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Free efile h&r block 4. Free efile h&r block   Tax Withholding and Estimated Tax Table of Contents What's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 What's New for 2014 Tax law changes for 2014. Free efile h&r block  When you figure how much income tax you want withheld from your pay and when you figure your estimated tax, consider tax law changes effective in 2014. Free efile h&r block For more information, see Publication 505. Free efile h&r block Reminders Estimated tax safe harbor for higher income taxpayers. Free efile h&r block  If your 2013 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2014 or 110% of the tax shown on your 2013 return to avoid an estimated tax penalty. Free efile h&r block Introduction This chapter discusses how to pay your tax as you earn or receive income during the year. Free efile h&r block In general, the federal income tax is a pay-as-you-go tax. Free efile h&r block There are two ways to pay as you go. Free efile h&r block Withholding. Free efile h&r block If you are an employee, your employer probably withholds income tax from your pay. Free efile h&r block Tax also may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. Free efile h&r block The amount withheld is paid to the IRS in your name. Free efile h&r block Estimated tax. Free efile h&r block If you do not pay your tax through withholding, or do not pay enough tax that way, you may have to pay estimated tax. Free efile h&r block People who are in business for themselves generally will have to pay their tax this way. Free efile h&r block Also, you may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rent, and royalties. Free efile h&r block Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Free efile h&r block This chapter explains these methods. Free efile h&r block In addition, it also explains the following. Free efile h&r block Credit for withholding and estimated tax. Free efile h&r block When you file your 2013 income tax return, take credit for all the income tax withheld from your salary, wages, pensions, etc. Free efile h&r block , and for the estimated tax you paid for 2013. Free efile h&r block Also take credit for any excess social security or railroad retirement tax withheld (discussed in chapter 37). Free efile h&r block Underpayment penalty. Free efile h&r block If you did not pay enough tax during the year, either through withholding or by making estimated tax payments, you may have to pay a penalty. Free efile h&r block In most cases, the IRS can figure this penalty for you. Free efile h&r block See Underpayment Penalty for 2013 at the end of this chapter. Free efile h&r block Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request 1040-ES Estimated Tax for Individuals 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen Tax Withholding for 2014 This section discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. Free efile h&r block This section explains the rules for withholding tax from each of these types of income. Free efile h&r block This section also covers backup withholding on interest, dividends, and other payments. Free efile h&r block Salaries and Wages Income tax is withheld from the pay of most employees. Free efile h&r block Your pay includes your regular pay, bonuses, commissions, and vacation allowances. Free efile h&r block It also includes reimbursements and other expense allowances paid under a nonaccountable plan. Free efile h&r block See Supplemental Wages , later, for more information about reimbursements and allowances paid under a nonaccountable plan. Free efile h&r block If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. Free efile h&r block This is explained under Exemption From Withholding , later. Free efile h&r block You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. Free efile h&r block If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Free efile h&r block Military retirees. Free efile h&r block   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. Free efile h&r block Household workers. Free efile h&r block   If you are a household worker, you can ask your employer to withhold income tax from your pay. Free efile h&r block A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. Free efile h&r block   Tax is withheld only if you want it withheld and your employer agrees to withhold it. Free efile h&r block If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed later under Estimated Tax for 2014 . Free efile h&r block Farmworkers. Free efile h&r block   Generally, income tax is withheld from your cash wages for work on a farm unless your employer does both of these: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. Free efile h&r block Differential wage payments. Free efile h&r block    When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Free efile h&r block Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. Free efile h&r block The wages and withholding will be reported on Form W-2, Wage and Tax Statement. Free efile h&r block   The credit employers can claim for differential wages paid to activated military reservists is scheduled to expire for wages paid after December 31, 2013. Free efile h&r block Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. Free efile h&r block The amount you earn in each payroll period. Free efile h&r block The information you give your employer on Form W-4. Free efile h&r block Form W-4 includes four types of information that your employer will use to figure your withholding. Free efile h&r block Whether to withhold at the single rate or at the lower married rate. Free efile h&r block How many withholding allowances you claim (each allowance reduces the amount withheld). Free efile h&r block Whether you want an additional amount withheld. Free efile h&r block Whether you are claiming an exemption from withholding in 2014. Free efile h&r block See Exemption From Withholding , later. Free efile h&r block Note. Free efile h&r block You must specify a filing status and a number of withholding allowances on Form W-4. Free efile h&r block You cannot specify only a dollar amount of withholding. Free efile h&r block New Job When you start a new job, you must fill out Form W-4 and give it to your employer. Free efile h&r block Your employer should have copies of the form. Free efile h&r block If you need to change the information later, you must fill out a new form. Free efile h&r block If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. Free efile h&r block You may be able to avoid overwithholding if your employer agrees to use the part-year method. Free efile h&r block See Part-Year Method in chapter 1 of Publication 505 for more information. Free efile h&r block Employee also receiving pension income. Free efile h&r block   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. Free efile h&r block However, you can choose to split your withholding allowances between your pension and job in any manner. Free efile h&r block Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. Free efile h&r block When this happens, you may need to give your employer a new Form W-4 to change your withholding status or your number of allowances. Free efile h&r block If the changes reduce the number of allowances you are claiming or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. Free efile h&r block Generally, you can submit a new Form W-4 whenever you wish to change the number of your withholding allowances for any other reason. Free efile h&r block Changing your withholding for 2015. Free efile h&r block   If events in 2014 will decrease the number of your withholding allowances for 2015, you must give your employer a new Form W-4 by December 1, 2014. Free efile h&r block If the event occurs in December 2014, submit a new Form W-4 within 10 days. Free efile h&r block Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too little or too much. Free efile h&r block If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. Free efile h&r block You should try to have your withholding match your actual tax liability. Free efile h&r block If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. Free efile h&r block If too much tax is withheld, you will lose the use of that money until you get your refund. Free efile h&r block Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. Free efile h&r block Note. Free efile h&r block You cannot give your employer a payment to cover withholding on salaries and wages for past pay periods or a payment for estimated tax. Free efile h&r block Completing Form W-4 and Worksheets Form W-4 has worksheets to help you figure how many withholding allowances you can claim. Free efile h&r block The worksheets are for your own records. Free efile h&r block Do not give them to your employer. Free efile h&r block Multiple jobs. Free efile h&r block   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Free efile h&r block Then split your allowances between the Forms W-4 for each job. Free efile h&r block You cannot claim the same allowances with more than one employer at the same time. Free efile h&r block You can claim all your allowances with one employer and none with the other(s), or divide them any other way. Free efile h&r block Married individuals. Free efile h&r block   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Free efile h&r block Use only one set of worksheets. Free efile h&r block You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. Free efile h&r block   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. Free efile h&r block Alternative method of figuring withholding allowances. Free efile h&r block   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. Free efile h&r block For more information, see Alternative method of figuring withholding allowances under Completing Form W-4 and Worksheets in Publication 505, chapter 1. Free efile h&r block Personal Allowances Worksheet. Free efile h&r block   Use the Personal Allowances Worksheet on Form W-4 to figure your withholding allowances based on exemptions and any special allowances that apply. Free efile h&r block Deduction and Adjustments Worksheet. Free efile h&r block   Use the Deduction and Adjustments Worksheet on Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. Free efile h&r block Also, complete this worksheet when you have changes to these items to see if you need to change your withholding. Free efile h&r block Two-Earners/Multiple Jobs Worksheet. Free efile h&r block   You may need to complete the Two-Earners/Multiple Jobs Worksheet on Form W-4 if you have more than one job, a working spouse, or are also receiving a pension. Free efile h&r block Also, on this worksheet you can add any additional withholding necessary to cover any amount you expect to owe other than income tax, such as self-employment tax. Free efile h&r block Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. Free efile h&r block You accurately complete all the Form W-4 worksheets that apply to you. Free efile h&r block You give your employer a new Form W-4 when changes occur. Free efile h&r block But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. Free efile h&r block This is most likely to happen in the following situations. Free efile h&r block You are married and both you and your spouse work. Free efile h&r block You have more than one job at a time. Free efile h&r block You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. Free efile h&r block You will owe additional amounts with your return, such as self-employment tax. Free efile h&r block Your withholding is based on obsolete Form W-4 information for a substantial part of the year. Free efile h&r block Your earnings are more than the amount shown under Check your withholding in the instructions at the top of page 1 of Form W-4. Free efile h&r block You work only part of the year. Free efile h&r block You change the number of your withholding allowances during the year. Free efile h&r block Cumulative wage method. Free efile h&r block   If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. Free efile h&r block You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. Free efile h&r block You must ask your employer in writing to use this method. Free efile h&r block   To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. Free efile h&r block ) since the beginning of the year. Free efile h&r block Publication 505 To make sure you are getting the right amount of tax withheld, get Publication 505. Free efile h&r block It will help you compare the total tax to be withheld during the year with the tax you can expect to figure on your return. Free efile h&r block It also will help you determine how much, if any, additional withholding is needed each payday to avoid owing tax when you file your return. Free efile h&r block If you do not have enough tax withheld, you may have to pay estimated tax, as explained under Estimated Tax for 2014 , later. Free efile h&r block You can use the IRS Withholding Calculator at www. Free efile h&r block irs. Free efile h&r block gov/Individuals, instead of Publication 505 or the worksheets included with Form W-4, to determine whether you need to have your withholding increased or decreased. Free efile h&r block Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. Free efile h&r block These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. Free efile h&r block New Form W-4. Free efile h&r block   When you start a new job, your employer should have you complete a Form W-4. Free efile h&r block Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. Free efile h&r block   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. Free efile h&r block The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. Free efile h&r block No Form W-4. Free efile h&r block   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. Free efile h&r block Repaying withheld tax. Free efile h&r block   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Free efile h&r block Your employer cannot repay any of the tax previously withheld. Free efile h&r block Instead, claim the full amount withheld when you file your tax return. Free efile h&r block   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Free efile h&r block Your employer can repay the amount that was withheld incorrectly. Free efile h&r block If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. Free efile h&r block Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. Free efile h&r block The exemption applies only to income tax, not to social security or Medicare tax. Free efile h&r block You can claim exemption from withholding for 2014 only if both of the following situations apply. Free efile h&r block For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. Free efile h&r block For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. Free efile h&r block Students. Free efile h&r block   If you are a student, you are not automatically exempt. Free efile h&r block See chapter 1 to find out if you must file a return. Free efile h&r block If you work only part time or only during the summer, you may qualify for exemption from withholding. Free efile h&r block Age 65 or older or blind. Free efile h&r block   If you are 65 or older or blind, use Worksheet 1-3 or 1-4 in chapter 1 of Publication 505, to help you decide if you qualify for exemption from withholding. Free efile h&r block Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. Free efile h&r block Instead, see Itemizing deductions or claiming exemptions or credits in chapter 1 of Publication 505. Free efile h&r block Claiming exemption from withholding. Free efile h&r block   To claim exemption, you must give your employer a Form W-4. Free efile h&r block Do not complete lines 5 and 6. Free efile h&r block Enter “Exempt” on line 7. Free efile h&r block   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. Free efile h&r block If you claim exemption in 2014, but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. Free efile h&r block   Your claim of exempt status may be reviewed by the IRS. Free efile h&r block An exemption is good for only 1 year. Free efile h&r block   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. Free efile h&r block Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. Free efile h&r block The payer can figure withholding on supplemental wages using the same method used for your regular wages. Free efile h&r block However, if these payments are identified separately from your regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. Free efile h&r block Expense allowances. Free efile h&r block   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. Free efile h&r block   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. Free efile h&r block   For more information about accountable and nonaccountable expense allowance plans, see Reimbursements in chapter 26. Free efile h&r block Penalties You may have to pay a penalty of $500 if both of the following apply. Free efile h&r block You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. Free efile h&r block You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. Free efile h&r block There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. Free efile h&r block The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. Free efile h&r block These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. Free efile h&r block A simple error or an honest mistake will not result in one of these penalties. Free efile h&r block For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a W-4 penalty. Free efile h&r block Tips The tips you receive while working on your job are considered part of your pay. Free efile h&r block You must include your tips on your tax return on the same line as your regular pay. Free efile h&r block However, tax is not withheld directly from tip income, as it is from your regular pay. Free efile h&r block Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. Free efile h&r block See chapter 6 for information on reporting your tips to your employer. Free efile h&r block For more information on the withholding rules for tip income, see Publication 531, Reporting Tip Income. Free efile h&r block How employer figures amount to withhold. Free efile h&r block   The tips you report to your employer are counted as part of your income for the month you report them. Free efile h&r block Your employer can figure your withholding in either of two ways. Free efile h&r block By withholding at the regular rate on the sum of your pay plus your reported tips. Free efile h&r block By withholding at the regular rate on your pay plus a percentage of your reported tips. Free efile h&r block Not enough pay to cover taxes. Free efile h&r block   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. Free efile h&r block See Giving your employer money for taxes in chapter 6. Free efile h&r block Allocated tips. Free efile h&r block   Your employer should not withhold income tax, Medicare tax, social security tax, or railroad retirement tax on any allocated tips. Free efile h&r block Withholding is based only on your pay plus your reported tips. Free efile h&r block Your employer should refund to you any incorrectly withheld tax. Free efile h&r block See Allocated Tips in chapter 6 for more information. Free efile h&r block Taxable Fringe Benefits The value of certain noncash fringe benefits you receive from your employer is considered part of your pay. Free efile h&r block Your employer generally must withhold income tax on these benefits from your regular pay. Free efile h&r block For information on fringe benefits, see Fringe Benefits under Employee Compensation in chapter 5. Free efile h&r block Although the value of your personal use of an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can choose not to withhold income tax on that amount. Free efile h&r block Your employer must notify you if this choice is made. Free efile h&r block For more information on withholding on taxable fringe benefits, see chapter 1 of Publication 505. Free efile h&r block Sick Pay Sick pay is a payment to you to replace your regular wages while you are temporarily absent from work due to sickness or personal injury. Free efile h&r block To qualify as sick pay, it must be paid under a plan to which your employer is a party. Free efile h&r block If you receive sick pay from your employer or an agent of your employer, income tax must be withheld. Free efile h&r block An agent who does not pay regular wages to you may choose to withhold income tax at a flat rate. Free efile h&r block However, if you receive sick pay from a third party who is not acting as an agent of your employer, income tax will be withheld only if you choose to have it withheld. Free efile h&r block See Form W-4S , later. Free efile h&r block If you receive payments under a plan in which your employer does not participate (such as an accident or health plan where you paid all the premiums), the payments are not sick pay and usually are not taxable. Free efile h&r block Union agreements. Free efile h&r block   If you receive sick pay under a collective bargaining agreement between your union and your employer, the agreement may determine the amount of income tax withholding. Free efile h&r block See your union representative or your employer for more information. Free efile h&r block Form W-4S. Free efile h&r block   If you choose to have income tax withheld from sick pay paid by a third party, such as an insurance company, you must fill out Form W-4S. Free efile h&r block Its instructions contain a worksheet you can use to figure the amount you want withheld. Free efile h&r block They also explain restrictions that may apply. Free efile h&r block   Give the completed form to the payer of your sick pay. Free efile h&r block The payer must withhold according to your directions on the form. Free efile h&r block Estimated tax. Free efile h&r block   If you do not request withholding on Form W-4S, or if you do not have enough tax withheld, you may have to make estimated tax payments. Free efile h&r block If you do not pay enough tax, either through estimated tax or withholding, or a combination of both, you may have to pay a penalty. Free efile h&r block See Underpayment Penalty for 2013 at the end of this chapter. Free efile h&r block Pensions and Annuities Income tax usually will be withheld from your pension or annuity distributions unless you choose not to have it withheld. Free efile h&r block This rule applies to distributions from: A traditional individual retirement arrangement (IRA); A life insurance company under an endowment, annuity, or life insurance contract; A pension, annuity, or profit-sharing plan; A stock bonus plan; and Any other plan that defers the time you receive compensation. Free efile h&r block The amount withheld depends on whether you receive payments spread out over more than 1 year (periodic payments), within 1 year (nonperiodic payments), or as an eligible rollover distribution (ERD). Free efile h&r block Income tax withholding from an ERD is mandatory. Free efile h&r block More information. Free efile h&r block   For more information on taxation of annuities and distributions (including ERDs) from qualified retirement plans, see chapter 10. Free efile h&r block For information on IRAs, see chapter 17. Free efile h&r block For more information on withholding on pensions and annuities, including a discussion of Form W-4P, see Pensions and Annuities in chapter 1 of Publication 505. Free efile h&r block Gambling Winnings Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings. Free efile h&r block Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding. Free efile h&r block Any sweepstakes; wagering pool, including payments made to winners of poker tournaments; or lottery. Free efile h&r block Any other wager, if the proceeds are at least 300 times the amount of the bet. Free efile h&r block It does not matter whether your winnings are paid in cash, in property, or as an annuity. Free efile h&r block Winnings not paid in cash are taken into account at their fair market value. Free efile h&r block Exception. Free efile h&r block   Gambling winnings from bingo, keno, and slot machines generally are not subject to income tax withholding. Free efile h&r block However, you may need to provide the payer with a social security number to avoid withholding. Free efile h&r block See Backup withholding on gambling winnings in chapter 1 of Publication 505. Free efile h&r block If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. Free efile h&r block See Estimated Tax for 2014 , later. Free efile h&r block If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Free efile h&r block See Underpayment Penalty for 2013 at the end of this chapter. Free efile h&r block Form W-2G. Free efile h&r block   If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld. Free efile h&r block Report the tax withheld on line 62 of Form 1040. Free efile h&r block Unemployment Compensation You can choose to have income tax withheld from unemployment compensation. Free efile h&r block To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Free efile h&r block All unemployment compensation is taxable. Free efile h&r block So, if you do not have income tax withheld, you may have to pay estimated tax. Free efile h&r block See Estimated Tax for 2014 , later. Free efile h&r block If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Free efile h&r block For information, see Underpayment Penalty for 2013 at the end of this chapter. Free efile h&r block Federal Payments You can choose to have income tax withheld from certain federal payments you receive. Free efile h&r block These payments are: Social security benefits, Tier 1 railroad retirement benefits, Commodity credit corporation loans you choose to include in your gross income, Payments under the Agricultural Act of 1949 (7 U. Free efile h&r block S. Free efile h&r block C. Free efile h&r block 1421 et. Free efile h&r block seq. Free efile h&r block ), as amended, or title II of the Disaster Assistance Act of 1988, that are treated as insurance proceeds and that you receive because: Your crops were destroyed or damaged by drought, flood, or any other natural disaster, or You were unable to plant crops because of a natural disaster described in (a), and Any other payment under Federal law as determined by the Secretary. Free efile h&r block To make this choice, fill out Form W-4V (or a similar form provided by the payer) and give it to the payer. Free efile h&r block If you do not choose to have income tax withheld, you may have to pay estimated tax. Free efile h&r block See Estimated Tax for 2014 , later. Free efile h&r block If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Free efile h&r block For information, see Underpayment Penalty for 2013 at the end of this chapter. Free efile h&r block More information. Free efile h&r block   For more information about the tax treatment of social security and railroad retirement benefits, see chapter 11. Free efile h&r block Get Publication 225, Farmer's Tax Guide, for information about the tax treatment of commodity credit corporation loans or crop disaster payments. Free efile h&r block Backup Withholding Banks or other businesses that pay you certain kinds of income must file an information return (Form 1099) with the IRS. Free efile h&r block The information return shows how much you were paid during the year. Free efile h&r block It also includes your name and taxpayer identification number (TIN). Free efile h&r block TINs are explained in chapter 1 under Social Security Number (SSN) . Free efile h&r block These payments generally are not subject to withholding. Free efile h&r block However, “backup” withholding is required in certain situations. Free efile h&r block Backup withholding can apply to most kinds of payments that are reported on Form 1099. Free efile h&r block The payer must withhold at a flat 28% rate in the following situations. Free efile h&r block You do not give the payer your TIN in the required manner. Free efile h&r block The IRS notifies the payer that the TIN you gave is incorrect. Free efile h&r block You are required, but fail, to certify that you are not subject to backup withholding. Free efile h&r block The IRS notifies the payer to start withholding on interest or dividends because you have underreported interest or dividends on your income tax return. Free efile h&r block The IRS will do this only after it has mailed you four notices over at least a 210-day period. Free efile h&r block See Backup Withholding in chapter 1 of Publication 505 for more information. Free efile h&r block Penalties. Free efile h&r block   There are civil and criminal penalties for giving false information to avoid backup withholding. Free efile h&r block The civil penalty is $500. Free efile h&r block The criminal penalty, upon conviction, is a fine of up to $1,000 or imprisonment of up to 1 year, or both. Free efile h&r block Estimated Tax for 2014 Estimated tax is the method used to pay tax on income that is not subject to withholding. Free efile h&r block This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Free efile h&r block You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Free efile h&r block Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. Free efile h&r block If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Free efile h&r block If you do not pay enough by the due date of each payment period (see When To Pay Estimated Tax , later), you may be charged a penalty even if you are due a refund when you file your tax return. Free efile h&r block For information on when the penalty applies, see Underpayment Penalty for 2013 at the end of this chapter. Free efile h&r block Who Does Not Have To Pay Estimated Tax If you receive salaries or wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. Free efile h&r block To do this, give a new Form W-4 to your employer. Free efile h&r block See chapter 1 of Publication 505. Free efile h&r block Estimated tax not required. Free efile h&r block   You do not have to pay estimated tax for 2014 if you meet all three of the following conditions. Free efile h&r block You had no tax liability for 2013. Free efile h&r block You were a U. Free efile h&r block S. Free efile h&r block citizen or resident alien for the whole year. Free efile h&r block Your 2013 tax year covered a 12-month period. Free efile h&r block   You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return. Free efile h&r block For the definition of “total tax” for 2013, see Publication 505, chapter 2. Free efile h&r block Who Must Pay Estimated Tax If you owe additional tax for 2013, you may have to pay estimated tax for 2014. Free efile h&r block You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. Free efile h&r block General rule. Free efile h&r block   In most cases, you must pay estimated tax for 2014 if both of the following apply. Free efile h&r block You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Free efile h&r block You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers, later). Free efile h&r block Your 2013 tax return must cover all 12 months. Free efile h&r block    If the result from using the general rule above suggests that you will not have enough withholding, complete the 2014 Estimated Tax Worksheet in Publication 505 for a more accurate calculation. Free efile h&r block Special rules for farmers, fishermen, and higher income taxpayers. Free efile h&r block   If at least two-thirds of your gross income for tax year 2013 or 2014 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. Free efile h&r block If your AGI for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. Free efile h&r block See Figure 4-A and Publication 505, chapter 2 for more information. Free efile h&r block Figure 4-A. Free efile h&r block Do You Have To Pay Estimated Tax? Please click here for the text description of the image. Free efile h&r block Figure 4-A Do You Have To Pay Estimated Tax? Aliens. Free efile h&r block   Resident and nonresident aliens also may have to pay estimated tax. Free efile h&r block Resident aliens should follow the rules in this chapter unless noted otherwise. Free efile h&r block Nonresident aliens should get Form 1040-ES (NR), U. Free efile h&r block S. Free efile h&r block Estimated Tax for Nonresident Alien Individuals. Free efile h&r block   You are an alien if you are not a citizen or national of the United States. Free efile h&r block You are a resident alien if you either have a green card or meet the substantial presence test. Free efile h&r block For more information about the substantial presence test, see Publication 519, U. Free efile h&r block S. Free efile h&r block Tax Guide for Aliens. Free efile h&r block Married taxpayers. Free efile h&r block   If you qualify to make joint estimated tax payments, apply the rules discussed here to your joint estimated income. Free efile h&r block   You and your spouse can make joint estimated tax payments even if you are not living together. Free efile h&r block   However, you and your spouse cannot make joint estimated tax payments if:  You are legally separated under a decree of divorce or separate maintenance, You and your spouse have different tax years, or Either spouse is a nonresident alien (unless that spouse elected to be treated as a resident alien for tax purposes (see chapter 1 of Publication 519)). Free efile h&r block   If you do not qualify to make joint estimated tax payments, apply these rules to your separate estimated income. Free efile h&r block Making joint or separate estimated tax payments will not affect your choice of filing a joint tax return or separate returns for 2014. Free efile h&r block 2013 separate returns and 2014 joint return. Free efile h&r block   If you plan to file a joint return with your spouse for 2014, but you filed separate returns for 2013, your 2013 tax is the total of the tax shown on your separate returns. Free efile h&r block You filed a separate return if you filed as single, head of household, or married filing separately. Free efile h&r block 2013 joint return and 2014 separate returns. Free efile h&r block   If you plan to file a separate return for 2014 but you filed a joint return for 2013, your 2013 tax is your share of the tax on the joint return. Free efile h&r block You file a separate return if you file as single, head of household, or married filing separately. Free efile h&r block   To figure your share of the tax on the joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2013 using the same filing status as for 2014. Free efile h&r block Then multiply the tax on the joint return by the following fraction. Free efile h&r block     The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Free efile h&r block Joe and Heather filed a joint return for 2013 showing taxable income of $48,500 and a tax of $6,386. Free efile h&r block Of the $48,500 taxable income, $40,100 was Joe's and the rest was Heather's. Free efile h&r block For 2014, they plan to file married filing separately. Free efile h&r block Joe figures his share of the tax on the 2013 joint return as follows. Free efile h&r block   Tax on $40,100 based on a separate return $5,960     Tax on $8,400 based on a separate return 843     Total $6,803     Joe's percentage of total ($5,960 ÷ $6,803) 87. Free efile h&r block 6%     Joe's share of tax on joint return  ($6,386 × 87. Free efile h&r block 6%) $5,594   How To Figure Estimated Tax To figure your estimated tax, you must figure your expected adjusted gross income (AGI), taxable income, taxes, deductions, and credits for the year. Free efile h&r block When figuring your 2014 estimated tax, it may be helpful to use your income, deductions, and credits for 2013 as a starting point. Free efile h&r block Use your 2013 federal tax return as a guide. Free efile h&r block You can use Form 1040-ES and Publication 505 to figure your estimated tax. Free efile h&r block Nonresident aliens use Form 1040-ES (NR) and Publication 505 to figure estimated tax (see chapter 8 of Publication 519 for more information). Free efile h&r block You must make adjustments both for changes in your own situation and for recent changes in the tax law. Free efile h&r block For a discussion of these changes, visit IRS. Free efile h&r block gov. Free efile h&r block For more complete information on how to figure your estimated tax for 2014, see chapter 2 of Publication 505. Free efile h&r block When To Pay Estimated Tax For estimated tax purposes, the tax year is divided into four payment periods. Free efile h&r block Each period has a specific payment due date. Free efile h&r block If you do not pay enough tax by the due date of each payment period, you may be charged a penalty even if you are due a refund when you file your income tax return. Free efile h&r block The payment periods and due dates for estimated tax payments are shown next. Free efile h&r block   For the period: Due date:*     Jan. Free efile h&r block 1 – March 31 April 15     April 1 – May 31 June 16     June 1 – August 31 Sept. Free efile h&r block 15     Sept. Free efile h&r block 1– Dec. Free efile h&r block 31 Jan. Free efile h&r block 15, next year     *See Saturday, Sunday, holiday rule and January payment . Free efile h&r block Saturday, Sunday, holiday rule. Free efile h&r block   If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday. Free efile h&r block January payment. Free efile h&r block   If you file your 2014 Form 1040 or Form 1040A by January 31, 2015, and pay the rest of the tax you owe, you do not need to make the payment due on January 15, 2015. Free efile h&r block Fiscal year taxpayers. Free efile h&r block   If your tax year does not start on January 1, see the Form 1040-ES instructions for your payment due dates. Free efile h&r block When To Start You do not have to make estimated tax payments until you have income on which you will owe income tax. Free efile h&r block If you have income subject to estimated tax during the first payment period, you must make your first payment by the due date for the first payment period. Free efile h&r block You can pay all your estimated tax at that time, or you can pay it in installments. Free efile h&r block If you choose to pay in installments, make your first payment by the due date for the first payment period. Free efile h&r block Make your remaining installment payments by the due dates for the later periods. Free efile h&r block No income subject to estimated tax during first period. Free efile h&r block    If you do not have income subject to estimated tax until a later payment period, you must make your first payment by the due date for that period. Free efile h&r block You can pay your entire estimated tax by the due date for that period or you can pay it in installments by the due date for that period and the due dates for the remaining periods. Free efile h&r block The following chart shows when to make installment payments. Free efile h&r block If you first have income on which you must pay estimated tax: Make a payment  by:* Make later installments by:* Before April 1 April 15 June 16 Sept. Free efile h&r block 15 Jan. Free efile h&r block 15 next year April 1–May 31 June 16 Sept. Free efile h&r block 15 Jan. Free efile h&r block 15 next year June 1–Aug. Free efile h&r block 31 Sept. Free efile h&r block 15 Jan. Free efile h&r block 15 next year After Aug. Free efile h&r block 31 Jan. Free efile h&r block 15 next year (None) *See Saturday, Sunday, holiday rule and January payment . Free efile h&r block How much to pay to avoid a penalty. Free efile h&r block   To determine how much you should pay by each payment due date, see How To Figure Each Payment, next. Free efile h&r block How To Figure Each Payment You should pay enough estimated tax by the due date of each payment period to avoid a penalty for that period. Free efile h&r block You can figure your required payment for each period by using either the regular installment method or the annualized income installment method. Free efile h&r block These methods are described in chapter 2 of Publication 505. Free efile h&r block If you do not pay enough during each payment period, you may be charged a penalty even if you are due a refund when you file your tax return. Free efile h&r block If the earlier discussion of No income subject to estimated tax during first period or the later discussion of Change in estimated tax applies to you, you may benefit from reading Annualized Income Installment Method in chapter 2 of Publication 505 for information on how to avoid a penalty. Free efile h&r block Underpayment penalty. Free efile h&r block   Under the regular installment method, if your estimated tax payment for any period is less than one-fourth of your estimated tax, you may be charged a penalty for underpayment of estimated tax for that period when you file your tax return. Free efile h&r block Under the annualized income installment method, your estimated tax payments vary with your income, but the amount required must be paid each period. Free efile h&r block See chapter 4 of Publication 505 for more information. Free efile h&r block Change in estimated tax. Free efile h&r block   After you make an estimated tax payment, changes in your income, adjustments, deductions, credits, or exemptions may make it necessary for you to refigure your estimated tax. Free efile h&r block Pay the unpaid balance of your amended estimated tax by the next payment due date after the change or in installments by that date and the due dates for the remaining payment periods. Free efile h&r block Estimated Tax Payments Not Required You do not have to pay estimated tax if your withholding in each payment period is at least as much as: One-fourth of your required annual payment, or Your required annualized income installment for that period. Free efile h&r block You also do not have to pay estimated tax if you will pay enough through withholding to keep the amount you owe with your return under $1,000. Free efile h&r block How To Pay Estimated Tax There are several ways to pay estimated tax. Free efile h&r block Credit an overpayment on your 2013 return to your 2014 estimated tax. Free efile h&r block Pay by direct transfer from your bank account, or pay by credit or debit card using a pay-by-phone system or the Internet. Free efile h&r block Send in your payment (check or money order) with a payment voucher from Form 1040-ES. Free efile h&r block Credit an Overpayment If you show an overpayment of tax after completing your Form 1040 or Form 1040A for 2013, you can apply part or all of it to your estimated tax for 2014. Free efile h&r block On line 75 of Form 1040, or line 44 of Form 1040A, enter the amount you want credited to your estimated tax rather than refunded. Free efile h&r block Take the amount you have credited into account when figuring your estimated tax payments. Free efile h&r block You cannot have any of the amount you credited to your estimated tax refunded to you until you file your tax return for the following year. Free efile h&r block You also cannot use that overpayment in any other way. Free efile h&r block Pay Online Paying online is convenient and secure and helps make sure we get your payments on time. Free efile h&r block You can pay using either of the following electronic payment methods. Free efile h&r block Direct transfer from your bank account. Free efile h&r block Credit or debit card. Free efile h&r block To pay your taxes online or for more information, go to www. Free efile h&r block irs. Free efile h&r block gov/e-pay. Free efile h&r block Pay by Phone Paying by phone is another safe and secure method of paying electronically. Free efile h&r block Use one of the following methods. Free efile h&r block Direct transfer from your bank account. Free efile h&r block Credit or debit card. Free efile h&r block To pay by direct transfer from your bank account, call 1-800-555-4477 (English), 1-800-244-4829 (Espanol). Free efile h&r block People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD can call 1-800-733-4829. Free efile h&r block To pay using a credit or debit card, you can call one of the following service providers. Free efile h&r block There is a convenience fee charged by these providers that varies by provider, card type, and payment amount. Free efile h&r block WorldPay 1-888-9-PAY-TAXTM(1-888-972-9829) www. Free efile h&r block payUSAtax. Free efile h&r block com Official Payments Corporation 1-888-UPAY-TAXTM (1-888-872-9829) www. Free efile h&r block officialpayments. Free efile h&r block com Link2Gov Corporation 1-888-PAY-1040TM (1-888-729-1040) www. Free efile h&r block PAY1040. Free efile h&r block com For the latest details on how to pay by phone, go to www. Free efile h&r block irs. Free efile h&r block gov/e-pay. Free efile h&r block Pay by Check or Money Order Using the Estimated Tax Payment Voucher Each payment of estimated tax by check or money order must be accompanied by a payment voucher from Form 1040-ES. Free efile h&r block During 2013, if you: made at least one estimated tax payment but not by electronic means, did not use software or a paid preparer to prepare or file your return,  then you should receive a copy of the 2014 Form 1040-ES/V. Free efile h&r block The enclosed payment vouchers will be preprinted with your name, address, and social security number. Free efile h&r block Using the preprinted vouchers will speed processing, reduce the chance of error, and help save processing costs. Free efile h&r block Use the window envelopes that came with your Form 1040-ES package. Free efile h&r block If you use your own envelopes, make sure you mail your payment vouchers to the address shown in the Form 1040-ES instructions for the place where you live. Free efile h&r block Note. Free efile h&r block These criteria can change without notice. Free efile h&r block If you do not receive a Form 1040-ES/V package and you are required to make an estimated tax payment, you should go to www. Free efile h&r block irs. Free efile h&r block gov and print a copy of Form 1040-ES which includes four blank payment vouchers. Free efile h&r block Complete one of these and make your payment timely to avoid penalties for paying late. Free efile h&r block Do not use the address shown in the Form 1040 or Form 1040A instructions for your estimated tax payments. Free efile h&r block If you did not pay estimated tax last year, you can order Form 1040-ES from the IRS (see inside back cover of this publication) or download it from IRS. Free efile h&r block gov. Free efile h&r block Follow the instructions to make sure you use the vouchers correctly. Free efile h&r block Joint estimated tax payments. Free efile h&r block   If you file a joint return and are making joint estimated tax payments, enter the names and social security numbers on the payment voucher in the same order as they will appear on the joint return. Free efile h&r block Change of address. Free efile h&r block   You must notify the IRS if you are making estimated tax payments and you changed your address during the year. Free efile h&r block Complete Form 8822, Change of Address, and mail it to the address shown in the instructions for that form. Free efile h&r block Credit for Withholding and Estimated Tax for 2013 When you file your 2013 income tax return, take credit for all the income tax and excess social security or railroad retirement tax withheld from your salary, wages, pensions, etc. Free efile h&r block Also take credit for the estimated tax you paid for 2013. Free efile h&r block These credits are subtracted from your total tax. Free efile h&r block Because these credits are refundable, you should file a return and claim these credits, even if you do not owe tax. Free efile h&r block Two or more employers. Free efile h&r block   If you had two or more employers in 2013 and were paid wages of more than $113,700, too much social security or tier 1 railroad retirement tax may have been withheld from your pay. Free efile h&r block You may be able to claim the excess as a credit against your income tax when you file your return. Free efile h&r block See Credit for Excess Social Security Tax or Railroad Retirement Tax Withheld in chapter 37. Free efile h&r block Withholding If you had income tax withheld during 2013, you should be sent a statement by January 31, 2014, showing your income and the tax withheld. Free efile h&r block Depending on the source of your income, you should receive: Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or A form in the 1099 series. Free efile h&r block Forms W-2 and W-2G. Free efile h&r block   If you file a paper return, always file Form W-2 with your income tax return. Free efile h&r block File Form W-2G with your return only if it shows any federal income tax withheld from your winnings. Free efile h&r block   You should get at least two copies of each form. Free efile h&r block If you file a paper return, attach one copy to the front of your federal income tax return. Free efile h&r block Keep one copy for your records. Free efile h&r block You also should receive copies to file with your state and local returns. Free efile h&r block Form W-2 Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. Free efile h&r block You should receive a separate Form W-2 from each employer you worked for. Free efile h&r block If you stopped working before the end of 2013, your employer could have given you your Form W-2 at any time after you stopped working. Free efile h&r block However, your employer must provide or send it to you by January 31, 2014. Free efile h&r block If you ask for the form, your employer must send it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later. Free efile h&r block If you have not received your Form W-2 by January 31, you should ask your employer for it. Free efile h&r block If you do not receive it by February 15, call the IRS. Free efile h&r block Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Free efile h&r block Include the federal income tax withheld (as shown in box 2 of Form W-2) on: Line 62 if you file Form 1040, Line 36 if you file Form 1040A, or Line 7 if you file Form 1040EZ. Free efile h&r block In addition, Form W-2 is used to report any taxable sick pay you received and any income tax withheld from your sick pay. Free efile h&r block Form W-2G If you had gambling winnings in 2013, the payer may have withheld income tax. Free efile h&r block If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. Free efile h&r block Report the amounts you won on line 21 of Form 1040. Free efile h&r block Take credit for the tax withheld on line 62 of Form 1040. Free efile h&r block If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ. Free efile h&r block The 1099 Series Most forms in the 1099 series are not filed with your return. Free efile h&r block These forms should be furnished to you by January 31, 2014 (or, for Forms 1099-B, 1099-S, and certain Forms 1099-MISC, by February 15, 2014). Free efile h&r block Unless instructed to file any of these forms with your return, keep them for your records. Free efile h&r block There are several different forms in this series, including: Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; Form 1099-DIV, Dividends and Distributions; Form 1099-G, Certain Government Payments; Form 1099-INT, Interest Income; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Income; Form 1099-OID, Original Issue Discount; Form 1099-PATR, Taxable Distributions Received from Cooperatives; Form 1099-Q, Payments From Qualified Education Programs; Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Free efile h&r block ; Form 1099-S, Proceeds From Real Estate Transactions; Form RRB-1099, Payments by the Railroad Retirement Board. Free efile h&r block If you received the types of income reported on some forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. Free efile h&r block See the instructions to these forms for details. Free efile h&r block Form 1099-R. Free efile h&r block   Attach Form 1099-R to your paper return if box 4 shows federal income tax withheld. Free efile h&r block Include the amount withheld in the total on line 62 of Form 1040 or line 36 of Form 1040A. Free efile h&r block You cannot use Form 1040EZ if you received payments reported on Form 1099-R. Free efile h&r block Backup withholding. Free efile h&r block   If you were subject to backup withholding on income you received during 2013, include the amount withheld, as shown on your Form 1099, in the total on line 62 of Form 1040, line 36 of Form 1040A, or line 7 of Form 1040EZ. Free efile h&r block Form Not Correct If you receive a form with incorrect information on it, you should ask the payer for a corrected form. Free efile h&r block Call the telephone number or write to the address given for the payer on the form. Free efile h&r block The corrected Form W-2G or Form 1099 you receive will have an “X” in the “CORRECTED” box at the top of the form. Free efile h&r block A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2. Free efile h&r block In certain situations, you will receive two forms in place of the original incorrect form. Free efile h&r block This will happen when your taxpayer identification number is wrong or missing, your name and address are wrong, or you received the wrong type of form (for example, a Form 1099-DIV instead of a Form 1099-INT). Free efile h&r block One new form you receive will be the same incorrect form or have the same incorrect information, but all money amounts will be zero. Free efile h&r block This form will have an “X” in the “CORRECTED” box at the top of the form. Free efile h&r block The second new form should have all the correct information, prepared as though it is the original (the “CORRECTED” box will not be checked). Free efile h&r block Form Received After Filing If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X, Amended U. Free efile h&r block S. Free efile h&r block Individual Income Tax Return. Free efile h&r block Separate Returns If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Free efile h&r block Do not include any amount withheld from your spouse's income. Free efile h&r block However, different rules may apply if you live in a community property state. Free efile h&r block Community property states are listed in chapter 2. Free efile h&r block For more information on these rules, and some exceptions, see Publication 555, Community Property. Free efile h&r block Fiscal Years If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules to determine your credit for federal income tax withholding. Free efile h&r block For a discussion of how to take credit for withholding on a fiscal year return, see Fiscal Years (FY) in chapter 3 of Publication 505. Free efile h&r block Estimated Tax Take credit for all your estimated tax payments for 2013 on line 63 of Form 1040 or line 37 of Form 1040A. Free efile h&r block Include any overpayment from 2012 that you had credited to your 2013 estimated tax. Free efile h&r block You must use Form 1040 or Form 1040A if you paid estimated tax. Free efile h&r block You cannot use Form 1040EZ. Free efile h&r block Name changed. Free efile h&r block   If you changed your name, and you made estimated tax payments using your old name, attach a brief statement to the front of your paper tax return indicating: When you made the payments, The amount of each payment, Your name when you made the payments, and Your social security number. Free efile h&r block The statement should cover payments you made jointly with your spouse as well as any you made separately. Free efile h&r block   Be sure to report the change to the Social Security Administration. Free efile h&r block This prevents delays in processing your return and issuing any refunds. Free efile h&r block Separate Returns If you and your spouse made separate estimated tax payments for 2013 and you file separate returns, you can take credit only for your own payments. Free efile h&r block If you made joint estimated tax payments, you must decide how to divide the payments between your returns. Free efile h&r block One of you can claim all of the estimated tax paid and the other none, or you can divide it in any other way you agree on. Free efile h&r block If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2013. Free efile h&r block Divorced Taxpayers If you made joint estimated tax payments for 2013, and you were divorced during the year, either you or your former spouse can claim all of the joint payments, or you each can claim part of them. Free efile h&r block If you cannot agree on how to divide the payments, you must divide them in proportion to each spouse's individual tax as shown on your separate returns for 2013. Free efile h&r block If you claim any of the joint payments on your tax return, enter your former spouse's social security number (SSN) in the space provided on the front of Form 1040 or Form 1040A. Free efile h&r block If you divorced and remarried in 2013, enter your present spouse's SSN in that space and write your former spouse's SSN, followed by “DIV,” to the left of Form 1040, line 63, or Form 1040A, line 37. Free efile h&r block Underpayment Penalty for 2013 If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty. Free efile h&r block Generally, you will not have to pay a penalty for 2013 if any of the following apply. Free efile h&r block The total of your withholding and estimated tax payments was at least as much as your 2012 tax (or 110% of your 2012 tax if your AGI was more than $150,000, $75,000 if your 2013 filing status is married filing separately) and you paid all required estimated tax payments on time. Free efile h&r block The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Free efile h&r block Your total 2013 tax minus your withholding and refundable credits is less than $1,000. Free efile h&r block You did not have a tax liability for 2012 and your 2012 tax year was 12 months, or You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000. Free efile h&r block See Publication 505, chapter 4, for a definition of “total tax” for 2012 and 2013. Free efile h&r block Farmers and fishermen. Free efile h&r block   Special rules apply if you are a farmer or fisherman. Free efile h&r block See Farmers and Fishermen in chapter 4 of Publication 505 for more information. Free efile h&r block IRS can figure the penalty for you. Free efile h&r block   If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. Free efile h&r block Generally, the IRS will figure the penalty for you and send you a bill. Free efile h&r block However, if you think you are able to lower or eliminate your penalty, you must complete Form 2210 or Form 2210-F and attach it to your paper return. Free efile h&r block See chapter 4 of Publication 505. Free efile h&r block Prev  Up  Next   Home   More Online Publications
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Register to Vote

Find assistance with registering to vote and voting.

Registering to Vote

The U.S. Election Assistance Commission has resources for voters, including voter guides, registration information, voting accessibility, and information for military and overseas voters.

Voter Eligibility

To be eligible to vote, you must be a U.S. citizen. In most states, you must be 18 years old to vote, but some states do allow 17 year olds to vote. States also have their own residency requirements to vote. For additional information about state-specific requirements and voter eligibility, contact your state election office.

How to Register

In almost all states, you can register by mail to vote using the National Mail Voter Registration Form. North Dakota, Wyoming, American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands do not accept the National Mail Voter Registration Form. New Hampshire accepts it only as a request for an absentee voter mail-in registration form. If you live in one of these states, please check with your state election office to find out how to register to vote.

You may also use the National Mail Voter Registration Form to update your registration if you changed your name, to change your address, or to register with a political party.

You may be able to apply to register to vote in person at the following public facilities:

In some states, you can also register online to vote. To learn if your state offers online voter registration, please contact your state election office.

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State Registration Deadlines

Almost every state has a voter registration deadline. In order to be eligible to vote in the November elections, you must submit the National Mail Voter Registration Form by these deadlines:

  • Alabama – Voter registration is closed during the 10 days before an election. Applications must be postmarked or delivered by the eleventh day prior to the election.
  • Alaska – 30 days before the election
  • Arizona – 29 days before the election
  • Arkansas – 30 days before the election
  • California – 15 days before the election
  • Colorado – 29 days before the election. If the application is received in the mails without a postmark, it must be received within 5 days of the close of registration.
  • Connecticut – 14 days before the election
  • Delaware – The fourth Saturday before a primary or general election, and 10 days before a special election.
  • District of Columbia – 30 days before the election
  • Florida – 29 days before the election
  • Georgia – The fifth Monday before any general primary, general election, or presidential preference primary, or regularly scheduled special election following the Georgia Election Code. If a special  election is scheduled on a date other that those dates prescribed by the Georgia Election Code, registration would close on the fifth day after the call.
  • Hawaii – 30 days before the election
  • Idaho – 25 days before the election
  • Illinois – 28 days before the election
  • Indiana – 29 days before the election
  • Iowa – Must be delivered by 5 PM, 10 days before the election, if it is a state primary or general election; 11 days before all others. Registration forms which are postmarked 15 or more days before an election are considered on time even if received after the deadline. If you fail to meet these deadlines, you can register to vote on election day.
  • Kansas – Postmarked or delivered 21 days before the election.
  • Kentucky – 29 days before the election
  • Louisiana – 30 days before the election
  • Maine – Delivered 21 business days before the election or you can register in-person up to and including election day.
  • Maryland – Delivered by 9 PM, 21 days before the election
  • Massachusetts – 20 days before the election
  • Michigan – 30 days before the election
  • Minnesota – Delivered by 5 PM, 21 days before the election. You can also register at the polling place on election day.
  • Mississippi – 30 days before the election
  • Missouri – 28 days before the election
  • Montana – 30 days before the election
  • Nebraska – The third Friday before the election (or delivered by 6 PM, on the second Friday before the election)
  • Nevada – The deadline for mail-in registration is the fifth Saturday before any primary or general election. In person registration remains available until 9 PM on the third Tuesday preceding any primary or general election. You may register to vote in person only by appearing at the office of the County Clerk/Registrar of Voters.
  • New Hampshire – Town and city clerks will accept the National Mail Voter Registration Form only as a request for their own absentee voter mail-in registration form, which your city or town clerk must receive by 10 days before the election. You can register at the town or city clerk’s office or in-person on election day.
  • New Jersey – 21 days before the election
  • New Mexico – 28 days before the election
  • New York – 25 days before the election
  • North Carolina – Postmarked 25 days before the election or received in the elections office or designated voter registration agency site by 5 PM, 25 days before the election.
  • North Dakota – No voter registration
  • Ohio – 30 days before the election
  • Oklahoma – 25 days before the election
  • Oregon – 21 days before the election
  • Pennsylvania – 30 days before an election or primary
  • Rhode Island – 30 days before the election
  • South Carolina – 30 days before the election
  • South Dakota – Received 15 days before the election
  • Tennessee – 30 days before the election
  • Texas – 30 days before the election
  • Utah – 30 days before the election for mail-in applications and 15 days before the election for walk-in registration at the county clerk’s office
  • Vermont – Delivered to the town clerk before 5 PM, on the Wednesday before the election
  • Virginia – Delivered 22 days before the election
  • Washington – 29 days before the election or 8 days before the election if delivered in person to the local voter registration office
  • West Virginia – 21 days before the election
  • Wisconsin – 20 days before the election or completed in the local voter registration office up to 5 PM or the close of business, whichever is later, on the Friday before the election. You can also register at the polling place on election day.
  • Wyoming – Cannot accept the National Mail Voter Registration Form. You can register in-person, by mail, or at the polls on election day.

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The Free Efile H&r Block

Free efile h&r block 1. Free efile h&r block   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. Free efile h&r block Gasoline and Aviation GasolineTaxable Events Gasoline Blendstocks Diesel Fuel and KeroseneTaxable Events Dyed Diesel Fuel and Dyed Kerosene Alaska and Feedstocks Back-up Tax Diesel-Water Fuel Emulsion Kerosene for Use in AviationTaxable Events Liability For Tax Surtax on any liquid used in a fractional ownership program aircraft as fuel Certificate for Commercial Aviation and Exempt UsesExempt use. Free efile h&r block Reseller statement. Free efile h&r block Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. Free efile h&r block Deep-draft ocean-going vessels. Free efile h&r block Passenger vessels. Free efile h&r block Ocean-going barges. Free efile h&r block State or local governments. Free efile h&r block Cellulosic or Second Generation Biofuel Not Used as Fuel Biodiesel Sold as But Not Used as Fuel Definitions Excise taxes are imposed on all the following fuels. Free efile h&r block Gasoline, including aviation gasoline and gasoline blendstocks. Free efile h&r block Diesel fuel, including dyed diesel fuel. Free efile h&r block Diesel-water fuel emulsion. Free efile h&r block Kerosene, including dyed kerosene and kerosene used in aviation. Free efile h&r block Other Fuels (including alternative fuels). Free efile h&r block Compressed natural gas (CNG). Free efile h&r block Fuels used in commercial transportation on inland waterways. Free efile h&r block Any liquid used in a fractional ownership program aircraft as fuel. Free efile h&r block The following terms are used throughout the discussion of fuel taxes. Free efile h&r block Other terms are defined in the discussion of the specific fuels to which they pertain. Free efile h&r block Agri-biodiesel. Free efile h&r block   Agri-biodiesel means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats. Free efile h&r block Approved terminal or refinery. Free efile h&r block   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. Free efile h&r block Biodiesel. Free efile h&r block   Biodiesel means the monoalkyl esters of long chain fatty acids derived from plant or animal matter that meet the registration requirements for fuels and fuel additives established by the Environmental Protection Agency (EPA) under section 211 of the Clean Air Act, and the requirements of the American Society of Testing Materials (ASTM) D6751. Free efile h&r block Blended taxable fuel. Free efile h&r block   This means any taxable fuel produced outside the bulk transfer/terminal system by mixing taxable fuel on which excise tax has been imposed and any other liquid on which excise tax has not been imposed. Free efile h&r block This does not include a mixture removed or sold during the calendar quarter if all such mixtures removed or sold by the blender contain less than 400 gallons of a liquid on which the tax has not been imposed. Free efile h&r block Blender. Free efile h&r block   This is the person that produces blended taxable fuel. Free efile h&r block Bulk transfer. Free efile h&r block   This is the transfer of taxable fuel by pipeline or vessel. Free efile h&r block Bulk transfer/terminal system. Free efile h&r block   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Free efile h&r block Fuel in the supply tank of any engine, or in any tank car, railcar, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system. Free efile h&r block Cellulosic biofuel. Free efile h&r block   Cellulosic biofuel means any liquid fuel produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis that meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act. Free efile h&r block Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). Free efile h&r block For fuels sold or used after December 31, 2009, cellulosic biofuel does not include fuel of which more than 4% (determined by weight) is any combination of water and sediment, fuel of which the ash content is more than 1%, or fuel that has an acid number greater than 25. Free efile h&r block Also see Second generation biofuel below. Free efile h&r block Diesel-water fuel emulsion. Free efile h&r block   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. Free efile h&r block The emulsion additive used to produce the fuel must be registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. Free efile h&r block Dry lease aircraft exchange. Free efile h&r block   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Free efile h&r block Enterer. Free efile h&r block   This is the importer of record (under customs law) for the taxable fuel. Free efile h&r block However, if the importer of record is acting as an agent, such as a customs broker, the person for whom the agent is acting is the enterer. Free efile h&r block If there is no importer of record, the owner at the time of entry into the United States is the enterer. Free efile h&r block Entry. Free efile h&r block   Taxable fuel is entered into the United States when it is brought into the United States and applicable customs law requires that it be entered for consumption, use, or warehousing. Free efile h&r block This does not apply to fuel brought into Puerto Rico (which is part of the U. Free efile h&r block S. Free efile h&r block customs territory), but does apply to fuel brought into the United States from Puerto Rico. Free efile h&r block Fractional ownership aircraft program and fractional program aircraft. Free efile h&r block   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Free efile h&r block Measurement of taxable fuel. Free efile h&r block   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. Free efile h&r block Other fuels. Free efile h&r block   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. Free efile h&r block Pipeline operator. Free efile h&r block   This is the person that operates a pipeline within the bulk transfer/terminal system. Free efile h&r block Position holder. Free efile h&r block   This is the person that holds the inventory position in the taxable fuel in the terminal, as reflected in the records of the terminal operator. Free efile h&r block You hold the inventory position when you have a contractual agreement with the terminal operator for the use of the storage facilities and terminaling services for the taxable fuel. Free efile h&r block A terminal operator that owns taxable fuel in its terminal is a position holder. Free efile h&r block Rack. Free efile h&r block   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. Free efile h&r block Refiner. Free efile h&r block   This is any person that owns, operates, or otherwise controls a refinery. Free efile h&r block Refinery. Free efile h&r block   This is a facility used to produce taxable fuel and from which taxable fuel may be removed by pipeline, by vessel, or at a rack. Free efile h&r block However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. Free efile h&r block For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. Free efile h&r block Registrant. Free efile h&r block   This is a taxable fuel registrant (see Registration Requirements, later). Free efile h&r block Removal. Free efile h&r block   This is any physical transfer of taxable fuel. Free efile h&r block It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. Free efile h&r block However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. Free efile h&r block Renewable diesel. Free efile h&r block   See Renewable Diesel Credits in chapter 2. Free efile h&r block Sale. Free efile h&r block   For taxable fuel not in a terminal, this is the transfer of title to, or substantial incidents of ownership in, taxable fuel to the buyer for money, services, or other property. Free efile h&r block For taxable fuel in a terminal, this is the transfer of the inventory position if the transferee becomes the position holder for that taxable fuel. Free efile h&r block Second generation biofuel. Free efile h&r block   This is any liquid fuel derived by, or from, qualified feedstocks, and meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U. Free efile h&r block S. Free efile h&r block C. Free efile h&r block 7545). Free efile h&r block It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. Free efile h&r block It is not alcohol of less than 150 proof (disregard any added denaturants). Free efile h&r block See Form 6478 for more information. Free efile h&r block State. Free efile h&r block   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. Free efile h&r block An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. Free efile h&r block Taxable fuel. Free efile h&r block   This means gasoline, diesel fuel, and kerosene. Free efile h&r block Terminal. Free efile h&r block   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. Free efile h&r block It does not include a facility at which gasoline blendstocks are used in the manufacture of products other than finished gasoline if no gasoline is removed from the facility. Free efile h&r block A terminal does not include any facility where finished gasoline, diesel fuel, or kerosene is stored if the facility is operated by a registrant and all such taxable fuel stored at the facility has been previously taxed upon removal from a refinery or terminal. Free efile h&r block Terminal operator. Free efile h&r block   This is any person that owns, operates, or otherwise controls a terminal. Free efile h&r block Throughputter. Free efile h&r block   This is any person that is a position holder or that owns taxable fuel within the bulk transfer/terminal system (other than in a terminal). Free efile h&r block Vessel operator. Free efile h&r block   This is the person that operates a vessel within the bulk transfer/terminal system. Free efile h&r block However, vessel does not include a deep draft ocean-going vessel. Free efile h&r block Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. Free efile h&r block A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. Free efile h&r block For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. Free efile h&r block The returns are due the last day of the month following the month in which the transaction occurs. Free efile h&r block Generally, these returns can be filed on paper or electronically. Free efile h&r block For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. Free efile h&r block Publication 3536 is only available on the IRS website. Free efile h&r block Form 720-TO. Free efile h&r block   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. Free efile h&r block Each terminal operator must file a separate form for each approved terminal. Free efile h&r block Form 720-CS. Free efile h&r block   This information return must be filed by bulk transport carriers (barges, vessels, and pipelines) who receive liquid product from an approved terminal or deliver liquid product to an approved terminal. Free efile h&r block Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. Free efile h&r block See Form 637 for other persons who must register and for more information about registration. Free efile h&r block Persons that are required to be registered. Free efile h&r block   You are required to be registered if you are a: Blender; Enterer; Pipeline operator; Position holder; Refiner; Terminal operator; Vessel operator; Producer or importer of alcohol, biodiesel, agri-biodiesel, and renewable diesel; or Producer of cellulosic or second generation biofuel. Free efile h&r block Persons that may register. Free efile h&r block   You may, but are not required to, register if you are a: Feedstock user, Industrial user, Throughputter that is not a position holder, Ultimate vendor, Diesel-water fuel emulsion producer, Credit card issuer, or Alternative fuel claimant. Free efile h&r block Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. Free efile h&r block However, they must be registered to file claims for certain sales and uses of fuel. Free efile h&r block See Form 637 for more information. Free efile h&r block Taxable fuel registrant. Free efile h&r block   This is an enterer, an industrial user, a refiner, a terminal operator, or a throughputter who received a Letter of Registration under the excise tax registration provisions and whose registration has not been revoked or suspended. Free efile h&r block The term registrant as used in the discussions of these fuels means a taxable fuel registrant. Free efile h&r block Additional information. Free efile h&r block   See the Form 637 instructions for the information you must submit when you apply for registration. Free efile h&r block Failure to register. Free efile h&r block   The penalty for failure to register if you must register, unless due to reasonable cause, is $10,000 for the initial failure, and then $1,000 each day thereafter you fail to register. Free efile h&r block Gasoline and Aviation Gasoline Gasoline. Free efile h&r block   Gasoline means all products commonly or commercially known or sold as gasoline with an octane rating of 75 or more that are suitable for use as a motor fuel. Free efile h&r block Gasoline includes any gasoline blend other than: Qualified ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from coal, including peat), Partially exempt ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from natural gas), or Denatured alcohol. Free efile h&r block Gasoline also includes gasoline blendstocks, discussed later. Free efile h&r block Aviation gasoline. Free efile h&r block   This means all special grades of gasoline suitable for use in aviation reciprocating engines and covered by ASTM specification D910 or military specification MIL-G-5572. Free efile h&r block Taxable Events The tax on gasoline is $. Free efile h&r block 184 per gallon. Free efile h&r block The tax on aviation gasoline is $. Free efile h&r block 194 per gallon. Free efile h&r block When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. Free efile h&r block 141 per gallon. Free efile h&r block See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. Free efile h&r block Tax is imposed on the removal, entry, or sale of gasoline. Free efile h&r block Each of these events is discussed later. Free efile h&r block Also, see the special rules that apply to gasoline blendstocks, later. Free efile h&r block If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. Free efile h&r block See Refunds of Second Tax in chapter 2. Free efile h&r block Removal from terminal. Free efile h&r block   All removals of gasoline at a terminal rack are taxable. Free efile h&r block The position holder for that gasoline is liable for the tax. Free efile h&r block Two-party exchanges. Free efile h&r block   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. Free efile h&r block A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. Free efile h&r block The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. Free efile h&r block The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. Free efile h&r block The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. Free efile h&r block The transaction is subject to a written contract. Free efile h&r block Terminal operator's liability. Free efile h&r block   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. Free efile h&r block   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. Free efile h&r block The terminal operator is a registrant. Free efile h&r block The terminal operator has an unexpired notification certificate (discussed later) from the position holder. Free efile h&r block The terminal operator has no reason to believe any information on the certificate is false. Free efile h&r block Removal from refinery. Free efile h&r block   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. Free efile h&r block It is made by bulk transfer and the refiner, the owner of the gasoline immediately before the removal, or the operator of the pipeline or vessel is not a registrant. Free efile h&r block It is made at the refinery rack. Free efile h&r block The refiner is liable for the tax. Free efile h&r block Exception. Free efile h&r block   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. Free efile h&r block The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Free efile h&r block The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Free efile h&r block The removal from the refinery is by railcar. Free efile h&r block The same person operates the refinery and the facility at which the gasoline is received. Free efile h&r block Entry into the United States. Free efile h&r block   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. Free efile h&r block It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Free efile h&r block It is not made by bulk transfer. Free efile h&r block The enterer is liable for the tax. Free efile h&r block Importer of record's liability. Free efile h&r block   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. Free efile h&r block   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Free efile h&r block The importer of record has an unexpired notification certificate (discussed later) from the enterer. Free efile h&r block The importer of record has no reason to believe any information in the certificate is false. Free efile h&r block Customs bond. Free efile h&r block   The customs bond will not be charged for the tax imposed on the entry of the gasoline if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. Free efile h&r block Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Free efile h&r block   The removal by bulk transfer of gasoline from a terminal is taxable if the position holder for the gasoline or the operator of the pipeline or vessel is not a registrant. Free efile h&r block The position holder is liable for the tax. Free efile h&r block The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Free efile h&r block However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Free efile h&r block Bulk transfers not received at approved terminal or refinery. Free efile h&r block   The removal by bulk transfer of gasoline from a terminal or refinery, or the entry of gasoline by bulk transfer into the United States, is taxable if the following conditions apply. Free efile h&r block No tax was previously imposed (as discussed earlier) on any of the following events. Free efile h&r block The removal from the refinery. Free efile h&r block The entry into the United States. Free efile h&r block The removal from a terminal by an unregistered position holder. Free efile h&r block Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). Free efile h&r block   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. Free efile h&r block However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Free efile h&r block The owner is a registrant. Free efile h&r block The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. Free efile h&r block The owner has no reason to believe any information on the certificate is false. Free efile h&r block The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. Free efile h&r block The operator is jointly and severally liable if the owner does not meet these conditions. Free efile h&r block Sales to unregistered person. Free efile h&r block   The sale of gasoline located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. Free efile h&r block   The seller is liable for the tax. Free efile h&r block However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Free efile h&r block   The seller is a registrant. Free efile h&r block The seller has an unexpired notification certificate (discussed later) from the buyer. Free efile h&r block The seller has no reason to believe any information on the certificate is false. Free efile h&r block The buyer of the gasoline is liable for the tax if the seller meets these conditions. Free efile h&r block The buyer is jointly and severally liable if the seller does not meet these conditions. Free efile h&r block Exception. Free efile h&r block   The tax does not apply to a sale if all of the following apply. Free efile h&r block The buyer's principal place of business is not in the United States. Free efile h&r block The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Free efile h&r block The seller is a registrant and the exporter of record. Free efile h&r block The fuel was exported. Free efile h&r block Removal or sale of blended gasoline. Free efile h&r block   The removal or sale of blended gasoline by the blender is taxable. Free efile h&r block See Blended taxable fuel under Definitions, earlier. Free efile h&r block   The blender is liable for the tax. Free efile h&r block The tax is figured on the number of gallons not previously subject to the tax on gasoline. Free efile h&r block   Persons who blend alcohol with gasoline to produce an alcohol fuel mixture outside the bulk transfer/terminal system must pay the gasoline tax on the volume of alcohol in the mixture. Free efile h&r block See Form 720 to report this tax. Free efile h&r block You also must be registered with the IRS as a blender. Free efile h&r block See Form 637. Free efile h&r block   However, if an untaxed liquid is sold as taxed taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. Free efile h&r block Notification certificate. Free efile h&r block   The notification certificate is used to notify a person of the registration status of the registrant. Free efile h&r block A copy of the registrant's letter of registration cannot be used as a notification certificate. Free efile h&r block A model notification certificate is shown in the Appendix as Model Certificate C. Free efile h&r block A notification certificate must contain all information necessary to complete the model. Free efile h&r block   The certificate may be included as part of any business records normally used for a sale. Free efile h&r block A certificate expires on the earlier of the date the registrant provides a new certificate, or the date the recipient of the certificate is notified that the registrant's registration has been revoked or suspended. Free efile h&r block The registrant must provide a new certificate if any information on a certificate has changed. Free efile h&r block Additional persons liable. Free efile h&r block   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax is imposed on: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty, or Anyone who willfully causes the person to fail to pay the tax. Free efile h&r block Gasoline Blendstocks Gasoline blendstocks may be subject to $. Free efile h&r block 001 per gallon LUST tax as discussed below. Free efile h&r block Gasoline includes gasoline blendstocks. Free efile h&r block The previous discussions apply to these blendstocks. Free efile h&r block However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. Free efile h&r block 001 per gallon or are not subject to the excise tax. Free efile h&r block Blendstocks. Free efile h&r block   Gasoline blendstocks are: Alkylate, Butane, Butene, Catalytically cracked gasoline, Coker gasoline, Ethyl tertiary butyl ether (ETBE), Hexane, Hydrocrackate, Isomerate, Methyl tertiary butyl ether (MTBE), Mixed xylene (not including any separated isomer of xylene), Natural gasoline, Pentane, Pentane mixture, Polymer gasoline, Raffinate, Reformate, Straight-run gasoline, Straight-run naphtha, Tertiary amyl methyl ether (TAME), Tertiary butyl alcohol (gasoline grade) (TBA), Thermally cracked gasoline, and Toluene. Free efile h&r block   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. Free efile h&r block Not used to produce finished gasoline. Free efile h&r block   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. Free efile h&r block Removals and entries not connected to sale. Free efile h&r block   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. Free efile h&r block Removals and entries connected to sale. Free efile h&r block   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant, and at the time of the sale, meets the following requirements. Free efile h&r block The person has an unexpired certificate (discussed later) from the buyer. Free efile h&r block The person has no reason to believe any information in the certificate is false. Free efile h&r block Sales after removal or entry. Free efile h&r block   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. Free efile h&r block The seller is liable for the tax. Free efile h&r block However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. Free efile h&r block The seller has an unexpired certificate (discussed next) from the buyer. Free efile h&r block The seller has no reason to believe any information in the certificate is false. Free efile h&r block Certificate of buyer. Free efile h&r block   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. Free efile h&r block The certificate may be included as part of any business records normally used for a sale. Free efile h&r block A model certificate is shown in the Appendix as Model Certificate D. Free efile h&r block The certificate must contain all information necessary to complete the model. Free efile h&r block   A certificate expires on the earliest of the following dates. Free efile h&r block The date 1 year after the effective date (not earlier than the date signed) of the certificate. Free efile h&r block The date a new certificate is provided to the seller. Free efile h&r block The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. Free efile h&r block The buyer must provide a new certificate if any information on a certificate has changed. Free efile h&r block   The IRS may withdraw the buyer's right to provide a certificate if that buyer uses the gasoline blendstocks in the production of finished gasoline or resells the blendstocks without getting a certificate from its buyer. Free efile h&r block Received at approved terminal or refinery. Free efile h&r block   The nonbulk removal or entry of gasoline blendstocks received at an approved terminal or refinery is not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) meets all the following requirements. Free efile h&r block The person is a registrant. Free efile h&r block The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. Free efile h&r block The person has no reason to believe any information on the certificate is false. Free efile h&r block Bulk transfers to registered industrial user. Free efile h&r block   The removal of gasoline blendstocks from a pipeline or vessel is not taxable (other than LUST) if the blendstocks are received by a registrant that is an industrial user. Free efile h&r block An industrial user is any person that receives gasoline blendstocks by bulk transfer for its own use in the manufacture of any product other than finished gasoline. Free efile h&r block Credits or Refunds. Free efile h&r block   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. Free efile h&r block For more information, see chapter 2. Free efile h&r block Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). Free efile h&r block However, special rules (discussed later) apply to dyed diesel fuel and dyed kerosene, and to undyed diesel fuel and undyed kerosene sold or used in Alaska for certain nontaxable uses and undyed kerosene used for a feedstock purpose. Free efile h&r block Diesel fuel means: Any liquid that without further processing or blending is suitable for use as a fuel in a diesel-powered highway vehicle or train, and Transmix. Free efile h&r block A liquid is suitable for this use if the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. Free efile h&r block A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. Free efile h&r block However, a liquid does not possess this practical and commercial fitness solely by reason of its possible or rare use as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. Free efile h&r block Diesel fuel does not include gasoline, kerosene, excluded liquid, No. Free efile h&r block 5 and No. Free efile h&r block 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. Free efile h&r block An excluded liquid is either of the following. Free efile h&r block A liquid that contains less than 4% normal paraffins. Free efile h&r block A liquid with all the following properties. Free efile h&r block Distillation range of 125 degrees Fahrenheit or less. Free efile h&r block Sulfur content of 10 ppm or less. Free efile h&r block Minimum color of +27 Saybolt. Free efile h&r block Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. Free efile h&r block Kerosene. Free efile h&r block   This means any of the following liquids. Free efile h&r block One of the two grades of kerosene (No. Free efile h&r block 1-K and No. Free efile h&r block 2-K) covered by ASTM specification D3699. Free efile h&r block Kerosene-type jet fuel covered by ASTM specification D1655 or military specification MIL-DTL-5624T (Grade JP-5) or MIL-DTL-83133E (Grade JP-8). Free efile h&r block See Kerosene for Use in Aviation, later. Free efile h&r block   However, kerosene does not include excluded liquid, discussed earlier. Free efile h&r block   Kerosene also includes any liquid that would be described above but for the presence of a dye of the type used to dye kerosene for a nontaxable use. Free efile h&r block Diesel-powered highway vehicle. Free efile h&r block   This is any self-propelled vehicle designed to carry a load over public highways (whether or not also designed to perform other functions) and propelled by a diesel-powered engine. Free efile h&r block Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. Free efile h&r block For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. Free efile h&r block 2) in chapter 2. Free efile h&r block Diesel-powered train. Free efile h&r block   This is any diesel-powered equipment or machinery that rides on rails. Free efile h&r block The term includes a locomotive, work train, switching engine, and track maintenance machine. Free efile h&r block Taxable Events The tax on diesel fuel and kerosene is $. Free efile h&r block 244 per gallon. Free efile h&r block It is imposed on the removal, entry, or sale of diesel fuel and kerosene. Free efile h&r block Each of these events is discussed later. Free efile h&r block Only the $. Free efile h&r block 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. Free efile h&r block If the tax is paid on the diesel fuel or kerosene in more than one event, a refund may be allowed for the “second” tax paid. Free efile h&r block See Refunds of Second Tax in chapter 2. Free efile h&r block Use in certain intercity and local buses. Free efile h&r block   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. Free efile h&r block A claim for $. Free efile h&r block 17 per gallon may be made by the registered ultimate vendor (under certain conditions) or the ultimate purchaser for undyed diesel fuel or undyed kerosene sold for use in certain intercity or local buses. Free efile h&r block An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Free efile h&r block The bus must be engaged in one of the following activities. Free efile h&r block Scheduled transportation along regular routes regardless of the size of the bus. Free efile h&r block Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). Free efile h&r block A bus is available to the general public if the bus is available for hire to more than a limited number of persons, groups, or organizations. Free efile h&r block Removal from terminal. Free efile h&r block   All removals of diesel fuel and kerosene at a terminal rack are taxable. Free efile h&r block The position holder for that fuel is liable for the tax. Free efile h&r block Two-party exchanges. Free efile h&r block   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. Free efile h&r block A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. Free efile h&r block The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. Free efile h&r block The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. Free efile h&r block The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. Free efile h&r block The transaction is subject to a written contract. Free efile h&r block Terminal operator's liability. Free efile h&r block   The terminal operator is jointly and severally liable for the tax if the terminal operator provides any person with any bill of lading, shipping paper, or similar document indicating that diesel fuel or kerosene is dyed (discussed later). Free efile h&r block   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. Free efile h&r block However, a terminal operator will not be liable for the tax in this situation if, at the time of the removal, the following conditions are met. Free efile h&r block The terminal operator is a registrant. Free efile h&r block The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. Free efile h&r block The terminal operator has no reason to believe any information on the certificate is false. Free efile h&r block Removal from refinery. Free efile h&r block   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. Free efile h&r block It is made by bulk transfer and the refiner, the owner of the fuel immediately before the removal, or the operator of the pipeline or vessel is not a registrant. Free efile h&r block It is made at the refinery rack. Free efile h&r block The refiner is liable for the tax. Free efile h&r block Exception. Free efile h&r block   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. Free efile h&r block The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Free efile h&r block The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Free efile h&r block The removal from the refinery is by: Railcar and the same person operates the refinery and the facility at which the diesel fuel or kerosene is received, or For diesel fuel only, a trailer or semi-trailer used exclusively to transport the diesel fuel from a refinery (described in (1)) to a facility (described in (2)) less than 20 miles from the refinery. Free efile h&r block Entry into the United States. Free efile h&r block   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. Free efile h&r block It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Free efile h&r block It is not made by bulk transfer. Free efile h&r block The enterer is liable for the tax. Free efile h&r block Importer of record's liability. Free efile h&r block   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. Free efile h&r block   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Free efile h&r block The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. Free efile h&r block The importer of record has no reason to believe any information in the certificate is false. Free efile h&r block Customs bond. Free efile h&r block   The customs bond will not be charged for the tax imposed on the entry of the diesel fuel or kerosene if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. Free efile h&r block Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Free efile h&r block   The removal by bulk transfer of diesel fuel or kerosene from a terminal is taxable if the position holder for that fuel or the operator of the pipeline or vessel is not a registrant. Free efile h&r block The position holder is liable for the tax. Free efile h&r block The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Free efile h&r block However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Free efile h&r block Bulk transfers not received at approved terminal or refinery. Free efile h&r block   The removal by bulk transfer of diesel fuel or kerosene from a terminal or refinery or the entry of diesel fuel or kerosene by bulk transfer into the United States is taxable if the following conditions apply. Free efile h&r block No tax was previously imposed (as discussed earlier) on any of the following events. Free efile h&r block The removal from the refinery. Free efile h&r block The entry into the United States. Free efile h&r block The removal from a terminal by an unregistered position holder. Free efile h&r block Upon removal from the pipeline or vessel, the diesel fuel or kerosene is not received at an approved terminal or refinery (or at another pipeline or vessel). Free efile h&r block   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. Free efile h&r block However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Free efile h&r block The owner is a registrant. Free efile h&r block The owner has an unexpired notification certificate (discussed under Gasoline) from the operator of the terminal or refinery where the diesel fuel or kerosene is received. Free efile h&r block The owner has no reason to believe any information on the certificate is false. Free efile h&r block The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. Free efile h&r block The operator is jointly and severally liable if the owner does not meet these conditions. Free efile h&r block Sales to unregistered person. Free efile h&r block   The sale of diesel fuel or kerosene located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. Free efile h&r block   The seller is liable for the tax. Free efile h&r block However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Free efile h&r block The seller is a registrant. Free efile h&r block The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. Free efile h&r block The seller has no reason to believe any information on the certificate is false. Free efile h&r block The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. Free efile h&r block The buyer is jointly and severally liable if the seller does not meet these conditions. Free efile h&r block Exception. Free efile h&r block   The tax does not apply to a sale if all of the following apply. Free efile h&r block The buyer's principal place of business is not in the United States. Free efile h&r block The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Free efile h&r block The seller is a registrant and the exporter of record. Free efile h&r block The fuel was exported. Free efile h&r block Removal or sale of blended diesel fuel or kerosene. Free efile h&r block   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. Free efile h&r block Blended taxable fuel produced using biodiesel is subject to the tax. Free efile h&r block See Blended taxable fuel under Definitions, earlier. Free efile h&r block   The blender is liable for the tax. Free efile h&r block The tax is figured on the number of gallons not previously subject to the tax. Free efile h&r block   Persons who blend biodiesel with undyed diesel fuel to produce and sell or use a biodiesel mixture outside the bulk transfer/terminal system must pay the diesel fuel tax on the volume of biodiesel in the mixture. Free efile h&r block Generally, the biodiesel mixture must be diesel fuel (defined earlier). Free efile h&r block See Form 720 to report this tax. Free efile h&r block You also must be registered by the IRS as a blender. Free efile h&r block See Form 637 for more information. Free efile h&r block   However, if an untaxed liquid is sold as taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. Free efile h&r block Additional persons liable. Free efile h&r block   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax applies to: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty; or Anyone who willfully causes the person to fail to pay the tax. Free efile h&r block Credits or Refunds. Free efile h&r block   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. Free efile h&r block For more information, see chapter 2. Free efile h&r block Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. Free efile h&r block 001 per gallon LUST tax as discussed below, unless the fuel is for export. Free efile h&r block The excise tax is not imposed on the removal, entry, or sale of diesel fuel or kerosene (other than the LUST tax) if all the following tests are met. Free efile h&r block The person otherwise liable for tax (for example, the position holder) is a registrant. Free efile h&r block In the case of a removal from a terminal, the terminal is an approved terminal. Free efile h&r block The diesel fuel or kerosene satisfies the dyeing requirements (described next). Free efile h&r block Dyeing requirements. Free efile h&r block   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. Free efile h&r block It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. Free efile h&r block 9 pounds of the solid dye standard Solvent Red 26 per thousand barrels of fuel or any dye of a type and in a concentration that has been approved by the Commissioner. Free efile h&r block Is indelibly dyed by mechanical injection. Free efile h&r block See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. Free efile h&r block Notice required. Free efile h&r block   A legible and conspicuous notice stating either: DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE or DYED KEROSENE, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE must be: Provided by the terminal operator to any person that receives dyed diesel fuel or dyed kerosene at a terminal rack of that operator, and Posted by a seller on any retail pump or other delivery facility where it sells dyed diesel fuel or dyed kerosene for use by its buyer. Free efile h&r block   The notice under item (1) must be provided by the time of the removal and must appear on all shipping papers, bills of lading, and similar documents accompanying the removal of the fuel. Free efile h&r block   Any seller that fails to post the required notice under item (2) is presumed to know that the fuel will be used for a taxable use (a use other than a nontaxable use listed later). Free efile h&r block That seller is subject to the penalty described next. Free efile h&r block Penalty. Free efile h&r block   A penalty is imposed on a person if any of the following situations apply. Free efile h&r block Any dyed fuel is sold or held for sale by the person for a use the person knows or has reason to know is not a nontaxable use of the fuel. Free efile h&r block Any dyed fuel is held for use or used by the person for a use other than a nontaxable use and the person knew, or had reason to know, that the fuel was dyed. Free efile h&r block The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. Free efile h&r block The person has knowledge that a dyed fuel that has been altered, as described in (3) above, sells or holds for sale such fuel for any use for which the person knows or has reason to know is not a nontaxable use of the fuel. Free efile h&r block   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Free efile h&r block After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Free efile h&r block   This penalty is in addition to any tax imposed on the fuel. Free efile h&r block   If the penalty is imposed, each officer, employee, or agent of a business entity who willfully participated in any act giving rise to the penalty is jointly and severally liable with that entity for the penalty. Free efile h&r block   There is no administrative appeal or review allowed for the third and subsequent penalty imposed by section 6715 on any person except for: Fraud or a mistake in the chemical analysis, or Mathematical calculation of the penalty. Free efile h&r block   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. Free efile h&r block However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. Free efile h&r block The penalty may apply if the fuel is held for sale or use for a taxable use while the back-up tax does not apply unless the fuel is delivered into a fuel supply tank. Free efile h&r block Exception to penalty. Free efile h&r block   The penalty under item (3) will not apply in any of the following situations. Free efile h&r block Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. Free efile h&r block Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any other liquid (other than diesel fuel or kerosene) that contains the type and amount of dye required to meet the dyeing requirements. Free efile h&r block The alteration or attempted alteration occurs in an exempt area of Alaska. Free efile h&r block See Removal for sale or use in Alaska, later. Free efile h&r block Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with diesel fuel or kerosene not meeting the dyeing requirements and the blending occurs as part of a nontaxable use (other than export), discussed later. Free efile h&r block Alaska and Feedstocks Tax of $. Free efile h&r block 001 per gallon is imposed on: Undyed diesel fuel or undyed kerosene sold or used in Alaska for certain nontaxable uses (see Later sales on page 10). Free efile h&r block Undyed kerosene used for feedstock purposes. Free efile h&r block Removal for sale or use in Alaska. Free efile h&r block   No tax is imposed on the removal, entry, or sale of diesel fuel or kerosene in Alaska for ultimate sale or use in certain areas of Alaska for certain nontaxable uses. Free efile h&r block The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. Free efile h&r block The person otherwise liable for the tax (position holder, refiner, or enterer): Is a registrant, Can show satisfactory evidence of the nontaxable nature of the transaction, and Has no reason to believe the evidence is false. Free efile h&r block In the case of a removal from a terminal, the terminal is an approved terminal. Free efile h&r block The owner of the fuel immediately after the removal or entry holds the fuel for its own use in a nontaxable use (discussed later) or is a qualified dealer. Free efile h&r block   If all three of the requirements above are not met, then tax is imposed at $. Free efile h&r block 244 per gallon. Free efile h&r block   A qualified dealer is any person that holds a qualified dealer license from the state of Alaska or has been registered by the IRS as a qualified retailer. Free efile h&r block Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. Free efile h&r block Later sales. Free efile h&r block   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. Free efile h&r block The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. Free efile h&r block However, the sale is not taxable (other than the LUST tax at $. Free efile h&r block 001 per gallon) if all the following requirements are met. Free efile h&r block The fuel is sold in Alaska for certain nontaxable uses. Free efile h&r block The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. Free efile h&r block The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. Free efile h&r block Feedstock purposes. Free efile h&r block   The $. Free efile h&r block 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. Free efile h&r block The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. Free efile h&r block In the case of a removal from a terminal, the terminal is an approved terminal. Free efile h&r block Either: The person otherwise liable for tax uses the kerosene for a feedstock purpose, or The kerosene is sold for use by the buyer for a feedstock purpose and, at the time of the sale, the person otherwise liable for tax has an unexpired certificate (described later) from the buyer and has no reason to believe any information on the certificate is false. Free efile h&r block   If all of the requirements above are not met, then tax is imposed at $. Free efile h&r block 244 per gallon. Free efile h&r block   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. Free efile h&r block For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. Free efile h&r block A feedstock user is a person that uses kerosene for a feedstock purpose. Free efile h&r block A registered feedstock user is a person that has been registered by the IRS as a feedstock user. Free efile h&r block See Registration Requirements, earlier. Free efile h&r block Later sales. Free efile h&r block   The excise tax ($. Free efile h&r block 244 per gallon) applies to kerosene sold for use by the buyer for a feedstock purpose (item (3)(b) above) if the buyer in that sale later sells the kerosene. Free efile h&r block The tax is imposed at the time of the later sale and that seller is liable for the tax. Free efile h&r block Certificate. Free efile h&r block   The certificate from the buyer certifies the buyer is a registered feedstock user and the kerosene will be used by the buyer for a feedstock purpose. Free efile h&r block The certificate may be included as part of any business records normally used for a sale. Free efile h&r block A model certificate is shown in the Appendix as Model Certificate G. Free efile h&r block Your certificate must contain all information necessary to complete the model. Free efile h&r block   A certificate expires on the earliest of the following dates. Free efile h&r block The date 1 year after the effective date (not earlier than the date signed) of the certificate. Free efile h&r block The date the seller is provided a new certificate or notice that the current certificate is invalid. Free efile h&r block The date the seller is notified the buyer's registration has been revoked or suspended. Free efile h&r block   The buyer must provide a new certificate if any information on a certificate has changed. Free efile h&r block Back-up Tax Tax is imposed on the delivery of any of the following into the fuel supply tank of a diesel-powered highway vehicle. Free efile h&r block Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. Free efile h&r block Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. Free efile h&r block Any liquid other than gasoline, diesel fuel, or kerosene. Free efile h&r block Generally, this back-up tax is imposed at a rate of $. Free efile h&r block 244 per gallon. Free efile h&r block Liability for tax. Free efile h&r block   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. Free efile h&r block In addition, the seller of the diesel fuel or kerosene is jointly and severally liable for the tax if the seller knows or has reason to know that the fuel will be used for other than a nontaxable use. Free efile h&r block Exemptions from the back-up tax. Free efile h&r block   The back-up tax does not apply to a delivery of diesel fuel or kerosene for uses 1, 2, 6, 7, 12, 13, 14, and 15 listed under Definitions of Nontaxable Uses in chapter 2. Free efile h&r block   In addition, since the back-up tax is imposed only on the delivery into the fuel supply tank of a diesel-powered vehicle or train, the tax does not apply to diesel fuel or kerosene used as heating oil or in stationary engines. Free efile h&r block Diesel-Water Fuel Emulsion Diesel-water fuel emulsion means diesel fuel at least 14% of which is water and for which the emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. Free efile h&r block A reduced tax rate of $. Free efile h&r block 198 per gallon is imposed on a diesel-water fuel emulsion. Free efile h&r block To be eligible for the reduced rate, the person who sells, removes, or uses the diesel-water fuel emulsion must be registered by the IRS. Free efile h&r block If the diesel-water fuel emulsion does not meet the requirements above, or if the person who sells, removes, or uses the fuel is not registered, the diesel-water fuel emulsion is taxed at $. Free efile h&r block 244 per gallon. Free efile h&r block Credits or refunds. Free efile h&r block   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. Free efile h&r block Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. Free efile h&r block 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). Free efile h&r block For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. Free efile h&r block 219. Free efile h&r block The rate of $. Free efile h&r block 219 also applies if kerosene is removed into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene from a terminal that is located within an airport. Free efile h&r block The airport terminal does not need to be a secured airport terminal for this rate to apply. Free efile h&r block However, the refueler truck, tanker, or tank wagon must meet the requirements discussed under Certain refueler trucks, tankers, and tank wagons, treated as terminals, later. Free efile h&r block For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. Free efile h&r block 044 per gallon. Free efile h&r block For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. Free efile h&r block 044 rate applies only if the truck, tanker, or tank wagon is loaded at a terminal that is located in a secured area of the airport. Free efile h&r block See Terminal located within a secured area of an airport, later. Free efile h&r block In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Free efile h&r block For kerosene removed directly into the fuel tank of an aircraft for a use exempt from tax under section 4041(c) (such as use in an aircraft for the exclusive use of a state or local government), the rate of tax is $. Free efile h&r block 001. Free efile h&r block There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Free efile h&r block The kerosene must be removed from a qualifying refueler truck, tanker, or tank wagon loaded at a terminal located within a secured area of an airport. Free efile h&r block See Terminal located within a secured area of an airport, later. Free efile h&r block In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Free efile h&r block The position holder is liable for the $. Free efile h&r block 001 per gallon tax. Free efile h&r block For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. Free efile h&r block 141 per gallon applies. Free efile h&r block Certain refueler trucks, tankers, and tank wagons treated as terminals. Free efile h&r block   For purposes of the tax imposed on kerosene for use in aviation removed directly into the fuel tank of an aircraft for use in commercial aviation, certain refueler trucks, tankers, and tank wagons are treated as part of a terminal if the following conditions are met. Free efile h&r block Such terminal is located within an area of an airport. Free efile h&r block Any kerosene for use in aviation that is loaded in a refueler truck, tanker, or tank wagon at a terminal is for delivery into aircraft at the airport in which the terminal is located. Free efile h&r block Except in exigent circumstances, such as those identified in Notice 2005-80, no vehicle registered for highway use is loaded with kerosene for use in aviation at the terminal. Free efile h&r block The refueler truck, tanker, or tank wagon meets the following requirements: Has storage tanks, hose, and coupling equipment designed and used for fueling aircraft, Is not registered for highway use, and Is operated by the terminal operator or a person that makes a daily accounting to the terminal operator of each delivery of fuel from the refueler truck, tanker, or tank wagon. Free efile h&r block Information reporting will be required by terminal operators regarding this provision. Free efile h&r block Until the format of this information reporting is issued, taxpayers are required to retain records regarding the daily accounting, but are not required to report such information. Free efile h&r block Terminal located within a secured area of an airport. Free efile h&r block   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. Free efile h&r block This list refers to fueling operations at airport terminals as it applies to the federal excise tax on kerosene for use in aviation, and has nothing to do with the general security of airports either included or not included in the list. Free efile h&r block Liability For Tax If the kerosene is removed directly into the fuel tank of an aircraft for use in commercial aviation, the operator of the aircraft in commercial aviation is liable for the tax on the removal at the rate of $. Free efile h&r block 044 per gallon. Free efile h&r block However, the position holder is liable for the LUST tax for kerosene for use in aviation removed directly into the fuel tank of an aircraft for use exempt from tax under section 4041(c) (except foreign trade). Free efile h&r block For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. Free efile h&r block For the aircraft operator to be liable for the tax $. Free efile h&r block 044 rate, the position holder must meet the following requirements: Is a taxable fuel registrant, Has an unexpired certificate (a model certificate is shown in the Appendix as Model Certificate K) from the operator of the aircraft, and Has no reason to believe any of the information in the certificate is false. Free efile h&r block Commercial aviation. Free efile h&r block   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. Free efile h&r block However, commercial aviation does not include any of the following uses. Free efile h&r block Any use exclusively for the purpose of skydiving. Free efile h&r block Certain air transportation by seaplane. Free efile h&r block See Seaplanes under Transportation of Persons by Air in chapter 4. Free efile h&r block Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. Free efile h&r block For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. Free efile h&r block Any use of an aircraft that has a maximum certificated takeoff weight of 6,000 pounds or less, unless the aircraft is operated on an established line. Free efile h&r block For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. Free efile h&r block Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. Free efile h&r block See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. Free efile h&r block Surtax on any liquid used in a fractional ownership program aircraft as fuel Fuel used in a fractional ownership program aircraft (as defined below) after March 31, 2012, is subject to a surtax of $. Free efile h&r block 141 per gallon. Free efile h&r block The fractional ownership program manager is liable for the tax. Free efile h&r block The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. Free efile h&r block If the surtax is imposed, the following air transportation taxes do not apply. Free efile h&r block Transportation of persons by air. Free efile h&r block Transportation of property by air. Free efile h&r block Use of international air travel facilities. Free efile h&r block These taxes are described under Air Transportation Taxes, later. Free efile h&r block A fractional ownership program aircraft flight is considered noncommercial aviation, for the rules for kerosene used in noncommercial aviation, see Kerosene for Use in Aviation above. Free efile h&r block Fractional ownership aircraft program    is a program under which:  A single fractional ownership program manager provides fractional ownership program management services on behalf of the fractional owners; There are one or more fractional owners per fractional program aircraft, with at least one fractional program aircraft having more than one owner; For at least two fractional program aircraft, none of the ownership interests in the aircraft are less than the minimum fractional ownership interest or held by the program manager; There exists a dry-lease aircraft exchange arrangement among all of the fractional owners; and There are multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program. Free efile h&r block Fractional program aircraft. Free efile h&r block   Any aircraft that, in any fractional ownership aircraft program, is listed as a fractional program aircraft in the management specifications issued to the manager of such program by Federal Aviation Administration under subpart K of part 91 title 14, Code of Federal Regulations, and is registered in the U. Free efile h&r block S. Free efile h&r block   Fractional program aircraft are not considered used for transportation of a qualified fractional owner, or on account of such qualified fractional owner when they are used for flight demonstration, maintenance or crew training. Free efile h&r block In such situations, the flight is not commercial aviation. Free efile h&r block Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. Free efile h&r block Fractional owner. Free efile h&r block   Any person owning any interest (including the entire interest) in a fractional program aircraft. Free efile h&r block Dry lease aircraft exchange. Free efile h&r block   An agreement, documented by the written program agreements, under which the fractional program aircraft are available, on an as-needed basis without crew, to each fractional owner. Free efile h&r block Special rule relating to deadhead service. Free efile h&r block   A fractional program aircraft will not be considered to be used on account of a qualified fractional owner when it is used in deadhead service and a person other than a qualified fractional owner is separately charged for such service. Free efile h&r block More information. Free efile h&r block   See section 4043 for more information on the surtax. Free efile h&r block Certificate for Commercial Aviation and Exempt Uses A certificate is required from the aircraft operator: To support aircraft operator liability for tax on removal of kerosene for use in aviation directly into the fuel tank of an aircraft in commercial aviation, or For exempt uses. Free efile h&r block Certificate. Free efile h&r block   The certificate may be included as part of any business records normally used for a sale. Free efile h&r block See Model Certificate K in the Appendix. Free efile h&r block   A certificate expires on the earliest of the following dates. Free efile h&r block The date 1 year after the effective date (not earlier than the date signed) of the certificate. Free efile h&r block The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. Free efile h&r block The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. Free efile h&r block   The buyer must provide a new certificate if any information on a certificate has changed. Free efile h&r block   The IRS may withdraw the buyer's right to provide a certificate if the buyer uses the kerosene for use in aviation to which a certificate relates other than as stated in the certificate. Free efile h&r block Exempt use. Free efile h&r block   The rate on kerosene for use in aviation is $. Free efile h&r block 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. Free efile h&r block An exempt use includes kerosene for the exclusive use of a state or local government. Free efile h&r block There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Free efile h&r block Flash title transaction. Free efile h&r block   A position holder is not liable for tax if, among other conditions, it obtains a certificate (described above) from the operator of the aircraft into which the kerosene is delivered. Free efile h&r block In a “flash title transaction” the position holder sells the kerosene to a wholesale distributor (reseller) that in turn sells the kerosene to the aircraft operator as the kerosene is being removed from a terminal into the fuel tank of an aircraft. Free efile h&r block In this case, the position holder will be treated as having a certificate from the operator of the aircraft if: The aircraft operator puts the reseller's name, address, and EIN on the certificate in place of the position holder's information; and The reseller provides the position holder with a statement of the kerosene reseller. Free efile h&r block Reseller statement. Free efile h&r block   This is a statement that is signed under penalties of perjury by a person with authority to bind the reseller; is provided at the bottom or on the back of the certificate (or in an attached document); and contains: The reseller's name, address, and EIN; The position holder's name, address, and EIN; and A statement that the reseller has no reason to believe that any information in the accompanying aircraft operator's certificate is false. Free efile h&r block Credits or Refunds. Free efile h&r block   A claim may be made by the ultimate purchaser (the operator) for taxed kerosene for use in aviation used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia). Free efile h&r block A claim may be made by a registered ultimate vendor for certain sales. Free efile h&r block For more information, see chapter 2. Free efile h&r block Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. Free efile h&r block Other Fuels include alternative fuels. Free efile h&r block Alternative fuels are: Liquefied petroleum gas (LPG), “P Series” fuels, Compressed natural gas (CNG) (discussed later), Liquefied hydrogen, Any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, Liquid fuel derived from biomass, Liquefied natural gas (LNG), and Liquefied gas derived from biomass. Free efile h&r block Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. Free efile h&r block Qualified methanol and ethanol fuels. Free efile h&r block   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. Free efile h&r block The tax rates are listed in the Instructions for Form 720. Free efile h&r block Partially exempt methanol and ethanol fuels. Free efile h&r block   A reduced tax rate applies to these fuels. Free efile h&r block Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. Free efile h&r block The tax rates are listed in the Instructions for Form 720. Free efile h&r block Motor vehicles. Free efile h&r block   Motor vehicles include all types of vehicles, whether or not registered (or required to be registered) for highway use, that have both the following characteristics. Free efile h&r block They are propelled by a motor. Free efile h&r block They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t