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Amend Tax Forms

Amend tax forms 10. Amend tax forms   Self-Employment (SE) Tax Table of Contents Who Must Pay SE Tax?Special Rules and Exceptions Figuring Earnings Subject to SE Tax Farm Optional Method Using Both Optional Methods Reporting Self-Employment Tax The SE tax rules apply no matter how old you are and even if you are already receiving social security and Medicare benefits. Amend tax forms Who Must Pay SE Tax? Generally, you must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. Amend tax forms Use Schedule SE to figure net earnings from self-employment. Amend tax forms Sole proprietor or independent contractor. Amend tax forms   If you are self-employed as a sole proprietor or independent contractor, you generally use Schedule C or C-EZ (Form 1040) to figure your earnings subject to SE tax. Amend tax forms SE tax rate. Amend tax forms    For 2013, the SE tax rate on net earnings is 15. Amend tax forms 3% (12. Amend tax forms 4% social security tax plus 2. Amend tax forms 9% Medicare tax). Amend tax forms Maximum earnings subject to self-employment tax. Amend tax forms    Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. Amend tax forms 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. Amend tax forms   All of your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. Amend tax forms 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. Amend tax forms   If your wages and tips are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. Amend tax forms 4% social security part of the SE tax on any of your net earnings. Amend tax forms However, you must pay the 2. Amend tax forms 9% Medicare part of the SE tax on all your net earnings. Amend tax forms Special Rules and Exceptions Aliens. Amend tax forms   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. Amend tax forms S. Amend tax forms citizens. Amend tax forms Nonresident aliens are not subject to SE tax unless an international social security agreement in effect determines that they are covered under the U. Amend tax forms S. Amend tax forms social security system. Amend tax forms However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. Amend tax forms S. Amend tax forms residents for self-employment tax purposes. Amend tax forms For more information on aliens, see Publication 519, U. Amend tax forms S. Amend tax forms Tax Guide for Aliens. Amend tax forms Child employed by parent. Amend tax forms   You are not subject to SE tax if you are under age 18 and you are working for your father or mother. Amend tax forms Church employee. Amend tax forms    If you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108. Amend tax forms 28 or more in wages from the church or organization. Amend tax forms For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Amend tax forms Fishing crew member. Amend tax forms   If you are a member of the crew on a boat that catches fish or other water life, your earnings are subject to SE tax if all the following conditions apply. Amend tax forms You do not get any pay for the work except your share of the catch or a share of the proceeds from the sale of the catch, unless the pay meets all the following conditions. Amend tax forms The pay is not more than $100 per trip. Amend tax forms The pay is received only if there is a minimum catch. Amend tax forms The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. Amend tax forms You get a share of the catch or a share of the proceeds from the sale of the catch. Amend tax forms Your share depends on the amount of the catch. Amend tax forms The boat's operating crew normally numbers fewer than 10 individuals. Amend tax forms (An operating crew is considered as normally made up of fewer than 10 if the average size of the crew on trips made during the last four calendar quarters is fewer than 10. Amend tax forms ) Notary public. Amend tax forms   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ but are not subject to self-employment tax (see the Instructions for Schedule SE (Form 1040)). Amend tax forms State or local government employee. Amend tax forms   You are subject to SE tax if you are an employee of a state or local government, are paid solely on a fee basis, and your services are not covered under a federal-state social security agreement. Amend tax forms Foreign government or international organization employee. Amend tax forms   You are subject to SE tax if both the following conditions are true. Amend tax forms You are a U. Amend tax forms S. Amend tax forms citizen employed in the United States, Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Virgin Islands by: A foreign government, A wholly-owned agency of a foreign government, or An international organization. Amend tax forms Your employer is not required to withhold social security and Medicare taxes from your wages. Amend tax forms U. Amend tax forms S. Amend tax forms citizen or resident alien residing abroad. Amend tax forms    If you are a self-employed U. Amend tax forms S. Amend tax forms citizen or resident alien living outside the United States, in most cases you must pay SE tax. Amend tax forms Do not reduce your foreign earnings from self-employment by your foreign earned income exclusion. Amend tax forms Exception. Amend tax forms    The United States has social security agreements with many countries to eliminate double taxation under two social security systems. Amend tax forms Under these agreements, you generally must only pay social security and Medicare taxes to the country in which you live. Amend tax forms The country to which you must pay the tax will issue a certificate which serves as proof of exemption from social security tax in the other country. Amend tax forms   For more information, see the Instructions for Schedule SE (Form 1040). Amend tax forms More Than One Business If you have earnings subject to SE tax from more than one trade, business, or profession, you must combine the net profit (or loss) from each to determine your total earnings subject to SE tax. Amend tax forms A loss from one business reduces your profit from another business. Amend tax forms Community Property Income If any of the income from a trade or business, other than a partnership, is community property income under state law, it is included in the earnings subject to SE tax of the spouse carrying on the trade or business. Amend tax forms Gain or Loss Do not include in earnings subject to SE tax a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. Amend tax forms It does not matter whether the disposition is a sale, exchange, or an involuntary conversion. Amend tax forms Lost Income Payments If you are self-employed and reduce or stop your business activities, any payment you receive from insurance or other sources for the lost business income is included in earnings subject to SE tax. Amend tax forms If you are not working when you receive the payment, it still relates to your business and is included in earnings subject to SE tax, even though your business is temporarily inactive. Amend tax forms Figuring Earnings Subject to SE Tax Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. Amend tax forms The regular method. Amend tax forms The nonfarm optional method. Amend tax forms The farm optional method. Amend tax forms You must use the regular method unless you are eligible to use one or both of the optional methods. Amend tax forms Why use an optional method?    You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. Amend tax forms You want to receive credit for social security benefit coverage. Amend tax forms You incurred child or dependent care expenses for which you could claim a credit. Amend tax forms (An optional method may increase your earned income, which could increase your credit. Amend tax forms ) You are entitled to the earned income credit. Amend tax forms (An optional method may increase your earned income, which could increase your credit. Amend tax forms ) You are entitled to the additional child tax credit. Amend tax forms (An optional method may increase your earned income, which could increase your credit. Amend tax forms ) Effects of using an optional method. Amend tax forms   Using an optional method could increase your SE tax. Amend tax forms Paying more SE tax could result in your getting higher benefits when you retire. Amend tax forms   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller tax or no tax using the regular method. Amend tax forms   The optional methods may be used only to figure your SE tax. Amend tax forms To figure your income tax, include your actual earnings in gross income, regardless of which method you use to determine SE tax. Amend tax forms Regular Method Multiply your total earnings subject to SE tax by 92. Amend tax forms 35% (. Amend tax forms 9235) to get your net earnings under the regular method. Amend tax forms See Short Schedule SE, line 4, or Long Schedule SE, line 4a. Amend tax forms Net earnings figured using the regular method are also called actual net earnings. Amend tax forms Nonfarm Optional Method Use the nonfarm optional method only for earnings that do not come from farming. Amend tax forms You may use this method if you meet all the following tests. Amend tax forms You are self-employed on a regular basis. Amend tax forms This means that your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. Amend tax forms The net earnings can be from either farm or nonfarm earnings or both. Amend tax forms You have used this method less than 5 years. Amend tax forms (There is a 5-year lifetime limit. Amend tax forms ) The years do not have to be one after another. Amend tax forms Your net nonfarm profits were: Less than $5,024, and Less than 72. Amend tax forms 189% of your gross nonfarm income. Amend tax forms Net nonfarm profits. Amend tax forms   Net nonfarm profit generally is the total of the amounts from: Line 31, Schedule C (Form 1040), Line 3, Schedule C-EZ (Form 1040), Box 14, code A, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J1, Schedule K-1 (Form 1065-B). Amend tax forms   However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. Amend tax forms Gross nonfarm income. Amend tax forms   Your gross nonfarm income generally is the total of the amounts from: Line 7, Schedule C (Form 1040), Line 1, Schedule C-EZ (Form 1040), Box 14, code C, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J2, Schedule K-1 (Form 1065-B). Amend tax forms Figuring Nonfarm Net Earnings If you meet the three tests explained earlier, use the following table to figure your net earnings from self-employment under the nonfarm optional method. Amend tax forms Table 10-1. Amend tax forms Figuring Nonfarm Net Earnings IF your gross nonfarm income is. Amend tax forms . Amend tax forms . Amend tax forms THEN your net earnings are equal to. Amend tax forms . Amend tax forms . Amend tax forms $6,960 or less Two-thirds of your gross nonfarm income. Amend tax forms More than $6,960 $4,640 Actual net earnings. Amend tax forms   Your actual net earnings are 92. Amend tax forms 35% of your total earnings subject to SE tax (that is, multiply total earnings subject to SE tax by 92. Amend tax forms 35% (. Amend tax forms 9235) to get actual net earnings). Amend tax forms Actual net earnings are equivalent to net earnings figured using the regular method. Amend tax forms Optional net earnings less than actual net earnings. Amend tax forms   You cannot use this method to report an amount less than your actual net earnings from self-employment. Amend tax forms Gross nonfarm income of $6,960 or less. Amend tax forms   The following examples illustrate how to figure net earnings when gross nonfarm income is $6,960 or less. Amend tax forms Example 1. Amend tax forms Net nonfarm profit less than $5,024 and less than 72. Amend tax forms 189% of gross nonfarm income. Amend tax forms Ann Green runs a craft business. Amend tax forms Her actual net earnings from self-employment were $800 in 2011 and $900 in 2012. Amend tax forms She meets the test for being self-employed on a regular basis. Amend tax forms She has used the nonfarm optional method less than 5 years. Amend tax forms Her gross income and net profit in 2013 are as follows: Gross nonfarm income $5,400 Net nonfarm profit $1,200 Ann's actual net earnings for 2013 are $1,108 ($1,200 × . Amend tax forms 9235). Amend tax forms Because her net profit is less than $5,024 and less than 72. Amend tax forms 189% of her gross income, she can use the nonfarm optional method to figure net earnings of $3,600 (2/3 × $5,400). Amend tax forms Because these net earnings are higher than her actual net earnings, she can report net earnings of $3,600 for 2013. Amend tax forms Example 2. Amend tax forms Net nonfarm profit less than $5,024 but not less than 72. Amend tax forms 189% of gross nonfarm income. Amend tax forms Assume that in Example 1 Ann's gross income is $1,000 and her net profit is $800. Amend tax forms She must use the regular method to figure her net earnings. Amend tax forms She cannot use the nonfarm optional method because her net profit is not less than 72. Amend tax forms 189% of her gross income. Amend tax forms Example 3. Amend tax forms Net loss from a nonfarm business. Amend tax forms Assume that in Example 1 Ann has a net loss of $700. Amend tax forms She can use the nonfarm optional method and report $3,600 (2/3 × $5,400) as her net earnings. Amend tax forms Example 4. Amend tax forms Nonfarm net earnings less than $400. Amend tax forms Assume that in Example 1 Ann has gross income of $525 and a net profit of $175. Amend tax forms In this situation, she would not pay any SE tax under either the regular method or the nonfarm optional method because her net earnings under both methods are less than $400. Amend tax forms Gross nonfarm income of more than $6,960. Amend tax forms   The following examples illustrate how to figure net earnings when gross nonfarm income is more than $6,960. Amend tax forms Example 1. Amend tax forms Net nonfarm profit less than $5,024 and less than 72. Amend tax forms 189% of gross nonfarm income. Amend tax forms John White runs an appliance repair shop. Amend tax forms His actual net earnings from self-employment were $10,500 in 2011 and $9,500 in 2012. Amend tax forms He meets the test for being self-employed on a regular basis. Amend tax forms He has used the nonfarm optional method less than 5 years. Amend tax forms His gross income and net profit in 2013 are as follows: Gross nonfarm income $12,000 Net nonfarm profit $1,200 John's actual net earnings for 2013 are $1,108 ($1,200 × . Amend tax forms 9235). Amend tax forms Because his net profit is less than $5,024 and less than 72. Amend tax forms 189% of his gross income, he can use the nonfarm optional method to figure net earnings of $4,640. Amend tax forms Because these net earnings are higher than his actual net earnings, he can report net earnings of $4,640 for 2013. Amend tax forms Example 2. Amend tax forms Net nonfarm profit not less than $5,024. Amend tax forms Assume that in Example 1 John's net profit is $5,400. Amend tax forms He must use the regular method. Amend tax forms He cannot use the nonfarm optional method because his net nonfarm profit is not less than $5,024. Amend tax forms Example 3. Amend tax forms Net loss from a nonfarm business. Amend tax forms Assume that in Example 1 John has a net loss of $700. Amend tax forms He can use the nonfarm optional method and report $4,640 as his net earnings from self-employment. Amend tax forms Farm Optional Method Use the farm optional method only for earnings from a farming business. Amend tax forms See Publication 225 for information about this method. Amend tax forms Using Both Optional Methods If you have both farm and nonfarm earnings, you may be able to use both optional methods to determine your net earnings from self-employment. Amend tax forms To figure your net earnings using both optional methods, you must: Figure your farm and nonfarm net earnings separately under each method. Amend tax forms Do not combine farm earnings with nonfarm earnings to figure your net earnings under either method. Amend tax forms Add the net earnings figured under each method to arrive at your total net earnings from self-employment. Amend tax forms You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. Amend tax forms If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. Amend tax forms Example. Amend tax forms You are a self-employed farmer. Amend tax forms You also operate a retail grocery store. Amend tax forms Your gross income, actual net earnings from self-employment, and optional farm and optional nonfarm net earnings from self-employment are shown in Table 10-2. Amend tax forms Table 10-2. Amend tax forms Example—Farm and Nonfarm Earnings Income and Earnings Farm Nonfarm Gross income $3,000 $6,000 Actual net earnings $900 $500 Optional net earnings (2/3 of gross income) $2,000 $4,000 Table 10-3 shows four methods or combinations of methods you can use to figure net earnings from self-employment using the farm and nonfarm gross income and actual net earnings shown in Table 10-2. Amend tax forms Method 1. Amend tax forms Using the regular method for both farm and nonfarm income. Amend tax forms Method 2. Amend tax forms Using the optional method for farm income and the regular method for nonfarm income. Amend tax forms Method 3. Amend tax forms Using the regular method for farm income and the optional method for nonfarm income. Amend tax forms Method 4. Amend tax forms Using the optional method for both farm and nonfarm income. Amend tax forms Note. Amend tax forms Actual net earnings is the same as net earnings figured using the regular method. Amend tax forms Table 10-3. Amend tax forms Example—Net Earnings Net Earnings 1 2 3 4 Actual  farm $ 900   $ 900   Optional  farm   $ 2,000   $ 2,000 Actual nonfarm $ 500 $ 500     Optional nonfarm     $4,000 $4,000 Amount you can report: $1,400 $2,500 $4,900 $4,640* *Limited to $4,640 because you used both optional methods. Amend tax forms Fiscal Year Filer If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. Amend tax forms Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year. Amend tax forms Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. Amend tax forms Then enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. Amend tax forms Most taxpayers can use Section A—Short Schedule SE to figure their SE tax. Amend tax forms However, certain taxpayers must use Section B—Long Schedule SE. Amend tax forms If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. Amend tax forms Joint return. Amend tax forms   Even if you file a joint return, you cannot file a joint Schedule SE. Amend tax forms This is true whether one spouse or both spouses have earnings subject to SE tax. Amend tax forms If both of you have earnings subject to SE tax, each of you must complete a separate Schedule SE. Amend tax forms However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. Amend tax forms Attach both schedules to the joint return. Amend tax forms More than one business. Amend tax forms   If you have more than one trade or business, you must combine the net profit (or loss) from each business to figure your SE tax. Amend tax forms A loss from one business will reduce your profit from another business. Amend tax forms File one Schedule SE showing the earnings from self-employment, but file a separate Schedule C, C-EZ, or F for each business. Amend tax forms Example. Amend tax forms You are the sole proprietor of two separate businesses. Amend tax forms You operate a restaurant that made a net profit of $25,000. Amend tax forms You also have a cabinetmaking business that had a net loss of $500. Amend tax forms You must file a Schedule C for the restaurant showing your net profit of $25,000 and another Schedule C for the cabinetmaking business showing your net loss of $500. Amend tax forms You file Schedule SE showing total earnings subject to SE tax of $24,500. Amend tax forms Prev  Up  Next   Home   More Online Publications
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Amend tax forms 13. Amend tax forms   Payment of Taxes Table of Contents How To Make Deposits When To Make Deposits Amount of DepositsSafe Harbor Rule Generally, semimonthly deposits of excise taxes are required. Amend tax forms A semimonthly period is the first 15 days of a month (the first semimonthly period) or the 16th through the last day of a month (the second semimonthly period). Amend tax forms However, no deposit is required for the situations listed below; the taxes are payable with Form 720. Amend tax forms The net liability for taxes listed in Part I (Form 720) does not exceed $2,500 for the quarter. Amend tax forms The gas guzzler tax is being paid on a one-time filing. Amend tax forms The liability is for taxes listed in Part II (Form 720), except for the floor stocks tax which generally requires a single deposit. Amend tax forms How To Make Deposits Electronic deposit requirement. Amend tax forms   You must use electronic funds transfer to make excise tax deposits. Amend tax forms Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). Amend 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 deposits on your behalf. Amend tax forms Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Amend tax forms   EFTPS is a free service provided by the Department of Treasury. Amend tax forms Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Amend tax forms To get more information about EFTPS or to enroll in EFTPS, visit www. Amend tax forms eftps. Amend tax forms gov or call 1-800-555-4477. Amend tax forms Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. Amend tax forms    Depositing on time. Amend tax forms For EFTPS deposits to be on time, you must initiate the transaction at least 1 day before the date the deposit is due (before 8:00 p. Amend tax forms m. Amend tax forms Eastern time). Amend tax forms You will automatically be enrolled in EFTPS when you apply for an EIN. Amend tax forms You will receive a separate mailing containing instructions for activating your EFTPS enrollment after you receive your EIN. Amend tax forms When To Make Deposits There are two methods for determining deposits: the regular method and the alternative method. Amend tax forms The regular method applies to all taxes in Part I of Form 720 except for communications and air transportation taxes if deposits are based on amounts billed or tickets sold, rather than on amounts actually collected. Amend tax forms See Alternative method below. Amend tax forms If you are depositing more than one tax under a method, combine all the taxes under the method and make one deposit for the semimonthly period. Amend tax forms Regular method. Amend tax forms   The deposit of tax for a semimonthly period is due by the 14th day following that period. Amend tax forms Generally, this is the 29th day of a month for the first semimonthly period and the 14th day of the following month for the second semimonthly period. Amend tax forms If the 14th or the 29th day falls on a Saturday, Sunday, or legal holiday, you must make the deposit by the immediately preceding day that is not a Saturday, Sunday, or legal holiday. Amend tax forms Alternative method (IRS Nos. Amend tax forms 22, 26, 27, and 28). Amend tax forms   Deposits of communications and air transportation taxes may be based on taxes included in amounts billed or tickets sold during a semimonthly period instead of on taxes actually collected during the period. Amend tax forms Under the alternative method, the tax included in amounts billed or tickets sold during a semimonthly period is considered collected during the first 7 days of the second following semimonthly period. Amend tax forms The deposit of tax is due by the 3rd banking day after the 7th day of that period. Amend tax forms   For an example of the alternative method, see the Instructions for Form 720. Amend tax forms To use the alternative method, you must keep a separate account of the tax included in amounts billed or tickets sold during the month and report on Form 720 the tax included in amounts billed or tickets sold and not the amount of tax that is actually collected. Amend tax forms For example, amounts billed in December, January, and February are considered collected during January, February, and March and are reported on Form 720 as the tax for the 1st quarter of the calendar year. Amend tax forms The separate account for each month must reflect: All items of tax included in amounts billed or tickets sold during the month, and Other items of adjustment relating to tax for prior months (within the statute of limitations on credits or refunds). Amend tax forms The separate account for any month cannot include an adjustment resulting from a refusal to pay or inability to collect unless the refusal has been reported to the IRS. Amend tax forms See Uncollected Tax Report in chapter 4. Amend tax forms The net amount of tax that is considered collected during the semimonthly period must be either: The net amount of tax reflected in the separate account for the corresponding semimonthly period of the preceding month, or One-half of the net amount of tax reflected in the separate account for the preceding month. Amend tax forms Special rule for deposits of taxes in September. Amend tax forms   See the Instructions for Form 720 for a special rule on deposits made in September. Amend tax forms Amount of Deposits Deposits for a semimonthly period generally must be at least 95% of the net tax liability for that period unless the safe harbor rule (discussed later) applies. Amend tax forms Generally, you do not have to make a deposit for a period in which you incurred no tax liability. Amend tax forms Net tax liability. Amend tax forms   Your net tax liability is your tax liability for the period minus any claims on Schedule C (Form 720) for the period. Amend tax forms You may figure your net tax liability for a semimonthly period by dividing your net liability incurred during the calendar month by two. Amend tax forms If you use this method, you must use it for all semimonthly periods in the calendar quarter. Amend tax forms Do not reduce your liability by any amounts from Form 720X. Amend tax forms Safe Harbor Rule The safe harbor rule applies separately to deposits under the regular method and the alternative method. Amend tax forms Persons who filed Form 720 for the look-back quarter (the 2nd calendar quarter preceding the current quarter) are considered to meet the semimonthly deposit requirement if the deposit for each semimonthly period in the current quarter is at least 1/6 (16. Amend tax forms 67%) of the net tax liability reported for the look-back quarter. Amend tax forms For the semimonthly period for which the additional deposit is required, the additional deposit must be at least 11/90 12. Amend tax forms 23%), 10/90 (11. Amend tax forms 12%) for non-EFTPS, of the net tax liability reported for the look-back quarter. Amend tax forms Also, the total deposit for that semimonthly period must be at least 1/6 (16. Amend tax forms 67%) of the net tax liability reported for the look-back quarter. Amend tax forms Exceptions. Amend tax forms   The safe harbor rule does not apply to: The 1st and 2nd quarters beginning on or after the effective date of an increase in the rate of tax unless the deposit of taxes for each semimonthly period in the calendar quarter is at least 1/6 (16. Amend tax forms 67%) of the tax liability you would have had for the look-back quarter if the increased rate of tax had been in effect for that look-back quarter, Any quarter if liability includes any tax not in effect throughout the look-back quarter, or For deposits under the alternative method, any quarter if liability includes any tax not in effect throughout the look-back quarter and the month preceding the look-back quarter. Amend tax forms Requirements to be met. Amend tax forms   For the safe harbor rule to apply, you must: Make each deposit timely at an authorized financial institution, and Pay any underpayment for the current quarter by the due date of the return. Amend tax forms    The IRS may withdraw the right to make deposits of tax using the safe harbor rule from any person not complying with these rules. Amend tax forms Tax rate increases. Amend tax forms   You must modify the safe harbor rule if there has been an increase in the rate of tax. Amend tax forms You must figure your tax liability in the look-back quarter as if the increased rate had been in effect. Amend tax forms To qualify for the safe harbor rule, your deposits cannot be less than 1/6 of the refigured tax liability. Amend tax forms Prev  Up  Next   Home   More Online Publications