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Free E File And Free State Tax Filing

Free e file and free state tax filing 1. Free e file and free state tax filing   Filing and Paying Business Taxes Table of Contents Introduction Useful Items - You may want to see: Identification NumbersNew EIN. Free e file and free state tax filing Employee. Free e file and free state tax filing Other payee. Free e file and free state tax filing Income TaxDo I Have To File an Income Tax Return? How Do I File? IRS e-file (Electronic Filing) When Is My Tax Return Due? How Do I Pay Income Tax? Self-Employment (SE) TaxHow to become insured under social security. Free e file and free state tax filing Earning credits in 2013 and 2014. Free e file and free state tax filing Employment Taxes Excise Taxes Information ReturnsWaiver of penalties. Free e file and free state tax filing Penalties. Free e file and free state tax filing Introduction This chapter explains the business taxes you may have to pay and the forms you may have to file. Free e file and free state tax filing It also discusses taxpayer identification numbers. Free e file and free state tax filing Table 1-1 lists the benefits of filing electronically. Free e file and free state tax filing Table 1-2 lists the federal taxes you may have to pay, their due dates, and the forms you use to report them. Free e file and free state tax filing Table 1-3 provides checklists that highlight the typical forms and schedules you may need to file if you ever go out of business. Free e file and free state tax filing You may want to get Publication 509, Tax Calendars. Free e file and free state tax filing It has tax calendars that tell you when to file returns and make tax payments. Free e file and free state tax filing Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 1040 U. Free e file and free state tax filing S. Free e file and free state tax filing Individual Income Tax Return 1040-ES Estimated Tax for Individuals Sch C (Form 1040) Profit or Loss From Business Sch C-EZ (Form 1040) Net Profit From Business Sch SE (Form 1040) Self-Employment Tax See chapter 12 for information about getting publications and forms. Free e file and free state tax filing Identification Numbers This section explains three types of taxpayer identification numbers, who needs them, when to use them, and how to get them. Free e file and free state tax filing Social security number (SSN). Free e file and free state tax filing   Generally, use your SSN as your taxpayer identification number. Free e file and free state tax filing You must put this number on each of your individual income tax forms, such as Form 1040 and its schedules. Free e file and free state tax filing   To apply for an SSN, use Form SS-5, Application for a Social Security Card. Free e file and free state tax filing This form is available at Social Security Administration (SSA) offices or by calling 1-800-772-1213. Free e file and free state tax filing It is also available from the SSA website at www. Free e file and free state tax filing socialsecurity. Free e file and free state tax filing gov. Free e file and free state tax filing Individual taxpayer identification number (ITIN). Free e file and free state tax filing   The IRS will issue an ITIN if you are a nonresident or resident alien and you do not have and are not eligible to get an SSN. Free e file and free state tax filing In general, if you need to obtain an ITIN, you must attach Form W-7, Application for IRS Individual Taxpayer Identification Number, with your signed, original, completed tax return and any other required documentation and mail them to the following address. Free e file and free state tax filing  Internal Revenue Service ITIN Operation P. Free e file and free state tax filing O. Free e file and free state tax filing Box 149342 Austin, TX 78714-9342 The exceptions are covered in detail in the instructions for Form W-7. Free e file and free state tax filing If you must include another person's SSN on your return and that person does not have and cannot get an SSN, enter that person's ITIN. Free e file and free state tax filing The application is also available in Spanish. Free e file and free state tax filing The form is available at IRS. Free e file and free state tax filing gov or you can call 1-800-829-3676 to order the form. Free e file and free state tax filing    An ITIN is for tax use only. Free e file and free state tax filing It does not entitle the holder to social security benefits or change the holder's employment or immigration status. Free e file and free state tax filing Employer identification number (EIN). Free e file and free state tax filing   You must also have an EIN to use as a taxpayer identification number if you do either of the following. Free e file and free state tax filing Pay wages to one or more employees. Free e file and free state tax filing File pension or excise tax returns. Free e file and free state tax filing   If you must have an EIN, include it along with your SSN on your Schedule C or C-EZ. Free e file and free state tax filing   You can apply for an EIN: Online by clicking on the Employer ID Numbers (EINs) link at www. Free e file and free state tax filing irs. Free e file and free state tax filing gov/businesses/small. Free e file and free state tax filing The EIN is issued immediately once the application information is validated. Free e file and free state tax filing By telephone at 1-800-829-4933. Free e file and free state tax filing By mailing or faxing Form SS-4, Application for Employer Identification Number. Free e file and free state tax filing New EIN. Free e file and free state tax filing   You may need to get a new EIN if either the form or the ownership of your business changes. Free e file and free state tax filing For more information, see Publication 1635, Understanding Your EIN. Free e file and free state tax filing When you need identification numbers of other persons. Free e file and free state tax filing   In operating your business, you will probably make certain payments you must report on information returns. Free e file and free state tax filing These payments are discussed under Information Returns, later in this chapter. Free e file and free state tax filing You must give the recipient of these payments (the payee) a statement showing the total amount paid during the year. Free e file and free state tax filing You must include the payee's identification number and your identification number on the returns and statements. Free e file and free state tax filing Employee. Free e file and free state tax filing   If you have employees, you must get an SSN from each of them. Free e file and free state tax filing Record the name and SSN of each employee exactly as they are shown on the employee's social security card. Free e file and free state tax filing If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. Free e file and free state tax filing This may occur if the employee's name was changed due to marriage or divorce. Free e file and free state tax filing   Form W-4, Employee's Withholding Allowance Certificate, is completed by each employee so the correct federal income tax can be withheld from their pay. Free e file and free state tax filing   If your employee does not have an SSN, he or she should file Form SS-5 with the SSA. Free e file and free state tax filing Other payee. Free e file and free state tax filing   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. Free e file and free state tax filing If you must report payments to an organization, such as a corporation or partnership, you must get its EIN. Free e file and free state tax filing   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. Free e file and free state tax filing   A payee who does not provide you with an identification number may be subject to backup withholding. Free e file and free state tax filing For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. Free e file and free state tax filing Income Tax This part explains whether you have to file an income tax return and when you file it. Free e file and free state tax filing It also explains how you pay the tax. Free e file and free state tax filing Do I Have To File an Income Tax Return? You have to file an income tax return for 2013 if your net earnings from self-employment were $400 or more. Free e file and free state tax filing If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions. Free e file and free state tax filing How Do I File? File your income tax return on Form 1040 and attach Schedule C or Schedule C-EZ. Free e file and free state tax filing Enter the net profit or loss from Schedule C or Schedule C-EZ on page 1 of Form 1040. Free e file and free state tax filing Use Schedule C to figure your net profit or loss from your business. Free e file and free state tax filing If you operated more than one business as a sole proprietorship, you must attach a separate Schedule C for each business. Free e file and free state tax filing You can use the simpler Schedule C-EZ if you operated only one business as a sole proprietorship, you did not have a net loss, and you meet the other requirements listed in Part I of the schedule. Free e file and free state tax filing IRS e-file (Electronic Filing) Please click here for the text description of the image. Free e file and free state tax filing E-file logo You may be able to file your tax returns electronically using an IRS e-file option. Free e file and free state tax filing Table 1-1 lists the benefits of IRS e-file. Free e file and free state tax filing IRS e-file uses automation to replace most of the manual steps needed to process paper returns. Free e file and free state tax filing As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. Free e file and free state tax filing As with a paper return, you are responsible for making sure your return contains accurate information and is filed on time. Free e file and free state tax filing Using e-file does not affect your chances of an IRS examination of your return. Free e file and free state tax filing You can file most commonly used business forms using IRS e-file. Free e file and free state tax filing For more information, visit IRS. Free e file and free state tax filing gov. Free e file and free state tax filing Electronic signatures. Free e file and free state tax filing   Paperless filing is easier than you think and it's available to most taxpayers who file electronically—including those first-time filers who were 16 or older at the end of 2013. Free e file and free state tax filing If you file electronically using tax preparation software or a tax professional, you will participate in the Self-Select PIN (personal identification number) program. Free e file and free state tax filing If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures. Free e file and free state tax filing    To create a PIN, you must know your adjusted gross income (AGI) from your originally filed 2012 income tax return (not from an amended return, Form 1040X, or any math error notice from the IRS). Free e file and free state tax filing You will also need to provide your date of birth (DOB). Free e file and free state tax filing Make sure your DOB is accurate and matches the information on record with the Social Security Administration before you e-file. Free e file and free state tax filing To do this, check your annual Social Security Statement. Free e file and free state tax filing   With a Self-Select PIN, there is nothing to sign and nothing to mail—not even your Forms W-2. Free e file and free state tax filing For more details on the Self-Select PIN program, visit IRS. Free e file and free state tax filing gov. Free e file and free state tax filing State returns. Free e file and free state tax filing   In most states, you can file an electronic state return simultaneously with your federal return. Free e file and free state tax filing For more information, check with your local IRS office, state tax agency, tax professional, or IRS. Free e file and free state tax filing gov. Free e file and free state tax filing Refunds. Free e file and free state tax filing   You can have your refund check mailed to you, or you can have your refund deposited directly to your checking or savings account. Free e file and free state tax filing   With e-file, your refund will be issued in half the time as when filing on paper. Free e file and free state tax filing Most refunds are issued within 3 weeks. Free e file and free state tax filing If you choose Direct Deposit, you can receive your refund in as few as 10 days. Free e file and free state tax filing Offset against debts. Free e file and free state tax filing   As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. Free e file and free state tax filing You will be notified if the refund you claimed has been offset against your debts. Free e file and free state tax filing Refund inquiries. Free e file and free state tax filing   You can check the status of your refund if it has been at least 24 hours (4 weeks if you mailed a paper return) from the date you filed your return. Free e file and free state tax filing Be sure to have a copy of your tax return available because you will need to know the filing status, the first social security number shown on the return, and the exact whole-dollar amount of the refund. Free e file and free state tax filing To check on your refund, do one of the following. Free e file and free state tax filing Go to IRS. Free e file and free state tax filing gov and click on Where's My Refund. Free e file and free state tax filing Call 1-800-829-4477 for automated refund information, and follow the recorded instructions. Free e file and free state tax filing Call 1-800-829-1954 during the hours shown in your form instructions. Free e file and free state tax filing Balance due. Free e file and free state tax filing   If you owe tax, you must pay it by April 15, 2014, to avoid late-payment penalties and interest. Free e file and free state tax filing You can make your payment electronically by scheduling an electronic funds withdrawal from your checking or savings account or by credit card. Free e file and free state tax filing Using an Authorized IRS e-file Provider Many tax professionals can electronically file paperless returns for their clients. Free e file and free state tax filing You have two options. Free e file and free state tax filing You can prepare your return, take it to an authorized IRS e-file provider, and have the provider transmit it electronically to the IRS. Free e file and free state tax filing You can have an authorized IRS e-file provider prepare your return and transmit it for you electronically. Free e file and free state tax filing You will be asked to complete Form 8879, IRS e-file Signature Authorization, to authorize the provider to enter your self-selected PIN on your return. Free e file and free state tax filing Depending on the provider and the specific services requested, a fee may be charged. Free e file and free state tax filing To find an authorized IRS e-file provider near you, go to IRS. Free e file and free state tax filing gov or look for an “Authorized IRS e-file Provider” sign. Free e file and free state tax filing Using Your Personal Computer A computer with Internet access is all you need to file your tax return using IRS e-file. Free e file and free state tax filing When you use your personal computer, you can e-file your return from your home any time of the day or night. Free e file and free state tax filing Sign your return electronically using a self-selected PIN to complete the process. Free e file and free state tax filing There is no signature form to submit or Forms W-2 to send in. Free e file and free state tax filing Free Internet filing options. Free e file and free state tax filing   More taxpayers can now prepare and e-file their individual income tax returns free using commercial tax preparation software accessible through IRS. Free e file and free state tax filing gov or www. Free e file and free state tax filing usa. Free e file and free state tax filing gov. Free e file and free state tax filing The IRS is partnering with the tax software industry to offer free preparation and filing services to a significant number of taxpayers. Free e file and free state tax filing Security and privacy certificate programs will assure tax data is safe and secure. Free e file and free state tax filing To see if you qualify for these services, visit the Return Preparation and Filing Options page at IRS. Free e file and free state tax filing gov. Free e file and free state tax filing   If you cannot use the free services, you can buy tax preparation software at various electronics stores or computer and office supply stores. Free e file and free state tax filing You can also download software from the Internet or prepare and file your return completely online by using tax preparation software available on the Internet. Free e file and free state tax filing Filing Through Employers and Financial Institutions Some businesses offer free e-file to their employees, members, or customers. Free e file and free state tax filing Others offer it for a fee. Free e file and free state tax filing Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit. Free e file and free state tax filing Free Help With Your Return Free help in preparing your return is available nationwide from IRS-trained volunteers. Free e file and free state tax filing The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers, and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. Free e file and free state tax filing Some locations offer free electronic filing. Free e file and free state tax filing Table 1-1. Free e file and free state tax filing Benefits of IRS e-file Accuracy • Your chance of getting an error notice from the IRS is significantly reduced. Free e file and free state tax filing Security • Your privacy and security are assured. Free e file and free state tax filing Electronic signatures • Create your own personal identification number (PIN) and file a completely paperless return through your tax preparation software or tax professional. Free e file and free state tax filing There is nothing to mail. Free e file and free state tax filing Proof of acceptance • You receive an electronic acknowledgment within 48 hours that the IRS has accepted your return for processing. Free e file and free state tax filing Fast refunds • You get your refund faster with Direct Deposit—in as few as 10 days. Free e file and free state tax filing Free Internet filing options • Use IRS. Free e file and free state tax filing gov to access commercial tax preparation and e-file services available at no cost to eligible taxpayers. Free e file and free state tax filing Electronic payment options • Convenient, safe, and secure electronic payment options are available. Free e file and free state tax filing E-file and pay your taxes in a single step. Free e file and free state tax filing Schedule an electronic funds withdrawal from your checking or savings account (up to and including April 15, 2014) or pay by credit card. Free e file and free state tax filing Federal/State filing • Prepare and file your federal and state tax returns together and double the benefits you get from e-file. Free e file and free state tax filing When Is My Tax Return Due? Form 1040 for calendar year 2013 is due by April 15, 2014. Free e file and free state tax filing If you use a fiscal year (explained in chapter 2), your return is due by the 15th day of the 4th month after the end of your fiscal year. Free e file and free state tax filing If you file late, you may have to pay penalties and interest. Free e file and free state tax filing If you cannot file your return on time, use Form 4868, Application for Automatic Extension of Time To File U. Free e file and free state tax filing S. Free e file and free state tax filing Individual Income Tax Return, to request an automatic 6-month extension. Free e file and free state tax filing For calendar year taxpayers, this will extend the tax filing due date until October 15. Free e file and free state tax filing Filing an extension does not extend the time to pay your taxes, only the time to file the tax return. Free e file and free state tax filing How Do I Pay Income Tax? Federal income tax is a pay-as-you-go tax. Free e file and free state tax filing You must pay it as you earn or receive income during the year. Free e file and free state tax filing An employee usually has income tax withheld from his or her pay. Free e file and free state tax filing If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Free e file and free state tax filing You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax (discussed later), of $1,000 or more when you file your return. Free e file and free state tax filing Use Form 1040-ES to figure and pay the tax. Free e file and free state tax filing If you do not have to make estimated tax payments, you can pay any tax due when you file your return. Free e file and free state tax filing For more information on estimated tax, see Publication 505, Tax Withholding and Estimated Tax. Free e file and free state tax filing What are my payment options?   You can pay your estimated tax electronically using various options. Free e file and free state tax filing If you pay electronically, there is no need to mail in Form 1040-ES payment vouchers. Free e file and free state tax filing These options include: Paying electronically through the Electronic Federal Tax Payment System (EFTPS). Free e file and free state tax filing Paying by authorizing an electronic funds withdrawal when you file Form 1040 electronically. Free e file and free state tax filing Paying by credit or debit card over the phone or by Internet. Free e file and free state tax filing Other options include crediting an overpayment from your 2013 return to your 2014 estimated tax, or mailing a check or money order with a Form 1040-ES payment voucher. Free e file and free state tax filing EFTPS    To enroll in EFTPS, go to www. Free e file and free state tax filing eftps. Free e file and free state tax filing gov or call 1-800-555-4477. Free e file and free state tax filing When you request a new EIN and you will have a tax obligation, you are automatically enrolled in EFTPS. Free e file and free state tax filing Benefits of EFTPS: The chance of an error in making your payments is reduced. Free e file and free state tax filing You receive immediate confirmation of every transaction. Free e file and free state tax filing Penalty for underpayment of tax. Free e file and free state tax filing   If you did not pay enough income tax and self-employment tax for 2013 by withholding or by making estimated tax payments, you may have to pay a penalty on the amount not paid. Free e file and free state tax filing The IRS will figure the penalty for you and send you a bill. Free e file and free state tax filing Or you can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you have to pay a penalty and to figure the penalty amount. Free e file and free state tax filing For more information, see Publication 505. Free e file and free state tax filing Self-Employment (SE) Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Free e file and free state tax filing It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. Free e file and free state tax filing If you earned income as a statutory employee, you do not pay SE tax on that income. Free e file and free state tax filing Social security coverage. Free e file and free state tax filing   Social security benefits are available to self-employed persons just as they are to wage earners. Free e file and free state tax filing Your payments of SE tax contribute to your coverage under the social security system. Free e file and free state tax filing Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Free e file and free state tax filing By not reporting all of your self-employment income, you could cause your social security benefits to be lower when you retire. Free e file and free state tax filing How to become insured under social security. Free e file and free state tax filing   You must be insured under the social security system before you begin receiving social security benefits. Free e file and free state tax filing You are insured if you have the required number of credits (also called quarters of coverage), discussed next. Free e file and free state tax filing Earning credits in 2013 and 2014. Free e file and free state tax filing   For 2013, you received one credit, up to a maximum of four credits, for each $1,160 ($1,200 for 2014) of income subject to social security taxes. Free e file and free state tax filing Therefore, for 2013, if you had income (self-employment and wages) of $4,640 that was subject to social security taxes, you receive four credits ($4,640 ÷ $1,160). Free e file and free state tax filing   For an explanation of the number of credits you must have to be insured and the benefits available to you and your family under the social security program, consult your nearest Social Security Administration (SSA) office. Free e file and free state tax filing    Making false statements to get or to increase social security benefits may subject you to penalties. Free e file and free state tax filing The Social Security Administration (SSA) time limit for posting self-employment income. Free e file and free state tax filing   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Free e file and free state tax filing If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. Free e file and free state tax filing The SSA will not change its records to increase your self-employment income. Free e file and free state tax filing Who must pay self-employment tax. Free e file and free state tax filing   You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. Free e file and free state tax filing Your net earnings from self-employment (excluding church employee income) were $400 or more. Free e file and free state tax filing You had church employee income of $108. Free e file and free state tax filing 28 or more. Free e file and free state tax filing The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. Free e file and free state tax filing SE tax rate. Free e file and free state tax filing   For 2013, the SE tax rate on net earnings is 15. Free e file and free state tax filing 3% (12. Free e file and free state tax filing 4% social security tax plus 2. Free e file and free state tax filing 9% Medicare tax). Free e file and free state tax filing Maximum earnings subject to SE tax. Free e file and free state tax filing   Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. Free e file and free state tax filing 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. Free e file and free state tax filing   All your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. Free e file and free state tax filing 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. Free e file and free state tax filing   If wages and tips you receive as an employee are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. Free e file and free state tax filing 4% social security part of the SE tax on any of your net earnings. Free e file and free state tax filing However, you must pay the 2. Free e file and free state tax filing 9% Medicare part of the SE tax on all your net earnings. Free e file and free state tax filing Deduct one-half of your SE tax as an adjustment to income on line 27 of Form 1040. Free e file and free state tax filing   More information. Free e file and free state tax filing   For information on methods of calculating SE tax, see Chapter 10, Self-Employment Tax. Free e file and free state tax filing Table 1-2. Free e file and free state tax filing Which Forms Must I File? IF you are liable for: THEN use Form: DUE by:1 Income tax 1040 and Schedule C or C-EZ2 15th day of 4th month after end of  tax year. Free e file and free state tax filing Self-employment tax Schedule SE File with Form 1040. Free e file and free state tax filing Estimated tax 1040-ES 15th day of 4th, 6th, and 9th months of tax year, and 15th day of 1st month after the end of tax year. Free e file and free state tax filing Social security and Medicare taxes and income tax withholding 941 or 944 April 30, July 31, October 31, and January 313. Free e file and free state tax filing     See Publication 15. Free e file and free state tax filing Providing information on social security and Medicare taxes and income tax withholding W-2 (to employee)  W-2 and W-3 (to the Social Security Administration) January 313. Free e file and free state tax filing   Last day of February (March 31 if filing electronically)3. Free e file and free state tax filing Federal unemployment (FUTA) tax 940 January 313. Free e file and free state tax filing     April 30, July 31, October 31, and January 31, but only if the liability for unpaid tax is more than $500. Free e file and free state tax filing Filing information returns for payments to nonemployees and transactions with other persons See Information Returns Forms 1099 – to the recipient by January 31 and to the IRS by February 28 (March 31 if filing electronically). Free e file and free state tax filing     Other forms – see the General Instructions for Certain Information Returns. Free e file and free state tax filing Excise tax See Excise Taxes See the instructions to the forms. Free e file and free state tax filing 1 If a due date falls on a Saturday, Sunday, or legal holiday, file by the next day that is not a Saturday, Sunday, or legal holiday. Free e file and free state tax filing For more information, see Publication 509, Tax Calendars. Free e file and free state tax filing 2 File a separate schedule for each business. Free e file and free state tax filing 3 See the form instructions if you go out of business, change the form of your business, or stop paying wages. Free e file and free state tax filing     Employment Taxes If you have employees, you will need to file forms to report employment taxes. Free e file and free state tax filing Employment taxes include the following items. Free e file and free state tax filing Social security and Medicare taxes. Free e file and free state tax filing Federal income tax withholding. Free e file and free state tax filing Federal unemployment (FUTA) tax. Free e file and free state tax filing For more information, see Publication 15 (Circular E), Employer's Tax Guide. Free e file and free state tax filing That publication explains your tax responsibilities as an employer. Free e file and free state tax filing To help you determine whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. Free e file and free state tax filing That publication has information to help you determine whether an individual is an independent contractor or an employee. Free e file and free state tax filing If you incorrectly classify an employee as an independent contractor, you may be held liable for employment taxes for that worker plus a penalty. Free e file and free state tax filing An independent contractor is someone who is self-employed. Free e file and free state tax filing You do not generally have to withhold or pay any taxes on payments made to an independent contractor. Free e file and free state tax filing Excise Taxes This section identifies some of the excise taxes you may have to pay and the forms you have to file if you do any of the following. Free e file and free state tax filing Manufacture or sell certain products. Free e file and free state tax filing Operate certain kinds of businesses. Free e file and free state tax filing Use various kinds of equipment, facilities, or products. Free e file and free state tax filing Receive payment for certain services. Free e file and free state tax filing For more information on excise taxes, see Publication 510, Excise Taxes. Free e file and free state tax filing Form 720. Free e file and free state tax filing   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. Free e file and free state tax filing Environmental taxes on the sale or use of ozone-depleting chemicals and imported products containing or manufactured with these chemicals. Free e file and free state tax filing Communications and air transportation taxes. Free e file and free state tax filing Fuel taxes. Free e file and free state tax filing Tax on the first retail sale of heavy trucks, trailers, and tractors. Free e file and free state tax filing Manufacturers taxes on the sale or use of a variety of different articles. Free e file and free state tax filing Tax on indoor tanning services. Free e file and free state tax filing Form 2290. Free e file and free state tax filing   There is a federal excise tax on the use of certain trucks, truck tractors, and buses on public highways. Free e file and free state tax filing The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Free e file and free state tax filing Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. Free e file and free state tax filing For more information, see the Instructions for Form 2290. Free e file and free state tax filing Depositing excise taxes. Free e file and free state tax filing   If you have to file a quarterly excise tax return on Form 720, you may have to deposit your excise taxes before the return is due. Free e file and free state tax filing For details on depositing excise taxes, see the Instructions for Form 720. Free e file and free state tax filing Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. Free e file and free state tax filing The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. Free e file and free state tax filing You must give a copy of each information return you are required to file to the recipient or payer. Free e file and free state tax filing In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. Free e file and free state tax filing For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. Free e file and free state tax filing Form 1099-MISC. Free e file and free state tax filing   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your business. Free e file and free state tax filing These payments include the following items. Free e file and free state tax filing Payments of $600 or more for services performed for your business by people not treated as your employees, such as fees to subcontractors, attorneys, accountants, or directors. Free e file and free state tax filing Rent payments of $600 or more, other than rents paid to real estate agents. Free e file and free state tax filing Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. Free e file and free state tax filing Royalty payments of $10 or more. Free e file and free state tax filing Payments to certain crew members by operators of fishing boats. Free e file and free state tax filing You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. Free e file and free state tax filing Form W-2. Free e file and free state tax filing   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. Free e file and free state tax filing You can file Form W-2 online. Free e file and free state tax filing For more information about Form W-2, see the General Instructions for Forms W-2 and W-3. Free e file and free state tax filing Penalties. Free e file and free state tax filing   The law provides for the following penalties if you do not file Form 1099-MISC or Form W-2 or do not correctly report the information. Free e file and free state tax filing For more information, see the General Instructions for Certain Information Returns. Free e file and free state tax filing Failure to file information returns. Free e file and free state tax filing This penalty applies if you do not file information returns by the due date, do not include all required information, or report incorrect information. Free e file and free state tax filing Failure to furnish correct payee statements. Free e file and free state tax filing This penalty applies if you do not furnish a required statement to a payee by the required date, do not include all required information, or report incorrect information. Free e file and free state tax filing Waiver of penalties. Free e file and free state tax filing   These penalties will not apply if you can show that the failure was due to reasonable cause and not willful neglect. Free e file and free state tax filing   In addition, there is no penalty for failure to include all required information, or for including incorrect information, on a de minimis (small) number of information returns if you correct the errors by August 1 of the year the returns are due. Free e file and free state tax filing (A de minimis number of returns is the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. Free e file and free state tax filing ) Form 8300. Free e file and free state tax filing   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction, or two or more related business transactions. Free e file and free state tax filing Cash includes U. Free e file and free state tax filing S. Free e file and free state tax filing and foreign coin and currency. Free e file and free state tax filing It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. Free e file and free state tax filing Cash does not include a check drawn on an individual's personal account (personal check). Free e file and free state tax filing For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). Free e file and free state tax filing Penalties. Free e file and free state tax filing   There are civil and criminal penalties, including up to 5 years in prison, for not filing Form 8300, filing (or causing the filing of) a false or fraudulent Form 8300, or structuring a transaction to evade reporting requirements. Free e file and free state tax filing Table 1-3. Free e file and free state tax filing Going Out of Business Checklists (Note. Free e file and free state tax filing The following checklists highlight the typical final forms and schedules you may need to file if you ever go out of business. Free e file and free state tax filing For more information, see the instructions for the listed forms. Free e file and free state tax filing ) IF you are liable for:   THEN you may need to: Income tax □ File Schedule C or C-EZ with your Form 1040 for the year in which you go out of business. Free e file and free state tax filing   □ File Form 4797 with your Form 1040 for each year in which you sell or exchange property used in your business or in which the business use of certain section 179 or listed property drops to 50% or less. Free e file and free state tax filing   □ File Form 8594 with your Form 1040 if you sold your business. Free e file and free state tax filing Self-employment tax □ File Schedule SE with your Form 1040 for the year in which you go out of business. Free e file and free state tax filing Employment taxes □ File Form 941 (or Form 944) for the calendar quarter in which you make final wage payments. Free e file and free state tax filing Note. Free e file and free state tax filing Do not forget to check the box and enter the date final wages were paid on line 15 of Form 941 or line 14 of Form 944. Free e file and free state tax filing   □ File Form 940 for the calendar year in which final wages were paid. Free e file and free state tax filing Note. Free e file and free state tax filing Do not forget to check box d, Final: Business closed or stopped paying wages, under Type of Return. Free e file and free state tax filing Information returns □ Provide Forms W-2 to your employees for the calendar year in which you make final wage payments. Free e file and free state tax filing Note. Free e file and free state tax filing These forms are generally due by the due date of your final Form 941 or Form 944. Free e file and free state tax filing   □ File Form W-3 to file Forms W-2. Free e file and free state tax filing Note. Free e file and free state tax filing These forms are generally due within 1 month after the due date of your final Form 941 or Form 944. Free e file and free state tax filing   □ Provide Forms 1099-MISC to each person to whom you have paid at least $600 for services (including parts and materials) during the calendar year in which you go out of business. Free e file and free state tax filing   □ File Form 1096 to file Forms 1099-MISC. Free e file and free state tax filing Prev  Up  Next   Home   More Online Publications
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TEB Post-Issuance Compliance: Some Basic Concepts

Tax Exempt Bonds (TEB) focuses on providing participants in the municipal bond industry with quality service to assist issuers and conduit borrowers in understanding their tax responsibilities.  As part of that service, TEB is providing the following basic information for issuers of tax-advantaged bonds with respect to their post-issuance compliance requirements.  Issuers may use this basic information to establish due diligence practices to monitor tax compliance throughout the period that their bonds are outstanding.  However, issuers may not cite this basic information as an authoritative source.  TEB recommends that issuers review this basic information in consultation with their counsel.

Generally

Tax-advantaged bonds (tax-exempt, tax credit, and direct pay) are bonds that receive preferential tax treatment.  These bonds, issued by or on behalf of state and local governments, are subject to applicable federal tax requirements both at the time of issuance and for so long as the bonds remain outstanding.  An issuer or other party’s failure to comply with any applicable federal tax requirement with respect to tax-advantaged bonds jeopardizes the preferential tax status of those bonds.  

Compliance with certain applicable federal tax requirements normally occurs at the closing of the bond transaction, while other federal tax requirements require on-going monitoring after the issuance of the bonds.  Issuance related requirements include filing a Form 8038 series information return ( 8038, 8038-G, 8038-GC, 8038-B, or 8038-TC) and the issuer having reasonable expectations of on-going post-issuance compliance.  Additional issuance related requirements might include volume cap allocation limits and public approval of the bond issue.

Post-issuance federal tax requirements generally fall into two categories:  (1) qualified use of proceeds and financed property; and (2) arbitrage yield restriction and rebate.  Qualified use requirements require monitoring of the various direct and indirect uses of bond-financed property over the life of the bonds and calculations of the percentage of nonqualified uses.  Arbitrage requirements also require monitoring over the life of the bonds to determine whether both the yield on investments acquired with bond proceeds are properly restricted and whether the issuer must file Form 8038-T to pay a yield reduction payment and/or rebate payment.

Some federal tax requirements that are generally issuance related might require some level of post-issuance due diligence monitoring.  For example, adjustments to the determination of issue price for federal tax purposes can affect compliance with volume cap allocation, arbitrage yield restriction, and other federal tax requirements.  Similarly, some level of post-issuance monitoring may be required to determine compliance with the issuance costs limitations applicable to qualified private activity bonds.

Importance of Post-Issuance Compliance

The on-going nature of post-issuance compliance requirements applicable to tax-advantaged bonds requires issuers to actively monitor compliance throughout the entire period their bonds remain outstanding.  This due diligence will significantly improve the issuer’s ability to identify noncompliance and prevent violations from occurring, or timely correct identified violations (when prevention is not possible), to ensure the continued tax-advantaged status of the bonds. 

Written Procedures for Monitoring Compliance

Issuers should adopt written procedures, applicable to all bond issues, which go beyond reliance on tax certificates included in bond documents provided at closing.  Sole reliance on the closing bond documents may result in procedures insufficiently detailed or not incorporated into an issuer’s operations.  Written procedures should contain certain key characteristics, including making provision for:

  • Due diligence review at regular intervals;
  • Identifying the official or employee responsible for review;
  • Training of the responsible official/employee;
  • Retention of adequate records to substantiate compliance (e.g., records relating to expenditure of proceeds);
  • Procedures reasonably expected to timely identify noncompliance; and
  • Procedures ensuring that the issuer will take steps to timely correct noncompliance.

The goal of establishing and following written procedures is to identify and resolve noncompliance, on a timely basis, to preserve the preferential status of tax-advantaged bonds.  Generally, an issuer that has established and followed comprehensive written procedures to promote post-issuance compliance is less likely, than an issuer that does not have such procedures, to violate the federal tax requirements related to its bonds.

How Does the IRS Promote Post-Issuance Compliance?

TEB administers a Voluntary Closing Agreement Program (TEB VCAP) to assist issuers in resolving federal tax violations related to their bonds as described in Notice 2008-31 and IRM section 7.2.3

Generally, an issuer will receive more favorable resolution terms under TEB VCAP than for the same tax violation discovered during an examination of the bonds.  In addition, an issuer that identifies a violation in accordance with the implementation of its written post-issuance compliance procedures can generally expect to receive more favorable treatment in resolving its tax violation under TEB VCAP than if the issuer has not implemented such procedures.

TEB uses compliance check questionnaires to evaluate compliance trends and practices issuers use to monitor compliance with federal tax requirements.  For example, in May 2011 TEB initiated a questionnaire project on advance refundings.  Generally, the design of the questionnaires is to gather information from a segment of the municipal bond market.  While these questionnaires are not examinations of  specific bond issues, the data collected allows TEB to develop new voluntary compliance and education programs as well as to identify future compliance projects.

Issuers of tax-advantaged bonds are required to file a Form 8038 series information return.  All Form 8038 series returns include questions regarding whether the issuer has established written procedures to timely identify and correct violations and to ensure compliance with the arbitrage yield restriction and rebate requirements.
 
The Advisory Committee on Tax Exempt and Government Entities (ACT) issued several reports related to post-issuance compliance.  Specific ACT recommendations on post-issuance compliance procedures are included in an exhibit to its June 2007 report.

Page Last Reviewed or Updated: 08-Jan-2014

The Free E File And Free State Tax Filing

Free e file and free state tax filing Publication 3920 - Introductory Material Table of Contents Introduction Useful Items - You may want to see: Introduction This publication explains some of the provisions of the Victims of Terrorism Tax Relief Act of 2001. Free e file and free state tax filing Under this Act, the federal income tax liability of those killed in the following attacks is forgiven for certain tax years. Free e file and free state tax filing The April 19, 1995, attack on the Alfred P. Free e file and free state tax filing Murrah Federal Building (Oklahoma City attack). Free e file and free state tax filing The September 11, 2001, attacks on the World Trade Center, the Pentagon, and United Airlines Flight 93 in Somerset County, Pennsylvania (September 11 attacks). Free e file and free state tax filing Terrorist attacks involving anthrax occurring after September 10, 2001, and before January 1, 2002 (anthrax attacks). Free e file and free state tax filing The Act also provides other types of relief. Free e file and free state tax filing For example, it provides that the following amounts are not included in income. Free e file and free state tax filing Payments from the September 11th Victim Compensation Fund of 2001. Free e file and free state tax filing Qualified disaster relief payments made after September 10, 2001, to cover personal, family, living, or funeral expenses incurred because of a terrorist attack. Free e file and free state tax filing Certain disability payments received in tax years ending after September 10, 2001, for injuries sustained in a terrorist attack. Free e file and free state tax filing Death benefits paid by an employer to the survivor of an employee if the benefits are paid because the employee died as a result of a terrorist attack. Free e file and free state tax filing Debt cancellations made after September 10, 2001, and before January 1, 2002, because an individual died as a result of the September 11 attacks or anthrax attacks. Free e file and free state tax filing Worksheet A. Free e file and free state tax filing Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Free e file and free state tax filing 1       2 Enter the total tax from the decedent's income tax return. Free e file and free state tax filing See Table 1 on page 5 for the line number for years before 2002. Free e file and free state tax filing 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Free e file and free state tax filing (These taxes are not eligible for forgiveness. Free e file and free state tax filing )           a Self-employment tax. Free e file and free state tax filing 3a         b Social security and Medicare tax on tip income not reported to employer. Free e file and free state tax filing 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Free e file and free state tax filing 3c         d Tax on excess accumulation in qualified retirement plans. Free e file and free state tax filing 3d         e Household employment taxes. Free e file and free state tax filing 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Free e file and free state tax filing 3f         g Tax on golden parachute payments. Free e file and free state tax filing 3g       4 Add lines 3a through 3g. Free e file and free state tax filing 4       5 Tax to be forgiven. Free e file and free state tax filing Subtract line 4 from line 2. Free e file and free state tax filing 5       Note. Free e file and free state tax filing If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Free e file and free state tax filing Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Free e file and free state tax filing If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Free e file and free state tax filing The IRS will determine the amount to be refunded. Free e file and free state tax filing Worksheet A. Free e file and free state tax filing Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Free e file and free state tax filing 1       2 Enter the total tax from the decedent's income tax return. Free e file and free state tax filing See Table 1 on page 5 for the line number for years before 2002. Free e file and free state tax filing 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Free e file and free state tax filing (These taxes are not eligible for forgiveness. Free e file and free state tax filing )           a Self-employment tax. Free e file and free state tax filing 3a         b Social security and Medicare tax on tip income not reported to employer. Free e file and free state tax filing 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Free e file and free state tax filing 3c         d Tax on excess accumulation in qualified retirement plans. Free e file and free state tax filing 3d         e Household employment taxes. Free e file and free state tax filing 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Free e file and free state tax filing 3f         g Tax on golden parachute payments. Free e file and free state tax filing 3g       4 Add lines 3a through 3g. Free e file and free state tax filing 4       5 Tax to be forgiven. Free e file and free state tax filing Subtract line 4 from line 2. Free e file and free state tax filing 5       Note. Free e file and free state tax filing If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Free e file and free state tax filing Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Free e file and free state tax filing If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Free e file and free state tax filing The IRS will determine the amount to be refunded. Free e file and free state tax filing Useful Items - You may want to see: Publication 547 Casualties, Disasters, and Thefts 559 Survivors, Executors, and Administrators Form (and Instructions) 706 United States Estate (and Generation- Skipping Transfer) Tax Return 1040 U. Free e file and free state tax filing S. Free e file and free state tax filing Individual Income Tax Return 1040NR U. Free e file and free state tax filing S. Free e file and free state tax filing Nonresident Alien Income Tax Return 1040X Amended U. Free e file and free state tax filing S. Free e file and free state tax filing Individual Income Tax Return 1041 U. Free e file and free state tax filing S. Free e file and free state tax filing Income Tax Return for Estates and Trusts 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer 4506 Request for Copy or Transcript of Tax Form Prev  Up  Next   Home   More Online Publications