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Free Irs Tax Filing 1040ez

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Free Irs Tax Filing 1040ez

Free irs tax filing 1040ez 10. Free irs tax filing 1040ez   Self-Employment (SE) Tax Table of Contents Who Must Pay SE Tax?Special Rules and Exceptions Figuring Earnings Subject to SE Tax Farm Optional Method Using Both Optional Methods Reporting Self-Employment Tax The SE tax rules apply no matter how old you are and even if you are already receiving social security and Medicare benefits. Free irs tax filing 1040ez Who Must Pay SE Tax? Generally, you must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. Free irs tax filing 1040ez Use Schedule SE to figure net earnings from self-employment. Free irs tax filing 1040ez Sole proprietor or independent contractor. Free irs tax filing 1040ez   If you are self-employed as a sole proprietor or independent contractor, you generally use Schedule C or C-EZ (Form 1040) to figure your earnings subject to SE tax. Free irs tax filing 1040ez SE tax rate. Free irs tax filing 1040ez    For 2013, the SE tax rate on net earnings is 15. Free irs tax filing 1040ez 3% (12. Free irs tax filing 1040ez 4% social security tax plus 2. Free irs tax filing 1040ez 9% Medicare tax). Free irs tax filing 1040ez Maximum earnings subject to self-employment tax. Free irs tax filing 1040ez    Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. Free irs tax filing 1040ez 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. Free irs tax filing 1040ez   All of your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. Free irs tax filing 1040ez 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. Free irs tax filing 1040ez   If your wages and tips are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. Free irs tax filing 1040ez 4% social security part of the SE tax on any of your net earnings. Free irs tax filing 1040ez However, you must pay the 2. Free irs tax filing 1040ez 9% Medicare part of the SE tax on all your net earnings. Free irs tax filing 1040ez Special Rules and Exceptions Aliens. Free irs tax filing 1040ez   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez citizens. Free irs tax filing 1040ez Nonresident aliens are not subject to SE tax unless an international social security agreement in effect determines that they are covered under the U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez social security system. Free irs tax filing 1040ez However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez residents for self-employment tax purposes. Free irs tax filing 1040ez For more information on aliens, see Publication 519, U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez Tax Guide for Aliens. Free irs tax filing 1040ez Child employed by parent. Free irs tax filing 1040ez   You are not subject to SE tax if you are under age 18 and you are working for your father or mother. Free irs tax filing 1040ez Church employee. Free irs tax filing 1040ez    If you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108. Free irs tax filing 1040ez 28 or more in wages from the church or organization. Free irs tax filing 1040ez For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Free irs tax filing 1040ez Fishing crew member. Free irs tax filing 1040ez   If you are a member of the crew on a boat that catches fish or other water life, your earnings are subject to SE tax if all the following conditions apply. Free irs tax filing 1040ez You do not get any pay for the work except your share of the catch or a share of the proceeds from the sale of the catch, unless the pay meets all the following conditions. Free irs tax filing 1040ez The pay is not more than $100 per trip. Free irs tax filing 1040ez The pay is received only if there is a minimum catch. Free irs tax filing 1040ez The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. Free irs tax filing 1040ez You get a share of the catch or a share of the proceeds from the sale of the catch. Free irs tax filing 1040ez Your share depends on the amount of the catch. Free irs tax filing 1040ez The boat's operating crew normally numbers fewer than 10 individuals. Free irs tax filing 1040ez (An operating crew is considered as normally made up of fewer than 10 if the average size of the crew on trips made during the last four calendar quarters is fewer than 10. Free irs tax filing 1040ez ) Notary public. Free irs tax filing 1040ez   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ but are not subject to self-employment tax (see the Instructions for Schedule SE (Form 1040)). Free irs tax filing 1040ez State or local government employee. Free irs tax filing 1040ez   You are subject to SE tax if you are an employee of a state or local government, are paid solely on a fee basis, and your services are not covered under a federal-state social security agreement. Free irs tax filing 1040ez Foreign government or international organization employee. Free irs tax filing 1040ez   You are subject to SE tax if both the following conditions are true. Free irs tax filing 1040ez You are a U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez citizen employed in the United States, Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Virgin Islands by: A foreign government, A wholly-owned agency of a foreign government, or An international organization. Free irs tax filing 1040ez Your employer is not required to withhold social security and Medicare taxes from your wages. Free irs tax filing 1040ez U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez citizen or resident alien residing abroad. Free irs tax filing 1040ez    If you are a self-employed U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez citizen or resident alien living outside the United States, in most cases you must pay SE tax. Free irs tax filing 1040ez Do not reduce your foreign earnings from self-employment by your foreign earned income exclusion. Free irs tax filing 1040ez Exception. Free irs tax filing 1040ez    The United States has social security agreements with many countries to eliminate double taxation under two social security systems. Free irs tax filing 1040ez Under these agreements, you generally must only pay social security and Medicare taxes to the country in which you live. Free irs tax filing 1040ez The country to which you must pay the tax will issue a certificate which serves as proof of exemption from social security tax in the other country. Free irs tax filing 1040ez   For more information, see the Instructions for Schedule SE (Form 1040). Free irs tax filing 1040ez More Than One Business If you have earnings subject to SE tax from more than one trade, business, or profession, you must combine the net profit (or loss) from each to determine your total earnings subject to SE tax. Free irs tax filing 1040ez A loss from one business reduces your profit from another business. Free irs tax filing 1040ez Community Property Income If any of the income from a trade or business, other than a partnership, is community property income under state law, it is included in the earnings subject to SE tax of the spouse carrying on the trade or business. Free irs tax filing 1040ez Gain or Loss Do not include in earnings subject to SE tax a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. Free irs tax filing 1040ez It does not matter whether the disposition is a sale, exchange, or an involuntary conversion. Free irs tax filing 1040ez Lost Income Payments If you are self-employed and reduce or stop your business activities, any payment you receive from insurance or other sources for the lost business income is included in earnings subject to SE tax. Free irs tax filing 1040ez If you are not working when you receive the payment, it still relates to your business and is included in earnings subject to SE tax, even though your business is temporarily inactive. Free irs tax filing 1040ez Figuring Earnings Subject to SE Tax Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. Free irs tax filing 1040ez The regular method. Free irs tax filing 1040ez The nonfarm optional method. Free irs tax filing 1040ez The farm optional method. Free irs tax filing 1040ez You must use the regular method unless you are eligible to use one or both of the optional methods. Free irs tax filing 1040ez Why use an optional method?    You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. Free irs tax filing 1040ez You want to receive credit for social security benefit coverage. Free irs tax filing 1040ez You incurred child or dependent care expenses for which you could claim a credit. Free irs tax filing 1040ez (An optional method may increase your earned income, which could increase your credit. Free irs tax filing 1040ez ) You are entitled to the earned income credit. Free irs tax filing 1040ez (An optional method may increase your earned income, which could increase your credit. Free irs tax filing 1040ez ) You are entitled to the additional child tax credit. Free irs tax filing 1040ez (An optional method may increase your earned income, which could increase your credit. Free irs tax filing 1040ez ) Effects of using an optional method. Free irs tax filing 1040ez   Using an optional method could increase your SE tax. Free irs tax filing 1040ez Paying more SE tax could result in your getting higher benefits when you retire. Free irs tax filing 1040ez   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller tax or no tax using the regular method. Free irs tax filing 1040ez   The optional methods may be used only to figure your SE tax. Free irs tax filing 1040ez To figure your income tax, include your actual earnings in gross income, regardless of which method you use to determine SE tax. Free irs tax filing 1040ez Regular Method Multiply your total earnings subject to SE tax by 92. Free irs tax filing 1040ez 35% (. Free irs tax filing 1040ez 9235) to get your net earnings under the regular method. Free irs tax filing 1040ez See Short Schedule SE, line 4, or Long Schedule SE, line 4a. Free irs tax filing 1040ez Net earnings figured using the regular method are also called actual net earnings. Free irs tax filing 1040ez Nonfarm Optional Method Use the nonfarm optional method only for earnings that do not come from farming. Free irs tax filing 1040ez You may use this method if you meet all the following tests. Free irs tax filing 1040ez You are self-employed on a regular basis. Free irs tax filing 1040ez This means that your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. Free irs tax filing 1040ez The net earnings can be from either farm or nonfarm earnings or both. Free irs tax filing 1040ez You have used this method less than 5 years. Free irs tax filing 1040ez (There is a 5-year lifetime limit. Free irs tax filing 1040ez ) The years do not have to be one after another. Free irs tax filing 1040ez Your net nonfarm profits were: Less than $5,024, and Less than 72. Free irs tax filing 1040ez 189% of your gross nonfarm income. Free irs tax filing 1040ez Net nonfarm profits. Free irs tax filing 1040ez   Net nonfarm profit generally is the total of the amounts from: Line 31, Schedule C (Form 1040), Line 3, Schedule C-EZ (Form 1040), Box 14, code A, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J1, Schedule K-1 (Form 1065-B). Free irs tax filing 1040ez   However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. Free irs tax filing 1040ez Gross nonfarm income. Free irs tax filing 1040ez   Your gross nonfarm income generally is the total of the amounts from: Line 7, Schedule C (Form 1040), Line 1, Schedule C-EZ (Form 1040), Box 14, code C, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J2, Schedule K-1 (Form 1065-B). Free irs tax filing 1040ez Figuring Nonfarm Net Earnings If you meet the three tests explained earlier, use the following table to figure your net earnings from self-employment under the nonfarm optional method. Free irs tax filing 1040ez Table 10-1. Free irs tax filing 1040ez Figuring Nonfarm Net Earnings IF your gross nonfarm income is. Free irs tax filing 1040ez . Free irs tax filing 1040ez . Free irs tax filing 1040ez THEN your net earnings are equal to. Free irs tax filing 1040ez . Free irs tax filing 1040ez . Free irs tax filing 1040ez $6,960 or less Two-thirds of your gross nonfarm income. Free irs tax filing 1040ez More than $6,960 $4,640 Actual net earnings. Free irs tax filing 1040ez   Your actual net earnings are 92. Free irs tax filing 1040ez 35% of your total earnings subject to SE tax (that is, multiply total earnings subject to SE tax by 92. Free irs tax filing 1040ez 35% (. Free irs tax filing 1040ez 9235) to get actual net earnings). Free irs tax filing 1040ez Actual net earnings are equivalent to net earnings figured using the regular method. Free irs tax filing 1040ez Optional net earnings less than actual net earnings. Free irs tax filing 1040ez   You cannot use this method to report an amount less than your actual net earnings from self-employment. Free irs tax filing 1040ez Gross nonfarm income of $6,960 or less. Free irs tax filing 1040ez   The following examples illustrate how to figure net earnings when gross nonfarm income is $6,960 or less. Free irs tax filing 1040ez Example 1. Free irs tax filing 1040ez Net nonfarm profit less than $5,024 and less than 72. Free irs tax filing 1040ez 189% of gross nonfarm income. Free irs tax filing 1040ez Ann Green runs a craft business. Free irs tax filing 1040ez Her actual net earnings from self-employment were $800 in 2011 and $900 in 2012. Free irs tax filing 1040ez She meets the test for being self-employed on a regular basis. Free irs tax filing 1040ez She has used the nonfarm optional method less than 5 years. Free irs tax filing 1040ez Her gross income and net profit in 2013 are as follows: Gross nonfarm income $5,400 Net nonfarm profit $1,200 Ann's actual net earnings for 2013 are $1,108 ($1,200 × . Free irs tax filing 1040ez 9235). Free irs tax filing 1040ez Because her net profit is less than $5,024 and less than 72. Free irs tax filing 1040ez 189% of her gross income, she can use the nonfarm optional method to figure net earnings of $3,600 (2/3 × $5,400). Free irs tax filing 1040ez Because these net earnings are higher than her actual net earnings, she can report net earnings of $3,600 for 2013. Free irs tax filing 1040ez Example 2. Free irs tax filing 1040ez Net nonfarm profit less than $5,024 but not less than 72. Free irs tax filing 1040ez 189% of gross nonfarm income. Free irs tax filing 1040ez Assume that in Example 1 Ann's gross income is $1,000 and her net profit is $800. Free irs tax filing 1040ez She must use the regular method to figure her net earnings. Free irs tax filing 1040ez She cannot use the nonfarm optional method because her net profit is not less than 72. Free irs tax filing 1040ez 189% of her gross income. Free irs tax filing 1040ez Example 3. Free irs tax filing 1040ez Net loss from a nonfarm business. Free irs tax filing 1040ez Assume that in Example 1 Ann has a net loss of $700. Free irs tax filing 1040ez She can use the nonfarm optional method and report $3,600 (2/3 × $5,400) as her net earnings. Free irs tax filing 1040ez Example 4. Free irs tax filing 1040ez Nonfarm net earnings less than $400. Free irs tax filing 1040ez Assume that in Example 1 Ann has gross income of $525 and a net profit of $175. Free irs tax filing 1040ez In this situation, she would not pay any SE tax under either the regular method or the nonfarm optional method because her net earnings under both methods are less than $400. Free irs tax filing 1040ez Gross nonfarm income of more than $6,960. Free irs tax filing 1040ez   The following examples illustrate how to figure net earnings when gross nonfarm income is more than $6,960. Free irs tax filing 1040ez Example 1. Free irs tax filing 1040ez Net nonfarm profit less than $5,024 and less than 72. Free irs tax filing 1040ez 189% of gross nonfarm income. Free irs tax filing 1040ez John White runs an appliance repair shop. Free irs tax filing 1040ez His actual net earnings from self-employment were $10,500 in 2011 and $9,500 in 2012. Free irs tax filing 1040ez He meets the test for being self-employed on a regular basis. Free irs tax filing 1040ez He has used the nonfarm optional method less than 5 years. Free irs tax filing 1040ez His gross income and net profit in 2013 are as follows: Gross nonfarm income $12,000 Net nonfarm profit $1,200 John's actual net earnings for 2013 are $1,108 ($1,200 × . Free irs tax filing 1040ez 9235). Free irs tax filing 1040ez Because his net profit is less than $5,024 and less than 72. Free irs tax filing 1040ez 189% of his gross income, he can use the nonfarm optional method to figure net earnings of $4,640. Free irs tax filing 1040ez Because these net earnings are higher than his actual net earnings, he can report net earnings of $4,640 for 2013. Free irs tax filing 1040ez Example 2. Free irs tax filing 1040ez Net nonfarm profit not less than $5,024. Free irs tax filing 1040ez Assume that in Example 1 John's net profit is $5,400. Free irs tax filing 1040ez He must use the regular method. Free irs tax filing 1040ez He cannot use the nonfarm optional method because his net nonfarm profit is not less than $5,024. Free irs tax filing 1040ez Example 3. Free irs tax filing 1040ez Net loss from a nonfarm business. Free irs tax filing 1040ez Assume that in Example 1 John has a net loss of $700. Free irs tax filing 1040ez He can use the nonfarm optional method and report $4,640 as his net earnings from self-employment. Free irs tax filing 1040ez Farm Optional Method Use the farm optional method only for earnings from a farming business. Free irs tax filing 1040ez See Publication 225 for information about this method. Free irs tax filing 1040ez Using Both Optional Methods If you have both farm and nonfarm earnings, you may be able to use both optional methods to determine your net earnings from self-employment. Free irs tax filing 1040ez To figure your net earnings using both optional methods, you must: Figure your farm and nonfarm net earnings separately under each method. Free irs tax filing 1040ez Do not combine farm earnings with nonfarm earnings to figure your net earnings under either method. Free irs tax filing 1040ez Add the net earnings figured under each method to arrive at your total net earnings from self-employment. Free irs tax filing 1040ez You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. Free irs tax filing 1040ez If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. Free irs tax filing 1040ez Example. Free irs tax filing 1040ez You are a self-employed farmer. Free irs tax filing 1040ez You also operate a retail grocery store. Free irs tax filing 1040ez Your gross income, actual net earnings from self-employment, and optional farm and optional nonfarm net earnings from self-employment are shown in Table 10-2. Free irs tax filing 1040ez Table 10-2. Free irs tax filing 1040ez Example—Farm and Nonfarm Earnings Income and Earnings Farm Nonfarm Gross income $3,000 $6,000 Actual net earnings $900 $500 Optional net earnings (2/3 of gross income) $2,000 $4,000 Table 10-3 shows four methods or combinations of methods you can use to figure net earnings from self-employment using the farm and nonfarm gross income and actual net earnings shown in Table 10-2. Free irs tax filing 1040ez Method 1. Free irs tax filing 1040ez Using the regular method for both farm and nonfarm income. Free irs tax filing 1040ez Method 2. Free irs tax filing 1040ez Using the optional method for farm income and the regular method for nonfarm income. Free irs tax filing 1040ez Method 3. Free irs tax filing 1040ez Using the regular method for farm income and the optional method for nonfarm income. Free irs tax filing 1040ez Method 4. Free irs tax filing 1040ez Using the optional method for both farm and nonfarm income. Free irs tax filing 1040ez Note. Free irs tax filing 1040ez Actual net earnings is the same as net earnings figured using the regular method. Free irs tax filing 1040ez Table 10-3. Free irs tax filing 1040ez Example—Net Earnings Net Earnings 1 2 3 4 Actual  farm $ 900   $ 900   Optional  farm   $ 2,000   $ 2,000 Actual nonfarm $ 500 $ 500     Optional nonfarm     $4,000 $4,000 Amount you can report: $1,400 $2,500 $4,900 $4,640* *Limited to $4,640 because you used both optional methods. Free irs tax filing 1040ez Fiscal Year Filer If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. Free irs tax filing 1040ez Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year. Free irs tax filing 1040ez Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. Free irs tax filing 1040ez Then enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. Free irs tax filing 1040ez Most taxpayers can use Section A—Short Schedule SE to figure their SE tax. Free irs tax filing 1040ez However, certain taxpayers must use Section B—Long Schedule SE. Free irs tax filing 1040ez If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. Free irs tax filing 1040ez Joint return. Free irs tax filing 1040ez   Even if you file a joint return, you cannot file a joint Schedule SE. Free irs tax filing 1040ez This is true whether one spouse or both spouses have earnings subject to SE tax. Free irs tax filing 1040ez If both of you have earnings subject to SE tax, each of you must complete a separate Schedule SE. Free irs tax filing 1040ez However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. Free irs tax filing 1040ez Attach both schedules to the joint return. Free irs tax filing 1040ez More than one business. Free irs tax filing 1040ez   If you have more than one trade or business, you must combine the net profit (or loss) from each business to figure your SE tax. Free irs tax filing 1040ez A loss from one business will reduce your profit from another business. Free irs tax filing 1040ez File one Schedule SE showing the earnings from self-employment, but file a separate Schedule C, C-EZ, or F for each business. Free irs tax filing 1040ez Example. Free irs tax filing 1040ez You are the sole proprietor of two separate businesses. Free irs tax filing 1040ez You operate a restaurant that made a net profit of $25,000. Free irs tax filing 1040ez You also have a cabinetmaking business that had a net loss of $500. Free irs tax filing 1040ez You must file a Schedule C for the restaurant showing your net profit of $25,000 and another Schedule C for the cabinetmaking business showing your net loss of $500. Free irs tax filing 1040ez You file Schedule SE showing total earnings subject to SE tax of $24,500. Free irs tax filing 1040ez Prev  Up  Next   Home   More Online Publications
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IRS Criminal Investigation Issues Annual Report

IR-2014-18, Feb. 24, 2014
 

WASHINGTON — The Internal Revenue Service today announced the release of its IRS Criminal Investigation (CI) Annual Report for fiscal year 2013, reflecting significant increases in enforcement actions against tax criminals and a robust rise in convictions, including identity theft. 

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law.

High points of fiscal year 2013 include a 12.5 percent increase in investigations initiated compared to the prior year and a nearly 18 percent gain in prosecution recommendations. Specifically, CI initiated 5,314 cases and recommended 4,364 cases for prosecution. These increases were accomplished at a time when agent resources decreased more than 5 percent.

Meanwhile, convictions rose more than 25 percent compared to the prior year. The conviction rate for fiscal 2013 was 93 percent.

“The conviction rate is especially important because it reflects the quality of our case work, our teamwork with law enforcement partners and the U.S. Attorneys’ Offices, and it represents an increase over 2011 and 2012,” said Richard Weber, Chief of Criminal Investigation.

CI continues to play a vital role in the fight against identity theft. CI initiated over 1,400 investigations and recommended prosecution of over 1,250 individuals who were involved in identity theft crimes during fiscal 2013.

As an active partner in over 35 Identity Theft Task Forces, CI works side-by-side with federal, state and local law-enforcement agencies to combat the threat of this insidious crime. One of those task forces, the Tampa Bay Identity Theft Alliance, was recently recognized as the "2013 Task Force of the Year," a national award given by the International Association of Financial Crimes Investigators for investigative excellence and outstanding public service. The Tampa Bay Identity Theft Alliance was formed last year and comprises of 20 Tampa Bay federal, state and local law enforcement agencies and prosecutors.

“The Alliance represents true teamwork by all levels of law enforcement,” Weber said. “Individuals who commit identity theft demonstrate a blatant disregard of the integrity of the United States tax system and cause immeasurable hardship to innocent victims.”

In addition, the 36-page report summarizes a wide variety of IRS CI activity on a range of tax crimes, money laundering, public corruption, terrorist financing and narcotics trafficking financial crimes during the fiscal year ending Sept. 30, 2013.

“Our cases involved individuals and corporations from all segments of society. They led us into corporate board rooms, offices of public officials, tax preparation businesses, identity theft gangs and narcotics trafficking organizations,” Weber said.

"This report highlights some of the many noteworthy cases that were completed by CI, which is just the tip of the iceberg of the complex cases we completed this past year,” Weber added. “The dedication and enthusiasm of our employees was a driving force behind these achievements. IRS-CI continues to make our mark in history as the best financial investigators in the world."

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Page Last Reviewed or Updated: 24-Feb-2014

The Free Irs Tax Filing 1040ez

Free irs tax filing 1040ez Publication 51 - Main Content Table of Contents 1. Free irs tax filing 1040ez Taxpayer Identification NumbersWhen you receive your EIN. Free irs tax filing 1040ez Registering for SSNVS. Free irs tax filing 1040ez 2. Free irs tax filing 1040ez Who Are Employees?Crew Leaders Business Owned and Operated by Spouses 3. Free irs tax filing 1040ez Wages and Other Compensation 4. Free irs tax filing 1040ez Social Security and Medicare TaxesThe $150 Test or the $2,500 Test Social Security and Medicare Tax Withholding 5. Free irs tax filing 1040ez Federal Income Tax WithholdingImplementation of lock-in letter. Free irs tax filing 1040ez Seasonal employees and employees not currently performing services. Free irs tax filing 1040ez Termination and re-hire of employees. Free irs tax filing 1040ez How To Figure Federal Income Tax Withholding 6. Free irs tax filing 1040ez Required Notice to Employees About Earned Income Credit (EIC) 7. Free irs tax filing 1040ez Depositing TaxesWhen To Deposit How To Deposit Deposit Penalties Employers of Both Farm and Nonfarm Workers 8. Free irs tax filing 1040ez Form 943 9. Free irs tax filing 1040ez Reporting Adjustments on Form 943Current Year Adjustments Prior Year Adjustments 10. Free irs tax filing 1040ez Federal Unemployment (FUTA) Tax 11. Free irs tax filing 1040ez Reconciling Wage Reporting Forms 13. Free irs tax filing 1040ez Federal Income Tax Withholding MethodsWage Bracket Method Percentage Method Alternative Methods of Federal Income Tax Withholding How To Get Tax Help 1. Free irs tax filing 1040ez Taxpayer Identification Numbers If you are required to withhold any federal income, social security, or Medicare taxes, you will need an employer identification number (EIN) for yourself. Free irs tax filing 1040ez Also, you will need the SSN of each employee and the name of each employee as shown on the employee's social security card. Free irs tax filing 1040ez Employer identification number (EIN). Free irs tax filing 1040ez   An employer identification number (EIN) is a nine-digit number that the IRS issues. Free irs tax filing 1040ez The digits are arranged as follows: 00-0000000. Free irs tax filing 1040ez It is used to identify the tax accounts of employers and certain others who have no employees. Free irs tax filing 1040ez Use your EIN on all of the items that you send to the IRS and SSA. Free irs tax filing 1040ez   If you do not have an EIN, you may apply for one online. Free irs tax filing 1040ez Visit IRS. Free irs tax filing 1040ez gov and click on the Apply for an EIN Online link under Tools. Free irs tax filing 1040ez You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Free irs tax filing 1040ez Do not use a SSN in place of an EIN. Free irs tax filing 1040ez   If you do not have an EIN by the time a return is due, write “Applied For” and the date you applied for it in the space shown for the number. Free irs tax filing 1040ez If you took over another employer's business, do not use that employer's EIN. Free irs tax filing 1040ez   You should have only one EIN. Free irs tax filing 1040ez If you have more than one, and are not sure which one to use, call the toll-free Business and Specialty Tax Line at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). Free irs tax filing 1040ez Provide the EINs that you have, the name and address to which each number was assigned, and the address of your principal place of business. Free irs tax filing 1040ez The IRS will tell you which EIN to use. Free irs tax filing 1040ez   For more information, see Publication 1635 or Publication 583. Free irs tax filing 1040ez When you receive your EIN. Free irs tax filing 1040ez   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in the Electronic Federal Tax Payment System (EFTPS). Free irs tax filing 1040ez You will receive information in your Employer Identification Number (EIN) Package about Express Enrollment and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. Free irs tax filing 1040ez Call the toll-free number located in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your employment tax deposits. Free irs tax filing 1040ez If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. Free irs tax filing 1040ez Social security number (SSN). Free irs tax filing 1040ez   An employee's social security number (SSN) consists of nine digits arranged as follows: 000-00-0000. Free irs tax filing 1040ez You must obtain each employee's name and SSN as shown on the employee's social security card because you must enter them on Form W-2. Free irs tax filing 1040ez Do not accept a social security card that says “Not valid for employment. Free irs tax filing 1040ez ” A social security number issued with this legend does not permit employment. Free irs tax filing 1040ez You may, but are not required to, photocopy the social security card if the employee provides it. Free irs tax filing 1040ez If you do not show the employee's correct name and SSN on Form W-2, you may owe a penalty unless you have reasonable cause. Free irs tax filing 1040ez See Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs. Free irs tax filing 1040ez Applying for a social security card. Free irs tax filing 1040ez   Any employee who is legally eligible to work in the United States and does not have a social security card can get one by completing Form SS-5, Application for a Social Security Card, and submitting the necessary documentation to SSA. Free irs tax filing 1040ez You can get Form SS-5 at SSA offices, by calling 1-800-772-1213 or 1-800-325-0778 (TTY), or from the SSA website at www. Free irs tax filing 1040ez socialsecurity. Free irs tax filing 1040ez gov/online/ss-5. Free irs tax filing 1040ez html. Free irs tax filing 1040ez The employee must complete and sign Form SS-5; it cannot be filed by the employer. Free irs tax filing 1040ez You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. Free irs tax filing 1040ez Applying for a social security number. Free irs tax filing 1040ez   If you file Form W-2 on paper and your employee has applied for an SSN but does not have one when you must file Form W-2, enter “Applied For” on the form. Free irs tax filing 1040ez If you are filing electronically, enter all zeros (000-00-0000) in the social security number field. Free irs tax filing 1040ez When the employee receives the SSN, file Copy A of Form W-2c, Corrected Wage and Tax Statement, with the SSA to show the employee's SSN. Free irs tax filing 1040ez Furnish Copies B, C, and 2 of Form W-2c to the employee. Free irs tax filing 1040ez Up to 25 Forms W-2c per Form W-3c, Transmittal of Corrected Wage and Tax Statements, may be filed per session over the Internet, with no limit on the number of sessions. Free irs tax filing 1040ez For more information, visit SSA's Employer W-2 Filing Instructions & Information webpage at www. Free irs tax filing 1040ez socialsecurity. Free irs tax filing 1040ez gov/employer. Free irs tax filing 1040ez Advise your employee to correct the SSN on his or her original Form W-2. Free irs tax filing 1040ez Correctly record the employee's name and SSN. Free irs tax filing 1040ez   Record the name and number of each employee as they are shown on the employee's social security card. Free irs tax filing 1040ez If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Free irs tax filing 1040ez Continue to report the employee's wages under the old name until the employee shows you an updated social security card with the new name. Free irs tax filing 1040ez   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2. Free irs tax filing 1040ez It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. Free irs tax filing 1040ez IRS individual taxpayer identification numbers (ITINs) for aliens. Free irs tax filing 1040ez   Do not accept an ITIN in place of an SSN for employee identification or for work. Free irs tax filing 1040ez An ITIN is issued for use by resident and nonresident aliens who need identification for tax purposes, but who are not eligible for U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez employment. Free irs tax filing 1040ez The ITIN is a nine-digit number formatted like an SSN (for example, NNN-NN-NNNN). Free irs tax filing 1040ez However, it begins with the number “9” and has either a “7” or “8” as the fourth digit (for example, 9NN-7N-NNNN or 9NN-8N-NNNN). Free irs tax filing 1040ez    An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN. Free irs tax filing 1040ez If the individual is currently eligible to work in the United States, instruct the individual to apply for an SSN and follow the instructions under Applying for a social security number, earlier in this section. Free irs tax filing 1040ez Do not use an ITIN in place of an SSN on Form W-2. Free irs tax filing 1040ez Verification of social security numbers. Free irs tax filing 1040ez   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 employee names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive results the next business day. Free irs tax filing 1040ez Visit www. Free irs tax filing 1040ez socialsecurity. Free irs tax filing 1040ez gov/employer/ssnv. Free irs tax filing 1040ez htm for more information. Free irs tax filing 1040ez Registering for SSNVS. Free irs tax filing 1040ez   You must register online and receive authorization from your employer to use SSNVS. Free irs tax filing 1040ez To register, visit SSA's website at www. Free irs tax filing 1040ez socialsecurity. Free irs tax filing 1040ez gov/employer and click on the Business Services Online link. Free irs tax filing 1040ez Follow the registration instructions to obtain a user identification (ID) and password. Free irs tax filing 1040ez You will need to provide the following information about yourself and your company. Free irs tax filing 1040ez Name. Free irs tax filing 1040ez SSN. Free irs tax filing 1040ez Date of birth. Free irs tax filing 1040ez Type of employer. Free irs tax filing 1040ez EIN. Free irs tax filing 1040ez Company name, address, and telephone number. Free irs tax filing 1040ez Email address. Free irs tax filing 1040ez When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Free irs tax filing 1040ez You must enter the activation code online to use SSNVS. Free irs tax filing 1040ez 2. Free irs tax filing 1040ez Who Are Employees? Generally, employees are defined either under common law or under statutes for certain situations. Free irs tax filing 1040ez See Publication 15-A for details on statutory employees and nonemployees. Free irs tax filing 1040ez Employee status under common law. Free irs tax filing 1040ez   Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. Free irs tax filing 1040ez This is so even when you give the employee freedom of action. Free irs tax filing 1040ez What matters is that you have the right to control the details of how the services are performed. Free irs tax filing 1040ez See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Free irs tax filing 1040ez If an employer-employee relationship exists, it does not matter what it is called. Free irs tax filing 1040ez The employee may be called an agent or independent contractor. Free irs tax filing 1040ez It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Free irs tax filing 1040ez You are responsible for withholding and paying employment taxes for your employees. Free irs tax filing 1040ez You are also required to file employment tax returns. Free irs tax filing 1040ez These requirements do not apply to amounts that you pay to independent contractors. Free irs tax filing 1040ez The rules discussed in this publication apply only to workers who are your employees. Free irs tax filing 1040ez In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Free irs tax filing 1040ez For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. Free irs tax filing 1040ez Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. Free irs tax filing 1040ez The table in section 12, How Do Employment Taxes Apply to Farmwork , distinguishes between farm and nonfarm activities, and also addresses rules that apply in special situations. Free irs tax filing 1040ez Crew Leaders If you are a crew leader, you are an employer of farmworkers. Free irs tax filing 1040ez A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. Free irs tax filing 1040ez If there is no written agreement between you and the farm operator stating that you are his or her employee and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. Free irs tax filing 1040ez For FUTA tax rules, see section 10. Free irs tax filing 1040ez Business Owned and Operated by Spouses If you and your spouse jointly own and operate a farm or nonfarm business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Free irs tax filing 1040ez See Publication 541, Partnerships, for more details. Free irs tax filing 1040ez The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Free irs tax filing 1040ez Exception—Qualified joint venture. Free irs tax filing 1040ez   For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are spouses filing a joint income tax return, can elect not to be treated as a partnership for federal tax purposes. Free irs tax filing 1040ez A qualified joint venture conducts a trade or business where: The only members of the joint venture are spouses who file a joint income tax return, Both spouses materially participate (see Material participation in the Instructions for Schedule C (Form 1040), line G) in the trade or business (mere joint ownership of property is not enough), Both spouses elect to not be treated as a partnership, and The business is co-owned by both spouses and is not held in the name of a state law entity such as a partnership or limited liability company (LLC). Free irs tax filing 1040ez   To make the election, all items of income, gain, loss, deduction, and credit must be divided between the spouses, in accordance with each spouse's interest in the venture, and reported on separate Schedules C or F as sole proprietors. Free irs tax filing 1040ez Each spouse must also file a separate Schedule SE to pay self-employment taxes, as applicable. Free irs tax filing 1040ez   Spouses using the qualified joint venture rules are treated as sole proprietors for federal tax purposes and generally do not need an EIN. Free irs tax filing 1040ez If employment taxes are owed by the qualified joint venture, either spouse may report and pay the employment taxes due on the wages paid to the employees using the EIN of that spouse's sole proprietorship. Free irs tax filing 1040ez Generally, filing as a qualified joint venture will not increase the spouses' total tax owed on the joint income tax return. Free irs tax filing 1040ez However, it gives each spouse credit for social security earnings on which retirement benefits are based and for Medicare coverage without filing a partnership return. Free irs tax filing 1040ez    Note. Free irs tax filing 1040ez If your spouse is your employee, not your partner, you must pay social security and Medicare taxes for him or her. Free irs tax filing 1040ez   For more information on qualified joint ventures, visit IRS. Free irs tax filing 1040ez gov and enter “qualified joint venture” in the search box. Free irs tax filing 1040ez Exception—Community income. Free irs tax filing 1040ez   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez possession, you can treat the business either as a sole proprietorship (of the spouse who carried on the business) or a partnership. Free irs tax filing 1040ez You may still make an election to be taxed as a qualified joint venture instead of a partnership. Free irs tax filing 1040ez See Exception—Qualified joint venture , earlier in this section. Free irs tax filing 1040ez 3. Free irs tax filing 1040ez Wages and Other Compensation Cash wages that you pay to employees for farmwork are generally subject to social security tax and Medicare tax. Free irs tax filing 1040ez You may also be required to withhold, deposit, and report Additional Medicare Tax. Free irs tax filing 1040ez See section 4 for more information. Free irs tax filing 1040ez If the wages are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. Free irs tax filing 1040ez You may also be liable for FUTA tax, which is not withheld by you or paid by the employee. Free irs tax filing 1040ez FUTA tax is discussed in section 10. Free irs tax filing 1040ez Cash wages include checks, money orders, etc. Free irs tax filing 1040ez Do not count as cash wages the value of food, lodging, and other noncash items. Free irs tax filing 1040ez For more information on what payments are considered taxable wages, see Publication 15 (Circular E). Free irs tax filing 1040ez Commodity wages. Free irs tax filing 1040ez   Commodity wages are not cash and are not subject to social security and Medicare taxes or federal income tax withholding. Free irs tax filing 1040ez However, noncash payments, including commodity wages, are treated as cash wages (see above) if the substance of the transaction is a cash payment. Free irs tax filing 1040ez These noncash payments are subject to social security and Medicare taxes and federal income tax withholding. Free irs tax filing 1040ez Other compensation. Free irs tax filing 1040ez   Publications 15-A and 15-B discuss other forms of compensation that may be taxable. Free irs tax filing 1040ez Family members. Free irs tax filing 1040ez   Generally, the wages that you pay to family members who are your employees are subject to social security and Medicare taxes, federal income tax withholding, and FUTA tax. Free irs tax filing 1040ez However, certain exemptions may apply for your child, spouse, or parent. Free irs tax filing 1040ez See the table, How Do Employment Taxes Apply to Farmwork , in section 12. Free irs tax filing 1040ez Household employees. Free irs tax filing 1040ez   The wages of an employee who performs household services, such as a maid, babysitter, gardener, or cook, in your home are not subject to social security and Medicare taxes if you pay that employee cash wages of less than $1,900 in 2014. Free irs tax filing 1040ez   Social security and Medicare taxes do not apply to cash wages for housework in your private home if it was done by your spouse or your child under age 21. Free irs tax filing 1040ez Nor do the taxes apply to housework done by your parent unless: You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter, and You are a widow or widower, or divorced and not remarried, or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. Free irs tax filing 1040ez   For more information, see Publication 926, Household Employer's Tax Guide. Free irs tax filing 1040ez    Wages for household work may not be a deductible farm expense. Free irs tax filing 1040ez See Publication 225, Farmer's Tax Guide. Free irs tax filing 1040ez Share farmers. Free irs tax filing 1040ez   You do not have to withhold or pay social security and Medicare taxes on amounts paid to share farmers under share-farming arrangements. Free irs tax filing 1040ez Compensation paid to H-2A visa holders. Free irs tax filing 1040ez   Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2 but do not report it as social security wages (box 3) or Medicare wages (box 5) on Form W-2 because compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes. Free irs tax filing 1040ez On Form W-2, do not check box 13 (Statutory employee), as H-2A workers are not statutory employees. Free irs tax filing 1040ez   An employer is not required to withhold federal income tax from compensation it pays an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. Free irs tax filing 1040ez In that case, the worker must give the employer a completed Form W-4. Free irs tax filing 1040ez Federal income tax withheld should be reported in box 2 of Form W-2. Free irs tax filing 1040ez These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. Free irs tax filing 1040ez For rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. Free irs tax filing 1040ez 4. Free irs tax filing 1040ez Social Security and Medicare Taxes Generally, you must withhold social security and Medicare taxes on all cash wage payments that you make to your employees. Free irs tax filing 1040ez You may also be required to withhold Additional Medicare Tax. Free irs tax filing 1040ez For more information, see Additional Medicare Tax withholding , later. Free irs tax filing 1040ez The $150 Test or the $2,500 Test All cash wages that you pay to an employee during the year for farmwork are subject to social security and Medicare taxes and federal income tax withholding if either of the two tests below is met. Free irs tax filing 1040ez You pay cash wages to an employee of $150 or more in a year for farmwork (count all cash wages paid on a time, piecework, or other basis). Free irs tax filing 1040ez The $150 test applies separately to each farmworker that you employ. Free irs tax filing 1040ez If you employ a family of workers, each member is treated separately. Free irs tax filing 1040ez Do not count wages paid by other employers. Free irs tax filing 1040ez The total that you pay for farmwork (cash and noncash) to all your employees is $2,500 or more during the year. Free irs tax filing 1040ez Exceptions. Free irs tax filing 1040ez   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes, or federal income tax withholding, even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. Free irs tax filing 1040ez   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. Free irs tax filing 1040ez Social Security and Medicare Tax Withholding The social security tax rate is 6. Free irs tax filing 1040ez 2%, for both the employee and employer, on the first $117,000 paid to each employee. Free irs tax filing 1040ez You must withhold at this rate from each employee and pay a matching amount. Free irs tax filing 1040ez The Medicare tax rate is 1. Free irs tax filing 1040ez 45% each for the employee and employer on all wages. Free irs tax filing 1040ez You must withhold at this rate from each employee and pay a matching amount. Free irs tax filing 1040ez There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. Free irs tax filing 1040ez Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. Free irs tax filing 1040ez For details, see Publication 15-A. Free irs tax filing 1040ez Additional Medicare Tax withholding. Free irs tax filing 1040ez   In addition to withholding Medicare tax at 1. Free irs tax filing 1040ez 45%, you must withhold a 0. Free irs tax filing 1040ez 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Free irs tax filing 1040ez You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Free irs tax filing 1040ez Additional Medicare Tax is only imposed on the employee. Free irs tax filing 1040ez There is no employer share of Additional Medicare Tax. Free irs tax filing 1040ez All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Free irs tax filing 1040ez   For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E). Free irs tax filing 1040ez For more information on Additional Medicare Tax, visit IRS. Free irs tax filing 1040ez gov and enter “Additional Medicare Tax” in the search box. Free irs tax filing 1040ez Employee share paid by employer. Free irs tax filing 1040ez   If you would rather pay a household or agricultural employee's share of the social security and Medicare taxes without withholding them from his or her wages, you may do so. Free irs tax filing 1040ez If you do not withhold the taxes, however, you must still pay them. Free irs tax filing 1040ez Any employee social security and Medicare taxes that you pay is additional income to the employee. Free irs tax filing 1040ez Include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages and do not include it in boxes 3 and 5. Free irs tax filing 1040ez Also, do not count the additional income as wages for FUTA tax purposes. Free irs tax filing 1040ez Different rules apply to employer payments of social security and Medicare taxes for non-household and non-agricultural employees. Free irs tax filing 1040ez See section 7 of Publication 15-A. Free irs tax filing 1040ez Withholding social security and Medicare taxes on nonresident alien employees. Free irs tax filing 1040ez   In general, if you pay wages to nonresident alien employees, you must withhold social security and Medicare taxes as you would for a U. Free irs tax filing 1040ez S. Free irs tax filing 1040ez citizen or resident alien. Free irs tax filing 1040ez However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. Free irs tax filing 1040ez Also see Compensation paid to H-2A visa holders in section 3. Free irs tax filing 1040ez Religious exemption. Free irs tax filing 1040ez    An exemption from social security and Medicare taxes is available to members of a recognized religious sect opposed to public insurance. Free irs tax filing 1040ez This exemption is available only if both the employee and the employer are members of the sect. Free irs tax filing 1040ez   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Free irs tax filing 1040ez 5. Free irs tax filing 1040ez Federal Income Tax Withholding Farmers and crew leaders must withhold federal income tax from the wages of farmworkers if the wages are subject to social security and Medicare taxes. Free irs tax filing 1040ez The amount to withhold is figured on gross wages before taking out social security and Medicare taxes, union dues, insurance, etc. Free irs tax filing 1040ez You may use one of several methods to determine the amount of federal income tax withholding. Free irs tax filing 1040ez They are discussed in section 13. Free irs tax filing 1040ez Form W-4. Free irs tax filing 1040ez   To know how much federal income tax to withhold from employees' wages, you should have a Form W-4 on file for each employee. Free irs tax filing 1040ez Encourage your employees to file an updated Form W-4 for 2014, especially if they owed taxes or received a large refund when filing their 2013 tax return. Free irs tax filing 1040ez Advise your employees to use the IRS Withholding Calculator on the IRS website at www. Free irs tax filing 1040ez irs. Free irs tax filing 1040ez gov/individuals for help in determining how many withholding allowances to claim on their Form W-4. Free irs tax filing 1040ez   Ask each new employee to give you a signed Form W-4 when starting work. Free irs tax filing 1040ez Make the form effective with the first wage payment. Free irs tax filing 1040ez If a new employee does not give you a completed Form W-4, withhold tax as if he or she is single, with no withholding allowances. Free irs tax filing 1040ez Forms in Spanish. Free irs tax filing 1040ez   You can provide Formulario W-4(SP) in place of Form W-4 to your Spanish-speaking employees. Free irs tax filing 1040ez For more information, see Publicación 17(SP). Free irs tax filing 1040ez Effective date of Form W-4. Free irs tax filing 1040ez   A Form W-4 remains in effect until the employee gives you a new one. Free irs tax filing 1040ez When you receive a new Form W-4, do not adjust withholding for pay periods before the effective date of the new form. Free irs tax filing 1040ez Do not adjust withholding retroactively. Free irs tax filing 1040ez If an employee gives you a replacement Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4. Free irs tax filing 1040ez For exceptions, see Exemption from federal income tax withholding , IRS review of requested Forms W-4 , and Invalid Forms W-4 , later in this section. Free irs tax filing 1040ez A Form W-4 that makes a change for the next calendar year will not take effect in the current calendar year. Free irs tax filing 1040ez Completing Form W-4. Free irs tax filing 1040ez   The amount of federal income tax withholding is based on marital status and withholding allowances. Free irs tax filing 1040ez Your employees may not base their withholding amounts on a fixed dollar amount or percentage. Free irs tax filing 1040ez However, the employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4. Free irs tax filing 1040ez   Employees may claim fewer withholding allowances than they are entitled to claim. Free irs tax filing 1040ez They may do this to ensure that they have enough withholding or to offset other sources of taxable income that are not subject to withholding. Free irs tax filing 1040ez   See Publication 505, Tax Withholding and Estimated Tax, for more information about completing Form W-4. Free irs tax filing 1040ez Along with Form W-4, you may wish to order Publication 505 for use by your employees. Free irs tax filing 1040ez    Do not accept any withholding or estimated tax payments from your employees in addition to withholding based on their Form W-4. Free irs tax filing 1040ez If an employee wants additional withholding, he or she should submit a new Form W-4 and, if necessary, pay estimated tax by filing Form 1040-ES, Estimated Tax for Individuals, or by using the Electronic Federal Tax Payment System (EFTPS) to make estimated tax payments. Free irs tax filing 1040ez Exemption from federal income tax withholding. Free irs tax filing 1040ez   Generally, an employee may claim exemption from federal income tax withholding because he or she had no federal income tax liability last year and expects none this year. Free irs tax filing 1040ez See the Form W-4 instructions for more information. Free irs tax filing 1040ez However, the wages are still subject to social security and Medicare taxes. Free irs tax filing 1040ez   A Form W-4 claiming exemption from withholding is effective when it is filed with the employer and only for that calendar year. Free irs tax filing 1040ez To continue to be exempt from withholding in the next calendar year, an employee must give you a new Form W-4 by February 15. Free irs tax filing 1040ez If the employee does not give you a new Form W-4 by February 15, withhold tax based on the last valid Form W-4 you have for the employee that did not claim an exemption from withholding or, if one does not exist, withhold as if he or she is single with zero withholding allowances. Free irs tax filing 1040ez If the employee provides a new Form W-4 claiming an exemption from withholding on February 16 or later, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. Free irs tax filing 1040ez Withholding income taxes on the wages of nonresident alien employees. Free irs tax filing 1040ez   In general, you must withhold federal income taxes on the wages of nonresident alien employees. Free irs tax filing 1040ez However, see Publication 515 for exceptions to this general rule. Free irs tax filing 1040ez Also see Compensation paid to H-2A visa workers in section 3. Free irs tax filing 1040ez Withholding adjustment for nonresident alien employees. Free irs tax filing 1040ez   A special procedure applies for figuring the amount of income tax to withhold from wages of nonresident alien employees performing services within the United States for wages paid in 2014. Free irs tax filing 1040ez This procedure requires a special chart to be used with the withholding tables to determine the amount to withhold from the wages of the nonresident alien employee. Free irs tax filing 1040ez See Withholding adjustment for nonresident alien employees in section 9 of Publication 15 (Circular E). Free irs tax filing 1040ez Nonresident alien employee's Form W-4. Free irs tax filing 1040ez   When completing Forms W-4, nonresident aliens are required to: Not claim exemption from income tax withholding; Request withholding as if they are single, regardless of their actual marital status; Claim only one allowance (if the nonresident alien is a resident of Canada, Mexico, or Korea, he or she may claim more than one allowance); and Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4. Free irs tax filing 1040ez   If you maintain an electronic Form W-4 system, you should provide a field for nonresident alien employees to enter nonresident alien status in lieu of writing “Nonresident Alien” or “NRA” above the dotted line on line 6. Free irs tax filing 1040ez    A nonresident alien employee may request additional withholding at his or her option for other purposes, although such additions should not be necessary for withholding to cover federal income tax liability related to employment. Free irs tax filing 1040ez Form 8233. Free irs tax filing 1040ez   If a nonresident alien employee claims a tax treaty exemption from withholding, the employee must submit Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with respect to the income exempt under the treaty, instead of Form W-4. Free irs tax filing 1040ez See Publication 515 for details. Free irs tax filing 1040ez IRS review of requested Forms W-4. Free irs tax filing 1040ez   When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. Free irs tax filing 1040ez You may also be directed to send certain Forms W-4 to the IRS. Free irs tax filing 1040ez You may receive a notice from the IRS requiring you to submit a copy of Form W-4 for one or more of your named employees. Free irs tax filing 1040ez Send the requested copy or copies of Form W-4 to the IRS at the address provided and in the manner directed by the notice. Free irs tax filing 1040ez The IRS may also require you to submit copies of Form W-4 to the IRS as directed by a revenue procedure or notice published in the Internal Revenue Bulletin. Free irs tax filing 1040ez When we refer to Form W-4, the same rules apply to Formulario W-4(SP), its Spanish translation. Free irs tax filing 1040ez   After submitting a copy of the requested Form W-4 to the IRS, continue to withhold federal income tax based on that Form W-4 if it is valid (see Invalid Forms W-4 , later in this section). Free irs tax filing 1040ez However, if the IRS later notifies you in writing that the employee is not entitled to claim a complete exemption from withholding or more than the maximum number of withholding allowances specified by the IRS in the written notice, withhold federal income tax based on the effective date, marital status, and maximum number of withholding allowances specified in the notice (commonly referred to as a “lock-in letter”). Free irs tax filing 1040ez Initial lock-in letter. Free irs tax filing 1040ez   The IRS uses information reported on Form W-2 to identify employees with withholding compliance problems. Free irs tax filing 1040ez In some cases, where a serious under-withholding problem is found to exist for a particular employee, the IRS may issue a lock-in letter to the employer specifying the maximum number of withholding allowances and marital status permitted for a specific employee. Free irs tax filing 1040ez You will also receive a copy for the employee that identifies the maximum number of withholding allowances permitted and the process by which the employee can provide additional information to the IRS for purposes of determining the appropriate number of withholding allowances. Free irs tax filing 1040ez If the employee is employed by you as of the date of the notice, you must furnish the employee copy to the employee within 10 business days of receipt. Free irs tax filing 1040ez You may follow any reasonable business practice to furnish the employee copy to the employee. Free irs tax filing 1040ez Implementation of lock-in letter. Free irs tax filing 1040ez   When you receive the notice specifying the maximum number of withholding allowances and marital status permitted, you may not withhold immediately on the basis of the notice. Free irs tax filing 1040ez You must begin withholding tax on the basis of the notice for any wages paid after the date specified in the notice. Free irs tax filing 1040ez The delay between your receipt of the notice and the date to begin the withholding on the basis of the notice permits the employee to contact the IRS. Free irs tax filing 1040ez Seasonal employees and employees not currently performing services. Free irs tax filing 1040ez   If you receive a notice for an employee who is not currently performing services for you, you are still required to furnish the employee copy to the employee and withhold based on the notice if any of the following apply. Free irs tax filing 1040ez You are paying wages for the employee's prior services and the wages are subject to income tax withholding on or after the date specified in the notice. Free irs tax filing 1040ez You reasonably expect the employee to resume services within 12 months of the date of the notice. Free irs tax filing 1040ez The employee is on a bona fide leave of absence that does not exceed 12 months or the employee has a right to reemployment after the leave of absence. Free irs tax filing 1040ez Termination and re-hire of employees. Free irs tax filing 1040ez   If you are required to furnish and withhold based on the notice and the employment relationship is terminated after the date of the notice, you must continue to withhold based on the notice if you continue to pay any wages subject to income tax withholding. Free irs tax filing 1040ez You must also withhold based on the notice or modification notice (explained next) if the employee resumes the employment relationship with you within 12 months after the termination of the employment relationship. Free irs tax filing 1040ez Modification notice. Free irs tax filing 1040ez   After issuing the notice specifying the maximum number of withholding allowances and marital status permitted, the IRS may issue a subsequent notice (modification notice) that modifies the original notice. Free irs tax filing 1040ez The modification notice may change the marital status and/or the number of withholding allowances permitted. Free irs tax filing 1040ez You must withhold federal income tax based on the effective date specified in the modification notice. Free irs tax filing 1040ez New Form W-4 after IRS notice. Free irs tax filing 1040ez   After the IRS issues a notice or modification notice, if the employee provides you with a new Form W-4 claiming complete exemption from withholding or claims a marital status, a number of withholding allowances, and any additional withholding that results in less withholding than would result under the IRS notice or modification notice, you must disregard the new Form W-4. Free irs tax filing 1040ez You are required to withhold on the basis of the notice or modification notice unless the IRS subsequently notifies you to withhold based on the new Form W-4. Free irs tax filing 1040ez If the employee wants to put a new Form W-4 into effect that results in less withholding than required, the employee must contact the IRS. Free irs tax filing 1040ez   If, after you receive an IRS notice or modification notice, your employee provides you with a new Form W-4 that does not claim exemption from federal income tax withholding and claims a marital status, a number of withholding allowances, and any additional withholding that results in more withholding than would result under the notice or modification notice, you must withhold tax on the basis of that new Form W-4. Free irs tax filing 1040ez Otherwise, disregard any subsequent Forms W-4 provided by the employee and withhold based on the IRS notice or modification notice. Free irs tax filing 1040ez Substitute Forms W-4. Free irs tax filing 1040ez   You are encouraged to have your employees use the official version of Form W-4 to claim withholding allowances or exemption from withholding. Free irs tax filing 1040ez Call the IRS at 1-800-TAX-FORM (1-800-829-3676) or visit IRS. Free irs tax filing 1040ez gov to obtain copies of Form W-4. Free irs tax filing 1040ez   You may use a substitute version of Form W-4 to meet your business needs. Free irs tax filing 1040ez However, your substitute Form W-4 must contain language that is identical to the official Form W-4 and your form must meet all current IRS rules for substitute forms. Free irs tax filing 1040ez At the time that you provide your substitute form to the employee, you must provide him or her with all tables, instructions, and worksheets from the current Form W-4. Free irs tax filing 1040ez   You cannot accept a substitute Form W-4 developed by an employee, and the employee submitting such form will be treated as failing to furnish a Form W-4. Free irs tax filing 1040ez However, continue to use any valid Forms W-4 developed by your employees that you accepted before October 11, 2007. Free irs tax filing 1040ez Invalid Forms W-4. Free irs tax filing 1040ez   Any unauthorized change or addition to Form W-4 makes it invalid. Free irs tax filing 1040ez This includes taking out any language by which the employee certifies that the form is correct. Free irs tax filing 1040ez A Form W-4 is also invalid if, by the date an employee gives it to you, he or she indicates in any way that it is false. Free irs tax filing 1040ez An employee who submits a false Form W-4 may be subject to a $500 penalty. Free irs tax filing 1040ez You may treat a Form W-4 as invalid if the employee wrote “exempt” on line 7 and also entered a number on line 5 or an amount on line 6. Free irs tax filing 1040ez   When you get an invalid Form W-4, do not use it to figure federal income tax withholding. Free irs tax filing 1040ez Tell the employee that it is invalid and ask for another one. Free irs tax filing 1040ez If the employee does not give you a valid one, withhold taxes as if the employee was single and claiming no withholding allowances. Free irs tax filing 1040ez However, if you have an earlier Form W-4 for this worker that is valid, withhold as you did before. Free irs tax filing 1040ez   For additional information about these rules, see Treasury Decision 9337, 2007-35 I. Free irs tax filing 1040ez R. Free irs tax filing 1040ez B. Free irs tax filing 1040ez 455, available at www. Free irs tax filing 1040ez irs. Free irs tax filing 1040ez gov/irb/2007-35_IRB/ar10. Free irs tax filing 1040ez html. Free irs tax filing 1040ez Amounts exempt from levy on wages, salary, and other income. Free irs tax filing 1040ez   If you receive a Notice of Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), or 668-W(ICS), you must withhold amounts as described in the instructions for these forms. Free irs tax filing 1040ez Publication 1494, Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income—Forms 668-W(ACS), 668-W(c)(DO), and 668-W(ICS), shows the exempt amount. Free irs tax filing 1040ez If a levy issued in a prior year is still in effect and the taxpayer submits a new Statement of Exemptions and Filing Status, use the current year Publication 1494 to compute the exempt amount. Free irs tax filing 1040ez How To Figure Federal Income Tax Withholding There are several ways to figure federal income tax withholding. Free irs tax filing 1040ez Wage bracket tables. Free irs tax filing 1040ez See section 13 for directions on how to use the tables. Free irs tax filing 1040ez Percentage method. Free irs tax filing 1040ez See section 13 for directions on how to use the percentage method. Free irs tax filing 1040ez Alternative formula tables for percentage method withholding. Free irs tax filing 1040ez See Publication 15-A. Free irs tax filing 1040ez Wage bracket percentage method withholding tables. Free irs tax filing 1040ez See Publication 15-A. Free irs tax filing 1040ez Other alternative methods. Free irs tax filing 1040ez See Publication 15-A. Free irs tax filing 1040ez Employers with automated payroll systems will find the two alternative formula tables and the two alternative wage bracket percentage method tables in Publication 15-A useful. Free irs tax filing 1040ez If an employee wants additional federal tax withheld, have the employee show the extra amount on Form W-4. Free irs tax filing 1040ez Supplemental wages. Free irs tax filing 1040ez   Supplemental wages are wage payments to an employee that are not regular wages. Free irs tax filing 1040ez They include, but are not limited to, bonuses, commissions, overtime pay, accumulated sick leave, severance pay, awards, prizes, back pay and retroactive pay increases for current employees, and payments for nondeductible moving expenses. Free irs tax filing 1040ez Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. Free irs tax filing 1040ez   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total was a single payment for a regular payroll period. Free irs tax filing 1040ez   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold federal income tax from your employee's regular wages. Free irs tax filing 1040ez If you withheld federal income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages. Free irs tax filing 1040ez Withhold a flat 25% (no other percentage allowed). Free irs tax filing 1040ez If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. Free irs tax filing 1040ez If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. Free irs tax filing 1040ez Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Free irs tax filing 1040ez Subtract the tax withheld from the regular wages. Free irs tax filing 1040ez Withhold the remaining tax from the supplemental wages. Free irs tax filing 1040ez If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and previous supplemental wage payments, and withhold the remaining tax from the current payment of supplemental wages. Free irs tax filing 1040ez If you did not withhold federal income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b above. Free irs tax filing 1040ez This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. Free irs tax filing 1040ez    Separate rules apply to any supplemental wages exceeding $1 million that you pay to an individual during the year. Free irs tax filing 1040ez See section 7 in Publication 15 (Circular E) for details. Free irs tax filing 1040ez   Regardless of the method that you use to withhold federal income tax on supplemental wages, they are generally subject to social security, Medicare, and FUTA taxes. Free irs tax filing 1040ez 6. Free irs tax filing 1040ez Required Notice to Employees About Earned Income Credit (EIC) You must notify employees who have no federal income tax withheld that they may be able to claim a tax refund because of the EIC. Free irs tax filing 1040ez Although you do not have to notify employees who claim exemption from withholding on Form W-4 about the EIC, you are encouraged to notify any employees whose wages for 2013 were less than $46,227 ($51,567 if married filing jointly) that they may be eligible to claim the credit for 2013. Free irs tax filing 1040ez This is because eligible employees may get a refund of the amount of EIC that is more than the tax that they owe. Free irs tax filing 1040ez You will meet the notification requirement if you issue to the employee Form W-2 with the EIC notice on the back of Copy B, or a substitute Form W-2 with the same statement. Free irs tax filing 1040ez You may also meet the requirement by providing Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC), or your own statement that contains the same wording. Free irs tax filing 1040ez If a substitute Form W-2 is given to the employee on time but does not have the required statement, you must notify the employee within 1 week of the date that the substitute Form W-2 is given. Free irs tax filing 1040ez If Form W-2 is required but is not given on time, you must give the employee Notice 797 or your written statement by the date that Form W-2 is required to be given. Free irs tax filing 1040ez If Form W-2 is not required, you must notify the employee by February 7, 2014. Free irs tax filing 1040ez 7. Free irs tax filing 1040ez Depositing Taxes Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld. Free irs tax filing 1040ez You must use electronic funds transfer to make all federal tax deposits. Free irs tax filing 1040ez See How To Deposit , later in this section. Free irs tax filing 1040ez The credit against employment taxes for COBRA premium assistance payments is treated as a deposit of taxes on the first day of your return period. Free irs tax filing 1040ez For more information, see COBRA premium assistance credit under Introduction. Free irs tax filing 1040ez Payment with return. Free irs tax filing 1040ez   You may make payments with Forms 943 or 945 instead of depositing if one of the following applies. Free irs tax filing 1040ez You report less than a $2,500 tax liability for the year (Form 943, line 11; Form 945, line 3) and you pay in full with a return that is filed on time. Free irs tax filing 1040ez However, if you are unsure that you will report less than $2,500, deposit under the rules explained in this section so that you will not be subject to failure-to-deposit penalties. Free irs tax filing 1040ez You are a monthly schedule depositor and make a payment in accordance with the Accuracy of Deposits Rule discussed later in this section. Free irs tax filing 1040ez This payment may be $2,500 or more. Free irs tax filing 1040ez Only monthly schedule depositors, defined later, are allowed to make an Accuracy of Deposits Rule payment with the return. Free irs tax filing 1040ez Semiweekly schedule depositors must timely deposit the amount. Free irs tax filing 1040ez See Accuracy of Deposits Rule and How To Deposit, later in this section. Free irs tax filing 1040ez When To Deposit If you employ both farm and nonfarm workers, do not combine the taxes reportable on Forms 941 or 944 with Form 943 to decide whether to make a deposit. Free irs tax filing 1040ez See Employers of Both Farm and Nonfarm Workers, later in this section. Free irs tax filing 1040ez The rules for determining when to deposit Form 943 taxes are discussed below. Free irs tax filing 1040ez See section 10 for the separate rules that apply to FUTA tax. Free irs tax filing 1040ez Under these rules, you are classified as either a monthly schedule depositor or a semiweekly schedule depositor. Free irs tax filing 1040ez The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often your business pays its employees or how often you are required to make deposits. Free irs tax filing 1040ez The terms identify which set of rules you must follow when you incur a tax liability (for example, when you have a payday). Free irs tax filing 1040ez The deposit schedule that you must use for a calendar year is determined from the tax liability reported on your Form 943, line 9, for the lookback period, discussed next. Free irs tax filing 1040ez If you reported $50,000 or less of Form 943 taxes for the lookback period, you are a monthly schedule depositor. Free irs tax filing 1040ez If you reported more than $50,000 of Form 943 taxes for the lookback period, you are a semiweekly schedule depositor. Free irs tax filing 1040ez Lookback period. Free irs tax filing 1040ez   The lookback period is the second calendar year preceding the current calendar year. Free irs tax filing 1040ez For example, the lookback period for 2014 is 2012. Free irs tax filing 1040ez Example of deposit schedule based on lookback period. Free irs tax filing 1040ez Rose Co. Free irs tax filing 1040ez reported taxes on Form 943 as follows. Free irs tax filing 1040ez 2012 — $48,000 2013 — $60,000 Rose Co. Free irs tax filing 1040ez is a monthly schedule depositor for 2014 because its taxes for the lookback period ($48,000 for calendar year 2012) were not more than $50,000. Free irs tax filing 1040ez However, for 2015, Rose Co. Free irs tax filing 1040ez is a semiweekly schedule depositor because the total taxes before adjustment for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. Free irs tax filing 1040ez Adjustments to lookback period taxes. Free irs tax filing 1040ez   To determine your taxes for the lookback period, use only the tax that you reported on the original return (Form 943, line 9). Free irs tax filing 1040ez Do not include adjustments shown on Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. Free irs tax filing 1040ez Example of adjustments. Free irs tax filing 1040ez An employer originally reported total tax of $45,000 for the lookback period in 2012. Free irs tax filing 1040ez The employer discovered during March 2014 that the tax reported for the lookback period was understated by $10,000 and corrected this error by filing Form 943-X. Free irs tax filing 1040ez The total tax reported in the lookback period is still $45,000. Free irs tax filing 1040ez The $10,000 adjustment is also not treated as part of the 2014 taxes. Free irs tax filing 1040ez Deposit period. Free irs tax filing 1040ez   The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. Free irs tax filing 1040ez For monthly schedule depositors, the deposit period is a calendar month. Free irs tax filing 1040ez The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. Free irs tax filing 1040ez Monthly Deposit Schedule If the tax liability reported on Form 943, line 9, for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. Free irs tax filing 1040ez You must deposit Form 943 taxes on payments made during a calendar month by the 15th day of the following month. Free irs tax filing 1040ez Monthly schedule example. Free irs tax filing 1040ez   Red Co. Free irs tax filing 1040ez is a seasonal employer and a monthly schedule depositor. Free irs tax filing 1040ez It pays wages each Friday. Free irs tax filing 1040ez It paid wages during August 2014, but did not pay any wages during September. Free irs tax filing 1040ez Red Co. Free irs tax filing 1040ez must deposit the combined tax liabilities for the August paydays by September 15. Free irs tax filing 1040ez Red Co. Free irs tax filing 1040ez does not have a deposit requirement for September (that is, due by October 15, 2014) because no wages were paid in September; therefore, it did not have a tax liability for September. Free irs tax filing 1040ez New employers. Free irs tax filing 1040ez   For agricultural employers, your tax liability for any year in the lookback period before the date you started or acquired your business is considered to be zero. Free irs tax filing 1040ez Therefore, you are a monthly schedule depositor for the first and second calendar years of your agricultural business (but see the $100,000 Next-Day Deposit Rule , later in this section). Free irs tax filing 1040ez Semiweekly Deposit Schedule You are a semiweekly schedule depositor for a calendar year if the tax liability on Form 943, line 9, during your lookback period was more than $50,000. Free irs tax filing 1040ez Under the semiweekly deposit schedule, deposit Form 943 taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Free irs tax filing 1040ez Deposit amounts accumulated for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. Free irs tax filing 1040ez Semiweekly depositors are not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule (discussed later in this section) applies. Free irs tax filing 1040ez For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 by the following Wednesday. Free irs tax filing 1040ez If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. Free irs tax filing 1040ez Semiweekly schedule depositors must complete Form 943-A, Agricultural Employer's Record of Federal Tax Liability, and submit it with Form 943. Free irs tax filing 1040ez Semiweekly Deposit Schedule IF the payday falls on a. Free irs tax filing 1040ez . Free irs tax filing 1040ez . Free irs tax filing 1040ez THEN deposit taxes by the following. Free irs tax filing 1040ez . Free irs tax filing 1040ez . Free irs tax filing 1040ez Wednesday, Thursday, and/or Friday Wednesday Saturday, Sunday, Monday, and/or Tuesday Friday Semiweekly schedule example. Free irs tax filing 1040ez   Green, Inc. Free irs tax filing 1040ez , is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Free irs tax filing 1040ez Green, Inc. Free irs tax filing 1040ez , will deposit only once a month, but the deposit will be made under the semiweekly deposit schedule as follows. Free irs tax filing 1040ez Green, Inc. Free irs tax filing 1040ez 's tax liability for the April 25, 2014 (Friday), wage payment must be deposited by April 30, 2014 (Wednesday). Free irs tax filing 1040ez Semiweekly deposit period spanning two quarters. Free irs tax filing 1040ez   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. Free irs tax filing 1040ez For example, if you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. Free irs tax filing 1040ez Both deposits will be due Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). Free irs tax filing 1040ez Deposits on Business Days Only If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. Free irs tax filing 1040ez A business day is any day other than a Saturday, Sunday, or legal holiday. Free irs tax filing 1040ez For example, if a deposit is required to be made on Friday and Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). Free irs tax filing 1040ez Semiweekly schedule depositors   will always have 3 business days to make a deposit. Free irs tax filing 1040ez That is, if any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the deposit. Free irs tax filing 1040ez For example, if a semiweekly schedule depositor accumulated taxes on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). Free irs tax filing 1040ez Legal holiday. Free irs tax filing 1040ez   The term “legal holiday” means any legal holiday in the District of Columbia. Free irs tax filing 1040ez Legal holidays for 2014 are listed below. Free irs tax filing 1040ez January 1— New Year's Day January 20— Birthday of Martin Luther King, Jr. Free irs tax filing 1040ez February 17— Washington's Birthday April 16— District of Columbia Emancipation Day May 26— Memorial Day July 4— Independence Day September 1— Labor Day October 13— Columbus Day November 11— Veterans' Day November 27— Thanksgiving Day December 25— Christmas Day $100,000 Next-Day Deposit Rule If you accumulate $100,000 or more of Form 943 taxes (that is, taxes reported on Form 943, line 11) on any day during a deposit period, you must deposit the tax by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. Free irs tax filing 1040ez For purposes of the $100,000 rule, do not continue accumulating a tax liability after the end of a deposit period. Free irs tax filing 1040ez For example, if a semiweekly schedule depositor has accumulated a liability of $95,000 on a Tuesday (of a Saturday-through-Tuesday deposit period) and accumulated a $10,000 liability on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. Free irs tax filing 1040ez Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. Free irs tax filing 1040ez However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. Free irs tax filing 1040ez For example, Fir Co. Free irs tax filing 1040ez is a semiweekly schedule depositor. Free irs tax filing 1040ez On Monday, Fir Co. Free irs tax filing 1040ez accumulates taxes of $110,000 and must deposit this amount on Tuesday, the next business day. Free irs tax filing 1040ez On Tuesday, Fir Co. Free irs tax filing 1040ez accumulates additional taxes of $30,000. Free irs tax filing 1040ez Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. Free irs tax filing 1040ez does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). Free irs tax filing 1040ez If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year. Free irs tax filing 1040ez Example of the $100,000 next-day deposit rule. Free irs tax filing 1040ez   Elm, Inc. Free irs tax filing 1040ez , started its business on May 1, 2014. Free irs tax filing 1040ez Because Elm, Inc. Free irs tax filing 1040ez , is a new employer, the taxes for its lookback period are considered to be zero; therefore, Elm, Inc. Free irs tax filing 1040ez , is a monthly schedule depositor. Free irs tax filing 1040ez On May 8, Elm, Inc. Free irs tax filing 1040ez , paid wages for the first time and accumulated taxes of $50,000. Free irs tax filing 1040ez On May 9 (Friday), Elm, Inc. Free irs tax filing 1040ez , paid wages and accumulated taxes of $60,000, for a total of $110,000. Free irs tax filing 1040ez Because Elm, Inc. Free irs tax filing 1040ez , accumulated $110,000 on May 9, it must deposit $110,000 by May 12 (Monday), the next business day. Free irs tax filing 1040ez Elm, Inc. Free irs tax filing 1040ez , became a semiweekly schedule depositor on May 10. Free irs tax filing 1040ez It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. Free irs tax filing 1040ez Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. Free irs tax filing 1040ez However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. Free irs tax filing 1040ez Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited. Free irs tax filing 1040ez The deposit shortfall is paid or deposited by the shortfall makeup date as described below. Free irs tax filing 1040ez Makeup Date for Deposit Shortfall:    Monthly Schedule Depositor—Deposit the shortfall or pay it with your return by the due date of your Form 943. Free irs tax filing 1040ez You may pay the shortfall with your Form 943 even if the amount is $2,500 or more. Free irs tax filing 1040ez Semiweekly Schedule Depositor—Deposit by the earlier of (a) the first Wednesday or Friday (whichever comes first) that falls on or after the 15th of the month following the month in which the shortfall occurred, or (b) the due date for Form 943. Free irs tax filing 1040ez For example, if a semiweekly schedule depositor has a deposit shortfall during February 2014, the shortfall makeup date is March 19, 2014 (Wednesday). Free irs tax filing 1040ez How To Deposit You must deposit employment taxes by electronic funds transfer. Free irs tax filing 1040ez See Payment with return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. Free irs tax filing 1040ez Electronic deposit requirement. Free irs tax filing 1040ez   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Free irs tax filing 1040ez Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). Free irs tax filing 1040ez If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Free irs tax filing 1040ez   EFTPS is a free service provided by the Department of Treasury. Free irs tax filing 1040ez To get more information or to enroll in EFTPS, call 1-800-555-4477 (business), 1-800-316-6541 (individual), or 1-800-733-4829 (TDD). Free irs tax filing 1040ez You can also visit the EFTPS website at www. Free irs tax filing 1040ez eftps. Free irs tax filing 1040ez gov. Free irs tax filing 1040ez Additional information about EFTPS is also available in Publication 966. Free irs tax filing 1040ez New employers that have a federal tax obligation will be pre-enrolled in EFTPS. Free irs tax filing 1040ez Call the toll-free number located in your Employer Identification Number (EIN) Package to activate your enrollment and begin making your tax deposit payments. Free irs tax filing 1040ez See When you receive your EIN in section 1 for more information. Free irs tax filing 1040ez Deposit record. Free irs tax filing 1040ez   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. Free irs tax filing 1040ez The number can be used as a receipt or to trace the payment. Free irs tax filing 1040ez Depositing on time. Free irs tax filing 1040ez   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. Free irs tax filing 1040ez m. Free irs tax filing 1040ez Eastern time the day before the date a deposit is due. Free irs tax filing 1040ez If you use a third party to make a deposit on your behalf, they may have different cutoff times. Free irs tax filing 1040ez Same-day payment option. Free irs tax filing 1040ez   If you fail to initiate a deposit transaction on EFTPS by 8 p. Free irs tax filing 1040ez m. Free irs tax filing 1040ez Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). Free irs tax filing 1040ez To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. Free irs tax filing 1040ez Please check with your financial institution regarding availability, deadlines, and costs. Free irs tax filing 1040ez Your financial institution may charge you a fee for payments made this way. Free irs tax filing 1040ez To learn more about the information you will need to provide to your financial institution to make a same-day wire payment, visit www. Free irs tax filing 1040ez eftps. Free irs tax filing 1040ez gov to download the Same-Day Payment Worksheet. Free irs tax filing 1040ez Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits for less than the required amount. Free irs tax filing 1040ez The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. Free irs tax filing 1040ez IRS may also waive deposit penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. Free irs tax filing 1040ez For amounts not properly deposited or not deposited on time, the penalty rates are shown next. Free irs tax filing 1040ez Penalty Charged for. Free irs tax filing 1040ez . Free irs tax filing 1040ez . Free irs tax filing 1040ez 2% Deposits made 1 to 5 days late. Free irs tax filing 1040ez 5% Deposits made 6 to 15 days late. Free irs tax filing 1040ez 10% Deposits made 16 or more days late. Free irs tax filing 1040ez Also applies to amounts paid within 10 days of the date of the first notice the IRS sent asking for the tax due. Free irs tax filing 1040ez 10% Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return. Free irs tax filing 1040ez See Payment with return , earlier in this section, for exceptions. Free irs tax filing 1040ez 15% Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. Free irs tax filing 1040ez Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. Free irs tax filing 1040ez Order in which deposits are applied. Free irs tax filing 1040ez   Deposits generally are applied to the most recent tax liability within the year. Free irs tax filing 1040ez If you receive a failure-to-deposit penalty notice, you may designate how your deposits are to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Free irs tax filing 1040ez Follow the instructions on the penalty notice that you received. Free irs tax filing 1040ez For examples on how the IRS will apply deposits and more information on designating deposits, see Revenue Procedure 2001-58. Free irs tax filing 1040ez You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. Free irs tax filing 1040ez irs. Free irs tax filing 1040ez gov/pub/irs-irbs/irb01-50. Free irs tax filing 1040ez pdf. Free irs tax filing 1040ez Example. Free irs tax filing 1040ez Cedar, Inc. Free irs tax filing 1040ez , is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. Free irs tax filing 1040ez It does not make the deposit on July 15. Free irs tax filing 1040ez On August 15, Cedar, Inc. Free irs tax filing 1040ez , deposits $2,000. Free irs tax filing 1040ez Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. Free irs tax filing 1040ez Accordingly, $500 of the July 15 liability remains undeposited. Free irs tax filing 1040ez The penalty on this underdeposit will apply as explained above. Free irs tax filing 1040ez Trust fund recovery penalty. Free irs tax filing 1040ez   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. Free irs tax filing 1040ez The penalty is the full amount of the unpaid trust fund tax. Free irs tax filing 1040ez This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. Free irs tax filing 1040ez   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. Free irs tax filing 1040ez   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship. Free irs tax filing 1040ez A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. Free irs tax filing 1040ez    Willfully means voluntarily, consciously, and intentionally. Free irs tax filing 1040ez A responsible person acts willfully if the person knows that the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. Free irs tax filing 1040ez “Average” failure-to-deposit penalty. Free irs tax filing 1040ez   IRS may assess an “averaged” failure-to-deposit penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 943, line 17, when your tax liability shown on Form 943, line 11, was $2,500 or more. Free irs tax filing 1040ez IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 943, line 11, was $2,500 or more and you did any of the following. Free irs tax filing 1040ez Completed Form 943, line 17, instead of Form 943-A. Free irs tax filing 1040ez Failed to attach a properly completed Form 943-A. Free irs tax filing 1040ez Completed Form 943-A incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. Free irs tax filing 1040ez   IRS figures the penalty by allocating your tax liability on Form 943, line 11, equally throughout the tax period. Free irs tax filing 1040ez Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. Free irs tax filing 1040ez   You can avoid the penalty by reviewing your return before filing it. Free irs tax filing 1040ez Follow these steps before filing your Form 943. Free irs tax filing 1040ez If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 943, line 17. Free irs tax filing 1040ez If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Form 943-A in the lines that represent the dates you paid your employees. Free irs tax filing 1040ez Verify that your total liability shown on Form 943, line 17, or Form 943-A, line M, equals your tax liability shown on Form 943, line 11. Free irs tax filing 1040ez Do not show negative amounts on Form 943, line 17, or Form 943-A. Free irs tax filing 1040ez For prior period errors discovered after December 31, 2008, do not adjust your tax liabilities reported on Form 943, line 17, or on Form 943-A. Free irs tax filing 1040ez Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941 and 944 taxes). Free irs tax filing 1040ez Form 943 taxes and Form 941/944 taxes are not combined for purposes of applying any of the deposit schedule rules. Free irs tax filing 1040ez If a deposit is due, deposi