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

Online Ordering for Information Returns and Employer Returns

 

Place your order below for information returns and employer products. Your request for products for 2014 will be held until they become available. Please do not reorder these products as they will be automatically shipped and may arrive in multiple shipments.

Specify the quantity needed, by tax year, in the corresponding fill-in space. Quantities are limited to 1,000 each for forms and 25 each for instructions and publications. One copy of the corresponding instruction is automatically included with your order. Some employer forms are printed 2 or 3 to a sheet; order the number of forms needed, not the number of sheets.

File Forms W-2/W-2c and W-3/W-3c electronically by visiting the Social Security Administration's Employer Reporting Instructions and Information website to create and file electronic "fill-in" versions of Forms W-2 and W-3.

Caution: Forms W-2, W-3, 1096, 1097, 1098, 1099, and 5498 Series are non-continuous feed, carbonless, non-laser forms.

Information Returns

Tax Year 2013
Quantity
Tax Year 2014
Quantity
Product Title
Form W-2 Wage and Tax Statement
Form W-3 Transmittal of Wage and Tax Statements
Instruction W-2 & W-3 General Instructions for Forms W-2 and W-3
Form W-2AS American Samoa Wage and Tax Statement
Form W-2G Certain Gambling Winnings
Instruction W-2G & 5754 Instructions for Forms W-2G and 5754
Form W-2GU Guam Wage and Tax Statement
Form W-2VI U.S. Virgin Islands Wage and Tax Statement
Form W-3SS Transmittal of Wage and Tax Statements
Form 1096 Annual Summary and Transmittal of U.S. Information Returns
Form 1097-BTC Bond Tax Credit
Instruction 1097-BTC Instructions for Form 1097-BTC
Form 1098 Mortgage Interest Statement
Instruction 1098 Instructions for Form 1098
Form 1098-C Contributions of Motor Vehicles, Boats, and Airplanes
Instruction 1098-C Instructions for Form 1098-C
Form 1098-E Student Loan Interest Statement
Form 1098-MA Mortgage Assistance Payments
Form 1098-T Tuition Statement
Instruction 1098-E & 1098-T Instructions for Forms 1098-E and 1098-T
Instruction 1099-GENERAL General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G)
Form 1099-A Acquisition or Abandonment of Secured Property
Instruction 1099-A & C Instructions for Forms 1099-A and 1099-C
Form 1099-B Proceeds from Broker and Barter Exchange Transactions
Instruction 1099-B Instructions for Form 1099-B
Form 1099-C Cancellation of Debt
Form 1099-CAP Changes in Corporate Control and Capital Structure
Instruction 1099-CAP Instructions for Form 1099-CAP
Form 1099-DIV Dividends and Distributions
Instruction 1099-DIV Instructions for Form 1099-DIV
Form 1099-G Certain Government Payments
Instruction 1099-G Instructions for Form 1099-G
Form 1099-INT Interest Income
Instruction 1099-INT & OID Instructions for Forms 1099-INT and 1099-OID
Form 1099-K Payment Card and Third Party Network Transactions
Instruction 1099-K Instructions for Form 1099-K
Form 1099-LTC Long Term Care and Accelerated Death Benefits
Instruction 1099-LTC Instructions for Form 1099-LTC
Form 1099-MISC Miscellaneous Income
Instruction 1099-MISC Instructions for Form 1099-MISC
Form 1099-OID Original Issue Discount
Form 1099-PATR Taxable Distributions Received From Cooperatives
Instruction 1099-PATR Instructions for Form 1099-PATR
Form 1099-Q Payments From Qualified Education Programs (Under Sections 529 and 530)
Instruction 1099-Q Instructions for Form 1099-Q
Form 1099-R Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
Instruction 1099-R & 5498 Instructions for Forms 1099-R and 5498
Form 1099-S Proceeds from Real Estate Transactions
Instruction 1099-S Instructions for Form 1099-S
Form 1099-SA Distributions from an HSA, Archer MSA, or Medicare Advantage MSA
Instruction 1099-SA & 5498-SA Instructions for Forms 1099-SA and 5498-SA
Form 5498 IRA Contribution Information
Form 5498-ESA Coverdell ESA Contribution Information
Instruction 5498-ESA Instructions for Form 5498 ESA
Form 5498-SA HSA, Archer MSA, or Medicare Advantage MSA Information

 

Employer Products

Quantity Product Title
Form W-2c Corrected Wage and Tax Statement
Form W-3c Transmittal of Corrected Wage and Tax Statements
Form W-4 Employee's Withholding Allowance Certificate
Form W-4P Withholding Certificate for Pension or Annuity Payments
Form W-4S Request for Federal Income Tax Withholding From Sick Pay
Form W-4(SP) Employee's Withholding Allowance Certificate (Spanish version)
Form W-4V Voluntary Withholding Request
Form 940 Employer's Annual Federal Unemployment (FUTA) Tax Return
Instruction 940 Instructions for Form 940
Form 940 Sch A Multi-State Employer and Credit Reduction Information
Form 941 Employer's QUARTERLY Federal Tax Return
Instruction 941 Instructions for Form 941
Form 941 Sch B Report of Tax Liability for Semiweekly Schedule Depositors
Instruction 941 Sch B Instructions for Schedule B (Form 941)
Form 941 Sch D Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations
Instruction 941 Sch D Instructions for Schedule D (Form 941)
Form 941 Sch R Allocation Schedule for Aggregate Form 941 Filers
Form 941-SS Employer's QUARTERLY Federal Tax Return (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands)
Instruction 941-SS Instructions for Form 941-SS
Form 941-X Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund
Instruction 941-X Instructions for Form 941-X
Form 943 Employer's Annual Federal Tax Return for Agricultural Employees
Instruction 943 Instructions for Form 943
Form 943-A Agricultural Employer's Record of Federal Tax Liability
Form 943-X Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund
Instruction 943-X Instructions for Form 943-X
Form 944 Employer's ANNUAL Federal Tax Return
Instruction 944 Instructions for Form 944
Form 944-X Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund
Instruction 944-X Instructions for Form 944-X
Form 945 Annual Return of Withheld Federal Income Tax
Instruction 945 Instructions for Form 945
Form 945-A Annual Record of Federal Tax Liability
Form 945-X Adjusted Annual Return of Withheld Federal Income Tax or Claim for Refund
Instruction 945-X Instructions for Form 945-X
Form 3921 Exercise of an Incentive Stock Option Under Section 422(b)
Form 3922 Transfer of Stock Acquired Through An Employee Stock Purchase Plan Under Section 423(c)
Instruction 3921 & 3922 Instructions for Forms 3921 and 3922
Form 5754 Statement by Person(s) Receiving Gambling Winnings
Publication 15 (Circular E), Employer's Tax Guide
Publication 15-A Employer's Supplemental Tax Guide
Publication 15-B Employer's Tax Guide to Fringe Benefits
Publication 51 (Circular A), Agricultural Employer's Tax Guide
Publication 80 (Circular SS), Federal Tax Guide for Employers in the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands
Publication 1244 Employee's Daily Record of Tips and Report to Employer
Publication 1494 Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income (Forms 668-W(ACS), 668-W(c)(DO) and 668-W(ICS))

Page Last Reviewed or Updated: 23-Jan-2014

The File My State Taxes Online Free

File my state taxes online free Other Methods of Depreciation Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: How To Figure the DeductionBasis Useful Life Salvage Value Methods To UseStraight Line Method Declining Balance Method Income Forecast Method How To Change Methods DispositionsSale or exchange. File my state taxes online free Property not disposed of or abandoned. File my state taxes online free Special rule for normal retirements from item accounts. File my state taxes online free Abandoned property. File my state taxes online free Single item accounts. File my state taxes online free Multiple property account. File my state taxes online free Topics - This chapter discusses: How to figure the deduction Methods to use How to change methods Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records 946 How To Depreciate Property Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization Schedule C (Form 1040) Profit or Loss From Business If your property is being depreciated under ACRS, you must continue to use rules for depreciation that applied when you placed the property in service. File my state taxes online free If your property qualified for MACRS, you must depreciate it under MACRS. File my state taxes online free See Publication 946. File my state taxes online free However, you cannot use MACRS for certain property because of special rules that exclude it from MACRS. File my state taxes online free Also, you can elect to exclude certain property from being depreciated under MACRS. File my state taxes online free Property that you cannot depreciate using MACRS includes: Intangible property, Property you can elect to exclude from MACRS that you properly depreciate under a method that is not based on a term of years, Certain public utility property, Any motion picture film or video tape, Any sound recording, and Certain real and personal property placed in service before 1987. File my state taxes online free Intangible property. File my state taxes online free   You cannot depreciate intangible property under ACRS or MACRS. File my state taxes online free You depreciate intangible property using any other reasonable method, usually, the straight line method. File my state taxes online free Note. File my state taxes online free The cost of certain intangible property that you acquire after August 10, 1993, must be amortized over a 15-year period. File my state taxes online free For more information, see chapter 12 of Publication 535. File my state taxes online free Public utility property. File my state taxes online free   The law excludes from MACRS any public utility property for which the taxpayer does not use a normalization method of accounting. File my state taxes online free This type of property is subject to depreciation under a special rule. File my state taxes online free Videocassettes. File my state taxes online free   If you are in the videocassette rental business, you can depreciate those videocassettes purchased for rental. File my state taxes online free You can depreciate the cost less salvage value of those videocassettes that have a useful life over one year using either: The straight line method, or The income forecast method. File my state taxes online free The straight line method, salvage value, and useful life are discussed later under Methods To Use. File my state taxes online free You can deduct in the year of purchase as a business expense the cost of any cassette that has a useful life of one year or less. File my state taxes online free How To Figure the Deduction Two other reasonable methods can be used to figure your deduction for property not covered under ACRS or MACRS. File my state taxes online free These methods are straight line and declining balance. File my state taxes online free To figure depreciation using these methods, you must generally determine three things about the property you intend to depreciate. File my state taxes online free They are: The basis, The useful life, and The estimated salvage value at the end of its useful life. File my state taxes online free The amount of the deduction in any year also depends on which method of depreciation you choose. File my state taxes online free Basis To deduct the proper amount of depreciation each year, first determine your basis in the property you intend to depreciate. File my state taxes online free The basis used for figuring depreciation is the same as the basis that would be used for figuring the gain on a sale. File my state taxes online free Your original basis is usually the purchase price. File my state taxes online free However, if you acquire property in some other way, such as inheriting it, getting it as a gift, or building it yourself, you have to figure your original basis in a different way. File my state taxes online free Adjusted basis. File my state taxes online free   Events will often change the basis of property. File my state taxes online free When this occurs, the changed basis is called the adjusted basis. File my state taxes online free Some events, such as improvements you make, increase basis. File my state taxes online free Events such as deducting casualty losses and depreciation decrease basis. File my state taxes online free If basis is adjusted, the depreciation deduction may also have to be changed, depending on the reason for the adjustment and the method of depreciation you are using. File my state taxes online free   Publication 551 explains how to figure basis for property acquired in different ways. File my state taxes online free It also discusses what items increase and decrease basis, how to figure adjusted basis, and how to allocate cost if you buy several pieces of property at one time. File my state taxes online free Useful Life The useful life of a piece of property is an estimate of how long you can expect to use it in your trade or business, or to produce income. File my state taxes online free It is the length of time over which you will make yearly depreciation deductions of your basis in the property. File my state taxes online free It is how long it will continue to be useful to you, not how long the property will last. File my state taxes online free Many things affect the useful life of property, such as: Frequency of use, Age when acquired, Your repair policy, and Environmental conditions. File my state taxes online free The useful life can also be affected by technological improvements, progress in the arts, reasonably foreseeable economic changes, shifting of business centers, prohibitory laws, and other causes. File my state taxes online free Consider all these factors before you arrive at a useful life for your property. File my state taxes online free The useful life of the same type of property varies from user to user. File my state taxes online free When you determine the useful life of your property, keep in mind your own experience with similar property. File my state taxes online free You can use the general experience of the industry you are in until you are able to determine a useful life of your property from your own experience. File my state taxes online free Change in useful life. File my state taxes online free   You base your estimate of useful life on certain facts. File my state taxes online free If these facts change significantly, you can adjust your estimate of the remaining useful life. File my state taxes online free However, you redetermine the estimated useful life only when the change is substantial and there is a clear reason for making the change. File my state taxes online free Salvage Value It is important for you to accurately determine the correct salvage value of the property you want to depreciate. File my state taxes online free You generally cannot depreciate property below a reasonable salvage value. File my state taxes online free Determining salvage value. File my state taxes online free   Salvage value is the estimated value of property at the end of its useful life. File my state taxes online free It is what you expect to get for the property if you sell it after you can no longer use it productively. File my state taxes online free You must estimate the salvage value of a piece of property when you first acquire it. File my state taxes online free   Salvage value is affected both by how you use the property and how long you use it. File my state taxes online free If it is your policy to dispose of property that is still in good operating condition, the salvage value can be relatively large. File my state taxes online free However, if your policy is to use property until it is no longer usable, its salvage value can be its junk value. File my state taxes online free Changing salvage value. File my state taxes online free   Once you determine the salvage value for property, you should not change it merely because prices have changed. File my state taxes online free However, if you redetermine the useful life of property, as discussed earlier under Change in useful life, you can also redetermine the salvage value. File my state taxes online free When you redetermine the salvage value, take into account the facts that exist at the time. File my state taxes online free Net salvage. File my state taxes online free   Net salvage is the salvage value of property minus what it costs to remove it when you dispose of it. File my state taxes online free You can choose either salvage value or net salvage when you figure depreciation. File my state taxes online free You must consistently use the one you choose and the treatment of the costs of removal must be consistent with the practice adopted. File my state taxes online free However, if the cost to remove the property is more than the estimated salvage value, then net salvage is zero. File my state taxes online free Your salvage value can never be less than zero. File my state taxes online free Ten percent rule. File my state taxes online free   If you acquire personal property that has a useful life of 3 years or more, you can use an amount for salvage value that is less than your actual estimate. File my state taxes online free You can subtract from your estimate of salvage value an amount equal to 10% of your basis in the property. File my state taxes online free If salvage value is less than 10% of basis, you can ignore salvage value when you figure depreciation. File my state taxes online free Methods To Use Two methods of depreciation are the straight line and declining balance methods. File my state taxes online free If ACRS or MACRS does not apply, you can use one of these methods. File my state taxes online free The straight line and declining balance methods discussed in this section are not figured in the same way as straight line or declining balance methods under MACRS. File my state taxes online free Straight Line Method Before 1981, you could use any reasonable method for every kind of depreciable property. File my state taxes online free One of these methods was the straight line method. File my state taxes online free This method was also used for intangible property. File my state taxes online free It lets you deduct the same amount of depreciation each year. File my state taxes online free To figure your deduction, determine the adjusted basis of your property, its salvage value, and its estimated useful life. File my state taxes online free Subtract the salvage value, if any, from the adjusted basis. File my state taxes online free The balance is the total amount of depreciation you can take over the useful life of the property. File my state taxes online free Divide the balance by the number of years remaining in the useful life. File my state taxes online free This gives you the amount of your yearly depreciation deduction. File my state taxes online free Unless there is a big change in adjusted basis, or useful life, this amount will stay the same throughout the time you depreciate the property. File my state taxes online free If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use. File my state taxes online free Example. File my state taxes online free In April 1994, Frank bought a franchise for $5,600. File my state taxes online free It expires in 10 years. File my state taxes online free This property is intangible property that cannot be depreciated under MACRS. File my state taxes online free Frank depreciates the franchise under the straight line method, using a 10-year useful life and no salvage value. File my state taxes online free He takes the $5,600 basis and divides that amount by 10 years ($5,600 ÷ 10 = $560, a full year's use). File my state taxes online free He must prorate the $560 for his 9 months of use in 1994. File my state taxes online free This gives him a deduction of $420 ($560 ÷ 9/12). File my state taxes online free In 1995, Frank can deduct $560 for the full year. File my state taxes online free Declining Balance Method The declining balance method allows you to recover a larger amount of the cost of the property in the early years of your use of the property. File my state taxes online free The rate cannot be more than twice the straight line rate. File my state taxes online free Rate of depreciation. File my state taxes online free   Under this method, you must determine your declining balance rate of depreciation. File my state taxes online free The initial step is to: Divide the number 1 by the useful life of your property to get a straight line rate. File my state taxes online free (For example, if property has a useful life of 5 years, its normal straight line rate of depreciation is ⅕, or 20%. File my state taxes online free ) Multiply this straight line rate by a number that is more than 1 but not more than 2 to determine the declining balance rate. File my state taxes online free Unless there is a change in the useful life during the time you depreciate the property, the rate of depreciation generally will not change. File my state taxes online free Depreciation deductions. File my state taxes online free   After you determine the rate of depreciation, multiply the adjusted basis of the property by it. File my state taxes online free This gives you the amount of your deduction. File my state taxes online free For example, if your adjusted basis at the beginning of the first year is $10,000, and your declining balance rate is 20%, your depreciation deduction for the first year is $2,000 ($10,000 ÷ 20%). File my state taxes online free To figure your depreciation deduction in the second year, you must first adjust the basis for the amount of depreciation you deducted in the first year. File my state taxes online free Subtract the previous year's depreciation from your basis ($10,000 - $2,000 = $8,000). File my state taxes online free Multiply this amount by the rate of depreciation ($8,000 ÷ 20% = $1,600). File my state taxes online free Your depreciation deduction for the second year is $1,600. File my state taxes online free   As you can see from this example, your adjusted basis in the property gets smaller each year. File my state taxes online free Also, under this method, deductions are larger in the earlier years and smaller in the later years. File my state taxes online free You can make a change to the straight line method without consent. File my state taxes online free Salvage value. File my state taxes online free   Do not subtract salvage value when you figure your yearly depreciation deductions under the declining balance method. File my state taxes online free However, you cannot depreciate the property below its reasonable salvage value. File my state taxes online free Determine salvage value using the rules discussed earlier, including the special 10% rule. File my state taxes online free Example. File my state taxes online free If your adjusted basis has been decreased to $1,000 and the rate of depreciation is 20%, your depreciation deduction should be $200. File my state taxes online free But if your estimate of salvage value was $900, you can only deduct $100. File my state taxes online free This is because $100 is the amount that would lower your adjusted basis to equal salvage value. File my state taxes online free Income Forecast Method The income forecast method requires income projections for each videocassette or group of videocassettes. File my state taxes online free You can group the videocassettes by title for making this projection. File my state taxes online free You determine the depreciation by applying a fraction to the cost less salvage value of the cassette. File my state taxes online free The numerator is the income from the videocassette for the tax year and the denominator is the total projected income for the cassette. File my state taxes online free For more information on the income forecast method, see Revenue Ruling 60-358 in Cumulative Bulletin 1960, Volume 2, on page 68. File my state taxes online free How To Change Methods In some cases, you may change your method of depreciation for property depreciated under a reasonable method. File my state taxes online free If you change your method of depreciation, it is generally a change in your method of accounting. File my state taxes online free You must get IRS consent before making the change. File my state taxes online free However, you do not need permission for certain changes in your method of depreciation. File my state taxes online free The rules discussed in this section do not apply to property depreciated under ACRS or MACRS. File my state taxes online free For information on ACRS elections,see Revocation of election, in chapter 1 under Alternate ACRS Method. File my state taxes online free Change to the straight line method. File my state taxes online free   You can change from the declining balance method to the straight line method at any time during the useful life of your property without IRS consent. File my state taxes online free However, if you have a written agreement with the IRS that prohibits a change, you must first get IRS permission. File my state taxes online free When the change is made, figure depreciation based on your adjusted basis in the property at that time. File my state taxes online free Your adjusted basis takes into account all previous depreciation deductions. File my state taxes online free Use the estimated remaining useful life of your property at the time of change and its estimated salvage value. File my state taxes online free   You can change from the declining balance method to straight line only on the original tax return for the year you first use the straight line method. File my state taxes online free You cannot make the change on an amended return filed after the due date of the original return (including extensions). File my state taxes online free   When you make the change, attach a statement to your tax return showing: When you acquired the property, Its original cost or other original basis, The total amount claimed for depreciation and other allowances since you acquired it, Its salvage value and remaining useful life, and A description of the property and its use. File my state taxes online free   After you change to straight line, you cannot change back to the declining balance method or to any other method for a period of 10 years without written permission from the IRS. File my state taxes online free Changes that require permission. File my state taxes online free   For most other changes in method of depreciation, you must get permission from the IRS. File my state taxes online free To request a change in method of depreciation, file Form 3115. File my state taxes online free File the application within the first 180 days of the tax year the change is to become effective. File my state taxes online free In most cases, there is a user fee that must accompany Form 3115. File my state taxes online free See the instructions for Form 3115 to determine if a fee is required. File my state taxes online free Changes granted automatically. File my state taxes online free   The IRS automatically approves certain changes of a method of depreciation. File my state taxes online free But, you must file Form 3115 for these automatic changes. File my state taxes online free   However, IRS can deny permission if Form 3115 is not filed on time. File my state taxes online free For more information on automatic changes, see Revenue Procedure 74-11, 1974-1 C. File my state taxes online free B. File my state taxes online free 420. File my state taxes online free Changes for which approval is not automatic. File my state taxes online free   The automatic change procedures do not apply to: Property or an account where you made a change in depreciation within the last 10 tax years (unless the change was made under the Class Life System), Class Life Asset Depreciation Range System, and Public utility property. File my state taxes online free   You must request and receive permission for these changes. File my state taxes online free To make the request, file Form 3115 during the first 180 days of the tax year for which you want the change to be effective. File my state taxes online free Change from an improper method. File my state taxes online free   If the IRS disallows the method you are using, you do not need permission to change to a proper method. File my state taxes online free You can adopt the straight line method, or any other method that would have been permitted if you had used it from the beginning. File my state taxes online free If you file your tax return using an improper method, but later file an amended return, you can use a proper method on the amended return without getting IRS permission. File my state taxes online free However, you must file the amended return before the filing date for the next tax year. File my state taxes online free Dispositions Retirement is the permanent withdrawal of depreciable property from use in your trade or business or for the production of income. File my state taxes online free You can do this by selling, exchanging, or abandoning the item of property. File my state taxes online free You can also withdraw it from use without disposing of it. File my state taxes online free For example, you could place it in a supplies or scrap account. File my state taxes online free Retirements can be either normal or abnormal depending on all facts and circumstances. File my state taxes online free The rules discussed next do not apply to MACRS and ACRS property. File my state taxes online free Normal retirement. File my state taxes online free   A normal retirement is a permanent withdrawal of depreciable property from use if the following apply: The retirement is made within the useful life you estimated originally, and The property has reached a condition at which you customarily retire or would retire similar property from use. File my state taxes online free A retirement is generally considered normal unless you can show that you retired the property because of a reason you did not consider when you originally estimated the useful life of the property. File my state taxes online free Abnormal retirement. File my state taxes online free   A retirement can be abnormal if you withdraw the property early or under other circumstances. File my state taxes online free For example, if the property is damaged by a fire or suddenly becomes obsolete and is now useless. File my state taxes online free Gain or loss on retirement. File my state taxes online free   There are special rules for figuring the gain or loss on retirement of property. File my state taxes online free The gain or loss will depend on several factors. File my state taxes online free These include the type of withdrawal, if the withdrawal was from a single property or multiple property account, and if the retirement was normal or abnormal. File my state taxes online free A single property account contains only one item of property. File my state taxes online free A multiple property account is one in which several items have been combined with a single rate of depreciation assigned to the entire account. File my state taxes online free Sale or exchange. File my state taxes online free   If property is retired by sale or exchange, you figure gain or loss by the usual rules that apply to sales or other dispositions of property. File my state taxes online free See Publication 544. File my state taxes online free Property not disposed of or abandoned. File my state taxes online free   If property is retired permanently, but not disposed of or physically abandoned, you do not recognize gain. File my state taxes online free You are allowed a loss in such a case, but only if the retirement is: An abnormal retirement, A normal retirement from a single property account in which you determined the life of each item of property separately, or A normal retirement from a multiple property account in which the depreciation rate is based on the maximum expected life of the longest lived item of property and the loss occurs before the expiration of the full useful life. File my state taxes online free However, you are not allowed a loss if the depreciation rate is based on the average useful life of the items of property in the account. File my state taxes online free   To figure your loss, subtract the estimated salvage or fair market value of the property at the date of retirement, whichever is more, from its adjusted basis. File my state taxes online free Special rule for normal retirements from item accounts. File my state taxes online free   You can generally deduct losses upon retirement of a few depreciable items of property with similar useful lives, if: You account for each one in a separate account, and You use the average useful life to figure depreciation. File my state taxes online free However, you cannot deduct losses if you use the average useful life to figure depreciation and they have a wide range of useful lives. File my state taxes online free   If you have a large number of depreciable property items and use average useful lives to figure depreciation, you cannot deduct the losses upon normal retirements from these accounts. File my state taxes online free Abandoned property. File my state taxes online free   If you physically abandon property, you can deduct as a loss the adjusted basis of the property at the time of its abandonment. File my state taxes online free However, your intent must be to discard the property so that you will not use it again or retrieve it for sale, exchange, or other disposition. File my state taxes online free Basis of property retired. File my state taxes online free   The basis for figuring gain or loss on the retirement of property is its adjusted basis at the time of retirement, as determined in the following discussions. File my state taxes online free Single item accounts. File my state taxes online free   If an item of property is accounted for in a single item account, the adjusted basis is the basis you would use to figure gain or loss for a sale or exchange of the property. File my state taxes online free This is generally the cost or other basis of the item of property less depreciation. File my state taxes online free See Publication 551. File my state taxes online free Multiple property account. File my state taxes online free   For a normal retirement from a multiple property account, if you figured depreciation using the average expected useful life, the adjusted basis is the salvage value estimated for the item of property when it was originally acquired. File my state taxes online free If you figured depreciation using the maximum expected useful life of the longest lived item of property in the account, you must use the depreciation method used for the multiple property account and a rate based on the maximum expected useful life of the item of property retired. File my state taxes online free   You make the adjustment for depreciation for an abnormal retirement from a multiple property account at the rate that would be proper if the item of property was depreciated in a single property account. File my state taxes online free The method of depreciation used for the multiple property account is used. File my state taxes online free You base the rate on either the average expected useful life or the maximum expected useful life of the retired item of property, depending on the method used to determine the depreciation rate for the multiple property account. File my state taxes online free Prev  Up  Next   Home   More Online Publications