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File my state taxes free Publication 80 - Main Content Table of Contents Introduction 1. File my state taxes free Employer Identification Number (EIN) 2. File my state taxes free Who Are Employees?Tests. File my state taxes free Business Owned and Operated by Spouses Farm Crew Leaders 3. File my state taxes free Employee's Social Security Number (SSN)Registering for SSNVS. File my state taxes free 4. File my state taxes free Wages and Other CompensationFringe Benefits 5. File my state taxes free TipsOrdering rule. File my state taxes free 6. File my state taxes free Social Security and Medicare Taxes for FarmworkersThe $150 Test or the $2,500 Test 7. File my state taxes free How To Figure Social Security and Medicare TaxesHousehold and agricultural employers. File my state taxes free 8. File my state taxes free Depositing TaxesPayment with Return When To Deposit How To Deposit Deposit Penalties 9. File my state taxes free Employer's ReturnsReporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Prior Period Adjustments 10. File my state taxes free Wage and Tax StatementsWaiver. File my state taxes free 11. File my state taxes free Federal Unemployment (FUTA) Tax—U. File my state taxes free S. File my state taxes free Virgin Islands Employers Only How To Get Tax Help Introduction This publication is for employers whose principal place of business is in the U. File my state taxes free S. File my state taxes free Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, or who have employees who are subject to income tax withholding for any of these jurisdictions. File my state taxes free Employers and employees in these areas are generally subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA). File my state taxes free See section 6 and section 7 for more information. File my state taxes free This publication summarizes employer responsibilities to collect, pay, and report these taxes. File my state taxes free Whenever the term “United States” is used in this publication, it includes U. File my state taxes free S. File my state taxes free Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. File my state taxes free This publication also provides employers in the U. File my state taxes free S. File my state taxes free Virgin Islands with a summary of their responsibilities in connection with the tax under the Federal Unemployment Tax Act, known as FUTA tax. File my state taxes free See section 11 for more information. File my state taxes free Except as shown in the table in section 12, social security, Medicare, and FUTA taxes apply to every employer who pays taxable wages to employees or who has employees who report tips. File my state taxes free This publication does not include information relating to the self-employment tax (for social security and Medicare of self-employed persons). File my state taxes free See Publication 570, Tax Guide for Individuals With Income From U. File my state taxes free S. File my state taxes free Possessions, if you need this information. File my state taxes free This publication also does not include information relating to income tax withholding. File my state taxes free In U. File my state taxes free S. File my state taxes free Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, contact your local tax department for information about income tax withholding. File my state taxes free See Publication 15 (Circular E), for information on U. File my state taxes free S. File my state taxes free federal income tax withholding. File my state taxes free Comments and suggestions. File my state taxes free   We welcome your comments about this publication and your suggestions for future editions. File my state taxes free   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. File my state taxes free NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File my state taxes free Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File my state taxes free    You can also send us comments from www. File my state taxes free irs. File my state taxes free gov/formspubs. File my state taxes free Click on More Information and then click on Comment on Tax Forms and Publications. File my state taxes free   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. File my state taxes free 1. File my state taxes free Employer Identification Number (EIN) An employer identification number (EIN) is a nine-digit number that the IRS issues. File my state taxes free Its format is 00-0000000. File my state taxes free It is used to identify the tax accounts of employers and certain other organizations and entities that have no employees. File my state taxes free Use your EIN on all of the items that you send to the IRS and SSA for your business. File my state taxes free If you do not have an EIN, you may apply for one online. File my state taxes free Go to IRS. File my state taxes free gov and click on the Apply for an EIN Online link under Tools. File my state taxes free You may also apply for an EIN by calling 1-800-829-4933, (U. File my state taxes free S. File my state taxes free Virgin Islands only) or 267-941-1099 (toll call), or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. File my state taxes free Do not use a social security number (SSN) in place of an EIN. File my state taxes free If you do not have an EIN by the time a return is due, file a paper return and enter “Applied For” and the date that you applied for it in the space shown for the number. File my state taxes free If you took over another employer's business, do not use that employer's EIN. File my state taxes free You should have only one EIN. File my state taxes free If you have more than one, write to the IRS office where you file your returns using the “without a payment” address in the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943. File my state taxes free Or call the IRS Business & Specialty Tax Line at 1-800-829-4933 (U. File my state taxes free S. File my state taxes free Virgin Islands only) or 267-941-1000 (toll call). File my state taxes free Persons who are deaf, hard of hearing, or have a speech disability (TDD/TTY users) in the U. File my state taxes free S. File my state taxes free Virgin Islands may call 1-800-829-4059. File my state taxes free The IRS will tell you which EIN to use. File my state taxes free For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records. File my state taxes free 2. File my state taxes free Who Are Employees? Generally, employees are defined either under common law or under special statutes for certain situations. File my state taxes free See Publication 15-A, Employer's Supplemental Tax Guide, for details on statutory employees and nonemployees. File my state taxes free Employee status under common law. File my state taxes free   Generally, a worker who performs services for you is your employee if you can control what will be done and how it will be done. File my state taxes free This is so even when you give the employee freedom of action. File my state taxes free What matters is that you have the right to control the details of how the services are performed. File my state taxes free See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. File my state taxes free    Generally, people in business for themselves are not employees. File my state taxes free For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. File my state taxes free However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. File my state taxes free   If an employer-employee relationship exists, it does not matter what it is called. File my state taxes free The employee may be called an agent or independent contractor. File my state taxes free It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. File my state taxes free Statutory employees. File my state taxes free   There are also some special definitions of employees for social security, Medicare, and FUTA taxes. File my state taxes free   While the following persons may not be common law employees, they are considered employees for social security and Medicare purposes if the conditions under Tests , discussed later, are met. File my state taxes free a. File my state taxes free   An agent (or commission) driver who delivers food or beverages (other than milk) or picks up and delivers laundry or dry cleaning for someone else. File my state taxes free b. File my state taxes free   A full-time life insurance salesperson who sells primarily for one company. File my state taxes free c. File my state taxes free   A homeworker who works by the guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. File my state taxes free d. File my state taxes free   A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. File my state taxes free The orders must be for merchandise for resale or supplies for use in the customer's business. File my state taxes free The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. File my state taxes free Tests. File my state taxes free   Withhold social security and Medicare taxes from statutory employees' wages if all three of the following tests apply. File my state taxes free The service contract states or implies that almost all of the services are to be performed personally by them. File my state taxes free They have little or no investment in the equipment and property used to perform the services (other than an investment in transportation facilities). File my state taxes free The services are performed on a continuing basis for the same payer. File my state taxes free Persons in a or d, earlier, are also employees for FUTA tax purposes if tests 1 through 3 are met (U. File my state taxes free S. File my state taxes free Virgin Islands only). File my state taxes free   Publication 15-A gives examples of the employer-employee relationship. File my state taxes free Statutory nonemployees. File my state taxes free   Certain direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. File my state taxes free They are generally treated as self-employed for employment tax purposes. File my state taxes free See Publication 15-A for details. File my state taxes free H-2A agricultural workers. File my state taxes free   On Form W-2, do not check box 13 (Statutory employee) as H-2A workers are not statutory employees. File my state taxes free Treating employees as nonemployees. File my state taxes free   If you incorrectly treated an employee as a nonemployee and did not withhold social security and Medicare taxes, you will be liable for the taxes. File my state taxes free See Treating employees as nonemployees in section 2 of Publication 15 (Circular E), for details on Internal Revenue Code section 3509, which may apply. File my state taxes free IRS help. File my state taxes free   If you want the IRS to determine if a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. File my state taxes free Voluntary Classification Settlement Program (VCSP). File my state taxes free   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. File my state taxes free To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). File my state taxes free For more information, visit IRS. File my state taxes free gov and enter “VCSP” in the search box. File my state taxes free Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. File my state taxes free See Publication 541, Partnerships, for more details. File my state taxes free The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. File my state taxes free Exception—Qualified Joint Venture. File my state taxes free   If you and your spouse materially participate as the only members of a jointly owned and operated business, and you file a joint Form 1040, U. File my state taxes free S. File my state taxes free Individual Income Tax Return, or joint Form 1040-SS, U. File my state taxes free S. File my state taxes free Self-Employment Tax Return—U. File my state taxes free S. File my state taxes free Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or Puerto Rico, you can make a joint election to be taxed as a qualified joint venture instead of a partnership. File my state taxes free See the Instructions for Schedule C (Form 1040) or the Instructions for Form 1040-SS. File my state taxes free Spouses electing qualified joint venture status are treated as sole proprietors for federal tax purposes. File my state taxes free Either of the sole proprietor spouses may report and pay the employment taxes due on wages paid to the employees, using the EIN of that spouse’s sole proprietorship. File my state taxes free For more information on qualified joint ventures, visit IRS. File my state taxes free gov and enter “qualified joint venture” in the search box. File my state taxes free Farm Crew Leaders You are an employer of farmworkers if you are a crew leader. File my state taxes free A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. File my state taxes free If there is no written agreement between you and the farm operator stating that you are his or her employee, and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. File my state taxes free 3. File my state taxes free Employee's Social Security Number (SSN) An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. File my state taxes free You must get each employee's name and SSN and enter them on Form W-2AS, W-2CM, W-2GU, or W-2VI. File my state taxes free If you do not report the employee's correct name and SSN, you may owe a penalty unless you have reasonable cause. File my state taxes free See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. File my state taxes free Employee's social security card. File my state taxes free   You should ask the employee to show you his or her social security card. File my state taxes free The employee may show the card if it is available. File my state taxes free Do not accept a social security card that says “Not valid for employment. File my state taxes free ” A social security number issued with this legend does not permit employment. File my state taxes free You may, but you are not required to, photocopy the social security card if the employee provides it. File my state taxes free If an employee does not have a social security card or needs a new one, the employee should apply for one on Form SS-5 and submit the necessary documentation. File my state taxes free The employee must complete and sign Form SS-5; it cannot be filed by the employer. File my state taxes free You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. File my state taxes free If your employee has applied for an SSN but has not received the card before you must file your Form W-2 reports, and you are filing your reports on paper, enter “Applied For” in box d. File my state taxes free Enter all zeroes in the SSN field if filing electronically. File my state taxes free When the employee receives the SSN, file Copy A of Form W-2c with SSA to show the employee's SSN. File my state taxes free Correctly record the employee's name and SSN. File my state taxes free   Record the name and number of each employee as they appear on his or her social security card. File my state taxes free If the name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. File my state taxes free Continue to use the old name until the employee shows you the replacement social security card with the corrected name. File my state taxes free   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2AS, W-2CM, W-2GU, or W-2VI. File my state taxes free It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. File my state taxes free Where to get and file social security number application forms. File my state taxes free    U. File my state taxes free S. File my state taxes free Virgin Islands—U. File my state taxes free S. File my state taxes free Social Security Administration, 8000 Nisky Center, First Floor, Suite 2, St. File my state taxes free Thomas, VI 00802. File my state taxes free  Guam—U. File my state taxes free S. File my state taxes free Social Security Administration, 655 Harmon Loop Road, Suite 300, Dededo, GU 96929. File my state taxes free  American Samoa—U. File my state taxes free S. File my state taxes free Social Security Administration, Pago Plaza, Suite 117, Pago Pago, AS 96799. File my state taxes free  Commonwealth of the Northern Mariana Islands—U. File my state taxes free S. File my state taxes free Social Security Administration, MH Building, Suite 201, Saipan, MP 96950. File my state taxes free Verification of social security numbers. File my state taxes free   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. File my state taxes free Visit www. File my state taxes free socialsecurity. File my state taxes free gov/employer/ssnv. File my state taxes free htm for more information. File my state taxes free Registering for SSNVS. File my state taxes free   You must register online and receive authorization from your employer to use SSNVS. File my state taxes free To register, visit SSA's website at www. File my state taxes free ssa. File my state taxes free gov/employer and click on the Business Services Online link. File my state taxes free Follow the registration instructions to obtain a user identification (ID) and password. File my state taxes free You will need to provide the following information about yourself and your company. File my state taxes free Name. File my state taxes free SSN. File my state taxes free Date of birth. File my state taxes free Type of employer. File my state taxes free EIN. File my state taxes free Company name, address, and telephone number. File my state taxes free Email address. File my state taxes free   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. File my state taxes free You must enter the activation code online to use SSNVS. File my state taxes free 4. File my state taxes free Wages and Other Compensation Generally, all wages are subject to social security and Medicare tax (and FUTA tax for U. File my state taxes free S. File my state taxes free Virgin Islands employers). File my state taxes free However, wages subject to social security tax and FUTA tax are limited by a wage base amount that you pay to each employee for the year. File my state taxes free The wage base for social security tax is $117,000 for 2014. File my state taxes free After you pay $117,000 to an employee in 2014, including tips, do not withhold social security tax on any amount that you later pay to the employee for the year. File my state taxes free The wage base for FUTA tax is $7,000 for 2014. File my state taxes free All wages are subject to Medicare tax. File my state taxes free The wages may be in cash or in other forms, such as an automobile for personal use. File my state taxes free Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. File my state taxes free It does not matter how payments are measured or paid. File my state taxes free See the table in section 12 for exceptions to social security, Medicare, and FUTA taxes on wages. File my state taxes free See section 5 and section 6 for a discussion of how the rules apply to tips and farmworkers. File my state taxes free Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies. File my state taxes free Special rules apply to the reporting of third-party sick pay. File my state taxes free For details, see Publication 15-A. File my state taxes free Determine the value of noncash pay (such as goods, lodging, and meals) by its fair market value. File my state taxes free However, see Fringe Benefits , later in this section. File my state taxes free Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes. File my state taxes free Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is taxed as ordinary wages in the year paid. File my state taxes free For information on reporting back pay to the Social Security Administration, see Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration. File my state taxes free Travel and business expenses. File my state taxes free   Payments to your employee for travel and other necessary expenses of your business generally are included in taxable wages if (a) your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, or (b) you advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount that he or she does not substantiate. File my state taxes free Sick pay. File my state taxes free   In general, sick pay is any amount that you pay, under a plan that you take part in, to an employee because of sickness or injury. File my state taxes free These amounts are sometimes paid by a third party, such as an insurance company. File my state taxes free In either case, these payments are subject to social security and Medicare taxes (and FUTA tax for U. File my state taxes free S. File my state taxes free Virgin Islands employers). File my state taxes free Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. File my state taxes free Publication 15-A explains the employment tax rules that apply to sick pay, disability benefits, and similar payments to employees. File my state taxes free Fringe Benefits Generally, fringe benefits are includible in the gross income of an employee and are subject to employment taxes. File my state taxes free Examples of fringe benefits include the use of an automobile, aircraft flights that you provide, free or discounted commercial airline flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. File my state taxes free In general, the amount included in the employee's income is the excess of the fair market value of the benefit over the sum of any amount paid for it by the employee and any amount excluded by law. File my state taxes free For more information, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. File my state taxes free When fringe benefits are treated as paid. File my state taxes free   You can choose to treat certain noncash fringe benefits (including personal use of an automobile provided by you) as paid by the pay period, quarter, or on any other basis that you choose, but they must be treated as paid at least annually. File my state taxes free You do not have to make a formal choice of payment dates or notify the IRS. File my state taxes free You do not have to use the same basis for all employees. File my state taxes free You may change methods as often as you like, as long as all benefits provided in a calendar year are treated as paid no later than December 31 of the calendar year. File my state taxes free However, see Special accounting rule for fringe benefits provided during November and December , later in this section. File my state taxes free   You can treat the value of a single taxable noncash fringe benefit as paid on one or more dates in the same calendar year, even if the employee gets the entire benefit at one time. File my state taxes free However, once you elect the payment dates, you must report the taxes on your return in the same tax period in which you treated them as paid. File my state taxes free This election does not apply to a fringe benefit where real property or investment personal property is transferred. File my state taxes free Withholding social security and Medicare taxes on fringe benefits. File my state taxes free   You add the value of fringe benefits to regular wages for a payroll period and figure social security and Medicare taxes on the total. File my state taxes free   If you withhold less than the required amount of social security and Medicare taxes from the employee in a calendar year but report and pay the proper amount, you may recover the taxes from the employee. File my state taxes free Depositing taxes on fringe benefits. File my state taxes free   Once you choose payment dates for taxable noncash fringe benefits, you must deposit taxes in the same deposit period that you treat the fringe benefits as paid. File my state taxes free You may make a reasonable estimate of the value of the fringe benefits. File my state taxes free In general, the value of taxable noncash fringe benefits provided in a calendar year must be determined by January 31 of the following year. File my state taxes free   You may claim a refund of overpayments or elect to have any overpayment applied to the next employment tax return. File my state taxes free If deposits are underpaid, see Deposit Penalties in section 8. File my state taxes free Valuation of vehicles provided to employees. File my state taxes free    If you provide a vehicle to your employees, you may either determine the actual value of the benefit for the entire calendar year, taking into account the business use of the vehicle, or consider the entire use for the calendar year as personal and include 100% of the value of the vehicle in the employee's income. File my state taxes free For reporting information to employees, see the box 14 instructions in the General Instructions for Forms W-2 and W-3. File my state taxes free Special accounting rule for fringe benefits provided during November and December. File my state taxes free   You may choose to treat the value of taxable noncash fringe benefits provided during November and December as paid in the next year. File my state taxes free However, this applies only to those benefits that you actually provided during November and December, not to those you merely treated as paid during those months. File my state taxes free   If you use this rule, you must notify each affected employee between the time of the employee's last paycheck of the calendar year and at or near the time that you give the employee Form W-2AS, W-2CM, W-2GU, or W-2VI. File my state taxes free If you use the special accounting rule, your employee must also use it for the same period that you use it. File my state taxes free You cannot use this rule for a fringe benefit of real property or tangible or intangible real property of a kind normally held for investment that is transferred to your employee. File my state taxes free 5. File my state taxes free Tips Tips that your employee receives from customers are generally subject to social security and Medicare withholding. File my state taxes free Your employee must report cash tips to you by the 10th of the month after the month that the tips are received. File my state taxes free The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. File my state taxes free Both directly and indirectly tipped employees must report tips to you. File my state taxes free The report should not include tips that the employee paid out to other employees. File my state taxes free No report is required for months when tips are less than $20. File my state taxes free Your employees report tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. File my state taxes free They may also use Form 4070A, Employee's Daily Record of Tips, to keep a record of their tips. File my state taxes free Both forms are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer, available at IRS. File my state taxes free gov. File my state taxes free The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period that the report covers, and The total tips received during the month or period. File my state taxes free You are permitted to establish a system for electronic tip reporting by employees. File my state taxes free See Regulations section 31. File my state taxes free 6053-1(d). File my state taxes free Collecting taxes on tips. File my state taxes free   You must collect the employee social security and Medicare taxes on the employee's tips. File my state taxes free You can also collect these taxes from the employee's wages or from other funds that he or she makes available. File my state taxes free Stop collecting the employee social security tax when his or her total wages and tips for 2014 reach $117,000. File my state taxes free Collect the employee Medicare tax for the whole year on all wages and tips. File my state taxes free   You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the wage base limit. File my state taxes free You are responsible for the employer Medicare tax for the whole year on all wages and tips. File my state taxes free File Form 941-SS (or Form 944) to report withholding and employer taxes on tips. File my state taxes free The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. File my state taxes free Ordering rule. File my state taxes free   If, by the 10th of the month after the month you received an employee's report on tips, you do not have enough employee funds available to deduct the employee social security and Medicare tax on tips, you no longer have to collect it and are not liable for it. File my state taxes free Reporting tips. File my state taxes free   Report tips and any collected and uncollected social security in boxes 1, 5, 7, and 12 on Forms W-2AS, W-2CM, W-2GU, or W-2VI and on Form 941-SS, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). File my state taxes free Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. File my state taxes free Report an adjustment on Form 941-SS, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. File my state taxes free The table in section 12 shows how tips are treated for FUTA tax purposes. File my state taxes free   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. File my state taxes free See Revenue Ruling 2012-18, 2012-26 I. File my state taxes free R. File my state taxes free B. File my state taxes free 1032, available at www. File my state taxes free irs. File my state taxes free gov/irb/2012-26_IRB/ar07. File my state taxes free html. File my state taxes free 6. File my state taxes free Social Security and Medicare Taxes for Farmworkers The tests described below apply only to services that are defined as agricultural labor (farmwork). File my state taxes free In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. File my state taxes free For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. File my state taxes free Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. File my state taxes free A “share farmer” working for you is not your employee. File my state taxes free However, the share farmer may be subject to self-employment tax. File my state taxes free In general, share farming is an arrangement in which certain commodity products are shared between the farmer and the owner (or tenant) of the land. File my state taxes free For details, see Regulations section 31. File my state taxes free 3121(b)(16)-1. File my state taxes free The $150 Test or the $2,500 Test All cash wages that you pay to any employee for farmwork are subject to social security and Medicare taxes if either of the following two tests is met. File my state taxes free You pay cash wages to the employee of $150 or more in a year (count all cash wages paid on a time, piecework, or other basis) for farmwork. File my state taxes free The $150 test applies separately to each farmworker that you employ. File my state taxes free If you employ a family of workers, each member is treated separately. File my state taxes free Do not count wages paid by other employers. File my state taxes free The total that you pay for farmwork (cash and noncash) to all of your employees is $2,500 or more during the year. File my state taxes free Exceptions. File my state taxes free   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. File my state taxes free   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. File my state taxes free 7. File my state taxes free How To Figure Social Security and Medicare Taxes The tax rate for social security is 6. File my state taxes free 2% (amount withheld) each for the employer and employee (12. File my state taxes free 4% total). File my state taxes free The social security wage base limit is $117,000. File my state taxes free The tax rate for Medicare is 1. File my state taxes free 45% (amount withheld) each for the employee and employer (2. File my state taxes free 9% total). File my state taxes free There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. File my state taxes free Multiply each wage payment by these percentages to figure the tax to withhold from employees. File my state taxes free Employers report both the employee and employer shares on Forms 941-SS, 944, or Form 943 (farm employment). File my state taxes free See section 5 for information on tips. File my state taxes free Additional Medicare Tax withholding. File my state taxes free   In addition to withholding Medicare tax at 1. File my state taxes free 45%, you must withhold a 0. File my state taxes free 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. File my state taxes free You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. File my state taxes free Additional Medicare Tax is only imposed on the employee. File my state taxes free There is no employer share of Additional Medicare Tax. File my state taxes free All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. File my state taxes free   For more information on what wages are subject to Medicare tax, see the chart Special Rules for Various Types of Employment and Payments in section 12. File my state taxes free For more information on Additional Medicare Tax, visit IRS. File my state taxes free gov and enter “Additional Medicare Tax” in the search box. File my state taxes free Deducting the tax. File my state taxes free   Deduct the employee tax from each wage payment. File my state taxes free If you are not sure that the wages that you pay to a farmworker during the year will be taxable, you may either deduct the tax when you make the payments or wait until the $2,500 test or the $150 test explained in section 6 has been met. File my state taxes free Employee's portion of taxes paid by employer. File my state taxes free   If you pay your employee's social security and Medicare taxes without deducting them from the employee's pay, you must include the amount of the payments in the employee's wages for social security and Medicare taxes. File my state taxes free This increase in the employee's wage payment for your payment of the employee's social security and Medicare taxes is also subject to employee social security and Medicare taxes. File my state taxes free This again increases the amount of the additional taxes that you must pay. File my state taxes free Household and agricultural employers. File my state taxes free   This discussion does not apply to household and agricultural employers. File my state taxes free If you pay a household or agricultural employee's social security and Medicare taxes, these payments must be included in the employee's wages. File my state taxes free However, this wage increase due to the tax payments is not subject to social security or Medicare taxes as discussed in this section. File my state taxes free See Publication 15-A for details. File my state taxes free Sick pay payments. File my state taxes free   Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. File my state taxes free For details on third-party payers of sick pay, see Publication 15-A. File my state taxes free 8. File my state taxes free Depositing Taxes You must deposit social security and Medicare taxes if your tax liability (Form 941-SS, line 10; Form 944, line 7; or Form 943, line 11) is $2,500 or more for the tax return period. File my state taxes free You must make the deposit by electronic funds transfer. File my state taxes free For more information about electronic funds transfers, see How To Deposit , later in this section. File my state taxes free Payment with Return $2,500 rule. File my state taxes free   Instead of making deposits during the current quarter, you can pay your total Form 941-SS tax liability when you timely file Form 941-SS if: Your total Form 941-SS tax liability for either the current quarter or the preceding quarter is less than $2,500 and You do not incur a $100,000 next-day deposit obligation during the current quarter. File my state taxes free   If you are not sure your total liability for the current quarter will be less than $2,500, (and your liability for the preceding quarter was not less than $2,500), make deposits using the semiweekly or monthly rules so you won't be subject to failure to deposit penalties. File my state taxes free Employers who have been notified to file Form 944 can pay their tax liability due for the fourth quarter with Form 944, if their fourth quarter tax liability is less than $2,500. File my state taxes free Employers must have deposited any tax liability due for the first, second, and third quarters, according to the deposit rules, in order to avoid failure-to-deposit penalties for deposits due during those quarters. File my state taxes free Only monthly schedule depositors are allowed to make an Accuracy of Deposits Rule payment with the return. File my state taxes free Semiweekly schedule depositors must timely deposit the amount. File my state taxes free See Accuracy of Deposits Rule and How To Deposit, later in this section. File my state taxes free When To Deposit Under the rules discussed below, the only difference between farm and nonfarm workers' employment tax deposit rules is the lookback period. File my state taxes free Therefore, farm and nonfarm workers are discussed together except where noted. File my state taxes free Depending on your total taxes reported during a lookback period (discussed later), you are either a monthly schedule depositor or a semiweekly schedule depositor. File my state taxes free The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often you pay your employees or how often you are required to make deposits. File my state taxes free The terms identify which set of rules that you must follow when a tax liability arises (for example, when you have a payday). File my state taxes free You will need to determine your deposit schedule for a calendar year based on the total employment taxes reported on Forms 941-SS, line 10; Form 944, line 7; or Form 943, line 9, for your lookback period (defined below). File my state taxes free If you filed both Forms 941-SS and 941 during the lookback period, combine the tax liabilities for these returns for purposes of determining your deposit schedule. File my state taxes free Determine your deposit schedule for Form 943 separately from Forms 941-SS and 941. File my state taxes free Lookback period for employers of nonfarm workers. File my state taxes free   The lookback period for Form 941-SS (or Form 941) consists of four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. File my state taxes free These four quarters are your lookback period even if you did not report any taxes for any of the quarters. File my state taxes free For 2014, the lookback period is July 1, 2012, through June 30, 2013. File my state taxes free    Table 1. File my state taxes free Lookback Period for Calendar Year 2014 Lookback Period July 1, 2012 Oct. File my state taxes free 1, 2012 Jan. File my state taxes free 1, 2013 Apr. File my state taxes free 1, 2013 through through through through Sep. File my state taxes free 30, 2012 Dec. File my state taxes free 31, 2012 Mar. File my state taxes free 31, 2013 June 30, 2013    The lookback period for Form 944 is the second calendar year preceding the current calendar year. File my state taxes free For example, the lookback period for calendar year 2014 is calendar year 2012. File my state taxes free In addition, for employers who filed Form 944 for 2012 or for 2013 and will file Form 941-SS (or Form 941) for 2014, the lookback period for 2014 is the second calendar year preceding the current calendar year, that is, 2012. File my state taxes free Lookback period for employers of farmworkers. File my state taxes free   The lookback period for Form 943 is the second calendar year preceding the current calendar year. File my state taxes free The lookback period for calendar year 2014 is calendar year 2012. File my state taxes free Adjustments to lookback period taxes. File my state taxes free   To determine your taxes for the lookback period, use only the tax that you reported on the original returns (Forms 941-SS, 943, or 944). File my state taxes free Do not include any adjustments shown on Form 941-X, 943-X, or 944-X. File my state taxes free Example. File my state taxes free   An employer originally reported total taxes of $45,000 for the lookback period. File my state taxes free The employer discovered during January 2014 that the tax reported during the lookback period was understated by $10,000 and corrected this error by filing Form 941-X. File my state taxes free The employer is a monthly schedule depositor for 2014 because the lookback period tax liabilities are based on the amounts originally reported, and they were $50,000 or less. File my state taxes free Deposit Period The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. File my state taxes free For monthly schedule depositors, the deposit period is a calendar month. File my state taxes free The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. File my state taxes free Monthly Deposit Schedule If your total tax reported for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. File my state taxes free You must deposit taxes on wage payments made during a calendar month by the 15th day of the following month. File my state taxes free New employers. File my state taxes free   Your tax liability for any quarter in the lookback period before the date you started or acquired your business is considered to be zero. File my state taxes free Therefore, you are a monthly schedule depositor for the first calendar year of your business (but see the $100,000 Next-Day Deposit Rule , later in this section). File my state taxes free Semiweekly Deposit Schedule If your total tax reported for the lookback period is more than $50,000, you are a semiweekly schedule depositor for the current year. File my state taxes free If you are a semiweekly schedule depositor, you must deposit on Wednesday and/or Friday, depending on what day of the week that you make wage payments, as follows. File my state taxes free Deposit taxes on wage payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. File my state taxes free Deposit taxes on wage payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. File my state taxes free Semiweekly depositors are generally not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule , discussed later in this section, applies. File my state taxes free For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 on the following Wednesday. File my state taxes free If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. File my state taxes free Semiweekly deposit period spanning two quarters. File my state taxes free   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. File my state taxes free Example. File my state taxes free   If you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. File my state taxes free Both deposits will be due on Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). File my state taxes free Examples of Monthly and Semiweekly Schedules Employers of nonfarm workers. File my state taxes free   Rose Co. File my state taxes free reported Form 941-SS taxes as follows: 2013 Lookback Period 3rd Quarter 2011 $12,000 4th Quarter 2011 12,000 1st Quarter 2012 12,000 2nd Quarter 2012 12,000   $48,000 2014 Lookback Period 3rd Quarter 2012 $12,000 4th Quarter 2012 12,000 1st Quarter 2013 12,000 2nd Quarter 2013 15,000   $51,000 Rose Co. File my state taxes free is a monthly schedule depositor for 2013 because its taxes for the four quarters in its lookback period ($48,000 for the 3rd quarter of 2011 through the 2nd quarter of 2012) were not more than $50,000. File my state taxes free However, for 2014, Rose Co. File my state taxes free is a semiweekly schedule depositor because the total taxes for the four quarters in its lookback period ($51,000 for the 3rd quarter of 2012 through the 2nd quarter of 2013) exceeded $50,000. File my state taxes free Employers of farmworkers. File my state taxes free   Red Co. File my state taxes free reported taxes on its 2012 Form 943, line 9, of $48,000. File my state taxes free On its 2013 Form 943, line 11, it reported taxes of $60,000. File my state taxes free   Red Co. File my state taxes free is a monthly schedule depositor for 2014 because its taxes for its lookback period ($48,000 for calendar year 2012) were not more than $50,000. File my state taxes free However, for 2015, Red Co. File my state taxes free is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. File my state taxes free New agricultural employers. File my state taxes free   New agricultural employers filing Form 943 are monthly schedule depositors for the first and second calendar years of their business because their taxes for the lookback period (2 years) are considered to be zero. File my state taxes free However, see the $100,000 Next-Day Deposit Rule , later in this section. File my state taxes free Deposits on Business Days Only If a deposit due date falls on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. File my state taxes free A business day is any day other than a Saturday, Sunday, or legal holiday. File my state taxes free For example, if a deposit is required to be made on Friday, but Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). File my state taxes free Semiweekly schedule depositors have at least 3 business days to make a deposit. File my state taxes free If any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the required deposit. File my state taxes free For example, if a semiweekly schedule depositor accumulated taxes for payments made on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). File my state taxes free Legal holiday. File my state taxes free   The term “legal holiday” means any legal holiday in the District of Columbia. File my state taxes free Legal holidays for 2014 are listed below. File my state taxes free January 1—New Year's Day January 20—Birthday of Martin Luther King, Jr. File my state taxes free February 17—Washington's Birthday April 16—District of Columbia Emancipation Day May 26—Memorial Day July 4—Independence Day September 1—Labor Day October 13—Columbus Day November 11—Veterans Day November 27—Thanksgiving Day December 25—Christmas Day Application of Monthly and Semiweekly Schedules The following examples illustrate the procedure for determining the deposit date under the two different deposit schedules. File my state taxes free Monthly schedule example. File my state taxes free   Spruce Co. File my state taxes free is a monthly schedule depositor with seasonal employees. File my state taxes free It paid wages each Friday during August but did not pay any wages during September. File my state taxes free Under the monthly deposit schedule, Spruce Co. File my state taxes free must deposit the combined tax liabilities for the four August paydays by September 15. File my state taxes free Spruce Co. File my state taxes free does not have a deposit requirement for September (due by October 15) because no wages were paid and, therefore, it did not have a tax liability for September. File my state taxes free Semiweekly schedule example. File my state taxes free   Green, Inc. File my state taxes free is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. File my state taxes free Although Green, Inc. File my state taxes free , has a semiweekly deposit schedule, it will deposit just once a month because it pays wages only once a month. File my state taxes free The deposit, however, will be made under the semiweekly deposit schedule as follows: Green, Inc. File my state taxes free ’s tax liability for the April 25, 2014 (Friday), payday must be deposited by April 30, 2014 (Wednesday). File my state taxes free Under the semiweekly deposit schedule, liabilities for wages paid on Wednesday through Friday must be deposited by the following Wednesday. File my state taxes free $100,000 Next-Day Deposit Rule If you accumulate taxes of $100,000 or more on any day during a deposit period, you must deposit by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. File my state taxes free For purposes of the $100,000 rule, do not continue accumulating taxes after the end of a deposit period. File my state taxes free For example, if a semiweekly schedule depositor has accumulated taxes of $95,000 on Tuesday and $10,000 on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. File my state taxes free Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. File my state taxes free However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. File my state taxes free For example, Fir Co. File my state taxes free is a semiweekly schedule depositor. File my state taxes free On Monday, Fir Co. File my state taxes free accumulates taxes of $110,000 and must deposit on Tuesday, the next business day. File my state taxes free On Tuesday, Fir Co. File my state taxes free accumulates additional taxes of $30,000. File my state taxes free Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. File my state taxes free does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). File my state taxes free If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day during a month, you become a semiweekly schedule depositor on the next day and remain so for the remainder of the calendar year and for the following calendar year. File my state taxes free Example. File my state taxes free   Elm, Inc. File my state taxes free started its business on May 1, 2014. File my state taxes free On May 8, it paid wages for the first time and accumulated a tax liability of $40,000. File my state taxes free On Friday, May 9, Elm, Inc. File my state taxes free paid wages and accumulated a liability of $60,000, making its accumulated Form 941-SS tax liability total $100,000. File my state taxes free Elm, Inc. File my state taxes free must deposit $100,000 by Monday, May 12, the next business day. File my state taxes free Because this was the first year of its business, the tax liability for its lookback period is considered to be zero, and it would be a monthly schedule depositor based on the lookback rules. File my state taxes free However, because Elm, Inc. File my state taxes free accumulated $100,000 on May 9, it became a semiweekly schedule depositor on May 10. File my state taxes free It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. File my state taxes free Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. File my state taxes free However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. File my state taxes free Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited, and The deposit shortfall is paid or deposited by the shortfall makeup date as described below. File my state taxes free Makeup date for deposit shortfall: Monthly schedule depositor. File my state taxes free Deposit or pay the shortfall by the due date of your Form 941-SS, 944, or 943 for the period in which the shortfall occurred. File my state taxes free You may pay the shortfall with your return even if the amount is $2,500 or more. File my state taxes free Semiweekly schedule depositor. File my state taxes free Deposit by the earlier of: The first Wednesday or Friday (whichever comes first) that comes on or after the 15th of the month following the month in which the shortfall occurred, or The return due date for the period in which the shortfall occurred. File my state taxes free For example, if a semiweekly schedule depositor filing Form 941-SS has a deposit shortfall during July 2014, the shortfall makeup date is August 15, 2014 (Friday). File my state taxes free However, if the shortfall occurred on the required April 2 (Wednesday), deposit date for a March 28 (Friday) pay date, the return due date for the March 28 pay date (April 30) would come before the May 16 (Friday) shortfall makeup date. File my state taxes free In this case, the shortfall must be deposited by April 30, 2014. File my state taxes free Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941-SS or 944 taxes). File my state taxes free Form 943 taxes and Form 941-SS (or Form 944) taxes are not combined for purposes of applying any of the deposit rules. File my state taxes free If a deposit is due, deposit the Form 941-SS (or Form 944) taxes and Form 943 taxes separately, as discussed next. File my state taxes free How To Deposit You must deposit employment taxes by electronic funds transfer. File my state taxes free See Payment with Return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. File my state taxes free Electronic deposit requirement. File my state taxes free   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). File my state taxes free Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). File my state taxes free If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. File my state taxes free   EFTPS is a free service provided by the Department of the Treasury. File my state taxes free To get more information or to enroll in EFTPS, call 1-800-555-4477 (U. File my state taxes free S. File my state taxes free Virgin Islands only) or 303-967-5916 (toll call). File my state taxes free You can also visit the EFTPS website at www. File my state taxes free eftps. File my state taxes free gov. File my state taxes free Additional information about EFTPS is also available in Publication 966. File my state taxes free When you receive your EIN. File my state taxes free   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in EFTPS. File my state taxes free You will receive information about Express Enrollment in your Employer Identification Number (EIN) Package and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. File my state taxes free Follow the steps in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your payroll tax deposits. File my state taxes free If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. File my state taxes free Deposit record. File my state taxes free   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. File my state taxes free The number can be used as a receipt or to trace the payment. File my state taxes free Depositing on time. File my state taxes free   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. File my state taxes free m. File my state taxes free Eastern time the day before the date the deposit is due. File my state taxes free If you use a third party to make deposits on your behalf, they may have different cutoff times. File my state taxes free Same-day payment option. File my state taxes free   If you fail to initiate a deposit transaction on EFTPS by 8 p. File my state taxes free m. File my state taxes free Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). File my state taxes free To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. File my state taxes free Please check with your financial institution regarding availability, deadlines, and costs. File my state taxes free Your financial institution may charge you a fee for payments made this way. File my state taxes free To learn more about the information you will need to provide your financial institution to make a same-day wire payment, please visit www. File my state taxes free eftps. File my state taxes free gov to download the Same-Day Payment Worksheet. File my state taxes free How to claim credit for overpayments. File my state taxes free   If you deposited more than the right amount of taxes for a tax period, you can choose on Form 941-SS, 941, 944, or 943 for that tax period to have the overpayment refunded or applied as a credit to your next return. File my state taxes free Do not ask EFTPS to request a refund from the IRS for you. File my state taxes free Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits of less than the required amount. File my state taxes free The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. File my state taxes free The IRS may also waive penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. File my state taxes free For amounts not properly or timely deposited, the penalty rates are as follows. File my state taxes free 2% - Deposits made 1 to 5 days late. File my state taxes free 5% - Deposits made 6 to 15 days late. File my state taxes free 10% - Deposits made 16 or more days late. File my state taxes free Also applies to amounts paid within 10 days of the date of the first notice that the IRS sent asking for the tax due. File my state taxes free 10% - Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return (but see Payment with Return , earlier in this section, for exceptions). File my state taxes free 15% - Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. File my state taxes free Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. File my state taxes free Special rule for former Form 944 filers. File my state taxes free    If you filed Form 944 for the prior year and must file Forms 941-SS for the current year because your employment tax liability for the prior year exceeded the Form 944 eligibility requirement ($1,000 or less), the failure-to-deposit penalty will not apply to a late deposit of employment taxes for the first month of the current year if the taxes are deposited in full by March 15 of the current year. File my state taxes free Order in which deposits are applied. File my state taxes free   Deposits generally are applied to the most recent tax liability within the return period (quarter or year). File my state taxes free However, if you receive a failure-to-deposit penalty notice, you may designate how your payment is to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. File my state taxes free Follow the instructions on the penalty notice that you received. File my state taxes free For more information on designating deposits, see Revenue Procedure 2001-58. File my state taxes free You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. File my state taxes free irs. File my state taxes free gov/pub/irs-irbs/irb01-50. File my state taxes free pdf. File my state taxes free Example. File my state taxes free Cedar, Inc. File my state taxes free is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. File my state taxes free It does not make the deposit on July 15. File my state taxes free On August 15, Cedar, Inc. File my state taxes free deposits $2,000. File my state taxes free Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. File my state taxes free Accordingly, $500 of the July 15 liability remains undeposited. File my state taxes free The penalty on this underdeposit will apply as explained earlier. File my state taxes free Trust fund recovery penalty. File my state taxes free   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. File my state taxes free The penalty is the full amount of the unpaid trust fund tax. File my state taxes free This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. File my state taxes free   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. File my state taxes free   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship, or any other person or entity that is responsible for collecting, accounting for, and paying over trust fund taxes. File my state taxes free A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. File my state taxes free    Willfully means voluntarily, consciously, and intentionally. File my state taxes free A responsible person acts willfully if the person knows the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. File my state taxes free “Averaged” failure-to-deposit penalty. File my state taxes free   The IRS may assess an “averaged” failure-to-deposit (FTD) penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 941-SS, line 14, when your tax liability shown on Form 941-SS, line 10, was $2,500 or more. File my state taxes free IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 941-SS, line 10, was $2,500 or more and you did any of the following. File my state taxes free Completed Form 941-SS, line 14, instead of Schedule B (Form 941). File my state taxes free Failed to attach a properly completed Schedule B (Form 941). File my state taxes free Completed Schedule B (Form 941) incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. File my state taxes free   The IRS figures the penalty by allocating your total tax liability shown on Form 941-SS, line 10, equally throughout the tax period. File my state taxes free Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. File my state taxes free   You can avoid the penalty by reviewing your return before filing it. File my state taxes free Follow these steps before filing your Form 941-SS. File my state taxes free If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 941-SS, line 14. File my state taxes free If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Schedule B (Form 941) in the lines that represent the dates you paid your employees. File my state taxes free Verify that your total liability shown on Form 941-SS, line 14, or the bottom of Schedule B (Form 941) equals your tax liability shown on Form 941-SS,  line 10. File my state taxes free Do not show negative amounts on Form 941-SS, line 14, or Schedule B (Form 941). File my state taxes free For prior period errors, do not adjust your tax liabilities reported on your current Form 941-SS, line 14, or on Schedule B (Form 941). File my state taxes free Instead, file an adjusted return (Form 941-X (if you are adjusting a previously filed Form 941-SS) or Form 944-X (if you are adjusting a previously filed Form 944-SS or 944)) if you are also adjusting your tax liability. File my state taxes free If you are only adjusting your deposits in response to a failure-to-deposit penalty notice, see the Instructions for Schedule B (Form 941) (if you previously filed Form 941-SS) or the Instructions for Form 944-X (if you previously filed Form 944-SS or 944). File my state taxes free If you filed Form 944 for 2013 and line 7 was $2,500 or more, you were required to complete Form 944, lines 13a–13m, or attach Form 945-A, Annual Record of Federal Tax Liability. File my state taxes free If you failed to complete lines 13a–13m, or failed to attach Form 945-A, whichever was required, IRS may assess an “averaged” failure-to-deposit (FTD) penalty. File my state taxes free 9. File my state taxes free Employer's Returns General instructions. File my state taxes free   File Forms 941-SS (or Form 944) for nonfarm workers and Form 943 for farmworkers. File my state taxes free (U. File my state taxes free S. File my state taxes free Virgin Islands employers may be required to file Form 940 for the combined wages of nonfarm workers and farmworkers. File my state taxes free ) Employers with employees subject to U. File my state taxes free S. File my state taxes free income tax withholding. File my state taxes free   If you have both employees who are subject to U. File my state taxes free S. File my state taxes free income tax withholding and employees who are not subject to U. File my state taxes free S. File my state taxes free income tax withholding, you must file only Form 941 (or Form 944) and include all your employees’ wages on that form. File my state taxes free Nonfarm employers. File my state taxes free   File Form 941-SS for the calendar quarter in which you first pay wages for nonfarm workers and for each quarter thereafter unless you are a seasonal employer or file a final return. File my state taxes free Due dates for each quarter of the calendar year are as follows. File my state taxes free Quarter Due Jan. File my state taxes free , Feb. File my state taxes free , Mar. File my state taxes free Apr. File my state taxes free 30 Apr. File my state taxes free , May, June July 31 July, Aug. File my state taxes free , Sept. File my state taxes free Oct. File my state taxes free 31 Oct. File my state taxes free , Nov. File my state taxes free , Dec. File my state taxes free Jan. File my state taxes free 31   However, if you deposited all taxes when due for the quarter, you have 10 additional days from the due dates to file the return. File my state taxes free If the due date for filing your return falls on a Saturday, Sunday, or legal holiday, you may file on the next business day. File my state taxes free   If you closed your business or stopped paying wages and do not have to file returns in the future, check the box on line 15 of your final Form 941-SS and show the date final wages were paid. File my state taxes free Form 944. File my state taxes free   If IRS notified you to file Form 944, file your 2013 Form 944 by January 31, 2014, or by February 10, 2014 (if you deposited all taxes when due). File my state taxes free Household employers reporting social security and Medicare taxes. File my state taxes free   If you are a sole proprietor and file Forms 941-SS (or Form 944) for business employees, you may include taxes for household employees on your Forms 941-SS (or Form 944). File my state taxes free Otherwise, report social security and Medicare taxes for household employees on Schedule H (Form 1040), Household Employment Taxes. File my state taxes free See Publication 926, Household Employer's Tax Guide, for more information. File my state taxes free Employers of farmworkers. File my state taxes free   Every employer of farmworkers must file a Form 943 for each calendar year beginning with the first year the employer pays $2,500 or more for farmwork or employs a farmworker who meets the $150 test described in section 6. File my state taxes free   File a Form 943 each year for all taxable wages paid for farmwork. File my state taxes free You may report household workers in a private home on a farm operated for profit on Form 943. File my state taxes free Do not report wages for farmworkers on Form 941-SS or 944. File my state taxes free   Send Form 943 to the IRS by January 31 of the following year. File my state taxes free Send it with payment of any taxes due that you are not required to deposit. File my state taxes free If you deposited all taxes when due, you have 10 additional days to file. File my state taxes free Penalties. File my state taxes free   For each whole or part month that a return is not filed when required (disregarding any extensions of the filing deadline), there is a failure-to-file penalty of 5% of the unpaid tax due with that return. File my state taxes free The maximum penalty is generally 25% of the tax due. File my state taxes free Also, for each whole or part month that the tax is paid late (disregarding any extensions of the payment deadline), there is a failure-to-pay penalty of 0. File my state taxes free 5% per month of the amount of tax. File my state taxes free For individual filers only, the failure-to-pay penalty is reduced from 0. File my state taxes free 5% per month to 0. File my state taxes free 25% per month if an installment agreement is in effect. File my state taxes free You must have filed your return on or before the due date of the return to qualify for the reduced penalty. File my state taxes free The maximum amount of the failure-to-pay penalty is also 25% of the tax due. File my state taxes free If both penalties apply in any month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty. File my state taxes free The penalties will not be charged if you have a reasonable cause for failing to file or pay. File my state taxes free If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists. File my state taxes free Reporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Make current period adjustments for fractions of cents, sick pay, tips, and group-term life insurance on your Form 941-SS, 944, or 943. File my state taxes free See the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943 for information on how to report these adjustments. File my state taxes free Prior Period Adjustments Forms for prior period adjustments. File my state taxes free   Use Form 941-X or Form 944-X to make a correction after you discover an error on a previously filed Form 941 or Form 944. File my state taxes free There are also Forms 943-X, 945-X, and CT-1X to report corrections on the corresponding returns. File my state taxes free Form 941-X and Form 944-X also replace Form 843, Claim for Refund and Request for Abatement, for employers to request a refund or abatement of overreported employment taxes. File my state taxes free Continue to use Form 843 when requesting a refund or abatement of assessed interest or penalties. File my state taxes free See Revenue Ruling 2009-39, 2009-52 I. File my state taxes free R. File my state taxes free B. File my state taxes free 951, for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. File my state taxes free You can find Revenue Ruling 2009-39, at www. File my state taxes free irs. File my state taxes free gov/irb/2009-52_IRB/ar14. File my state taxes free html. File my state taxes free Background. File my state taxes free   Treasury Decision 9405 changed the process for making interest-free adjustments to employment taxes reported on Forms 941-SS, 943, 944-SS, and 944, and for filing a claim for refund of employment taxes. File my state taxes free Treasury Decision 9405, 2008-32 I. File my state taxes free R. File my state taxes free B. File my state taxes free 293, is available at www. File my state taxes free irs. File my state taxes free gov/irb/2008-32_IRB/ar13. File my state taxes free html. File my state taxes free You will use the adjustment process if you underreported employment taxes and are making a payment, or if you overreported employment taxes and will be applying the credit to the Form 941-SS, 943, or 944 period during which you file Forms 941-X, 943-X, or 944-X, respectively. File my state taxes free You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. File my state taxes free We use the terms “correct” and “corrections” to include interest-free adjustments under sections 6205 and 6413, and claims for refund and abatement under sections 6402, 6414, and 6404 of the Internal Revenue Code. File my state taxes free Correcting employment taxes. File my state taxes free   When you discover an error on a previously filed Form 941-SS, 943, 944-SS, or 944, you must: Correct that error using Form 941-X, Form 943-X, or Form 944-X, File a separate Form 941-X, Form 943-X, or Form 944-X for
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File my state taxes free 6. File my state taxes free   How To Figure Cost of Goods Sold Table of Contents Introduction Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42Line 35 Inventory at Beginning of Year Line 36 Purchases Less Cost of Items Withdrawn for Personal Use Line 37 Cost of Labor Line 38 Materials and Supplies Line 39 Other Costs Line 40 Add Lines 35 through 39 Line 41 Inventory at End of Year Line 42 Cost of Goods Sold Introduction If you make or buy goods to sell, you can deduct the cost of goods sold from your gross receipts on Schedule C. File my state taxes free However, to determine these costs, you must value your inventory at the beginning and end of each tax year. File my state taxes free This chapter applies to you if you are a manufacturer, wholesaler, or retailer or if you are engaged in any business that makes, buys, or sells goods to produce income. File my state taxes free This chapter does not apply to a personal service business, such as the business of a doctor, lawyer, carpenter, or painter. File my state taxes free However, if you work in a personal service business and also sell or charge for the materials and supplies normally used in your business, this chapter applies to you. File my state taxes free If you must account for an inventory in your business, you must generally use an accrual method of accounting for your purchases and sales. File my state taxes free For more information, see chapter 2. File my state taxes free Figuring Cost of Goods Sold on Schedule C, Lines 35 Through 42 Figure your cost of goods sold by filling out lines 35 through 42 of Schedule C. File my state taxes free These lines are reproduced below and are explained in the discussion that follows. File my state taxes free 35 Inventory at beginning of year. File my state taxes free If different from last year's closing inventory, attach explanation   36 Purchases less cost of items withdrawn for personal use   37 Cost of labor. File my state taxes free Do not include any amounts paid to yourself   38 Materials and supplies   39 Other costs   40 Add lines 35 through 39   41 Inventory at end of year   42 Cost of goods sold. File my state taxes free Subtract line 41 from line 40. File my state taxes free  Enter the result here and on line 4   Line 35 Inventory at Beginning of Year If you are a merchant, beginning inventory is the cost of merchandise on hand at the beginning of the year that you will sell to customers. File my state taxes free If you are a manufacturer or producer, it includes the total cost of raw materials, work in process, finished goods, and materials and supplies used in manufacturing the goods (see Inventories in chapter 2). File my state taxes free Opening inventory usually will be identical to the closing inventory of the year before. File my state taxes free You must explain any difference in a schedule attached to your return. File my state taxes free Donation of inventory. File my state taxes free   If you contribute inventory (property that you sell in the course of your business), the amount you can claim as a contribution deduction is the smaller of its fair market value on the day you contributed it or its basis. File my state taxes free The basis of donated inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. File my state taxes free You must remove the amount of your contribution deduction from your opening inventory. File my state taxes free It is not part of the cost of goods sold. File my state taxes free   If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. File my state taxes free Treat the inventory's cost as you would ordinarily treat it under your method of accounting. File my state taxes free For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. File my state taxes free   A special rule may apply to certain donations of food inventory. File my state taxes free See Publication 526, Charitable Contributions. File my state taxes free Example 1. File my state taxes free You are a calendar year taxpayer who uses an accrual method of accounting. File my state taxes free In 2013, you contributed property from inventory to a church. File my state taxes free It had a fair market value of $600. File my state taxes free The closing inventory at the end of 2012 properly included $400 of costs due to the acquisition of the property, and in 2012, you properly deducted $50 of administrative and other expenses attributable to the property as business expenses. File my state taxes free The charitable contribution allowed for 2013 is $400 ($600 − $200). File my state taxes free The $200 is the amount that would be ordinary income if you had sold the contributed inventory at fair market value on the date of the gift. File my state taxes free The cost of goods sold you use in determining gross income for 2013 must not include the $400. File my state taxes free You remove that amount from opening inventory for 2013. File my state taxes free Example 2. File my state taxes free If, in Example 1, you acquired the contributed property in 2013 at a cost of $400, you would include the $400 cost of the property in figuring the cost of goods sold for 2013 and deduct the $50 of administrative and other expenses attributable to the property for that year. File my state taxes free You would not be allowed any charitable contribution deduction for the contributed property. File my state taxes free Line 36 Purchases Less Cost of Items Withdrawn for Personal Use If you are a merchant, use the cost of all merchandise you bought for sale. File my state taxes free If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into a finished product. File my state taxes free Trade discounts. File my state taxes free   The differences between the stated prices of articles and the actual prices you pay for them are called trade discounts. File my state taxes free You must use the prices you pay (not the stated prices) in figuring your cost of purchases. File my state taxes free Do not show the discount amount separately as an item in gross income. File my state taxes free   An automobile dealer must record the cost of a car in inventory reduced by any manufacturer's rebate that represents a trade discount. File my state taxes free Cash discounts. File my state taxes free   Cash discounts are amounts your suppliers let you deduct from your purchase invoices for prompt payments. File my state taxes free There are two methods of accounting for cash discounts. File my state taxes free You can either credit them to a separate discount account or deduct them from total purchases for the year. File my state taxes free Whichever method you use, you must be consistent. File my state taxes free If you want to change your method of figuring inventory cost, you must file Form 3115, Application for Change in Accounting Method. File my state taxes free For more information, see Change in Accounting Method in chapter 2. File my state taxes free   If you credit cash discounts to a separate account, you must include this credit balance in your business income at the end of the tax year. File my state taxes free If you use this method, do not reduce your cost of goods sold by the cash discounts. File my state taxes free Purchase returns and allowances. File my state taxes free   You must deduct all returns and allowances from your total purchases during the year. File my state taxes free Merchandise withdrawn from sale. File my state taxes free   If you withdraw merchandise for your personal or family use, you must exclude this cost from the total amount of merchandise you bought for sale. File my state taxes free Do this by crediting the purchases or sales account with the cost of merchandise you withdraw for personal use. File my state taxes free You must also charge the amount to your drawing account. File my state taxes free   A drawing account is a separate account you should keep to record the business income you withdraw to pay for personal and family expenses. File my state taxes free As stated above, you also use it to record withdrawals of merchandise for personal or family use. File my state taxes free This account is also known as a “withdrawals account” or “personal account. File my state taxes free ” Line 37 Cost of Labor Labor costs are usually an element of cost of goods sold only in a manufacturing or mining business. File my state taxes free Small merchandisers (wholesalers, retailers, etc. File my state taxes free ) usually do not have labor costs that can properly be charged to cost of goods sold. File my state taxes free In a manufacturing business, labor costs properly allocable to the cost of goods sold include both the direct and indirect labor used in fabricating the raw material into a finished, saleable product. File my state taxes free Direct labor. File my state taxes free   Direct labor costs are the wages you pay to those employees who spend all their time working directly on the product being manufactured. File my state taxes free They also include a part of the wages you pay to employees who work directly on the product part time if you can determine that part of their wages. File my state taxes free Indirect labor. File my state taxes free   Indirect labor costs are the wages you pay to employees who perform a general factory function that does not have any immediate or direct connection with making the saleable product, but that is a necessary part of the manufacturing process. File my state taxes free Other labor. File my state taxes free   Other labor costs not properly chargeable to the cost of goods sold can be deducted as selling or administrative expenses. File my state taxes free Generally, the only kinds of labor costs properly chargeable to your cost of goods sold are the direct or indirect labor costs and certain other costs treated as overhead expenses properly charged to the manufacturing process, as discussed later under Line 39 Other Costs. File my state taxes free Line 38 Materials and Supplies Materials and supplies, such as hardware and chemicals, used in manufacturing goods are charged to cost of goods sold. File my state taxes free Those that are not used in the manufacturing process are treated as deferred charges. File my state taxes free You deduct them as a business expense when you use them. File my state taxes free Business expenses are discussed in chapter 8. File my state taxes free Line 39 Other Costs Examples of other costs incurred in a manufacturing or mining process that you charge to your cost of goods sold are as follows. File my state taxes free Containers. File my state taxes free   Containers and packages that are an integral part of the product manufactured are a part of your cost of goods sold. File my state taxes free If they are not an integral part of the manufactured product, their costs are shipping or selling expenses. File my state taxes free Freight-in. File my state taxes free   Freight-in, express-in, and cartage-in on raw materials, supplies you use in production, and merchandise you purchase for sale are all part of cost of goods sold. File my state taxes free Overhead expenses. File my state taxes free   Overhead expenses include expenses such as rent, heat, light, power, insurance, depreciation, taxes, maintenance, labor, and supervision. File my state taxes free The overhead expenses you have as direct and necessary expenses of the manufacturing operation are included in your cost of goods sold. File my state taxes free Line 40 Add Lines 35 through 39 The total of lines 35 through 39 equals the cost of the goods available for sale during the year. File my state taxes free Line 41 Inventory at End of Year Subtract the value of your closing inventory (including, as appropriate, the allocable parts of the cost of raw materials and supplies, direct labor, and overhead expenses) from line 40. File my state taxes free Inventory at the end of the year is also known as closing or ending inventory. File my state taxes free Your ending inventory will usually become the beginning inventory of your next tax year. File my state taxes free Line 42 Cost of Goods Sold When you subtract your closing inventory (inventory at the end of the year) from the cost of goods available for sale, the remainder is your cost of goods sold during the tax year. File my state taxes free Prev  Up  Next   Home   More Online Publications