for Publication 503, Child and Dependent Care Expenses Child tax credit (including the additional child tax credit) Instructions for Form 1040 or Form 1040A Earned income credit Publication 596, Earned Income Credit Education credits Publication 970, Tax Benefits for Education Elderly or the disabled, credit for the Publication 524, Credit for the Elderly or the Disabled Foreign tax credit (except any credit that applies to wages not subject to U. 2009 1040 S. 2009 1040 income tax withholding because they are subject to income tax withholding by a foreign country) Publication 514, Foreign Tax Credit for Individuals General business credit Form 3800, General Business Credit Mortgage interest credit Publication 530, Tax Information for First-Time Homeowners Qualified electric vehicle passive activity credit Form 8834 Prior year minimum tax, credit for (if you paid alternative minimum tax in an earlier year) Form 8801 instructions Retirement savings contributions credit (saver's credit) Publication 590, Individual Retirement Arrangements (IRAs) Tax credit bonds, credit to holders of Form 8912 instructions Completing Form W-4 and Worksheets When reading the following discussion, you may find it helpful to refer to Form W-4. 2009 1040 Marital Status There is a lower withholding rate for people who qualify to check the “Married” box on line 3 of Form W-4. 2009 1040 Everyone else must have tax withheld at the higher single rate. 2009 1040 Single. 2009 1040   You must check the “Single” box if any of the following applies. 2009 1040 You are single. 2009 1040 If you are divorced, or separated from your spouse under a court decree of separate maintenance, you are considered single. 2009 1040 You are married, but neither you nor your spouse is a citizen or resident of the United States. 2009 1040 You are married, either you or your spouse is a nonresident alien, and you have not chosen to have that person treated as a resident alien for tax purposes. 2009 1040 For more information, see Nonresident Spouse Treated as a Resident in chapter 1 of Publication 519. 2009 1040 Married. 2009 1040   You qualify to check the “Married” box if any of the following applies. 2009 1040 You are married and neither you nor your spouse is a nonresident alien. 2009 1040 You are considered married for the whole year even if your spouse died during the year. 2009 1040 You are married and either you or your spouse is a nonresident alien who has chosen to be treated as a resident alien for tax purposes. 2009 1040 For more information, see Nonresident Spouse Treated as a Resident in chapter 1 of Publication 519. 2009 1040 You expect to be able to file your return as a qualifying widow or widower. 2009 1040 You usually can use this filing status if your spouse died within the previous 2 years and you provide more than half the cost of keeping up a home for the entire year that was the main home for you and your child whom you can claim as a dependent. 2009 1040 However, you must file a new Form W-4 showing your filing status as single by December 1 of the last year you are eligible to file as a qualifying widow or widower. 2009 1040 For more information on this filing status, see Qualifying Widow(er) With Dependent Child under Filing Status in Publication 501, Exemptions, Standard Deduction, and Filing Information. 2009 1040 Married, but withhold at higher single rate. 2009 1040   Some married people find that they do not have enough tax withheld at the married rate. 2009 1040 This can happen, for example, when both spouses work. 2009 1040 To avoid this, you can check the “Married, but withhold at higher Single rate” box (even if you qualify for the married rate). 2009 1040 Also, you may find that more tax is withheld if you fill out the Two-Earners/Multiple Jobs Worksheet, explained later. 2009 1040 Withholding Allowances The more allowances you claim on Form W-4, the less income tax your employer will withhold. 2009 1040 You will have the most tax withheld if you claim “0” allowances. 2009 1040 The number of allowances you can claim depends on the following factors. 2009 1040 How many exemptions you can take on your tax return. 2009 1040 Whether you have income from more than one job. 2009 1040 What deductions, adjustments to income, and credits you expect to have for the year. 2009 1040 Whether you will file as head of household. 2009 1040 If you are married (filing jointly), it also depends on whether your spouse also works and claims any allowances on his or her own Form W-4. 2009 1040 Or, if married filing separately, whether or not your spouse also works. 2009 1040 Form W-4 worksheets. 2009 1040    Form W-4 has worksheets to help you figure how many withholding allowances you can claim. 2009 1040 The worksheets are for your own records. 2009 1040 Do not give them to your employer. 2009 1040   Complete only one set of Form W-4 worksheets, no matter how many jobs you have. 2009 1040 If you are married and will file a joint return, complete only one set of worksheets for you and your spouse, even if you both earn wages and each must give Form W-4 to your employers. 2009 1040 Complete separate sets of worksheets only if you and your spouse will file separate returns. 2009 1040   If you are not exempt from withholding (see Exemption From Withholding , later), complete the Personal Allowances Worksheet on page 1 of the form. 2009 1040 Also, use the worksheets on page 2 of the form to adjust the number of your withholding allowances for itemized deductions and adjustments to income, and for two-earner or multiple-job situations. 2009 1040 If you want to adjust the number of your withholding allowances for certain tax credits, use the Deductions and Adjustments Worksheet on page 2 of Form W-4, even if you do not have any deductions or adjustments. 2009 1040   Complete all worksheets that apply to your situation. 2009 1040 The worksheets will help you figure the maximum number of withholding allowances you are entitled to claim so that the amount of income tax withheld from your wages will match, as closely as possible, the amount of income tax you will owe at the end of the year. 2009 1040 Multiple jobs. 2009 1040   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. 2009 1040 Then split your allowances between the Forms W-4 for each job. 2009 1040 You cannot claim the same allowances with more than one employer at the same time. 2009 1040 You can claim all your allowances with one employer and none with the other(s), or divide them any other way. 2009 1040 Married individuals. 2009 1040   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. 2009 1040 Use only one set of worksheets. 2009 1040 You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. 2009 1040   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. 2009 1040 Alternative method of figuring withholding allowances. 2009 1040   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. 2009 1040   The method you use must be based on withholding schedules, the tax rate schedules, and the 2014 Estimated Tax Worksheet in chapter 2. 2009 1040 It must take into account only the items of income, adjustments to income, deductions, and tax credits that are taken into account on Form W-4. 2009 1040   You can use the number of withholding allowances determined under an alternative method rather than the number determined using the Form W-4 worksheets. 2009 1040 You still must give your employer a Form W-4 claiming your withholding allowances. 2009 1040 Employees who are not citizens or residents. 2009 1040   If you are neither a citizen nor a resident of the United States, you usually can claim only one withholding allowance. 2009 1040 However, this rule does not apply if you are a resident of Canada or Mexico, or if you are a U. 2009 1040 S. 2009 1040 national. 2009 1040 It also does not apply if your spouse is a U. 2009 1040 S. 2009 1040 citizen or resident and you have chosen to be treated as a resident of the United States for tax purposes. 2009 1040 Special rules apply to residents of South Korea and India. 2009 1040 For more information, see Withholding From Compensation in chapter 8 of Publication 519. 2009 1040 Personal Allowances Worksheet Use the Personal Allowances Worksheet on page 1 of Form W-4 to figure your withholding allowances based on all of the following that apply. 2009 1040 Exemptions. 2009 1040 Only one job. 2009 1040 Head of household filing status. 2009 1040 Child and dependent care credit. 2009 1040 Child tax credit. 2009 1040 Exemptions (worksheet lines A, C, and D). 2009 1040   You can claim one withholding allowance for each exemption you expect to claim on your tax return. 2009 1040 Self. 2009 1040   You can claim an allowance for your exemption on line A unless another person can claim an exemption for you on his or her tax return. 2009 1040 If another person is entitled to claim an exemption for you, you cannot claim an allowance for your exemption even if the other person will not claim your exemption. 2009 1040 Spouse. 2009 1040   You can claim an allowance for your spouse's exemption on line C unless your spouse is claiming his or her own exemption or another person can claim an exemption for your spouse. 2009 1040 Do not claim this allowance if you and your spouse expect to file separate returns. 2009 1040 Dependents. 2009 1040   You can claim one allowance on line D for each exemption you will claim for a dependent on your tax return. 2009 1040 Only one job (worksheet line B). 2009 1040    You can claim an additional withholding allowance if any of the following apply for 2014. 2009 1040 You are single and you have only one job at a time. 2009 1040 You are married, you have only one job at a time, and your spouse does not work. 2009 1040 Your wages from a second job or your spouse's wages (or the total of both) are $1,500 or less. 2009 1040 If you qualify for this allowance, enter “1” on line B of the worksheet. 2009 1040 Head of household filing status (worksheet line E). 2009 1040   Generally, you can file as head of household if you are unmarried and pay more than half the cost of keeping up a home that: Was the main home for all of 2014 of your parent whom you can claim as a dependent, or You lived in for more than half the year with your qualifying child or any other person you can claim as a dependent. 2009 1040 For more information, see Publication 501. 2009 1040   If you expect to file as head of household on your 2014 tax return, enter “1” on line E of the worksheet. 2009 1040 Reduction of personal allowances. 2009 1040   For 2014, your deduction for personal exemptions on your tax return is reduced if your adjusted gross income (AGI) is more than the AGI shown next for your filing status. 2009 1040 Personal Allowance Phaseout Threshold Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than the amount listed, use Worksheet 1-1 to figure your reduced number of personal allowances on lines A, C, and D of the Personal Allowances Worksheet. 2009 1040 Worksheet 1-1. 2009 1040 Personal Allowances Worksheet (Form W-4) Reduction of Personal Allowances if AGI Above Phaseout Threshold 1. 2009 1040 Enter the total amount of allowances on lines A, C, and D of the Personal Allowance Worksheet without regard to the phaseout rule 1. 2009 1040   2. 2009 1040 Enter your expected AGI 2. 2009 1040       3. 2009 1040 Enter $254,200 if single $305,050 if married filing jointly or qualifying widow(er) $152,525 if married filing separately $279,650 if head of household 3. 2009 1040       4. 2009 1040 Subtract line 3 from line 2 4. 2009 1040       5. 2009 1040 Divide line 4 by $125,000 ($62,500 if married filing separately). 2009 1040 Enter the result as a decimal 5. 2009 1040   6. 2009 1040 Multiply line 1 by line 5. 2009 1040 If the result is not a whole number, increase it to the next higher whole number 6. 2009 1040   7. 2009 1040 Subtract line 6 from line 1. 2009 1040 The total of the numbers you enter on A, C, and D of the Personal Allowances Worksheet can not be more than this amount 7. 2009 1040     Child and dependent care credit (worksheet line F). 2009 1040   Enter “1” on line F if you expect to claim a credit for at least $2,000 of qualifying child or dependent care expenses on your 2014 return. 2009 1040 Generally, qualifying expenses are those you pay for the care of your dependent who is your qualifying child under age 13 or for your spouse or dependent who is not able to care for himself or herself so that you can work or look for work. 2009 1040 For more information, see Publication 503, Child and Dependent Care Expenses. 2009 1040   Instead of using line F, you can choose to take the credit into account on line 5 of the Deductions and Adjustments Worksheet, as explained under Tax credits , later. 2009 1040 Child tax credit (worksheet line G). 2009 1040   If your total income will be less than $65,000 ($95,000 if married), enter “2” on line G for each eligible child. 2009 1040 Subtract “1” from that amount if you have three to six eligible children. 2009 1040 Subtract “2” from that amount if you have seven or more eligible children. 2009 1040   If your total income will be between $65,000 and $84,000 ($95,000 and $119,000 if married), enter “1” on line G for each eligible child. 2009 1040   An eligible child is any child: Who is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Who will be under age 17 at the end of 2014, Who is younger than you (or your spouse if filing jointly) or permanently and totally disabled, Who will not provide over half of his or her own support for 2014, Who will not file a joint return, unless the return is filed only as a claim for refund, Who will live with you for more than half of 2014, Who is a U. 2009 1040 S. 2009 1040 citizen, U. 2009 1040 S. 2009 1040 national, or U. 2009 1040 S. 2009 1040 resident alien, and Who will be claimed as a dependent on your return. 2009 1040 If you are a U. 2009 1040 S. 2009 1040 citizen or U. 2009 1040 S. 2009 1040 national and your adopted child lived with you all year as a member of your household, that child meets the citizenship test. 2009 1040   Also, if any other person can claim the child as an eligible child, see Qualifying child of more than one person in the 2013 instructions for Form 1040 or 1040A, line 6c. 2009 1040   For more information about the child tax credit, see the instructions for Form 1040 or Form 1040A. 2009 1040   Instead of using line G, you can choose to take the credit into account on line 5 of the Deductions and Adjustments Worksheet, as explained under Tax credits , later. 2009 1040 Total personal allowances (worksheet line H). 2009 1040    Add lines A through G and enter the total on line H. 2009 1040 If you do not use either of the worksheets on the back of Form W-4, enter the number from line H on line 5 of Form W-4. 2009 1040 Deductions and Adjustments Worksheet Use the Deductions and Adjustments Worksheet on page 2 of Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. 2009 1040 Also, complete this worksheet when you have changes to those items to see if you need to change your withholding. 2009 1040 Use the amount of each item you reasonably can expect to show on your return. 2009 1040 However, do not use more than: The amount shown for that item on your 2013 return (or your 2012 return if you have not yet filed your 2013 return), plus Any additional amount related to a transaction or occurrence (such as payments already made, the signing of an agreement, or the sale of property) that you can prove has happened or will happen during 2013 or 2014. 2009 1040 Do not include any amount shown on your last tax return that has been disallowed by the IRS. 2009 1040 Example. 2009 1040 On June 30, 2013, you bought your first home. 2009 1040 On your 2013 tax return, you claimed itemized deductions of $6,600, the total mortgage interest and real estate tax you paid during the 6 months you owned your home. 2009 1040 Based on your mortgage payment schedule and your real estate tax assessment, you reasonably can expect to claim deductions of $13,200 for those items on your 2014 return. 2009 1040 You can use $13,200 to figure the number of your withholding allowances for itemized deductions. 2009 1040 Not itemizing deductions. 2009 1040   If you expect to claim the standard deduction on your tax return, skip lines 1 and 2, and enter “0” on line 3 of the worksheet. 2009 1040 Itemized deductions (worksheet line 1). 2009 1040   Enter your estimated total itemized deductions on line 1 of the worksheet. 2009 1040   Listed below are some of the deductions you can take into account when figuring additional withholding allowances for 2014. 2009 1040 You normally claim these deductions on Schedule A of Form 1040. 2009 1040 Medical and dental expenses that are more than 10% (7. 2009 1040 5% if either you or your spouse was born before January 2, 1950) of your 2014 AGI (defined under AGI , later). 2009 1040 State and local income or property taxes. 2009 1040 Deductible home mortgage interest. 2009 1040 Investment interest up to net investment income. 2009 1040 Charitable contributions. 2009 1040 Casualty and theft losses that are more than $100 and 10% of your AGI. 2009 1040 Fully deductible miscellaneous itemized deductions, including: Impairment-related work expenses of persons with disabilities, Federal estate tax on income in respect of a decedent, Repayment of more than $3,000 of income held under a claim of right that you included in income in an earlier year because at the time you thought you had an unrestricted right to it, Unrecovered investments in an annuity contract under which payments have ceased because of the annuitant's death, Gambling losses up to the amount of gambling winnings reported on your return, and Casualty and theft losses from  income-producing property. 2009 1040 Other miscellaneous itemized deductions that are more than 2% of your AGI, including: Unreimbursed employee business expenses, such as education expenses, work clothes and uniforms, union dues and fees, and the cost of work-related small tools and supplies, Safe deposit box rental, Tax counsel and assistance, and Certain fees paid to an IRA trustee or custodian. 2009 1040 AGI. 2009 1040   For the purpose of estimating your itemized deductions, your AGI is your estimated total income for 2014 minus any estimated adjustments to income (discussed later) that you include on line 4 of the Deductions and Adjustments Worksheet. 2009 1040 Phaseout of itemized deductions. 2009 1040   For 2014, your total itemized deductions may be phased out (reduced) if your AGI is more than the following thresholds. 2009 1040    Itemized Deduction Phaseout Threshold Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than the amount listed, use Worksheet 1–2 to figure your reduction in itemized deductions. 2009 1040 Worksheet 1-2. 2009 1040 Deductions and Adjustments Worksheet (Form W-4)—Line 1 Phaseout of Itemized Deductions 1. 2009 1040 Enter the estimated total of your itemized deductions 1. 2009 1040   2. 2009 1040 Enter the amount included in line 1 for medical and dental expenses, investment interest, casualty or theft losses, and gambling losses 2. 2009 1040   3. 2009 1040 Is the amount on line 2 less than the amount on line 1? ❑ No. 2009 1040 Stop here. 2009 1040 Your deduction is not limited. 2009 1040 Enter the amount from line 1 above on line 1 of the Deductions and Adjustments Worksheet. 2009 1040  ❑ Yes. 2009 1040 Subtract line 2 from line 1. 2009 1040 3. 2009 1040       4. 2009 1040 Multiply line 3 by 80% (. 2009 1040 80) 4. 2009 1040       5. 2009 1040 Enter your expected AGI 5. 2009 1040       6. 2009 1040 Enter $305,050 If married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately 6. 2009 1040   7. 2009 1040 Is the amount on line 6 less than the amount on line 5? ❑ No. 2009 1040 Stop here. 2009 1040 Your deduction is not limited. 2009 1040 Enter the amount from line 1 above on line 1 of the Deductions and Adjustments Worksheet. 2009 1040  ❑ Yes. 2009 1040 Subtract line 6 from line 5. 2009 1040 7. 2009 1040       8. 2009 1040 Multiply line 7 by 3% (. 2009 1040 03) 8. 2009 1040       9. 2009 1040 Enter the smaller of line 4 or line 8 9. 2009 1040     10. 2009 1040 Subtract line 9 from line 1. 2009 1040 Enter the result here and on line 1 of the Deductions and Adjustments Worksheet 10. 2009 1040     Adjustments to income (worksheet line 4). 2009 1040   Enter your estimated total adjustments to income on line 4 of the Deductions and Adjustments Worksheet. 2009 1040   You can take the following adjustments to income into account when figuring additional withholding allowances for 2014. 2009 1040 These adjustments appear on page 1 of your Form 1040 or 1040A. 2009 1040 Net losses from Schedules C, D, E, and F of Form 1040 and from Part II of Form 4797, line 18b. 2009 1040 Net operating loss carryovers. 2009 1040 Certain business expenses of reservists, performing artists, and fee-based government officials. 2009 1040 Health savings account or medical savings account deduction. 2009 1040 Certain moving expenses. 2009 1040 Deduction for self-employment tax. 2009 1040 Deduction for contributions to self-employed SEP, and qualified SIMPLE plans. 2009 1040 Self-employed health insurance deduction. 2009 1040 Penalty on early withdrawal of savings. 2009 1040 Alimony paid. 2009 1040 IRA deduction. 2009 1040 Student loan interest deduction. 2009 1040 Jury duty pay given to your employer. 2009 1040 Reforestation amortization and expenses. 2009 1040 Deductible expenses related to income reported on line 21 from the rental of personal property engaged in for profit. 2009 1040 Repayment of certain supplemental unemployment benefits. 2009 1040 Contributions to IRC 501(c)(18)(D) pension plans. 2009 1040 Contributions by certain chaplains to IRC 403(b) plans. 2009 1040 Attorney fees and court costs for certain unlawful discrimination claims. 2009 1040 Attorney fees and court costs for certain whistleblower awards. 2009 1040 Estimated amount of decrease in tax attributable to income averaging using Schedule J (Form 1040). 2009 1040 Tax credits (worksheet line 5). 2009 1040   Although you can take most tax credits into account when figuring withholding allowances, the Personal Allowances Worksheet uses only the child and dependent care credit (line F) and the child tax credit (line G). 2009 1040 But you can take these credits and others into account by adding an extra amount on line 5 of the Deductions and Adjustments Worksheet. 2009 1040   If you take the child and dependent care credit into account on line 5, do not use line F. 2009 1040 If you take the child tax credit into account on line 5, do not use line G. 2009 1040   In addition to the child and dependent care credit and the child tax credit, you can generally take into account the following credits. 2009 1040 See the individual tax form instructions for more details. 2009 1040 Foreign tax credit, except any credit that applies to wages not subject to U. 2009 1040 S. 2009 1040 income tax withholding because they are subject to income tax withholding by a foreign country. 2009 1040 See Publication 514, Foreign Tax Credit for Individuals. 2009 1040 Credit for the elderly or the disabled. 2009 1040 See Publication 524, Credit for the Elderly or the Disabled. 2009 1040 Education credits. 2009 1040 See Publication 970, Tax Benefits for Education. 2009 1040 Retirement savings contributions credit (saver's credit). 2009 1040 See Publication 590. 2009 1040 Mortgage interest credit. 2009 1040 See Publication 530, Tax Information for Homeowners. 2009 1040 Adoption credit. 2009 1040 See the Instructions for Form 8839. 2009 1040 Credit for nonrefundable portion of prior year minimum tax if you paid alternative minimum tax in an earlier year. 2009 1040 See the Instructions for Form 8801. 2009 1040 General business credit. 2009 1040 See the Instructions for Form 3800. 2009 1040 Earned income credit. 2009 1040 See Publication 596. 2009 1040 Figuring line 5 entry. 2009 1040   To figure the amount to add on line 5 for tax credits, multiply your estimated total credits by the appropriate number from Table 1-3 . 2009 1040 Example. 2009 1040 You are married and expect to file a joint return for 2014. 2009 1040 Your combined estimated wages are $68,000. 2009 1040 Your estimated tax credits include a child and dependent care credit of $960 and a mortgage interest credit of $1,700 (total credits = $2,660). 2009 1040 In Table 1-3, the number corresponding to your combined estimated wages ($42,001 – $98,000) is 6. 2009 1040 7. 2009 1040 Multiply your total estimated tax credits of $2,660 by 6. 2009 1040 7. 2009 1040 Add the result, $17,822, to the amount you otherwise would show on line 5 of the Deductions and Adjustments Worksheet and enter the total on line 5. 2009 1040 Because you choose to account for your child and dependent care credit this way, do not make an entry on line F of the Personal Allowances Worksheet. 2009 1040 Nonwage income (worksheet line 6). 2009 1040   Enter on line 6 your estimated total nonwage income (other than tax-exempt income). 2009 1040 Nonwage income includes interest, dividends, net rental income, unemployment compensation, alimony, gambling winnings, prizes and awards, hobby income, capital gains, royalties, and partnership income. 2009 1040   If line 6 is more than line 5, you may not have enough income tax withheld from your wages. 2009 1040 See Getting the Right Amount of Tax Withheld , later. 2009 1040 Net deductions and adjustments (worksheet line 8). 2009 1040    If line 7 is less than $3,950, enter “0” on line 8. 2009 1040 If line 7 is $3,950 or more, divide it by $3,950, drop any fraction, and enter the result on line 8. 2009 1040 Example. 2009 1040 If line 7 is $5,200, $5,200 ÷ $3,950 = 1. 2009 1040 32. 2009 1040 Drop the fraction (. 2009 1040 32) and enter “1” on line 8. 2009 1040 Two-Earners/Multiple Jobs Worksheet Complete the Two-Earners/Multiple Jobs Worksheet on page 2 of Form W-4 if you have more than one job or are married and you and your spouse both work and the combined earnings from all jobs are more than $50,000 ($20,000 if married). 2009 1040 Reducing your allowances (worksheet lines 1-3). 2009 1040   On line 1 of the worksheet, enter the number from line H of the Personal Allowances Worksheet (or line 10 of the Deductions and Adjustments Worksheet, if used). 2009 1040 Using Table 1 in the Two-Earners/Multiple Jobs Worksheet, find the number listed beside the amount of your estimated wages for the year from your lowest paying job (or if lower and you are filing jointly, your spouse's job). 2009 1040 Enter that number on line 2. 2009 1040 However, if you are married filing jointly and estimated wages from the highest paying job are $65,000 or less, do not enter more than “3. 2009 1040 ”    Table 1-3. 2009 1040 Deductions and Adjustments Worksheet (Form W-4)—Line 5 a. 2009 1040  Married Filing Jointly or Qualifying Widow(er) If combined income from all sources is:   Multiply credits by: $0 – 42,000 10. 2009 1040 0 $42,001 – 98,000 6. 2009 1040 7 $98,001 – 180,000 4. 2009 1040 0 $180,001 – 270,000 3. 2009 1040 6 $270,001 – 440,000 3. 2009 1040 0 $440,001 – 490,000. 2009 1040 . 2009 1040 . 2009 1040 . 2009 1040 2. 2009 1040 9 $490,001 and over 2. 2009 1040 5 b. 2009 1040  Single If combined income from all sources is:   Multiply credits by: $0 – 19,000 10. 2009 1040 0 $19,001 – 47,000 6. 2009 1040 7 $47,001 – 104,000 4. 2009 1040 0 $104,001 – 205,000 3. 2009 1040 6 $205,001 – 430,000 3. 2009 1040 0 $430,001 and over 2. 2009 1040 5 c. 2009 1040  Head of Household If combined income from all sources is:   Multiply credits by: $0 – 30,000 10. 2009 1040 0 $30,001 – 66,000 6. 2009 1040 7 $66,001 – 150,000 4. 2009 1040 0 $150,001 – 235,000 3. 2009 1040 6 $235,001 – 430,000 3. 2009 1040 0 $430,001 – 460,000 2. 2009 1040 9 $460,001 and over 2. 2009 1040 5 d. 2009 1040  Married Filing Separately   If combined income from all sources is:   Multiply credits by: $0 – 21,000 10. 2009 1040 0 $21,001 – 49,000 6. 2009 1040 7 $49,001 – 90,000 4. 2009 1040 0 $90,001 – 135,000 3. 2009 1040 6 $135,001 – 220,000 3. 2009 1040 0 $220,001 – 245,000 2. 2009 1040 9 $245,001 and over 2. 2009 1040 5   Subtract line 2 from line 1 and enter the result (but not less than zero) on line 3 and on Form W-4, line 5. 2009 1040 If line 1 is more than or equal to line 2, do not use the rest of the worksheet. 2009 1040   If line 1 is less than line 2, enter “0” on Form W-4, line 5. 2009 1040 Then complete lines 4 through 9 of the worksheet to figure the additional withholding needed to avoid underwithholding. 2009 1040 Other amounts owed. 2009 1040   If you expect to owe amounts other than income tax, such as self-employment tax, include them on line 8. 2009 1040 The total is the additional withholding needed for the year. 2009 1040 Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. 2009 1040 You accurately complete all the Form W-4 worksheets that apply to you. 2009 1040 You give your employer a new Form W-4 when changes occur. 2009 1040 But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. 2009 1040 This is most likely to happen in the following situations. 2009 1040 You are married and both you and your spouse work. 2009 1040 You have more than one job at a time. 2009 1040 You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. 2009 1040 You will owe additional amounts with your return, such as self-employment tax. 2009 1040 Your withholding is based on obsolete Form W-4 information for a substantial part of the year. 2009 1040 Your earnings are more than $130,000 if you are single or $180,000 if you are married. 2009 1040 You work only part of the year. 2009 1040 You change the number of your withholding allowances during the year. 2009 1040 You are subject to Additional Medicare Tax or Net Investment Income Tax. 2009 1040 If you anticipate liability for Additional Medicare Tax or Net Investment Income Tax, you may request that your employer withhold an additional amount of income tax withholding on Form W-4. 2009 1040 Part-Year Method If you work only part of the year and your employer agrees to use the part-year withholding method, less tax will be withheld from each wage payment than would be withheld if you worked all year. 2009 1040 To be eligible for the part-year method, you must meet both of the following requirements. 2009 1040 You must use the calendar year (the 12 months from January 1 through December 31) as your tax year. 2009 1040 You cannot use a fiscal year. 2009 1040 You must not expect to be employed for more than 245 days during the year. 2009 1040 To figure this limit, count all calendar days that you are employed (including weekends, vacations, and sick days) beginning with the first day you are on the job for pay and ending with your last day of work. 2009 1040 If you are temporarily laid off for 30 days or less, count those days too. 2009 1040 If you are laid off for more than 30 days, do not count those days. 2009 1040 You will not meet this requirement if you begin working before May 1 and expect to work for the rest of the year. 2009 1040 How to apply for the part-year method. 2009 1040   You must ask your employer in writing to use this method. 2009 1040 The request must state all three of the following. 2009 1040 The date of your last day of work for any prior employer during the current calendar year. 2009 1040 That you do not expect to be employed more than 245 days during the current calendar year. 2009 1040 That you use the calendar year as your tax year. 2009 1040 Cumulative Wage Method If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. 2009 1040 You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. 2009 1040 You must ask your employer in writing to use this method. 2009 1040 To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. 2009 1040 ) since the beginning of the year. 2009 1040 Aids for Figuring Your Withholding IRS Withholding Calculator. 2009 1040   If you had too much or too little income tax withheld from your pay, the IRS provides a withholding calculator on its website. 2009 1040 Go to www. 2009 1040 irs. 2009 1040 gov/Individuals/IRS-Withholding-Calculator. 2009 1040 It can help you determine the correct amount to be withheld any time during the year. 2009 1040 Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. 2009 1040 These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. 2009 1040 New Form W-4. 2009 1040   When you start a new job, your employer should give you a Form W-4 to fill out. 2009 1040 Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. 2009 1040   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. 2009 1040 The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. 2009 1040 No Form W-4. 2009 1040   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. 2009 1040 Repaying withheld tax. 2009 1040   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. 2009 1040 Your employer cannot repay any of the tax previously withheld. 2009 1040 Instead, claim the full amount withheld when you file your tax return. 2009 1040   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. 2009 1040 Your employer can repay the amount that was withheld incorrectly. 2009 1040 If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. 2009 1040 IRS review of your withholding. 2009 1040   Whether you are entitled to claim a certain number of allowances or a complete exemption from withholding is subject to review by the IRS. 2009 1040 Your employer may be required to send a copy of the Form W-4 to the IRS. 2009 1040 There is a penalty for supplying false information on Form W-4. 2009 1040 See Penalties , later. 2009 1040   If the IRS determines that you cannot claim more than a specified number of withholding allowances or claim a complete exemption from withholding, the IRS will issue a notice of the maximum number of withholding allowances permitted (commonly referred to as a “lock-in letter”) to both you and your employer. 2009 1040   The IRS will provide a period of time during which you can dispute the determination before your employer adjusts your withholding. 2009 1040 If you believe that you are entitled to claim complete exemption from withholding or claim more withholding allowances than the maximum number specified by the IRS in the lock-in letter, you must submit a new Form W-4 and a written statement to support your claims to the IRS. 2009 1040 Contact information (a toll-free number and an IRS office address) will be provided in the lock-in letter. 2009 1040 At the end of this period, if you have not responded or if your response is not adequate, your employer will be required to withhold based on the original lock-in letter. 2009 1040   After the lock-in letter takes effect, your employer must withhold tax on the basis of the withholding rate (marital status) and maximum number of withholding allowances specified in that letter. 2009 1040   If you later believe that you are entitled to claim exemption from withholding or more allowances than the IRS determined, you can complete a new Form W-4 and a written statement to support the claims made on the Form W-4 and send them directly to the IRS address shown on the lock-in letter. 2009 1040 Your employer must continue to figure your withholding on the basis of the number of allowances previously determined by the IRS until the IRS advises your employer otherwise. 2009 1040   At any time, either before or after the lock-in letter becomes effective, you may give your employer a new Form W-4 that does not claim complete exemption from withholding and results in more income tax withheld than specified in the lock-in letter. 2009 1040 Your employer must then withhold tax based on this new Form W-4. 2009 1040   Additional information is available at IRS. 2009 1040 gov. 2009 1040 Enter “withholding compliance questions” in the search box. 2009 1040 Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. 2009 1040 The exemption applies only to income tax, not to social security or Medicare tax. 2009 1040 You can claim exemption from withholding for 2014 only if both of the following situations apply. 2009 1040 For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. 2009 1040 For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. 2009 1040 Use Figure 1-A to help you decide whether you can claim exemption from withholding. 2009 1040 Do not use Figure 1-A if you: Are 65 or older, Are blind, Will itemize deductions on your 2014 return, Will claim an exemption for a dependent on your 2014 return, or Will claim any tax credits on your 2014 return. 2009 1040 These situations are discussed later. 2009 1040 Students. 2009 1040   If you are a student, you are not automatically exempt. 2009 1040 If you work only part time or during the summer, you may qualify for exemption from withholding. 2009 1040 Example 1. 2009 1040 You are a high school student and expect to earn $2,500 from a summer job. 2009 1040 You do not expect to have any other income during the year, and your parents will be able to claim an exemption for you on their tax return. 2009 1040 You worked last summer and had $375 federal income tax withheld from your pay. 2009 1040 The entire $375 was refunded when you filed your 2013 return. 2009 1040 Using Figure 1-A, you find that you can claim exemption from withholding. 2009 1040 Please click here for the text description of the image. 2009 1040 Figure 1-A: Exemption From Withholding on Form W-4 Example 2. 2009 1040 The facts are the same as in Example 1, except that you also have a savings account and expect to have $400 interest income during the year. 2009 1040 Using Figure 1-A, you find that you cannot claim exemption from withholding because your unearned income will be more than $350 and your total income will be more than $1,000. 2009 1040    You may have to file a tax return, even if you are exempt from withholding. 2009 1040 See Publication 501 to see whether you must file a return. 2009 1040    Age 65 or older or blind. 2009 1040 If you are 65 or older or blind, use Worksheet 1-3 or Worksheet 1-4, to help you decide whether you can claim exemption from withholding. 2009 1040 Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. 2009 1040 Instead, see Itemizing deductions or claiming exemptions or credits, next. 2009 1040 Itemizing deductions or claiming exemptions or credits. 2009 1040   If you had no tax liability for 2013, and you will: Itemize deductions, Claim an exemption for a dependent, or Claim a tax credit, use the 2014 Estimated Tax Worksheet (also see chapter 2), to figure your 2014 expected tax liability. 2009 1040 You can claim exemption from withholding only if your total expected tax liability (line 13c of the worksheet) is zero. 2009 1040 Claiming exemption from withholding. 2009 1040   To claim exemption, you must give your employer a Form W-4. 2009 1040 Do not complete lines 5 and 6. 2009 1040 Enter “Exempt” on line 7. 2009 1040   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. 2009 1040 If you claim exemption in 2014 but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. 2009 1040   Your claim of exempt status may be reviewed by the IRS. 2009 1040 See IRS review of your withholding , earlier. 2009 1040 An exemption is good for only 1 year. 2009 1040   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. 2009 1040 Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. 2009 1040 The payer can figure withholding on supplemental wages using the same method used for your regular wages. 2009 1040 However, if these payments are identified separately from regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. 2009 1040 Expense allowances. 2009 1040   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. 2009 1040 A nonaccountable plan is a reimbursement arrangement that does not require you to account for, or prove, your business expenses to your employer or does not require you to return your employer's payments that are more than your proven expenses. 2009 1040   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. 2009 1040 Accountable plan. 2009 1040   To be an accountable plan, your employer's reimbursement or allowance arrangement must include all three of the following rules. 2009 1040 Your expenses must have a business connection. 2009 1040 That is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. 2009 1040 You must adequately account to your employer for these expenses within a reasonable period of time. 2009 1040 You must return any excess reimbursement or allowance within a reasonable period of time. 2009 1040    An excess reimbursement or allowance is any amount you are paid that is more than the business-related expenses that you adequately accounted for to your employer. 2009 1040   The definition of reasonable period of time depends on the facts and circumstances of your situation. 2009 1040 However, regardless of those facts and circumstances, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. 2009 1040 You receive an advance within 30 days of the time you have an expense. 2009 1040 You adequately account for your expenses within 60 days after they were paid or incurred. 2009 1040 You return any excess reimbursement within 120 days after the expense was paid or incurred. 2009 1040 You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement. 2009 1040 Nonaccountable plan. 2009 1040   Any plan that does not meet the definition of an accountable plan is considered a nonaccountable plan. 2009 1040 For more information about accountable and nonaccountable plans, see chapter 6 of Publication 463, Travel, Entertainment, Gift, and Car Expenses. 2009 1040 Penalties You may have to pay a penalty of $500 if both of the following apply. 2009 1040 You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. 2009 1040 You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. 2009 1040 There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. 2009 1040 The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. 2009 1040 These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. 2009 1040 A simple error or an honest mistake will not result in one of these penalties. 2009 1040 For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a Form W-4 penalty. 2009 1040 However, see chapter 4 for information on the penalty for underpaying your tax. 2009 1040 Tips The tips you receive while working on your job are considered part of your pay. 2009 1040 You must include your tips on your tax return on the same line as your regular pay. 2009 1040 However, tax is not withheld directly from tip income, as it is from your regular pay. 2009 1040 Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. 2009 1040 Reporting tips to your employer. 2009 1040   If you receive tips of $20 or more in a month while working for any one employer, you must report to your employer the total amount of tips you receive on the job during the month. 2009 1040 The report is due by the 10th day of the following month. 2009 1040   If you have more than one job, make a separate report to each employer. 2009 1040 Report only the tips you received while working for that employer, and only if they total $20 or more for the month. 2009 1040 How employer figures amount to withhold. 2009 1040   The tips you report to your employer are counted as part of your income for the month you report them. 2009 1040 Your employer can figure your withholding in either of two ways. 2009 1040 By withholding at the regular rate on the sum of your pay plus your reported tips. 2009 1040 By withholding at the regular rate on your pay plus a percentage of your reported tips. 2009 1040 Not enough pay to cover taxes. 2009 1040   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. 2009 1040   If you do not give your employer money to cover the shortage, your employer first withholds as much Medicare tax and social security or railroad retirement tax as possible, up to the proper amount, and then withholds income tax up to the full amount of your pay. 2009 1040 If not enough tax is withheld, you may have to pay estimated tax. 2009 1040 When you file your return, you also may have to pay any Medicare and social security tax or railroad retirement tax your employer could not withhold. 2009 1040 Tips not reported to your employer. 2009 1040   On your tax return, you must report all the tips you receive during the year, even tips you do not report to your employer (this includes the value of any noncash tips you received, such as tickets, passes, or other items of value). 2009 1040 Make sure you are having enough tax withheld, or are paying enough estimated tax (see chapter 2), to cover all your tip income. 2009 1040 Allocated tips. 2009 1040   If you work in a large food or beverage establishment, your employer may have to report an allocated amount of tips on your Form W-2. 2009 1040   Your employer should not withhold income tax, Medicare tax, and social security or railroad retirement tax on the allocated amount. 2009 1040 Withholding is based only on your pay plus your reported tips. 2009 1040 Your employer should refund to you any incorrectly withheld tax. 2009 1040 More information. 2009 1040   For more information on the reporting and withholding rules for tip income and on tip allocation, see Publi